Delhi High Court
Veena Pruthi & Ors. vs Oriental Fire & Genl. Insurance Co. Ltd. on 25 November, 2009
Author: Pradeep Nandrajog
Bench: Pradeep Nandrajog, Suresh Kait
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on: 6thOctober, 2009
Judgment Delivered on: 25th November, 2009
+ LPA 30/1989
VEENA PRUTHI & ORS. ..... Appellants
Through: Mr. Ashok Popli, Adv. with
Mr. Navneet Goyal, Adv.
versus
ORIENTAL FIRE & GENL. INSURANCE
CO. LTD. ..... Respondent
Through: Mr. V.P.Chaudhary, Sr. Adv. with
Ms. Sushma, Adv. for R-1
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MR. JUSTICE SURESH KAIT
1. Whether the Reporters of local papers may be
allowed to see the judgment?
2. To be referred to the Reporter or not? No
3. Whether the judgment should be reported in the
Digest? No
PRADEEP NANDRAJOG, J.
1. 7th April, 1975 was an unfortunate day in the life of Late Jai Kishan Pruthi. Proceeding towards Azadpur on a two- wheeler scooter bearing registration No.DHU-6689, at around 9:00 PM, he was hit by truck bearing registration No.HRB-4969 driven by Mahender Singh. Jai Kishan Pruthi was fatally injured and no medical aid could be given to him inasmuch as by the time he was brought at the casualty of Irwin Hospital, New Delhi he had died.
LPA No.30/1989 Page 1 of 13
2. The offending truck was owned by Hukam Chand and in respect thereof he had obtained a policy of insurance from the Oriental Fire & General Insurance Company Ltd.
3. The widow and minor children of Jai Kishan Pruthi filed a claim petition seeking compensation under the Motor Vehicles Act 1939. Holding in their favour that the death of Jai Kishan Pruthi was a result of the offending truck being rashly driven by the driver thereof, the learned Tribunal assessed comensation in sum of Rs.1,34,500/- and directed that the insurance company would pay the entire awarded sum.
4. The insurance company had taken up a defence that in terms of Section 95 of the MV Act 1939, its liability to pay under the policy of insurance was limited to Rs.50,000/-.
5. The original policy of insurance was obviously in the hand of the owner of the vehicle i.e. Hukam Chand. He never produced the policy which he had obtained and as a result thereof the original never saw the light of the day. The insurance company examined one witness Sh.H.R.Bajaj its Branch Manager who appeared as RW-1 and proved the office copy consisting of only one page i.e. the last, pertaining to the policy issued. The said document was marked as Ex.R-1/1.
6. The one page document Exhibited as R-3/1, evidenced that premium received was in sum of Rs.135/- LPA No.30/1989 Page 2 of 13 consisting of 2 parts. Rs.125/- towards basic premium and Rs.10/- as premium for the insurance cover being extended for the driver and the cleaner.
7. The said document further evidences that the licensed carrying capacity of the truck is 10 tonnes. The make of the truck is „TMB‟ and the engine is of 90 Horse Power.
8. The learned Judge MACT negated the defence of the insurance company that its liability was limited to Rs.50,000/-, holding as under:-
"19. The next question to be decided is about the liability of the respondents. The liability of the respondents 1 and 2 i.e. driver and the owner of the truck, is unlimited. So far as Insurance Company is concerned, it is statutory liability under Section 95 of the Motor Vehicles Act, 1939 is fixed at Rs.50,000/- which can be increased by means of a contract of insurance between the parties. It was, therefore, for the Insurance Co-respondent, if it wanted its liability to be limited to Rs.50,000/-, to have produced on record the insurance policy. The original policy of Insurance was, in the ordinary course of events, must have been issued to the owner of the truck but he said owner during the present proceedings was neither called upon to produce the same on record. The Insurance Company produced its witness RW-1 H.R.Bajaj who produced an attested true copy of the Insurance Policy in question and got it proved and exhibited as R-3/1 which was objected to by the learned counsel for the petitioners and the said objection was kept open without being decided. This witness stated in the examination chief that the original policy was with the insured-respondent No.1. He stated that the office copy of the insurance policy brought by him on the day of his deposition consisted of one sheet only and that the terms and conditions were not contained therein although there was a reference about them. In my view, objection by the learned counsel for the LPA No.30/1989 Page 3 of 13 petitioners qua the admissibility of the duplicate copy of the insurance policy and its exhibition as R-3/1 was rightly taken and is liable to be sustained for a couple of reasons. Firstly, the original insurance policy is neither stated to have been lost nor destroyed. It was, therefore, incumbent upon the Insurance Company to have called upon on the owner-respondent No.2 to produce the original insurance policy which would have enlightened on the entire state of affairs qua the statutory limited liability or otherwise of the Insurance Company in respect of the vehicle involved in the accident. The insurance policy in original was as per the statement of RW-1 was available with the insured respondent. The non-production of the insurance poli9cy on record gives rise to presumption against the plea of limited liability of the Insurance Co. and law in this regard has been laid down in Sham Lal Vs. New India Assurance Co. Ltd. (1979 A.C.J. 208 Madhya Pradesh High Court). Further, the alleged duplicate copy of the insurance policy was incomplete inasmuch as RW-1 in his cross examination admitted that the terms and conditions of the insurance were not contained in the office copy of the insurance policy brought by him and, therefore, by no standard, it could be said certainty that the Insurance Company had limited its liability to the statutory limit prescribed under Section 95 of the Motor Vehicles Act, 1939."
9. It is apparent that the learned Judge MACT did not deal with the issue as to whether the basic premium in sum of Rs.125/- pertained to the statutory minimum liability prescribed under the MV Act 1939 qua third parties i.e. Rs.50,000/- or was it a case of unlimited liability.
10. The insurance company was aggrieved by the award and hence filed a first appeal. The claimants were also aggrieved by the award as they felt that the compensation awarded was inadequate. The appeal filed by the insurance company as also the cross objections filed by the claimants were LPA No.30/1989 Page 4 of 13 decided by the learned Single Judge vide order dated 10 th February, 1989.
11. Whether or not the police stood proved and what was the effect of R-3/1 being proved and the further issue as to whether premium paid in sum of Rs.125/- related to the policy being unlimited, the learned Single Judge opined as under:-
"It is an admitted fact that the owner of the offending vehicle did not produce the original policy although he was claiming that the entire liability was that of the Insurance Company. The Insurance Company produced the office copy of the policy. Usually, in the file pertaining to the insurer only the last page of the policy is annexed as the rest of the terms are standard terms. The Tribunal held that the sheet produced by the Insurance Company without the terms and conditions cannot be accepted in evidence. The approach of the Tribunal was wholly erroneous. The Tribunal ought to have weighed the circumstances and evidence before it. When the owner had not produced the original copy, it was erroneous on the part of the Tribunal to hold the Insurance Company also jointly and severally liable for the entire amount. As stated above, the normal practice of the Insurance Companies is to keep the relevant page or pages on the file of each insurer, showing how much of the premium is paid and risk of what nature is covered. The Tribunal also overlooked the fact that it is supposed to make a summary enquiry where it cannot insist upon the technical rules of evidence. I have, therefore, no hesitation to accept the office copy of the policy produced by the Insurance Company. The copy of the policy would show that the basic premium paid by the owner was Rs.125/-. According to the tariff (of which a copy was produced and which is taken on record) in case of liability to public risk in regard to vehicles used for carriage of goods for hire or reward as in the case of a truck, the basic premium is Rs.125/-. In case of „Act Only‟ liability the basic premium is Rs.84/-. Counsel for the owner submitted that if the basic premium is Rs.84/- the excess amount LPA No.30/1989 Page 5 of 13 of Rs.41/- would make it a case of unlimited liability for the insurance company. Having seen various provisions of the Tariff, it is clear that the argument is thoroughly misconceived. The Insurance Company had not claimed or accepted that it was a case of „Act Only‟ liability. It has specifically stated that it was a public risk liability of which the basic premium is Rs.125/-. This is shown at page 77 of the Tariff. At page 120-A a chart is given, showing the quantum of the liability over and above a ceiling and the corresponding additional premium required to be paid. For example it is stated that Rs.39/- is an additional premium for unlimited personal liability where the damage to the property is Rupees One lakh. The quantum of liability is proportionately increased with the corresponding increase in the premium paid. It is not shown by the owner from the tariff that anything above Rs.125/- was charged in the present case, such as the sums mentioned as additional premium at page 120-A of the tariff. The appeal of the Insurance Company is, therefore, to be accepted. The cross- appeal of the owner and the driver is rejected. The Insurance Company shall be liable to pay Rs.50,000/- towards compensation and proportionate interest. The Insurance Company has already paid Rs.50,000/- to the claimants. The owner and the driver are jointly and severally responsible for payment of the balance amount with 9% simple interest from the date of application till the date of realisation."
12. We note that the cross appeal referred to as the one filed by the owner and the driver is actually cross objections filed by the claimants. Needless to state the same have been dismissed without any adjudication on the issue of the quantum of compensation.
13. In view of the fact that the claimants have not been able to realize the sum awarded in excess of Rs.50,000/- from the owner of the vehicle, learned counsel for the claimants submitted during hearing of the appeal that if this Court were to LPA No.30/1989 Page 6 of 13 allow the appeal and hold that the liability of the insurance company is unlimited in that even suitable directions may be passed pertaining to the cross objection filed by the claimants. If not, the issue be closed.
14. It is apparent that the learned Single Judge did not decide on the cross objections filed by the claimants for the reason it hardly mattered whether the compensation was enhanced if it was held that the liability of the insurance company is limited to Rs.50,000/-. The reason being that in view of the stay granted in appeal in favour of the insurance company directing that the award in excess of Rs.50,000/- be not executed, the claimants were unable to locate the owner of the truck and recover the balance amount. What was the practical use to enhance the sum awarded?
15. On the issue whether the policy was proved, we concur with the view taken by the learned Single Judge that the original policy of insurance is always handed over to the owner of the vehicle. The last sheet is one which is retained by the insurance company which contains the necessary particulars pertaining to the premium which has been received. We further note that Ex.R-3/1 i.e. the document proved by the insurance company clearly records that the policy is subject to IMT Nos.2(A) and 16. It is the office copy of the insurance company. The document Exhibited is a true copy thereof, the original office LPA No.30/1989 Page 7 of 13 copy was produced. It records that the basic premium charged is Rs.125/- and Rs.10/- has been charged on account of insurance coverage for the driver and the cleaner. The said document clearly records under the caption „Liability‟:
Limit of the amount of the Company's liability under Section II-1(i) in respect of any one accident: Such amount which is necessary to meet the requirements of the Motor Vehicles Act, 1939.
Limit of the amount of the Company's liability under Section II-1(ii) in respect of any one claim or series of claims arising out of one event: Rs.50,000/-".
16. The learned Single Judge has referred to the tariff applicable in the year in question but has not reproduced the same. We do so.
17. The tariff in question as notified by the Tariff Advisory Committee, inter alia, reads as under:-
"Note - In the event of cover being granted under Extra Benefit Item 7 on sheet 123 of the Tariff, the words "and also the liability under the Workmen‟s Compensation Act, 1923, in respect of the carriage of more than six persons employed in connection with the loading and unloading of the vehicle" shall be inserted after the figure Rs.50,000/- under Regulation 9 (i) (a) or the wording under Regulation 9 (i) (b)."
(ii) Limit of Liability under Section II-1 (ii).
(a) Goods or Passenger carrying }Rs.50,000/-
vehicles ... ... ... ...
(b) Vehicles other than described in }Rs.1,50,000/-
(a) Above ... ... ... N.B.- Where
LPA No.30/1989 Page 8 of 13
additional
premium
has been
paid for
increased
limits,
insert the
increased
amount in
question."
18. Pertaining to commercial vehicles the tariff stands recorded as under:-
Class "A(2)" - GOODS CARRYING VEHICLES - GENERAL CARTAGE Vehicles used for the carriage of goods for hire or reward. Endorsement No.26 must be used - See Regulation 4, Licensed Comprehensive Liability to the "Act Only"
Carrying Public Risks Liability Capacity of the Vehicle Town Mof. Town Mof. Town Mof. Not Rs.261 + Rs.286+ Rs.78 Rs.87 Rs. 65 exceeding ½% on ½% on 508 Kgs. I.E.V. I.E.V. Not Rs.336+ Rs.496+ Rs.78 Rs.87 Rs. 65 exceeding ½% on ½% on 2032 Kgs. I.E.V. I.E.V. Not Rs.411+ Rs.611+ Rs.78 Rs.87 Rs. 65 exceeding ½% on ½% on 3048 Kgs. I.E.V. I.E.V. Not Rs.761+ Rs.911+ Rs.87 Rs.106 Rs. 74 exceeding ½% on ½% on 5080 Kgs. I.E.V. I.E.V. Exceeding Above Above Rs.97 Rs.125 Rs. 84 5080 Kgs. rate plus rate plus Rs.150/- Rs.150/- for each for each additional additional 1016 1016 Kgs. or Kgs. or part part LPA No.30/1989 Page 9 of 13 thereof thereof.
N.B. - Section 1 of all Comprehensive Policies must be subject to a compulsory excess of
(i) in respect of 3 wheeled vehicles with licensed Carrying capacity no exceeding 508 Kgs. ... Rs.200/-
(ii) in respect of all other vehicles ... ... Rs.500/-
See „Note‟ to Endorsement No.26 Special Exclusions (Commercial Vehicles Policies only) on sheet 177 of the Tariff."
19. It is thus apparent that pertaining to vehicles licensed carrying capacity whereof exceed 5080 kgs., the tariff applicable for an act only liability requires premium to be paid in sum of Rs.84/-. In case of policy being extended to cover liability to the public risk, the applicable tariff i.e. the premium payable would be Rs.97/- or Rs.125/- depending upon whether the liability to the public risk is intended to be in towns or Mufasil areas.
20. Liability to public risk would mean that the policy provides indemnity to the insured against legal liability for claim by the public in respect of accidental personal injury or damage to the property caused by the insured vehicle.
21. The tariff in question refers to the liability to the public risk as under:-
"1. Liability to the Public Risks The indemnity granted to the insured may be increased in respect of the undernoted vehicles by payment of an additional premium on the following scale. In cases where the limits of Indemnity provided under the standard policy exceedRs.50,000/- such limits may be increased in LPA No.30/1989 Page 10 of 13 accordance with the scale at an additional premium equivalent to the difference between the scale rates for such standard Policy limits and those for the required increased limits.
(a) All Commercial Vehicles except those rateable under Class A (2) and Class "E".
Vehicles Trailers
Unlimited personal Additional Premium Rs.4 Rs. 2
injury
Rs.1,50,000
property damage
Unlimited personal Additional Premium Rs.12 Rs. 5
injury
Rs.3,00,000
property damage
Unlimited personal Additional Premium Rs.16 Rs. 7
injury
Rs.4,00,000
property damage
Unlimited personal Additional Premium Rs.20 Rs. 9
injury
Rs.5,00,000
property damage
Unlimited personal Additional Premium Rs.24 Rs. 11
injury
Rs.6,00,000
property damage
Unlimited personal Additional Premium Rs.28 Rs. 13
injury
Rs.7,00,000
property damage
Unlimited personal Additional Premium Rs.32 Rs. 15
injury
Rs.8,00,000
property damage
Unlimited personal Additional Premium Rs.36 Rs. 17
LPA No.30/1989 Page 11 of 13
injury
Rs.9,00,000
property damage
Unlimited personal Additional Premium Rs.40 Rs. 19
injury
Rs.10,00,000
property damage
Note: The property damage limit in respect of vehicles rated under Class "E" may be increased in accordance with the above scale by charging 50 per cent of the above rates."
22. It is thus apparent that where premium paid is Rs.125/- and the policy extends to cover the liability to the public risk the same would be restricted to Rs.50,000/- unless additional premium as per table above is paid.
23. Thus, learned Single Judge has correctly held that in the instant case the premium charged is basic premium in sum of Rs.125/- as Ex.R-3/1 specifically states that the policy issue is a public risk liability policy, the inevitable conclusion has to be that the liability of the insurance company has to be restricted to Rs.50,000/-.
24. On the proof of Ex.R-3/1, we concur with the learned Single Judge that the last page retained by the insurance company is the only relevant page to be kept for the reason rest of the contents of a policy of insurance are nothing but the reproduction of the relevant parts of the tariff notified by the LPA No.30/1989 Page 12 of 13 Tariff Advisory Committee. The proof of said document is the following testimony of RW-1:-
"I have brought the attested true copy of Insurance Policy bearing No.NG/10209/1/4/NB/1119. It was issued a 20/12/1974. It is valid from 20/12/74 to 19/12/75 for a years in respect of Truck No.HRB-4969 owned by Hukam Chand. It has been attested as true copy by the Asstt. Administration Officer on 7/12/78. Sh.Madan Lal Mago. I have seen him writing and signing and as such I can identify the signatures. The Original policy is with the insured respondent No.1. It is Ext.R-3/1 (objected to).
The original policy was not prepared in my presence nor do I know who had signed it. The copy of the original is in our record which I have brought. It bears the signatures of the officer dt.21/12/74. When the policy was acquistely issued covering the period from 20/12/74 to 19/12/75. The office copy brought by me consists of one sheet only. The terms and conditions are contained with it. Though there is reference about it. It is incorrect to suggest that the unlimited third party was covered under the policy."
25. The appeal is dismissed.
26. No costs.
(PRADEEP NANDRAJOG) JUDGE (SURESH KAIT) JUDGE November 25, 2009 mm LPA No.30/1989 Page 13 of 13