Andhra HC (Pre-Telangana)
National Insurance Company Limited vs Nooti Venkateswarulu And Ors. on 1 October, 2002
Equivalent citations: 2003(1)ALD771
JUDGMENT V.V.S. Rao, J.
1. This appeal is filed by the National Insurance Company Limited aggrieved by the Award of the Motor Vehicle Accidents Claims Tribunal-cum-the Court of District Judge, Ongole, passed in O.P. No. 509 of 1992, dated 30-5-1996.
2. Brief facts of the case are as follows. One Sri Nooti Venu met with an accident on 26.8.1992 involving lorry bearing No. AP 16T 0775 which was driven by the driver in rash and negligent manner. He died in the accident. The claimants therefore filed the O.P. before the Tribunal claiming compensation of Rs. 80,000/-. The O.P. was opposed by the Insurance Company inter alia on the ground that the deceased was unauthorised passenger in the goods vehicle and therefore, the claim does not cover under the insurance policy. The Tribunal rejected the contention of the Insurance Company and awarded a sum of Rs. 39,000/- with interest at 6% per annum from the date of petition till the date of the Award, at 12% per anum from the date of the Award till 29.8.1996, and thereafter at 15% per annum till the date of payment. Hence, the present C.M.A. is filed by the Insurance Company.
3. The learned Counsel for the appellant has reiterated the submissions taken before the Tribunal.
4. The question raised in this C.M.A is squarely covered by the judgment of the Supreme Court in New India Assurance Co. Ltd. v. Satpal Singh, , wherein their Lordships held that under the Motor Vehicles Act, 1988 all insurance policies covering third party risks are not required to exclude gratuitous passengers in the vehicle though vehicle is of any type or class. It was held:
Under Clause (ii) of the proviso to Section 95(1) of the Motor Vehicles Act, 1939 (for short "the old Act") the insurance policy was not required to cover liability in respect of the death of or bodily injury to persons who were gratuitous passengers of that vehicle. But the proviso to Section 147(1) of the Motor Vehicles Act, 1988 (for short, "the new Act") shows that it is a recast provision by placing the erstwhile Clause (iii) as the present Clause (ii). In other words, Clause (ii) of the proviso to Section 95(1) of the old Act is totally non-existent in the proviso to Section 147(1) of the new Act. Moreover, under Section 147(2) of the new Act there is no upper limit for the insurer regarding the amount of compensation to be awarded in respect of death or bodily injury of a victim of the accident. It is, therefore, apparent that the limit contained in the old Act has been removed and the policy should insure the liability incurred and cover injury to any person including owner of the goods or his authorised representative carried in the vehicle..... Therefore, under the new Act an insurance policy covering third-party risk is not required to exclude gratuitous passengers in a vehicle, no matter that the vehicle is of any type or class.
5. The other submission of the learned Counsel for the Insurance Company is that in view of the fact that the question decided in Satpal Singh 's case (supra) is, referred to a Larger Bench in New India Assurance Co. Ltd. v. Asha Rani, , the decision in Satpal Singh's case (supra) is not a binding authority.
6. This submission of the learned Counsel cannot be countenanced. In Branch', Manager, New India Assurance Co. Ltd. Kurnool v. Vibudhi Durgaiah (unreported judgment in C.M.A.Nos.95 of 1998 and Batch, dated 20.8.2002), I considered this: aspect of the matter. After referring to the judgments of the Supreme Court in State of Orissa v. Dandasi Sahu, , and State of Rajasthan v. R.S. Sharma and Co., , I held that when a judgment of the Supreme Court, which is binding on the High Court, is referred to a subsequent Bench of equal strength, the same does not take away the binding affect of earlier Supreme Court judgment. Therefore, the decision in Satpal Singh's case (supra) is binding on this Court and it would be improper for this Court to ignore the binding authority.
7. Insofar as awarding interest is concerned, Section 171 of the Act lays down that where the Tribunal passed an award for payment of compensation, the Tribunal in addition to the amount may direct payment of simple interest at such rate and from such date from the date of making claim or some other date as the Tribunal may deem fit. There is no power which inheres the Tribunal to award penal interest In United India Insurance Co. Ltd. v. Sarat Kumar Sahoo's case, 1995 (2) ACJ 1120, it was observed that the Award of the Tribunal indicating payment 12% interest in case of default in payment cannot be sustained. Similar view was taken in Gouranga Katrual v. Govinda Mohapatra, 1996 (1) ACJ 93, and New India Assurance Company Limited v. Chand Rani, 1996 (2) ACJ 911. Therefore, the impugned Award of the Tribunal insofar as it directs payment of interest at 12% from the date of award till 29-8-1996 and at 15% from 30-8-1996 till the date of realization is wholly illegal and usustaianble.
8. In the result, the appeal is partly allowed modifying the Award to the effect that the insurer and the owner shall be liable to pay simple interest at 9% per annum from the date of petition till the date of realisation on the amount awarded by the Tribunal.