Bombay High Court
Sanjay S/O Badriprasad Khandelwal vs Smt.Sukhiyabai W/O Baratiya Gond on 25 March, 2010
Author: C.L.Pangarkar
Bench: C.L.Pangarkar
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY.
NAGPUR BENCH, NAGPUR.
FIRST APPEAL NO.430 OF 1997.
APPELLANT : Sanjay s/o Badriprasad Khandelwal,
aged about 44 years, r/o near Railway
Gate, Babupeth,Chandrapur, Distt.
Chandrapur.
..VERSUS..
RESPONDENTS: 1. Smt.Sukhiyabai w/o Baratiya Gond,
aged about 34 years, r/o village Keka,
P. O. Chhilpi,Police Station Saza Tq. Saza,
Distt.Durg (MP).
2. National Insurance Company Ltd.
Chandrapur, City Branch, over Bank of
India Building, near Jatpura Gate,
Chandrapur, Distt.Chandrapur.
FIRST APPEAL NO.431 OF 1997.
APPELLANT : Sanjay s/o Badriprasad Khandelwal,
aged about 44 years, r/o near Railway
Gate, Babupeth,Chandrapur, Distt.
Chandrapur.
..VERSUS..
RESPONDENTS: 1. Ramadhar s/o Laxman Kalar,
aged about 29 years, Occu: labourer, r/o
village Rajpur, P.O. Odea Khurd, Police
Station Lohara, Tq.Kawardha,
Distt.Rajnandgaon (M.P.)
2. National Insurance Company Ltd.
Chandrapur, City Branch, over Bank of
India Building, near Jatpura Gate,
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Chandrapur, Distt.Chandrapur.
FIRST APPEAL NO.432 OF 1997.
APPELLANT : Sanjay s/o Badriprasad Khandelwal,
aged about 44 years, r/o near Railway
Gate, Babupeth,Chandrapur, Distt.
Chandrapur.
..VERSUS..
RESPONDENTS: 1. Smt.Kumaribai wd/o Nanduram Kewat,
aged about 34 years, Occu: Housewife
and Labourer.
2. Master Roshan s/o Nanduram Kewat,
aged about 10 years, Minor, through his
legal and natural Guardian mother -
Smt.Kumaribai.
3. Ku.Chunia d/o Nanduram Kewat,
aged about 6 years, Minor through her
legal and natural guardian - Mother
Smt.Kumaribai.
4. Bhagela s/o Samaru Kewat,
aged about 54 years, Occu: Labourer
(father of deceased Nandu)
All residents of Singhan Garh,
P.O. - Singhan Garh, Police Station,
Lohara,Tq. Kawardha,Distt.
Rajnandgaon (M.P.)
5. National Insurance Company Ltd.
Chandrapur, City Branch, over Bank of
India Building, near Jatpura Gate,
Chandrapur, Distt.Chandrapur.
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FIRST APPEAL NO.433 OF 1997.
APPELLANT : Sanjay s/o Badriprasad Khandelwal,
aged about 44 years, r/o near Railway
Gate, Babupeth,Chandrapur, Distt.
Chandrapur.
..VERSUS..
RESPONDENTS: 1. Bhagwatprasad s/o Baisakhu Kalar,
aged about 39 years, Occu: Labourer.
2. Master Ramlal s/o Bhagwatprasad Kalar,
aged about 14 years, minor through his
natural Guardian father- Bhagwatprasad.
Both residents of village Saza, Post Office,
Police Station and Tq. Saza, Distt.Durg
(Madhya Pradesh)
3. National Insurance Company Ltd.
Chandrapur, City Branch, over Bank of
India Building, near Jatpura Gate,
Chandrapur, Distt.Chandrapur.
FIRST APPEAL NO.457 OF 1997.
APPELLANT : Sanjay s/o Badriprasad Khandelwal,
aged about 44 years, r/o near Railway
Gate, Babupeth,Chandrapur, Distt.
Chandrapur.
..VERSUS..
RESPONDENTS: 1. Smt.Tizbati wd/o Boharan Kalar,
aged about 26 years, Occu: Housewife
and Labourer.
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2. Master Parasram s/o Boharan Kalar,
aged about 7 years, Minor, represented
through his legal and natural Gaurdian
Mother - Smt.Tizbati.
3. Itwari s/o Jagat Kalar,
aged about 49 years, Occu: Labourer,
(father of deceased Boharan Kalar)
All residents of village Kehka, P.O.
Saza, Police Station and Tq. Saza,
Distt.Durg (M.P.)
4. National Insurance Company Ltd.
Chandrapur, City Branch, over Bank of
India Building, near Jatpura Gate,
Chandrapur, Distt.Chandrapur.
FIRST APPEAL NO.506 OF 1997.
APPELLANT : Sanjay s/o Badriprasad Khandelwal,
aged about 44 years, r/o near Railway
Gate, Babupeth,Chandrapur, Distt.
Chandrapur.
..VERSUS..
RESPONDENTS: 1. Bagas Gond s/o Manglu Gond,
aged about 29 years, Occu:Labourer,
r/o Rajpur P.O. Odea Khurd, P.S.Lohara,
Tq. Kawardha,Distt.Rajnandgaon (MP)
2. National Insurance Company Ltd.
Chandrapur, City Branch, over Bank of
India Building, near Jatpura Gate,
Chandrapur, Distt.Chandrapur.
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Mr.S.V.Sirpurkar Adv. for the appellant.
Mr.B.N.Khanjode Adv. for the respondent/Insurance Company.
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CORAM: C.L.Pangarkar, J.
DATED : 25th March, 2010.
ORAL JUDGMENT:
1. These six first appeals can be disposed by a common judgment since they involve the identical questions and arise out of the same accident. The appeals are preferred by the owner of the vehicle involved in the accident feeling aggrieved by fastening of liability on him and exonerating the Insurance Company.
2. The facts giving rise to the appeals are as follows -
The appellant is the owner of the truck No.5691. The appellant used to carry coal in the said truck. On the date of the incident, the truck was coming from Ballarshah to Chahndrapur after loading the same with the coal. On its way, the truck turned turtle. It is alleged that some 11 to 12 persons were travelling in the said truck. When the said truck met with an accident, four persons died on the spot and four persons suffered injuries. They laid the claim before the Motor Accident Claims Tribunal seeking compensation.
::: Downloaded on - 09/06/2013 15:45:33 ::: 63. The present appellant contested the claim. He admitted to be the owner of the vehicle. He also admitted that the truck met with an accident, four persons died and four persons suffered injuries. He further admitted that one Laxman was driving the said truck. It is his contention that the truck was insured with respondent no.2/Insurance Company.
4. The Insurance Company also resisted the application. It is not disputed by the Insurance Company that the truck was insured with it. It's only contention is that the policy covered only 2 + 6 persons i.e. driver, cleaner and six coolies. It is contended that more people than the insured were travelling.
There was thus a breach of the condition of the policy and therefore, the Insurance Company was liable to be exonerated.
The accident had taken place due to mechanical defect and not due to the rash and negligent driving.
5. The learned judge of the Tribunal tried and decided all the claim petitions. The learned Judge awarded the compensation but refused to fasten the liability on the Insurance Company, as he found that by carrying more persons the insured had committed a fundamental breach of the ::: Downloaded on - 09/06/2013 15:45:33 ::: 7 condition of the policy and on account of such breach the Insurance Company was not liable. Holding so, he exonerated the Insurance Company and directed the present appellant alone to pay the compensation.
6. I have heard the learned counsel for the appellant and the respondents.
7. Shri Sirpurkar, the learned counsel for the appellant, contends that the Insurance Company could not have been absolved in the instant case since the vehicle was admittedly insured with the Insurance Company. He submits that the Tribunal fell in error in holding that there was a fundamental breach of condition of the policy, assuming that more persons than permitted were travelling in the truck. He submits that the Insurance policy covered one driver, one cleaner and six other persons i.e. coolies. He submits that the Insurance Company cannot escape the liability as far as six persons, who are covered by the policy, are concerned. He submits that at the most Insurance Company will not be liable for the 7th and the 8th person.
8. Shri Khanjode, learned counsel for the Insurance ::: Downloaded on - 09/06/2013 15:45:33 ::: 8 Company, very vehemently argues that the truck was carrying 12 persons and this was in breach of the policy condition. He submits that if the policy and the permit do not permit more than six persons to be carried, the breach should be treated as fundamental one leading to the breach of the condition.
According to him, putting a restriction on the number of persons to be carried would otherwise carry no meaning. He also submits that if such large number of persons are allowed to be carried in a goods vehicle, the very purpose of prevention of persons travelling in goods vehicle would be defeated.
9. In order to appreciate the arguments, a few undisputed facts may be required to be noted. The vehicle involved in the accident is admittedly a goods vehicle. Twelve persons besides driver and the cleaner were travelling in the truck at the time of the accident. The cover note discloses insurance for 2 + 6, which includes driver and cleaner.
10. Shri Sirpurkar, the learned counsel for the appellants, submits that only six claim-petitioners have preferred the appeal and six persons are covered by the contract of insurance. Shri Khanjode contended that carrying even a ::: Downloaded on - 09/06/2013 15:45:33 ::: 9 single person more than the insured number would be the breach and therefore, the contract would not be enforceable.
The question is whether carrying more persons than insured would put an end to the contract of insurance and whether it could be treated as a fundamental breach. To my mind, that will not be so in every case. The persons, who were travelling, were coolies. There was an insurance for six coolies. The claim petitioners are coolies and not unauthorised or gratuitous or fare paying passengers. Carrying more coolies than the transport permit may at the most be breach of Motor Vehicle Act. Carrying more number of coolies than insured cannot be a breach of policy unless the policy condition specifically says so.
The policy has not been placed on record. There is nothing on record to show that carrying more number of coolies would also be treated as breach of condition of policy. For this reason too, it cannot be said that in this case there was fundamental breach of terms of policy. This court had an occasion to deal with the similar situation while rendering the two decisions.
The first decision is a Division Bench decision reported in 1997 ACJ 1014 ( Shivraj Vasant Bhagwat .l.vs.. Shevanta Dattaram ::: Downloaded on - 09/06/2013 15:45:33 ::: 10 Indulkar and anr.) wherein following observations are made.
"9. There is also another facet to this matter due to which, according to our opinion, in the facts and circumstances of this case, even though there are more than 11 labourers at the time of accident, the said clause (3) is not applicable. The clause is as under :
"(3) Carrying passengers in the vehicle except employees (other than the driver) not exceeding six in number coming under the purview of Workmen's Compensation Act, 1923."
Admittedly, in this case, appellant truck owner was carrying more than six persons at the time of the accident. However, according to our opinion, the said breach of the condition is not such by which the contract of insurance will be vitiated, as the said term of not carrying more than six labourers in the truck is not so fundamental to offer ground to insurance company to absolve itself from the liability. The terms of the policy of insurance have not to be construed strictly and to be read down to advance the main purpose of the contract. The main purpose of the policy is to indemnify the damage caused to the vehicle and the inmates, ::: Downloaded on - 09/06/2013 15:45:33 ::: 11 who are injured. It is plain from the terms of the insurance policy that insured vehicle was entitled to carrying six workmen excluding driver. If six persons travelling in the vehicle are assumed not to have increased any risk from the point of view of the insurance company on occurring of an accident, how could those added persons be said to have contributed to the causing of it. Admittedly, all the 11 persons in the truck were working as labourers on the quarry of the appellant, who is also owner of the truck. Merely because 4/5 labourers more than the agreed six labourers were taken in the truck, it cannot be said to be such fundamental breach that the owner should in all events be denied the indemnification. The breach of the insurance policy or the misuse of the vehicle may somewhat be irregular, but not illegal as it is not so fundamental in the nature so as to put an end to the contract. The aforesaid view of ours is also supported by the ratio of the Supreme Court cases more particularly, decided in B.V.Nagaraju v. Oriental Insurance Co.Ltd., 1996 ACJ 1178 (SC). The aforesaid view taken by us is also supported by the view taken in Dalbir Singh v. Krishna, 1990 ACJ 800 (P&H); Baldev Singh v. Vidya Devi, 1993 ACJ 938 (P&H); New India ::: Downloaded on - 09/06/2013 15:45:33 ::: 12 Assurance Co.Ltd. v. Lalaram, 1995 ACJ 847 (MP); Somti Bai v. Mishri Lal Chhoudhary, 1995 ACJ 1233 (MP); and Abdul Sattar Qureshi v.
Mehboob, 1987 ACJ 448 (P&H). In view of this, according to our opinion, the trial court was wrong in absolving respondent no.2, insurance company from its liability under the policy."
Relying on the above decision, this court once again in another decision reported in 2008 ACJ 2274 (United India Insurance Co.Ltd. ..vs.. Vimal Narayanrao Nandanwar and others) held as follows -
"The facts of that case are almost identical with the case at hand. In the reported decision the truck was being used to carry crushed stone and was carrying coolies exceeding six in number. In the instant case also the tractor was being used for the construction work and coolies were being carried in it. In view of the observations of this court, it has to be held that breach of condition of policy is not so fundamental in nature as to put an end to the contract. This plea, therefore, is of no avail to the appellant insurance company."::: Downloaded on - 09/06/2013 15:45:33 ::: 13
Thus, it is very clear from the above decisions that such a breach is not a fundamental breach putting an end to the contract. There are only six claimants/six coolies covered by the policy of insurance. The Insurance Company has to meet liability of only six persons. Had, therefore, the claim been laid by seven or more persons, Insurance Company could certainly avoid the claim in respect of those persons or those claims which are in excess of six. The learned Judge of the Tribunal has observed as follows -
"Thus, there has been substantial increase in the liability for which there was no contract between the Insurance Company and respondent no.1. It cannot be said that the Insurance Co. should be liable to pay for 6 persons and the truck owner should pay for the remaining two. It would be whimsical and arbitrary to direct that Insurance Co. should pay to the particular claimants and not to the others. When there has been clear breach of the terms of Insurance Policy, whole of the contract would be put to an end and Insurance Co. would be absolved from meeting the liability under the contract of Insurance. In view of these facts, respectfully it is submitted that the ::: Downloaded on - 09/06/2013 15:45:33 ::: 14 authority of the Bombay High Court in the case of Shivraj ..vs.. Shevanta will not help respondent no.1 in the present case."
Thus, according to the learned judge, it is difficult for the court to decide, which claim should be decreed against the Insurance Company and which should not, if there are more claimants than the number of persons insured. The Supreme Court had an occasion to deal with the similar situation in a case reported in AIR 2007 SC 2870 (National Insurance Co.Ltd. vs. Anjana Shyam and ors.). The Supreme Court observes as under -
15.. . . . . The High Court has considered only the aspect whether by overloading the vehicle, the owner had put the vehicle to a use not allowed by the permit under which the vehicle is used. This aspect is different from the aspect of the determining the extent of the liability of the insurance company in respect of the passengers of a stage carriage insured in terms of Section 147(1)(b) (ii) of the Act. We are of the view that the insurance company can be made liable only in respect of the number of passengers for whom insurance can be taken under the Act and for whom insurance has been taken as a fact and not in respect of the other passengers involved in the ::: Downloaded on - 09/06/2013 15:45:33 ::: 15 accident in a case of overloading.
16. Then arises the question, how to determine the compensation payable or how to quantify the compensation since there is no means of ascertaining who out of the overloaded passengers constitute the passengers covered by the insurance policy as permitted to be carried by the permit itself. As this court has indicated, the purpose of the Act is to bring benefit to the third parties who are either injured or dead in an accident. It serves a social purpose. Keeping that in mind, we think that the practical and proper course would be to hold that the insurance company, in such a case, would be bound to cover the higher of the various awards and will be compelled to deposit the higher of the amounts of compensation awarded to the extent of the number of passengers covered by the insurance policy. Illustratively, we may put it like this. In the case on hand, 42 passengers were the permitted passengers and they are the once who have been insured by the insurance company. 90 persons have either died or got injured in the accident. Awards have been passed for varied sums. The Tribunal should take into account, the higher of the 42 awards made, add them up and direct the insurance ::: Downloaded on - 09/06/2013 15:45:33 ::: 16 company to deposit that limp sum. Thus, the liability of the insurance company would be to pay the compensation awarded to 42 out of the 90 passengers. It is to ensure that the maximum benefit is derived by the insurance taken for the passengers of the vehicle, that we hold that the 42 awards to be satisfied by the insurance company would be the 42 awards in the descending order starting from the highest of the awards. In other words, the higher of the 42 awards will be taken into account and it would be the sum total of those higher 42 awards that would be the amount that the insurance company would be liable to deposit. It will be for the "Tribunal thereafter to direct distribution of the money so deposited by the insurance company proportionately to all the claimants, here all the 90, and leave all the claimants to recover the balance from the owner of the vehicle. In such cases, it will be necessary for the Tribunal, even at the initial stage, to make appropriate orders to ensure that the amount could be recovered from the owner by ordering attachment or by passing other restrictive orders against the owner so as to ensure the satisfaction in full of the awards that may be passed ultimately.
::: Downloaded on - 09/06/2013 15:45:33 ::: 1711. It is thus clear that the Insurance Company is bound to satisfy the highest six claims. In this case, there are only six claims now and Insurance Company would very much be bound to reimburse the insured in respect of these six claims.
12. Shri Khanjode, the learned counsel for the Insurance Company, has placed a reliance on the decision of Karnataka High Court in 1999 ACJ 1402 United India Insurance Co.Ltd. ..vs.. Thimmanna and ors.). The decision, in fact, is not very different from the decision of the Supreme Court cited above. In this case, the court held that though 81 passengers were travelling, the liability of Insurance Company was limited to 38 only as per policy. Thus, it is not that none of the passengers was paid the claim because 81 passengers in breach of permit were carried. Yet another decision reported in 2009 (4) TAC 382 ( National Insurance Co.Ltd. vs. Parvathneni and anr.) was placed before me. The decision has no bearing on the question before me. In the said decision the Supreme Court holds that the Insurance Company cannot be directed to satisfy the award and then recover the amount from the owner where Insurance Company is not at all liable.
::: Downloaded on - 09/06/2013 15:45:33 ::: 18In the instant case, six coolies were carried and they were covered. There are only six claims. Six persons in any case were covered by the policy of Insurance. To conclude, I find that in this case there was in fact no breach of contract, in as much as, policy showing that it would amount to breach if more passengers are carried, is not placed on record. If at all there is any breach, it is not so fundamental breach as to put an end to the contract totally. The Insurance Company is bound to satisfy the highest awards of six claimants as six were insured. We have seen that there are only six claimants now.
The other claimants whose claims were rejected by the Tribunal have not preferred any appeal as stated by Shri Sirpurkar. In the circumstances, these six appeals have to be allowed. They are so allowed. The award of Tribunal is modified to the extent that the owner/appellant and the Insurance Company shall jointly and severally pay the amount of compensation to the claimants with 7.5% interest from date of order of Tribunal. No order as to costs.
JUDGE.
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