The Oriental Insurance Company ... vs Palla Padmanabham
2022 Latest Caselaw 7597 AP

     IN THE HIGH COURT OF ANDHRA PRADESH, AMARAVATHI

                                ****
                   M.A.C.M.A.No.3415 of 2005


Between:

The Oriental Insurance Company Limited,
Represented by its Divisional Manager,
Visakhapatnam.                                     ... Appellant
            And
1.   Palla Padmanabham, S/o.Appala Naidu,
     Aged about 23 years, Lorry Driver,
     R/o.Sowbhagyapuram Agraharam,
     Pendurti Mandal, Visakhapatnam District.
2.   V.Srinivasa Rao, S/o.Venkateswara Rao,
     Aged about 33 years, Driver, R/o.D.No.1-7-3,
     Vidhyadharapuram, Vijayawada.
3.   Chintalapati Padmaja,W/o.Ramakrishnaraju,
     Aged about 38 years, Owner of the lorry,
     R/o.D.No.4-128, Hanuman Junction,
     Bapulapadu Mandal, Krishna District.
                                                  ... Respondents

DATE OF JUDGMENT PRONOUNCED: 11-10-2022


SUBMITTED FOR APPROVAL:

     THE HON'BLE SRI JUSTICE DUPPALA VENKATA RAMANA

1.     Whether Reporters of Local Newspapers
       may be allowed to see the judgment?          No

2.     Whether the copies of judgment may be
       marked to Law Reporters / Journals?          Yes

3.     Whether His Lordship wish to
       see the fair copy of the Judgment?           Yes



                                  DUPPALA VENKATA RAMANA, J
                                  2



  * THE HON'BLE SRI JUSTICE DUPPALA VENKATA RAMANA

                    + M.A.C.M.A.No.3415 of 2005

% 11-10-2022

Between:
The Oriental Insurance Company Limited,
Represented by its Divisional Manager,
Visakhapatnam.                                      ... Appellant
            And
1.   Palla Padmanabham, S/o.Appala Naidu,
     Aged about 23 years, Lorry Driver,
     R/o.Sowbhagyapuram Agraharam,
     Pendurti Mandal, Visakhapatnam District.
2.   V.Srinivasa Rao, S/o.Venkateswara Rao,
     Aged about 33 years, Driver, R/o.D.No.1-7-3,
     Vidhyadharapuram, Vijayawada.
3.   Chintalapati Padmaja,W/o.Ramakrishnaraju,
     Aged about 38 years, Owner of the lorry,
     R/o.D.No.4-128, Hanuman Junction,
     Bapulapadu Mandal, Krishna District.         ... Respondents

! Counsel for Appellant              : K.Ashok Ramarao

^ Counsel for 1st Respondent         : Jayanti S.C.Sekhar

< Gist:

> Head Note:

? Cases referred:

      1) (2004) 2 SCC 1

      2) 2004 (2) ALD 775

      3) (2004) 2 SCC 1

      4) (2001) 4 SCC 342

      5) (2003) 3 SCC 338

      6) (2018) 9 SCC 650

      7) (2021) 6 SCC 512

This Court made the following:
                                    3



 HON'BLE SRI JUSTICE DUPPALA VENKATA RAMANA
                 M.A.C.M.A.No.3415 of 2005
JUDGMENT:

This appeal under Section 173 of Motor Vehicles Act, 1988

(for short „M.V.Act‟) has been filed by the Oriental Insurance

Company Limited challenging the judgment and award

dt.31.08.2005 delivered by the Motor Accidents Claims Tribunal-

cum-District Judge, Vizianagaram in M.V.O.P.691 of 2002 granting

compensation of a sum of Rs.78,000/- along with interest @ 9%

per annum thereon from the date of presentation of the claim till

the date of realization of the amount, to the claimant/petitioner on

account of the injuries sustained by the claimant in the road

accident occurred on 25.05.2002 at Nathavalasa, Vizianagaram

District.

2. For the sake of convenience, the parties are referred to as

they are arrayed before the Motor Accidents Claims Tribunal

(hereinafter referred to as "the Tribunal").

3. The factual context of the case is as under:

(a) On 25.05.2002 at about 10.30 p.m., the petitioner boarded a

lorry bearing registration No.AP 16 X 2697 at Pendurthi Village to

go to Palasa. On the way when the lorry reached a place near

Nathavalasa, the 1st respondent/driver drove the lorry at a high

speed in a rash and negligent manner and dashed against the

stationed lorry from behind as a result, the petitioner sustained

injuries on his right leg, right knee, left leg and all parts of his

body. He was admitted in Government Hospital, Vizianagaram and

was treated as inpatient for three days. Later he took treatment in

a private hospital at Pendurthi and he suffered permanent

disability and suffered loss of earnings. The matter was reported to

the Police alleging that the accident took place as a result of rash

and negligent driving of the said lorry and based on the F.I.R

lodged by the petitioner, a case in Cr.No.50 of 2002 was registered

under Section 337 IPC and after investigation of the case, charge

sheet was submitted against the accused driver of the lorry(1st

respondent) for having committed offence punishable under

Section 338 IPC. Petitioner filed application claiming compensation

of Rs.1,00,000/- before the Motor Accidents Claims Tribunal at

Vizianagaram on account of his injuries in the said road accident,

as mentioned below:

SPECIAL DAMAGES:

Compensation for treatment and For extra nourishment ..... Rs.10,000/-

GENERAL DAMAGES:

Compensation for pain and suffering And mental agony ..... Rs. 5,000/-

Compensation for loss of earnings, Future amenities and permanent disability .... Rs.85,000/-

--------------

                              Total             Rs.1,00,000/-
                                                  ---------------

(b) Respondents 1 and 2 did not contest the matter. The 3rd

respondent/Insurance Company filed written statement denying

the case of the petitioner. It is pleaded that the petitioner is put to

strict proof of the same that the 1st respondent held valid driving

licence to drive the lorry and that the vehicle had necessary permit

and vehicular documents and was duly insured with the 3rd

respondent at the time of accident. It is further pleaded that the

petitioner is also put to strict proof that there were no violations of

terms and conditions of the policy and permit. It is further pleaded

that the petitioner travelled in a lorry to go to Palasa and he was an

unauthorized and gratuitous passenger. The policy, if any, does

not cover the risk of such passenger. The petitioner is not entitled

to claim compensation and further pleaded that the compensation

claimed is high and excessive and the petition may be dismissed.

(c) In view of the pleadings of the parties, the Tribunal framed

the following issues:

(1) Whether the accident occurred due to rash and negligent driving of the driver of the lorry bearing No.AP 16 X 2697?

(2) Whether the petitioner is entitled to compensation? (3) Whether the respondents are jointly and severally liable to pay any compensation?

(4) To what relief?

(d) In order to establish the claim of the petitioner, P.Ws.1 and 2

were examined and Exs.A.1 to A.7 and X.1 & X.2 were marked on

behalf of the petitioner. R.W.1 was examined and Ex.B.1 was

marked on behalf of the 3rd respondent.

(e) On appreciation of evidence, the Tribunal awarded

compensation amount of Rs.78,000/- with interest @ 9% per

annum from the date of petition till the date of realization of the

amount recoverable by the petitioner from Respondents 1 to 3

jointly and severally, and the 3rd respondent/Insurance Company

shall satisfy the claim arising out of the award and recover from the

owner of the vehicle.

4. Being aggrieved and dissatisfied with the said judgment and

award, the present appeal has been preferred by the 3rd

respondent/Insurance Company and challenged the said award

mainly on the following grounds:

(i) The Tribunal erred in holding that the

appellant/insurance company has to pay the compensation

amount and recover the same from the owner of the vehicle.

(ii) The Tribunal found that the petitioner/claimant was

travelling as an unauthorized passenger in a goods vehicle(lorry) at

the time of accident. As such, there is clear breach of terms and

conditions of the policy.

(iii) The Tribunal should have relied and followed the

judgment of the Hon‟ble Supreme Court of India in the case of

National Insurance Company Limited Vs. Bommithi Subbayamma

reported in 2005 ACJ 721 (SC) and another decision in

M.V.Jayadevappa Vs. Oriental Fire and General Insurance

Company Limited reported in 2005 (2) TAC 5 (SC) and should have

directed the injured to recover the awarded amount from the owner

of the lorry instead of the appellant/Insurance Company.

(iv) The reasoning given by the Tribunal directing the

appellant/Insurance Company to pay the awarded compensation

amount to the petitioner is unsustainable.

(v) The compensation awarded by the Tribunal is

excessive and exorbitant.

(vi) The Tribunal erred in awarding interest @ 9% per

annum instead of 6% per annum.

(vii) It is further pleaded that the appellant may be

permitted to urge other grounds at the time of hearing of the

appeal.

5. In the course of arguments, learned counsel for the appellant

has contended that the compensation awarded by the Tribunal was

excessive. Further argued that the Tribunal erred in awarding

amount directing the Insurance Company to pay the amount to the

injured and recover the same from the owner of the offending

vehicle which is contrary to law, in view of the judgments referred

supra by the appellant. Therefore, the award passed by the

Tribunal needs to be set aside and the appeal has to be allowed.

6. Learned counsel for the claimant/1st respondent, while

refuting the said submissions on the other hand contends that the

order of the learned Tribunal is well reasoned; that the

compensation awarded by the Tribunal was absolutely justified

which warrants no interference in the appeal. It is further argued

that the Motor Accidents Claims Tribunal while directing the

payment of compensation by the Insurance Company, and same

can be recovered from the owner of the vehicle and the award of the

Tribunal is well reasoned and warrants no interference by this

Court.

7. This Court has considered the submissions of the learned

counsels representing the parties, perused and assessed the entire

evidence including the exhibited documents.

8. On a close scrutiny of the matter, the point for consideration

by this Court is,

"Whether the liability can be fastened on the Insurance

Company in respect of an unauthorized/gratuitous passenger

travelling in a goods vehicle and as to whether the award of the

Tribunal in directing the Insurance Company to pay the

compensation and to recover the same from the owner of the

offending vehicle, is sustainable?"

9. In view of the judgment of the Hon‟ble Supreme Court of

India in the case of National Insurance Company Vs. Baljit Kaur

and others1 the three-Judge Bench dealt with the provisions of

Motor Vehicles Act dealing with the aspects relating to the

passengers travelling in goods vehicles and the legal position with

reference to the amendments brought in by Motor Vehicles

(Amendment) Act, 1994, more particularly, Section 147(1)(b) held

that the effect of the provisions contained in Section 147 with

respect to persons other than the owner of the goods or his

authorized representative remains the same and although the

owner of the goods or his authorized representative would not be

covered by the policy of insurance in respect of a goods vehicle, it

was not the intention of the Legislature to provide for the liability of

the insurer with respect to passengers especially gratuitous

passengers, who were neither contemplated at the time the

contract of insurance was entered into, nor was any premium paid

to the extent of the benefit of insurance of such category of

persons.

10. It may be appropriate to mention here the judgment of this

High Court in United India Insurance Company Vs. Tam Tam

Venkat Reddy2 wherein the Insurance Company was directed to

pay the compensation, with a liberty to recover the same from the

insured by proving the breach of policy conditions. In the said

(2004) 2 SCC 1

2004 (2) ALD 775

decision while referring the decisions of the Hon‟ble Supreme Court

of India in National Insurance Company Vs. Baljit Kaur and

others3, New India Assurance Company Limited Vs. Kamla and

Others4 and United India Insurance Company Limited Vs.

Lehru and Others5 it was held that, the above referred judgments

are read together and the intention of the Apex Court is clear i.e.,

even if there is violation of the terms and conditions of the policy,

either by way of insured vehicle being driven by a driver not

possessing valid licence or the insured vehicle carrying gratuitous

passengers, or violation of the terms and conditions of the policy in

any other manner, the liability of the insurer to pay compensation

to the third party-injured, does not cease. At best, the insurer after

paying the compensation to the claimant/petitioner can later

recover the same from the insured by proving violation of policy

conditions.

11. In the light of the above discussion, the contention of the

Insurance Company that it is not liable to pay compensation as

there was violation of the terms and conditions of the policy,

cannot be sustained and the Insurance Company shall pay the

awarded compensation first to the claimant and if so chooses, can

(2004) 2 SCC 1

(2001) 4 SCC 342

(2003) 3 SCC 338

recover the same from the insured by proving the alleged violations

of the terms and conditions of the policy.

12. At this juncture, it is appropriate to mention here that while

laying down the legal position with regard to liability of the

Insurance Company visa-a-vis gratuitous passengers travelling in

goods vehicles, the Hon‟ble Supreme Court of India at Para 21 of

the judgment in Baljit Kaur‟s case held as follows:

"The upshot of the aforementioned discussion is that instead and in place of the insurer the owner of the vehicle shall be liable to satisfy the decree. The question, however, would be as to whether keeping in view the fact that the law was not clear so long such a direction would be fair and equitable. We do not think so. We, therefore, clarify the legal position which shall have prospective effect. The Tribunal as also the High Court had proceeded in terms of the decisions of this Court in Satpal Singh (supra). The said decision has been overruled only in Asha Rani (supra). We, therefore, are of the opinion that the interest of justice will be sub-served if the appellant herein is directed to satisfy the awarded amount in favour of the claimant if not already satisfied and recover the same from the owner of the vehicle. For the purpose of such recovery, it would not be necessary for the insurer to file a separate suit but it may initiate a proceeding before the executing Court as if the dispute between the insurer and the owner was the subject matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer". We have issued the aforementioned directions having regard to the scope and purport of Section 168 of the Motor Vehicle Act, 1988 in terms whereof it is not only entitled to determine the amount of claim as put forth by the claimant for recovery thereof from the insurer, owner or driver of the vehicle jointly or severally but also the dispute between

the insurer on the one hand and the owner or driver of the vehicle involved in the accident inasmuch as can be resolved by the Tribunal in such a proceeding".

13. Thus, it is clear that the Hon‟ble Supreme Court looking into

the facts and circumstances of the said case, disposed of the

matter directing the appellant-Insurance Company to satisfy the

awarded amount in favour of the claimant, if not already satisfied

and recover the same from the owner of the vehicle keeping in view

that the Law was not clear for so long with regard to the liability of

the insurer in respect of passengers travelling in goods vehicles.

14. It is also relevant to refer another decision of the Hon‟ble

Supreme Court of India in the case of Shamanna and Another Vs.

Divisional Manager, Oriental Insurance Company Limited and

Others6. The relevant para of the judgment may be extracted as

follows:

"Since the reference to the larger bench in Parvathneni case has been disposed of by keeping the questions of law open to be decided in an appropriate case, presently the decision in Swaran Singh case followed in Laxmi Narain Dhut and other cases hold the field. The award passed by the Tribunal directing the insurance company to pay the compensation amount awarded to the claimants and thereafter, recover the same from the owner of the vehicle in question, is in accordance with the judgment passed by this Court in Swaran Singh and Laxmi Narain Dhut cases. While so, in our view, the High Court ought not to have interfered with the award passed by

(2018) 9 SCC 650

the Tribunal directing the first respondent to pay and recover from the owner of the vehicle. The impugned judgment of the High Court exonerating the insurance company from its liability and directing the claimants to recover the compensation from the owner of the vehicle is set aside and the award passed by the Tribunal is restored".

15. In the light of the decision in Tam Tam Venkat Reddy supra,

it can be said that the Tribunal had rightly passed the award

directing the Insurance Company to pay the compensation with a

liberty to recover the same from the owner of the vehicle by straight

away filing an execution petition.

16. It is also appropriate to mention the decision of the Hon‟ble

Supreme Court of India in the case of Brahampal @ Sammay and

another Vs. National Insurance Company7, wherein it was held

as follows:

"The legislation intends to provide appropriate compensation for the victims and to protect their substantive rights, in pursuit of the same, the interpretation should not be as strict as commercial claims."

17. The Tribunal had scrutinized the evidence on record and the

documents and held that the accident occurred due to rash and

negligent driving of the lorry bearing registration No.AP 16 X 2697

by its driver and awarded compensation which is just and

(2021) 6 SCC 512

reasonable. The Tribunal also held that Respondents 1 to 3 are

jointly and severally liable to pay the compensation to the

petitioner and directed the 3rd respondent to pay the awarded

compensation first and recover the same from the owner of the

vehicle. Therefore, I am of the opinion that the petitioner may,

therefore, succeed in getting relief of direction to the appellant-

Insurance Company to pay the compensation amount with a liberty

to recover the same from the owner of the vehicle. In the present

case of nature, the injured was travelling in a goods lorry bearing

registration No. AP 16 X 2697 and this Court is of the view that the

benefit of the said decision referred above cannot be denied to the

claimant. Even though the insured vehicle carries gratuitous

passenger, the liability of the insurer to pay the compensation to

the claimant does not cease. The compensation awarded is a

meager sum of Rs.78,000/-. Keeping in view the said aspect and

that the Motor Vehicles Act is a beneficial legislation, this Court is

not inclined to set aside the award of the Tribunal in the facts and

circumstances of the case. This Court feels that it would not be

fair or equitable to drive the claimant who sustained injuries to

proceed against the owner of the vehicle.

18. Therefore, I hold that it is a fit case to direct the

appellant/Insurance Company to pay the award amount at first

and recover the same from the owner of the vehicle since,

admittedly policy was in force and claimant is a third party.

19. In these circumstances, I find no justification in the

arguments of the appellant/Insurance Company and therefore, I

find no illegality or infirmity in the order of the Tribunal and

warrants no interference.

20. In the result, I find no merits in the appeal, and the same is

accordingly dismissed by confirming the award passed by the

Tribunal in M.V.O.P.691 of 2002, dt. 31.08.2005. No costs in the

appeal.

As a sequel, miscellaneous applications pending, if any, shall

stand closed.

JUSTICE DUPPALA VENKATA RAMANA

Date: 11.10.2022

L.R.Copy to be marked.

Dinesh

HON'BLE SRI JUSTICE DUPPALA VENKATA RAMANA

M.A.C.M.A.No.3415 OF 2005

11.10.2022

Dinesh