Andhra Pradesh High Court - Amravati

Shaik Ameenabee 3 Ors vs Pushadapu Koteswara Rao Anr on 3 February, 2023

Bench: T Mallikarjuna Rao

          HON'BLE SRI JUSTICE T MALLIKARJUNA RAO

                     MACMA.No.3335 OF 2012


JUDGMENT :

1. Aggrieved by the order dated 13.12.2005 in M.V.O.P. No.842 of

2000 passed by the Chairman, Motor Accidents Claims Tri-

bunal-cum-VI Additional District Judge (F.T.C.), Markapur (for

short "the tribunal"), the claimants preferred this appeal not

fastening the liability on the insurance company and also not

being satisfied with the quantum of compensation awarded by

the Tribunal.

2. For convenience's sake, the parties will hereinafter be referred

to as arrayed in the M.V.O.P.

3. It is a petition filed under Section 166 of the Motor Vehicles

Act, 1988 (for short 'M.V.Act') claiming compensation for

Rs.4,00,000/- for the death of Shaik Mahaboob Pera (hereinaf-

ter referred to as 'deceased').

4. It is not in dispute that the deceased is the husband of the

first claimant, the father of claimants 2 to 4.

5. The claimant's case is that on 26.04.1998 at about 02.00 PM,

the deceased and some others stayed at the Devarajugattu bus

stop to go to Markapur. At that time, the lorry bearing

No.AP12T5095 (hereinafter referred to as 'offending vehicle')

stopped there. All the persons, including the deceased,

boarded the lorry with the driver's permission. While the lorry

was going at high speed and reaching Gundlakamma bridge,

the driver lost control of the vehicle, went towards the left side

of the road, and turned turtle, as a result of which two per-

sons, including the deceased, died on the spot and some oth-

ers, received injuries. The accident occurred only due to the

rash and negligent driving of the driver of the lorry.

6. The 1st respondent is the owner, and the 2nd respondent is the

insurer of the offending vehicle. The 1st respondent is the re-

mained ex-parte.

7. The 2nd respondent filed a written statement contending that

the 2nd respondent does not admit the manner of the accident,

the age, or the income of the deceased at the time of the acci-

dent. The offending vehicle's driver did not have a valid driving

license to drive the lorry, the offending vehicle was not road

worth plying, and the deceased was a passenger in a goods

vehicle. As such, the 2nd respondent is not liable to pay the

compensation; the accident occurred due to negligence on the

part of the deceased; the compensation claimed is highly ex-

cessive.

8. Based on the pleadings, the Tribunal framed appropriate is-

sues. Before the Tribunal, on behalf of the claimants, PWs.1

and 2 were examined and marked Exs.A.1 to A.4, and 2 nd res-

pondent RW.1 got examined, marked Ex.B.1-policy.

9. After considering the evidence on record, the Tribunal held

that the accident had occurred due to rash and negligent driv-

ing of the offending vehicle's driver and the death of the de-

ceased was caused due to injuries sustained in the accident.

The Tribunal awarded compensation of Rs.1,83,000/- with in-

terest at 9% per annum from the date of petition till the date of

realization and proportionate costs against the 1st respondent.

The claim against the 2nd respondent is dismissed.

10. Heard the arguments of the learned counsel for both parties.

11. Learned counsel for appellants/claimants contends that they

are entitled to compensation even against the insurance com-

pany ; the insurance company cannot avoid its liability. There

is negligence on the part of the offending vehicle's driver, and

consequently, the owner and insurer are jointly and severally

liable; otherwise, the insurance company has to pay the clai-

mants, and thereafter it can recover from the owner. The Tri-

bunal, while assessing the compensation, should have seen

the loss of estate and loss of consortium. The deduction of

1/3rd of income towards incurring the expenses for the main-

tenance of the deceased varies from person to person; the

compensation awarded by the Tribunal is meagre.

12. Now the points for determination are

1. whether the Tribunal is justified in not fastening the liability on the insurance company and

2. whether the compensation amount awarded is just and reasonable.

13. There is no serious dispute concerning the manner of an accident.

The finding of the Tribunal that the accident occurred due to rash

and negligent driving of the offending vehicle's driver is also not

disputed. It is not in dispute that the deceased died while travelling

in the offending vehicle. It is evident by Ex.A1 - Copy of F.I.R.,

Ex.A2 - Copy of Charge Sheet, Ex.A3 inquest report and Ex.A4 copy

of postmortem certificate. Thus, it is unnecessary to narrate the

factual aspects of the accident in detail.

Point No.1 :

14. It is evident that the accident occurred due to the rash and

negligent driving of the offending vehicle's driver. It is not in dispute

that the accident occurred while the deceased was proceeding in the

offending vehicle. To establish the policy violation, the respondent

examined RW.1 - M.Yogayya, who deposed in his evidence that R2

insurance company issued an Ex.B1 policy to the offending vehicle

covering the risk of goods vehicle ; Ex.B1 policy was in force at the

time of the accident. As seen from the policy terms, an amount of

Rs.50/- is collected per L.L. to non-fare paying passengers as per

IMT.No.14. Nothing on record shows any amount collected from the

deceased for proceeding in the lorry.

15. Ex B1 policy shows the insurance company collected

premiums for un-named occupants. Thus, it is clear that the

owner paid an extra premium to cover the risk of non-fare

passengers. This Court views that the insurance company's

liability subsists when it has collected the extra premium

covering the risk of passengers. It is the contention of the

respondent/insurance company that the deceased was a

gratitious passenger. In a decision between Amritlal Sood vs

Kaushalya Devi Thakar1, the Hon'ble Apex Court held that

"the comprehensive policy issue covers the risk of gratuitous

passengers, i.e., the car's occupants. Therefore, it is clear from

the Act itself, the words of the policy and the decision in

Amritlal Sood's case that a comprehensive policy covers the

risk of gratuitous passengers to the extent of the liability

incurred.

16. A three-Judge Bench of the Hon'ble Apex Court in the case of

(1998) 3 SCC 744

National Insurance Co. Ltd. Vs Baljit Kaur and Others 2 held

that, considering the question of whether the insurance policy

in respect of goods vehicle is required to cover the gratuitous

passenger in view of the amendment to Section 147 of the Act.

The apex court, after considering all the previous decisions,

concluded that the Insurance Company was not liable as the

risk of an unauthorized passenger in a goods vehicle or

gratuitous passengers is not covered under the policy, there is

a breach of the condition of the policy in carrying a passenger

in a goods vehicle. Therefore, the vehicle's owner was held

liable to satisfy the decree. However, in paragraph 21, the

Court thought that the interest of justice would be sub-served

if the Insurance Company is directed to satisfy the award in

favour of the claimant, if not already satisfied, recover the

same from the vehicle's owner.

17. In a decision between National Insurance Co.Ltd., V.

Anjana Shyam3 The Hon'ble Apex court held that "it does not

mean that an insurer is not bound to pay amounts outside the

contract of insurance itself or in respect of persons not covered

by the contract at all. In other words, the insured is covered

only to the extent the passengers are permitted to be insured

(2004) 2 S.C.C. 1

2007 CJ 2129 (S.C.)

or directed to be insured by the statute, covered by the con-

tract. An insurance company can be made liable only in re-

spect 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 accident in a case of overloading. "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 insur-

ance policy".

18. The identical issue once again surfaced in the case of United

India Insurance Co.Ltd., v. K.M.Poonam 4, the Hon'ble Apex

Court reiterated the relevant provisions of the Motor Vehicles

Act and, after taking note of its various earlier decisions, in-

cluding Baljit Kaur (supra) and Anjana Shyam (supra), has re-

solved and settled the issue thus: "the liability of the insurer,

therefore, is confined to the number of persons covered by the

insurance policy and not beyond the same. In other words, as

in the present case, since the insurance policy of the owner of

2011 ACJ 917 (S.C.)

the vehicle covered six occupants of the vehicle in question,

including the driver, the liability of the insurer would be con-

fined to six persons only, notwithstanding the larger number

of persons carried in the vehicle. As the such excess number

of persons would have to be treated as third parties, but since

no premium had been paid in the policy for them, the insurer

would not be liable to make payment of the compensation

amount as far as they are concerned".

19. In a decision between Manuara Khatun and others Vs. Ra-

jesh Kr. Singh and others5, it is a case where the Tribunal

further held that all the passengers, including the two de-

ceased, were travelling in Tata Sumo for hire and hence were

held to be gratuitous passengers. Due to the said reason,

United India Insurance Company Ltd., the insurer of Tata

Sumo(offending vehicle) was not liable". In the facts of the case

the Hon'ble Apex Court held that "in view of the foregoing dis-

cussion, we are of the view that the direction to United India In-

surance Company (respondent No. 3) - they being the insurer of

the offending vehicle which was found involved in causing acci-

dent due to negligence of its driver needs to be issued directing

them (United India Insurance Company-respondent No.3) to first

2017 (2) ALD 65 (SC)

pay the awarded sum to the appellants (claimants) and then to

recover the paid awarded sum from the owner of the offending

vehicle (Tata Sumo)-respondent No.1 in execution proceedings

arising in this very case as per the law laid down in Para 26 of

Saju P. Paul's case quoted supra". Shamanna and another Vs.

The Divisional Manager The Oriental Insurance Co. Ltd. and

Ors. The Hon'ble Supreme Court held that "to deny the benefit

of pay and recover, what seems to have substantially weighed

with the High Court is the reference to larger Bench made by

the two-Judge Bench in National Insurance Co. Ltd. v. Par-

vathneni and another.6 which doubted the correctness of the

decisions in the exercise of jurisdiction under Article 142 of

the Constitution of India directing insurance companies to pay

the compensation amount even though the insurance compa-

ny has no liability to pay. In the Parvathneni case, the Su-

preme Court pointed out that Article 142 of the Constitution of

India does not cover such types of cases and that if the insur-

ance company has no liability to pay at all, then it cannot be

compelled by order of the Court in the exercise of its jurisdic-

tion under Article 142 of the Constitution of India to pay the

compensation amount and later on recover it from the owner

(2009) 8 SCC 785

of the vehicle. The above reference in the Parvathneni case was

disposed of on 17.09.2013 by the three-Judges Bench keeping

the questions of law open to be decided in an appropriate case.

Since the reference to the larger Bench in the Parvathneni

case has been disposed of by keeping the questions of law

open to be decided in an appropriate case, presently, the deci-

sion in the Swaran Singh case followed in Laxmi Narain Dhut

and other cases hold the field. The award passed by the Tri-

bunal directing the insurance company to pay the compensa-

tion amount awarded to the claimants and, thereafter, recover

the same from the owner of the vehicle in question is in accor-

dance 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 the Tribunal directing the first respondent to pay and re-

cover from the vehicle's owner. The impugned judgment of the

High Court exonerating the insurance company from its liabili-

ty 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".

20. Coming to the instant case, the vehicle owner paid an addi-

tional premium to cover the liability of non-fare-paying pas-

sengers as per IMT.No. 14. As already observed, no evidence is

placed by the insurance company to show that any amount

was collected from the deceased.

21. The terms of the contract bind the insurance company. In the

present case, the policy issued by the insurance company is a

package policy. As such, the insurance company is liable to

pay the compensation amount.

22. On the other hand, the policy issued under section 147 of the

Motor Vehicles Act is statutory and also called an Act policy.

For the foregoing reasons, this Court views that the Tribunal

has not perused correctly and considered the evidence on

record.

23. In view of the above materials, this Court views that the Tri-

bunal committed an error in not fastening the liability on the

insurance company, and it is not the case that the deceased

travelled in the lorry's cabin. However, it has not contributed

to the accident. This Court views that a direction can be given

to the insurance company to pay and recover the compensa-

tion from the offending vehicle owner.

Point No.2 :

24. According to the appellant's case, the deceased was aged 38

years by the date of the accident. The claimants have not

placed documentary evidence showing the exact age of the de-

ceased. In the absence of the same, by considering Ex.A4 -

Postrmotem Report, the Tribunal considered the age of the de-

ceased can safely be taken as 38 years by the date of the acci-

dent.

25. It is the claimant's case; the deceased worked as a Tailor and

earned Rs.3,000/-. But the Tribunal has taken the deceased's

earnings at Rs.50/- per day. In a case where there is no spe-

cific evidence as to the income of the deceased, the Apex Court

in Lakshmi Devi and others Vs. Mohammad Tabber 7held

that, in today's world, even common labour can earn Rs.100/-

per day. Based on the above principle, this Court can safely

assess the monthly earnings of the deceased at Rs.3,000/-.

But the Tribunal wrongly assessed the income of the deceased

notionally at Rs.1500/- per month.

26. In National Insurance Company Limited Vs. Pranay Sethi 8,

wherein it is held in case the deceased was self-employed, an

additional 40% of the established income should be the war-

rant where the deceased was below the age of 40 years. The

finding of the Tribunal that the deceased's age is 38 as of the

date of the accident is not disputed. Given the same, the an-

2008 ACJ 488

2017 ACJ 270

nual earnings of the deceased, including a future prospectus,

can be assessed at Rs.3,000/- + 40% = Rs.4,200/-.

27. Since the deceased was married and the claimants are depen-

dents upon the earnings of the deceased, and considering the

size of the dependents, i.e., 4 in number and view of the prin-

ciple laid down in Sarala Verma v. Delhi Transport Corpo-

ration9, this Court views that 1/4th of the earnings of the de-

ceased to be deducted towards personal and living expenses.

After the deduction of 1/4th of the earnings as observed above,

the monthly earnings, including the future prospectus of the

deceased after deducting personal expenses, would arrive at

Rs.3150/- (Rs.4,200 x ¼ = 1050/-).

28. To assess the loss of earnings, this Court relied on the

judgment of the Apex Court in Sarla Verma's case, in which

the Apex Court provided the table of the multiplier to be

considered for the claims made under Section 166 of the

Motor Vehicles Act. Hence, the multiplier for the persons

aged between 36 to 40 is provided as '15'. Therefore, the

loss of dependency can arrive at an amount of

Rs.5,67,000.00/- i.e., 3150 x 12x 15).

2009 ACJ 1298

29. In Magma General Ins. Co. Ltd., v. Nanu Ram 10, at para-

graph 8, the Apex Court held that:

"(8.6)...the Motor Vehicles Act is beneficial and welfare legislation. The Court is duty-bound and entitled to award 'just compensation, irrespective of whether any plea on that behalf was raised by the claimant.

(8.7) A Constitution Bench of this Court in Pranay Sethi, 2017 ACJ 2700 (S.C.), dealt with the various heads under which compensation is to be awarded in a death case. One of these heads is the loss of consortium.

In legal parlance, 'consortium' is a compendious term which encompasses 'spousal consortium', parental consortium', and filial consortium. The right to consortium would include the company, care, help, comfort, guidance, solace and affection of the deceased, which is a loss to his family. With respect to a spouse, it would include sexual relations with the deceased spouse (Rajesh v. Rajbir Singh 2013 ACJ 1403 (S.C.).

The parental consortium is granted to the child upon the premature death of a parent, for loss of 'parental aid, protection, affection, society, discipline, guidance and training.

The filial consortium is the right of the parents to compensate in the case of the accidental death of a child. An accident leading to the death of a child causes great shock and agony to the parents and family of the deceased. The greatest agony for a parent is to lose their child during their lifetime. Children are valued for their love, affection, companionship, and role in the family unit."

30. The judgment in Pranay Sethi's case was rendered in

the year 2017. Therefore, the claimants are entitled to

2018 ACJ 2782

a 10% enhancement of conventional heads. In all, the

claimants are entitled to the compensation as detailed

below:

Towards loss of dependency Rs. 5,67,000/-

                   Towards funeral expenses               Rs.     16,500/-
                   Loss of Estate                         Rs.     16,500/-
                   spousal consortium                     Rs.     44,000/-
                   Parental consortium                    Rs. 1,32,000/-
                                                                          (44,000x3)
                                                          ---------------------
                               Total:                      Rs. 7,76,000/-
                                                          ----------------------

31. In Laxman @ Laxman Mourya v. Divisional Manager,

Oriental Insurance Company Limited and another 11 the Apex

Court while referring to Nagappa v. Gurudayal Singh 12 held as

under:

"It is true that in the petition filed by him under Section 166 of the Act, the appellant had claimed compensation of Rs.5,00,000/- only, but as held in Nagappa v. Gurudayal Singh (2003) 2 SCC 274, in the absence of any bar in the Act, the Tribunal and for that any competent Court is entitled to award higher compensation to the victim of an accident."

32. In Ramla vs National Insurance Co. Ltd.,13 the Apex Court

held no restriction to award compensation exceeding the

amount claimed. As such, given the principle laid down by the

Apex Court, the claimants are entitled to an amount of

(2011) 10 SCC 756

2003 A.C.J. 12 (SC) 274 13CIVIL APPEAL No.11495 OF 2018

Rs.7,76,000/- exceeding the claim amount. However, the

claimants shall pay the requisite court fee over and above the

compensation awarded.

33. Following the principles laid down by the Apex Court in a cate-

na of judgments, this Court can safely conclude that the clai-

mants are entitled to get more than what has been claimed.

Further, the Motor Vehicles Act is a beneficial piece of legisla-

tion where the interest of the claimants is a paramount consid-

eration. The Courts should always endeavour to extend the

benefit to the claimants to a just and reasonable extent.

34. As a result, the appeal is allowed without costs, enhancing the

compensation from an amount of Rs.1,83,000/- to

Rs.7,76,000/- against the 2nd respondent, with the same rate

of interest awarded by the Tribunal, i.e., at 9% per annum. The

claimants are directed to pay the requisite court fee on en-

hanced compensation amount over and above the compen-

sation amount claimed.

35. In the facts and circumstances of the case by directing the 2nd

respondent/insurance company is directed to pay the compen-

sation as awarded along with interest, thereon to the claimants

at the first instance, and thereafter it shall recover the same

from the owner of the offending vehicle without initiating any