United India Insurance Co. Ltd. vs Kuruvalakshmi 3 Ots
2023 Latest Caselaw 592 AP

           HON'BLE SRI JUSTICE T. MALLIKARJUNA RAO

                         MACMA No.810 OF 2012

JUDGMENT:

1. Aggrieved by the order dated 17.01.2012 in M.V.O.P. No.73 of

2010 passed by the Chairman, Motor Accidents Claims Tribunal-

cum- II Additional District Judge, Kurnool at Adoni (for short

'the Tribunal'), the 2nd respondent/United Indian Insurance

Company Limited, Kurnool, has preferred this appeal fastening

liability on it.

2. The parties will be referred to as arrayed in the M.V.O.P. for

convenience.

3. The claimants filed the claim application under Sections 140 and

166 of the Motor Vehicles Act requesting to award compensation

of Rs.3,00,000/- for causing the death of Kuruva Hanumanthu

(hereinafter referred to as 'deceased'), who died in the Motor

Vehicle Accident that occurred on 21.06.2004.

4. The claimant's case is on 21.06.2004, after loading the sand in

the tractor and trailer bearing Nos.AP-21-V-3698 and AP-21-B-

0368 (hereinafter referred to as 'the offending vehicle') of the 1 st

respondent, which is insured with the 2nd respondent; the driver

of the offending vehicle drove it in a rash and negligent manner,

MACMA_810_2012

applied sudden breaks to avert the cattle coming across the road

at Sambagallu village. As a result, the offending vehicle turned

turtle and fell on its right side. Due to this, the deceased and

Golla Chinna Purushotham, who was on the sand in the

offending vehicle, the offending vehicle fell on the deceased, and

the deceased received grievous injuries to his neck and all over

the body. While the deceased was being shifted to a Government

hospital, he succumbed to the injuries.

5. The 1st respondent remained ex parte.

6. The 2nd respondent filed counter-denying the allegations in the

petition, including the age, income of the deceased and the

manner of the accident. The offending vehicle was not insured by

the 2nd respondent. The offending vehicle's driver did not have a

valid driving licence at the time of the accident. The accident

occurred due to the careless and negligent attitude of the

deceased only. At the time of the accident, the deceased was

travelling in the offending vehicle by sitting on the sand, which

was loaded in the offending vehicle, which clearly shows his

negligence. The offending vehicle is used against the terms and

conditions of the policy and M.V.Act. The compensation claimed

is highly excessive.

MACMA_810_2012

7. Based on the pleadings, the Tribunal has formulated relevant

issues. On behalf of the claimants, PWs.1 to 4 got examined and

marked Exs.A.1 to A.5. On behalf of the 2nd respondent, RW.1

got examined and marked Ex.B1 copy of the policy with consent.

8. After evaluating the evidence on record, the Tribunal held that

the accident occurred due to the rash and negligent driving of

the offending vehicle's driver. The deceased died due to injuries

sustained in the accident. The said finding of the Tribunal is not

dispute, it attained finality. As the facts relating to the accident

need not be referred and discussed. The Tribunal granted a

compensation amount of Rs.4,50,500/- with proportionate

interest, costs @ 7.5% p.a., from the date of petition till the date

of realization against the 1st respondent. Still, the Tribunal

directed the 2nd respondent to pay the entire compensation

amount and later recover the same from the 1st respondent.

9. Learned counsel for the respondents supported the Tribunal's

findings and observations.

10. Now the point for determination is,

Whether the Tribunal erred in directing the 2nd respondent/insurance company to pay the compensation amount and recover the same from the 1st respondent/owner despite holding that the 2nd

MACMA_810_2012

respondent/insurance company is not liable to pay compensation?

Point :

11. From the reading of the grounds of appeal and submissions

made on behalf of either side, it can be seen that the following

findings are not disputed by either the insurance company or

claimants.

a. The deceased and PW.2, who loaded sand in the offending

tractor-trailer, travelled in the tractor to go to Adoni to

purchase items in the sand. While they were going in the

offending vehicle, the accident occurred due to the rash

and negligent driving of the offending vehicle's driver; the

deceased died due to injuries sustained injuries in the

accident.

b. The offending vehicle was validly insured with the 2nd

respondent at the time of the accident, and insurance was

in force on the date of the accident.

c. The quantum of compensation as awarded by the Tribunal

is not disputed by the insurance company despite the filing

of the appeal. The claimants have also not questioned the

quantum of compensation as awarded by the Tribunal.

MACMA_810_2012

12. As seen from the record, the copy of the insurance policy is

marked as Ex.B1, and the premium details collected by the

insurance company as follows ;

    B: T.P-Basic                                   3,280.00

    ADD: Premium for Trailer                        510.00

    Compulsory PA to Owner-Driver
    Amount 2,00,000                                 100.00

    WC to employee 4                                100.00

13. It shows the limit of liability as follows ;

"Limit of the amount of the company's liability under

Section II.1(ii) in respect of any claim or series of claims

arising out of one even up to Rs.7,50,000/-".

14. Based on the premium collected for W.C. to employee 4, it is

contended on behalf of the claimants/respondents that the

insurance company's liability is extended to four workers. Having

collected the premium amount, it is not open to the insurance

company to contend that it has no liability to pay the

compensation amount to the deceased, who proceeded in the

offending vehicle at the time of the accident. It is the appellant's

submission that the Tribunal, on appreciation of the evidence on

record, has found that the deceased proceeded in the tractor-

trailer after unloading the sand to go to sandy to purchase items.

MACMA_810_2012

As the claimants did not question the said finding, it is not open

to contend that the deceased proceeded in the offending vehicle

as a worker.

15. The learned counsel appearing on behalf of the appellant relied

on a decision between Branch Manager, United India

Insurance Company Limited, Kamareddy, Nizamabad District

Vs. Kondakotla Saroja and others 1 , in support of his

contention that when no extra premium is paid to cover

passengers who travelled in the offending vehicle, the insurance

company cannot be held liable to pay compensation for the death

of passengers who travelled in an insured vehicle.

A careful reading of the said judgment shows that Ex.A5

policy therein is only an act policy. No extra premium has been

paid to cover the passengers who travelled in the jeep.

Whereas, coming to the case facts, Ex.B1 policy shows that

it collected a premium amount to cover the risk of four

employees.

16. The learned counsel for appearing for the appellant relied on a

decision between Yallwwa and others Vs. National Insurance

2008(5) ALD 288 (D.B.)

MACMA_810_2012

Company Limited and another 2 , wherein it held that "the

insurance company would not be liable in cases where

passengers of vehicle are not third parties".

17. Simply because after the completion of the unloading of the sand

from the offending vehicle, the deceased and others proceeded in

the said vehicle to attend to their work, can they be considered

employees or not? This Court views that they cannot be branded

as gratuitous passengers.

18. However, this Court is inclined to consider treating the deceased

as gratuitous passengers.

19. The learned counsel for the respondents contends that the

Hon'ble Apex Court held that the discretional power to give

appropriate relief under Articles 141 and 142 of the Constitution

of India only for the Apex Court, but it is not available even for

the Tribunals and High Courts.

20. In a decision between Amritlal Sood vs Kaushalya Devi

Thakar3 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

2008 (1) ALD 117 (S.C.)

(1998) 3 SCC 744

MACMA_810_2012

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.

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

National Insurance Co. Ltd. Vs Baljit Kaur and Others 4, 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, and there is a breach

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

vehicle. Therefore, the owner of the vehicle was held liable to

satisfy the decree. However, in paragraph No. 21, the Court was

of the opinion that the interest of justice would be sub-served if

the Insurance Company was directed to satisfy the award in

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

same from the owner of the vehicle. The Court also observed that,

for such recovery, it would not be necessary for the insurer to file

(2004) 2 S.C.C. 1

MACMA_810_2012

a separate suit. Still, it may initiate a proceeding before the

executing Court as if the dispute between the insurer and the

insured was also determined by the Tribunal and the issue was

decided against the owner and in favour of the insurer.

22. In a decision between National Insurance Co.Ltd., V. Anjana

Shyam5.C.)

23. 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 or directed to

be insured by the statute and actually covered by the contract.

An insurance company can be made liable only in respect of the

number of passengers for whom insurance can be taken under

the Act and not for 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

2007 CJ 2129 (S

MACMA_810_2012

number of passengers covered by insurance policy".

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

India Insurance Co.Ltd., v. K.M.Poonam 6 , the Hon'ble Apex

Court reiterated the relevant provisions of the Motor Vehicles Act

and, after taking note of its various earlier decisions, including

Baljit Kaur (supra) and Anjana Shyam (supra), has resolved 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 the

vehicle covered six occupants of the vehicle n question, including

the driver, the liability of the insurer would be confined to six

persons only, notwithstanding the larger number of persons

carried in the vehicle. A 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".

2011 ACJ 917 (S.C.)

MACMA_810_2012

25. In a decision Shivaraj vs Rajendra 7 , the Apex Court, in the

following facts of the case, held that

".....the High Court, however, found in favour of respondent No.2 (insurer) that the appellant travelled in the tractor as a passenger who was in breach of the policy condition, for the tractor was insured for agriculture purposes and not for carrying goods. The evidence on record unambiguously pointed out that neither was any trailer insured nor was any trailer attached to the tractor. Thus, it would follow that the appellant travelled in the tractor as a passenger, even though the tractor could accommodate only one person, namely the driver. As a result, the Insurance Company (respondent No.2) was not liable for the loss or injuries suffered by the appellant or to indemnify the owner of the tractor. In our opinion, the conclusion reached by the High Court, in our opinion, is unexceptionable in the present case.

.....At the same time, however, in the facts of the present case, the High Court ought to have directed the Insurance Company to pay the compensation amount to the claimant (appellant) with the liberty to recover the same from the tractor owner, in view of the consistent view taken in that regard by this Court in National Insurance Co. Ltd. Vs Swarna Singh & Others 2004 3 SCC 297 1, Mangla Ram Vs. Oriental Insurance Co. Ltd. 2018 5 SCC 656, Rani & Ors. Vs.

2018 Law Suit (SC) 853

MACMA_810_2012

National Insurance Co. Ltd. And others 2018 9 Scale 310 including Manuara Khatun and Others Vs. Rajesh Kumar Singh And Others. 2017 4 SCC 796. In other words, the High Court should have partly allowed the appeal preferred by respondent No.2. The appellant may, therefore, succeed in getting relief of direction to respondent No.2 Insurance Company to pay the compensation amount to the appellant with the liberty to recover the same from the tractor owner".

26. In Shamanna and another Vs. The Divisional Manager

The Oriental Insurance Co. Ltd. and Ors.8, the Apex 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. Parvathneni and anoth-

er.9 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 compen-

sation amount even though the insurance company has no

liability to pay. In the Parvathneni case, the Supreme Court

pointed out that Article 142 of the Constitution of India does

Civil Appeal No.8144 of 2008

(2009) 8 SCC 785

MACMA_810_2012

not cover such types of cases and that if the insurance com-

pany has no liability to pay at all, then it cannot be com-

pelled by order of the Court in the exercise of its jurisdiction

under Article 142 of the Constitution of India to pay the

compensation amount and later on recover it from the owner

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 ap-

propriate case. Since the reference to the larger Bench in the

Parvathneni case has been disposed of by keeping the ques-

tions of law open to be decided in an appropriate case, pre-

sently, the decision in the Swaran Singh case followed in

Laxmi Narain Dhut and other cases hold the field. The

award passed by the Tribunal directing the insurance com-

pany to pay the compensation amount awarded to the clai-

mants and, after that, recover the same from the owner of

the vehicle in question is per 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 recover from the owner of the vehicle.

MACMA_810_2012

The impugned judgment of the High Court exonerating the

insurance company from its liability and directing the clai-

mants to recover the compensation from the owner of the

vehicle is set aside, and the award passed by the Tribunal is

restored".

27. In a decision between Manuara Khatun and others Vs. Rajesh

Kr. Singh and others10, it is a case where the Tribunal further

held that all the passengers, including the two deceased, were

travelling in Tata Sumo for hire and hence they 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 said facts of the case, the

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

discussion, we are of the view that the direction to United India

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

of the offending vehicle which was found involved in causing an

accident due to negligence of its driver needs to be issued

directing them (United India Insurance Company-respondent

No.3) to first pay the awarded sum to the appellants (claimants)

and then to recover the paid awarded sum from the owner of the

2017 (2) A.L.D. 65 (S.C.)

MACMA_810_2012

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".

28. By following the principles laid down in the said decisions, this

Court views that even if assumed that the deceased travelled in

the offending vehicle as gratuitous passengers, the direction

given by the Tribunal to pay and recover cannot be found fault

with.

29. As seen from the Ex.B1 policy, the owner of the offending vehicle

paid an additional premium to cover the liability of four

employees. On the other hand, the policy issued under Section

147 of the Motor Vehicles Act is statutory and also called an Act

policy. The insurer's liability under this policy is restricted to

indemnify the insured in respect of the claim made by the third

parties and the owner of the goods or his authorized

representative who travels in the goods vehicle along with the

goods.

30. According to my opinion, even a worker who travels in the

vehicle to load or unload sand may be considered as his

authorized representative of the owner of the goods travelling in

the offending vehicle as a third party. On that ground, the

MACMA_810_2012

Insurance Company is liable to pay compensation, as a statutory

liability, to the third party who was travelling as a worker in the

offending vehicle. Being his authorized representative of owner

carried in the vehicle. So, on that ground, the insurance

company cannot deny the liability of workers travelling in the

offending vehicle at the time of the accident.

31. Since the evidence on record shows that the deceased was

proceeding in the offending vehicle, though 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

compensation from the offending vehicle's owner, as there is no

seating provided to worker/employee in the trailer.

32. In the light of the law laid down by the Apex Court and High

Court, this Court finds that the contention raised by the

insurance company that it cannot be fastened with the liability

by paying the compensation to the respondents and recovering

the same from the owner of the offending vehicle is not

sustainable.

33. Given the discussion, as mentioned earlier, I do not find any

substance in the appeal, and I do not see any reason to interfere

with the impugned order in the present appeal.

MACMA_810_2012

34. Accordingly, the appeal, devoid of merits, is dismissed without

costs by confirming the order dt.17.01.2012 passed by the

Tribunal in MVOP.No.73 of 2010.

35. Miscellaneous petitions pending, if any, in this appeal shall

stand closed.

------------------------------------- T. MALLIKARJUNA RAO, J Dt.03.02.2023 KGM/SAK