K Nataraju vs The District Legal Services ...
2023 Latest Caselaw 4035 AP

     THE HON'BLE SRI JUSTICE CHEEKATI MANAVENDRANATH ROY
                                    AND
       THE HON'BLE SRI JUSTICE TARLADA RAJASEKHAR RAO

                    WRIT PETITION No.9951 of 2019


ORDER:- (Per Hon'ble Sri Justice Cheekati Manavendranath Roy)


       Challenging the legal validity of the award dated 04.04.2019

passed in P.L.A.C.No.374 of 2018 on the file of the Permanent Lok

Adalat for Public Utility Services, Kadapa, whereby the petitioner

was directed to pay a sum of Rs.3,27,000/- with interest accrued

thereon at the rate of 12% per annum towards damages and

repairs of the vehicle, the present writ petition has been filed.


2.     Heard    learned     counsel     for   the    petitioner   and    Sri

S.Lakshminarayana Reddy, learned Standing Counsel for 1st

respondent. None appeared for 2nd respondent.

3. The 2nd respondent is the owner of Mahendra Bolero Pickup

Transport Vehicle bearing No.AP 04 TW 4893. The said vehicle

was insured with the petitioner-United India Insurance Company

Limited as per policy bearing No.0509013117P109117078 issued

by the petitioner-Insurance Company, commencing from

27.09.2017 and it is valid up to 26.09.2018. During the

subsistence of the said policy, the said vehicle met with a road

accident on 30.09.2017. There was a damage caused to the

vehicle in the said accident and the 2nd respondent has effected

repairs to the said damaged vehicle. The Surveyor estimated the

cost of the repairs effected to the damaged vehicle at

Rs.3,27,000/-. Therefore, alleging that the 2nd respondent has

incurred a sum of Rs.3,27,000/- to effect repairs to the damaged

vehicle, he has claimed the said amount from the Insurance

Company in terms of the policy conditions.

4. The petitioner-Insurance Company repudiated the said

claim on the ground that the 2nd respondent has allowed one

Subba Narasaiah @ Penchalaiah to travel in the said vehicle, who

is an unauthorized passenger and as the 2nd respondent allowed

an unauthorized passenger to travel in the vehicle in violation of

the terms and conditions of the policy, the claim of the 2nd

respondent was repudiated by the Insurance Company.

5. Aggrieved by the same, the 2nd respondent has approached

the Permanent Lok Adalat, Kadapa and made a claim for refund of

the said sum of Rs.3,27,000/- with interest thereon in

P.L.A.C.No.374 of 2018.

6. In the written statement that was filed by the Insurance

Company, the same stand was taken stating that the vehicle in

question is a goods vehicle and a public carrier and contrary to

the terms of the policy, that the 2nd respondent has allowed an

unauthorized passenger to travel in the said goods vehicle and as

such, the Insurance Company is not liable to indemnify the owner

of the vehicle and repay the costs of the repairs effected to the

damaged vehicle.

7. The fact that the 2nd respondent is the owner of the said

vehicle in question and that the said vehicle was insured with the

petitioner-Insurance Company, is absolutely not in dispute.

Similarly, the fact that the said vehicle met with a road accident

on 30.09.2017 when the said policy was in force, is also not in

controversy. A case in Crime No.178 of 2017 was also registered

in Ontimitta Police Station in connection with the said accident.

The fact that the said vehicle was damaged in the said accident

and that the 2nd respondent got the said vehicle repaired and that

he has incurred a sum of Rs.3,27,000/- as estimated by the

Surveyor of the Insurance Company, is also not in controversy.

Therefore, the aforesaid material facts are all incontrovertible facts

in this lis.

8. Now the only ground on which the claim of the 2nd

respondent to indemnify the owner of the vehicle and to repay the

costs incurred by him to effect repairs to the damaged vehicle, was

repudiated by the Insurance Company is that contrary to the

terms of the policy, that the 2nd respondent has allowed an

unauthorized passenger to travel in the said goods vehicle and as

such, the Insurance Company is not liable to pay the sum claimed

by the 2nd respondent. The said contention is absolutely devoid of

any merit. If an unauthorized passenger claims any

compensation on account of the injuries, if any, sustained by him

in the said accident, then the said contention of the Insurance

Company holds good to repudiate the said claim of the third party.

But the Insurance Company cannot repudiate the claim of the

owner of the vehicle to recover the expenditure incurred by him to

effect repairs to the vehicle that was damaged in the accident.

9. The fact that the unauthorized passenger, who was allowed

to travel in the vehicle, has nothing to do with the accident or with

cause of the accident. When the policy covers the damage caused

to the vehicle and for recovery of costs of its repairs, the Insurance

Company is bound under law to pay the same to the 2nd

respondent. Therefore, the ground on which the Insurance

Company sought to repudiate the claim, is legally unsustainable.

There was absolutely no breach of contract or violation of the

terms of the policy insofar as the claim made by the 2nd

respondent-owner of the vehicle for recovery of the costs incurred

by him to effect repairs to the damaged vehicle.

10. In the judgments of the Apex Court cited by the Permanent

Lok Adalat in the case of Lakhmi Chand v. Reliance General

Insurance1, the legal position is made clear that when the terms

and conditions stipulated in the contract of Insurance are not

violated, that the Insurance Company cannot escape from its

liability unless there is a fundamental breach of contract resulting

in repudiation of contract.

11. It is relevant to note here that the unauthorized passenger,

who sustained injuries in the said accident, has claimed

compensation by way of filing claim petition in M.V.O.P.No.211 of

2018 on the file of learned I Additional District Judge, Kadapa

against the Insurance Company and the owner of the vehicle and

the same is pending. The Insurance Company can take the said

objection in the said claim petition filed by the unauthorized

passenger. But the Insurance Company cannot seek to avoid its

liability to pay the costs incurred by the 2nd respondent-owner of

the vehicle to effect repairs to the damaged vehicle on that ground.

12. The Permanent Lok Adalat, by the impugned order, has

therefore, rightly allowed the claim of the 2nd respondent directing

the Insurance Company to pay the said sum of Rs.3,27,000/- with

interest thereon. We absolutely see no legal flaw or infirmity in

(2016) 3 SCC 100

the impugned award. Therefore, the award is perfectly

sustainable under law and it calls for no interference in this writ

petition. But, as rightly contended by the learned counsel for the

Insurance Company, the interest that was allowed appears to be

on higher side. Even in regular Motor Vehicle Claims, as per the

settled law, interest @ only 7.5% is permissible on the

compensation amount. Therefore, we deem it appropriate to allow

the same rate of interest i.e. @ 7.5% on the sum of Rs.3,27,000/-.

Therefore, the 2nd respondent is entitled to interest only at the rate

of 7.5% per annum.

13. Resultantly, the Writ Petition is dismissed confirming the

order of the Permanent Lok Adalat, by modifying the rate of

interest as indicated above. There shall be no order as to costs.

Miscellaneous petitions, if any pending, in the Writ Petition,

shall stand closed.

______________________________________________ JUSTICE CHEEKATI MANAVENDRANATH ROY

______________________________________ JUSTICE TARLADA RAJASEKHAR RAO Date: 05.09.2023 ARR

THE HON'BLE SRI JUSTICE CHEEKATI MANAVENDRANATH ROY

AND

THE HON'BLE SRI JUSTICE TARLADA RAJASEKHAR RAO

WRIT PETITION No.9951 of 2019

Date: 05.09.2023

ARR