New India Assurance Co. Ltd. vs Jayashree And Ors.
2005 Latest Caselaw 12 Bom

JUDGMENT

P.B. Gaikwad, J.

1. New India Assurance Co. Ltd., being dissatisfied with the judgment and the award dated 21.3.1998 passed by the Member, Motor Accidents Claims Tribunal, Ahmednagar, in M.A.C. Application No. 553 of 1992, filed the present appeal.

2. The facts in nutshell, leading to the present appeal, are that:

The legal representatives of deceased Vasant Shelar had filed an application for compensation before the Motor Accidents Claims Tribunal, Ahmednagar, claiming compensation of Rs. 3,00,000 on account of death of Vasant Baburao Shelar in motor accident which took place on 13.5.1992 at about 7 or 7.30 p.m. in front of 'vasti' of one Vijay Abhawe, near village Jeur Bam-bhari on Nagar-Manmad Road. Claimants, while giving particulars in respect of the accident, manner in which it took place, vehicle involved in the accident, age and income of the deceased, their relationship with the deceased, made it clear that the claimant No. 1 is the widow of deceased Vasant, claimant No. 2 was the father of deceased, who died during the pendency of appeal, and claimant No. 3 is the mother of deceased. It was further claimed that Vasant was aged about 29 years at the time of the accident. His monthly income was approximately Rs. 4,500. He was serving with National Printing Press, Curny Road, Mumbai. So far as accident, manner in which it took place and the vehicle involved in the said accident are concerned, it was contended that the vehicle involved in the accident is a Swaraj Mazda Tempo bearing registration No. MWA 7037. The said vehicle is owned by Ashok Dattatraya Dandawate, original opponent No. 1 and at the relevant time, it was driven by Lax-man Baburao Kolhe, opponent No. 2 and insured with present appellant New India Assurance Co. Ltd., opponent No. 3. It was further contended that on the day of the accident, deceased Vasant and one of his relatives were proceeding from Kopargaon to Shirdi for obtaining orders for printing job. The deceased and his relative were waiting for S.T. bus at Saibaba Square, Kopargaon on 13.5.1992. Vehicle involved in the accident was proceeding to Babhale-shwar. Deceased and his relative made a request to the driver of the said vehicle to give them lift up to Shirdi. The driver accordingly gave them lift. It was contended that accordingly deceased and his relative occupied seats in the said vehicle and the said vehicle proceeded for Babhaleshwar. It was contended that the opponent No. 2, who was the driver of the said Tempo, was driving the said vehicle in a rash and negligent manner and after crossing a distance of 2-3 km., he could not control the vehicle, it went on wrong side and dashed against a tree by the side of the road. Va-sant Shelar sustained multiple injuries and ultimately succumbed to the said injuries. It was contended that the said accident took place solely due to negligence on the part of the driver of the said Tempo. Information in respect of the said accident was given to the police. Crime was accordingly registered against opponent No. 2 for the offences punishable under Sections 304-A, 279, 337, 338 and 427 of the Indian Penal Code.

3. So far as claim for compensation is concerned, it was contended that deceased was the only earning member in the family. He used to earn a salary of Rs. 2,750 per month and getting T.A., D.A. for outside work. It was also claimed that deceased used to get commission for collecting the orders for printing jobs and thus his total monthly income was Rs. 4,500. It was further claimed that on account of untimely death of Vasant, claimants became helpless as the only earning member in the family had died in the said accident. Thus they have submitted the claim for an amount of Rs. 3,00,000.

4. The present appellant New India Assurance Co. Ltd., original opponent No. 3, filed its written statement at Exh. 18 and denied the claim as set up by the claimants.

However, it was admitted that the vehicle was insured with New India Assurance Co. Ltd., opponent No. 3 and the insurance was valid during the period from 13.3.1992 to 12.3.1993 subject to the terms and conditions of the policy. The contention of the claimants as regards age and income of the deceased has been specifically denied. It was contended that opponent No. 2 was driving the said vehicle and was carrying the passengers on hire or reward at the material time while the policy issued by them was only for carrying goods and as there is a breach of policy condition, the insurance company is not in any way liable to pay the compensation.

5. The opponent Nos. 1 and 2 have also filed a written statement and denied the claim. It was contended that there was no negligence on the part of the driver of the said vehicle. It was claimed that the vehicle is insured with New India Assurance Co. Ltd. A request is made to dismiss the application for compensation.

6. Considering the pleadings, issues were framed at Exh. 24. The Member, Motor Accidents Claims Tribunal, allowed the parties to lead oral and documentary evidence. Claimants examined Jayashree Vasant Shelar, at Exh. 33. Witness No. 2 is Shridhar Ramchandra Shelar, relative of the deceased, who was accompanying the deceased at the relevant time. His evidence is at Exh. 34. Witness No. 3, Vishnu Shelar, is proprietor of National Printing Press at Mumbai. His evidence is at Exh. 35. This witness is examined to prove income of the deceased. Witness No. 4 is Suresh Raut, A.S.I, attached to Kopargaon Police Station at the relevant time and who registered Crime No. 39 of 1992. His evidence is at Exh. 45. Through his evidence, the spot panchnama and the F.I.R. are brought on record. On the other hand, opponent No. 1 examined himself. His evidence is at Exh. 55. Evidence of opponent No. 2 is at Exh. 61. Certain documents are also brought on record including insurance policy at Exh. 66.

7. Member, Motor Accidents Claims Tribunal, after considering the above evidence on record, concluded that the said accident took place solely due to negligence on the part of driver, opponent No. 2. He further concluded that claimants are entitled to compensation of Rs. 2,75,000. So far as liability is concerned, the Claims Tribunal has concluded that the opponent Nos. 1 to 3 are jointly and severally liable to pay compensation. The said judgment and award is challenged by the insurance company, original opponent No. 3, by filing the present appeal.

8. In the appeal, I heard Mr. V.N. Upa-dhye, Advocate for appellant New India Assurance Co. Ltd., Mr. S.D. Kulkarni, Advocate for respondent Nos. 1 and 3 and Mr. P.R. Katneshwarkar, Advocate with Mr. Y.S. Kulkarni, Advocate for owner of the vehicle, respondent No. 4. Respondent No. 2 died during the pendency of appeal. Respondent No. 5, though served, remained absent.

9. It is submitted by Mr. Upadhye, Advocate for the appellant that the award passed by Motor Accidents Claims Tribunal is illegal, null and void. According to him, the Tribunal has wrongly held liable the present appellant insurance company along with owner and driver of the vehicle to pay the compensation. He further submits that the Tribunal has failed to consider the evidence on record, as from the evidence on record, it is apparently clear that deceased and others were proceeding in the said Tempo as fare paying passengers and they were not connected with the milk business for which the vehicle was engaged, i.e., for transporting milk. He thus contends that there is a breach of policy condition. He further submits that the evidence of Ram-chandra Shelar sufficiently makes it clear that he and 6 other persons were travelling in the said vehicle and were unknown to Tempo driver. Lastly, according to him, the vehicle involved in accident is a goods carriage and when the persons travelling in the said vehicle have no concern with the goods carried in the said vehicle, at the relevant time when the accident took place, Claims Tribunal has wrongly held liable the insurance company along with owner and driver of the said vehicle to pay the compensation. Mr. Upadhye, Advocate, has placed reliance on one authority in the case of Mallawwa v. Oriental Insurance Co. Ltd. . Relying on the ratio laid down in the said authority, he submits that insurance company needs to be absolved from the liability. He accordingly requests to allow the appeal and to set aside the award passed by the Member, Motor Accidents Claims Tribunal.

10. On the other hand, it is submitted by Mr. S.D. Kulkarni, Advocate for respondent Nos. 1 and 3 that the award passed by the Tribunal is proper and justified. According to him, the appeal itself is not maintainable. Relying on the ratio laid down in the case of Shankarayya v. United India Insurance Co. Ltd. , he submits that in the present case, the insurance company has no right to challenge the appeal on the ground of quantum or negligence on the part of the driver.

11. Mr. Katneshwarkar, Advocate for respondent No. 4, submits that owner of the vehicle, respondent No. 1, is not in anyway liable to pay the compensation as there was specific instruction by owner to the driver not to carry any passengers in the said vehicle, however, the driver has not obeyed the said instruction and, therefore, the driver alone needs to be held liable to pay the compensation, in case if it is held that the accident took place solely due to negligence on his part. He further submits that there was no negligence on the part of the driver while driving the said vehicle. However, with a view to avoid dash to a bicycle, he took the vehicle to wrong side and unfortunately dashed against a tree by the roadside. Mr. Katneshwarkar, Advocate, placed reliance on one authority in the case of Pushpabai Purshottam Udeshi v. Ranjit Ginning and Pressing Co. 1977 ACJ 343 (SC). According to him, owner cannot be held liable for the act of the driver when there are specific instructions not to carry passengers in the vehicle.

12. Firstly, it is necessary to consider the submission made by Mr. S.D. Kulkarni, Advocate for original claimants that the appeal filed by the insurance company is not maintainable in view of the ratio laid down in the case of Shankarayya v. United India Insurance Co. Ltd. (SC). As a matter of fact, it is seen that the present appeal is filed by the insurance company on the ground that the Tribunal has not considered the aspect that there is a breach of policy condition. I, therefore, find that the appeal is maintainable and the ratio laid down in the authority, on which reliance is placed by Mr. S.D. Kulkarni, Advocate, is not applicable in the present case.

13. Considering the submissions made on behalf of the parties to the appeal, it is now necessary to see whether the award passed by Tribunal is proper and justified and further to see whether the insurance company can be held liable to pay the compensation along with the owner and driver of the vehicle and for which a reference to the evidence on record, adduced by the parties, is necessary. Shridhar Ramchandra Shelar, witness No. 2, is an eyewitness to the said accident as he and deceased, on the day of the accident, were proceeding from Kopargaon to Shirdi in the said vehicle. He stated that he and Vasant requested the driver of the said vehicle to give them lift up to Shirdi. Accordingly, the driver of the vehicle allowed them to occupy seats in the said Tempo. He further stated that the driver of Tempo was driving the said vehicle in excessive speed. At that time one bicycle came in front of Tempo. The driver could not control the vehicle and took the vehicle to the wrong side (i.e., right side of the road) and dashed against a tree. This witness Shridhar and the deceased Vasant sustained injuries in the said accident. He made a report in respect of the said accident to the police. According to him, the accident took place solely due to negligence on the part of the driver. According to him, the driver did not ask for any fare, however, he had given them lift. If the evidence of this witness is read together with the evidence of the driver of the said vehicle and other documents on record, i.e., spot panchnama and F.I.R., it is safe to conclude that the said accident took place due to negligence on the part of the driver of the said Tempo, i.e., Laxman Kolhe, opponent No. 2 and thus I find that the Tribunal is justified in concluding in that respect.

14. So far as the claim for compensation is concerned, the certificate about income of the deceased is brought on record, which is at Exh. 36 which shows that monthly salary of the deceased was Rs. 2,750. If the evidence of Shridhar Shelar and Vishnu Shelar is read together with document, Exh. 36, it is safe to gather that income of the deceased was to the extent of Rs. 2,750 per month. So far as age of the deceased is concerned, Tribunal has rightly concluded that the age of deceased was approximately 29 years at the time of accident. The Tribunal accordingly calculated the dependency and rightly awarded the compensation. I do not find that the amount of compensation, awarded by the Tribunal, is excessive or exorbitant. On the other hand, I find that the amount of compensation, awarded by the Tribunal, is reasonable, just and fair.

15. The last aspect is about the liability. A reference, in this respect, is necessary to Section 149 of the Motor Vehicles Act, which reads as under:

Section 149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks. (1) If, after a certificate of insurance has been issued under Sub-section (3) of Section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under Clause (b) of Sub-section (1) of Section 147 (being a liability covered by the terms of the policy) or under the provisions of Section 163-A is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this Section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.

(2) No sum shall be payable by an insurer under Sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:

(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely

(i) a condition excluding the use of the vehicle

(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or

(b) for organised racing and speed testing, or

(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or

(d) without side-car being attached where the vehicle is a motor cycle; or

(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or

(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot on civil commotion, or

(b) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular.

16. In the present case, it is submitted by Mr. Upadhye, Advocate for the appellant insurance company, that the vehicle is a goods transport vehicle. The permit was issued only to transport goods, however, on the contrary, the vehicle was used for carrying the passengers on hire or reward and, therefore, there is a breach of policy condition. He, therefore, submitted that the appellant insurance company is not in anyway liable to pay the compensation. A reference, in this respect, is necessary to the insurance policy, which is on record at Exh. 66. The material portion about the 'Limitation as to use' needs to be referred. It is specifically mentioned therein to the following effect:

Use only for carriage of goods within the meaning of the Motor Vehicles Act, 1988.

Clause (3) reads as under:

(3) Use for 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.

I have referred to this particular Clause, as it seems that the Tribunal has wrongly interpreted this particular Clause.

17. A reference, in this respect, is also necessary to the cross-examination of the owner and driver of the vehicle on the part of insurance company. Evidence of owner of the vehicle is at Exh. 55. In the cross-examination, on the part of the insurance company, he specifically admitted that the vehicle with registration No. MWA 7037 is a goods carrier having permit to transport goods. Even he has specifically admitted that the permit is issued only to transport the goods. Even the driver of the vehicle, whose evidence is at Exh. 61, in his cross-examination, admits that vehicle involved in the accident is a goods vehicle and was to be used only for transportation of goods and not for transportation of passengers.

18. Considering the policy conditions as to the limitation as to use of the vehicle and the admissions given by the owner and driver of the vehicle, I find that there is a breach of policy condition. Tribunal has wrongly interpreted the words 'six in number' as referred in Clause (3) of 'Limitation as to use', as quoted above and wrongly held liable the insurance company to pay the compensation jointly and severally with owner and driver of the vehicle.

19. A reference in this respect is necessary to one authority on which reliance is placed by Mr. V.N. Upadhye, Advocate for appellant, in the case of Mallawwa v. Oriental Insurance Co. Ltd. , wherein it has been observed to the following effect:

Motor Vehicles Act, 1939Section 95 (1) (b) (i) and (ii)liability of insurer of goods vehiclewhether passenger was carried for hire or reward within the meaning of proviso (ii)test to determineonly a vehicle which is used for a systematic carrying of the passengers, held can be said to be a vehicle in which passengers are carried for hire or rewardHence, persons travelling in goods vehicles, whether owners of the goods or passengers on payment of fare or gratuitous passengers, who died in accident met with by such goods vehicle, held not covered by proviso (ii) and, therefore, insurer of the goods vehicle is not liable to pay compensation for their death.

Section 95 of 1939 Act is corresponding to Section 147 of the 1988 Act which deals with requirements of policies and limits of liability.

20. Considering the ratio laid down in the above authority, I find that the Tribunal has wrongly held liable the insurance company to pay compensation jointly and severally with the owner and driver of the vehicle. It is necessary to make it clear that the vehicle was insured with the appellant insurance company and the insurance was valid at the time of the accident is not in dispute. Therefore, considering the factual aspects in the present case, it is desirable to direct the present appellant insurance company to pay the compensation to the claimants and to recover the said amount from the owner and driver of the vehicle.

21. A reference is also necessary to the submission made by Mr. Katneshwarkar, Advocate for the owner of the vehicle, that the owner had given specific instructions to the driver not to carry passengers in the said vehicle and, therefore, the owner is not liable to pay any compensation. Considering the evidence of owner and driver of the vehicle, I find that the said submission is not acceptable. I have carefully gone through the evidence of the owner and driver of the vehicle. There is material inconsistency in their evidence. The driver, in his evidence, specifically stated that a written agreement was executed by him in favour of the owner. However, that document is not brought on record. I find that the contention raised on behalf of owner that he had given instructions to the driver not to carry passengers in the said vehicle is afterthought and raised only with a view to avoid the liability. The said contention, therefore, needs to be discarded.

22. Thus, on close scrutiny of the evidence on record and factual aspects referred above, 1 find that the award passed by the Tribunal needs to be modified to the extent that the present appellant insurance company needs to be absolved or exonerated from the liability to pay the compensation, however, with a direction to the appellant insurance company to satisfy the award and to recover the said amount from owner and driver of the vehicle, i.e., from original opponent Nos. 1 and 2.

23. In the result, First Appeal No. 373 of 1998 is partly allowed and the award dated 21.3.1998 passed by the Member, Motor Accidents Claims Tribunal, Ahmed-nagar in M.A.C. Application No. 553 of 1998, is modified to the following effect:

(i) The application for compensation is allowed.

(ii) The opponent Nos. 1 and 2 are jointly and severally held liable to pay compensation of Rs. 2,75,000 (rupees two lakh seventy-five thousand) to the claimants along with interest at the rate of 12 per cent per annum from the date of filing of the claim application till realisation of the amount, along with proportionate costs.

(iii) Present appellant New India Assurance Co. Ltd., original opponent No. 3, with whom the vehicle was insured, is directed to satisfy the award and to recover the said amount from original opponent Nos. 1 and 2.

(iv) Record and proceedings be transmitted to the Tribunal.