National Insurance Co. Ltd. vs Santosh Gandhi & Ors.
2012 Latest Caselaw 4247 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

                                      Date of decision: 18th July, 2012
+       MAC.APP. 713/2010

        NATIONAL INSURANCE CO. LTD.     ..... Appellant
                     Through Mr. A.K. Soni, Advocate

                    versus

        SANTOSH GANDHI & ORS.                       ..... Respondents
                    Through   None

        CORAM:
        HON'BLE MR. JUSTICE G.P.MITTAL

                             JUDGMENT

G. P. MITTAL, J. (ORAL)

1. The Appellant National Insurance Company Limited impugns a judgment dated 03/04.08.2010 passed by the Motor Accident Claims Tribunal (the Claims Tribunal) whereby a compensation of ` 6,50,000/- was awarded in favour of Respondents No.1 and 2 and the Appellant was made liable to pay the compensation.

2. The sole ground of challenge is that during inquiry before the Claims Tribunal it was established that the bus was overcrowded and thus, the insured committed the breach of the terms and conditions of permit and consequently, the insurance policy. Thus, the learned counsel argues that the Insurance Company was entitled to recover the compensation from the insured.

3. While dealing with the liability, the Claims Tribunal held that the Appellant had failed to prove that more than 45 passengers were present in the bus at the time of the accident or there was violation of the terms and condition of the policy because of the same.

4. The finding of fact reached by the Claims Tribunal cannot be accepted as Pradeep Kumar Adlakkha PW-4 admitted in his cross-examination that the deceased was travelling on the footstep of the charted bus and that the bus was overcrowded. It is, therefore, evident that there were more passengers in the bus than its capacity.

5. The question for consideration however is whether this amounts to breach of the terms of the policy as envisaged under Section 149(2)(a) of the Motor Vehicles Act, 1988 (the Act). A similar contention came up for consideration in National Insurance Co. Ltd. v. Anjana Shyam & Ors., (2007) 7 SCC 445. The bus had carrying capacity of 42 passengers for which it paid the premium. It was overloaded and was carrying 90 passengers. The bus fell off the road into a nala leading to death of 26 persons including the driver and injuring 63 other persons. The legal representatives of the deceased and the injured approached the Motor Accident Claims Tribunal claiming compensation under Section 166 of the Act. A contention was raised before the Claims Tribunal that it was a fundamental breach of the contract of Insurance and therefore, the Insurance Company

could repudiate the policy and was not liable for the compensation that may be adjudged. The Claims Tribunal brushed aside the objection and passed the award. The Insurance Company filed 38 Appeals before the Himachal Pradesh High Court. The High Court held that overloading of a bus which had permit to ply on the route with only 42 passengers did not amount to violation of the route permit or any other law for which the State Govt. could be held to be contributory negligence and that the Insurance Company was liable to pay the amounts as awarded by the Claims Tribunal. The Insurance Company approached the Supreme Court where it was held that Insurance Company would be liable to pay compensation in respect of 42 awards passed for the highest amount which would be distributed amongst the injured/legal representatives of the deceased equitably.

6. In the instant case, even if there was overcrowding in the bus, it could not be said that the bus was being driven for a purpose not allowed by the permit under which the vehicle is used.

7. It is not the Appellant's case that persons more than the authorized capacity of the bus suffered injuries in the accident. Rather it appears that there was only one person i.e. the deceased Punita Gandhi who suffered injuries which proved fatal.

8. The Insurance Company in view of the settled legal position cannot avoid liability.

9. The Appeal is devoid of any merit; the same is accordingly dismissed.

10. The statutory deposit of `25,000/- be refunded to the Appellant Insurance Company.

11. Pending Applications also stand disposed of.

(G.P. MITTAL) JUDGE JULY 18, 2012 vk