Karnataka High Court

The Claim Manager vs Mahadevi on 12 January, 2021

Author: Alok Aradhe Rangaswamy

                             1




IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 12TH DAY OF JANUARY, 2021

                        PRESENT

         THE HON'BLE MR.JUSTICE ALOK ARADHE

                             AND

     THE HON'BLE MR.JUSTICE NATARAJ RANGASWAMY

            M.F.A. NO.5355 OF 2016 (MV-I)

BETWEEN:

THE CLAIM MANAGER
ROYAL SUNDARAM ALLIANCE
INSURANCE COMPANY LIMITED,
NO.132, 2ND FLOOR, MANGALAYA,
BRIGADE ROAD,
BANGALORE-560025.
BY
ROYAL SUNDARAM ALLIANCE COMPANY LTD.,
SUBRAMANIAM BUILDING,
II FLOOR, NO.1,
CLUB HOUSE ROAD, ANNASALAI,
CHENNAI-600002.

BY IT'S MANAGER
                                          ...APPELLANT
(BY SRI. O. MAHESH, ADVOCATE)

AND:

1.     MAHADEVI
       AGE 44 YEAR,
       W/O SHANKARAIAH,
       RESIDING AT NO.123,
       1ST STAGE, II U.P.
                              2




      SHANESWARA TEMPLE ROAD,
      GAYATHRIPURAM, MYSURU-570001.

2.    B. KRISHNA
      AGE 60 YEAR,
      S/O BASAVEGOWDA,
      RESIDING AT NO.360,
      JATTIC STREET,
      NAZARBAD, MYSURU-570001.
                                              ...RESPONDENTS

(BY SRI. A.L.SHABBIR AHMED, ADVOCATE FOR RESPONDENT
NO.1;
NOTICE SERVED ON RESPONDENT NO.2 BUT UNREPRESENTED)

     THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER
SECTION 173(1) OF THE MOTOR VEHICLES ACT, 1988 AGAINST
THE JUDGMENT AND AWARD DATED 12.05.2016, PASSED IN
MVC NO.538/2011, ON THE FILE OF THE III ADDITIONAL
DISTRICT JUDGE AND MEMBER, MACT, MYSURU AWARDING
COMPENSATION OF RS.15,86,731/- WITH INTEREST @6% P.A.
FROM THE DATE OF PETITION TILL REALIZATION.

    THIS APPEAL COMING ON FOR ADMISSION THIS DAY,
NATARAJ RANGASWAMY, J., DELIVERED THE FOLLOWING:


                        JUDGMENT

This appeal under Section 173(1) of the Motor

Vehicles Act is filed by the insurer challenging the liability

imposed upon it to pay the compensation awarded in

terms of the Judgment and Award dated 12.05.2016 by

the III Additional District Judge and MACT., Mysuru in MVC

No.538/2011.

2. Though, this appeal is listed for admission, as

the records of the Tribunal are received it is taken up for

final disposal with the consent of the counsel for the

parties.

3. The parties shall henceforth be referred to as

they were arrayed before the Tribunal.

4. The claim petition discloses that the claimant

and others were on a pilgrimage to places in North India

and Nepal by a bus bearing registration No.KA-09-A-3344

(hereinafter referred to as "offending bus" for short). It is

stated that on 29.05.2010, when they were returning to

India from Nepal at about 3.15 am., the bus fell into a

ravine and the passengers suffered serious injuries. The

claimant also suffered injuries and was treated at College

of Medical Science - Teaching Hospital, Bharathpura

Chitwan, Nepal and later continued treatment at Vikram

Jeev Hospital. The claimant had suffered an amputation of

her right arm. The police in Nepal had registered Crime

No.2066/067 under Section 147, 161(2) and 162(2) of the

Transportation Arrangement Act. The claimant filed a

claim petition under Section 166 of the MV Act claiming

compensation of a sum of Rs.50,00,000/- from the owner

and the insurer of the offending bus. The claimant claimed

that she was earning a sum of Rs.10,000/- per month from

tailoring, embroidery and sale of sarees.

5. The driver - owner of the offending bus

contested the claim petition and claimed that on

29.05.2010, it was snowing at 3.15 am., and due to bright

headlamp of a vehicle coming from the opposite direction,

the driver moved the vehicle to the left side of the road

and hit a road side rock which caused a land slide and the

bus fell into the ravine. He admitted that the claimant was

a passenger and was suffered injuries. The insurer though

entered appearance did not file its written statement but

only filed a memo claiming that the Tribunal did not have

territorial jurisdiction to entertain the petition.

6. The claim petition was initially dismissed by

the Tribunal on the ground of want of territorial jurisdiction

in terms of the order dated 16.11.2011 which was

reversed by this Court in MFA No.1829/2012. Later, the

insurer filed its statement of objections and reiterated that

the accident occurred outside India and that the Motor

Vehicles Act, 1988 was not applicable for the accidents

outside India. It however, admitted that the offending bus

was covered by a policy of insurance issued by it. It

contended that the policy covered only the geographical

area of India and not beyond and if the insurance was to

cover beyond India, then the insured had to pay an

additional premium and obtain a specific endorsement to

that effect on the insurance policy. It claimed that the

owner had not paid any additional premium.

7. The claimant was examined as PW1 and

examined three other witnesses as PWs.2, 3 and 4 and

marked documents as Exs.P1 to P23. While, the owner of

the offending bus was examined as RW1 and the State

Legal Head of the insurer was examined as RW2 and they

marked documents as Exs.R1 to R9.

8. The Tribunal noticed that the accident which

occurred on 29.05.2010 is not seriously disputed by the

respondents, since the driver - owner of the offending bus

had categorically admitted about the accident. The

claimant who was traveling by the offending bus deposed

that the driver of the offending bus was driving it rash and

negligently and since he took a sharp turn, the vehicle fell

down from the top of a hill. The Tribunal therefore, held

that the accident was due to the rash and negligent driving

by the driver of the offending bus.

9. While considering the principal contention of

the insurer that it owed no obligation to indemnify the

owner of the offending bus against any claim for

compensation as the Motor Vehicles Act, 1988 was not

applicable to the accident which occurred in Nepal, the

Tribunal noticed Sections 1, 139 and 166(2) and held even

if the accident had occurred in Nepal, the claimant was

entitled to file a claim petition in India. It also noticed the

contention of the insurer that as per the Indian Motor Tariff

Regulations, an insurer could cover the risk if the owner

had paid additional premium as prescribed under General

Regulation No.4 of the Indian Motor Tariff Regulations.

Hence, the Tribunal held that it had the territorial

jurisdiction to entertain the petition.

10. In so far as the claim for compensation is

concerned, the Tribunal considered the evidence of PWs.2

and 3 who were the customers of the claimant who

deposed that they use to avail the tailoring and

embroidery services of the claimant. Hence, the Tribunal

considered the notional income of the claimant at a sum of

Rs.6,000/- per month. It also noticed the evidence of PW4

who was the doctor who treated and assessed the

disability of the claimant at 89% as the claimant had

suffered an amputation of her right arm. The Tribunal

assessed the disability at 50% and taking into account the

period of treatment undergone by the claimant at Nepal

and in Mysuru, it awarded the following compensation.

              Heads under which              Amount in
            Compensation awarded              Rupees
  Loss of future income                        12,49,560
  Loss of earning during treatment                 4,000
  Medical expenses                                 8,171
  Future medical expenses, including              75,000
  towards expenses for attendant and
  conveyance charges
  Damages for pain, suffering and trauma        1,50,000
  Loss of amenities                             1,00,000
                      Total                   15,86,731

11. Feeling aggrieved by the Judgment and Award

passed by the Tribunal, the insurer of the offending bus is

in appeal. It is contended that no positive evidence was

placed on record to prove the cause of the alleged accident

and therefore, the Tribunal could not have assumed that

the driver of the offending bus was negligent in driving the

vehicle and causing the accident. It also contended that

Section 1 of the Motor Vehicles Act, 1988 prescribes the

application of the Act to the whole of India and the vehicle

registered in India could be taken outside India only after

obtaining traveling pass or certificate or authorization

under Section 139 of the Motor Vehicles Act, 1988. It also

contended that Section 166(2) of the Motor Vehicles Act,

1988 is not applicable as the place of accident is outside

India and the owner of the offending bus was not paid the

additional premium of a sum of Rs.100/- to extend the

policy of insurance when the offending bus was in Nepal.

12. Per contra, the learned counsel for the

claimant contended that the owner of the offending bus

had a policy of insurance which covered the offending bus.

He also obtained a special permit dated 29.04.2010 which

indicated that the offending bus was permitted to travel to

Katmandu, Nepal. The learned counsel contended that the

offending bus was checked by the Nepal authorities at the

border and were permitted to travel into Nepal. He

contended that the claimant was entitled to lodge a claim

in Mysuru by virtue of Section 166(2) of the Motor Vehicles

Act, 1988.

13. We have given our anxious consideration to

the arguments canvassed by the learned counsel for the

parties and we have perused the records of the Tribunal as

well as its Judgment and Award.

14. Dealing with the first question regarding the

applicability of the provisions of the Motor Vehicles Act,

1988, Section 1 of the Motor Vehicles Act declares that it

shall extend to the whole of India. However, Section 139

of the Motor Vehicles Act, 1988 permits the Central

Government to make Rules for the purpose of grant and

authentication of travel pass / certificate or authorization

to persons temporarily taking motor vehicles outside India

and may for this purpose frame Rules in respect of the

matters contained therein. For the sake of convenience,

Section 139 of the Motor Vehicles Act, 1988 is extracted

below:

"139. Power of Central Government to make rules.--

(1) The Central Government may, by notification in the Official Gazette, make rules for all or any of the following purposes, namely:--

         (a) the      grant   and     authentication   of
         travelling      passes,       certificates    or





   authorisations     to   persons    temporarily

taking motor vehicles out of India to any place outside India or to persons temporarily proceeding out of India to any place outside India and desiring to drive a motor vehicle during their absence from India;

(b) prescribing the conditions subject to which motor vehicles brought temporarily into India from outside India by persons intending to make a temporary stay in India may be possessed and used in India; and

(c) prescribing the conditions subject to which persons entering India from any place outside India for a temporary stay in India may drive motor vehicles in India.

(2) For the purpose of facilitating and regulating the services of motor vehicles operating between India and any other country under any reciprocal arrangement and carrying passengers or goods or both by road for hire or reward, the Central Government may, by notification in the Official Gazette, make rules with respect to all or any of the following matters, namely:--

(a) the conditions subject to which motor vehicles carrying on such services may be

brought into India from outside India and possessed and used in India;

(b) the conditions subject to which motor vehicles may be taken from any place in India to any place outside India;

(c) the conditions subject to which persons employed as drivers and conductors of such motor vehicles may enter or leave India;

(d) the      grant    and      authentication       of
travelling       passes,            certificates    or
authorisations       to   persons       employed    as
drivers   and conductors             of such motor
vehicles;

(e) the particulars (other than registration marks) to be exhibited by such motor vehicles and the manner in which such particulars are to be exhibited;

(f) the use of trailers with such motor vehicles;

(g) the exemption of such motor vehicles and their drivers and conductors from all or any or the provisions of this Act [other than those referred to in sub-section (4)] of the rules made thereunder ;

(h) the identification of the drivers and conductors of such motor vehicles;

(i) the replacement of the travelling passes, certificates or authorisations,

permits, licences or any other prescribed documents lost or defaced, on payment of such fee as may be prescribed;

(j) the exemption from the provisions of such laws as relate to customs, police or health with a view to facilitate such road transport services;

(k) any other matter which is to be, or may be, prescribed.

(3) No rule made under this section shall operate to confer on any person any immunity in any State from the payment of any tax levied in that State on motor vehicles or their users.

(4) Nothing in this Act or in any rule made thereunder by a State Government relating to--

   (a) the   registration    and      identification   of
   motor vehicles, or
   (b) the   requirements        as   to   construction,
   maintenance       and    equipment        of   motor
   vehicles, or

(i) to any motor vehicle to which or to any driver of a motor vehicle to whom any rules made under clause (b) or clause (c) of sub-

section (1) or under sub-section (2) apply; or

(ii) to any conductor of a motor vehicle to whom any rules made under sub-section (2) apply."

15. A perusal of Section 139(2) does not mandate

that a person taking his motor vehicle outside India should

also obtain appropriate insurance coverage to operate the

vehicle outside India. It is noted that the owner - driver of

the offending bus had obtained the required permissions to

take the vehicle outside India and merely because an

additional premium of Rs.100/- was not paid for a

geographical extension of the area, the insurer cannot

escape its liability to pay the compensation. A perusal of

Sections 146 and 147 of the Motor Vehicles Act, 1988

makes it clear that the insurance policy is attached to the

vehicle in question and this position would not change on

the area where the vehicle is put to use, so long as such

area is a public place. Once the vehicle is insured and is

permitted to ply in any area, then it is deemed that such

vehicle carries with a policy of insurance. In similar

circumstances, the Punjab and Haryana High Court in Anil

Kumar Vs. Roop Kumar Sharma and another reported

in 2019 ACJ 381 held that an insurer cannot avoid liability

on the ground that the accident occurred outside India and

that no additional premium was paid for plying outside

India. It is relevant to note that the offending bus was

registered in Karnataka and both the claimant and the

owner of the offending bus are citizens of India and are

thus, bound by the provisions of the Motor Vehicles Act,

1988. The extra-territorial jurisdiction of a sovereign State

qua its citizens, is a well entrenched jurisprudential

concept. Yet another provision which palpably runs counter

to the contention of the insurer in this case is Section

149(3) of the Motor Vehicles Act, 1988 which warrants that

a Judgment of a foreign Court or by a Court in a

reciprocating Country shall be honoured by the insurer,

notwithstanding the fact that such insurer is either

registered or not in such reciprocating Country. Thus, if

the insurer is bound to honour a foreign award, it would be

preposterous to contend that the insurer is not liable to

honour a Judgment and Award passed in India, on the

ground that the accident occurred in India. In that view of

the matter, the insurer cannot escape its liability on the

ground that owner of the offending bus had not paid an

additional premium.

16. In so far as the maintainability of the claim

petition before the Tribunal, Section 166(2) of the Motor

Vehicles Act, 1988 reads as follows:

"Section 166(2) : Every application under sub-section (1) shall be made, at the option of the claimant, either to the Claims Tribunal having jurisdiction over the area in which the accident occurred, or to the Claims Tribunal within the local limits of whose jurisdiction the claimant resides or carries on business or within the local limits of whose jurisdiction the defendant resides, and shall be in such form and contain such particulars as my be prescribed:

Provided that where no claim for compensation under section 140 is made in such application, the application shall contain a separate statement to that effect immediately before the signature of the applicant."

17. Since, the claimant was a resident of Mysuru,

she has opted to file the claim petition at Mysuru and

therefore, the Tribunal had the jurisdiction to adjudicate

the petition filed before it by the claimant.

18. In so far as the compensation awarded by the

Tribunal is concerned, it had considered a sum of

Rs.6,000/- per month as the notional income of the

claimant which is on par with the notional income

prescribed by the Karnataka State Legal Services Authority

in respect of persons who do not have any proof of income

and who die or are injure in the road traffic accident in the

year 2010. The Tribunal had considered the evidence of