Sainuddin vs George Thomas
2023 Latest Caselaw 5426 Ker

           IN THE HIGH COURT OF KERALA AT ERNAKULAM

                               PRESENT
            THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN
        FRIDAY, THE 28TH DAY OF APRIL 2023 / 8TH VAISAKHA, 1945
                        MACA NO. 2439 OF 2016
   AGAINST THE AWARD DATED 18.11.2014 IN OPMV 512/2012 OF MOTOR
                 ACCIDENT CLAIMS TRIBUNAL ,ERNAKULAM
APPELLANT/PETITIONER:

            SAINUDDIN
            S/O. MOIDEEN, KANAN PUTHENPARAMBU,
            ERNAKULAM.
            BY ADV SRI.JACOB ABRAHAM


RESPONDENT/RESPONDENTS 1 TO 3:

    1       GEORGE THOMAS
            S/O. THOMAS MATHEW, KOCHUPARAMBATHU,
            VELYANADU, ALAPPUZHA. PIN- 689 590.
    2       THOMASKUTTY
            S/O. JACOB, CHAKKALKANDATHIL PARAMBA,
            KIDANGARA, ALAPUZHA- 688 001.
    3       THE UNITED INDIA INSURANCE CO. LTD
            CHANGANASSERRY, KOTTAYAM.
            BY ADVS.
            DIPU JAMES
            S.JAYASREE
            GEORGE MATHEW
            SUNIL KUMAR A.G

THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD
ON 31.08.2022, THE COURT ON 28.04.2023, DELIVERED THE
FOLLOWING:
 MACA No.2439 of 2016            ..2..




                        JUDGMENT

This appeal is preferred by the petitioner in O.P.(MV)

No.512 of 2012 on the file of the Motor Accidents Claims

Tribunal, Ernakulam. The parties in this appeal are referred

to as per their status in the claim petition.

2. The petitioner, a fish merchant, sustained injuries in

a road accident occurred on 15.09.2011 when a Tata Sumo

car bearing Registration No.KL-04-AA/7881 hit his bicycle.

The 1st respondent is the driver, the 2nd respondent is the

registered owner and the 3rd respondent is the insurer, of the

car. The petitioner claimed an amount of Rs.10,00,000/-

(Rupees Ten lakhs) as compensation for the personal injuries

sustained by him in the accident. It was contended that the

accident happened due to the negligent driving of the car by

the 1st respondent.

3. Before the Tribunal, Exts.A1 to A10 were marked on

the side of the petitioner and Exts.B1 to B4 were marked on

the side of the 3rd respondent. The certificate issued by the MACA No.2439 of 2016 ..3..

Medical Board was marked as Ext.C1 wherein the Medical

Board has certified that the petitioner is having 10%

permanent partial disability.

4. The 1st respondent filed a written statement

contending that there was no negligence on his part and that

he was having a valid driving license at the time of the

accident and the offending vehicle was validly insured with

the 3rd respondent. The 2nd respondent, the owner of the car

was set ex parte.

5. The 3rd respondent, the insurer, filed a written

statement contending that the insurance policy mentioned in

the claim petition pertains to a private car bearing

Registration No. TN-07/F-3135 in the name of one Thomas

George and was transferred to the name of the 2nd

respondent w.e.f. 24.08.2011 and the vehicle was altered as a

transport vehicle - LMV contract carriage and re-registered

as KL-04/AA-7881 without changing the insurance. It is

stated that the 2nd respondent was using the said car as a

transport vehicle and the vehicle was deliberately insured as MACA No.2439 of 2016 ..4..

a private car under a 'liability only policy', in order to pay

less premium, which is a clear suppression of material facts

and therefore, the 3rd respondent is not liable to indemnify

the 2nd respondent or to compensate the petitioner. It is also

stated that there is contributory negligence on the part of the

petitioner in causing the accident. The 3rd respondent

disputed the age, occupation and monthly income of the

petitioner and contended that the compensation claimed is

excessive.

6. The Tribunal found that the accident happened due to

the negligence of the 1st respondent, the driver of the car.

With regard to the liability of the 3rd respondent insurer to

indemnify the 2nd respondent owner, the Tribunal found that,

as per Ext.B1 insurance policy, the owner has taken only a

'private car - liability only policy' whereas Ext.B4 shows that

the vehicle was a contract carriage and there is clear

suppression of material facts. The Tribunal held that the

owner registered the vehicle as a transport vehicle and took

insurance policy for a private vehicle and thus, there is MACA No.2439 of 2016 ..5..

suppression of material facts at the time of taking the policy

which amounts to a void contract between the insurer and

the insured. The Tribunal exonerated the 3rd respondent

insurer from the liability to indemnify the 2nd respondent. The

relevant paragraph of the award is extracted below:

"9. The 1st respondent in his written statement stated that the TATA Sumo has valid insurance policy with the 3rd respondent. The 3rd respondent admitted that an insurance policy was taken but the policy was taken for a private car. But later it was changed as transport vehicle as LMV contract carriage. The vehicle was insured by one Thomas George. The owner of the said car has taken a policy for a private car and suppressed the material fact that it is a taxi. In order to take a policy for a taxi, the owner has to pay additional premium and the premium itself will come to Rs. 14,060/-. There is suppression of material facts while taking insurance policy. Therefore, the 3rd respondent is not liable to indemnify the insured. In order to prove the said contention of the 3rd respondent, Exts.B1 to B4 were marked. Ext.B1 is the insurance policy taken for TATA Sumo, which is seen issued in the name of one Thomaskutty and taken for a private car. It is MACA No.2439 of 2016 ..6..

only a liability only policy. Ext.B2 is the copy of the AMVI report, which shows that the TATA Sumo bearing Regn.No.KL-04-AA-7881 is a LMV contract carriage. Ext.B3 is the copy of a fitness certificate and Ext.B4 is copy of the contract carriage permit issued to offending vehicle.

Exts.B1 to B4 proved that TATA Sumo car is a contract carriage. Ext.B1 proved that the owner has taken a policy for a private car and that too only a "liability only policy". It shows that there is clear suppression of material facts. The owner of the said car has suppressed the fact that it is a taxi car and took policy as a private car. The 3rd respondent has produced judgment in MACA No.1766/2009 of the Hon'ble High Court of Kerala (National Insurance Company Ltd. Vs. Thankamma and others.) dated 05.10.2009 where the same facts were discussed. In that decision also a LMV contract carriage was insured as a private vehicle and as per the permit, the vehicle was operated as public vehicle. Therefore, necessarily to take insurance for public vehicle, it requires enhanced premium. But what the owner of the vehicle had done is registered the vehicle as a transport vehicle and took a policy as a private vehicle. That too to suppress the material facts at the time of taking policy, which amounts to a MACA No.2439 of 2016 ..7..

avoid contract between the insurer and the insured. Therefore, the insurance company has to be exonerated from the liability."

7. The Tribunal, in the absence of evidence as regards

the monthly income of the petitioner, fixed his notional

income as Rs.4,000/-. The multiplier was taken as '13'. The

Tribunal awarded an amount of Rs.4,26,800/- as total

compensation under various heads as per the table given

below:

                 Heads              Amount    Amount
                                    Claimed   Awarded
         Loss of earnings and       150000     24000    4000x6
         loss of earnings to the
         parents

         Transport to Hospital       5000      5000
         and back to Home
         Extra nourishment          15000      1000
         Damage to clothes and       1000       500
         articles
         Attendant Expenses         30000      3500
         Medical Expenses           450000    315000
         Compensation for pain      30000      25000
         and suffering
         Compensation       for     40000      52800    4000x12
         continuing        and                          x10/100x

         disability

 MACA No.2439 of 2016                     ..8..

           disfiguration

           of earning power

           future treatment

           expectation of life.

           of expectation of life/
           amenities         and
           enjoyment in life
           Total                       1021000        426800
           Claimed Rs.10,00,000/-



The    petitioner          was   allowed         to   realise   the   sum   of

Rs.4,26,800/- with 8% interest per annum from the date of

petition till realisation with proportionate costs from

respondents 1 and 2, who were made jointly and severally

liable to pay the compensation.

8. Aggrieved by the amount of compensation and

exoneration of the insurance company from the liability to

pay compensation, the petitioner has preferred this appeal.

According to the petitioner, there is no suppression of

material facts at the time of taking the policy and the 3rd

respondent should have been made liable to indemnify the MACA No.2439 of 2016 ..9..

2nd respondent and to satisfy the award.

9. Heard Adv. Jacob Abraham, the learned counsel for

the petitioner, Adv. George Mathew, the learned counsel for

respondents 1 and 2 and Adv. S. Jayasree, the learned

counsel for the 3rd respondent.

10. With regard to the liability of the 3rd

respondent/insurer to indemnify the 2nd respondent/owner, it

will be relevant to consider the following facts. Ext.B1

certificate of insurance shows that the Tata Sumo car with

Registration No. TN-07/F-3135 was insured in the name of Fr.

Thomas George, xxxx, Chennai, Tamil Nadu for the period

from 19.05.2011 to 18.05.2012 as 'private car - liability only

policy'. As per the Endorsement Schedule forming part of

Ext.B1, the vehicle has been transferred to Thomas Kutty, the

2nd respondent and the policy of insurance is transferred to

Thomas Kutty w.e.f. 24.08.2011. The Registration Number of

the vehicle is shown as KL-04/AA-7881. The period of validity

of the policy after the transfer is from 24.08.2011 to MACA No.2439 of 2016 ..10..

18.05.2012. At the time of the transfer of policy on

24.08.2011, the ownership of the vehicle was with the 2nd

respondent and the vehicle was re-registered as KL-04/AA-

7881. Ext.B4 is the copy of the contract carriage permit

issued in respect of the said vehicle for the period from

02.09.2011 to 01.03.2016. The date of the accident was

15.09.2011. As on the date of the accident, the vehicle

bearing Registration No. KL-04/AA-7881 was having a

'private car - liability only policy' and the vehicle was a

contract carriage. The finding of the Tribunal is that there is

suppression of material facts while taking the insurance

policy inasmuch as the owner has suppressed the fact that

the car is a contract carriage and took policy for the vehicle

as a private car. The Tribunal held that, since the 2nd

respondent suppressed material facts at the time of taking

the policy, the contract between the insurer and the insured

is void and the insurance company has to be exonerated from

the liability.

11.Section 149(2)(b) of the Motor Vehicles Act, 1988 MACA No.2439 of 2016 ..11..

(hereinafter referred to as the 'M.V. Act' for short) provides

for an exception to the insurers to avoid liability in spite of

the policy having been issued if it is proved 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. To avoid liability, the

insurer has to prove that (i) the policy is void on the ground

that it was obtained by the non-disclosure of a material fact

or (ii) by a representation of a fact that was false in some

material particular. The Tribunal found that the 2nd

respondent registered the vehicle as a 'transport vehicle' and

took a policy as 'private vehicle' and there is suppression of

materials facts at the time of taking the policy which

amounts to a void contract. The said finding of the Tribunal is

not correct. The Endorsement Schedule in Ext.B1 policy

shows that the insurance policy has been transferred to the

2nd respondent w.e.f. 24.08.2011. The period of validity of the

policy is from 24.08.2011 to 18.05.2012. Ext.B4 is the

contract carriage permit issued on 03.09.2011 and the period MACA No.2439 of 2016 ..12..

of validity of the permit is from 02.09.2011 to 01.09.2016. As

on the date of transfer of the policy of insurance into the

name of the 2nd respondent on 24.08.2011, the vehicle KL-

04/AA-7881 was a private car and not a contract carriage.

Section 149(2)(b) of the M.V. Act enables the insurance

company to avoid liability when the policy was obtained by

non-disclosure of a material fact. Since the vehicle was a

private car as on 24.08.2011, the date of transfer of the

policy into the name of the 2nd respondent, it cannot be said

that there was non-disclosure of any material facts to the

effect that the vehicle was a contract carriage. As on

24.08.2011, the vehicle was not a contract carriage and there

was no suppression of material facts to attract Section 149(2)

(b) of the M.V. Act. Since there is no suppression of material

facts in obtaining the policy, the policy is not void under

Section 149(2)(b) of the M.V. Act and therefore, the finding of

the Tribunal, to the said extent, is set aside.

12. The vehicle was converted into a contract carriage

w.e.f. 02.09.2011 and the accident happened on 15.09.2011.

MACA No.2439 of 2016 ..13..

As on the date of the accident, the vehicle was a contract

carriage. Ext. B1 policy of insurance provides for limitations

as to use, limits of liability and general exceptions. The

limitations as to use read as under:

"The Policy covers use of the vehicle for any purpose other than

a) Hire or Reward

b) Carriage of Goods (other than samples or personal luggage)

c) Organized Racing

d) Pace Making

e) Speed Testing and Reliability Trails

f) Use in connection with Motor Trade"

The conditions of Ext. B1 policy exclude the plying of vehicle

for hire or reward viz., use as a contract carriage. Thus,

there is a breach of a specified condition of the policy as

provided under Section 149 (2) (a) (i) (a) of the M.V. Act, a

condition excluding the use of the vehicle as contract

carriage. Grant of contract carriage permit under Section 74

of the M.V. Act does not require any no objection certificate

from the insurer. However, once the vehicle has been granted

a contract carriage permit, the vehicle shall have an

insurance policy for a contract carriage. The accident MACA No.2439 of 2016 ..14..

happened 12 days after the vehicle was converted into a

contract carriage. As on the date of the accident, the vehicle

had only a 'private car - liability only policy' with a condition

excluding its use as a contract carriage. Thus, there is

violation of the conditions of the policy by the insured.

Therefore, the liability cannot be fastened on the insurer.

However, in the facts and circumstances of the case and

considering the beneficial purpose of the enactment of the

Motor Vehicles Act and to meet the ends of justice, a

direction to pay and recover the compensation deserves to be

issued against the insurer.

13. With regard to the quantum of compensation, the

Tribunal has taken the notional monthly income of the

petitioner as Rs.4,000/-. Taking the percentage of permanent

disability as 10% based on Ext.C1 and the multiplier as '13',

the Tribunal has awarded Rs.52,800/- (4,000 x 12 x 10/100 x

13) (the actual amount under the head as per the above

calculation should come as Rs.62,400/-) as compensation for

continuing and permanent/ partial disability. The petitioner MACA No.2439 of 2016 ..15..

was a fish merchant. In the absence of any evidence

regarding the income of the petitioner, the Tribunal can

calculate compensation by arriving at a notional income.

Going by the dictum laid down in Ramachandrappa v.

Manager, Royal Sundaram Alliance Insurance Company

Limited [2011 (13) SCC 236], the notional income of a

manual labourer in respect of an accident that occurred in

2011, has to be taken as Rs.8,000/-. The Tribunal went wrong

in taking the multiplier as '13'. The petitioner was aged 54

years at the time of the accident and the multiplier

applicable is '11' in the light of the decision in Sarla Verma

v. Delhi Transport Corporation [2009 (6) SCC 121: AIR

2009 SC 3104]. Accordingly, the compensation for

continuing and permanent/ partial disability is re-fixed as

Rs.1,05,600/- (8,000x12x11x10/100). Since the Tribunal has

already awarded an amount of Rs.52,800/- as compensation

under the said head, the petitioner is entitled to an enhanced

amount of Rs.52,800/- (Rs.1,05,600-52,800).

14. Towards loss of earnings, the Tribunal has awarded MACA No.2439 of 2016 ..16..

an amount of Rs.24,000/- (4,000x6), finding that the

petitioner was incapacitated to do work for a period of six

months. Since the notional monthly income of the petitioner

is re-fixed as Rs.8,000/-, he is entitled to an amount of

Rs.48,000/- (8,000x6) towards loss of earnings. After

deducting the amount already awarded, the petitioner is

entitled to an additional amount of Rs.24,000/- (Rs.48,000-

24,000) under the said head.

15. Towards loss of amenities in life, no amount has

been awarded by the Tribunal. Taking into consideration the

nature of injuries sustained by the petitioner and the

disability, he is entitled to an amount of Rs.50,000/- under

the said head.

16. I find that the compensation awarded under the

other heads is just and reasonable.

In the result, the petitioner is entitled for an enhanced

amount of Rs.1,26,800/- (Rupees one lakh twenty six

thousand and eight hundred only) (Rs.52,800+ 24,000+

50,000) towards compensation. The 3rd respondent insurance MACA No.2439 of 2016 ..17..

company is absolved from liability of paying the

compensation to the petitioner. However, the 3rd respondent

shall satisfy and pay the amount of compensation as

enhanced by this Court at the first instance and thereafter

the 3rd respondent shall be entitled to recover the same from

the 2nd respondent in accordance with law. The petitioner can

realise the total compensation of Rs.5,53,600/- (Rs.4,26,800

+ 1,26,800) together with 8% interest per annum from the

date of petition till realisation with proportionate costs from

the 3rd respondent insurer at the first instance. The 3rd

respondent is directed to deposit the said amount (less the

amount, if any, already paid by the 2nd respondent) before the

Tribunal within a period of two months from the date of

receipt of a certified copy of this judgment.

The appeal is allowed as above.

Sd/-

MURALI PURUSHOTHAMAN JUDGE SB