Kerala High Court
Rakesh R Kammath vs Santhosh on 3 April, 2025
2025:KER:28044
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE EASWARAN S.
THURSDAY, THE 3RD DAY OF APRIL 2025 / 13TH CHAITHRA, 1947
MACA NO. 2067 OF 2021
AGAINST THE AWARD DATED 26.06.2020 IN OPMV NO.682 OF
2014 OF MOTOR ACCIDENT CLAIMS TRIBUNAL, ERNAKULAM.
APPELLANT/PETITIONER:
RAKESH R KAMMATH
AGED 32 YEARS
S/O. RAMDAS, POKKAMTHAZHATH HOUSE, KUNJATTUKARA,
EDATHALA P.O., PIN-683561, ERNAKULAM DISTRICT.
BY ADV K.V.RAJAN
RESPONDENTS/RESPONDENTS:
1 SANTHOSH
S/O.RAJAN, 7/348 (10/343), MUTHIRAKKATTUMUGAL,
EDATHALA P.O., ERNAKULAM-683561.
2 SAJO JOSEPH,
S/O. JOSEPH M.A., MUKKOTTIMUKAL HOUSE, AKG NAGAR,
NAD P.O., ERNAKULAM-683101.
3 ICCI LOMBARD GENERAL INSURANCE CO. LTD.,
3RD FLOOR, KANNANKERI ESTATE, SHANMUGHAM ROAD,
MARINE DRIVE, KOCHI-682031.
BY ADVS.
A.T.Anilkumar A.T.
jacob mathew p
V.SHYLAJA(K/1281/1995)
THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD
ON 07.03.2025, THE COURT ON 03.04.2025 DELIVERED THE
FOLLOWING:
MACA No.2067/2021
2
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EASWARAN S., J.
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MACA No.2067 OF 2021
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Dated this the 3rd day of April, 2025
This appeal arises out of the award passed by the Motor
Accidents Claims Tribunal, Ernakulam, in OP(MV)No.682/2014.
2. The brief facts necessary for the disposal of the
appeal are as follows:
The appellant, who is stated to be doing a partnership
business in flex board met with an accident on 09.04.2013 at
about 4 AM. The claimant along with his partner Sumesh, hired
a Tata Ace goods carriage bearing Reg.No.KL-41-G-3107
belonging to the 1st respondent and were travelling along with
the goods in the platform of the vehicle. The accident occurred
due to the rash and negligent driving of the driver of the vehicle
and therefore he claimed compensation towards the injuries
sustained by him in the road traffic accident. It was contended
that the appellant was earning a monthly income of Rs.10,000/-
per month. However, the Tribunal proceeded to fix the notional
income at Rs.9,000/- and then granted the following
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compensation:
Heads Amount Amount
claimed awarded
(in Rupees) (in Rupees)
Loss of earnings 120000 45000
Transport to hospital and back to home 2000 10000
Extra nourishment 10000 20000
Damage to clothes and articles 1000 1000
Bystander Expenses 5000 8750
Treatment Expenses 200000 172200
Compensation for pain and sufferings 100000 80000
Compensation for continuing or permanent 887400 563760
disability
Compensation for future treatment expenses 30000 0
Compensation for loss of amenities and 50000 130000
comforts
Total 14,05,400/- 10,30,710/-
Claim limited to Rs.13,00,000/-
3. While granting the aforesaid compensation, the
Tribunal accepted the contention of the Insurance Company that
the claimant was a gratuitous passenger in the vehicle and
therefore was not entitled to claim compensation from the
Insurance Company. Therefore, the owner of the vehicle was
mulcted with the liability. It is as against the findings of the
Tribunal exonerating the Insurance Company from the liability
and also claiming enhancement of the compensation, that the
claimant has approached this Court in the present appeal.
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4. Heard Sri.KV Rajan - learned counsel appearing on
behalf of the appellant and Sri.P.Jacob Mathew - learned counsel
appearing for the Insurance Company.
5. On a consideration of the rival submissions raised
across the Bar, this Court finds that the claimant is entitled to
succeed on the question of enhancement of the compensation as
well as on the question as to whether the Insurance Company is
liable to indemnify the owner for the reasons to follow.
6. It is seen that the Tribunal discarded the averment of
the claimant that he was earning a monthly income of
Rs.10,000/- per month and proceeded to fix the notional income
at Rs.9,000/-. In Sanjay Kumar v. Ashok Kumar and
Another [2014 (5) SCC 330], the Hon'ble Supreme Court has
held that if the claim of income is reasonable and in tune with
the ground realities, the Tribunal is bound to apply the same
without insisting on the documentary evidence. Therefore, this
Court is of the considered view that the claimant having claimed
only an amount of Rs.10,000/- per month, the same can be fixed
as the income.
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7. Once the income of the claimant is fixed as above,
necessarily under the various non-conventional heads also, the
claimant is entitled to enhancement.
8. A perusal of the award passed by the Tribunal shows
that the Tribunal has awarded compensation under the head loss
of earnings only for a period of five months. Considering the
nature of injuries and also the avocation of the claimant, this
Court is of the opinion that the compensation for loss of earnings
can be increased to period of eight months.
9. Although this Court has found the entitlement of the
claimant for enhancement, this Court need to address the most
pivotal issue in this appeal. As noticed above, the Tribunal had
exonerated the Insurance Company from its liability on the
premises that the claimant was a gratuitous passenger in the
vehicle and was not covered under the policy. This finding is also
questioned by the claimant in the present appeal. The counsel
for the appellant relied on the decision of this Court in Mani and
Others v. Joby John and Others [(2017) ACJ 392], United
India Insurance Company Ltd. v. Suresh [2006 (4 )KLT 333]
and the decision of the Hon'ble Supreme Court in Shivawwa
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and Another v. Branch Manager, National India Insurance
Company Ltd. and Another [(2018) ACJ 1288].
10. The learned counsel for the Insurance Company, on
the other hand, vehemently points out that since the claimant
was travelling in the platform of the vehicle, he is not covered
under the policy. In support of his contention, he relied on the
decision of the Hon'ble Supreme Court in Sanjeev Kumar
Samrat v. National Insurance Company Ltd. [2013 (1) KLT
41 (SC)].
11. This Court has bestowed its anxious consideration to
the rival contention and also the relevant clause in the policy.
Ext.B2 is the certificate of insurance policy which contains the
following details:
Premium Details
OWN DAMAGE(A) ₹ LIABILITY(B) ₹
Basic OD Premium -4745 Basic Third Party Liability 10902
IMT-23 Loading 1105 Total 10902
Sub Total -4745 Add:
Total Own Damage -4745 Total Liability Premium(B)
Premium(A)
Total Package Premium(A+B): -4745
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Service Tax (Inclusive of education cess
&higher education cess): 1833
Total Premium Payable in ₹ 16663
12. Coming to the limits of liability as prescribed under
the contract of insurance, one can find the following clause, " The
policy does not cover....3) Use of carrying passengers in the
vehicles;' except employees (other than the driver) not
exceeding the number permitted in the registration document
and coming within the purview of the Workmen's Compensation
Act, 1923." In this case, apparently there is a conflict in the two
clauses in the policy. Firstly, the insurer has paid a third party
premium of Rs.10,902/-. He has also paid the premium for
personal coverage of the owner and the legal liability for the
employees. After accepting the premium for the third party, the
insurer had included a clause. It is in the above pretext of Clause
3 of limits of liability of the insurance policy that the learned
counsel for the Insurance Company vehemently opposed the
plea of the appellant that the Insurance Company cannot be
mulcted with the liability of payment of compensation under the
policy.
13. The apparent conflict in the policy needs to be
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resolved by this Court in order to find out the question as to
whether there is any statutory liability under Section 147(1)(i) of
the Motor Vehicles Act, 1988, on the Insurance Company to
cover the risk of a gratuitous passenger. In New India
Assurance Company Ltd. v. C.M.Jaya and Others [2002 ACJ
271], the Hon'ble Supreme Court held that even though the
statutory liability cannot be more than what is required in the
statute itself, there is no provision in the Act prohibiting the
parties from creating a higher liability to cover a wider risk.
Therefore, in such cases, it will have to be held that the insurer
will be bound by the terms of contract.
14. A Division Bench of this Court in Mary and Others v.
United India Insurance Company Ltd. and Another [(2014)
1 KLJ 805] held that, even if the owner of the vehicle is not
expected to carry any person on the platform, if there is a
coverage for covering the liability of the person carried in the
vehicle, he can only carry such persons. Although the insured
would have violated the terms and conditions of the policy by
carrying the persons on the platform, the insurer cannot escape
the liability of payment of amount under the contract and
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therefore, held that the Insurance Company is liable to satisfy
the award in respect of the claim and recover the amount from
the insurer/owner of the vehicle.
15. In United India Insurance Company Ltd. v. K.M.
Poonam and Others [2015 (15) SCC 297], the Hon'ble
Supreme Court held that when a private vehicle was used as a
public service vehicle and the insurance policy permitting
carriage of six persons including the driver, the passengers in
excess of six would be considered as third parties and since no
payment was made towards third party premium, the insurer
was entitled to recover the amount from the insured. It is
expedient to extract paragraph 28 and 36 of the said judgment.
"28. While the aforesaid judgment was delivered on 5-1-
2004, on the very next day, another three-Judge Bench of
this Court rendered a decision in National Insurance Co.
Ltd. v. Baljit Kaur [(2004) 2 SCC 1], in the context of the
provisions of Section 147(1)(b) of the 1988 Act after its
amendment in 1994. While referring to the earlier decision in
the reference decided in New India Assurance Company
Ltd. v. Asha Rani [(2003) 2 SCC 223], their Lordships held
that in spite of the amendment effected to Section 147(1)(b)
in 1994, the position remained the same in respect of
persons other than the owner of the goods and his authorised
representative being carried in the goods vehicle. It was held
that: (Baljit Kaur case, SCC p.8, para 20.)
"20. it was not the intention of the legislature to
provide for the liability of the insurer with respect
to passengers, especially gratuitous passengers,
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who were neither contemplated at the time the
contract of insurance was entered into, nor was
any premium paid to the extent of the benefit of
insurance to such category of people."
It was, therefore, felt that the interest of justice would be
subserved if the Insurance Company satisfied the awarded
amount and recovered the same from the owner of the
vehicle and for the said purpose it would not be necessary for
the Insurance Company to file a separate suit, but to initiate
a proceeding before the executing court as if the dispute
between insurer and the owner was the subject-matter of the
determination before the Tribunal which had decided in
favour of the insurer and against the owner of the vehicle.
***
36. The liability of the insurer, therefore, is confined to the
number of persons covered by the insurance policy and not
beyond the same. In other words, as in the present case,
since the insurance policy of the owner of the vehicle covered
six occupants of the vehicle in question, including the driver,
the liability of the insurer would be confined to six persons
only, notwithstanding the larger number of persons carried in
the vehicle. Such excess number of persons would have to be
treated as third parties, but since no premium had been paid
in the policy for them, the insurer would not be liable to
make payment of the compensation amount as far as they
are concerned. However, the liability of the Insurance
Company to make payment even in respect of persons not
covered by the insurance policy continues under the
provisions of sub-section (1) of Section 149 of the Act, as it
would be entitled to recover the same if it could prove that
one of the conditions of the policy had been breached by the
owner of the vehicle."
16. The same view has been reiterated by the Hon'ble
Supreme Court in Shivawwa (supra) and by the Division Bench
of this Court in Mani (supra).
17. Having analysed the principles governing the liability
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of Insurance Company qua the violation of the policy conditions,
this Court needs to address one more glaring issue which has
presented itself before it. In the present case, the insured has
undertaken to cover the liability of third parties and has accepted
the premium towards the same. However, there is a clause in
the contract of insurance which apparently stands in conflict with
the general purpose for which the contract was intended to, that
is Clause No.3 under the limits of liability, which creates a
negative covenant on the insured/owner not to carry any
passengers other than what is provided in the policy. Therefore,
though the Insurance Company has agreed to indemnify the
owner for any liability arising out of the use of the vehicle qua
third parties, this Court cannot remain oblivious to the fact that
the contract prohibits the insured from carrying any person on
the platform. Apparently, in the present case, going by the
evidence adduced by the parties before the Tribunal, it is evident
that the claimant was travelling in the platform of the vehicle in
question and thus there is a breach in the conditions of the
insurance policy.
18. It is now settled law that all breach of policy
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conditions will not ultimately lead to exonerating the liability of
the Insurance Company. The exoneration of the liability of the
Insurance Company would always depend upon the facts
presented in each case and depending upon the construction of
the contract of insurance. In the present case, on construction
of the contract of insurance - Ext.B2, this Court is of the view
that the Insurance Company having undertaken to cover the
liability of the third parties, cannot plead that they are not liable
to indemnify the owner. At the same time, since there occurred
a breach of policy condition as held by this Court in Mary(supra),
the Insurer has to be given a liberty to recover the amounts from
the owner.
As an upshot of the above discussion, the appellant is entitled
to succeed. Hence, the appeal is allowed and the appellant is
entitled for enhanced compensation as follows:
Heads Amount awarded Total Enhanced amount
by the Tribunal compensation of compensation
awarded in
appeal
Notional income of the appellant is fixed at Rs.10,000/-. Adding 40% future
prospects, the income would come to Rs.14,000/-
Loss of earnings 45,000/- 80,000/- 35,000/-
[10000x8] [80000-45000]
Compensation for 80,000/- 1,05,000/- 25,000/-
pain and sufferings [105000-80000]
Compensation for 5,63,760/- 8,76,960/- 3,13,200/-
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continuing or [14000x12x18x29/ [876960-563760]
permanent 100]
disability
Compensation for 1,30,000/- 2,92,320/- 1,62,320/-
loss of amenities [1/3rd of
compensation for
permanent
disability]
Total enhanced amount of compensation 5,35,520/-
Accordingly, the appellant/claimant is awarded an additional
compensation of Rs.5,35,520/- (Rupees five lakhs thirty five
thousand five hundred twenty only) over and above the
compensation awarded by the Tribunal with interest @9% per
annum from the date of petition till realization together with
proportionate costs. The Insurance Company is directed to deposit
the aforesaid amount within a period of one month from the date of
receipt of a copy of this judgment. The Insurance Company is
however given liberty to recover the entire amount awarded as
compensation from the owner of the vehicle in question.
The appeal is ordered accordingly.
Sd/-
EASWARAN S.
JUDGE
ACR
