Madhya Pradesh High Court
Bala Prasad vs New India Insurance Company Limited on 22 May, 2024
1
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE BINOD KUMAR DWIVEDI
ON THE 22 nd OF MAY, 2024
MISC. APPEAL No. 1206 of 2022
BETWEEN:-
1. BALA PRASAD S/O HARISHCHANDRA RAIKWAR,
AGED ABOUT 60 YEARS, VILLAGE MURPAR KALA
BEGUMGANJ, (MADHYA PRADESH)
2. MOHANBAI W/O SHRI BALAPRASAD, AGED
ABOUT 55 YEARS, OCCUPATION: HOUSEWIFE R/O
VILLAGE MURPAR KALA BEGUMTGANJ,
DISTRICT RAISEN, M.P. (MADHYA PRADESH)
3. SUKHWATI D/O SHRI BALAPRASAD, AGED ABOUT
17 YEARS, OCCUPATION: MINOR THROUGH ITS
NATURAL GUARDIAN FATHER SHRI
BALAPRASAD R/O VILLAGE MURPAR KALA
BEGUMGANJ, DISTRICT RAISEN, M.P. (MADHYA
PRADESH)
4. ROHIT S/O SHRI BALAPRASAD, AGED ABOUT 16
YEAR S , OCCUPATION: MINOR THROUGH ITS
NATURAL GUARDIAN FATHER SHRI
BALAPRASAD R/O VILLAGE MURPAR KALA
BEGUMGANJ, DISTRICT RAISEN, M.P. (MADHYA
PRADESH)
.....APPELLANTS
(BY SHRI SOURABH SINGH - ADVOCATE)
AND
1. NEW INDIA INSURANCE COMPANY LIMITED
THROUGH BLOCK NO.3, SECOND FLOOR,
PARYAWAS BHAWAN, ARERA HILLS, BHOPAL
(MADHYA PRADESH)
2. SUSHIL SINGH THAKUR S/O DHEERAJ SINGH
T H A K U R R/O HOUSE NO. 46 GHATAMPUR,
DISTRICT RAISEN, M.P. (OWNER OF VEHICLE)
(MADHYA PRADESH)
Signature Not Verified
Signed by: AKANKSHA
MAURYA
Signing time: 27-05-2024
10:58:07
2
3. RANJEET GOAND S/O SHRI DEVANAND GOND,
AGED ABOUT 46 YEARS, R/O HOUSE NO. 68/7,
VAANGANGA, BEHIND ROTARI CLUB, BHOPAL,
M.P. (MADHYA PRADESH)
.....RESPONDENTS
(BY SHRI JAYANT NEEKHRA - ADVOCATE FOR THE RESPONDENT NO.1.)
This appeal coming on for admission this day, th e court passed the
following:
ORDER
Appellants/claimants have preferred this appeal against the impugned
award dated 20.1.2022 passed in MACC No.50/2018 whereby looking to the
breach of permit and insurance policy, learned Claims Tribunal has ordered
that respondent no.2 and 3/ owner and driver of the offending vehicle will pay
the compensation amount. Insurance company has been exonerated from the
liability to pay.
2. Learned counsel for the appellants submits that direction to pay and recover
may be issued and for this learned counsel for the appellants has placed
reliance in Para 23 and 24 of Amrit Paul Singh v. TATA AIG General
Insurance Co. Ltd., (2018) 7 SCC 558 relevant para is extracted below;-
"23. The Court held that when the intention of the
legislature is quite clear to the effect that a registered
owner of the vehicle should not be held liable if the
vehicle is not in his possession and control and there was
evidence on record that Respondent 2 plied the vehicle
without the insurance in violation of the statutory
provision contained in Section 146 of the Act, the High
Court could not have mulcted the liability on the financier
and finally, the financier was absolved of the liability.
24. In the case at hand, it is clearly demonstrable from the
materials brought on record that the vehicle at the time of
the accident did not have a permit. The appellants had
taken the stand that the vehicle was not involved in the
accident. That apart, they had not stated whether the
vehicle had temporary permit or any other kind of permit.
The exceptions that have been carved out under Section
66 of the Act, needless to emphasise, are to be pleaded
and proved. The exceptions cannot be taken aid of in the
course of an argument to seek absolution from liability.
Use of a vehicle in a public place without a permit is a
fundamental statutory infraction. We are disposed to think
so in view of the series of exceptions carved out in
Section 66. The said situations cannot be equated with
absence of licence or a fake licence or a licence for
different kind of vehicle, or, for that matter, violation of a
condition of carrying more number of passengers.
Therefore, the principles laid down in Swaran Singh
[National Insurance Co. Ltd. v. Swaran Singh, (2004) 3
SCC 297 : 2004 SCC (Cri) 733] and Lakhmi Chand
[Lakhmi Chand v. Reliance General Insurance, (2016) 3
SCC 100 : (2016) 2 SCC (Civ) 45] in that regard would
not be applicable to the case at hand. That apart, the
insurer had taken the plea that the vehicle in question had
no permit. It does not require the wisdom of the
"Tripitaka", that the existence of a permit of any nature is
a matter of documentary evidence. Nothing has been
brought on record by the insured to prove that he had a
permit of the vehicle. In such a situation, the onus cannot
be cast on the insurer. Therefore, the Tribunal as well as
the High Court had directed that the insurer was required
to pay the compensation amount to the claimants with
interest with the stipulation that the insurer shall be
entitled to recover the same from the owner and the
driver. The said directions are in consonance with the
principles stated in Swaran Singh [National Insurance Co.
Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC
(Cri) 733] and other cases pertaining to pay and recover
principle."
3. Learned counsel for the appellant has further relied on para 3,13, and
14 of a judgment of cooridante bench of this court in case of Smt. Gudiya
and others -Vs- Govind Sharma and others [Before Anand Pathak ,J]
M.A.No.532/2013. Decided on -03/05/2019 which is extracted below. -
"3- Claim application was preferred by the claimants
under Section 166 of the Motor Vehicles Act, 1988
(hereinafter referred to as 'the Act') seeking compensation.
The Claims Tribunal found that the deceased sustained
injuries because of rash and negligent act of the offending
vehicle and rejected the theory of contributory negligence
and awarded Rs.6,60,000/- as compensation to the
claimants along with interest 7%, although accepted the
submission of the Insurance Company regarding liability
because the offending vehicle breached the policy
condition because of non possession of permit in the name
of owner of vehicle -Indrapal Singh Sikarwar. Therefore,
this appeal has been preferred for enhancement of the
amount of compensation as well as seeking direction for
the Insurance Company to adopt 'Pay and Recover'
approach.
13- Having gone through the evidence adduced by the
claimants and after taking into consideration all the
evidence record, the amount awarded by the tribunal
appears to be on the lower side as referred above which
deserves to be enhanced. From the above discussion, this
Court comes to the conclusion that the Claims Tribunal
did not err in assessing the income of the deceased as
Rs.5,000/-. Therefore, income of the deceased is assessed
at Rs.60,000/- annually (Rs.5,000/- per month) and by
assessing the same as annual income of the deceased and
deducting 1/3rd towards personal expenses (Rs.20,000/-)
and applying the multiplier of 16, the loss of dependency
comes to Rs.6,40,000/- (Rs.40,000x16=Rs.6,40,000/-)
over which 40% should be granted to the claimants under
the head of future prospects (Rs.2,56,000/-) thus total
dependency comes to Rs.8,96,000/-. Further the amount
awarded under other heads like loss of estate, funeral
expenses and loss of consortium Rs.20,000/- are on lower
side and according to the judgment of National Insurance
Co. Ltd. Vs. Pranay Sethi and others, 2017 ACJ 2700
under the other heads Rs.70,000/- should be awarded to
the claimants. Thus, total compensation comes to
Rs.9,66,000/- along with interest at the rate of 7 % per
annum from the date of application. Thus, the appellants
are entitled for Rs.9,66,000/- instead of Rs.6,60,000/-.
The enhanced amount of Rs.3,06,000/- shall carry interest
@ 7% p.a.
14- In view of the forgoing discussions, the appeal
succeeds and is hereby allowed. The appellants are held
entitled to receive the enhanced amount of Rs.3,06,000/-
in addition to the amount of compensation already
awarded by the Claims Tribunal. Respondent
No.3/Insurance Company is directed to make the payment
of enhanced and already awarded amount to appellants/
claimants within a period of three months from today. The
aforesaid awarded amount shall carry interest at the rate
of 7% per annum. Rest of the conditions as imposed by
Claims Tribunal shall remain intact. It is made clear that
Insurance Company shall pay the amount of compensation
to the claimants and thereafter would recover the same
from the owner of the vehicle. "
5. Combating the contentions raised on behalf of the appellants, learned
counsel for the respondent/ insurance company submits that in the instant case,
gratuitous passengers were being carried by the offending truck which was not
having permit and also insurance company did not cover the risk of gratuitous
passengers in goods carriage vehicle. Looking to the factual and legal aspects
learned Claims Tribunal has exonerated the insurance company and also not
applied the doctrine of pay and recover. Appeal is devoid of any substance
and therefore is liable to be dismissed.
6. Heard the learned counsel for the parties and perused the record.
7. Learned Claims Tribunal has extensively dealt with the issue of
breach of insurance policy on issue no.3 and after detailed discussion
concluded in para 27 of impugned award that in insurance policy of the
offending vehicle (Ex.D/1) only premium for driver and conductor and cleaner
was paid. No premium was paid for covering risk of passengers. At the time of
accident seven passengers were being carried in the offending vehicle and in
such circumstances, liability to pay compensation amount was saddled only
upon respondent no.2 and 3/ owner and driver of the vehicle. Supreme Court
in the case of National Insurance company vs. Rattani and Ors. (2009) 2
SCC 75 in para 19 has extensively dealt with this issue and held that victims of
the accident were travelling in the truck as gratuitous passengers and in view of
the matter the appellant herein was not liable to pay the amount compensation
to the claimant. Relevant para 19 is extracted as under;-
"19. In National Insurance Co. Ltd. v. Cholleti
Bharatamma this Court categorically held: (SCC
p.433, paras 27-28)
27. The learned counsel appearing for the respondent,
submitted that from the aforementioned finding, it is
evident that the respondent was travelling as the owner of
the goods. We do not think that the said submission is
correct. PW 2, in his evidence, stated:
"I am doing tamarind business. I witnessed the accident
which took place about 3 years back at about 6 a.m. at
Borrampalem Junction beyond Talluru. At the time of the
accident I was in the crime lorry by the side of the driver.
Myself and 6 others were carrying tamarind in that lorry
belonging to us. We boarded the lorry along with our load
of tamarind at Dharamavaram to go to Rajanagaram. We
were selling the tamarind at Rajanagaram in retail by
taking the tamarind there in our lorry from our village of
Dharamavaram."
28. The Tribunal, therefore, correctly recorded that
according to PW 2, he was travelling with his goods as
owner thereof and not the deceased."
We, therefore, in the facts and circumstances of the case,
have no hesitation to hold that the victims of the accidents
were travelling in the truck as gratuitous passengers and in
that view of the matter, the appellant herein was not liable
to pay the amount of compensation to the claimants.
8. Co-ordinate Bench of this Court in the case of Cholamandalam Ms
General Ins. Co.Ltd. vs. Abdul Karim Khan and others has held that when
there is no coverage for gratuitous passenger travelling in goods carrying vehicle
then there is no liability on insurance company to pay compensation. It has
further been held that a direction to pay and recover in such cases though
appears to be humanitarian but cannot be applied. Relevant para 6 is extracted
as under;-
"6. Though the Claims Tribunal has relied on the
judgment of the Supreme Court in the case of Shivaraj v.
Rajendra and another, (2018) 10 SCC 432 but it is true
that the said judgment failed to take into consideration a
three- Judge Bench decision in the case of New India
Assurance Co. Ltd. v. Asha Rani (supra) wherein it is
held that if there is no coverage, then there will be no
liability to pay compensation. When this aspect is taken
into consideration, then it is true that when there is no
coverage for gratuitous passengers travelling in a goods
carrying vehicle which too had capacity of only two
persons i.e. driver and one more, and three persons were
admittedly travelling besides the driver then a direction to
pay and recover, though appears to be humanitarian but
cannot be sustained in the eye of law as there was no
coverage for the gratuitous passengers in the insurance
policy."
9 . The judgments relied by learned counsel for the appellants in Amrit
Paul Singh (Supra ) and Smt. Gudiya and others (Supra) are
distinguishable on facts in those cases passengers were not carried in goods
carrying vehicle therefore, the judgments relied upon by learned counsel for the
appellant did not help him. In the conspectus of judgments as referred
hereinabove the appellants could not make out any case for direction of this
court to insurance company to pay the compensation amount first and then
recover it from owner and driver of the offending vehicle.
10. Consequently, appeal fails and is hereby dismissed.
(BINOD KUMAR DWIVEDI)
JUDGE
Akm
