Madras High Court
The Manager vs C.Sakthivel on 1 August, 2024
Author: V.Bhavani Subbaroyan
Bench: V.Bhavani Subbaroyan
CMA(MD)No.91 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED:01.08.2024
CORAM :
THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN
and
THE HONOURABLE MR.JUSTICE K.K.RAMAKRISHNAN
CMA(MD)No.91 of 2021
and
CMP(MD)No.849 of 2021
The Manager,
M/s.The Oriental Insurance Company Limited,
having its office at
Lyola Building,
Salai Road,
Dindigul. ... Appellant/Respondent No.2
vs.
1. C.Sakthivel ... Respondent No.1 / Petitioner
2. P.Subramani ... Respondent No.2/Respondent No.1
PRAYER: Appeal filed under Section 173 of the Motor Vehicles Act,
1988, to set aside the order of the Motor Accident Claims Tribunal cum
Special Subordinate Judge, Dindigul made in M.C.O.P.No.27 of 2019,
dated 24.09.2019 and allow the appeal with costs.
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Page No.1 of 29
CMA(MD)No.91 of 2021
For Appellant : Mr.C.Jawahar Ravindran
For Respondents : Mr.A.Saravanan for R1
: Mr.P.Samuel Gunasing for R2
JUDGMENT
(Order of the Court was made by K.K.RAMAKRISHNAN, J.
The appellant/insurance company filed this appeal “challenging
the liability”.
2.The first respondent filed the claim petition in M.C.O.P.No.27 of
2019 on the file of the Motor Accident Claims Tribunal cum Special
Subordinate Judge, Dindigul, claiming compensation of Rs.20,00,000/-.
In the said petition, he stated that he was working as Electrician. On
28.08.2012, at about 02.15 p.m., when he was travelling in the car
bearing Registration No.TN 50 C 1323 on Karur to Salem Four way
road, the driver of the said car drove the vehicle in a rash and negligent
manner and dashed against the centre Median and went off to the other
side of the road and collided with on coming opposite car bearing
Registration No.59 AS 3694 and in the said accident, the petitioner
sustained grievous injury in his right leg, right shoulder, right arm and
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right side hip. Immediately, he was admitted in the hospital and in the
hospital, his right leg below knee was amputated and after taking
continuous treatment, he filed the claim petition seeking the said
compensation. He also averred that the Velayutham Police Officials
registered the case in Crime No.390 of 2012 under Section 279, 337 of
IPC, against the driver of the said car bearing Registration No.TN 50 C
1323. He also impleaded the first respondent as the owner of the vehicle
and the second respondent as the insurer of the vehicle.
3.The first respondent, owner of the vehicle filed a counter stating
that he was not the owner of the vehicle and one Mr.R.Kumar, is the
owner of the vehicle. He also disputed the manner of the accident as
pleaded by the claimant. He also disputed the monthly earning of the
claimant.
4.The second respondent insurance company filed a counter and
denied the liability. They also disputed the income and the compensation
amount claimed under the various heads. The vehicle was private vehicle
and the same was used for commercial purpose. Therefore, they seek for
dismissal of claim petition against the insurance company.
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5.To prove the claim, the claimant examined himself as P.W.1 and
marked exhibited Ex.P.1 to Ex.P.11. On the side of second respondent,
three witnesses have been examined as R.W.1 to R.W.3 and exhibited
Ex.R.1 insurance policy was marked. The Ex.X1 and Ex.X2 were also
marked. Even though, the owner of the vehicle filed a counter denying
his ownership, he did not let in any evidence.
6.The learned Tribunal after considering both the oral and
documentary evidence, held that the driver of the car had not possessed
valid license and hence, the learned Tribunal Judge is directed the
insurance company to pay the amount and recover from the owner of the
vehicle. The learned Tribunal judge also considered the amputation of
leg of the claimant and his other grievous injuries and also considering
the 80% disability certificate given by the competent medical Board and
the nature of the work namely, Electrician, calculated his monthly income
as Rs.9,100/- and applied the multiplier method and calculated the other
headings and awarded total compensation of Rs.18,36,160/- with 7.5 %
of interest by passing the impugned award.
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7.Challenging the same, the insurance company filed this appeal
before this Court questioning the liability alone.
8.The learned counsel for the insurance company would submit
that without payment of separate premium to the occupant of the car, the
liability fixed upon the insurance company on the basis of the policy
marked Ex.R.1, is not legally valid and hence, he seeks for the
exoneration of the appellant insurance company. The learned counsel has
not disputed the quantum.
9.The learned counsel for the claimant submitted that the insurance
company has not raised any plea regarding the above payment of
premium before the Tribunal. Even though R.W.1 was examined on the
side of the insurance company to substantiate said pleading, he admitted
that the deceased was third party. Under the policy, all the premium was
paid as per the statutory requirement. The learned Tribunal directed the
Insurance company to pay and recover. Therefore, he seeks to dismiss
this appeal.
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10.Even though the owner of the vehicle was set exparte before the
Court below, he has appeared through the counsel and made the
following submissions:
(i) He filed the counter denying the ownership. He already sold the
vehicle and hence, the order of pay and recovery against this respondent
is liable to be set aside.
(ii) He produced the delivery note dated 22.03.2011 and argued
that on the basis of the said delivery note, he was not the owner of the
vehicle on the date of the accident. He also produced the dismissal order
passed in I.A.No.1088 of 2015 to implead the subsequent owner of the
vehicle and hence, he seeks for the deletion of pay and recovery against
this respondent.
11.This Court considered the rival submissions made by the
learned counsel appearing on either side and perused the materials
available on record.
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12.From the above submission, this Court framed the following
points for determination:
(i)whether the plea of the insurance company to exonerate on the
ground of the non-payment of the separate premium to the occupants of
the car is correct?
(ii)whether the plea of the second respondent/owner of the vehicle
to delete the direction of pay and recovery against him can be
entertained?
Question No.1:
13.The learned counsel for the insurance company submitted that
the first respondent sustained injuries as a occupant of the car in the
insured vehicle bearing registration No.TN-50-C-1323. The policy was
marked as Ex.R1. No separate premium has been paid by the insured, to
fix the liability, for the occupant of the car. The said submission of the
learned counsel has no legs to stand for the reason that the policy is
standard Motor Policy as formulated by the Tariff Advisory Committee
and IRDA. Under Section 64 (U) (C) of the Insurance Act, the insurance
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company shall follow the Tariff and Advisory committee, the rules,
regulation, rates, advantage, terms and conditions for the transaction of
the Motor Insurance Business in India and from 2007 onwards IRDA
(Insurance Regulatory and Development Authority) issued direction to
the insurance company in force for the above said purpose. Till
31-12-2006 the Tariff Advisory Committee and, thereafter, from
1-1-2007 IRDA functioned as the statutory regulatory authorities and
they are entitled to fix the tariff as well as the terms and conditions of the
policies issued by all insurance companies. Therefore, the insurance
company is bound by the circular issued by the IRDA.
14.The Hon'ble Supreme Court in the case of Pushpabai
Purshottam Udeshi vs.Ranjit Ginning and Pressing Co., reported in
1977 ACJ 343, has held as follows:
20..............it is not required that a policy of
insurance should cover risk to the passengers
who are not carried for hire or reward. As under
Section 95 the risk to a passenger in a vehicle
who is not carried for hire or reward is not
required to be insured the plea of the counsel for
the insurance company will have to be accepted
and the insurance company held not liable
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under the requirements of the Motor Vehicles
Act.
21. The insurer can always take policies
covering risks which are not covered by the
requirements of Section 95. In this case the
insurer had insured with the insurance company
the risk to the passengers.
14.1.Consequent to the decision of the Apex Court in the case of
Pushpabai Purshottam Udeshi v. Ranjit Ginning and Pressing Co.,
reported in 1977 ACJ 343, Tariff Advisory Committee as per Section 64
(U) (C) of the Insurance Act has issued a circular with regard to the
liability of the Insurance Company in relation to private vehicle :
“TARIFF ADVISORY COMMITTEE
BOMBAY REGIONAL COMMITTEE
Bombay 17th March 1978
Insurance Company's Liability in Respect of
Gratuitous Passengers conveyed in a Private
Car-Standard Form for Private Car
Comprehensive Policy ? Section II ? Liability to
Third-Parties.
I am directed to inform Insurers that advices
have been received from the Tariff Advisory
Committee to the effect that since the industry
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had all these years holding the view on liability
the same practice should continue.
In order to make this intention clear, Insurers
are requested to amend clause 1(a) of Section II
of the Standard Private Car Policy by
incorporating the following words after the
words ‘death of or bodily injury to any person’
appearing therein:
‘Including occupants carried in the motor car
provided that such occupants are not carried for
hire or reward’
I am accordingly to request Insurers to make the
necessary amendment on sheet 38 of the Indian
Motor Tariff pending reprinting of the relevant
sheet.
All existing Policies may be deemed to
incorporate the above amendment as the above
decision is being brought into force with effect
from 25th March, 1977.”
The said circular has been followed by the
insurance company till date.
15.The IRDA also reiterated the said circular, by issuing another
following official circular dated 16.11.2009:
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On 16th November, 2009, IRDA issued a
Circular to CEOs of all the Insurance
Companies restating the factual position
relating to the liability of Insurance companies
in respect of a pillion rider on a two-wheeler
and occupants in a Private Car under the
Comprehensive/Package Policy. The relevant
portion of the said Circular is reproduced
hereunder:
IRDA
Ref: IRDA/NL/CIR/F&U/073/11/2009
November 16, 2009
To
CEOs of all General Insurance Companies
Re: Liability of Insurance Companies in respect
of Occupants of a Private Car and Pillion rider
on a Two-Wheeler under Standard Motor
Package Policy [also called Comprehensive
Policy].
Insurers' attention is drawn to wordings of
Section II (1)(ii) of Standard Motor Package
Policy (also called Comprehensive Policy) for
Private Car and Two-Wheeler under the
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(erstwhile) India Motor Tariff. For convenience
the relevant provisions are reproduced
hereunder:
Section II - Liability to Third Parties:
1. Subject to the limits of liabilities as laid down
in the Schedule hereto the Company will
indemnify the insured in the event of an accident
caused by or arising out of the use of the
insured vehicle against all sums which the
insured shall become legally liable to pay in
respect of—
(i) death or bodily injury to any person
including occupants carried in the vehicle
(provided such occupants are not carried for
hire or reward) but except so far as it is
necessary to meet the requirements of Motor
Vehicles Act, the Company shall not be liable
where such death or injury arises out of and in
the course of employment of such person by the
insured.
It is further brought to the attention of insurers
that the above provisions are in line with the
following Circulars earlier issued by the TAC
on the subject:
(i) Circular M.V. No. 1 of 1978 - dated 18th
March, 1978 [regarding occupants carried in
Private Car] effective from 25th March, 1977.
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(ii) MOT/GEN/10 dated 2nd June, 1986
[regarding Pillion Riders in a Two-Wheeler]
effective from the date of the Circular.
The above Circulars make it clear that the
insured's liability in respect of Occupant(s)
carried in a Private Car and Pillion Rider
carried on Two-wheeler is covered under the
Standard Motor Package Policy. A copy each of
the above circulars is enclosed for ready
reference.
The Authority vide circular No.
066/IRDA/F&U/Mar-08 dated March 26, 2008
issued under File & Use Guidelines has
reiterated that pending further orders the
insurers shall not vary the coverage, terms and
conditions wording, warranties, clauses and
endorsements in respect of covers that were
under the erstwhile tariffs. Further the
Authority, vide Circular No.
019/IRDA/NL/F&U/Oct-08 dated November 6,
2008 has mandated that insurers are not
permitted to abridge the scope of standard
covers available under the erstwhile tariffs
beyond the options permitted in the erstwhile
tariffs.
All General Insurers are advised to adhere to
the afore-mentioned Circulars and any non-
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compliance of the same would be viewed
seriously by the Authority.
This is issued with the approve of Competent
Authority.
Sd/- (Prabodh Chander)
Executive Director
16.It is pertinent to note that the learned counsel appearing for the
insurance company has created the unintended ambiguity over the above
settled issues of covering the liability to the occupants of the car and the
pillion rider of the two wheeler under the misnomer of the Act policy and
the Comprehensive policy without taking note of the circular of
“standard motor policy” which emphasized M.V. No. 1 of 1978 - dated
18th March, 1978 [regarding occupants carried in Private Car] effective
from 25th March, 1977, MOT/GEN/10 dated 2nd June, 1986 [regarding
Pillion Riders in a Two-Wheeler] effective from the date of the Circular
and IRDA/NL/CIR/F&U/073/11/2009 November 16, 2009. The IRDA
once again reiterated the same by issuing the another following circular
during the course of the hearing of the larger issue before the Delhi High
Court in the case of Yashpal Luthra v. United India, reported in (2012)
2 TN MAC 625:
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IRDA/NL/CIR/F&U/078/12/2009 3rd Dec. 2009.
To
All CEOs of All General Insurance Companies
(except ECGC, AIC, Staff Health, Apollo)
Re:Liability of Insurance Companies in respect
of Occupant of a Private Car and Pillion Rider
in a Two-Wheeler under Standard Motor
Package Policy (also called Comprehensive
Policy).
Pursuant to the Order of the Delhi High Court
dated 23.11.2009 in MAC APP No. 176/209 in
the case of Yashpal Luthra v. United India, the
Authority convened a meeting on November 26,
2009 of the CEOs of all the general insurance
companies doing motor insurance business in
the presence of the Counsel appearing on
behalf of the Authority and the leaned amicus
curie.
Based on the unanimous decision taken in the
meeting by the representatives of the general
insurance companies to comply with the IRDA
circular dated 16th November, 2009 restating
the position relating to the liability of all the
general insurance companies doing motor
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insurance business in respect of the occupants
in a Private Car and pillion rider on a Two-
Wheeler under the Comprehensive/Package
Policies which was communicated to the Court
on the same day i.e. November 26, 2009 and the
Court was pleased to pass the order (dt.
26.11.2009) received from the Court Master,
Delhi High Court, is enclosed for your ready
reference and adherence. In terms of the said
order and the admitted liability of all the
general insurance companies doing motor
insurance business in respect of the occupants
in a Private Car and pillion rider on a Two-
Wheeler under the Comprehensive/Package
Policies, you are advised to confirm to the
Authority, strict compliance of the Circular
dated 16th November, 2009 and orders dt.
26.11.2009 of the High Court. Such compliance
on your part would also involve:
(i) withdrawing the plea against such a
contest wherever taken in the cases pending
before the MACT, and issue appropriate
instructions to their respective lawyers and the
operating officers within 7 days.
(ii) with respect to all Appeals pending
before the High Courts on this point, issuing
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instructions within 7 days to the respective
operating officers and the Counsels to
withdraw the contest on this ground which
would require identification of the number of
Appeals pending before the High Courts
(whether filed by the Claimants or the insurers)
on this issue within a period of 2 weeks and the
contest on this ground being withdrawn within
a period of four weeks thereafter.
(iii) with respect to the Appeals pending
before the Hon'ble Supreme Court, informing,
within a period of 7 days, their respective
Advocates on record about the IRDA Circulars,
for appropriate advice and action.
Your attention is also drawn to the discussions
in the CEOs meeting on 26.11.2009, when it
was reiterated that insurers must take
immediate steps to collect statistics about
accident claims on the above subject through a
central point of reference decided by them as
the same has to be communicated in due course
to the Honourable High Court. You are,
therefore, advised to take up the exercise of
collecting and collating the information within
a period of two months to ensure necessary &
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effective compliance of the order of the Court.
The information may be centralized with the
Secretariat of the General Insurance Council
and also furnished to us.
The IRDA requires a written confirmation from
you on the action taken by you in this regard.
This has the approval of the Competent
Authority.
Sd/- (Prabodh Chander)
Executive Director
17.From the above, it is clear that “as of now, the standard motor
vehicle policy” covers the occupant of the car and there was no necessity
to make separate premium. The same has been considered in detail by the
Hon'ble Supreme Court in the case of National Insurance Company
Ltd., Vs. Balakrishnan reported in 2013 (1)SCC 731.
18.Apart from that, in this case, the insurance company marked the
policy under Ex.R.1. The policy is extracted hereunder:
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19.From the perusal of the above policy, it is seen that there was
no condition to make the separate premium for the occupants of the car.
In view of the above IRDA circular, the policy was framed as a standard
motor policy with implied inclusion of the occupants of the car without
any condition for separate premium. Hence, the submission made by the
learned counsel differentiating “the Act policy and comprehensive
policy” without noting the above said circular deserves to be rejected.
Therefore, in all aspects, the submission of the learned counsel for the
insurance company cannot be accepted.
20.The learned counsel without any material marked before the
Court below tries to explain the various definition of the IMT. As
discussed above, the competent authority namely the IRDA issued the
circular to include the liability for the payment of the occupants of the
car under the issuance of the standard motor vehicle policy which was
otherwise called comprehensive policy, this Court is unable to concur
with the said submission.
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21.Yet other important circumstance is that the insurance company
filed counter before the trial Court. They never raised the said issue of
requirement of payment of separate premium before the Court below.
R.W.1 also not deposed anything about the said requirement to exonerate
the said insurance company from the liability. No documents containing
the terms of insurance to disown the liability were filed before the Court
below. It is also settled principle that when the insurance company took a
plea that there is a requirement to pay separate premium under the policy,
the insurance company is duty bound to prove the said fact ie., to avoid
the liability. It is the duty of the insurance company to produce the terms
and condition before the Court below and substantiate the factual and
legal aspects in this regard. In this aspect, it is relevant to follow the
following portion of the judgment of the Hon'ble Supreme Court in the
case of National Insurance Company Ltd., Vs. Jugal Kishore and
others reported in 1988 1 SCC 626:
10. Before parting with the case, we
consider it necessary to refer to the attitude
often adopted by the Insurance Companies, as
was adopted even in this case, of not filing a
copy of the policy before the Tribunal and even
before the High Court in appeal. In this
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connection what is of significance is that the
claimants for compensation under the Act are
invariably not possessed of either the policy or a
copy thereof. This Court has consistently
emphasised that it is the duty of the party which
is in possession of a document which would be
helpful in doing justice in the cause to produce
the said document and such party should not be
permitted to take shelter behind the abstract
doctrine of burden of proof. This duty is greater
in the case of instrumentalities of the State such
as the appellant who are under an obligation to
act fairly. In many cases even the owner of the
vehicle for reasons known to him does not
choose to produce the policy or a copy thereof.
We accordingly wish to emphasise that in all
such cases where the Insurance Company
concerned wishes to take a defence in a claim
petition that its liability is not in excess of the
statutory liability it should file a copy of the
insurance policy along with its defence. Even in
the instant case had it been done so at the
appropriate stage necessity of approaching this
Court in civil appeal would in all probability
have been avoided. Filing a copy of the policy,
therefore, not only cuts short avoidable
litigation but also helps the court in doing
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justice between the parties. The obligation on
the part of the State or its instrumentalities to
act fairly can never be over-emphasised.
22.Apart from lack of both pleadings and evidence, R.W.1 officer
from the insurance company admitted that the injured was a third party
and the relevant evidence is as follows:
kDjhuh; Nkw;fz;l thfdj;ij
nghWj;jtiu 3k; egu; vd;why; rupjhd;.
23.From the above, it is clear that they never raised any defence of
exoneration on the ground that he was occupant of the car and
requirement of any payment of the separate premium under policy and in
the absence of the proof for the same, this Court cannot accept the
submission of the learned counsel for the insurance company.
24.The learned counsel appearing for the claimant rightly relied
the paragraph 19, 20 and 21 of the judgment of this Court in C.M.A.No.
20 of 2014:
19.On the side of the appellant, it is
stated that there is no policy coverage for the
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occupants of the car. A perusal of the policy
reveals that a sum of Rs.670/- was paid
towards basic T.P. And a sum of Rs.25/- was
paid towards the employee of the owner. There
is no wordings in the policy to denote whether
the policy is an Act only policy or a
comprehensive policy. There is no specific
wordings in the policy to denote that there was
no coverage for the occupants in the car. It is
the duty of the insurance company to give clear
details regarding the extend of policy coverage.
Failure on the part of the insurance company is
fatal.
20.At this juncture, this Court would rely
upon a judgement of the Hon'ble Supreme
Court of India in the case of National
Insurance Company Ltd., v. Balakrishnan and
another in Civil Appeal No.8163 of 2012,
wherein it is stated as follows:
“It is the admitted position, as the
decision would show, the earlier circulars
dated 18th March, 1978 and 2nd June, 1986
continue to be valid and effective and all
insurance companies are bound to pay the
compensation in respect of the liability towards
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an occupant in a car under the
comprehensive/package policy irrespective of
the terms and conditions contained in the
policy.”
21.Hence, it is decided that there is
policy coverage for the occupant of the vehicle
and the order passed by the trial Court is
reasonable. The compensation awarded by the
Tribunal under various heads is reasonable.
25.Therefore, in all aspects, this Court finds no merits in the
submission made by the learned counsel for the insurance company to
interfere with the well considered impugned judgment. Accordingly, the
first question is answered against the insurance company.
26.The insurance company have not challenged the quantum. The
first respondent has suffered grievous injury all over body. His leg was
amputated. The Medical Board assessed 80% disability. He was
electrician. Therefore, the learned Tribunal Judge correctly calculated
his monthly income of Rs.9,100/- and applied multiplier method and
calculated compensation under various heads as stated below:-
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S.No. Description Amount awarded by
Tribunal (Rs.)
1. For Future Loss of Rs.14,85,120/-
Income and disability
2. For Medical Rs.2,92,540/-
Expenses
3. For Attendant Rs.7,500/-
Charges
4. For Pain and Rs.30,000/-
Sufferings
5. For loss of personal Rs.3,000/-
belongings and
clothing
6. For Transport Rs.3,000/-
Charges
7. For Extra Rs.15,000/-
Nourishment
Total: Rs.18,36,160/-
27.This Court finds no reasons to interfere with the same.
28.Question No.2:
28.1.The learned counsel appearing for the second respondent
would submit that he already sold the vehicle and hence, the order of pay
and recovery against this respondent is liable to be set aside.
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28.2.The second respondent was the registered owner. His name
was found place in the registration certificate. He has not appeared
before the Court below and produced the relevant documents to
substantiate his plea of transfer. As per the Section 157 of Motor Vehicle
Act, it is duty of the owner of the vehicle to inform the transfer of
ownership to the Registration Department, otherwise he is deemed to be
owner.
28.3.There was award against the second respondent. Therefore,
without filing any appeal as per the Section 173 Motor Vehicel Act, 1988,
this Court declines to entertain the said argument. Accordingly, the
second question is answered against the second respondent.
29.Accordingly, this Civil Miscellaneous Appeal is dismissed. No
costs. Consequently, the connected miscellaneous petition is closed.
(V.B.S., J.) (K.K.R.K., J.)
01.08.2024
Index : Yes / No
Internet : Yes / No
sbn
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To
1. The Motor Accident Claims Tribunal
cum Special Subordinate Judge,
Dindigul.
2. The Section Officer,
VR Section,
Madurai Bench of Madras High Court, Madurai.
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V.BHAVANI SUBBAROYAN, J.
and
K.K.RAMAKRISHNAN, J.
sbn
and
01.08.2024
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