Telangana High Court

The Oriental Insurance Company Ltd vs Smt.Swapna Gosh on 6 August, 2024

          THE HONOURABLE SRI JUSTICE SUJOY PAUL
                           AND
  THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO


          M.A.C.M.A.Nos.3241 of 2019 and 732 of 2020


COMMON JUDGMENT:

(per Hon'ble Sri Justice Namavarapu Rajeshwar Rao)

These two appeals are being disposed of by way of this

common judgment since M.A.C.M.A.No.3241 of 2019 is filed by

the appellant/Oriental Insurance Company Ltd.,

M.A.C.M.A.No.732 of 2020 is filed by the appellants/claimants

are directed against the very same order and decree, dated

20.03.2019 passed in M.V.O.P.No.142 of 2015 by the

Chairman, Motor Vehicle Accidents Claims Tribunal-cum-

Special Sessions Judge for trial of cases under SCs & STs (PoA)

Act-cum-VII Additional District Judge, Ranga Reddy (for short,

"the Tribunal").

2. For the sake of convenience, the parties are hereinafter

referred to as they are arrayed before the Tribunal.

3. The brief facts of the case are as follows:-

On 28.02.2014, deceased Sudip Ghosh and his friend

went to Bachupally to attend a party and, while returning from

Bachupally towards Kondapur in a car bearing No.AP-09-AB-

4241. After completion of the party, in the early hours of

01.03.2014 at about 3.00 a.m. at Pragathi Nagar Road,

Hirans Bhavan Apartment, KPHB, Balanagar, the owner and

driver of the said car drove the car at high speed, in a rash and

negligent manner and hit the said car to a tree beside the road.

As a result, the deceased Sudip Ghosh sustained grievous

injuries and died on the spot. On receipt of the complaint,

Police KPHB Colony, Cyberabad, registered a case in Crime

No.200 of 2014 under Section 304-A and 337 IPC against

respondent No.1, the driver of the crime vehicle. Hence, the

claim petition is filed by the parents of the deceased, claiming

compensation of Rs.30,50,000/-.

4. Before the Tribunal, respondent No.1 filed a counter

denying the allegations made in the claim petition and

submitted that he is the registered owner of the car bearing

No.AP-09-AB-4241 insured his car with the 2nd respondent vide

policy No.4315PO/31/2014/3192, valid from 28.08.2013 to

27.08.2014.

5. Respondent No.2/Insurance Company filed a counter

denying the manner in which the accident took place and

contended that the compensation claimed was excessive and

that the accident was not caused by the rash and negligent

driving of the driver of the crime vehicle car bearing No.AP-09-

AB-4241. They further contended that the impleaded vehicle

owner should be held primarily responsible for the accident

and other consequences. The petitioners are not entitled to

interest on the compensation amount and prayed to dismiss

the claim petition.

6. Respondent No.2 also filed an additional counter stating

that the policy has been traced in the TP HUB Office, and it is

noticed that the branch office has issued an Act policy for the

bearing No.AP-09-AB-4241 vide policy

No.4315PO/31/2014/3192 covering the period from

28.08.2013 to 27.08.2014. Respondent No.1 has taken only

an Act Policy from respondent No.2 wherein the covered policy

granted is as per the requirement of the M.V. Act only, and as

per the M.V. Act, gratuitous passengers are not required to be

covered by the policy. Hence, the deceased was only a

gratuitous passenger; and as such, the 2nd respondent cannot

be made liable to indemnify the owner of the car.

7. On behalf of the claimants, P.Ws.1 and 2 were examined

and marked Exs.A1 to A11 and Ex.X-1 to X-3. On behalf of the

2nd respondent, RW.1 was examined and marked Ex.B1-copy of

the insurance policy.

8. After considering the oral and documentary evidence

available on record, the Tribunal held that the accident

occurred due to the rash and negligent driving of the driver of

the crime vehicle car bearing No.AP-09-AB-4241 and

accordingly awarded an amount of Rs.26,70,000/- with

interest @ 7.5% per annum from the date of petition till the

date of realization. Challenging the same, the present

M.A.C.M.A.s are filed.

9. Learned counsel appearing for the respondent Insurance

Company contended that car bearing No.AP-09-AB-4241 was

covered under private car liability only (Policy-Zone A) which

did not cover risk of occupants in a private vehicle. The

Tribunal erred in considering the terms and conditions of

private car liability. It erroneously applied the terms and

conditions of a comprehensive policy, which was not opted for

by the insured while insuring the vehicle. As such, the

Tribunal failed to consider the fact that the pillion rider on a

motorcycle and occupants of a private car are not covered if the

policy taken by the Insured is an Act Policy.

10. Learned counsel appearing for respondent Insurance

Company further contended that the Tribunal also failed to

appreciate the fact that no additional premium has been

collected for the passengers in the car, which would be done in

case of issuance of a comprehensive policy to cover the inmates

travelling in the private car, and that the Tribunal erred by

failing to consider the inmates of the car as gratuitous

passengers.

11. Learned counsel appearing for the respondent Insurance

Company further contended that the gratuitous passengers are

not covered under an Act policy. Hence, the existing private car

is covered under only an Act policy, wherein the passengers

travelling in the said private car are not covered by such policy.

12. Per contra, learned counsel for the

respondents/claimants relied upon the judgment of the Hon'ble

Apex Court in Manuara Khatun and ors.; Mamoni Saikia

Mohanty & Ors., Vs. Rajesh K.R. Singh and ors. 1,wherein it

was held as follows:

"14) The only question, which arises for consideration in these appeals, is whether the appellants are entitled for an order against the Insurer of the offending vehicle, i.e., (respondent No. 3) to pay the awarded sum to the appellants and then to recover the said amount from the insured (owner of the offending vehicle-Tata Sumo)-

respondent No.1 in the same proceedings.

15) The aforesaid question, in our opinion, remains no more res integra. As we notice, it was subject matter of several decisions of this Court rendered by three Judge Bench and two Judge Bench in past, viz., National Insurance Co. Ltd. vs. Baljit Kaur & Ors., (2004) 2 SCC 1, National Insurance Co. Ltd. vs. Challa Upendra Rao & Ors., (2004) 8 SCC 517, National Insurance Co. Ltd. vs. Kaushalaya Devi & Ors., (2008) 8 SCC 246, National Insurance Co. Ltd. vs. Roshan Lal, [Order dated 19.1.2007 in SLP© No. 5699 of 2006], and National Insurance Co. Ltd. vs. Parvathneni & Anr., (2009) 8 SCC 785.

16) This question also fell for consideration recently in Manager, National Insurance Company Limited vs. Saju P.

2017 (4) SCC 796

Paul & Anr., (supra) wherein this Court took note of entire previous case law on the subject mentioned above and examined the question in the context of Section 147 of the Act. While allowing the appeal filed by the Insurance Company by reversing the judgment of the High Court, it was held on facts that since the victim was travelling in offending vehicle as "gratuitous passenger" and hence, the Insurance Company cannot be held liable to suffer the liability arising out of accident on the strength of the insurance policy. However, this Court keeping in view the benevolent object of the Act and other relevant factors arising in the case, issued the directions against the Insurance Company to pay the awarded sum to the claimants and then to recover the said sum from the insured in the same proceedings by applying the principle of "pay and recover".

18) The facts of the case at hand are somewhat identical to the facts of the case mentioned supra because here also we find that the deceased were found travelling as "gratuitous passengers" in the offending vehicle and it was for this reason, the insurance companies were exonerated. In Saju P. Paul's case (supra) also having held that the victim was "gratuitous passenger", this Court issued directions against the Insurer of the offending vehicle to first satisfy the awarded sum and then to recover the same from the Insured in the same proceedings.

22) In view of the foregoing discussion, we are of the view that the direction to United India Insurance Company (respondent No. 3) - they being the insurer of the offending vehicle which was found involved in causing accident due to negligence of its driver needs to be issued directing them (United India Insurance Company-respondent No.3) to first pay the awarded sum to the appellants (claimants) and then to recover the paid awarded sum from the owner of the offending vehicle (Tata Sumo)-respondent No.1 in execution proceedings arising in this very case as per the law laid down in Para 26 of Saju P. Paul's case quoted supra."

13. Learned counsel for the petitioners/claimants submitted

that in view of the aforesaid judgment, it is clear that the

Hon'ble Apex Court held that the MV Act is a benevolent

legislation. Further, the Tribunal categorically observed that

the deceased was not a gratuitous passenger since the accident

vehicle is not a goods vehicle. It rightly held that the

respondent Insurance company is liable to pay compensation

to the petitioners/claimants.

14. A perusal of the impugned order discloses that the

Tribunal, having framed Issue No.1 as to whether the accident

occurred due to the rash and negligent driving of the vehicle

car bearing No.AP-09-AB-4241 by its driver, and having

considered the documentary evidence i.e., Ex.A1-F.I.R., Ex.A2-

charge sheet and Ex.A3-Postmortem report and inquest

panchnama, came to the conclusion that the accident occurred

due to the rash and negligent driving of respondent No.1 and

has answered in favour of the petitioners and against the

respondent Nos.1 and 2. As such, there are no reasons to

interfere with the said finding.

15. The Tribunal observed that according to the deposition of

RW.1 with regards to third party liability, "subject to the

conditions laid down in the schedule, the Company will

indemnify the insured in the event of an accident caused by or

arising out of the use of the Motor vehicle anywhere in India

against the sums including claimant's cost and expenses which

the insured shall be legally liable to pay in respect of death of or

bodily to any person so far as it is necessary to meet the

requirement of the Motor Vehicles Act." It was also observed

that the respondent - Insurance company has not stated

anything in this regard in the counter; even in the additional

counter, it has merely denied the claim petition of the

petitioners. Admittedly, the car bearing No.AP-09-AB-4241 is

not a goods vehicle. Thus, the owner of a vehicle carrying

passengers must a pay premium to cover the passengers' risk .

The Tribunal also relied upon the judgment of this Hon'ble

Court in M. Swarupa & Others Vs. Musapet Narsimhulu

and another 2, wherein the following was observed at

para No.6:

6. Now coming to the liability of the insurer, the regulation of IRDA referred in the two decisions of this Court one in Smt. Ch. Jayamma & others (supra) para 14 and Sohel Sardar Khan (supra) para 17 reads as under:

"Section II - Liability to Third Parties"

1. Subject to the limits of liability 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 Tariff Advisory committee on the subject;

(1) Circular M.V. No.1 of 1978 - dated 18th March 1978 (regarding occupants carried in Private Car) effective from 25th March 1977.

(2) 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

2014 Supreme(AP)192

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, wordings, 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 aforementioned circulars and any non-compliance of the same would be viewed seriously by the Authority.

The Tribunal further observed that in the instant case, the

vehicle involved was not a goods vehicle, and therefore, it

concluded that the deceased was not a gratuitous passenger.

Therefore, the Insurance Company was held liable to pay

compensation to the petitioners.

16. The learned counsel for respondent Insurance Company

relied upon the judgment of this Court in M.A.C.M.A No.670 of

2021 decided on 08.06.2022 with regard to an Act policy

wherein the respondent Insurance Company relied upon the

judgment of the Apex Court in United India Insurance

Company Limited Vs. Tilak Singh and others 3;wherein it

was held that:

"An Insurance policy under Section 147 does not cover the risk of death or injury to gratuitous passengers carried in a private vehicle."

(2006) 4 SCC 404

Further, relied upon Ramashary Singh Vs. New India

Assurance Company Limited 4 wherein it was held as follows:

"Under Section 147 the liability of insurer in respect of third party risk, the policy covers only the persons or classes of persons specified in the policy. Moreover, comprehensive policy covers loss sustained by the insured up to the insured amount irrespective of the actual loss suffered."

17. In M.A.C.M.A No.670 of 2021, this Court decided, the

persons were travelling in the offending vehicle beyond its

seating capacity. In that case, it was a hit-and-run case, and

no charge-sheet was filed. As such, the facts stated in the said

case are different to that of the present case, and thus, the said

judgment relied upon by the respondent - Insurance Company

is not relevant to the present case.

18. A perusal of the Ex.B1-Insurance policy shows that it is

nowhere specified that it is only an Act policy. Further, there is

no mention of the extent of its coverage being limited to third-

party damage. The column 'seating capacity', it is simply

mentioned that the vehicle capacity is 4+1, including that of

the driver. This Court is not inclined to agree with the

contention of the learned counsel appearing for the respondent

insurance company that since the policy does not assign any

value to the insured vehicle, the limit of the liability extends

only to the third-party damage and not to the passengers

seated inside the insured vehicle. When the policy is silent

(2003)10, SCC 664

about the extent of its coverage, the same cannot be taken as a

reason to deprive the survivors of the unfortunate victims of an

accident of their rightful compensation.

19. With regard to the Tribunal's finding that the deceased

was not a gratuitous passenger, learned counsel appearing for

the respondent insurance company had contended that the

Tribunal erred by not considering the deceased as a gratuitous

passenger. Even if such a contention were to be accepted, it

would not disentitle the petitioners from getting compensated,

in light of the judgment of the Hon'ble Apex Court in Manuara

Khatun (supra), which had placed reliance on Manager,

National Insurance Company Limited vs. Saju P. Paul &

Anr 5, wherein the direction to the insurance company was to

pay the compensation and recover the same from the insured.

Section 147(1) of the MV Act states as follows:

"147. Requirements of policies and limits of liability. -

(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which -

(a) is issued by a person who is an authorised insurer; and

(b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2) -

(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person including owner of the goods or his authorised representative carried in the motor vehicle or damage to any property of a third party caused by or arising out of the use of the motor vehicle in a public place;

2013 (2) SCC 41

(ii) against the death of or bodily injury to any passenger of a transport vehicle, except gratuitous passengers of a goods vehicle, caused by or arising out of the use of the motor vehicle in a public place."

(emphasis supplied)

A plain reading of Section 147(1)(b)(ii) shows that the exception

to pay compensation arises only in cases of gratuitous

passengers of a goods vehicle. As such, the Tribunal had

rightly observed that in the facts and circumstances of the

present case, the exception to pay the compensation would not

be attracted since the passengers were not travelling in a goods

vehicle.

20. Further, the Tribunal has rightly relied upon the

judgment of the Hon'ble Apex Court in United India Insurance

Company Ltd vs Lehru And Ors. 6, wherein the liability of the

insurance company was specified, and it was clearly held:

"...Thus under sub-section (1) the Insurance Company must pay to the person entitled to the benefit of the decree, notwithstanding that it has become "entitled to avoid or cancel or may have avoided or cancelled the policy". The words "subject to the provisions of this Section" mean that the Insurance Company can get out of liability only on grounds set out in Section 149 Sub-section (7), which has been relied on, does not state anything more or give any higher right to the Insurance Company. On the contrary the wording of sub-section (7) viz. "No insurer to whom the notice referred to in sub-section (2) or sub-section (3) has been given shall be entitled to avoid his liability" indicate that the Legislature wanted to clearly indicate that Insurance Companies must pay unless they are absolved of liability on a ground specified in sub-section (2). This is further clear from sub-section (4) which mandates that conditions, in the insurance policy, which purport to restrict insurance would be of no effect if they are not of the nature specified in sub-

2003 (3) SCC 338

section (2). The proviso to sub- section (4) is very illustrative. It shows that the Insurance Company has to pay to third parties but it may recover from the person who was primarily liable to pay. The liability of the Insurance Company to pay is further emphasised by sub-section (5). This also shows that the Insurance Company must first pay, then it can recover. If Section 149 is read as a whole it is clear that sub-section (7) is not giving any additional right to the Insurance Company. On the contrary it is emphasising that the Insurance Company cannot avoid liability except on the limited grounds set out in sub-section (2)."

(emphasis supplied)

Hence, the Tribunal, taking into consideration Ex.B1-copy of

insurance policy, rightly came to the conclusion that the

petitioners are entitled for the compensation, which does not

require any interference from this Court.

21. Insofar as the deceased's income is concerned, according

to the petitioners, the deceased completed his Bachelor's

Degree in Commerce from Burdwan University of West Bengal

State and he got a job at ICICI Securities Limited at Hyderabad

and his salary was Rs.2,00,004/- per annum at the time of the

accident. The deceased was the only son to them. In support

of their contention, the petitioners examined PW.2, HR

Executive in Cognizant Technology Solutions Pvt. Ltd., and he

deposed that Ex.X2 is the attested copy of offer-cum-

appointment letter and Ex.X3 is attested copy of pay slips of

the deceased certifying that the deceased Sudip Ghosh was an

employee of their company from 27.02.2013 to March 2014.

The petitioners also filed Ex.A11 to show that the deceased

worked as a Process Executive and also filed salary certificate

in Annexure-I showing the total salary of the deceased is

Rs.25,000/- per month. The Tribunal, based on the evidence

of PW.2 and Ex.A11 rightly came to the conclusion that the

deceased was earning Rs.25,000/- per month. Thus, the

annual income of the deceased comes to Rs.3,00,000/-

(Rs.25,000/-x 12).

22. As rightly contended by the learned counsel for the

petitioners, the Tribunal failed to consider the future prospects

of the deceased. Since the deceased was aged 26 years, as per

the decision of the Apex Court in National Insurance

Company Ltd. Vs. Pranay Sethi 7, the future prospects of the

deceased shall be computed at 40%, and the annual income

comes to Rs.4,20,000/- [Rs.3,00,000/-+Rs.1,20,000/-]. Since

the deceased is a bachelor, half of the income is to be deducted

towards personal and living expenses of the deceased. After

deducting the same, the contribution of the deceased would be

Rs.2,10,000/-[Rs.4,20,000/- (minus) Rs.2,10,000/-]. Further,

considering the age of the deceased at the time of the accident,

the Tribunal rightly considered the multiplier as '17' as per the

decision of the Apex Court reported in Sarla Verma Vs. Delhi

(2017) 16 SCC 680.

Transport Corporation 8. Adopting a multiplier of '17', the

total loss of dependency comes to Rs.2,10,000/- x 17 =

Rs.35,70,000/-.

23. The Tribunal has grossly erred in awarding Rs.1,00,000/-

to the petitioners towards love and affection and Rs.20,000/-

towards funeral expenses, which needs to be modified. As per

the decision of the Apex Court in National Insurance

Company Ltd. Vs. Pranay Sethi (supra), petitioners are

entitled to a sum of Rs.36,300/- (Rs.15,000/- +Rs.15,000/-

+10%+10%) towards loss of estate and funeral expenses.

Further, in view of the judgment of the Hon'ble Apex Court in

Magma General Insurance Company Limited v. Nanu Ram

@ Chuhru Ram and others 9, the petitioners are entitled to

Rs.40,000/- each towards filial consortium. Therefore, the

order dated 07.01.2019 passed by the Tribunal in

M.V.O.P.No.705 of 2015 is modified as follows:-

      S.No.            Particulars                    Amount

       1.      Annual    salary  of   the           Rs.3,00,000/-
               deceased (Rs.25,000 x 12)
       2.      Add: 40% Future Prospects            Rs. 1,20,000/-

       3.      Sub-Total                            Rs.4,20,000/-





  (2009) 6 SCC 121.

 (2018) 18 SCC 130


         4.    Less: ½ (half) towards           (-)Rs.2,10,000/-
               Personal Expenditure
         5.    Sub-Total [3-4]                  Rs.2,10,000/-

         6.    Total Loss of Dependency         Rs.35,70,000/-.
               (Rs.2,10,000/- x 17)
         7.    Add : Conventional Heads           Rs.36,300/-
               (Funeral    Expenses     and
               Loss of Estate)
               (Rs.15,000/- + Rs.15,000/-
               +10%+10%)
         8.    Add:     Loss     of    filial     Rs.80,000/-
               consortium      (Rs.40,000/-
               +40,000/-) to petitioners
               Total Compensation               Rs.36,86,300/-

24. Though the claimed amount is Rs.30,50,000/-, invoking

the principle of just compensation, and in view of the law laid

down by the Hon'ble Supreme Court in Rajesh vs. Rajbir

Singh 10 and in a catena of decisions, this Court is empowered

to grant compensation beyond the claimed amount.

25. The Tribunal has rightly awarded the rate of interest at

7.5% per annum which needs no interference by this Court.

26. Accordingly, M.A.C.M.A. No.732 of 2020 is allowed by

enhancing the compensation awarded by the Tribunal from

Rs.26,70,000/- to Rs.36,86,300/- (Rupees Thirty Six Lakh,

Eighty six thousand, Three Hundred only) with interest @7.5 %

p.a. from the date of petition till the date of realization.