Telangana High Court

Magma Hdi General Insurance Company ... vs Pathri Venkataiah on 13 February, 2024

HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY

                  M.A.C.M.A.No.640 OF 2023

JUDGMENT:

Heard Sri Harinath Reddy Soma, learned standing counsel

for the appellant-insurance company, and Sri. B.Balaji, learned

counsel for respondent Nos.1 and 2/claimants.

2. The present appeal has been filed by the appellant-insurance

company challenging the Award passed by the Motor Accidents

Claims Tribunal-cum-Principal District Judge, Warangal (for short,

'Tribunal') in MVOP No.639 of 2017, dated 30.01.2023, and

thereby to set aside the said Award.

3. The brief factual matrix of the case is as under:-

On 26.12.2016 in the morning hours, the deceased along

with others left on a tractor and trailer bearing Nos.AP 36 X 9043

and 9041 respectively for Padmaja rice mill at Mahabubabad,

loaded the husk into the trolley and transported the load to the

brick chimney of respondent No.2 herein situated on the outskirts

of Jamandlapally village. After unloading the husk, while they

were returning to Jamandlapally village, respondent No.1 herein LNA,J

drove the tractor and trailer in a rash and negligent manner and

when it reached the agricultural land of Laxma Reddy around

11.30 hours, due to heavy gales, the 11-KV power supply line

came into contact with the iron stand rod of tractor, thereby passing

the power supply into the tractor & trailer due to which the

deceased fell down on the road and sustained fatal injuries. He

succumbed to the injuries on the way to hospital. Upon the

complaint made by claimant No.1, Police of Mahabubabad (Rural)

Police Station registered a case in Cr.No.195/2016 and laid the

charge sheet under Section 304-A of IPC against the respondent

No.3 herein-driver of the crime vehicle.

3.1. It was the case of the claimants that they are the parents of

the deceased. At the time of accident, the deceased was aged about

40 years and was hale and healthy. He was doing labour work in

and around his village, thereby earning Rs.10,000/- per month and

was contributing the same to the maintenance of the family. As the

deceased was the sole breadwinner of the family, due to his sudden

death, they lost their source of dependency in addition to love and

affection. Hence, the claim petition for compensation of LNA,J

Rs.10,00,000/- against the owner, the driver and the insurer of the

crime vehicle, who are jointly and severally liable to pay the

compensation.

3.2. Respondents No.3 and 4 herein (Respondent Nos.1 and 2

before the Tribunal), who are the driver and the owner of the crime

vehicle, remained ex parte before the Tribunal.

3.3. The appellant herein i.e., the insurance company

(respondent no.3 before Tribunal) filed counter denying the

averments of the petition including the mode and manner of the

accident, age, income and avocation of the deceased. It took a

specific plea that at the time of accident, the deceased was

travelling on the tractor and trailer bearing Nos.AP-36-X-9043 and

9041 respectively, the seating capacity of which is zero (0) and as

such, the deceased is a gratuitous passenger. It was also stated that

the driver of the offending tractor did not possess valid and

effective driving license and hence, the owner of the tractor

violated the terms and conditions of the policy and therefore, the

insurance company is not liable to pay the compensation.

LNA,J

4. On the basis of the above pleadings, the Tribunal framed the

following issues:

i) Whether the deceased due to rash and negligent driving of the driver of tractor and trailor bearing registration Nos.AP 36 X 9043 and 9041?

ii) Whether the respondents are liable to pay compensation amount to the petitioners?

iii) To what relief ?

5. In order to substantiate the case, on behalf of the claimants,

PWs.1 and 2 were examined and Exs.A1 to A5 were marked. On

behalf of the appellant herein, R.Ws.1 and 2 were examined and

Exs.B-1 to B-4 were marked.

6. The Tribunal, on due consideration of evidence and material

placed on record, came to a conclusion that the accident took place

due to rash and negligent driving of the tractor by its driver i.e.,

respondent No.3 herein and awarded compensation of

Rs.12,33,060/- along with costs and interest @ 7.5% per annum

from the date of petition till the date of deposit. The appellant-

insurance company was directed to deposit the compensation

amount and then to recover the same from the owner and driver of

the crime vehicle.

LNA,J

7. During the course of hearing of appeal, learned Standing

Counsel for the appellant contended that the Tribunal failed to take

note of the fact that the deceased was travelling in the crime

vehicle as a gratuitous passenger, thereby violating the terms and

conditions of the insurance policy. He further submitted that the

Tribunal erred in deducting 1/3rd of his income instead of ½

towards his personal and living expenses. He further contended

that the Tribunal erred in taking 25% future prospects into

consideration as the avocation of the deceased is not proved.

8. On the other hand, learned counsel for respondent Nos.1 and

2-claimants would submit that on due consideration of the evidence

and the material placed on record, the Hon'ble Tribunal had rightly

awarded the compensation and the grounds raised by the appellant

are untenable and therefore, prayed for dismissal of the Appeal.

Consideration :

9. Learned standing counsel for appellant contended that the

Tribunal erred in deducting 1/3rd of the monthly income of the

deceased instead of ½ towards his personal and living expenses, as

per the decision of Hon'ble Apex Court in Sarla Verma (Smt) LNA,J

and others vs. Delhi Transport Corporation and another 1 since

the deceased was unmarried.

10. However, P.W.1-father of the deceased deposed that

deceased was married and his wife predeceased him without

children. He further deposed that the deceased was the sole

breadwinner of the family. In the light of evidence of P.W.1-father

of the deceased, the contention of the appellant that the deceased

was unmarried is factually incorrect and therefore, though wife of

the deceased predeceased him, in considered opinion of this Court,

only 1/3rd of the income of the deceased has to be deducted towards

personal and living expenses and therefore, the contention of the

appellant on this aspect is rejected.

11. The other contention raised by the learned standing counsel

for the appellant is with regard to contributory negligence on the

part of the deceased.

12. The Police concerned after investigation, filed Ex.A2-charge

sheet and as per the contents of the charge sheet, on the date of the

(2009) 6 SCC 121 LNA,J

accident i.e., on 26.12.2016, the offending tractor and trailor was

being driven by its driver in a rash and negligent manner and when

it negotiated the agricultural fields of one Laxma Reddy, due to

heavy gales and squall, 11-KV power supply line came into contact

with the iron stand rod of the tractor. The deceased who was sitting

on the right side of the mudguard of the tractor got electrocuted,

fell on the ground and the tyres of the crime vehicle also caught

fire.

13. Ex.P1-F.I.R. and Ex.P2-charge sheet coupled with the

averments made in the claim petition show that the deceased was

working as a labourer.

14. Further, on behalf of the appellant-insurance company,

RW.1-Typist of R.T.O. was examined. He deposed that as per

Ex.B2-extract of 'B' Register of tractor, passengers cannot travel in

the trolley.

15. Apart from that, there is also evidence of RW.2-legal

Executive of the appellant-insurance company on record who

deposed that as on the date of the accident, the insurance policy of

the crime vehicle was in force. He further deposed that as per LNA,J

Ex.B-4- insurance policy of the crime vehicle, the seating capacity

of the crime vehicle is only one i.e., the driver.

16. Apropos the entitlement of gratuitous passenger for

compensation, the Hon'ble Supreme Court in Manuara Khatun

and others Vs. Rajesh Kumar singh and others 2 at paragraphs-14

to 16 observed as under:-

"(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.

(2017) 4 SCC 796 LNA,J

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

16.1. Further, the Hon'ble Supreme at paragraphs-17 and 21 of

the said judgment held as under:-

"17. 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 LNA,J

awarded sum and then to recover the same from the Insured in the same proceedings.

21. 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."

17. In the light of the aforesaid legal position, this court is of

the considered view that though the deceased was a gratuitous

passenger, the insurance company shall be fastened with liability to

pay compensation and then recover the same from the owner of the

crime vehicle.

18. As regards the income of the deceased, in the claim

petition, the claimants averred that the deceased was earning

Rs.10,000/- per month by doing labour work and contributing his

entire income to the family. Except the said mere statement, no LNA,J

material was placed before the Tribunal to show that the deceased

was earning Rs.10,000/- per month by doing labour work. No

steps were taken by the claimants to examine the co-labourers of

the deceased to prove the earnings of the deceased. In the

impugned award also, the Tribunal neither recorded any reasons

nor discussed the aspect of monthly income of the deceased and

further, there is no basis on which the Tribunal has arrived at

R.8,000/- as monthly income of the deceased as against

Rs.10,000/- claimed by the claimants. Therefore, without there

being any scrap of evidence as regards the income of the deceased,

the Tribunal erred in taking the monthly income of the deceased as

Rs.8,000/- per month. Hence, having regard to the inflation, cost

of living, etc., at the relevant time of the accident, the monthly

income of the deceased can be taken as Rs.6,500/- per month.

19. The other contention raised by the appellant is that the

driver of the offending vehicle was not having driving license and

that despite notice to the driver and owner of the offending vehicle,

they failed to produce the driving licence of the driver of the LNA,J

offending vehicle and hence, the insurance company should be

exonerated from its liability to pay compensation.

20. With regard to exoneration of insurance company from its

liability to pay the compensation amount, it is relevant to mention

that the Motor Vehicles Act is beneficial legislation aimed at

providing relief to the victims and their families. In National

Insurance Co. Ltd Vs. Swaran Singh and others 3, the Hon'ble

Apex Court held as under:

"107. We may, however, hasten to add that the Tribunal and the court must, however, exercise their jurisdiction to issue such a direction upon consideration of the facts and circumstances of each case and in the event such a direction has been issued, despite arriving at a finding of fact to the effect that the insurer has been able to establish that the insured has committed a breach of contract of insurance as envisaged under sub-clause (ii) of clause (a) of sub-section (2) of Section 149 of the Act, the insurance company shall be entitled to realise the awarded amount from the owner or driver of the vehicle, as the case may be, in execution of the same award having regard to the provisions of Sections 165 and 168 of the Act. However, in the event, having regard to the limited scope of inquiry in the proceedings before the Tribunal it had not been able to do so, the insurance company may initiate a separate action therefor against the owner or the driver of the vehicle or both, as the case may be. Those exceptional cases may arise when the evidence becomes available to or comes to the notice of the insurer at a subsequent stage or for one reason or the other, the insurer was not given an opportunity to defend at all. Such a course of action may also be resorted to when a fraud or collusion

(2004) 3 SCC 297 LNA,J

between the victim and the owner of the vehicle is detected or comes to the knowledge of the insurer at a later stage.

108. Although, as noticed hereinbefore, there are certain special leave petitions wherein the persons having the vehicles at the time when the accidents took place did not hold any licence at all, in the facts and circumstances of the case, we do not intend to set aside the said awards. Such awards may also be satisfied by the petitioners herein subject to their right to recover the same from the owners of the vehicles in the manner laid down therein. But this order may not be considered as a precedent."

21. Thus, as per the decision of Hon'ble Apex Court in Swaran

Singh's case (third cited supra), it is clear that mere absence of

possession of valid driving license by the driver of the crime

vehicle will not absolve the insurance company from its liability to

pay compensation.

22. In the light of the facts, circumstances of the case and the

legal position, this Court is of the considered opinion that the

Tribunal had rightly directed the insurance company to first satisfy

the Award and later to recover the same from the driver and owner

of the crime vehicles i.e., respondents 4 and 5 herein, which needs

no interference by this Court.

LNA,J

Conclusion:

23. In view of the above discussion, the compensation amount to

be awarded to respondent Nos.1 and 2-claimants is recalculated as

under:

Sl.No.     Head                                 Compensation awarded

1          Income                               Rs.78,000/- per annum (Rs.6,500/-
                                                per month)
2          Future prospectus                    Rs.19,500/- (25% of the annual
                                                income i.e.,78,000/-)
3          Total income                         Rs.97,500/-

4          Deduction        towards   personal Rs.32,500/- (i.e., 1/3rd of Rs.97,500/-)
           expenses
5          Net Income                           Rs.65,000/- (i.e.,     Rs.97,500/-     (-)
                                                Rs.32,500/-)


7          Loss of dependency                   Rs.9,75,000/-
                                                (i.e., Rs.65,000/- x 15)
8          Loss of estate                       Rs. 15,000/-

9          Funeral expenses                     Rs.    15,000/-

           Total compensation                   Rs.10,05,000/-

24. In the result, the Appeal is partly allowed and the impugned

award, dated 30.01.2023, passed by the Tribunal insofar as

compensation amount is concerned, is modified by reducing the

compensation amount from Rs.12,33,060/- to Rs.10,05,600/-. The

above compensation amount of Rs.10,05,600/- shall carry interest

@ 7.5% per annum from the date of the claim petition till the date LNA,J

of realization. The appellant shall deposit the said compensation

amount within a period of six weeks from the date of receipt of

copy of this order, duly adjusting the amount already deposited by

it. However, the insurance company is directed to first satisfy the

Award and later recover the same from the driver and owner of the

crime vehicle i.e., respondents 4 and 5 herein There shall be no