T. M. RENUKAPPA v. FAHMIDA — 1979 DIGILAW 82 (KAR)

( 1 ) THE above miscellanous first appeal is directed against the judgment and award passed by the District Judge Chitradurge in M. V. C. . No. 12 of 1971 dated 5-11-1976 fixing the liability of the insurer at Rs. 10,000/- out of the total compensation of Rs. 25. 048/- and the owner of the vehicle bearing no. MYT 3887 for payment of the balance amount to respondents 1 to 4. ( 2 ) THE appellant is the owner of the lorry bearing No. MYT 3887. Respondents 1 to 4 are the claimants. Respondent-5 is the insurer. Respondent-6 is the driver. ( 3 ) THE claimants instituted a patition before the Motor Accidents Claims tribunal at Chitradurga, claiming compensation of a lakh of rupees for death of one Mohamed Ameer, the husband of the 1st claimant and father of respondents 2 to 4, arising out of the motor accident which took place on 13-3-1971, when he (deceased) was travelling in the said goods vehicle from Davanagere to Hiriyur with his goods loaded in the said vehicle. Facts of the case are that Mohammed Ameer was travelling from davanagere to Harihar with his goods loaded in the vehicle MYT 3887. At 101|2 mile stone near Vanivilasa Sagar Mills, Hiriyur town, the lorry dashed against another vehicle bearing No. HMT 2672, which was packed for some repairs, as a result of which Mohammed Ameer sustained injuries. He was removed to Hiriyur Hospital and from there, he was removed to the Hospital at Chitradurga in a car where he succumbed to the injuries. According to the claimants the death was due to the rash and negligent driving by the 6th respondent. ( 4 ) THE owner and the driver in their written statements have denied the facts of the deceased travelling in their vehicle by paying charges. They denied that the alleged accident was due to rash and negligent driving of the vehicle by the Gth respondent. ( 5 ) THE insurer by its written statement denied the rash and negligent driving on the part of the driver and the accident was of the. case of a 'vis Major'. It pleaded that there is no statutory obligation to insure the risk resulting to persons travelling in goods vehicles and that there is no coverage of insurance relating to the, deceased person. case of a 'vis Major'. It pleaded that there is no statutory obligation to insure the risk resulting to persons travelling in goods vehicles and that there is no coverage of insurance relating to the, deceased person. Further, it was averred that there was no coverage of insurance for non-fare paying passengers. ( 6 ) UPON these pleadings, the following issues were framed by the Claims tribunal (1) Whether the petitioners prove that the deceased died in an accident near Vani Vilas Sugar Mills on Bangalore-Dharwar road, when he he was travelling in vehicle No. MYT 3887? (2) Whether the accident was due to rash and negligent driving of the driver of vehicle No. MYT 3887? (3) Whether the petitioners prove that they are heirs to the deceased? (4) Whether they prove that the deceased was aged, 35 years and a merchant with an income of Rs. 300/- per month? (5) Whether they prove that they are entitled to the quantum of damage claimed (6) What order?the claimants examined seven witnesses in support of their case. No defence witness was examined on behalf of the respondents. ( 7 ) THE Claims Tribunal upon consideration of the evidence on record found that Mohammed Ameer died due to the motor accident in which vehicle NO. MYT 3887 was involved and held that the accident was due to the rash and negligent driving of the vehicle. It further held that the claimants were the heirs of the deceased that the income of the deceased was Rs. 150/- per month, and that the claimants were entitled to the compensation. In that view of the matter, it awarded compensation of rs. 25,048/- payable by the owner and the driver. It held that the insurer was not liable for payment of any compensation. ( 8 ) AGGRIEVED by the said judgment and award the present appellnt-owner filed miscellanous first appeal No. 333 of 1976 challenging the order of the Claims Tribunal for exonerating and not holding the Insurer liable to pay compensation to the claimants. The otheir findings were not challenged in that appeal. ( 8 ) AGGRIEVED by the said judgment and award the present appellnt-owner filed miscellanous first appeal No. 333 of 1976 challenging the order of the Claims Tribunal for exonerating and not holding the Insurer liable to pay compensation to the claimants. The otheir findings were not challenged in that appeal. ( 9 ) A Division Bench of this Court of which one of us (K. B. J.) was a member set aside the award passed by the Claims Tribunal only to the extent it exonerated the insurer from the liability to pay compensation and remanded the case to the Claims Tribunal below to decide the question whether the insurer is liable to pay the amount of compensation determined by it or not afresh, after giving reasonable opportunity to all the parties to file additional pleadings, if any. And in other respects the award passed by the Claims Tribunal was affirmed. ( 10 ) THUS the only question referred to the Tribunal for decision by this court was whether the insurer is liable to indemnify the insured in so far as the amount of compensation that he is liable to pay to the claimants on account of the death of a person who is carried in a goods vehicle along with his goods in the vehicle in question. ( 11 ) AFTER remand, the Claims Tribunal determined this question and held that the insurer was liable to pay Rs. 10,000/- out of the total amount of compensation awarded and the owner is liable to pay the balance of compensation. Aggrieved by this judgment and award, the owner has filed the above miscellaneous first appeal. ( 12 ) THEREFORE, the only question for deteimination is whether the Claims tribunal is justified in law in fixing the liability of the insurer to an extent of Rs. 10,000/- and holding that the owner is liable to pay the balance amount of compensation. The learned advocate for the appellant firstly contended that the insurer the 5th respondent under-took to pay compensaton in respect of the death or bodily injuries to a third party who was travelling in the lorry along with his goods, as per the terms of the 3rd party risk as contemplated under Section 95 of the Indian Motor Vehicles Act, 1939 (to be called the 'act ). He further urged that the liability of the insurer the 5th respondent is limited to the extent of Rs. 50,000/- as the appellant has paid additional premium as pdr notice Exhibit R. 2 and, therefore, he urged that the 5th respondent insurer is liable to indemnify the appellant to the entire extent of liability under the award under the policy in force at the time of the accident. ( 13 ) THE counsrl for the 5th respondent insurer sought to support the order under appeal and he urged that the insurance policy in question did not cover the non-fare paying passengers. However, as an alternative he argued that in the event of fastening the liability on the insurer its liability in respect of death or bodily injuries on a, non-fare paid passenger is restricted to the extent of Rs. 10,000/- only according to the terms of endorsement 14 (b) attached to the policy and, therefore he justified the Award limiting the liability of the insurer to the extent of Rs. 10,000/. He relied upon certain decisions in support of h's contention. It is unnecessary to consider them in view of the judgment of a Division bench, cf which one of us (KBJ) was a member in M F. A. 227 of 1975 and m. F. A. 363/1975 (Channappn Chanavirappa Katti v Lakshman Bhimappa bhajantri and ohers and Mallappa Malkajappa Nidagundi v. Yeli Buddappa bankapur and others ). The material facts in that case were: A goods vehicle bearing registration No. MTR 3739 was being used by its owner, a public carrier, for carriage of goods from Bijapur to Talikot. On 3. 3. 1973, when the said vehicle was carrying goods from Bijapur to Talikot, it met with an accident at 6 p. m. near a place called Hitnalli as the driver of me vehicle failed in his attempt to successfully negotiate the vehicle in a sharp curve on the road. As a result of the accident, six parsons in the vehicle including one Somappa Mallappa Nidagundi of Talikot, the owner of tertain goods who had hired the vehicle for carrying the goods and balappa Bajentri, the cleaner of the vehicle sustained fatal injuries and died of those injuries. The legal representatives Sommappa Mallappa nidagundi claimed compensation in a sum of Rs. 4,24,000/. for the death of Somappa Mallappa Nidagundi owner of the goods ). The legal representatives Sommappa Mallappa nidagundi claimed compensation in a sum of Rs. 4,24,000/. for the death of Somappa Mallappa Nidagundi owner of the goods ). The insurer took the stand of non-liability for the claim for compensation made, in respect of the death of the owner o. f the goods on the ground that the risk of such a person was not covered by the insurance policy issued in respect of the vehicle inasmuch as such risk was not required to be instued against compulsorily under the Act. ( 14 ) IN the above decision this Court after careful examination of the relevant provisions of Section 95 of the Act and Rule 161 of the Mysore (Karnataka) Motor Vehicles Rules, 1963 (1o be called the 'rules) observed thus: "it has to be mentioned at the outset that the policy of the law in making provision for compulsory insurance of vehicles is to cover the risk of innocent "third parties. " If we consider the case of the owner of the goods (hirer of goods vehicle) who wants to convey his goods through a public goods-vehicle, will be an innocent third party when he dies or suffers injury while accompanying his goods carried by a public goods vehicle, in the, course of the user of the vehicle? our answer to this question can only be in the affirmative for the simple reason that when the owner of the goods wants to convey his goods in a public goods vehicle, hired by him and accompanies the goods for their safety, in the normal course of things, it would not be possible for him to ascertain the financial stability of the user of the vehicle, the expertise of the driver of the vehicle in driving it, or the road-worthy condition of the vehicle, as would ensure his safety when such a person travels as a passenger in a goods-vehicle which is used to advance the business interests of its owner and is permitted by law, it cannot be said that it is not a vehicle meant for carrying passengers for hue or reward, provided for in the exception to the first part of the proviso. In fact, in our opinion, the hire payable for carrying the goods must be dqemed to include the hire for carrying the owner of the goods or 1 is agent or servant who travels in the vehicle along with the goods for their safety, inasmuch as it is impossible for us to think of a binding obligation on the part of the owner of the goods vehicle to carry in it the owner of the goods, who hires the goods vehicle for carrying the goods. Moreover, such obligation to carry the ownar of the goods along with his goods in a goods vehicle can only be as a business proposition as opposed to a gratuitous proposition. Hence, we have no doubt in our minds that the Legislature by enacting the exception contained in the first part of the proviso has thought of compulsory coverage by insurance the risk of owners of goods who are entiled to travel in a goods vehicle along with their goods in the event of any risk arising in the course of the user of the vehicle. ( 15 ) FROM this, it would follow that the goods vehicle with whllich we the concerned was a goods vehicle which was meant to carry along with the goods passengers for hire qr reward and fell within the exception contained in the first part of the proviso so as to require coverage or risk of the owners of goods travelling as passengers by compulsory insurance, required to be taken in respect of the vehicle urder chapter VIII of the Act and Ext. D-1 is the policy of insurance which had been taken accordingly. ( 16 ) IN this context, we consider it necessary to deal with another point which has a bearing on the question under consideration. From the terms and conditions of the Insurance Policy which have been extracted hereinbefore, it will be seen that under the heading limitations' it is stated that the policy does not cover use for the conveyance of passengers foa hire or reward'. From the terms and conditions of the Insurance Policy which have been extracted hereinbefore, it will be seen that under the heading limitations' it is stated that the policy does not cover use for the conveyance of passengers foa hire or reward'. But the said limitation, in our view, if upheld, will have the effect of nullifying the provisions contained in the exception in the first part of the proviso and therefore, the insurer cannot be allowed to take advantage of the same to deny its liability to indemnify the insured for the compensation payable in respect of the death of the owner of the goods who travelled in the goods vehicle. ( 17 ) THE proviso the R. 161 (1) of the Rules, since specifically authorises the use of the goods vehicle for carrying the owners of goods carried in the, vehicle as passengers it cannot be said the vehicle which carries such passengers is not the one covered by a permit to ply for hire or reward. In the said view of the matter, the term relating to the limitation of liability contained in the policy adverted to by us does not enable the insurer to escape its liability for the risk of the owner of the goods. ( 18 ) THUS it is clear from the above decision that the insurer does not escape its liability for the risk of the owner of the goods travelling in the vehicle along with his goods. The next question for determination is as to the limits of liability or the insurer under the policy of insurance. Sub-sec. (2) of S. 95 of the Act, which has a bearing on the point reads thus: "95 (2):-Subject to the proviso to sub-sec. (1), a policy of insurance shall cover any liability incurred in respect of any one accident up to the following limits, viz. , (a) Where the vehicle is a goods vehicle, a limit of fifty thousand rupees in all, including the liabilities if any, arising under the Workmen's compensation Act, 1923, in respect of the death or bodily injury to employee (other than the driver), not exceeding six in number, being carried in the vehicle. , (a) Where the vehicle is a goods vehicle, a limit of fifty thousand rupees in all, including the liabilities if any, arising under the Workmen's compensation Act, 1923, in respect of the death or bodily injury to employee (other than the driver), not exceeding six in number, being carried in the vehicle. " ( 19 ) HENCE we are of the opinion that the liability of the insurance company for the death of a passenger in goods vehicle has to be fixed with reference to, the terms in cl. (a) of sub-sec. (2) of S. 95 of the Act and the term referred to in the policy. Thus, it is clear that the limits of liability of the insurer in the case of passengers cariied for hire or reward, in a goods vehicle who die or suffer bodily injury the limit of liability cannot exceed fifty thousand as provided in the case. When the Legislature has made a specific provision fixing the liability of the insurer in respect of the goods vehicle, we are of the view that the liability for the death of passengers in the goods vehicle has to be made good by the insurer in its entirety if the amount does not exceed rs. 50,000 as provided lor specifically in cl. (a) of sub-section (2) of Section 95 of the Act. Therefore, in the instant case, the legal position is that the limit of liability of the insurer in respect of the death of a passenger shall be up to Rs. 50,000. Therefore the view taken by the Claims tribunal that the deceased in the instant case was only a non-fare paying passenger travelling in the lorry and the liability of the insurance company is limited to Rs. 10,000/- is unsustainable in law. It is therefore set aside. In the view that we have taken the insurer 5th respondent is liable to indemnify the insured up to the extent ot Rs. 50,000/ -. In the instant case the claimants 1 to 4 have been awarded compensation of Rs. 25,048/- together with interest at the rate of 6 per cent from the date of petition till the date of payment. The insurer 5th respondent is liable to pay the on the amount. Accordingly, it is ordered and the award is modified. 50,000/ -. In the instant case the claimants 1 to 4 have been awarded compensation of Rs. 25,048/- together with interest at the rate of 6 per cent from the date of petition till the date of payment. The insurer 5th respondent is liable to pay the on the amount. Accordingly, it is ordered and the award is modified. In view of the above modification in the award, the appellant insured is not liable to pay any amount towards compensation awarded to respondents 1 to 4 by the Claims Tribunal. ( 20 ) IN the result, miscellaneous first appeal is allowed. In the facts and circumstances of the case parties are directed to bear their own costs. --- *** --- .