Elumalai v. Sarasu — 1996 DIGILAW 1165 (MAD)

Judgment :- 1. This is an appeal against the order passed by the Motor Accidents Claims Tribunal in MCOP No. 34 of 1983, on the file of the Additional Motor Accidents Claims Tribunal (Additional Sub Judge, Salem), dated 18.11.1985. 2. The case of the petitions is as follows: The first petitioner is the wife, petitioners 2 to 4 are the children, the fifth and sixth petitioners are the parents of one Rama Gounder, aged 40 years and having a ‘Javvarisi’ mill. On 2.11.1982 at about 2.30 pm while he was carrying ‘Kuchikizhangu’ from Pondicherry in the goods vehicle belonging to the first respondent, the vehicle met with ah accident on account of the rash and negligent driving of the same by its driver. The driver of the bus as well as Rama Gounder died on the spot. Rama Gounder was earning a sum of Rs. 1,500/- per month in his ‘Javvarisi’ mill. The petitioners have filed the application for payment of compensation of Rs. 1,00,000/-. 3. The first respondent in his counter has stated that he had sold the vehicle on 9.10.1982 itself and on 2.11.1982 he was not the owner of the vehicle, and therefore he is an unnecessary party to the proceedings, and that the petition may be dismissed against him. 4. The second respondent has contended in his counter that he has become the owner of the vehicle on 4.11.1982, and since the accident took place on 2.11.1982, he is an unnecessary party to the proceedings, and that the petition against him may be dismissed. 5. The third respondent in its counter has contended as follows: The first respondent has sold the vehicle on 9.10.1982. He is therefore not the owner of the vehicle. The insurance policy issued to the first respondent lapsed immediately after the change of the name of the insured in the policy. The accident was not due to the rash and negligent driving of the bus by its driver. The vehicle was driven by the person who had no valid licence. Therefore, the insurance company is not liable to pay any compensation. The claim is also excessive. 6. On the above pleadings, the Motor Accidents Claims Tribunal held an enquiry and gave a finding that the accident was due to the rash and negligent driving of the lorry by its driver, and the petitioners are entitled to a total compensation of Rs. The claim is also excessive. 6. On the above pleadings, the Motor Accidents Claims Tribunal held an enquiry and gave a finding that the accident was due to the rash and negligent driving of the lorry by its driver, and the petitioners are entitled to a total compensation of Rs. 75,000/- and apportioned the same among the petitioners. Aggrieved over the same, the first respondent/appellant has come forward with this appeal. 7. The learned counsel appearing for the appellant has made it clear even at the outset that even though in the grounds of appeal, the appellant has challenged the finding of the Tribunal that the appellant is not the owner of the lorry involved in the accident and there was no negligence on the part of the driver of the lorry, he is not pressing these grounds in this appeal and restricts his arguments with regard to the liability of the appellant to the claimants. 8. According to the learned counsel appearing for the appellant, the deceased Rama Gounder was travelling in the lorry along with the goods owned by him and he is to be considered as a nonfare paying passenger at the time of the accident and the insurance company cannot be absolved of its liability from making payment of the compensation awarded as held by the Tribunal relying on the decision reported in G. Dayananda and Anr. v. Sanmani Bi & Ors. (1982 ACJ Page 399), and the liability of the insurance company arises under Section 95(2)(a) of the Motor Vehicles Act, in view of the payment of additional premium by the insured as per Clause 14(a) of the policy. The learned counsel appearing for the respondent-insurance company would contend that Section 95(1) of the Motor Vehicles Act alone will apply and Section 95(2) of the Act does not apply, to make the insurance company liable, and the liability of the insurance company is only Rs. 10,000/- and not more, as contended by the appellant. 9. Before proceeding further, it is desirable to bear in mind that as regards the liability of the insurance company, in respect of the goods carrier, in which human beings are permitted to travel, the Supreme Court has held in the decision reported in B.V. Nagaraju v. Oriental Insurance Co. 10,000/- and not more, as contended by the appellant. 9. Before proceeding further, it is desirable to bear in mind that as regards the liability of the insurance company, in respect of the goods carrier, in which human beings are permitted to travel, the Supreme Court has held in the decision reported in B.V. Nagaraju v. Oriental Insurance Co. Ltd. (Judgments Today 1996(6) S.C. 32) that the terms of the policy of insurance must be read down to advance the main purpose of the contract,, under the insurance that is to indemnify the damage caused. In the case reported in Santha Bai v. Prahalad (1985 ACJ 762) the Full Bench of the Rajasthan High Court, Jaipur Bench considered the case law regarding passenger risk, liability of insurance company in respect of persons who died or sustained injuries while travelling in the goods vehicle with our without goods as the owner of the goods or as his representatives and has held as follows: “(i) in the case of gratuitous passenger going on joy-ride or on his own responsibility, insurance company is not liable; (ii) in case of passengers carried for hire or reward or by reason of or in pursuance of a contract of employment in any vehicle, the insurance company is liable. This would include owner of the goods as well as his employees; (iii) the insurer shall not be liable to cover liability in respect of employee of the insured in respect of the death of or bodily injury to, any such employee arising out of and in the course of his employment other than a liability arising under the Workmens Compensation Act, 1923, if such employee is (a) engaged in driving such vehicle, or (b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods vehicle being carried in the vehicle; (iv) the insurer shall not be liable to cover any contractual liability.” As per the above decision, the insurance company is liable in case a passenger including the owner of the goods, is met with an accident and it would show that the deceased who was travelling in the lorry along with the goods owned by him, having met with an accident and died, the insurance company cannot get itself absolved of its liability. 10. 10. In the decision reported in United India Insurance Co. Ltd. v. Seethamma (1985 ACJ 840), it has been held while considering Section 95(2)(a) of the Motor Vehicles Act that the statute permits the owner of the goods to travel in the vehicle which is a goods vehicle and when he meets with an accident and dies, the liability springs under Section 95(2)(a) and not under the contract of the policy and the insurance company is liable to pay Rs. 50,000/-. In the decision reported in Harishankar Tiwari v. Jagru (1987 ACJ Page 1), it has been held as follows: “The hirer while paying hire charges for carrying the goods in the vehicle and while he or his employee is required to travel with the goods for its safety in the vehicle, it will be deemed that the hirer was carried in the vehicle for reward while his employee was carried in the vehicle in pursuance of his employment. So the hirer and his employee both have to be covered under the insurance policy and the insurer is bound to pay the compensation for death or bodily injuries while the vehicle met with an accident.” The above decision has laid down that the owner of the goods accompanying the goods and travelling in the goods vehicle would be deemed to be a passenger who was being carried for hire or reward and the insurance company is therefore liable to cover the risk of a hirer travelling with the goods. As against the above Rulings cited by the learned counsel appearing for the appellant, the learned counsel for the respondent would refer to the decision reported in Ramadoss Motor Transport v. New India Assurance Co. Ltd. (1993 ACJ 1060 = 1993-1-L.W. 586) wherein, a Division Bench of our High Court has held that the liability of the insurance company in respect of the goods vehicle which met with an accident due to his rash and negligent driving resulting in the death of two persons, the owner alone is vicariously liable and not the insurance company. But it is a case in which, no extra premium as per Clause 14(a) has been collected by the insurance company and therefore, the above decision cannot be made applicable to the case on hand. The learned counsel appearing for the respondent has also referred to the decision reported in New India Assurance Co. But it is a case in which, no extra premium as per Clause 14(a) has been collected by the insurance company and therefore, the above decision cannot be made applicable to the case on hand. The learned counsel appearing for the respondent has also referred to the decision reported in New India Assurance Co. Ltd. v. Shanti Bai (1995 ACJ 470), wherein the Supreme Court has held that insurance company is liable to the extend of Rs. 15,000/- as per statute, in respect of a motor insurance covered by a comprehensive policy of including passenger risk. But, the above decision is not a case in which the owner of the goods travelled in a goods vehicle. It was a case in which, the deceased travelled in the bus. Therefore, it is not a case where the Supreme Court has considered the liability of the insurance company in respect of a non fare paying passenger travelling in a goods vehicle with the goods owned by him and therefore, the above decision is also not applicable to facts of the present case. Similarly, the Ruling relied by the learned Counsel appearing for the respondent viz., National Insurance Co. Ltd. v. Jugal Kishore (1988 ACJ 270), is also a case in which the deceased was not a non-fare paying passenger travelling in a goods vehicle involved in the accident and therefore, the above Ruling is also not applicable to the case on hand. We have already seen that the decisions reported in Santra Bai v. Prahlad (1985 ACJ 762); United India Insurance Co. Ltd. v. Seetkamma (1985 ACJ 840) and Harishankar Tiwari v. Jagru (1987 ACJ 1) are Rulings regarding the liability of the insurance company, in the case of a non-fare paying passenger in a goods vehicle with his goods and therefore, I am of opinion that the insurance company has to be necessarily made liable for the compensation awarded. 11. The learned counsel appearing for the respondent would argue that the liability is only Rs. 10,000/- and relies upon the judgment of this Court in AAO No. 398 of 1979 and CMP No. 9837/1979 dated 24.7.1981 in which, the Division Bench of this Court has held that in view of the terms of the policy, which covers the risk for a non-fare paying passenger to the extent of Rs. 10,000/-, the insurance company is liable to the extent of Rs. 10,000/-. 10,000/-, the insurance company is liable to the extent of Rs. 10,000/-. But, the learned counsel appearing for the appellant would contend that the liability of the insurance company in the case on hand does not arise under the endorsement of the policy, but under Section 95(2) of Motor Vehicles Act and the Rulings referred by him along are applicable to make the insurance company liable for the entire compensation. The learned counsel also refers to the decisions reported in Motor Owners Insurance Co. Ltd. v. Jadavji Keshavji Modi (1981 ACJ 507 = 95 L.W. 24 S.N.); and Ramesh Kumar v. National Insurance Co. Ltd. ( 1986 ACJ 557 ), for the above proposition. In the decision reported in Motor Owners Insurance Co. Ltd. v. Jadavji Keshavji Modi (1981 ACJ 507), the Supreme Court has held as follows: “The ambiguity in the language used by the legislature in the opening part of Section 95(2) and the doubt arising out of the co-relation of that language with the words ‘in all’ which occur in clause (a), must be resolved by having regard to the underlying legislative purpose of the provisions contained in Chapter VIII of the Act, which deals with third party risks. In matters involving third party risk, it is subjective considerations which must prevail and the occurrence has to be looked from the point of view of these who are immediately affected by it, since the purpose of law is to alleviate, not augment the sufferings of the people.” In the decision reported in Ramesh Kumar v. National Insurance Co. Ltd. (1986 ACT 557), it has been held that the extent of the liability of the insurer under Section 95(2)(a) amended with effect from 1.10.1982 is upto Rs. 1,50,000/-. In the case on hand, the compensation awarded is only Rs. 75,000/-. Whether the amendment will have restrospective effect is to be considered by us. In the decision reported in New India Assurance Co. 1,50,000/-. In the case on hand, the compensation awarded is only Rs. 75,000/-. Whether the amendment will have restrospective effect is to be considered by us. In the decision reported in New India Assurance Co. Ltd. v. Ramesh Kalita (1989 ACJ 607), it has been held as follows: “It may be noted that full compensation was recoverable on proof of rashness or negligence for which the claim was pending when by the amendment, a socially beneficial provision was engrafted on the law whereunder the claim was pending and, therefore, it may not be even considered as giving restrospective operation to the law and that just because the claim under it related to an accident that occured before the law came into force it may also be said that the amendment may not be considered as retrospective in the sense under consideration.” It was a case in which, whether the no fault liability which came into force after the amendment of Section 92-A is to be given retrospective effect. The same principle applies to the case on hand also when the extend of liability of insurer in respect of the goods vehicle, is fixed under Section 95(2)(a) which was amended with effect from 1.10.1982. Similarly, in the case reported in Indramal Mukhriya v. G.K. Madhya Pradesh State Road Transport Corporation ( 1991 ACJ 605 ) also, it has been held that “no fault liability”, introduced as per Section 92-A will have retrospective effect. Therefore, by virtue of the amendment to Section 95(2)(a) with effect from 1.10.1982 fixing the extent of liability of the insurer in respect of the goods vehicle which met with an accident, I am in agreement with the learned counsel appearing for the appellant that the liability is full i.e. , the entire compensation fixed by the Tribunal has to be paid only by the insurance company and not by the insured. In that view, I am of the opinion that the order passed by the Motor Accidents Claims Tribunal holding that the owner of the vehicle involved in the accident viz., the appellant herein alone is liable for the compensation awarded is to be set aside and the entire compensation has to be paid by the 8th respondent in this appeal viz. , the insurance company. In that view, I hold that the appeal has got to be allowed. 12. , the insurance company. In that view, I hold that the appeal has got to be allowed. 12. In the result, the appeal is allowed setting aside the order passed by the Motor Accidents Claims Tribunal, Salem and directing the 8th respondent in the appeal viz., United India Insurance Company to pay the entire compensation awarded by the Tribunal viz. , Rs. 75,000/- with interest at 12% from date of petition till date of deposit to the claimants who are respondents 1 to 6 in this appeal. No costs.