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2001 DIGILAW 523 (MP)

NATIONAL INSURANCE COMPANY LIMITED v. GEETABAI

2001-07-20

N.G.KARAMBELKAR, S.P.SRIVASTAVA

body2001
S. P. SRIVASTAVA, J. ( 1 ) FEELING aggrieved by the impugned award passed by Motor accidents Claims Tribunal, Guna, holding the insurer company to be liable to pay an amount of Rs. 1,12,000 to the claimants, heirs of the deceased victim of the motor accident, it has come up in appeal seeking redress praying for its being exonerated from liability to pay any amount towards the compensation and modification of the award accordingly. ( 2 ) WE have heard learned counsel for the appellant as well as the learned counsel representing the claimants-respondents and have carefully perused the record. ( 3 ) THE facts, shorn of details and necessary for the disposal of this appeal lie in a narrow compass: A claim petition had been filed by the claimants-respondents, the legal heirs of the deceased, Madanlal, praying for the award as compensation an amount of Rs. 12,60,000 along with interest calculated at the rate of 24 per cent per annum on 10. 8. 1992 specifying clearly therein that the said petition was being filed under section 140 and section 166 of the Motor Vehicles Act, 1988. ( 4 ) IN para 23 of the claim petition, it had been clearly asserted that an amount of Rs. 25,000 be immediately paid to the claimants on account of death of Madanlal in the accident in question, on the principle of no fault liability as provided under section 140 of the Motor Vehicles Act, 1988. ( 5 ) MADANLAL, the deceased, at the time of the accident in question on 29. 4. 1992 was sitting in the trolley attached with the tractor which was being driven by Ram singh. The owners of the said tractor and trolley were Pratap Singh and Hanumant singh, the present respondent Nos. 5 and 6. At about 8 p. m. on 29. 4. 1992 while passing through an unmanned railway crossing the motor vehicle was hit by a train coming from Guna, as a result of this collision Ram singh, the driver, and Madanlal sitting in the trolley, died on the spot. The tractor was insured with the present appellant. ( 6 ) IN their claim petition the claimants had stated in para 4 thereof that the deceased Madanlal was doing thekedari work by engaging labourers and his average income was about Rs. 3,000 per month. The tractor was insured with the present appellant. ( 6 ) IN their claim petition the claimants had stated in para 4 thereof that the deceased Madanlal was doing thekedari work by engaging labourers and his average income was about Rs. 3,000 per month. ( 7 ) THE Motor Accidents Claims Tribunal found that under the terms and conditions of the insurance under which the insurer had issued the insurance policy contained in section II of the policy in question which related to the liability of third parties it had been clearly stipulated that subject to the limits of the liability as laid down in the Schedule annexed with the policy, the insurer company will indemnify the insured against all sums including claimants' costs and expenses which the insured shall become legally liable to pay in respect of death or bodily injury to any person caused by or arising out of the use (including the loading and/or unloading)of the motor vehicle and any damage to property caused by the use (including the loading and/or unloading) of the motor vehicle, provided always that the company shall not be liable to in respect of death or bodily injury caused or arising beyond the limits of any carriageway or thoroughfare in connection with the bringing of the load to the motor vehicle for loading thereon or the taking away of the load from the motor vehicle after unloading therefrom. ( 8 ) THE Tribunal laid emphasis on the condition stipulated in the policy in regard to the fastening of the liability occurring on account of death or bodily injury to any person caused by or arising out of the use of the motor vehicle and found that the case of Madanlal fell within the ambit of the aforesaid condition. ( 9 ) THE Tribunal in this connection came to the conclusion that for casting the liability in question the statutory provision contained in section 165 and referred to in section 166 of the Motor Vehicles Act, had used the expression "accidents involving the death of or bodily injury to persons arising out of the use of motor vehicles, or damages to any property of a third party so arising or both". The Tribunal laying emphasis on the use of the expression 'arising out of the use of motor vehicles' came to the conclusion that since the accident resulting in the death of Madanlal had arisen out of the use of the motor vehicle, therefore, the insurer could not escape the liability. ( 10 ) ON a consideration of the evidence and the materials on record, the Tribunal came to the conclusion that, in all, the claimants were entitled to an amount of rs. 1,12,000 as just compensation. The claimants were also found entitled to interest on the aforesaid amount calculated at the rate of 12 per cent per annum. The joint and several liability for the payment of the amount determined as just compensation was fastened on the owner and the driver as well as the insurer company only. ( 11 ) THIS appeal had been heard along with the Miscellaneous Appeal No. 193 of 1996 (National Insurance Co. Ltd. v. Kantibai), which had been filed against the award of the Tribunal in respect of the death of Ram Singh, the driver of the tractor in question. ( 12 ) THE learned counsel for the appellant in support of this appeal has urged that since the tractor and trolley in question had been insured for the 'agricultural use only' and according to the claimants' own case Madanlal was a thekedar, who was travelling in the trolley as a passenger, the tribunal has manifestly erred in fastening the liability on the insurer to indemnify the owner even though the tractor with trolley was being used for a purpose other than agriculture. So far as this aspect of the case is concerned, after considering the evidence and the materials brought on the record, the Tribunal has come to the conclusion that the deceased Madanlal was not a thekedar and was an agriculture-labourer. However, according to the Tribunal the occupation of Madanlal was wholly irrelevant and for the purpose of fixation of liability on the insurer, it was sufficient for the claimants to establish that on the date in question Madanlal was travelling in the trolley driven by the tractor in question. In this connection, it was observed that even if the victim was taken to be gratuitous passenger it could not exclude the insurer company to pay the amount of compensation. In this connection, it was observed that even if the victim was taken to be gratuitous passenger it could not exclude the insurer company to pay the amount of compensation. ( 13 ) HOWEVER, going further the Tribunal found that in fact Madanlal was an agriculture-labourer and was allowed to sit in the tractor-trolley for the agricultural use of the tractor. ( 14 ) THE aforesaid finding, taking into consideration the oral evidence tendered by the claimants especially the widow of the deceased Madanlal cannot be held to be suffering from any such legal infirmity which may justify an interference therein. Even otherwise, taking into consideration the ratio of the decision of the Apex Court in the case of New India Assurance Co. Ltd. v. Satpal Singh, 2000 ACJ 1 (SC), the finding in regard to the liability of the owner and the indemnifier in regard to the payment of compensation taking Madanlal to be a gratuitous passenger cannot be disputed. ( 15 ) THE learned counsel for the appellant in the aforesaid connection has also relied upon a decision in the case of Babu ram v. Om Prakash, 2000 ACJ 393 (MP), in support of his submission. In that case, the passenger was not found to be an agriculture-labourer and the finding was that the vehicle was being used for business purposes contrary to the terms and conditions subject to which the policy has been issued. This decision is distinguishable on facts and cannot come to the rescue of the appellant. ( 16 ) THE other decision in the case of sukhnandan Ram Sahu v. Oriental Insurance Co. Ltd. , 1999 ACJ 750 (MP), has also been relied upon. This decision is also distinguishable on facts as the tractor was found not being used for any agricultural operation or transportation of goods of the owner but was used for transporting the deceased for delivery along with her relations. Finding was that the vehicle was used for the purpose other than the agricultural purposes. The finding in the present case is to the contrary. ( 17 ) THE factual position in the present case which stands established on the record indicates that the status of the deceased madanlal was clearly that of a passenger in a motor vehicle which was being driven undisputedly in a rash and negligent manner by the driver, Ram Singh with undue haste. ( 17 ) THE factual position in the present case which stands established on the record indicates that the status of the deceased madanlal was clearly that of a passenger in a motor vehicle which was being driven undisputedly in a rash and negligent manner by the driver, Ram Singh with undue haste. ( 18 ) IN the aforesaid view of the matter, the cases of the deceased Madanlal and the deceased Ram Singh stand on entirely different footing. All the necessary ingredients for maintaining a petition for the award of compensation as contemplated under section 166 of the Motor Vehicles act, stood satisfied in the case of the deceased Madanlal. This is in contradistinction to the case of Ram Singh, the driver, who himself had committed the actionable negligence and could not in the proceedings under section 166 of the Act, be held entitled to derive any advantage out of his own wrong. The learned counsel for the appellant has not challenged in this appeal the quantum of compensation awarded by the Tribunal which has been determined after taking into consideration the relevant evidence and the materials brought on record. ( 19 ) IT may be noticed that as stated by the learned counsel for the parties neither the claimants nor the owner of the offending motor vehicle have challenged the impugned award and as against them, it has attained finality. ( 20 ) THE status of the insurer in law so far as the statutory liability sought to be fastened upon him under the Act cannot be more than that of a guarantor and he acts as a security for the third party with respect to its realising damages for the injuries suffered but a right to get any amount paid in excess is refunded to it by the insured stands secured. The ultimate burden always remains cast or fastened on the insured-owner of the motor vehicle. ( 21 ) AS has already been noticed herein-above, the terms and conditions of the insurance policy clearly stipulate that the insurer will not be liable to pay any compensation in case the motor vehicle in question was used for any purpose other than the agricultural use only. It was also clearly stipulated that the policy did not cover the liability of compensation in case of the use of motor vehicle for hire and reward. It was also clearly stipulated that the policy did not cover the liability of compensation in case of the use of motor vehicle for hire and reward. ( 22 ) HOWEVER, there is another aspect of the matter which is of considerable importance so far as the controversy raised in this appeal is concerned and it cannot be lost sight of. ( 23 ) IN a recent decision, the Supreme court in the case of Oriental Insurance co. Ltd. v. Cheruvakkara Nafeessu, 2001 acj 1 (SC), had elaborately dealt with the extent of liability of an insurance company towards the third party as per section 95 (1) (b) of the Motor Vehicles Act, 1939, and on the question as to what are its rights in case of payment of an amount in excess of the limits of the liability under the insurance policy vis-a-vis the insured. ( 24 ) IN the aforesaid case, the claimants-respondents raised a claim for an amount of Rs. 2,00,000 as compensation on account of the death of their predecessor-in-interest in a road accident on 6. 7. 1988 involving the offending motor vehicle an autorickshaw bearing the registration No. KRN 1859. The insurer had contested the claim specifically stating therein that its liability was limited to Rs. 50,000 under the policy of insurance. The Claims Tribunal however had granted an award for an amount of Rs. 1,94,150 and had fastened the entire liability on the appellant insurance company. The insurance policy in that case was of a date prior to the coming into force of the new Motor Vehicles Act, 1988, on 1. 7. 1989. ( 25 ) UNDER the aforesaid insurance policy the limit of the insurance company's liability in respect of any one claim or series of claims arising out of one event was fixed at Rs. 50,000 only. However, the avoidance clause of the policy provided that"nothing in the said policy or the endorsement hereon shall affect the right of any person indemnified by this policy or any other person to recover an amount under or by virtue of the provisions of the motor Vehicles Act, 1939, section 96. But the insured shall pay to the company all sums paid by the company which the company would not have been liable to pay but for the said provisions". But the insured shall pay to the company all sums paid by the company which the company would not have been liable to pay but for the said provisions". Section II of the policy dealt with 'liability of third party' and provided that the company will indemnify the insured against all sums including the claimants costs and expenses which the insured becomes legally liable to pay in respect of the death of or bodily injury to any person caused by or arising out of the use of the motor vehicle or damage to the property caused by such use. ( 26 ) TAKING into consideration the earlier decisions of the Apex Court in the case of New Asiatic Insurance Co. Ltd. v. Pessumal Dhanamal Aswani, 1958-65 ACJ 559 (SC) and Amrit Lal Sood v. Kaushalya devi Thapar, 1998 ACJ 531 (SC), the hon'ble Supreme Court came to the conclusion that despite holding the liability under the policy limited to the extent of rs. 50,000, the Claims Tribunal and the high Court were not unjustified in directing the appellant insurance company to pay the whole of the awarded amount to the claimants on the basis of the contractual obligations contained in clauses relating to the liability of the third parties and avoidance clause. However, it was further indicated that the Claims Tribunal and the high Court were not justified in rejecting the right of the appellant insurance company to recover from the insured the excess amount paid in execution and discharge of the award of the Tribunal. ( 27 ) IN the aforesaid view of the matter, the Apex Court allowed the appeal holding that the appellant insurance company was liable to pay the entire award amount to the claimants. Upon making such payment, the appellant can recover the excess amount from the insured by executing the award against the insured to the extent of such excess as per section 174 of the Motor vehicles Act, 1988. ( 28 ) IN its another decision in the case of New India Assurance Co. Upon making such payment, the appellant can recover the excess amount from the insured by executing the award against the insured to the extent of such excess as per section 174 of the Motor vehicles Act, 1988. ( 28 ) IN its another decision in the case of New India Assurance Co. Ltd. v. Kamla, 2001 ACJ 843 (SC), the Supreme Court had indicated taking into consideration the implications arising under sub-section (4)and its proviso together with sub-section (5) of section 149 of the Motor Vehicles act, 1988, that they are intended to safeguard the interest of an insurer who otherwise has no liability to pay any amount to the insured but for the provisions contained in Chapter XI of the Act. This, it was clarified means that the insurer has to pay to the third parties only on account of the fact that a policy of insurance has been issued in respect of the vehicle, but the insurer is entitled to recover any such sum from the insured if the insurer was not otherwise liable to pay such sum to the insured by virtue of the conditions of the contract of insurance indicated by the policy. ( 29 ) IN para 22 of the aforesaid decision, the Apex Court summarised the position in law indicating that when a valid insurance policy has been issued in respect of a vehicle as evidenced by a certificate of insurance the burden is on the insurer to pay to third parties, whether or not there has been any breach or violation of the policy conditions. But the amount so paid by the insurer to third parties can be allowed to be recovered from the insured if as per the policy conditions the insurer had no liability to pay such sum to the insured. ( 30 ) IN para 25 of the aforesaid decision, it was indicated that the insurer and the insured are bound by the conditions enumerated in the policy and the insurer was not liable to the insured if there was violation of any policy condition. ( 30 ) IN para 25 of the aforesaid decision, it was indicated that the insurer and the insured are bound by the conditions enumerated in the policy and the insurer was not liable to the insured if there was violation of any policy condition. But the insurer who was made statutorily liable to pay compensation to third parties on account of the certificate of insurance issued shall be entitled to recover from the insured the amount paid to the third parties, if there was any breach of policy conditions on account of the vehicle being driven without a valid licence. ( 31 ) IN view of the aforesaid position in law and what has been indicated herein before, the appeal is allowed holding that the appellant insurance company is liable to pay the entire award amount to the claimants and upon making such payment, the appellant company can recover the excess (Sic.) amount from the insured by executing the award against the insured to the extent of such excess as per section 174 of the Motor Vehicles Act, 1988. The impugned award shall stand modified to that extent. In other respects, since the owner submitted to the impugned award, it shall remain intact. ( 32 ) THERE shall, however, be no order as to costs. Appeal allowed. .