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Rajasthan High Court · body

2014 DIGILAW 1819 (RAJ)

Manoj Jain v. Sita Ram

2014-11-13

PRASHANT KUMAR AGARWAL

body2014
JUDGMENT : These two civil misc.appeals have been filed against the judgment and award dated 12.05.2003 passed by the Judge, Motor Accident Claims Tribunal, Kishangarh (Ajmer) in MAC Case No.314/1992. CMA No.1627/2003 has been filed by the claimant-Shri Manoj Jain, dissatisfied with the amount of compensation awarded by the learned Tribunal with a prayer to make suitable enhancement in the same whereas the CMA No.2158/2003 has been filed by the Insurance Company with a prayer that it has limited liability to make payment of amount of compensation to the extent of Rs.15,000/- only, but the learned Tribunal has wrongly held it liable to make payment of whole of the compensation amount awarded to the claimant. It is pertinent to note that the matter relates to the Motor Vehicles Act, 1939 (hereinafter to be referred as “the Act”) as the accident occurred before the commencement of the Motor Vehicles Act, 1988. As these appeals arise out of the same judgment and award passed by the learned Tribunal, with the consent of learned counsel for the parties, they were heard together and are being decided by this common judgment and order. Brief relevant facts for the disposal of these appeals are that the claimant-Shri Manoj Jain sustained injuries on 30.7.1988 when he was travelling as a passenger in the offending Bus (a passenger carrying vehicle) bearing registration No.RSB-1385 which met with an accident due to negligent and rash driving of the same by its driver respondent-Shri Sitaram. Claiming that as a result of the injuries sustained by him, his right leg was amputated above ankle, Claim Petition under Section 110-A of the Act was filed by him with a prayer an amount of Rs.11,80,000/- with interest may be awarded as compensation under various heads. The Insurance Company filed written reply with a specific averment that it has limited liability to the extent of Rs.15,000/- only in accordance with the terms and conditions of the insurance policy and the relevant provisions of the Act as according to the claimant himself he was travelling in the offending vehicle as a fare paying passenger at the time of the said accident. It is to be noted that owner and driver of the offending vehcle did not appear before the Tribunal despite due service of notice and exparte proceedings were taken against them. It is to be noted that owner and driver of the offending vehcle did not appear before the Tribunal despite due service of notice and exparte proceedings were taken against them. The plea taken by the insurance company was considered by the learned Tribunal under Issue No.3 and it came to a conclusion that an extra amount of Rs.40/-was obtained by the insurance company and, therefore, the company undertook to cover the risk of a third party to an unlimited extent and, therefore, it is liable to make payment of the whole of the amount to be awarded to the claimant as compensation. The question of quantum of compensation to be awarded to the claimant was considered by the Tribunal under Issue No.4 and a total amount of Rs.2,68,964/-and interest @ 9% per annum was awarded from the date of filing of the claim petition. As already stated, the claimant has filed the aforesaid appeal with a prayer to enhance the amount so awarded whereas the Insurance Company has filed the appeal with a prayer that its liability cannot exceed Rs.15,000/-. It was submitted on behalf of the Insurance Company that although comprehensive policy was issued in favour of the owner of the offending vehicle, but only by that reason it cannot be said that the Insurance Company undertook to cover unlimited risk of a person travelling as a passenger in the offending vehicle as a comprehensive policy at the most covers the damage caused to the insured vehicle. It was further submitted that from the evidence available on record it is clear that the sitting capacity of the offending vehicle was 37 passengers in all and to cover the risk of these passengers Rs.1110/- were charged by the insurance company as premium and no extra premium was paid by the insured to make the liability of passengers unlimited, but the learned Tribunal without considering this aspect of the matter in a proper manner has wrongly held that as Rs.40/- have been obtained by the company as extra premium to cover the liability to public risk, it has liability to make payment of entire amount to be awarded to the claimant even if he was travelling in the offending vehicle as passenger. It was pointed out by the learned counsel for the Insurance Company that even if it is admitted that at the relevant time the normal charge of premium to cover the liability to public risk was Rs.200/- only and an extra amount of Rs.40/- was charged by it even then at the most it can be said that the unlimited risk of a third person other than a passenger travelling inside the offending vehicle and the driver and cleaner was undertaken. As in the present case admittedly the claimant was travelling in the offending vehicle as passenger and no extra premium was paid to cover the unlimited risk of the passengers, the liability of the insurance company was to the extent of Rs.15,000/- only. In support of his submissions, learned counsel for the Insurance Company relied upon the case of Oriental Insurance Company Limited Vs. Raj Kumar & Ors. reported in (2007) 12 SCC 768 . On the other hand, learned counsel for the claimant supporting the finding of the learned Tribunal and controverting the submissions made on behalf of the Insurance Company, submitted that as per the insurance policy an extra amount of Rs.40/- was obtained by the company and as a result thereof, the liability to make payment of amount of compensation became unlimited and, therefore, the company now estopped to that it has limited liability to make payment to the extent of Rs.15,000/- only as per the provisions of the Act. It was further submitted that admittedly the policy was comprehensive and thus, the company undertook to cover the unlimited risk of a third party including the passenger travelling in the offending vehicle. It was pointed out that one more passenger also received injuries in the same accident and on the basis of compromise arrived between the insurance company and the other passenger, an amount of Rs.45,000/- was paid by the company to him and, therefore, in the present case the company is estopped to contend that it has limited liability only. It was also submitted that if by any reason this Hon'ble Court comes to a conclusion that the insurance company has limited liability to the extent of Rs.15,000/- only an order to pay the entire compensation amount to the claimant with recovery right from the owner and driver of the offending vehicle should be made. It was also submitted that if by any reason this Hon'ble Court comes to a conclusion that the insurance company has limited liability to the extent of Rs.15,000/- only an order to pay the entire compensation amount to the claimant with recovery right from the owner and driver of the offending vehicle should be made. So far as the sufficiency of quantum of compensation awarded to the claimant is concerned, it was submitted on behalf of the claimant that from the evidence available on record it is clear that at the time of the accident the age of the claimant was 24 years and his right leg was amputated above ankle and he sustained 50% permanent disability and, therefore, the amount of compensation awarded by the learned Tribunal cannot be said to be reasonable by any measurement. It was submitted that no amount was awarded for future prospects and the amount awarded under the head of pain and suffering is also on lower side which requires to be increased to a reasonable extent. It was also pointed out that no amount was paid for future treatment likely to be taken by the claimant from time to time. In support of his submissions, learned counsel for the claimant relied upon the case of National Insurance Co.Ltd. Vs. Hastimal Lodha & 5 Ors. reported in MACD 2006 (2) (Raj.) 1123, Syed Sadiq etc. Vs. Divisional Manager, United India Ins.Co. Reported in 2014 R.A.R (SC) 91 and Sanjay Kumar Vs. Ashok Kumar & Anr. reported in 2014 R.A.R. (SC) 103. In reply to the submissions made on behalf of the claimant, it was submitted by the learned counsel for the insurance company that sufficient and reasonable amount has already been awarded by the learned Tribunal taking into all the aspects of the case and, therefore, no case has been made out on behalf of the claimant for any increase in the same more particularly in view of the fact that although bills Rs.14,904 were produced by the claimant for expenses incurred by him for his treatment, but even then an amount of Rs.45,404/- were awarded by the learned Tribunal. It was further submitted that looking to the fact that the accident occurred in the year 1988 the amount awarded by the learned Tribunal cannot be said to be unreasonable and insufficient by any measurement. It was further submitted that looking to the fact that the accident occurred in the year 1988 the amount awarded by the learned Tribunal cannot be said to be unreasonable and insufficient by any measurement. It was also submitted that the Insurance Company cannot be estopped to raise a legal question regarding its limited liability only by the reason that in some other case arising out of the same accident on the basis of compromise the company agreed to make higher amount as in a case decided on the basis of compromise some times relaxation is made by the company. I have considered the submissions made on behalf of the respective parties, perused the material available on record and the relevant legal provisions as well as the relevant case law including that cited on behalf of the parties. It is not in dispute that the offending vehicle involved in the accident is a passenger carrying Heavy Transport Vehicle (Bus) bearing registration No.RSB-1385 having a sitting capacity of 37 passengers in all and at the time of the accident, the claimant was travelling in it as a fare-paying passenger. As per cover-note dated 29.1.1988 (Ex.11) the offending vehicle was comprehensively insured by the insurance company for the period from 31.1.1988 to 30.1.1989 and a total sum of Rs.3,456/- was charge by it as premium and the offending vehicle was to be used as per the provisions of the Act. As per certificate of insurance (Ex.56), a sum of Rs.2019/-was charged by the insurance company to cover the risk under the head of "OWN DAMAGE" whereas to cover the liability to "PUBLIC RISK", a sum of Rs.240/- was charged as basic premium, Rs.1110/- were charged to cover the risk of passengers as per the provisions of the Act and Rs.16/- were charged to cover the limited liability of a paid driver and/or a cleaner. Thus, in total a sum of Rs.3,456/- were charged by the insurance company as comprehensive premium. Looking to the sitting capacity of the offending vehicle, it is clear that Rs.30/- were charged per passenger as premium. Thus, in total a sum of Rs.3,456/- were charged by the insurance company as comprehensive premium. Looking to the sitting capacity of the offending vehicle, it is clear that Rs.30/- were charged per passenger as premium. As per sub-clause (ii) of clause (b) of sub-section (2) of Section 95 of the Act, where the vehicle is a vehicle in which passengers are carried for hire or reward, the liability of the insurer in respect of passengers was to the limit of fifteen thousand for each individual passenger, whereas as per sub-clause (i) of clause (b) of sub-section (2) of Section 95 of the Act, such liability in respect of persons, other than passengers carried for hire or reward, was to the limit of fifty thousand rupees in all. Thus, there is clear distinction between the maximum limit of statutory liability where the offending vehicle is a vehicle in which passengers are carried for hire or reward in respect of persons travelling in it as passengers and the persons other than the passengers. The other persons can be of various kinds such as a pedestrian, a person travelling in other vehicle etc. A person travelling in such a vehicle as a passenger cannot come within the category of other persons and similarly a person other than a passenger can never be treated as a passenger of the offending vehicle. In the case of National Insurance Company Limited Vs. Jugal Kishore & ors. reported in 1988 ACJ 270 (SC), it was held by the Hon'ble Supreme Court that comprehensive insurance of the vehicle and payment of higher premium on this score do not mean that the limit of the liability with regard to third party risk becomes unlimited or higher than the statutory liability fixed under sub section (2) of Section 95 of the Act. For this purpose a specific agreement has to be arrived at between the owner and the insurance company and separate premium has to be paid on the amount of liability undertaken by the insurance company in this behalf. Likewise, if risk of any other nature, for instance, with regared to the driver or passengers etc. in excess of statutory liability, if any, is sought to be covered, it has to be clearly specified in the policy and separate premium is paid therefor. This is the requirement of Tariff Regulations framed for the purpose. Likewise, if risk of any other nature, for instance, with regared to the driver or passengers etc. in excess of statutory liability, if any, is sought to be covered, it has to be clearly specified in the policy and separate premium is paid therefor. This is the requirement of Tariff Regulations framed for the purpose. It was also held that if a vehicle is comprehensively insured a higher premium than that of an "ACT ONLY" policy is payable depending on estimated value of the vehicle. Such insurance entitles the owner to claim reimbursement of the entire amount of loss or damage suffered upto the estimated value of the vehicle calculated according to Rules and Regulations framed in this behalf. Similarly, in the case of New India Assurance Co.Ltd. Vs. Shanti Bai & Ors. reported in (1995) 2 SCC 639 also, it was held by the Hon'ble Supreme Court that mere fact that the insurance policy is comprehensive policy does not mean that the limit of liability with regard to third party risk becomes unlimited or higher than the statutory liability. For this purpose, a specific agreement is necessary. The comprehensive policy entitles the owner to claim reimbursement of the entire amount of loss or damage suffered upto the estimated value of the vehicle. In the case of Amrit Lal Sood & anr. Vs. Kaushlya Devi Thapar reported in (1998) 3 SCC 744 , Hon'ble Court found that :- (a) The liability of the Insurer depends on the terms of the contract between the insured and the insurer contained in the policy; (b) There is no prohibition for an insured from entering into a contract of insurance covering a risk wider than the minimum requirement of the statute and; (c) In such cases where the policy is not mere statutory policy, the terms of the policy have to be considered to determine the liability of the insurer. Constitution Bench of Five Hon'ble Judges of Hon'ble Supreme Court in the case of New India Assurance Co.Ltd. Vs. C.M.Jaya & ors. Constitution Bench of Five Hon'ble Judges of Hon'ble Supreme Court in the case of New India Assurance Co.Ltd. Vs. C.M.Jaya & ors. reported in 2002 (2) RLW SC 193 also held that in a case of insurance policy not taking any higher liability by accepting a higher premium in case of payment of compensation to a third party, insurer would be liable to the extent limited under Section 95 (2) of the Act and would not be liable to pay the entire amount even if vehicle is comprehensively insured. Similar view has also been expressed by the Hon'ble Court in the case of Road Transport Company Vs. Bhan Singh reported in (1998) 6 SCC 307 . Thus, the well settled legal position emerging out from the aforesaid decisions of Hon'ble Supreme Court may be summarized as below:- (a) Comprehensive policy of a vehicle does not mean that the limit of the liability with regard to the third party becomes automatically unlimited or higher than the statutory liability as fixed under sub-section (2) of Section 95 of the Act. (b) If a comprehensive policy is taken by the insured by paying extra amount as premium, such policy at the most entitles the insured to claim reimbursement of the entire amount of loss or damager suffered upto the estimated value of the vehicle i.e. such policy covers the damage caused to the vehicle only. (c) the insurer is free to cover the entire or unlimited risk of a third party by charging extra premium i.e. premium over and above the premium payable to cover the statutory risk of a third party in accordance with the provisions of the Act. For this purpose a specific agreement has to be arrived at between the insured and the insurer and it has to be clearly specified in the policy that by charging extra premium, the insured has undertaken to cover the entire or unlimited risk of the third party. In view of the aforesaid well settled legal position the stand of the claimant to the effect that the policy being a comprehensive one, the insurance company is liable to make payment of the entire amount of compensation is liable to be outrightly rejected. In view of the aforesaid well settled legal position the stand of the claimant to the effect that the policy being a comprehensive one, the insurance company is liable to make payment of the entire amount of compensation is liable to be outrightly rejected. So far as payment of an extra amount of Rs.40/- as premium is concerned, a close look at the certificate of insurance clearly shows that this extra amount was obtained by the insurance company to cover the unlimited risk of a third party (other than the passengers travelling in the offending vehicle and its driver and the cleaner). From the evidence available on record at the most it can be held that at the relevant time, a sum of Rs.200/- was payable as premium to cover the limited (statutory) risk of a third party (other than the passengers travelling in the offending vehicle) and the insurance company by charging an extra amount of Rs.40/- undertook to cover the entire risk of such third party and not the entire or unlimited risk of a passenger travelling in the offending vehicle. As already said a sum of Rs.1110/- was obtained to cover the risk of 37 passengers i.e. Rs.30/- were charged per passenger. A look at the policy does not show some extra premium was paid or obtained making the liability unlimited even in respect of passengers travelling in the offending vehcile rather it is clear that the aforesaid amount of Rs.1110/- was charged only to cover limited statutory liability as per the provisions of the Act. It is not the case of the claimant that at the relevant time the amount of premium payable to cover the statutory liability of a passenger was less than what was charged by the insurance company. The case of National Insurance Company Vs. Hastimal Lodha (supra) heavily relied upon on behalf of the claimant, being based on a different set of facts is of no help to him. It is not clear from the facts what was the nature of the offending vehicle in that case i.e. whether it was a goods vehicle or a passenger carrying vehicle or any other type of vehicle. It is also not clear who was the victim of the accident i.e. whether he was a passenger travelling in the offending vehicle or a person other than a passenger. It is also not clear who was the victim of the accident i.e. whether he was a passenger travelling in the offending vehicle or a person other than a passenger. A close perusal of the aforesaid case shows that in the case of a passenger carrying vehicle (excluding Passengers Risks), the rate of premium payable to cover the "Act Only" liability was Rs.200/- whereas to cover the liability to the Public Risk was Rs.240/-. It is thus clear that the aforesaid rates were not applicable to cover passengers risks. Thereof, merely because in the present case a sum of Rs.240/- was charged as premium to cover the liability to the Public Risk, it can not be held that the liability of a passenger also became unlimited to be borne by the insurance company. Consequently, the finding arrived at by the learned Tribunal under Issue No.3 being contrary to the law and facts of the case is liable to be set aside and it is to be held that liability of the insurance company is limited to the extent of Rs.15,000/- only as per provisions of subsection (2) of Section 95 of the Act and the rest of the amount of compensation is liable to be paid by the owner and/or driver of the offending vehicle. So far as prayer made on behalf of the claimant that in the first instance the insurance company be directed to pay the entire amount of compensation to the claimant and to recover it from the owner and/or driver of the offending vehicle is concerned, there is no absolute rule of law that in each and every case when it is found that the insurer has no liability or has limited liability to make payment of amount of compensation to the claimant, without taking into consideration the facts and circumstances of the case including the conduct of the owner and/or driver of the vehicle, it is to be ordered and directed that at the first instance insurer pay to the claimant and then recover the same from the owner and/or driver of the vehicle. In the present case, the offending vehicle is a Heavy Transport Passengers carrying vehicle. In the present case, the offending vehicle is a Heavy Transport Passengers carrying vehicle. The owner thereof even did not care to appear before the Tribunal and this Court to explain his position at least in regard to his liability to make payment of amount of compensation, if any, awardable to the claimant. The onwer was doing transport business. There is no material placed on record to show that the claimant would have any difficulty in recovering the awarded amount from him. Although, the insurance company is engaged in the business of insurance but at the same time it is custodian of public fund Award amount is paid by it to claimant from the premium collected by it from the insured persons. In such circumstances it would be travesty of justice if the insurance company is directed to pay the entire amount to the claimant and to recover the amount not legally payable by it from the owner and driver of the vehicle as it would face immense difficulties to recover the same by filing an execution petition after such a long time. So far as sufficiency of amount of compensation awarded by the learned Tribunal is concerned, I am of the considered view that the Tribunal after taking into consideration all aspects of the matter on the basis of evidence made available on record including the permanent disability caused to the claimant has already awarded a reasonable and just amount except that no amount has been awarded for future treatment likely to be taken by the claimant from time to time. Although, no medical evidence has been produced by the claimant regarding future treatment likely to be taken by him but looking to the nature of injury caused, I deem it proper to award a lump sum amount of Rs.60,000/- to him for future treatment and conveyance charges. So far as award of some amount of compensation under the head of future prospects is concerned, no amount is payable for the same as in his cross-examination the claimant has admitted that presently he is earning a sum of Rs.2500/-per month by doing the work of "Meenakari". So far as award of some amount of compensation under the head of future prospects is concerned, no amount is payable for the same as in his cross-examination the claimant has admitted that presently he is earning a sum of Rs.2500/-per month by doing the work of "Meenakari". Consequently, CMA No.2158/2003 filed by the Insurance Company is allowed and the finding of the Tribunal under Issue No.3 is set aside and it is held that its liability to make payment of amount of compensation is limited to the extent of Rs.15000/- only. Vide order dated 6.10.2003, the Insurance Company was directed to deposit the entire award amount alongwith interest in the Tribunal and it was further ordered that 50% of the amount so deposited may be disbursed to the claimant and remaining amount would be deposited in FDR. Although, it has been found by this Court that only an amount of Rs.15,000/-is payable by the insurance company, but looking to the overall facts and circumstances of the case and more particularly in view of the fact that in compliance of the order dated 6.10.2003, 50% of the amount may have already been paid to the claimant, it is made clear that the amount already disbursed/paid to the claimant shall not be recoverable from him at the behest of the insurance company but it can recover it from the owner and/or Tribunal of the offending vehicle with interest @ 6% per annum after deducting its part of liability of Rs.15,000/- by following the procedure prescribed by law. It is further made clear and ordered that the amount deposited in the form of FDR in compliance of the aforesaid order alongwith interest earned upon it shall be refunded to the insurance company by the Tribunal after obtaining a proper receipt if an application is moved by the insurance company for that purpose. The CMA No.1627/2003 filed by the claimant is partly allowed and it is held that he is entitled to get an additional amount of Rs.60,000/- as compensation alongwith simple interest @ 6% per annum from the date of filing of the claim petition. The owner and driver of the offending vehicle are jointly and severally liable to pay this enhanced amount to the claimant. The owner and driver of the offending vehicle are jointly and severally liable to pay this enhanced amount to the claimant. They are directed either directly pay to the claimant or deposit in the Tribunal, 50% of the amount of compensation alongwith interest @ 9% per annum as awarded by the Tribunal (as 50% of the amount has already been paid by the insurance company) together with the enhanced amount of Rs.60,000/- awarded by this Court alongwith interest @ 6% per annum within a period of one month from today. As the respondent-owner and driver of the offending vehcle did not appear even before this Court, office is directed to send copy of this judgment to them on their address immediately. In case the owner and/or driver of the offending vehciel fail to make payment of the awarded amount held to be paid by them by this Court within the period so granted to them, the claimant may recover the same from them by following the procedure prescribed by law. Consequently, the appeals are disposed of in the aforesaid manner, but without any order as to costs.