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2014 DIGILAW 2468 (ALL)

U. P. STATE ROAD TRANSPORT CORP. v. RAJESHWARI

2014-08-13

OM PRAKASH VII, RAJES KUMAR

body2014
JUDGMENT By the Court.—This First Appeal From Order has been filed by the appellants (Uttar Pradesh State Road Transport Corporation through the Rregional Manager, Kanpur Region, Kanpur and Managing Director, Uttar Pradesh State Road Transport Corporation, Parivahan Bhawan, Dedhi Kothi, Lucknow) against the judgement and award dated 20.12.2007 passed by the Motor Accident Claims Tribunal/Additional District Judge, Court No. 2, Fatehpur in M.A.C.P. No. 269 of 2005 awarding compensation amounting to Rs. 9,43,484/- and fastening liability to pay the compensation on the appellants. As per the award, initially the awarded amount is to be paid by the Oriental Insurance Company with right to recover the same from the appellants. Cross Appeal/Cross Objection, as mentioned above, has also been filed by the claimants. 2. Facts in brief for filing the present appeal are as follows: As per facts mentioned in the impugned judgement and order, on 19.8.2005 at 1.30 p.m. when deceased Shiv Lal was going on his bicycle from his house towards his office at Lucknow - Raebareli road, a road-ways bus bearing registration No. UP32-AN/6918, being driven by its driver rashly and negligently, hit the deceased, consequently, he suffered grievous injuries and on 20.9.2005, during treatment, he died. 3. FIR was lodged at P.S. Kotwali, District - Raebareli by Anis Kumar, son of the deceased. The deceased Shiv Lal was about 55 years. 4. UPSRTC has filed its written statement denying the facts of accident. It has been stated that the registered owner of the bus is Ravindra Ahuja and the vehicle in question was affiliated with UPSRTC and as per the terms and conditions of the contract, the owner is responsible for any accident as also for payment of compensation. 5. The owner of the vehicle has also filed his written statement denying the involvement of his bus in the accident in question. He has also denied any negligence on the part of driver of the offending bus. 6. The insurance company has also filed its written statement denying the accident. 7. The Tribunal in the claim petition has framed issues regarding the accident, rash and negligent driving by the driver of the offending bus. Issues regarding driving license, insurance policy and quantum of compensation have also been framed and the Tribunal has afforded opportunity to adduce the evidence to the parties. 8. 7. The Tribunal in the claim petition has framed issues regarding the accident, rash and negligent driving by the driver of the offending bus. Issues regarding driving license, insurance policy and quantum of compensation have also been framed and the Tribunal has afforded opportunity to adduce the evidence to the parties. 8. After hearing the parties, the Tribunal vide impugned judgement and order allowed the claim petition fastening the liability to pay the compensation upon the UPSRTC and observing that the accident is the result of sole rash and negligent driving of the driver of offending vehicle bus. 9. Feeling aggrieved with the impugned judgement and order the present First Appeal From Order has been filed by the appellants. 10. Heard Shri Anubhav Chandra, learned counsel for the appellants, Shri Ram Singh, learned counsel for the claimants-respondents and Shri A.K. Jaiswal, learned counsel for the insurance company. 11. Shri Anubhav Chandra, learned counsel for the appellants submitted that on the date and time of the accident, the vehicle in question was validly insured with the insurance company, therefore, only on this basis that the vehicle in question was being plied under the direct control of the UPSRTC, no liability can be fastened on the appellants to pay the compensation amount. It has also been submitted that the indemnity contract between the owner and the insurance company on the date of the accident validly exists. Learned counsel for the appellants placed reliance on the decision of the Supreme Court in the case of Uttar Pradesh State Road Transport Corporation v. Kulsum and others, 2011 (2) AICC 426. Relevant paragraphs of the said judgement are as follows (paragraphs 29 to 39 of the said judgement): “29. In the instant case, the driver was employed by Ajay Vishen, the owner of the bus but evidently through Clause 4.4. of the Agreement, reproduced hereinabove, driver was supposed to drive the bus under the instructions of the conductor who was appointed by the Corporation. The said driver was also bound by all orders of the Corporation. Thus, it can safely be inferred that effective control and command of the bus was that of the Appellant. 30. Thus, for all practical purposes, for the relevant period, the Corporation had become the owner of the vehicle for the specific period. The said driver was also bound by all orders of the Corporation. Thus, it can safely be inferred that effective control and command of the bus was that of the Appellant. 30. Thus, for all practical purposes, for the relevant period, the Corporation had become the owner of the vehicle for the specific period. If the Corporation had become the owner even for the specific period and the vehicle having been insured at the instance of original owner, it will be deemed that the vehicle was transferred alongwith the Insurance Policy in existence to the Corporation and thus Insurance Company would not be able to escape its liability to pay the amount of compensation. 31. The liability to pay compensation is based on a statutory provision. Compulsory Insurance of the vehicle is meant for the benefit of the Third Parties. The liability of the owner to have compulsory insurance is only in regard to Third Party and not to the property. Once the vehicle is insured, the owner as well as any other person can use the vehicle with the consent of owner. Section 146 of the Act does not provide that any person who uses the vehicle independently, a separate Insurance Policy should be taken. The purpose of compulsory insurance in the Act has been enacted with an object to advance social justice. 32. Third Party rights have been considered by this Court in several judgments and the law on the said point is now fairly well-settled. 33. The Apex Court in the case of Guru Govekar v. Filomena F. Lobo and others, (1988 ACJ 585), 1988 AIR 1332, has held that: “8. ...Thus, if a policy is taken in respect of a motor vehicle from an insurer in compliance with the requirements of Chapter VIII of the Act, the insurer is under an obligation to pay the compensation payable to a third party on account of any injury to his/her person or property or payable to the legal representatives of the third party in case of death of the third party caused by or arising out of the use of the vehicle at a public place. The liability to pay compensation in respect of death of or injury caused to the person or property of a third party undoubtedly arises when such injury is caused when the insured is using the vehicle in a public place. The liability to pay compensation in respect of death of or injury caused to the person or property of a third party undoubtedly arises when such injury is caused when the insured is using the vehicle in a public place. It also arises when the insured has caused or allowed any other person (including an independent contractor) to use his vehicle in a public place and the death of or injury to the person or property of a third party is caused on account of the use of the said vehicle during such period, unless such other person has himself taken out a policy of insurance to cover the liability arising out of such an accident. 13. ...This meant that once the insurer had issued a certificate of insurance in accordance with sub-section (4) of Section 95 of the Act the insurer had to satisfy any decree which a person receiving injuries from the use of the vehicle insured had obtained against any person insured by the policy. He was liable to satisfy the decree when he had been served with a notice under sub-section (2) of Section 96 of the Act about the proceedings in which the judgment was delivered. 14. ...Any other view will expose innocent third parties to go without compensation when they suffer injury on account of such motor accidents and will defeat the very object of introducing the necessity for taking out insurance policy under the Act.” 34. In a recent judgment of this Court, in the case of United India Insurance Company Limited v. Santro Devi and others, (2009) 1 SCC 558 , it has been held as under : “16. The provisions of compulsory insurance have been framed to advance a social object. It is in a way part of the social justice doctrine. When a certificate of insurance is issued, in law, the insurance company is bound to reimburse the owner. There cannot be any doubt whatsoever that a contract of insurance must fulfil the statutory requirements of formation of a valid contract but in case of a third-party risk, the question has to be considered from a different angle. 17. Section 146 provides for statutory insurance. An insurance is mandatorily required to be obtained by the person in charge of or in possession of the vehicle. 17. Section 146 provides for statutory insurance. An insurance is mandatorily required to be obtained by the person in charge of or in possession of the vehicle. There is no provision in the Motor Vehicles Act that unless the name(s) of the heirs of the owner of a vehicle is/are substituted on the certificate of insurance or in the certificate of registration in place of the original owner (since deceased), the motor vehicle cannot be allowed to be used in a public place. Thus, in a case where the owner of a motor vehicle has expired, although there does not exist any statutory interdict for the person in possession of the vehicle to ply the same on road; but there being a statutory injunction that the same cannot be plied unless a policy of insurance is obtained, we are of the opinion that the contract of insurance would be enforceable. It would be so in a case of this nature as for the purpose of renewal of insurance policy only the premium is to be paid. It is not in dispute that quantum of premium paid for renewal of the policy is in terms of the provisions of the Insurance Act, 1938.” 35. Perusal of the ratio of aforesaid judgments of this Court, shows that Section 146 of the Act gives complete protection to Third Party in respect of death or bodily injury or damage to the property while using the vehicle in public place.For that purpose, insurance of the vehicle has been made compulsory to the vehicles or to the owners. This would further reflect that compulsory insurance is obviously for the benefit of Third Parties. 36. Certificate of Insurance, between the owner and the Insurance Company contemplates, under what circumstances Insurance Company would be liable to pay the amount of compensation. The relevant conditions are reproduced hereinbelow : “Rules with respect to use of the Vehicle Use only for carriage of passengers in accordance with permit (contract carriage or stage carriage) issued within the meaning of the Motor Vehicles Act, 1988. This policy does not cover: 1. Use for organised racing pace making reliability trial speed testing. 2. Use whilst drawing a trailer except the towing (other than to reward) of any one disabled mechanically propellor vehicle. This policy does not cover: 1. Use for organised racing pace making reliability trial speed testing. 2. Use whilst drawing a trailer except the towing (other than to reward) of any one disabled mechanically propellor vehicle. Persons who are qualified to use the Vehicle: Any person including the insured provided that person driving holds an effective driving licence at the time of the accident and is not disqualified from holding or obtaining such licence. Provided also that a person holding an effective learner’s licence may also drive the vehicle when non used for transport of passenger at the time of the accident and such a person satisfies the requirement of rule No. 3 of this Central Motor Vehicle Rule, 1989.” 37. Perusal thereof would show that there has not been any violation of the aforesaid terms and conditions of the policy. Respondent - Insurance Company has also failed to point out violation of any Act, Rules or conditions of the Insurance. Insurance Company has no legal justification to deny the payment of compensation to the claimants. 38. In the light of the foregoing discussions, the Appeal filed by Insurance Company fails, wherein it has been directed that the amount would first be paid by the Company, with right to it to recover the same from owner of the vehicle. This we hold so, as the liability of the Insurance Company is exclusive and absolute. 39. Thus, looking to the matter from every angle, we are of the considered opinion that Insurance Company cannot escape its liability of payment of compensation to Third Parties or claimants. Admittedly, owner of the vehicle has not violated any of the terms and conditions of the policy or provisions of the Act. The owner had taken the insurance so as to meet such type of liability which may arise on account of use of the vehicle.” 12. Thus, prayer has been made to allow the First Appeal From Orders filed on behalf of UPSRTC and to set aside the judgement and award passed against the UPSRTC. 13. Shri Ram Singh, learned counsel for the claimants/respondents has submitted that a cross appeal/cross objection, mentioned above, has been filed challenging the multiplier adopted by the Tribunal and also the amount awarded towards funeral expenses, loss of consortium etc.. Income assessed by the Tribunal has also been disputed. 13. Shri Ram Singh, learned counsel for the claimants/respondents has submitted that a cross appeal/cross objection, mentioned above, has been filed challenging the multiplier adopted by the Tribunal and also the amount awarded towards funeral expenses, loss of consortium etc.. Income assessed by the Tribunal has also been disputed. Thus, prayer has been made to allow the cross appeal/cross objection enhancing the compensation amount fastening the liability upon the insurance company to the pay the amount. 14. Shri A.K. Jaiswal, learned counsel for the insurance company has submitted that since the vehicle in question was under direct control of the UPSRTC, no information in regard to the contract entered into between the UPSRTC and the owner of the vehicle has been given to the insurance company, therefore, the insurance company cannot be held liable to pay compensation. 15. We have considered the submissions raised by learned counsel for the parties and also perused the entire record. 16. In this matter, the vehicle in question was being plied on the basis of contract entered into between the owner of the vehicle and the UPSRTC under the direct control of the UPSRTC. The Tribunal while allowing the claim petition has observed that the UPSRTC is responsible to pay the compensation amount but the insurance company has been directed to pay the amount initially and a right to recover the same from the UPSRTC has been given. In view of the law laid down in the case of Uttar Pradesh State Road Transport Corporation (supra), when a valid indemnity contract exist between the owner and the insurer on the date of accident, then the observation made by the Tribunal is not found in accordance with law and the same requires interference. The insurance company cannot be absolved from its liability to indemnify the owner from any liability. The insurance policy issued by the insurance company will be deemed to be issued for all purposes for the risk of owner and the third party for that period and Insurance company cannot escape from its contractual liability to pay the compensation. Thus, the appeal filed by the UPSRTC has substance and the same is liable to be allowed. The appeal is accordingly allowed. The finding arrived at by the Tribunal fixing responsibility to pay the compensation amount on the appellants UPSRTC is set aside. 17. Thus, the appeal filed by the UPSRTC has substance and the same is liable to be allowed. The appeal is accordingly allowed. The finding arrived at by the Tribunal fixing responsibility to pay the compensation amount on the appellants UPSRTC is set aside. 17. In the facts and circumstances of the case, the compensation amount will be paid by the insurance company. 18. So far as the argument advanced by the learned counsel for the claimants/respondents that to work out the compensation the Tribunal has applied the multiplier of 8 instead of 11 is concerned, as per the second schedule appended to the Motor Vehicles Act and also in view of the law laid down in the case of Sarla Verma and others v. Delhi Transport Corp.and another, (2009) 6 SCC 121 , the Tribunal ought to have applied the multiplier of 11. Thus, we are of the view that the impugned judgement and award so far as multiplier is concerned is liable to be modified to that extent applying the multiplier of 11 into the loss of annual dependency to work out the compensation amount. 19. So far as deduction made by the Tribunal on account of own expenses is concerned, looking to the status of the claimants, the same cannot be said to be illegal. 20. The Tribunal has also awarded Rs. 5,000/- for loss of consortium, Rs. 2,000/- for funeral expenses and Rs. 2,500/- for loss of estate. 21. Learned counsel for the claimants has placed reliance on the decision of the Apex Court in the case of Anjani Singh and others v. Salauddin and others, 2014 (3) TAC 1 (SC). 22. Vide Uttar Pradesh Motor Vehicles (Eleventh Amendment) Rules, 2011, Rule 220-A has been inserted in the Uttar Pradesh Motor Vehicles Rules. Sub-rule (4) of the said Rule 220-A is as under: “(4) The non-pecuniary damages shall also be payable in the compensation as follows- (i) Compensation for loss of estate : Rs. 5000 to Rs. 10,000. (ii) Compensation for loss of consortium : Rs. 5000 to 10000 (iii) Compensation for loss of love and affection : Rs. 5000 to Rs. 15000. (iv) Funeral expenses, costs of transportation of body expenses whichever is less. : Rs. 5000 or actual (v) Medical expenses : Actual expenses proved to the satisfaction of the Claims Tribunal.” 23. 10,000. (ii) Compensation for loss of consortium : Rs. 5000 to 10000 (iii) Compensation for loss of love and affection : Rs. 5000 to Rs. 15000. (iv) Funeral expenses, costs of transportation of body expenses whichever is less. : Rs. 5000 or actual (v) Medical expenses : Actual expenses proved to the satisfaction of the Claims Tribunal.” 23. We have considered the submissions raised by learned counsel for the claimants and also carefully gone through the law laid down in the case of Anjani Singh (supra) and also law laid down in the case of Sarla Verma (supra). Looking to the entire facts and circumstances of the case, we are of the view that in the present matter, it will be appropriate to award non-pecuniary damages in accordance with the provisions contained in Rule 220-A (4) of the Uttar Pradesh Motor Vehicles (Eleventh Amendment) Rules, 2011, which has been quoted above and also in accordance with the law laid down by the Apex Court in Sarla Verma case (supra). Thus, the claimants are entitled to Rs. 10,000/- towards loss of consortium in place of Rs. 5000/- and Rs. 5000/- towards funeral expenses in place of Rs. 2000/- and also Rs. 10,000/- for the loss of estate in place of Rs. 2500/-. The Cross Appeal/Cross Objection filed by the claimants is thus liable to be allowed to this extent. 24. Accordingly, the impugned judgement and award passed by the Tribunal is modified, allowing the First Appeal From Order No. 648 of 2008 and the Cross Appeal/Cross Objection No. 78176 of 2008 as follows: 1. Rs. 9860/-X 12 =Rs. 1,18,320/- : Annual Loss of dependency 2. Rs. 1,18,320/-X11-17,292/- = Rs. 12,84,228/- : Total Loss of dependency deducting Income Tax 3. Rs. 10,000/- : Loss of consortium 4. Rs. 5,000/- : Funeral expenses 5. Rs. 10,000/- : Loss of estate ————————— Rs. 14,27,548/- ————————— 25. The aforesaid amount of Rs. Rs. 14,27,548/- (Rupees fourteen lakh forty four thousand and eight hundred and forty only) alongwith simple interest of 6% per annum from the date of filing of claim petition till its realization, be deposited by the insurance company within two months from today before the Tribunal giving due adjustment to the amount already deposited. The deposited amount be paid to the claimants-appellants, in the proportion as given by the Tribunal in the impugned award. 26. The deposited amount be paid to the claimants-appellants, in the proportion as given by the Tribunal in the impugned award. 26. Rest of the terms and conditions laid down in the impugned award would continue to remain operative. 27. No order as to costs. —————