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2014 DIGILAW 264 (MAD)

New India Assurance v. Govindan

2014-02-04

R.MAHADEVAN

body2014
Judgment : 1. This Civil Miscellaneous Appeals has been filed against the award dated 03.01.2006 in M.C.O.P No.396 of 2004 passed by the Motor Accident Claims Tribunal, Fast Track Court, Dharmapuri. 2. The Insurance Company is the appellant in the Appeal. The Claim arises out of the accident that took place on 13.09.2002 and the first respondent in the appeal, who was travelling in the Tractor bearing registration No TN 30 Y 0750 with a Trailer, was injured because of the rash and negligent driving of the driver of the 2nd respondent, the owner of the vehicle. The Appellant opposed the claim on the grounds that the first respondent herein was an unauthorized passenger, that as per the policy conditions, the vehicle can be used only for agricultural purpose, that the owner of the vehicle did not pay any extra premium for carrying loadmen and therefore, the appellant is not liable to pay any compensation. 3. After considering the oral as well as documentary evidence, the Tribunal awarded Rs.1,63,000/- with costs and interest @ 7.5% per annum against the claim of Rs.7,00,000/-. Aggrieved by the same, the present appeals have been filed by the Insurance Company. 4. Heard the counsel for the appellant and the 1st respondent. The 2nd respondent-owner has not chosen to appear before this Court. 5. The learned counsel for the appellant, assailing the order of the Tribunal, argued that since there is a violation of the policy conditions, the appellant is not liable. The counsel contended that the 1st respondent travelled alongwith a load of brick, which was not permitted. The 1st respondent was only an unauthorized passenger and therefore, there is a violation of Section 147 of the Motor Vehicles Act. The counsel for the appellant also contended that compensation cannot be awarded both under the heads of disability and loss of income. The counsel further contended that the vehicle was used for a purpose namely, carriage of persons, other than one for which it was permitted and without considering the above contention, the Tribunal has erroneously allowed the claim, which is liable to be set aside. The counsel also placed reliance upon the judgments reported in NATIONAL INSURANCE CO. LTD. v. V.CHINNAMMA (2004 (4) CTC 459) and ORIENTAL INSURANCE CO. LTD. The counsel also placed reliance upon the judgments reported in NATIONAL INSURANCE CO. LTD. v. V.CHINNAMMA (2004 (4) CTC 459) and ORIENTAL INSURANCE CO. LTD. v. BRIJ MOHAN AND OTHERS (2007 (2) TNMAC 66 (SC)) to augment his contention that when no additional premium is paid and when the vehicle insured is used for a purpose other than for which it was permitted under the policy, the insurance company is not liable. 6. In reply, the learned counsel for the 1st respondent argued that the said judgments are not applicable to the facts and circumstances of the case and that the award of the Tribunal is well found and need not be interfered. The counsel also contended that once there is an insurance policy, the insurance company would be liable to pay the compensation and even if there is violation of policy condition, the insurance company would be liable to pay the compensation and recover the same from the owner. The Counsel also placed reliance upon the judgment of this Court in UNITED INDIA INSURANCE CO. LTD. v. AYYAMALAI (2012 (2) TNMAC 173) and hence sought dismissal of the appeal. 7. Upon consideration of the pleadings, oral as well as documentary evidence, this court is of the view that the factum of accident, injury and treatment are established. Even though the 1st respondent had claimed his monthly income to be Rs.6,000/-, for the purpose of awarding compensation, the Tribunal has rightly considered the petitioner’s income at only Rs.3,000/-. 8. The next point for consideration is whether the Tribunal was right in awarding compensation under disability and Loss of earnings. Section 168 of the Motor Vehicles Act reads as under:- "168. Award of the Claims Tribunal. 8. The next point for consideration is whether the Tribunal was right in awarding compensation under disability and Loss of earnings. Section 168 of the Motor Vehicles Act reads as under:- "168. Award of the Claims Tribunal. – (1) On receipt of an application for compensation made under section 166, the Claims Tribunal shall, after giving notice of the application to the insurer and after giving the parties (including the insurer) an opportunity of being heard, hold an inquiry into the claim or, as the case may be, each of the claims and, subject to the provisions of section 162 may make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid and in making the award the Claims Tribunal shall specify the amount which shall be paid by the insurer or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be : Provided that where such application makes a claim for compensation under section 140 in respect of the death or permanent disablement of any person, such claim and any other claim (whether made in such application or otherwise) for compensation in respect of such death or permanent disablement shall be disposed of in accordance with the provisions of Chapter X. (2) The Claims Tribunal shall arrange to deliver copies of the award to the parties concerned expeditiously and in any case within a period of fifteen days from the date of the award. (3) When an award is made under this section, the person who is required to pay any amount in terms of such award shall, within thirty days of the date of announcing the award by the Claims Tribunal, deposit the entire amount awarded in such manner as the Claims Tribunal may direct." 9. The word “ Just” used in the section makes it clear that the compensation awarded must synchronize with the facts of the case. In the present case, the disability has been proved to be permanent. Obviously, the permanent disability would result in reducing the earning capacity of the injured. But it cannot be said that compensation cannot be awarded under both heads. The loss in earning capacity, which is purely money oriented, is only one of the effects of a permanent disability. In the present case, the disability has been proved to be permanent. Obviously, the permanent disability would result in reducing the earning capacity of the injured. But it cannot be said that compensation cannot be awarded under both heads. The loss in earning capacity, which is purely money oriented, is only one of the effects of a permanent disability. Compensation under the head 'continuing or permanent disability' is awarded keeping in mind the psychological and social aspects. The object of awarding compensation is to balance the life before and after the accident. Therefore, the first respondent, who has suffered 40% permanent disability, obviously would have to lead a disabled life. Therefore, this court holds that the Tribunal has not erred in awarding compensation under both heads of disability and loss in earning capacity. 10. The next point for consideration is whether the vehicle was used for any purpose other than for which it was permitted. The evidence before the Tribunal reveals that the first respondent travelled in the Trailer alongwith bricks which were intended to be used for building the compound wall of Mariamman Temple. From the facts, it is clearly evident that the first respondent is not a gratuitous passenger. Upon perusal of the Insurance policy, it is clear that the policy covers the driver and the cleaner. The premium paid is Agricultural Tractor Premium. The policy also covers third party risks. Carrying bricks to build a compound wall cannot, by any stretch, be considered for agricultural purpose. In fact, in the claim, nothing is mentioned about the Trailer loaded with bricks. In the FIR, which was given, three days after the accident, it has been mentioned that the bricks were intended for building the compound wall of the Temple. So it can be said that the evidence of the 1st respondent that the bricks were intended for building the compound wall of the petitioner’s Farm is only an afterthought and cannot be accepted. 11. In the judgment relied upon by the counsel for the Appellant in 2004 (4) CTC 459, the Apex Court found factually that the deceased, a third party in the case, had carried agricultural goods for sale for his business activities. The deceased therein was not the owner of the vehicle. Therefore, the Hon’ble Apex Court, finding that the Tractor with Trailer were used as goods carriage vehicle, exonerated the Insurance Company. 12. The deceased therein was not the owner of the vehicle. Therefore, the Hon’ble Apex Court, finding that the Tractor with Trailer were used as goods carriage vehicle, exonerated the Insurance Company. 12. In the Judgment reported in 2007 (2) TNMAC 66 (SC), the Apex Court, after finding that the Tractor With Trolley was used for carrying earth when the accident occurred, though held that the owner had violated the policy condition and hence the Insurance company was not liable, considering the fact that the claimant was a poor labourer, directed the Insurance Company to pay the compensation and recover the same from the owner. 13. In the judgment reported in 2012 (2) TNMAC 173, relied upon by the first respondent, following the ratio of the Apex Court in the judgment reported in GIRIRAJ PRASAD AGRAWAL v. PARWATI DEVI (2005 (2) TNMAC 65 (FB)) that breach of the terms of permission may be an offence by the insured, but, that will not be a ground for the insurer to avoid its liability under the contract of Insurance, this Court directed the Insurance company to pay the compensation and recover the same from the Owner of the Vehicle. In that case also, construction material was carried in the Trailer of the Tractor, which was permitted to be used only for agricultural purpose. 14. As per the dictum laid down in SWARAN SINGH'S case in (2004 (1) TAC 321(SC)), UNITED INDIA INSURANCE COMPANY LIMITED v. S.SARAVANAN (2009(2) TNMAC 103 DB), MANIMOZHI'S CASE (2010(2) TAMAC 542), NAGAMMAL'S CASE of the Full Bench ( 2009(1) LW 702 ), JAWHAR SINGH v. BALA JAIN AND OTHERS (2011(1) TNMAC 641(SC)) and IFCO TYOKO case (2012 1394 DB), it is settled that if the insurer establishes that there is a breach of policy condition under Section 149(2)(a)(ii), the Insurance Company, though not liable, as it has successfully established its defence, can be directed to pay and recover from the insured. 15. Therefore, it is held that the Insurance Company, though exonerated, is directed to pay and recover the same from the owner of the vehicle. However, the Insurance Company is entitled to recover the compensation as per the mode of recovery mentioned in paragraph 7 of the judgment in ORIENTAL INSURANCE CO. LTD. 15. Therefore, it is held that the Insurance Company, though exonerated, is directed to pay and recover the same from the owner of the vehicle. However, the Insurance Company is entitled to recover the compensation as per the mode of recovery mentioned in paragraph 7 of the judgment in ORIENTAL INSURANCE CO. LTD. v. SHRI.NANJAPPAN AND OTHERS ((2004) ACC 524 (SC)), which is extracted hereunder:- "For the purpose of recovering the compensation amount from the insured, the insurer shall not be required to file a suit. It may initiate a proceeding before the concerned Executing Court as if the dispute between the insurer and the insured was the subject matter of determination before the Tribunal and as if the issue is decided against the owner and in favour of the insurer. A notice shall be issued to the insured to furnish security for the entire amount. The offending vehicle shall be attached as a part of the security. If necessity arises, the Executing Court shall take assistance of the concerned Regional Transport Authority. The Executing Court shall pass appropriate orders in accordance with law as to the manner in which the insured/owner of the vehicle shall make payment to the insurer. In case there is any default it shall be open to the Executing Court to direct realisation by disposal of the securities to be furnished or from any other property of the insured." 16. Further, upon perusal of Exhibits P1, P7 and R2, it is clear that bricks were carried in the trailer and the vehicle was used for non-agricultural purpose. Hence, the appellant cannot be held to be liable. In so for as the first respondent is concerned, he is third party to the insurance policy. One cannot expect every person, who travels in a vehicle, to know the coverage of policy and then travel. Nevertheless, accident as it is, is an unexpected event. This court could only see that first respondent as a poor labour , harbouring his life as a loadman. He must have travelled in the vehicle with a bona fide belief of earning some money but lost his future by suffering two grievous injuries. Therefore, in the facts and circumstances of the case, the order of the Tribunal is modified to an extent that the appellant shall pay the compensation awarded and recover the same from the second respondent as observed above. Therefore, in the facts and circumstances of the case, the order of the Tribunal is modified to an extent that the appellant shall pay the compensation awarded and recover the same from the second respondent as observed above. With the above modification, the civil miscellaneous appeal is disposed of. No costs. The connected miscellaneous petition is closed.