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2014 DIGILAW 28 (JK)

New India Assurance Co. Ltd. v. Manzoor Ahmad

2014-01-31

HASNAIN MASSODI

body2014
JUDGMENT Hasnain Massodi, J.- 1. Passenger vehicle bearing registration no. JK02G-2108, on 07.12.2003 while proceeding from Ramsoo to Village Shalgadi met a tragic accident at Ramban. Shri Javeed Ahmad Naik driver of the vehicle was allegedly driving the vehicle rashly and negligently at the time of accident. He lost his life in the accident and a number of passengers travelling in the vehicle either died or suffered multiple injuries. The accident led to registration of case FIR No. 229 of 2003 under Sections 279, 337,338, 304A Ranbir Penal Code at Police Station, Banihal. In the report regarding occurrence transmitted by Incharge Police Post/Division, Ramsoo through Manjit Singh 224/SPO to SHO Police Station, Banihal, the number and particulars of the passengers who had lost their lives in the accident or were injured was not given. However, SHO Police Station, Banihal came to know that 28 passengers had lost their lives and 23 passengers were injured in the accident. The accident led to filing of 16 claim petitions before Motor Accident Claims Tribunal, Jammu and 12 petitions in Motor Accident Claims Tribunal, Ramban by the dependents of the deceased and the injured passengers. The case set up was that the accident was attributable to rash and negligent driving of the driver of the offending vehicle and the Insurance Company with which the vehicle was insured was under an obligation to pay compensation to the dependents and the injured. The Insurance Company was arrayed as party respondent in each of the claim petition. The claimants set out necessary details in the claim petitions like age and annual income of the deceased, loss of income suffered by the dependents of the deceased passengers and the injured on account of accident, to enable the Tribunal to assess just compensation within the meaning of Section 168 of Motor Vehicles Act, 1988. 2. The Insurance Company - present appellant, opposed the claim petitions on the ground that as the owner of the offending vehicle was guilty of breach of insurance contract, the Insurance Company-was free from any obligation to indemnify him and pay compensation to the dependents of the deceased passengers and the injured. 2. The Insurance Company - present appellant, opposed the claim petitions on the ground that as the owner of the offending vehicle was guilty of breach of insurance contract, the Insurance Company-was free from any obligation to indemnify him and pay compensation to the dependents of the deceased passengers and the injured. It was pleaded that the driver of the offending vehicle at the time of accident was not having an effective driving license; that the vehicle was being plied against the route permit and that the driver by carrying 51 passengers as against 20 persons (including driver and conductor) permitted under the Registration Certificate, had violated the conditions of Registration Certificate. The Insurer further disputed the factual averments made in the claim petitions as regards age of the deceased/injured at the time of accident, their monthly income and loss of income suffered by the families of the deceased and injured. 3. The Tribunal at Jammu on going through the pleadings settled following issues- "1, Whether an accident took place at a place Dhara District Ramban on 07.12.2003 clue to the rash and negligent driving of the offending matador No. JK02G 2108 in the hands of erring driver in which the deceased namely Farid Ahmed, Mohd Ashraf, Javaid Ahmed, Shabir Ahmed, Mohd. Iqbal, Taja Begum., Hafiza, Begum, Raja Begum, Master Imran, Parveen Begum, Sajad Ahmed, Mohd. Ibrahim, Khadam Begum, Sabuyra Begum suffered fatal injuries and petitioners Amina Banoo and Parveez Ahmed, suffered grievous nature of injuries.? OPP 2. If issue No. 1 is proved in affirmative whether petitioners in each case are entitled, to the compensation if so to what amount and from whom? OPP 3. Whether driver of offending Matador at the time of accident was not holding valid and effective driving license to the knowledge of owner of offending matador and the matador was being driven in violation of terms and conditions of insurance policy, route permit etc? OPP1 4. Whether the offending matador at the time of accident was over loaded with passengers beyond the sitting capacity, if so what is its effect. OPR 4-A Whether offending vehicle stood transferred by respondent no. 2 to respondent no. 3 before the date of accident if so to what affect on the liability of insurance company? OPR-1" 4. OPP1 4. Whether the offending matador at the time of accident was over loaded with passengers beyond the sitting capacity, if so what is its effect. OPR 4-A Whether offending vehicle stood transferred by respondent no. 2 to respondent no. 3 before the date of accident if so to what affect on the liability of insurance company? OPR-1" 4. The issues framed by the Tribunal at Ramban, read as under- "1) Whether deceased Was travelling by vehicle No. 2108/JK02G on 07.12.2003 at Adhal Pogal area falling under the jurisdiction of Police Station Banihal? (OPP). 2) Whether vehicle No. 2108/JK02G was being driven rashly and negligently by driver ]aved Ahmed who died on spot at the lime of accident? (OPP) 3) Whether vehicle No. 2108/JK02Gwas driven by driver in violation of Route Permit, RC and FC and what is the affect of this violation? (OPR) 4) Whether driver of the ill-fated vehicle No. 2108/JK02G was not holding valid driving license at the time of accident? (OPR) 5) In case issue No. 3 and 4 are not proved in affirmative what is the extent of compensation to which the petitioner is entitled, and from whom? (OPP)." 5. The parties led evidence to discharge the onus of proving issues, burden, whereof was placed on them. The appellant examined S/Shri Vidaya Sagar, Balvinder Singh - officials of the Regional Transport Office and Ankush Abrol - the recorded owner of the offending vehicle, to establish that the driver of the offending vehicle did not have valid and effective driving license at the time of accident; that the vehicle was being plied against the route permit and that passengers much more than permitted were travelling in the vehicle at the time of accident. The claimants' evidence mainly focused on the factors relevant for assessment of compensation. 6. The Tribunal decided all the issues in favour of claimants-respondents herein, and against the appellant. The appellant was held to have failed to prove that the owner of the offending vehicle was guilty of breach of any of the conditions of the insurance policy/contract, so as to enable the appellant to wriggle out of its liability to indemnify the owner of the vehicle. 7. The Tribunals took up all the claim petitions together and disposed of the petitions by a common award dated 31.10.2009 and 25.10.2011 respectively. 7. The Tribunals took up all the claim petitions together and disposed of the petitions by a common award dated 31.10.2009 and 25.10.2011 respectively. The Tribunals assessed compensation in 28 claim petitions (16 at Jammu and 12 at Rarnban), tabulated here under- MACT Ramban 8. The awards rendered by MACT Jammu and Ramban are questioned in 28 Civil First Miscellaneous Appeals on hand, on the grounds identical to grounds set out in reply to each of the claim petitions. It is pleaded that the Tribunal erroneously held the appellant to have failed to prove that the offending vehicle was carrying passengers more thanits permitted capacity at the time of the accident. The Tribunal is said to have lost sight of the Police Report indicating that 51 passengers were travelling in the vehicle at the time of accident and 28 of the passengers lost their lives in the accident while 23 passengers suffered injuries. The Tribunal, it is urged, ought not to have fastened liability on the appellant, as the appellant because of breach of important conditions of insurance policy by the owner, was free from its obligations under the insurance policy. The Tribunal is also said to have awarded compensation much more than the compensation due to the claimants, having regard to settled legal principles governing assessment of compensation. 9. I have gone through memo of appeal and the record available on the file. I have heard learned counsel for the parties. 10. The main plank of the appellant's case is that the offending vehicle at the time of unfortunate accident was carrying passengers much more than its permitted capacity and, therefore, the vehicle was being plied in violation of terms of the Registration Certificate. The appellant to substantiate its stand placed reliance on the report under Section 169 Cr.P.C. of Station House Officer, Banihal. SHO, because of death of the accused (driver) in the accident, closed the matter and submitted final report under Section 169 Cr.P.C. The Tribunals, however, did not give the report under Section 169 Cr.P.C. credit it deserved, and held the appellant to have failed to substantiate that the offending vehicle was overloaded at the time of accident and carried passengers more than its permitted capacity. The conclusions drawn by the Tribunal, however, are untenable for the reason that the appellant had brought on record sufficient material to prove that the number of passengers in the vehicle at the time of accident was much more than its permitted capacity. It is nobody's case that the offending vehicle was permitted to carry more than 20 passengers included its driver and cleaner. The very fact that 28 claim petitions have been filed and allowed by the Tribunals leads to the conclusion that the offending vehicle was being plied at the time of accident in violation of the Registration Certificate (RC). 11. It is pertinent to point out that the liability of an Insurance Company to indemnify the owner in the event of vehicular accident giving rise to third party claim(s) does not get extinguished, in case, the vehicle is found to have been carrying passengers more than its permitted capacity. The liability of the Insurance Company, however remains restricted to the permitted capacity and in case number of claims on the ground of death or injury on account of vehicular accident is more than its permitted capacity, compensation awarded to the extent of permitted capacity is to go to all the claimants. In National Insurance Company Ltd. v. Anjana Shah, 2007 (5) Supreme 856 , Supreme Court held that the insurance company cannot be compelled to make payment of amounts covered by decrees even in respect of those passengers not covered by the policy and who have been loaded into the vehicle in violation of the permit, the condition of registration of the vehicle and the statute. In case of an overloaded vehicle, meeting an accident, the Tribunal, would face problem in identifying the passengers covered by the Insurance Policy and the passengers having no insurance cover. The Supreme Court, to deal with such situation laid down following guidelines- "16. Then, arises the question, how to determine the compensation payable or how to quantify the compensation since there is no means of ascertaining who out of the overloaded passengers constitute the passengers covered by the insurance policy as permitted to be carried by the permit itself. As this Court has indicated, the purpose of the Act is to bring benefit to the third parties who are either injured or dead in an accident. It serves a social purpose. As this Court has indicated, the purpose of the Act is to bring benefit to the third parties who are either injured or dead in an accident. It serves a social purpose. Keeping that in mind, we think that the practical and proper course would be to hold that the insurance company, in such a case, would be bound to cover the higher of the various awards and will be compelled to deposit the higher of the amounts of compensation awarded to the extent, of the number of passengers covered by the insurance policy. Illustratively, we may put it like this. In the case on hand, 42 passengers were the permitted passengers and they are the ones who have been insured by the insurance company. 90 persons have either died or got injured in the Accident. Awards have been passed for varied sums. The Tribunal should take into account, the higher of the 42 awards made, add them up and direct the insurance company to deposit that lump sum. Thus, the liability of the insurance company would be to pay the compensation awarded to 42 out of the 90 passengers. It is to ensure that the maximum benefit is derived by the insurance taken for the passengers of the vehicle, that we hold that the 42 awards to be satisfied by the insurance company would be the 42 awards in the descending order starting from the highest of the awards. In other words, the higher of the 42 awards will be taken into account and it would be the sum total of those higher 42 awards that would be the amount that the insurance company would be liable to deposit. It will be for the Tribunal thereafter TO direct distribution of the money so deposited by the insurance company proportionately to all the claimants, here all the 90, and leave all the claimants to recover the balance from the owner of the vehicle. In such cases, it will be necessary for the Tribunal, even at the initial stage, to make appropriate orders to ensure that the amount could be recovered from the owner by ordering attachment or by passing other restrictive orders against the owner so as to ensure the satisfaction in full of the awards that may be passed ultimately." 12. In such cases, it will be necessary for the Tribunal, even at the initial stage, to make appropriate orders to ensure that the amount could be recovered from the owner by ordering attachment or by passing other restrictive orders against the owner so as to ensure the satisfaction in full of the awards that may be passed ultimately." 12. The law was reiterated in United India Insurance Company Ltd. v. K.M. Poonam and ors., 0127/2011 : 2011 ACJ 917.The Court held that the liability of Insurance Company would be limited to the number of 'passengers covered by the Insurance Policy and the excess amount would be recoverable from the owner of the vehicle in execution proceedings without filing a separate suit. 13. In the present case, 28 claim petitions have been laid and allowed by the Motor Accident Claims Tribunal. The appellant Insurance Company having regard to the law laid down by the Supreme Court in above cited cases would be liable to indemnify the owner of the offending vehicle to the extent of its permitted capacity. In the said background, highest awarded amount in 20 claim petitions i.e. to the extent of permitted capacity are to be picked up. The amount awarded added and thereafter rateably distributed amongst the 28 claim petitions. The claimants would not be left without remedy as regards the amount awarded less by the amount received. They have a right to recover the awarded amount to the said extent from the owner of the vehicle. 14. The appellant sought to escape liability to indemnify the owner of the offending vehicle also on the ground that the driver of the offending vehicle was not having an effective driving license at the time of accident and that the vehicle at the time of accident was being plied in violation of the route permit. The plea raised by the appellant in its objections, is duly reflected in issues framed by the Tribunals. The appellant to discharge the burden of proving the issue to the extent of ineffective driving license held by the driver of the offending vehicle, examined Shri Balvinder Singh an official of the Regional Transport Office. Shri Balvinder Singh categorically stated that Shri Javaid Ahmad Wani-driver of the offending vehicle was holding a Heavy Goods Vehicle (HGV) driving license at the time of the accident. Shri Balvinder Singh categorically stated that Shri Javaid Ahmad Wani-driver of the offending vehicle was holding a Heavy Goods Vehicle (HGV) driving license at the time of the accident. The driving license, according to the witness, did not have a Passenger Service Vehicle (PSV) endorsement recorded on it. The driver, therefore, was not competent and authorised to drive a passenger vehicle. In other words, the license held by him was ineffective. The owner of the offending vehicle, in the circumstances, was guilty of breach of an important conditions of insurance policy whereunder he was required not to handover the vehicle to a person not having valid and effective driving license. The onus shifted to the owner of the vehicle to prove that he had acted as a man of ordinary prudence and taken all possible steps to satisfy himself that the driver he was employing, had valid and effective driving license. In the present case, no such stand was taken by the owner of the vehicle. 15. Learned Tribunal while recording a finding on Issue did not go through the evidence, appreciate the case set up by the appellant and the evidence adduced to discharge the onus of proving the issue. Learned Tribunal did not even refer to the testimony of RW-Balvinder Singh that had gone un-rebutted, let alone sift and analyse his statement to find out whether it helped the appellant to substantiate its stand. The Tribunal without any discussion merely proceeded to decide Issue No. 3 in favour of the respondents and against the appellant. The finding recorded, therefore, is erroneous and without any evidence and deserves to be overset. 16. It is well settled law that the conditions as regards validity and effectiveness of driving license, is a fundamental conditions of Insurance Policy and any breach by the owner of the vehicle would free insurance company of its liability to indemnify the owner. The driving license held by driver of the offending license must not be only valid but also effective. The driving license held by driver of the offending license must not be only valid but also effective. A brief survey of the case law, would reveal that the Insurance Company would be entitled to avoid liability under Insurance Policy to indemnify the owner where the driver, had driving license before the date of accident and got it extended after the date of accident, but the license was not renewed on the date of accident or where the driver had a valid license to drive vehicle of a particular description say Heavy Goods Vehicle, but the vehicle he was driving at the time of accident was of a different description. 17. So viewed, the appellant was wrongly held liable to indemnify the owner of the offending vehicle ignoring the evidence leading to the conclusion that its liability was restricted to permitted capacity and that the driver of the offending vehicle at the time of accident was not holding effective driving license. 18. This takes us to the quantum of compensation assessed by the Tribunal. The appellants' case that the Tribunals assessed compensation in disregard of Hnd Schedule to Motor Vehicles Act and the guidelines emerging from the case law on the subject, is without substance. It may not be necessary to go to individual awards as the principles running through weft and warp of all the awards are identical. On scanning the awards made by the Tribunals in all the 28 claim petitions, one arrives at an irresistible conclusion that the Tribunals have adopted a conservative approach and without reason applied a multiplier less than one required to be applied under IInd Schedule to the Motor Vehicles Act as interpreted by the Supreme Court in Smt. Sarla Verma v. Delhi Transport Corporation, : AIR 2009 SC 3104 , and reiterated in authoritative pronouncement made thereafter. The Apex Court in the aforesaid case has with all clarity laid down the formula to be adopted by the Tribunal while determining the applicable multiplier. Once the Tribunal on strength of the evidence brought on record, finds the deceased or injured to fall within a particular age group, it would not be proper for the Tribunal to apply a lesser multiplier without detailing the reasons that prompt it to follow such recourse. The Tribunal again has followed a less liberal and orthodox approach whole determining a multiplicand. The Tribunal again has followed a less liberal and orthodox approach whole determining a multiplicand. The Tribunal in each of the claim petitions has on the strength of the evidence come to a conclusion as regards annual income of the deceased or injured and thereafter without assigning any reasons felt persuaded to take income on the lower side while assessing compensation. This attitude on part of the Tribunal also is inappropriate. The Tribunal is under a statutory obligation in terms of Section 168 Motor Vehicles Act to determine "just compensation". It is not to feel jittery or scared, it makes an exercise to discharge such obligation and avoid to award the compensation due, on the ground that it may be blamed to have awarded compensation on higher side. There is no merit in the appellants, case that the Tribunal in any of the claim petitions has awarded compensation that exceeded the permissible limit or violated the settled norms. 19. So viewed, the compensation assessed does not call for any interference in any of the claim petitions. 20. The total amount awarded in all the 28 petitions is Rs.1,20,21,328/-. The amount awarded in 20 claim petitions with highest award amount is Rs. 1,04,26,128/-. The aforesaid amount is 86.73 per cent of the amount awarded in all the 28 claim petitions. 21. In the circumstances, each claimant is to get 86.73 per cent of the amount awarded by the Tribunal in his/her favour. The rest of the amount i.e. 13.27 per cent is to be recovered by the claimant from the owner of the vehicle. Registry to work out the amount due to each of the respondent/claimants applying above formula i.e. 86.73 percent of the awarded amount and release it in favour of the respondents/claimants less by amount already released. The record would reveal that the appellant Insurance Company has deposited Rs. 1,56,01,272/- with the Registry. The amount deposited, therefore, is over and above the amount awarded by the Tribunal i.e. Rs. 1,20,21,328/- and obviously more than 86.73% of the awarded amount i.e. Rs. 1,04,26,128/-. Having regard to the long pendency of the matter, it would be just and proper to release this amount ratably amongst claimants in 28 claim petitions. The appellant Insurance Company would be free to recover the amount from the owner of the Company. 1,20,21,328/- and obviously more than 86.73% of the awarded amount i.e. Rs. 1,04,26,128/-. Having regard to the long pendency of the matter, it would be just and proper to release this amount ratably amongst claimants in 28 claim petitions. The appellant Insurance Company would be free to recover the amount from the owner of the Company. The amount deposited in excess of the amount award, be, after proper verification, i.e. amount deposited and amount due, returned to the appellant insurance company through an account payee cheque.