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Karnataka High Court · body

2014 DIGILAW 983 (KAR)

United India Insurance Co Ltd. v. Jayesh Arodi

2014-11-13

K.L.MANJUNATH, RAVI MALIMATH

body2014
Judgment 1. This appeal is by the United India Insurance Company questioning the liability saddled or the Company by the MACT, Bangalore, dated 02.07.2008 in MVC No.406/2006. 2. Heard Mr. Seetharama Rao, learned counsel appearing for the appellant. Mr. S.P. Shankar, learned Senior Counsel appearing for respondent No.2. Mr. S.V. Prakash, learned counsel appearing for respondent No.1. 3. The facts leading to this appeal are as hereunder: The claimant-Jayesh Arodi, an employee of M/s. Concorde Motors (India) Pvt. Ltd, was travelling in a vehicle (Tata Sumo) bearing No.KA-01-TC-311 on N.H.4 road from Bangalore to Tumkur, which vehicle met with an accident on 15.08.2005 at about 11.30 a.m., due to loss of control over the vehicle by the driver and dashed against road divider. As a result of the accident, the claimant sustained multiple injuries and he was shifted to Nimhans Hospital, Bangalore and thereafter, he was admitted to M.S. Ramaiah Hospital and subsequently was admitted to Sharavathi Hospital. Since there was no improvement, he was advised for physiotherapy treatment for spinal cord C-6. He was developed quadriplegia. On account of the same, he has become living vegetable. The claimant was aged about 23 years on the date of the accident. He was a B.A. graduate employed with M/s. Concorde Motors (India) Pvt. Ltd., on a monthly salary of Rs.8,700/-p.m. On account of the injuries sustained by him, he is completely bed ridden and lost his future. Therefore, the claim petition was filed. The Insurance Company contested the matter. The Insurance Company admitted the issuance of policy in favour of the employer of the claimant. According to the company, it is a trade package policy' and that it does not cover the risk of the claimant since the vehicle in question was taken for the road show in Tumkur. Accordingly, the Insurance Company requested the Court to dismiss the claim petition against the claimant. The owner of the vehicle contended that in view of the trade package policy obtained by the Company, the Insurance Company is liable to pay the claim of the claimant. Before the Tribunal, to prove their respective contentions on behalf of the claimant, six witnesses were examined and the claimant relied upon Exs.Pl to P18. On behalf of the respondents, two witnesses were examined and the Insurance Company relied upon the insurance policy and the case records. The Tribunal awarded total compensation of Rs.21,38,000/- under different heads. Before the Tribunal, to prove their respective contentions on behalf of the claimant, six witnesses were examined and the claimant relied upon Exs.Pl to P18. On behalf of the respondents, two witnesses were examined and the Insurance Company relied upon the insurance policy and the case records. The Tribunal awarded total compensation of Rs.21,38,000/- under different heads. The Tribunal also held that the Insurance Company is liable to pay compensation in view of the policy issued by the Company and the risk of the claimant is covered under Ex.R1. Therefore, the present appeal is filed by the Insurance Company challenging the liability and the claimant being not satisfied with the compensation awarded to him has filed a separate appeal for enhancement in MFA No.11371/2008, which would be dealt by us separately. 4. The main contention of Mr. Seetharama Rao, learned counsel for the appellant-Insurance Company is that the policy in question is only a trade policy and it covers only the risk of the driver who was driving the vehicle in terms of I.M.T. 60. According to him, I.M.T. 59 also attracts the policy. It does not cover the risk of director of the Company. According to him, the Company is authorized to allow its employees to use the vehicle for the pleasure purpose. In other words, an employee can also travel in the vehicle but does not cover the risk of the employee who travels in the vehicle since I.M.T.59 does not covers the risk. Therefore, he contends the Tribunal without considering the effect of I.M.T.59 and I.M.T.60 has wrongly saddled liability on the appellant-Insurance Company. In the circumstances, he requested the Court to set aside the award passed against the Company by allowing appeal. 5. Mr. S.P. Shankar, learned senior counsel, appearing for the owner of the vehicle contends that in view of the specific endorsement issued by the Company that I.M.T.59 is included, since the owner of the vehicle has permitted this employee to travel in the vehicle to the road show, the risk of the employee is covered. According to him, if the intention of the Company was not to cover risk of the employee who travels in the vehicle not as a driver, there was no need to grant authorization for the owner of the vehicle to allow the employee to take vehicle either for his pleasure trip or domestic purpose. According to him, if the intention of the Company was not to cover risk of the employee who travels in the vehicle not as a driver, there was no need to grant authorization for the owner of the vehicle to allow the employee to take vehicle either for his pleasure trip or domestic purpose. According to him, the policy covers the risk of the employees also. Ex.R1 is the policy. It is a trade package policy. As rightly pointed out by the learned counsel for the parties, I.M.T. 21, 41, 28, 59, 60 and 24 are attached to the policy. In order to appreciate the respective contentions, we have to consider I.M.T.59 and I.M.T.60 as contended by learned counsel appearing for the Insurance Company. I.M.T.59 and I.M.T.60 read here as under: "IMT.59. Private use of vehicle by Member/Director/Employee of the insured (Motor Trade only) In consideration of the payment of an additional premium of Rs… and notwithstanding anything contained herein to the contrary it is hereby understood and agreed that this Policy shall be operative whilst the vehicle insured is being used by the insured or with the permission of the insured by a Member Director or employee of the insured for social domestic or pleasure purposes. Whllst the vehicle insured is being so used the insurer will in terms of and subject to the limitations of and for the purpose of Section II of this policy treat as though he were the insured person using the vehicle insured provided that such person: 1. is not entitled to indemnity under any other policy; 2. shall as though he/she were the insured observe fulfill and be subject to the terms provisions conditions and endorsements of this policy in so far as they apply; 3. has not been refused any Motor Vehicle Insurance or continuance thereof by any insurer. Subject otherwise to the terms conditions limitations and exceptions of this Policy. IMT.60. Demonstration-Driving Extension (Applicable to Motor Trade Policies Only) In consideration of the payment of an additional premium of Rs.... has not been refused any Motor Vehicle Insurance or continuance thereof by any insurer. Subject otherwise to the terms conditions limitations and exceptions of this Policy. IMT.60. Demonstration-Driving Extension (Applicable to Motor Trade Policies Only) In consideration of the payment of an additional premium of Rs.... and notwithstanding anything to the contrary contained herein it is hereby understood and agreed that the policy shall be operative whilst the vehicles are being driven for the purpose of demonstration by person(s) not in the employment of the insured provided he/she/they is/are driving with the insured's permission and is/are accompanied by the insured or by any person(s) in the insured's employment." 6. According to Mr. Seetharama Rao, as per I.M.T.60, for the purpose of demonstration, if the owner or the director of a Company permits any other person to drive the vehicle for the road show or if a regular driver met with an accident, such risk is covered. Therefore, the only point considered by us is, in view of I.M.T.59, whether the risk of the claimant is covered on account of the injuries sustained in the accident while travelling in the vehicle with the permission of the employer. So far as this point is concerned, according to us I.M.T.59 would mean that the policy covers when the vehicle is used by the insured or with his permission by a member, director or employee for social, domestic or pleasure purpose. Therefore, when a vehicle is used by the insured or by anyone else with his permission, the same is covered by the policy and that such person is to be considered as if he is insured. Therefore, we are of the view, all those persons who are in the vehicle with the permission of the insured, who can be a member, director or an employee would be covered by the policy. The word 'used' cannot mean that the persons should actually be driving the vehicle. It would encompass those persons who are also occupants of the vehicle. The vehicle being 'used' therefore has to be given such a meaning. If that was not the intended meaning, then the language would not have been 'used', but the language would have been 'driven'. Therefore, when 'driven' is not specifically stated, 'used' has to be understood to include all the persons so covered under I.M.T.59. The vehicle being 'used' therefore has to be given such a meaning. If that was not the intended meaning, then the language would not have been 'used', but the language would have been 'driven'. Therefore, when 'driven' is not specifically stated, 'used' has to be understood to include all the persons so covered under I.M.T.59. According to us, the difference between I.M.T.59 and I.M.T.60 is that I.M.T.59 is applicable to the insured as well as any other person driving the vehicle with the permission of the insured, who can he a member, director or an employee. If a employer permits the employee to travel in the vehicle along with the regular driver of the Company, there is no necessity to include or incorporate I-M.T.59 in that circumstance. Otherwise, the very purpose of incorporating I.M.T.59 would be defeated. When an employee is permitted to travel along with the driver of the vehicle and if such vehicle is met with an accident, the risk of such employee is covered. 7. There is no necessity for the Company to collect extra premium to cover the risk of I.M.T.59. However, it can be seen that extra premium has been collected. Therefore, there appears to be coverage vide the extra premium as well as I.M.T.59. 8. Therefore, we are of the view that when the policy authorizes the director or an employee to travel in the vehicle, when such person is riot driving the vehicle according to I.M.T.59, risk of such person is also covered. Therefore, we are of the view there is no merit in this appeal. Accordingly, the appeal is dismissed. Amount in deposit be transmitted to the Tribunal.