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2020 DIGILAW 1060 (KAR)

Renuka v. Muttappa

2020-06-12

V.SRISHANANDA

body2020
JUDGMENT V. Srishananda, J. - This appeal is preferred by the claimants being aggrieved by the judgment and award dated 31.07.2009, passed by the MACT, Bailhongal, in MVC No.2234/2007, questioning the correctness as to quantum of compensation. 2. The brief facts which are necessary for the disposal of this appeal are as under : It is contended that on 08.03.2007 at about 1.00 a.m. on Badami-Ramdurg road near Karadigudda cross, Badami Taluka, one Nagappa Iliger riding the motorcycle bearing No.KA-24/H-8777 and the first respondent was the pillion rider and the said Nagappa encounter the wild pig across the road and as such, he lost the balance and fell down from the motorcycle resulting in serious injuries sustained by Nagappa Iliger. He was shifted to the hospital for medical treatment, but said Nagappa Iliger succumbed to the injuries. It is further contended that on account of wild pig crossing the road, the accident has taken place and sought for compensation by the dependents of Sri. Nagappa namely Smt. Renuka the wife and Ningawwa the mother have approached the tribunal seeking compensation under Section 163A of the MV Act. 3. On issuance of notice, respondents appeared before the court and filed their written statement denying the averments made in the claim petition. The first respondent-Insurance company admitted the accident, but denied the other allegations made in the claim petition. 4. In order to substantiate the averments made in the claim petition, first claimant got examined herself as PW1 and one witness got examined as PW2. The claimants also relied on the documentary evidence marked at Ex.P1 to P8. Among them Ex.P1 to 7 are the certified copies of FIR, complaint, spot panchanama and other relevant documents in respect of criminal case. Ex.P8 is the salary certificate of the deceased. On behalf of respondents, the first respondent got examined himself as RW1 and Ex.R1 Insurance policy came to be marked. 5. On cumulative consideration of the oral and documentary evidence placed on record, the tribunal allowed the claim petition and granted a sum of Rs.4,00,500/- as total compensation as under : 1 Loss of dependency 3,96,000/- 2 Loss of estate 2,500/- 3 Funeral and obsequies 2,000/- TOTAL 4,00,500/- 6. 5. On cumulative consideration of the oral and documentary evidence placed on record, the tribunal allowed the claim petition and granted a sum of Rs.4,00,500/- as total compensation as under : 1 Loss of dependency 3,96,000/- 2 Loss of estate 2,500/- 3 Funeral and obsequies 2,000/- TOTAL 4,00,500/- 6. The tribunal also came to the conclusion that since it is the owner of the motorcycle himself is the tortfeasor and as such, the liability was fastened on the owner of the motorcycle and the Insurance company was absolved from the liability. 7. The learned counsel for the appellants Sri. Hanumanth Latur vehemently contended that the tribunal has erred in law in not taking into consideration the evidential value of Ex.P8, especially his employer examined as PW2, therefore, sought for enhancement of the compensation awarded by the tribunal. 8. Further, it is contended that in view of the Full Bench judgment of this court in MFA No.30131/2010, the Insurance company be directed to pay the adjudged compensation and recover the same from the owner of the vehicle. 9. The counsel for the first respondent Sri. H.M.Dharigond further submitted that the tribunal has wrongly assessed the income of the deceased and has granted exorbitant compensation and prayed for dismissal of the appeal. 10. The counsel for Insurance company, Sri. N.C. Kolloori vehemently contended that the quantum of compensation as adjudged by the tribunal itself is on the higher side. 11. In reply, learned counsel for the appellant Sri. Hanumanth Latur contended that in fact the owner of the motorcycle had already approached this court in MFA No.21616/2012, dated 21.11.2012 and said appeal came to be dismissed for non compliance of non depositing the statutory deposit of Rs.25,000/- and as such, he has no locus-standi to question the quantum of compensation. 12. In support of his contentions, the learned counsel for respondent No.2-Insurance company relied on the decision in the case of Ramkhiladi & Anr V/s. The United India Insurance Company & Anr, (2020) 2 SCC 550 . 13. In the said case, the Hon'ble Apex Court after referring to the contract of Insurance has held as under : "5.8 However, at the same time, even as per the contract of insurance, in case of personal accident the owner-driver is entitled to a sum of Rs.1 lakh. 13. In the said case, the Hon'ble Apex Court after referring to the contract of Insurance has held as under : "5.8 However, at the same time, even as per the contract of insurance, in case of personal accident the owner-driver is entitled to a sum of Rs.1 lakh. Therefore, the deceased, as observed hereinabove, who would be in the shoes of the owner shall be entitled to a sum of Rs.1 lakh, even as per the contract of insurance. However, it is the case on behalf of the original claimants that there is an amendment to the 2nd Schedule and a fixed amount of Rs.5 lakh has been specified in case of death and therefore the claimants shall be entitled to Rs.5 lakh. The same cannot be accepted. In the present case, the accident took place in the year 2006 and even the judgment and Award was passed by the learned Tribunal in the year 2009, and the impugned judgment and Order has been passed by the High Court in 10.05.2018, i.e., much prior to the amendment in the 2nd Schedule. In the facts and circumstance of the present case, the claimants shall not be entitled to the benefit of the amendment to the 2nd Schedule. At the same time, as observed hereinabove, the claimants shall be entitled to Rs.1 lakh as per the terms of the contract of insurance, the driver being in the shoes of the owner of the vehicle. 5.9. xxxxxxxxx It is further observed that, for the said purpose, only the terms of the contract of insurance could be taken recourse to. In the recent decision of this Court in the case of Ashalata Bhowmik (supra), it is specifically held by this Court that the parties shall be governed by the terms and conditions of the contract of insurance. Therefore, as per the contract of insurance, the insurance company shall be liable to pay the compensation to a third party and not to the owner, except to the extent of Rs.1 lakh as observed hereinabove." 14. Therefore, as per the contract of insurance, the insurance company shall be liable to pay the compensation to a third party and not to the owner, except to the extent of Rs.1 lakh as observed hereinabove." 14. Insofar as the judgment in Ramkhiladi supra, the learned counsel submits that the legal principles enunciated in the said judgment could be limited only to the extent of Insurance company paying the adjudged compensation and recover the same from the owner and nowhere in the said judgment, there is scope for questioning the quantum of compensation and prayed for allowing the appeal. 15. In view of the rival contentions urged by the parties, the points would arise for consideration are: 1. Whether the appellants-claimants have made out a case for enhancement of the compensation? 2. Whether the appellants-claimants are entitled to, a direction to the second respondent to pay the adjudged compensation and recover the same from the owner ? 16. Answer to the above points are negative and affirmative respectively for the following : REASONS 17. Before the tribunal, wife of the deceased Smt. Renuka examined as PW1. To show that the deceased Nagappa Iliger was employed as electrician and was earning salary of Rs.3,300/- per month, the claimants have examined the employer of the deceased as PW2 and marked the salary certificate vide Ex.P8. 18. The learned counsel for the appellantsclaimants vehemently contended that the tribunal failed to consider the grant of compensation on the head of loss of consortium and other conventional heads and sought for enhancement of the compensation. 19. It is no doubt true that the tribunal did not grant the compensation on the head of loss of consortium. But, it is noted that the present petition is filed under Section 163A of MV Act. 20. The Insurance company has contended that in the package policy vide Ex.R1, unless additional premium is paid and additional coverage is sought for, the maximum compensation that is payable by the Insurance company is as per policy terms and conditions and the courts are required to adhere to the terms of the policy. 21. In the present case, since the owner already had questioned the quantum of compensation and the said appeal came to be dismissed, the quantum of compensation ordered by the tribunal has become final insofar as owner is concerned. 21. In the present case, since the owner already had questioned the quantum of compensation and the said appeal came to be dismissed, the quantum of compensation ordered by the tribunal has become final insofar as owner is concerned. By looking into the facts and circumstances of the present case, this court is of the considered opinion that the amount of Rs.4,00,500/- adjudged by the tribunal is just and proper. 22. Moreover, the Insurance company did not question the quantum of compensation by filing a separate appeal as there is no liability fastened on the Insurance company in the impugned award. 23. Under the circumstances, in an appeal filed by the claimants seeking enhancement, the question of quantum need not be gone into in detail by this court in the absence of appeal or cross objection on behalf of the Insurance company. Under the circumstances, the point is answered in the negative. 24. Point No.2: In the impugned judgment and award, the liability was fastened on the owner of motorcycle by applying principle that the owner of the vehicle was a joint tort-feaser. Recently, Full bench judgment of this court in MFA No.30131/2010 dealt with such type of cases also. It is just and necessary for this court to point-out the relevant paragraph in this regard. 64. Once there is breach of any of the conditions of the policy and the conditions are recognized under Section 149(2) of the Act, still the legal aspect remains, whether breach of those conditions are recognized under Section 149(2) as fundamental breach i.e., whether the particular breach can be called as a breach which has contributed to the cause of accident. In this regard, main purpose rule will have to be also borne in mind. Therefore, we have to understand the concept of fundamental breach in this regard. After going through various provisions of the Contract Act, it can be safely said that, when a party having a duty to perform a contract, fails to perform that duty or does an act whereby the performance of the contract by the other become impossible or, if a party fails to do or refuses to perform the contract, there is said to be a breach of contract on his part. On there being a breach of conditions by one party, the other party is discharged of his obligation to perform his part of the obligation. On there being a breach of conditions by one party, the other party is discharged of his obligation to perform his part of the obligation. But, breach of contract of an insurance policy by one party does not discharge the other party to the contract and thereby automatically does not terminate the obligation towards an innocent party, if an innocent party dies or sustains injury or damage due to such breach by the insured. Though the primary obligation of the parties to the contract is determined but the indemnifying party becomes liable for payment of compensation to the third party. However, law also permits the insurer to waive the defective performance or any breach and elect to pay the damages instead of avoiding the contract due to a special reason or special agreement with the insured. Therefore, the breach of contract may be either actual, i.e., non-performance of the contract on due date of performance, or anticipatory, i.e., before due date of performance is given. Thus, when the party to the contract refuses to do an act or does any act at the time of performance of the contract contrary to the agreed terms, then it is said to be the actual breach of the contract but when the party to the contract refuses to do an act or does an act before the time for performance by the parties of contract, such breach is termed as an anticipatory breach of contract. 65. The above are general concept of breach of contract. But, in the context of fundamental breach of a contract of insurance, it is necessary to explain the expression fundamental breach with reference to the Act. Of course, insurance companies would not draw up a separate contract with every individual but they will prepare a standard form contract containing various conditions whereby a standard form with a large number of terms and conditions are imposed on the insured, restricting the liability of the insurer to the contract. Therefore, the individual can hardly bargain with the insurers which are mighty organizations and third parties may also suffer due to such conditions. Thus, the only option available to the insured is either to accept or reject the terms of insurance except what are stipulated in Section 147 of the Act. 66. xxxxxxx 67. Therefore, the individual can hardly bargain with the insurers which are mighty organizations and third parties may also suffer due to such conditions. Thus, the only option available to the insured is either to accept or reject the terms of insurance except what are stipulated in Section 147 of the Act. 66. xxxxxxx 67. The point can be further simplified by observing that, if a fundamental breach of a condition has occurred which is the cause for the accident or the incident and such breach is successfully proved to the satisfaction of the Courts by the insurer, even as per the guidelines in Swaran singh's and Shamanna's case noted above, the courts have the discretionary power to direct the insurance company to pay the compensation and recover the same from the owner so far as third parties are concerned. It is also made clear that the principles enunciated in Swaran Singh's case are not applicable to cases otherwise than those of third parties. xxxxx Xxxxx xxxxx 83. With the above said observations, we answer the questions 1 and 2 which are referred for our consideration, in the following manner: Questions referred:- I) If it is shown the insurance policy is not 'Act' policy in terms of Sections 145 and 147 of the Motor Vehicles Act, but a contractual policy issued collecting extra premium indicating insurance company has enlarged its liability, will not the insurance company be liable to pay and recover even if there is any breach by the insurer? II) II) In such cases, is not the rule to 'pay and recover' applicable in view of the mandate in Section 149, M.V.Act that upon issuance of policy, the insurer is bound to discharge the award as if it were a judgment debtor? Answers: i) The Insurer is liable to pay the third party and recover from the insured even if there is breach of any condition recognized under Section 149(2), even if it is a fundamental breach (that is breach of condition which is the cause for the accident) and the insurer proves the said breach, in view of the mandate under Section 149(1) of the Act. But no such order can be passed against the insurer, if, on the facts and circumstances of a case, a finding is given by the court that the third party (injured or deceased) had played any fraud or was in collusion with the insured, individually or collectively, for a wrongful gain to themselves or cause wrongful loss to the insurer. ii) ii) The Court can also fasten the absolute liability on the insurer, if there is any breach of condition which is enumerated under Section 149(2) of the Act or any other condition of the policy if the Insurance Company has waived breach of any such condition or has taken the special responsibility to pay by collecting extra premium by covering any type of risk depending upon facts of each case. iii) Before passing any order on the Insurance Company to pay and recover, the Court has to examine the facts and circumstances of each case and if it finds that the victim, injured or the deceased, in a particular case, was solely or jointly responsible for breach of such fundamental condition by playing fraud or in collusion with the insured, the Court may exercise its discretion not to fasten the liability on the insurer. iv) However, the court should not adopt the above guideline as a general rule in all cases, but only under peculiar facts and circumstances of each case and on giving appropriate reasons." 25. On careful perusal of the above paragraphs of the Full Bench judgment and applying the legal principles enunciated therein to the facts and circumstances of the present case, there is sufficient force in the arguments advanced by the learned counsel for the claimants that directing the Insurance company to pay the adjudged compensation and recover the same from the owner of the vehicle. 26. In view of the same, by following legal principle enunciated in MFA No.30131/2010 answer to the point No.2 is in the affirmative and following order is passed. ORDER Appeal is allowed. The adjudged compensation of Rs.4,00,500/- by the tribunal is ordered to be paid by the Insurance company and is entitled to recover the same from the owner of the vehicle. No order as to costs.