JUDGMENT : 1. Aggrieved by the order dated 30.12.2011 in M.V.O.P. No.309 of 2007 passed by the Chairman, Motor Accidents Claims Tribunal-cum-IV Additional District Judge, Tirupati, the claimants in the M.V.O.P. No.309 of 2007 filed M.A.C.M.A. No.546 of 2012. In contrast, the 2nd respondent-United India Insurance Company Limited, Tirupati, has filed M.A.C.M.A. No.851 of 2012. As both appeals arise out of the orders passed in M.V.O.P. No.309 of 2007, both appeals are disposed of by common Judgment. 2. For the sake of convenience, hereinafter, the parties will be referred to as per their rankings in the M.V.O.P. as claimants and respondents. 3. The claimants have filed a claim petition under Section 163-A of the Motor Vehicles Act, 1988, claiming a compensation amount of Rs.5,00,000/- for the death of K. Revathi, daughter of petitioners, in a motor vehicle accident that occurred on 06.01.2007. The said K. Revathi would hereinafter be referred to as 'the deceased’. 4. The claimant's case is on 06.01.2007 at about 8.00 AM, while Revathi and some others proceeded on a Tractor and Trailer bearing No.AP03-T-7802 and 7803 (hereinafter referred to as 'the offending vehicle') as coolies, and when they reached Krisna eddy Poultry Farm, Mangalam village, the offending vehicle's Driver drove the same in a rash and negligent manner at high speed, crossed the road, lost control over the same. As a result, the offending vehicle turned turtle, where the deceased sustained grievous head injury and other coolies sustained injuries, and immediately all of them were shifted to S.V.R.R.G.G. Hospital, Tirupati, where the deceased died on the same day in the hospital. 5. The relationship between the claimants with the deceased, as referred to in the claim petition, is not disputed by the respondents. 6. The 1st respondent, the owner of the offending vehicle, remained exparte. 7. The 2nd respondent filed its counter, denying the averments in the petition and submitted that there was no negligence on the part of the 1st respondent's Driver, the kith and kin of the deceased being local gained over the police and filed a case against the 1st respondent's Driver without conducting a proper investigation and that the 1st respondent's Driver does not have a valid and effective driving licence to drive the offending vehicle as on the date of the accident.
The policy issued by the 2nd respondent to the 1st respondent vehicle as a miscellaneous and special type of vehicle and liability policy only for one year commencing from 07.09.2006 to 06.09.2007, and the 1st respondent did not pay any premium to cover the risk of inmates of the offending vehicle. They paid a premium to cover the risk of the offending vehicle's Driver only. The amount claimed is excessive and exaggerated without any documents. 8. During the pendency of O.P., respondents 3 and 4 added as L.R.s of the 1st respondent and requested the Court to pass a decree against the estate of the deceased 1st respondent in the hands of respondents 3 and 4. 9. Based on the pleadings, the Tribunal framed appropriate issues. During the trial, on behalf of claimants, P.Ws.1 and 2 got examined and marked Exs.A.1 to A.5. On behalf of the respondents, R.Ws.1 and 2 got examined, marked Exs.X.1 to X.4 and Ex.B1 policy. 10. The learned Tribunal, after evaluating the evidence on record, held that the accident occurred due to the Driver's rash and negligent driving of the offending vehicle, which resulted in the death of the deceased and others sustained injuries, awarded compensation of Rs.2,77,000/- with proportionate costs and interest at 7.5% per annum from the date of the petition till the date of realization in favour of 2nd claimant, against 2nd respondent and estate of 1st respondent in the hands of respondents 3 and 4. 11. Heard both the learned counsels. 12. Learned counsel for the appellants/claimants in M.A.C.M.A. No.546 of 2012 contended that the Tribunal granted meagre compensation towards the deceased's death; the Tribunal committed a grave error in applying lesser multiplier without considering the age of the 2nd claimant. 13. Learned counsel for the appellant/2nd respondent in M.A.C.M.A. No.851 of 2012 contended that Tribunal miserably failed to see that the insurance company issued the policy only on the offending vehicle by receiving the premium of Rs.25/- by covering the risk of Driver only; the Tribunal failed to see that offending vehicle's Driver is having the driving licence only for L.M.V. (Non-Transport) and not authorized to drive the offending vehicle at the time of the accident; the Tribunal failed to see the contents of Ex.A5-charge sheet; the Tribunal erroneously awarded the compensation with proportionate costs and interest. 14. Now the points that arise for consideration are 1.
14. Now the points that arise for consideration are 1. Whether the Tribunal is justified in fastening liability on the United India Insurance Company Limited/ 2nd respondent? 2. Whether the quantum of compensation fixed by the Tribunal is just and reasonable in the facts and circumstances of the case? POINT No.1: 15. The findings of the Tribunal that the accident occurred due to the rash and negligent driving of the offending vehicle's Driver is not disputed by the respondent. The death of the deceased due to the injuries sustained in the accident is also not disputed. It is also evident from Ex.A.1-copy of F.I.R., Ex.A.2-copy of inquest report and Ex.A.3-copy of P.M.E. report and Ex.A.5-certified copy of charge sheet. The said findings of the Tribunal are not disputed by the second respondent/insurance company. The said findings have attained finality. The claimants' case concerning the manner of the accident is not disputed by the respondents. The claimants established the said case by adducing oral and documentary evidence. The Tribunal has accepted the case of the petitioners and gave a finding as referred to above; thus Court finds that the details of the accident and the evidence adduced regarding the manner of the accident need not be discussed. 16. It is the insurance company's case, and also the evidence adduced that the Driver of the offending vehicle had no valid and effective driving license at the time of the accident. In support of the said contention, the insurance company adduced oral and documentary evidence. RW.1 – G.Y. Prakash, Employee in R.T.A. Office at Tirupathi, deposed that Ex.X2 registration extract of tractor bearing No.AP03T7802 stands in the name of S. Krishna Reddy/the 1st respondent, and it is a commercial tractor. Ex.X3 is the DL Extract of Venkatesulu Chetti; it shows that the said Driver took L.M.V. Non-Transport from 22.01.2001, and the same is converted to Transport from 25.02.2004, and he had also taken DL for H.T.V. transport vehicle from 21.11.2006 and the same is valid upto 27.10.2012. It is the evidence of RW.1 that by the accident date; the said Venkatesulu Chetti had valid DL for L.M.V. Transport and H.T.V. Transport. It is the contention of the insurance company and the evidence of RW.1 that a separate license shall be taken for the tractor and trailer.
It is the evidence of RW.1 that by the accident date; the said Venkatesulu Chetti had valid DL for L.M.V. Transport and H.T.V. Transport. It is the contention of the insurance company and the evidence of RW.1 that a separate license shall be taken for the tractor and trailer. So the said Venkatesulu Chetti is not authorized to drive the tractor and trailer as he has not obtained DL for the tractor and trailer. However, RW.1 admitted that by the accident date, the said Driver possessed DL for H.T.V. Transport. He denied the suggestion that DL for Tractor and Trailer comes under DL for H.T.V. Transport and Driver had H.T.V. Transport is entitled to drive any type of H.T.V. Ex.X2 – R.C. Extract for Tractor bearing registration No.AP30T7802 shows the class of vehicle noted as a tractor – L.M.V. Transport. 17. As per Section 2 (28) of the MV Act, a trailer, when attached to a mechanically propelled vehicle, becomes a motor vehicle. No condition in an insurance policy to show prohibiting the use of a tractor with any other trailer. Merely because an insurance policy was issued concerning a particular tractor and trailer would not imply any condition that the same must be used simultaneously to enjoy insurance coverage as a tractor-trailer combined is a motor vehicle. This Court views that the contention raised by the insurance company in this regard is not sustainable. 18. The Apex Court in Santalal Vs. Rajesh and others, 2017 A.I.R. (Civil ) 734, in which it held as follows “the Apex Court has considered the question of whether the holder of a licence for a light motor vehicle can drive a tractor attached to the trolley carrying goods and also whether a separate endorsement is required authorizing him to drive such a transport vehicle. We have answered the question that a driver with a licence to drive a light motor vehicle can drive such a transport vehicle of L.M.V. class, and there is no necessity to obtain a separate endorsement since the tractor attached to the trolley was a transport vehicle of the category of a light motor vehicle. Hence, there was no breach of the conditions of the policy. Accordingly, in view of the answer given to reference by the three-Judge Bench of this Court in Mukund Dewangan vs. Oriental Insurance Co. Ltd. etc.
Hence, there was no breach of the conditions of the policy. Accordingly, in view of the answer given to reference by the three-Judge Bench of this Court in Mukund Dewangan vs. Oriental Insurance Co. Ltd. etc. (Civil Appeal No.5826 of 2011), these appeals have to be here allowed. The right given to the insurer to recover the amount from the owner is hereby set aside. The liability is held to be joint and several of owner, Driver and insurer.” 19. In light of the principles laid down in the above decision, this Court views that the objection raised by the insurance company regarding the non-holding of a valid driving license is unsustainable. 20. The copy of the insurance policy is marked as Ex.B1. A premium of Rs.25/-is collected by the insurance company covering the risk of W.C. to employee 1. 21. It is the evidence of RW.2 -L. Jyotheswari that the 1st respondent insured his trailer bearing registration No.AP03T178 with their insurance company for one year, but it has not issued any policy for the trailer bearing registration No.AP03T7803 in favour of the 1st respondent. Ex.B1 insurance company collected a premium for trailer AP03/T178 of Rs.25/-. Because the said trailer was not attached to the tractor at the time of the accident, it does not mean that the petitioner has not paid a premium for the trailer. It is the evidence of RW.2 that by the date of the accident, Ex.B1 policy is in force for tractor bearing No.AP03-T7802. 22. As already observed, Ex.B1 shows that one employee's premium amount is collected. In view of the same, the Tribunal’s finding that in Ex.B1 policy, the total premium received by the insurance company noted no more particulars for the premium paid for each category of the third party, is not correct. It is clear that the seating capacity of the offending vehicle is only one. Still, the evidence on record shows that the deceased, along with some others, proceeded in a tractor and trailer for coolie work. Even if it is assumed that the offending vehicle was used for a different purpose, the insurance company cannot escape its liability. 23. In a decision between Amritlal Sood vs. Kaushalya Devi Thakar, (1998) 3 SCC 744 the Hon’ble Apex Court held that "the comprehensive policy issue covers the risk of gratuitous passengers, i.e., the car's occupants.
Even if it is assumed that the offending vehicle was used for a different purpose, the insurance company cannot escape its liability. 23. In a decision between Amritlal Sood vs. Kaushalya Devi Thakar, (1998) 3 SCC 744 the Hon’ble Apex Court held that "the comprehensive policy issue covers the risk of gratuitous passengers, i.e., the car's occupants. Therefore, it is clear from the Act itself, the words of the policy and the decision in Amritlal Sood's case that a comprehensive policy covers the risk of gratuitous passengers to the extent of the liability incurred. 24. A three-Judge Bench of the Hon’ble Apex Court in the case of National Insurance Co. Ltd. Vs. Baljit Kaur and Others, (2004) 2 S.C.C. 1 , held that, considering the question of whether the insurance policy in respect of goods vehicle is required to cover the gratuitous passenger in view of the amendment to Section 147 of the Act. The apex court, after considering all the previous decisions, concluded that the Insurance Company was not liable as the risk of an unauthorized passenger in a goods vehicle or gratuitous passengers is not covered under the policy, and there is a breach of the condition of the policy in carrying a passenger in a goods vehicle. Therefore, the vehicle's owner was held liable to satisfy the decree. However, in paragraph 21, the Court was of the opinion that the interest of justice would be sub-served if the Insurance Company was directed to satisfy the award in favour of the claimant, if not already satisfied and recover the same from the owner of the vehicle. The Court also observed that, for such recovery, it would not be necessary for the insurer to file a separate suit. Still, it may initiate a proceeding before the executing Court as if the dispute between the insurer and the insured was also determined by the Tribunal and the issue was decided against the owner and in favour of the insurer. 25. In a decision between National Insurance Co. Ltd. v. Anjana Shyam, 2007 ACJ 2129 (SC), the Hon’ble Apex court held that "it does not mean that an insurer is not bound to pay amounts outside the contract of insurance itself or in respect of persons not covered by the contract at all.
25. In a decision between National Insurance Co. Ltd. v. Anjana Shyam, 2007 ACJ 2129 (SC), the Hon’ble Apex court held that "it does not mean that an insurer is not bound to pay amounts outside the contract of insurance itself or in respect of persons not covered by the contract at all. In other words, the insured is covered only to the extent the passengers are permitted to be insured or directed to be insured by the statute and covered by the contract. An insurance company can be made liable only for the number of passengers for whom insurance can be taken under the Act and not for the other passengers involved in the accident in case of overloading. “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 insurance policy”. 26. The identical issue once again surfaced in the case of United India Insurance Co. Ltd. v. K.M. Poonam, 2011 ACJ 917 (SC), the Hon’ble Apex Court reiterated the relevant provisions of the Motor Vehicles Act and, after taking note of its various earlier decisions, including Baljit Kaur (supra) and Anjana Shyam (supra), has resolved and settled the issue thus: "the liability of the insurer, therefore, is confined to the number of persons covered by the insurance policy and not beyond the same. In other words, as in the present case, since the insurance policy of the owner of the vehicle covered six occupants of the vehicle n question, including the Driver, the liability of the insurer would be confined to six persons only, notwithstanding the larger number of persons carried in the vehicle. A such excess number of persons would have to be treated as third parties, but since no premium had been paid in the policy for them, the insurer would not be liable to make payment of the compensation amount as far as they are concerned". 27.
A such excess number of persons would have to be treated as third parties, but since no premium had been paid in the policy for them, the insurer would not be liable to make payment of the compensation amount as far as they are concerned". 27. In a decision Shivaraj vs. Rajendra, 2018 Law Suit (SC) 853, the Apex Court, in the following facts of the case, held that “…..the High Court, however, found in favour of respondent No.2 (insurer) that the appellant travelled in the tractor as a passenger, which was in breach of the policy condition, for the tractor was insured for agriculture purposes and not for carrying goods. The evidence on record unambiguously pointed out that neither was any trailer insured nor was any trailer attached to the tractor. Thus, it would follow that the appellant travelled in the tractor as a passenger, even though the tractor could accommodate only one person, namely the Driver. As a result, the Insurance Company (respondent No.2) was not liable for the loss or injuries suffered by the appellant or to indemnify the tractor's owner. In our opinion, the conclusion reached by the High Court, in our opinion, is unexceptionable in the present case. …..At the same time, however, in the facts of the present case, the High Court ought to have directed the Insurance Company to pay the compensation amount to the claimant (appellant) with the liberty to recover the same from the tractor owner, in view of the consistent view taken in that regard by this Court in National Insurance Co. Ltd. Vs Swarna Singh & Others 2004 (3) SCC 297 , Mangla Ram Vs. Oriental Insurance Co. Ltd. 2018 (5) SCC 656 , Rani & Ors. Vs. National Insurance Co. Ltd. And others 2018 (9) Scale 310 including Manuara Khatun and Others Vs. Rajesh Kumar Singh And Others. 2017 (4) SCC 796 . In other words, the High Court should have partly allowed the appeal preferred by respondent No.2. The appellant may, therefore, succeed in getting relief of direction to respondent No.2 Insurance Company to pay the compensation amount to the appellant with the liberty to recover the same from the tractor owner". 28. In Shamanna and another Vs. The Divisional Manager The Oriental Insurance Co.
The appellant may, therefore, succeed in getting relief of direction to respondent No.2 Insurance Company to pay the compensation amount to the appellant with the liberty to recover the same from the tractor owner". 28. In Shamanna and another Vs. The Divisional Manager The Oriental Insurance Co. Ltd. and Ors., Civil Appeal No. 8144 of 2008, the Apex Court held that “to deny the benefit of pay and recover, what seems to have substantially weighed with the High Court is the reference to larger Bench made by the two-Judge Bench in National Insurance Co. Ltd. v. Parvathneni and another, (2009) 8 SCC 785 , which doubted the correctness of the decisions in the exercise of jurisdiction under Article 142 of the Constitution of India directing insurance companies to pay the compensation amount even though the insurance company has no liability to pay. In the Parvathneni case, the Supreme Court pointed out that Article 142 of the Constitution of India does not cover such types of cases and that if the insurance company has no liability to pay at all, then it cannot be compelled by order of the Court in the exercise of its jurisdiction under Article 142 of the Constitution of India to pay the compensation amount and later on recover it from the owner of the vehicle. The above reference in the Parvathneni case was disposed of on 17.09.2013 by the three-Judges Bench keeping the questions of law open to be decided in an appropriate case. Since the reference to the larger Bench in the Parvathneni case has been disposed of by keeping the questions of law open to be decided in an appropriate case, presently, the decision in the Swaran Singh case followed in Laxmi Narain Dhut and other cases hold the field. The award passed by the Tribunal directing the insurance company to pay the compensation amount awarded to the claimants and, after that, recover the same from the owner of the vehicle in question is in accordance with the Judgment passed by this Court in Swaran Singh and Laxmi Narain Dhut cases. While so, in our view, the High Court ought not to have interfered with the award passed by the Tribunal directing the first respondent to pay and recover from the owner of the vehicle.
While so, in our view, the High Court ought not to have interfered with the award passed by the Tribunal directing the first respondent to pay and recover from the owner of the vehicle. The impugned Judgment of the High Court exonerating the insurance company from its liability and directing the claimants to recover the compensation from the owner of the vehicle is set aside, and the award passed by the Tribunal is restored". 29. In a decision between Manuara Khatun and others Vs. Rajesh Kr. Singh and others, 2017 (2) A.L.D. 65 (S.C.), it is a case where the Tribunal further held that all the passengers, including the two deceased, were travelling in Tata Sumo for hire and hence were held to be gratuitous passengers. Due to the said reason, United India Insurance Company Ltd., the insurer of Tata Sumo(offending vehicle), was not liable". In the said facts of the case, the Hon'ble Apex Court held that "in view of the foregoing discussion, we are of the view that the direction to United India Insurance Company (respondent No. 3) -they being the insurer of the offending vehicle which was found involved in causing an accident due to negligence of its driver needs to be issued directing them (United India Insurance Company-respondent No.3) to first pay the awarded sum to the appellants (claimants) and then to recover the paid awarded sum from the owner of the offending vehicle (Tata Sumo)-respondent No.1 in execution proceedings arising in this very case as per the law laid down in Para 26 of Saju P. Paul’s case quoted supra”. 30. As seen from the Ex.B1 policy, the owner of the offending vehicle paid an additional premium to cover the liability of one employee. The insurance company is bound by the terms of the contract. In the present case, the policy issued by the insurance company is a package policy. 31. On the other hand, the policy issued under Section 147 of the Motor Vehicles Act is statutory and also called an Act policy. The insurer's liability under this policy is restricted to indemnify the insured in respect of the claim made by the third parties and the owner of the goods or his authorized representative who travels in the goods vehicle along with the goods. 32.
The insurer's liability under this policy is restricted to indemnify the insured in respect of the claim made by the third parties and the owner of the goods or his authorized representative who travels in the goods vehicle along with the goods. 32. According to my opinion, even a worker who travels in the vehicle may be considered his authorized representative of the owner travelling in the offending vehicle as a third party. On that ground, the Insurance Company is liable to pay compensation, as a statutory liability, to the third party who was travelling as a worker in the offending vehicle, being his authorized representative of the owner carried in the vehicle. So, on that ground, the insurance company cannot deny the liability of workers travelling in the offending vehicle at the time of the accident. 33. Since the evidence on record shows that the proceeding of the deceased in the offending vehicle, though it has not contributed to the accident, this Court views that a direction can be given to the insurance company to pay and recover the compensation from the offending vehicle's owner, as there is no seating provided to worker/employee in the trailer. 34. In light of the law laid down by the Apex Court and High Court, this Court finds that the contention raised by the insurance company that it cannot be directed to pay compensation is not sustainable. By following the principles in the said decisions, this Court views that the insurance company can be directed to pay the award amount and recover the same from the offending vehicle's owner. Accordingly, this point is answered. Point No.2 : 35. At this juncture, it is relevant to refer to the observations made by the Hon’ble Apex Court in Rajendra Singh & Ors. vs National Insurance Co. Ltd. & Ors., 2020 ACJ 2211 . As seen from the Judgment, in the said case, Tribunal assessed the notional income of the minor child. However, the Tribunal deducted 50% towards personal expenditure with a multiplier of 15. Without disturbing the said finding, The Hon'ble Apex Court observed, in paragraph 13, held that the income of the minor child is incapable of precise fixation and observed further that they find no reason to interfere with the assessed notional income of the second deceased.
However, the Tribunal deducted 50% towards personal expenditure with a multiplier of 15. Without disturbing the said finding, The Hon'ble Apex Court observed, in paragraph 13, held that the income of the minor child is incapable of precise fixation and observed further that they find no reason to interfere with the assessed notional income of the second deceased. Considering the grant of the future prospectus for the deceased child aged about ten years, in R.K. Malik and others vs. Kiran Paul, 2009 A.C.J. 1924, the Hon'ble Apex Court held, in paragraph 31, as follows : "31. A forceful submission has been made by the learned Counsels appearing for the claimants-appellants that both the Tribunal and the High Court failed to consider the claims of the appellants concerning the future prospects of the children. It has been submitted that the evidence with regard to the same has been ignored by the Courts below. On perusal of the evidence on record, we find merit in such submission that the Courts below have overlooked that aspect of the matter while granting compensation. It is well settled legal principle that in addition to awarding compensation for pecuniary losses, it must also grant compensation with regard to the prospects of the children. It is incumbent upon the Courts to consider the said aspect while awarding compensation." 36. In National Insurance Company Limited v. Pranay Sethi and others, (2017) 16 SCC 680 it was observed that where the deceased was a bachelor and the claimants are the parents; the deduction follows a different principle. In regard to a bachelor's, normally, 50% is deducted as personal and living expenses because it is assumed that a bachelor would tend to spend more on himself. Further observed that taking into consideration the cumulative factors, namely, the passage of time, the changing society, escalation of price, the change in the price index, the human attitude to follow a particular pattern of life, etc., an addition of 40% of the established income of the deceased towards future prospects. 37. By following the principles laid down by the Hon'ble Apex Court, this Court considers that 50% of the income is to be deducted towards personal expenses and 40% of the income to be added towards future prospectus. 38. The finding of the Tribunal that the deceased, aged about 16 years and was attending coolie works and earning Rs.75/-per day is not disputed.
38. The finding of the Tribunal that the deceased, aged about 16 years and was attending coolie works and earning Rs.75/-per day is not disputed. The Tribunal applied a multiplier, i.e., 15' instead of 18'. The Tribunal has assessed the monthly income of the deceased at Rs.2,250/-. But the Tribunal deducted 1/3rd earnings of the deceased instead of 50% of the earnings. Thus 50% of the earnings are to be deducted towards the personal and living expenses of the deceased. Then the yearly earnings of the deceased come to Rs.13,500/-(1125x12), and 40% of the annual income under the future head prospects arrived at Rs.5400/-; in total, the annual income assessed at Rs.18,900/-. To assess the loss of dependency, it has to be multiplied by 18' = Rs.3,40,200/-(18900x18). An amount of Rs.16,500/- is to be awarded towards funeral expenses, and an amount of Rs.20,000/- is to be awarded filial consortium. Thus the petitioners are entitled to Rs.3,76,700/-(3,40,200+ 16,500+ 20,000). Accordingly, this point is answered. 39. As a result, the appeal filed by the claimants in MVOP.No.309 of 2007, i.e., MACMA.No.546 of 2012, is partly allowed without costs by enhancing the compensation from Rs.2,77,000/- to Rs.3,76,700/- against the 2nd respondent and estate of 1st respondent in the hands of respondents 3 and 4 with interest at 7.5% from the date of petition till the date of realization. The 2nd petitioner is entitled to receive the amount of the deposit made by the insurance company by filing an appropriate application before the Tribunal. 40. As a result, the appeal filed by the insurance company, i.e., MACMA.No.851 of 2012, is partly allowed without costs by modifying the order dated 30.12.2011 passed by the Tribunal by directing the 2nd respondent/insurance company to pay the compensation as awarded by this Court excluding the amount already paid within two months from the date of the order and recover the same from the estate of the 1st respondent in the hands of respondents 3 and 4 by filing an Execution Petition before the Tribunal. The petitioners can withdraw the amount by filing an appropriate application before the Tribunal as per the Tribunal’s terms. 41. Miscellaneous petitions pending, if any, in this appeal shall stand closed.