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2023 DIGILAW 310 (KER)

NEW INDIA ASSURANCE COMPANY LIMITED v. SARASWATHY

2023-03-24

SOPHY THOMAS

body2023
JUDGMENT : SOPHY THOMAS, J. 1. The 2nd respondent/insurer in OP (MV) No. 1221 of 2003 on the file of Motor Accidents Claims Tribunal, Attingal is the appellant herein, challenging the award dated 02.01.2010 on the ground that a gratuitous passenger in a goods vehicle was not covered by the policy, and hence the legal heirs were not entitled to get compensation on his death. 2. The facts in brief are as follows: Sri. Shanmugha Raja, a 28 year old man, succumbed to the injuries in a motor accident occurred on 28.06.2003. The deceased was travelling inside the cabin of a lorry bearing Registration No. TN-72/Z-5494 as a loading worker. The lorry was driven by the 6th respondent-Sri. Subramaniyan. When the lorry reached near Azhicode, due to his rash and negligent driving, it took a right turn recklessly and Sri. Shanmugha Raja was thrown out of the cabin. While he was lying on the road, the lorry ran over him and he sustained severe fatal injuries. Though he was rushed to the hospital, he succumbed to the injuries on the same day. Respondents 1 to 5 are the wife, children and parents of the deceased. They approached the Tribunal claiming compensation of Rs. 8 lakh. The Tribunal, on finding that the deceased was an employee of the insured, as a loading and unloading worker, and also on finding that as per Ext.B1 policy, the insured had paid premium of Rs. 50/- for two employees, awarded compensation of Rs. 3,59,500/-. The insurer is challenging that finding as well as the award, contending that the deceased was only a gratuitous passenger in a goods vehicle and so, the Insurance Company was not liable to indemnify the insured, as the policy will not cover a gratuitous passenger in a goods vehicle. 3. Before the Tribunal, no oral evidence was adduced from either side. Exts.A1 to A4 were marked from the side of the claimants and Ext.B1 policy copy was marked from the side of the insurer. 4. Pending appeal, the 4th respondent-father of the deceased passed away. His legal heirs were impleaded as additional respondents 7 to 9. 5. The 2nd respondent, who is the son of the deceased, entered appearance and filed vakalath. The 8th respondent was duly served with notice but she opted to remain absent. 4. Pending appeal, the 4th respondent-father of the deceased passed away. His legal heirs were impleaded as additional respondents 7 to 9. 5. The 2nd respondent, who is the son of the deceased, entered appearance and filed vakalath. The 8th respondent was duly served with notice but she opted to remain absent. With respect to respondents 1, 3, 5, 6, 7 and 9, substituted service was effected through paper publication. But they remained absent. 6. Now let us see whether the impugned award is liable to be set aside, as prayed for in the appeal. 7. Heard learned counsel Sri. Rajan P. Kaliyath, appearing for the appellant/insurer and learned counsel Sri. R.T. Pradeep, appearing for the 2nd respondent/2nd claimant. 8. Admittedly, Sri. Shanmugha Raja, aged 28 years, sustained fatal injuries in a road traffic accident occurred at 8 p.m. on 28.06.2003 at Nedumangad-Karakulam public road, and he succumbed to the injuries on the same day. It is also an admitted fact that the deceased was travelling in the cabin of the lorry bearing Registration No. TN-72/Z-5494. It is also not in dispute that the lorry was a goods vehicle. Ext.B1 policy shows that the said vehicle was duly insured with the appellant as on the date of accident and premium was paid to cover two employees, specifying that they are to be compensated under the Workmen’s Compensation Act (At present Employees’ Compensation Act). 9. The respondents 1 to 5/the claimants filed the claim petition before the Tribunal contending that the deceased was travelling inside the cabin of the lorry as a loading and unloading worker and so, the insurer was liable to honour their claim, as the deceased also was covered by the policy. But, the appellant would contend that the deceased was only a gratuitous passenger in that lorry, which was a goods vehicle and so, on his death, his legal heirs were not eligible to get compensation, as he was not covered by the policy. 10. Learned counsel for the appellant invited attention of this Court to Ext.A1 FIR in Crime No. 379 of 2003 of Nedumangad Police Station, registered for the death of Sri. Shanmugha Raja in the road traffic accident occurred on 28.06.2003. The F.I statement was given by the father-in-law of the deceased, based on which the FIR was registered. According to his statement, Sri. Shanmugha Raja in the road traffic accident occurred on 28.06.2003. The F.I statement was given by the father-in-law of the deceased, based on which the FIR was registered. According to his statement, Sri. Shanmugha Raja was doing coolie work in Kerala and for coming to Tamil Nadu, he travelled in TN-72/Z-5494 lorry and due to the rash and negligent driving of that lorry, Sri. Shanmugha Raja was thrown out to the road and then the lorry ran over his hip and he sustained fatal injuries and later died at the hospital. So, learned counsel for the appellant vehemently argued that the F.I Statement itself is sufficient to show that the deceased was a gratuitous passenger in a goods vehicle and he was never an employee in that lorry, to get insurance coverage. 11. Section 147 of the Motor Vehicles (Amendment) Act, 1994 reads as under: “147. Requirements of policies and limits of liability: (1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which: (a) is issued by a person who is an authorised insurer. (b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2): (i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including owner of the goods or his authorised representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place. (ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place: Provided that a policy shall not be required: (i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923 (8 of 1923) in respect of the death of, or bodily injury to, any such employee: (a) engaged in driving the vehicle. (b) if it is a public service vehicle engaged as conductor of the vehicle or in examining tickets on the vehicle. (c) if it is a goods carriage, being carried in the vehicle. (ii) to cover any contractual liability. Explanation: For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.” 12. Prior to the amendment of 1994, going by Section 147(1)(b)(i) of M.V. Act, 1988, it was not necessary for the insurer to insure against the owner of the goods or his authorised representative being carried in the vehicle as the expression used was any person. But, subsequent to the amendment in 1994, ‘including owner of the goods or his authorised representative carried in the vehicle’ was added to the pre-existed expression ‘injury to any person’ which means the Legislature wanted to bring within the sweep of Section 147, and making it compulsory for the insurer to insure even in case of goods vehicle, the owner of the goods or his authorised representative being carried in a goods vehicle, when that vehicle met with an accident and the owner of the goods or his representative either dies or suffers bodily injury. 13. Overruling the decision New India Assurance Company vs. Satpal Singh and Others, (2000) 1 SCC 237 , a three Judge Bench of the Apex Court in New India Assurance Co. 13. Overruling the decision New India Assurance Company vs. Satpal Singh and Others, (2000) 1 SCC 237 , a three Judge Bench of the Apex Court in New India Assurance Co. Ltd. vs. Asha Rani, 2003 (1) KLT 165 (SC) held that, if the ratio of the decision in Satpal Singh’s case cited supra is taken to its logical conclusion, the owner of a goods carriage or his authorised representative carried in the vehicle need not take out an insurance policy, as they would be deemed to have been covered under the policy, even no premium is paid to cover them, as the words ‘injury to any person’ as it stood before 1994 amendment, could have been attributed to the owner of the goods or his authorised representative. So, prior to the amendment of 1994, it was not necessary for the insurer to insure against the owner of the goods or his authorised representative being carried in a goods vehicle as it was held in Satpal Singh’s case cited supra. On a careful scrutiny of the Motor Vehicles (Amendment) Act of 1994 particularly, Section 46 of Act 6 of 1994 by which the expression ‘injury to any person’ in the original Act stood substituted by the expression ‘injury to any person including owner of the goods or his authorised representative carried in the vehicle’, the Apex Court in Asha Rani’s case cited supra, held that the conclusion is irresistible that prior to the aforesaid amendment Act of 1994, even if widest interpretation is given to the expression ‘to any person’ it will not cover either the owner of the goods or his authorised representative being carried in the vehicle. The objects and reasons of clause 46 also is to amend Section 147 to include the owner of the goods or his authorised representative carried in the vehicle for the purposes of liability under the insurance policy. The Apex Court further observed that, it is true that sometimes the Legislature amends the law by way of amplification and clarification of an inherent position which is there in the statute. It was clear that the Legislature wanted to make it compulsory for the insurer to insure even in case of a goods vehicle, the owner of the goods or his authorised representative being carried in a goods vehicle, to bring them within the sweep of Section 147 of the M.V. Act. 14. It was clear that the Legislature wanted to make it compulsory for the insurer to insure even in case of a goods vehicle, the owner of the goods or his authorised representative being carried in a goods vehicle, to bring them within the sweep of Section 147 of the M.V. Act. 14. The proviso (i) appended to Section 147(1)(b) of the M.V. Act categorically states that compulsory coverage in respect of drivers and conductors of public service vehicle and employees carried in a goods vehicle would be limited to the liability under the Workmen’s Compensation Act. It does not speak of any gratuitous passenger in a ‘goods carriage’. As the provisions of Section 147 of the M.V. Act do not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured for any passenger travelling in a goods vehicle, the insurer will not be liable thereof. 15. Learned counsel for the appellant relied on a decision of this Court New India Assurance Co. Ltd vs. Daisy Paul, 2021 (5) KLT SN 4 (Case No. 4) to substantiate their case that a gratuitous passenger in a goods vehicle is not entitled to get the coverage of the policy, because in a goods vehicle, passengers are not permitted and it will be against the conditions of the permit of the vehicle in question, and against the purpose for which the vehicle ought to have been used. 16. Learned counsel for the appellant contended that there was no evidence from the part of the respondents to show that the deceased was an employee in the lorry involved in the accident. Moreover, the F.I statement given by the father-in-law of the deceased will clearly show that the deceased was a coolie worker in Kerala and he was going to Tamil Nadu in TN-72/Z-5494 lorry as a gratuitous passenger. Hence, the Company has no liability to compensate the respondents/claimants. In the appeal, they have taken up another contention that, even if it is assumed that the deceased was travelling in the cabin of the lorry as an employee, Ext.B1 policy is clear enough to show that the liability of the insurer was limited to compensation payable under the Workmen’s Compensation Act (The Employee’s Compensation Act, 1923). They would place reliance on the proviso (i) to Section 147(1)(b)(ii) of the M.V. Act. 17. They would place reliance on the proviso (i) to Section 147(1)(b)(ii) of the M.V. Act. 17. On going through Section 167 of the M.V. Act, it gives an option to make a claim for compensation either under the Workmen’s Compensation Act or under the provisions of the Motor Vehicles Act, but not under both, where the death of or bodily injury to any person gives rise to a claim for compensation under the Motor Vehicles Act, and also under the Workmen’s Compensation Act. 18. In the case on hand, the policy certificate issued by the appellant covers two employees, limiting the liability of the insurer under the Workmen’s Compensation Act (Employees’ Compensation Act). Ext.B1 policy is a statutory policy/liability only policy. In National Insurance Co. Ltd vs. Prembai Patel, 2005 (3) KLT S.N. 41 (C. No. 50) (SC), the Apex Court held that, an insurance policy which covers only the liability arising under the Workmen’s Compensation Act in respect of death or bodily injury to any employee as described in sub-clauses (a) or (b) or (c) to proviso (i) to S.147(1)(b) of the Motor Vehicles Act is perfectly valid and permissible under the Act. Where any such policy has been taken by the owner of the vehicle, the liability of the insurance company will be confined to that arising under the Workmen’s Compensation Act. The policy must show that the liability of the insurance company in case of death or bodily injury to the aforesaid kind of employees is not restricted to that provided under the Workmen’s Compensation Act and is either more or unlimited depending upon the quantum of premium paid and the terms of the policy. 19. Learned counsel for the appellant would argue that the compensation awarded by the Tribunal is exceeding the compensation that would have been awarded under the Workmen’s Compensation Act. The policy itself restricted the liability of the Insurance Company to compensate the victim under the Workmen’s Compensation Act. No extra premium was seen paid to make the compensation unlimited, and in the policy also, no specific clause was there to that effect. 20. The case of the respondents is that the deceased, as a loading and unloading worker, was earning monthly income of Rs. 5,000/- though no documents were produced to substantiate their claim. So, the learned Tribunal fixed his notional income at Rs. 2,500/-. 20. The case of the respondents is that the deceased, as a loading and unloading worker, was earning monthly income of Rs. 5,000/- though no documents were produced to substantiate their claim. So, the learned Tribunal fixed his notional income at Rs. 2,500/-. Going by the decision Ramchandrappa vs. Manager, Royal Sundaram Alliance Insurance Company Limited, AIR 2011 SC 2951 , since he was a 28 year old man, in the year 2003, he was eligible to get his notional income fixed @ Rs. 4,000/- per month. As per Section 4 of the Employee’s Compensation Act, 1923, in the case of death, the amount of compensation shall be the amount equal to 50% of the monthly wages of the employee multiplied by the relevant factor or an amount of Rupees one lakh twenty thousand whichever is more. The relevant factor for a 28 year old man is 211.79 as per Schedule IV of the Employee’s Compensation Act. So, the compensation under the Employee’s Compensation Act would have been Rs. 4,23,580/- or Rupees One lakh twenty thousand whichever is more. So, the respondents are eligible to get Rs. 4,23,580/- instead of Rs. 3,59,500/- awarded by the Tribunal. So, the contention of the appellant that the compensation awarded by the Tribunal exceeds the compensation ought to have been allowed under the Workmen’s Compensation Act (Employee’s Compensation Act, 1923) is not tenable. 21. The definite case of the appellant is that the deceased was not an employee in the lorry involved in the accident and he was only a gratuitous passenger. No materials whatsoever had been produced by the appellant to show that the deceased was not an employee of the lorry except the F.I statement given by the father-in-law of the deceased who was not an eye witness to the incident. No witnesses were also examined to substantiate their case. 22. Viewing the incident on a different angle, let us see whether the deceased was eligible to be compensated as a third party, if at all he could not be treated as an employee, in the absence of materials to prove his employment in that lorry. Ext.A1 FIR as well as Ext.A3 charge sheet will show that the deceased, who was inside the cabin, fell down on the road when the driver of the lorry abruptly swerved the vehicle to the other side. Ext.A1 FIR as well as Ext.A3 charge sheet will show that the deceased, who was inside the cabin, fell down on the road when the driver of the lorry abruptly swerved the vehicle to the other side. The deceased sustained fatal injuries leading to his death, when the lorry ran over through his hip, while he was lying on the road. 23. In United India Insurance Company Limited vs. P. Shanthi @ P. Santhamani, (2011) 1 TN MAC 227 (DB), a similar case came up for consideration. When the owner of the lorry parked the vehicle on the road side and was attending to the repairs of the vehicle, the driver suddenly moved the vehicle and due to his negligence, the owner sustained injuries and despite treatment, he died. Legal representatives made a claim for compensation. Opposing the same, the Insurance Company contended that the legal representatives stepped into the shoes of the owner and therefore, they cannot claim compensation from themselves, and in such circumstances, no award should have been passed. It was also contended that the policy did not cover the owner. The Tribunal recorded a finding that, since premium was paid for the owner’s risk, the legal representatives are entitled for compensation and accordingly, quantified the amount. Seeking to set aside the award, the company filed an appeal before the High Court of Madras contending inter alia that the Insurance Company would indemnify the insured-owner of the vehicle, only on the contract of indemnification and that the deceased cannot be treated as a third party to the insurance, and hence the legal representatives are not entitled to make any claim for compensation. The Insurance Company contended that no additional premium was paid to cover the owner’s risk. The legal representatives advanced an argument that, there was nothing wrong in the finding of the Tribunal that when the owner was outside the vehicle i.e on the road, he should be considered only as a third party and even though he was one among the parties to the contract of insurance, the company was liable to pay compensation to the legal representatives. But, since the owner was a party to the contract of indemnity, without additional premium covering the owner’s risk, the Insurance Company was held not liable to compensate the victim. 24. In the case on hand, the deceased was not a party to the contract of indemnity. But, since the owner was a party to the contract of indemnity, without additional premium covering the owner’s risk, the Insurance Company was held not liable to compensate the victim. 24. In the case on hand, the deceased was not a party to the contract of indemnity. The deceased sustained fatal injuries outside the vehicle, at the road. Even if the contention of the appellant that the deceased was not an employee in the lorry involved in the accident is accepted, since the deceased was a stranger who sustained fatal injuries outside the vehicle on the road, there is nothing wrong in treating him as a third party, as he was not the owner having privity to the contract of indemnity. 25. Learned counsel for the appellant contended that the compensation awarded by the Tribunal under Section 166 of the M.V. Act, is on the higher side. But, on going through the impugned award, it could be seen that the Tribunal fixed his notional income at Rs. 2,500/- only, though he was eligible to get Rs. 4,000/- per month as per Ramchandrappa’s case cited supra. The compensation awarded to respondents 1 to 5 under various heads such as funeral expenses, loss of estate, loss of consortium etc. are on the lower side, considering their eligibility as per the decision National Insurance Company Ltd. vs. Pranay Sethi and Others, AIR 2017 SC 5157 . Moreover, though the deceased was having five dependants, learned Tribunal reduced 1/3rd towards his personal expenses instead of 1/4th. The multiplier applicable was 17. But, the Tribunal applied only 15. So, the allegation of the appellant that the award of the Tribunal is excessive, is without any factual basis. The 1st respondent became a widow at the age of 23, with two children of three years and ten months respectively. In the absence of any appeal from the part of the respondents, this Court is not disturbing the award passed by the Tribunal. 26. The 1st respondent became a widow at the age of 23, with two children of three years and ten months respectively. In the absence of any appeal from the part of the respondents, this Court is not disturbing the award passed by the Tribunal. 26. In the result, the appeal is dismissed directing the appellant to deposit the balance amount, if any, due to the respondents with interest as ordered in the impugned award, before the Motor Accidents Claims Tribunal concerned, within two months from the date of receipt of a copy of this judgment, and the learned Tribunal shall disburse the amount to respondents 1 to 3 and 5 (original claimants 1 to 3 and 5) in equal share, on production of legal heirship certificate of deceased Shanmugha Raja. 27. With these observations and directions, the appeal stands dismissed.