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2023 DIGILAW 477 (AP)

Cholamandalam Ms General Insurance Co Ltd. v. Jillelamudi Chandrakala

2023-03-01

T.MALLIKARJUNA RAO

body2023
JUDGMENT : 1. Aggrieved by the award and decree dated 27.01.2015 in M.V.O.P. No.249 of 2013 passed by the Chairman, Motor Accidents Claims Tribunal-cum-VII Additional District Judge, Ongole (for short, "the tribunal"), whereby the Tribunal awarded compensation of Rs.13,30,000/- with interest 9% per annum against the respondents 1 and 2 and dismissing the claim against the respondents 3 and 4, the 2nd respondent, Cholamandalam Ms. General Insurance Company Limited, has preferred the present appeal. 2. For convenience, the parties herein will be referred to as per their rankings in the M.V.O.P. 3. The claim is filed under Section 166 of the Motor Vehicles Act, 1988, for compensation of Rs.10,00,000/- on account of the death of Jillelamudi Venkatswarlu (hereinafter referred to as ‘the deceased’) in a road accident that occurred on 15.11.2012. 4. The 1st petitioner is the wife; the 2nd is the son, and petitioners 3 and 4 are the deceased's parents. The claimant's case is that on 15.11.2012 at about 03.20PM, the deceased and one Unnam Rosaiah came to Addanki on a motorcycle bearing No.AP27AE3790 from their village Peda Ullagallu and while they returned to their village at about 03.00 PM and when they reached to brick kiln of Thokala Venkateswarlu at approximately 03.20 PM on Addanki-Dasari road, one A.P.S.R.T.C. Hire Bus bearing No.AP27W8109 (hereinafter referred to as 'offending vehicle') came in opposite direction rashly and negligently and dashed the motorcycle, as a result, the rider of bike Unnam Rosaiah died on the spot and the pillion rider i.e., the deceased herein received multiple injuries, he was shifted to Government Hospital, Addanki and from there to Sanghamitra Hospital, Ongole for better treatment, where deceased succumbed to injuries on 18.11.2012 at about 01.00 PM. 5. The 4th respondent remained exparte. 6. Respondents 1 to 3 filed their counters separately. 7. Respondents 1 to 3 denied the accident, age, income, or avocation of the deceased; there was no negligence on the part of the offending vehicle's driver, but there was negligence on the part of the rider of the motorcycle in which the deceased was a pillion rider. So the respondents are not liable to pay compensation. The 3rd respondent submitted that the owner of the bus entered into an agreement with A.P.S.R.T.C., and as per Clause-IV of it, the owner shall be responsible for all the claims that may arise due to statutory violation. 8. So the respondents are not liable to pay compensation. The 3rd respondent submitted that the owner of the bus entered into an agreement with A.P.S.R.T.C., and as per Clause-IV of it, the owner shall be responsible for all the claims that may arise due to statutory violation. 8. Based on the pleadings, the Tribunal framed relevant issues. To substantiate the claim on behalf of the claimant during the trial, PWs.1 and 2 got examined and marked Exs.A.1 to A.20. On behalf of the respondents, RW.1 got examined and attested Xerox copy of agreement dt.10.07.2012 executed between the owner of the bus and the A.P.S.R.T.C. marked as Ex.B.1. 9. After appreciation of the oral and documentary evidence, the Tribunal held that the accident occurred due to the rash and negligent driving of the offending vehicle’s driver; the deceased died due to the injuries sustained in the accident. Accordingly, the Tribunal granted compensation of Rs.13,30,000/- with interest @ 9% p.a. from the date of the petition till realization against respondents 1 and 2, and the claim was dismissed against respondents 3 and 4. Aggrieved thereby, the 2nd respondent has preferred the present appeal. 10. I have heard the learned counsel appearing for both parties. 11. In the grounds of appeal, learned counsel for the 2nd respondent/ appellant contends that the Tribunal failed to see that there is no proper evidence about the income and occupation of the deceased; Tribunal failed to see that the claimant has not filed authenticated documents like original passbook etc., The Tribunal failed to see that supervisory capacities have to be ascertained without loss of future prospectus; the Tribunal failed to see that amount granted under non-pecuniary heads is also on the high side. The medical bills are not proved by the petitioners. The Tribunal ought to have passed a decree against respondents 3 and 4 also. 12. Per contra, learned counsel appearing for the respondents has supported the findings and observations of the Tribunal. 13. Now, the points for determination are Whether the quantum of compensation fixed by the Tribunal is just and reasonable ? POINT: 14. As seen from the grounds of appeal and submissions made on behalf of the learned counsel for the appellant, the appellant has not disputed the findings given by the Tribunal regarding the manner of the accident and the death of the deceased due to injuries sustained in the accident. POINT: 14. As seen from the grounds of appeal and submissions made on behalf of the learned counsel for the appellant, the appellant has not disputed the findings given by the Tribunal regarding the manner of the accident and the death of the deceased due to injuries sustained in the accident. In view of the same, the details of the manner of the accident and evidence adduced on that behalf need not be referred to and discussed in detail. 15. As seen from the grounds of appeal, the main dispute concerns the quantum of the compensation amount and non-fixing the liability on respondents 3 and 4. 16. It is not in dispute that Ex.B1 is the agreement executed between the owner of the hired bus with the A.P.S.R.T.C. The driver of the hired bus is not an employee of A.P.S.R.T.C. By giving a reason; the Tribunal held that the Corporation is not liable to pay the compensation to the petitioner. As seen from the record, the claimants have not questioned the award passed by the Tribunal on the ground that liability is not fixed on respondents 3 and 4 in M.V.O.P. It is not the case of the insurance company that the insurance policy for the offending vehicle was not in force at the time of the accident. The Tribunal accepted the petitioners' case regarding the subsistence of the valid policy at the time of the accident and fixed the liability on the insurance company. As seen from the grounds of appeal, the insurance company has not disputed the petitioners' case regarding the subsistence of the insurance policy at the time of the accident. 17. In Rikhi Ram And Anr vs Smt. Sukhrania And Ors, 2003 ACJ 534 SC, the Apex Court held that, "whenever a vehicle which is covered by the insurance policy is transferred to a transferee, the liability of the insurer does not ceases so far as the third party/victim is concerned, even if the owner or purchaser does not give any intimation as required under the provisions of the Act." 18. The Hon’ble Full Bench of the erstwhile High Court of Andhra Pradesh rendered in L.P.A. No.206, 207, 208 and 2019 of 2000 and 6 of 2002 and batch dated 20.11.2012 wherein it was held at Para 94 of the said judgment that the Insurance company is solely liable for payment of compensation in respect of vehicles engaged by the Corporation under the category of acquired insured buses by the owners to the Corporation and it was observed as follows: "On the above analysis, we hold that mere hiring of insured buses by the owners to the A.P.S.R.T.C. would not in any manner limit the liability and accountability of the Insurance Companies, be it under the Act of 1988 or the Act of 1939, to honour passengers/third party risks covered by the Insurance Policies issued by them in favour of the owners. Notwithstanding the hiring of insured buses by the owners to the A.P.S.R.T.C., the Insurance Companies shall be solely and exclusively liable for payment of the compensation arising out of such passengers/third party claims unless any of the grounds in Section 149 (2) of the Act of 1988/Section 96 (2) of the Act of 1939 are made out. We therefore affirm the view taken by the Full Bench of this Court in MADINENI KONDAIAH AIR 1986 A.P. 62 (F.B.) and applied thereafter in RIKHI RAM AIR 2003 SC 1446 = (2003) 3 S.C.C. 97 = 2003 ACJ 534 . We answer the question referred to us for decision accordingly. All the matters shall be placed before the appropriate Courts for individual adjudication.” Similarly, the Hon’ble Apex Court in Civil Appeal No.18490, 18491 of 2017, dated 14.07.2021 also held that the Insurance company is liable to pay the compensation amount when the acquired buses of the Corporation were involved in the accident on the ground of vicarious liability. It was held as follows: “The question that falls for our consideration in the instant appeal is: if an insured vehicle is plying under an agreement with the Corporation on the route as per permit granted in favour of the 3 Corporation and in case of any accident during that period, whether the Insurance Company would be liable to pay compensation or would it be the responsibility of the Corporation or the owner? This question has been answered by this Court in Uttar Pradesh State Road Transport Corporation v. Kulusum and Others, (2011) 8 SCC 142 , which is an identical case where the Supreme Court examined the agreement entered into between the Corporation and the owner of the vehicle. The Court has come to the conclusion that when the effective control and command of the bus is with the Corporation, the Corporation becomes the owner of the vehicle for the specified period. It was further held that when the actual possession of the vehicle is with the Corporation, the vehicle, the driver and the conductor were under the direct control and supervision of the Corporation. Therefore, through the definition of "vicarious liability," it can be inferred that the person supervising the driver is liable to pay the compensation to the victim. During such time, however, it will be deemed that that vehicle was transferred along with the insurance policy, even if it was insured at the instance of the original owner. Thus, the Insurance Company would not be able to escape its liability to pay the amount of compensation." Similarly, the Hon'ble Supreme Court in Civil Appeal Nos. 5901 of 2011 and batch dated 25.07.2011 held that the Insurance company only is liable to pay the amount of compensation to the claimants. 19. In Uttar Pradesh State Road Transport Corporation v. Kulsum & Ors., (2011) 8 SCC 142 the Apex Court held that "If the Corporation had become the owner even for the specific period and the vehicle having been insured at the instance of the original owner, it will be deemed that the vehicle was transferred along with the Insurance Policy in existence to the Corporation and thus Insurance Company would not be able to escape its liability to pay the amount of compensation." 20. Keeping in mind the principle laid down by the Apex Court, after careful reading of the record, this Court finds that it is not the case of the insurance company that there has been any violation of the terms and conditions of the policy. It has also failed to point out the violations of any Act, Rules or conditions of the insurance company. Therefore, the Insurer has no legal justification for denying compensation to the claimants. It has also failed to point out the violations of any Act, Rules or conditions of the insurance company. Therefore, the Insurer has no legal justification for denying compensation to the claimants. The 1st respondent had insured the offending vehicle to meet the such liability, which may arise on account of the use of the vehicle. 21. It is not in dispute that the offending vehicle was under the absolute control of the Corporation, and the original owner did not part with the ownership of the vehicle. In other words, there is no cessation of the relationship between the vehicle and its original owner. 22. In similar facts of the case, in a case between A.P.S.R.T.C., Mushirabad, Hyderabad V. Kanche Nagabhushanam @ Bhushanam and others, (2007) 6 ALT 627 this Court observed that 29. Even in such cases, it is to be remembered that there is no cessation of the privity of contract between the original owner and the Insurer through a policy. In other words, even in case of transfer of ownership, in any manner, so long as the policy is in force covering certain risks, notwithstanding the possession of the vehicle or the nature of possession, the liability of the Insurer cannot be held to be ceased to the extent of its liability against third parties only as postulated under Section 157 of the new Act. This position has been made clear by the apex Court in United India Insurance Company Ltd., Shimla v. Tilak Singh, 2006 (3) A.L.D. 75 (S.C.): 2006 (1) D.T. (SC) 479. 30….. 31…. 32…. 33. Unless and until the obligation of indemnification on the part of the Insurance Company is divested by way of an express agreement between the owner and the hirer, the said obligation on the part of the Insurer will not get ceased. Furthermore, the conditions of the insurance policy would always remain unless they are specifically excluded by way of a separate agreement between the owner, hirer and the Insurance Company. In other words, the Insurance Company must be a party to a tripartite agreement, but not a bipartite settlement between the owner and the hirer. Any such agreement does not absolve the Insurer from its liability of indemnification. The same thing may happen by an independent agreement between the owner and the hirer excluding the Insurer's liability as in Kailash Nath Kothari's case (supra)." 23. Any such agreement does not absolve the Insurer from its liability of indemnification. The same thing may happen by an independent agreement between the owner and the hirer excluding the Insurer's liability as in Kailash Nath Kothari's case (supra)." 23. It is not the case of the appellant that the obligation of the indemnification on the part of the appellant is divested by way of the Ex.B1 Agreement entered in between 1st respondent and respondents 3 and 4 in M.V.O.P. 24. By following the principles and considering the legal position, this Court views the Tribunal has justified in fastening the insurance company's liability. Given the above-settled legal position, the Order passed by the Tribunal insofar as indemnification of the claim against the insurance company against the offending vehicle is to be confirmed. 25. The insurance company has questioned the award on the ground that there is no proper evidence about the income and occupation of the deceased. The claimant has not filed authenticated documents like the original passbook and the Tribunal failed to see that Supervisory capacity has to be ascertained without loss of future prospectus. 26. The Tribunal has accepted Ex.A6 and A7 pattadar passbooks and found that the petitioners have agricultural land of Ac. 09.46 cents. It negatives the contention of the appellant that the petitioners have not filed authenticated documents pertaining to the lands. However, the Tribunal assessed the income of the deceased at Rs.72,000/- per annum. 27. In a decision reported in D.Vinoda Vs. B.Basava Raju, 1988 ACJ 1072 , after referring to as many as 17 cases of various High Courts summarized the principles regarding estimated damages on the death of an agriculturist as under. “in the case of death of an agriculturist owning agricultural land, the value of the 'supervisory' services of the deceased have to be first estimated. This will not be merely equivalent to the value of the services of a farm servant or a manager of the property employed for that purpose. It will be more than that because an owner-manager takes extra care in increasing the income year by year and also in increasing the value of the property. This will not be merely equivalent to the value of the services of a farm servant or a manager of the property employed for that purpose. It will be more than that because an owner-manager takes extra care in increasing the income year by year and also in increasing the value of the property. After thus estimating the 'special' value of the supervisory services of an 'owner-manager', a deduction is to be made in respect of the money the deceased would have spent for himself out of such sum and then the annual contribution to the family is to be arrived at. Then an actuarial multiplier suitable to the age of the deceased has to be applied”. 28. In the facts of the case, this Court views that the Tribunal should have assessed supervisory loss instead of granting compensation based on income. The claimants have not filed the authenticated documents showing the exact income of the deceased. Since the deceased happened to be an agriculturist, it is not possible to produce such evidence. 29. To consider the loss of earnings is concerned, in Lakshmi Devi and others Vs. Mohammad Tabber, 2008 ACJ 1488 , the Apex Court laid down a principle that, in today's world, even common labour can earn Rs.100/- per day. Following the principles laid down by the Apex Court, in D.Vinoda’s Case and Lakshmi Devi’s Case, this Court views that the monthly income including supervisory loss can be assessed at Rs.5,500/-. 30. In National Insurance Company vs Paranay seti, 2017, ACJ 270, the Apex Court held that in case the deceased was self-employed, an additional 40% of the established income should be the warrant where the deceased was below the age of 40 years. The finding of the Tribunal that the age of the deceased is 28 years as of the date of the accident is not disputed. Given the same, the annual earnings of the deceased, including a future prospectus, can be assessed at Rs.5,500/+ 40% = Rs.7,700/-. Since petitioners 1 to 4 depending on the deceased's earnings, the Tribunal rightly deducted one-fourth (1/4th) of his earnings towards personal and living expenses. Thus, the monthly earnings of the deceased after deducting personal expenses arrived at Rs.7,700/- X 1/4 = Rs.1925 /- i.e., Rs.7700/- - 1925/- = Rs.5,775/-. 31. As per "Sarala Varma’s case and others Vs. Since petitioners 1 to 4 depending on the deceased's earnings, the Tribunal rightly deducted one-fourth (1/4th) of his earnings towards personal and living expenses. Thus, the monthly earnings of the deceased after deducting personal expenses arrived at Rs.7,700/- X 1/4 = Rs.1925 /- i.e., Rs.7700/- - 1925/- = Rs.5,775/-. 31. As per "Sarala Varma’s case and others Vs. Delhi Corporation and another, 2009 ACJ 1298 , the appropriate multiplier applicable to the age group of 26 to 30 is ‘17’. After deducting 1/4th amount, the net income of the deceased, which can contribute to the family, arrived at Rs.5775/- and when multiplied by 17, the loss of dependency came at Rs.11,78,100/- (5775x12x17). Rounded off to Rs.11,78,000/-. 32. In Magma General Ins. Co.Ltd., V.Nanu Ram, 2018 ACJ 2782 (S.C.), the Apex Court held that: "The Motor Vehicles Act is a beneficial and welfare legislation. The Court is dutybound and entitled to award 'just compensation, irrespective of whether any plea on that behalf was raised by the claimant. A constitution Bench of Hon'ble Apex Court in Pranay Sethi 2017 ACJ 2700 (S.C.) dealt with the various heads under which compensation is to be awarded in a death case. One of these heads is the loss of consortium. 33. In legal parlance, "consortium' is a compendious term which encompasses 'spousal consortium ''parental consortium', and 'filial consortium'. The right to consortium would include the company. Care, help, comfort, guidance, solace and affection for the deceased, which is a loss of his family. For a spouse, it would include sexual relations with the deceased spouse [Rajesh v. Rajbir Singh, 2013 ACJ 1403 (S.C). The parental consortium is granted to the child upon the premature death of a parent, for loss of 'parental aid, protection, affection, society, discipline, guidance and training. 34. In Pranay Sethi, the Hon'ble Supreme Court has awarded a total sum of Rs.70,000/- under conventional heads, namely, loss of estate, loss of consortium and funeral expenses. It was held that the sum should be enhanced at 10 per cent every three years. It was held thus in para 61: "(viii) Reasonable figures under conventional heads, namely loss of estate, loss of consortium and funeral expenses should be Rs.15,000/-, Rs.40,000/- and Rs.15,000/- respectively. The aforementioned amounts should be enhanced at the rate of 10 per cent in every three years". The Judgment in Pranay Sethi was rendered in the year 2017. It was held thus in para 61: "(viii) Reasonable figures under conventional heads, namely loss of estate, loss of consortium and funeral expenses should be Rs.15,000/-, Rs.40,000/- and Rs.15,000/- respectively. The aforementioned amounts should be enhanced at the rate of 10 per cent in every three years". The Judgment in Pranay Sethi was rendered in the year 2017. Therefore, the claimants are entitled to a 10 per cent enhancement. Thus, a sum of Rs.16,500/- each is awarded towards loss of estate and funeral expenses. Therefore the appellants are entitled to compensation as under i. Towards loss of dependency Rs. 11,78,000/- ii. Loss of estate Rs. 16,500/- iii. Funeral expenses Rs. 16,500/- iv. Loss of spousal consortium Rs. 44,000/- v. Loss of parental consortium Rs. 44,000/- vi. Loss of Filial consortium Rs. 31,000/- Total Rs. 13,30,000/- 35. In Laxman @ Laxman Mourya v. Divisional Manager, Oriental Insurance Company Limited and another, (2011) 10 SCC 756 the Apex Court while referring to Nagappa v. Gurudayal Singh, 2003 A.C.J. 12 (SC) 274 held as under: “It is true that in the petition filed by him under Section 166 of the Act, the appellant had claimed compensation of Rs.5,00,000/- only, but as held in Nagappa v. Gurudayal Singh (2003) 2 SCC 274 , in the absence of any bar in the Act, the Tribunal and for that any competent Court is entitled to award higher compensation to the victim of an accident.” 36. In Ramla vs National Insurance Co. Ltd., CIVIL APPEAL No.11495 OF 2018 the Apex Court held no restriction to award compensation exceeding the amount claimed. Given the principle laid down by the Apex Court, the claimants are entitled to Rs.13,30,000/- exceeding the claimed amount. However, the claimants shall pay the requisite court fee over and above the compensation awarded. 37. Following the principles laid down by the Apex Court in a catena of judgments, this Court can safely be concluded that the claimants are entitled to get more amount than what has been claimed. Further, the Motor Vehicles Act is a beneficial piece of legislation where the interest of the claimants is a paramount consideration. The Courts should always endeavour to extend the benefit to the claimants to a just and reasonable extent. 38. In view of the aforementioned discussion, I do not find any substance in the appeal to interfere with the impugned Order in the present appeal. 39. The Courts should always endeavour to extend the benefit to the claimants to a just and reasonable extent. 38. In view of the aforementioned discussion, I do not find any substance in the appeal to interfere with the impugned Order in the present appeal. 39. Accordingly, the appeal is devoid of merits and is hereby dismissed without costs, and the Order passed by the Tribunal dated 27.01.2015 in M.V.O.P. No.249 of 2013 is hereby confirmed. 40. Miscellaneous petitions, if any are pending, shall stand closed.