Research › Search › Judgment

Kerala High Court · body

2023 DIGILAW 737 (KER)

C. B. Vijaya v. Sivaraman (Deceased), S/o. Chami

2023-09-20

ZIYAD RAHMAN A.A.

body2023
JUDGMENT : These appeals arise from the award dated 03.03.2014 passed by the Motor Accident Claims Tribunal, Palakkad, in OP(MV) No.278/2010. M.A.C.A. No.586/2015 is filed by the 2nd respondent in the claim petition, the owner of the vehicle involved in the accident, challenging the finding of the tribunal, exonerating the insurance company and directing the appellant therein to deposit the entire amount of compensation. M.A.C.A. No.357/2017 is filed by the claimants in the claim petition seeking enhancement of compensation. For convenience, the parties in these appeals are referred to as per their respective ranks in the claim petition. 2. The claim petition was submitted by the petitioners, who are the appellants 1 and 2 in MACA No. 357/2017, seeking compensation for the death of their son due to the injuries sustained in a motor accident that occurred on 23.08.2009. The deceased was aged 27 years at the time of the accident, and he was working as a driver with a monthly income of Rs.8,000/-. The accident occurred when he was run over by a bus while walking through the National Highway at about 1.30 p.m. on 23.08.2009. At the relevant time, the vehicle was being driven by the 1st respondent, owned by the 2nd respondent and was insured by the 3rd respondent in the claim petition. 3. As compensation, the petitioners claimed Rs.8,10,000/-. The 1st and 2nd respondents filed a written statement admitting the accident but disputed the negligence on their part. It was also contended by both of them that, at the relevant time, the vehicle was insured with the 3rd respondent, and therefore, if at all any liability is fixed, the same should be indemnified by the 3rd respondent. The 3rd respondent submitted a written statement admitting the policy issued to the said vehicle. However, a specific contention of violation of the terms and conditions of the policy was raised by them. According to them, the insurance policy was issued to the vehicle for its operation as a stage carriage as per the permit, but the same was used by the 2nd respondent for carrying a marriage party without any proper permit in this regard. According to them, the insurance policy was issued to the vehicle for its operation as a stage carriage as per the permit, but the same was used by the 2nd respondent for carrying a marriage party without any proper permit in this regard. According to the 3rd respondent insurance company, the policy in this case, was issued to ply the said vehicle as a stage carriage, whereas, at the relevant time, the same was being operated as a contract carriage and, therefore, there was a violation of policy conditions. 4. The evidence in this case consists of Exts.A1 to A7 from the side of the petitioners. Exts.B1 and B2 were marked from the side of the respondents. 5. After appreciating the materials placed on record, the tribunal came to a finding that since the 2nd respondent was charge sheeted by the Police as per Ext.B1 final report under Section 66 of the Motor Vehicles Act, the respondents 1 and 2 had violated the terms and conditions of the policy. For that reason, the 3rd respondent Insurance Company was exonerated from the liability, and the 1st and 2nd respondents were held jointly and severally liable to pay the amount awarded. The quantum of compensation was fixed as Rs.3,04,000/-and the said amount was directed to be deposited by respondents 1 and 2 with interest at the rate of 9% per annum. One of these appeals is submitted by the 2nd respondent owner challenging the exoneration of the insurance company, whereas the claimants have submitted the other appeal seeking enhancement of compensation. 6. Heard Sri. Baby Mathew, the learned counsel appearing for the appellants, Sri.P.Jacob Mathew, the learned counsel appearing for the 3rd respondent Insurance Company in M.A.C.A. No.357/2017 and Sri. Sajan Varghese, the learned counsel appearing for the appellant and Sri.K.C.Santhosh Kumar, the learned counsel appearing for the 4th respondent Insurance Company in M.A.C.A. No.586/2015. 7. During the pendency of the appeal, the 1st appellant/1st petitioner passed away, and the legal heirs of the said petitioner got themselves impleaded as the additional appellants 2 to 4 in M.A.C.A. 8. The first contention that is to be considered is with regard to the finding of the tribunal on the question of exoneration of the Insurance Company from liability. The first contention that is to be considered is with regard to the finding of the tribunal on the question of exoneration of the Insurance Company from liability. The learned counsel for the 2nd respondent/owner would contend that the violation alleged by the 3rd respondent Insurance Company is not a fundamental breach of policy so as to warrant an exoneration of or grant of the right of recovery to the insurance company. The learned counsel places reliance on the decisions rendered in United India Insurance Co. Ltd. v. Sabeer Ali [ 1999(3) KLT 700 ] and B.V. Nagaraju v. M/s. Oriental Insurance Co. Ltd., Divisional Office, Hassan [ 1996(4) SCC 647 ]. 9. On the other hand, Sri. K.C. Santhosh Kumar, the learned counsel appearing for the 3rd respondent Insurance Company, would oppose the aforesaid contention by pointing out that it is evident from Ext.B1 petty charge sheet that the 2nd respondent had violated the policy conditions as the vehicle was used as a contract carriage for carrying a marriage party in violation of the stage carriage permit issued to them. Therefore, it was a fundamental breach of policy, which warrants an order exonerating the Insurance Company or at least making them entitled to the right of recovery of the amount from the owner after satisfying the award. 10. I have carefully gone through the materials placed on record and also the contentions raised by both sides. The materials placed on record would indicate that there was indeed a breach of permit conditions on the part of the 2nd respondent. Even though the vehicle was covered with a route permit for plying the same as a stage carriage, evidently, the same was used for carrying a marriage party, thereby indicating that the said vehicle was used as a contract carriage at the relevant time. As per law, the 2nd respondent ought to have taken a special permit for the said purpose, which was not admittedly taken. The crucial question here is whether such a use of the vehicle by the 2nd respondent would entitle the Insurance Company to get exonerated from the liability or to get the right of recovery. 11. The liability of the Insurance Company in this regard is contemplated under Section 149 sub-clause 2(a) of the Motor Vehicles Act, 1988, which reads as follows: 149. 11. The liability of the Insurance Company in this regard is contemplated under Section 149 sub-clause 2(a) of the Motor Vehicles Act, 1988, which reads as follows: 149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.- (1) xxx xxx xxx xxx xxx xxx xx (2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:- (a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:- (i) a condition excluding the use of the vehicle- (a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or (b) for organized racing and speed testing, or (c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or (d) without side-car being attached where the vehicle is a motor cycle; or (ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or (iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or (b) that the policy is void on the ground that it was obtained by the nondisclosure of a material fact or by a representation of fact which was false in some material particular.” As per Section 149, 2(a)(i)(c), if the vehicle was used for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, the insurance company shall be entitled to raise a defence in this regard, seeking exoneration. However, the crucial question that arises is whether the expression “for a purpose not allowed by the permit” used in the said provision can be extended to a situation that existed in this case. 12. In this case, it is evident that the purpose permitted as per the permit issued to the 2nd respondent was to carry passengers based on fare fixed by the Government for stage carriage from time to time, through a particular route mentioned therein. The 2nd respondent has used the said vehicle as a contract carriage for carrying a marriage party, which would indicate that the violation allegedly committed by him is confined to the aspect of the collection of the fare. To be precise, the breach of permit is that, instead of collecting the fare in the manner and the range as fixed by the Government in this regard, they entered into a contract with another individual for remuneration in a different manner. Of course, if the said bus deviated from the route covered by the permit, that can also be treated as a breach of the permit. But in this, it is not clear whether the bus deviated from the route. Therefore, the deviation is confined to collecting the remuneration/charges alone, but the primary purpose for which the vehicle was used remained the same, i.e. for carrying passengers in the vehicle for remuneration. Even if it is assumed for argument sake that the bus deviated from the route, although the same may amount to a violation of the permit condition, that may not be a fundamental breach affecting the rights of the insured to get indemnified by the insurer. In this regard, the learned counsel appearing for the Insurance Company fairly admitted that the premium that is being collected for stage carriage and a contract carriage is the same. Evidently, the route of the bus as per the permit is not a criterion which determines the quantum of premium under normal circumstances. Thus, the question whether the vehicle was used as a stage carriage or contract carriage is completely immaterial as far as the liability of the insurance company and the extent thereof are concerned. 13. In Sabeer Ali’s case (supra), a Division Bench of this Court considered a more or less similar situation and observed in paragraph 4 thereof as follows: “4. 13. In Sabeer Ali’s case (supra), a Division Bench of this Court considered a more or less similar situation and observed in paragraph 4 thereof as follows: “4. A mere reading of the provisions of clause (c) of S.149(2)(a)(i) would show that there is no merit in the contention raised by the insurance company. The breach of the condition should be one relating to the use of the vehicle for a purpose not allowed by the permit. In the present case, there is no dispute that the offending vehicle was allowed by permit to carry passengers. It is also admitted case that when the accident happened the vehicle was being used as a taxi for carrying passengers. If that be so, there is no question of putting the vehicle to a purpose not allowed by the permit (emphasis supplied). If the vehicle was used for carrying goods then it would have come within clause (c). So also, if it was permitted to be used as a public goods carrier but at the same time it was used to carry passengers then also it would come under clause (c). Merely because more number of passengers than was allowed under the permit it cannot be said that the vehicle was used for a purpose not allowed by the permit. It may amount to a violation of the permit conditions regarding number of persons to be carried in the vehicle. But, that will not be a reason coming under clause (c). Therefore, according to us, the Insurance Company cannot be absolved from its liability for the reason that there is breach of a specified condition of the policy being one coming under S.149(2)(a)(i)(c).” 14. Similarly, in B.V. Nagaraju’s case (supra), the Hon'ble Supreme Court was pleased to observe in paragraph 7 as follows: “7. It is plain from the terms of the Insurance Policy that the insured vehicle was entitled to carry 6 workmen, excluding the driver. If those 6 workmen when travelling in the vehicle, are assumed not to have increased any risk from the point of view of the insurance company on occurring of an accident, how could those added persons be said to have contributed to the causing of it is poser, keeping apart the load it was carrying. Here, it is nobody’s case that the driver of the insured vehicle was responsible for the accident. Here, it is nobody’s case that the driver of the insured vehicle was responsible for the accident. In fact, it was not disputed that the oncoming vehicle had collided head on against the insured vehicle, which resulted in the damage. Merely by lifting a person or two, or even three, by the driver or the cleaner of the vehicle, without the knowledge of owner cannot be said to be such a fundamental breach that the owner should, in all events, be denied indemnification. *The misuse of the vehicle was somewhat irregular though, but not so fundamental in nature so as to put an end to the contract, unless some factors existed which, by themselves, had gone to contribute to the causing of the accident.. In the instant case, however, we find no such contributory factor. In Skandie’s case (AIR 1987) SC 1184) this Court paved the way towards reading down the contractual clause by observing as follows (at pp 1191 and 1992 of AIR) “… When the option is between opting for a view which will relieve the distress and misery of the victims of accidents or their defendants on the one hand and the equally plausible view which will reduce the profitability of the insurer in regard to the occupational hazard undertaken by him by way of business activity, there is hardly any choice. The Court cannot but opt for the former view. Even if one were to make a strictly doctrinaire approach, the very same conclusion would emerge in obeisance to the doctrine of ‘reading down’ the exclusion clause in the light of the main purpose of the provision so that the exclusion clause highlighted earlier. The effort must be to harmonize the two instead of allowing the exclusion clause to snipe successfully at the main purpose. The theory which needs no support is supported by Carter’s Breach of Contract vide para 251. To quote: Notwithstanding the general ability of contracting parties to agree to exclusion clauses which operate to define obligations there exists a rule, usually referred to as the main purpose rule, which may limit the application of wide exclusion clauses defining a promiser’s contractual obligations. For example, in Glynn v. Margestson and Co. To quote: Notwithstanding the general ability of contracting parties to agree to exclusion clauses which operate to define obligations there exists a rule, usually referred to as the main purpose rule, which may limit the application of wide exclusion clauses defining a promiser’s contractual obligations. For example, in Glynn v. Margestson and Co. (1893 AC 351 (357), Lord Halsbury, L.C. stated: It seems to me that in construing this document, which is a contract of carriage between the parties, one must in the first instance look at the whole instrument and not at one part of it only. Looking at the whole instrument, and seeing what one must regard as its main purpose, one must reject words, indeed whole provisions, if they are inconsistent with what one assumes to be the main purpose of the contract. Although this rule played a role in the development of the doctrine of fundamental breach, the continued validity of the rule was acknowledge when the doctrine was rejected by the House of Lords in Suissee Atlantique Societe d’ Armement Maritime S.A. v. N.V. Rotterdamsche Kolen, Centrate, 1967 (1) AC 361. Accordingly, wide exclusion clauses will be read down to the extent to which they are inconsistent with the main purpose, or object of the contract” *(underlined for emphasis) 15. Thus, it is evident that to treat a breach of policy conditions as a fundamental breach, such breach must have contributed to the accident to some extent. Similarly, a mere technical violation, even if it would attract penal consequences under the Motor Vehicles Act, 1988, by itself cannot be treated as a fundamental breach unless such breach increases the obligations of the insurance company or imposes a new obligation, which otherwise, they may not have to fulfill. In this case, the breach is related to using the bus as a contract carriage, whereas the permit was for a stage carriage. In both the said usage, the purpose remains the same, namely, to carry passengers, but the distinction is only with respect to charges collected by the insured. As observed above, the premium also remains the same in both cases. Therefore, such a change of use does not create any additional risks or burden or increase the obligations of the insurer. In both the said usage, the purpose remains the same, namely, to carry passengers, but the distinction is only with respect to charges collected by the insured. As observed above, the premium also remains the same in both cases. Therefore, such a change of use does not create any additional risks or burden or increase the obligations of the insurer. The position would have been different if the vehicle had been used for other purposes, such as using a goods vehicle to carry passengers or vice versa. Moreover, the breach of the condition, as such, has not contributed to the accident as well. Thus, it remains as a technical breach without any consequences as far as the obligations of the insurer are concerned. 16. Even though the learned counsel for the 3rd respondent Insurance Company would rely upon the decision rendered by the Hon'ble Supreme Court in Amrit Paul Singh v. TATA AIG General Insurance Co. Ltd. [ 2018(3) KLT 911 (SC)], a careful reading of the aforesaid decision would indicate that the case dealt with in that case was relating to an incident where the vehicle concerned was used without any permit at all. In this case, the factual position is different, and admittedly, the vehicle was covered with a route permit, whereas the violation alleged is that the condition of the route permit was violated. Therefore, the question to be considered in this case is completely different from that considered in Amrit Paul Singh’s case, and hence, the principles laid down therein cannot be made applicable to this case. 17. Thus, after considering all the aforesaid aspects, I am of the view that the breach alleged against the 2nd respondent/owner of the vehicle, even if taken as proved, by itself is not sufficient to exonerate the insurance company from the liability to indemnify the insured. The only consequence due to the violation of such permit conditions is that the 2nd respondent/insured can be prosecuted for the offences contemplated under the Motor Vehicles Act, 1988 and under no circumstances that can have any impact upon the contractual right of the 2nd respondent to get indemnified by the 3rd respondent Insurance Company. 18. The only consequence due to the violation of such permit conditions is that the 2nd respondent/insured can be prosecuted for the offences contemplated under the Motor Vehicles Act, 1988 and under no circumstances that can have any impact upon the contractual right of the 2nd respondent to get indemnified by the 3rd respondent Insurance Company. 18. In such circumstances, I am of the view that, merely because the 2nd respondent has used the vehicle at the relevant time as a contract carriage, deviating from the permit granted for stage carriage, that cannot be treated as a violation which is so fundamental as to attract the stipulations contained under Section 149(2)(a)(i)(c) of the Motor Vehicles Act, 1988. Therefore, I hold that the finding of the tribunal exonerating the insurance company is liable to be set aside. It is ordered accordingly, and the 3rd respondent insurance company is held liable to pay the compensation. 19. When moving on to the enhancement of compensation as claimed in MACA No. 357/2017, the main contention raised by the learned counsel for the claimants is that the amount awarded for loss of dependency was on the lower side. It was contended that even though an amount of Rs.8000/-was claimed as the monthly income of the deceased, who was working as a driver, the income taken by the tribunal is only Rs.4000/-. In the facts and circumstances of the case, I find some force in the contention put forward by the learned counsel for the claimants. The accident occurred in the year 2009 and when adopting the method of computation of monthly income by following the principles laid down by the Hon’ble Supreme Court in Ramachandrappa v. Manager, Royal Sundaram Alliance Insurance Co.Ltd [ (2011) 13 SCC 236 ] and Syed Sadiq v. Divisional Manager, United India Insurance Company [ (2014) 2 SCC 735 ] under no circumstances the monthly income of an ordinary employee be lesser than Rs.7000/-. In this case, even though the deceased was claimed to be a driver, no evidence was adduced to substantiate the same. Therefore, I deem it appropriate to fix the monthly income as Rs.7000/-. 20. Another aspect to be noticed is that no addition was made towards future prospects by the tribunal while computing the compensation. In this case, even though the deceased was claimed to be a driver, no evidence was adduced to substantiate the same. Therefore, I deem it appropriate to fix the monthly income as Rs.7000/-. 20. Another aspect to be noticed is that no addition was made towards future prospects by the tribunal while computing the compensation. As per the principles laid down by the Hon’ble Supreme Court in the National Insurance Company Ltd. v. Pranay Sethi [ 2017(4) KLT 662 ], an addition of 40% has to be made as the deceased was aged only 27 years at the time of the accident. Similarly, the multiplier adopted by the tribunal was 11, which is also erroneous. It is a well settled position of law that, even in respect of the death of the bachelor, the multiplier has to be taken based on the age of the deceased, which is 17 in this case and therefore, the said multiplier is adopted. However, as the deceased was a bachelor, a deduction of 50% has to be made, taking into account his personal expenses. 21. While reassessing the compensation with the revised criteria referred to above, the compensation for disability would come to Rs.9,99,600/-[ (7000 + 40%) x 12 x 17 x ½ ]. The tribunal has awarded an amount of Rs.2,64,000/-under this head, and therefore, an amount of Rs.7,35,600 is the entitlement of the petitioners as the additional compensation. The petitioners 1 and 2, the parents of the deceased, are entitled to loss of consortium at the rate of Rs.40,000/-each, and this would result in an additional compensation of Rs.80,000/-. However, in the award, an amount of Rs.10,000/-is allowed towards the head of loss of love and affection. As per the principles laid down by the Hon’ble Supreme Court in United India Insurance Company Ltd. v. Satinder Kaur @ Satwinder Kaur [ (2021) 11 SCC 780 ] and New India Assurance Company Ltd v. Somwati and Others [ (2020) 9 SCC 644 ], when compensation for the loss of consortium is awarded, no separate amount is to be awarded under the head of loss of love and affection. Therefore Rs.10,000/-awarded under the head of loss of love and affection has to be adjusted to the compensation for loss of consortium. Therefore Rs.10,000/-awarded under the head of loss of love and affection has to be adjusted to the compensation for loss of consortium. Hence, the additional amount under this head would come to Rs.70,000/-Thus, the total additional compensation receivable by the appellant would come to Rs.8,05,600/- 22. In such circumstances, in the light of the observations and findings referred to above, these appeals are allowed. The award dated 03.03.2014 passed in OP(MV) No.278/2010 by the Motor Accidents Claims Tribunal Palakkad is hereby modified by setting aside the finding exonerating the 3rd respondent insurance company from the liability and also awarding a further amount of Rs.8,05,600/-(Rupees Eight Lakhs Five Thousand and Six hundred only) to the appellants in this appeal. In the light of the above findings, the 3rd respondent insurance company is directed to deposit the entire amount of compensation awarded by the tribunal along with the additional compensation awarded in this case, i.e Rs 11,09,600/-(Rupees Eleven Lakhs Nine Thousand and Six hundred only), with interest at the rate of 7.5% per annum from the date of petition till realization. The said amount shall be deposited within a period of three months from the date of receipt of a copy of this judgment. However, it is clarified that as this Court condoned the delay of 932 days in filing the M.A.C.A. No.357/2017, on the condition that the appellants shall not be entitled to interest for the said period, the insurance company shall be permitted to exclude the period of 932 days while computing the interest. Since it is reported that the 1st claimant is no more, the amount receivable by the said appellant shall be apportioned among the other appellants in accordance with their personal law. The appellant in M.A.C.A. No.586/2015 shall be entitled to get back the amount already deposited under Section 173(2) of the Motor Vehicles Act.