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2025 DIGILAW 433 (AP)

United India Insurance Co. v. Abothula Parvathi

2025-03-07

V.R.K.KRUPA SAGAR

body2025
JUDGMENT : The insurance company preferred this Appeal under Section 173 of the Motor Vehicles Act, 1988 questioning the correctness of the award dated 19.04.2005 of the learned District Judge and Motor Accidents Claims Tribunal at Srikakulam (hereinafter referred to as ‘the Claims Tribunal’) in M.V.O.P.No.199 of 2000. 2. Heard arguments of Ms. A.Malathi, the learned counsel for appellant-Insurance Company. Respondent Nos.1 to 4 were the claimants before the Claims Tribunal. Notices were served on them but none entered appearance for them. Respondent Nos.5 and 6 were the driver and owner of the offending lorry. The appeal was already dismissed for default as against them. 3. The following facts are required to be noticed: The subject matter accident took place during the intervening night on 22/23.11.1997 at Payakaraopeta in Visakhapatnam District. The offending vehicle was stated to be a lorry bearing registration No.AP-16-U-7157 and at the material point of time it was carrying Kadapa Slab Stones. Sri Srikakulapu Prasad was the registered owner of this vehicle and the vehicle was insured with the United India Insurance Company Limited as per copy of insurance policy/Ex.B.1. The said insurance policy covered a period from 10.01.1997 to 09.01.1998. The subject matter accident took place on 22/23.11.1997 and therefore at the material point of time the insurance policy was valid and effective. The offending lorry was driven by Sri Bandi Sankarayya. The allegation was that he drove the offending lorry rashly or negligently and dashed on the back of another lorry going in front of it. In this regard, Crime No.152 of 1997 was registered at Payakaraopeta Police Station, Visakhapatnam District/Ex.A.1. After due investigation against him, a charge sheet was laid evidenced by Ex.A.2. In the collision that took place in the above referred manner about five people travelling in the offending lorry fell and four of them died and one of the survivors was PW.2. One of the deceased was Sri Abothula Appanna aged between 36 years and 40 years. His wife and his three minor children filed M.V.O.P.No.199 of 2000 seeking compensation of Rs.2,00,000/-. The driver and owner of the offending vehicle did not choose to appear and contest. Insurance company filed its counter and disputed the liability saying that the deceased was a gratuitous passenger and that the claim made is excessive. It prayed for dismissal of the claim. 4. The driver and owner of the offending vehicle did not choose to appear and contest. Insurance company filed its counter and disputed the liability saying that the deceased was a gratuitous passenger and that the claim made is excessive. It prayed for dismissal of the claim. 4. The learned Claims Tribunal settled the following issues: 1) Whether the deceased –Abothula Appanna died in the motor accident that took place on 22/23.11.1997 at 00.30 hours on NH-5 road at Payakaraopeta in Vizag District in which the lorry AP-16-U-7157 of the 2 nd respondent was involved? 2) Whether the accident was due to the fault of the driver of the lorry AP-16-U-7157 only? 3) Whether the petitioners are dependents on the deceased-Abothula Appanna? 4) What is the compensation to which the petitioners are entitled for? 5) Which of the respondents are liable to pay the said compensation? 6) To what result? 5. For its consideration there was the evidence of PWs.1 and 2 and Exs.A.1 to A.4 on behalf of the claimants. No oral evidence was adduced for respondents. Ex.B.1 is the copy of the insurance policy got exhibited by the insurance company. 6. After detailed analysis of the evidence on record, the learned Claims Tribunal found that the death of Sri Appanna was in an automobile accident which occurred because of the rash or negligent driving of driver of the offending lorry bearing registration No.AP-16-U-7157. Under various heads it assessed the compensation and found that the claimants were entitled to Rs.2,24,000/-. However, it limited the award to Rs.2,00,000/- which was the prayer made in the claim petition. It fastened the liability on the tort-feasor/driver of the lorry and fastened liability on the owner stating that he is vicariously liable for the acts of his driver. 7. One of the principal contentions that was considered was whether the deceased was a gratuitous passenger or not. After analysis of evidence the learned Claims Tribunal held that the deceased was neither the owner of the goods nor a person authorized to travel along with the goods by the owner of the goods or the vehicle. Eventually it held that the deceased was a gratuitous passenger. It then considered the question whether insurance company was liable to pay compensation or not. It recorded the precedent and held that the insurance company was not liable to pay compensation. Eventually it held that the deceased was a gratuitous passenger. It then considered the question whether insurance company was liable to pay compensation or not. It recorded the precedent and held that the insurance company was not liable to pay compensation. However, relying on a ruling of the Hon’ble Supreme Court of India, it held that in the light of subsisting valid insurance policy it would be appropriate to direct the insurance company to pay first and then recover later. It passed the award in the following terms: “In the result, the petition is allowed awarding compensation of Rs.2,00,000/- (Rupees two lakhs only) to the petitioners, from the respondents 1 and 2 with costs and interest at the rate of 9% per annum from the date of filing of the petition, till the date of realization; i) The compensation amount shall be apportioned among the petitioners by paying Rs.80,000/- (Rupees eighty thousand only) to the first petitioner and Rs.40,000/- (Rupees forty thousand only) to each of the petitioners 2 to 4; ii) The respondents 1 and 2 are jointly and severally liable to pay compensation to the petitioners and they shall deposit the compensation amount within 45 days from the date of this order and on such deposit, the first petitioner is permitted to withdraw Rs.40,000/- (Rupees forty thousand only) and the remaining amount allotted to her share shall be kept in fixed deposit in any nationalised Bank, for a period of three years; iii) The entire amount allotted to the shares of the petitioners 2 to 4 who are minors, shall be kept in fixed deposits in any nationalised Bank, till they attain majority; iv) If the respondents 1 and 2 fail to deposit the compensation amount as directed above, the 3 rd respondent shall pay the compensation amount and recover the same from the 2 nd respondent by initiating proceedings before the executing Court. v) Advocates’ fee is fixed at Rs.2,000/-. vi) The office is directed to issue the certified copies of this order and decretal order to the petitioners only after the Court fee due on this petition is realized.” 8. Insurance company is aggrieved and preferred the present appeal. It is contended that from the evidence on record since the deceased was a gratuitous passenger in a goods vehicle, the award of the Tribunal has to be set aside as against the insurance company. Insurance company is aggrieved and preferred the present appeal. It is contended that from the evidence on record since the deceased was a gratuitous passenger in a goods vehicle, the award of the Tribunal has to be set aside as against the insurance company. Further submission is that the interest awarded is excessive. 9. The points that fall for consideration in this appeal are: 1. Application of principle of pay and recover adopted in the impugned award is or is not in accordance with law in the given facts and circumstances of the case? 2. Whether the rate of interest awarded by the Claims Tribunal is against the principles of law? POINT Nos.1 and 2 10. Section 171 of the Motor Vehicles Act, 1988 reads as below: “ 171. Award of interest where any claim is allowed. Where any Claims Tribunal allows a claim for compensation made under this Act, such Tribunal may direct that in addition to the amount of compensation simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim as it may specify in this behalf.” 11. The provision does not indicate the rate of interest. It has been consistently held by Courts that the rate of interest as is granted by the nationalized banks can be adopted by the Claims Tribunal. In the case at hand, 9% interest was granted by the Claims Tribunal. It rightly granted the interest only from the date of filing of the claim petition. The incident occurred in the year 1997 and the claim petition was filed in the year 2000. In this appeal the appellant failed to disclose any material to show that at the relevant time either in 1997 or in the year 2000 nationalised banks were not granting 9% interest. Since no such material is made available, it cannot be said that the Claims Tribunal committed an error in granting 9% interest. 12. Owner of an automobile is duty bound to obtain an insurance policy covering the risk of third parties, [Sections 146 and 147 of the Motor Vehicles Act, 1988 ]. Since no such material is made available, it cannot be said that the Claims Tribunal committed an error in granting 9% interest. 12. Owner of an automobile is duty bound to obtain an insurance policy covering the risk of third parties, [Sections 146 and 147 of the Motor Vehicles Act, 1988 ]. Section 2(14) of the Motor Vehicles Act defines “goods carriage” and the same reads as below: “2(14) “goods carriage” means any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods.” 13. This provision makes it clear that in such vehicles only goods can be carried, and such vehicle cannot be used for carrying passengers. Law is also clear that the owner of a goods carriage vehicle need not take insurance policy covering the risk of those who travel in the goods carriage. As per Section 147 of the Motor Vehicles Act, the policy would cover injury or death of owner or his authorized representative who were travelling in the vehicle carrying goods. Therefore, anyone other than that is not covered by insurance policy. Ex.B.1-insurance policy does not cover any such people. Those who wished to travel in such goods carriage vehicle are not third parties. Referring to these aspects their Lordships of the Hon’ble Supreme Court of India in New India Assurance Co. Ltd. v. Asha Rani , [ (2003) 2 SCC 223 ] and United India Insurance Co. Ltd. v. K.M. Poonam , [ (2015) 15 SCC 297 ] held that in such cases insurance company is not legally liable to compensate for death or bodily injuries of such passengers in a goods vehicle. These aspects are appropriately noticed by the learned Chairman, Claims Tribunal. To that extent there is nothing more to decide in this appeal filed by the insurance company. Then the only question is whether the Claims Tribunal is right in directing the insurance company to pay first and then recover later. It is here one must see the ratio of their Lordships of the Hon’ble Supreme Court of India in M/s. National Insurance Co. Ltd. v. Baljit Kaur , [ (2004) 2 SCC 1 ] . Then the only question is whether the Claims Tribunal is right in directing the insurance company to pay first and then recover later. It is here one must see the ratio of their Lordships of the Hon’ble Supreme Court of India in M/s. National Insurance Co. Ltd. v. Baljit Kaur , [ (2004) 2 SCC 1 ] . In similar circumstances, their Lordships held that in cases of this nature insurance company could be directed to pay the awarded compensation to the legal representatives of the deceased and thereafter file a petition for execution before the Court seeking for recovery from the owner of the offending vehicle. This ratio was followed by the Claims Tribunal. Though this appeal is filed challenging the award, the insurance company failed to bring to the notice of this Court any principle contrary to it. Thus, in the considered opinion of this Court the award impugned is right on facts and law and it requires no interference at all. Hence, both the points are answered against the appellant. 14. In the result, this Appeal is dismissed. The award dated 19.04.2005 of the learned District Judge and Motor Accidents Claims Tribunal at Srikakulam in M.V.O.P.No.199 of 2000 is confirmed. There shall be no order as to costs. As a sequel, miscellaneous applications pending, if any, shall stand closed.