Smt. Sarojamma,K. v. The United India Insurance Co.Ltd.

Judgment

( per AM.J.) In as much as these two appeals arise out of the one and the same Award passed by the Tribunal, they are heard together and being disposed of by this common judgment. Civil Miscellaneous Appeal No. 1986 of 1998 is filed by the injured claimant against the Award dated 31.08.1997 passed in MVOP.No. 203 of 1992 by the learned Chairman, Motor Accident Claims Tribunal-cum-First Additional District Judge, Chittoor, for enhancement of the compensation; whereas, Civil Miscellaneous Appeal No. 1965 of 1999 is filed by the United India Insurance Company Limited, Bangalore, against the very same Award, disputing the quantum of compensation awarded to her thereunder. Briefly stated, the facts of the case are that, on 29.11.1991 while the claimant was travelling in the car bearing No.CKS-1818 (NE-118) which was owned and driven by one P.Krishnappa (second respondent in both the appeals) and insured with the United Insurance Co.Ltd., from Bangalore to Chittoor, met with an accident at about 3.30 pm when the said car reached near Bangarupalem police station limits, having dashed against lorry bearing No.ADC 9924 being driven in rash and negligent manner by its driver. In the said accident, the claimant suffered multiple fractures to her ribs, left hand, and also sustained severe head injuries, flail chest left lung damaged. Immediately, she was shifted to Government Hospital, Chittoor and thereafter to CMC Vellore and then to Manipal Medical Center, Bangalore. She therefore, filed a claim petition under Section 166 of the Motor Vehicles Act 1988 claiming compensation of Rs.19,50,067.72 ps under different heads with costs and interest at 16% per annum from the date of the accident till the date of realization. The Insurance Company contested the said claim contending that the driver and insurer of the lorry bearing No. ADC 9924 were not made as necessary and proper parties to the claim petition; that the insurance policy in vogue as on the date of the accident was not a comprehensive policy and it was insured only to cover third party risk and as such, it did not cover the risk of the passengers travelled in the said car; that as the claimant herself is the wife of the insurer-cum-driver of the car, the insurance company was not liable to indemnify the claimant and that the compensation claimed and awarded is excessive and exorbitant. Basing on the above pleadings, the Tribunal framed the following issues for trial.

1. Did the accident in which the petitioner is said to have sustained injuries take place on 29.11.1991 at about 3.30 pm on Palamaner-Chittoor road due to the rash and negligent driving of the car CKS 1818 by the second respondent or due to the rash and negligent driving of the lorry ADC 9924 by its driver.

2. Whether the petitioner is entitled to claim a sum of Rs.19,50,067-72 ? if not, to what amount ? In order to prove the claim, on behalf of the claimant, P.Ws. 1 and 2 were examined and Exs.A.1 to A.25 were got marked and on behalf of the Insurance Company, Rws.1 and 2 were examined and Ex.B.1 policy was got marked. Upon due consideration of the evidence brought on record, both oral and documentary, the Tribunal recorded a finding that the accident occurred due to rash and negligent driving of the car bearing No. CKS 1818 by the second respondent-PKrishnappa; and that since the second respondent is solely responsible for the alleged accident, the non-joinder of the insurer and driver of the lorry bearing No. ADC 9924 as parties to the claim petition was not fatal. While holding so, the Tribunal allowed the claim petition awarding compensation of Rs.11,15,900/- with interest at 12% per annum from the date of petition till the date of realization. Heard both sides. Perused the case file. The learned Standing Counsel for the Insurance Company mainly contended that the private car in question did not have a comprehensive policy in as much as the insured had paid the premium to cover only the third party risk and such risk covers only the driver and thereby the policy did not cover the risk of the passengers travelling in the car. He further contended that as the claimant who was travelling in the car being the wife of the owner- cum-driver, the Insurance Company is not legitimately liable to pay any compensation to her. He urged that in the absence of the driver and insurer of the lorry bearing No. ADC 9924 which dashed the private car who are necessary and proper parties to the claim petition, the same cannot be adjudicated effectively as it is fatal to the case. He argued that the compensation awarded by the Tribunal is excessive and exorbitant having due regard to the facts and circumstances of the case. Per contra, the learned Senior Counsel appearing for the claimant contended that as the claimant was travelling in the car in question without paying any charges of hire or reward, the Insurance Company being the insurer of the said car is completely liable to indemnify the compensation payable by the second respondent, who is no other than the driver-cum-owner of the subject car and husband of the claimant. He further submitted that since the claimant suffered permanent disability owing to the accident, she is entitled to the full quantum of the claim made by her before the Claims Tribunal. He thus argued that the claims

Tribunal failed to sift the evidence adduced before it by the parties and thereby committed a grave error in awarding the lesser quantum of compensation to his client. The question that arises for consideration and decision, having regard to the facts and circumstances of the case, whether insurance company can be made liable for awarding compensation in respect of the claim made by the claimant who was travelling in the subject private car as “an occupant’, is no longer res nova having due regard to a catena of decisions of the Apex Court as well as this court and other High Courts in the Country in this regard. Before embarking on the rival contentions relating to the issue that arise for adjudication as to whether the expression ‘any person’ appearing in Section 147 of the Motor Vehicles Act, 1988 covers the family members of the insured travelling in his car, it is just and necessary to have a look at the provisions of Section 147 the Motor Vehicles Act, 1988, which enumerates requirements of polices and limits of liability. It reads thus: “"147. Requirements of policies and limits of liability. (1) In order to comply with the requirements of this Chap- ter, a policy of insurance must be a policy which (a) is issued by a person who is an authorized insurer; or (b) Insurer 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 authorized 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 Workmen's Compensation Act, 1923 (8 of 1923) in respect of the death of or bodily injury to, any such employee liability arising under than a (a) engaged in driving the vehicle, or (b) if it is a public service vehicle engaged as conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods carriage, being carried in the vehicle, or (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. (2) Subject to the proviso to sub-section (1), a policy of insurance referred to in sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely: (a) save as provided in clause (b), the amount of liability incurred; (b) in respect of damage to any property of a third party, a limit of rupees six thousand: liability and Provided that any policy of insurance issued with any force, limited commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier.” immediately before Chapter XI of the Act itself specifically deals with insurance of motor vehicles against third party risk including the definition of ‘third party’. Thus, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorized 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. When it relates to persons other than the owner/insured, the Apex Court had an occasion to held in Amrit Lal Soeod and another v. Kaushalya Devi Thapar ( 1998 ACJ 531) to the effect that in the absence of any limitation in the policy, even gratuitous passengers travelling in the car are entitled to compensation. The Apex Court pointed out that the liability of the insurer depends on the terms of the contract between the insured and the insurer as is evident from the policy. Noting that the statutory insurance does not cover the injuries suffered by the occupants of the vehicle who are not carried for hire or reward, it was held that the same does not prevent an insurer from entering into a contract of insurance covering a risk wider than the minimum requirement of the statute whereby the risk to gratuitous passengers could also be covered. It was held that where the policy is not merely a statutory policy, the terms of the policy have to be considered to determine the liability of the insurer. Interpreting the terms of the insurance policy in that case, the expression 'any person' was held to undoubtedly mean and include an occupant of the car who is gratuitously travelling in the car. In Jayavarapou Rajamma Vs. Jayavarapu Laxminarayana { 2007(6) ALD 306), it was held by this Court that mere nomenclature of a policy as a comprehensive policy is not the guide and where the policy is not merely a statutory policy, the terms of the policy have to be considered to determine the liability of the insurer. A policy by its terms can cover the risk to the owner or gratuitous passengers also. Claims by the kith and kin of the insured for injuries or their legal representatives in case of their death in the accident have to be treated as third party claims and are sustainable if the policy in question covers such third party claims. Thus, the determination of the maintainability of the claims for compensation on the facts and circumstances of each case depends upon the terms and conditions of the insurance policy involved in a given case. Thus, as was held by the Apex Court as well as this Court, it is axiomatic that the terms of the insurance policy determine the liability of the insurer in each case, it is appropriate to have a look at the policy of the private car in question, wherein Section-II deals with liability to third party to the following effect: “1.The company will indemnify the insured in the event of an accident caused by the use of Motor Car against all sums including claimant’s costs and expenses which the insured shall become legally liable to pay in respect of (a) death or bodily injury to any person including occupants carried in the motor car.( provided such occupants are not carried for hire or reward) but except so far as it necessary to meet the requirements of Motor Vehicles Act, 1988 the Company shall not be liable where such death or injury arises out of and the course of employment of such person by the insured. (b) Damage to the property other than property belonging to the insured or held in trust or in the custody or control of the insured”. In view of the above, it is manifest that as per Section II(1)(a) of the policy, the insurer is liable to indemnify the insured against all sums which the insured shall become legally liable to pay in respect of death of or bodily injury to ‘any person’. The expression ‘any person’ would therefore undoubtedly mean and include an occupant of the car who is gratuitously travelling in the car also. As can be seen from the terms of the policy in question, it is patent that in so far as gratuitous passengers are concerned there is no limitation in the policy in that regard. Ergo, under the terms of the policy, the insurer is clearly liable to honour the award passed in favour of the claimant by the claims Tribunal. Further, the question as to whether gratuitous passengers travelling in a private car or pillion riders carried on two-wheeler are automatically covered under a package policy/comprehensive policy came up for consideration before a Division Bench of Madras High Court in Royal Sundaram Insurance Company Ltd., Vs. V.A.Meenakshi (CMA.No. 312 of 2009), wherein Lordships specifically considered and dismissed the appeal filed Insurance Company, confirming the quantum of compensation awarded legal representatives of deceased passenger of the insured vehicle. In a similar and identical case, a learned Judge of this Court in Oriental Insurance Company Limited Vs.Nakirikanti Narendra Babu {2006(5) ALT 442) referring to the aforementioned clause in the policy i.e. Section-II (1) (a) held that the Insurance Company is liable to third parties in case of their death or bodily injuries including occupants carried in the motor car provided that such occupants are not carried for hire or reward. In the said decision, the learned Judge relied on the decision in National Insurance Company Limited Vs. Rasheeda ( ILR 1997KAR2697) wherein the words ‘any person’ used in Section 147 of the Act fell for consideration before the Karnataka High Court. In that case, those words were construed to mean and include a traveler in a private vehicle. The Constitution Bench of the Apex Court in New India Assurance Co.Ltd Vs C.M. Jay and ors (2002 ACJ 271) while referring to its earlier judgment in Amrit Lal Sood (supra) elaborately held as under: “On a careful reading and analysis of the decision in Amrit Lal Sood (supra), it is clear that the view taken by the Court is no different. In this decision also, the case of Jugal Kishore is referred to. It is held (i) that the liability of the insurer depends on the terms of the contract between the insured and the insurer contained in the policy; (ii) there is no prohibition for an insured from entering into a contract of insurance covering a risk wider than the minimum requirement of the statute whereby risk to the gratuitous passenger could also be covered; and (iii) in such cases where the policy is not merely statutory policy, the terms of the policy have to be considered to determine the liability of the insurer. Hence the Court after noticing the relevant clauses in the policy, on facts found that under Section II-1(a) of the policy, the insurer has agreed to indemnify the insured against all sums which the insured shall become legally liable to pay in respect of death of or bodily injury to "any person". The expression "any person" would undoubtedly include an occupant of the car who is gratuitously travelling in it. Further, referring to the case of Pushpabai Purshottam Udeshi (supra), it was observed that the said decision was based upon the relevant clause in the insurance policy in that case which restricted the legal liability of the insurer to the statutory requirement under Section 95 of the Act. As such, that decision had no bearing on Amrit Lal Sood's case as the terms of the policy were wide enough to cover a gratuitous occupant of the vehicle. Thus, it is clear that the specific clause in the policy being wider, covering higher risk, made all the difference in Amrit Lal Sood's case as to unlimited or higher liability. The Court decided that case in the light of the specific clause contained in the policy. The said decision the statute is required under cannot be read as laying down that even though the liability of the insurance company is limited to the statutory requirement, an unlimited or higher liability can be imposed on it. The liability could be statutory or contractual. A statutory liability cannot be more than what itself. However, there is nothing in Section 95 of the Act prohibiting the parties from contracting to create unlimited or higher liability to cover wider risk. In such an event, the insurer is bound by the terms of the contract as specified in the policy in regard to unlimited or higher liability as the case may be. In the absence of such a term or clause in the policy, pursuant to the contract of insurance, a limited statutory liability cannot be expanded to make it unlimited or higher. If it is so done, it amounts to re- writing the statute or the contract of insurance which is not permissible.” That apart, it is on record that the R.W.1 who was working as the Assistant Divisional Manager of the Insurance Company had admitted during the cross examination that basic liability means third party risk and it is not mentioned in Ex.B.1-policy specifically that the policy does not cover the risk of the members of the family and the insured. He has also admitted during the cross-examination that in addition to the insured and driver, the rest of the persons travelling in a private car can be called as occupants of the vehicle and covered by the policy. In as much as the Ex.B.1 policy unequivocally discloses the limitations of using the vehicle for hire or reward or for organized racing etc., but not for taking his family members, the Insurance Company being the insurer of the car comprehensively is liable to indemnify the compensation payable by the second respondent-insured owing to the accident whereby the claimant sustained injuries as discussed hereinbefore. The decisions upon which reliance is placed by the learned Standing Counsel for the Insurance Company have no bearing on the issue involved in the case on hand and therefore the same cannot be taken into consideration to support its case. Apropos the contention of the Insurance Company that the non-joinder of the driver and insurer of lorry bearing No.ADC.9924 is fatal to the case, it is brought on record that the second respondent-insured has filed his written statement admitting his fault at the time of the accident while driving the car in question. He has also categorically deposed in his evidence as PW.2 to that extent admitting the guilt of negligence. Added to this, a crime was registered against him in this regard and he was prosecuted by the Criminal Court for the offence punishable under Section 337 IPC but on the plea of his guilt, he was convicted. Basing on the evidence on record, the Tribunal recorded a finding that the second respondent-insured was solely responsible for the accident in question and not the driver of the lorry No. ADC 9924. Therefore it can be said under the above circumstances that non- joinder of the driver and insurer of the lorry bearing No. ADC 9924 was not fatal to the case of the claimant. We therefore do not see any error in recording the said finding by the claims Tribunal. Furthermore the evidence of P.Ws 1 and the recitals in Ex.A.1-medical certificate issued by the Manipal Hospital, Bangalore, and Ex.A.10-discharge summary clearly go to establish that the claimant was admitted in CMC hospital on 29.11.1991 with injuires to scalp, face, avulsion of right ear with framentation of ear cartilage, abrasions over left upper chest and badly contaminated wound over left elbow region with exposure of tendons and muscle, flail chest due to left rib fracture, dislocation, left rib sulluxation, left ear avulsion and that she developed chest infection and urinary tract infection both of which were treated according to cultures and when the claimant who had gradual improvement in sensortium. She was ultimately discharged to have nursing care at a local center on 29.1.1992, but the recitals in Ex.A.1 and the evidence of P.W.1 would also show that the claimant was again admitted in yet another hospital, namely, Manipal Hospital on 30.1.1992 immediately after discharge from the CMC hospital, Vellore and that she was suffering from hypoxic brain damage which resulted in paralysis to all the four limbs, loss of speech and not able to move and there was also loss of sensorium and she was not in command of her mental faculties. It was therefore manifestly established from the evidence on record that the claimant is unable to speak and respond to calls and paralysis of the limbs of the claimant was only due to the injuries sustained by her on her hand, left arm and right ear etc owing to the accident. On the other hand, the said evidence was not rebutted either by insurer or insured. Under circumstances, the Tribunal rightly held that the claimant suffered permanent disability due to the injuries received by her in the accident in question which finding does not warrant interference for the reasons discussed hereinabove. It is on record that no evidence was forthcoming to show that the claimant has incurred expenditure towards attendant charges or consultancy charges. The claimant filed a claim before the claims Tribunal under various heads namely, Rs.3,00,067.72ps towards medical expenses; Rs.6,00,000/- towards future medical bills; the acceptable expenditure shown by the claimant comes to Rs.10,15,435-47Ps. The Tribunal considering the medical evidence on record, awarded a sum of Rs.9,00,067.72Ps towards medical expenses, which we feel that it is just and reasonable. Towards pain and suffering the claimant claimed Rs.4,00,000/- which in our is excessive and exorbitant and the Tribunal considering injuries suffered by the claimant, awarded Rs.50,000/- towards pain and suffering, which does not call for our interference in view of the facts and circumstances of the case. Though the claimant claimed Rs.42,000/- towards conveyance charges, lodging etc. and the like; and Rs.18,000/-, 75,000/- and 15,000/- towards nursing charges, but no evidence to support of the same was adduced to substantiate the said claim. Considering the nature of treatment, the Tribunal awarded a sum of Rs.10,000/- towards extra-nourishment which is again in our opinion quite just and reasonable. The Tribunal further considering the fact that the claimant has lost her earning capacity due to the injuries suffered in the accident in question, took the income of Rs.18,690/- based on her income tax assessments without deducting 1/3rd amount towards her personal expenses since she was not in consciousness, applied the multiplier 8 for her age 58 years as on the date of the accident and computed a compensation of Rs.1,49,520/- towards permanent loss of income and another sum of Rs.50,000/- towards permanent disability against the claim of Rs.4,00,000/-, which in our view, does not appear excessive or exorbitant and the same is just and reasonable. So computing, in all the Tribunal awarded a sum of Rs.11,15,877.72ps, which was rounded off at Rs.11,15,900/- with interest at the rate of 12% p.a. from the date of petition till realization. As such, the contention of the learned Senior Counsel for the claimant that the quantum of compensation awarded by the Tribunal against the claim of the claimant is very low and requires to be enhanced cannot be countenanced the reasons discussed hereinbefore and we see no reason muchless a substantial ground/reason to enhance the same. To this compensation, the learned Counsel for the Insurance Company submitted that the same is excessive and exorbitant and that the Tribunal below de horse the evidence on record awarded the amounts under different heads. Refuting the said contention, the learned Senior Counsel appearing for the claimant submitted that the appeal filed by the Insurance Company questioning the quantum of compensation awarded by the Tribunal and finding recorded as to rash and negligent driving of the Driver, is not maintainable as held by the Apex Court in Chinnamma George Vs. N.K.Raju { (2000) 4 SCC 130}. He further submitted that in as much as the Insurance Company did not obtain leave as contemplated under Section 170 of the Act to contest the claim of the claimant on any ground, the appeal filed by it therefore is not maintainable. In support of the said contention, he placed reliance on the decision of the Apex Court in National Insurance Company Vs. Mastan {(2006) 2 SCC 641}. In Mastan’s case (supra) it is held by the Apex Court that it is beyond any doubt or dispute that in a proceeding where the right of the insurer to raise a defence is limited in terms of sub-section (2) of Section 149, an appeal preferred by it against an award of the Motor Accidents Claims Tribunal must only be confined or limited to some extent. But once a leave is granted to the insurer to contest the claim on any ground as envisaged in Section 170 of the 1988 Act, an appeal shall also be maintainable as a matter of right, wherein the High Court can go into all contentions. It is well settled that the right of the Insurer under Section 96(2) of the Motor Vehicles Act, 1939 which corresponds to Section 149(2) of the MV. Act 1988 is a creature of statute and its content depends upon the provisions of the statute. Therefore, the Insurer, who is the respondent in the claim petition is entitled to defend the action on the grounds enumerated in Section 149 of the MV Act 1988 and no other ground is available to it. Therefore, if the Insurer wishes to file an appeal, the challenge in the appeal will be confined only to those grounds that are posited under Section 149(2) of the MV Act 1988. (See: National Insurance Company Ltd Vs.Nicolletta— {(2002)7 SCC 456}. In view of the above, We see no force in the contentions of the learned Counsel appearing for the Insurance Company. In the result and for the foregoing discussion, both these appeals, one by the claimant and the other by the Insurance Company, are liable to be dismissed and they are accordingly dismissed. The miscellaneous petitions filed in both the appeals, if pending, shall stand dismissed in consequence. There shall be no order as to costs. -------------------------------------- JUSTICE ASHUTOSH MOHUNTA ------------------------------------------- --- JUSTICE G.KRISHNA MOHAN REDDY Dated 24th July, 2012. Msnro