The Divisional Manager, The United India Insurance Co. Ltd. v. Sudha & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 11.11.2010CORAMTHE HON'BLE MR.JUSTICE T.S.SIVAGNANAMCRP(NPD)Nos.1034 to 1040 of 2004 andCRP(NPD)Nos.272 to 277 of 2004 And C.M.P.Nos.7962 to 7968 of 2004andC.M.P.Nos.2317 to 2322 of 2004 The Divisional Manager, The United India Insurance Co. Ltd.,Katpadi Road, Vellore. ... Petitioner in CRP(NPD)No.1034 of 2004vs. Sudha... 1st Respondent in CRP No.1034 of 2004 Balaraman... 1st Respondent in CRP No.1035 of 2004 Sumathi... 1st Respondent in CRP No.1036 of 2004V.Lalitha... 1st Respondent in CRP No.1037 of 2004 Ramesh... 1st Respondent in CRP No.1038 of 2004 Rajammal... 1st Respondent in CRP No.1039 of 2004 Rajamani... 1st Respondent in CRP No.1040 of 2004 Chinnaponnu... 1st Respondent in CRP No.272 of 2004 Shanthi... 1st Respondent in CRP No.273 of 2004 Malliga... 1st Respondent in CRP No.274 of 2004 Chinnaraj... 1st Respondent in CRP No.275 of 2004 Annamalai... 1st Respondent in CRP No.276 of 2004 Thanji... 1st Respondent in CRP No.277 of 2004K.Rajendran ... 2nd Respondents in all CRP'S Prayer in CRP(NPD)No.1034 of 2004: Petition filed under Article 227 of the Constitution of Indiaagainst the Judgment and Decree of the Learned Motor Accidents ClaimsTribunal (Additional District Judge Cum Chief Judicial Magistrate'sCourt), Tiruvannamalai in MACTOP No.323 of 2001 316/2001, 322/2001,312/2001, 315/2001, 317/2001, 318/2001, 300/2001, 302/2001, 306/2001,304/2001, 305/2001, 307/2001, 310/2001. dated 31.12.2002. https://hcservices.ecourts.gov.in/hcservices/ For petitioner: M/s.K.SuryanarayananFor respondents : No Appearance COMMON ORDERThese revision petitions are filed under Article 227 of the Constitution of India by the Insurance Company against the common award passed by the Learned Motor Accidents Claims Tribunal and Additional District Judge Cum Chief Judicial Magistrate's Court, Tiruvannamalai in MACTOP Nos.300, 302, 304, 305, 307, 310, 312, 315,316, 317, 318, 322, 323 of 2001 dated 31.12.2002.

The 1st respondent in all these appeals are the claimants and the 2nd respondent is the owner of the vehicle. The facts are that on10.06.2001 at about 10.a.m., when the claimants were proceeding on Thiruvannamalai Polur main road in the lorry owned by the 2ndrespondent bearing Registration no.TN 21B 5074, the lorry capsized and on account of the accident, the claimants who are travelling in the lorry were injured. According to the claimants, the accident occurred due to the rash and negligent driving of the driver of the lorry. A criminal case was also registered in Crime No.202 of 2001against the driver of the lorry before the Kalasapakkam PoliceStation. The claimants contention is that they are all coolies and they were travelling in the vehicle to reach the work spot and because of the injury sustained on account of the accident, they had lost their livelihood and therefore, they filed individual claim petitions claiming various sums as compensation.

The learned counsel for the petitioner submits that totally 32persons travelled in the vehicle out of which 22 persons filed claim petitions and the Insurance Company has preferred these 13 revision petitions as against the awards passed by the Tribunal in cases where the compensation amount awarded exceeded the sum of Rs.10,000/-. TheInsurance company resisted the claim petition by filing a counteraffidavit interalia contending that the persons who travelled in the lorry were not coolies but they were gratuitous passengers as they were travelling to attend a marriage and the date on which the accident occurred namely 10.06.2001, which was a marriage day. Further, the Insurance company also contended that the amount claimed under various heads are excessive. The owner of the lorry though served remained exparte before the Tribunal.

The claimants examined P.W.1 to P.W.24 and marked 44 documents and on the side of the respondents one witness was examined as R.W.1who is the Senior Assistant of the Insurance Company. https://hcservices.ecourts.gov.in/hcservices/

Based on the above pleadings and contentions raised, the tribunal framed three points for consideration namely,"1) Whether the accident has taken place only due to the rash and negligent not of the driving of the driver of the first respondent's lorry?2)Whether the second respondent is obsolvedfrom liability to pay compensation, as theinjuried-victims have travelled in the said lorry as unauthorised passengers, as against the terms and conditions of the insurance policy?3) Whether the petitioner in each applicationis entitled to compensation, and if so what is the quantum?"

In respect of the Point no. (1) the Tribunal came to the conclusion that the accident occurred due to the rash and negligent driving of the driver of the lorry. As against this conclusion thereis no serious contest by the petitioner Insurance Company in these revisions and therefore the finding of the Tribunal on this point is confirmed.

In respect of the Point No.(2) the Tribunal held that the Insurance Company is liable to pay the compensation. In support ofits finding, the Tribunal placed reliance on the decision of the Hon'ble Supreme Court in New India Assurance Co. Vs. Satpal Singh, reported in 200 A.C.J (1), wherein the Hon'ble Supreme Court has held as follows: ""The result is that under the new Act an insurance policy covering third party risk is not required to exclude gratuitous passenger in avehicle, no matter that the vehicle is of any type or class. Hence the decisions rendered under the old Act viz-a-vis gratuitous passengers are of no avail while considering the liability of the insurance company in respect of any accident which occurred of would occur after the new Act came into force"."

In respect of the Point No.(3) the Tribunal considered the evidence available on record and awarded various compensation amounts. In respect of the quantum awarded, there is no serious contention in these revision petitions and therefore the quantum of compensation awarded by the Tribunal in all the cases stands confirmed. https://hcservices.ecourts.gov.in/hcservices/

The learned counsel for the petitioner would submit that the Tribunal ought to have considered that under proviso to Section 147(i)(c) of the Motor Vehicles Act 1994 a policy of Insurance shall not be required to cover things which are being carried in the vehicle and there is no liability to Insurance Company for payment of compensation to such persons carried in a goods vehicle. The Learnedcounsel placed reliance on the decision of the Hon'ble Supreme Courtin New India Assurance Company Limited Versus Asha Rani and others reported in AIR 2003 Supreme Court 607 wherein the Hon'ble SupremeCourt overruled the decision in the case of New India AssuranceCompany versus Satpal Singh, referred supra.

Though the owner of the vehicle, the second respondent in all these revisions has been served and names have been printed in the cause list, none appears for the second respondent.

Ihave carefully considered the submissions of the learned counsel for the petitioner and perused the materials available on record. The only issue for consideration in all these revision petitions is as to whether the tribunal was justified in directing the payment of compensation to the injured persons by the Insurance Company without granting them liberty to recover from the owner of the vehicle. Moreso when the Insurance Company have raised a plea that they are not liable to compensate the persons who were gratuitous passengers travelling in a goods vehicle. The sheet anchor of the arguments of the learned counsel for the Insurance company is that admittedly the vehicle is a goods carriage vehicle and asper the policy conditions, the Insurance Company is not liable to honour the compensation claim in respect of the passengers who are carried in goods vehicle, therefore, the tribunal ought not to have directed the Insurance Company to pay the compensation.

In view of the above pronouncement, the finding of the tribunal holding that the insurer is liable requires interference.

However, the learned counsel for the petitioner would fairly submit that the compensation amounts have been paid to the victims and in such cases, the Hon'ble Supreme Court has always permitted the Insurer to pay the compensation amount with liberty to recover it from the insured. Therefore, the learned counsel submits that such liberty should be granted.

The concept regarding pay and recovery came up for consideration before a Hon'ble Division Bench before this Court in which I was a party. The Hon'ble Division Bench in the case of United India Insurance Co. Ltd., and others Vs. S.Saravanan(Infirmity), rep. by his wife NF.S.Lalitha and another reported in(2009) 5 MLJ 715 after discussions of the guamate of case laws on the issue held as follows: "22. Considerring the above decisions and the facts as seen from the records, the owner has breached the policy condition. At the same time, as far as the third party risk is concerned, the consistent view has been, as can be seen from the above, that the insurer must pay the third party and then take a decision whether to proceed against the owner. This is in consonance with the spirit of the Act. It would be the only just and reasonable course since the claimant, anintelligent young man, has been reduced to nothing in one moment of negligence. The continuous care and support he needs must be taken note of. It is virtually a life sentence that has been imposed on the claimant and his wife and his children too – asentence of living death on the claimant, and alife sentence on the wife, to care and nurture for24 hours a dear husband, who is no more than avegetable now. And, to require them to proceed against the owner would be rubbing salt in their raw wounds. We, therefore, feel that we must ask the appellant – insurance company to pay the https://hcservices.ecourts.gov.in/hcservices/ compensation to the claimant and recover it from the owner for his breach of the policy conditions. "

Subsequently a Hon'ble Two Judge Bench of the Hon'ble SupremeCourt doubted the correctness of the principle of "pay and recovery"and made reference to the Hon'ble Chief Justice of India for reference to a Larger Bench. Therefore, a contention was raised that this pay and recovery should not be adopted after reference to aLarger Bench has been made by the Hon'ble Supreme Court. Infact this very objection came up for consideration before the Hon'ble FirstBench of this Court in which I was a party and the Hon'ble FirstBench in C.M.A.No.315 of 2009 dated 02.09.2010 held as follows: "18. Chapter 11 of the Motor Vehicles Act provides for compulsory insurance of vehicles in relation to the matters specified therefor. The provision for compulsory insurance has been made with a view of protect the right of a third party. The Hon'ble Supreme Court in the case Sohan LalPassi, referred above took note of the fact that the road accidents in India have touched a new height and in majority of cases due to rash and negligent driving and innocent persons become victims of such accidents because of which their dependants in many cases are in the streets. Therefore, their Lordships observed that the question of payment of compensation in respect of motor accidents has assumed great importance for public as well as for Courts. The Hon'ble Supreme Court in the case of Oriental InsuranceCo. Ltd. V. Swaran Singh, referred supra, took note of the various decisions of the Hon'ble Supreme Court including that of the decision in Sohan Lal Passi, and theirLordships held as follows:-15. The intention of Parliament became further evident when in the Motor Vehicles Act, 1939, anew chapter being Chapter VII-A dealing with insurance of motor vehicles against third-partyrisks was introduced and the beneficent provisions contained in the Motor Vehicles Act, 1939 were further made liberal by reason of the MotorVehicles Act, 1988 and the amendments carried out therein from time to time in aid of the third-party claims by way of grant of additional or new rights conferred on the road accident victims.

Under the common law a person injured by reason of another person’s wrongdoing had no right of action against insurers who undertook to indemnify the wrongdoer. The first invasion of this principle took place by reason of the Third https://hcservices.ecourts.gov.in/hcservices/ Parties (Rights against Insurers) Act, 1930. TheBritish Parliament in the light of the aforementioned Act enacted the Road Traffic Act,1930 which has since been replaced by the RoadTraffic Act, 1988.

The Third Parties (Rights against Insurers)Act, 1930 was enacted with a view to correct injustice effecting a statutory assignment of the rights of the assured to the injured person as prior thereto the right of a person to be indemnified under a contract of insurance against claims made against him by persons whom he might have injured was one personal to himself, and there was no privity of any sort between the injured person and the insurers. The injured person had no interest either at law or in equity in the insurance money, either before or after it was paid by the insurers to the assured. In a case where the assured became bankrupt and if the injured person had not already obtained judgment and levied execution of his claim for damages, his only right was to move in the bankruptcy or thewinding-up proceedings. The beneficial provisions of the aforementioned English statutes were incorporated by the Parliament of India while enacting the Motor Vehicles Act, 1939 which has also since been repealed and replaced by the MotorVehicles Act, 1988.

Concededly, different types of insurance covers are issued containing different nature of contracts of insurance. We are, however, in this batch of cases mainly concerned with third-partyright under the policy. Any condition in the insurance policy, whereby the right of the third party is taken away, would be void.

Indisputably, such a benefit to a third party was provided under the statute keeping in view the fact that the conditions in the assured’s policy may be of little or no effect in relation to aclaim by a person to whom an assured was under acompulsorily insurable liability.

In this context, it is necessary to consideras to what is a third-party right. A third-partyclaim arises when a victim of an accident suffersa bodily injury or death as a result thereof or his property is damaged. An accident is not susceptible to a very precise definition.

The popular and ordinary sense of the word was “an unlooked-for mishap or an untoward event which is not expected or designed”. https://hcservices.ecourts.gov.in/hcservices/

In R. v. Morris10 the Court of Appeal defined the word as an “unintended occurrence which has an adverse physical result”. The Supreme Court of Canada in Pickford & Black Ltd. v. CanadianGeneral Insurance Co.11 stated the law thus:

The meaning to be attached to the word ‘accident’as employed in the body of an insurance policy was thoroughly explored by Mr Justice Pigeon in the reasons for judgment which he delivered on behalf of the majority of this Court in CanadianIndemnity Co. v. Walkem Machinery & EquipmentLtd.12 In the course of these reasons at p. 5 he adopted the views expressed by Mr JusticeFreedman, in a dissenting opinion in the Court of Appeal of Manitoba in Marshall Wells of CanadaLtd. v. Winnipeg Supply and Fuel and R. Litz &Sons Co. v. Canadian General Insurance Co.13, atp. 665 where that learned Judge said: With respect, I am of the view that what occurred here was an accident. One must avoid the danger of construing that term as if it were equivalent to‘inevitable accident’. That a mishap might have been avoided by the exercise of greater care and diligence does not automatically take it out of the range of accident. Expressed another way,‘negligence’ and ‘accident’ as here used are not mutually exclusive terms. They may coexist. After expressing the view that even an occurrence which is the result of a calculated risk or of adangerous operation may come within the meaning of the word ‘accident’, Mr Justice Pigeon went on to say at p. 6:While it is true that the word ‘accident’ is sometimes used to describe unanticipated or unavoidable occurrences, no dictionary need becited to show that in everyday use, the word is applied as Halsbury says ... to any unlooked-formishap or occurrence ... this is the propertest....

In Halsbury’s Laws of England, 4th Edn. Reissue, it is stated:

An injury caused by the wilful or even criminal act of a third person, provided the assured is nota party or privy to it, is to be regarded as accidental for the purposes of the policy, since from the assured’s point of view it is not expected or designed.

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In Colinvaux: Law of Insurance, 6th Edn., p. 304, the following illustration is given:

If a man walks and stumbles, thus spraining his ankle, the injury is accidental for while he intends to walk he does not intend to stumble. InHamlyn v. Crown Accidental Insurance14 theassured’s injury was due to stooping forward topick up a marble dropped by a child as it rolled away from him. He stood with his legs together, separated his knees, leaned forward and made agrab at the marble, and in doing so, wrenched his knee. The injury was held by the Court of Appealto be accidental, on the ground that the assured did not intend to get into such a position that hemight wrench his knee.

At para 17-13 of the said treatise it is stated:

Accident includes negligenceIt makes no difference that the accident was caused by the negligence of the assured (as opposed to his intentional act). Thus there is an accident where the assured crosses a railway line without exercising due care and is knocked down byan approaching train. In fact, one of the commonest causes of accidents is negligence, and an accident policy applies, excepted perils apart, whether the injury is caused by the negligent act of the assured himself or of a third party.

The right of the victim of a road accident to claim compensation is a statutory one. He is avictim of an unforeseen situation. He would not ordinarily have a hand in it. The negligence on the part of the victim may, however, be contributory. He has suffered owing to wrongdoing of others. An accident may ruin an entire family. It may take away the only earning member. Anaccident may result in the loss of her only son toa mother. An accident may take place for a variety of reasons. The driver of a vehicle may not have ahand in it. He may not be found to be negligent ina given case. Other factors such as unforeseen situation, negligence of the victim, bad road or the action or inaction of any other person may lead to an accident.

A person suffering grievous bodily injury may require money for his survival/medicaltreatment. Statutory compensation paid to the https://hcservices.ecourts.gov.in/hcservices/ next of kin of the victim of an accident may, thus, bring to a large number of families the only ray of light at the end of the tunnel.

In other words, what would also be covered by the contract of insurance vis-à-vis the beneficent statutory provisions like sub-section(2) [sic (1)] of Section 149 of the said Actwould be when a death or bodily injury has been caused as a result of the assured’s own voluntary act. Even an unforeseeable result of the assured’s deliberate act may come within the purview of the accident. Even if an accident has occurred due to negligent driving of the assured person, it may not prevent recovery under the policy and certainly thereby a third party would not be non-suited. "Thus in view of the law enuntiated above and taking note of the facts of the case, it is appropriate for this Court to issue direction toenable the petitioner Insurance Company to recover the compensation amount paid by them as being the insurer of the 2nd respondent in the same proceedings. Except for this liberty being granted to recover the compensation amount from the owner of the vehicle, the 2ndrespondent, the award passed by the Tribunal stands confirmed in all other respects. 16. In the result, these Civil Revision petitions are partly allowed to the extent indicated above by permitting the petitionerInsurance Company to recover the compensation paid to the claimants from the second respondent/Insured in the same proceedings. Nocosts. Consequently, the connected miscellaneous petitions are closed. Sd/-Asst. Registrar/True Copy/Sub. Asst. Registrarpri https://hcservices.ecourts.gov.in/hcservices/ To1.Learned Learned Motor Accidents Claims Tribunal (Additional District Judge Cum Chief Judicial Magistrate's Court), Tiruvannamalai. 2. The Section Officer, V.R. Section, High Court, madras.•13 ccs to Mr. K. Surya Narayanan, Advocate Sr.81032 to 81037 & SR.81040 to 81046CRP(NPD)Nos.1034 to 1040 of 2004 and CRP(NPD)Nos.272 to 277 of 2004 And C.M.P.Nos.7962 to 7968 of 2004 and C.M.P.Nos.2317 to 2322 of 2004 TS(CO)EU 3.12.10