Oriental Insurance Company Ltd v. Dhanabackiam

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 29-09-2006CORAMTHE HONOURABLE MR. JUSTICE P.K. MISRAANDTHE HONOURABLE MR. JUSTICE M. JAICHANDRENL.P.A.NO.18 OF 2003ANDC.M.P.NO.1362 of 2003 & M.P.NO.1 OF 2006ANDCROSS OBJECTION SR.NO.66981 OF 2006LPA.NO.18 of 2003 Oriental Insurance Company Ltd.,38, Anna Salai, Chennai 600 002... Appellant in LPA.No.18/03 and 1st Respondent in Cross Objection SR No. 66981/06Vs.

Dhanabackiam W/o. Kuppan2. Kuppan, S/o. Thanthoni3. Kesavan, S/o. Srinivasan.. Respondents in LPA.No.18/03 and Cross Objection SR in LPA.No.18/03and 2nd Respondent in Cross Objection SR No. 66981/063rd Respondent herein was the first respondent before the trial court and in CMA and he remained exparte in both proceedingsHence the summons to the 3rd Respondent may be dispensed with. Appeal filed against the judgment dated 20.3.2002 made inC.M.A.No.42 of 2001 passed by the learned single Judge modifying the judgment dated 15.2.2000 made in MCOP.No.289 of 1993, on the file of Motor Accident Claims Tribunal (Principal Sub Judge),Chengalpattu. For Appellant: Mr.S. Manohar& R1 in Cross Objn. https://hcservices.ecourts.gov.in/hcservices/ For Respondents 1&2: Mr.M.M. Sundaram for & Cross Objectors Mr.T. Mohan- - - COMMON JUDGMENTP.K. MISRA, JThe Insurer has filed this appeal against the decision of the learned single Judge in C.M.A.No.42 of 2001. SuchC.M.A., filed by the claimants was directed against the award dated 15.2.2000 in MCOP.No.289 of 1993. The claim application was filed by the parents of the deceased.

On 28.8.1992, the son of the claimants was travelling in a lorry bearing Registration No.TN-31-W-0149belonging to present Respondent No.2. Such vehicle was insured with the present appellant. The claimants, who filed the claim application, claimed Rs.2,00,000/- as compensation. The owner remained ex parte. The contention of the Insurance Company was that the deceased was travelling in the lorry and was an unauthorised passenger and, therefore, the Insurance Company is not liable to pay compensation to the claimants. The Tribunalheld that a sum of Rs.66,000/- was payable as compensation to the parents of the deceased. The Tribunal by relying upon the decision reported in 1999 ACJ 1 (MALLAWWA (Smt) AND OTHERS v.ORIENTAL INSURANCE COMPANY LIMITED AND OTHERS) held that such amount was payable by the owner and the Insurance Company was not liable to pay such amount as the person was carried in agoods vehicle, which was not authorised. Thereafter, the appeal was filed by the claimants claiming higher compensation. It was also contended that the Insurance Company should pay compensation. Learned single Judge while confirming the award of the Tribunal relating to quantum payable, relying upon the decision of the Supreme Court in AIR 2000 SC 235 (NEW INDIAASSURANCE COMPANY v. SATPAL SINGH AND OTHERS), held that the owner as well as the Insurance Company were jointly and severally liable to pay the compensation of Rs.66,000/- with interest at 12% from the date of application till the date of payment. Accordingly the award of the Tribunal was modified by the learned single Judge to the above extent. Thereafter the present appeal has been filed by the Insurance Company.

The only contention raised by the Insurance Companyis to the effect that the deceased was travelling in the lorry as a passenger which is not permitted and as such there was violation of the Policy conditions and, therefore, the InsuranceCompany is not liable. https://hcservices.ecourts.gov.in/hcservices/

Since the owner had remained ex-parte before the Tribunal, notice on the owner had been initially dispensed in the present appeal. Subsequently, however, notice has been issued to the owner and thereafter notice has been published in the newspaper. The owner has not appeared.

The claimants / respondents have subsequently filedCross Objection claiming higher compensation.

In view of the contentions raised in the appeal and the cross-objection, the following two questions arise for determination :-(1) Whether the cross-objection can be allowed and the compensation awarded is required to be enhanced ?(2) Whether the Insurance Company is liable to pay compensation ?7. It is convenient to consider the question of liability of the Insurance Company first because the question of maintainability of the Cross Objection is dependant upon such question.

The Tribunal has relied upon the decision of the Supreme Court reported in 1999 ACJ 1 (cited supra) to come to the conclusion that the Insurance Company is not liable in respect of the liability of a passenger travelling in a goods vehicle. Learned single Judge has, however, relied upon the decision of the Supreme Court in AIR 2000 SC 235 (citedsupra). This later decision of the Supreme Court in SatpalSingh case has been subsequently over-ruled in 2002(8) Supreme594 = (2003) 2 SCC 223 (NEW INDIA ASSURANCE CO. LTD., v. ASHARANI & OTHERS). The question raised in Satpal Singh case was specifically referred to a larger Bench and that is how the matter came before the larger Bench in 2002(8) Supreme 594. After referring to the relevant provisions contained in the Motor Vehicles Act, 1988, before such Act was amended, and the Motor Vehicles Act, 1939, the Supreme Court observed as follows:-"

In Satpal's case (supra) the Court assumed that the provisions of Section 95(1) of Motor VehiclesAct 1939 are identical with Section 147(1) of the MotorVehicles Act 1988, as it stood prior to its amendment. But a careful scrutiny of the provisions would make it clear that prior to the amendment of 1994 it was not necessary for the insurer to insure against the owner of the goods or his authorised representative being carried in a goods vehicle. On an erroneous impression this Court came to the conclusion that the insurer would be liable to pay compensation in respect of the death or bodily injury caused to either the owner of https://hcservices.ecourts.gov.in/hcservices/ the goods or his authorised representative when being carried in a goods vehicle the accident occurred. Ifthe Motor Vehicles Amended Act of 1994 is examined, particularly Section 46 of Act 6 of 1991 by which expression 'injury to any person' in the original Actstood substituted by the expression 'injury to any person including owner of the goods or his authorised representative carried in the vehicle' the conclusionis irresistible that prior to the aforesaid amendmentAct of 1994, even if widest interpretation is given to the expression 'to any person' it will not cover either the owner of the goods or his authorised representative being carried in the vehicle.

Therefore, while upholding the contention of the Insurance Company that it is not liable to pay the amount on account of the death of a passenger travelling in a goods vehicle (other than the owner or the authorised representative of the owner accompanying the goods, which is now permitted under the amendment), we would follow the course adopted by the https://hcservices.ecourts.gov.in/hcservices/ Division Bench IN 2006(1) MLJ 154 and the Supreme Court in(2004) 2 SCC 1 (cited supra) and direct the appellant to pay the amount to the claimants and recover the same subsequently from the owner. This can be done by the Insurance Company by initiating execution proceedings and it is not necessary for any further determination of the question. In other words, the owner is liable to pay the amount, but in order to facilitate the payment to the claimants, the Insurance Company is directed to pay the amount and recover the same from the owner and such direction can executed by the Insurance Company against the owner.

So far as the question of enhancement is concerned, such question arises because of the cross-objectionfiled by the claimants. However, in the peculiar facts and circumstances of the case, this cross-objection is not maintainable. From the factual narration, it is apparent that the Insurance Company has filed the appeal only challenging its liability to pay the compensation amount as according to the Insurance Company the deceased was unauthorisedly travelling in the goods vehicle as a passenger and, therefore, there was astatutory violation as well as violation of the conditions of the Insurance Policy. The cross-objection filed is essentially against the co-respondent, namely, the owner. The appeal filed by the Insurance Company is only confined to the question of its own liability. As already held the Insurance Company is not liable to pay the compensation amount and the entire amount is liable to be paid by the owner. It is thus apparent that thecross-objection is essentially against a co-respondent and the appellant has practically no concern with the result of suchcross-objection. Such a Cross Objection would not be maintainable.

Learned counsel appearing for the claimants /respondents has however placed reliance upon a Division Benchdecision of this Court in (2005) 1 M.L.J 20 (UNITED INDIAINSURANCE COMPANY LIMITED v. R. SATHIYANARAYANAN AND OTHERS) and contended that under certain circumstances a cross-objectionagainst a co-respondent can be maintained and even compensation can be enhanced by applying the principle under Section 41 Rule33 CPC.

In the said decision, the position has been summarised as follows :-"35. We would like to briefly summarise the conclusions from the above discussion: (1) Where the appeal is filed by the InsuranceCompany only on the ground envisaged under Section 149of the Motor Vehicles Act, relating to liability of the insurer, and if by virtue of allowing the cross-objection, the additional liability has to be borne by the owner, namely, the co-respondent, such cross- https://hcservices.ecourts.gov.in/hcservices/ objection may not be maintainable as such cross-objection would be effective against the co-respondentand not against the insurer/appellant. (2) Where the Insurance Company files appeal challenging the award on merit, cross-objection can be maintainable, provided the ultimate liability in respect of enhanced compensation is to be borne by the Insurance Company and not by the owner/co-respondentand the fact that the appeal of the Insurer is liable to be dismissed on the ground that permission envisaged under Section 170 of the Motor Vehicles is not obtained, shall not stand in the way of the claimant-respondent in filing cross-objection. (3) Even where the cross-objection is not filed, in appropriate case, the principle laid down under Order 41, Rule 33 of C.P.C can be invoked. "

A reading of the aforesaid decision makes it clear that only where the liability of the Insurance Company is co-terminus with that of the owner, a cross-objection can be maintained, provided the appeal of the Insurance Company is also on all aspects, that is to say, on the question of quantum aswell as on the question of liability of the Insurance Company. However, where the appeal of the Insurance Company is only confined to the question of its own liability, such cross-objection against a co-respondent would not be maintainable. Asa matter of fact, a Division Bench of this Court in 1993 ACJ 486(UNITED INDIA INSURANCE COMPANY LIMITED v. RAJAMMAL AND OTHERS),which had been specifically noticed in the above decision, has laid down such principle. Subsequently another Division Benchin 2004-4-L.W. 674 (BRANCH MANAGER, NEW INDIA ASSURANCE CO.LTD., v. SALAT MARY & OTHERS) has observed that where the appeal of the Insurance Company is confined to its liability, thecross-objection filed by the claimant against the owner being essentially a cross-objection against a co-respondent would not be maintainable.

In our opinion, there is no conflict between the observations made in 1993 ACJ 486, 2004-4-L.W. 674 on the one hand and 2005(1) M.L.J. 20 on the other hand. In 2005(1) MLJ 20the liability of the Insurance Company was unlimited. It had filed the appeal challenging the quantum, even though it had not contested the proceedings on merit by seeking permission under Section 170 of the Motor Vehicles Act. In the appeal filed in the High Court, it had challenged the quantum and negligence aswell as the question of its own liability. Only in the above context, it was held that the cross-objection filed by the claimants / respondents was maintainable as ultimately the liability of the Insurance Company was co-terminus with that of the owner. The aforesaid principle is not at all applicable to the facts of the present case. On the other hand, the ratio of the decision in 1993 ACJ 486 and 2004-4 L.W.674 are applicable to the present case. https://hcservices.ecourts.gov.in/hcservices/

Therefore, the cross objection filed in the present case being essentially against the co-respondent and there being no common point to be agitated between the appellant and the co-respondent, such cross-objection is not maintainable. The aforesaid view is obviously is line with the decision of the Supreme Court in AIR 1963 SC 1516 (PANNA LAL v. STATE OF BOMBAY)and the Full Bench decision of the Madras High Court in AIR 1950 Madras 379 (VENKATESWARU v. RAMAMMA).

For the aforesaid reasons, we are unable to enhance the compensation. Even otherwise the fixation of compensation of Rs.66,000/- by the Claims Tribunal and confirmed by the learned single Judge cannot be characterised as grossly low, deserving any enhancement.