First Appeal No.41 of 1996,First Appeal No.472 of 1995,First Appeal No.218 of 1997

19th November, 2009

Petitioner Counsel: Shri. A. H. KASLIWAL
Respondent Counsel: Shri. C. K. SHINDE,Shri. A. B. GATNE

Cases Cited:
New India Assurance Company Ltd. Vs. C. M. Jaya, 2002(1) ALL MR 930 (S.C.)=AIR 2002 SC 651 [Para 11]

JUDGMENT

JUDGMENT :- These are three Civil Appeals directed against one and the same judgment and award dated 14-9-1995 passed by learned Member, Motor Accident Claims Tribunal, Ahmednagar in Motor Accident Claims Application No.63 of 1989.

2. The appellants in First Appeal No.41 of 1996 are original claimants who are legal heirs of deceased Narendra Kataria who died in a road accident on 21-1-1989. They had filed petition under section 166 of the Motor Vehicles Act for compensation. They had filed a claim of Rs.5 lacs by way of compensation against the truck driver (Respondent No.2) of the offending vehicle namely; truck No.MTB 4728 belonging to Somnath Damodhar Kale (Respondent No.1), the truck owner and also the Insurance Company (respondent No.3). The award came to be passed directing all respondents, jointly and severally to pay to the appellants a sum of Rs.2,37,000/- only with interest @ 12 per cent p. a. and for Rs.2,62,000/-, it was disallowed and dismissed by learned Member of the MACT, Ahmednagar. Therefore, it is appeal for Rs.2,62,000/-.

3. First Appeal No.472 of 1995 has been preferred by appellant United India Insurance Company Ltd. who also challenged the same Award dated 14-9-1995 on the point of limited liability as per the terms and conditions of the policy referring to the risk of third party and alleged liability to the extent of Rs.1,50,000/- only. The impugned award was further challenged on the point of quantum on account of alleged contributory negligence of the deceased who met with an accident due to rash and negligent act while driving his own scooter. Therefore, appellant United India Insurance Company urged for reduction of an award by 50 per cent after considering that the real income of the deceased is not proved on record. It is thus for modification of award to the extent of Rs.5,000/- on these two grounds.

4. First Appeal No.218 of 1997 is a separate appeal filed by the truck owner of the offending vehicle for denying his liability as per the award passed jointly and severally including himself and his driver of the said truck in the light of the policy purchased by him from the respondent i.e. United India Insurance Company, covering third party risk. According to him, the policy in question is valid and in force covering the third party risk as per the impugned award. Therefore, the same should be quashed for joint and several liability.

5. Heard Shri. S. V. Kulkarni, Shri. A. B. Gatne and Shri. V. N. Upadhye, learned Counsel for United India Insurance Company Ltd., and Shri. A. H. Kasliwal and Shri. C. K. Shinde, learned Counsel for respective parties in support of their contentions and claims in their respective appeals.

6. First Appeal No.41 of 1996 is for Rs.2,62,000/- which was disallowed by the learned Member of M.A.C.T. The original claim of the appellant was for Rs.5 lacs. The appellants are claimants namely; widow Jaishree and two minor children Shweta and Neeraj and also the parents of the deceased; Pramilabai mother and Padmakar father, total five dependents, all residents of Ahmednagar.

7. The facts briefly are as under :

The deceased Narendra and his friend Kishor Dattatraya Jape who was pillion rider, both were going to Aurangabad on a scooter bearing No.MJF 7985 for their business on 21-1-1989. The deceased was young aged 33 years and himself was driving scooter which met with an accident near village Pravara Sangam. Truck No.MTB 4728 was coming from the opposite side and gave dash to the scooter. It was alleged that truck driver was rash and therefore, accident took place without any fault or negligence on the part of the deceased. It was further alleged that claimants were totally dependent on his earning. The deceased was qualified [ I.T.I. certificate holder ] and trained wireman was doing his own business in the name and style as "Sargam decorator" of pendal and decoration of marriages and other public function. He was petty contractor and was earning Rs.5000/- p. m. and was maintaining his family. There was no earning member in the family except the deceased. Therefore, there is claim of Rs.5 lacs as compensation on account of fatal accident on the basis of his income of Rs.3000/- p.m. after deducting personal and business expenses and his young age 33 years.

8. R. & P. was made available at the time of hearing.

9. Perused the impugned award and the claim petition, so also the relevant part of the evidence discussed by the learned Member of MACT. It is true that there is no documentary proof about the earning of the deceased who is a petty contractor for mandap decoration which is not disputed by the respondent. One witness named Ashok Gandhi, a Tax Consultant, was examined but it is not accepted widow deposed that she was getting Rs.3000/- p. m. from her husband for household expenses and education of her children.

10. Relying on her evidence, monthly dependency was worked out at Rs.1500/- and for yearly dependency, an amount of Rs.18,000/-. On this point, learned Counsel for the claimants urged that there is no valid reason given for discarding her evidence on the point of dependency which should have been considered for Rs.3000/-. The learned Member of MACT used multiplier 14 for awarding their claim of Rs.2,52,000/-. With regard to yearly dependency of Rs.18,000/- @ Rs.1500/- p.m., there is no dispute about the multiplier used as 14. It was on the basis that there is no documentary evidence of the earning of the deceased Rs.5000/- p.m. Admittedly, the deceased was not income tax payer or an assessee. However, the dependency quoted for Rs.3000/- as deposed by the deceased should not be accepted but it cannot be reduced to Rs.1500/- p.m. as he was maintaining the family of five persons and was doing his business smoothly. In connection of his business he was moving from one place to another and, therefore, though it is not proved by documentary evidence that he was earning Rs.5000/- p.m. it would not certainly disprove such income every month. Therefore, in my opinion, the claim about the dependency can be accepted for Rs.2000/- p.m. as basis for compensation i.e. Rs.24,000/- yearly dependency, which would be a proper appreciation of their claim as just compensation under the scheme of the Motor Vehicles Act meant for compensation payable to them under third party risk, although it is not accepted @ Rs.3,000/- p.m. There are five dependents in the family and they are still jointly residing with no support for their livelihood. The dependency @ Rs.1500/- is thus found inadequate and requires a revision with regard to the evidence of widow. To that extent, First Appeal No.41 of 1996 needs to be partly allowed for Rs.84,000/- in addition to an amount in award, as "just compensation" payable to them under the Act. Thus, the claim of Rs.5 lacs as per the claim petition though it is a demand and they should get not what they desire but what they deserve on merits of the case. In addition to that, an amount of Rs.10,000/- granted by way of consortium is maintained. Accordingly, appellants/ claimants Appeal No.41/1996, is partly allowed as per final order.

11. Now coming to another First Appeal No.472 of 1995 by main contestant - United India Insurance Company Limited, the thrust of the argument of learned Counsel for the appellant was pointing out at the contributory negligence and the deceased himself was responsible for the said accident by his own rash and negligent driving and further it was argued that the liability of the Insurance Company would be limited to the extent of Rs.1,50,000/- only. Reliance was placed on a decision of Hon'ble Apex Court in the case of New India Assurance Company Ltd., Appellant Vs. C. M. Jaya and others reported in AIR 2002 S.C. 651 : [2002(1) ALL MR 930 (S.C.)].

Motor Vehicles Act (4 of 1939) S.95(2) - Compensation - Liability of Insurance Company -

"In the case of Insurance Company not taking any higher liability by accepting a higher premium for payment of compensation to a third party, the insurer would be liable to the extent limited under S.95(2) of the Act and would not be liable to pay the entire amount. The deceased was riding the pillion seat of a two-wheeler when it met with a truck insured by the appellant-Insurance Company by comprehensive insurance policy. It is not the case that any additional or higher premium was paid to cover unlimited or higher liability than the statutory liability fixed as found in the term of the policy and copy of the insurance policy produced before the Court shows that the liability of the Insurance Company is limited to Rs.50,000/- in regard to the claim in question. It necessarily follows that the liability of the Insurance Company is limited to Rs.50,000/-. The liability of the Insurance Company was not unlimited merely on the ground that the insured had taken a comprehensive policy i.e. the truck was covered by a comprehensive insurance policy.

The liability of Insurance Company could be a statutory or contractual. A statutory liability cannot be more than what is required under the statute itself. However, there is nothing in S.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 of 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.

1996 AIHC 1471 (Delhi), Reversed. New India Assurance Co. Vs Shanti Bai, 1995 AIR SCW 1142, Approved."

12. On careful reading of the impugned award it is found that learned Member of MACT, Ahmednagar had dealt both the points quite in detail referring to the evidence of eye-witness Kishore Jape who was a pillion rider. Police papers, panchanama, etc. were also considered for arriving at the conclusion that the accident was caused because of rash and negligent driving of truck driver (original opponent No.2) and findings came to be recorded against the truck driver. It is also admitted that after due investigation offence was registered as Crime No.19/89 against opponent No.2 punishable under sections 304-A, 337, 338, 279, 427 of the Indian Penal Code and section 116 of the Motor Vehicles Act. So far as extent of liability limited to Rs.1,50,000/-, there is discussion found at relevant para No.18 of the impugned award referring insurance policy (Exhibit 66 on record) clauses (a) and (b) that limits of the amount of the Company's liability under section II-1 (ii) in respect of any one claim or series of claims arising out of one event Rs.1,50,000/-. Further, no extra premium was charged by the company to hold that the Company is liable to pay amount more than that. It is evident that policy (Exhibit 66) is a third party risk policy and for that purpose, Rs.240/- was paid as premium i.e. liability to public risk. Therefore, limits of the Insurance Company is not limited to Rs.1,50,000/-. Under the caption of 'Limits of Liability' it has been specifically mentioned that limit of the amount of the Company's liability under Section II-1(i) in respect of any one accident such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939 and the policy is specific of third party risk and the premium was accepted as Rs.240/-. Thus, it was held that the vehicle involved in the accident was insured with appellant Insurance Company (Original opponent No.2) to meet out all third party liability claims and thus, the liability of the Insurance Company is unlimited. There is elaborate discussion found in paragraphs 18 and 19 of the impugned award which needs to be accepted as legal and proper finding that came to be recorded against the appellant Insurance Company.

13. I, therefore, find no substance in the Appeal No.472 of 1995 of United India Insurance Company Ltd. and the relevant finding and the Award on this point is maintained since it calls for no interference.

14. The third appeal came to be filed numbered as First Appeal No.218 of 1997 by the truck owner named Somnath Damodhar Kale. On proof of policy covering third party risk for additional premium is accepted as valid to accept his case in the light of the above discussion made.

15. As such, liability to pay compensation is the sole liability of the Opponent No.3 United India Insurance Company Ltd. as per the order passed in this appeal. Thus, Appeal No.218 of 1997 deserves to be allowed on merits by this common judgment. Hence this order :

(I) First Appeal No.41 of 1996 is partly allowed and the Respondent No.3 United India Insurance Company Limited is hereby directed to pay Rs.84,000/- [ Rupees Eighty Four thousand only ] with interest @ 9% p.a. from the date of the claim petition to the appellants who are the original claimants, to be shared equally amongst themselves with proportionate costs of this appeal.

(II) First Appeal No.472 of 1995 stands dismissed.

(III) First Appeal No.218 of 1997 is allowed with no order as to costs.

All these three appeals are decided and disposed of accordingly.

Ordered accordingly.