M.F.A. No.104088 of 2017,C/w M.F.A. No.103690 of 2017

27th February, 2018.

Petitioner Counsel: Sri RAJASHEKHAR S. ARANI
Respondent Counsel: Smt. GEETHA K.M. @ PAWAR, Smt. P.R. BENTUR

Cases Cited:
The Branch Manager, New India Insurance Co.Ltd. Vs. M.Prasilla D’souza & others, MFA No.654/2013 (MVC), Dt.25.2.2016 (Kar.) [Para 8]
The Branch Manager, New India Insurance Co.Ltd. Vs. Marco Fernandis & others, MFA No.655/2013 (MVC) (Kar.) [Para 8]
P.S.Somaiah and Another Vs. The Director, Bangalore Diary and Others, MFA No.2059/1996, Dt.1.1.2003 (Kar.) [Para 9]
Lakhmi Chand Vs. Reliance General Insurance, 2018(2) ALL MR 413 (S.C.)=AIR 2016 SC 315 [Para 12]
Smt.Manisha W/o.Narendra Petkar & Anr. Vs. Shri Prabhunand Appaso Jeur & Anr., MFA No.101262/2014 and MFA No.101628/2014 (MV), Dt.28.10.2014 (Kar.) [Para 13]
Devisingh Vs. Vikramsingh and Others, AIR 2008 MP 18 [Para 14]
National Insurance Company Limited Vs. Pranay Sethi, 2018 ALL SCR 953=AIR 2017 SC 5157 [Para 27,29]

JUDGMENT

JUDGMENT :- MFA No.104088/2017 filed by the insurance company and MFA No.103690/2017 filed by the claimants are directed against the judgment and award dated 18.09.2017 made by the Additional Motor Accidents Claims Tribunal, Belagavi (for short 'MACT') in MVC No.2542/2016 whereby a compensation of Rs.13,87,400/- with interest at the rate of 6% per annum thereon from the date of petition till realization has been awarded.

2. The insurance company in MFA No.104088/2017 challenged the liability fastened on it as well as the quantum of compensation awarded by the Tribunal, whereas the claimants in their appeal MFA No.103690/2017 have sought for enhancement of compensation.

3. The parties will be referred to as per their rankings before the MACT.

4. The brief facts of the case are:

In a vehicular accident that happened on 21.10.2016 involving a motor cycle bearing registration No.KA-22/EQ-8960, Smt.Kasturi, the wife of the claimant No.1 and mother of claimant nos.2 and 3 sustained fatal injuries and succumbed to the same on 23.10.2016.

5. In the claim for compensation presented before the MACT, the claimants' side examined PW-1 Adiveppa Appanna Naik and eight documents were got marked as Ex.P-1 to Ex.P-8. From the side of the Insurance Company, one Mr. Umesh Gunda Bhat, who was working as Administrative Officer was examined as RW-1. The insurance policy was got marked as Ex.R-1. The jurisdictional MACT made the judgment and award which is now in question.

6. The learned counsel for the Insurance Company vehemently contended that the Tribunal grossly erred in fastening the liability on the insurance company when the insured was proved to have been carrying two pillion riders even though carrying even one was prohibited by the provisions of Rule 143 of the Karnataka Motor Vehicle Rules 1989 (for short 'KMV Rules'). Sub-rule (3) of Rule 143 reads as under:

"143. Attachment to motor cycle.-(1) x x x

(2) x x x

(3) No pillion seat shall be attached to a motor-cycle with less than 100 cc engine."

7. The learned counsel submits that the order of the Tribunal in fastening the liability on the insurer for the benefit of the violator of statutory mandate contained in the aforesaid Rule virtually amounts to placing premium on illegality. He submits that the contract of insurance being regulated by the provisions of Motor Vehicles Act, 1988 (for short 'the Act'), the violator of law should not be permitted to take the benefit of his violation.

8. The learned counsel for the appel lant brought to my notice the decisions of this court i.e., the judgment dated 25.02.2016 in MFA No.654/2013 (MVC) (The Branch Manager, New India Insurance Co.Ltd. Vs. M.Prasilla D'souza & others) and MFA No.655/2013 (MVC) (The Branch Manager, New India Insurance Co.Ltd. Vs. Marco Fernandis & others) and read out paragraph 3 of the same which is as under:

"5. Perusal of the record reveals that the scooty had engine capacity of 75 cc. In such cases, no pillion seat shall be attached to a motorcycle. But in the present case, the pillion seat was attached and the same was not disputed by the respondents-claimants. So, this itself proves that there was more than one pillion riders travelling in the scooty and this was the cause for the accident. Hence, they should be made liable for some negligence. Hence, I hold that the negligence has to be fixed for the pillion riders of two wheeler to the extent of 25% and remaining 75% shall be borne by the insurance company."

9. The learned counsel for the insurance company also brought to my notice a relevant portion of paragraph 2 of another decision dated 01.01.2003 rendered by this Court in MFA Nos.2059 of 1996 (P.S.Somaiah and Another Vs. The Director, Bangalore Diary and Others) and connected matters, which reads as under:

"2. .......Secondly, the Insurance Companies shall make it a point that in everyone of the Insurance policies issued in the case of two wheelers that a slip is prominently pasted in the insurance policy bringing it to the notice of the insurer that in the event of any accident or any death or injury if the insurer is in breach of the provisions of the law that there will be a disqualification as far as the claiming of the compensation is concerned. It is very necessary that these steps be taken in order to put a full stop to the reckless practice of operating two wheelers in breach of the provisions of Section 128 of the Act. ......"

10. With the help of the above decisions, in sum and substance, the learned counsel for the appellant insurance company contends that the liability of the insurance company does not arise when the claim is by the violators of law.

11. Per contra, learned counsel for the respondents claimants submitted that the liability of the insurer arises under the terms and conditions of the contract of insurance and that there is no term which excludes the liability of the insurer when the insured or anyone claiming the benefit of the insurance himself has violated the penal provisions of law, whether in Motor Vehicles Act, 1988 or Indian Penal Code. She further submits that if the provisions of the Act or the Rules are violated, law will take its own course and that is irrelevant to decide the liability of the insurance company.

12. In support of her contention, she banked upon the decision of the Apex Court in the case of Lakhmi Chand Vs. Reliance General Insurance, AIR 2016 SC 315 : [2018(2) ALL MR 413 (S.C.)]. Paragraph 17 of the judgment which she banks upon in support of the propositions advanced is as below:

"17. It becomes very clear from a perusal of the above mentioned case law of this Court that the insurance company, in order to avoid liability must not only establish the defence claimed in the proceeding concerned, but also establish breach on the part of the owner/insured of the vehicle for which the burden of proof would rest with the insurance company. In the instant case, the respondent-Company has not produced any evidence on record to prove that the accident occurred on account of the overloading of passengers in the goods carrying vehicle. Further, as has been held in the case of B.V. Nagaraju (supra) that for the insurer to avoid his liability, the breach of the policy must be so fundamental in nature that it brings the contract to an end. ..... "

13. The learned counsel for the respondents/claimants also banks upon the decision of this Court rendered on 28.10.2014 in MFA No.101262/2014 (Smt.Manisha W/o. Narendra Petkar & Anr. Vs. Shri Prabhunand Appaso Jeur & Anr) and MFA No.101628 of 2014 (MV). She loudly reads out paragraph (3) of the said decision whose facts are little matchable to the facts in the present case. However, the said decision does not support the propositions sought to be advanced.

14. Yet another decision relied upon by the Bar is from Hon'ble Madhya Pradesh High Court in the case of Devisingh Vs. Vikramsingh and Others, decided on 17.10.2007 [AIR 2008 MP 18]. Paragraph 12 of the said decision reads as under:

"12. A plain reading of Section 128 of the Act quoted above, would show that Sub-section (1) casts a duty on the driver of a two wheeled motor cycle not to carry more than one person in addition to himself on the motor cycle. Similarly, Rule 123 of the Rules quoted above mentions the safety devices to be provided while manufacturing a motor cycle. These provisions obviously are safety measures for the driver and pillion rider and breach of such safety measures may amount to "negligence" but such negligence will not amount to "contributory negligence" on the part of the pillion rider or "composite negligence" on the part of the driver of the motor cycle, unless such negligence was partly the immediate cause of the accidence or damage suffered by the pillion rider as would be clear from the authorities discussed above."

15. This decision too does not answer the question that is being treated by this Court. Except that, a few facts are matching with the gist of the case in hand not much is available here too to the counsel on either side.

16. I have careful ly considered the rival contentions of the learned counsel on either side. The short question that arises for consideration is:

"Whether the insurance company can deny its liability on the ground that the insured or anyone claiming the benefit of insurance has himself violated the mandate of Rule 143 of the Karnataka Motor Vehicle Rules, 1989?"

17. My answer to said question is in the negative for the following reasons:

18. The liability of the insurance company arises in a contract of insurance which stipulates terms and conditions. The said contract is regulated by the provisions of the Act. The Parliament has enacted Sub-section (2) of Section 149 of the Act only as a Limited Defence Clause restricting the scope of defence available to an insurance company to resist the claim. It speaks of a breach of specified condition of policy of insurance and such a condition should relate to one of the items enumerated under Clause (a) of Sub-section (2). In other words, it is not open to the insurance company to take a defence de-hors the provisions of sub-section (2)(a) of Section 149 at all. The fact that the insured or anyone seeking the benefit of insurance has violated the provisions of the Motor Vehicles Act or any of the Rules made thereunder, per se does not fit into the limited defence clause enacted under sub-section (2) of Section 149 of the Act.

19. The contention of the learned counsel for the insurance company that awarding of compensation for the violators of law virtually amounts to placing premium on illegality appears to be attractive on the face of it. But, when the same is treated in the rigor of Limited Defence Clause enacted under sub-section (2) of Section 149 of the Act, all it's attraction ceases. If this argument is accepted the same would widen the scope of Limited Defence Clause enacted under subsection (2) of Section 149 of the Act which the Court in the interpretation process cannot do. Therefore, this argument is also liable to be rejected since it militates against the scheme of Section 149 of the Act.

20. Yet another reason for rejecting this contention is that if the Parliament intended that the violation of the provisions of the Act should eventually result into repudiation of liability which otherwise the insurance company would have incurred, a necessary provision would have been made either in the Act or the Rules made thereunder. No such provision was brought to the notice of this Court by either side of the contenders. Therefore, the submission of the learned counsel for the insurance company that the insurance company is not liable is rejected.

21. The learned counsel for the Appellant Insurance Company vehemently contended that the contract of insurance as incorporated in the insurance policy stipulates that the parties or anyone claiming under them have to abide by the provisions of Motor Vehicles Act and also Rules made thereunder. Rule 143 of the Karnataka Motor Vehicles Rules having been made under Motor Vehicles Act, 1988, the violation of the said Rule virtually amounts to violation of the terms and conditions of contract of insurance and therefore violation of this Rule should be treated as breach of terms and conditions of the policy. He further submits that this defence of the Insurance Company fal ls within the narrow scope of Limited Defence Clause enacted under Section 149(2) of the Act. He therefore submits that the Insurance Company is entitled to repudiate its liability for the breach of condition of the contract of insurance.

22. Apparently, the contentions of the learned counsel for the appel lant company has the ef fect of swaying away the Court. But I hasten to add that a condition in a contract requiring the parties to abide by the law is nothing more than reminding the parties to fol low the law. Cicero the great Roman lawyer/philosopher had said "Let havens fall down, law should be obeyed". The term of a contract requiring the parties not to disobey the law is nothing more than reminding the them their duty to obey the law. In substance, such term is only a reminder and that even in the absence of such term, the duty cast on all the citizens/persons to obey the law nevertheless continues. Therefore, the duty to obey the law even when it is stipulated as a bargain between the parties cannot be treated as a condition of contract. It is more so when the Act and the Rules in question leave no discretion to disobey. Therefore, I am not inclined to accept the contentions of the Insurance company that term/condition of contract of Insurance is violated and this violation per se results into repudiation of Insurer's liability which otherwise would have been fastened on the Insurance Company.

23. The learned counsel for the insurer next contended that there has been a contributory negligence attributable to the insured and also to the deceased who was the second pillion rider and therefore there ought to have been apportionment of liability which exercise the MACT has not undertaken and to this extent, the impugned judgment and award are flawsome. The learned counsel could not point out from his pleadings the foundational fact matrix on the basis of which the doctrine of contributory negligence could have been pressed into service. In the absence of pleadings and much less the proof, this contention does not avail to the insurance company and therefore, the same is rejected.

24. The learned counsel for the insurance company next contended that the deceased Smt.Kasturi was only a house-wife and she was not a tailor by occupation and that except the self-serving statement of PW-1, the husband of the deceased, there is absolutely no material worth mentioning from the record. Therefore, he submits that the MACT grossly erred in taking Rs.11,000/- as the notional income of the deceased. On the contrary, the learned counsel for the respondents/claimants contended that there is some evidence on record namely, the statement of the husband of the deceased as to her occupation and also the income as well.

25. I have gone through the lower court record which supports the version of the learned counsel for the appellant/insurance company. Therefore, I upset the findings of the MACT that the deceased was a Tailor by occupation and her monthly income was Rs.11,000/-.

26. However, this Court cannot fold its hands and say there is no material to decide the occupation and income of the deceased in the case on hand. In any way, it is not the case of the insurance company that the deceased was an idle woman who was not earning anything at all. Even if the deceased is taken to be an ordinary labourer, still her notional monthly income would be Rs.8,000/- to Rs.9,000/-. This is supported by the notional income chart ordinarily operated by the Lok Adalats in settling the disputes. Accordingly, I hold that the notional monthly income of the deceased was Rs.9,000/-.

27. Learned counsel for the claimants prosecuting her appeal contends that in view of the law declared by the Apex Court in National Insurance Company Limited Vs. Pranay Sethi, AIR 2017 SC 5157 : [2018 ALL SCR 953], the Tribunal is not justified in not making an addition of 25% to the established income of the deceased since she was in the age group of 40 to 50.

28. The learned counsel for the appellant insurance company vehemently opposed the said submission on the ground that in the appeal, this ground has not at all been taken and therefore, there is no foundational matrix for the said arguments at all. I was taken through the contents of the appeal filed by the claimants. There is no ground taken to this effect by the claimants in their appeal. Therefore, this argument of the learned counsel for claimants is rejected.

29. The learned counsel for the insurance company next contended that the award of Rs.1,05,000/- under the heads of loss of consortium, loss of love and affection, loss of elderly guidance and loss to the estate and towards transportation of dead body and funeral expenses, is far in excess of what is permitted by the Apex Court in Pranay sethi 's case, AIR 2017 SC 5157 : [2018 ALL SCR 953] (supra). He takes me through paragraph 61 of the said judgment, which reads as under:

"61. In view of the aforesaid analysis, we proceed to record our conclusions:-

(i) x x x

(ii) x x x

x x x

(viii) Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs.15,000/-, Rs.40,000/- and Rs.15,000/- respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three years."

30. It is true that at sub-para (viii) of paragraph 61, the Apex Court states that the total amount of compensation payable under these heads cannot exceed Rs.70,000/-. In response, the learned counsel for the claimants fairly concedes that it is the law declared by the Apex Court. However, the award of compensation of Rs.87,685/- granted under the head of Medical Expenses is left undisturbed since the quantum is not much debated.

31. In view of the above findings, the values have been worked out in the tabular column below:

Sl. No.	Heads	Amount
1	Towards loss of dependency:	Rs.9,36,000-00
	Rs.9000 * 1/3 =Rs.3000 (Rs.9,000-Rs.3000 = Rs.6,000/-) [Rs.6,000/- X 12 X 13]
2	Medical expenses :	Rs.87,685-00
3	Other heads :	Rs.70,000-00
	TOTAL:	Rs.10,93,685-00

32. Therefore, I pass the following order:

ORDER

(i) The appeals filed by the insurance company and the claimants are allowed in part;

(ii) The impugned judgment and award dated 18.09.2017 passed in M.V.C. No.2542/2016 by the I Additional Senior Civil Judge and Addl. MACT, Belagavi, is modified;

(iii) The compensation amount of Rs.10,93,685/- (Rupees Ten Lakh Ninety-three Thousand Six Hundred and Eighty-five only) is awarded with same rate of interest as was awarded by the Tribunal below and other conditions and stipulation of the impugned award remaining intact;

(iv) The statutory deposit made before the Registry of this Court shall be transmitted to the jurisdictional MACT at the earliest;

(v) Learned counsel for the insurance company fairly undertakes before the Court and assures to the claimants that the balance of compensation, if any, will be credited within five weeks from this day.

Appeals partly allowed.