CMA/1526/2000 of Ambothu Premi Vs N. Janardhan on 24 December 2009

JUDGMENT:

This is an Appeal preferred under Section 173 ofthe Motor Vehicles Act, 1988, by the Claimants,aggrieved by the inadequate compensation awarded bythe Motor Accidents Claims Tribunal –cum- II AdditionalDistrict Judge, Nalgonda, in O.P.No.434 of 1996.

The 1[st] claimant-appellant is the wife, whereas 2[nd] to 5[th] appellants are the children and mother of thedeceased Ambothu Kadya, who died on 17-01-1996 ina motor accident, involving a Truck bearing registrationNo. AEK 1277. It is the case of the claimants that thedeceased Kadya along with several others hadboarded the Truck along with certain goods, such as, abag of rice, utensils, etcetera, to go to Hyderabad foreking out their livelihood. It is asserted that thedeceased had paid money to the Driver of the Truck forthe trip. The Truck was proceeding from Chintapallytowards Hyderabad and due to the rash and negligentmanner of driving by the Driver, at about 7-30 pm,nearby Kokkirala Thanda, it fell into a ditch by the sideof the road, resulting in death of two individuals, one ofwhom is Kadya and causing injuries to several others. The Police, Chinthapally, have registered a case inCrime No.4 of 1996 under Sections 304 A, 337 and 338

of the Indian Penal Code, against the Driver of theTruck. It was further asserted that the deceased wasworking as a manual labourer, earning a sum ofRs.2,500/- per month. Thus, a claim in a sum ofRs.1,50,000/- has been laid.

The 1[st] respondent, who was the owner of theTruck, remained ex parte. The 2[nd] respondent –Insurance Company has contested the case. It haddisputed the negligence on the part of the Driver. It hadalso specifically asserted that the deceased was foundtraveling in the Truck in violation of the conditions ofpublic carrier permit granted by the Transport authoritiesand hence, the Insurance Company is not liable to paycompensation for the accident. It is further stated theInsurance policy, does not cover the passengerstraveling in the goods carrier.

On behalf of the claimants, two witnesses have beenexamined and two documents - Exs.A-1 and A-2 havebeen marked. Though no oral evidence has been let in,however, the insurance policy for the Truck in questionhas been got marked as Ex.B-1, which is for the periodfrom 05-06-1995 to 04-06-1996 and hence, it is a validand subsisting policy at the time the accident hadoccasioned i.e., on 17-01-1996. Ex.B-1 has clearlycontained the limitations as to the use of the motorvehicle in this regard, which are as follows:

“ use only for carriage of goods withinthe meaning of the Motor Vehicles Act, 1988. The policy does not cover:

1. xxxxxxxxxxxxx.

2. xxxxxxxxxxxxx.

3. Use for carrying passengers in thevehicle except employees (other thanthe driver) not exceeding six innumber coming under the purview ofWorkmen’s Compensation Act, 1923.”vehicle except employees (other thanthe driver) not exceeding six innumber coming under the purview ofWorkmen’s Compensation Act, 1923.”

Therefore, Ex.B-1, which is an Insurance Policy and isthe result of a contract, has also clearly provided for notrendering itself liable to cover the risk of passengerswhether paid or unpaid, carried in the Truck.

The 1[st] claimant-appellant examined herself as PW-1. She has deposed about the relationship of theclaimants with the deceased, his employment andearning capacity. She has also filed a copy of the FIRand a copy of the Postmortem examination certificate asExs.A-1 and A-2. The Postmortem examinationcertificate - Ex.A-2 revealed the following internal andexternal injuries:

External injuries:

1. Abrasion – 3” x 3” front of chest –Rough surface A.M.Rough surface A.M.

Internal injuries:

1. Fracture ribs on ( R) side – 3[rd] to 8[th]

rigs.

2. Fracture ribs (L) side – 4[th] to 8[th] ribs.

3. Bil Halmo-thorax – in – 2 litres.

4. Lacerate of Lung 2” x 1” x 1” – (L)

side.

5. Lacerate of Lung 3” x 2” x 1” ( R) side.

PW-2 is an eye witness, who has described as tohow the accident in question had been caused. Hedeposed that the Truck was loaded with a consignmentof cement bags and nearly 35 persons boarded the truckto go to Hyderabad. Though it is deposed by PW-2 thatall of them, including the deceased, have paid their fareto the Driver of the Truck, but the fact remains that theTruck in question is a public transport vehicle and is notliable to carry passengers paid or unpaid in it. In view ofthe deposition of PW-2 that he is also one of the severalpersons, who have received injuries in the accident, andin view of the fact that Ex.A-1 has noted the factum ofdeath of two individuals including Kadya in the saidaccident and Ex.A-2 has only confirmed the death of saidKadya due to multiple injuries sustained by him in thesaid accident, the Tribunal had no difficulty in arriving ata finding that the accident in question has been causedwholly due to the negligent, rash and irresponsiblemanner of driving by it’s Driver. The Tribunal had foundthat, apart from a consignment of load of cement bags,the Truck was also carrying several persons aspassengers and one of them was Kadya, who succumbed to the injuries caused by the accident.

The questions that remain to be answered are,about was the quantum of compensation, which is liableto be paid to the claimants and which of the respondentsis liable to pay the same.

Though PW-1 claims that the deceased was 30years at the time of the accident, but however, going byEx.A-2, the age of the deceased was considered as 35years. Since, there is no material to support thecontention that the deceased was earning Rs.2,500/- permonth, the Tribunal, taking into account andconsideration the contemporary standards of wages paidand earned by the manual labour, had considered itappropriate that a sum of Rs.600/- per month as the likelyquantum of contribution of the deceased to his family. The Tribunal had adopted a very conservative method inworking out the quantum of contribution by the deceasedto his family. No exception can be taken thereto. Unfortunately, the error that was committed by theTribunal was that; as per II Schedule, introduced by virtueof the Amending Act No.54 of 1994, which was broughtinto force with effect from 14-11-1994, prior to the date of accident in the instantcase, the multiplier that is to be applied for the agebracket of 30 – 35 years is, 17. Therefore, the annualcontribution, i.e., Rs.7200/- (Rs.600/- x 12 months), hasgot to be multiplied by 17 instead of 14.81, which wasadopted by the Tribunal based upon the ratio laid down by the Supreme Court in BHAGWANDAS v. MOHD.

ARIF[[1]]. Therefore, to the extent of quantifying thecompensation, the amount awarded by the Tribunaldeserves to be enhanced to Rs.1,22,400/- (Rs.7200 x17).

Ratio decidendi

This apart, a sum of Rs.5,000/- has been awardedby the Tribunal towards loss of consortium to the 1[st]claimant. Here, again, the Tribunal has overlooked thefact that the deceased was only 35 year-old, while the 1[st]claimant – appellant wife, was only 28 year-old at thetime of the accident. The deceased was young enoughand the 1[st] claimant wife was still a young person. Therefore, the quantum of compensation under the headof loss of consortium, ought to have been awarded atRs.15,000/-. Therefore, to this extent also, the quantumof compensation deserves to be enhanced.

However, one question of legal significance remains tobe answered.

The Tribunal has held that the Insurance Companyis not liable to pay the said compensation, and it is the 1[st] respondent-Truck owner, who is responsible forpaying the quantum of compensation fixed. It will berelevant to notice the viewpoint canvassed in this regardby Sri P. Gopal Dass – learned Standing Counsel for therespondent – insurance Company that the SupremeCourt in NEW INDIA ASSURANCE COMPANYV.ASHA RANI ((2003) 2 SCC 233), while reversing the judgment rendered by the Supreme Court earlier in NEWINDIA ASSURANCE COMPANY LIMITED V. SATPALSINGH (1999 AIR SCW 4337), it was ultimately held thatthe expression ‘any person’ found in Section 147 of the1988 Act, would not include passengers in goods vehicleand hence, the insurance Company would not be liableto pay the compensation to the family of the victims foundtraveling in goods vehicles. With regard to the statutoryliability of the Insurance Company, in case of gratuitouspassengers, the issue had been well settled inNATIONAL INSURANCE COMPANY LIMITED V.BALJIT KAUR AND OTHERS[[2]]. It was further pointedout that the dictum in ASHA RANI’S Case (cited supra)has subsequently been followed in ORIENTALINSURANCE COMPANY V. DEVIREDDY KONDAREDDY ( 2003 ACJ 468 (SC)) and subsequently, theSupreme Court had once again considered this questionin NEW INDIA ASSURANCE CO. LTD. V. VEDAWATIAND OTHERS[[3]],with reference to the amendmentmade to Section 147 (1)(b)(i) of the Act, by the AmendingAct No.54 of 1994, by which, injury to any person,including the owner of the goods or his authorizedrepresentative carried in the vehicle is also liable to becompensated or not, and it was held as under:

"6. This Court had occasion to deal with casesof passengers traveling in goods vehicleswhich met accident resulting in death of suchperson or bodily injury. Such cases belong tothree categories i. e. (1) those covered by the

old Act, (2) those covered by the Act; and (3)those covered by amendment of the Act in1994 by the Motor Vehicles (Amendment) Act.1994 (hereinafter referred to as the'amendment act' ). 7. The present appealsbelong to the second category. 8. In SatpalSingh's case (supra) this Court proceeded onthe footing that provisions of section 95 (1) ofthe old Act are in pari materia with Section 147(1) of the Act as it stood prior to the amendmentin 1994. 9. On a closer reading of theexpressions "goods vehicle". "public servicevehicle", "state carrier" and "transport vehicle"occurring in sections 2 (8), 2 (25), 2 (29) and 2(33) of the old act with the correspondingprovisions i. e. Section 2 (14), 2 (35) 2 (40) and2 (47) of the Act, it is clear that there areconceptual differences. The provisions read asfollows: old Act: "2 (8) "goods vehicle" meansany motor vehicle constructed or adapted foruse for the carriage of goods, or any motorvehicle not so constructed or adapted whenused for the carriage of goods solely or inaddition to passengers" "2 (25) "public servicevehicle" means any motor vehicle used oradapted to be used for the carriage ofpassengers for hire or reward and includes amotor cab contract carriage, and stagecarriage. " "2 (29) "stage carriage" means amotor vehicle carrying or adapted to carry morethan six persons excluding the driver whichcarries passengers for hire or reward atseparate fares paid by or for individualpassengers either for the whole journey or forstages of the journey:" "2 (33) "transportvehicle" means a public service vehicle or agoods vehicle:" the Act (New Act): "2 (14)"goods carriage" any motor vehicle constructedor adapted for use solely for the carriage ofgoods or any motor vehicle not to constructedor adapted when used for the carriage ofgoods:" "2 (35) "public service vehicles"

means any motor vehicles used or adapted tobe used for the carriage of passengers for hireor reward, and includes a maxicab a motorcab,contract and stage carriage:" " 2 (40) "stagecarriage" means a motor vehicle constructed oradapted to carry more than six passengersexcluding the driver for (SIC) or reward atseparate fares paid by or for individualpassengers either for the whole journey or forstages of the journey:" "2 (47) "transportvehicle" means a pubic services vehicle agoods carriage an educational institution busor a private service vehicle:" (Underlined foremphasis)10. "liability" as defined in Section145 (c) of the Act reads as follows: "liability",wherever used in relation to the death of orbodily injury to any person, includes liability inrespect thereof under Section 140. " 11. Thirdparty risks in the background of vehicles whichare subject-matter of insurance are dealt within Chapter VIII of the old Act and Chapter XI ofthe Act. Proviso to Section 147 of the Act (sic)is to be (sic) with Section 96 of the old Act.Proviso to Section 147 of the Act reads asfollows: provided that a policy shall not berequired (i) to cover liability in respect of thedeath arising out of and in the course of hisemployment of the employee of a personinsured by the policy or in respect of bodilyinjure sustained by such an employee arisingout of and in the course of his employmentother than a liability arising under theworkmen's Compensation Act. 1993 (8 of1923) in respect of the death of or bodily injuryto, any such employee- (a) engaged in drivingthe vehicle, or (b) if it is a public service vehicleengaged as conductor of the vehicle or inexamining tickets on the vehicles, or (c) if it is agood carriage, being carried in the vehicle, or(ii) to cover any contractual liability. "12. It is of significance that proviso appendedto Section 95 of the old Act contained Clause

(ii) which does not find place in the Act. Thesame reads as follows:-"except where thevehicle is a vehicle in which passengers arecarried for hire or reward or by reason of or inpursuance of a contract of employment to coverliability in respect of the death of or bodilyinjury to persons being carried in or upon orentering or mounting or alighting from thevehicle at the time of the occurrence of theevent out of which a claim arises. "

13. The difference in the language of "goodsvehicle" as appear in the old Act and "goodscarriage" in the Act is of significance. A barereading of the provisions makes it clear that thelegislative intent was to prohibit goods vehiclefrom carrying any passenger. This is clear fromthe expression "in addition to passengers" ascontained in definition of "good vehicle" in theold Act. The position becomes further clearbecause the expression used is "goodcarriage" is solely for the carriage of goods.Carrying of passengers in a goods carriage isnot contemplated in the Act. There is noprovision similar to Clause (ii) of the provisoappended to Section 95 of the old Actprescribing requirement of insurance policy.Even Section 147 of the Act mandatescompulsory coverage against death of orbodily injury to any passenger of "publicservice vehicle". The proviso makes it furtherclear that compulsory coverage in respect ofdrivers and conductors of public servicevehicle and employees carried in goodsvehicle would be limited to liability under theWorkmen's compensation Act, 1923 (in short'wc Act" ). There is no reference to anypassenger in "goods carriage".

14. The inevitable conclusion, therefore, is thatprovisions of the Act do not enjoin any statutoryliability on the owner of a vehicle to get hisvehicle insured for any passenger travelling ina goods carriage and the insurer would have no liability therefor.

15. Our view gets support from a recentdecision of a three-Judge Bench of this Courtin New India Assurance Company Limited v.Asha Rani and Ors. (2002 (8) Supreme 594] inwhich it has been held that Satpal Singh'scase (supra) was not correctly decided. Thatbeing the position, the Tribunal and the Highcourt were not justified in holding that theinsurer had the liability to satisfy the award.16. This position was also highlighted inoriental Insurance Co. Ltd. v. Devireddy kondaReddy and Others (2003 (2) SCC 339 ).Subsequently also in National Insurance Co.Ltd. v. Ajit Kumar and Others (2003 (9) SCC668), in National Insurance Co. Ltd. v. Baljitkaur and Others (2004 (2) SCC 1) and innational Insurance Co. Ltd. v. Bommithisubbhayamma and Others (2005 (12) SCC243), the view in Asha Rani's case (supra) wasreiterated. "

Hence, it is now a settled principle of law that thepolicy of insurance taken out by the owner of a Truckwould only cover a third-party risk as well as the risk ofthe owner of the goods or his authorized representative,but not the risk of a passenger, whether paid or unpaid,carried in a goods vehicle. Therefore, the finding of theTribunal that the insurance company is not liable to payfor the compensation, but only the owner of the offendingTruck is liable to pay for the compensation, calls for nomodification.

Hence, subject to the modification and substitutionof the quantum of compensation as noted supra, in theaward passed in OP No.434 of 1996, the rest of the award is confirmed.

The Appeal stands allowed, to the extent indicatedsupra. No costs.

--------------------------------Nooty Ramamohana Rao, J

24[th] December 2009mrk/knk

[1]1987(2) ALT 137: ACJ 1987 1052[2](2004) AIR SCW 212[3]2007(3) Scale 397