Case: Oriental Insurance Company Limited Vs. Santosh Satish Kumar Garg & Others

B.H. Marlapalle, J.1. This appeal filed under Section 173 of the Motor Vehicles Act, 1988, arises from the award dated 15.2.1997 passed by the Motor Accident Claims Tribunal, Raigad at Alibaug in the Accident Claim Case No. 250 of 1992 and thereunder directed the appellant insurer and the owner of the motor vehicle to pay jointly and severally a sum of Rs. 6,21,120 (Rupees six lakh twenty-one thousand one hundred twenty) including the amount of no fault liability with interest at the rate of 12 per cent per annum from the date of claim petition till realization of the amount.2. Satish Kumar Garg who was working as Works Manager with Savita Chemicals Ltd., respondent No. 4, died in an accident on 14.3.1992 while he was travelling in the jeep bearing registration No. MGR 7218 and which was owned by the said company. One Shashidharan who was employed as driver, was driving the jeep and he lost control over it when he saw another vehicle coming from opposite direction and consequently the jeep went down about 50 ft. in the valley. The injured was removed to Sion Hospital and then to Bombay Hospital and while undergoing treatment he succumbed to the injuries on 1.4.1992. Deceased Satish Kumar was the husband of applicant No. 1 and father of applicant Nos. 2 and 3 in Accident Claim Case No. 250 of 1992 and the applicants claimed compensation of Rs. 25,00,000 (rupees twenty-five lakh) on account of the death of Satish Kumar Chamanlal Garg. The original opponent No. 1 who was the employer of the deceased and the owner of the jeep filed the written statement at Exh. 46 and resisted the claim against it. It submitted that the deceased was the occupant of the vehicle and risk of the occupants in the said vehicle was covered under the terms of the policy issued by the insurer opponent No. 2, (present appellant) and, therefore, the insurer was liable to make good all the liability of the owner. In support of the claim, applicant No. 1 examined herself as PW 1, C.V. Alexander, PW 2 and Dr. Sanjay Paranhar, PW 3. The Insurance Company filed written statement at Exh. 42 and resisted the claim contending the claim was excessive and exorbitant the claim was not maintainable, the deceased was the employee of the owner of the vehicle and as he died during the course of his employment, the insurer was not liable to pay compensation as the risk of employee in such condition was not indemnified by the policy. The Claims Tribunal framed the following issues:(1) Whether the applicants prove that on 14.3.1992 at about 12 noon within the jurisdiction of village Kemburli, on Mumbai-Goa Highway, deceased Satish Kumar Chamanlal Garg met with motor accident(2) Whether the applicants prove that the said accident arose out of the use of vehicle bearing No. MGR 7218(3) Whether the applicants prove that the driver of the said vehicle was rash and negligent and responsible for causing the accident(4) Whether the applicants prove that Satish Kumar died due to injuries caused in the said accident(5) Whether the Insurance Company, opponent No. 2, proves that the risk of the deceased was not indemnifiableIssue Nos. 1 to 4 were answered in affirmative and issue No. 5 was answered in the negative. It is pertinent to note that the insurer did not examine any witness to discharge its burden in support of issue No. 5.3. We have noted that after the appeal was admitted on 9.2.1999 the execution of the award was stayed on the condition of deposit of the entire award amount and the award amount has been deposited with the Claims Tribunal. Claimants were allowed to withdraw an amount of Rs. 3,00,000 on furnishing security to the satisfaction of the Tribunal and the balance amount has been invested by way of fixed deposit.4. The only issue which has been raised by Mrs. Agarwal in support of the appeal is that the claim was not maintainable as the deceased died during the course of his employment in the motor accident and consequently in view of the provisions of Section 147(1)(b) of the Act read with Section II, Clause I (a) of the insurance policy at Exh. 67, the insurer was not liable to pay the compensation and in support of these contentions she relied upon the decision in the case of Oriental Insurance Co. Ltd. v. Meena Variyal, IV (2007) ACC 335 (SC)=IX (2007) SLT 251=2007 ACJ 1284 (SC).5. Mr. M.B. Kotak, the learned Counsel for the claimants on the other hand has supported the award and submitted that the Insurance Company is estopped from challenging the award even on the limited ground as it did not examine any witness in support of its case that the risk of the deceased was not indemnified by it in terms of the insurance policy issued by it covering the jeep with registration No. MGR 7218. By relying upon the decision in the case of Oriental Insurance Co. Ltd. v. Inderjit Kaur, I (1998) ACC 1 (SC)=I (1998) SLT 341=1998 ACJ 123 (SC), Mr. Kotak submitted that the public interest that a policy of insurance serves, must, clearly prevail over the interest of the Insurance Company.6. In the case of Meena Variyal, 2007 ACJ 1284 (SC), deceased was employed as a Regional Manager with the company which owned the motor vehicle that had met with an accident. There was no special contract beyond insurance policy for a third party cover. The owner of the car, i.e., the company that employed the deceased, did not appear and did not file any written statement. The Tribunal recorded a finding that the deceased himself was driving the vehicle. The Apex Court held that as a Regional Manager of the company which was the owner of the vehicle, the deceased was himself driving the vehicle and during the course of it he died in an accident and whether the accident occurred due to his negligence or otherwise, he was not covered by the insurance and more so when he was not an employee as defined under the Workmens Compensation Act, 1923. It further held that the object of Chapter XI of the Act has always been recognised as one intended to protect third parties as understood in the context of the Act, unless of course there is a special contract in respect of protection to others. It finally concluded that the deceased being an employee not covered by the Workmens Compensation Act the owner of the vehicle has not to be covered compulsorily under the Act and only by entering into a special contract by the insured with the insurer could such a person be brought under coverage. It also recorded a finding that there was no case of any special contract in this behalf in that case.7. We have given our anxious considerations to the arguments advanced by Mrs. Agarwal and we are not impressed by the same. We set out our reasons in the following paras.8. C.V. Alexander was the witness examined by the claimants and he was the Secretary of the employer-company at the relevant time. Deceased was holding the post of Works Manager at Mahad which was one of the two factories of the company and the second factory was located at Belapur. He stated that jeep bearing registration No. MGR 7218 was owned by the company and it was for the use of the deceased for the companys work. The jeep was duly insured and he placed on record insurance policy, Exh. 67. He stated that the insurance policy covered the risk of the occupants in the jeep other than the driver.We have perused the policy at Exh. 67 and we have noted that in addition to the third party risk, there was extra premium paid of Rs. 150 so as to cover the passengers/occupants in the vehicle and in addition there was a separate premium amount paid for coverage of the driver. From the record it is clear that the insurance policy covered the third party liabilities as well as all the occupants, i.e., 1+5 in the said jeep. Opponent No. 2s witness No. 1, therefore, was right in stating that the insurance policy was covering the risk of occupants. The decision in the case of Meena Variyal, 2007 ACJ 1284 (SC), relied upon by Mrs. Agarwal clearly states that the object of Chapter XI of the Act has always been recognised as one intended to protect third parties as understood in the context of the Act, unless, of course, there is a special contract in respect of protection to others. In the instant case the insurance policy at Exh. 67 contains a special contract in respect of protection to all the occupants, i.e., driver as well as five occupants and, therefore, it cannot be said that the claim for compensation was not maintainable on account of the proviso below Section 147(1) of the Act.9. Issue No. 5 framed by the Claims Tribunal had cast the burden on the present appellant to prove that the risk of the deceased was not indemnified. No witness was examined by the insurer despite taking a plea that the deceased was not indemnified. It was imperative for the insurer to prove by examining one of its managers/officers as to how the insurance policy at Exh. 67 did not create a special contract so as to cover all the occupants of the jeep and further to show that the risk of the deceased was not indemnified. It was held in the case of National Insurance Co. Ltd. v. Swaran Singh, I (2004) ACC 1 (SC)=I (2004) SLT 345=109 (2004) DLT 304 (SC)=2004 ACJ 1 (SC), that the Insurance Company to avoid liability, must not only establish the available defence raised in the proceeding concerned but must also establish breach on the part of the owner of the vehicle for which the burden of proof would rest with the Insurance Company. Whether such a burden had been discharged, would depend upon the facts and circumstances of each case. Even when the insurer is able to prove breach on the part of the insured concerning a policy condition, the insurer would not be allowed to avoid its liability towards the insured unless the said breach of condition is so fundamental as to be found to have contributed to the cause of the accident.It is, therefore, clear that the Insurance Company was required to prove in the instant case that the insurance policy at Exh. 67 did not indemnify the risk of the deceased or any one other than the driver. It is not the case of the Insurance Company that the deceased himself was driving the vehicle and, therefore, in the peculiar facts of this case the law laid down in the case of Meena Variyal, 2007 ACJ 1284 (SC), for denying compensation to the claimants of the deceased in that case would not be applicable in the present case. It is also not the case of the Insurance Company that deceased was a gratuitous passenger. It ought to be noted that the owner of the jeep was the company and obviously it would be used by its employees/officers. It was not a passenger vehicle as such like any other private jeep. The company had, therefore, taken enough precautions to ensure that the liability/risk in respect of the occupants was covered by a special contract by paying extra premium over and above required to be paid for covering the third party risk. The vehicle was insured as a company car and it was obviously allowed to carry occupants. It is fairly admitted across the Bar by the insurer that if there is additional premium amount paid so as to cover risks of the occupants of the private vehicle, other than the driver, the risk in respect of such passengers/occupants could be duly indemnified and the owners liability to pay compensation is required to be borne by the Insurance Company. The facts of this case are not similar to the facts in Meena Variyals case (supra), and hence that said decision does not apply.The evidence of witness No. 1 clearly goes to show that deceased was using the vehicle for the companys work (owner) and it was not being used for his personal work. Even otherwise, the risk for 1+5 occupants was covered by paying extra premium as is evident from the insurance policy at Exh. 67. Unless the Insurance Company had examined any of its officers to prove to the contrary, it cannot be held that the Tribunal committed any error in awarding compensation to the claimants.10. The impugned award has not been challenged on any other ground by the learned Counsel for the appellant. Even for calculating the compensation the Tribunal had taken into consideration that the deceased was 48 years of age. He left behind his widow and two minor children who were studying and deceased was the only bread earner. The retirement age was 58 years. The multiplier was fixed at 14 and there is no challenge to the monthly income assessed or to the multiplier fixed. It cannot be denied that the deceased would have achieved further promotions and he would have retired at the age of 58 in a higher position. He was a technically qualified person and the retirement at the age of 58 or 60 by itself would not put an end to his earning capacity and his prospects for acting as a consultant in post-retirement period could not be ruled out till the age of 70 years or so.

Decision:
0[ds]7. We have given our anxious considerations to the arguments advanced by Mrs. Agarwal and we are not impressed by the same. We set out our reasons in the following paras.8. C.V. Alexander was the witness examined by the claimants and he was the Secretary of theat the relevant time. Deceased was holding the post of Works Manager at Mahad which was one of the two factories of the company and the second factory was located at Belapur. He stated that jeep bearing registration No. MGR 7218 was owned by the company and it was for the use of the deceased for the companys work. The jeep was duly insured and he placed on record insurance policy, Exh. 67. He stated that the insurance policy covered the risk of the occupants in the jeep other than the driver.We have perused the policy at Exh. 67 and we have noted that in addition to the third party risk, there was extra premium paid of Rs. 150 so as to cover the passengers/occupants in the vehicle and in addition there was a separate premium amount paid for coverage of the driver. From the record it is clear that the insurance policy covered the third party liabilities as well as all the occupants, i.e., 1+5 in the said jeep. Opponent No. 2s witness No. 1, therefore, was right in stating that the insurance policy was covering the risk of occupants. The decision in the case of Meena Variyal, 2007 ACJ 1284 (SC), relied upon by Mrs. Agarwal clearly states that the object of Chapter XI of the Act has always been recognised as one intended to protect third parties as understood in the context of the Act, unless, of course, there is a special contract in respect of protection to others. In the instant case the insurance policy at Exh. 67 contains a special contract in respect of protection to all the occupants, i.e., driver as well as five occupants and, therefore, it cannot be said that the claim for compensation was not maintainable on account of the proviso below Section 147(1) of the Act.9. Issue No. 5 framed by the Claims Tribunal had cast the burden on the present appellant to prove that the risk of the deceased was not indemnified. No witness was examined by the insurer despite taking a plea that the deceased was not indemnified. It was imperative for the insurer to prove by examining one of its managers/officers as to how the insurance policy at Exh. 67 did not create a special contract so as to cover all the occupants of the jeep and further to show that the risk of the deceased was not indemnified. It was held in the case of National Insurance Co. Ltd. v. Swaran Singh, I (2004) ACC 1 (SC)=I (2004) SLT 345=109 (2004) DLT 304 (SC)=2004 ACJ 1 (SC), that the Insurance Company to avoid liability, must not only establish the available defence raised in the proceeding concerned but must also establish breach on the part of the owner of the vehicle for which the burden of proof would rest with the Insurance Company. Whether such a burden had been discharged, would depend upon the facts and circumstances of each case. Even when the insurer is able to prove breach on the part of the insured concerning a policy condition, the insurer would not be allowed to avoid its liability towards the insured unless the said breach of condition is so fundamental as to be found to have contributed to the cause of the accident.It is, therefore, clear that the Insurance Company was required to prove in the instant case that the insurance policy at Exh. 67 did not indemnify the risk of the deceased or any one other than the driver. It is not the case of the Insurance Company that the deceased himself was driving the vehicle and, therefore, in the peculiar facts of this case the law laid down in the case of Meena Variyal, 2007 ACJ 1284 (SC), for denying compensation to the claimants of the deceased in that case would not be applicable in the present case. It is also not the case of the Insurance Company that deceased was a gratuitous passenger. It ought to be noted that the owner of the jeep was the company and obviously it would be used by its employees/officers. It was not a passenger vehicle as such like any other private jeep. The company had, therefore, taken enough precautions to ensure that the liability/risk in respect of the occupants was covered by a special contract by paying extra premium over and above required to be paid for covering the third party risk. The vehicle was insured as a company car and it was obviously allowed to carry occupants. It is fairly admitted across the Bar by the insurer that if there is additional premium amount paid so as to cover risks of the occupants of the private vehicle, other than the driver, the risk in respect of such passengers/occupants could be duly indemnified and the owners liability to pay compensation is required to be borne by the Insurance Company. The facts of this case are not similar to the facts in Meena Variyals case (supra), and hence that said decision does not apply.The evidence of witness No. 1 clearly goes to show that deceased was using the vehicle for the companys work (owner) and it was not being used for his personal work. Even otherwise, the risk for 1+5 occupants was covered by paying extra premium as is evident from the insurance policy at Exh. 67. Unless the Insurance Company had examined any of its officers to prove to the contrary, it cannot be held that the Tribunal committed any error in awarding compensation to the claimants.10. The impugned award has not been challenged on any other ground by the learned Counsel for the appellant. Even for calculating the compensation the Tribunal had taken into consideration that the deceased was 48 years of age. He left behind his widow and two minor children who were studying and deceased was the only bread earner. The retirement age was 58 years. The multiplier was fixed at 14 and there is no challenge to the monthly income assessed or to the multiplier fixed. It cannot be denied that the deceased would have achieved further promotions and he would have retired at the age of 58 in a higher position. He was a technically qualified person and the retirement at the age of 58 or 60 by itself would not put an end to his earning capacity and his prospects for acting as a consultant inperiod could not be ruled out till the age of 70 years or so.