1/14 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR :JUDGMENT: (i) [PRECEDENT]. (ii) [PRECEDENT]. DATE OF JUDGMENT : 29th August, 2016 PRESENT HON'BLE MR.JUSTICE [ENTITY] Mr. [ENTITY], for the appellant-Insurance Company Mr. [ENTITY], for the respondents-cross objectors- claimants Mr. [ENTITY], for the respondent-owner BY THE COURT :
The present appeal & cross objection are directed against the judgment & award dated 27/8/1994 passed by the Motor Accident Claims Tribunal, Dungarpur ('the Tribunal'), whereby, the Tribunal has awarded a sum of Rs.60,000/- as compensation along with interest @ 12% p.a. w.e.f.21/11/1989 till actual payment is made and the appellant Insurance Company has been held liable for payment of compensation. The cross objection has been filed by the claimants seeking enhancement of compensation.
An application for compensation was filed on 23/11/1989 by the claimants-mother/sisters of one [ENTITY], who was aged 18 years, inter alia with the averments that said [ENTITY], who was student of class 9th was travelling in Bus No. RJB-4474 on 23/5/1989, which was being driven by driver [ENTITY], the deceased was travellilng on the roof of the Bus, on the way one branch of tree struck [ENTITY] on the head, resulting in his death. It was alleged that the Bus was being driven rashly & negligently by the driver. It was claimed that the deceased along with studies was involved in the business of milk and wool and used to earn Rs.700/- per month and used to spend Rs.500/- on the family. Based on the these averments, compensation of Rs.9,62,000/- was claimed.
The claim was resisted by the non-claimants, while the driver did not file any reply, the owner admitted his ownership but denied that the accident occurred on account of negligence of the driver and alleged that the deceased climbed on the roof of the Bus without anybody's information and was struck by branch of the tree and died, therefore, the owner was not liable.
The Insurance Company admitted that the vehicle in question was insured with the Insurance Company and indicated that the sisters were not the legal representatives of the deceased; the owner was not in possession of a valid permit and it was claimed that the liability of the Insurance Company was limited to Rs.15,000/-.
The Tribunal framed six issues. On behalf of the claimants, two witnesses were examined and on behalf of non-claimants no witness appeared in the witness box. After hearing the parties, the Tribunal came to the conclusion that if the driver permits any passenger to travel on the roof top of the Bus, the same itself is his negligence and held that the accident occurred on account of negligence of the driver of the Bus. While assessing the compensation, the Tribunal did not believe the plea that the deceased used to earn Rs.700/- per month while attending the school and, therefore, awarded a sum of Rs.60,000/- lump sum for mental agony to the mother. While assessing the liability of the Insurance Company, the Tribunal came to the conclusion that the Insurance Policy in question was comprehensive and besides basic premium, Rs.12/- per passenger has been charged additionally and for the purpose of extending the liability towards third party to the extent of Rs.1,50,000/-, additional premium of Rs.100/- has also been charged & nowhere in the Policy it is indicated that the liability of the Insurance Company would be limited to Rs.15,000/- and, therefore, the liability of the Insurance Company was not limited to Rs.15,000/-. The plea raised by the Insurance Company regarding the lack of permit was negated and ultimately the Tribunal passed the award as indicated hereinbefore.
It was submitted by the learned counsel for the appellant that the Tribunal committed an error in coming to the conclusion that the liability of the Insurance Company was not limited to Rs.15,000/-. It was submitted that in view of the statutory provisions contained in [SECTION] of the [ACT] ('the Act'), the liability of the Insurance Company is limited to Rs.15,000/- and the finding of the Tribunal that Insurance Company had accepted additional premium and, therefore, contracted for higher liability has no basis and, therefore, the judgment impugned to the said extent deserves to be set aside.
Reliance was placed on the judgment of this Court in the case of [PRECEDENT].
With reference to [ACT] (IMT), it was submitted that the Schedule of premium clearly indicates that limit of legal liability for accident to passengers is Rs.15,000/- for one passenger on payment of premium of Rs.12/- per passenger and admittedly, premium of Rs.12/- per passenger only has been paid and the Tribunal has wrongly assumed that the liability of the appellant Insurance Company on account of payment of Rs.12/- per passenger would result in unlimited liability. It was further submitted that the extended liability upto Rs.1,50,000/- was in respect of third party and it is now well settled that passengers in a vehicle cannot be termed as third party and, therefore, the finding of the Tribunal regarding limit of liability of appellant Insurance Company deserves to be set aside.
Learned counsel for the respondent-owner supported the award impugned. It was submitted that from the perusal of the certificate produced by the appellant Insurance Company, it is apparent that the Policy is comprehensive and besides charging basic premium, the Insurance Company has charged Rs.12/- per passenger for 47 passengers to the tune of Rs.564/- and has failed to produce IMT-13, which is indicated in the certificate, therefore, the liability of the appellant Insurance Company is unlimited. It was submitted that once the appellant Insurance Company has failed to place on record the material to substantiate its plea pertaining to limited liability, the same has to be assumed as unlimited.
It was further submitted that the cross objection filed by the respondents also deserves to be dismissed as adequate compensation has been awarded by the Tribunal and same does not call for any interference.
Reliance was placed on National Insurance Company Ltd. vs. [ENTITY] & Ors. : 2004 R.A.R. 519 (Raj.).
Learned counsel for the claimants supported the award passed by the Tribunal so far as the liability of the Insurance Company is concerned. It was submitted that the liability of the Insurance Company is unlimited and in the absence of any material whatsoever on record, the Insurance Company cannot claim limited liability in terms of the provisions of the Act. It was submitted that the Tribunal committed an error in not awarding any amount under the head 'loss of income' inasmuch as it was proved on record that the deceased was aged 18 years and looking to the background, it cannot be said that besides studying the deceased was not doing anything and, therefore, the award impugned deserves to be enhanced suitably.
I have considered the submissions made by the counsel for the parties and have perused the material available on record.
It may be noticed that the record of the Tribunal, though was summoned, the same was incomplete as the documentary and oral evidence of the parties have been weeded out by the Tribunal. Under the directions of the Court, the appellant Insurance Company has produced a copy of the Certificate of Insurance pertaining to the offending vehicle. A bare look at the said Certificate indicates that the Insurance Company besides charging premium under the head 'own damage', towards liability to public risk, it charged the basic premium of Rs.240/- and for legal liability to passengers as per END IMT-13, the Insurance Company has charged Rs.564/- (47x12). The Insurance Company has also charged Rs.24/- towards legal liability to paid driver and/or cleaner as per END IMT-16 and another Rs.100/- was charged for increased T.P.Limits. The Tribunal while deciding the issue pertaining to liability of the appellant Insurance Company, came to the conclusion that the Policy was comprehensive, additional premium of Rs.12/- per passenger was separately charged and for liability towards third party to the extent of Rs.1,50,000/-, Rs.100/- was charged and based on the said aspect it came to the conclusion that the Insurance Company assumed liability beyond the provisions of [SECTION] of the Act. The said determination by the Tribunal is apparently contrary to the material on record inasmuch as payment of premium of Rs.12/- per passenger by itself does not amount to assuming liability beyond the statutory limit as contained in [SECTION] of the Act. In fact, said amount of Rs.12/- per passenger is in relation to statutory liability only. The said aspect is fortified from the [ACT] produced by the counsel for the appellant indicating the premium of Rs.12/- per passenger for limited liability of Rs.15,000/- and Rs.50/- per passenger for unlimited liability. Premium of Rs.100/- admittedly was towards increased third party limits and the very fact that separate premium was charged towards liability of passengers and third party, necessarily indicates that passengers are not included within the nomenclature 'third party'.
The Hon'ble Supreme Court in the case of New India Assurance Co. Ltd. vs. [ENTITY] & Ors.: (1995) 2 SCC 539 while dealing with the limit of liability of the Insurance Company in respect of provisions of [SECTION] of the Act held as under:-
"7. [SECTION] forms part of [SECTION] of the [ACT] which deals with insurance of motor vehicles against third party risks. Under [SECTION], in order to comply with the requirements of this Chapter, a policy of insurance must be a policy which, inter alia, insures the person or classes of persons specified in the policy to the extent specified in sub-section (2). Under [SECTION](1)(b)
(ii), the insurance policy must cover the death or bodily injury to any passenger of a public service vehicle, caused by or arising out of the use of the vehicle in a public place. Sub-section (2)(b) provides as follows:
"95(1) : * * * (2) Subject to the proviso to sub-
section (1), a policy of insurance shall cover any liability incurred in respect of any one accident up to the following limits, namely -
(a) * * *
(b) Where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment,
(i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all;
(ii) in respect of passengers, a limit of fifteen thousand rupees for each individual passenger;"
There were the provisions at the relevant time. These provisions were interpreted by this Court in the case of [PRECEDENT]. This Court observed that even though it is not permissible to use a vehicle unless it is covered at least under an 'act only' policy, it is not obligatory for the owner of a vehicle to get it comprehensively insured. In case, however, it is got comprehensively insured, a higher premium is payable depending on the estimated value of the vehicle. Such insurance entitles the owner to claim reimbursement of the entire amount of loss or damage suffered up to the estimated value of the vehicle calculated according to the rules and regulations framed in this behalf. It has further observed as under:
"Comprehensive insurance of the vehicle and payment of higher premium on this score, however,does not mean that the limit of the liability with regard to third party risk becomes unlimited or higher than the statutory liability fixed under sub- [SECTION] of the Act. For this purpose a specific agreement has to be arrived at between the owner and the insurance company and separate premium has to be paid on the amount of liability undertaken by the insurance company in this behalf"
In the present case, therefore, a comprehensive policy which has been issued on the basis of the estimated value of the vehicle of Rs 2,50,000/- does not automatically result in covering the liability with regard to third party risk for an amount higher than the statutory limit.
8. It was contended before the High Court that a separate premium has been paid for the passengers. This shows that there was a special contract to cover unlimited liability in respect of passengers between the appellant-Company and Respondent 4. The Tribunal as well as the High Court seem to have proceeded on the basis that the appellant-Company had charged an extra premium of 0.50 paise per passenger to cover the risk of unlimited liability towards passengers. This seems to be an error. The premium of Rs 600 has been paid in respect of 50 passengers. The policy clearly shows this. It is not 0.50 paise per passenger. It is pointed out by the appellant-Company with reference to its tariff in respect of "Legal Liability for Accidents to Passengers" that if the limit of liability for any one passenger is fifteen thousand rupees, the rate of annual premium per passenger is Rs 12. If the limit is twenty thousand rupees, the rate of premium per passengers is Rs 23 per annum and so on. In respect of unlimited liability, the premium payable per passenger is Rs 50.
9. In the present case, the premium which has been paid is at the rate of Rs 12 per passenger and is clearly referable to the statutory liability of fifteen thousand rupees per passenger under [SECTION] (2)
(b)(ii) of the [ACT]. In the present case, there is no special contract between the appellant-Company and Respondent 4 to cover unlimited liability in respect of an accident to a passenger. In the absence of such an express agreement, the policy covers only the statutory liability. The mere fact that the insurance policy is a comprehensive policy will not help the respondents in any manner. As pointed. out by this Court in the case of [PRECEDENT] comprehensive policy only entitles the owner to claim reimbursement of the entire amount of loss or damage suffered up to the estimated value of the vehicle. It does not mean that the limit of liability with regard to third party risk becomes unlimited or higher than the statutory liability. For this purpose, a specific agreement is necessary which is absent in the present case. Reference in this connection may also be made to the case of [PRECEDENT]. The appellant-Company is, therefore, entitled to succeed to the extent that it has been directed to pay to Respondents 1 to 3 any amount in excess of Rs 15,000."
The above law laid down by the Hon'ble Supreme Court in the case of [ENTITY] (supra) has in specific terms laid down with respect to charging of premium of Rs.12/- being referable to the statutory limit of Rs.15,000/- per passenger under the provisions of [SECTION] of the Act. In view thereof, the finding of the Tribunal regarding liability of the appellant Insurance Company being unlimited cannot be sustained.
So far as the judgment in the case of [ENTITY] (supra) relied on by the learned counsel for the respondents is concerned, the said judgment pertains to the case of third party and not in respect of passengers in the vehicle and, therefore, the said judgment has no application to the facts of the present case.
So far as the amount of compensation to the claimants for death of [ENTITY] is concerned, the Tribunal was apparently not justified in not awarding any amount for loss of income to the claimant mother. The plea raised by the claimants that the deceased was involved in the business of milk and wool, though apparently was not substantiated. However looking to the nature of business conducted by him and the background to which the deceased belonged, the finding of the Tribunal that as the deceased was studying in school, he could not have undertaken any other activity, cannot be sustained specially in view of the fact that his father had already died and his family included, besides his mother, two minor sisters. In view thereof, the finding of the Tribunal in this regard is set aside.
Looking to the material on record and the submissions made, the income of the deceased is taken at Rs.700/- as claimed, after adding 50% towards future prospects and after deducting half of the amount towards his personal expenses and applying the multiplier of 18, looking to the age of the deceased, the claimants would be entitled to a sum of Rs.1,13,400/- towards pecuniary damages. Further, the lump sum amount of Rs.60,000/- awarded by the Tribunal towards mental agony and loss of love and affection does not call for any interference. However, the claimants are entitled to funeral expenses at Rs.5,000/-. On the enhanced amount of compensation, the claimants would be entitled to interest @ 7% p.a. from the date of filing of the application i.e. 8/12/1989 till the date of actual payment. The claimants would be entitled to recovery the amount from the respondent no.5, owner of the vehicle and the liability of the Insurance Company would be restricted to Rs.15,000/- along with interest.
It may be noticed at this stage that the Insurance Company had deposited a sum of Rs.15,000/- towards interim compensation under [SECTION] of the Act and Rs.25,000/- under the provisions of [SECTION] of the [ACT]. Further, by interim order dated 18/1/1995 it was directed that the appellant Insurance Company would also deposit the balance of the amount in terms of the award, however, it was directed that amount shall not be disbursed to the claimants.
In view of the above discussion, the appeal filed by the appellant Insurance Company is allowed and the cross objection filed by the claimants are partly allowed. The liability of the appellant Insurance Company for payment of compensation under the impugned award dated 27/11/1989 shall be limited to Rs.15,000/- along with interest. The claimants would be entitled to a total compensation of Rs.1,78,400/- and on the enhanced compensation to the tune of Rs.1,18,400/- interest @ 7% p.a. from the respondent owner of the vehicle from the date of application i.e. 8/12/1989 till the date of actual payment. The appellant Insurance Company would be entitled to recover the amount paid to the claimants in excess of its liability from the owner of the vehicle and the amount deposited by it in the Tribunal, if not disbursed to the claimants, shall be refunded to the appellant Insurance Company. No order as to costs.
([ENTITY]), J.
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