* HON’BLE SRI JUSTICE G. BHAVANI PRASAD + CIVIL MISCELLANEOUS APPEAL Nos.1636, 1638, 1655, 1656 & 1674 OF 2002 % Dated : 18.11.2010 + CIVIL MISCELLANEOUS APPEAL No.1636 OF 2002 CIVIL MISCELLANEOUS APPEAL No.1636 OF 2002 Between: # United India Insurance Co. Ltd. ..... Appellant And $ P. Prabhavathi & 2 others …Respondents CIVIL MISCELLANEOUS APPEAL No.1638 OF 2002 Between: # United India Insurance Co. Ltd. ..... Appellant And $ G. Sarojini & 2 others …Respondents CIVIL MISCELLANEOUS APPEAL No.1655 OF 2002 Between: # United India Insurance Co. Ltd. ..... Appellant And $ Sakali Muddappa & 2 others …Respondents CIVIL MISCELLANEOUS APPEAL No.1656 OF 2002 Between: # United India Insurance Co. Ltd. ..... Appellant And $ M. Aruna Kumari & 2 others …Respondents And CIVIL MISCELLANEOUS APPEAL No.1674 OF 2002 Between: # United India Insurance Co. Ltd. ..... Appellant And $ S.S.G. Krishnamraju & 4 others …Respondents ! Counsel for appellant : Sri Ravi Shankar Jandhyala ^ Counsel for respondents : Sri Kota Subba Rao <GIST : >HEAD NOTE : ? Cases referred : 1. AIR 1977 Supreme Court 1248 2. AIR 1987 Supreme Court 1690 3. 1998 ACJ 531 4. 1985 ACJ 243 5. 1979 ACJ 65 6. 1998 (2) ACJ 1351 7. 2001 ACJ 428 8. 2002 ACJ 1506 9. 2005 ACJ 1227 10. 2000 ACJ 1323 11. 2000 (3) ALT 456 12. 2009 ACJ 2218 13. 2010 (4) ALD 531 (DB) 14. 2006 ACJ 2234 IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD THURSDAY, THE EIGHTEENTH DAY OF NOVEMBER TWO THOUSAND AND TEN PRESENT HON’BLE SRI JUSTICE G. BHAVANI PRASAD CIVIL MISCELLANEOUS APPEAL No.1636 OF 2002 Between: United India Insurance Co. Ltd. ..... Appellant And P. Prabhavathi & 2 others …Respondents CIVIL MISCELLANEOUS APPEAL No.1638 OF 2002 Between: United India Insurance Co. Ltd. ..... Appellant And G. Sarojini & 2 others …Respondents CIVIL MISCELLANEOUS APPEAL No.1655 OF 2002 Between: United India Insurance Co. Ltd. ..... Appellant And Sakali Muddappa & 2 others …Respondents CIVIL MISCELLANEOUS APPEAL No.1656 OF 2002 Between: United India Insurance Co. Ltd. ..... Appellant And M. Aruna Kumari & 2 others …Respondents And CIVIL MISCELLANEOUS APPEAL No.1674 OF 2002 Between: United India Insurance Co. Ltd. ..... Appellant And S.S.G. Krishnamraju & 4 others …Respondents The Court made the following: HON’BLE SRI JUSTICE G. BHAVANI PRASAD CIVIL MISCELLANEOUS APPEAL Nos.1636, 1638, 1655, 1656 & 1674 OF 2002 COMMON JUDGMENT: All the five Civil Miscellaneous Appeals arise against the awards passed in five claim petitions by the common order, dated 28.12.2001, by the Motor Accidents Claims Tribunal-cum-IV Additional Chief Judge-cum-Principal Special Judge for SPE & ACB Cases, City Civil Court, Hyderabad. All the claim petitions in O.P.Nos.478, 604, 605, 606 & 607 of 1999 arise out of the same accident. 2. The five deceased in the five claim petitions went to Ramanaidu Film Studio at Film Nagar at Hyderabad on behalf of E.T.V to cover the shooting of a film, in a Jeep No.AP 10T 7011. After completing the coverage of the event, the five deceased were returning in the jeep when there was a big bomb blast totally damaging the jeep and killing all its occupants. The jeep belongs to the first respondent in all the five cases and was insured with the second respondent in all the five cases. 3. The dependents/legal representatives of the five deceased filed the claim petitions for compensation. 4. The first respondent, owner of the jeep, remained ex parte in all the five cases, while the second respondent/insurer contested all the five cases putting the claimants to strict proof of their allegations and admitting the insurance of the vehicle owned by the first respondent with it which was subsisting at the time of the accident. The insurer claimed that it was a bomb planted in some other vehicle that exploded when the insured vehicle was passing by the side of that vehicle and it was the impact of the explosion that resulted in the damage to the vehicle. There was no connection between the usage of the insured motor vehicle and the accident and hence, the insurer is not liable to pay any compensation. The compensation might have to be claimed from the owner and insurer of the vehicle in which the bomb was planted as the deceased would be third parties to that vehicle and no case was registered against the insured jeep driver. The jeep driver was not shown to be having a valid license and the claims were exorbitant. Hence, the insurer desired the petitions to be dismissed. 5. During the common enquiry into all the five claim petitions, P.Ws.1 to 5 were examined and Exs.A-1 to A-7, B-1 and B-2 were marked. 6. In the impugned common order leading to the five awards, the Tribunal referred to Ex.A-1-First Information Report and Ex.B- 2-Judgment in C.C.No.330 of 1998 and noted that the five deceased were travelling in the damaged insured jeep in the course of their employment with the first respondent and that the incident was the result of factious disputes between the first accused in the Sessions Case and one Sri Paritala Ravi in Anantapur District. The Tribunal opined that the first respondent, the owner of the jeep had not taken reasonable care for ensuring the safety of the television crew while sending them to the film studio for recording the ‘Muhurtham’ shot of the movie sought to be produced by Sri Paritala Ravi. Considering that the first respondent is the sister concern of E.T.V. and Eenadu Newspaper, the Tribunal presumed that the first respondent must have been aware of the factious disputes and ought not to have sent its crew without any security. Attributing negligence to the first respondent due to failure to perform such duty, the Tribunal also concluded that when the accident took place when the deceased were in the employment of the first respondent, both the respondents are liable to pay the compensation. Then the Tribunal went on to assess the quantum of compensation payable to the claimants in each case and directed compensation awarded in each case to carry interest at 9% per annum and proportionate costs, while also directing the manner in which the compensation, has to be disbursed to the claimants. 7. The insurer is the appellant in all the five cases challenging the conclusions about the absence of reasonable care by the first respondent and contending that there was no negligence on the part of the driver of the vehicle to bring the deaths under any Motor Accidents Claims and the Tribunal in fact had no jurisdiction to entertain the claims. It is the duty of the vehicle owner to provide security for the passengers and if he fails to do so, the passengers are entitled to compensation in their capacity as users of the vehicle which was not properly appreciated. Hence, the insurer desired the impugned awards to be reversed. 8. Sri Ravi Shanker Jandhyala, learned standing counsel for the second respondent/insurer and Sri Kota Subba Rao, learned counsel for the claimants in all the cases were heard and none appeared for the first respondent before this Court also. 9. None of the parties challenged the quantum of compensation awarded to the claimants in the five cases or the entitlement of the claimants to claim compensation for the death of the respective deceased and, therefore, those aspects are not the subject of consideration in these appeals. 10. The manner in which the accident had occurred and death resulted for the five persons in question is also not in dispute. The five deceased went to the Film Studio as part of E.T.V. crew to record the ‘Muhurtham’ shot of a film being produced by Sri Paritala Ravi and were returning after such recording in the jeep in question owned by the first respondent and insured with the second respondent. There was an explosion of a bomb in another vehicle passing by while the five deceased were travelling in this jeep and due to the impact of the explosion, the jeep was damaged and the five persons died. The implanting of the bomb and its explosion were concluded by a competent Criminal Court to be the result of a faction feud between Sri Paritala Ravi and the first accused in the Sessions Case. 11. With that background, the question is whether the insurer of the jeep in which the deceased five persons were travelling is liable to pay any compensation to the dependents/legal representatives of the deceased. 12. Sri Ravi Shanker Jandhyala, learned standing counsel for the second respondent/insurer strongly relied on MINU B. MEHTA AND ANOTHER VS. BALKRISHNA RAMCHANDRA NAYAN AND ANOTHER[1], in which a Three Judge Bench of the Apex Court laid down that proof of negligence is necessary before the owner or the insurance company could be held to be liable for the payment of compensation in a Motor Accidents Claims case. It was observed that in the case of a motor accident, the owner is only liable for negligence and on proof of vicarious liability for the acts of his subordinates and it was noted that if the owner has not incurred any liability in respect of death or bodily injury to any person, there is no liability and it is not intended to be covered by the insurance and the liability contemplated arises under the law of negligence and under the principle of vicarious liability. It was further observed that it is the duty of the owners to show that they had taken all reasonable care and that despite such care, the mechanical defect in the vehicle remained hidden; it is not an accident due to the mechanical defect and in order to succeed in an action for negligence, the plaintiff must prove that the defendant had, in the circumstances, a duty to take care which duty was owed by him to the plaintiff and that there was a breach of that duty as a result of which the plaintiff suffered damage. 13. The learned counsel for the second respondent/insurer also relied on GUJARAT STATE ROAD TRANSPORT CORPORATION, AHMEDABAD VS. RAMANBHAI PRABHATBHAI AND ANOTHER[2], wherein following the above decision, a two Judge Bench of the Apex Court reiterated the above principle to which the statutory no fault liability is an exception. 14. The principles are unexceptionable, but it is seen from the main common order that the Tribunal gave cogent reasons satisfying the self same principles for fastening the liability on the owner and insurer of the damaged jeep though the explosion was in another vehicle. The Tribunal gathered from Ex.B-2-Judgment in the Sessions Case that the accident resulting in death of 25 persons and injuries to 20 persons apart from damage to nearby houses was the result of a factious dispute between the first accused in the Sessions Case and Sri Paritala Ravi who was producing the picture to record the ‘Muhurtham’ shot of which the deceased crew of E.T.V. were sent in the damaged jeep by the first respondent. The Tribunal rightly presumed that the first respondent, a sister concern of E.T.V. and Eenadu Newspaper, must have been aware of the subject faction feuds and ought not have sent the deceased crew members to the Film Studio for recording the ‘Muhurtham’ shot without any security personnel or precautions. The Tribunal reasonably inferred that the first respondent failed to take any precautions in this regard which it ought to have taken under the circumstances and relied on a decision of the Apex Court to conclude that the first respondent has to be presumed to have acted negligently in sending the deceased for the purpose. The damaged jeep was in movement and in use when the explosion took place in some other vehicle, the impact of which practically destroyed the damaged jeep going by its side and killed the five persons through whom the claimants are seeking compensation. Apart from the deceased being in the employment of the first respondent at the time of the accident, the accident, thus, occurred during the use of a motor vehicle in a public place. It can be reasonably inferred to be caused by or arising out of the use of the vehicle in a public place. On facts, therefore, though the accident was not due to any mechanical defect in the subject jeep, the negligence of the first respondent in deputing the deceased five persons to record the ‘Muhurtham’ shot of the film in question without taking any precautions and without any security can reasonably be inferred to be a positive act of negligence making it vicariously liable for its consequences and if the owner is so liable, the insurer of the vehicle can be consequently liable under the admitted insurance policy. 15. Sri Kota Subba Rao, learned counsel for the claimants referred to various precedents commencing from AMRIT LAL SOOD AND ANOTHER VS. KAUSHALYA DEVI THAPAR AND OTHERS[3], wherein adjudicating a claim on a comprehensive policy, the Apex Court held that once the insurance company had undertaken liability to third parties incurred by the persons specified in the policy, the right of third parties to recover any amount under or by virtue of the provisions of the Act is unaffected by any condition of the policy and the Apex Court also held that the expression “any person” would undoubtedly include an occupant of the car who is gratuitously travelling in the car. 16. The learned counsel for the claimants further referred to ORIENTAL FIRE & GENERAL INS. CO. LTD. VS. SUMAN NAVNATH RAJGURU AND OTHERS[4], wherein a parked oil tanker burst and exploded killing a passer by. A Division Bench of the Bombay High Court repelled the contention that the vehicle was not in use much less in a public place and observed that the vehicle had to be considered to be in use on the road and the poor and innocent cobbler who was moving by the side of the parked vehicle could have no reason to suspect of any lurking danger. 17. In ORIENTAL FIRE & GENERAL INSURANCE CO. LTD. VS. GANCHI RAMANLAL KANTILAL AND OTHERS[5], also relied on by Sri Kota Subba Rao, learned counsel, the principle laid down is about reasonable and rational connection with the business of the owner of the vehicle/the insured or relationship or nexus in any other manner for the employed person carried in the vehicle to fasten the liability to the insurance company. When the passenger carried in the vehicle is a passenger employed by the insurer or employed with some one else with a reasonable and notional association with the business of the insured, the insurer was held liable for the risk of such a person as passenger covered by the old Section 95 of the then Motor Vehicles Act. 18. Similarly, in SAMIR CHAND VS. M.D., ASSAM STATE TRANSPORT CORPORATION[6], the Apex Court was dealing with an explosion of a bomb in a stationary bus, the injured passenger in which claimed the compensation and the Apex Court felt that when the explosion took place in the bus which had no usual police escort and when the atmosphere during the period of the accident was so polluted requiring care on the part of the conductor and driver of the bus, there cannot be any doubt that the accident arose out of the use of the motor vehicle justifying the claim of the injured claimant. 19. In KAUSHNUMA BEGUM AND OTHERS VS. NEW INDIA ASSURANCE CO. LTD. AND OTHERS[7], the burst of the front tyre of the jeep led to the accident whereby the jeep crushed a pedestrian walking on the road to death due to the injuries sustained in the accident. The defence was that there was neither rashness nor negligence in driving the vehicle and consequently, the driver or the owner or the insurer have no vicarious liability to compensate the dependants of the victim. The Apex Court noted that the rule in RYLANDS VS. FLETCHER, 1861-73 All ER 1 gained approval in a large number of decisions rendered in England and abroad and also from the Supreme Court. The principle that a person who for his own purposes, brings on his land and collects and keeps there anything likely to do mischief if it escapes, must keep it at his peril and if he does not do so, he is prima facie answerable for all the damage which is the natural consequence of its escape, was held to be basis for strict liability or no fault statutory liability. It was also concluded that even apart from Section 140 of the Motor Vehicles Act, 1988, a victim in an accident which occurred while using a motor vehicle is entitled to get compensation from a Tribunal unless any one of the exceptions would apply. 20. Similarly, in ANDHRA PRADESH STATE ROAD TRANS. CORPN. VS. P. VENKAT RAO AND OTHERS[8], the learned Judge was considering the case of a bus which was stopped on the road at the time of the incident when the fire broke out due to two persons who entered the bus pouring kerosene from out of petrol cans and lighting a match stick. The learned Judge noted that the victims in the accident no way contributed to the incident/accident or to the fire and the employees of the Road Transport Corporation i.e., the conductor and the driver failed to perform their bounden duty to prevent and object to the entry of persons into the bus with combustible material, explosive substances or inflammable material, in the larger interest of the passengers. Consequently, the learned Judge concluded that the Road Transport Corporation is vicariously liable for payment of compensation and the relationship between the use of the motor vehicle and the accident resulting in the death or permanent disablement is not required to be direct or proximate. The learned Judge referred to the various decisions of the Apex Court, this Court and other Courts in this regard and concluded that the basic requirement of such claims is only that it should arise out of the use of the motor vehicle. 21. In UNITED INDIA INSURANCE CO. LTD. VS. CHETIKAM NAGAMANI AND OTHERS[9], the cleaner dropped a loaded box from the top of the bus which fell on the deceased resulting in his death. The owner was made vicariously liable by the Claims Tribunal and the appeal was based on the contention that the words “arising out of the use of motor vehicle” cannot cover a period when the vehicle is not in motion or is stationary. The learned Judge noted that several High Courts in several decisions held the expression as susceptible to a wider but not a restricted meaning and the act of the cleaner was held to be amounting to be due to use of the bus. The learned Judge also referred to the disability of the insurer to maintain an appeal questioning the quantum of compensation or the finding of negligence without the leave of the Tribunal under Section 170 of the Motor Vehicles Act, 1988. 22. I n GAYATRI BAI AND ANOTHER VS. AHMADJI AND OTHERS[10], when a stationary bus was being repaired, the jack slipped and the deceased got pressed between the mudguard and wheels of the bus. The defence that the incident did not arise out of the use of the motor vehicle was negatived observing that the expression should be given extended meaning because of the social object behind the enactment. The Division Bench of the Madhya Pradesh High Court referred to the case law on the aspect to conclude that stationary vehicles are not excluded and a parked vehicle, though not in motion, will still be used. 23. Sri Kota Subba Rao, learned counsel for the claimants also drew attention to GOURIPALA MANEMMA VS. A.P.S.R.T.C.[11], for the proposition that once the accident was proved by the claimant, it is for the respondent to prove that there was no negligence on the part of the driver in causing the accident and the principles of res ipsa loquitur applied to such cases. 24. Sri Kota Subba Rao, learned counsel for the claimants also referred to the decisions of and the circular issued by the Insurance Regulatory and Development Authority of India cited in the circular of the New India Assurance Company to all the Regional Incharges, dated 27.11.2009, a copy of which was filed by him. The Insurance Regulatory and Development Authority of India had specified that the occupants of private cars are to be treated as third parties by the insurers who are liable in such cases as per the provisions of the Motor Vehicles Act, 1988. The authority had in fact directed withdrawal of all appeals filed on the ground of such occupants of private cars being not third parties immediately, if the policy concerned is a standard motor package policy. The learned counsel also drew attention to the decision of a Division Bench of the Madras High Court in ROYAL SUNDARAM ALLIANCE INSURANCE CO. LTD. VS. A. MEENAKSHI AND OTHERS[12], to emphasize that such circulars from Insurance Regulatory and Development Authority of India have binding force on the insurers. The Division Bench laid down therein with reference to the decisions of various High Courts that regulations, guidelines and circulars by the Regulatory Authority are binding on the insurance companies. 25. The last but not the least of the decisions relied on by the claimants is a decision of a Division Bench of this Court in BHUPATI PRAMEELA AND OTHERS VS. SUPERINTENDENT OF POLICE, VIZIANAGARAM AND OTHERS[13], which is binding on this Court. The Division Bench elaborately discussed the contention about entitlement to compensation irrespective of proof of rash and negligent driving by the driver of the vehicle. The Division Bench held that negligence is breach of duty imposed by law and when an act is done without due care and caution or done with recklessness and indifference to consequences, such act has to be treated as rash and negligent act. The Division Bench further, on exhaustive examination of the case law, concluded that the vehicle need not be in motion at the time of the accident and even where the owner of the vehicle fails to take care to check the mechanical defects of the vehicle or where there is no evidence that he has taken all necessary precautions for maintenance of the vehicle, such acts also should be treated as negligent acts in using the vehicle. The Division Bench further elaborated with reference to even cases involving terrorist attacks that where the owner or the driver or conductor had not taken necessary precautions for the safety of passengers although terrorist attacks were expected and the vehicle met with an accident in terrorist attacks, the accident has to be held to have arisen out of the use of the vehicle and the respondents have to be held to be negligent, liable to pay compensation. What was required to be seen was held to be not the entitlement to compensation, but the quantum of just and reasonable compensation in such cases. 26. Incidentally, both the learned counsel had also referred to the terms and conditions of the insurance policy in question in support of their respective contentions. Liability to third parties had been assured under Section II of the conditions attached to the policy and it is true that under IMT-21, riots, strikes and terrorism were stated to be excluded from the policy. Terrorist activity referred to in the said clause could not have been in the ordinary parlance considered to be including any factious activities. Reliance was also placed by the insurer on the general exceptions stated in the policy about an accident connected with the various manners in which it was described like war, invasion, an act of foreign enemies, hostilities, etc. Accidents arising out of a war or war like situation involving enemies or a civil war or a mutiny, etc., could not have been in any sense equated to a factious incident or a bomb explosion arising out of factious