IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD THURSDAY, THE FIFTEENTH DAY OF JULY TWO THOUSAND AND TEN HON’BLE SRI JUSTICE G. BHAVANI PRASAD M.A.C.M.A.(SR)No.12887 of 2006, M.A.C.M.A.Nos.1746 of 2008, 1750 of 2008, 1766 of 2008, 2645 of 2008, 3215 of 2008, 3278 of 2008, 3280 of 2008, 3481 of 2009, 3482 of 2009, C.R.P.Nos.1598 of 2007, 1599 of 2007, 1600 of 2007, 1601 of 2007, 1602 of 2007, 1603 of 2007, 2829 of 2007 and 5150 of 2007 MACMA (SR) No.12887 of 2006 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Yarrasani Aparanji and another .. Respondents MACMA.No.1746 of 2008 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Yarrasani Siromani and another .. Respondents MACMA.No.1750 of 2008 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Yarrasani Syman and another .. Respondents MACMA.No.1766 of 2008 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Yarrasani China Veera Swamy and another .. Respondents MACMA.No.2645 of 2008 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Kodavati Yesodamma and 5 others .. Respondents MACMA.No.3215 of 2008 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Yarrasani Yohan and 3 others .. Respondents MACMA.No.3278 of 2008 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Yarrasani Leela and another .. Respondents MACMA.No.3280 of 2008 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Yarrasani Marthamma and another .. Respondents MACMA.No.3481 of 2009 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Yarrasani Venkaiah and another .. Respondents MACMA.No.3482 of 2009 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Arumalla Seshamma and another .. Respondents C.R.P.No.1598 of 2007 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Yerrasani Venkata Lakshmi and another .. Respondents C.R.P.No.1599 of 2007 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Yerrasani Janamma and another .. Respondents C.R.P.No.1600 of 2007 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Pagidipati Yesu Babu and another .. Respondents C.R.P.No.1601 of 2007 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Yerrasani Samuel and another .. Respondents C.R.P.No.1602 of 2007 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Yarrasani Bujji and another .. Respondents C.R.P.No.1603 of 2007 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Yarrasani Dakshamma and another .. Respondents C.R.P.No.2829 of 2007 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Kodavati Veeraiah and 3 others .. Respondents C.R.P.No.5150 of 2007 Between: National Insurance Company Limited, represented by Its Divisional Manager, Divisional Office, Nellore ..Appellant AND Kodavati Yesodamma and another .. Respondents COMMON ORDER: The Civil Revision Petitions and the Civil Miscellaneous Appeals totalling to 18 at the instance of National Insurance Company Limited, the insurer of the offending vehicle involved in the accident, are against the common order passed by the Motor Accidents Claims Tribunal-cum-IX Additional District Judge, Guntur, on 30-09-2005 in M.V.O.P.Nos.800 to 811 of 2002 and 913 to 918 of 2002 on its file arising out of the same accident. All the 18 petitions for compensation by the legal representatives of the victims or the injured, as the case may be, were against the owner of the tipper lorry No.AP-31-V-595, the insured and the National Insurance Company Limited, the insurer, seeking to make both of them jointly and severally liable for the compensation claimed. The victims were travelling in the subject vehicle on 15-06-2002 at 8.30P.M. from Sathenapalli side towards Guntur side, when the vehicle met with an accident near Paladugu cross road and turned turtle, which resulted in two deaths and injuries to 16 persons. The accident was claimed by the claimants to be due to the rash and negligent driving of the vehicle by the driver and after registration of Cr.No.89 of 2002 at Medikonduru Police Station, the injured were referred to the Government General Hospital, Guntur for treatment. Sums specified in each of the Claim Petitions were claimed as compensation on the specific grounds raised in each of them and the owner of the vehicle impleaded as the 1st respondent in all the cases remained ex parte. The insurer contested the claims contending that there was no rash and negligent driving of the vehicle and that the driver did not have an effective and valid driving licence and that the vehicle had no valid permit and fitness certificate. It is also contended that there is no valid insurance policy and the vehicle insured as a goods vehicle carried unauthorized passengers, the liability in respect of whom cannot be imposed on the Insurance Company in violation of the terms and conditions of the insurance policy. The insurer sought for protection under Section 170 of the Motor Vehicles Act in the written statements filed in the petitions and requested for dismissal of the claims. In each of the Claim Petitions, the rash and negligent driving of the lorry by the driver, the entitlement of the respective petitioners to compensation and to which quantum were the subject matter of the issues framed for trial and in all the cases, the petitioners examined different witnesses on their behalf including the doctors, who treated the injured and on behalf of the Insurance Company only one witness was examined, while in each of the cases the relevant documents, more particularly about the injuries sustained and the treatment given, were marked as exhibits. The Tribunal rendered the common order impugned herein firstly deciding the question of rashness and negligence commonly answering the same in favour of the claim petitioners. Then it dealt with the claim for compensation in each of the Claim Petitions and arrived at different quantums awarded against both the insurer and the insured jointly and severally, while it was also held that the insurer is entitled to recover the same from the insured in execution proceedings without the necessity of filing separate suits. The common order is under challenge in these Civil Revision Petitions and the Civil Miscellaneous Appeals at the instance of the insurer contending that when the conditions of the insurance policy were violated, the insurer is not liable to deposit the compensation and recover the same from the insured in the light of the principles laid down in National Insurance Company Limited v. Bommithi Subbhayamma and others (2005 ACJ 721) a n d M.V. Jayadevappa and another v. Oriental Insurance Company Ltd., (2005 ACC 472). The insurer claimed that the compensation is to be recovered only from the owner of the vehicle and also questioned the quantum of compensation fixed and the multiplier adopted in each of the cases alleging the same to be not substantiated by any evidence. Sri Nisaruddin Ahmed Jeddy, learned standing counsel for the revision petitioners/appellants and Sri N. Subba Rao, learned counsel for the claimants are heard at length. The points that arise for consideration herein are:- 1) Whether the insurer can question the quantum of compensation? 2) Whether the liability of the insurer can be fixed in respect of the claimants in all the cases compelling it to deposit the compensation and recover the same from the insured, if the terms and conditions of the policy were violated? 3) To what relief? Point No.1: Section 170 of the Motor Vehicles Act, 1988 (for short “the Act”) lays down that where in the course of any inquiry, the Claims Tribunal is satisfied that there is collusion between the claimants and the person against whom the claim is made or where the person against whom the claim is made fails to contest the claim, it can direct the insurer to be impleaded as party for reasons to be recorded in writing if that insurer may be liable in respect of such claim. The insurer so impleaded will have the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made. Failure to obtain permission under Section 170 of the Act was uniformly held by precedential law to be making any appeal by the insurer against the quantum of compensation incompetent and this incompetence is without prejudice to the provisions of Section 149 (2) of the Act. Section 149 (2) of the Act gives a right to the insurer to defend any claim or action on the ground of breach of specified conditions of the insurance policy enumerated in the provisions or on the ground of the policy being void due to having been obtained by non- disclosure of a material fact or by a representation of fact which was false in some material particular. Therefore, in the present batch of cases though the insurer referred to the protection under Section 170 of the Act in the written statements filed in the Claim Petitions, there is no material available on record to show that in fact specific permission was obtained by the insurer under Section 170 of the Act, due to which it becomes disabled from questioning the quantum of compensation in the revisions and the appeals, though it has a right to question the liability on the ground of infringement of specified terms and conditions of the insurance policy in the light of Section 149 (2) read with Section 170 of the Act. It may be incidentally noted that the appreciation of evidence by the Motor Accidents Claims Tribunal in each of the cases concerning the nature of injuries, the disability suffered and the quantum of compensation to be granted including in cases of death cannot be faulted and without replicating the factual questions in issue herein again, it is suffice to emphasize that the quantums of compensation awarded by the Tribunal are but proper and reasonable and in fact, the Tribunal could have been more liberal in arriving at the compensation than it did. However, the claimants themselves did not seek any enhancement of such compensation in any manner. Therefore, it has to be concluded that the challenge to the quantums of compensation by the insurer cannot be sustained both legally and factually. Point No.2: The insurance policy in question between the insured and the insurer was admitted by both parties to be containing a specific condition that only three passengers had to travel in the lorry and only six loading and unloading coolies are covered. None else were supposed to travel in the lorry, which was insured as a goods carrying vehicle under the insurance policy in question. It is also not factually in dispute that at the time of accident, 25 persons were travelling in the lorry claiming to be loading and unloading coolies. Though the status of these 25 persons vis-à-vis their travel in the lorry was also questioned, the Tribunal had come to a conclusion on the evidence before it in each of the cases and on the broad human probabilities arising out of the evidence that these persons were travelling as loading and unloading coolies in the lorry. While these conclusions of fact need not be reopened in the absence of any specific reason, the factual matrix is that the vehicle insured as a goods carrying vehicle was carrying 25 loading and unloading coolies by the time of accident in clear violation of the specific term and condition of the insurance policy permitting travel of only six loading and unloading coolies in it. With that background, the precedential law relied on by the learned counsel for the parties has to be looked into. I n National Insurance Co. Ltd, v. Bommithi Subhayamma and others[1], the Apex Court reiterated that the death of a gratuitous passenger travelling in a goods vehicle will not make the insurer liable to pay any compensation. Similarly, in National Insurance Co Ltd., v. V. Chinnamma and others[2], the Apex Court held that when a tractor and trailer were being used for carriage of goods by a third party for his business activities, the same cannot be construed to be used for agricultural purposes and the factual situation was held to be governed by the principle laid down in Asha Rani 2003 ACJ 1 (SC). A learned Judge of this Court in Anasuyamma and another v. B. Narsinga Rao and another[3] was holding a passenger travelling in a goods vehicle carrying a load of sand to be an unauthorized passenger and to be not capable of being construed as a person accompanying goods. Similarly, the High Court of Delhi in National Insurance Co. Ltd., v. Surat Singh and others[4] observed that a gratuitous passenger in a goods vehicle travelling in breach of policy conditions cannot make the insurer liable and it was further held that in such cases, even the recovery rights cannot be given as insurance company is completely absolved from any liability to pay compensation amount. Another learned Judge of this Court held in New India Assurance Company Ltd, v. K. Bharath Kumar and others[5] that the victims picked up by the driver of the lorry in the mid-way were only passengers being carried from place to place against the law and therefore, they cannot be treated as persons, who engaged the lorry for transporting their personal effects from one place to another. The principles laid down in these precedents cited by the learned counsel for the appellant/revision petitioner are not in dispute, but the questions involved herein are with a different factual background. Here, the insurance policy itself permits the vehicle to carry six loading and unloading coolies and the travel by the persons in the lorry at the time of accident was not in any manner in violation of the purpose for which the vehicle could have been used in terms of the insurance policy. The vehicle could have lawfully carried six loading and unloading labourers at the time of accident, the liability for injuries to or the death of whom is squarely on the insurer also along with the insured in terms of the insurance policy. The situation in these cases, therefore, is straight away governed by the principles laid down by the Apex Court in National Insurance Co. Ltd., v. Anjana Shyam and others[6]. That was a case where a bus was insured in respect of a driver and conductor and 42 passengers and the route permit also was for carrying 42 passengers other than the driver and the conductor. At the time of accident, the bus was carrying 90 passengers and 26 persons were dead and 63 persons were injured in the accident. When the injured or the legal representatives of the deceased persons approached the Motor Accidents Claims Tribunal, they were awarded different sums of compensation. In considering the challenge by the insurer to the award of such compensation, the Apex Court referred in detail to the relevant provisions of the statute and pointed out that in the situation before it, the insurance taken out for the number of permitted passengers can alone determine the liability of the insurance company in respect of those passengers. It was observed that the statute no doubt made insurance obligatory in public interest and by way of social security. But that does not mean that an insurer is bound to pay amounts outside the contract of insurance or in respect of persons not covered by the insurance at all. Therefore, the Apex Court concluded that the insurance company can be made liable only in respect of number of passengers for whom the insurance can be taken under the Act and for whom insurance has been taken as a fact and not in respect of other passengers involved in accident in case of overloading. Consequently, the Apex Court directed Motor Accidents Claims Tribunal to take into account the higher of the 42 awards made out of 90 persons who either died or got injured in the accident add them up and direct the insurance company to deposit that lump sum. Then after the amount is so deposited in respect of 42 awards in the descending order starting from the highest of the awards, the Tribunal shall thereafter direct to distribute the money proportionately to all the 90 claimants and leave all the claimants to recover the balance from the owner of the vehicle. Of course, as no notices were issued to the claimants therein, the Apex Court confined the directions to a clarification of the law on the question and permitted the insurer to recover the excess amount, which was deposited, from the owner of the vehicle. In the present case, there is no difficulty of absence of notice to the claimants as the claimants in all the Civil Revision Petitions/ Civil Miscellaneous Appeals entered appearance through the counsel and the absence of the owner of the vehicle before this Court presents no difficulty as the owner did not appear in spite of service of notice of the revisions and appeals. When the Apex Court has clarified the law on the question of the liability of the insurer in respect of accidents involving overloaded vehicles, this Court is bound by the same as to dispose of all these Civil Revision Petitions and Civil Miscellaneous Appeals in the same lines. Consequently, as the insurance policy in question permits carrying of six loading and unloading coolies, the Motor Accidents Claims Tribunal should take into account the higher of the 18 awards made in the descending order starting from the highest of the awards and add up the top six (6) awards and direct the insurer to deposit the amounts payable under the six (6) awards to the credit of these matters and then distribute the same proportionately among the claimants in all the 18 cases respectively, while leaving it open to the claimants to recover the respective balances of compensation from the owner of the vehicle. The common order and the consequential awards in individual cases have to be modified accordingly in the light of the principles laid down by the Apex Court. Accordingly, the common order in M.V.O.P.Nos.800 to 811 of 2002 and 913 to 918 of 2002 and the consequential awards in the said M.V.O.Ps on the file of the Motor Accidents Claims Tribunal-cum-IX Additional District Judge, Guntur, are modified by directing the said Tribunal to take into account the higher of the 18 awards made in pursuance of the common order and after adding up the sums payable by the insurer and the insured under the said awards, direct the insurer to deposit that lump sum to the credit of these matters and then distribute the amount so deposited by the insurer proportionately to all the claimants in these 18 cases and the claimants in all these 18 cases are at liberty to recover the balance of compensation to which each of them are entitled from the owner of the vehicle/the 1st respondent in all the cases. The Civil Revision Petitions and the Civil Miscellaneous Appeals are ordered accordingly without costs. _____________________ G. BHAVANI PRASAD, J Date: 15-07-2010 Ksn [1] 2005 Accidents Claims Journal 721 [2] 2004 Accidents Claims Journal 1909 [3] 2008 Accidents Claims Journal 2385 [4] 2008 (5) Accident and Compensation Cases 48 [5] 2008 (6) Andhra Law Times 561 [6] 2007 (4) ACC 355 (SC)