IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD FRIDAY THE TENTH DAY OF DECEMBER TWO THOUSAND AND TEN HON’BLE SRI JUSTICE G. BHAVANI PRASAD M.A.C.M.A. No.4347 of 2004 and M.A.C.M.A. Nos.773, 2315 and 2316 of 2005 M.A.C.M.A. No.4347 of 2004: Between: Aluguvelli Viraja and others .. Appellants And Abdul Saleem and others .. Respondents M.A.C.M.A. No.773 of 2005: Between: United India Insurance Co. Ltd., rep. by its Branch Manager, Mancherial .. Appellant And Aluguvelli Narayana Reddy and others .. Respondents M.A.C.M.A. No.2315 of 2005: Between: The United India Insurance Co Ltd., rep. by its Branch Manager, Mancherial .. Appellant And Damera Srinivasa Rao and others .. Respondents M.A.C.M.A. No.2316 of 2005: Between: The United India Insurance Co. Ltd., rep. by its Branch Manager, Branch Office, Mancherial .. Appellant And Panjala Ramesh and others .. Respondents COMMON JUDGMENT: M.A.C.M.A. Nos.773, 2315 and 2316 of 2005 by the insurer arise out of different awards rendered by the Motor Accidents Claims Tribunal-cum-II Additional District Judge, Karimnagar involving the same accident, while M.A.C.M.A. No.4347 of 2004 is by respondents 3 to 5 in M.A.C.M.A. No.773 of 2005 seeking enhancement of compensation. The facts leading to the appeals are that on 20-10-2001 Aluguvelli Ravinder Reddy, the son of respondents 1 and 2/husband of the 3rd respondent/father of respondents 4 and 5 in M.A.C.M.A. No.773 of 2005, and the 1st respondents in M.A.C.M.A. Nos.2315 and 2316 of 2005 were travelling in Tata Sumo No.AP 25E 4444 and at about 4.15 A.M. the 1st respondent in the claim petitions driving the vehicle dashed against a stationary lorry with his rash and negligent driving. Aluguvelli Ravinder Reddy died on the spot, while the 1st respondents in the other two appeals sustained severe multiple injuries. The parents, wife and children of Ravinder Reddy filed M.V.O.P. No.448 of 2002 for a compensation of Rs.15,00,000/- claiming that as an employee of National Thermal Power Corporation Limited, the deceased was drawing a monthly salary of Rs.12,539/- at the age of 38 years, contributed entirely to the family. The 1st respondent in M.A.C.M.A. No.2315 of 2005 filed M.V.O.P. No.501 of 2003 claiming that he sustained multiple compound facture of maxilla in the facial region, fracture of both zygomatic bones, extensive pneumocephalus with its effects, injury to right orbit, fracture of left mandible, fracture of left zygoma, fracture of nasal bone, fracture of both bones of left lower limb and other lacerated wounds. He was treated at Gandhi hospital, Secunderabad and then at Sai Vani Nursing Home and then at Hyderabad Nursing Home. He underwent surgeries incurring an expenditure of Rs.1,00,000/- and he requires further surgeries at a cost of Rs.80,000/- for removal of damaged right eyeball and removal of clips in the face and in the left leg. He was earning Rs.5,000/- per month as Work Inspector at the age of 36 years and he sustained permanent disability and lost his income. Hence, he claimed a compensation of Rs.5,00,000/-. The claimant in M.V.O.P. No.584 of 2002 is the 1st respondent in M.A.C.M.A. No.2316 of 2005 and he claimed that he sustained injuries on the lower lip, right knee and right eye and was treated at Gandhi hospital, Secunderabad and Apollo Hospital, Hyderabad incurring an expenditure of Rs.20,000/-. He was disabled from attending his job for six months and is not able to work as before and hence, he claimed a compensation of Rs.1,00,000/-. The driver and owner of the vehicle did not appear before the Tribunal, while the insurer denied the allegations of the claimants and the negligence of the driver in driving the vehicle as well as any subsisting insurance for the vehicle or driving licence for the driver. The vehicle was originally owned by one Gattaiah and transferred in the name of the 2nd respondent in M.V.O.P. No.448 of 2002 on 14-09-2001. Hence, the insurer desired the claims to be negatived. In M.V.O.P. No.448 of 2002, the Tribunal framed issues about the responsibility for the accident, subsistence of a valid insurance and entitlement of the claimants to compensation, while in the other two matters, similar issues were framed on the other aspects, but there was no issue about the subsistence of a valid insurance on the date of the accident. In M.V.O.P. No.448 of 2002, P.Ws.1 to 3 and R.Ws.1 and 2 were examined and Exs.A.1 to A.11 and B.1 and B.2 were marked during the enquiry. The Tribunal rendered the award dated 17-07-2004 impugned in M.A.C.M.A. Nos.773 of 2005 and 4347 of 2004 firstly accepting the eye witness account of P.W.3, corroborated by Exs.A.1 and A.2 first information report and charge-sheet as probablising the rash and negligent driving of the vehicle by the 1st respondent. Ex.B.2 copy of insurance policy was held to be showing valid insurance and the age of the deceased was taken as 38 years. While referring to the evidence of P.W.2, a Senior Officer of the employer of the deceased, the Tribunal noted that on her admission of Ex.A.9 being the salary certificate about the salary drawn by the deceased at the time of his death, the salary had to be taken as only Rs.6,586/- as mentioned therein. The Tribunal noted that the scope for any future promotions for the deceased cannot be considered, as the deceased was not technically qualified and as future promotions are based only on the existence of vacancies. Applying a multiplier of 16, the Tribunal arrived at a sum of Rs.8,43,072/- towards loss of dependency, while it also considered awarding Rs.10,000/- towards loss of consortium to the wife and Rs.5,000/- each to the other claimants towards loss of love and affection. In total it awarded a sum of Rs.8,73,000/- payable with interest at 9 per cent per annum and proportionate costs. The Tribunal referred to the evidence of R.Ws.1 and 2 about the deceased travelling in the vehicle registered as a private vehicle. The Tribunal accepted the evidence of P.W.3 about the deceased travelling in the vehicle for the personal purpose of the owner of the vehicle, the 2nd respondent, to purchase some electrical materials for him. The Tribunal opined that the insurance policy covers the risk of such a passenger and therefore, considered that the driver, owner and insurer are jointly and severally liable to pay the compensation. Against the award so passed, the insurer contended in M.A.C.M.A. No.733 of 2005 that the passengers carried in a private vehicle will not come under the purview of third parties and the owner did not pay any premium to cover the risk of the inmates of the vehicle, as the vehicle was used for carrying passengers, whose risk is not covered by the policy. The insurer could not have been fastened with any liability and no weight could have been given to the evidence of P.W.3. In C.M.A. No.4347 of 2004, claimants 3 to 5 contended that the Tribunal ought to have seen that the deceased as a Pump Operator in National Thermal Power Corporation was drawing a salary of Rs.13,603/- per month which would have ended with a basic pay of Rs.19,803/- in due course of time. Taking into consideration only the take home salary is unjust and the amount awarded being hopelessly low needs upward revision to the extent of their claim. In M.V.O.P. No.501 of 2003, P.Ws.1 and 2 and R.Ws.1 and 2 were examined and Exs.A.1 to A.18 and Exs.B.1 to B.3 were marked. The Tribunal rendered the impugned award firstly accepting the evidence of the injured P.W.1, corroborated by the first information report and the charge-sheet, Exs.A.1 and A.2, to prove the rash and negligent driving of the vehicle by the driver and after referring to the evidence about the injuries suffered and the consequences that ensued, the Tribunal considered it just and adequate to award a total compensation of Rs.2,35,500/- to the claimant. Referring to various decisions cited before it concerning the non-liability of the insurer in respect of the passengers carried for hire or reward in a private vehicle, the Tribunal accepted that the insurance policy does not cover the risk of the occupants and that the deceased who was carried for hire or reward and the other claimants can be held to be travelling in the vehicle as fare-paying passengers. Still the Tribunal considered the law as settled (appears to be with reference to 2003(2) ALD 775) that the insurer should pay the compensation and recover the same from the owner. Therefore, the Tribunal granted the compensation against both the respondents jointly and severally, while declaring the entitlement of the insurer to recover the amount from the owner of the vehicle without filing any separate suit. In M.V.O.P. No.584 of 2002, P.W.1 and R.Ws.1 and 2 were examined and Exs.A.1 to A.8 and B.1 to B.3 were marked. The Tribunal rendered the impugned award accepting the evidence of the injured P.W.1, corroborated by Exs.A.1 and A.2, the first information report and the charge-sheet, as proving the rashness and negligence in driving the Tata Sumo. The Tribunal, after assessing the evidence concerning the injuries and their consequences, considered it just and adequate to award a compensation of Rs.42,000/-. Then with reference to the nature of travel of the claimant in the vehicle at the relevant time, the Tribunal came to identical conclusions as in M.V.O.P. No.501 of 2003 and passed a similar award. The award in M.V.O.P. No.501 of 2003, dated 24-06-2005 and the award in M.V.O.P. No.584 of 2002, dated 14-06-2005 were challenged by the insurer on identical grounds as in M.A.C.M.A. No.773 of 2005. Sri Srinivasa Rao Vutla, learned counsel for the insurer, Sri Venkateswar Varanasi, learned counsel representing the claimants in M.V.O.P. No.448 of 2002 and Sri A. Jagan, learned counsel representing the claimant in M.A.C.M.A. No.2316 of 2005 are heard. In so far as the quantum of compensation awarded in M.V.O.P. Nos.501 of 2003 and 584 of 2002 are concerned, the claimants did not file any appeal or cross appeal or cross- objections and the same is not under consideration herein. Similarly, the driver and owner of the vehicle Tata Sumo did not challenge the awards passed against them jointly and severally in the three cases and hence, their liability is also not under consideration herein. The finding of the Tribunal in all the three cases about the rash and negligent driving of the driver of Tata Sumo being the cause for the accident is not under challenge in any of the four appeals and the existence of valid and subsisting insurance policy in respect of Tata Sumo vehicle by the time of the accident also is not in dispute. Therefore, the only question that remains for consideration in the appeals filed by the insurer is about the liability of the insurer to compensate the injured or the dependents of the deceased when the injured and the deceased were travelling as passengers in a private vehicle, in respect of whose risk no premium was separately paid under the insurance policy in question. Sri Srinivasa Rao Vutla, learned counsel for the insurer referred to Bhagyalakshmi and others v. United Insurance Co. Ltd. and another[1], wherein the Apex Court was considering the question whether gratuitous passengers travelling in a private car or pillion riders carried on two wheelers are automatically covered under a package policy/comprehensive policy. The Apex Court noted the view of the Delhi High Court that the package policy covers such a risk and the view of the Madras High Court that there would be no coverage of such risk and considered that the matter requires consideration by a Larger Bench. The answer to the reference is still awaited. While there is, thus, an apparent conflict of judicial opinion on such a question, the reasoning adopted by the Delhi High Court appears more in tune with the object and purpose of the beneficial provisions of the Motor Vehicles Act, 1988 and the wider coverage assuming greater risk liability implicitly involved in a package/comprehensive policy. However, the need for any further probe into the legal questions did not arise in view of the circular of the Insurance Regulatory and Development Authority, dated 03-12-2009 in No.IRDA/NL/CIR/F&U/078/12/2009 which referred to an earlier circular, dated 16-11-2009 and the consequential order of the Delhi High Court in another case on 23-11-2009. The Authority reiterated in terms of the circular and the order of the Delhi High Court that the liability of all the General Insurance Companies doing motor insurance business in respect of the occupants in a private car and a pillion rider on a two wheeler under comprehensive/package policies is admitted and the earlier circular and the orders of the Delhi High Court have to be strictly complied. The Authority, therefore, directed all the General Insurance Companies to withdraw all the appeals pending before High Courts on this point as directed. The binding nature of the circular instructions of the Insurance Regulatory and Development Authority received recognition from judicial precedents including from this Court and if so, irrespective of the capacity in which the injured and the deceased in the present case were travelling in the Tata Sumo vehicle/a private car, the insurance policy in question being a comprehensive policy, the occupants in the private car are entitled to be compensated for their risk. The challenge to the impugned awards by the insurer on this count, therefore, has to fail. Coming to the question raised by the appellants in C.M.A. No.4347 of 2004 about the justifiability of the quantum of compensation awarded, it is seen from the award that notwithstanding the other claims of P.W.2, a Senior officer of the employer of the deceased, P.W.2 admitted that Ex.A.9 was the salary certificate showing the salary drawn by the deceased at the time of his death. The Tribunal noted the certificate showing his monthly salary to be Rs.6,586/- and it assessed the compensation payable on that basis. So, the references to higher sums by P.W.2, therefore, do not appear to have any evidentiary basis. Similarly, though P.W.2 referred to the chances of the deceased getting promotion up to the 10th grade with a basic pay of Rs.19,803/-, she also stated that the deceased was not technically qualified and therefore, it is certain that he would not be promoted to the higher grades apart from the availability or non-availability of the vacancies for such promotions. So certainty of promotion, any enhancement of the assessed income towards any future prospects and other grounds raised by the claimants in this appeal do not appear to be based on any possible certainties, but on uncertain imponderables. As grant of compensation has as its object, just compensation and not unjust enrichment, the compensation of Rs.8,73,000/- awarded by the Tribunal taking into consideration the real income that the deceased was earning by the time of his death cannot be considered low. However in Sarala Verma v. Delhi Transport Corporation[2], the Apex Court, apart from directing addition of income towards future prospects (no future prospects having been probablised in this case) directed deduction for personal and living expenses of the deceased only at one-fourth where the number of dependent family members is 4 to 6. In the present case, the dependents of the deceased are 5 in number and hence, instead of one-third, one-fourth should have been deducted. If so, there will be a difference of Rs.550/- per month or Rs.6,600/- per annum or Rs.1,05,600/- in total. However, as per Sarala Verma v. Delhi Transport Corporation (2 supra) the appropriate multiplier applicable will be 15 and not 16 and if so, there should be a deduction of the compensation to that extent, which will come to about Rs.59,300/-. Taking an overall view and in the light of all heads of pecuniary and non-pecuniary damages, there should be considered enhancement of the compensation already awarded, by Rs.50,000/- which will be reasonable and just. In the light of the length of time for which interest has to be paid on such enhanced compensation, such interest can be restricted to 6 per cent per annum, while proportionate costs should be awarded. In the result, M.A.C.M.A. Nos.773, 2315 and 2316 of 2005 are dismissed without costs. M.A.C.M.A. No.4347 of 2004 is allowed in part without costs and the award in M.V.O.P. No.448 of 2002 on the file of the Motor Accidents Claims Tribunal-cum-II Additional District Judge, Karimnagar, dated 17-07-2004 is modified by awarding a further compensation of Rs.50,000/- (Rupees fifty thousand only) with interest thereon at 6 per cent per annum from the date of the petition till the date of realization and proportionate costs in addition to the compensation already awarded by the impugned award. The enhanced compensation shall be shared between all the five claimants in the same proportion in which the compensation originally awarded was directed to be shared and no further directions need be given about the disbursement of the compensation at this distance of time. _____________________ G. BHAVANI PRASAD, J Date: 10-12-2010 Svv [1] 2009(7) Scale 550 [2] 2009 ACJ 1298