AJN 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION LETTERS PATENT APPEAL NO.121 OF 2000 1. M/s. Traders Pvt. Ltd., Janasatta Karyalaya, Mirazapur Road, Ahmedabad, (Owner of Motor Vehicle No.MHT 1835). ) ) ) ) 2. The Oriental Insurance Co. Ltd., 30-B, Swastik Society, Navrangpura, Ahmedabad – 380 009 (Insurer of Motor Vehicle No.GBL-8335.) ) ) ) ) ) .... Appellants Versus 1. Smt. Sunanda widow of Krishna Machivale. ) ) 2. Kum. Nutan Krishna Machivale, daughter of the deceased. ) ) 3. Kumar Niranjan Krishna Machivale, son of the deceased. ) ) 4. Kum. Kavita Krishna Machivale, daughter of the deceased. ) ) 4A Yeshodabai Babu Machivale, mother of the deceased. All resident of 24-A, Nanabhai Chawl, Room No.2, Parel Village, Back Road, Bombay – 400 012. ) ) ) ) ) 5. Shri Tukaram Maruti More, 16, Hanuman Building, R/76, S.V. Road, Bombay – 400 007. (Owner of Truck No.MHT 1835) (since deceased). ) ) ) ) ) AJN 2 5A Jijabai Tukaram More, widow of Tukaram Maruti More, 16, New Hanuman Building, R/76, S.V. Road, Bombay – 400 007. ) ) ) ) 6. Shri Sampat Yeshwant Dhanwat, Uday Housing Company, Kavarana Bldg., 26, P. D'Mello Road, Bombay – 400 009 (Driver of Truck No.MHT 1835) ) ) ) ) ) 7. The New India Assurance Co. Ltd., New India Bhavan, 34-38, Bank Street, Fort, Bombay – 400 023. (Insurer of Motor Truck No.MHT 1835) (Discharged). ) ) ) ) ) ... Respondents Mr. M.G. Barve for the petitioners. Mr. P.M. Patel for respondents 1 to 3. Mr. R. Mahadik i/b Mr. S.R. Singh for respondent 7. CORAM : SMT. RANJANA DESAI & SMT. R.P. SONDURBALDOTA, JJ. DATE ON WHICH THE JUDGMENT RESERVED : 13TH JUNE, 2008. DATE ON WHICH THE JUDGMENT PRONOUNCED : 27TH AUGUST, 2008. JUDGMENT : (Per Smt. Ranjana Desai, J.) 1. Rule. Respondents waive service. By consent of the parties, taken up for hearing forthwith. AJN 3 2. In this letters patent appeal, order dated 8/3/2000 passed by learned Single Judge of this court in First Appeal No.807 of 1994 is under challenge. Respondents 1 to 4A are the heirs of one Krishna Babu Machivala. They filed Application No.827 of 1988 under the Motor Vehicles Act, 1939 (for short, “the said Act”) in the Motor Accident Claims Tribunal at Bombay, (for short, “the Tribunal”) for compensation on account of the death of the said Krishna (for convenience, “the deceased”) in a car accident on 16/12/1987. 3. We shall now state how the parties are arraigned in the application before the Tribunal. Respondents 1 to 4A are the original applicants-claimants (for convenience, “the applicants). Appellant 1 firm is opposite party No.3. It is the owner of Maruti Car No.GBL 8335. Maruti Car No.GBL 8335 shall be referred to as the said car and appellant 1 shall be referred to as the owner of the said car. Appellant 2 is the 2nd insurer. It is the insurer of the said car and shall be referred to as such. Respondent 5 is the owner of Motor Truck No.MHT 1835. He is opposite party No.1. Motor Truck No.1835 shall be referred to as the offending truck and respondent 5 shall be referred to as the owner of the offending AJN 4 truck. Respondent 5A is the widow of respondent 5. Respondent 6 is the driver of the offending truck. He is opposite party No.2 and shall be referred to as the driver of the offending truck. Respondent 7 is the 1st insurer. It is the insurer of the offending truck and shall be so referred to. 4. On 16/12/1987, at about 11.40 p.m., the deceased was driving the said car. One Anil Dwarkanath Chudji, an employee of the Indian Express Newspaper Ltd. (for short, “the Indian Express”) and another colleague from the Indian Express Office, were with him. They were proceeding from Nariman Point to Pune. When the said car approached Sion-Trombay Road near R.K. Studio, suddenly the offending truck coming from the opposite direction driven by opposite party No.2 in fast and uncontrollable speed dashed against Maruti Motor No.CGZ-6272 which was ahead of it, then went over the driver and dashed against the said car driven by the deceased with such a great force that it turned round on the spot killing the deceased instantaneously. Other inmates of the said car were injured. Soon, the wireless van of the police came to the spot of incident and removed the injured to the Rajawadi Hospital, Bombay. AJN 5 5. The case of the applicants is that the sudden death of the only earning member of the family has caused irreparable loss, pain and suffering to them. The deceased was young and of robust health. He could have lived upto 75 years but for this accident. Besides driving in Bombay for the Indian Express who was his employer, he was required to go to Pune, almost daily on overtime wages. 6. The applicants' further case is that the accident took place because of the rash and negligent driving of the driver of the offending truck. The owner of the truck is liable to pay compensation to the applicants because its driver was driving the truck as its servant in the course of employment with him and/or as the agent of and/or on behalf of and/or with his knowledge and/or permission. The insurer of the offending truck is also liable to indemnify any driver holding license after issuing the certificate of insurance under the said Act. It is also the case of the applicants that the deceased was driving the said car as a servant of the owner of the said car in the course of employment with it and/or as the agent of and/or on behalf of and/or with the knowledge of AJN 6 and/or with its permission and, therefore, the owner of the said car was liable to pay compensation to the applicants. According to the applicants, the insurer of the said car driven by the deceased was also liable to indemnify the deceased holding license after issuing the certificate of insurance under the provisions of the said Act. The applicants, therefore, prayed that the Opposite Parties may be ordered to pay to the applicants a sum of Rs.4,00,000/- or such other sum as may be deemed fit by way of general and special damages with interest thereon from the date of the application till payment. 7. Before the Tribunal, Opposite Party Nos.1 to 3 i.e. the owner of the offending truck, driver of the offending truck and owner of the said car respectively, remained absent. The insurer of the offending truck filed written statement admitting their liability to the extent of Rs.1,50,000/- and deposited Rs.1,50,000/- with the Tribunal. The applicants then made an application and requested the Tribunal that the insurer of the offending truck be discharged. The Tribunal granted this prayer. Notice as against the said insurer was discharged. AJN 7 8. Insurer of the said car who is appellant 2 herein denied the claim. It contended that the deceased was employed by the Indian Express. He was not the employee of the owner of the said car i.e. M/s. Traders Private Limited (appellant 1 herein). Therefore, even though he was driving the said car belonging to the owner of the said car, the insurer of the said car was not liable to pay compensation to the applicants either in the claim made under the said Act or under the Workmen's Compensation Act. According to the insurer of the said car, assuming the applicants are entitled to compensation they would be entitled to it only under the Workmen's Compensation Act and, therefore, the Tribunal has no jurisdiction to entertain the application. According to the insurer of the said car, as there was no negligence on the part of the deceased, there was no question of the insurer of the said car or the owner of the said car paying any compensation to the applicants. 9. Upon consideration of the evidence, the Tribunal concluded that the driver of the offending truck drove it in a rash and negligent manner which resulted in the offending truck colliding against the said car driven by the deceased causing him fatal injuries. The AJN 8 Tribunal held that the insurer of the said car was not liable even under the Workmen's Compensation Act to pay compensation to the applicants as the deceased was not an employee of the owner of the said car. The Tribunal held that the owner of the offending truck and the insurer of the offending truck are liable to pay Rs.2,98,000/- minus Rs.15,000/- already paid under section 92A of the said Act i.e. Rs.2,83,000/- as compensation to the applicants with interest at the rate of 12% per annum from the date of application till payment, jointly and severally. 10. The Tribunal further held that the liability of the insurer of the offending truck is however limited to Rs.1,50,000/- minus Rs.7,500/- already paid under section 92A of the said Act. The Tribunal ordered that balance amount of award (Rs.2,83,000/- - Rs.1,42,500/-) i.e. Rs.1,40,500/- with interest and proportionate costs be recovered from the owner of the offending truck. The application was dismissed as against the driver of the offending truck and the owner of the said car and notice against the insurer of the said car was discharged. 11. Being aggrieved by this judgment and order, the applicants AJN 9 preferred First Appeal No.807 of 1994. Main contention of the applicants before learned Single Judge was that the deceased was an employee of the owner of the said car and was driving his car and, hence, the insurer of the said car was liable to pay compensation to the applicants as the insurance policy included liability to third parties. It was contended that therefore, the insurer of the said car had paid compensation under section 92A of the said Act. It was urged that the Tribunal ought to have called upon the insurer of the said car to produce the insurance policy. It was also urged that the compensation awarded was inadequate and the entire amount claimed ought to have been granted. 12. Learned Single Judge directed the insurer of the said car to produce the policy of insurance. On a consideration of certain clauses of the policy, learned Single Judge came to a conclusion that the insurer of the said car cannot avoid its liability to pay compensation to the applicants. He observed that the employer of the deceased had ordered him to drive the car of its subsidiary company i.e. the owner of the said car. Learned Single Judge held that the insurer of the said car was liable to indemnify the applicants under its 'Comprehensive Policy' insuring the said car. AJN 10 Learned Single Judge was of the view that the compensation awarded was inadequate and the applicants would be entitled to the amount claimed by them that is Rs.4,00,000/-. Learned Single Judge observed that the insurer of the offending truck had accepted its liability and deposited Rs.1,50,000/- and that amount has been received by the applicants. Hence, the balance amount i.e. Rs.2,50,000/- should be recovered from the insurer of the said car. Insurer of the said car was, therefore, directed to pay Rs.2,50,000/- to the applicants with interest thereon at the rate of 12% per annum from the date of the order of the Tribunal. 13. The said judgment and order is challenged in the instant letters patent appeal by M/s. Traders Private Limited i.e. owner of the said car (appellant 1 herein) and the Oriental Insurance Company Limited - the insurer of the said car (appellant 2 herein). 14. We have heard, at some length, Mr. Barve, learned counsel for the appellants and Mr. Singh, learned counsel for the New India Assurance Company Limited i.e. the insurer of the offending truck, who is respondent 7 herein. We have also heard Mr. Patel, learned counsel for the claimants. AJN 11 15. Mr. Barve, learned counsel for the appellants took us through the written submissions tendered in the court by the appellants. He submitted that learned Single Judge erred in taking the insurance policy issued by the insurer of the said car to the owner of the said car, on record. He submitted that application to bring on record the said document was rejected by the Tribunal. That order was not challenged. The said policy, therefore, could not have been read in evidence at the appellate stage. Mr. Barve submitted that taking of the said policy on record has occasioned serious miscarriage of justice because the appellants had no opportunity to lead evidence to prove the extent to which IMT 5 purported to extend Personal Accident Insurance Cover. 16. Mr. Barve submitted that section 110 of the said Act conferred upon the Tribunal jurisdiction to adjudicate upon claims for compensation in respect of accidents involving the death of or bodily injury to and/or damage to any property of Third Party. The deceased was neither a Third Party within the meaning of section 95(1)(b)(i) nor was he in the employment of the owner of the said car so that liability under the Workmen's Compensation Act, 1923 AJN 12 can be fastened on it. The deceased was in fact a First Party and the liability, if any, of the appellants would have been in respect of acts of his negligence resulting into death of or bodily injury to and/or damage to any property of Third Party. 17. Mr. Barve submitted that learned Single Judge has wrongly interpreted clause 3 of section II of the said policy. He pointed out that section II is titled as Liability to Third Parties. Clause 3 thereof only states that the insurer of the said car was liable in respect of liability of the driver for his tortuous acts towards Third Party personal injury or property damage. Learned Single Judge has wrongly held that the insurer of the said car is liable to compensate the deceased who was driving the car of the owner of the said car. 18. Mr. Barve submitted that endorsement IMT 5 on which reliance is placed by learned Single Judge pertains to “Accidents to unnamed passengers other than the insured and his paid Driver or Cleaner”. Thus the deceased not being a passenger was not entitled to the benefit of Personal Accidents Insurance Cover. Mr. Barve submitted that learned Single Judge erred in treating Personal Accidents Insurance Cover under Endorsement IMT 5 as AJN 13 a contract of indemnity. He submitted that neither Personal Accidents Insurance Cover nor Life Insurance Policy is a contract of indemnity. Mr. Barve contended that endorsement IMT 5 is a Personal Accidents Insurance Cover in respect of death limited to Rs.15,000/- to unnamed passengers and specifically excludes such compensation to person driving the vehicle. 19. Mr. Barve submitted that enhancement of compensation has no basis. In any event, it is the insurer of the Third Party vehicle which has to satisfy the award and excess compensation must be recovered from the said Insurer. He submitted that liability cannot be fastened on the insurer of the said car in the absence of any liability being fastened on the owner of the said car. 20. In support of his submissions, Mr. Barve has relied on judgments of the Supreme Court in Padma Srinivasan v. Premier Insurance Co. Ltd., AIR 1982 SC 836; National Insurance Co. Ltd. v. Swaran Singh & Ors., AIR 2004 SC 1531; Punam Devi & Anr. v. Divisional Manager, New India Assurance Co. Ltd. & Ors., (FB) AIR 2004 SC 1742; M/s. National Insurance Co. Ltd. AJN 14 v. Baljit Kaur & Ors. AIR 2004 SC 1340; Sohan Lal Passi v. P. Sesh Reddy & Ors., 1996 (5) SCC 21; Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan & Ors., AIR 1987 SC 1184; National Insurance Co. Ltd. v. Deepa Devi & Ors. 2008 ACJ 705; Oriental Insurance Co. Ltd. v. Syed Ibrahim & Ors., 2007 ACJ 2816; National Insurance Co. Ltd. v. Anjana Shyam & Ors. 2007 ACJ 2129; British India General Insurance Co. Ltd. v. Captain Itbar Singh & Ors. AIR 1959 SC 1331 and Subramania Naicker & Anr. v. Kuppuswamy & Anr., 1990 ACJ 261. Mr. Barve submitted that in the circumstances, the impugned judgment and order be set aside and necessary direction be given to recover the excess compensation from the insurer of the offending truck. 21. Mr. Singh learned counsel for the New India Assurance Company Limited i.e. the Insurer of the offending truck, respondent 7 herein, submitted that the insurer of the offending truck had filed written statement in the Tribunal stating that its liability was limited to Rs.1,50,000/-. It accepted the limited liability and paid Rs.1,50,000/- to the Claimants and the Claimants filed application praying for deletion of its name from the proceedings. That AJN 15 application was allowed and notice issued against the insurer of the offending truck was discharged. This order was not challenged by the appellants. In fact, the appellants have now prayed that the judgment of the Tribunal be upheld. Therefore, the appellants cannot now urge that the insurer of the offending truck is liable to pay any additional compensation to the Claimants. 22. Mr. Singh submitted that in any case, at the relevant time, the liability of the insurer of the offending truck in respect of Third Party risks, in case of goods vehicle was limited to Rs.1,50,000/- under section 95(2)(a) of the said Act. Mr. Singh further submitted that on perusal of schedule of the policy of the insurer of the offending truck, it is clear that premium of Rs.240/- has been paid towards “Public Risk” under section II-1(i) of the Policy and Rs.16 has been paid for covering risk of driver/cleaner. No extra premium has been paid for coverage of any passenger to be carried in the vehicle or for unlimited liability for Third Party risks. Limits of liability has been described as “such amount as is necessary to meet the requirements of M.V. Act, 1939”. Mr. Singh submitted that it is well settled that liability of the insurer would be limited as provided under the statute/law except where it can be shown that AJN 16 there was a special contract to enhance the liability and extra premium was paid therefor. Mr. Singh submitted that so far as insurer of the offending truck is concerned, there was no special contract to enhance the liability and no extra premium was paid. Therefore, there is no question of the insurer of the offending truck paying any compensation to the Claimants beyond the admitted liability of Rs.1,50,000/- as per section 95(2)(a). 23. Mr. Singh pointed out that the policy of the insurer of the offending truck is styled as “Third Party Policy”. Third Party Property Damage as provided under “Limits of Liability” is Rs.50,000/- (Section II(i)(ii) of the policy). Thus Third Party Property Damage though limited to Rs.2,000/- under section 92(2) (d) was extended upto Rs.50,000/- however as far as “Third Party injury and/or death” is concerned, the liability is restricted to Rs.15,000/- as per the said Act (Section II-1(i) of the policy). Mr. Singh submitted that in case of a Comprehensive Policy damage caused to the vehicle and certain other risks are covered on payment of requisite extra premium. But that does not mean that the limit of the liability with regard to Third Party risks becomes unlimited or higher than that which is statutorily fixed. In this AJN 17 connection, Mr. Singh relied on National Insurance Company Limited v. Jugal Kishore & Ors. 1988 ACJ 270 (SC), New India Assurance Company Limited v. C.M. Jaya & Ors. 2002 ACJ 271 (SC), Oriental Insurance Company Limited v. Smt. Raj Kumari & Ors. AIR 2008 SC 403, and National Insurance Company Limited v. Anjance Shayam & Ors. (2007) 7 SCC 445. 24. Mr. Singh further submitted that the appellant's argument that the insurer of the offending truck should be directed to pay the entire award amount to the Claimants and then recover that from the owner of the truck is misconceived. Mr. Singh submitted that the liability of the insurer of the offending truck is limited to only Rs.1,50,000/- and there is no provision in law under which any insurer can be asked first to pay the Claimants and then recover from the insured even if there is no liability and/or restricted liability. Mr. Singh submitted that the extra-ordinary jurisdiction to make such a direction is only enjoyed by the Supreme Court under Article 136 read with Article 142 of the Constitution of India if the finding under the law is that there is no liability upon the insurer to pay the compensation to the Claimants and then recover it from the AJN 18 owner. In this connection, Mr. Singh relied upon the judgments of the Supreme Court in National Insurance Company Limited v. Kusum Rai & Ors. (2006) 4 SCC 250, Oriental Insurance Co. Ltd. v. Brij Mohan & Ors. (2007) 7 SCC 56. He also relied on judgments of this court in United India Insurance Co. Ltd. v. Anubai G. Thakore & Ors. (F.A. No.827 of 2006 decided on 26/8/2007 and New India Assurance Co. Ltd. v. Diwakar & Ors. 2007 ACJ 215. Mr. Singh also relied on the judgment of the Rajasthan High Court in United India Insurance Co. Ltd. v. Madho Singh & Ors. 2005 ACJ 1953 (RAJ). Mr. Singh submitted that in the circumstances, the insurer of the offending truck cannot be saddled with the liability of paying any additional compensation to the Claimants nor can it be asked to pay the amount to the Claimants and recover it from the owners of the offending truck. 25. Mr. Patel, learned counsel for the claimants submitted that learned Single Judge has rightly granted the claim of the claimants in its entirety. He submitted that no case is made out for interference with the quantum of maintenance. He submitted that learned Single Judge has rightly held the appellants also liable to AJN 19 pay compensation to the claimants but assuming this court comes to the conclusion that they are not liable to pay the compensation, that would entirely be a matter between the two insurance companies and the owners with which the claimants are not concerned. 26. We have already noted that the Tribunal has returned a finding that the driver of the offending truck drove it in a rash and negligent manner which resulted in the offending truck colluding against the said car causing fatal injuries to the deceased. The Tribunal has not found the deceased to be negligent. These findings of the Tribunal have not been disturbed by learned Single Judge. We concur with the above findings recorded by the Tribunal which are endorsed by learned Single Judge. We must also note that there is no conclusive evidence on record to establish that the deceased was driving the said car at the instance of or on the order of the owners of the said car. 27. So far as quantum of compensation is concerned, learned Single Judge has come to a conclusion that the claimants are entitled to Rs.4,20,120/-. However, since the applicants have AJN 20 claimed only Rs.4 lakhs, learned Single Judge has allowed the applicants' claim in its entirety. Thus, learned Single Judge has enhanced the compensation. In our opinion, the enhancement of compensation is justified and legal. Moreover, having regard to the fact that the deceased is survived by two daughters, one son, a widow and a mother, we are not inclined to disturb the quantum. The amount awarded appears to us to be reasonable. 28. We must first deal with Mr. Barve's objection to the taking on record of the insurance policy of the insurer of the said car by learned Single Judge. The impugned order indicates that the Tribunal refused to take the xerox copy of the said policy on record. Learned Single Judge has observed that