IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD MONDAY, THE EIGHTH DAY OF AUGUST TWO THOUSAND AND ELEVEN Present HON’BLE SRI JUSTICE G. BHAVANI PRASAD CIVIL MISCELLANEOUS APPEAL No.1080 of 2003 Between: C. Maddilety & 3 others .. Appellant AND National Insurance Company Ltd. .. Respondents CIVIL MISCELLANEOUS APPEAL No.1316 of 2003 Between: National Insurance Company Ltd. .. Appellant AND C. Maddilety & 3 others .. Respondents The Court made the following: HON’BLE SRI JUSTICE G. BHAVANI PRASAD CIVIL MISCELLANEOUS APPEAL Nos.1080 of 2003 and 1316 of 2003 COMMON JUDGMENT: These appeals are directed against the award, dated 18.11.2002, in M.V.O.P.No.1085 of 2001, on the file of the Chairman, Motor Accidents Claims Tribunal-cum-I Additional District Judge, Kurnool. 2. The factual background for the appeals is that C. Maddilety, owner of Tractor and Trailer No.AP 21-U-7519 and AP 21-U-7520, was travelling in the Trailer along with napa slabs being carried from the quarries from Sunkesula Village to Parlapadu Village on 31.03.2001 along with three hamalies. While he was so travelling as the owner of the goods also, the vehicle, driven rashly and negligently by the driver, turned turtle near Chinna Kommerla Village, resulting in the death of Maddilety on the spot. His parents, wife and minor daughter claimed a compensation of Rs.5,00,000/- from the insurer of the Tractor and Trailer claiming Maddilety, aged 27 years, to be earning Rs.8,000/- per month from napa slabs business. 3. The insurer contested the claim contending that there was no negligence on the part of the Tractor driver and that the owner of the Tractor and Trailer need not have travelled in the vehicle along with the goods. Even if he had travelled, he should have taken necessary precautions and the insurer also questioned the existence of a driving license for the driver, permit and fitness certificate for the vehicle, etc. The insurer, hence, desired the claim to be negatived. 4. The Tribunal framed issues about the responsibility for the accident and the entitlement of the claimants for compensation and during the enquiry, examined P.Ws.1 and 2 and R.W.1 and marked Exs.A-1 to A-4, B-1 and B-2. 5. The Tribunal rendered the impugned award firstly opining that the question of impleading the legal heirs of the owner of the vehicle after the death of the owner in the accident does not arise and that the manner of the accident cannot be questioned by the insurer. The Tribunal deduced from the evidence of the wife as P.W.1 and one Hamali as P.W.2 (eye witness) that the accident occurred due to the rash and negligent driving of the vehicle. The contents of Ex.A-1-First Information Report, Ex.A-2-Inquest Report, Ex.A-3-Post Mortem Certificate and Ex.A-4-Motor Vehicle Inspector’s Report were considered to be corroborating the claims of P.Ws.1 and 2. 6. The Tribunal proceeded to assess the compensation payable by the insurer taking the age of the deceased as 27 years from Ex.A-3-Post Mortem Certificate. It adopted a multiplier of 18 with reference to the Second Schedule to the Motor Vehicles Act, 1988. The Tribunal, in the absence of any specific evidence for the income, considered the same to be Rs.18,000/- per annum treating the deceased as an unskilled labourer. It deducted 1/3rd of the assessed income towards the personal expenses of the deceased and on the annual contribution of Rs.12,000/- to the family, the loss of dependency was arrived at a sum of Rs.2,16,000/-. The Tribunal also considered it just to award Rs.15,000/- towards loss of consortium, Rs.2,500/- towards loss of estate, Rs.3,000/- towards funeral expenses, transport, etc., and granted a total compensation of Rs.2,36,500/-. The Tribunal rejected the claim of the insurer about the absence of liability for the death of the owner under Ex.B-1-Insurance Policy and Ex.B-2-Policy conditions relying on SARAJU SATYAVATH AND OTHERS VS. ORIENTAL INSURANCE COMPANY LIMITED[1] a n d NEW INDIA ASSURANCE CO., LTD VS. DOREDLA SATYANARAYANA AND OTHERS[2]. The Tribunal granted interest on the compensation at 9% per annum and gave further directions about the apportionment and disbursement of the compensation. 7. The insurer challenged the said award in C.M.A.No.1316 of 2003 reiterating the claim that no claim could have been maintained against the insurer alone in the absence of the owner of the vehicle and the owner of the vehicle could not have been considered as the owner of the goods for the purpose of compensation. The insurer also questioned the quantum arrived at without definite evidence and by applying a wrong multiplier. The insurer, therefore, desired the award to be reversed. 8. The claimants preferred C.M.A.No.1080 of 2003 questioning the assessment of the income of the deceased at a meagre level and not granting compensation towards loss of estate. The claimants desired that the balance of compensation claimed by them also be awarded. 9. The learned counsel for both the parties reiterated their respective contentions. 10. The following points arise for consideration and determination in these appeals: 1. Whether on the terms and conditions of Exs.B-1 and B-2, the insurer can be made liable for the death of the owner of the vehicle treating him as the owner of the goods? 2. If so, whether compensation awarded is not just and adequate? 3. To what relief? 11. POINT NO.1:- Exs.B-1 and B-2-Insurance Policy and the conditions of the policy do not disclose the payment of any specific premium covering the risk of the owner of the vehicle. Though the insurance policy is a comprehensive policy, the use of the vehicle was agreed to be limited only for carriage of goods and it was specifically stated that the policy does not cover use for carrying passengers in the vehicle except employees not exceeding six in number other than the driver who come under the purview of the Workmen’s Compensation Act, 1923. While the owner of the vehicle or the owner of the goods does not answer the description of an employee covered by the Workmen’s Compensation Act, 1923, the insurance policy, either expressly or impliedly, does not appear to cover the liability of the owner of the vehicle. Apart from the non-payment of any specific premium to cover the risk of the owner of the vehicle, the terms and conditions specified in Ex.B-2, more particularly, IMT 14 specify that indemnification of the legal liability of the insurer in respect of non-fare paying passengers who are not employees arises only on payment of additional premium. While the evidence of P.Ws.1 and 2 or Exs.A-1 to A-4 do not throw any light on this aspect, the A.A.O of the insurer as R.W.1 reiterated that the liability of the insurer does not extend to the owner of the vehicle under Ex.B-1- Insurance Policy. Though he admitted during the cross-examination that a sum of Rs.15/- is to be paid as premium for covering the risk of non-fare paying passengers/owners of the goods and though he does not know personally in which capacity the deceased travelled in the vehicle, he asserted that the deceased was the owner of the vehicle obviously implying that he does not come under the other two descriptions. 12. It is true that in the two precedents relied on by the Tribunal emanating from this Court, the insurer does not appear to be ex facie not liable for payment of compensation. Sri E. Venugopal Reddy, learned counsel for the insurer brought to notice that the decision of the Division Bench relied on by the Tribunal was set aside by the Apex Court in Civil Appeal Nos.8598-8599 of 1997 on 08.12.1998 in the light of the judgment of the Apex Court in SMT. MALLAWA ETC. VS. THE ORIENTAL INSURANCE CO. LTD. AND OTHERS. The learned counsel also invited attention to the decision reported in NEW INDIA ASSURANCE CO. LTD. VS. MEERA BAI[3], wherein the Apex Court, following DHANRAJ VS. NEW INDIA ASSURANCE CO. LTD.[4], held that the policy of insurance did not cover the risk of the owner of the vehicle who was the insured. That was a case where the owner himself was driving the vehicle at the time of the accident. 13. Similar was the decision of the Apex Court in ORIENTAL INSURANCE CO. LTD. VS. JHUMA SAHA[5], wherein the Apex Court followed again DHANRAJ’s case (4 supra) and stated that the liability of the insurer is to the extent of indemnification of the insured and if the insured cannot be fastened with any liability under the Motor Vehicles Act, 1988, the question of the insurer being liable to indemnify the insured does not arise. A owner of a vehicle was held to be entitled to sustain a claim provided a personal accident insurance has been taken out and additional premium has been paid. 14. In ORIENTAL INVESTMENT COMPANY LIMITED VS. SUNITA RATHI[6], a Three Judge Bench of the Apex Court considered that the liability of the insurer arises only when the liability of the insured has been upheld. Therefore, the decision in NEW INDIA ASSURANCE COMPANY LTD., VIJAYAWADA, REP. BY ITS BRANCH MANAGER VS. DOREDLA SATYANARAYANA[7], or other decisions concurring with such view, cannot any longer be considered to be good law. 15. In fact, the question received attention of this Court i n DIVISIONAL MANAGER, NATIONAL INSURANCE CO., LTD., ANANTAPUR VS. MAHAMOODA AND OTHERS[8], wherein the learned Judge noted all the above decisions and concluded that no liability can be fastened against the insurance company for the death of the owner of the vehicle unless an extra premium is paid under the insurance policy covering the risk of the owner of the vehicle also. Like in that case, no premium/additional premium was paid to cover any such liability in the present case also and, therefore, the insurer could not have been fastened with any liability to compensate the dependents of the deceased owner of the vehicle/the insured. 16. POINT NO.2: In view of the non-liability of the insurer to compensate the dependents of the deceased owner of the vehicle, in the absence of payment of any premium to cover any such risk and in the absence of any liability for the owner himself, which could have been interpreted to be indemnifiable by the insurer, the question of any just and adequate compensation being assessed in the claim only against the insurer does not arise and even otherwise, neither the acceptance of the age of the deceased with reference to the post mortem certificate nor the assessment of the probable income of the deceased treating him as unskilled labourer in the absence of any other evidence can be considered low, while the application of the multiplier in a petition under Section 166 with reference to the Second Schedule to the Motor Vehicles Act, 1988, was slightly on the higher side than even what was upheld b y SARLA VERMA AND OTHERS V. DELHI TRANSPORT CORPORATION AND ANOTHER[9] (it was only 17 as per the decision). The other amounts granted towards other heads of damages to a tune of Rs.20,500/- were marginally higher than what SARLA VERMA’s case (supra 9) upheld and, hence, in any view, the quantum of compensation could not have been revised further upwards. However, this answer to this question is only academic in view of the non-liability of the insurer. 17. POINT NO.3:- In view of the above conclusions, the appeal by the insurer has to succeed and the appeal by the claimants has to fail, but under the circumstances, both without costs. 18. In the result, C.M.A.No.1316 of 2003 is allowed without costs and C.M.A.No.1080 of 2003 is dismissed without costs and consequently, the award, dated 18.11.2002, in M.V.O.P.No.1085 of 2001, on the file of the Motor Accidents Claims Tribunal-cum-I Additional District Judge, Kurnool, is set aside. The said M.V.O.P.No.1085 of 2001 is dismissed without costs. Any amounts paid under the award set aside by this judgment can be recovered by the insurer in accordance with law. ______________________ G. BHAVANI PRASAD, J Date: 8th August, 2011 KL HON’BLE SRI JUSTICE G. BHAVANI PRASAD CIVIL MISCELLANEOUS APPEAL Nos.1080 of 2003 and 1316 of 2003 Date: 8th August, 2011 KL [1] 2002 ACJ 1414 [2] 1998 ACJ 952 [3] 2007 ACJ 821 [4] 2005 ACJ 1 (SC) [5] 2007 ACJ 818 [6] 1998 ACJ 121 [7] 1997 (5) ALD 32 (DB) [8] 2009 (2) ALD 489 [9] 2009 ACJ 1298