THE HON’BLE SRI JUSTICE B.N. RAO NALLA M.A.C.M.A.No.1745 of 2005 JUDGMENT: This appeal is filed by the insurance company against the order dated 29.11.2004 in M.V.O.P.No.267 of 2003 on the file of the Motor Accidents Claims Tribunal-cum-III Additional District Judge, Kurnool at Nandyal whereby and whereunder the legal heirs of the deceased were awarded an amount of Rs.2,87,200/- as against the claim of Rs.3,00,000/, with proportionate costs and interest at 9% per annum from the date of the petition till the date of realisation. 2. The facts leading to the filing of this appeal can be summarised as follows: On 27.10.2001, the deceased along with others was travelling by jeep bearing No. AP-21-A-9018 to go to Kurnool from Nandyal; that when the said vehicle reached Nannur Electrical Sub-Station, the driver-cum-owner drove it at high speed in a rash and negligent manner and it turned turtle due to puncture of the rear side tyre and he lost control over the vehicle resulting in the death of the deceased on the spot. Orvakal P.S. registered a case in Crime No.71/2001; that the first respondent-wife, second and third respondents-minor children and respondents 4 and 5 - parents of the deceased preferred claim petition for Rs.3,00,000/-. The sixth respondent being the owner and the appellant being the insurer of the jeep are liable to pay the compensation. 3. During the course of trial, this M.V.O.P. was clubbed with M.V.O. P. No. 266 of 2003 since both the M.V.O.Ps arose out of the same accident and common evidence was let in. PWs 1 to 3 were examined and Exs.A.1 to A.4 and Ex.X.1 were marked on behalf of the claimants, whereas RW1 was examined and Ex.B.1 was marked on behalf of the insurance company. The lower Tribunal after framing relevant issues gave a finding that the accident had occurred due to rash and negligent driving on the part of the owner-cum- driver of the accident jeep. The deceased was aged 30 years by the date of the accident. He was working as Hamali and was earning Rs.100/- per day. The Tribunal taking into consideration the fact that the deceased was unskilled labour, fixed his income at Rs.65/- per day and his monthly income would come to Rs.1950/- and annually it comes to Rs.23,400/-. After deducting 1/3rd towards personal expenses, the loss of earnings arrived at Rs.15,600/- per annum and the same was calculated with appropriate multiplier ‘17’. Thus, the total loss of earnings is at Rs.2, 65, 200/-. In addition to that, the lower Tribunal granted an amount of Rs.10,000/- towards loss of consortium to the first respondent, Rs.10,000/- towards love and affection and Rs.2,000/- towards special damages. Thus, the lower Tribunal awarded a total compensation of Rs.2,87,200/- with interest at 9% per annum. 4. The learned standing counsel for the appellant-insurance company contends that Ex.B.1- policy does not cover the risk of fare paid passengers and that carrying passengers in the accident vehicle is violation of policy conditions. Therefore, the insurance company is not liable to pay any compensation. As per the terms of Ex.B.1- policy, the liability of the insurer is limited to the extent of Rs.1,00,000/- per each passenger in case of death or injury. In case where the insurance company failed to raise specific plea in its counter that its liability is restricted to Rs.1,00,000/- in respect of each passenger, the Tribunal should consider the same and restrict the liability only to that extent in view of clause (ii) of Sub- Rule 7 of Rule 476 of A.P. Motor Vehicles Rules 1989. In case of fastening liability on the insurance company to pay the entire compensation amount, it may be permitted to recover the said compensation amount from the insured i.e. owner of the accident vehicle and to that effect he relied on decisions reported in United India Insurance Company Ltd., Adilabad District v. Gorla Shankar and others,[1] and National Insurance Co. Ltd., v. Challa Bharathamma and others,[2]. He further contends that the interest should be restricted to 6% per annum and to that effect he relied on decisions reported in Shyamwati Sharma & others v. Karam Singh [3] and Sarla Verma & others v. Delhi Transport Corporation and another [4]. 5. On the other hand, the learned counsel for the respondents submits that in M.V.O.P. No.218 of 2003, the same Tribunal has awarded compensation to the claimants therein and the entire compensation amount was deposited by the Insurance Company and the same was withdrawn by the claimants therein. Therefore, he submits that the appellant-insurance company is acting in a partisan and in discriminatory way since it is contesting the compensation in this matter which is not fair. It is further submitted that the contentions raised by the learned counsel for the appellant-insurance company as to the defence proper or alternative defence and the rule position as well as the conditions of the policy were not raised before the lower Tribunal. Moreover, such pleas were not even taken in their counter. Therefore, it is submitted that the insurance company should not be permitted to raise such pleas at the appellate stage of the matter since no evidence was adduced in that behalf. That if such pleas are considered at appellate stage, they are likely to cause prejudice to the claimants. 6. Heard the learned counsel on either side and perused the record. 7. PW.2 is one of the passengers who was travelling in the accident vehicle at the time of the accident. He categorically stated that while they were travelling in the said vehicle, the owner-cum-driver drove the vehicle in a rash and negligent manner and when it reached near Electrical Sub- Station, Nannur, the left side of the rear tyre was burst and as a result the jeep turned turtle, consequently, the deceased died on the spot and another person was also died while undergoing treatment at Government General Hospital, Kurnool. PW.2 is one of the injured in the accident. The evidence of PW.2 is corroborated by Exs.A.1 to A.3 with regard to rash and negligent driving of the accident vehicle by its driver and that the deceased died due to injuries received in the said accident. The sixth respondent-owner-cum-driver of the accident vehicle was set exparte. There is no evidence on record to rebut the evidence adduced on behalf of the respondents-claimants. In that view of the matter, the lower Tribunal came to the conclusion that the accident had occurred due to the rash and negligent driving of the sixth respondent-owner- cum-driver. 8. So far as the fastening of the liability is concerned, the lower Tribunal came to the conclusion that sixth respondent and the appellant are liable to pay the compensation amount. It is the contention of the appellant that Ex.B.1 policy does not cover the risk of passengers and that carrying passengers in the accident vehicle is violation of the terms and conditions of the policy. In the decisions reported in United India Insurance Company Ltd., Adilabad District v. Gorla Shankar and others (supra 1) and National Insurance Co. Ltd., v. Challa Bharathamma and others, (supra 2), it was held that though there is breach or violation of the policy conditions, the insurance company is liable to pay the compensation and the insurance company is entitled to recover the same from the insured. However, a perusal of the impugned order does not reveal that it followed the legal position. In the above decisions, it is specifically mentioned that the insurer has to comply with the award and then proceed to recover the same from the insured. Further, as per the terms of Ex.B.1-insurance policy, the liability of the insurer is limited to the extent of Rs.1,00,000/- per each passenger in case of death or injury. Though the said plea was not taken by the insurance company before the lower Tribunal, the lower Tribunal should have based its award on the terms of the insurance policy as stipulated in clause (ii) of Sub- Rule 7 of Rule 476 of A.P. Motor Vehicles Rules 1989. 9. In the circumstances, the appellant-insurance company is directed to pay Rs.1,00,000/- to the respondents- claimants out of the total compensation amount. Further, the insurance company shall pay the balance amount of compensation, which is payable by the insured- sixth respondent-owner-cum-driver, to the claimants and recover the same from him. However, the lower Tribunal awarded interest at 9% per annum which is liable to be reduced and the same is hereby reduced to 6% per annum in view of the decision reported in Sarala Varma & others Vs. Delhi Transport Corporation & another (supra 4). 10. With this modification, the C.M.A. is disposed of. ​_______________ B.N.RAO NALLA,J 13-08-2010 Stp [1] 2003 (2) ALT 596 [2] 2004 ACJ 2094 [3] 2010 (1) Decisions Today (SC) 330 [4] 2009 ACJ 1298