HON’BLE SRI JUSTICE K.S. APPA RAO M.A.C.M.A.No.4485 of 2008 and Cross Objections (SR) No.51291 of 2008 Date: 06-07-2011 Between: Between: The New India Assurance co. Ltd ……. Appellant and T. Narasimharao and another …… Respondents HON’BLE SRI JUSTICE K.S. APPA RAO M.A.C.M.A.No.4485 of 2008 and Cross Objections (SR) No.51291 of 2008 COMMON JUDGMENT: Being aggrieved by the order, dated 16-10-2007 passed in O.P.No.458 of 2005 on the file of the Special Judge for the Trial of Offences under SCs and STs (POA) Act-cum-VI Additional Metropolitan Sessions Judge—Additional Chairman, MACT-cum-XX Additional Chief Judge at Secunderabad, the second respondent therein-Insurance Company filed the present Appeal and the petitioner filed the Cross Objections. For the sake of convenience, the parties hereinafter will be referred to as they are arrayed in the Tribunal. 2. The brief facts of the case are that on 05-03-2005 at about 5-30 AM, the petitioner by name T. Narsimha Rao along with other relatives was proceedings in an Ambassador Car bearing No.AP 29D 4350 from Hyderabad towards Ghangapur and when they reached near Chowdapur Thada on Afzal road, Gulbarga, the driver drove the car in a rash and negligent manner with high speed and lost control over the car due to which the car fell into a ditch and thereby the petitioner and other passengers sustained severe multiple injuries and fractures. The driver of the car ran away from the place of accident. The petitioner and other injured were immediately shifted to the local P.G. Shah Hospital for treatment. The petitioner sustained 1) fracture in right knee joint; 2) fracture of right leg big bone (Tibia); 3) fracture in left ribs; 4) fracture in knee cap of right leg; 5) fracture in lower jaw; 6) deep cut injury on forehead and 7) deep cut injury on cheek and therefore, later he was admitted in Apollo Hospital on 06-03-2005 and treatment was given for the injuries sustained by him. Therefore, the petitioner filed the petition claiming compensation of Rs.8,00,000/- for the injuries sustained by him in the said motor accident. 3. During the course of trial, on behalf of the petitioner, the petitioner himself was examined as PW-1 and PWs.2 and 3 were got examined and Exs.A-1 to A-12 and X-1 were got marked. On behalf of the respondents, RW-1 was got examined and Ex.B-1, Insurance Policy, was got marked. 4. The Tribunal, after considering the oral and documentary evidence adduced by both parties, came to the conclusion that the accident occurred due to rash and negligent driving of the driver of the offending car and accordingly, allowed the petition in part through the order, dated 16-10-2007, granting compensation of Rs.2,58,500/- under all the heads with proportionate costs and interest at 6% per annum from the date of petition till the date of deposit and fastened the liability against the owner of the offending car and the Insurance Company holding that they are jointly and severally liable to pay the compensation to the petitioner. Aggrieved thereby, the second respondent-Insurance Company filed the present appeal and the petitioner filed the Cross Objections seeking enhancement of the compensation. 5. It is the main contention of the learned counsel for the Insurance Company-appellant that the compensation awarded by the Tribunal is highly excessive and not based on the evidence on record and therefore, he sought to reduce the same to a reasonable extent. It is his further contention that the petitioner is an unauthorised passenger travelling in the private car and that the owner of the car has not paid any premium to cover the risk of the inmates of the car and therefore, the Insurance Company is not liable to pay the compensation awarded by the Tribunal. In support of his contention, the learned counsel placed reliance on the decisions reported in UNITED INDIA INSURANCE CO. LTD. V. TILAK SINGH [1], ORIENTAL INSURANCE CO. LTD. v. MEENA VARIYAL [2], UNITED INDIA INSURANCE CO. LTD. v. MUPPALLA ANASURYANVATHI [3], NATIONAL INSURANCE CO. LTD. v. KAUSHALAYA DEVI [4] and NATIONAL INSURANC CO. LTD. v. PARVATHNENI [5] and urged that the gratuitous passengers travelling in the private vehicle are not entitled to any compensation. 6. On the other hand, the learned counsel appearing for the petitioner-cross objector mainly urged that the Tribunal while assessing the disability for the injuries and fractures sustained by the petitioner, awarded meagre amount of compensation, which is not just and reasonable, and therefore, sought for enhancement of the same. 7. Now the points for consideration are: 1. Whether the amount of compensation granted by the Tribunal to the petitioner is just and reasonable? and 2. Whether the finding of the Tribunal fastening the liability against the Insurance Company is sustainable? POINT NO.1: 8. The factum of the accident is not disputed. In order to prove his claim, the petitioner (injured) was examined as PW-1 besides PWs.2 and 3. In support of his evidence, the petitioner also filed Exs.A-1 to A-12 and X-1. After considering the evidence of PW-1 and the documentary evidence, the Tribunal rightly assessed the compensation and granted the same, which is just and reasonable. In view of the positive and cogent finding of the Tribunal on that score, I see no grounds for enhancement of the compensation. Therefore, the order of the Tribunal is sustainable on that finding. POINT NO.2: 9. So far as the liability is concerned, on behalf of the respondents, RW-1, who is Assistant Manager of the Insurance Company, was examined and Ex.B-1, Insurance Policy, was marked. RW-1 deposed that Ex.B-1, Insurance Policy, did not disclose that the offending car had valid insurance coverage against the risk of the passengers travelling in it, and there is gross violation of the terms and conditions of the policy. Though this witness was put to cross- examination, he stated that though Ex.B-1, policy, was in force on the date of accident, the risk of the inmates of the offending car is not covered thereunder. 10. The Tribunal, though held that it is violation of the policy conditions, observed that the innocent injured cannot be penalised as they could not know the terms and conditions of the policy which is a contract entered between the owner of the vehicle and the insurance company and directed the Insurance Company to pay the compensation to the petitioner in the first instance and recover the same from the owner of the vehicle. 11. It is an admitted fact that the offending car had no insurance coverage against the risk of the inmates of the car. It is also proved by the Insurance Company through the evidence of RW-1 that the owner of the offending car has violated the terms and conditions of Ex.B-1, Insurance Policy. The Tribunal also held that there is violation of the policy conditions. Admittedly the owner of the offending car was not examined in this case. It is the evidence of RW- 1 that no premium was paid by the owner of the offending car covering the risk of the inmates of the car. When no extra premium covering the risk of the inmates of the car is not paid by the owner of the offending car, it cannot be said that the Insurance Company is liable to pay the compensation. In the decision reported in ORIENTAL INSURANCE CO. LTD. v. B.R. PEDDI REDDY LAKSHMI DEVI [6], a Division Bench of this Court held that: “17. From the language of Section 147 of the Act, it can be understood that the intention of the Legislature is only to cover the risk of third parties under the Act. The expression ‘any person’ used in Section 147 does not include the owner of the vehicle or a gratuitous passenger. It is not the mandate of Section 147 that the Act policy shall include the risk of the owner or any other persons who are being carried in the vehicle with the permission of the owner. 18. However, the insurance company may enter into a contract with the insured even to cover the risk of the owner of driver of the vehicle or the inmates of the car by collecting the additional premium from the owner for the said purpose thereby widening the scope of statutory contract. In such an event if the owner pays extra premium to cover any such risk the insurance company is liable to indemnify the owner to the said extent. But, it is strictly in accordance with the terms of contract entered into between the insured and the insurer. It is not even obligatory on the part of the owner of the vehicle to get the vehicle insured at least under an Act policy. 19. It is therefore, obvious that even if the policy is Act only policy, it does not cover the risk of the owner, driver or any other inmates of the car. However, to cover the risk of any such persons, the owner and the insurance company are not prohibited to extend the terms of contract when the owner of the vehicle pays extra premium to cover such risk. Therefore, unless and until the liability arises either under Section 147 of the Act or under the terms of contract of insurance, the risk of the owner or any gratuitous passenger travelling in the vehicle of the owner is not covered merely because it is an Act policy.” 12. Therefore, as could be seen from Ex.B-1, Insurance Policy, no premium was paid by the owner of the offending car to cover the risk of the inmates of the car and as such, it is held that the Insurance Company is not liable to pay the compensation to the petitioner. However, the owner of the offending car is liable to pay the compensation to the petitioner. 13. In view of the above observations, the finding of the Tribunal fastening the liability against the Insurance Company is not sustainable and therefore, the same is set aside. The petitioner is entitled to get the compensation awarded by the Tribunal from the owner of the offending car (Respondent No.1 in the O.P). 14. In the result, the M.A.C.M.A. filed by the Insurance Company is allowed and the Cross Objections filed by the petitioner are dismissed. No order as to costs. _______________ K.S. APPA RAO, J Date:06-07-2011 YCR [1] (2006) 4 SCC 404 [2] (2007) 5 SCC 428 [3] 2007 (6) ALT 466 [4] (2008) 8 SCC 246 [5] (2009) 8 SCC 785 [6] 2011 (1) ALD 686 (DB)