THE HON’BLE SRI JUSTICE B.N. RAO NALLA M.A.C.M.A.No.1155 of 2006 JUDGMENT: This appeal is filed by the insurance company against the order dated 22.4.2004 in M.V.O.P.No.156 of 2002 on the file of the Motor Accidents Claims Tribunal-cum-II Additional District Judge, Kurnool whereby and whereunder the claimants were awarded an amount of Rs.2,25,000/- 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 Nadyal; 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 bursting of the rear left side tyre and as a result, one person died on the spot and causing injuries to the deceased and other passengers. The deceased was taken to Government General Hospital, Kurnool where he succumbed to the injuries on the next day. Orvakal P.S. registered a case in Crime No.71/2001; that the first respondent is the wife and the second respondent is the mother of the deceased. They preferred claim petition claiming compensation of Rs.3,00,000/-. 3. The third respondent was set exparte. The appellant-insurance company filed counter denying the averments made in the claim petition. It is stated that Jeep AP-21 A-9018 is a private Jeep and it has no permit to carry passengers. The deceased and others were travelling in the Jeep as passengers. Thus, there is violation of terms and conditions of the Policy. The accident had occurred due to bursting of the tyre, but not due to rash and negligent driving. 4. During the course of trial, first respondent-wife of the deceased got herself examined as PW.1 besides examining PW.2- eye witness to the accident and got marked Exs.A.1 to A.6, whereas RW.1 was examined and Ex.B.1-insurance policy was marked on behalf of the appellant-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 27 years by the date of accident. He was working as Driver under one Maddilety and was earning Rs.4,000/- per month, however, the respondents did not produce any evidence to that effect. The Tribunal taking into consideration the facts of the case, fixed his income at Rs.50/- per day which comes to Rs.1500/- per month and annually it comes to Rs.18,000/-. After deducting 1/3rd towards his personal expenses, his annual contribution would come to Rs.12,000/-. Since the age of the deceased was 27 years, the relevant multiplier is ‘18’. Thus, the loss of dependency would come to Rs.2,16,000/-. In addition thereto, the lower Tribunal granted an amount of Rs.5,000/- towards loss of consortium to the first respondent, Rs.2,000/- towards funeral expenses and Rs.2,000/- towards loss of estate. In all the lower Tribunal awarded Rs.2,25,000/- with interest at 9% per annum. 5. The learned standing counsel for the insurance company contends that Ex.B.1- policy did not cover the risk of fare paid passengers and that carrying the 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]. 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 at high speed. As a result, the left rear tyre burst and the jeep turned turtle, consequently, one person died on the spot and he along with others and deceased sustained injuries. The deceased died on the next day in the hospital. Exs.A1 to A4 indicate that the accident vehicle was driven in a rash and negligent manner by its driver and that the deceased died due to injuries received in the said accident. The third 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 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 third respondent-owner-cum-driver. 8. So far as the fastening of the liability is concerned, the lower Tribunal has directed the appellant-insurance company and the third respondent-owner-cum-driver to pay the compensation. 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- third 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