Case: M/S. Traders Private Limited & Another Vs. Smt. Sunanda Widow of Krishna Machivale & Others


Decision reasoning: 1[ds]27. So far as quantum of compensation is concerned, learned Single Judge has come to a conclusion that the claimants are entitled to Rs.However, since the applicants have 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, he has stated that the deceased was not an employee of owner of the said car. He has stated that the Indian Express and owner of the said car are different companies. He has admitted that the deceased was paid salary by the Indian Express and he was not receiving any salary from the owner of the said car. Therefore, it is clear that the deceased was an employee of the Indian Express and not of the owner of the said car. There is no evidence on record to establish that the Indian Express is a sister concern of owner of the said car. This finding reached by the Tribunal is in our opinion correct. Contrary finding recorded by learned Single Judge is, therefore, setwe have already noted, there is no clear evidence on record to establish that the owner of the said car is a subsidiary company of the Indianconsidering the provisions of the said Act, particularly sections 95(1)(a) and (b), 95(1)(b)(i) and section 96, the Supreme Court observed that the owners liability arises out of his failure to discharge a duty cast on him by law. The right to receive compensation can only be against person who is bound to compensate due to the failure to perform a legal obligation. If a person is not liable legally, he is under no duty to compensate any one else. The Tribunal is constituted for expeditious disposal of the motor claims. The general law applicable is only common law and the law of torts. If under the law, a person becomes legally liable then the person suffering the injuries is entitled to be compensated and the Tribunal is authorized to determine the amount of compensation, which appears to be just. The Supreme Court observed that the concept of owners liability without any negligence is opposed to the basic principle of law and the mere fact that a party received an injury arising out of the use of a vehicle in public place cannot justify fastening liability on the owner. The Supreme Court concluded that the proof of negligence remains the lynch pin to recover compensation.Before going to the terms of the policy, we must note that after examining the present case in the light of the judgment of the Supreme Court in Minu Mehtas case (supra), we are of the opinion that the insurer of the said car would have been liable in respect of acts of negligence of the deceased resulting into death of / or bodily injury to and/or damage to any property of Third Party. The deceased was not a Third Party within the meaning of section 95(1)(b)(i) of the said Act. The deceased was a victim in this case. There is no evidence to establish that he was negligent. There is nothing to establish that he was the employee of the owner of the said car or he was driving the said car at the instance of the owner of the said car. On first principles, we do not see how the insurer of the said car could be held liable to pay compensation to the heirs of the deceased. It is also difficult to understand how the owner of the said car can be held liable to pay compensation to the heirs of the deceased under the said Act under the policy which is issued in its favour and which is onwords indemnify the driver mean to make good the loss or damage caused to Third Parties because of the negligent driving of the driver of the car of the insured by the insurer of the car. It does not mean that the victim has to be compensated by the insurer of the car.In view of the above, we are clearly of the view that learned Single Judge is not right in fastening the liability to pay the compensation on the owner of the said car or the insurer of the said car. We must now turn to the liability of the insurer of the offending truck.Thus, as per sectionof the policy as far as Third Party injury and/or death is concerned, the limits of liability set out in the policy, the liability of the insurer of the said truck, it being a goods vehicle was limited to Rs.1,50,000/under section 95(2)(a) of the said Act.Under the caption Limits of liability, Rs.50,000/is covered under sectionof the policy i.e. Third Party Property Damage. Under section 95(2)(d), Third Party Damage is limited to Rs.In this connection, we shall again refer to the judgment of the Supreme Court in Jugal Kishores case (supra). In that case, the Supreme Court was concerned with comprehensive policy, which covers more risks than Third Party Policy with which we are concerned here. The Tribunal had awarded compensation in the sum of Rs.10,000/recoverable jointly and severally from the appellant insurance company and the owner of the offending bus. The claimant preferred an appeal to the Delhi High Court contending that the compensation was inadequate. The Delhi High Court awarded a sum of Rs.1,00,000/as compensation to the claimant recoverable jointly and severally from the appellant insurance company and the owner of the offending truck. Aggrieved by the said judgment, the appellant insurance company approached the Supreme Court. The policy of the appellant insurance company indicated that the liability undertaken with regard to the death or bodily injury to any person caused by or arising out of the use (including the loading and/or unloading) of the motor vehicle falling under section II(1)(i) had been confined to such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939. This liability as noted by the Supreme Court, at the relevant time as per clause (b) ofsubsection (2) of section 95 of thesaid Act was Rs.20,000/only. The details of premium indicated that no extra premium with regard to a case falling under section II (1)(i) was paid by the owner of the offending bus. The Supreme Court noted that only the offending bus was comprehensively insured the insureds estimate of value including accessories (I.E.V.) thereof having been shown as Rs.In our opinion, ratio of this judgment is clearly attracted to the present case. 54. In C.M. Jayas case (supra), the deceased was riding the pillion seat of a two wheeler when it met with accident with a truck insured by the appellant insurance company. The Tribunal awarded a sum of Rs.1,03,360/as compensation and held that the liability of thewas limited to Rs.50,000/and the balance amount was recoverable from the driver and owner of the truck. In appeal, the High Court held that the liability of the appellant insurer was unlimited as the truck was comprehensively insured. The High Court allowed thepreferred by the claimants and placed the full pecuniary liability on the insurer while enhancing the compensation. Submissions were advanced on the extent of liability of the insurer. The question which was posed for consideration before the Constitution Bench of the Supreme Court was whether in a case of insurance policy not taking any higher liability by accepting a higher premium, in case of payment of compensation to a third party, the insurer would be liable to the extent limited under section 95(2) or the insurer would be liable to pay the entire amount and he may ultimately recover it from the insured. Since there was conflict of opinion in the decisions of the Supreme Court, the Constitution Bench took a resume of its earlier decisions. On facts, the Constitution Bench noted that the policy disclosed that the limit of the amount of the insurers liability under section 11(1)(ii) in respect of one accident was Rs.The limit of the amount of the insurers liability under section 11(1)(ii) in respect of series of claims arising out of one event was Rs.No higher premium was paid to cover higher liability than the statutory liability fixed in the policy. The Constitution Bench referred to Jugal Kishores case (supra) and to New India Assurance CO. Ltd. v. Shanti Bai, 1995 ACJ 470 (SC) and observed that the liability of the insurer is limited, as indicated in section 95 of the said Act, but it is open to the insured to make payment of additional higher premium and get higher risk covered in respect of third party also. But in the absence of any such clause in the insurance policy, the liability of the insurer cannot be unlimited in respect of third party and it is limited only to the statutory liability. The Constitution Bench added that this view has been consistently taken in its other decisions. Though the Constitution Bench did not in so many words state that if the insurance companys liability is limited, it cannot be made to pay the entire compensation amount and recover it from the insurer while holding that the appellant insurance companys liability was limited, it was made clear that the liability of the driver of the offending vehicle and owner of the offending vehicle was not affected. The Constitution Bench did not direct the appellant insurance company to pay the compensation amount and recover it from the owner and driver of the vehicle. The judgments of the Supreme Court in Jugal Kishores case (supra) and C.M. Jayas case (supra), in our opinion, apply to the present case. There is no extra premium paid for coverage of any passenger to be carried in the vehicle for `unlimited liability for third party risks. Liability of the insurer of the offending truck as per the schedule is limited to such amount as is necessary to meet the requirements of the said Act. There is no special contract to enhance the liability and hence, no extra premium was paid therefor. We therefore hold the liability of the insurer of the offending truck being limited, it cannot be saddled with liability to pay additional compensation.In our opinion, we cannot in all cases issue a direction to any insurance company if it is not bound in law to pay compensation, to pay it and recover it from the owner of the offending vehicle. We have already referred to the Constitution Bench judgment in C.M. Jayas case (supra), where this question fell for consideration and the Constitution Bench did not direct the insurance company to pay the entire amount, that is including the amount in excess of its limited liability and recover it from the insured. The Constitution Bench had before it the judgment of the Supreme Court in Jugal Kishores case (supra), where the Supreme Court held that the liability of the appellant insurance companywas limited to Rs.50,000/and observed that this finding did not affect in any manner the liability of the truck owner and the driver to pay the full amount of the award. Similarly, in National Insurance Co. Ltd. v. Bommithi SubbhayammaOrs., (2005 ACJ 721  ), the Supreme Court held that the insurance company was not liable to pay compensation on the death of gratuitous passenger in the truck when it met with accident but the claimants are entitled to recover the amount of compensation granted by the Tribunal from the owner of the vehicle.In our opinion, directions facilitating recovery of the amount from the owner of the offending vehicle issued by the Supreme Court in Baljit Kaurs case (supra), in Oriental Insurance Co. Ltd. v. NanjappanOrs. (2004) 13 SCC 224  , in Kusum Rais case (supra), in Oriental Insurance Co. Ltd. v. Brij MohanOrs. (2007) 7 SCC 56     and in Syed Ibrahims case (supra) are in exercise of its jurisdiction under Article 142 of the Constitution of India read with Article 136 thereof for doing complete justice to the parties. Such powers do not vest in us. It is therefore not possible for us to pass similar orders. We may note that learned Single Judge of Aurangabad Bench of this court (Kingaonkar, J.) has taken a similar view in First Appeal No.827 of 2006 and First Appeal No.826 of 2006 decided on 4/8/2007. However, learned Single Judge of Nagpur Bench of this court (Kharche, J.) has taken a contrary view in National Insurance Co. Ltd. v. Prakash Sakharam DudhankarOrs. (2006(1) BCR 412). The view taken by Kingaonkar, J. commends itself to us.We have already referred to Padma Srinivasans case (supra), and stated that the accident took place on 16/12/1987 i.e. prior to amendment whereby limit of liability was increased, the insurer of the offending truck cannot be made to pay the enhanced liability. However, had the accident taken place after the amendment which enhanced the liability to unlimited liability, the insurer would be liable to pay the difference between the limited liability and the amount awarded and recover it from the insured. In this connection, we may usefully refer to Madho Sens case (supra) where the Rajasthan High Court has considered this aspect and laid down the law. We find substance in Mr. Singhs submission that the legislature has given statutory right undersubsection (2) of section96 of the said Act andsubsection (2) of section149 of the Motor Vehicles Act, 1988.(3) and (4) of section 96 or (4) and (5) of section 149 confer rights on the insurer to recover from the insured under certain contingencies as explained above and, therefore, the said rights granted by the legislature cannot be converted into obligation or liability of the insurer to pay to the claimants first in all cases whether they are liable or not and then recover it from the insured. Section 96(2) / section 149(2) would become superfluous if any other interpretation is put on the above provisions.69. In our opinion, judgments of the Supreme Court in Punam Devis case (supra), Sohan Lals case (supra), Skandia Insurance Companys case (supra), Deepa Devis case (supra) and Subramania Naickers case (supra), have no application to the issues involved in this case and, hence, need not be elaborately discussed.