* THE HON’BLE SRI JUSTICE U. DURGA PRASAD RAO
+ M.A.C.M.A No.489 of 2009
%23.04.2014
Between:
The Branch Manager, United India Insurance Co. Ltd, Vijayawada,. Appellant AND Dasari Parvathi and others. …. Respondents ! Counsel for Appellant : Sri Naresh Byrapaneni ^ Counsel for Respondents 1 to 3 : Sri R. Raghunandan < Gist:
> Head Note:
? Cases referred:
1) AIR 2000 Supreme Court 235 (1)
2) 2001 (1) ALT 485
3) 2002 (8) Supreme 594
4) AIR 2004 SC 1340
5) 2003 ACJ 468
HON’BLE SRI JUSTICE U. DURGA PRASAD RAO
M.A.C.M.A. No.489 of 2009
JUDGMENT:
Aggrieved by the award dated 03.10.2002 in O.P.No.497 of 1998 passed by the Chairman, M.A.C.T-cum-I Additional District Judge, Ongole (for short “the Tribunal”), the second respondent/United Insurance Company Limited preferred the instant appeal.
The respondents 1 to 3 in the appeal are claimants before the Tribunal and respondent No.4 herein is the first respondent before the Tribunal.
2) The factual matrix of the case is thus:
a) The claimants are wife and minor children of the deceased—D. Hanumantha Rao of Martur village in Prakasam District. Their case is that the deceased used to raise tobacco seed nursery and sell away seedlings. On the intervening night of 21/22-07-1998 deceased and two others purchased the tobacco seed grains and got into the lorry bearing No.AHH 2279 and paid fair to the driver and started to Martur. On the way at about 3.30 A.M. the driver drove the lorry in a rash and negligent manner and while he was overtaking the front vehicles his lorry turned turtle and marble stones in the lorry fell on the persons traveling in the lorry including the deceased and thereby the deceased and two others crushed and died on the spot. It was averred that accident occurred due to the fault of lorry driver. It was further averred that due to sudden demise of the deceased the claimants became destitutes. On these pleas claimants filed MVOP No.497 of 1998 against respondents 1 and 2, who are owner and insurer of the offending lorry and claimed Rs.1,50,000/- as compensation under different heads mentioned in the OP.
b) Respondent No.1 remained ex parte.
c) Respondent No.2/Insurance Company opposed the claim contending that accident was occurred due to the unknown lorry which hit the crime lorry. R2 further contended that the driver of the offending lorry had no valid licence at the time of accident. Nextly, R2 contended that the deceased travelled in the lorry as gratuitous passenger and so Insurance Company is not liable to pay the compensation. Finally, R2 contended that claim under different heads is highly excessive and untenable.
d) During trial P.Ws.1 and 2 were examined and Exs.A.1 to A3 were marked on behalf of claimants. Policy copy filed by R2 was marked as Ex.B1.
e) A perusal of the award would show that issue No.1 which relates to fault of lorry driver is concerned, the Tribunal basing on the evidence of PW2—Putta Nageswara Rao who travelled in the crime lorry along with the deceased, concluded that the accident was occurred due to the fault of lorry driver. Issue No.2 which relates to quantum of compensation and liability of the respondents is concerned, the Tribunal granted Rs. 1,11,000/- as compensation under different heads as follows:
Total Rs. 1,11,000/-
The said amount was awarded with proportionate costs and simple interest @ 9% per annum from the date of OP till the date of realisation.
f) Then liability is concerned, first respondent was found to be the owner of the vehicle and liability was fastened on him. The 2nd respondent/Insurance Company repudiated its liability on the plea that deceased travelled in the lorry which is a goods vehicle as a gratuitous passenger and his risk is not covered under the terms of policy. However, the Tribunal negatived its contention relying upon the decision reported in New India Assurance
[1]
Company vs. Satpal Singh and others .
Hence, the appeal by the 2nd respondent/Insurance Company.
3) Heard arguments of Sri Naresh Byrapaneni, learned counsel for appellant/Insurance Company and Sri R.Raghunandan learned counsel for respondents/claimants. Appeal against respondent No.4/owner of the lorry was dismissed for default on 15-12-2008. However, in view of the fact that he remained ex-parte and suffered decree before the Tribunal, his absence will not have any effect in the appeal in the light of decision reported in Meka Chakra Rao vs. Yelubandi Babu Rao
[2]
@ Reddemma and others .
4) Learned counsel for appellant/Insurance Company vehemently argued that deceased and others travelled in the crime vehicle which was a goods carriage vehicle as unauthorized passengers, they cannot be treated as owners of the goods, since the vehicle was already laden with load of tiles. He submitted that Ex.B1—policy will not cover their risk. In spite of it the Tribunal basing on the decision in Satpal Singh’s case (1 supra) fastened the liability on the Insurance Company. He submitted that the said decision was subsequently overruled by the Apex Court in the case of New India Assurance Co. Ltd. vs.
[3]
Asha Rani and others . As per the said decision, the risk of gratuitous/unauthorized passengers in the goods vehicle will not be covered by policies issued under Section 147 of amended Act, 1988. In the light of change in law, learned counsel prayed that the appeal may be allowed and appellant/Insurance Company may be exonerated from the liability.
5) Per contra, learned counsel for respondents/claimants while supporting the award argued that the deceased and others travelled in the vehicle as owners of the goods inasmuch as they travelled with the bags of tobacco seedling by paying fare. Therefore, they are not gratuitous/unauthorised passengers. He submitted that Ex.B1—policy squarely covers the risk of owners of the goods. Therefore, the Tribunal rightly fixed the liability on the Insurance Company. He admitted that Satpal Singh’s (1 supra) was subsequently overruled in Asha Rani’s case (3 supra). However, he alternatively argued that if the deceased was held not the owner of the goods and consequently Insurance Company held not liable, this Court may direct the Insurance Company to pay compensation and recover from the owner basing on the decision of the Apex Court in National
[4]
Insurance Co. Ltd. vs. Baljit Kaur and others .
6) In the light of above rival arguments, the point for determination in this appeal is:
“Whether the risk of deceased is covered under Ex.B1-Policy? If not, whether the Insurance Company can be directed to pay and recover the compensation amount from the owner of the vehicle?
7) POINT: Accident, involvement of crime lorry bearing No.AHH 2279 and death of deceased are not in dispute. Hence, in this appeal the core point for discussion is what was the capacity in which the deceased travelled in the crime lorry.
a) PW2—Putta Nageswara Rao travelled along with the deceased in the crime lorry. His evidence is to the effect that himself, the deceased and some others travelled along with their tobacco seedlings in the lorry which met with accident. He stated that driver drove the vehicle in a rash and negligent manner and thereby the vehicle turned turtle, he received simple injuries and three passengers including the deceased died by falling under the tiles load. In the cross-examination he admitted that lorry which was carrying tiles load was a goods vehicle. So, his evidence clearly shows that as rightly argued by the appellant, lorry was already carrying tiles load when PW2, deceased and others boarded on it. Therefore, the main goods in the lorry are the titles, but not the personal luggage of deceased and others. Therefore, the deceased and others cannot be termed as ‘owners of the goods’ so as to be covered under the terms of the policy. They were only gratuitous passengers. Of course, the Tribunal basing on the law prevailing then in Satpal Singh’s case (1 supra) held that their risk was covered under the terms of the policy. In Satpal Singh’s case (1 supra) the Supreme Court held thus:
“The result is that under the new Act an insurance policy covering third party risk is not required to exclude gratuitous passengers in a vehicle, no matter that the vehicle is of any type or class. Hence the decisions rendered under the old Act vis-à-vis gratuitous passengers are of no avail while considering the liability of the insurance company in respect of any accident which occurred or would occur after the new Act came into force.”
b) Thus, in the above decision the Supreme Court with reference to Section 147 of Motor Vehicles Act, 1988 (as it stood before amendment w.e.f 14.11.1994) held that the risk of a gratuitous passenger in a goods vehicle was covered. As stated supra, the Tribunal relying on the above decision held that Insurance Company is liable to pay the compensation. However, it must be said that the above decision was overruled subsequently.
c) In New India Assurance Company Limited vs. Asha Rani and others (3 Supra) (decided on 03.12.2002), the Supreme Court had an occasion to consider the correctness of its earlier decision rendered in Satpal Singh’s case (1 Supra). It held that the judgment in Satpal Singh’s case (1 Supra) was not correct and accordingly overruled. A number of reasons were quoted to come to the said conclusion. Precisely, in this decision the judgment of the Satpal Singh’s case (1 Supra) was found fault on the ground that the said judgment went on a wrong premise that the phrase “any person” used in Section 147(1)(b)(i) of Motor Vehicles Act includes gratuitous passengers also but that is not so and the meaning of the words “any person” must be attributed to “a third party”. Thus, the decision in Satpal Singh’s case (1 Supra) was overruled.
d) Applying the ratio in Asha Rani’s case (3 supra) it must be said that risk of the deceased who was a gratuitous passenger in a crime vehicle is not covered. Now, the alternative prayer of the respondents/claimants to direct the appellant/Insurance Company to pay and recover the compensation from the owner of the vehicle has to be looked into in the light of Baljit Kaur’s case (4 supra).
e) In Baljit Kaur’s case (4 supra) (decided on 06.01.2004) the Supreme Court was considering the question as to whether an insurance policy issued in respect of goods vehicle would cover gratuitous passengers in the light of Section 147 of M.V. Act (Amendment Act 1994 w.e.f. 14.11.1994). The facts of the case are that the victim who was returning in a truck from a marriage ceremony on 19.02.1999 died as a result of rash and negligent driving by the driver of the truck. The crime vehicle no doubt was insured with insurance company. The Claims Tribunal relying on Satpal Singh’s case (1 supra) fastened liability on insurance company despite its protest that the deceased was a gratuitous passenger in a goods vehicle and it had no liability. The High Court upheld the verdict of Tribunal. The matter went up to Supreme Court. It was brought to the notice of the respondents/claimants about overruling of Satpal Singh’s case (1 supra) subsequently in Asha Rani’s case (3 supra) which was followed in Oriental Insurance Company Limited vs.
[5]
Devireddy Konda Reddy and others . However, the argument was that those two cases were decided with respect to the position prevailing prior to the amendment of Section 147 of M.V.Act (Amendment Act, 1994) and as such the effect of Legislative Amendment in 1994 was not in question in the above cases. Whereas the accident in their case (Baljit Kaur’s case) was occurred subsequent to the Amendment of M.V. Act in 1994 and so the liability of insurance company has to be decided afresh in terms of the Amendment Act, 1994. Thus, the Supreme Court again considered the liability of Insurance Company in respect of a gratuitous passenger in a goods vehicle in terms of Amended Act in 1994 and held thus:
“20. It is therefore, manifest that in spite of the amendment of 1994, the effect of the provision contained in Section 147 with respect to persons other than the owner of the goods or his authorized representative remains the same. Although the owner of the goods or his authorized representative would now be covered by the policy of insurance in respect of a goods vehicle, it was not the intention of the legislature to provide for the liability of the insurer with respect to passengers, especially gratuitous passengers, who were neither contemplated at the time the contract of insurance was entered into, nor any premium was paid to the extent of the benefit of insurance to such category of people.
21. The upshot of the aforementioned discussions is that instead and in place of the insurer, the owner of the vehicle shall be liable to satisfy the decree.”
f) So, the Supreme Court observed that despite the amendment of M.V. Act w.e.f 14.11.1994, the position of gratuitous passengers with reference to a goods vehicle has not been changed and Insurance Company is not liable to bear their responsibility and owner alone shall be liable. Apart from this the Supreme Court made another observation directing insurance company to pay and recover the compensation and the said observation is now worth discussion. The Supreme Court observed thus:
“We, therefore, clarify the legal position which shall have prospective effect. The Tribunal as also the High Court had proceeded in terms of the decisions of this Court in Satpal Singh (supra). The said decision has been overruled only in Asha Rani (supra). We, therefore, are of the opinion that the interest of justice will be subserved if the appellant, herein is directed to satisfy the awarded amount in favour of the claimant if not already satisfied and recover the same from the owner of the vehicle.”
g) The above observation of the supreme Court made on equitable grounds applies only to limited cases i.e. those cases where, basing on Satpal Singh’s case (1 Supra) which was by then a law, if compensation was granted to a gratuitous passenger in a goods vehicle against Insurance Company and the appeal carried out by the Insurance Company is allowed basing on Asha Rani’s case (3 Supra), in such circumstances though insurance company is exonerated by virtue of Asha Rani’s case (3 Supra), still it can be directed to pay compensation at first and recover the same from the owner/insured. Except to those limited cases, pay and recover ordered in Baljit Kaur’s case (4 Supra) will not apply to other cases. Since in the instant case, the Tribunal awarded compensation to the claimants on the strength of Satpal Singh’s case (1 Supra) and the same is reversed in appeal in Asha Rani’s case (3 supra) the appellant/Insurance Company, in my considered view, can be directed to pay the compensation and recover the same from the owner of the vehicle on the strength of Baljit Kaur’s case (4 supra).
8) In the result, this MACMA is partly allowed with a direction that appellant/Insurance Company shall pay the compensation amount to the claimants and recover the same from the owner of the vehicle. No order as to costs in this appeal.
As a sequel, miscellaneous applications pending if any shall stand closed.
U. DURGA PRASAD RAO, J
Date: 23.04.2014
Note: L.R Copy to be marked: YES / NO
Murthy
[1] AIR 2000 Supreme Court 235 (1)
[2] 2001 (1) ALT 485
[3] 2002 (8) Supreme 594
[4] AIR 2004 SC 1340
[5] 2003 ACJ 468