HONOURABLE SRI JUSTICE U.DURGA PRASAD RAO M.A.C.M.A. No. 1598 OF 2009 DATED 4TH AUGUST, 2014.
BETWEEN The New India Assurance Company Limited, Rep. By its Branch Manager, Chittoor.
….Appellant and M.Raghunadha Reddy and ors.
….Respondents.
HONOURABLE SRI JUSTICE U.DURGA PRASAD RAO
M.A.C.M.A. No. 1598 of 2009
JUDGMENT
Aggrieved by the Award dated 01.02.2007 in MVOP.No.209 of 2003 passed by the learned Chairman, MACT-cum-District Judge, Chittoor, the New India Assurance Company Limited preferred the instant appeal.
2) The factual matrix of the case is thus:
On 27.09.2002 at 12.20 PM while the deceased Bhanu Prakash Reddy, a B.Sc. student was returning from college in APSRTC bus bearing No. AP.03U.3081 and after reaching his village, when he was getting down the bus, the driver drove the bus in a rash and negligent manner and the deceased fell down under the rear wheel and died on the spot. It was averred that the bus driver was responsible for the accident and due to abrupt death of the deceased, his bright future was marred and claimants who are his parents lost their future hopes on their son. On these pleas, they filed M.V.O.P.No.209 of 2003 against respondents 1 to 3 who are owner, insurer and APSRTC claiming compensation of Rs.10,00,000/- under different heads.
a) The first respondent remained ex parte.
b) The second respondent, Insurance Company opposed the claim and contended that the bus in question was under hire by third respondent-APSRTC which was controlling the bus and hence the third respondent alone was liable to pay compensation.
c) The third respondent-APSRTC opposed the claim inter alia contending that the accident was due to negligence of the deceased boy himself and not the bus driver. It further contended that third respondent was unnecessarily added as party to the proceedings.
d) During trial, P.Ws.1 and 2 were examined and Exs.A.1 to A.5 were marked. R.W.1 was examined on behalf of the second respondent but no documentary evidence was adduced.
e) A perusal of the judgment would show that having regard to the oral evidence of PW2—eyewitness, coupled with Exs.A1-FIR, Ex.A2—charge- sheet and Ex.A3—postmortem certificate, the Tribunal has come to conclusion that the accident was occurred due to the fault of the driver of the bus.
f) So far as the liability is concerned, the Tribunal observed that the vehicle belongs to the first respondent and stood insured with second respondent by the date of accident and hence, respondents 1 and 2 alone liable to pay compensation.
g) Regarding the quantum of compensation, the Tribunal having regard to the evidence on record, awarded Rs.4,72,500/- with costs and interest at 9% per annum against respondents 1 and 2 under the different heads as follows:
Loss of earning by deceased/dependency Rs.4,68,000/-
Loss of estate Rs. 2,500/-
Funeral expenses Rs. 2,000/-
Total Rs.4,72,500/-
Hence the appeal by the Insurance Company.
3) Heard arguments of Sri T.Ramulu, learned Counsel for the appellant—Insurance Company and Sri J.M.Naidu, learned Counsel for the first and second respondents-Claimants. Though notice to R3 and R4 was served, no representation on their behalf, hence treated as heard.
The main argument of learned Counsel for the appellant is that admittedly the bus in question was under hire with APSRTC who was controlling the bus and no extra premium was paid by the owner for hiring the vehicle and no intimation regarding hire was made either. Hence, the liability, if any, has to be attached to APSRTC alone but not to the Insurance Company. Thus, he requested to allow the appeal and exonerate the insurance company from liability.
a) Secondly he argued that the deceased was only 19 years old by the date of accident and a student of second year B.Sc. and he was not an earning member and as such the Tribunal fixing his notional income at Rs.4,500/- per month was on high side and therefore the same is liable to be scaled down atleast to Rs.3,000/- per month.
b) Thirdly he argued that the interest at 9% per annum as awarded by the Tribunal is also on high side and the same needs to be scaled down. He thus prayed to allow the appeal.
4) Per contra, learned Counsel for respondents 1 and 2/ claimants while supporting the award argued that the Tribunal rightly fastened the liability on the owner and insurance company in view of the Full Bench judgment of our High Court in Andhra Pradesh State Road
[1]
Transport Corporation v. B. Kanakaratnabai and in view of the same, the appellant has no legs to stand. Secondly he argued that compensation awarded under different heads was just and reasonable and there is no need to review the same. He thus prayed to dismiss the appeal.
5) In the light of the above divergent arguments the point for determination is:
“Whether the award passed by the Tribunal is legally and factually sustainable?”
6) POINT: The accident, involvement of the bus bearing No.AP.03U.3081, death of the deceased are admitted facts.
The main contention of the learned counsel for the appellant is that since the bus was under hire to APSRTC, Insurance Company cannot be fastened with liability. I am unable to agree with the said contention in view of the Full Bench judgment of our High Court reported in B. Kanakaratnabai’s case (1 supra) wherein in it was held thus:
(Para No.88) “On principle, it is not open to the insurance companies to absolve themselves of liability towards passengers/third party risks on the short ground that the insured vehicle has been given on hire without following the prescribed procedure. This Court in Madineni Kondaiah, (1986 ACJ 1 (AP)), has already held that even transfer of ownership of an insured vehicle without following the due procedure would not absolve the insurance company of liability towards third party risks. Mere transfer of possession, through hire of the vehicle, cannot stand on a worse footing or exempt the insurance companies from liability in this regard.”
xxxxxxx (Para No.90) “On the above analysis, we hold that mere hiring of insured buses by the owners to APSRTC would not in any manner limit the liability and accountability of the insurance companies, be it under the Act of 1988 or the Act of 1939 to honour passengers/third party risks covered by the insurance policies issued by them in favour of the owners. Notwithstanding the hiring of insured buses by the owners to APSRTC, the insurance companies shall be solely and exclusively liable for payment of the compensation arising out of such passengers/third party claims unless any of the grounds in section 149 (2) of the Act 1988/section 96(2) of the Act of 1939 are made out. We, therefore, affirm the view taken by the Full Bench of this Court in Maddineni Kondaiah, 1986 ACJ 1 (AP), which was approved and upheld by the Supreme Court in G.Govindan, 1999 ACJ 781 (SC), and applied thereafter in Rikhi Ram, 2003 ACJ 534 (SC).”
In view of the above judgment it is very much clear that though the bus was under hire to APSRTC, the Insurance Company cannot be absolved from liability as the policy was in force by the date of accident and it should invariably cover the risk of the third party.
7) The second contention of the appellant is that the Tribunal erred in taking the notional income of the deceased at Rs.4,500/- per month. I am afraid this contention is also not tenable one. Having regard to the evidence on record to the effect that the deceased was aged 19 years studying B.Sc. Computers and that he was an intelligent student having good prospectus in life, the Tribunal fixed his notional income at Rs.4500/- per month. It cannot be said that the same is on high side.
a) The third contention of the appellant is that the interest awarded by the Tribunal is on high side. There is force in this contention. The Tribunal has awarded interest at 9% per annum which is on high side which can be reduced to 7.5% per annum which is now prevailing.
8) In view of the above discussion, the appeal is dismissed by confirming the Award passed by the Tribunal. However, the rate of interest is scaled down from 9% per annum to 7.5% per annum from the date OP till the date of realization. No costs in the appeal.
As a sequel, miscellaneous applications pending, if any, shall stand closed.
JUSTICE U.DURGA PRASAD RAO Dated 4th August, 2014.
Msnr/Murthy
[1] 2013 ACJ 1593 (AP)