1. Heard learned advocates for both the sides and perused the papers on record.
2. Being aggrieved by the judgement and award dated 17.03.2005 passed by the Motor Accident Claims Tribunal (Main), Bharuch in Motor Accident Claims Petition No. 198 to 205 of 2002, whereby the Tribunal has awarded compensation to the claimants holding the insurance company liable, the present appeals are preferred.
3. It is the case of the claimants that on 28.01.2002 at about 01.30 am some of the deceased persons and some injureda were travelling in truck bearing registration No. GJ- 12-U 5432 owned by original opponent no. 2 and driven by original opponent no. 1. It is the say of the claimants that the opponent no. 1 suddenly applied brakes as a result of which it turned turtle and the passengers of the truck were crushed under the iron sheets loaded in the truck. Out of them, some persons died and some sustained severe injuries. The legal heirs/injured filed claim petitions seeking compensation and the Tribunal after hearing the parties awarded various amounts as compensation.
4. Mr. Thakore, learned advocate appearing for the appellant – Insurance Company submitted that the appellant is not liable to pay any amount of compensation as the truck was a goods vehicle and the deceased/injured persons were illegal passengers in a goods vehicle whose risk was neither required to be covered under the Act nor was covered under the policy. He submitted that the Tribunal has rightly concluded that the Insurance Company is not liable to pay compensation for unauthorized passengers. He strongly submitted that no liability would fasten on the insurance company when admittedly all the deceased as well as injured persons were travelling in a goods vehicle.
5. Mr. Hakim, learned advocate appearing for the original claimants strongly supported the award passed by the Tribunal. He submitted that the Tribunal has relied decisions of the Apex Court and concluded that the Insurance Company is liable to deposit the awarded amount and then recover it from the insured.
5.1 In the alternative, without prejudice to his rights and contentions, Mr. Hakim submitted that the claims are of the year 1989 and therefore relying upon a decision of the Apex Court in the case of United India Insurance Co. Ltd vs.
K.M. Poonam and Others reported in 2011 ACJ 917 wherein the Apex Court has directed the insurance company to pay amount of all the awards to the claimants and recover the amount in excess of its liability from the owner in execution without filing a separate suit, the same principle may be applied in the present case as well. He has relied upon a decision of this Court passed in First Appeals No.1892 to 1910 of 1999 which deals with the same question of law.
6. Though the owner of the vehicle in question is served, none appears for him.
7. It is an admitted position that the truck was involved in the accident and the original opponent no. 1 is the driver and the original opponent no. 2 is the owner of the truck. It is also admitted that because of the accident, the persons who were travelling in the trucks were crushed under the iron sheets.
7.1 Mr. Hakim has relied upon paras 8,11, 24 & 27 of the decision in the case of United India Insurance Co. Ltd (supra). The same read as under:
“8. On the basis of the aforesaid evidence, the Motor Accident Claims Tribunal held that even if a larger number of passengers than was permitted under the terms of the insurance policy were being carried in the vehicle, it could not be said that the Appellant Insurance Company would stand exonerated from its liability because the vehicle was insured for third party coverage for unlimited liability. The learned Tribunal, accordingly, answered Issue Nos.1 to 3 in favour of the claimants observing that carrying a larger number of passengers than was permitted in terms of the Insurance Policy, did not amount to breach of the terms and conditions of the Policy and the Insurance Company would still be liable since the vehicle was legally insured.
11. Learned counsel appearing for the appellant submitted that having regard to the provisions of Section 149 of the Motor Vehicles Act, 1988, the liability, if any, of the Insurance Company for payment of compensation would have to be limited to the number of passengers validly permitted to be carried in the vehicle covered by the insurance policy and did not extend to the number of passengers carried in excess of the permitted number. Learned counsel submitted that the said question had been considered by a two-Judge Bench of this Court in National Insurance Co. Ltd. Vs. Anjana Shyam & Ors. [(2007) 7 SCC 445] decided on 20th August, 2007. While considering the provisions of Section 147(1)(b)(ii) and (2) and Section 149(1)(2) and (5) of the 1988 Act in relation to an insurer's liability, their Lordships came to the conclusion that the insurer's liability was limited by the insurance taken out for the number of permitted 14 passengers and did not extend to paying amounts decreed in respect of other passengers. Taking recourse to a harmonious construction of the relevant provisions, their Lordships held that the total amount of compensation payable should be deposited by the Insurance Company which could be proportionately distributed to all the claimants, who could recover the balance of the compensation amounts awarded to them from the owner of the vehicle.
24. The liability of the insurer, therefore, is confined to the number of persons covered by the insurance policy and not beyond the same. In other words, as in the present case, since the insurance policy of the owner of the vehicle covered six occupants of the vehicle in question, including the driver, the liability of the insurer would be confined to six persons only, notwithstanding the larger number of persons carried in the vehicle. Such excess number of persons would have to be treated as third parties, but since no premium had been paid in the policy for them, the insurer would not be liable to make payment of the compensation amount as far as they are concerned. However, the liability of the Insurance Company to make payment even in respect of persons not covered by the insurance policy continues under the provisions of sub-section (1) of Section 149 of the Act, as it would be entitled to recover the same if it could prove that one of the conditions of the policy had been breached by the owner of the vehicle. In the instant case, any of the persons travelling in the vehicle in excess of the permitted number of six passengers, though entitled to be compensated by the owner of the vehicle, would still be entitled to receive the compensation amount from the insurer, who could then recover it from the insured owner of the vehicle.
27. In other words, the Appellant Insurance Company shall deposit with the Tribunal the total amount of the amounts awarded in favour of the awardees within two months from the date of this order and the same is to be utilized to satisfy the claims of those claimants not covered by the Insurance Policy along with the persons so covered. The Insurance Company will be entitled to recover the amounts paid by it, in excess of its liability, from the owner of the vehicle, by putting the decree into execution. For the aforesaid purpose, the total amount of the six Awards which are the highest shall be construed as the liability of the Insurance Company. After deducting the said amount from the total amount of all the Awards deposited in terms of this order, the Insurance Company will be entitled to recover the balance amount from the owner of the vehicle as if it is an amount decreed by the Tribunal in favour of the Insurance Company. The Insurance Company will not be required to file a separate suit in this regard in order to recover the amounts paid in excess of its liability from the owner of the vehicle. “
9. Considering the settled law, it is clear that for the passengers travelling in a goods vehicle which in the instant case is the truck, prima facie the appellant – insurance company shall not be liable to pay compensation. In that view of the matter, considering the decisions of the Apex Court it would be just and proper to exonerate the Insurance Company from the liability.
10. In the premises aforesaid, the appeals are allowed. The insurance company is exonerated from the liability of paying compensation in the aforesaid claim petitions. The following order is passed in the interest of justice:
(I) The award of the Tribunal is quashed and set aside qua liability of the insurance company-present appellant.
(II) The amount of award deposited by the insurance company in each claim petition shall remain with the Tribunal for a period of one year from today by way of Fixed Deposit.
(III) The original claimants shall file execution proceedings against the owner of the vehicle within a period of three (03) months from today.
(IV) The Tribunal shall hear and decide the execution proceedings within a period of one year from the date of filing of the execution proceedings by the original claimants.
(V) It is clarified that pending such execution proceedings the insurance company shall not be allowed to withdraw the amount deposited.
(VI) However, the insurance company shall be at liberty to withdraw the amount after expiry of the period of one year.
(VII) It shall be open to the claimants to recover the amount of compensation from the owner of the vehicle in question.
(VIII) The awards of the Tribunal are modified accordingly.
(K.S. JHAVERI, J.) Divya//