Citation Codes

Equivalent Citations

citation codes

Case Number

Civil Miscellaneous Appeal Nos. 612, 613/1994 & 1784/1996 and C.M.P No. 17556 of 1996

Attorney(S)

For appellant in CMA. No. 612 & 613/1994 & R.3 in CMA. No. 1784/1996: Mrs. N.B Surekha
For appellant in CMA. No. 1784 of 1996: Mr. M. Dhandapani for M/s. Muthumani Duraisami.
For R.3 in CMA. No. 612/94 and for R.1 in CMA. Nos. 613/94 & 1784/96: Mr. L. Mohan.
For R.1 in CMA. No. 612/94 and for R.2 in CMA. No. 1784/1996: Mr. P. Jagadeesan.

Judges

P. Sathasivam
A.K Rajan, JJ.

Acts

Sections 95 (1) (b) (i) and 110-A of the 1939 Act.
Section 95 (1) (b) (i), of Motor Vehicles Act 1939
Court.10. Sections 165 and 166 of 1988 Act
SECTION 110 MOTOR VEHICLES ACT
provision (i.e, Section 166 of 1988 Act)
MOTOR VEHICLES ACT
Clause (1) Sub-clause (d) of Section 11

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Smart Summary

Common Judgment — P. Sathasivam, J. (Summary)

Factual and Procedural Background

This is a common judgment disposing three appeals arising from a common award of the Motor Accidents Claims Tribunal, Villupuram. The appeals are:

C.M.A. No. 612 of 1994 — filed by M/s. United India Insurance Company Limited challenging the Tribunal's award dated 23.04.1993 in M.A.C.T.O.P No. 376 of 1987 (contentions on negligence and quantum to be left undecided for the present);
C.M.A. No. 613 of 1994 — filed by M/s. United India Insurance Company Limited challenging the award passed in M.A.C.T.O.P No. 227 of 1988, principally contesting its liability to indemnify loss of goods;
C.M.A. No. 1784 of 1996 — filed by Tiruvalluvar Transport Corporation, aggrieved by a Tribunal award directing the Corporation to pay 50% of the award.

The material facts (as pleaded and recorded) relevant to the dispute in M.A.C.T.O.P No. 227 of 1988 are:

M/s. Annamalai Roadways Company (ARC) claimed Rs. 6,62,545.70 as compensation for loss of goods carried in lorry bearing registration No. TMF 3238 (said lorry belonged to one Chitty Babu). The consignments were carried by ARC under 26 way bills from Madras to Madurai and the goods belonged to third parties/consignors.
On 21.04.1987 at about 3:30 a.m. near Shenkuruchi (Ulundupet), a Tiruvalluvar Transport Corporation bus (No. TMF 9756) allegedly collided with the said lorry due to rash and negligent driving; the bus caught fire and the goods and lorry were totally damaged.
A criminal complaint was lodged in Crime No. 96 of 1987. ARC produced documents (Exs.R.1 to R.52) to show the goods were entrusted to them, but the owners of the goods did not file claims before the Tribunal.
The Claims Tribunal awarded compensation in favour of ARC; the Insurance Company and the Transport Corporation challenged that award by the above appeals.

Legal Issues Presented

Whether, under the Motor Vehicles Act (Sections 165 and 166 of the 1988 Act corresponding to Sections 95(1)(b)(i) and 110-A of the 1939 Act), a claim for loss of goods carried in a lorry by the carrier (ARC) is maintainable before the Motor Accidents Claims Tribunal when the goods are alleged to be in the custody/control/trust of the carrier rather than being the property of a third party;
Whether the Insurance Company is liable to indemnify the claimed loss of goods under the policy when the policy contains clauses excluding liability for damage to property in the custody/control of the insured;
As a consequential matter, whether the Transport Corporation's liability and any apportionment of compensation should be affected by the determination on maintainability of ARC's claim.

Arguments of the Parties

United India Insurance Company (Appellant)

Contended that under the policy (Section 2(i)(ii) as referred in the opinion) the insurer's liability is excluded in respect of damage to property in the control of the insured; therefore the Tribunal's conclusion to indemnify ARC cannot be sustained.
Relied on statutory provision (Section 166(1)(b) of the Motor Vehicles Act, 1988) which, in their submission, permits only the "owner of property" (a third party) to make an application for compensation; thus the insurer argued only owners of goods (third parties) are entitled to claim before the Tribunal.
Relied on an earlier Division Bench decision of this Court: United India Insurance Company Limited v. K.A.R.N Janarthanam (1988 ACJ 503) to support the proposition that claims where the goods are not third party property are not maintainable before the Claims Tribunal.

M/s. Annamalai Roadways Company (ARC) — Claimant

Asserted entitlement to Rs. 6,62,545.70 for loss of goods carried in their hired lorry (registration TMF 3238), claiming either ownership or sufficient interest to claim compensation for the damaged consignments.
Produced a number of documents (Exs.R.1 to R.52) showing the goods were entrusted to them for transport; relied on precedent (Full Bench of Madhya Pradesh High Court in Harishankar Tiwari v. Jagru, 1987 ACJ 1) to support the maintainability of their claim before the Tribunal.
The claim petition’s averments (Column 24, sub-paras 4 and 6 in O.P. No. 227/88) described ARC's position but did not clearly state whether ARC claimed as owner, consignor or on behalf of consignees.

Tiruvalluvar Transport Corporation (Appellant in CMA No. 1784 of 1996)

Questioned the finding regarding negligence and apportionment by the Tribunal.
The court noted that a prior order in CMA No. 585 of 1995 dated 26.03.2002 had already confirmed the finding on negligence in MCOP No. 376 of 1987; accordingly, the Corporation's challenge to negligence was not accepted in this judgment.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
United India Insurance Company Limited v. K.A.R.N Janarthanam (1988 ACJ 503)	Held that where the goods involved are not the property of a third party (i.e., goods held in custody/control by the insured), the Claims Tribunal constituted under the Motor Vehicles Act does not have jurisdiction to entertain the claim; Tribunal under the relevant provision (Section 110 / Section 166/165 correspondence) can adjudicate only on damage to third party property.	The Court followed and applied this Division Bench decision as authoritative, using it to conclude that Section 166 (and corresponding provisions) does not cover loss to property carried in a public carrier and held in trust by the carrier; therefore ARC's claim was not maintainable and the Tribunal's award was set aside.
Harishankar Tiwari v. Jagru (Full Bench, Madhya Pradesh High Court, 1987 ACJ 1)	Relied upon by ARC to contend that the carrier's claim for loss of goods was maintainable before the Claims Tribunal (the Full Bench held a view favourable to the carrier's maintainability).	The present Court considered this authority but expressly declined to follow it, stating inability to share the view expressed by the Madhya Pradesh Full Bench and instead followed the earlier Division Bench decision of this Court (United India Insurance Company Limited v. K.A.R.N Janarthanam).

Court's Reasoning and Analysis

The Court's reasoning proceeds in the following logical steps, strictly as recorded in the opinion:

Statutory and contractual framework: The Court examined the relevant statutory provisions in the Motor Vehicles Act — noting that Sections 165 and 166 of the 1988 Act correspond to Sections 95(1)(b)(i) and 110-A of the 1939 Act — and the policy exclusion (Section 2(i)(ii) of the Insurance Policy) which excludes insurer liability for damage to property in the control of the insured.
Who is entitled to claim: The Court observed that Section 166(1)(b) of the 1988 Act permits the "owner of property" to make an application for compensation; accordingly, the Court treated entitlement as limited to owners (i.e., third parties) in the circumstances contemplated by that Section.
Clarity of pleadings: The Court noted that ARC's claim petition (O.P. No. 227 of 1988), specifically Column 24 sub‑paras 4 and 6, did not clearly indicate whether ARC was claiming as owner, consignor, or on behalf of consignees. Because this central question of status could not be resolved on the pleadings, the Tribunal could not properly entertain the claim.
Precedent and comparative authority: The Court relied on the Division Bench decision in United India Insurance Co. Ltd. v. K.A.R.N Janarthanam (1988 ACJ 503) which held that Claims Tribunals under the Motor Vehicles Act only have jurisdiction to adjudicate claims for damage to third party property; when goods are not third party property the Tribunal lacks jurisdiction. The Court considered and rejected the contrary view expressed by the Madhya Pradesh Full Bench in Harishankar Tiwari v. Jagru, and expressly followed the earlier Division Bench decision of this Court.
Application to the facts: Applying the statutory language and the cited Division Bench authority, the Court concluded that Section 166 does not extend to loss of goods carried in a public carrier which are held in trust by the carrier; therefore, ARC (as pleaded) was not a third party within the scope of Sections 165 and 166 and the Claims Tribunal had no jurisdiction to entertain ARC's claim.
Consequences for co-appellants: Because ARC's claim was held not maintainable, the Court concluded that the Transport Corporation (which had been directed to pay 50% of the award) was entitled to the benefit of that conclusion; a separate challenge to negligence by the Corporation was not sustained given a prior order confirming negligence.

Holding and Implications

Core Ruling: The Court set aside the Tribunal's award in favour of ARC and allowed the appeals challenging that award. Specifically:

Result: The award granting Rs. 6,62,545.70 to ARC in O.P. No. 227 of 1988 was set aside.
Appeal Dispositions: CMA No. 613 of 1994 (filed by the Insurance Company) and CMA No. 1784 of 1996 (filed by Tiruvalluvar Transport Corporation) were allowed. CMA No. 612 of 1994 was dismissed as unnecessary to consider in view of the conclusion on maintainability.
Costs: No costs were awarded; the connected CMP was dismissed.

Implications:

Direct effect — the claimant ARC's award for loss of goods was vacated; the Insurance Company and the Transport Corporation were relieved of the indemnity/ liability ordered by the Tribunal in respect of that award.
Jurisdictional principle — the Court reaffirmed the principle (as stated in the Division Bench decision relied upon) that the Claims Tribunal constituted under the Motor Vehicles Act adjudicates claims for damage to third party property and does not have jurisdiction to entertain claims for loss of goods which are held in trust or in the custody/control of the carrier where the claimant is not shown to be a third party owner.
Precedential posture — the Court followed an earlier Division Bench decision of this Court and expressly declined to follow the contrary view of a Madhya Pradesh Full Bench. The decision applies that existing precedent to the facts before the Court rather than creating a new extension of law.

End of summary. This summary is strictly derived from the contents of the provided opinion and does not add information beyond that text.

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United India Insurance Company Ltd. v. Managing Director Tiruvalluvar Transport Corporation Ltd.

Common Judgement — P. Sathasivam, J.

Since all these three appeals arose from a common award of the Motor Accidents Claims Tribunal, Villupuram, they are being disposed of by the following common judgement.

2. CMA. Nos. 612 and 613 of 1994 are by M/s. United India Insurance Company Limited. C.M.A No. 612 of 1994 is filed against the award of the Motor Accident Claims Tribunal, Villupuram dated 23.04.1993 made in M.A.C.T.O.P No. 376 of 1987, wherein the United India Insurance Company challenges the conclusion of the Tribunal relating to negligence and quantum of compensation. C.M.A No. 613 of 1994 is filed against the award passed in M.A.C.T.O.P No. 227 of 1988, wherein the very same Insurance Company challenges its liability. Aggrieved by the same award, directing Tiruvalluvar Transport Corporation to pay 50% of the award amount, the Transport Corporation has filed C.M.A No. 1784 of 1996.

3. Among the three appeals, let us consider C.M.A Nos. 612 and 613 of 1994, filed by M/s. United India Insurance Company Limited. As stated earlier, in C.M.A No. 612 of 1994, the Insurance Company challenges the finding regarding negligence and quantum of compensation determined by the Tribunal, which we shall consider after arriving a decision in the other appeals.

4. In C.M.A No. 613 of 1994, the Insurance Company challenges its liability. Mrs. N.B Surekha, learned counsel for the Insurance Company after taking us through the claim of M/s. Annamalai Roadways Company (in short “ARC”), claiming a sum of Rs. 6,62,545.70 towards compensation for the loss of the goods carried in their lorry bearing registration No. TMF 3238 and the impugned award of the Tribunal directing the Insurance Company to indemnify the loss caused to ARC in respect of the goods carried in their lorry, would contend that in the light of Section 2 (i) (ii) of the Policy, which excludes the liability of the Insurance Company in respect of damage to property in control of the insured, the contrary conclusion arrived at by the Tribunal cannot be sustained.

5. In the light of the said contention, let us consider the necessary facts which necessitated ARC to file a claim for compensation, for the loss of the goods carried in their lorry. It is the case of ARC that they hired lorry bearing registration No. TMF 3238 belonged to one Chitty Babu - third respondent in CMA. No. 613 of 1994 and transported the goods through 26 way bills, valued at Rs. 6,62,545.70 from Madras to Madurai. The goods belonged to third parties/consignors. While the said lorry, namely TMF 3238 with goods was proceeding towards Madurai, at about 3.30 a.m on 21.04.1987 at Shenkuruchi near Ulundupet from North to South, the Tiruvalluvar Transport Corporation bus bearing registration No. TMF 9756, which was coming in the opposite direction, driven in a rash and negligent manner, dashed against the lorry. It is further stated that as a result of the heavy impact, the bus caught fire and spread over to the lorry, causing total damage to the entire consignments carried and also to the lorry. A criminal complaint had been lodged by the driver of the lorry before the Tiruvallur Police Station in Crime No. 96 of 1987. The loss to the goods is valued at Rs. 6,62,545.70. The accident occurred as a direct result of the rash and negligent driving on the part of the bus driver. It is alleged that as the owner of the bus, first respondent is vicariously liable to compensate the loss of Rs. 6,62,545.70.

6. Before going further, it is relevant to refer the case of ARC, as pleaded in their claim petition (O.P No. 227/88). In Column 24, sub

Para 4 it is stated.

“….. As owner of the Transport bus the first respondent is vicariously liable to compensate the loss of Rs. 6,62,545.70. to the petitioner, consignors and consignees.

(emphasis supplied).

In sub-para 6 it is stated,

“The petitioner has claimed a sum of Rs. 6,62,545.70 as damage of the goods as per the list attached herewith. The details of way bill numbers and description of goods which were consigned and carried in the lorry are given in the said list. The respondents are liable to compensate the damages to the petitioner at Rs. 6,62,545.70. Hence this petition.”

7. It is contended on behalf of the Insurance Company that as per the statutory provisions and the Policy of Insurance, they are liable to indemnify and pay compensation in respect of bodily injury or death and damage to the properties belonging to third parties. Though ARC has produced number of documents as Exs.R.1 to R.52 to show that the goods were entrusted to them for transport by various persons, admittedly, the owners of the goods have not filed any claim petitions before the Tribunal. It is relevant to note that as per Section 166(1)(b) of the Act, the “owner of property” alone is permitted to make an application for compensation. In the light of the said statutory provision (i.e, Section 166 of 1988 Act) and in view of Section 2 (i) (ii) of the Policy, it is clear that the owner of the goods alone is entitled to claim compensation from the Tribunal. In our case (MACTOP. No. 227 of 1988), though ARC has claimed that they are the owner of the goods entrusted to them, the said question cannot be gone into by the Tribunal. We have already referred to the claim of ARC vide sub-para 4 and 6 in Column 24, as extracted above. It is not clear whether ARC has filed the said claim petition as owner or consignor or on behalf of the consignees. Therefore, in the light of the particulars furnished in the claim petition (O.P No. 227 of 1988), we are of the view that the said question can not be agitated before the Tribunal.

8. In this regard learned counsel for the Insurance Company has relied on the earlier Division Bench decision of this Court in the case of United India Insurance Company Limited v. K.A.R.N Janarthanam reported in 1988 ACJ 503. The facts before the Division Bench are as follows: The claimant therein filed a petition under Section 110-A of the Motor Vehicles Act claiming compensation for damages caused to his goods at about 10.30 p.m on 05.07.1977 for the lorry bearing registration No. MSL 771. He had booked a consignment of 42 bales of MCU 5 cotton worth Rs. 70,000/- on 05.07.1979 from Jayam Ginning Factory at Theni by the second respondent's lorry to be carried to Rajapalyam. Freight was to be paid at the destination. The lorry was driven by second respondent's driver, who has been impleaded as first respondent. It left Theni at 7.00 p.m and due to the rash and negligent driving by the first respondent, the load of cotton came into contact with the electric wire running east to west in the north south road, as a result of which the entire 42 bales of cotton were burnt. Hence, he claimed a compensation of Rs. 70,000/- from the owner of the lorry, being the second respondent and the Insurance Company with which the lorry had been insured, being the third respondent. On behalf of the Insurance Company it was submitted that when the policy issued contains a specific term in Clause (1) Sub-clause (d) of Section 11 that it shall not be liable in respect of damage to property belonging to or held in trust by or in the custody or control of the insured or a member of the insured's household or being conveyed by the motor vehicle, no liability could be fastened on it by the petitioner. It is further contended that when contractual liability had been excluded, the transaction entered into between P.Ws 1 and 4 and the consequent happening would not be binding upon it. On behalf of the second respondent it was contended that the petition filed under Section 110-A of the Motor Vehicles Act itself is not maintainable on the finding that the goods damaged are not properties of a third party. The Division Bench after finding that the goods involved in the petition are not properties of a third party, coming within the scope of Section 95 (1) (b) (i), of Motor Vehicles Act 1939 and in view of Section 110 held that the claims Tribunal would have no jurisdiction to entertain such a claim. The Division Bench further held that, “the Tribunal constituted under Section 110 of Motor Vehicles Act, 1939 could only adjudicate upon claims for compensation in respect of damage to any property of a third party so arising. Therefore, the petition as filed was not maintainable before the Tribunal at Madurai.”

After holding so, the Division Bench allowed the appeals filed by the Insurance Company.

9. Mr. L. Mohan, learned counsel for ARC relying on a Full Bench decision of the Madhya Pradesh High Court in the case of Harishankar Tiwari v. Jagru reported in 1987 ACJ 1 would contend that the claim made by ARC before the Tribunal is maintainable and the Tribunal has rightly granted the relief. In the light of the said contention, we have gone through the decision of the Madhya Pradesh High Court. We have already referred to the relevant provisions of the Motor Vehicles Act both in 1939 and 1988 Acts as well as the Division Bench decision of this Court i.e, 1988 ACJ 503 (cited supra) and with respect, we are unable to share the view expressed by the Madhya Pradesh High Court and we follow the view of the earlier Division Bench decision of this Court.

10. Sections 165 and 166 of 1988 Act are corresponding to Sections 95 (1) (b) (i) and 110-A of the 1939 Act. Accordingly, by applying the said principles laid down by the Division Bench and in view of the language used in Sections 165 and 166 of 1988 Act, we are of the view that Section 166 of the Act does not cover the liability in question and damage to the property as envisaged under. The Section only relates to the property of a third party and does not cover the loss to the property carried in a “public carrier” held in trust by the carrier for the owners of the goods. Inasmuch as the claimant in O.P No. 227 of 1988 is not a third party, coming within the scope of Sections 165 and 166 of the Act, we are of the view that the Claims Tribunal would have no jurisdiction to entertain such a claim. It is a well settled law that the Tribunal constituted under Section 165 of 1988 Act could only adjudicate upon the claims for compensation in respect of the accident involving death or bodily injury to persons arising out of the use of motor vehicles or damages to any property of a third party, so arising. In the light of uncertain details furnished in Column 24 sub-para 4 and 6 in O.P No. 227 of 1988 by ARC, the said claim petition was not maintainable before the Tribunal. The Tribunal failed to consider the above material aspect and committed an error in adjudicating the issue by passing an award as claimed in favour of the claimant/ARC. Accordingly, we set aside the same.

11. Learned counsel appearing for Tiruvalluvar Transport Corporation - appellant in CMA. No. 1784 of 1996 though questions the finding regarding negligence and apportionment by the Tribunal, in the light of the order passed by this Court in CMA. No. 585 of 1995 dated 26.03.2002, confirming the very same finding on the negligence in MCOP. No. 376 of 1987 (disposed of along with OP. No. 227 of 1988), we reject the said contention. However, in view of our conclusion, namely the claim petition filed by ARC (Claim Petition No. 227 of 1988) claiming compensation for the damages to the goods as carrier, is not maintainable before the Motor Accident Claims Tribunal, the appellant Transport Corporation is also entitled to the benefit of such conclusion.

12. In the light of what is stated above, we set aside the award of the Tribunal granting compensation of Rs. 6,62,545.70 in favour of ARC. Consequently, we allow CMA. No. 613 of 1994 filed by the Insurance Company and CMA. No. 1784 of 1996 filed by Tiruvalluvar Transport Corporation. In view of the said orders, the question raised in CMA. No. 612 of 1994 need not be considered; hence, the same is dismissed. No costs. Consequently, connected CMP., is also dismissed.

VCJ/VCS

United India Insurance Company Ltd. v. Managing Director Tiruvalluvar Transport Corporation Ltd.

Common Judgment — P. Sathasivam, J. (Summary)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

United India Insurance Company (Appellant)

M/s. Annamalai Roadways Company (ARC) — Claimant

Tiruvalluvar Transport Corporation (Appellant in CMA No. 1784 of 1996)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

United India Insurance Company Ltd. v. Managing Director Tiruvalluvar Transport Corporation Ltd.

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