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Om Wati And Others v. Mohd. Din & Others
Structured Summary of the Opinion (B.A. Khan, J.)
Factual and Procedural Background
On 27.5.1979 a car (No. HRH-24), driven by Sanjeev Kumar with two passengers Shiv Singh and Sat Pal, was hit by a truck (No. DLL-5052) coming from the opposite direction. All three occupants of the car sustained injuries and died. Their legal representatives filed claim petitions against the truck and its insurer. The Insurance Company resisted the claims on the basis that its liability was limited to Rs. 50,000/- and produced an attested copy of a policy through its Branch Manager (RW-1) but did not produce the original or office copy or contemporaneous premium records. The Motor Accident Claims Tribunal (MACT) accepted the insurer's evidence and held the company's liability to be Rs. 50,000/-, and apportioned fault 70% on the truck owner/driver and insurer and 30% on the car owner/insurer.
Appeals were filed by the claimants (FAOs and LPAs Nos. 59, 60 and 61/1993 and FAO Nos. 11/1989, 23/1989, 24/1989) challenging (inter alia) the apportionment and the limited liability finding. The Insurance Company filed its own appeals (LPAs Nos. 90, 91 and 92/1993) asserting limited liability of Rs. 50,000/-. The First Appellate Court affirmed the apportionment but disagreed with the MACT on limited liability (holding insurer's liability to be unlimited) and additionally held that the passengers (Shiv Singh and Sat Pal) were disentitled to the 30% share because they had not impleaded tort-feasors of the car in their claims. The present opinion reviews these competing findings and disposes of the appeals.
Legal Issues Presented
- Whether the Insurance Company's liability was limited to Rs. 50,000/- as claimed (i.e., whether the insurer proved a policy limiting third-party liability), or whether the insurer's liability was unlimited.
- Whether claimants who were passengers in the car (Shiv Singh and Sat Pal) were required to forfeit 30% of their compensation because they failed to implead the driver/owner/insurer of the car as parties (i.e., whether failure to implead joint tort-feasors justifies deduction of share for contributory negligence).
Arguments of the Parties
Claimants' Arguments
- Disputed that any contributory negligence could be attributed to the deceased passengers; alternatively, even if negligence were attributable to the driver Sanjeev Kumar, it could not be attributed to the passengers Shiv Singh and Sat Pal.
- Asserted that the Insurer's liability was unlimited and that the Tribunal erred in limiting liability to Rs. 50,000/-.
Insurance Company's Arguments
- Pleaded limited liability to Rs. 50,000/- in its written statement and relied on an attested copy of policy No. 459680287 produced through its Branch Manager (RW-1), who testified that it was a true copy and that the original was issued under his signatures.
- Did not produce the original or office copy of the policy or premium receipt register, and did not seek framing of a specific issue on limited liability at trial.
- Relied on a Division Bench judgment (A.C. Gupta v. New India Assurance Co., LPA 56/1990) as support for limited liability and asked the court to follow it.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| A.C. Gupta v. New India Assurance Co., LPA 56/1990, 2000 (56) DRJ (Suppl) 724 (DB) | The judgment (in its facts) upheld limited liability where the insurer had not charged extra premium for extended third-party risk—i.e., liability was held limited by reference to the facts and proof of premium charged. | The court found this precedent distinguishable on the facts: in the present case the insurer failed to produce any record showing that it had not charged additional premium and therefore could not rely on the precedent to establish limited liability. The court refused to follow the precedent as dispositive for the insurer here because factual proof required by that decision was absent. |
| Hiraben Bhaga v. Gujarat State Road Transport Corporation and another, 1982 ACJ (Supp) 414 (DB) | Principle that passengers' compensation cannot be deducted on account of contributory negligence of a driver who is a joint tort-feasor and was not impleaded; claimants may sue any one or more of joint tort-feasors and are not to be saddled with deduction for failure to implead other tort-feasors. | The court relied on this decision to hold that the First Appellate Court erred in forfeiting the 30% share of the passengers for failure to implead tort-feasors of the car; the passengers were entitled to recover their full share from the truck insurer, and the insurer could seek recovery from the car's owner/insurer. |
Court's Reasoning and Analysis
The court's reasoning proceeds in two primary strands: (A) the question of limited liability claimed by the insurer; and (B) the propriety of deducting 30% from the car passengers because they did not implead the car-related tort-feasors.
(A) On limited liability:
- The First Appellate Court scrutinised the attested copy of the policy (referred to as Mark-A) produced by the insurer and found it unreliable because it was not shown to be an original, office copy or photocopy compared with an identified original. The attested copy was prepared on a different form and the Branch Manager (RW-1) did not explain from what document Mark-A was derived.
- The insurer failed to produce the original policy, the office copy, the premium receipt register or proposal form which would demonstrate whether extra premium had been paid to cover unlimited liability. The Branch Manager admitted that such records were available at the insurer's office but those records were not produced.
- Because the insurer withheld the best evidence (original/office copy and premium records) and did not substantiate its claim that the liability was limited, the Tribunal's reliance on Mark-A was found to be a grave error. The court accepted the First Appellate Court's reasoning that in the absence of these records, an attested copy could not be relied upon to prove a limitation of liability.
- The court reviewed the A.C. Gupta decision cited by the insurer and concluded that it was distinguishable—A.C. Gupta had held limited liability on its own facts where the insurer had not charged a higher premium; but in the present case there was no evidence (premium receipts, proposal forms or office copy) to show whether higher premium was or was not charged. Thus the insurer's reliance on its branch manager's testimony alone was insufficient to establish limited liability.
- On this basis the court affirmed the First Appellate Court's conclusion that the insurer's liability in the present case was unlimited.
(B) On apportionment and forfeiture of 30%:
- The First Appellate Court had sustained the MACT's apportionment of negligence as 70% truck / 30% car but concluded that two passengers (Shiv Singh and Sat Pal) should be disentitled to their 30% because the claimants had not impleaded tort-feasors of the car.
- The present court disagreed with the First Appellate Court on the consequence of failure to implead. It reasoned that the accident could not be regarded as wholly resulting from contributory negligence of the car passengers; even if drivers of both vehicles contributed, the passengers could not be held responsible for the driver's negligence.
- The court applied the principle of composite negligence: where more than one person is responsible for the wrong, the injured party may proceed against any one or more of the wrongdoers, and any one wrongdoer may be held liable for the whole damage (joint and several liability). Thus claimants have a choice; joint tort-feasors are proper, not necessary, parties.
- Relying on Hiraben Bhaga, the court held that a claimant should not be penalised by deducting compensation on account of the omission to sue another joint tort-feasor. The deduction performed by the Tribunal/First Appellate Court was therefore held to be improper.
- Consequently, the passengers were entitled to their full 30% share recoverable from the truck insurer; the insurer, if so advised, may pursue recovery from the car owner/insurer jointly or severally after satisfying the claim.
Holding and Implications
Holding: The court affirmed the First Appellate Court's finding that the Insurance Company's liability was unlimited (i.e., not limited to Rs. 50,000/-). It also held that the First Appellate Court erred in forfeiting the 30% share of compensation due to passengers Shiv Singh and Sat Pal for failure to implead the car tort-feasors.
Result in the appeals:
- Appeals filed by the Insurance Company (LPA Nos. 90, 91 and 92/1993) are dismissed.
- Appeals filed by claimants (LPA Nos. 59/1993 and 60/1993) are allowed.
- LPA No. 61/1993 (filed by legal representatives of Sanjeev Kumar) is partly allowed to the extent that they may recover the whole 70% compensation amount from the Insurance Company.
Implications: As a direct practical consequence, the insurer is not entitled to have its liability capped at Rs. 50,000/- in this matter and must satisfy the compensatory amounts as determined (subject to the apportionment). The two passenger-claimants are entitled to their 30% share; the insurer, after satisfying awards, may seek contribution or recovery from the car owner/insurer. The opinion does not purport to lay down a novel legal principle beyond applying existing precedents (it distinguishes A.C. Gupta on facts and follows the holding in Hiraben Bhaga), so no new legal precedent is declared beyond the court's factual application.
Note: This summary is confined to and derived exclusively from the text of the provided opinion and does not add or infer facts not present therein.
B.A Khan, J.— All these appeals arise out of one accident involving a limited question of the extent of the insurer's liability and whether claimants in LPAs. (59, 60 and 61/1993) were liable to forego their 30% share of compensation because they had failed to plead driver and owner and insurer of the car involved in the accident. LPAs. (59, 60 and 61/1993) are filed by claimants questioning forfeiture of their 30% share of compensation amount and the other set of appeals (Nos. 90, 91 and 92/1993) are preferred by the Insurance Company pleading limited liability up to Rs. 50,000/-.
2. One Sanjeev Kumar was driving his car No. HRH-24 with two others-Shiv Singh and Sat Pal on 27.5.1979 when it was hit by a truck No. DLL-5052 coming from opposite direction. All the three sustained injuries and died in the process. Their LRs filed claim petitions which were resisted by the Insurance Company on the plea of its limited liability of Rs. 50,000/-. The company took the plea in its written statement but did not seek framing of any issue on this. Nor did it place on record any original copy, carbon copy or photocopy of the insurance policy alongwith or immediately thereafter. It also failed to call upon the insured to produce the original copy. It, however, produced an attested copy through its Branch Manager, R.K Khanna (RW-1) who testified that this was the true copy of original policy No. 459680287 covering vehicle No. DLL-5052 for a period from 27.2.1979 to 26.2.1980 for a third party risk of Rs. 50,000/-. He also stated that the original policy was issued under his signatures. He did not produce any other document or record to show that the company had not charged any extra premium from the insurer.
3. MACT relied upon his evidence and held the company's liability to Rs. 50,000/-. It also found that accident had occurred because of contributory negligence of drivers of both vehicles and accordingly apportioned 70% liability on the truck owner/driver and insurer and 30% on the car owner/insurer.
4. Claimants filed (FAO Nos. 11/1989, 23/1989 and 24/1989) against this award and disputed that there was any contributory negligence by the deceased. They alternatively contended that assuming negligence could be attributed to Sanjeev Kumar driving the car, it could not be so attributed to Shiv Singh and Sat Pal travelling in that car. They also urged that Insurer's liability was unlimited and that Tribunal had fallen in error in holding it limited to Rs. 50,000/-.
5. First Appellate Court on appreciation of evidence on record concurred with the Tribunal's finding of contributory negligence and apportionment of liability into 70:30. But it disentitled claimants of car passengers Shiv Singh and Sat Pal also from receiving 30% of their compensation as they had failed to implead tort-feasors of the car as party respondents and held that they would have to forego it in favour of tort feasors of the truck present before the Court. The Court, however, upset the Tribunal finding on the question of limited liability and held it unlimited. While doing so it substantiated it by sound and cogent reason which can be best appreciated by extracting the relevant portion of its judgment which reads as under:
“Even though strict principles of Evidence Act are not applicable but at the same time one cannot loose sight of the fact that the document which the insurance company wants the court to rely must be either original or photocopy or at least office copy. Mark-A is prepared on a totally different form. Therefore, it cannot be called true copy of the original or of office copy. In the absence of the original or the office copy, no reliance can be placed on this attested copy of the insurance policy. It has not been explained as to from which document Mark-A was compared. In the absence of any explanation, to my mind, Mark-A must have been prepared from imagination. Mr. R.K Khanna, RW-1, has not explained as to from where and when this attested copy was prepared, because the original was not in company's possession and the office copy stood destroyed. Therefore, in the absence of the original as well as of the office copy, how could he prepare Mark-A and attest it unless he was doing it from his imagination. The owner of the truck has categorically stated that the vehicle was fully insured and the entire liability of the third party was that of the insurance company in the event of the accident. If the liability was limited or was “act only” policy then nothing prevented the insurance company from calling the original or produce the office copy. No record has been produced to show that office copy has been destroyed nor the premium receipt book and the proposal cost application had been produced. RW-1 could not deny the suggestion that these records were available in the office at Asaf Ali Road. This shows that the Insurance Company withheld the best evidence from the court deliberately. Had the original or the office copy of the policy and other record been produced, it would have belied the plea of limited liability. The premium for covering Section 95 risk policy at the relevant time was Rs. 84/- and for third party liability Rs. 125/- per year as per motor tariff. The premium receipt register if produced could have clinched the whole issue. It was a very relevant record to prove whether extra premium was paid to cover unlimited liability as alleged by the owner of the truck. In the absence of the original policy or the office copy and the premium receipt book, to my mind, the Tribunal fell in grave error in relying on Mark-A and coming to the conclusion that the liability of insurance was limited.”
6. We find ourselves in complete accord with the reasoning adopted by the First Appellate Court and feel that it could not have been stated better. Following all this we have no hesitation to conclude that Insurance Company had failed to substantiate and prove its plea of limited liability in the facts and circumstances of the case.
7. L/C for Insurance company Mr. Suri wanted us to ignore and overlook the exercise undertaken by First Appellate Court and to go by a D.B judgment of this Court in LPA. 56/1990 titled “A.C Gupta v. New India Assurance Co., 2000 (56) DRJ (Suppl) 724 (DB)” decided on 1.9.2000, which according to him cover the point in issue in favour of the insurer requiring us to hold that Insurance company's liability was limited to Rs. 50,000/-. We have gone through this judgment and we find it wholly distinguishable. It appears to us that Mr. Suri had misread it to believe that section 95 of mv act envisaged a limited liability of the Insurer in all events and circumstances. This judgment on the contrary held the company's liability limited in the facts and circumstances of the case and on finding that Insurer had not charged any higher premium for third party risk. In the present case, however, insurer had failed to produce any record or legal evidence to prove that it had not charged any additional premium and that its liability was limited to Rs. 50,000/-. It seems to have mistakenly believed that its branch Manager's testimony would be the last word on the subject and would do the trick to reduce its liability.
8. We accordingly affirm the finding of First Appellate Court and hold in the circumstances of the case that appellant company's liability was unlimited and not limited to Rs. 50,000/- as claimed by it.
9. Coming to the question of ‘apportionment’ it seems to us that First Appellate Court was in error in holding that claimants would have to forego 30% share of their awarded compensation in favour of the joint tort feasors of the truck present before the court as they had failed to implead tort feasors of the car as party-respondents in their claim suits. This is because the accident could not be wholly treated to be the result of contributory negligence. Even, if it was assumed that the drivers of the two vehicles contributed to the accident in some measure, the other two deceased who were travelling in the car could not be held responsible for any such negligence. Therefore, it was a case of composite negligence in their case. The principle of composite negligence is that where more than one person are responsible for commission of the wrong, the person wronged has a choice of proceedings against all or any one or more. Any one of the wrong doer is liable for the whole damage if it is otherwise made out. In otherwords the liability of two sets of tort feasors became both joint and several.
10. It logically follows from this that a claimant could choose to file a claim petition against all or any one of them and it was not necessary that he should implead all joint tort feasors as party respondents because they were only proper parties and not necessary parties. It may as well be that claimant had not set up a case of composite negligence but if there was material on record to suggest so, neither Tribunal nor Court was disabled or incompetent to record a finding in this regard. Support for this is derived from a DB Judgment of High Court in Hiraben Bhaga v. Gujarat State Road Transport Corporation and another, (1982 ACJ (Supp) 414) holding as under:
11. It passes one's understanding as to how could a passenger's compensation be deducted on account of the contributory negligence of the driver of a vehicle. It is entirely the choice of the claimants whether to implead both the joint tort-feasors or either of them. The claimants cannot be saddled with the liability for contributory negligence of one of the joint tort-feasors, if they fail to implead him as one of the opponents, in their claim petition. It would be for the impleaded joint tort-feasors to take proceedings to get the other joint tort-feasors impleaded in the claim petition, or for that matter such an impleaded joint tort-feasor may select to sue the other one after the decree or award is given and the other joint tort-feasor is held liable therein. It would be however quite a different argument to advance that because the claimants did not sue one of the tort-feasors, they themselves should be held liable for the deduction of the amount, which the omitted joint tort-feasor would have been called upon to pay. Thus, there would be no deduction in the amount of compensation awarded to the appellants as done by the Tribunal.”
12. We, therefore, hold that it was a case of composite negligence in case of Shiv Singh and Sat Pal and their claimants had an option to file the claim petition either against all or any one of the joint tort-feasors and their failure to implead the tort-feasors of the car was not fatal for their claim and that First Appellate Court had wrongly forfeited their 30% share of awarded compensation amount for this which they were entitled to recover from the Appellant company, being insurer of tort-feasors of truck. It would then be open to the company to recover such amount from the owner/insurer of the car jointly or severally.
13. The result is that Appeals filed by Insurance Company (LPA. 90, 91 and 92/93) are dismissed and those filed by claimants in LPA. Nos. (59/1993 and 60/1993) are allowed. The other Appeal (LPA. No. 61/1993) filed by LRs of Sanjeev Kumar is partly allowed to the extent that they could recover the whole 70% compensation amount from the Appellant Insurance Company.
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