Oriental Fire & General Insurance Co. Ltd. v. M.C Shashidhara And Others

The Judgment of the Court was delivered by

G.N Sabhahit, J.:— These appeals are directed against the judgment and awards, dated 30.9.1980, passed by the Motor Accidents Claims Tribunal, Chickmagalur, in MVC Nos. 10 and 14 of 1979, on his file, awarding compensation of Rs. 43,000/- in the case of injured and Rs. 49,000/- in case of death.

2. M.F.A Nos. 482 and 483 of 1981 are instituted by the insurance company, against the awards passed in M.V.C Nos. 10 and 14 of 1979 challenging its liability to pay compensation. M.F.A 1788 and 1849 of 1981 are instituted by the owner, against the awards passed in M.V.C Nos. 10 and 14 of 1979. According to them the entire compensation shall be, if at all they are liable, should be saddled on the insurance company.

3. They also contended that the compensation awarded in each case is very much on the higher side. The owner has also challenged the finding given by the Tribunal with regard to the actionable negligence.

4. On 12.10.1978, at about 11 a.m, the van bearing No. MYC 601 met with an accident near Gownahalli village, as a result of which Bhadregowda died and M.C Shashidhara sustained serious injuries. The legal heirs of Bhadregowda have instituted M.V.C No. 14 of 1979, claiming compensation of Rs. 75,000/- from respondents and the injured Shashidhara has instituted M.V.C 10 of 1979, claiming Rs. 80,000/- as compensation. The petitions were resisted by the owner and the insurer. They contended that the accident was not the result of rash and negligent driving of the van in question. It was due to a mechanical defect and as such it was a vis major. There was no liability on the part of the owner of the vehicle to pay compensation. Alternatively, he contended that the compensation prayed for in each case was excessive. The Tribunal heard these two petitions together and raised the following issues in M.V.C No. 10 of 1979:

(1) Whether the petitioner proves that the 2nd respondent drove the vehicle MYC 601 on 12.10.1978 at 11 a.m near Gownahall on Mudi-gere-Chickmagalur road, in a rash and negligent manner and caused severe injuries to the petitioner?

(2) Whether the petitioner is entitled to the compensation as claimed?

(3) To what order?

5. In M.V.C No. 14 of 1979 the following issues have been raised:

(1) Whether the petitioners prove that the 2nd respondent drove the vehicle No. MYC 601 in a rash and negligent manner near Gownahall on Mudigere and Chickmagalur road on 12.10.1978 at 11 a.m and caused severe injuries to M.P Bhadregowda, who succumbed to those injuries on 19.10.1978 at 10 a.m, at General Hospital, Hassan?

(2) Whether the petitioners are entitled to the compensation as claimed?

(3) To what order?

6. During hearing the claimants examined in all 8 witnesses and got marked Exh. P. 1 to P. 53. As against that the contesting respondents examined three witnesses and got marked Exh. D-1 to D-4.

7. The Tribunal, appreciating the evidence on record, held that the accident was the result of negligent maintenance of the van in question and rash and negligent driving of the van and in that view it awarded compensation as stated above in the two petitions. Aggrieved by the said judgment and awards the present appeals are instituted as narrated above.

8. The learned counsel for the owner of the vehicle strenuously urged before us that the Tribunal was not justified in recording its finding that the accident was the result of rash and negligent driving of the van in question. He also submitted alternatively that the compensation awarded was very much on the higher side in each case. He further submitted that if at all the insurance company was liable to pay the compensation, at any rate upto Rs. 50,000/- in each case.

9. As against that the learned counsel for the insurance company argued that there was no liability on the company to pay the compensation for the injury or death of persons travelling in the van. He submitted pressing his appeals for consideration that insurance company was not liable to pay any compensation. The learned counsel for the claimants argued supporting the judgment and awards of the Tribunal.

10. The points, therefore, that arise for our consideration in these appeals are:

(1) Whether the Tribunal was justified in holding that the accident was the result of rash and negligent driving of the van?

(2) Whether compensation awarded in each case is just and proper?

(3) Whether the Tribunal was justified in saddling the liability on the insurance company also in the two cases?

11. PW 1 Panchaksharaiah, has sworn to the fact that on 12.10.1979, at about 11 a.m, he was waiting for a bus at Mukt-hihalli to go to Chickmagalur. They waited for a long time, but no bus turned up. In the meanwhile a car in which Virendra Patil was travelling proceeded towards Chickmagalur. Then Veerashetty, the third respondent, told that he had his van in which all of them could go. Accordingly, deceased Bhadregowda and the two witnesses along with others went in the van towards Chickmagalur. The second respondent Shashidhara was driving the van. While they had covered about 1½ miles, the driver of the van overtook a car and went ahead. The speed of the van was excessive. At a distance of one furlong thereafter a double bullock cart was noticed. The driver of the van got panicky. He was unable to control the vehicle. He suddenly applied the brakes and the van capsized on its leftside. Shashidhara, the petitioner in M.V.C 10 of 1979, got stuck up under the van and sustained fracture of the left leg and Bhadregowda sustained fatal injuries. A little later third respondent Veerashetty came there in his car and removed the injured to the hospital in Chickmagalur. Thus, it is the case of this witness who was travelling in the van that the van capsized because of the sudden applying of the brakes by the driver when it was in high speed. That the van capsized is not denied. But according to the respondent-owner the van capsized because there was dislocation of ball joint of the track rod of the nuckle arm. It may be noticed that this could happen because of the sudden application of the brakes to the speeding vehicle, which constitutes obviously actionable negligence on the part of the driver of the vehicle.

12. Even assuming that there was sudden dislocation, it is obvious that the dislocation is due to wear and tear. It is the duty of every owner of the vehicle as also the driver to keep the vehicle roadworthy. They have to get it checked at regular intervals to see that all parts of mechanism are in good order. The owner of the vehicle has not adduced any evidence in this behalf to satisfy the Tribunal that the vehicle was maintained in a roadworthy condition. Simply to say that a mechanical part in the vehicle gave way is consistent with the negligence of the owner in maintaining the vehicle as also in sudden failure due to some latent defect. Hence simply to put forward a case that the vehicle capsized because of sudden dislocation of ball joint of the track rod to the nuckle arm would not absolve the pwrjer of his liability. Hence the Tribunal was justified in holding that the accident was the result of rashness and negligence on the part of the owner and the driver on the additional ground that the owner did not establish that the vehicle was maintained in a roadworthy condition by taking all diligent care in the matter. Thus, on both these grounds we are satisfied that the accident was the result of rashness and negligence on the part of the owner and driver in maintaining the vehicle in a roadworthy condition as also on the ground that the driver while driving the vehicle at high speed suddenly applied the brakes which obviously resulted in capsizing of the vehicle.

13. That takes us to the question of quantum of compensation. We will first take up the case of the injured in suit M.V.C 10 of 1979. The evidence on record shows that his left leg had to be amputated. The learned counsel for the owner no doubt submitted that general damages were very much on the higher side. Rs. 10,000/- are awarded for shock, pain and suffering; Rs. 10,000/- are awarded for loss of future prospects; Rs. 15,000/- awarded for disability and loss of earnings; Rs. 4,000/- are awarded for artificial leg and another sum of Rs. 4,000/- are awarded for treatment etc., So far as the special damages are concerned at Rs. 4,000/- for treatment and Rs. 4,000/- for artificial leg etc. we have no reason to interfere with the same. But the general damages are in all awarded at Rs. 25,000/-. Rs. 15,000/- are no doubt awarded for disability and loss of future earnings which we have no reason to interfere. Another sum of Rs. 10,000/- are awarded for disability and loss of future prospects. Hence, that becomes duplicate. Rs. 10,000/- are awarded for pain and suffering, shock which we confirm. That being so, out of Rs. 43,000/- awarded, we are of the considered view that Rs. 10,000/- are surplus being duplicate and have to be reduced.

14. We will next take up the case of the deceased Bhadregowda. The two widows, mother and children have applied for compensation. The Tribunal has fixed loss of dependency at Rs. 250/- per month which amounts to Rs. 3,000/- annually. The evidence on record shows that he was 38 years and was doing agricultural work. He had his own lands. Having regard to the fact that he was supervising his own lands and working in his own lands, loss of dependency fixed at Rs. 3,000/- annually cannot be considered to be excessive. The Tribunal has taken the multiplier as 12. The accident has occurred in 1978. Having regard to the rate of interest prevailing in 1978 as also the age of the deceased, the multiple taken at 12 cannot be considered to be wrong. Hence the loss of dependency at Rs. 36,000/- awarded requires no interference. To this the Tribunal has awarded Rs. 4,000/- towards loss of consortium to each of the widows and Rs. 5,000/- towards loss to the estate of the deceased. Thus the Tribunal has arrived at Rs. 49,000/- as compensation. We have no reason to differ from the compensation so awarded. It is quite reasonable.

15. The next point that is urged before us that the compensation awarded in the two cases shall be directed to be paid by the insurance company. The learned counsel for the owner of the vehicle submitted that the vehicle was covered by insurance which was valid on the date of the accident. He further invited our attention to section 95(2) of the Motor Vehicles Act, and submitted that persons travelling in the van are covered under Section 95(2)(b)(i). Alternatively he submitted that the vehicle falls under the category (c) under sub-section (2) of section 95. Hence the liability of the insurance company is unlimited. Section 95(2)(b)(i) reads:

“Subject to the proviso to sub-section (1), a policy of insurance shall cover any liability incurred in respect of any one accident up to the following limits namely:

(a) xxxx

(b) Where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment—

(i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all.”

16. The learned counsel for the owner wants us to read this clause (i) to mean that it covers persons travelling in the vehicle without paying fare or in pursuance of a contract of employment. That is why he submitted that since the persons travelling in the van could not be considered either as passengers paying fare or persons travelling in pursuance of contract of employment, they fall in the category of persons mentioned in clause (i). It should have been so, but for the proviso to sub-section (1). Normally it can be interpreted that persons even going in the van other than fare paying passengers and persons travelling pursuant to a contract of employment are third parties. If that be so, the limit of liability with regard to the third party is fixed at Rs. 50,000/- and it could cover persons going in the van or car without paying fare or not covered in the category pursuant to contract of employment. But the Supreme Court of India has ruled in Pushpabai Purshottam Udeshi v. Ranjit Ginning and Pressing Co. Pvt. Ltd. . 1977 A.C.J 343 S.C. that persons going in the car or van cannot be considered to be third parties for the purpose of insurance. Speaking on this aspect, it is observed:

“The plea that the words ‘third party’ are wide enough to cover all persons except the person and the insurer is negatived as the insurance cover is not available to the passengers made clear by the proviso to sub-section which provides that a policy shall not be required:

“(ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises.”

22. Therefore it is not required that a policy of insurance should cover risk to the passengers who are not carried for hire or reward. As under section 95 the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured, the plea of the counsel for the insurance company will have to be accepted and the insurance company held not liable under the requirements of the Motor Vehicles Act.”

17. In view of this ruling ex cathedra, it is obvious that there is no substance in the plea of learned counsel for the owner that the insurance company would be liable to pay the compensation that the owner is legally liable to pay, in this case for the death of Bhadregowda and injury to Shashidhara.

18. The learned counsel also invited our attention to clause (c) which reads:

“Save as provided in clause (d) where the vehicle is a vehicle of any other class, the amount of liability incurred.”

19. That obviously refers to the amount of liability incurred by the owner which the insurance company is liable under section 95 of the Act to pay if compulsorily insurable in nature. We have pointed out that persons travelling in a van or a car are not to be insured upon by insurer under section 95. That being so, clause (c) would have no application to the facts of the case. That being so, following the decision of the Supreme Court cited above we are constrained to hold that the insurance company is not liable to pay the compensation awarded on the facts of this case and we hold that the two appeals instituted by the insurance company are entitled to succeed.

20. In the result, M.F.A Nos. 482 and 483 of 1981 are allowed, the direction given by the Tribunal making the insurance company liable to pay compensation is hereby set aside. The compensation shall be paid over by the owner of the vehicle and the driver.

21. M.F.A No. 1788 of 1981 is allowed partly. The compensation awarded at Rs. 43,000/- is reduced to Rs. 33,000/-. The owner and the driver of the van in question shall pay the same along with interest at 6 per cent per annum from date of petition till payment as also the costs of the claimant before the Tribunal. No costs in the appeal.

22. M.F.A No. 1849 of 1981 is dismissed. No costs.

23. Order accordingly.