(1) On the morning of 25 - 6 - 1976 at about 8 a. M. Syed nawab saheb was driving the motor cab apn 8057carrying there in some passengers including one meka venkaiah and mahimaluru venkaiah, both residents of vovveru village. When the motor cab reached damaramadugu junction, it went to extreme left side and dashed an against electric pole and turned turtle. Meka venkaiah, who received injuries as a result of that accident, died in the hospital as a result of those injuries on the same day at 9 p. M. Mahimaluru venkaiah received some fractures of his left hand and left thigh resulting in partial permanent disability despite the medical treatment given to him in the hospital for about 4 months. Concerning this incident, the widow and mother of meka venkeiah claimed a total compensation of rs, 18,050/. In o p no 138/77 before the district judge nellore, rs. 4,000/ - was claimed towards compensation for the loss of consortium rs. 14,000/ - was claimed towards loss to the estate and the balance amount of rs. 50/ - was claimed as expenses incurred for transporting meka venkaiah to the hospital. Mahimaluri venkaiah claimed a total compensation of rs. 20. 000/ in o p no 139/77 to both those applications, the insurer was impleaded as the 2nd respondent. The claims were opposed mainly on the grounds that the accident was not due to any rashness or negligence of the driver, that the amounts claimed were excessive and that in any event the insurer is not liable to pay more than rs. 5. 000/ - towards compensation to the claimants in each of the petitions. The district judge. Nellore. Awarded a total compensation of rs. 12,000/ - in 0 p no 138/77 and rs. 13. 000/ - in o p no 139/77. Before the district judge, both the parties appeared to have proceeded on a common footing that the insurer's liability in the case of a single individual is limited to a maximum of rs. 10,000/ - in decreeing the amounts in favour of the claimants, however, the insurer was also made jointly liable along with the owner of the motor cab who incidentally happens to be the driver of the motor cab.
(2) The insurer and the owner of the motor cab have preferred appeais in cm a nos 401/79 and 690/79 against the compensation awarded against them in o p no 138/77. Likewise, they preferred c m a nos 402 and 689 of 1979 against the compensation awarded against them in o p no 139/77. The district judge, nellore, disposed of both the 0 ps by a common order and accordingly these four c m as have been disposed of together.
(3) It is submitted on behalf of the owner that there was no rashness or negligent driving ana that the amounts awarded as compensation are excessive. The submission on behalf of the insurer is that the district judge, nellore, erred in making the insurer liable to pay any amount in excess of the insurance limit for which the insurer is liable.
(4) The eye - witness account of the incident is given by mahimaluru venkaiah who was admittedly one of the persons travelling in the motor cab at that time. Another meka venkayya naidu (p w 4) also gave evidence that ho was also one of the passengers travelling in the motor cab at that time. Mahimaluru venkaiah (p w 1) in his evidence stated that the cab was being driven at that time with excessive speed and despite the caution given to the owner driver of the cab, he did not reduce the speed. He was confronted with a statement made before the police who investigated into the case wherein he is alleged to have stated that the driver of the cab was not at fault. There are certain hard facts regarding whicn tnere cannot be any dispute. The right front wheel of the motor cab had come off the vehicle resulting in the accident. The 1st respondent in the two claim petitions who was the driver owner of the motor cab is the most competent witness to say as to how the right front wheel had come off the vehicle. He did not examine himself. Any wheel of the vehicle would not come off by itself unless a proper explanation is given for the happening of that event. The non - examination of the driver owner of the cab is therefore a circumstance which does not rebut the pre sumption of negligence on his part in not keeping the vehicle in a state of good repair. The vehicle had gone to the extreme left, dashed against an electric pole and turned turtle. It was, therefore, the duty of the owner driver to explain why the motor vehicle had to be taken to the extreme left and why it was not possible for him to bring the vehicle to a stop before it hit against the electric pole and turned turtle. It appears that while the vehicle was being driven, some buffaloes were coming in the opposite direction and the vehicle was swerved in different directions to avoid hitting the buflelces. The coming of buffaloes along the road on the opposite driection should have alerted the driver to control the vehicle and obviously the vehicle was being driven without reducing the speed of the vehicle. The presumption of rash driving of the vehicle arises in these circumstances and such presumption has not been displaced. The conclusion of the district judge, neilore, that there has been rash and negligent driving is correct though his judgment dees not reflect the application of the proper principles to the facts of the case.
(5) The compensation awaited to the two claimants in 0 p no 138/77 is, on the facts, reasonable and fair and is accordingly confirmed. Regarding, however, the compensation of rs. 13,000/~ awarded to the claimant in 0 p no. 1 39/77, it appears to be excessive p w 1. Who is a dhobi is aged obout 60 years. He cannot le expected to be earring rs, 350/ per month by practising his profession as dhobi at that age. P w 1 sustained the fractures to his left leg and left hand,. There is nothing to indicate that he is a ieft - hander. The medical evidence discloses that the disablity, though perment, is partial. Further, concerning the death of meka venkaiah, the total compensation awarded to the petitioners in 0 p no. 138/79 was only rs 12 000/ - in the nature of things and having regard to the advanced age of p w 1, the compensation of rs. 13, 000/ awarded to him is excessive. A fair compensation will be rs. 10, 000/ - and the compensation granted to the claimant in o p 139/77 is accordingly modified to rs. 10000/ -
(6) The evidence of p. W. 1 is that at the time, the van came to be involved in the accident, there are about 7 or 8 people in the van. There is no evidence whether that number given by p. W. 1 included the driver or excluded him. Motor cab as defined in sec. 2 (15) of the motor vehicles act means any motor vehicle constructed, adopted or used to carry not more than six passengers, excluding the. Driver, for hire or reward sec. 95 of the motor vehicles act dealing with the requirements of policies and limits of liability provided, among other, things, that the liability of the insurer is rs. 10000/ - for each individual passenger where the vehicle is a motor cab, and rs 5,000/ - for each individual passenger in any other case subject to certain other maximum liability limit of an insurer under sec. 95 (2) (b) (ii) of the motor vehicle act before the district judge, nellore, it appears to have been agreed by both the parties that the 'nsurer's liability in respect oi each individual passenger should be limited to rs. 10. 000/ - evidently, it was so agreed because the vehicle answers the definition of the motor cab as made in sec. 2 (15) of the motor vehicles act and that was the limit of the insurer's liability in terms of the policy. The district judge in ultimately making the insurer liable for amounts in excess of rs ;,10,000/ - in respect of each claim, did not obviously keep in view the aloresaid limitation to be made, though he recorded in his judgment that the liability of the insurer has to be so restricted.
(7) The claimants, however, placing reliance of united india fire and general insurance co. Ltd v. P. Parvatamma (1981 (i) aplj 49) have submitted that in an appeal filed by the insurance company, it is not open to the insurer to raise the ground that its liability has been fixed by the tribunal in excess of the limits aforesaid. Mr. Somayajulu, appearing for the insurer, has submitted that the observations made in that judgment run counter to the express previsions of the motor vehicles act, 1939 and may not be accepted as laying down the correct legal position.
(8) Before dealing with these rival contentions made on behalf of the claimants and the insurer, the judgment dated 24 - 4 - 1981 rendered by a division bench of this court in c. M. A. No. 233/79 and batch (united india fire and general insurance co. V. Pallamparthy indiramma and others) may be noticed. Ln that case, the insurer was made liable to pay amounts excesss ef the statutory liability. There was, in that case, no plea raised by the insurer that its liability was limited and the insurance policy was not produced to show that the policy did not cover higher risks than the prescribed compulsory insurable risks and no evidence was let in by the insurer in support of its plea that the liability should be so restricted. On those facts and relying upon national insurance company v. Narendra kumar (1981 0 acj 93) and shyam lal v. The new india assurance co. Ltd (1979 0 acj 209) , the bench of this court did not give relief to the insurer and the insurer was directed to pay compensation in excess of the maximum liability stated in the act. Sec. 96 (1) of the motor vehicles act, 1939 reads as follows -
"if after a certificate of insurance has been issued under
subsection (4) of section 95 in favour of the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under
clause (b) of sub - section (1) of section 95 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable there - under as if he were the judgment - debtor in respect of the liability together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments"
Sec. 96 (2) gives the insurer the right to defend the action on any of the grounds stated therein. Sec. 96 (6) of the act provides that no insurer, to whom the notice ot the action has been given, shall be entitled to avoid his liability under sub - section (1) otherwise than in the manner provided few in sub - section (2). It is now settled law that the insurer cannot challenge the quantum of compensation. Suffice if reference is made to reddipalli chinna rao v. Smt. Reddi lorudu (2) air 1980 ap 279) sec. 96 (2) has to be read with sec. 96 (1) of the motor vehicle act. Sec. 96 (1) restricts the liability of the insurer to pay only such sums not exceeding the sum assured payable under the policy of insurance reading the two sub - sections together, the conclusion is inescapable that the insurer cannot avoid his liability if the amount granted as compensation falls within the limits of the insurer's liability in terms of the policy is the insurer to be barred also from stating that he has no liability to satisfy a decree for an amount which is in excess of the amounts covered by the insurance policy? neither in indiramma's case (supra) nor in the two decisions referred to by the division bench of this court, the insurer's right to question the quantum of compensation in excess of the monetory limits was doubted. The insurer was made liable for the amount in excess of the statutory liability in those cases because the insurer did not raise any such plea and the insurance policy was not produced to show that the policy did not cover a higher risk.
(9) In parvathamma's case (1 supra) p. A. Choudary, j, found that the tribunal below erred in awarding rs. 12,000/ - executable both against the owner of the bus and the insurer in a sum exceeding rs. 5. 000/ - which was the limit of the liability of the insurer in that case. He, however construed sec. 96 (2) of the motor vehicles act, 1939 in isolation and held that the insurer cannot be permitted to raise the ground that the liability as may be fixed by the tribunal exceeded the amount payable by the insurer in terms of the policy. While noticing the provisions of sec. 96 (1) he felt that the decision of the supreme court in b. I. G, insurance co. , v. Itbar singh (air 1959 sc 1331) barred the insurer from questioning the quantum of compensation. In the supreme court case, the facts were that the vehicle involved in the accident was a private car and insrance to be for the entire amount of the liability incurred under sec. 95 (2) (c) of the motor vehicles act, 1939. The supreme court case cannot, therefore, be construed as having decided that the insurer cannot question the quantum of compensation even when it exceeded the limits of the liability for which insurance has been effected. In reddipalli chinna rao v. Smt. Reddy lorudu (2 supra) the insurer in respect of a bus was directed to pay rs. 50,000/ - out of the total compensation of rs. 58000/ - awarded to the legal representatives of the person who died in the bus accident. That sum of rs. 50. 000/ - is the statutory insurance liability of the insurer under sec. 95 (2) (b) of the motor vehicles act, 1939. This decision cannot therefore, he understood to have laid down that the insurer under sec. 95 (2) (b) of the motor vehicles act, 1939. This decision cannot, therefore, be understood to have laid down that the insurer cannot complain if a compensation in excess of the insurance policy in terms of the policy was granted against the insurer. In sheikhpura transport co. Ltd. (1971 0 acj 206) , the tribunal directed the entire compensation amount of rs. 18, 000/ - payable to the claimants by both tha bus owner and by the insurance company. On the insurer's appeal to the high court the high court restricted the amount payable by the insurer to rs. 2. 000/ - in the case of each one of the decased persons and directed the owner to pay the balance comperisation amount as was enhanced by the high court. On the owner's further appeal to the supreme court, the supreme court observed
"reading all these provisions together, it is clear that the statutory liability of the insurer to indemnify the insured is as prescribed in sec. 95 (2) of the motor vehicles act, 1939."
In view of the aforesaid cases, the observations mada by p a choudary, j in parvatamma's case, have to be confined only to that case.
(10) As both the parties have stated that the insurer's liability in respect of each individual passenger cannot exceed rs. 10. 000/ - the in surer cannot be made liable to pay in excess of rs. 10,000/ - other than by way of costs and interest,
(11) C m a no. 690/79 filed by the owner of the motor cab is dismissed with costs.
(12) C m a no. 401/79 is allowed in part restricting the liability or the insurer to a sum of only rs. 10, 000/ - besides costs and interest and dismissing it in other respects. Ms the respondents were awarded costs in c m a no. 690/79, the parties in c m a no. 401/79 are directed to bear their respective costs so far as that c m a is concerned.
(13) C m a nos. 402 and 689/79 are allowed in part modifying the compensation amount to read as rs. 10, 000/ - instead of rs. 13. 000/ - both the appeals in other respects are disimissed with costs payable to the claimant by the appellant in c m a no. 689/79. The parties in the circumstances, are directed to bear their respective costs in c m a no. 402 of 1979.