when there are 4 dependants even son a dependant or not even as per Sarla Verma supra from para Nos.29 to 32, if there are more than three dependants upto 6, 1/4th to be deducted.HONOURABLE Dr. JUSTICE B.SIVA SANKARA RAO M.A.C.M.A.No.380 of 2008 and batch 23-12-2014 National Insurance Company Limited .Appellant Manne Laxmi and 7 others.... Respondents
HONOURABLE Dr. JUSTICE B.SIVA SANKARA RAO
M.A.C.M.A.No.380 of 2008 and batch
23-12-2014
National Insurance Company Limited .Appellant
Manne Laxmi and 7 others.... Respondents
Counsel for the Appellant : M/s.R.Brizmohan Singh
Counsel for the Respondents:Sri K.Madhava Reddy
Sri N.Vasudeva Reddy for A.P.S.R.T.C
<Gist :
>Head Note:
? Cases referred:
1. AIR 1997 SC 481
2. 2014(1) Decisions Today 122
3. 1965 (1) All.E.R. 563
4. 1963 (2) All.E.R. 432
5. 1969 (1) All.E.R 555
6. 1995 ACJ 366 (SC) CA Nos.1799 & 1800 of 1989 with SLP (Civil) 4586 of
1989
7. (2011)8 SCC 142
8. (1988) 3 SCC 1
9. (2009) 1 SCC 558
10. AIR 2003 SC 1446 = (2003)3 SCC 97
11. 2001 (8) SCC 197
12. 2013(4)ALT 35(SC)
13. 2014(6) ALD 281
14. 2009 ACJ 1298
HONOURABLE Dr. JUSTICE B.SIVA SANKARA RAO
M.A.C.M.A.No.380 of 2008 &
CROSS OBJECTIONS (SR) No.9366 of 2008
COMMON JUDGMENT :
The 2nd respondent insurer among the 4 respondents, preferred the
appeal impugning the award of the Tribunal in O.P. No.983 of 2004 dated
28.03.2007, in the claim filed by the claimants under Section 166 of the
Motor Vehicle Act, 1988 (for short, the Act) viz., by wife, major
daughter, major son and parents of deceased Nagabhushanam, aged about
44 years as per Ex.A-5 post mortem report claiming compensation of
Rs.20,00,000/- since awarded by the Tribunal of Rs.7,85,000/- with
interest at 7.5% p.a. with joint liability against the owner of the bus
bearing No.AP 28 U 3925, the insurer (appellant herein) and the A.P.S.R.T.
Managing Director and Depot Manager respectively, with contentions in the
grounds of appeal by the insurer supra, wherein the claimants are shown as
Respondent Nos.1 to 5, (owner of the bus and the R.T.C Lessee shown as
Respondent Nos.6 to 8) that the Tribunal gravely erred in fixing joint
liability on the insurer though it is A.P.S.R.T.C i.e., the lessee from the
original owner that is liable to pay compensation, that Tribunal also erred
in not adopting multiplier 11 i.e., the just multiplier from the age of the
deceased, otherwise Tribunal should should have followed Section 163-A of
the M.V.Act for the reason even annual income above Rs.40,000/- also as
held by the Apex Court in several expressions that is not a bar to the
application of Section 163-A, the trial Court failed to follow the expressions
of the Apex Court in Kailash Nath Kothari V. R.S.R.T.C to fix liability on
the R.T.C alone, that the quantum of compensation also excessive and
unjust, hence to set aside the award and exonerating the insurer.
2) In the course of hearing arguments, the learned counsel for the
insurer appellant besides reiterating the same drawn attention of the Court
to the recent expression of the Apex Court in Purnya Kala Devi V. State
of Assam in saying as per the said expression and from reading of Section
2 Sub-section 30 of the M.V.Act, 1988, R.T.C. the lessee alone is the owner
and not the original owner in whose name the vehicle registered and once
there is liability for the owner, the question of fastening liability on the
appellant-insurer does not arise. Hence on that counts also to exonerate
the insurer by allowing the appeal sought for.
3) The claimants filed cross-objections impugning the quantum of
compensation in seeking as prayed for before the Tribunal to allow and also
with the submissions that the award of the Tribunal holds good, for this
Court while sitting in the appeal, there is nothing to interfere in fixing the
joint liability but for enhancement of compensation.
4) Whereas, it is the contention of the learned counsel for the
A.P.S.R.T.C that the award of the Tribunal holds good and the proposition
of Purnya Kala Devi supra has no application for not referred the earlier
expressions of the Apex Court besides not laying down any principle that
the lessee alone liable and lessor is liable to be exonerated, but for to say
the facts are entirely different in fixing liability on the State of Assam as
per the provisions of the Act referred therein, hence to dismiss the appeal
as well as cross-objections in saying nothing to interfere either on the
quantum or on the joint liability.
5) Heard. Perused the material on record. The parties hereinafter
are referred to as arrayed before the Tribunal for the sake of convenience
in the appeal.
6) Now the points that arise for consideration in the appeal are:
1. Whether the award of the Tribunal fixing joint liability on the
insurer and original owner along with the A.P.S.R.T.C lessee of
the crime vehicle is unsustainable and the quantum of
compensation is unjust either excessive or utterly low and with
what observations?
2. To what result?
POINT No.1:
7) Now doubt the manner of accident speaks that the deceased
along with family members were traveling in Maruthi Van bearing No.AHX
1737 from Toopran village to Hyderabad and the crime bus while
proceeding in opposite direction, the bus dashed the van. To say that
there is any contributory negligence, merely because both vehicles
proceeding in opposite direction, there is no independent evidence from
the Respondents R.W-1 Depot Manager of the R.T.C and even Ex.B-1 rough
sketch of scene of offence observation report, no way shows any
contribution on the part of the driver of the Maruthi Van, where the
deceased was traveling. The F.I.R and the charge sheet are against the
driver of the bus. The M.V.I. report also no way improve the contention of
the respondent to the claim petition of there is any contribution of the
accident by the van driver apart from it, there is nothing to disbelieve the
version of P.W-2 eye witness to the accident of the manner of accident
who is no other than inmate of the van. Thus, there is no substance in the
contention of Tribunal went wrong in not taking consideration of the
contributory negligence, for no contributory negligence on the part of the
van driver even for this Court while sitting in appeal to fix.
8) Before coming to the dispute against fixation of liability on the 3rd
respondent-APSRTC and not fixing the liability jointly against the
respondents 1 and 2 being original owner (insured) and insurer of the hired
bus and the quantum of compensation whether excessive and what is just
compensation in the factual matrix of the case concerned, it is apt to state
that perfect compensation is hardly possible and money cannot renew a
physique or frame that has been battered and shattered, nor relieve from a
pain suffered as stated by Lord Morris. In Ward v. James , it was observed
by Lord Denning that award of damages in personal injury cases is basically
a conventional figure derived from experience and from awards in
comparable cases. Thus, in a case involving loss of limb or its permanent
inability or impairment, it is difficult to say with precise certainty as to
what composition would be adequate to sufferer. The reason is that the
loss of a human limb or its permanent impairment cannot be measured or
converted in terms of money. The object is to mitigate hardship that has
been caused to the victim or his or her legal representatives due to sudden
demise. Compensation awarded should not be inadequate and neither be
unreasonable, excessive nor deficient. There can be no exact uniform rule
in measuring the value of human life or limb or sufferance and the measure
of damage cannot be arrived at, by precise mathematical calculation, but
amount recoverable depends on facts and circumstances of each case.
Upjohn LJ in Charle red House Credit v. Tolly remarked that the
assessment of damages has never been an exact science and it is essentially
practical. Lord Morris in Parry v. Cleaver observed that to compensate in
money for pain and for physical consequences is invariably difficult without
some guess work but no other process can be devised than that of making a
monitory assessment though it is impossible to equate the money with the
human sufferings or personal deprivations. The Apex Court in
R.D.Hattangadi v. Pest Control (India) Private Limited at paragraph
No.12 held that in its very nature whatever a Tribunal or a Court is to fix
the amount of compensation in cases of accident, it involves some guess
work, some hypothetical consideration, some amount of sympathy linked
with the nature of the disability caused. But all the aforesaid elements
have to be viewed with objective standard. Thus, in most of the cases
involving Motor Accidents, by looking at the totality of the circumstances,
an inference may have to be drawn and a guess work has to be made even
regarding compensation in case of death, for loss of dependent and estate
to all claimants; care, guidance, love and affection especially of the minor
children, consortium to the spouse, expenditure incurred in transport and
funerals etc., and in case of injured from the nature of injuries, pain and
sufferance, loss of earnings particularly for any disability and also probable
expenditure that has to be incurred from nature of injuries sustained and
nature of treatment required.
9) Now, coming to the liability, the 1st respondent in claim petition
is the owner of the bus bearing bus No.AP 22 W 3520 which was hired with
the 3rd respondent-APSRTC insured with 3rd respondent-Insurance Company
covered by Ex.B-1 policy. The 3rd respondent-APSRTC no doubt exercising
control over the bus including on the driver of the bus by engaging its own
conductor under the contract of hire. The question is whether that by itself
exonerates the real owner and the insurer though APSRTC is a limited
owner within the meaning of Section 2 (30) of the Act so long as the
contract of hire in force and given full control of the bus if it is with or
without knowledge of the insurer of the vehicle insured by the owner and
not by APSRTC.
10) In this regard the Apex Court in Uttar Pradesh State Road
Transport Corporation V. Kulsum by referring to Section 146 to 149, 157
read with Section 2(30) of the M.V. Act, 1988 regarding the third party risk
from the statutory insurance on the scope and meaning of who is owner of
a hired vehicle when the policy taken out by lesser and transferred the
vehicle to the lessee covered by terms of lease held that
The liability to pay compensation is based on a statutory provision.
Compulsory insurance of the vehicle is meant for the benefit of
third parties. The liability of the owner to have compulsory
insurance is only in regard to the third party and not to the
property. Once the vehicle is insured, the owner as well as any
other person can use the vehicle with the consent of the owner.
Section 146 of the Act does not provide that any person who uses
the vehicle independently, a separate insurance policy should be
taken. The purpose of compulsory insurance in the Act has been
enacted with an object to advance social justice.
Third party rights have been considered by this Court and several
expressions and the law on the said point is now fairly well
settled.
10(a). The Apex Court in Guru Govekar V. Filomena F.Lobo
held that
Thus if a policy is taken in respect of a motor vehicle from an
insurer in compliance with the requirements of chapter VII of the
Act, the insurer is under an obligation to pay the compensation
payable to a third party on account of any injury to his/her person
or property or payable to the legal representatives of the third
party in case of death of the third party caused by or arising out of
the use of the vehicle at a public place. The liability to pay
compensation in respect of death of or injury caused to the person
or property of a third party undoubtedly arises when such injury is
caused when the insured is using the vehicle in a public place. It is
also arises when the insured has caused or allowed any other person
(including an independent contractor) to use his vehicle in a public
place and the death of or injury to the person or property of a third
party is caused on account of the use of the said vehicle during such
period, unless such other person has himself taken out a policy of
insurance to cover the liability arising out of such an accident.
This meant that once the insurer had issued a certificate of
insurance in accordance with sub-section (4) of Section 95 of the
Act the insurer had to satisfy any decree which a person receiving
injuries from the use of the vehicle insured had obtained against
any person insured by the policy. He was liable to satisfy the decree
when he had been served with a notice under sub-section (2) of
Section 96 of the Act about the proceedings in which the judgment
was delivered.
Any other view will expose innocent third parties to go
without compensation when they suffer injury on account of such
motor accidents and will defeat the very object of introducing the
necessity for taking out insurance policy under the Act.
10(b) In a recent judgment of this Court, in United India Insurance Co.
Ltd., V. Santro Devi it has been held as under:
The provisions of compulsory insurance have been framed to
advance a social object. It is in a way part of the social justice
doctrine. When a certificate of insurance is issued, in law, the
insurance company is bound to reimburse the owner. There cannot
be any doubt whatsoever that a contract of insurance must fulfil
the statutory requirements of formation of a valid contract but in
case of a third-party risk, the question has to be considered from a
different angle.
Section 146 provides for statutory insurance. An insurance is
mandatorily required to be obtained by the person in charge of or
in possession of the vehicle. There is no provision in the Motor
Vehicles Act that unless the name(s) of the heirs of the owner of a
vehicle is/are substituted on the certificate of insurance or in the
certificate of registration in place of the original owner (since
deceased), the motor vehicle cannot be allowed to be used in
apublic place. Thus, in a case where the owner of a motor vehicle
has expired, although there does not exist any statutory interdict
for the person in possession of the vehicle to ply the same on road;
but there being a statutory injunction that the same cannot be
plied unless a policy of insurance is obtained, we are of the opinion
that the contract of insurance would be inforceable. It would be so
in a case of this nature as for the purpose of renewal of insurance
policy only the premium is to be paid. It is not in dispute that
quantum of premium paid for renewal of the policy is in terms of
the provisions of the Insurance Act, 1938.
Perusal of the ratio of aforesaid judgments of this Court
shows that Section 146 of the Act gives complete protection to the
third party in respect of death or bodily injury or damage to the
property while using the vehicle in public place. For that purpose,
insurance of the vehicle has been made compulsory to the vehicles
or to the owners. This would further reflect that compulsory
insurance is obviously for the benefit of third parties.
Certificate of insurance between the owner and the
insurance company contemplates under what circumstances the
insurance company would be liable to pay the amount of
compensation. The relevant conditions are reproduced
hereinbelow:
Rules with respect to use of the vehicle
Use only for carriage of passengers in accordance with permit
(contract carriage or stage carriage) issued within the meaning of
the Motor Vehicles Act, 1988. This policy does not cover:
1. Use for organized racing, pace making, reliability trial, speed
testing.
2. Use whilst drawing a trailer except the towing (other than to
reward) of any one disabled mechanically propeller (sic propelled)
vehicle.
Persons who are qualified to use the vehicle:
Any person including the insured provided that the person
driving holds an effective driving licence at the time of the
accident and is not disqualified from holding or obtaining such
licence. Provided also that a person holding an effective learners
licence may also drive the vehicle when not used for transport of
passengers at the time of the accident and such a person satisfies
the requirement of Rule 3 of the Central Motor Vehicle Rules, 1989.
Perusal thereof would show that there has not been any
violation of the aforesaid terms and conditions of the policy. The
respondent Insurance Company has also failed to point out violation
of any Act, Rules or conditions of insurance. The Insurance
Company has no legal justification to deny the payment of
compensation to the claimants.
In the light of the foregoing discussions, the appeal filed by
the Insurance Company fails, wherein it has been directed that the
amount would first be paid by the Company, with right to it to
recover the same from the owner of the vehicle. This we hold so as
the liability of the Insurance Company is exclusive and absolute.
Thus, looking to the matter from every angle, we are of the
considered opinion that the Insurance Company cannot escape its
liability of payment of compensation to third parties or claimants.
Admittedly, owner of the vehicle has not violated any of the terms
and conditions of the policy or provisions of the Act. The owner had
taken the insurance so as to meet such type of liability which may
arise on account of use of the vehicle.
Apart from the above, the learned counsel for the Insurance
Company could not point out any legal embargo which may give
right to it to deny the payment of compensation. Thus, legally or
otherwise, liability has to be fastened on the Insurance Company
only.
10(c). From this expression it is also necessary to discuss the
relevant portions
A critical examination thereof would show that the appellant and
the owner had specifically agreed that the vehicle will be insured
and a driver would be provided by owner of the vehicle but overall
control, along with the driver would be that of the APSRTC. Thus,
the vehicle was given on hire by owner of the vehicle together with
existing and running insurance policy in view of the aforesaid terms
and conditions, the insurance company cannot escape its liability to
pay the amount of compensation.
On account of the aforesaid discussions, it is crystal clear that
actual possession of the vehicle was with the Corporation. The
vehicle, driver and the conductor were under the direct control and
supervision of the Corporation.
Blacks Law Dictionary defines vicarious liability as
follows:
Liability that a supervisory party (such as an employer) bears for
the actionable conduct of a subordinate or associate (such as an
employee) because of the relationship between the two parties.
So, through the above definition, it can be inferred that the person
supervising the driver through the principle of respondent superior
should pay for the damages of the victim.
11. From the above, for all practical purposes, for the relevant
period, the APSRTC had become the owner of the vehicle during the
specific hire period. If the Corporation had become the owner even for the
specific period and for the limited purpose the vehicle having been insured
at the instance of original owner, it will be deemed that the vehicle was
transferred along with the insurance policy in existence to the Corporation
and thus the Insurance Company would not be able to escape its liability to
pay the amount of compensation. So, through the definition of vicarious
liability it can be inferred that the person supervising the vehicle through
the principal-respondent superior to pay the damages to the victim-third
party, when it is not the case of the insurer that driver was not holding a
valid licence to drive the vehicle at the time of accident. It has not also
been contended that there is any violation of terms and conditions of the
policy from saying driver was not entitled to drive the vehicle. The insured
admittedly received the premium for third party risk for the period at the
time that bus had met with accident and the bus being plied by APSRTC. No
doubt the above expression in Kulsums case supra proceeded that there is
no statutory duty cast on the owner under the Act or the Rules to seek
permission or to give intimation to insurer in case of vehicle hired with
APSRTC for it is being plied to say any violation, the insurer cannot escape
the liability muchless any legal justification to deny the payment of
compensation to the third party claimants. In fact Section 157 of the Act
provides that the insured-owner in the event of transfer of ownership of
the vehicle also deemed transferred the certificate of insurance (policy)
w.e.f date of vehicle ownership with rights and liabilities of the policy.
Further that the transferee shall apply within (14) days of transfer of
vehicle ownership to the insurer for making necessary changes in the
certificate of insurance (policy). The term transfer is not defined in the
Act but for the term owner in Section 2 (30) that includes person in
possession of hire purchase or lease or hypothecation agreement. The
Apex Court in Rikhi Ram V. Sikhrania held the non-intimation of transfer
of ownership even no way exonerates insurer from liability but for saying
on that case the insurer can recover from insured or transferee. That
expression is not relating to lease but alienation of ownership rights by
sale. Section 157 of the Act from reading of the expression in Kulsum
supra to say not applicable to hiring of vehicle but for transfer by sale,
though it was not so held in specific terms, in holding of rights, conceded
by counsel for insurer of no specific provision of intimation to insurer about
hiring and any non-intimation to exonerate the insurer. It is because the
liability of the insurance company is exclusive and absolute to the third
party from the Act policy even, leave about any other specific coverage of
risks.
12. Apart from the above expression in the Full Bench judgment of
this Court [in LPA No.206 of 2000, dated 20.11.2012] in APSRTC Vs.
B.Kanakaratnabai and others it was held that
The only question that arises for consideration is as to whether
the compensation payable in respect of third party claims arising
out of accident, involving insured vehicle hired by the APSRTC,
should be borne by the owner of the vehicle or by the insurance
company or by the APSRTC or by some or all of them?
A similar question as to whether the compensation payable in
respect of the claims arising out of accident involving insured but
hired by the APSRTC should be borne by the owner of the vehicle or
by the Insurance Company or by the APSRTC or by some or all of
them was referred to a Full Bench of this Court and the Full Bench
in L.P.A. No.206 of 2000 and batch vide common judgment, dated
20.11.2012 held that mere hiring of insured buses by the owners to
the APSRTC would not in any manner limit the liability and
accountability of the insurance companies, be it under the Act of
1988 or the Act of 1939, to honour passengers/third party risks
covered by the Insurance policies issued by them in favour of the
owners and notwithstanding the hiring of insured buses by the
owner to the APSRTC, the Insurance Company shall be solely and
exclusively liable for payment of the compensation arising out of
such passengers/third party claims unless any of the grounds in
Section 149(2) of the Act of 1988/Section 96(2) of the Act of 1939
are made out.
Therefore, we are of the opinion that the issue raised in this appeal
by the APSRTC is squarely covered by the Full Bench judgment of
this Court.
Having regard to the facts and circumstances of the case, the
appeal is allowed setting aside the order dated 22.03.2010 passed
in O.P.No.904 of 2008 by the Tribunal, in so far as dismissing the
same as against the owner and insurance company. The 8th
respondent insurance company is directed to honour the claim of
respondents 1 to 6 herein as ordered by the Tribunal
notwithstanding hiring of the said vehicle by the owner in favour of
the APSRTC, as it is solely and exclusively liable to pay
compensation arising out of the third party claims.
13. In the expressions of Kakanaratna bais case supra and Rikhi
Rams case supra also referred and held at para 81 that
It is however to be noticed that in all the cases, premium
towards liability towards passengers and third party risk was
collected. Once separate premium was collected by the Insurance
Companies for covering the risk to the passengers and third parties,
it is no longer open to them to escape their liability in this regard.
The failure in paying the additional premium as per IMT.44, at best,
would absolve the Insurance Companies from covering the liability
and loss, if any, of the APSRTC. It would not extend to protect the
Insurance Companies from their acknowledged liability towards
third parties as is evident from the policy documents. The Supreme
Court in Rikhi Rams case (supra), in no uncertain terms, held that
whenever a vehicle covered by an Insurance Policy was transferred
to a transferee, the liability of the insurer would not cease so far as
the third party/ victim is concerned, even if the owner or purchaser
did not give intimation as required under the provisions of the Act.
The cases on hand stand on a better footing as the insured, being
the owner of the vehicle, did not transfer the title or ownership of
the vehicle but only its possession. IMT.44, as pointed out earlier,
has application when the hirer of the vehicle requires protection
and it does not apply to or abridge the liability of the Insurance
Company insofar as third party risks are concerned.
14) The above propositions of law thus crystallizes the issue on hand
to the conclusion that even the APSRTC, for the limited purpose during the
agreement of hire in force, having control over the bus as well as the driver
that belongs to the owner by engaging its own conductor in plying the bus
to a limited extent as owner, the real owner is always the original person
who hired the bus and owned the bus registered in his name and once the
insurance company insured the vehicle by impugning for its hiring even not
intimated, the insurer cannot escape the liability to third parties much less
can say to fasten the liability solely on the APSRTC. As the bus was taken
on hire for plying by the APSRTC and from above expression of the Honble
Apex Court, no doubt there is something left open to say that if there is
any violation of the policy terms and conditions saying that the driver of
the bus was not having valid driving license at the time of accident;
whether the insurance company is liable to be exonerated and if so, the
real owner or the APSRTC limited owner can alone or both together subject
to any direction to the insurer to pay and recover from real owner to be
given. In the present case that aspect also does not arise even from any
non-intimation of hire, for not a case of driver having no valid license and
the like for pay and recovery to answer but for to say among the
respondents 1 to 3 i.e., real owner and the insurer of the bus which hired
to APSRTC are jointly liable and not the APSRTC.
15) Now coming to the decision of Purnya Kala Devis case placed
reliance on by the insurer to the contention of RTC is the owner and not
the hirer (original owner) concerned, as this decision did not discuss the
scope of Sections 146-149 of the M.V.Act as to what is the position when
vehicle is once insured, much less by referring to any of the expressions of
Kulsum (when vehicle on hire), Rikhiram (when ownership is transferred);
said decision will not come in aid to the Insurance Company to claim
exoneration from liability for the reason that in that case one Md.Abdul
Salam, registered owner of the bus (who did not at all insure the vehicle)
was requisitioned by the State of Assam on Government Duty and within
two days of requisition the vehicle under the control of Government while
driving on the way it dashed the cyclist, who died and the vehicle for not
covered by Insurance, the claim was preferred against the registered owner
and State of Assam. The registered owner contended that the vehicle at
the time of accident was under the requisition and control of the State
Government that is only liable to pay. Whereas the State taken a converse
plea that it only requisitioned the vehicle and not the owner under the
provisions of Assam Requisition and Control of Vehicles Act, 1968 and the
Tribunal though directed the registered owner, placing reliance on the Act,
to pay compensation exonerating the State of Assam. On appeal by the
claimants, the High Court of Gauhati enhanced the compensation but held
that the State Government was not liable as it was not the owner. On
appeal, the Apex Court by referring to Section 2 (30) of M.V Act on the
definition of owner held when the vehicle was not released by the State
Government by serving notice in writing on the owner as contemplated by
Section 5 (1) of the Assam Act as such the State can be squarely covered
under the definition of owner as contained in Section 2 (30) of the M.V. Act
and fastened the liability on the State of Assam. Despite the same, it is
the contention of the learned counsel for the appellant-insurer that from
Purnya Kala Devi supra once the vehicle is under control of R.T.C the
Respondent Nos.3 and 4 of the claim petition hired by the 1st respondent
covered by Ex.R-3 agreement, the question of fastening the liability on the
original and registered owner of the bus, the 1st respondent to the claim
petition muchless to indemnify the 2nd respondent-insurer (appellant) does
not arise. Hence to exonerate from the above proposition in Purnya Kala
Devi in saying the original owner is not liable but for the Government of
Assam which requisitioned the vehicle. The contention is at the cost of
repetition untenable.
16) Here, appellant did not requisition the vehicle with full control
but only taken possession without ownership to ply on hire as discussed
supra in Kulsums case of the Apex Court and also the full bench expression
of this Court in Kanakaratna Bai (supra) though under Section 2 (30) of the
Act the owner in the limited purpose for the vehicle not only that who has
hired to APSRTC but also the APSRTC.
17) Having regard to the above, it is the insurer to indemnify the
original owner with joint liability along with the original owner as well as
the APSRTC and the tribunal went wrong in exonerating the original owner
and insurer and in fixing liability only against the APSRTC-3rd respondent to
the claim in stead of saying all the three respondents are jointly liable for
the insurer to indemnify 1st respondent as well as the hireree--3rd
respondent. Accordingly, point No.1 is answered.
18) Now coming to the quantum of compensation awarded by the
Tribunal is excessive or utterly low and if so, what is the just compensation
concerned, in addition to the principle in arriving the just compensation
referred in the expressions supra, for the claim under Section 166 of the
M.V.Act herein also, though the claimants placed reliance upon Ex.A-14
partnership deed of M/s.Vasavi Traders to claim and Ex.A-12 is the
partnership deed of Nagarjuna Traders to claim the deceased was a
businessman and also having R.C as can be seen from Ex.A-13 and Ex.A-9
respectively besides Ex.A-10 Panchayat licence fees receipts, though his
avocation by business, one or the other as the case may be cannot be
disputed much that itself is not sufficient for the Court or the Tribunal
below to arrive a fixed sum by estimation of monthly earnings or annual
earnings. It is for the reason that even admittedly having R.C and to do the
business to submit sales tax returns showing the profit and loss and what is
the tax payable generated and paid, there was no sales tax assessment
filed even for a single year for claiming as a businessman for a long time.
It is to say in the absence of which, the documents having R.C. earlier and
now are showing as partner in some business not sufficient including from
Exs.A-20, 21 to say dealership in C.R.I Pumps or Maha Cements for not even
sales tax returns of those dealership business filed. When the income tax
and commercial tax returns are the criterion and the evidence placed
before the Tribunal to arrive, if at all, he is getting any such huge income
for establishing for non-filing of the best evidence including from the
expression of AIR 1968 SC 1413, the contention of the claimants cannot be
accepted of the deceased was from the business earnings more than
Rs.10,000/- per month including from the Tribunal to take Rs.50,000/- per
annum in net as what the so called business accounts from Ex.A-11 so
called ledger book and Ex.A-18 copy of statement of profit and loss account
cannot be given credence at all for not even subjected to commercial tax
assessment but for to say as contended rightly by the learned counsel for
the insurer-appellant as those are after the accident brought into existence
as had it been they could have been subjected to scrutiny by the
commercial tax department.
19) No doubt, the learned counsel for the claimants submits that as
per Exs.A-15 to A-17 the deceased paid L.I.C premium of Rs.25,000/- per
annum for three years. It makes no difference because it is difficult for
the Court to arrive by any guess work by payment of the premium as only
from business source and out of business profit. Leave about no Income
Tax returns filed even by showing non-taxable income tax with any
particular income. When such is the case as held by the Apex Court in
Latha Wadhwa vs. State of Bihar the minimum Rs.3,000/- to be taken
and the accident is within 3 years, thus even therefrom taken on average
earnings at Rs.3,400/- per month with 30% increase even by following
Rajesh v. Rajbir Singh and an expression of this Court in New India
Assurance Co. Ltd. V. Basantha Mohanthy from the record shows he
was a business man all through since several years when R.C. licences and
dealership permits, the earnings per year comes to Rs.40,800/- per year
and after increase of 30% increase, it comes to Rs.53,040/- per year. The
claimants are 5 in number of whom 2nd claimant is major son not a
dependant, but for at best a sufferer that to when there are dependants to
apportion any compensation to him. No doubt it is the contention of the
insure that the 3rd claimant-daughter, major married shows as if unmarried
and her dependency even taken as married only till marriage for few years
and if that is excluded only there are three persona and the contention of
the claimants relying upon Sarla Varma v. Delhi Transport Corporation
para Nos.29 to 32 of taking consideration 1/4th deduction has no
application. In fact there is nothing to show that the daughter is married,
even a major daughter is a dependant. When such is the case, when there
are 4 dependants even son a dependant or not even as per Sarla Verma
supra from para Nos.29 to 32, if there are more than three dependants
upto 6, 1/4th to be deducted. If 1/4th deducted, it comes to 39,780/- and
after applying multiplier 14 considering the age of the deceased, it comes
to Rs.5,56,920/- apart from loss of consortium Rs.1,00,000/-, loss of estate
Rs.10,000/- and funereal expenses Rs.15,000/-, it comes to Rs.6,91,920/-
rounded to Rs.7,00,000/-.
POINT No.2:
20) In the result, the appeal is partly allowed by decreasing the
compensation amount from Rs.7,85,000/- to Rs.7,00,000/-. The other
terms in the award passed by the Tribunal holds good. The cross-
objections filed by the claimants is dismissed. No order as to costs.
21) Miscellaneous petitions, if any pending in the appeal as well as in
the cross-objections, shall stand closed.
_______________________
Dr. B. SIVA SANKARA RAO, J
Date:23-12-2014
M.A.C.M.A.No.380 of 2008 and batch
23-12-2014
National Insurance Company Limited .Appellant
Manne Laxmi and 7 others.... Respondents
Counsel for the Appellant : M/s.R.Brizmohan Singh
Counsel for the Respondents:Sri K.Madhava Reddy
Sri N.Vasudeva Reddy for A.P.S.R.T.C
<Gist :
>Head Note:
? Cases referred:
1. AIR 1997 SC 481
2. 2014(1) Decisions Today 122
3. 1965 (1) All.E.R. 563
4. 1963 (2) All.E.R. 432
5. 1969 (1) All.E.R 555
6. 1995 ACJ 366 (SC) CA Nos.1799 & 1800 of 1989 with SLP (Civil) 4586 of
1989
7. (2011)8 SCC 142
8. (1988) 3 SCC 1
9. (2009) 1 SCC 558
10. AIR 2003 SC 1446 = (2003)3 SCC 97
11. 2001 (8) SCC 197
12. 2013(4)ALT 35(SC)
13. 2014(6) ALD 281
14. 2009 ACJ 1298
HONOURABLE Dr. JUSTICE B.SIVA SANKARA RAO
M.A.C.M.A.No.380 of 2008 &
CROSS OBJECTIONS (SR) No.9366 of 2008
COMMON JUDGMENT :
The 2nd respondent insurer among the 4 respondents, preferred the
appeal impugning the award of the Tribunal in O.P. No.983 of 2004 dated
28.03.2007, in the claim filed by the claimants under Section 166 of the
Motor Vehicle Act, 1988 (for short, the Act) viz., by wife, major
daughter, major son and parents of deceased Nagabhushanam, aged about
44 years as per Ex.A-5 post mortem report claiming compensation of
Rs.20,00,000/- since awarded by the Tribunal of Rs.7,85,000/- with
interest at 7.5% p.a. with joint liability against the owner of the bus
bearing No.AP 28 U 3925, the insurer (appellant herein) and the A.P.S.R.T.
Managing Director and Depot Manager respectively, with contentions in the
grounds of appeal by the insurer supra, wherein the claimants are shown as
Respondent Nos.1 to 5, (owner of the bus and the R.T.C Lessee shown as
Respondent Nos.6 to 8) that the Tribunal gravely erred in fixing joint
liability on the insurer though it is A.P.S.R.T.C i.e., the lessee from the
original owner that is liable to pay compensation, that Tribunal also erred
in not adopting multiplier 11 i.e., the just multiplier from the age of the
deceased, otherwise Tribunal should should have followed Section 163-A of
the M.V.Act for the reason even annual income above Rs.40,000/- also as
held by the Apex Court in several expressions that is not a bar to the
application of Section 163-A, the trial Court failed to follow the expressions
of the Apex Court in Kailash Nath Kothari V. R.S.R.T.C to fix liability on
the R.T.C alone, that the quantum of compensation also excessive and
unjust, hence to set aside the award and exonerating the insurer.
2) In the course of hearing arguments, the learned counsel for the
insurer appellant besides reiterating the same drawn attention of the Court
to the recent expression of the Apex Court in Purnya Kala Devi V. State
of Assam in saying as per the said expression and from reading of Section
2 Sub-section 30 of the M.V.Act, 1988, R.T.C. the lessee alone is the owner
and not the original owner in whose name the vehicle registered and once
there is liability for the owner, the question of fastening liability on the
appellant-insurer does not arise. Hence on that counts also to exonerate
the insurer by allowing the appeal sought for.
3) The claimants filed cross-objections impugning the quantum of
compensation in seeking as prayed for before the Tribunal to allow and also
with the submissions that the award of the Tribunal holds good, for this
Court while sitting in the appeal, there is nothing to interfere in fixing the
joint liability but for enhancement of compensation.
4) Whereas, it is the contention of the learned counsel for the
A.P.S.R.T.C that the award of the Tribunal holds good and the proposition
of Purnya Kala Devi supra has no application for not referred the earlier
expressions of the Apex Court besides not laying down any principle that
the lessee alone liable and lessor is liable to be exonerated, but for to say
the facts are entirely different in fixing liability on the State of Assam as
per the provisions of the Act referred therein, hence to dismiss the appeal
as well as cross-objections in saying nothing to interfere either on the
quantum or on the joint liability.
5) Heard. Perused the material on record. The parties hereinafter
are referred to as arrayed before the Tribunal for the sake of convenience
in the appeal.
6) Now the points that arise for consideration in the appeal are:
1. Whether the award of the Tribunal fixing joint liability on the
insurer and original owner along with the A.P.S.R.T.C lessee of
the crime vehicle is unsustainable and the quantum of
compensation is unjust either excessive or utterly low and with
what observations?
2. To what result?
POINT No.1:
7) Now doubt the manner of accident speaks that the deceased
along with family members were traveling in Maruthi Van bearing No.AHX
1737 from Toopran village to Hyderabad and the crime bus while
proceeding in opposite direction, the bus dashed the van. To say that
there is any contributory negligence, merely because both vehicles
proceeding in opposite direction, there is no independent evidence from
the Respondents R.W-1 Depot Manager of the R.T.C and even Ex.B-1 rough
sketch of scene of offence observation report, no way shows any
contribution on the part of the driver of the Maruthi Van, where the
deceased was traveling. The F.I.R and the charge sheet are against the
driver of the bus. The M.V.I. report also no way improve the contention of
the respondent to the claim petition of there is any contribution of the
accident by the van driver apart from it, there is nothing to disbelieve the
version of P.W-2 eye witness to the accident of the manner of accident
who is no other than inmate of the van. Thus, there is no substance in the
contention of Tribunal went wrong in not taking consideration of the
contributory negligence, for no contributory negligence on the part of the
van driver even for this Court while sitting in appeal to fix.
8) Before coming to the dispute against fixation of liability on the 3rd
respondent-APSRTC and not fixing the liability jointly against the
respondents 1 and 2 being original owner (insured) and insurer of the hired
bus and the quantum of compensation whether excessive and what is just
compensation in the factual matrix of the case concerned, it is apt to state
that perfect compensation is hardly possible and money cannot renew a
physique or frame that has been battered and shattered, nor relieve from a
pain suffered as stated by Lord Morris. In Ward v. James , it was observed
by Lord Denning that award of damages in personal injury cases is basically
a conventional figure derived from experience and from awards in
comparable cases. Thus, in a case involving loss of limb or its permanent
inability or impairment, it is difficult to say with precise certainty as to
what composition would be adequate to sufferer. The reason is that the
loss of a human limb or its permanent impairment cannot be measured or
converted in terms of money. The object is to mitigate hardship that has
been caused to the victim or his or her legal representatives due to sudden
demise. Compensation awarded should not be inadequate and neither be
unreasonable, excessive nor deficient. There can be no exact uniform rule
in measuring the value of human life or limb or sufferance and the measure
of damage cannot be arrived at, by precise mathematical calculation, but
amount recoverable depends on facts and circumstances of each case.
Upjohn LJ in Charle red House Credit v. Tolly remarked that the
assessment of damages has never been an exact science and it is essentially
practical. Lord Morris in Parry v. Cleaver observed that to compensate in
money for pain and for physical consequences is invariably difficult without
some guess work but no other process can be devised than that of making a
monitory assessment though it is impossible to equate the money with the
human sufferings or personal deprivations. The Apex Court in
R.D.Hattangadi v. Pest Control (India) Private Limited at paragraph
No.12 held that in its very nature whatever a Tribunal or a Court is to fix
the amount of compensation in cases of accident, it involves some guess
work, some hypothetical consideration, some amount of sympathy linked
with the nature of the disability caused. But all the aforesaid elements
have to be viewed with objective standard. Thus, in most of the cases
involving Motor Accidents, by looking at the totality of the circumstances,
an inference may have to be drawn and a guess work has to be made even
regarding compensation in case of death, for loss of dependent and estate
to all claimants; care, guidance, love and affection especially of the minor
children, consortium to the spouse, expenditure incurred in transport and
funerals etc., and in case of injured from the nature of injuries, pain and
sufferance, loss of earnings particularly for any disability and also probable
expenditure that has to be incurred from nature of injuries sustained and
nature of treatment required.
9) Now, coming to the liability, the 1st respondent in claim petition
is the owner of the bus bearing bus No.AP 22 W 3520 which was hired with
the 3rd respondent-APSRTC insured with 3rd respondent-Insurance Company
covered by Ex.B-1 policy. The 3rd respondent-APSRTC no doubt exercising
control over the bus including on the driver of the bus by engaging its own
conductor under the contract of hire. The question is whether that by itself
exonerates the real owner and the insurer though APSRTC is a limited
owner within the meaning of Section 2 (30) of the Act so long as the
contract of hire in force and given full control of the bus if it is with or
without knowledge of the insurer of the vehicle insured by the owner and
not by APSRTC.
10) In this regard the Apex Court in Uttar Pradesh State Road
Transport Corporation V. Kulsum by referring to Section 146 to 149, 157
read with Section 2(30) of the M.V. Act, 1988 regarding the third party risk
from the statutory insurance on the scope and meaning of who is owner of
a hired vehicle when the policy taken out by lesser and transferred the
vehicle to the lessee covered by terms of lease held that
The liability to pay compensation is based on a statutory provision.
Compulsory insurance of the vehicle is meant for the benefit of
third parties. The liability of the owner to have compulsory
insurance is only in regard to the third party and not to the
property. Once the vehicle is insured, the owner as well as any
other person can use the vehicle with the consent of the owner.
Section 146 of the Act does not provide that any person who uses
the vehicle independently, a separate insurance policy should be
taken. The purpose of compulsory insurance in the Act has been
enacted with an object to advance social justice.
Third party rights have been considered by this Court and several
expressions and the law on the said point is now fairly well
settled.
10(a). The Apex Court in Guru Govekar V. Filomena F.Lobo
held that
Thus if a policy is taken in respect of a motor vehicle from an
insurer in compliance with the requirements of chapter VII of the
Act, the insurer is under an obligation to pay the compensation
payable to a third party on account of any injury to his/her person
or property or payable to the legal representatives of the third
party in case of death of the third party caused by or arising out of
the use of the vehicle at a public place. The liability to pay
compensation in respect of death of or injury caused to the person
or property of a third party undoubtedly arises when such injury is
caused when the insured is using the vehicle in a public place. It is
also arises when the insured has caused or allowed any other person
(including an independent contractor) to use his vehicle in a public
place and the death of or injury to the person or property of a third
party is caused on account of the use of the said vehicle during such
period, unless such other person has himself taken out a policy of
insurance to cover the liability arising out of such an accident.
This meant that once the insurer had issued a certificate of
insurance in accordance with sub-section (4) of Section 95 of the
Act the insurer had to satisfy any decree which a person receiving
injuries from the use of the vehicle insured had obtained against
any person insured by the policy. He was liable to satisfy the decree
when he had been served with a notice under sub-section (2) of
Section 96 of the Act about the proceedings in which the judgment
was delivered.
Any other view will expose innocent third parties to go
without compensation when they suffer injury on account of such
motor accidents and will defeat the very object of introducing the
necessity for taking out insurance policy under the Act.
10(b) In a recent judgment of this Court, in United India Insurance Co.
Ltd., V. Santro Devi it has been held as under:
The provisions of compulsory insurance have been framed to
advance a social object. It is in a way part of the social justice
doctrine. When a certificate of insurance is issued, in law, the
insurance company is bound to reimburse the owner. There cannot
be any doubt whatsoever that a contract of insurance must fulfil
the statutory requirements of formation of a valid contract but in
case of a third-party risk, the question has to be considered from a
different angle.
Section 146 provides for statutory insurance. An insurance is
mandatorily required to be obtained by the person in charge of or
in possession of the vehicle. There is no provision in the Motor
Vehicles Act that unless the name(s) of the heirs of the owner of a
vehicle is/are substituted on the certificate of insurance or in the
certificate of registration in place of the original owner (since
deceased), the motor vehicle cannot be allowed to be used in
apublic place. Thus, in a case where the owner of a motor vehicle
has expired, although there does not exist any statutory interdict
for the person in possession of the vehicle to ply the same on road;
but there being a statutory injunction that the same cannot be
plied unless a policy of insurance is obtained, we are of the opinion
that the contract of insurance would be inforceable. It would be so
in a case of this nature as for the purpose of renewal of insurance
policy only the premium is to be paid. It is not in dispute that
quantum of premium paid for renewal of the policy is in terms of
the provisions of the Insurance Act, 1938.
Perusal of the ratio of aforesaid judgments of this Court
shows that Section 146 of the Act gives complete protection to the
third party in respect of death or bodily injury or damage to the
property while using the vehicle in public place. For that purpose,
insurance of the vehicle has been made compulsory to the vehicles
or to the owners. This would further reflect that compulsory
insurance is obviously for the benefit of third parties.
Certificate of insurance between the owner and the
insurance company contemplates under what circumstances the
insurance company would be liable to pay the amount of
compensation. The relevant conditions are reproduced
hereinbelow:
Rules with respect to use of the vehicle
Use only for carriage of passengers in accordance with permit
(contract carriage or stage carriage) issued within the meaning of
the Motor Vehicles Act, 1988. This policy does not cover:
1. Use for organized racing, pace making, reliability trial, speed
testing.
2. Use whilst drawing a trailer except the towing (other than to
reward) of any one disabled mechanically propeller (sic propelled)
vehicle.
Persons who are qualified to use the vehicle:
Any person including the insured provided that the person
driving holds an effective driving licence at the time of the
accident and is not disqualified from holding or obtaining such
licence. Provided also that a person holding an effective learners
licence may also drive the vehicle when not used for transport of
passengers at the time of the accident and such a person satisfies
the requirement of Rule 3 of the Central Motor Vehicle Rules, 1989.
Perusal thereof would show that there has not been any
violation of the aforesaid terms and conditions of the policy. The
respondent Insurance Company has also failed to point out violation
of any Act, Rules or conditions of insurance. The Insurance
Company has no legal justification to deny the payment of
compensation to the claimants.
In the light of the foregoing discussions, the appeal filed by
the Insurance Company fails, wherein it has been directed that the
amount would first be paid by the Company, with right to it to
recover the same from the owner of the vehicle. This we hold so as
the liability of the Insurance Company is exclusive and absolute.
Thus, looking to the matter from every angle, we are of the
considered opinion that the Insurance Company cannot escape its
liability of payment of compensation to third parties or claimants.
Admittedly, owner of the vehicle has not violated any of the terms
and conditions of the policy or provisions of the Act. The owner had
taken the insurance so as to meet such type of liability which may
arise on account of use of the vehicle.
Apart from the above, the learned counsel for the Insurance
Company could not point out any legal embargo which may give
right to it to deny the payment of compensation. Thus, legally or
otherwise, liability has to be fastened on the Insurance Company
only.
10(c). From this expression it is also necessary to discuss the
relevant portions
A critical examination thereof would show that the appellant and
the owner had specifically agreed that the vehicle will be insured
and a driver would be provided by owner of the vehicle but overall
control, along with the driver would be that of the APSRTC. Thus,
the vehicle was given on hire by owner of the vehicle together with
existing and running insurance policy in view of the aforesaid terms
and conditions, the insurance company cannot escape its liability to
pay the amount of compensation.
On account of the aforesaid discussions, it is crystal clear that
actual possession of the vehicle was with the Corporation. The
vehicle, driver and the conductor were under the direct control and
supervision of the Corporation.
Blacks Law Dictionary defines vicarious liability as
follows:
Liability that a supervisory party (such as an employer) bears for
the actionable conduct of a subordinate or associate (such as an
employee) because of the relationship between the two parties.
So, through the above definition, it can be inferred that the person
supervising the driver through the principle of respondent superior
should pay for the damages of the victim.
11. From the above, for all practical purposes, for the relevant
period, the APSRTC had become the owner of the vehicle during the
specific hire period. If the Corporation had become the owner even for the
specific period and for the limited purpose the vehicle having been insured
at the instance of original owner, it will be deemed that the vehicle was
transferred along with the insurance policy in existence to the Corporation
and thus the Insurance Company would not be able to escape its liability to
pay the amount of compensation. So, through the definition of vicarious
liability it can be inferred that the person supervising the vehicle through
the principal-respondent superior to pay the damages to the victim-third
party, when it is not the case of the insurer that driver was not holding a
valid licence to drive the vehicle at the time of accident. It has not also
been contended that there is any violation of terms and conditions of the
policy from saying driver was not entitled to drive the vehicle. The insured
admittedly received the premium for third party risk for the period at the
time that bus had met with accident and the bus being plied by APSRTC. No
doubt the above expression in Kulsums case supra proceeded that there is
no statutory duty cast on the owner under the Act or the Rules to seek
permission or to give intimation to insurer in case of vehicle hired with
APSRTC for it is being plied to say any violation, the insurer cannot escape
the liability muchless any legal justification to deny the payment of
compensation to the third party claimants. In fact Section 157 of the Act
provides that the insured-owner in the event of transfer of ownership of
the vehicle also deemed transferred the certificate of insurance (policy)
w.e.f date of vehicle ownership with rights and liabilities of the policy.
Further that the transferee shall apply within (14) days of transfer of
vehicle ownership to the insurer for making necessary changes in the
certificate of insurance (policy). The term transfer is not defined in the
Act but for the term owner in Section 2 (30) that includes person in
possession of hire purchase or lease or hypothecation agreement. The
Apex Court in Rikhi Ram V. Sikhrania held the non-intimation of transfer
of ownership even no way exonerates insurer from liability but for saying
on that case the insurer can recover from insured or transferee. That
expression is not relating to lease but alienation of ownership rights by
sale. Section 157 of the Act from reading of the expression in Kulsum
supra to say not applicable to hiring of vehicle but for transfer by sale,
though it was not so held in specific terms, in holding of rights, conceded
by counsel for insurer of no specific provision of intimation to insurer about
hiring and any non-intimation to exonerate the insurer. It is because the
liability of the insurance company is exclusive and absolute to the third
party from the Act policy even, leave about any other specific coverage of
risks.
12. Apart from the above expression in the Full Bench judgment of
this Court [in LPA No.206 of 2000, dated 20.11.2012] in APSRTC Vs.
B.Kanakaratnabai and others it was held that
The only question that arises for consideration is as to whether
the compensation payable in respect of third party claims arising
out of accident, involving insured vehicle hired by the APSRTC,
should be borne by the owner of the vehicle or by the insurance
company or by the APSRTC or by some or all of them?
A similar question as to whether the compensation payable in
respect of the claims arising out of accident involving insured but
hired by the APSRTC should be borne by the owner of the vehicle or
by the Insurance Company or by the APSRTC or by some or all of
them was referred to a Full Bench of this Court and the Full Bench
in L.P.A. No.206 of 2000 and batch vide common judgment, dated
20.11.2012 held that mere hiring of insured buses by the owners to
the APSRTC would not in any manner limit the liability and
accountability of the insurance companies, be it under the Act of
1988 or the Act of 1939, to honour passengers/third party risks
covered by the Insurance policies issued by them in favour of the
owners and notwithstanding the hiring of insured buses by the
owner to the APSRTC, the Insurance Company shall be solely and
exclusively liable for payment of the compensation arising out of
such passengers/third party claims unless any of the grounds in
Section 149(2) of the Act of 1988/Section 96(2) of the Act of 1939
are made out.
Therefore, we are of the opinion that the issue raised in this appeal
by the APSRTC is squarely covered by the Full Bench judgment of
this Court.
Having regard to the facts and circumstances of the case, the
appeal is allowed setting aside the order dated 22.03.2010 passed
in O.P.No.904 of 2008 by the Tribunal, in so far as dismissing the
same as against the owner and insurance company. The 8th
respondent insurance company is directed to honour the claim of
respondents 1 to 6 herein as ordered by the Tribunal
notwithstanding hiring of the said vehicle by the owner in favour of
the APSRTC, as it is solely and exclusively liable to pay
compensation arising out of the third party claims.
13. In the expressions of Kakanaratna bais case supra and Rikhi
Rams case supra also referred and held at para 81 that
It is however to be noticed that in all the cases, premium
towards liability towards passengers and third party risk was
collected. Once separate premium was collected by the Insurance
Companies for covering the risk to the passengers and third parties,
it is no longer open to them to escape their liability in this regard.
The failure in paying the additional premium as per IMT.44, at best,
would absolve the Insurance Companies from covering the liability
and loss, if any, of the APSRTC. It would not extend to protect the
Insurance Companies from their acknowledged liability towards
third parties as is evident from the policy documents. The Supreme
Court in Rikhi Rams case (supra), in no uncertain terms, held that
whenever a vehicle covered by an Insurance Policy was transferred
to a transferee, the liability of the insurer would not cease so far as
the third party/ victim is concerned, even if the owner or purchaser
did not give intimation as required under the provisions of the Act.
The cases on hand stand on a better footing as the insured, being
the owner of the vehicle, did not transfer the title or ownership of
the vehicle but only its possession. IMT.44, as pointed out earlier,
has application when the hirer of the vehicle requires protection
and it does not apply to or abridge the liability of the Insurance
Company insofar as third party risks are concerned.
14) The above propositions of law thus crystallizes the issue on hand
to the conclusion that even the APSRTC, for the limited purpose during the
agreement of hire in force, having control over the bus as well as the driver
that belongs to the owner by engaging its own conductor in plying the bus
to a limited extent as owner, the real owner is always the original person
who hired the bus and owned the bus registered in his name and once the
insurance company insured the vehicle by impugning for its hiring even not
intimated, the insurer cannot escape the liability to third parties much less
can say to fasten the liability solely on the APSRTC. As the bus was taken
on hire for plying by the APSRTC and from above expression of the Honble
Apex Court, no doubt there is something left open to say that if there is
any violation of the policy terms and conditions saying that the driver of
the bus was not having valid driving license at the time of accident;
whether the insurance company is liable to be exonerated and if so, the
real owner or the APSRTC limited owner can alone or both together subject
to any direction to the insurer to pay and recover from real owner to be
given. In the present case that aspect also does not arise even from any
non-intimation of hire, for not a case of driver having no valid license and
the like for pay and recovery to answer but for to say among the
respondents 1 to 3 i.e., real owner and the insurer of the bus which hired
to APSRTC are jointly liable and not the APSRTC.
15) Now coming to the decision of Purnya Kala Devis case placed
reliance on by the insurer to the contention of RTC is the owner and not
the hirer (original owner) concerned, as this decision did not discuss the
scope of Sections 146-149 of the M.V.Act as to what is the position when
vehicle is once insured, much less by referring to any of the expressions of
Kulsum (when vehicle on hire), Rikhiram (when ownership is transferred);
said decision will not come in aid to the Insurance Company to claim
exoneration from liability for the reason that in that case one Md.Abdul
Salam, registered owner of the bus (who did not at all insure the vehicle)
was requisitioned by the State of Assam on Government Duty and within
two days of requisition the vehicle under the control of Government while
driving on the way it dashed the cyclist, who died and the vehicle for not
covered by Insurance, the claim was preferred against the registered owner
and State of Assam. The registered owner contended that the vehicle at
the time of accident was under the requisition and control of the State
Government that is only liable to pay. Whereas the State taken a converse
plea that it only requisitioned the vehicle and not the owner under the
provisions of Assam Requisition and Control of Vehicles Act, 1968 and the
Tribunal though directed the registered owner, placing reliance on the Act,
to pay compensation exonerating the State of Assam. On appeal by the
claimants, the High Court of Gauhati enhanced the compensation but held
that the State Government was not liable as it was not the owner. On
appeal, the Apex Court by referring to Section 2 (30) of M.V Act on the
definition of owner held when the vehicle was not released by the State
Government by serving notice in writing on the owner as contemplated by
Section 5 (1) of the Assam Act as such the State can be squarely covered
under the definition of owner as contained in Section 2 (30) of the M.V. Act
and fastened the liability on the State of Assam. Despite the same, it is
the contention of the learned counsel for the appellant-insurer that from
Purnya Kala Devi supra once the vehicle is under control of R.T.C the
Respondent Nos.3 and 4 of the claim petition hired by the 1st respondent
covered by Ex.R-3 agreement, the question of fastening the liability on the
original and registered owner of the bus, the 1st respondent to the claim
petition muchless to indemnify the 2nd respondent-insurer (appellant) does
not arise. Hence to exonerate from the above proposition in Purnya Kala
Devi in saying the original owner is not liable but for the Government of
Assam which requisitioned the vehicle. The contention is at the cost of
repetition untenable.
16) Here, appellant did not requisition the vehicle with full control
but only taken possession without ownership to ply on hire as discussed
supra in Kulsums case of the Apex Court and also the full bench expression
of this Court in Kanakaratna Bai (supra) though under Section 2 (30) of the
Act the owner in the limited purpose for the vehicle not only that who has
hired to APSRTC but also the APSRTC.
17) Having regard to the above, it is the insurer to indemnify the
original owner with joint liability along with the original owner as well as
the APSRTC and the tribunal went wrong in exonerating the original owner
and insurer and in fixing liability only against the APSRTC-3rd respondent to
the claim in stead of saying all the three respondents are jointly liable for
the insurer to indemnify 1st respondent as well as the hireree--3rd
respondent. Accordingly, point No.1 is answered.
18) Now coming to the quantum of compensation awarded by the
Tribunal is excessive or utterly low and if so, what is the just compensation
concerned, in addition to the principle in arriving the just compensation
referred in the expressions supra, for the claim under Section 166 of the
M.V.Act herein also, though the claimants placed reliance upon Ex.A-14
partnership deed of M/s.Vasavi Traders to claim and Ex.A-12 is the
partnership deed of Nagarjuna Traders to claim the deceased was a
businessman and also having R.C as can be seen from Ex.A-13 and Ex.A-9
respectively besides Ex.A-10 Panchayat licence fees receipts, though his
avocation by business, one or the other as the case may be cannot be
disputed much that itself is not sufficient for the Court or the Tribunal
below to arrive a fixed sum by estimation of monthly earnings or annual
earnings. It is for the reason that even admittedly having R.C and to do the
business to submit sales tax returns showing the profit and loss and what is
the tax payable generated and paid, there was no sales tax assessment
filed even for a single year for claiming as a businessman for a long time.
It is to say in the absence of which, the documents having R.C. earlier and
now are showing as partner in some business not sufficient including from
Exs.A-20, 21 to say dealership in C.R.I Pumps or Maha Cements for not even
sales tax returns of those dealership business filed. When the income tax
and commercial tax returns are the criterion and the evidence placed
before the Tribunal to arrive, if at all, he is getting any such huge income
for establishing for non-filing of the best evidence including from the
expression of AIR 1968 SC 1413, the contention of the claimants cannot be
accepted of the deceased was from the business earnings more than
Rs.10,000/- per month including from the Tribunal to take Rs.50,000/- per
annum in net as what the so called business accounts from Ex.A-11 so
called ledger book and Ex.A-18 copy of statement of profit and loss account
cannot be given credence at all for not even subjected to commercial tax
assessment but for to say as contended rightly by the learned counsel for
the insurer-appellant as those are after the accident brought into existence
as had it been they could have been subjected to scrutiny by the
commercial tax department.
19) No doubt, the learned counsel for the claimants submits that as
per Exs.A-15 to A-17 the deceased paid L.I.C premium of Rs.25,000/- per
annum for three years. It makes no difference because it is difficult for
the Court to arrive by any guess work by payment of the premium as only
from business source and out of business profit. Leave about no Income
Tax returns filed even by showing non-taxable income tax with any
particular income. When such is the case as held by the Apex Court in
Latha Wadhwa vs. State of Bihar the minimum Rs.3,000/- to be taken
and the accident is within 3 years, thus even therefrom taken on average
earnings at Rs.3,400/- per month with 30% increase even by following
Rajesh v. Rajbir Singh and an expression of this Court in New India
Assurance Co. Ltd. V. Basantha Mohanthy from the record shows he
was a business man all through since several years when R.C. licences and
dealership permits, the earnings per year comes to Rs.40,800/- per year
and after increase of 30% increase, it comes to Rs.53,040/- per year. The
claimants are 5 in number of whom 2nd claimant is major son not a
dependant, but for at best a sufferer that to when there are dependants to
apportion any compensation to him. No doubt it is the contention of the
insure that the 3rd claimant-daughter, major married shows as if unmarried
and her dependency even taken as married only till marriage for few years
and if that is excluded only there are three persona and the contention of
the claimants relying upon Sarla Varma v. Delhi Transport Corporation
para Nos.29 to 32 of taking consideration 1/4th deduction has no
application. In fact there is nothing to show that the daughter is married,
even a major daughter is a dependant. When such is the case, when there
are 4 dependants even son a dependant or not even as per Sarla Verma
supra from para Nos.29 to 32, if there are more than three dependants
upto 6, 1/4th to be deducted. If 1/4th deducted, it comes to 39,780/- and
after applying multiplier 14 considering the age of the deceased, it comes
to Rs.5,56,920/- apart from loss of consortium Rs.1,00,000/-, loss of estate
Rs.10,000/- and funereal expenses Rs.15,000/-, it comes to Rs.6,91,920/-
rounded to Rs.7,00,000/-.
POINT No.2:
20) In the result, the appeal is partly allowed by decreasing the
compensation amount from Rs.7,85,000/- to Rs.7,00,000/-. The other
terms in the award passed by the Tribunal holds good. The cross-
objections filed by the claimants is dismissed. No order as to costs.
21) Miscellaneous petitions, if any pending in the appeal as well as in
the cross-objections, shall stand closed.
_______________________
Dr. B. SIVA SANKARA RAO, J
Date:23-12-2014
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