Kishan Lal Malhotra vs Prem Ram and Others

B.C. Kandpal, J.—This appeal, u/s 173 of Motor Vehicles Act, 1988, has been preferred by the Appellant i.e. owner of vehicle in question, against the judgment and award dated 3.6.2008 passed by M.A.C.T./A.D.J./First F.T.C., Haldwani, Nainital, in M.A.C.P. No. 70/2006, Prem Ram and Ors. v. Kishan Lal Malhotra and Ors. whereby the Tribunal has given recoverable rights against the Appellant/owner of vehicle in question for recovery of amount of compensation.

Brief facts of the case, according to the claimants, are that on 28.02.2006 at about 4''o clock, when deceased-Vinod Kumar was coming through Bus No. U.P.02-D/4243 from the side of Nainital near Kaladhungi Tiraha after giving his interview, the said bus overturned due to rash and negligent driving of its driver, as a result of which Vinod Kumar died at the spot itself. The deceased was 20 years of age and his monthly income was Rs. 6000/- from agriculture and by working in Renu Netra Sanstha. The claimants claimed a sum of Rs. 8,50,000/- as compensation against the opposite parties.

Opposite party No. 1 i.e. owner of vehicle in question/Appellant before this Court, filed his written statement admitting therein the factum of accident and pleaded that driver of vehicle in question was not at fault. On the date of accident the said vehicle was being plied with ail valid papers and his driver was having valid driving licence. The vehicle of opposite party No. 1 was insured with The New India Assurance Company Ltd. w.e.f. 03.01.2006 to 02.01.2007. Therefore, the liability to pay the compensation, if any, is of insurance company.

Opposite party No. 2. The New India Assurance Company Ltd. filed its written statement denying the contents of the claim petition and pleaded that opposite party No. 2 is not liable to pay the compensation unless opposite party No. 1 produces the entire papers of Vehicle No. U.P.02D/4243 and proves them. The insurance company had not been given any information by the owner of vehicle with regard to accident. The accident occurred due to overloading in the bus. The claim petition filed by claimants is not maintainable jointly under Sections 163-A and 166 of Motor Vehicles Act.

Opposite party No. 3-Ashok Kumar filed his written statement admitting therein the factum of accident and pleaded that opposite party No. 3 was driving the vehicle in question in accordance with valid papers. On the date of accident vehicle of opposite party No. 1 was insured with opposite party No. 2-insurance company, in the said accident opposite party No. 3 was not at fault, rather accident occurred ail of a sudden. The liability to pay the compensation is of opposite party No. 2-insurance company.

The learned Tribunal on the basis of pleadings adduced by the parties framed relevant issues in the claim petition, which were discussed in great detail. Parties led evidence in support of their case.

The learned Tribunal after having considered the entire evidence available on record and hearing learned Counsel for the parties, decreed the claim petition for a sum of Rs. 2,69,000/-, along with interest of 7% per annum from the date of filing the petition till the date of actual payment, vide judgment and award dated 03.06.2008. The Tribunal while passing the impugned judgment and award also directed that amount of compensation to be paid to the claimants, although shall be paid by the insurer of vehicle i.e. The New India Assurance Company Ltd., but insurance company shall have the recoverable rights from the owner of vehicle in question with regard to amount of compensation.

Feeling aggrieved by the aforesaid impugned judgment and award, the Appellant i.e. owner of vehicle in question, has preferred the present appeal before this Court.

Heard Sri D.S. Patni, learned Counsel for Appellant, Sri M.K. Goyal, learned Counsel for Respondent No. 4-insurance company and perused the record.

Learned Counsel for Appellant/owner of Bus No. U.P.02-D/4243 has submitted before me that in this case offending vehicle was having the permit for carrying 21 passengers at a time. Although the evidence on record shows that the vehicle was carrying 34 passengers and on account of overloading the accident took place and the vehicle was overturned. He has submitted that in view of the decision of the Hon''ble Apex Court in the case of National Insurance Co. Ltd. Vs. Anjana Shyam and Others, , and Oriental Insurance Company Ltd. v. Amit and Ors. reported in 2007 (1) U.D. 385 (Uttarakhand High Court), it is the liability of insurance company to pay the amount of compensation upto the limit of permitted passengers.

On the other hand, learned Counsel for insurance company has made the rival contention that it is a case of fundamental breach of insurance policy, therefore, the insurance company cannot be held to be liable for payment of amount compensation. He has further stated that the ratio given in the judgments cited above by learned Counsel for Appellant/owner of offending vehicle would not apply to the facts and circumstances of the present case.

After giving thoughtful consideration to the arguments advanced by learned Counsel for the parties, I am of the view that in this case the permitted number of passengers was 21. Learned Counsel for Appellant/owner of offending vehicle has clearly submitted before me that claim petitions are four in total number. If that is the situation, then the insurance company in view of decision of the Hon''ble Apex Court in the case reported in National Insurance Co. Ltd. Vs. Anjana Shyam and Others, is liable to pay the amount of compensation to the claimants. The Hon''ble Apex Court in paragraph nos. 22 and 23 of aforesaid decision has clearly observed as under:

Then arises the question, how to determine the compensation payable or how to quantify the compensation since there is no means of ascertaining who out of the overloaded passengers constitute the passengers covered by the insurance policy as permitted to be carried by the permit itself. As this Court has indicated, the purpose of the Act is to bring benefit to the third parties who are either injured or dead in an accident. It serves a social purpose. Keeping that in mind, we think that the practical and proper course would be to hold that the Insurance Company, in such a case, would be bound to cover the higher of the various awards and will be compelled to deposit the higher of the amounts of compensation awarded to the extent of the number of passengers covered by the insurance policy.

Illustratively, we may put it like this. In the case on hand, 42 passengers were the permitted passengers and they are the ones who have been insured by the Insurance Company. 90 passengers have either died or got injured in the accident, awards have been passed for varied sums. The Tribunal should take into account the higher of the 42 awards made, add them up and direct the Insurance Company to deposit the lump sum. Thus, the liability of the Insurance Company would be to pay the compensation awarded to 42 out of the 90 passengers. It is to ensure that the maximum benefit is derived by the insurance taken for the passengers of the vehicle, that we hold that the 42 awards to be satisfied by the Insurance Company would be the 42 awards in the descending order starting from the highest of the awards. In other words, the higher of the 42 awards will be taken into account and it would be the sum total of those higher 42 awards that would be the amount that the Insurance Company would be liable to deposit. It will be for the Tribunal thereafter to direct distribution of the money so deposited by the Insurance Company proportionately to all the claimants, here ail the 90, and leave all the claimants to recover the balance from the owner of the vehicle. In such cases, it will be necessary by the Tribunal, even at the initial stage, to make appropriate orders to ensure that the amount could be recovered from the owner by ordering attachment or by passing other restrictive orders against the owner so as to ensure the satisfaction in full of the awards that may be passed ultimately.

Further, the Division Bench of this Court has also observed in the judgment reported in 2007 (1) U.D. 385 (sup) that merely overloading would not bring the matter within the ambit of fundamental breach unless there is an evidence that it was the case that excess passengers were sitting on the front seat due to which the driver could not drive the vehicle properly and could not be able to negotiate the bend due to overloading. In the instant case, in case, if the pleading of insurance company is that the accident took place on account of fundamental breach of the policy, then it was the duty of the insurance company to place the evidence in order to show that the accident occurred due to overloading as well as fundamental breach, but the insurance company has not adduced any such type of evidence. Therefore, I am of the view that in the light of the judgments of the Hon''ble Apex Court as well as the Division Bench of this Court, the liability of the insurance company to pay the amount of compensation is there. The owner of offending vehicle in question cannot be said to be liable to pay the amount of compensation to the claimants. The direction issued by the Tribunal in the impugned judgment and award to this effect that the amount of compensation to be paid by the insurance company would be recovered from the owner of vehicle, is liable to be set aside.

As far as amount of compensation to be awarded in favour of claimant is concerned, the Tribunal has adopted absolutely right method for calculating the same and the same does not require any interference. So far as interest part is concerned, the same also appears to be justified and needs no interference. I do not find any infirmity in the said finding recorded by the Tribunal and the same deserves to be confirmed.

Accordingly, appeal is partly allowed. The impugned judgment and award is modified to the extent that amount of compensation awarded by the Tribunal is to be paid to the claimant by insurer of vehicle in question i.e. The New India Assurance Company Ltd., along with interest as indicated in the impugned judgment and award.

The direction issued by the Tribunal in the impugned judgment and award to this effect that the amount of compensation to be paid by the insurance company would be recovered from the owner of vehicle, is set aside.