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Judgment
Govardhan, J.—This appeal is against the order passed by the Motor Accidents Claims Tribunal/Udumalpet in M.C.O.P. No. 93 of 1986.
The petitioner''s case is as follows: Murugesan, husband of the first petitioner was an agriculturist. He is also having business. On 20.3.1986 near
Waverly Estate in Valaparai-Poltachi Road, when he was bringing the articles purchased by him in Pollachi shandy, the lorry in which he was
traveling driven by its driver in a rash and negligent manner met with an accident. The husband of the first petitioner died. The vehicle was insured
with the 3rd respondent. The deceased used to earn a minimum of Rs. 500/- per month in his business and Rs. 5,000/- per annum, in agriculture.
The petitioners 3 and 4 are his children. The 2nd petitioner is the father of the deceased. The petitioners have filed this claim application for
payment of Rs. 1,01,650/- as compensation.
The 2nd respondent in his counter has contended that the deceased was sitting at the side of the lorry, fell down when the vehicle was
negotiating a bend and it was not due to any rash and negligent driving of the lorry by the driver.
The 3rd respondent, who has adopted the counter of the 2nd respondent has contended that their liability is only Rs. 10,000/-.
On the above pleadings, the Motor Accidents Claims Tribunal held an enquiry and gave a finding that the accident was due to the rash and
negligent driving of the lorry and awarded a compensation of Rs. 80,000/- to the petitioners. Aggrieved over the same the 3rd respondent has
come forward with this appeal.
The learned counsel appearing for the appellant-third respondent would argue that the deceased was traveling in the lorry with the goods
belonging to him by hiring the lorry and therefore, he must be treated as a person who was traveling in the goods vehicle paying hire charges and it
is not in accordance with the terms of the policy and therefore, the insured viz., the appellant cannot be made liable for the liability which the first
respondent has to meet as the owner of the lorry. In support of his above contention, the learned counsel relies upon the decisions reported in G.
Dhyanand and Another Vs. Zaamni Bi and Others, and M. Kanda Swamy Pillai Vs. Chinnaswamy and Another, in which, two different Division
Benches of our High Court have held that in deciding the liability of the insurance company, the Supreme Court after referring to Sec. 95 of the
Motor Vehicles Act as amended by Act 56/1969, has held that the insurance cover is not available to passengers in a case like the present one
and that the proviso to Sub-Sec.(ii) provides that the policy shall not be required except where the vehicle is a vehicle in which passengers are
carried for hire or reward or by reason of or in pursuance of a contract of employment to cover liability in respect of the death of or bodily injury
to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a
claim arises. The Division Benches have held that there is no difficulty in coming to the conclusion that the driver was acting in the course of his
employment in carrying the deceased and as such, the owner of the lorry is liable. But, as far as the insurance company is concerned, the terms of
the policy will have to prevail and interpreting the clauses in the policy insurance, they have no hesitation in holding that the insurance company is
not liable since the liability in respect of the passenger in the lorry has been specifically excluded by the terms of the policy. The learned counsel
appearing for the appellant who has referred to these two decisions, which lays down that the insurance company cannot be made liable in a case
where the owner of the goods was traveling in the goods vehicle with his goods, also referred to the latest decision of this Court reported in
Kanniappa Nadar v Jayapandi (1997 I M.L.J. 148) in which the First Bench of this Court has referred to the Rule laid down in Sohan Lal Passi v
P. Sesh Reddy (1996) S.C.C.21) wherein it has been held that the burden of proving the breach of condition of permit or the contract of insurance
by the insured, is on the insurer viz., the insurance company and in that reported case, the burden has not been discharged and therefore the
insurance company cannot absolve itself from the liability to pay the compensation to the claimant. The facts of the case reported in Kanniappa
Nadar v Jayapandi (19971.M.LJ. 148) is similar to the facts of the present case in which, the driver of the lorry meant for carrying the goods, has
allowed the owner of the goods to travel in the lorry in breach of the condition of the insurance policy and in the accident that occurred, due to the
rash and negligent driving of the lorry driver, the passenger died. The learned counsel appearing for the appellant after referring to the above
decisions, has argued that the decision reported in Kanniappa Nadar v Jayapandi (1997 I M.L.J. 148) which holds a decision contra to the
decisions reported in M. Kanda Swamy Pillai Vs. Chinnaswamy and Another, and G. Dhyanand and Another Vs. Zaamni Bi and Others, has to
be distinguished, in that, the latter decision was rendered relying upon the Supreme Court decision in Sohan Lal Passi v P. Sesh Reddy (1982) 5
S.C.C.21) which deals with absence of valid licence as a violation of the policy conditions. In the Supreme Court case, their Lordship have held
that the expression ""breach"" occurring in Sec.96(2)(b) means infringement or violation of a promise or obligation and as such the insurance
company will have to establish that the insured was guilty of an infringement or violation of a promise and the insurer has also to satisfy the Tribunal
or the Court that such violation or infringement on the part of the insured was willful. In the case on hand, the deceased person traveled in the
goods vehicle with his goods on paying certain amount as hire charges and he cannot be considered as a non-fare paying passenger. When the
deceased person was a passenger who was traveling in the goods vehicle on payment of certain amount, the insurance company has to examine
the owner of the vehicle to prove that the traveling of the deceased in the goods vehicle belonging to him was without his knowledge and against
the directions given by him to his own driver. Insurance company ought to have established that the owner has not authorised the driver to permit
the persons with their goods to travel in-the lorry paying hire charges. There is no such evidence available in this case. Only if it is shown that the
breach of condition viz., permitting the deceased to travel in the vehicle was without the knowledge of the owner, it can be stated that there is no
violation of the policy condition which stipulates that the vehicle is intended to carry goods only and not passengers. Since such evidence which
would absolve the insurance company from the liability which the owner has to face, on account of the accident, is not available, I am of opinion
that the appellant has no case to contend that the appellant cannot be made liable for the compensation ordered to be paid by the claimants. The
appellant has not challenged the negligence aspect. The liability of the insurance company being Rs. 50,000/- all that the appellant can seek in this
appeal is that out of the total compensation of Rs. 80,000/-awarded to the petitioners, the liability of the insurance company viz., the appellant can
be fixed at Rs. 50,000/- and the second respondent can be directed to pay the balance. In that view, I am of opinion that the appeal has to be
ordered with this modification only. In the result, the appeal is dismissed with the modification that the liability of the appellant-third respondent
before the Tribunal is fixed as Rs. 50,000/- out of the compensation of Rs. 80,000/- payable to the petitioners, and the remaining amount of Rs.
30,000/- has to be paid only by the second respondent before the Tribunal. No costs.