The Divisional Manager, United India Insurance Co. Ltd. vs Rathnamma and Others

N.K. Patil, J.—These two appeals are by the United India Insurance Company Limited being aggrieved by the impugned common judgment and award dated 20.06.2011 in MVC Nos. 1206/2005 and 1205/2005 on the file of II Addl. Senior Civil Judge and Addl. MACT, Chitradurga. (hereinafter referred to as Tribunal'' for short).

By its judgment and award, the Tribunal has awarded a sum of Rs. 3,85,000/- in MFA No. 1206/2005 and Rs. 4,61,616/- in MFA No. 1205/2005 with interest at 6% p.a., from the date of petitions till realization as against the claim made by the claimants-respondents on account of the death of the deceased Rajanna and Ravesha @ Revanna in the road traffic accident.

It is case of the appellant-insurer that the direction issued by the Tribunal holding that the insurer of the offending vehicle are jointly and severally liable to indemnify the award amount is not sustainable and it is liable to be set aside.

Brief facts of the case in hand are that:

"The claimants in both the cases have filed a claim petition under Section 166 of MV Act before the Tribunal claiming compensation against the appellant-insurer and respondent Nos. 7 and 8 herein on account of death of the deceased persons, Rajanna and Ravesh @ Revanna in a road traffic accident, which occurred on 23.06.2005 at about 2.30 p.m. when the deceased persons along with others were going in a Jeep bearing No. KA-34/M-1775, due to rash and negligent driving by its driver. The Tribunal after hearing both sides and after appreciating the oral and documentary evidence has allowed the said claim petitions in part and awarded the compensation as referred above directing the appellant to indemnify the award amount. Dissatisfied with the same, the appellant has presented this appeal."

The submission of Sri M.U. Poonacha, learned counsel appearing for the appellant in both the cases at the outset is that, the Tribunal has committed a grave error in holding that the appellant-insurer is liable to satisfy the award amount. The Tribunal ought to have absolved the appellant-insurer of its liability in view of the clear breach and violation of the terms and conditions of the policy. Further, the Tribunal ought to have noticed that the policy of insurance issued in favour of the 7th respondent in respect of the offending vehicle is a private Car Package Policy and the risk of the occupant in the said vehicle is not covered under the said policy. Further the deceased were traveling in the said vehicle as an unauthorized passenger in violation of the terms and conditions of the policy. The Tribunal ought to have noticed that the private Jeep belonging to the 7th respondent was being used by the Excise Department for conducting a raid and as such it is obvious that the insurer has given the vehicle on hire basis to conduct the raid by the officials of the Excise Department and as such it is clear that the insurer in utter disregard and violation of the terms and conditions of the policy has used the vehicle for commercial purposes and as such the Tribunal ought to have completely absolved the appellant-insurance company of its liability as the deceased persons were carried in the said private Jeep in violation of the terms and conditions of the insurance policy. The conclusion arrived at by the Tribunal that the appellant and the owner are jointly and severally liable to pay the compensation by holding that there was a valid insurance policy on the date of accident and the said vehicle was not hired by any person on the date of accident is against the cogent and proper positive evidence available on record, wherein, it clearly established that the Deputy Commissioner, Department of Excise was using the vehicle for conducting the raid. Therefore, the impugned common judgment and award is not sustainable in law and liable to be set aside. To substantiate his submission, he placed reliance on the judgment of Apex Court reported in National Insurance Co. Ltd. Vs. Deepa Devi and Others, (2008) ACJ 705 : AIR 2008 SC 735 : (2008) 1 CLT 907 : (2008) 149 PLR 780 : (2007) 14 SCALE 168 : (2008) 1 SCC 414 , wherein, it is held that as per the terms and conditions of the policy, insurance company is not liable to indemnify the award. Hence, owner is liable to indemnify the award amount. Therefore, he submitted the impugned common judgment and award is liable to be set aside absolving the insurance company from indemnifying the award amount.

Per contra, learned counsel appearing for the claimants inter alia contended and sought to substantiate the impugned common judgment and award as just and proper. He submits that, the impugned judgment and award passed by the Tribunal is passed after due appreciation of oral and documentary evidence and other relevant material available on record. To substantiate the same, he pointed out and taken through the reasoning given by Tribunal at Para Nos. 18 to 22 of its judgment and specifically pointed out the finding of fact recorded in Para No. 21 of the judgment placing reliance on the judgment of this Court reported in Ramachandra and Another Vs. Shantaram and Others, (2005) ACJ 462 : (2004) ILR (Kar) 398 and another judgment reported in ILR 2006 Karnataka 889 (The Oriental Insurance Co. Limited v. Sri Purushotham T.M. and others). The reasoning given is well founded and well reasoned and on the basis of oral and documentary evidence available on file. Further, he submits that, the question of 2nd round of litigation before this Court does not arise since the deceased persons were working in the Excise Department and they died on account of the accidental injuries sustained during the course of their employment. These facts have been established on basis of oral and documentary evidence adduced by the respondent-claimants and interference by this Court is not called for. Further he is quick to point out and submit that the reliance placed by the learned counsel appearing for the appellant cannot be made applicable to the facts of the case on hand. The Tribunal has rightly awarded the compensation holding that the owner and insurer are jointly and severally liable to indemnify the award amount and since the insurance policy of the vehicle in question was in force as on the date of accident it has rightly directed the appellant/insurer to indemnify the award. Therefore, he prays for dismissal of the appeals.

After considering the submission made by the learned counsel appearing for both the parties and on perusal of the impugned common judgment and award passed by the Tribunal and after careful evaluation of the oral and documentary evidence available on file, it emerges that occurrence of accident resulting in the death of the deceased persons is not in dispute and also the fact that they are the employees of 8th respondent. During the course of their employment when they were traveling in the Jeep in question, they met with an accident and the said Jeep was insured with the appellant-insurance company and the policy was in force as on the date of accident. Only principal submission canvassed by the learned counsel Sri M.U. Poonacha that the vehicle had let out on lease basis to the Excise Department-8th respondent, therefore, in the light of judgment of the Apex Court reported in 2008 ACJ 705 referred above, insurance company should be absolved from indemnifying the award amount cannot be accepted nor it is applicable to the facts of this case. In fact, in the instant cases the Tribunal after due appreciation of oral evidence of PWs. 1 and 2 and RWs. 1 and 2 and documentary evidence adduced at Exs.P1 to 107 and Ex. R1, insurance policy, has rightly discussed in detail at Para Nos. 18, to 22 of its judgment and after specifically observing the finding of facts has held that admittedly the vehicle involved in the accident is not a passenger vehicle or goods carrier, it is a private vehicle and Ex. R1 shows that this vehicle stands in the name of 8th respondent. During the course of evidence of PWs. 1 and 2 they have clearly deposed that the deceased in both the appeals were working in the 7th respondent and they were discharging duties as per the direction of the 7th respondent. Such being the case, the vehicle was not hired by any of the persons traveling in the said vehicle as contended by the learned counsel appearing for the appellant. As on the date of accident the deceased were traveling in the vehicle belonging to 8th respondent and admittedly as on the date of accident the said vehicle was duly insured with the appellant. Though, it is alleged that, eight passengers were traveling in the said Jeep which is not permissible, there is no evidence for the sake of arguments nor credible documents and in the light of reliance placed on the judgment of this Court reported in Ramachandra and Another Vs. Shantaram and Others, (2005) ACJ 462 : (2004) ILR (Kar) 398 , wherein, this Court has held that the insurance company under the new Act is compulsorily required to cover the risk of passengers of a private car or of any passenger carrying vehicle including a two wheeler and the insurer of the car is liable to indemnify the insured to the extent of his liability arising out of the claim in question. Further, in the case of The Oriental Insurance Co. Limited v. Sri Purshotham T.M. and others reported in ILR 2006 Karnataka 889 it is held that passenger in a private car is also covered by the Act Policy under Section 147 of the Motor Vehicles Act, 1988 Law laid down in ILR 2004 KAR 393 in Ramachandra''s case approved and followed. Following these two judgments, the reasons assigned by the Tribunal are cogent and after recording finding of fact, it has answered issued Nos. 2 and 1 in the affirmative framed by it and held that the respondent Nos. 7 and 8 are jointly and severally liable to satisfy the award amount and consequently directed the appellant/insurer to indemnify the award as the policy was in force. I do not find any error or irregularity in the said judgment and award nor the appellant has made out any good ground to entertain these appeals. Accordingly, these two appeals are dismissed as devoid of merits.

Amount in deposit in both appeals shall be transferred to the jurisdictional Tribunal, immediately.

Draw the award, accordingly.