The Divisional Manager United India Insurance Co. Ltd. vs Vasudev Balavant Rode and Others

S. Sujatha, J—All these appeals are filed by the insurance company challenging the award passed by the MACT, Chikkodi.

The facts disclose that on 27.4.2011 at 3.00 a.m., while the deceased and four injured persons were travelling in Mahindra Max vehicle bearing No. MH-12/DS-49, near Kerur on Chikkodi Miraj road, the driver drove the said vehicle in rash and negligent manner and caused accident, as a result of which one victim Smt. Vanita died. The four inmates of the vehicle have sustained grievous injuries. The claimants filed petition before the Tribunal seeking compensation. The Tribunal awarded the compensation and directed the insurer to pay the compensation. These appeals are preferred by the insurer on the ground that the vehicle was a private vehicle, hired for reward in violation of the terms of policy and against the provisions of Section 149(2) of the M.V. Act. These appeals are filed disputing the liability of the insurer.

The Tribunal after considering the evidence on record has noticed Ex. R. 1 the policy, reveals that the vehicle is a private vehicle, however extra premium was paid for 10 passengers as per Ex. R. 1.

The learned counsel appearing for the claimants in these appeals placed reliance on the judgment of this Court in the case of United India Insurance Company Limited, Represented by its Deputy Manager vs. Kalawathi and others, reported in ILR 2011 Kar. 2328 and addressed arguments that the vehicle was covered with a comprehensive policy besides paying extra premium for 10 passengers as per the schedule of the policy.

The learned counsel for the appellant insurance company has placed reliance on the judgment of this Court dated 4.2.2008, in the case of M/s. United India Insurance company vs. Smt. Gangawwa in MFA No. 1894/2003, to contend that the evidence of P.W. 1 suggests breach of terms and conditions of the policy which clearly establishes that the vehicle has been used as a commercial vehicle and hence the appellant was not liable to indemnify the insured.

Having heard the learned counsels appearing for the parties and perusing the judgments, it is clear that owner of the vehicle has paid extra premium for 10 passengers, which is evident by policy Ex. R. 1. The policy admittedly is a comprehensive policy, which covers the risk of inmates. The Division Bench of this Court in the case of United India Insurance Company Limited represented by the Deputy Manager vs. Kalawathi and others reported in ILR 2001 Kar. 2328 has categorically held as follows:

That apart we do not find any rationale for the insurer as a ''State'' to discriminate between the paid inmate and the gratuitous inmate when the vehicle is covered with comprehensive policy. If the vehicle is a private vehicle played on hire, the owner may be liable for the penal and fiscal consequences under the Motor Vehicle Act for payment of penalty and taxes applicable to the commercial vehicles. But from the stand point of the insurer, it makes no difference whether the inmate is a paid passenger or gratuitous passenger. When the policy issued is a comprehensive policy covering risk of the inmates of private vehicle, the insurer cannot avoid liability on the ground that the inmate is a paid passenger. In that view, we hold that the terms in the policy, which discriminates the liability of the insurer for the paid inmate and gratuitous inmate is discriminatory and illegal.

In view of the dicta laid down by this Court, no discrimination would be made between the paid inmate and the gratuitous inmates when the vehicle is covered with a comprehensive policy. If the vehicle is a private vehicle, played on hire, the owner may be liable for the penal and fiscal consequences under the provisions of the M.V. Act for payment of penalty and taxes. It is also pertinent to note that extra premium is paid by the owner for 10 passengers.

In view of the judgment rendered by this Court cited supra, the Tribunal fastened the liability on the insurance company, which cannot be found fault with. The learned counsel for the appellant made a vain attempt to distinguish this Case in view of the principles of law laid down by this Court in MFA No. 1894/2003, the judgment of M/s. United India Insurance Company Ltd., vs. Smt. Gangawwa and others. Kalawathi''s case (supra) being also the Division Bench judgment rendered subsequently, it would be appropriate to follow the subsequent Division Bench judgment of this Court.

Following the same, these appeals are dismissed confirming the award passed by the Tribunal.

The amount in deposit, if any, shall be transmitted to the Tribunal and the claimants are at liberty to withdraw the same.