United India Insurance Co. Ltd. vs Ganapathi and Another

L. Narayana Swamy, J.—Miscellaneous First Appeal No. 8972 of 2006 is filed by the Insurance Company challenging the order dated 22nd April, 2006 passed in MVC No. 465 of 2003 by Motor Accident Claims Tribunal, Khanapur on the ground of liability as well as quantum. The respondents are the claimants, who filed claim petition claiming compensation on the ground that they sustained injury in the motor vehicle accident occurred on 6th May, 2002. Claimant, in order to prove the fact that they have sustained injuries in the accident in question and to fix liability against insurance company, has examined the injured as PW1 and doctor as PW2 and documents have been marked as Exhibits P1 to P9. The respondent therein, i.e. the Insurance Company, examined RW1 the treating doctor in order to rebut the evidence of PW2. No documents have been produced by the respondent-appellant herein. In this appeal, an application under Order LXI, Rule 27 of the CPC has been filed by producing the copy of the Insurance Policy. The learned counsel appearing for the appellant-Insurance Company contends that the policy was issued to cover the risk of owner-cum-driver as the vehicle is a private vehicle and the policy issued to the owner was with a condition that the vehicle should be used only for social, domestic and pleasure purposes and for the insured for his own business. He contends that the claimants are the passengers who hired the vehicle. Though the vehicle is a private car and was not having any permit to be used as a transport vehicle i.e. taxi; the owner has used the vehicle as a taxi contrary to Section 66 of the Motor Vehicles Act, 1988 (for short, hereinafter referred to as ''the Act''). The learned counsel relies on the complaint as per Exhibit P1, the FIR and the evidence of PW1, who is injured and an inmate of the vehicle in question. In the FIR it is stated to the police that they hired the vehicle in order to go to Goa and in view of rash and negligent driving of the driver of the vehicle, it met with an accident. PW2, whose cross-examination has been referred to by the learned counsel, has admitted the contents of Exhibit P1 and further has deposed that they have hired the vehicle in order to go to Goa. These materials were placed before the Tribunal and the Tribunal failed to consider in exonerating the liability on the Insurance company. In support of this submission, the learned counsel relied upon the decision of Hon''ble Supreme Court in the case of National Insurance Co. Ltd. Vs. Challa Bharathamma and Others, , wherein it has been held that the Insurance Company is not liable, since there is no valid permit in possession of the driver.

The learned counsel referred to Section 66 of the Act, which contemplates the criterion necessity of permits. It provides that no owner shall use any vehicle as a transport vehicle in any public place with or without carrying any passengers or goods. Since the owner/driver breached the conditions of policy issued, to that extent, liability be fastened on the owner and not on the insurer, is his submission.

Per contra, the learned counsel appearing for the claimant-respondents submits that the Tribunal has considered the case of the respective parties and fastened the liability and hence there is no scope to interfere in this matter. He submits that using of vehicle for transport purpose has not been proved. The complainant has not been examined in order to prove the fact of using the vehicle for transport purpose. If there is violation of permit u/s 66 of the Act, it is for the police authorities to take action for breach of policy and not for the insurance company to contend so to avoid liability. In support of the said submission, the learned counsel relied upon a Division Bench judgment of this court in the case of United India Insurance Company Ltd. Vs. Kalawathi and Others, wherein it has been held that "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".

The learned counsel for the respondent-claimant also referred to the judgment in the case of United India Insurance Company Limited v. Smt. Lachammawwa and others, reported in J (1999) ACC 36 and contended that the raising a new plea is not permissible, since the plea raised before the Tribunal has been contested by adducing evidence. He submits that on the basis of the evidence and materials produced, the Tribunal has rendered judgment and under these circumstances the application filed by the respondent Insurance Company by producing the insurance policy as an additional document, cannot be accepted. The learned counsel also relied upon the judgment of this Court in MFA No. 22446 of 2010 and connected appeals disposed of on 28th November, 2011 whereby the case of the insurance company was rejected since it has not proved the fact of hiring the vehicle.

Before proceeding to consider the rival contentions advanced by the learned counsel appearing for the parties, provisions of the Motor Vehicles Act, 1988 is to be considered. Chapter II of the Act provides for issuance of Driving Licence. Possessing of valid driving licence to drive the vehicle in question is not in dispute. It is not on record as to whether the driver was in possession of the valid driving licence to drive transport and non-transport vehicle. The conditions stipulated, for issuance of licence to drive a transport vehicle and a non-transport vehicle are different. A person possessing driving licence to drive non-transport vehicle is not permitted to drive a transport vehicle. Since the conditions are different in nature, the currency of driving licence is also different from transport to non-transport vehicle. The aims and objects of issuance of driving licence under the Act is to the effect that a driver, who is in possession of licence to drive a particular class of vehicle, shall use the said licence only for the said purpose. Chapter-IV of the Act is in respect of registration of vehicle for the purpose of classifying whether the vehicle is a transport vehicle or a non-transport vehicle. Chapter-V, again, restricts the owner that he shall not use or permit the using of vehicle as a transport vehicle, in any public place, whether or not such vehicle is actually carrying passengers or goods, save in accordance with the permission granted. Proviso to Section 66 of the Act further contemplates that such a carrier permit shall be subject to any condition that may be specified in the permit. The said Section defines the issuance of licence for transport and non-transport vehicle and the class of vehicles and permit the use of vehicle for transport and non-transport purpose.

The vehicle in question, which met with accident, comes under definition of non-transport vehicle. A private car is supposed to be used only for domestic or formal purpose. The said vehicle, which is classified as non-transport vehicle, according to the appellant was used for transport purpose. The said submission has been examined in the light of Exhibit P1 in which case has been instituted before the Criminal Court and also which is the basis for Tribunal to decide the issue. Though complainant has not been examined, but the contents of Exhibit P1 reads to the effect that "some persons hired the vehicle Taxi No. KA-22/M-3788 to go to Goa at 11.45 p.m." This piece of evidence has not been rebutted by either of the parties. On the basis of FIR, investigation has been launched and charge-sheet was filed against the driver of the vehicle as per Exhibit P5. The claimant has examined himself as PW1. In his affidavit evidence, he has stated that on 6th May, 2002 he was travelling in a Tempo Taxi Jeep. It met with an accident on account of rash and negligent driving of the driver of the said vehicle. In his additional evidence also he has reiterated the same statement. In the cross-examination, he has adverted to the contents of Exhibits P1 to P6. He has deposed that, he along with his brother and sister-in-law, were on their way to Londa by walk and when they reached Londa at 7.00 p.m. they got a vehicle and same was taken on hire. This evidence of PW1, if understood by jointly reading Exhibit P1, it goes to show that the vehicle was hired by the claimants. Then the question is whether the vehicle, which was hired by the claimants, was a taxi or not? To decide, as to whether the vehicle was a taxi or not, no supporting material has been produced by either of the parties. However, it is contended by the claimants that even if it is a taxi, the same cannot be differentiated between paid passengers and gratuitous passengers. On the other hand, the appellant states that since it is admitted undisputedly that the vehicle is a taxi, the same is nothing but a breach of policy conditions. Since the fact is admitted by both the parties, it proves the fact that the claimants have engaged the vehicle as a taxi, which is not a transport vehicle.

Irrespective of the fact that it is a taxi or a private vehicle; whether the inmate is a gratuitous passenger or a paid passenger, the liability cannot be shifted on the owners. In the judgment relied upon by the learned counsel for the claimant-respondents in the case of Kalawathi and others (supra), it has been referred by this Court that "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 plied on hire the owner may be liable for the penal and fiscal consequences under the Motor Vehicles 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 the risk of inmates of a private vehicle, the insurer cannot avoid liability on the ground that the inmate is a paid passenger." As per the judgment, it saddles liability on the insurer without there being any examination as to whether the inmate is a paid passenger or a gratuitous passenger.

The Hon''ble Supreme Court in National Insurance Co. Ltd. Vs. Challa Bharathamma and Others, has observed thus:

High Court was of the view that since there was no permit, the question of violation of any condition thereof does not arise. The view is clearly fallacious. A person without permit to ply a vehicle cannot be placed at a better pedestal vis-�-vis one who has a permit, but has violated any condition thereof. Plying of a vehicle without a permit is an infraction. Therefore, in terms of Section 149(2) defence is available to the insurer on that aspect. The acceptability of the stand is a matter of adjudication. The question of policy being operative had no relevance for the issue regarding liability of insurer. High Court was, therefore, not justified in holding the insurer liable.

In the light of the judgment of the Hon''ble Supreme Court referred to above, wherein after referring to the judgments in the case of National Insurance Co. Ltd., Chandigarh Vs. Nicolletta Rohtagi and Others, and in the case of New India Assurance Co. Ltd. Vs. Asha Rani and Others, , it has been held that the breach of permit is a ground to take defence to hold that insurance company is not liable to pay compensation. When there are judgments of the Hon''ble Supreme Court wherein it has not fastened the liability on the insurance company, the same is binding and has to be followed by this Court also. Accordingly, I hold that the appellant herein has to succeed in proving the case that the vehicle was a non-transport vehicle but the same was used for transport purpose without having a valid driving licence and the liability cannot be fastened on the Insurer. Further, the Hon''ble Supreme Court in the case of National Insurance Co. Ltd. Vs. Challa Bharathamma and Others, and in the case of National Insurance Co. Ltd. Vs. Baljit Kaur and Others, , has ordered for pay and recovery. In the facts and circumstances of the case, I hold that the appellant has to pay and recover from the owner, without instituting any independent suit for recovery. Accordingly, appeal is allowed in part.

As regards MFA No. 21441 of 2008 filed by the claimant seeking enhancement in the compensation is concerned, the learned counsel appearing for the respondent-Insurance Company challenging the quantum, submits that the injuries sustained by the claimant and the percentage of disability deposed by PW2, who is not a treated doctor, is on the higher side. He submits that RW1, who is a treated doctor, has been examined. He has deposed that the inmate has not sustained any injury or fracture, which is of grievous nature.

On the contrary, the learned counsel appearing for the claimant, submits that as per the deposition of RW1 who is the treated doctor, the injured has suffered grievous injuries. Exhibit P3 is the wound certificate issued by the Government Hospital where x-ray facility is not available. The treating doctor has deposed that the injured has suffered 20% disability and the Tribunal has assessed the disability at 10%.

Upon hearing the learned counsel for the parties and after going through the materials available on record and the discussion made by the Tribunal, in my considered opinion, the percentage assessed by the Tribunal is not on the higher side. Taking of disability at 10% cannot be said to be on a higher side by looking into other factors and the injuries sustained by the claimants. Accordingly, I do not find any good reason to consider the contention of the learned counsel for the Insurer regarding quantum and the same is rejected. As regards the contention of the learned counsel for the claimant-appellant for enhancement of compensation is concerned, the Tribunal taking into all relevant factors that the claimant has not produced any record to prove his income; the accident in question is of the year 2002 and by taking other aspects into consideration, has taken monthly income of the claimant at Rs. 2,400/- and awarded the compensation of Rs. 43,200/- towards future loss of earnings due to disability. The same is just and proper. The compensation awarded by the Tribunal under other heads is also just and proper and I do not find any good ground to interfere with the order of the Tribunal or enhance the compensation. Accordingly, MFA No. 21441 of 2008 stands dismissed.