United India Insurance Co. Ltd. vs Geetha and Others

M. Sathyanarayanan, J.—The Appellant is the Third Respondent in M.C.O.P. No. 1446 of 2002, on the file of the Court of Motor

Accident Claims Tribunal/Chief Judicial Magistrate, Erode and the present Appeal is preferred, challenging the award, on the ground of negligence

as well as on quantum. The Respondents 1 to 5 are the wife, minor son, minor daughter, mother and father of the deceased Subramani. As per the

averments in M.C.O.P. No. 1446 of 2002, Subramani was aged about 38 years and was doing the business and agriculture and he was earning a

sum of Rs. 30,000/-per month out of the said occupation.

On 5.8.2002, at about 8.30 a.m. Subramani was riding his TVS Suzuki Motorcycle bearing Reg. No. TN-39-T-1516 on Uthukuli to Tiruppur

Road on the left side of the road, observing the traffic rules. While he was proceeding to Tiruppur, near Ammaniammal house in Kodiampalayam

Four Roads, a bus bearing Reg. No.TN-33-D-5863, belonging to the 7th Respondent, driven by the 6th Respondent and insured with the

Appellant, came from West-East. The bus was driven in a rash and negligent manner and came on the wrong side of the road and hit Subramani.

Due to the said accident, Subramani died on the spot.

The Respondents 1 to 5/claimants filed the above Petition for compensation, claiming compensation of Rs. 30,00,000/- and the Tribunal vide

judgment and decree dated 30.7.2004, has awarded a sum of Rs. 19,35,000/- with interest at the rate of 9% per annum from the date of Petition,

till deposit and directed the Appellant/Insurance Company to pay the compensation and thereby indemnify the 7th Respondent.

The Appellant/Insurance Company, who was arrayed as the Third Respondent in the said Claim Petition, filed its Counter Statement contending

that the vehicle which involved in the accident was given permit only to ply in all roads in Namakkal District, with headquarters at Tiruchengode

and admittedly, the accident took place within the territorial limits of Uthukuli Police Station. Therefore, the conditions of the permit have been

violated and as per Section 66 of the Motor Vehicles Act and hence, the Insurance Company is not liable to compensate the claimants.

In the trial, the 6th and 7th Respondents herein remained ex parte. On the side of the claimants, three witnesses were examined including the

First Respondent herein and Exs.P1 to P31 were marked. On the side of the Respondents, R.W.1 and R.W.2 were examined and two exhibits

i.e. Permit and original Policy were marked.

The Tribunal, on consideration of oral and documentary evidences, held that even though the vehicle in question plied outside the territorial limits

indicated in the permit, it cannot be construed as violation of policy conditions and for the said reason, it was held that the Appellant/Insurance

Company is liable to compensate to the claimants.

In so far as the quantum is concerned, the Tribunal found that the deceased was earning not less than a sum of Rs. 15,000/- per month and after

deducting 1/3 towards Personal Expenses and applying multiplier of 16, the Tribunal, arrived at the Loss of Income at Rs. 19,20,000/-. For the

Loss of Consortium to the 1st Respondent/1st claimant and for the loss of love and affection to the minor claimants, the Tribunal has awarded a

sum of Rs. 5,000/- each in all aggregating a sum of Rs. 19,35,000/- with interest at 9% per annum from the date of Petition till deposit.

Heard the submissions of Mr. K.S. Narasimhan, learned Counsel appearing for the Appellant and Mr. N. Manokaran, learned Counsel

appearing for the Respondents 1 to 5. No relief has been claimed against the Respondents 6 and 7, as they were set ex parte before the Tribunal.

It is the submission of the learned Counsel appearing for the Appellant that since there was violation of permit conditions, the

Appellant/Insurance Company is exonerated from paying compensation. The learned Counsel appearing for the Appellant in support of his

submissions, placed reliance upon the judgment of the Hon''ble Supreme Court of India, reported; in National Insurance Co. Ltd. v. Chella

Bharathamma & ors., 2004 (2) TN MAC 196 (SC). The facts of the said case are that three persons were travelling in an auto-rickshaw, which

met with an accident on 9.5.1992 and two of them lost their lives, while one was seriously injured. Therefore, Claim Petitions were filed for

compensation. The Insurance Company resisted the claim on the ground that the Insured/owner of the auto had not obtained permit to ply the

vehicle and therefore, in terms of the policy of the Insurance, the Insurance Company is exonerated from paying compensation. The Motor

Accidents Claims Tribunal accepted the plea of the Insurance Company and however, held that the insured was liable to pay compensation. The

vires of the judgment of the Tribunal was challenged before the High Court of Andhra Pradesh at Hyderabad. The High Court held that the

Insurance Company was liable to pay compensation. The Insurance Company aggrieved by the said judgment, has preferred an Appeal before the

Hon''ble Supreme Court of India. The Hon''ble Supreme Court of India, after taking into consideration the factual aspects, in the judgments

reported in New India Assurance Co. Ltd. Vs. Asha Rani and Others, National Insurance Co. Ltd., Chandigarh Vs. Nicolletta Rohtagi and

Others, , held that ""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. It has been further held that ""Plying of vehicle without a permit, is an infraction and therefore, in terms of Section

149(2) defence is available to Insurance Company on that aspect and the acceptability of stand is a matter of adjudication"". The Hon''ble Supreme

Court of India, taking into consideration beneficial object of the Motor Vehicles Act, directed the Insurer to satisfy the Award, though in the eye of

law, it has no liability and for the purpose of recovering the amount, it need not file any separate Suit, but can straightaway levy Execution to

recover the amount from the owner.

Per contra, Mr. N. Manokaran, learned Counsel appearing for the Respondents 1 to 5 has placed reliance upon a decision of this Court

reported in National Insurance Company Vs. T. Elumalai and anothers, The said decision is pertaining a case of injury, wherein an auto-rickshaw

was involved. The Insurance Company took up a defence that there was breach of condition of policy of the policy of Insurance. Since the auto-

rickshaw had no permit to ply in the city of Madras and violated the terms of the permit by plying in Madras. The Tribunal held that there was no

breach of terms of policy and directed the Insurance Company to pay compensation and aggrieved by the same, the Appeal was preferred.

This Court in the said decision, has considered the scope of Section 96(2) of the old Act and placing reliance upon the judgment of the

Hon''ble Supreme Court of India, reported in British India General Insurance Co. Ltd. Vs. Captain Itbar Singh and Others, and the judgment of

the Gujarat High Court, reported in Bomanji Rustomji Ginwala Vs. Ibrahim Vali Master and Others, , and the judgments of Bombay High Court

and Division Bench judgment of the Karnataka High Court and also the judgment of Andhra Pradesh High Court, held that plying of the auto-

rickshaw outside the territorial limits does not amount to breach of any conditions of the policy of insurance and the policy of insurance may permit

the Insurer to avoid its liability under various circumstances. But as far as the third party risks are concerned, the liability having been created by

the statute, the Insurance Company cannot extricate itself and even if it is established that the auto was found plying contrary to permit conditions,

that cannot exonerate the Insurance Company from paying compensation.

It is submitted by the learned Counsel appearing for the Respondents 1 to 5 that even though the above cited judgment was rendered by the

Single Bench, it has got persuasive reference as the facts of the said case are similar to the present case on hand.

In the considered opinion of this Court, the judgment of the Hon''ble Supreme Court of India reported in National Insurance Co. Ltd. v. Chella

Bharathamma & Ors., 2004 (2) TN MAC 196 (SC), is not applicable to the facts of the present case, as in that case, there was no permit at all to

ply the vehicle in terms of the policy of the insurance. That apart, it has been held in the said decision that plying of vehicle without permit is only an

infraction and the acceptability of the said stand is a matter for adjudication.

The judgment reported in National Insurance Company Vs. T. Elumalai and anothers, is ipso facto applicable to the facts of this case. If there

is a breach of contract on the part of the owner of the vehicle/insured, the insurer is at liberty to proceed against the insured. But as far as the third

party risks are concerned, the liability having been created by the statute, cannot be overridden by the contract of insurance between the parties.

We are in respectful agreement with the decision reported in National Insurance Company Vs. T. Elumalai and anothers, and hence we hold

that the Appellant/Insurance Company is liable to indemnify the 7th Respondent and consequently, liable to pay compensation to the Respondents

1 to 5.

Now, coming to the question of quantum. The deceased was aged about 39 years and according to the claimants, he was having B.Com.,

Degree and was a partner in J.K.K. Exports and in Omega Embroideries and was earning a sum of Rs. 30,000/- per month. The Tribunal, after

taking into consideration the oral and documentary evidences, fixed the income of the deceased at Rs. 15,000/- per month and adopted 16 years

multiplier and after awarding sums in various heads, has fixed the compensation at Rs. 19,35,000/-.

This Court, after perusing the materials available on record, is of the view that in respect of agricultural income, it can be taken as loss of

services alone. In so far as the partnership businesses are concerned, the deceased was one of the partners and therefore, in that case also, only

loss of value of service can be taken into account.

The loss of value of service pertaining to the year 1999-2000, 2000-2001 and 2001-2002 can. be fixed as Rs. 1,54,100/-, Rs. 1,49,250/-

and Rs. 1,35,460/- respectively and the average of the same would workout to Rs. 1,46,270/- and if we deduct 10% towards income tax, it

comes to 1,32,643/-. If we deduct l/3rd towards Personal Expenses, it comes to Rs. 44211/- and the annual loss of income was Rs. 92,432/-.

The deceased was aged about 38 years and considering the loss of dependency the correct multiplier would be 15. The annual loss of income at

Rs. 92,432/- is multiplied by 15, the loss of income works out to Rs. 13,86,480/- which is rounded off to Rs. 14,00,000/-. The husband of the

First Respondent was aged about 38 years at the time of accident, he was carrying on agriculture. So, his contribution to the family from

agricultural income notionally fixed at Rs. 4,000/- per annum. Then the Pecuniary Loss would be Rs. 88,432/- + Rs. 4,000/- = 92,432/-.

The First Respondent/First claimant-wife of the deceased was aged about 24 years at the time of the accident and at the very young age, she

lost the support of her husband and therefore, she is entitled to get a sum of Rs. 25,000/- towards Loss of Consortium. The Respondents 2 and 3

are the minor children aged about 5 years and 2 years respectively. The Second Respondent is a male child and the Third Respondent is a female

child. The minor claimants at the very young age, lost love and affection of their father and therefore, they are entitled to a sum of Rs. 75,000/-

towards loss of love and affection. The Respondents 4 and 5 are mother and father of the deceased and they were aged about 65 and 70 years at

the time of accident. The parents of the deceased would have suffered very much on seeing the tragic demise of their son and they lost the support.

Therefore, it would be just and proper to award a sum of Rs. 25,000/- each to the Respondents 4 and 5 for the loss of love and affection.

In the result, the Appeal is partly allowed and the award of the Tribunal is modified as follows:

The claimants are entitled to a sum of Rs. 15,50,000/- with interest at the rate of 9% per annum from the date of Petition till deposit. But in the

circumstances, there will be no order as to costs.

At this juncture, the learned Counsel appearing for the Appellant prayed for leave of this Court to recover the said sum from the 7th

Respondent by way of paying and recovery. Since, we have already held that the liability of the Appellant/Insurance Company having been created

by the statute, the said plea cannot be accepted and therefore, we reject the said prayer. The Appellant/Insurance company after satisfying the

above said award is entitled to withdraw the balance if any available. On deposit of compensation, as modified above, the parents of the deceased

viz., Respondents 4 and 5 are entitled to withdraw a sum of Rs. 50,000/- each without furnishing any security and in so far as the award amount of

Rs. 3,00,000/- towards the share of minor claimants viz., Respondents 2 and 3, the Tribunal is directed to deposit the said sum in any one of the

Nationalised Bank till they attain majority and the First Respondent-mother-Natural Guardian and Next Friend is permitted to withdraw the

accrued interest once in three months. The First Respondent is permitted to withdraw the balance award amount without furnishing any security.