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United India Insurance Co. Ltd. Vs. Abdul Munaf Majur HussaIn MomIn and Others - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtMumbai High Court
Decided On
Case NumberFirst Appeals Nos. 1012 and 1013 of 1980 and 224 of 1981
Judge
Reported inI(1985)ACC85; [1985]58CompCas58(Bom)
Acts Motor Vehicles Act, 1939 - Sections 95 and 96(2); Workmen's Compensation Act, 1923
AppellantUnited India Insurance Co. Ltd.;united India Insurance Co. Ltd.;raziyabi and Others
RespondentAbdul Munaf Majur HussaIn MomIn and Others;raziyabi and Others;radheshyam Babulal Jaisw
Excerpt:
.....his liability as driver had acted in contravention of his instructions in taking passengers in truck - tribunal decided that insurance company and driver liable to pay compensation to respondents - insurance policy did not cover use of conveyance of passengers for hire or reward - truck was used in breach of permit and condition of policy - driver acted contrary to instruction of owner so as not to use truck for any purpose other than for milk cans - owner cannot be held to be vicariously responsible - tribunal order erroneous to extent owner and insurance company held liable. - section 31(4) (since repealed) :[tarun chatterjee & h.l.dattu, jj] jurisdiction of high court - respondent, a government company, chartered appellants vessel to carry rock phosphate from togo to west coast..........nos. 1 to 5. aggrieved by this decision, the insurance company has filed the present appeal. the claimants have not preferred any appeal against the decision of the tribunal holding that the owner of the truck was not liable to pay the said compensation. we have thus before us only the appeal of the insurance company in this case.5. as regards appeal no. 1013 of 1980 is concerned, this is also filed by the insurance company. the claimants in that case are the heirs of the said dost mohammad. they are respondents nos. 1 to 6 in the said appeal, the owner and the driver being respondents nos. 7 and 8, respectively. in that case, on the same reasoning, the tribunal allowed the claim of rs. 50,300 against the insurance company and the driver, respondent no. 8, in favour of the.....
Judgment:

Sawant J.

1. These three appeals arise out of the same accident and are being disposed of the by this common judgment since the material facts are common. Appeal No. 1012 of 1980 arises out of an application for claim made by the heirs and legal representatives of one of the victims of the accident while Appeal No. 1013 of 1980 arises out of the application for claim made by the heirs and legal representatives of another victim of the accident. Appeal No. 224 of 1981 is preferred for enhancement of compensation by the heirs of the second victim. For the purpose of convenience, we will deal first with Appeal No. 1012 of 1980. Reference to the parties hereafter is with reference to Appeal No. 1012 of 1980.

2. This appeal is preferred by the insurer of the truck, namely, the United India Insurance Co. Ltd., challenging the liability to pay the compensation to respondents Nos. 1 to 5, who are the original claimants and heirs and legal representatives of the deceased Jamilabi. Respondent No. 6 is the owner of the truck which met with the accident in question and respondent No. 7 was the driver of the truck at the material time. The truck was insured with the appellant-insurance company at the relevant time. On May 9, 1979, the truck in question was returning in the morning with empty milk cans after delivering milk at the milk dairy at Faizpur. On this return journey, respondent No. 7, driver, allowed 35 persons to board the truck by charging them Re. 1 per head as fare to their journey from the dairy at Faizpur to Yawal. After the truck left Faizpur with 35 empty cans and equal number of passengers, within a couple of minutes and about a couple of furlongs away from the dairy, the truck turned turtle and the passengers in the truck were thrown overboard. Some of them were crushed under the truck. As a result, in all six passengers died. Two of them died on the spot. One of them was Jamilabi whose heirs, i.e., respondents Nos. 1 and 5, are the claimants in the present proceedings and the other was one Dost Mohammad whose heirs are the claimants in Appeal No. 1013 of 1980. We will deal with the facts of that case at a later stage.

3. The claim was resisted by the appellant-insurance company on the ground that the truck was insured with it only as a goods vehicle. The policy did not cover the use of the vehicle for the conveyance of the passengers for hire or reward. The truck also did not have a permit to carry any passengers, but was registered with the regional transport office as a goods vehicle. In the circumstances, the insurance company was not liable to pay compensation to the passenger-victims or their heirs who were carried in the truck contrary to the terms of the insurance policy. Respondent No. 6, the owner, denied his liability urging that the driver had acted in contravention of his instructions in taking the passengers in the truck and that when he was driving the truck, he was acting contrary to and outside the terms of his employment. The persons who boarded the truck knew that it was not a passenger vehicle and he was, therefore, not liable to pay compensation either to the victims or to their heirs and legal representatives. According to respondent No. 7, driver, he did not know that the said 35 passengers had boarded the truck and since they had boarded the truck without his knowledge or consent, he was not liable to pay compensation to the victims or the claimants on their behalf.

4. On these pleadings and the evidence on the record, the Tribunal held that the fact that the said 35 persons were travelling in the truck at the time of the accident was established; that respondent No. 7, the driver, was driving the truck at the material time, and that the said passengers had boarded the truck with his knowledge and consent inasmuch as he had also charged them Re. 1 per head for carrying them from Faizpur to Yawal. The Tribunal further held that the insurance policy covered unlimited risk and since the additional premium of Rs. 64 was paid for covering third party risks, the insurance company was liable to pay compensation. The Tribunal also held that since the driver in taking the passengers in the truck had acted against the express injunction of the owner, respondent No. 6, owner, was not liable to pay the compensation. In the result, the Tribunal held the insurance company and the driver liable to pay compensation of Rs. 6,200 to the claimants-respondents Nos. 1 to 5. Aggrieved by this decision, the insurance company has filed the present appeal. The claimants have not preferred any appeal against the decision of the Tribunal holding that the owner of the truck was not liable to pay the said compensation. We have thus before us only the appeal of the insurance company in this case.

5. As regards Appeal No. 1013 of 1980 is concerned, this is also filed by the insurance company. The claimants in that case are the heirs of the said Dost Mohammad. They are respondents Nos. 1 to 6 in the said appeal, the owner and the driver being respondents Nos. 7 and 8, respectively. In that case, on the same reasoning, the Tribunal allowed the claim of Rs. 50,300 against the insurance company and the driver, respondent No. 8, in favour of the claimants-respondents Nos. 1 to 6. In that case, however, the claimants, i.e., original respondents Nos. 1 to 6, have preferred an appeal being First Appeal No. 224 of 1981, both against the dismissal of their claim against the owner of the truck as well as for enhancement of the amount of compensation awarded to them.

6. We will first deal with a question of law which is common to both the appeals, namely, whether the insurance company, on the facts and circumstances of the case, was liable to pay the compensation as held by the Tribunal.

7. The admitted facts are that the truck had a permit under the M.V. Act, 1939, only for the purpose of running it as a goods vehicle. The insurance policy which is Ex. 56 on record did not cover the use of the truck for the conveyance of passengers for hire or reward. In fact, in specific words an injunction against such user has been incorporated in the policy itself. Proviso (c) to cl. (1) of s. II of the policy makes this abundantly clear. Section II relates to the liability to third parties and sub-cl. (i) of cl. (l) states as follows :

'(1) Subject to the limits of liability, the company will indemnify the insured against all sums including claimant's cost and expenses which the insured become legally liable to pay in respect of

(i) death of or bodily injury to any person caused by or arising out of the use (including the loading and/or unloading) of the motor vehicle.'

Then follows the proviso (c) which states as follows :

'Provided always that :.......

(c) Except so far as is necessary to meet the requirements of s. 95 of the M.V. Act, 1939, in relation to liability under the Workmen's Compensation Act, 1923, the company shall not be liable in respect of death of or bodily injury to any person (other than a passenger carried by reason of or in pursuance of a contract of employment) being carried in or upon entering or mounting or alighting from the motor vehicle at the time of the occurrence of the event out of which any claim arises.'

8. Further, the policy mentions limitations as to use, and one of the limitations stated is as follows :

'Use for the conveyance of passengers for hire or reward.'

9. This makes it abundantly clear that the policy did not cover use for the conveyance of passengers for hire or reward. The extra premium of Rs. 64 was paid only for making the insurance company's liability unlimited so far as the third party risks were concerned. Admittedly, the third parties did not include the passengers in the vehicle in view of the decision of the Supreme Court in Pushpabai Parshottam Udeshi v. Ranjit Ginning and Pressing Co. P. Ltd., : [1977]3SCR372 . The other additional premium of Rs. 24 further was paid in order to cover the risk of the driver and the cleaner as stated in endorsement No. 16. Thus, the truck being a goods vehicle, the insurance policy of the truck did not cover the risk to the passengers travelling in it. Under s. 96(2)(b)(i)(c) of the M.V. Act, 1939, the appellant-insurance company, therefore, had a valid defence to the claim. Further, the said section says that if the conditions specified in the policy is that the insured vehicle will not be used for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle no sum shall be payable by the insurer in respect of the liability arising out of the accident. This is also the view expressed by the Full Bench of the Gujarat High Court in New India Assurance Co. Ltd. v. Smt. Nathiben Chatrabhuj, : AIR1982Guj116 . This position of law is not disputed before us by any of the contesting parties. The learned member of the Tribunal has, however, saddled the insurance company with liability by misreading the terms of the policy and their implications. According to the Tribunal, since s. II of the policy dealt with liability to third parties and since the insurance company had charged additional amount of Rs. 65 for covering third party risks, the company would be liable to pay compensation to the claimants. While arriving at the said conclusion, the Tribunal has committed a basic error in confusing third party risks with the passenger risks. As has been held by the Supreme Court in Pushpabai's case : [1977]3SCR372 , the passengers travelling in the vehicle are not third parties, and, hence, the conclusion arrived at by the Tribunal that the insurance company was liable because of the said coverage of the third party risk is obviously erroneous. This is apart from the fact that, as pointed out earlier, in the present case, it was established by the insurance company that the truck was prohibited by the RTO permit to carry any passengers for hire or reward. A specific condition in the policy excluded the use of the truck for the carriage of any passengers for hire or reward. The truck was, therefore, admittedly used in breach of the permit and the condition in the policy. We are, therefore, more than satisfied that the order of the Tribunal is erroneous to the extent that it makes the insurance company liable to pay compensation to the claimants on account of the death of Jamilabi who was a passenger in the truck. This appeal, therefore, will have to be allowed and the order of the Tribunal to that extent will have to be set aside. Appeal No. 1012 of 1980 is hereby allowed and the order dated October 28, 1980, passed by the Tribunal is modified as follows :

'The petitioners' claim for Rs. 6,200 is decreed against opponent No. 2 only. Claim against opponents Nos. 1 and 3 is dismissed. The rest of the money claim is dismissed. Parties to bear their own costs. Interest at 6% per annum is granted on the sum of Rs. 6,200 from the date of the petition till the amount is realised. Award be drawn accordingly. In the circumstances of the case, there will be no order as to costs.'

11. Coming now to Appeal No. 1013 of 1980 filed by the insurance company, for the same reasons, we allow the said appeal and hold that the Tribunal's order so far as it makes the insurance company liable to pay the said amount of Rs. 50,300 to respondents Nos. 1 to 6 to the appeal will have to be set aside and is hereby set aside.

12. As regards Appeal No. 224 of 1981 filed by the claimants both against their dismissal of claim against respondent No. 7, owner, and for the enhancement of the compensation, for the reasons stated hereinafter, the appeal against the owner will have to be dismissed. We have already allowed the appeal of the insurance company, and, therefore, the appeal against the insurance company will stand dismissed at the threshold.

13. Our reasons for dismissing the appeal against the owner, respondent No. 1, to the said appeal, are as follows : The only contention advanced in support of their claim against the owner of the truck is that the truck belonged to respondent No. 1 and respondent No. 2, the driver, was admittedly in the employment of respondent No. 1 at the relevant time. It is further contended that there is no positive evidence brought on record to show that respondent No. 1, owner, had specifically prohibited respondent No. 2 from taking any passengers in the truck. On the other hand, the deposition of the driver shows that he was not so specifically prohibited by the owner of the truck. We are afraid that for fastening the liability on the owner, the negative evidence of the driver will alone not be sufficient. This is particularly so when the documentary evidence on record shows that the truck was registered and has a permit only to ply as a goods vehicle and further that it was prohibited from being used for conveying passengers either for hire or reward. What is more, the stand taken by the driver himself is that the passengers in question had boarded the truck without his knowledge. In other words, his case was that he had not taken the passengers in the truck consciously. If the owner of the truck had permitted the carriage of the passengers, then, certainly he would have come out with the positive case that he was carrying the passengers with the permission of the owner of the truck. On the other hand, his prevarication on the point shows that he was carrying the passengers slyly to make money on his own without the knowledge of the owner of the truck. The evidence also further shows that he had collected Re. 1 from each passenger to whom he gave the lift. The truck had admittedly gone to the dairy with milk cans and it was returning with the empty cans when the driver obviously tried to make a fast buck. The owner in his deposition has stated that he had never permitted the driver to carry any passengers in the truck. All that the claimants had succeeded in eliciting from the driver was a solitary sentence in his deposition where he has stated that the owner had not prohibited him from taking passengers. However, this is far from saying that the owner had permitted him to take the passengers for hire or reward. In the circumstances of the case, it will be difficult to hold that the driver had taken the passengers either under the authority of or with the knowledge or consent of the owner and that he was carrying the passengers during during the course of his employment. On the contrary, it will have to be held that the driver's act in taking and carrying the passengers in the truck was contrary to the terms of his employment, and the conveyance of the passengers was not during the course of his employment. In the circumstances, it will be difficult to hold the owner responsible even vicariously for the act of the driver. In this view we are fortified by the decision of the Supreme Court in Sitaram Motilal Kalal v. Santanuprasad Jaishanker Bhatt : [1966]3SCR527 and of the two High Courts in Machiraju Vishalakshi v. Treasurer, Council of India Mission of the Luthern Church in America, : AIR1978AP310 and Mohiddinsab Gaffarsab Kundrol v. Rohidas Hari Kindalkar [1973] ACJ 424. Shri Pandit, the learned counsel appearing for the claimants, strongly relied upon a decision of the Madhya Pradesh High Court in Narayanlal v. Rukhmanibai : AIR1979MP74 which takes the view that when the driver is not expressly prohibited from taking the passengers in the vehicle, the master, i.e., the owner, is liable for the act of the driver. Since we have taken the view in the present case that it is not possible to rely upon the evidence of the driver when he says that he was not expressly prohibited by the owner, the ratio of the said decision will not be applicable to the facts of the present cast. In this view of the matter, we have to hold that the owner of the truck is not liable and the appeal against him must be dismissed.

14. Coming now to the claimants' case for enhancement of the compensation, the Tribunal has worked out the compensation on the following basis : The deceased, Dost Mohammad, was a senior clerk in the Block Development Office of the Zilla Parishad, Jalgaon, and his monthly emoluments were Rs. 733. At the time of his death, he was 38 years old and his superannuation age was 58. The Tribunal has held that Rs. 200 or thereabout were spent by the deceased on himself, and, therefore, the balance of about Rs. 500 was available to the family. The Tribunal then took into account the family pension of Rs. 175 per month that the claimants would get and also Rs. 75 as and by way of interest on the gratuity that they would get, and deducted the amount of Rs. 250, i.e., Rs. 175 plus Rs. 75, from the monthly amount of Rs. 500 which was the dependency of the claimants, and came to the conclusion that the family would get during the period of 20 years Rs. 250 x 12 x 20 = Rs. 60,000. From that amount, the Tribunal deducted an amount equal to 25% in view of the fact that the claimants were getting one lump sum and arrived at the amount of Rs. 45,000. To this amount of Rs. 45,000, the Tribunal added Rs. 5,000 as and by way of general damages and Rs. 300 for funeral expenses, and granted an amount of Rs. 50,300 as and by way of compensation. The argument advanced by Shri Pandit on behalf of the claimants is that the deceased was in the pay-scale of Rs. 335-15-500-20-580-20-680 and at the time of his death he was drawing a salary of Rs. 500. He would have reached his maximum within nine years. This pay-scale was further subject to future revisions. So also the dearness allowance. Inasmuch as the Tribunal had taken Rs. 500 per month as the basic salary, the figures worked out by the Tribunal were very much on the lower side. It was further contended on behalf of the claimants that the Tribunal could not have taken into consideration the family pension since it is held by a Full Bench of the Madhya Pradesh High Court in Sardar Rajendrasingh v. Kashmiran Mathur [1983] ACJ 152l: [1984] 56 Comp Cas 146 and by the Punjab and Haryana High Court in Bhagat Singh Sohan Singh v. Om Sharma [1983] ACJ 203: [1984] 56 Comp Cas 236 that the family pension was not deductible from the compensation. Hence, it could not have been taken into account by the Tribunal. Hence, in the present case, the dependency rate should be taken as Rs. 500 instead of Rs. 250 per month and thus calculated, the compensation would come to Rs. 1,20,000, i.e., Rs. 500 x 12 x 20 = Rs. 1,20,000.

15. There is no doubt that to the extent the Tribunal ignored the rise in emoluments and took into consideration the family pension without finding out the terms on which the said pension was granted, the Tribunal has committed an error in calculating the compensation. Some allowance has no doubt to be made for the increase in the salary, and, therefore, the increase in the quantum that would have been available for expenses of the family.

16. As regards the family pension, there is absolutely no material before us to show the terms of the family pension. If we presume that the family pension was made available to the claimants on the same terms and conditions as was given to the family of any other Government servant, it would appear that the deceased would have been required to make some contribution to the family pension fund periodically. The family pension would further have been available to the claimants even if the deceased were to die a natural death. In that case, as held by the Madhya Pradesh and the Punjab and Haryana High Courts in the decisions cited above, it will not be permissible to deduct the amount of the family pension from the compensation payable to the claimants. Taking, therefore, into consideration the revision of the pay-scales that the deceased might have been entitled to during the course of his service, and the deduction made by the Tribunal on account of the family pension, according to us, Rs. 600 would be the proper monthly dependency rate. Calculating the compensation on the said basis, the amount of compensation works out to Rs. 600 x 12 x 20 = Rs. 1,44,000. From this amount, 50% of the amount will have to be deducted for the acceleration of the benefit. That works out the compensation to Rs. 72,000. The claimants would, therefore, be entitled to Rs. 72,000. Hence, the amount of Rs. 50,300 worked out by the Tribunal is very much on the lower side. Hence, it will have to be held that respondent No. 2 is liable to pay to claimants Rs. 72,000 instead of Rs. 50,300 as awarded by the Tribunal. Interest is granted at 6% per annum till the amount is realised.


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