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National Insurance Co. Ltd. Vs. Laxmi Devi and ors. - Court Judgment

LegalCrystal Citation
SubjectMotor Vehicles
CourtOrissa High Court
Decided On
Case NumberMisc. Appeal No. 72 of 1980
Judge
Reported inAIR1984Ori197
ActsMotor Vehicles Act, 1939 - Sections 95(1), 95(2), 110A and 110CC
AppellantNational Insurance Co. Ltd.
RespondentLaxmi Devi and ors.
Appellant AdvocateS.S. Basu, Adv.
Respondent AdvocateP.K. Misra, Adv.
DispositionAppeal dismissed
Cases ReferredVeukataraman v. Abdul Munal Sahib
Excerpt:
.....three months, then the amount should carry a higher rate of interest, i. the provisions under themotor vehicles act awarding compensation in favour of the legal representatives of a deceased or injured are ameliorative measures and the object of such legislation is to save the destitutes from vagaries of life, they having lost their sources of income must get something to fall back upon, award of higher rate of interest if the compensation is not paid within three months may act in some cases, preventing the owners of the vehicles or the insurance companies from pursuing unsuccessful appeals and saving the poor claimants from unnecessary harassments. accordingly, the extent of liability of the owner of the truck as well as that of the insurance company is governed by the provisions of..........who are the wife and children of the deceased filed an application under section 110-a of the motor vehicles act claiming compensation to the tune of rs. 50,000/-.3. the insurance company filed objection before the tribunal denying the rash ness and negligence of the driver of the truck and further it was stated that the deceased was a passenger on the truck and was being carried therein by the driver at his own risk and was not a third-party and therefore, his heirs, the claimants, were not entitled to receive any compensation from the insurance company.4. on the pleadings of the parties, the learned tribunal on consideration of the evidence on record held that the truck in question was being driven rashly and negligently in consequence of which the accident occurred. on the.....
Judgment:

G.B. Patnaik, J.

1. The Insurance Company is the appellant challenging the award of the Second Motor Accident Claims Tribunal.

2. On 30-4-1973 at 12.30 a.m., a truek bearing registration number O. R. B. 1427 met with an accident at a place called Jhargadja on the Sambalpur-Cuttack road due to rash and negligent driving of the said truck. The truck was engaged in carrying goods of the Munsif, Bbadrak, who had been transferred to Angul. The deceased was the Night-Watchman of Bhadrak Civil Court and was going in the truck to keep watch over the goods. On account of the said accident, death having occurred, the claimants who are the wife and children of the deceased filed an application under Section 110-A of the Motor Vehicles Act claiming compensation to the tune of Rs. 50,000/-.

3. The Insurance Company filed objection before the Tribunal denying the rash ness and negligence of the driver of the truck and further it was stated that the deceased was a passenger on the truck and was being carried therein by the driver at his own risk and was not a third-party and therefore, his heirs, the claimants, were not entitled to receive any compensation from the Insurance Company.

4. On the pleadings of the parties, the learned Tribunal on consideration of the evidence on record held that the truck in question was being driven rashly and negligently in consequence of which the accident occurred. On the evidence of P. W. 2. the clerk of the Munsifs Court, Bhadrak, be found that the deceased was earning Rupees 141/- per month and on the basis of his date of birth as 18-9-1947, found that he would have continued in service till his sixtieth year. Thereafter on calculation, the Tribunal found that the deceased would have earned Rs. 1,17,258/- before retirement had he not died in the accident. Half of the said amount having been deducted for personal maintenance expenses In accordance with the decision of the Supreme Court in the case of Smt. Manjushri Raha v. B.L. Gupta, AIR 1977 SC 1158, the Tribunal found the gross contribution towards maintenance of the claimants to be Rupees 58,629/- and thereafter deducting one-eighth of the said contribution on account of benefits received by the claimants on the death of the deceased and further one-sixth on account of uncertainties of life since compensation was being given on lump sum basis, fixed the net compensation payable at Rs. 41,529/-. On the evidence of the concerned officer whose goods were being earned, the Tribunal found that the deceased was accompanying the goods on behalf of the owner of the goods and, therefore, the Insurance Company must be held responsible to make the necessary payments. On these findings, the Tribunal awarded Rs. 41,529/- with interest at six per cent per annum and further directed that if the amount be not paid within three months, then the rate of interest would be ten per cent.

5. Mr. Basu appearing for the Insurance Company challenged the direction of the Tribunal regarding higher rate of interest if amount was not paid within three months on the ground that since an appeal was provided for and could be filed within three months, the Tribunal was not competent to enhance the rate of interest if the amount was not paid within three months. He argued only on first principle and was not in a position to cite any authority in support of the proposition. In my view, the Tribunal was well within his jurisdiction to direct that if the amount be not paid within three months, then the amount should carry a higher rate of interest, i.e. at 10 per cent. The provisions under theMotor Vehicles Act awarding compensation in favour of the legal representatives of a deceased or injured are ameliorative measures and the object of such legislation is to save the destitutes from vagaries of life, they having lost their sources of income must get something to fall back upon, Award of higher rate of interest if the compensation is not paid within three months may act in some cases, preventing the owners of the vehicles or the Insurance Companies from pursuing unsuccessful appeals and saving the poor claimants from unnecessary harassments. I am, therefore, of the opinion that the order of the Tribunal granting higher rate of interest if compensation be not paid within three months is not illegal in any manner and the contention of Mr. Basu must, therefore, be rejected

6. Mr. Basu then seriously urged that the deceased not being the owner of the goods nor was there on the truck in course of his employment, the claimants were not entitled to any compensation and even it compensation was awarded, it could not be more than what the claimants were entitled to under the provisions of the Workmen's Compensation Act, as contemplated in Proviso (i) to Section 95 (1) (b) of the Motor Vehicles Act Mr. Misra. the learned counsel for the claimants-respondents, on the other hand, submitted that Section 95 (1) (b), Proviso (ii) squarely governed this case and, therefore, the claimants were entitled to receive the compensation from the Insurance Company. The correctness of the rival contentions depends upon an interpretation of the provisions of Section 95 of the Motor Vehicles Act.

7. Chapter VIII of the Motor Vehicles Act deals with insurance of motor vehicles against third-party risks and makes provisions for compulsory insurance in respect of third-party risks. This was found necessary because of frequent occurrence of accidents on road and dependents of those injured or killed found it difficult to realise damages or compensation. Section 95 of the Motor Vehicles Act deals with policies and limits of liability. Under Proviso (ii) to Section 95 (1) (b). if a person is carried in a goods vehicle by reason of a contract of employment, then he is entitled to the protection of compulsory insurance under Section 95 (1) (b). The term 'contract of employment' cannot be given a restricted meaning to cover a contract of employment with the owner of the insured vehicle alone, but must be given a wider meaning so asto cover persons on the vehicle in pursuance of a contract of employment with the owner of the goods carried on the vehicle. It has been held by the Madras High Court in the case of The Venguard Insurance Co. Ltd., Madras v. Chinnammal, AIR 1970 Mad 236, that if for sufficient practical or business reasons, the person must be on the vehicle in pursuance of a contract of employment and such person is injured, then he would come within the purview of Section 95 and would be entitled to receive compensation. The aforesaid Madras view gets support from the decision of the Punjab High Court in the case of Oriental Fire & General Insurance Co. Ltd., New Delhi v. Smt. Gurdev Kaur, AIR 1967 Punj 486 (FB). In. the case of Hukam Chand Insurance Co. Ltd. v. Badruddin, 1980 ACJ 164, a learned single Judge of the Madhya Pradesh High Court followed the Madras and Punjab High Courts, referred to earlier, and held :--

'.....,... I, therefore, hold that the risk of the servants of the owner of the goats which were being transported in the vehicle was covered under Section 95 (1) (b), Proviso (ii) and hence the appellant-Insurance Company is liable to pay the compensation.'

In view of the aforesaid legal position, the deceased being sent by P. W. 4, who had hired the vehicle in question, to accompany his goods, is entitled to protection of his risk being covered under, Section 95 (1) (b), Proviso (ii) and accordingly, Mr. Basil's contention is liable to be rejected.

8. The next submission of Mr. Basil is that the claimants are entitled only to the maximum compensation awardable under the provisions of the Workmen's Compensation Act as provided under the Proviso (i) to Section 95 (1) (b) of the Motor Vehicles Act. In support of this contention, reliance has been placed on the decision of this Court in the case of Orissa Co-operative Insurance Society Ltd. v. Sarat Chandra Champati 1975 ACJ 196 : (1976 Lab IC 371) and the decision of the Madras High Court in the case of Veukataraman v. Abdul Munal Sahib, 1971 ACJ 77.

9. In the Orissa case, referred to supra, the point of controversy was whether the insurer was liable to pay compensation where the policy of insurance was a third party one taken under Section 95 (1) of the Motor Vehicles Act in respect of persons not expressly mentioned in Chap. II. In that case, the contention of the InsuranceCompany that a proceeding under the Motor Vehicles Act would not be maintainable since the deceased was entitled to receive compensation under the Workmen's Compensation Act, was negatived. In my view, therefore, the aforesaid decision has no application to the present case.

10. The Madras case on which the learned counsel for the appellant placed reliance was on the issue as to whether the legal representatives of the deceased workman were entitled to take recourse to the provisions under Section 110-A of the Motor Vehicles Act in view of their entitlement to get compensation under the Workmen's Compensation Act and the Court answered in the affirmative. I am not concerned with that problem in the present case. The deceased in this case was not a workman under the owner of the vehicle and, therefore, his legal representatives are not entitled to claim compensation under the Workmen's Compensation Act. The deceased was a third party who was travelling in the truck under the contract of employment with the owner of the goods which were being transported for which the vehicle had been hired. Accordingly, the extent of liability of the owner of the truck as well as that of the Insurance Company is governed by the provisions of the Motor Vehicles Act and is not in any way limited by Section 95 (2) (a) or the provisions of the Workmen's Compensation Act. Consequently, the contention of Mr. Basu, the learned counsel for the appellant, is devoid of any force.

11. In the result, therefore. I do not find any merits in this appeal which is accordingly dismissed with costs.


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