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National Insurance Co v. William Jenifar - CMA.No.575 of 1998  RD-TN 950 (14 March 2007)
IN THE HIGH COURT OF JUDICATURE AT MADRAS
THE HONOURABLE MR.JUSTICE P.D.DINAKARAN
THE HONOURABLE MRS.JUSTICE CHITRA VENKATARAMAN
C.M.A.No.575 of 1998
National Insurance Company Ltd.
Neyveli. ...Appellant versus
1. William Jenifar Ajitha alias Jenifar Leo
2. Anthony Xavier
3. Tmt.Reeta Mary
4. Neyveli Lignite Corporation
rep. by its Secretary
Block No.I, Neyveli. ...Respondents -----
PRAYER: Civil Miscellaneous Appeal filed under Section 173 of the Motor Vehicles Act, 1988, against the order dated 17.11.1997 made in M.C.O.P.No.633 of 1994 on the file of the Motor Accidents Claims Tribunal (Sub Judge), Cuddalore. -----
For appellant : Mr.K.Kannan For respondents-1 and 3 : Mr.P.Mani For 4th respondent : Mr.N.A.K.Sarma -----
This appeal is by the Insurance Company challenging the award granted by the Tribunal dated 17.11.1997. The accident occurred on 16.4.1994 at 9.30 a.m. The deceased was working in the fourth respondent's concern, earning about Rs.4,000/- every month. The van belonging to the fourth respondent was insured with the appellant herein. There is no denial of the fact that the driver had a valid driving licence. In an application for compensation by the wife and the parents of the deceased, the appellant herein disputed their liability to pay the compensation claimed at Rs.30,00,000/-, but restricted to Rs.15,00,000/-.
2. A counter affidavit was filed by the fourth respondent, Neyveli Lignite Corporation, who was the first respondent in the M.C.O.P. This respondent had stated that the vehicle involved in the accident was insured with the appellant herein and that was used primarily for transporting the employees. It was also stated therein that this respondent could not use it for any other purpose. They also stated that the appellant, second respondent in the M.C.O.P., was liable to compensate, having regard to the valid policy existing. They also stated that the accident occurred while going along with the lake; that the van lost control due to the steering rod breaking away.
3. A counter affidavit was filed by the appellant herein as the second respondent. Since the employer had not paid additional premium, they denied their liability. They also stated that the van was to be used only for the purpose of transporting their employees. Referring to the policy, the appellant stated that Section 147(1)(b) of the Motor Vehicles Act, 1988, was for the public transport system and that the van involved in the accident was a private carrier. Consequently, the Insurance Company denied its liability to make the payment. They also contended that the deceased was a gratuitous passenger. In the circumstances, they prayed for rejecting the claim as far as the Insurance Company was concerned. They also stated that the Neyveli Lignite Corporation, the fourth respondent herein in this appeal, ought to have taken proper care and caution to allow the vehicle to be driven by a person knowing fully well the rules and regulations under the Motor Vehicles Act. For violation of the policy terms, the Neyveli Lignite Corporation, who is the fourth respondent, had disentitled themselves from making the appellant liable to pay the compensation. In any event, they submitted that the compensation claimed was excessive. An additional counter affidavit was also filed by the Insurance Company that the driver was exonerated in the criminal case filed against him. They also stated that the accident did not occur in a public place and hence, the Motor Accidents Claims Tribunal did not have the jurisdiction.
4. By order dated 17th November 1997, the Tribunal, however, granted a compensation of Rs.10,80,000/- with interest payable at 12 per annum.
5. On the question of compensation, the Tribunal came to the conclusion that the accident occurred due to the negligence and rash driving of the driver. The Tribunal also noted that in the enquiry conducted by the Neyveli Lignite Corporation, the fourth respondent herein, had not arrived at a clear finding. Although the proceedings were marked as Ex.R8, applying the decision reported in 1996 ACJ 746 (ORIENTAL INSURANCE CO. LTD. Vs. RENU ACHARYA), the Tribunal held that the respondent ought to have filed the necessary Motor Vehicle Inspector's report that the accident occurred due to the mechanical failure.
6. On the question of the contention of the Insurance Company that the accident occurred in a private place and not in a public place and hence not liable to pay compensation, the Tribunal noted the decision reported in 1996 ACJ 1224 (CHAIRMAN, THE TRUSTEES OF THE PORT OF MADRAS Vs. SUGANESAN & CO. AND ANOTHER) and held that the place where the accident occurred was a public place. The Tribunal also considered the contention that the accident occurred while the deceased was travelling in the course of his employment; consequently, the employer alone was liable to pay the compensation. In this connection, the Insurance Company relied on the decisions reported in AIR 1982 Madras 151 (NATIONAL INSURANCE CO. LTD. Vs. MAHADEVAYYA), 1993 (2) ACC 396 (RASHBIHARI PRASAD AND OTHERS Vs. PARBATI KEDIA AND OTHERS), 1977 ACJ 343 (PUSHPABAI PURUSHOTTAM UDESHI AND OTHERS Vs. RANJIT GINNING AND PRESSING CO. AND OTHERS), 1982 ACJ 261 (UNITED INDIA FIRE & GENERAL INSURANCE CO. LTD. Vs. M.S.DURAIRAJ) and an unreported judgment in C.R.P.No.1476 of 1995 dated 29.11.1996 (NATIONAL INSURANCE COMPANY LTD. Vs. RANGASAMY AND ANOTHER). The Tribunal also referred to the decision relied on by the Management in 1996 ACJ 722 (ORIENTAL FIRE & GENL. INSURANCE COMPANY LTD. Vs. SHAHJAHAN BEGUM AND OTHERS), 1996 ACJ 45 (ORIENTAL INSURANCE CO. LTD. Vs. GANGAVARAPUR PADMAVATHI AND OTHERS) and 1996 ACJ 1178 (B.V.NAGARAJU Vs. ORIENTAL INSURANCE CO. LTD.) that the accident occurred only in a public place that even if there was a slight violation, the Insurance Company was liable to make the payment. The Tribunal held that the Insurance Company could not exonerate itself by referring to the terms and conditions and that the Insurance Company was liable to pay the compensation to the unfortunate victims; that on some excuses stated, the Insurance Company, as such, could not escape from its liability as per the terms of the policy; consequently, the appellant was liable to pay the compensation. The Tribunal also noted that the fourth respondent had paid the necessary premium on the policy taken.
7. On the question of compensation, the Tribunal noted that the deceased was a Junior Engineer earning a sum of Rs.3,500/- per month and that at the time of the hearing of the petition, the persons who were employed along with the deceased, were promoted, earning a sum of Rs.7,000/-. The Tribunal also referred to the evidence given by the wife of the deceased. On behalf of the fourth respondent, R.W.2, one Murugesan, who was working in the Accounts Section, stated that the deceased joined as Second Grade Junior Engineer in the year 1988 and that he was earning a sum of Rs.4,108/- as gross monthly salary; that the deceased was at the 86th rank in seniority and 12 persons had already been granted the promotion. The Tribunal further noted that at the time of the accident, the deceased was 30 years old, as per Ex.P2. Ex.P6, showed that the deceased was qualified in Civil Engineering and he was a Diploma Holder in A.M.I.E. Going by Exs.A7 and A8, the Tribunal held that there was every possibility of the deceased getting a further promotion to reach the post of Superintending Engineer; that he would have had another 30 years of service; hence, the Tribunal applied the multiplier 18 and arrived at the contribution of Rs.5,000/-, taking his possible monthly earnings at Rs.7,500/- and fixed the contribution at Rs.10,80,000/- with 12 interest per annum with Rs.9,00,000/- to the widow of the deceased and Rs.1,80,000/- to the third claimant, mother of the deceased and the father was not entitled to any compensation.
8. Aggrieved by the liability fastened on the Insurance Company, this appeal is preferred, contending that the vehicle was insured only for third party risk; that the passenger under the private service carrier, namely, the employee of the Neyveli Lignite Corporation Ltd., was not covered under the terms of the policy. The appellant also submitted that no additional premium was paid. In the absence of the policy to cover the risk of a passenger in a private service carriage, there was no legal basis for fastening the liability on the Insurance Company. They also stated that the driver did not have a valid driving licence; hence, it was a breach of the terms of the policy. They also questioned the compensation paid, fixing the contribution at Rs.5,000/- per month.
9. Learned counsel appearing for the appellant submitted that the Tribunal erred in overlooking the provisions of Section 147; that if at all there is a cover, it could only be for public service vehicle, and that too in the case of a driver or a cleaner; consequently, the Tribunal overlooked the decision of the Apex Court. In this connection, he referred to the decision of the Supreme Court reported in AIR 1977 SC 1735 (PUSHPABAI Vs. RANJIT G. & P. CO.) to emphasize on the fact that the fourth respondent alone is vicariously liable for the acts of its servant, acting in the course of his employment in a negligent manner. The car involved in the accident was owned by a company driven by the employer's driver. Referring to the provision of Section 95(a) and 95(b)(i) of the Motor Vehicles Act, 1939, as amended by Act 56 of 1969 that the Act did not require the user of the motor vehicle to insure in respect of liability for death or bodily injury to the passengers of the vehicle, except the vehicle in which the passengers were carried for hire or reward, the Apex Court pointed out that it was not required that the policy and insurance "should cover risk to the passengers who are not carried for hire or reward", as under Section 95, the risk of a passenger in a vehicle who is not carried for hire or reward is not required to be insured. The plea of the learned counsel for the Insurance Company was accepted and the Insurance Company was held not liable under the requirement of the Motor Vehicles Act. The Apex Court also held that the insurer could always have a policy covering risks who were not covered by the requirement of Section 95. On the construction of the policy, the Apex Court held that the Insurance Company was not liable to compensate the liability of the employer, except to the extent of Rs.15,000/-. Learned counsel also referred to the decision reported in JT 2002 (10) SC 162 (NEW INDIA ASSURANCE COMPANY LTD. Vs. ASHA RANI) in support of his plea that the policy did not cover the case of a gratuitous passenger. Referring to the agreement under the present Act, learned counsel brought to our attention paragraph 26 of the said judgment and Section 147 of the Motor Vehicles Act, 1988, prescribing compulsory coverage against the death or bodily injury of a passenger of a public service vehicle. The proviso also covered compulsory coverage in respect of drivers and conductors of public service vehicles and that the liability as regards the employees carried in a goods vehicle could not be limited to the liability under the Workmen's Compensation Act. The owner of a passenger vehicle may not pay premium for covering the risk of the passenger. In the circumstances, he submitted that the decision would have an application to the case on hand. Learned counsel also referred to the decision reported in AIR 1989 Karnataka 104 (MANAGING DIRECTOR, KARNATAKA POWER CORPN. LTD. Vs. GEETHA) that considering the fact that the claimant had the benefit under the Workmen's Compensation Act, any remedy granted under the Motor Vehicles Act, 1988, are to take note of the compensation granted under the Workmen's Compensation Act. A remedy having thus already exhausted as provided under the Workmen's Compensation Act, it is not open to the claimant now to come under the Motor Vehicles Act also. In this connection, he referred to the decision reported in 96 LW 581 (PREMIER INSURANCE CO. LTD. Vs. C.THOMAS).
10. Learned counsel for the respondent, however, placed reliance on the decision reported in 2004 ACJ 1266 (SHARAD GANPAT DESHMUKH Vs. KUNDA ASHOK POLADE) in support of the plea that the mere receipt of the compensation under the Workmen's Compensation Act without a claim thereof would not take away the right of the claimant to claim compensation under the Motor Vehicles Act. He also placed reliance on the decision reported in 1988 ACJ 251: AIR 1989 Karnataka 104 (MANAGING DIRECTOR, KARNATAKA POWER CORPN. LTD. Vs. GEETHA) relied on by the appellant and 2004 ACJ 190 (NEW INDIA ASSURANCE CO. LTD. Vs. GEETA SINHA) to sustain the award granted in his favour. Learned counsel appearing for the fourth respondent also placed reliance on the policy cover and submitted that the inhibitions under Section 147 cannot apply to the vehicle belonging to persons like the fourth respondent. He also highlighted the fact that the vehicle was used wholly for the purpose of carrying the employees as a part of the welfare measure introduced and that, as such, the employees cannot be equated to gratuitous passengers travelling in a public vehicle. He emphasized on the fact that it is not a public carrier and it has not been denied by the Insurance Company. He also referred to the terms of the policy and submitted that there are no violations of the terms and conditions. In the light of the said circumstances, he submitted that the Tribunal had correctly arrived at the conclusion on the question of the Insurance Company's liability to pay the compensation.
11. On the question of the liability of the Insurance Company, heard Mr.K.Kannan, learned counsel for the appellant.
12. It may be seen that the vehicle was admittedly not a public carrier but one run by the fourth respondent for the purpose of carrying its employees. Considering the distinct circumstances herein that the vehicle is that of the employer run for the purposes of the staff, one cannot equate it to a public carrier carrying gratuitous passengers travelling in a goods vehicle or otherwise. Going by Section 147 that it refers to a public service vehicle, the reliance placed on the decisions relating to a public service vehicle carrying passengers in violation of the terms of the policy, have no relevance. Going by the provisions of Section 147 of the Motor Vehicles Act, it is clear that the exceptions given therein will not cover the case of a private carrier. In this connection, the decision referred to by the learned counsel for the appellant reported in AIR 1999 SC 3430 (HINDUSTAN AERONAUTICS LTD. Vs. REGISTERING AUTHORITY) needs to be noted. This case relates to the payment of a higher rate of tax under the Orissa Motor Vehicles Taxation Act in respect of private service vehicles, which were used as an amenity extended to the employees and their children. The Apex Court held that such vehicles could not be treated as being plied for hire or for reward and did not attract additional levy of tax. Learned counsel also referred to the decision reported in AIR 2000 Allahabad 85 (A.I.P. SCHOOL'S WELFARE SOCIETY, GHAZIABAD Vs. STATE OF U.P.) in support of his contention that the vehicle being a private service vehicle, in the absence of any additional premium paid, the Insurance Company was not liable.
13. He also referred to the decision reported in AIR 2003 SC 607 (NEW INDIA ASSURANCE LTD. Vs. ASHA RANI) that a person suffering an accident travelling as a gratuitous passenger in a goods vehicle is not to be entitled for a compensation. We do not find any ground to accept these decisions as supporting the cause of the appellant. On the other hand, going by the decision of the Supreme Court, given the character of the vehicle as a private carrier vehicle used only for the purpose of transporting the staff, it is clear that the vehicle is a private carrier and that an insurer can always take a policy to cover the risk. An insurance cover is a matter of contract between the insured and the insurer. As held in the decision reported in AIR 1977 SC 1735 (PUSHPABAI Vs. RANJIT G. & P. CO.), the clauses in the insurance policy clearly support the case of the fourth respondent. A reference to the policy taken marked as Ex.R3, at Clause 4, reads as follows: " Except so far as is necessary to meet the requirements of the Motor Vehicle Act, 1988, the Company shall not liable in respect of death 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 or entering or mounting or alighting from the Motor Vehicle at the time of the occurrence of the event out of which any claim arises. "
14. Considering the said clause, it is clear that the claim of the respondent is clearly covered under the terms of the policy.
15. Learned counsel for the respondents-referred to the decision reported in 2004 (1) TNMAC 146 (NATARAJAN Vs. D.CHANDRASEKARAN & OTHERS) and to impress on the fact that the liability of the Insurance Company could be statutory or contractual. Learned counsel for the respondent also referred to the decision reported in (2006) 2 MLJ 422 (SC.) (UNITED INDIA INSURANCE CO. LTD. Vs. TILAK RAJ). to impress on the fact that even under the 1939 act the legal position was that unless there was a specific coverage of a risk pertaining to a passenger in the policy, the insurer wa not liable even though the present Act provides a statutory cover in respect of gratuitous passengers as under Section 147(1)(b), yet, considering the terms of the policy, it being taken with clause (4) incorporated as referred to above, the liability is bound to be borne by the Insurance Company. We agree with the contention of the respondent that with a specific clause found in the policy that it cover a case of death or bodily injury to a person carried in the vehicle by reason of and in pursuance of the contract of employment, the contention put forth solely on the provisions as it stands today in Section 147 cannot be accepted.
16. It may also be noted that as regards the contention that the accident did not occur in a public place, the decision of this Court reported in 1999 ACJ 1520 (UNITED INDIA INSURANCE CO. LTD. Vs. PARVATHI DEVI) would cover the case in favour of the respondents. A public place would cover even those places of private ownership where members of public have an access whether free or controlled in any manner whatsoever. A Full Bench of this Court referred to the decision of the Bombay High Court reported in 1988 ACJ 674 (PANDURANG CHIMAJI AGALE Vs. NEW INDIA LIFE INSURANCE CO. LTD.), wherein, any accident occurred in the area of an industrial establishment is held to be a public place, having regard to the definition of Section 2(24) of the 1939 Act. In the light of the interpretation given by the Full Bench of this Court, we do not find any reason to accept the case of the appellant that the accident occurred in a private place and hence not liable for paying the compensation. Having regard to the above, we reject the case of the appellant herein.
17. Learned counsel for the appellant submitted that having regard to the claim for receiving compensation under the Motor Vehicles Act, any payment under the Motor Vehicles Act will have to take note of the compensation paid under the Workmen's Compensation Act and the balance alone need to be considered for payment. As rightly submitted by the learned counsel for the appellant, over which the respondents also could not raise a dispute, following the decision of the Karnataka High Court reported in AIR 1989 Karnataka 104 (MANAGING DIRECTOR, KARNATAKA POWER CORPN. LTD. Vs. GEETHA), the Insurance Company, appellant herein, shall pay the amount ordered by the Tribunal, after deducting the compensation paid under the Workmen's Compensation Act. This amount shall carry interest at 12 per annum, as ordered by the Tribunal. The Civil Miscellaneous Appeal is dismissed. There will, however, be no order as to costs. ksv
The Sub Judge
The Motor Accidents Claims Tribunal
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