Shriram General Insurance Company Limited Vs Palli Mary/Palla Mary

SHRIRAM GENER A L INSURANCE COMPANY LIMITE D , REP. BY ITS DIVISIONAL MAN A GER, E-8, EPIP RIICO INDU S TRIAL AREA, SITAPURA, JAIPUR, RAJASTHAN. STATE -302 022.

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...APPELLANT

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AND

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PALLI MARY/PAL L A MARY, , W/O. LATE SAMBASI V A RAO, AGED 27 YEARS.

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PALLI NIVAS PA L LA NIVAS, S/O. LATE SAMBASIV A RAO, AGED ABOUT 15 YEARS . 2ND RESPONDENT IS BEING MI N OR , REP. BY HIS GUARDIAN A N D NEXT FRIEND 1ST RESPONDENT HEREIN.

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PALLI KOTESWA R A RAO YESOBU, S/O. PRASADA R AO, AGED 60 YEARS

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PALLI YESUDAY A MMA, W/O. KOTERSWARARAO @ YESOBU, AGED ABOUT 54 Y EARS ALL ARE RESIDENTS OF Y ARRABALEM VILLAGE, MANGALAGIRI MANDAL, GUNTUR DISTRI C T.

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P SUBRAHMAN Y AM, SAMBASIVA RAO, R/ O .D.NO. 1-87, KUNCHANAPALLI, GUNTUR DISTRICT.

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MANDEPUDI SAM S ON, S/O. BHASKAR RAO, AGED 3 6 YEARS, R/O. YERRABALEM V ILLAGE, MANGALAGIRI MAND A L, GUNTUR DISTRICT. (RESP O NDENT NO.6 NOT NECESSARY P A RTY)

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...RESPONDENT(S):

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Appeal filed under Order 41 of CPC praying that the High court may be pleased to allow this appeal by setting aside the Decree and order dated 18.052023 passed in MVOP.No.806 of 2015 on the file of the Motor Accidents Claims Tribunal -Cum- II Additional District Judge, Guntur and dismiss the MVOP.No.806 of 2015 filed by the Respondent Nos. 1 to 4 herein/ Claim Petitioners against the Appellant herein/ Respondent No.2 in the lower court and pass

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IA NO: 1 OF 2023

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of all further proceedings dated 18.05.2023 passed in MVOP No. 806 of 2015 on the file of the Motor Accidents Claims Tribunal -Cum- II Additional District Judge, Guntur including execution proceedings and pass

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Counsel for the Appellant:

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1.A JAYANTHI

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Counsel for the Respondent(S):

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The Court made the following Judgment:

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The Insurance Company/ Appellant filed the present Appeal challenging the order and decree 18.05.2023 in M.V.O.P.No.806 of 2015 on the file of the Court of the Motor Accidents Claims Tribunal-cum-II Additional District Judge, Guntur, whereby and whereunder the Tribunal granted compensation of Rs.4,79,500/- to the Respondents/ Claimants, as against the claim of 5,00,000/- for the death of one Palli Sambasiva Rao, (in short ‘the deceased’) in a motor accident that occurred on 22.06.2015.

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For the purpose of convenience, the parties will be referred to as they are arrayed before the Tribunal.

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The case of the Petitioner is briefly as follows:

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On 22.06.2015 the deceased and another driver of auto and cleaner started his truck auto at Vijayawada with A.C Boxes load to Narayana College, Nellore at 6.00 p.m and on the way the driver deceased to sleep on the top of the auto. While proceeding to Nellore on the way in the early hours of 23.06.2015 at about 3.00 a.m, near Teachers Colony, Kothagunta, Musunuru, Kavali Mandal, the driver drove the auto in a rash and negligent manner at high speed, due to which the deceased accidentally fell down on the road from the top of the auto and sustained severe bleeding injury on back of the head, and blood oozing from nostrils. The Kavali Rural Police registered a case in Crime No. 140 of 2015 under Section 304-A of IPC against the driver of the auto in the accident. Therefore, the Claimants filed a claim petition seeking compensation against the Respondents.

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Respondent No.1 filed Written Statement denying all the allegations made in the Petition and inter alia contended that there was no rash and negligent driving on the part of the offending auto. The driver of the crime vehicle having valid driving license and that the said vehicle is insured with the Respondent No.2. As such, if any liability arose that is purely against the Respondent No.2/ Insurance Company.

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Respondent No.2 filed Written Statement denying all the allegations made in the Petition and inter alia contended that to cover the risk of the codriver or cleaner, additional premium is required to be paid, but in this case, no such additional premium was paid to cover the risk of cleaner. The driver of the auto in question have no valid and effective driving license to drive the

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vehicle at the time of accident. The goods auto bearing No. AP 07 TC 2033 and the deceased was travelling as unauthorized/ gratuitous passenger in the crime vehicle at the time of accident and vehicle which was alleged to be involved in the above accident is a ‘goods carriage vehicle’ means motor vehicle constructed or adapted solely for the carriage of goods. The said auto, at the time of accident, was carrying the deceased, who comes within the ambit of unauthorized passenger in the said auto. Hence, the Respondent No.2 is not liable to pay compensation to the Claimants and requested to dismiss the petition.

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Respondent No.3 filed counter denying the material averments made in the petition and contended that at the time of alleged accident, the insurance policy valid from 23.02.2015 to 22.06.2016 was in force and Respondent No.3 is having driving license valid from 21.03.2005 to 07.07.2015. Therefore, the Respondents 1 and 2 are liable to pay compensation to the Claimants and prayed to dismiss the petition.

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Basing on the pleadings, the Tribunal framed the following issues for trial:

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“1. Whether the accident occurred due to rash and negligent driving of the driver of the truck auto bearing No.AP 07 TC 2033?

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2. Whether the petitioners are entitled for compensation amount of Rs. 5,00,000/- from which of the respondent?

3. To what relief?

Additional issues:

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3. Whether 2^nd respondent is not liable to pay compensation as deceased being the unauthorized gratuitous passenger in goods auto bearing No. AP 07 TC 2033 at the relevant time of accident?

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4. To what relief?

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On behalf of the Claimants, P.Ws 1 to 3 were examined and Exs.A1 to A5 were marked. On behalf of Respondents, RW-1 and RW-2 were examined and Ex.B1, Ex.B2, Ex.X1 and Ex.X2 were marked.

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After hearing both parties and after considering the oral and documentary evidence on record, the Tribunal partly allowed the claim petition against Respondent No.3, awarding compensation of Rs.4,79,500/- with subsequent interest @ 7.5% per annum from the date of filing of the petition till dismissed on 30.08.2018 and later they are entitled interest at 7.5% p.a from the date of restoration i.e 06.08.2019 till the date of decree and thereafter at the rate of 6% p.a till realization and directed Respondent No.2 to deposit the said amount within a month from the date of the order.

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Aggrieved by the said award, the Insurance Company preferred the Appeal on the ground that the Tribunal having held that the deceased was travelling as an unauthorized passenger in a goods vehicle ought to have exonerated the insurance company from its liability. The Tribunal erred in granting 30% of income of the deceased towards future prospects, though the deceased was not a government employee or permanent employee or self employed as per Pranay Sethi’s judgment. That the Tribunal having given a finding in Para 29 of its judgment that as per evidence of RW-1 Senior

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Assistant from Transport Department, Guntur the seating capacity of the goods vehicle is only two, one is driver and another one is registered owner, but in the crime vehicle three persons were travelling and the deceased was travelling on the top of the cabin at the time of accident as an unauthorized passenger ought to have dismissed the claim against the insurance company. Therefore, requested this Court to allow the Appeal by dismissing the Award passed by the Tribunal.

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On the other hand, learned counsel for the Respondent Nos.1 to 4 herein have supported the impugned award and prayed to dismiss the appeal.

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Now the point for consideration is:

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Whether the order of the Tribunal needs any interference?

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POINT:

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On perusal of the Award passed by the Tribunal, it can be observed that the Claimant No.1 got examined himself as PW-1, who deposed with regard to nature of the accident and categorically contended that her husband/ deceased, another driver and cleaner started in a truck auto bearing No. AP 07 TC 2033 at Vijayawada with AC boxes load to Narayana College, Nellore and while proceeding the deceased slept on upper portion of the cabin of the truck and at about 3.00 a.m on 23.06.2015 when it reached near Teachers Colony, Kothagunta, Musunuru, Kavali Mandal, the Respondent No.3 drove it in a rash and negligent manner with high speed and as such Palli Sambasiva Rao accidentally fell down on the road and as a consequence, he sustained

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grievous injuries on the back of the head and blood oozed from nostrils. Then he was taken to a government hospital, Kavali. While undergoing treatment, he died on the same day.

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The Claimants also got examined PW-2, who is an eye-witness and none other than the cleaner, who was travelling along with the deceased in the said offending vehicle and also who gave information to the Police on 23.06.2015 at 8.00 a.m. PW-2 categorically deposed that the accident occurred while travelling in an auto bearing No. AP 07 TC 2033, resulting the deceased suffered injuries and later he died while undergoing treatment. Considering the evidence of PWs 1 and 2, coupled with Ex.A1 – C.C of FIR in Crime No.140 of 2015 of Kavali Rural Police registered for offence under Section 304-A of IPC and Ex.A2 – C.C of Charge Sheet filed by Investigating Officer, after due investigation holding that the accident was occurred due to rash and negligent driving of the Respondent No.3, the Tribunal answered the issue No.1 in favour of the Claimants.

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The Insurance Company took a plea before the Tribunal that Respondent No.3 did not possess valid driving license and that the owner of the vehicle/ Respondent No.1 violated the terms and conditions by giving the vehicle to the persons, who is not having valid driving license to drive the vehicle and that Respondent No.1 is not liable to pay compensation. In the absence of oral and documentary evidence to establish the contention raised by the Respondent No.2, the Tribunal held that the deceased sustained fatal injuries in the accident, due to rash and negligent driving of the offending auto

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driven by Respondent No.3, who has not holding valid driving license as on the date of accident.

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Considering the objections raised by the Insurance Company that the driver of the offending vehicle does not possess valid driving license, which in fact in violation of the terms and conditions of the Police, the Tribunal directed the Respondents to deposit the compensation amount within one month and to recover the same from the insured/ Respondent No.1 and 3 i.e owner and driver of the offending vehicle.

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Coming to the quantum of compensation is concerned as per evidence of PW-1, the deceased was a driver and used to earn Rs. 4,500/- per month. In the absence of any evidence to that extent, the Tribunal fixed the notional income of Rs.15,000/- per year as per second schedule of Clause-6. However, relying upon the judgment in “Kishan Gopal v. Lala”¹ , wherein it was held that in 1994 notional income was mentioned as Rs. 15,000/- per annum and since then there was drastic falling down of rupee value and that the Tribunal could consider an additional amount for notional income. The Tribunal following the principle considered the notional income as Rs. 30,000/per annum. As the deceased was aged 40 years as per Ex.A3 and Ex.A4 i.e Inquest Report and Postmortem Report, an additional 25% was added towards future prospects. If the same is added, it would come to Rs. 37,500/(Rs. 4,50,000 x 25%). Though there are four dependants in the present case, the Tribunal deducted only 1/3^rd towards personal expenses of the deceased

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1 2013 ACJ 2594 (SC)

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instead of 1/4^th towards personal expenses. If 1/4^th is deducted, it would come to Rs.28,125/-p.a. After applying appropriate multiplier is ‘15’ for the age group of 40 years, the loss of dependency of the deceased would come to Rs.4,21,875/-.

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Apart from that the Tribunal awarded compensation under conventional heads viz., loss of estate Rs. 15,000/-; funeral expenses Rs. 15,000/-; consortium Rs. 40,000/- only to the Claimant No.1, who is the wife of the deceased. As the Claimant No.2, who is none other than the minor children is also entitled to claim compensation of Rs. 40,000/- towards love and affection and Claimant No.3 and 4 are the parents of the deceased, who are also entitled compensation of Rs. 40,000/- each (Rs. 80,000/-) under perennial consortium. If same is considered for claimants, it would come to Rs.1,60,000/- (Rs. 40,000/- x 4).

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The compensation awarded by the Tribunal under different heads and the amounts enhanced by this Court, are as follows:-

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S.No.	Head of the Claim	Compensation awarded by the Tribunal	Amounts now enhanced by this Court
1.	Loss of dependency	4,09,500/-	4,21,875/-
2.	Loss of estate	15,000/-	15,000/-
3.	Funeral expenses	15,000/-	15,000/-
4.	Consortium	40,000/-	1,60,000/-
	Total	4,79,500/-	6,11,875/-

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Though, it is the case of the insurance company that the deceased was an unauthorized passenger in the Auto, who died in an accident while he was travelling in the top of the auto.

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However, it is to be noted that in National Insurance Co. Ltd. v. Swaran Singh & Ors.,² the Hon’ble Supreme Court has held that if the insurer successfully proves a breach of policy condition, the insurance company may still be directed to pay compensation to the Claimants and then recover the amount from the insured (owner of the vehicle). This ensures that the rights of the third-party victim are protected and it was emphasized that insurance policies are statutorily required to protect third parties, and even in cases of breach by the insured, the insurer's liability towards third-party victims does not vanish immediately.

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In the absence of any evidence, considering the law laid down by the Hon’ble Apex Court in the decision of Swaran Singh’s case cited supra, wherein a gracious passenger/ unauthorized passenger also entitled for payment of compensation and the liability was fixed on the Insurance Company. However, the Insurance Company initially directed to deposit the said amount and thereafter to recover the same from the owner and driver of the offending vehicle by way of execution proceedings before appropriate fora.

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2 (2004) 3 SCC 297

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The Tribunal also considered the said fact and directed the Insurance

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Company to pay compensation to the Claimants and then recover the same from the Respondent No.1, who is owner of the offending vehicle.

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In the result, the Motor Accident Civil Miscellaneous Appeal is dismissed. However, enhancing the compensation from Rs. 4,79,500/- to Rs.6,11,875/- with interest at 7.5% p.a from the date of filing of the Petition till the date of realization. The compensation amount shall be apportioned among the Claimants in the same manner and ratio as ordered by the Tribunal. There shall be no order as to costs.

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Pending miscellaneous applications, if any, shall stand closed.

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___________________ JUSTICE V.SUJATHA

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Date: 07.04.2026 KK

Shriram General Insurance Company Limited v. Palli Mary/Palla Mary

Case brief

What is this about?

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Shriram General Insurance Company Limited v. Palli Mary/Palla Mary

Case brief

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