Partly allowed

The Oriental Insurance Company Limited v. Thakurram

Chhattisgarh HC11 Dec 2024MAC/1256/2016

Case brief

AI extract

What is this about?

The High Court allowed the insurance company's appeal in part. It held the insurer not liable to pay directly but to pay first and recover from the owner/driver. It also quashed the award of penal interest, limiting it to 6% simple interest.

What did the court decide?

Appeal allowed in part; impugned award modified; insurer to pay compensation and recover from owner/driver; interest reduced to 6% per annum simple interest only.

The Oriental Insurance Company Limited Vs Thakurram — Cheque Dishonour | Chhattisgarh HC (2024)

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Digitally signed by ANJANI KUMAR ALLENA Date: 2024.12.20 10:33:55 +0530 HIGH COURT OF CHHATTISGARH AT BILASPUR

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NAFR

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MAC No. 1256 of 2016

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The Oriental Insurance Company Limited Manendragarh Road, Near To Ambedkar Chowk, Ambikapur, District- Sarguja, Chhattisgarh,.......(Insurance Company)

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... Appellant

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versus

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1 - Thakurram S/o. Shankar, Aged About 35 Years,

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2 - Bhishm, S/o. Thakur Ram, Aged About 15 Years

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3 - Fulkunwar, D/o. Thakur Ram, Aged About 14 Years

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4 - Pitambar, S/o Thakur Ram, Aged About 12 Years

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Appellants No.2 to 4 are minors Through Guardian, Next Friend Father,

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All Caste- Urao, R/o- Village- Bankipur, Thana- Gandhinagar, Tehsil- Ambikapur, District- Sarguja, Chhattisgarh,.......(Claimants)

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5 - Surendra Kumar Pandey, S/o. Jairam Pandey, R/o-Village- Lakhanpur, Thana And Tehsil- Lakhanpur, District- Sarguja, Chhattisgarh,......(Vehicle Owner)

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6 - Parmeshwar Rajwade, S/o. Shri Fatthu Ram Rajwade, Aged About 25 Years Occupation- Driver, R/o- Village- Bharatpur, Thana And Tehsil- Lakhanpur, DistrictSarguja, Chhattisgarh,.....(Vehilce Driver)

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... Respondents

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For Appellant : Shri Sudhir Agrawal, Ms. Prerna Agrawal and Shri Shashank Agrawal, Advocates. For Respondents 1 to 4 : Shri Abhinav Dubey appears on behalf of Shri Sunil Tripathi, Advocate. For Respondents 5 & 6 : Shri S.D.Singh, Advocate.

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(HON’BLE SHRI JUSTICE RADHAKISHAN AGRAWAL) JUDGMENT ON BOARD

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12/12/2024

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Heard.

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This is insurer’s appeal seeking exoneration from its liability to pay compensation awarded by the 3^rd Additional Motor Accidents Claims Tribunal, Ambikapur, Suguja (CG) (for short ‘the Tribunal’) in AMACT No.162/2011

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vide award dated 13.05.2016. Parties to this appeal are referred herein as per their description before the learned Claims Tribunal.

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As per the pleadings of the claim application, the accident occurred on 09.09.2010 when Tractor bearing registration No.C.G.15/A/8544 and Trolley No.C.G.15-A/8545 respectively, in which, the deceased – Dino Bai was travelling from Bakipur to Sukhri, was being driven by its driver / Nonapplicant No.2 in a rash and negligent manner, due to which, the deceased fell down from Tractor and died during course of treatment on 10.09.2010.

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On account of death of deceased, a Claim Petition was preferred by the claimants/respondents No.1 to 4 under Section 166 of the Motor Vehicles Act, 1988 (for short, the Act of MV Act) seeking total compensation of Rs.20,38,000/- on various grounds stating, inter alia, that the deceased used to earn Rs.4,500/- per month by working as labourer.

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The claim application was resisted by the Non-applicants on various grounds including that the Non-applicant No.3insurance company taking a plea that there is violation of terms and conditions of the insurance policy.

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Learned Claims Tribunal framed issues on the basis of pleadings and decided the same in favour of the claimants/respondent No.1 to 4 herein in Clam Case and awarded the compensation of Rs.6,37,000/- along with interest @ 6% per annum from the date of filing of application till its realisation within one month from the date of award, else, the interest shall carry 9% per annum, while making the Non-applicants jointly and severally liable to indemnify the compensation.

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Shri Sudhir Agrawal, learned counsel for the appellant/insurance company submits that the learned Claims Tribunal has not appreciated the evidence on record properly. He further submits that on the date of incident, though Tractor-Trolley was insured with the appellant/insurance company, but the deceased was travelling in the Tractor as gratuitous passenger and as per the finding of the learned Claims Tribunal, on the date of accident, the

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driver/Non-applicant No.2 caused the accident, thus, the finding itself shows that the deceased was traveling in the Tractor being driven by its driver/Nonapplicant No.2 in a rash and negligent manner. He further submits that claim petition and F.I.R. (Ex.P.2) would also clearly reveal that the deceased was travelling in the Tractor whereas, as per the registration certificate of Tractor & Trolley, the seating capacity of the Tractor is only one, i.e., exclusively for driver and there is no seating capacity in trolley. In this connection, he placed reliance upon a decision rendered in the matter of Oriental Insurance Company Limited through Divisional Manager, through its Asstt. Manager vs. Shyam Bai and others reported in 2024 SCC Online Chh 1521 and that of the decision of coordinate Bench of this Court passed on 15.07.2020 in MAC No.714/2012 (The Branch Manager, the New India Assurance Company Limited vs. Surendra Patel and others). He next contends that the learned Claims Tribunal has awarded penal interest, which is not sustainable in view of the decision of the Supreme Court in the matter of National Insurance Co. Ltd. vs. Keshav Bahadur and others reported in (2004) 2 SCC 370.

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On the other hand, Shri Abhinav Dubey, learned counsel for respective respondents 1 to 4 submit that although there is no appeal filed on behalf of the claimants against the impugned award, but the learned Claims Tribunal, after proper appreciation of evidence, has rightly awarded the compensation in favour of claimants and against Non-applicants, which does not call for interference.

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Shri S.D.Singh, learned counsel for respondents No. 5 & 6 submits that the Tractor-Trolley was insured with the appellant/insurance company on the date of accident and as per the copy of insurance policy of Tractor-Trolley, the seating capacity was shown to be 1 + 1 including driver, therefore, the deceased was covered under the insurance policy. He placed reliance on a decision of the Supreme Court in the matter of Kishan Gopal and another vs. Lala and others reported in (2014) 1 SCC 244. He further submits that the

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burden to prove that the deceased was travelling in the Tractor as gratuitous passenger was upon the insurer, however, it has failed to prove the breach of policy conditions, therefore, the Tribunal has rightly fastened upon the Nonapplicants jointly and severally to indemnify the compensation.

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I have heard learned counsel for the respective parties and perused the record of the Tribunal including the evidence adduced by the parties.

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Perusal of averments made in claim petition and the evidence of A.W.1 Thakurram, husband of deceased and A.W.2 Samaylal would clearly reveal that the claimants had specifically pleaded that on the date of accident, i.e., 09.09.2010, the driver/Non-applicant No. 2 was driving the Tractor rashly and negligently and that deceased – Dino Bai was also travelling in the Tractor as passenger and due to such rash and negligent driving by its driver, the deceased fell down and sustained grievous injuries and died on 10.09.2010. Contents of F.I.R. (Ex.P.2) would also show that report was lodged against the driver of the Tractor i.e., Non-applicant No.2 and that the deceased was sitting in the Tractor and was going from village Bakipur to Sukhri to collect wages from Rural Bank and due to rash and negligent driving of Tractor, the deceased fell down and died on account of grievous injuries. It is pertinent to mention here that neither the driver nor owner of the offending Tractor has been examined themselves and the learned Claims Tribunal, after considering the evidence on record has held in para 13 of its impugned award that on the date of accident, the driver/Non-applicant No.2 caused the accident, as a result of which, the deceased fell down and sustained serious injuries which led to her death. The said finding of the Tribunal has also not been challenged by either by the driver and owner or by the claimants. As per the registration certificate of Tractor & Trolley, the seating capacity of the Tractor is only one, i.e., exclusively for driver and there is no seating capacity in trolley. Even in the copy of insurance policy, the seating capacity was shown to be 1 + 1 including driver and that there was no seating facility for

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other person in the Tractor. In the matter of Oriental Insurance Company Limited through Divisional Manager, through its Asstt. Manager vs. Shyam Bai and others (supra), this Court has observed in para 7 which reads as

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under:-

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“7. Following the above decisions of the Supreme Court and this Court discussed above in the case of Beer Narayan Singh v. Ghanshyam reported in 2016 (4) TAC 44 it has been held by the Division of this Court as under:

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“27. As far as no passenger is permitted to be carried in the tractor or even in the trolley attached with the tractor is concerned, the tractor and the trolley were registered for agricultural purposes which only means that only agricultural produce could be carried in the tractor and trolley. A passenger is not supposed to be carried in the tractor or trolley except for the sitting capacity available in the tractor or trolley except for the driver. Therefore, the insurance company cannot be held liable for payment of compensation in a case of suffering injury or death of a person, who was travelling in the tractor and trolley as an authorized or gratuitous passenger.

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Even in the registration certificate, the sitting capacity including the driver is shown to be one. Therefore, the insurance company was rightly absolved of the liability to pay compensation.”

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Yet, in another decision in the matter of The Branch Manager, the New India Assurance Company Limited vs. Surendra Patel and others (supra), a coordinate Bench of this Court has held in paras 9 to 13 as under:-

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“9. To a pointed question raised by this Court, whether the vehicle was having any additional seats to carry any passenger other than the driver or any additional premium was collected from the owner to carry any passenger, the learned counsel for Respondents No.4 and 5 fairly conceded the same in the 'negative'. Even otherwise, the documents are available with this Court which clearly shows that as per the RC Book issued from the office of the RTO, there was only 'one seat', which was exclusively for the driver. No seat was available to carry any passenger and the policy was issued for using the vehicle only for the 'agricultural purposes' and not for carrying any passengers.

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“Tractor” has been defined in Section 2(44) of the Motor Vehicles Act, which is not manufactured or intended to carry any load (other than equipment used for the purpose of propulsion), and it becomes a 'goods carriage' when the Trolley is connected to the Tractor as in the instant case.

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As per the law declared by the Apex Court in New India Assurance Company Limited v. Asha Rani and Others reported in

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(2003) 2 SCC 223, no passenger can be carried in a goods carriage other than the owner or his representative of the goods carried or the employee of the insured. Even if such a person is to be carried within the framework of the statute, he is to be carried only in the 'cabin' of the vehicle, based on the seating capacity as permitted. This is the law declared by the Apex Court in National Insurance Company Limited v. Cholleti Bharatamma and Others reported in (2008) 1 SCC 423.

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In the instant case, the offending vehicle is a TractorTrolley, which does not have any cabin and only one seat is provided which is exclusively for the driver and nobody else. The liability of the Insurance Company in such circumstance had come up for consideration before the Apex Court and as per judgment in National Insurance Company Limited v. V. Chinnamma and Others reported in (2004) 8 SCC 697 it has been held that there cannot be any coverage and liability upon the insurer. The position has been reiterated by the Apex Court in many a judgment rendered thereafter. The law declared by the Apex Court has been followed and a judgment has been rendered in similar lines by a Division Bench of this Court as well, in Baijnath and Others v. Chandrika Prasad Sahu and Others reported in (2008) 1 CGLJ 307 (DB).

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In the above circumstance, we hold that the Tribunal has gone wrong in fixing the liability upon the shoulders of the Appellant/insurer. The liability ought to have been fixed on the Respondents No.4 and 5, the driver and owner respectively.”

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Returning to the facts of the present case in the light of aforesaid decisions, it is apparent that on the date of accident, the deceased was travelling in the Tractor as gratuitous passenger and that the driver / Non-applicant No.2 was also driving the offending Tractor in a rash and negligent manner, due to such negligence of the driver, the deceased fell down and received grievous injuries and died and that there is no seating capacity in the Tractor and seating capacity of Tractor is exclusively for driver. Be that as it may, it is clear that on the date of accident, the offending vehicle is being plied in violation of insurance policy and for that the appellant/insurer is not liable to indemnify the compensation as awarded by the Tribunal. Since the offending vehicle was held to be driven in breach of policy conditions and that neither driver nor its owner has been examined to unfold the accident and to rebut the contents of F.I.R. including evidence on record, therefore, the Nonapplicants No.1 & 2, owner and driver, are liable to pay compensation as the

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appellant insurance company could successfully discharge its duty to prove breach of policy conditions.

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In so far as penal interest as awarded by the Tribunal is concerned, similar question has come up before the Supreme Court in the matter of Keshav Bahadur and others (supra) wherein it has held in para 13, which reads as under:-

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“13. Though Section 110CC of the Act (corresponding to

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Section 171 of the New Act) confers a discretion on the Tribunal to award interest, the same is meant to be exercised in cases where the claimant can claim the same as a matter of right. In the above background, it is to be judged whether a stipulation for higher rate of interest in case of default can be imposed by the Tribunal. Once the discretion has been exercised by the Tribunal to award simple interest on the amount of compensation to be awarded at a particular rate and from a particular date, there is no scope for retrospective enhancement for default in payment of compensation. No express or implied power in this regard can be culled out from Section 110CC of the Act or Section 171 of the new Act. Such a direction in the award for retrospective enhancement of interest for default in payment of the compensation together with interest payable thereon virtually amounts to imposition of penalty which is not statutorily envisaged and prescribed. It is, therefore directed that the rate of interest as awarded by the High Court shall alone be applicable till payment, without the stipulation for higher rate of interest being enforced, in the manner directed by the Tribunal.”

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By applying the decision rendered in the matter of Keshav Bahadur and others (supra), it is directed that the rate of interest @ 6% per annum as made by the Tribunal would be applicable from the date of filing of claim petition till payment, without any stipulation for higher rate of interest, as directed by the Tribunal. The Claims Tribunal should have also been refrained from imposing penal interest.

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The case law cited on behalf of respondents No. 5 & 6 in the matter of Kishan Gopal and another vs. Lala and others, being distinguishable to the facts of the present matter, is not helpful to him.

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As regards payment of compensation, since the offending vehicle was insured with the appellant/insurance company at the time of accident, as is evident from the documents filed in criminal case, therefore, it is held that the appellant/insurance company shall first pay the amount of compensation to

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the claimant/respondent No.1 herein and then recover the same from Nonapplicants No.1 & 2, owner and driver of the offending vehicle, as per law laid down by the Supreme Court in the matter of Shamanna and another v. Divisional Manager, Oriental Insurance Company Ltd., reported in 2018 (9) SCC 650.

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In view of what has been stated above, the appeal is allowed in part and the impugned award is modified to the extent indicated above. No order as to costs. Sd/-

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(Radhakishan Agrawal) JUDGE

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Anjani

The Oriental Insurance Company Limited v. Thakurram

Case brief

What is this about?

What did the court decide?

The Oriental Insurance Company Limited v. Thakurram

Case brief

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What did the court decide?

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