Partly allowed

United India Insurance Company Ltd. v. Sri Muniswamy

Karnataka HC25 Sept 2021MFA/10362/2018

Case brief

AI extract

What is this about?

The High Court of Karnataka allowed an Insurance Appellate Appeal partly. The Court confirmed the liability of the insurer to pay compensation despite discrepancies regarding the driver's hazardous goods license endorsement and the vehicle load. However, the award of interest was reduced from 9% to 6% per annum.

What did the court decide?

Compensation liability confirmed but interest rate reduced to 6% per annum from the date of claim petition.

United India Insurance Company Ltd. Vs Sri Muniswamy — Cheque Dishonour | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 25^TH DAY OF SEPTEMBER, 2021

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PRESENT

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THE HON’BLE MRS. JUSTICE S. SUJATHA

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AND

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THE HON’BLE MR. JUSTICE RAVI V. HOSMANI

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M.F.A.No.10362/2018 (MV)

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BETWEEN:

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UNITED INDIA INSURANCE COMPANY LTD., REGIONAL OFFICE 5^TH & 6^TH FLOORS, KRISHI BHAVAN NRUPATHUNGA ROAD HUDSON CIRCLE BENGALURU-560 001. REP. BY ITS MANAGER SRI VENKATA KRISHNA

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...APPELLANT

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[BY SRI. KRISHNA KISHORE S., ADVOCATE (PHYSICAL HEARING)]

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AND:

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SRI. MUNISWAMY AGED ABOUT 56 YEARS S/O MANIKYAM

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SMT. VIMALA AGED ABOUT 42 YEARS W/O SRI. MUNISWAMY

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SRI. RAJA M. AGED ABOUT 28 YEARS S/O SRI MANIKYAM

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ALL ARE RESIDING AT NO.197/3, 1^ST CROSS OPP: JAYALAKSHMI HIGH SCHOOL SUBBANAPALYA, BENGALURU-560 033.

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SRI. B.S.SRIDHAR PRASAD MAJOR IN AGE PROPRIETOR M/s SAI KRISHNA SERVICE STATION NO.525/5, MAHADEVAPURA RING ROAD MAHADEVAPURA BENGALURU-560 048.

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...RESPONDENTS

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[BY SRI. R.CHANDRASHEKAR, ADVOCATE FOR R1 TO R3 (VIDEO CONFERENCE)

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SRI. A.K. BHAT, ADVOCATE FOR R4 (PHYSICAL HEARING)]

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THIS MFA IS FILED UNDER SECTION 173(1) OF MOTOR VEHICLES ACT AGAINST THE JUDGMENT AND AWARD DATED: 26.09.2018 PASSED IN MVC NO.4997/2017 ON THE FILE OF THE V ADDITIONAL SMALL CAUSES JUDGE AND XXIV ACMM., (SCCH-20) BENGALURU, AWARDING COMPENSATION OF RS.40,79,000/- WITH INTEREST @ 9% P.A., FROM THE DATE OF PETIITON TILL ITS REALIZATION.

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THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 24.08.2021, THIS DAY, RAVI V. HOSMANI J., PRONOUNCED THE FOLLOWING:

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J U D G M E N T

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Challenging the judgment and award dated 26.09.2018 passed by the V Additional Small Causes Judge and XXIV ACMM, Bengaluru, (‘tribunal’ for short) in MVC No.4997/2017, this appeal is filed by the insurer under Section 173 of Motor Vehicles Act, 1989 (hereinafter referred to as ‘M.V. Act’ for short).

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Brief facts as stated are that on 21.08.2017 at 10.45 a.m. one M. Ravikumar was riding his motorcycle bearing registration No.KA-03-GF-6718 on Whitefield Road, when he was in front of Durga Mohalla Road, a tanker bearing registration No. KA-13-B-3821 came in rash and negligent manner dashed against the motorcycle, due to which Ravikumar fell down on the road. The front wheel of the lorry ran over him. He died while being taken to Government Hospital, K.R. Puram. His parents and brother filed claim petition under Section 166 of M.V. Act, against owner and insurer of the offending tanker seeking compensation of Rs.65,00,000/-.

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Upon service of notice, respondents entered appearance and filed objections. Respondent No.1 mainly denied claim petition averments, but admitted ownership of offending vehicle and submitted that it was insured with second respondent and driver of tanker was having valid and effective driving licence at the time of accident. The claim petition was also opposed as being excessive and exorbitant. In addition, second respondent - insurer alleged violation of policy terms and sought discharge from its liability on the ground that driver of lorry was not having valid and effective driving licence. It also denied valid registration certificate, permit and fitness certificate of tanker at the time of accident. Insurer also denied age, occupation, income and dependency of claimants on deceased. It admitted issuance of insurance policy. It was also specifically contended that vehicle involved in accident was a hazardous goods carrying vehicle and as per subrule (3) to Rule 9 of Central Motor Vehicle Rules, 1984, driver of vehicle did not have endorsement to drive hazardous goods vehicle on his driving licence and

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therefore, was not authorized to drive the vehicle on the date of accident. The claim petition has also opposed as highly disproportionate.

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4. Based on pleadings tribunal framed

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following issues:

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Whether the Petitioners prove that on 21.08.2017 at about 10.45 a.m., when the deceased was riding his Motor Cycle bearing No.KA-03-GF-6718, on Whitefield Road, near K.R.Puram Railway Station, when he reached in front of Durga Mohalla Road, Bangalore, at that time, a Tanker bearing No.KA-13-B-3821 driven by its driver came from behind in a rash and negligent manner, so as to endanger human life and dashed against the deceased motor cycle and caused the accident. Due to forced impact, the deceased fell down and front wheel of the Tanker lorry ran over the body and sustained grievous injuries and died on the way to the hospital?

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Whether the Petitioners are entitled for compensation? If so, how much and from whom?

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3. What award/order?

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In support of their case, claimant No.2 got

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examined herself as PW-1. They also examined a representative of employer of deceased as PW-2. Exs.P.1 to P.22 were marked. On behalf of respondent,

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3 witnesses were examined as RWs-1 to RW-3. Exs.R.1 to R.12 were marked. On consideration, tribunal answered issue no.1 in affirmative, issue no.2 partly in affirmative and issue no.3 by allowing claim petition in part and awarding compensation of Rs.40,79,000/- with interest at 9% per annum, holding that owner and insurer of the offending vehicle are jointly and severally liable to pay the compensation and directing the insurer to deposit the compensation within 60 days. Aggrieved by the award, insurer is in appeal.

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Sri. S. Krishna Kishore, learned counsel appearing for appellant – insurer submitted that accident occurred on 21.08.2017. As on date of accident, driver of tanker was not having a valid and effective driving licence to drive hazardous goods vehicle which was carrying both petrol and diesel in different compartments. The driver required to have hazardous vehicle endorsement on his driving licence. Though he had it upto 05.09.2015, it had expired on date of accident. It was submitted that driver clearly

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admitted that vehicle was carrying both petrol and diesel in different compartments at the time of accident.

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Due to the same, it stood established that driver did not have valid and effective driving licence on the date of accident, which amounted to fundamental breach of terms and conditions of policy. Without noticing the same, tribunal passed impugned award holding appellant liable to pay compensation. As it was contrary to settled position of law, it was submitted that interference was called for.

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The fact that driver did not have hazardous goods vehicle endorsement on his driving licence stood established from extract of driving licence placed on record before tribunal. It was further submitted that even rate of interest awarded was on higher side and contrary to Section 34 and sought interference by this Court. But as tribunal ignored specific contention, insurer was in appeal. On the above grounds, learned counsel sought for allowing appeal and setting aside the impugned judgment and award.

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On the other hand, Sri. A.K. Bhat, learned counsel appearing for Sri. M. Umesh, advocate for respondent No.4 - owner of insured vehicle also supported the award. Relying upon decision of Hon’ble Supreme Court in the case of Swaran Singh and others Vs. National Insurance Company Ltd., reported in (2004) 3 SCC 297, learned counsel submitted that provisions of statute being beneficial to third parties need to be interpreted as such. The meaning of words used in Section 3 which are penal cannot be induced into meaning of words used in Section 149 (2) of the Act. The said provision provides insurer with limited grounds to avoid liability. Interpreting words ‘duly licenced’ in Section 149 of the Act, Hon’ble Supreme Court had clarified that insurer cannot avoid its liability, unless, it was established that driver of offending vehicle was barred from holding driving licence of hazardous goods carrying vehicle or that insured had assigned vehicle to a driver with knowledge that he does not possess effective and valid driving licence and unless either of conditions were

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satisfied, insurer could not avoid its liability. Learned counsel has also filed notes of arguments.

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We have heard learned counsel on both sides, perused impugned judgment and award and the record. From the above, occurrence of accident due to rash and negligent driving by driver of insured vehicle resulting in death of Sri. M.Ravikumar; issuance of insurance policy and coverage on date of accident are not in dispute. Tribunal allowed claim petition in part and held accident occurred due to rash and negligent driving of insured vehicle by its driver.

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As on date of accident, deceased was 24 years of age working as a Software Engineer at Tech Mahindra RMZ Company, on monthly salary of Rs.30,000/-. Taking note of same, tribunal assessed loss of dependency in a sum of Rs.40,08,960/-. In addition, it awarded a sum of Rs.40,000/- to claimant No.2 towards loss of consortium and Rs.15,000/towards loss of estate and Rs.15,000/- towards funeral expenses i.e., in all compensation of Rs.40,78,960/-

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which was rounded to Rs.40,79,000/- with interest at 9% per annum is awarded by the tribunal.

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The claimants are not in appeal challenging award on quantum; only insurer filed appeal challenging award on liability as well as quantum. Therefore, points that arise for our consideration in this appeal are:

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1) Whether I.A.No.1/2021 filed by respondent no.4 under Order 41 Rule 27 of CPC for additional evidence deserves to be allowed?

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2) Whether tribunal was justified in passing the impugned award and holding respondent no.2-insurer liable to pay compensation as per award?

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3) Whether tribunal was justified in awarding interest at 9% per annum and , whether it requires reduction?

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Re.Point No.1:

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In the impugned award, tribunal has directed respondent No.2 - insurer to deposit the compensation. Insurer’s challenge is on specific ground of breach of terms and conditions of policy insofar as

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driver not having valid and effective driving licence to drive tanker carrying hazardous goods.

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The insured-respondent No.4, has filed I.A.No.1/2021 under Order 41 Rule 27 read with Section 151 of Code of Civil Procedure, 1908, seeking for permission to lead additional evidence to establish that at the time of accident, insured vehicle was empty and was not carrying any hazardous goods, by producing ‘density register’ maintained by petrol pump by examining manager of petrol pump. The application is filed on 16.08.2021. In the affidavit filed in support of application, it is stated that respondent No.4 examined as RW-1 before tribunal inadvertently stated during cross-examination that Tanker was carrying hazardous goods at the time of accident, though in fact, it was empty. It is further stated that he had no personal knowledge in that behalf and RW.2 – driver had stated that vehicle was empty at the time of accident and was not carrying any hazardous goods. It was further stated that by production of density register and examining manager would throw light on the fact, whether at the

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time of accident vehicle was carrying fuel or empty. It is further stated that if application is not allowed, adverse inference would be drawn against insured and there is likelihood of liability falling upon insured and as amount involved is substantial, it would cause great injustice.

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Provisions of Order 41 Rule 27 CPC provide for an opportunity to parties for production of additional evidence before Appellate Court where trial Court refused to admit evidence, which ought to have been admitted or that party seeking to produce additional evidence establishes notwithstanding exercise of due diligence, such evidence was not within knowledge and could not have despite exercise of due diligence, be produced before passing of decree or that the Appellate Court requires it to enable it to pronounce judgment or for any other substantial cause. The averments in the application and affidavit do not make out any case for allowing the application. Firstly, it is not the case of applicant that tribunal refused to admit such evidence though produced before it. It was also not established that applicant was not aware of existence of such

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additional evidence and could not after exercise of due diligence produced it before Tribunal. The applicant not only examined himself, but also examined driver of vehicle before tribunal and availed sufficient opportunity. In fact, RW-1 has stated about the density register during cross-examination by the counsel for insurer. Having failed to produce the same before the trial Court, it cannot be sought to be produced before appellate Court. It is settled law that an application for production of additional evidence cannot be used as a tool to fill gaps in evidence. Therefore, applicant has not made out any substantial case.

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It is also not established that without said evidence on record, it would not be possible for this Court to pronounce judgment. Therefore, no case for leading additional evidence is made out. Point No.1 is answered in the negative. Accordingly, I.A.No.1/2021 is rejected.

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Re. Point No.2:

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Since, main ground urged by appellant/insurer in this appeal is that driver of

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offending tanker was driving it in violation of Rules 9 (1) and 9 (3) of Central Motor Vehicles Rules, at the time of accident. Brief reference to said provision is necessary. Rule 9 (1) and 9 (3) read as follows:

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“ Rule 9 . Educational qualifications for drivers of goods carriages carrying dangerous or hazardous goods -

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(1) One year from the date of commencement of Central Motor Vehicles (Amendment) Rules, 1993, any person driving a goods carriage carrying goods of dangerous or hazardous nature to human life shall, in addition to being the holder of a driving licence to drive a transport vehicle, also has the ability to read and write at least one Indian language out of those specified in the VIII Schedule of the Constitution and English and also possess a certificate of having successfully passed a course consisting of following syllabus and periodicity connected with the transport of such goods:

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(2) ...

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(3) The licensing authority, on receipt of the application referred to in subrule (2), shall make an endorsement in the driving licence of the applicant to the effect that he is authorized to drive a goods carriage carrying goods of dangerous or hazardous nature to human life.”

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A perusal of above would indicate that a person possessing a driving licence for driving transport vehicle is required to submit application along with a certificate for having successfully passed the prescribed course and sub-rule (3) of Rule 9 mandates that on receipt of such application licensing authority shall endorse the same on the driving licence.

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But, Rule 9 (1) merely mentions about such person possessing a certificate for having passed required course in addition to possessing driving licence to drive transport vehicle. Admittedly, driver of tanker in this case possessed driving licence to drive transport vehicle, which was current on date of accident.

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In the instant case, RW-1 – owner, produced notarized copy of RC as Ex.R.1, copy of permit as Ex.R.2, copy of insurance policy as Ex.R.3, copy of work order for bulk transport by road as Ex.R.4, copy of driving licence of driver as Ex.R.5 and copy of certificate for carrying hazardous goods as Ex.R.6.

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During his cross-examination by learned counsel for insurer, RW-1, unequivocally admitted that

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as on date, time and place of accident, vehicle was loaded with petrol and diesel in different compartments. It was elicited that hazardous vehicle endorsement was valid from 22.03.2018 to 10.03.2019. Copy of extract of DL issued by K.R. Puram, RTO to RW-1 was marked as Ex.R.7. The hazardous vehicle endorsement was renewed from 31.03.2015 to 23.03.2017 which was later on extended from 22.03.2018 to 10.03.2019. While denying suggestion that as on date of accident, driver did not have valid driving licence for driving hazardous goods vehicle, RW-1 states that driver was having valid driving licence and that same was renewed from time to time and valid as on date of accident. The driver was examined as RW-2. In his examination-inchief states that at the time of accident tanker was empty and there was no fuel in it.

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RW-2 produced certificates having passed prescribed training as per Exs.R.8 to R.12 respectively. The training would be valid for a period of one year. Ex.R.12 covers period of date of accident. RW-2 further states that during the year 2016 and 2017 he had taken

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training as required under Rule 9 (1) of Rules, copies of which were produced as Exs.R.8 and R.12 respectively. During cross-examination by insurer, RW-2 deposed that there was no hazardous vehicle endorsement on his driving licence - Ex.R.7, on the date of accident.

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From Ex.R.7, it is clear that driver of insured vehicle was having valid licence to drive transport vehicle. Vehicle in question was a transport vehicle. In view of owner producing copies of registration certificates, fitness certificate and permit, only fact to be established was whether driver was having hazardous goods vehicle endorsement as on date of accident.

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Ex.R.12 certificate issued to RW-2 - driver for having undergone refresher training program for drivers of hazardous goods transportation vehicles, issued on 16.10.2016 and valid for one year would cover date of accident. Since, extent rule requires undergoing such training. Merely by failing to submit application, RW-2 would not be disqualified from holding or obtaining a driving licence to drive hazardous goods carriage vehicle. The breach was only to an extent of

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not filing application before transport authorities producing copy of training certificate and seek for renewal of endorsement.

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It is not established that RW-2 was in any other respect disqualified from holding or obtaining driving licence to drive hazardous vehicle. Said breach would not amount to fundamental breach of conditions of policy and insurer cannot not escape the liability.

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As noted above, there is dispute regarding the fact whether the insured vehicle was carrying hazardous goods at the time of accident. While RW.1owner initially admitted the vehicle was carrying petrol and diesel in different compartments, but, RW-2 driver has stated that the vehicle was empty. In case, vehicle was empty, entire issue regarding RW-2 having hazardous goods vehicle endorsement on his driving licence as academic. There is no effort on the part of the insurer to establish this fact. The tribunal while giving its finding on liability took note of the experience of the driver to drive the vehicle and that he was not disqualified from holding a driving licence for driving

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hazardous goods vehicle proceeded to place the liability upon the insurer. The finding is with reference to evidence on record. There are no good or sufficient reasons are made out to differ from the same. Hence, point no.2 is answered in affirmative.

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Re. Point No.3.

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While passing the impugned award, the Tribunal has granted interest at the rate of 9% per annum as the rate of interest on fixed deposits in Nationalised Banks was high at that time. However, thereafter rate of interest has seen reduction. Considering the same and the fact that this Court has been consistently awarding rate of interest at 6% per annum, award of interest at 9% by tribunal would not be justified. It is reduced to 6% per annum. Hence, the following

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ORDER

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i) The appeal is allowed in part only insofar as rate of interest, which shall be at 6% per annum from the date of claim petition till its realisation.

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ii) For the sake of clarity, it is held that the award and the directions issued by the tribunal in all other aspects is confirmed.

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iii) The insurance company shall deposit the amount determined as aforesaid before the Tribunal within 90 days from the date of receipt of the certified copy of the judgment and order.

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iv) Draw modified award accordingly.

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v) The Registry shall transfer the amount in deposit for disbursement along with records to the jurisdictional Tribunal forthwith.

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vi) All pending I.As stand disposed of accordingly.

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Sd/JUDGE

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Sd/JUDGE

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BVK

United India Insurance Company Ltd. v. Sri Muniswamy

Case brief

What is this about?

What did the court decide?

United India Insurance Company Ltd. v. Sri Muniswamy

Case brief

What is this about?

What did the court decide?

What the court decided

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Cases cited

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