Dismissed

M/S National Insurance Company Limited v. Karnataka State Road Transport Corporation

Karnataka HC20 Jun 2023MFA/5440/2012

Case brief

AI extract

What is this about?

This Miscellaneous First Appeal challenges a Motor Accident Claim Tribunal decision awarding Rs. 28,105 in compensation. The High Court held that because the lorry had a package/comprehensive policy, the insurer's liability was unlimited. Consequently, the appeal asking to limit liability to Rs. 6,000 was dismissed.

What did the court decide?

The appeal was dismissed; the Judgment and Award passed by the Motor Accident Claims Tribunal is affirmed and confirmed.

M/S National Insurance Company Limited Vs… — Contract and Commercial Disputes | Karnataka HC (2023)

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NC: 2023:KHC:21503 MFA No. 5440 of 2012

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 20^TH DAY OF JUNE, 2023

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BEFORE

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THE HON'BLE MR JUSTICE HANCHATE SANJEEVKUMAR

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MISCELLANEOUS FIRST APPEAL NO. 5440 OF 2012 (MV-I)

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BETWEEN:

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M/S NATIONAL INSURANCE COMPANY LIMITED, BRANCH OFFICE, 1^ST FLOOR, G. MUDDAPPA COMPLEX, VIVEKANANDA ROAD, TUMKUR. NOW REP BY ITS REGIONAL OFFICE, NO.144,SUBHARAM COMPLEX, M.G. ROAD, BANGALORE-560001, R/BY ITS ADMINISTRATIVE OFFICER (BY SRI. LAKSHMI NARASAPPA, ADVOCATE FOR SRI. A.M. VENKATESH, ADVOCATE)

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AND:

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Digitally signed by VIJAYALAKSHMI B N 1. KARNATAKA STATE ROAD Location: HIGH TRANSPORT CORPORATION, COURT OF KARNATAKA TRANSPORT HOUSE, CENTRAL OFFICE, K.S.R.T.C, K.H. ROAD, BANGALORE – 560 027. REP BY ITS DIVISIONAL MANAGER, TUMKUR DIVISION, TUMKUR.

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…APPELLANT

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THIRU A AROKIARAJ S/O A. ANTONY SANNY, AGED ABOUT 40 YEARS, ANNANIPOULTRY FARM,

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NC: 2023:KHC:21503 MFA No. 5440 of 2012

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GANDHIKUPPAM POST, KRISHNAGIRI DISTRICT (OWNER OF LORRY BEARING REG.NO.TN-24/A-7569)

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…RESPONDENTS

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(BY SRI. K. NAGARAJU ADVOCATE FOR R1; R2 NOTICE SERVED)

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THIS MFA IS FILED U/S 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 14.3.2012 PASSED IN MVC NO.1001/2008 ON THE FILE OF ADDITIONAL SENIOR CIVIL JUDGE AND MACT-11, TUMKUR, AWARDING A COMPENSATION OF RS.28,105/- WITH INTEREST @ 6% P. A FROM THE DATE OF PETITION TILL THE DATE OF REALIZATION WITHIN ONE MONTH FROM THE DATE OF AWARD.

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THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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This appeal is filed by the Insurance Company

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challenging the Judgment and Award dated 14.03.2012 passed in MVC No.1001/2008, on the file of the Addl. Senior Civil Judge and MACT-XI at Tumkur, on the ground that the liability of the Insurance Company is only Rs.6,000/- towards damage caused to the property of third party.

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Brief facts:

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3 - NC: 2023:KHC:21503 MFA No. 5440 of 2012

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When the bus bearing Registration No.KA-06-F-0135 was plying from Sira to Soregunte, on 19.12.2006 at 10.00., near Managi gate, the driver of the bus stopped the bus at the bus stop. A lorry bearing Registration No.TN-24-A-7569 came from behind in a rash and negligent manner and dashed the bus, as a result, the rear left side of the bus was completely damaged. The owner of the bus was earning Rs.4,000/- per day by plying the bus. As a result of the damage, the bus was idle for four days in the workshop, resulting in loss of revenue of Rs.16,000/-. Further, repair costs was about Rs.12,105. Hence, it is submitted that there is total loss of Rs.28,105/- and prayed for compensation of Rs.28,105/-.

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Respondent No.1 is the owner and Respondent No.2 is the Insurance Company. The policy is a package policy. Hence, the Tribunal held that the Respondents 1 and 2 are jointly and severally liable to pay compensation of Rs.28,105/- with interest at 6% p.a., from the date of

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4 - NC: 2023:KHC:21503 MFA No. 5440 of 2012

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award till realization. The Insurance Company is in appeal

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challenging the said Judgment.

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Heard the learned counsel for the parties and perused the records.

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Learned counsel for the appellant-Insurance Company submitted that the Insurance Company is only liable for Rs.6,000/- as per Clause ‘B’ of sub-section (2) of Section 147 of the Motor Vehicles Act (in short ‘M.V.Act’) and for the remaining amount, the owner of the offending vehicle is liable. Therefore, by placing reliance on the Clause ‘B’ of sub-section (2) of Section 147 of the M.V.Act since the Insurance Company is liable only for Rs.6,000/-, prays for modification of the Judgment and Award by directing the owner to pay the balance amount on the premium amount paid by the driver.

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On the other hand, learned counsel for respondent No.1-KSRTC submitted that in the present case, the Insurance Policy issued to the Lorry No.TN-24/A-7569 is package policy. Therefore, when admittedly the insurance

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5 - NC: 2023:KHC:21503 MFA No. 5440 of 2012

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policy is a package policy, the liability of the Insurance Company is unlimited. Therefore, the Insurance Company is entirely liable to pay the damages. Therefore, prays to dismiss the appeal filed by the Insurance Company.

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In the present case, the accident is between the KSRTC bus and the lorry. The KSRTC bus got damaged in the said accident. Therefore, the KSRTC has filed a claim petition claiming damages. Accordingly, the Tribunal has determined compensation of Rs.28,105/- by fastening liability on the appellant/Insurance Company. Considering the submission made by the learned counsel for the appellant/Insurance Company whether the liability of the Insurance Company is limited or not, what is the nature of policy issued in respect of lorry is to be considered. Admittedly, as per Ex.R1-Insurance Policy, the policy is package policy. It is not only covering risk as per Section 147 of the M.V.Act, but the coverage of risk in package policy is higher and unlimited.

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6 - NC: 2023:KHC:21503 MFA No. 5440 of 2012

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Section 147 of the M.V.Act deals with requirement of policies and limits of liability. That means, irrespective of the premium paid, it is obligation on the part of the Insurance Company to issue insurance policy covering the risk to the third party or to persons enumerated therein for injury or death caused or third party property is damaged. Since Section 147 of M.V.Act is compulsorily covering risks, that means, it is compulsory coverage statutorily to third party or to persons stated therein irrespective of amount of premium collected. Under these circumstances, if insurance policy is issued as statutory policy/liability only policy, then the Insurance Company is correct as liability is only at Rs.6,000/-. But admittedly, in the present case, the Insurance Policy at Ex.R1 is package policy, therefore, in respect of injury or death or damage caused to the third party property, the liability is unlimited since the policy is package policy.

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Section 147(2) stipulates as follows:

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NC: 2023:KHC:21503 MFA No. 5440 of 2012

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“Requirement of policies and limits of liability : (1) xxxxxxxxxxx

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(2) Subject to the proviso to sub-section (1), a policy of insurance referred to in sub-section(1), shall cover any liability incurred in respect of any accident, up to the following limits, namely:-

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(a) save as provided in clause (b),the amount of liability incurred;

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(b) in respect of damage to any property of a third party, a limit of rupees six thousand:

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Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier.”

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Therefore, even under the package policy, the

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liability of the Insurance Company at Rs.6,000/- is not correct. The liability of Rs.6,000/- in the case of damage for third party is only in respect of the policy issued compulsorily as per Section 147 of the M.V.Act, that means the insurance policy is Act policy/statutory policy/liability only policy. Under the package policy, the collection of amount of premium is higher compared to the collection of amount of premium in statutory policy.

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8 - NC: 2023:KHC:21503 MFA No. 5440 of 2012

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The package insurance policy has vide

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amplitude compared to liability only policy. Under the package policy, not only the risk of third party classified in Section 147 of M.V.Act is compulsorily covered, but the risk to the person and property as per contract entered between them, is also covered. Therefore, package policy is having more vide diameter compared to statutory only

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policy. Therefore, issuance of the package policy is a bare contract of insurance between the insurer and the insured. Therefore, by very fact of issuance of comprehensive policy, the insurer has consented to cover

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the risk in an unlimited way compared to that of Act policy. Therefore, in the present case, the Insurance Policy issued is a package policy/comprehensive policy, even in respect of damage caused to the third party property, the liability is unlimited. Therefore, the Insurance Company is liable to pay damages what is determined by the Tribunal and accordingly, the Tribunal is correct in holding the Insurance Company is entirely liable to pay the damages assessed by the Tribunal.

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NC: 2023:KHC:21503 MFA No. 5440 of 2012

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Hence, in this regard, there is no merit in the appeal filed

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by the Insurance Company.

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In the result, I pass the following:

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ORDER

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i) The appeal is dismissed.

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ii) The Judgment and Award dated 14.03.2012 passed in MVC No.1001/2008, on the file of the Addl. Senior Civil Judge and MACT-XI at

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Tumkur, is confirmed.

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iii) No order as to costs.

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iv) Amount in deposit to be transmitted to the Tribunal for disbursement.

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Sd/JUDGE

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BNV

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List No.: 1 Sl No.: 20

M/S National Insurance Company Limited v. Karnataka State Road Transport Corporation

Case brief

What is this about?

What did the court decide?

M/S National Insurance Company Limited v. Karnataka State Road Transport Corporation

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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