Partly allowed

Royal Sundaram Alliance v. Uthiradam @ Govindaraj

Madras HC16 Oct 2014CMA/2028/2007

Case brief

AI extract

What is this about?

Single judge dismissed insurer's appeal on liability for gratuitous passenger in comprehensive policy but enhanced compensation awarded to claimants by fixing monthly income at 5000, applying 50% future prospects, and increasing funeral expenses and loss of love and affection.

What did the court decide?

Appeal by insurer dismissed; appeal by claimants allowed in part; compensation enhanced to Rs.8,65,000; interest unaltered.

Royal Sundaram Alliance Vs Uthiradam @ Govindaraj — Motor Accident Claims | Madras HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 16.10.2014

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CORAM

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THE HONOURABLE MR. JUSTICE S. VAIDYANATHAN

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C.M.A. Nos. 2028 of 2007 & 3009 of 2014

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C.M.A. No. 2028 of 2007

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Royal Sundaram Alliance Insurance Co. Ltd., No.46, Whites Road, Chennai – 600 041. ..Appellant Vs.

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1.Uthiradam @ Govindaraj 2.Manimekalai 3.Udhayamaran 4.Malathi 5.M. Anitha

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(5^th respondent ex parte before Lower Court and hence notice may be dispensed with) ..Respondents Prayer: Civil Miscellaneous Appeal as against the judgment and decree dated 31.03.2007 in M.C.O.P No. 294 of 2005 on the file of Motor Accidents Claims Tribunal Principal District Court, Pondicherry.

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For Appellant ::Mr.M.B. Raghavan For Respondents::Mr. Ilanthiraiyan for M/s. Sai, Bharath & Ilan for R1 to 4 R5 exparte

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C.M.A. No. 3009 of 2014

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1.Uthiradam @ Govindaraj 2.Manimekalai 3.Udhayamaran 4.Malathi ..Appellants Vs.

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1.M. Anitha

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2.Royal Sundaram Alliance Insurance Co. Ltd., No.46, Whites Road, Chennai – 14. ..Respondents

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https://hcservices.ecourts.gov.in/hcservices/

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Prayer: Civil Miscellaneous Appeal as against the judgment and decree dated 31.03.2007 in M.C.O.P No. 294 of 2005 on the file of motor Accidents Claims Tribunal Principal District Court, Pondicherry.

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For Appellants:: Mr. Ilanthiraiyan for

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M/s. Sai, Bharath & Ilan

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For Respondents:: Mr.M.B. Gopalan

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J U D G M E N T

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C.M.A.No. 2028 of 2007 has been preferred by the Insurance Company challenging the award dated 31.03.2007 passed by the Motor Accidents Claims Tribunal, Principal District Court, Pondicherry, in M.C.O.P. No. 294 of 2005 on the ground of liability as well as quantum while C.M.A. No. 3009 of 2014 has been preferred by the claimants seeking enhancement of the compensation awarded.

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As far as C.M.A. No. 2028 of 2007 is concerned, a Division Bench of this Court, while considering a similar issue, in C.M.A. No. 312 of 2009, by judgment dated 04.03.2009, has held as follows:

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"27. In Motor Vehicle Laws – 13^th Edition, 2008 (Lexis Nexis Butterworths Wadhwa, Nagpur), which is a critique on motor vehicle laws by Justice K. Kannan and N. Vijayaraghavan, the learned authors on considering the large scale use of two wheelers with pillion riders and carriage of gratuitous occupants in private car have given their opinion, referring to various judgments under the head "Liability of insurer for death/injury to gratuitous passengers in private car under a Package/Comprehensive Policy", since it is a very serious and sensitive issue that requires examination, They observe as follows :

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"Motor TP cover is still governed by Tariff. What TAC had directed or expressed in 1977 still holds good and their decision to amend the Policy wording which is in use till date, continues to bind the Insurers.

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The Insurers cannot ignore the TAC decision and argue as if the Policy is framed or issued by them independently and there is no cover for occupants.

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In our opinion, the 'additional premium' argument cannot be stretched too far by the Insurers, ignoring the Policy wording and the intention to cover as stipulated by TAC."

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The learned authors also observed as follows :

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"The liability of insurer to a pillion rider and a gratuitous occupant would depend upon the cover granted by insurer being Act Policy or Package Policy. In respoect of an Act Policy such persons are not required to be covered. It is only under a Package Policy such persons are covered by the contract of insurance. Under the earlier dispenseation in Motor Vehicle Act, this position was the same. In Pushpabai's case, the Supreme Court had held that the insurer would not be liable to occupants carried in a private vehicle under a Policy. In K. Gopalakrishnan vs. Sankaranarayanan, 1969 A.C.J. 34 and National Insurance Co. Ltd. vs. V. Vasantha, 1987 A.C.J. 887, the High Court, Madras had held that insurer was not liable to pillion riders carried on a 2 wheeler under an Act Policy. Similar decisions were delivered by all courts barring a few."

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We read in this very exhaustive critique that it is not without reason or out of ignorance that insurers were satisfying the awards all along from 1977, it was on account of the fact that as against an Act Policy, the Comprehensive (now Package) Policy, occupants were expressly covered, due to a conscious change in the Policy wording after insurers were held not liable by the Supreme Court in Pushpabai's case; and that as regards the third party coverage under Comprehensive Policy prevailing before 25.3.1977,it is clear that the Comprehensive Policy before 25.3.1977 did not use the words "including occupants carried in the motor car provided that such occupants are not carried for hire or reward". These are the words in the 1978 Circular. They further observe thus :

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"There is no change in the law – Insurers are not required to cover passengers in a private car. The relevant portion of the Policy has also not changed materially ever since 1977. TAC's Circular or the amendment has not become inapplicable or irrelevant when this portion of the Policy wording is being maintained till date even under the 2002 Tariff.

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When neither the law nor the relevant wording in the Policy has changed, it would not be open to Insurers to ignore the wording and the amendment brought about by TAC consciously in 1977 itself to argue that there is no liability for occupants, contrary to what is stated in the Policy document."

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The judgments of the Supreme Court where the insurer was held not liable were cases where either the policy was an Act Policy or the gratuitous passengers were travelling in a goods vehicle or a public transport vehicle. In none of those cases, the policy was a Comprehensive Policy, nor were the passengers travelling in a private car, except in Amrit Lal Sood's case, which was approved in C.M. Jaya (supra) by a five Judge Bench. The Supreme Court clearly held that

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it will depend on the insurance policy that has been taken. When Section II of the Policy as extracted in paragraph 11 above covers the risk of death of any occupant and when that is the contract to which the parties have bound themselves, we do not see how the insurance company can evade their duty to pay the compensation. In fact, as already pointed out, even in M. Laxmi's case (supra), the observations of the Supreme Court clearly indicate that the risk of a pillion rider would be covered if it is a Comprehensive Policy. We have already extracted the relevant clauses of the Policy and we find that there is no limit imposed on the insurer's liability. By virtue of the wording of Section 147 and also Section II of the Policy, the death or injury of a gratuitous passenger is covered. Over and above the premium paid by the insured who has taken a Comprehensive Policy, if the insured pays additional premium, then the insurer's liability arises to the extent agreed upon. In this case the extent is Rs.70,000/-. This is in addition to, and not the maximum extent of, the third party liability already agreed upon in Section II of the policy. In the context of renewal of Mediclaim Policy, the Supreme Court has held that, "(T)he insurance companies cannot either in the prospectus or in the terms of the policy lay down any condition that would be derogatory to the terms and conditions approved by the Regulatory Authority," and that "regulations guidelines and circulars are binding on the insurance companies." - vide (2008) 10 S.C.C. 404 [United India Insurance Co. Ltd. vs. Manubhai Dharmasinhbhai Gajera]."

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In the light of the above judgment, the appeal in C.M.A. No.2028 of 2007 filed by the Insurance Company fails and the same is dismissed.

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As far as the appeal filed by the claimants seeking enhancement is concerned, there is no dispute with regard to the accident that had occurred resulting in the death of one Madhan. According to the claimants, the deceased was 20 years old on the date of accident and he was working as a Gym Instructor drawing a monthly salary of Rs.7000/-. However, the Tribunal, while granting the relief, has not taken note of future prospects of the deceased and has also reduced the monthly income to Rs.4000/-. When the employer, who was examined as P.W.2, has deposed that the deceased was getting around Rs.8000/- per month, the Tribunal ought not to have reduced the monthly income to such an extent. Hence, in the light of the decisions of the Apex Court reported 2013 (3) CTC 883 (Rajesh and Others V. Rajbir Singh and Others) and 2014 (1) TNMAC 459 (SC) (Syed Sadiq V. Divisional Manager, United India Insurance Co. Ltd.), this Court feels that it would be reasonable to fix the monthly salary of the deceased at Rs.5000/- per month. Since the deceased was hardly 20 years old, on the date of the accident, future prospects at 50% will have to be applied and the multiplier to be adopted, as per Sarla Verma’s case, would be 18. Therefore, the compensation awarded by the Tribunal is modified as hereunder:

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Monthly Income now fixed ::Rs.5000/Add: Future Prospects at 50% :: Rs.5000 +(Rs.5000 x 50/100) Total monthly income :: Rs.7500/Deduction towards Personal expenses :: 7500 – ½ (Rs.7500/-) Loss of contribution to the family per month:: Rs.3,750/Annual loss of contribution ::Rs.3750 x 12

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Applying multiplier 18 Loss of dependency works out to:: Rs.3750 x 12 x 18 :: Rs.8,10,000/Further, the amount awarded towards “Loss of love and affection” is enhanced to Rs.40,000/- @ Rs.10,000/- to each of the claimants and the amount awarded towards “Funeral Expenses” is enhanced to Rs.15,000/-. Therefore, the modified compensation payable to the claimants is Rs. 8,65,000/-. The rate of interest awarded by the Tribunal remains unaltered. The Insurance Company is directed to deposit the enhanced compensation amount, to the tune of Rs.5,29,000/- with interest, within a period of eight weeks from the date of receipt of a copy of this order and on such deposit being made, the claimants are entitled to withdraw their respective shares, as apportioned by the Tribunal, by making necessary application. C.M.A. No. 3009 of 2014 is allowed in part. No costs.

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Sd/Assistant Registrar //True Copy// Sub Assistant Registrar nv To The MACT (Prl. Dist. Court,) Pondicherry.

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Copy to: The Section Officer, VR Section , High Court, Madras. + 2 ccs to M/s Sai Bharath & Ilan, Advocate Sr.49778 49777 + 2 ccs to Mr.M.B.Gopalan, Advocate SR.49521, 49918

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C.M.A. Nos. 2028 of 2007 & 3009 and 2014 KS(CO) Eu 04.02.15

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https://hcservices.ecourts.gov.in/hcservices/

Royal Sundaram Alliance v. Uthiradam @ Govindaraj

Case brief

What is this about?

What did the court decide?

Royal Sundaram Alliance v. Uthiradam @ Govindaraj

Case brief

What is this about?

What did the court decide?

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