Allowed

Smt. K.Kamalamma v. Sri B.Ramachandraiah

Telangana HC4 Dec 2014MACMA/2413/2007

Case brief

AI extract

What is this about?

The Court allowed the appeal against the Motor Accidents Claims Tribunal's award. It held that the insurer is jointly and severally liable with the vehicle owner and liable to pay compensation even if the transfer of the vehicle was not intimated to the insurer. The quantum of compensation was enhanced to Rs. 2,50,000 with interest at 7.5% per annum.

What did the court decide?

Compensation of Rs. 2,50,000 awarded with interest at 7.5% p.a.; Liability of insurer fixed as joint and several; Right to attach vehicle or owner's property for recovery.

Smt. K.Kamalamma Vs Sri B.Ramachandraiah — Insurance | Telangana HC (2014)

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HONOURABLE Dr. JUSTICE B.SIVA SANKARA RAO M.A.C.M.A.No.2413 OF 2007

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JUDGMENT:

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The present appeal is filed by the claimants having been aggrieved by the Order/Award of the learned Chairman of the Motor Accidents Claims Tribunal–cum-XIX Additional Chief Judge, City Criminal Courts, Hyderabad (for short, ’Tribunal’) in M.V.O.P.No.1486 of 2003 dated 18.11.2006, awarding compensation of Rs.1,80,000/(Rupees one lakh eighty thousand only) with interest at 7% per annum, against the owner of the crime vehicle 2^nd respondent, as against the claim of the claimant of Rs.2,50,000/-(Rupees Two lakhs fifty thousand only), in the claim petition under Section 163-A of the Motor Vehicle Act, 1988 (for short, ‘the Act’).

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2. Heard Smt.A.Chaya Devi, the learned counsel for the appellants. The respondent No.2 served served but not appeared and thus taken as heard to decide on merits. Perused the material on record. The parties hereinafter are referred to as arrayed before the Tribunal for the sake of convenience in the appeal.

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3 . The contentions in the grounds of appeal as well as oral submissions by the appellants in nutshell are that the Judgment and decree of the Tribunal is contrary to law, weight of evidence and probabilities of the case, the learned Judge erred in holding that it is the duty of the owner in whose favour the policy was effected to report the transfer of the vehicle to the 3^rd respondent, that mere noninformation of transfer of vehicle by the owner does not exempt the liability of insurance company when valid insurance is in existence, that the learned Judge ought to have fixed the liability on the insurance company as he rightly held that the insurance is carried with the vehicle that the learned Judge ought to have consider the fact whether the vehicle involved in the accident was covered by insurance or not as on the date of the accident, that the learned Judge failed to

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appreciate the fact that Ex.B-2 extract of R.C wherein it is clearly indicates that the vehicle jeep bearing No.AP 22 1623 is converted into a passenger vehicle with the changed number i.e., AP 22 U 5650, that the learned Judge failed to appreciate the fact that Ex.B-1 policy is issued for the vehicle bearing No.AP 22 B 1623 for the period from 23.08.2002 to 22.08.2003, that the learned Judge erred in holding that the vehicle number, owner and class of the vehicle are totally different from what they existed by the date of Ex.B-1 that the learned Judge ought to have consider the fact that even if there is violation of the conditions of the policy, the insurance company is liable to pay the compensation first and the same shall be recovered from the owner of the vehicle and prayed to allow the appeal as prayed for against all the respondents jointly and severally. The learned counsel for the claimants reiterated the same during the course of oral arguments.

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4. Now the points that arise for consideration in the appeal are:

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1. Whether the award of the Tribunal exonerating the insurer to indemnify the insured for the claimant(s) and requires interference by this Court while sitting in the appeal?

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2. Whether the quantum of compensation awarded by the Tribunal is utterly low and requires interference by this Court and if so with what extent and against whom with what rate of interest with what observations?

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3. To what result?

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POINT-1:

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5. The facts are that on 10.04.2003 the accident took place due to the rash and negligent driving of the driver of the jeep which turned turtle and the deceased sustained grievous injuries and succumbed due to the injuries while he was shifting to the hospital are proved from the material on record and no way requires interference in the appeal.

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6. During the course of trial, claimants examined P.Ws 1 and 2 and marked Exs.A-1 to A-5 on their behalf and the 3^rd respondent examined R.W-1 and marked Ex.B-1 to B-4.

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7. So far as exoneration of the insurer concerned, Ex.A-5 policy was issued in respect of the vehicle bearing No.AP 22 B 1623 which is a private car. But as per Ex.B-2 the vehicle was converted to passenger carrying vehicle with a changed registration number as AP 22 U 5650, whereas Ex.B-1 the vehicle number is shown as AP 22 B 1623. The vehicle number in Ex.B-1 and B-2 is not the same. Admittedly the 2^nd respondent is the owner of the vehicle, but not the 1^st respondent since the name of the owner was changed and as per the contention of the 3^rd respondent the same was not intimated to them.

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8. Now coming to decide whether the insurer can be exonerated from liability to indemnify the insured to the third party claimants concerned, the question which arises in the appeal is whether in the absence of an intimation of transfer, the liability of the insurer to pay compensation to the third party ceases.

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9. Since insurance against third party is compulsory and once the insurance company had undertaken liability to third party incurred by the persons specified in the policy, the third party's right to recover any amount is not affected by virtue of the provisions of the Act or by any condition in the policy. However, the liability of an insurer does not come to an end even if the owner of the vehicle does not give any intimation of transfer to the insurance company. Whenever an accident took place, the victim or the injured used to take legal proceedings against an erring motorist for recovery of damages. But many a times, it was found that the owner of an offending vehicle was not always in a position to pay compensation or damages to the injured or to the dependants of the deceased and in that event the claimants could not get the damages. For the first time, Third Parties (Rights Against Insurers) Act, 1930 was enacted, the provisions of which find place in Section 97 of the Act which gave to third party right to sue directly against the insurer. Subsequently, the Road Traffic Act, 1930 was

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enacted which provided for compulsory insurance of motor vehicles. The provisions of the said Act was engrafted in Section 95 of the Act. Under Section 38 of English Act, 1930, certain conditions of insurance policy were made ineffective so far as the third parties were concerned. The object behind the aforesaid legislation was that third party right should not suffer on account of failure to comply with those terms of the insurance policy. Section 94 of the Act gives protection to third party in respect of death or bodily injury or damage to the property while using the vehicle in public place and, therefore, the insurance of vehicle had been made compulsory under Section 94 read with Section 95 of the Act.

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10. A perusal of Sections 94 and 95 would further show that the said provisions do not make compulsory insurance to the vehicle or to the owners. Thus, it is manifest that compulsory insurance is for the benefit of third parties. The scheme of the Act shows that an insurance policy can cover three kinds of risk, i.e. owner of the vehicle; property (vehicle) and third party. The liability of the owner to have compulsory insurance is only in regard to the third party and not to the property. Section 95(5) of the Act runs as follows:

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"Notwithstanding anything elsewhere contained in any law, a person issuing a policy of insurance under this section shall be liable to indemnify the person or classes of person specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of person.' The aforesaid provision shows that it was intended to cover two legal objectives. Firstly, that no one who was not a party to a contract would bring an action on a contract; and secondly, that a person who has no interest in the subject matter of an insurance can claim the benefit of an insurance. Thus, once the vehicle is insured, the owner as well as any other person can use the vehicle with the consent of the owner. Section 94 does not provide that any person who will use the vehicle shall insure the vehicle in respect of his separate use.”

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11. On an analysis of Section 94 and 95, there are two third parties when a vehicle is transferred by the owner to a purchaser. The

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purchaser is one of the third parties to the contract and other third party is for whose benefit the vehicle was insured. So far, the transferee who is the third party in the contract, cannot get any personal benefit under the policy unless there is a compliance of the provisions of the Act. However, so far as third party injured or victim is concerned, he can enforce liability undertaken by the insurer.

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12. For the aforesaid reasons, whenever a vehicle which is covered by the insurance policy is transferred to a transferee, the liability of insurer does not ceases so far as the third party/victim is concerned, even if the owner or purchaser does not give any intimation as required under the provisions of the Act. The same was opinion was expressed by the Apex Court in Rikhi Ram V. Sukhrania^[1]

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13. Having regard to the above, it is the insurer also along with the insured owner of the crime vehicle jointly and severally liable to pay compensation to the claimant and then it is for the insurer to recover from the owner of the vehicle by filing execution petition in the same award without need of any separate proceedings. Accordingly Point No.1 is answered.

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POINT No.2:

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14. Coming to decide the dispute on quantum as to what is just compensation in the factual matrix of the case, it is apt to state that perfect compensation is hardly possible and money cannot renew a physique or frame that has been battered and shattered, nor relieve from a pain suffered as stated by Lord Morris. In Ward v. James^[2] , it was observed by Lord Denning that award of damages in personal injury cases is basically a conventional figure derived from experience and from awards in comparable cases. Thus, in a case involving loss of limb or its permanent inability or impairment, it is difficult to say with precise certainty as to what compensation would be adequate to sufferer. The reason is that the loss of a human limb or its permanent

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impairment cannot be measured or converted in terms of money. The object is to mitigate hardship that has been caused to the victim or his or her legal representatives due to sudden demise. Compensation awarded should not be inadequate and should neither be unreasonable, excessive nor deficient. There can be no exact uniform rule in measuring the value of human life or limb or sufferance and the measure of damage cannot be arrived at, by precise mathematical calculation, but amount recoverable depends on facts and circumstances of each case. Upjohn LJ in Charle red House Credit v. Tolly^[3] remarked that the assessment of damages has never been an exact science and it is essentially practical. Lord Morris in Parry v. Cleave r^[4] observed that to compensate in money for pain and for physical consequences is invariably difficult without some guess work but no other process can be devised than that of making a monitory assessment though it is impossible to equate the money with the human sufferings or personal deprivations. The Apex Court in R.D. Hattangadi v. Pest Control (India) Private Limited^[5] at paragraph No.12 held that in its very nature whatever a Tribunal or a Court is to fix the amount of compensation in cases of accident, it involves some guess work, some hypothetical consideration, some amount of sympathy linked with the nature of the disability caused. But all the aforesaid elements have to be viewed with objective standard. Thus, in most of the cases involving Motor Accidents, by looking at the totality of circumstances, an inference may have to be drawn and a guess work has to be made even regarding compensation in case of death, for loss of dependent and estate to all claimants; care, guidance, love and affection especially of the minor children, consortium to the spouse, expenditure incurred in transport and funerals etc., and in case of injured from the nature of injuries, pain and sufferance, loss of earnings particularly for any disability and also probable expenditure that has to be incurred from nature of injuries sustained and nature of treatment required.

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15. In this regard, it is well laid down by the Apex Court (Three Judges Bench) in the latest expression in Rajesh v. Rajbir Singh^[ at paras-1 and 7 referring to the earlier expressions in Sarla Verma v Delhi Transport Corporation^[7] and Nagappa v Gurudayal Singh^[8] that compensation which appears to it to be just, has to be assessed and awarded by the Tribunal set up under Section 166 of the Act. The expression ‘just compensation’ has been explained in Sarla Verma`s case (cited supra) holding that the compensation awarded by the Tribunal does not become just compensation merely because the Tribunal considered it to be just. ‘Just compensation’ is an adequate compensation which is fair and equitable, on the facts and circumstances of the case, to make good the loss suffered as a result of the wrong, as far as money can do so, by applying the well settled principles relating to award of compensation. It is also required to mention in this context that irrespective of lack of proof of income of deceased/injured of the permanent disability, the Court has to assess the income by nature of avocation by taking as guideline the expression of Apex Court in Latha Wadhwa vs. State of Biha r^[9] that even there is no proof of income and earnings, it can be reasonably estimated at Rs.3,000/- p.m. for any non-earning member and even for housewife as domestic contribution. Referring to the same, the Apex Court in Kishan Gopal V. Lala^[10] held including in a claim under Section 163-A of the Act that even as per the Act in the absence of proof of earning in the place of Rs.15,000/- per annum, it is to be taken at Rs.30,000/- per annum.

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16. In fact, in this claim filed originally under Section 166 of the Act and the Tribunal also proceeded thereunder, it is as per Section 163-A of the Act what is the compensation awarded is Rs.1,80,000/out of the claim of Rs.2,50,000/- is just or not to decide. The deceased was aged about 50 years including as per the Ex.A-3 post mortem

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report as also observed by the Tribunal in answering issue No.2. The claimants are wife and unmarried daughter of the deceased. There is no proof regarding the earnings. Thus, as per Kishan Gopal supra, it is to be taken at Rs.30,000/- per annum, the maximum and if 1/3^rd of it deducted towards personal expenses, it comes to Rs.20,000/- per annum, the dependency and the same is multiplied by 13 as per Section 163-A of the Act. It comes to Rs.2,60,000/- (Rs.20,000 x 13), apart from it Rs.2,000/- towards funereal expenses Rs.5,000/- towards consortium, Rs.5,000/- towards loss of estate, in all it comes to Rs.2,72,000/- and what they claim made in the appeal Rs.2,50,000/- is just to consider.

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17. Coming to the rate of interest, from the settled proposition of law in TN Transport Corporation v. Raja Priya^[11] , a n d Rajesh (supra); that while awarding reasonable rate of interest the steep fall in the bank interest rate since past several years has to be kept in mind, interest at 7.5% p.a. as reasonable. The appellate Court also got the discretionary power under Order LXI Rule 33 C.P.C to award reasonable rate of interest from the drastic fall in bank rate of interest in bank rate as laid down by the Apex Court in DDA Vs. Joginder S. Monga^[12] . Thus under Section 171 of the MVAct interest is awarded at 7.5% per annum from date of claim petition till realization. Accordingly, Point-2 for consideration is answered. POINT -3:

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18. Accordingly and in the result, while allowing the appeal with compensation of Rs.2,50,000/- with interest at 7.5% p.a. by fixing liability of insurer also as joint and several to the extent of pay by the insurer (3^rd respondent) and then to recover from both Respondent Nos.1 and 2 as held in Rikhiram (supra). The respondents shall deposit said amount within one month, failing which the claimant can execute and recover. It is made clear from the settled expressions of the Apex Court in Lehru (supra) & Nanjappan (supra) that the insurer

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3^rd Respondent is entitled, while depositing the amount payable, if not deposited or paid any amount so far to deposit the balance to approach the Tribunal to direct the RTA concerned not to register any transfer of the crime vehicle and to seek for attachment of the crime vehicle or other property of the Respondent Nos.1 and 2 as an assurance for execution and recovery in the same proceedings or under revenue recovery as per the MV Act, 1988 and also ask the Tribunal not to disburse the deposited amount to claimant (but for to invest in a bank) till such attachment order is made. However, after the same, the Tribunal shall not withhold the amount of the claimant, if there is any necessity to permit for any withdrawal but for to invest the balance in fixed deposit in a nationalized bank. Rest of the terms of the award of the Tribunal holds good. There is no order as to costs.

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19. Miscellaneous petitions, if any pending in this appeal, shall stand closed.

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_______________________ Dr. B. SIVA SANKARA RAO, J

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Date: -11-2014 ksh

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[1] (2003)3 SCC 9

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[2] 1965(1) All. E.R-563 [3] 1963(2) All.E.R-432 [4] 1969(1)All.E.R –555 [5] 1995 ACJ 366(SC) [6] 2013 ACJ 1403=(4)ALT-35(SC). [7] 2009 ACJ 1298. [8] 2003 ACJ 12. [9] (2001) 8 SCC 197=AIR 2001 (SC) 3218 [10] (2014)1 SCC 244 [11] (2005) 6 SCC 236 [12] (2004)2 SCC-297

Smt. K.Kamalamma v. Sri B.Ramachandraiah

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What is this about?

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Smt. K.Kamalamma v. Sri B.Ramachandraiah

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