Full Judgment Text
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NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 5681 OF 2008
[Arising out of SLP (C) No. 26255/04]
United India Insurance Company Ltd. … Appellant
Versus
A. N. Subbulakshmi & Ors. … Respondents
W I T H
CIVIL APPEAL NO. 5684 OF 2008
[Arising out of SLP (C) No. 26258/04]
United India Insurance Company Ltd. … Appellant
Versus
C. T. Meenakshi & Ors. … Respondents
J U D G M E N T
AFTAB ALAM,J.
1. Leave granted.
2. These appeals by the Insurance Company are on a limited issue
insofar as in the order of the High Court coming under appeal the appellant
is directed to make payment of the compensation amounts to the claimants
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and then to recover from the owner of the vehicle involved in the accident
excess amounts paid over and above its liability under the insurance policy
by instituting appropriate actions against them.
3. The matter arises from an unfortunate accident in which two lives
were lost. On 14 May, 1981 at about 6.30 in the morning a head-on
collision between an Ambassador car bearing Registration No. MDO 7789
and a lorry bearing Registration No. MDR 3106 took place on the Trichy -
Chennai highway near Thozhuthur. As a result of the collision the
Ambassador Car was badly smashed and turned turtle. Its owner,
Annamalai, who was on the driver’s seat died on the spot. Another person,
namely, Sigappi, aged about 24 years who worked as Annamalai’s Secretary
and who was sitting on the rear seat along with the latter’s son was thrown
out of the car and she too died on the spot. However, Annamalai’s wife and
daughter sitting on the front seat and his son sitting on the rear seat
survived. In the accident the truck also suffered substantial damage.
4. In regard to the accident three claim cases came to be filed before the
Motor Accidents Claims Tribunal, Cuddalore. MACTOP No.198 of 1982
was filed by the owner of the lorry, M/s. Aruppukottai Sri Jaya Vilas Pvt.
Ltd. claiming compensation of Rs.58, 300/- for the damage caused to the
lorry MDR 3106 in the accident, allegedly resulting from the rash and
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negligent driving of the car MDO 7789. The claim of the lorry’s owner was
resisted by the legal representatives of the deceased Annamalai. Another
claim petition, MACTOP no.625 of 1981 was filed by the heirs and legal
representatives of the deceased Sigappi against the owner of the lorry and
its insurer claiming damages for her death. A third claim petition, MACTOP
No.627 of 1981 was filed by the wife and children of the deceased
Annamalai, the owner of the car, against the owner of the lorry and its
insurer claiming a sum of Rs.10,04,600/- as compensation for his death.
5. The Tribunal by order dated 22 January, 1986 found and held that the
accident was caused entirely due to the rash and negligent driving of the car
driver, Annamalai. There was no mistake, rashness or negligence on the
part of the driver of the lorry. He accordingly rejected the claims instituted
by the heirs of the deceased Annamalai and the heirs and legal
representatives of the deceased Siggapi. Further, in accordance with its
finding, the Tribunal allowed the claim of the owner of the lorry but instead
of Rs.58, 300/- as claimed in the petition, awarded the smaller amount of
Rs.14,100/- with 7% interest to be recovered from the assets left by the
deceased Annamalai in the hands of his heirs, impleaded as respondents in
the claim petition.
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6. Against the order passed by the Tribunal three separate appeals came
to be filed in the Madras High Court. These appeals were disposed of by a
common judgment and order dated 12 December, 2003. The High Court
reversed the finding of the Tribunal as to the cause of the accident and on a
detailed examination of all the evidences on record came to hold and find as
follows:
“As seen from the file, B.7, B.8 as well as B.1 and A.1,
on a consideration of the oral evidence, this court holds
that the accident has not been caused exclusively by the
rash and negligent driving of the ambassador car, but the
accident has been caused by the rash and negligent
driving of both the vehicles, namely, ambassador car and
the lorry driver. This court holds that the contributory
negligence on the part of the lorry driver could be fixed
at 50% and that of the ambassador car at 50% as seen
from the place of impact, damages caused to the vehicles
as well as Exs.B.7 and B.8. The points 1 and 2 are
answered above.”
7. The High Court then proceeded to determine the amounts of
compensation payable for the death of Siggapi and Annamalai and directed
the owner and insurer of the lorry to pay half the amount of compensation
fixed by it in each case to the respective claimants (since the responsibility
for the accident lay equally on the two sides). In case of Siggapi the amount
payable to the claimants by the owner and insurer of the lorry is Rs.25,
000/- with 6% interest from the date of the claim petition and in case of
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Annamalai the amount payable to the claimants by the owner and the insurer
of the lorry worked out to Rs.3,25,000/- with 6% interest from the date of
claim petition to the claimants. Finally, in paragraph 36 of the judgment, the
High Court made the following direction:
“We make it clear in both claims that the insurer of the
lorry shall pay the compensation and thereafter it is for
the insurer to institute appropriate action against the
owner of the lorry thereafter for amount if any paid over
and above the liability covered by the insurance policy,
the two appeals are to be allowed in part.”
8. It is this direction making it the liability of the insurer to pay the
amounts of compensation to the two claimants that causes grievance to the
appellant and these appeals are preferred on the limited question about the
validity of the High Court’s direction.
9. Mr. P. K. Seth, learned counsel appearing on behalf of the appellant,
submitted that the accident took place on 14 May, 1981, when the Motor
Vehicles Act, 1939 was in operation and the liability of the insurer was
governed by Section 95(2)(a) of the Act. Learned counsel submitted that
under Section 95(2)(a), the insurer’s liability could not exceed the sum of
Rs.50, 000/- and the direction of the High Court asking the appellant to pay
the entire amounts of Rs.25, 000/- and Rs.3, 25,000/- to the claimants and
then to recover it from the insurer was without any sanction of law. In
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support of the submission he relied upon a Constitution Bench decision in
New Indian Assurance Co. Ltd. vs. C .M. Jaya & Ors. , (2002) 2 SCC 78.
In that case the same question came up for consideration before the
Constitution Bench of this Court and it was held that under Section 95(2)(a)
of the Act even in case of a comprehensively insured vehicle the liability of
the insurer was limited to Rs.50, 000/- (raised to Rs.1,50,000=00 with effect
from 1 October 1982). An unlimited or a higher liability than the statutory
liability of the insurer would arise only in case there is a separate contract
and payment of additional premium by the owner of the vehicle. In
paragraph 17 of the decision it was held as follows:
“In the circumstances, we hold that the liability of the
appellant-Insurance Company is limited to Rs.50, 000/-,
as held by the Tribunal. In the view we have taken, it is
unnecessary to go into the question relating to either
maintainability of cross-objections before the High Court
against the appellant alone or as to the enhancement of
compensation when the owner and driver have not filed
appeal against the impugned judgment.”
10. The Constitution Bench decision applies to the facts of this case with
full force. We accordingly hold and find that the impugned direction of the
High Court is unsustainable in law. The direction as contained in paragraph
36 of the High Court judgment is therefore set aside.
11. In terms of an interim order passed in this appeal, the appellant had
deposited a sum of Rs.50, 000/- before the Trial Court it will be open to the
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claimants to withdraw that amount. The balance amount in terms of the
High Court judgment would be payable by the owner of the lorry, namely,
M/s. Aruppukottai Sri Jaya Vilas Pvt. Ltd., unless the judgment of the High
Court is modified in any appeal preferred by the lorry’s owner.
12. In the result, the appeals are allowed but with no order as to costs.
…………………………….J.
[Tarun Chatterjee]
…………………………….J.
[Aftab Alam]
New Delhi,
September 16, 2008.