Full Judgment Text
1
R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 19 DAY OF JUNE, 2020
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
M.F.A.No.11489/2012 (MV)
BETWEEN:
THE ORIENTAL INSURANCE
COMPANY LIMITED
I FLOOR, SUVARNA TOWERS
No.70/5, NEAR BDA COMPLEX
GOVINDARAJANAGAR, VIJAYANAGAR
BENGALURU
BY THE MANAGER
REGIONAL OFFICE
THE ORIENTAL INSURANCE COMPANY LIMITED
LEO SHOPPING COMPLEX
Nos.44/45, RESIDENCY ROAD
BENGALURU-560 025 ... APPELLANT
(BY SRI. RAVISHANKAR A, ADVOCATE)
AND:
1. SHRI. K.M. HARISH KUMAR
S/O. SHRI MANJUNATHA
AGED ABOUT 15 YEARS
SINCE MINOR, IS REPRESENTED BY HIS MOTHER
SMT. MALLAJAMMA
W/O. SHRI MANJUNATHA
AGED ABOUT 36 YEARS
R/AT DEVARAHALLI VILLAGE
HULIKUNTE POST
KORATAGERE TALUK
TUMAKURU DISTRICT-572 129
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2. SHRI. SIDDARAJU
S/O LATE SHRI MADAIAH
AGED ABOUT 32 YEARS
R/AT BELAGAVADI
KALLADEVANAHALLI HOBLI
MAGADI TALUK
RAMANAGARA DISTRICT 562 120 … RESPONDENTS
(BY SRI. JAWAHAR BABU, ADVOCATE FOR R1
R1 IS MINOR AND REPRESENTED BY HIS MOTHER
R2 IS SERVED AND UNREPRESENTED)
THIS M.F.A IS FILED UNDER SECTION 173(1) OF MV
ACT AGAINST THE JUDGMENT AND AWARD DATED
30.06.2012 PASSED IN MVC.NO.20/2010 ON THE FILE OF
THE ADDITIONAL SENIOR CIVIL JUDGE AND MACT-XIII,
MADHUGIRI, AWARDING A COMPENSATION OF
RS.3,03,777/- WITH INTEREST @ 6% P.A. (EXCEPT
FUTURE MEDICAL EXPENSES) FROM THE DATE OF
PETITION TILL REALIZATION.
THIS M.F.A. HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT ON 15.06.2020, THIS DAY THE COURT
PRONOUNCED THE FOLLOWING:
J U D G M E N T
Though this matter is listed for admission, with
consent of learned counsel appearing for the parties,
the same is taken up for final disposal.
2. This appeal is filed by the Insurance
Company challenging the Judgment and Award passed
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in MVC No.20/2010 dated 30.06.2012 on the file of
Additional Senior Civil Judge and MACT XIII at
Madhugiri (‘the Tribunal’ for short), questioning the
fastening of the liability on the Insurance Company.
3. Heard learned counsel for the appellant/
Insurance Company and learned counsel for
respondent No.1/claimant.
Respondent No.2/ owner is served, but
unrepresented.
4. The brief facts of the case are that, the
claim petition was filed on behalf of one Master
Harishkumar, a minor, represented by his mother,
claiming compensation for the injuries sustained by
him in a road accident that occurred on 08.03.2009. It
is stated that the minor-claimant while he was
traveling as a pillion rider in a two wheeler - TVS
Victor GX bearing registration No.KA-02-EQ-5375, had
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sustained injuries due to rash and negligent riding by
its rider. In the accident, he has sustained the
fracture of right femur and the fracture of both bones
of right leg. The claimant was examined by Dr.Suresh
P.A. as P.W.2. The Doctor has assessed the disability
at 30% to the whole body.
5. The Tribunal, after considering both oral
and documentary evidence available on record,
allowed the claim petition partly granting the
compensation of Rs.3,03,777/- with 6% interest per
annum from the date of petition till its realization and
directing this appellant to pay the compensation.
Being aggrieved by the Judgment and Award of the
Tribunal, the present appeal is filed mainly on two
grounds. The first ground is, the policy issued by the
Insurance Company is an ‘act only policy’ (liability
only policy) and the provisions of the Motor Vehicles
Act, 1988 (‘the Act’ for short) does not make it
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mandatory to cover the risk for a pillion rider in a two
wheeler. Since no premium was collected towards
personal accident cover in respect of a two wheeler,
covers the risk for its owner-cum-driver only and not
its pillion rider. The other ground is, the Tribunal
while calculating the compensation, was wrongly
awarded a sum of Rs.1,57,500/- under the head ‘Loss
of income on account of disability’ as against
Rs.67,500/- as the whole body disability was only
30% and that the compensation granted under this
head is in excess by Rs.90,000/-.
6. Learned counsel appearing for the
appellant/Insurance Company would submit that the
Tribunal has committed an error in fastening the
liability on the Insurance Company and failed to take
note of the fact that the policy issued in respect of the
subject matter of the vehicle involved in the accident
is only an act policy and the same does not cover the
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risk of the pillion rider, who traveled in the motorcycle
and premium was paid only towards third party
liability and for driver-cum-owner. The Pillion rider
does not come within the meaning of third Party.
7. Learned Counsel appearing for the
appellant/Insurance Company in support of his
arguments, he relied upon the following judgments:
(i) in the case of Oriental Insurance Company
Limited v. Sudhakaran K.V. and others
reported in (2008) 7 Supreme Court Cases
428;
(ii) in the case of Dr.T.V.Jose v. Chacko P.M.
alias Thankachan and others reported in AIR
2001 Supreme Court 3939 ; and
(iii) in the case of United India Insurance Co.
Ltd., Shimla v. Tilak Singh & Ors. reported in
AIR 2006 Supreme Court 1576.
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Learned counsel while referring to these three
judgments would submit that the Insurance Company
is not liable and the Tribunal has committed an error
in fastening the liability on the Insurance Company by
making an observation that this is a two wheeler with
seating capacity of two including the driver, there has
been coverage towards third party liability and there is
separate personal expenditure coverage for registered
owner-cum-driver. When the seating capacity of the
vehicle is two and there is separate premium for
owner-cum-driver, then the liability has the coverage
of the petitioner (claimant) in respect of the said
vehicle. The said observation is erroneous and hence,
it requires the interference of this Court.
8. Further, the learned counsel would submit
that in respect of other ground urged before this Court
with regard to the quantum of compensation, he has
pointed out that the Tribunal while calculating the
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compensation particularly on the head of ‘Loss of
income on account of disability’ has committed an
error in taking the loss of income as Rs.10,500/-
instead of Rs.4,500/- per annum. There was a
calculation error that has been committed by the
Tribunal while awarding the compensation. Hence, it
requires interference to modify the quantum of
compensation.
9. Per contra, learned counsel for respondent
No.1/claimant would submit that though the policy is
an act policy, which has been marked as Ex.R2, it is
clear that the premium of Rs.300/- was collected
towards third party liability and also collected an
additional amount of Rs.50/- covering the liability in
respect of the owner-cum-driver and when the
amount has been collected to the tune of Rs.300/-
towards third party risk, the pillion rider comes within
the purview of third party. Hence, the Insurance
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Company is liable to pay the compensation and the
Tribunal has not committed any error in fastening the
liability on the Insurance Company and it does not
require any interference.
10. The learned counsel with regard to the
quantum of compensation is concerned would contend
that the Tribunal has not committed any error in
awarding the compensation and the compensation
awarded to the tune of Rs.3,03,777/- is just and
reasonable. Hence, it does not require any
interference by this Court.
11. Having heard the arguments of the learned
counsel for the appellant/Insurance Company and the
learned counsel for respondent No.1/Claimant and
keeping in view the rival contentions, the points that
arise for the consideration of this Court are:
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(i) Whether the Tribunal has committed
an error in calculating the ‘loss of
income on account of disability’ and it
requires interference of this Court?
(ii) Whether the Tribunal has committed
an error in fastening the liability on
the Insurance Company in the
absence of any premium is paid
covering the liability of the pillion
rider?
(iii) What order?
Point No.(i):
12. Before coming to the aspect of liability, this
Court has to examine with regard to the quantum of
compensation and whether the Tribunal has
committed an error in calculating the ‘loss of income
on account of disability’. No doubt, on perusal of
Judgment and Award of the Tribunal, there is an error
while calculating the ‘loss of income on account of
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disability’ and the Tribunal has taken the notional
income of Rs.15,000/- per annum and the Doctor has
assessed the disability to the extent of 30% for the
whole body, the same is not in dispute. In paragraph
No.10 of the Judgment, it is clearly shown that, 30%
disability is taken by the Tribunal while calculating the
‘loss of income on account of disability’. Taking the
disability of 30% would be 15000x30/100=4500 and
the relevant multiplier is 15, then, 15000-
4500=10500x15=Rs.1,57,500/- as ‘loss of income on
account of disability’, the same is an error apparent on
the face of the record. The Tribunal instead of taking
Rs.4,500/-, it has taken Rs.10,500/- while calculating
the ‘loss of income’. However, it has to be taken note
of the fact that the injured is a minor boy, who is aged
about 13 years, had sustained three fractures i.e.,
fracture of right femur and the fracture of both bones
of right leg. The appellant also does not dispute the
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fact that the Doctor has assessed the whole body
disability at 30%.
13. This Court would like to refer to the
Judgment of the Apex Court in the case of
Mallikarjun v. Divisional Manager, National
Insuance Company Limited and another reported
in (2014) 14 Supreme Court Cases 396. In the
said Judgment, the Apex Court while calculating the
just and fair compensation, particularly, children who
have suffered the disability held that, considering the
relevant factors, precedents and approach of various
High Courts, appropriate compensation on all other
heads in addition to actual expenditure for treatment,
attendant, etc. should be, if disability is above 10%
and up to 30% to whole body, Rs.3 lakhs; up to 60%,
Rs.4 lakhs; up to 90%, Rs.5 lakhs; and above 90%, it
should be Rs.6 lakhs. It is further held that, for
permanent disability up to 10%, it should be Rs.1
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lakh, unless there are exceptional circumstances to
take a different yardstick.
14. Having taken note of the principles laid
down in the Judgment referred supra with regard to
the quantum of compensation, particularly, in case of
children suffering disability, a table has been laid
down proportionate to the percentage of disability. In
the facts and circumstances of the present case, there
is no dispute that the claimant, who is a minor, aged
13 years old has suffered fracture of femur and
fracture of both bones of right leg and the Doctor has
assessed the disability at 30%. In terms of this
Judgment, the injured is entitled for Rs.3 lakhs on the
head of disability itself. No doubt, the claimant has
not filed any appeal before this Court for enhancement
of compensation and even in the absence of the
appeal, this Court can take note of the same and even
though there is an error in calculating the
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compensation on the head of ‘loss of income on
account of disability’, in all, total compensation of
Rs.3,03,777/- was awarded by the Tribunal. In these
circumstances of the present case, this Court would
come to the conclusion that the error in calculating
the ‘loss of income on account of disability’ may not
come into the aid of the appellant to calculate the
same and if it is re-calculated and allowed only
Rs.67,500/- as contended by the learned counsel for
the appellant, it would be an injustice to the person,
who has suffered injuries with 30% disability. The
Court has to take note of the fact that while awarding
the compensation, the compensation should be just
and reasonable as held by the Apex Court in the case
referred supra. Hence, it does not require any
interference of this Court.
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Point Nos.(ii) and (iii):
15. The main contention of the learned counsel
for the appellant/Insurance Company is that, the
Tribunal has committed an error in fastening the
liability on the Insurance Company. Even though there
was no specific premium paid in respect of the pillion
rider, the premium was paid covering only the third
party and owner-cum-driver. The interpretation of the
Tribunal is that when the seating capacity of the
vehicle is two and there is separate premium for
owner-cum-driver, then the liability has the coverage
of the petitioner in respect of the said vehicle is,
erroneous.
16. Learned counsel appearing for respondent
No.1/claimant would contend that the premium of
Rs.300/- was collected towards third party liability and
additional amount of Rs.50/- was collected from
owner-cum-driver. Hence, the Insurance Company is
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liable to pay the compensation. Now, this Court has
to examine whether the Tribunal has committed an
error in fastening the liability on the Insurance
Company.
17. Before considering the rival contentions of
both the parties, this Court would like to refer to the
document – Ex.R2. On perusal of Ex.R2-policy, which
has been marked through the witness of Insurance
Company, on top of the policy, it is clearly mentioned
that Motor Insurance Certificate cum Policy Schedule
motorized – two wheelers liability only policy – zone
A. Learned counsel while referring to the words
mentioned on top of the policy would submit that the
policy is an act policy and the same does not cover
the liability in respect of the pillion rider.
18. On the other hand, learned counsel would
contend that the Basic TP cover Rs.300/- was
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collected and this claimant, who is the pillion rider,
comes within the purview of third party. Hence, the
Company is liable to pay the compensation.
19. Learned counsel appearing for the
appellant/Insurance Company, in his arguments, he
vehemently submits that the Apex Court in the
Judgment reported in (2008) 7 Supreme Court
Cases 428 in the case of Oriental Insurance
Company Limited v. Sudhakaran K.V. and others,
laid down the law regarding gratuitous passenger and
third party.
20. On perusal of this Judgment, the Apex
Court has dealt with regard to Section 147 of the Act
and also dealt with regard to the definition of third
party. The learned counsel also brought to the notice
of this Court that the Apex Court in this Judgment
held that such a pillion rider is not to be treated as a
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“third party” under Section 147 of the Act. It is
further held that such a pillion rider would be covered
only in case additional cover is purchased under the
contract of insurance. The legal obligation arising
under Section 147 of the Act cannot be extended to
an injury or death of the owner of the vehicle or a
pillion rider traveling thereon.
21. The Apex Court also discussed with regard
to the pillion rider will become a gratuitous passenger
and he cannot be third party. The Insurance policy
did not cover the risk of injury or death of such a
passenger and thus, it was not liable to reimburse the
owner of the vehicle. The Apex Court has framed a
question as to whether a pillion rider on a scooter
would be a “third party” within the meaning of Section
147 of the Act and held that the pillion rider is not a
third party.
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22. Learned counsel would submit that the
Apex Court in the case of United India Insurance
Co. Ltd., Shimla v. Tilak Singh & Ors. (supra),
extended the same principles to other categories of
vehicles also.
23. In this regard, this Court would like to
extract the relevant paragraph Nos.18 and 21, as
hereunder:
“18. Thus, even under the 1939 Act the
established legal position was that unless there was a
specific coverage of the risk pertaining to a gratuitous
passengers in the policy, the insurer was not liable.
We find that clause (ii) of the proviso to Section
95(1) has been eliminated while drafting section
147 of the 1988 Act. Under sub-section (1)(b) under
the 1988 Act, compulsory policy of insurance required
under the statute must now provide against any
liability which may be incurred by the owner of the
vehicle "in respect of the death of or bodily injury to
any person including owner of the goods or authorised
representative carried in the vehicle or damage to any
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property of a third party caused by or arising out of
the use of the vehicles in a public place."
21. In our view, although the observations
made in Asha Rani's case (supra) were in connection
with carrying passengers in a goods vehicle, the same
would apply with equal force to gratuitous passengers
in any other vehicle also. Thus, we must uphold the
contention of the appellant-insurance company that it
owed no liability toward the injuries suffered by the
deceased Rajinder Singh who was a pillion rider, as
the insurance policy was a statutory policy, and hence
it did not cover the risk of death of or bodily injury to
gratuitous passengers.”
24. On perusal of the principles laid down in
the judgment, it is clear that the Insurance Company
is not liable to pay the compensation to the pillion
rider and the policy was a statutory policy and the
same did not cover the risk of the death of or bodily
injury to gratuitous passenger.
25. Further, the learned counsel would submit
that the Apex Court in the case of Dr.T.V.Jose v.
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Chacko P.M. alias Thankachan and others (supra),
has held that the liability of Insurer to third parties i.e,
gratuitous passengers – Third party Policy does not
cover liability to gratuitous passengers who are not
carried for hire or reward – Terms and conditions of
comprehensive Policy relating to private cars, cannot
apply to third party policy. In absence of terms and
conditions governing third party policy it cannot be
accepted that it covers liability to occupants of vehicle,
private car Insurance Company not liable to reimburse
the owner of vehicle.
26. This Court would like to extract the
relevant paragraph of the Apex Court judgment of the
above case, particularly Paragraph No. 19, which
discussed with regard to the coverage of the risk of
third party hereunder:
“19. In this case only the first sheet of
the policy is on record. This clearly shows that
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the policy is a third party policy. The terms and
conditions governing this Policy are not on
record. What was shown to Court was terms
and conditions of a comprehensive policy
relating to private cars. These cannot apply to
this policy. In the absence of terms and
conditions governing this policy it is not
possible to accept the submission of Mr. Iyer
that this policy covered liability to occupants of
the car. As has been set out hereinabove, the
law on this subject is clear, a third party policy
does not cover liability to gratuitous
passengers who are not carried for hire or
reward. The 8th Respondent Company will,
therefore, not be liable to reimburse the
Appellant.”
27. On perusal of the principles laid down in
the Judgment, it is clear that the policy is a third party
policy and not the comprehensive policy and the third
party policy does not cover liability to gratuitous
passenger, who is not carried for hire or reward. In
the case on hand, the policy issued is only an act
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policy and premium is paid only for third party and for
owner-cum-driver and not the pillion rider.
28. This Court would like to refer to the
Judgment of the Apex Court in the case of National
Insurance Company Ltd. v. Balakrishnan and
Anr. reported in AIR 2013 Supreme Court 473. In
this case, the Apex Court held that if specific premium
is not paid in respect of the pillion rider, the act policy
liability is only in respect of the liability policy and the
same does not cover the risk of the pillion rider. The
Apex Court in this Judgment referring to Section
147(1) of the Act, in respect of private vehicle, if any
person traveled in the private vehicle held that the
risk of a passenger in a private car is covered under
comprehensive/package policy and the Insurance
Company is liable to third party risk of an occupant of
a private Car is not covered under an act policy.
Hence, it is clear that the risk of an occupant of a
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private car or pillion rider is not covered under an act
policy. Unless specific premium is paid in respect of
the pillion rider and further held that the act policy
liability is only in respect of the liability policy and the
same does not cover the risk of the pillion rider.
29. Having taken note of the principles laid
down in the Judgment referred supra and the facts of
the case, it is clear that the injured minor was
proceeding in the motorcycle as pillion rider and the
same is not in dispute. On perusal of Ex.R2, it is
specific that it is only an act policy and when the act
policy was issued it does not cover the risk of the
pillion rider unless specific premium is collected in
respect of the pillion rider. No doubt, as contended by
the learned counsel for the claimant that an amount of
Rs.300/- was collected in respect of third party risk
and also additional amount of Rs.50/- was collected
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covering the liability in respect of owner-cum-driver
and not in respect of the pillion rider.
30. Learned counsel appearing for the
appellant/Insurance Company rightly contended that
the pillion rider does not come within the purview of
third party. The Apex Court in Oriental Insurance
Company Limited v. Sudhakaran K.V. and others
(supra), the deceased was traveled as a pillion rider
on a scooter and it is categorically held that such a
pillion rider is not to be treated as a “third party”
under Section 147 of the Act. It is further held that
such a pillion rider would be covered only in case
additional cover is purchased under the contract of
insurance. It is further held that, the legal obligation
arising under Section 147 of the Act cannot be
extended to an injury or death of the owner of the
vehicle or a pillion rider traveling thereon. It is also
held that the pillion rider become a gratuitous
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passenger and on perusal of the written statement, it
is also specifically contended that the policy does not
cover the risk of the pillion rider and in support of the
said contention also, the witness has been examined
before the Tribunal and proved the defence that the
policy does not cover the risk of the pillion rider.
Hence, it is clear that the appellant/Insurance
Company owed no liability towards the injuries
suffered by the injured, who was a pillion rider, as the
Insurance Policy was a statutory policy, and hence it
did not cover the risk of death of or bodily injury to a
gratuitous passenger. The injured was, indisputably,
not the driver of the vehicle, he was a pillion rider and
the premium paid in respect of the owner-cum-driver
and also in respect of the third party. The Apex Court
has held that the pillion rider cannot be treated as a
third party under Section 147 of the Act. The very
contention of the learned counsel for the claimant is
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that the Insurance Company is liable to pay the
compensation cannot be accepted.
31. The Tribunal failed to appreciate the facts
of the case on hand and erroneously came to the
conclusion that the vehicle is a two wheeler with
seating capacity of two including the driver, there has
been coverage towards third party liability and there is
separate personal expenditure coverage for registered
owner-cum-driver. It is erroneously further observed
that, when the seating capacity of the vehicle is two
and there is separate premium for owner-cum-driver,
then the liability has the coverage of the appellant in
respect of the said vehicle. The said approach is
erroneous and there is no separate premium in
respect of the pillion rider and premium is paid only in
respect of third party and also in respect of owner-
cum-driver and the policy was misinterpreted while
fastening the liability on the Insurance Company. In
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the absence of premium not paid in respect to the
pillion rider and when the policy is an act policy that
means liability policy, the Tribunal ought not to have
held that the Insurance Company is liable to pay the
compensation and the said erroneous approach
requires to be set aside and the liability has to be
modified by answering point No.2 as ‘affirmative’.
32. In view of the discussions made above, I
pass the following:
ORDER
(i) The appeal is allowed in part.
(ii) The judgment and award passed in
MVC No.20/2010 dated 30.06.2012
on the file of Additional Senior Civil
Judge and MACT XIII at Madhugiri, in
respect of the liability fastened on the
Insurance Company is set aside and
the same is modified and held that
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the respondent No.2 (owner/insured)
is liable to pay the compensation.
(iii) The owner/respondent No.2 is
directed to pay the compensation
within eight weeks.
(iv) Office is directed to refund the
amount in deposit, if any, in favour of
the Insurance Company.
(iv) The Registry is directed to send the
Trial Court records, forthwith.
Sd/-
JUDGE
cp*