National Insurance Company Limited vs Sandhya Rani Roy And Ors.

Heard Mr. P. Gautam, learned counsel appearing for the appellant- National Insurance Company Ltd. [the insurer] as well as Mr. A.K. Bhowmik, learned senior counsel assisted by Mr. R. Datta, learned counsel appearing for the owner of the offending vehicle [bus] bearing registration No. AS-01Y-7379 and Mr. D.C. Roy and Mr. A. Pal, learned counsel appearing for the claimant-respondents.

All these appeals being MAC APP.50 of 2014 [National Insurance Company Ltd. versus Sandhya Rani Roy & Others], MAC APP.56 of 2014 [The National Insurance Company Limited versus Jibu Ranjan Chowdhury & Others], MAC APP No. 58 of 2014 [The National Insurance Company Limited versus Smt. Arati Nama] & MAC APP 59 of 2014 [The National Insurance Company Limited versus Smt. Rina Nama (Biswas) and Others] are consolidated for disposal by a common judgment as all these appeals arise from the same road traffic accident and above all, the solitary question that has been raised in these appeals is in respect of the liability of the insurer-appellant in payment of the award. The facts are undisputed. The victims were returning from Guwahati to Agartala by boarding the night super bus bearing No.AS01- Y-7379. In the very early morning on the following day when the bus reached Tongseng under Khliehriat Police Station under East Jayantia Hills in the state of Meghalaya, due to rash and negligent driving, the driver of the said vehicle lost control in a sharp turning. Consequently, it fell down in a deep gorge. As a result, several passengers including the victim received fatal injuries and died. The compensation for the damage has been claimed in the Motor Accident Claims Tribunal, West Tripura, Agartala under Section 166 of the Motor Vehicle Act, 1988.

In the table as formed below, number of the claim case, name of the victim with the description of damage, the amount of compensation with date of the award and rate of interest are provided as the essentials for determining these appeals :

Claim Case No.

Name of the victim and nature of damage

The amount of compensation with

date of award

The rate of interest with date of effect

T.S.(MAC)533 of 2012

Biplab Ray

Injuries resulting in death

Rs.8,35,000/- by

judgment and award dated 06.03.2014

9% with effect from 14.12.2012 till

realisation.

T.S.(MAC)222 of 2012

Prasenjit Chowdhury Injuries resulting in

death

Rs.26,57,000/- by

judgment and award dated 03.03.2014

6% Panel interest at 9% p.a. if the amount is not paid within two months. with effect from 16.11.2012 till

realisation.

T.S.(MAC)534 of 2012

Swapan Nama Injuries resulting in

death

Rs.15,92,500/- by

judgment and award

dated 06.03.2014

9% with effect from 14.12.2012 till

realisation.

T.S.(MAC)535 of 2012

Monoranjan Biswas Injuries resulting in

death

Rs.15,67,500/- by

judgment and award

dated 06.03.2014

9% with effect from 14.12.2012 till

realisation.

Mr. P. Gautam, learned counsel appearing for the appellant has submitted that the liability of the insurance company is strictly limited by the condidiotns of the insurance policy. According to Mr. Gautam, learned counsel by the concerned policy [Exbt. E] only 38 passengers, were insured inasmuch as the vehicle was authorised to carry only 38 passengers not beyond that. But admittedly the vehicle carried more than 38 passengers as from the FIR filed in the Khliehriat Police Station being Khliehriat Police Station case No.130 of 2012 under section 279/337/338/427/304a of the IPC, it is discernable that 28 passengers died on the spot and 27 passengers including the driver sustained grievous injuries. Thus, the vehicle carried more passengers beyond its authorised capacity (38 -passengers + the driver).

Mr. Gautam, learned counsel has therefore urged that the insurer cannot be made liable to pay for the damage suffered by the passengers beyond its authorised capacity.

At this juncture, the counsel appearing for the respondents have in unison submitted that this court has already decided the question in the appeals arising from the same accident being MAC APP. No.06 of 2015, MAC APP. No.108 of 2014 and MAC APP. No.109 of 2014. The said decision [the judgment and order dated 24.04.2014] has been placed before this court. Having examined the said judgment it appears that all these appeals are squarely covered by the said judgment. The relevant passages from that judgment are reproduced below.

"8. In view of the above observations, the only question that is left for decision by this court in all these appeals is what has been formulated above [para-4]. Mr. Lodh, learned counsel appearing for the appellants has fairly submitted that even though, there is a breach of the condition as the insurer of the said offending vehicle they cannot avert the liability of payment of in respect of the passengers within limit and the driver- workman whom the insurance policy covered. Thus, according to Mr. Lodh, learned counsel 39 person [passengers + driver] are contractually covered by the policy. But the insurer- appellant are not liable to pay beyond that. If it happened that the claims are raised in respect of all the persons who died or received injuries in the said accident, the liability would involve for more than 39 persons. He has thus categorically stated that the insurance company cannot be saddled with the said liability which is not contractually permitted. In support of that Mr. Lodh, learned counsel has referred a decision of the apex court in National Insurance Co. Lt. versus Anjana Shyam and Others reported in 2007 AIR SCW 5237 where the law has been enunciated to resolve this complex issue in the following manner :

"16. Then arises the question, how to determine the compensation payable or how to quantify the compensation since there is no means of ascertaining who out of the overloaded passengers constitute the Page 9 of 12 MAC APP NO. 06 OF 2015 MAC APP NO.108 OF 2014 MAC APP NO. 109 OF 2014 passengers covered by the insurance policy as permitted to be carried by the permit itself ? As this court has indicated, the purpose of the Act is to bring benefit to the third parties who are either injured or dead in an accident. It serves a social purpose. Keeping that in mind, we think that the practical and proper course would be to hold that the insurance company, in such a case, would be bound to cover the higher of the various awards and will be compelled to deposit the higher of the amounts of compensation awarded to the extent of the number of passengers covered by the insurance policy. Illustratively, we may put it like this. In the case on hand, 42 passengers were the permitted passengers and they are the ones who have been insured by the insurance company. 90 persons have either died or got injured in the accident. Awards have been passed for varied sums. The Tribunal should take into account, the higher of the 42 awards made, add them up and direct the insurance company to deposit that lump sum. Thus, the liability of the insurance company would be to pay the compensation awarded to 42 out of the 90 passengers. It is to ensure that the maximum benefit is derived by the insurance taken for the passengers of the vehicle, that we hold that the 42 awards to be satisfied by the insurance company would be the 42 awards in the descending order starting from the highest of the awards. In other words, the higher of the 42 awards will be taken into account and it would be the sum total of those higher 42 awards that would be the amount that the insurance company would be liable to deposit. It will be for the Tribunal thereafter to direct distribution of the money so deposited by the insurance company proportionately to all the claimants, here all the 90 and leave all the claimants to recover the balance from the owner of the vehicle. In such cases, it will be necessary for the Tribunal, even at the initial stage, to make appropriate orders to ensure that the amount could be recovered from the owner by ordering attachment or by passing other restrictive orders against the owner so as to ensure the satisfaction in full of the awards that may be passed ultimately."

Mr. Lodh, learned counsel has further relied on a decision of the apex court in Sunil Sharma and Ors. versus Bachitar Singh reported in 2011 AIR SCW 2811. In order to counter the submissions of Mr. Lodh, learned counsel appearing for the appellants, Mr. Das, learned counsel has referred a decision of the Gauhati High Court in National Insurance Company Limited versus Samina Begum and Others reported Page 10 of 12 MAC APP NO. 06 OF 2015 MAC APP NO.108 OF 2014 MAC APP NO. 109 OF 2014 in (2013) 3 GLR 349 where the Gauhati High Court has laid down the law as under :

"13. On aggregate consideration of the materials as available in the records and as scrutinized by this court as well as on appreciation of the contentions by the counsel of the parties, this court has no hesitation to hold that the appellant shall pay the awarded sum to the claimant- respondent forthwith on deducting the sum, if any, that has been paid by this time. It is further held that after adjudication of the claim petitions as referred in Ext. C and D document, if it is found that the claims of the passengers are more than 34, then the insurance company would be at liberty to recover the rateable proportion as per the clause as extracted from the India Motor Tariff from the insured, owner of the vehicle under section 174 of the Motor Vehicles Act and for that purpose the appellant shall furnish copies of the judgment and award before the Tribunal for due examination. It is made clear that the award has to be satisfied by the appellant in all the cases initially and only thereafter they would be at liberty to realize the rateable proportion if it is found that the passengers who fell victim to the said accident were more than 34(thirty four)."

Mr. B. Debnath and Mr. D.C. Ray, learned counsel appearing for the claimant-respondents in other 2(two) appeals have expressed that there is no record in the evidence to show how many claims have been raised by the victims of the said accident, even if, hypothetically it is assumed that the claimants would be beyond 39 then also according to the learned counsel appearing for the claimant-respondents, the Insurance Company Limited cannot initially avert their liability inasmuch as in United India Insurance Co. Ltd. versus K.M. Poonam & Ors., reported in 2011 AIR SCW 2802 the apex court has observed as under :

"24. The liability of the insurer, therefore, is confined to the number of persons covered by the insurance policy and not beyond the same. In other words, as in the present case, since the insurance policy of the owner of Page 11 of 12 MAC APP NO. 06 OF 2015 MAC APP NO.108 OF 2014 MAC APP NO. 109 OF 2014 the vehicle covered six occupants of the vehicle in question, including the driver, the liability of the insurer would be confined to six persons only, notwithstanding the larger number of persons carried in the vehicle. Such excess number of persons would have to be treated as third parties, but since no premium had been paid in the policy for them, the insurer would not be liable to make payment of the compensation amount as far as they are concerned. However, the liability of the Insurance Company to make payment even in respect of persons not covered by the insurance policy continues under the provisions of sub-section (1) of Section 149 of the act, as it would be entitled to recover the same if it could prove that one of the conditions of the policy had been breached by the owner of the vehicle. In the instant case, any of the persons travelling in the vehicle in excess of the permitted number of six passengers, though entitled to be compensated by the owner of the vehicle, would still be entitled to receive the compensation amount from the insurer, who could then recover it from the insured owner of the vehicle."

Having considered the rival contentions as raised by the learned counsel for the parties, this court is of the view that the basic liability of the Insurance Company is limited to the highest awards till the first 39 awards meaning all the highest awards would be added for having the basic liability of the Insurance Company. If the awards were beyond the limit of liability, the initial liability of the Insurance company would be to satisfy the said additional awards but at the same time, the Insurance company shall remain entitled to recover the said additional amount from the owner by a certificate proceeding under Section 174 of the Motor Vehicles Act without instituting any suit"

This court has noticed that in the judgment and award dated 03.03.2014 T.S.(MAC)222 of 2012 the penal interest at 9% has been awarded retrospectively in default of payment within the prescribed time. This court in a series of judgments has held that the tribunal does not have the jurisdiction under Section 171 of the M.V. Act, 1988 to impose an award of penal interest retrospectively. As such, the imposition of penal interest stands interfered with and set aside. The liability of the payment of the award of the insurance company [the appellant in this appeals] is thus decided in terms of the decision in National Insurance Company Ltd. versus Ashish Ghosh and Others by the common judgment and order dated 24.04.2017 in MAC APP. No.06 of 2015 (etc).

In terms of the above observations and direction, these appeals are disposed of.

The appellant shall satisfy the award forthwith but by any rate not beyond one month from the date of receipt of the judgment and order.

There shall be no order as to costs.

A copy of the judgment and order be supplied to the learned counsel for the parties free of cost.