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Judgment
D. Jagannatha Raju, J.—These two appeals are filed by the insurance company, R-3, in two different original petitions. The two original petitions arise out of the same accident which took place on 2.11.1981 at 4 p.m. near Appannapet Shivar. CM.A No. 271 of 1985 arises out of O.P. No. 90 of 1982 on the file of the Motor Accidents Claims Tribunal, Karimnagar. It relates to the death of V. Guravaiah aged 25 years. His wife and mother are the claimants in the original petition. The Tribunal awarded a compensation of Rs. 50,000/- with proportionate costs and interest at 6 per cent per annum from the date of the original petition till the date of realisation. The decree was passed jointly and severally against all the 3 respondents--the driver, the owner and the insurance company. In this appeal the appeal was dismissed for default against the driver who is R-3 in the appeal.
C.M.A. No. 300 of 1985 arises out of O.P. No. 91 of 1982 and in this case the claimant is Erugula Rajaiah who was injured in the accident and his wife Nagamma aged 35 years and daughter Mariyamma aged 12 years died in the accident. He claimed compensation for injuries to himself and for the death of his wife and daughter. In all he claimed a compensation of Rs. 75,000/-. The Tribunal awarded compensation of Rs. 5,000/- for injuries to the claimant and awarded Rs. 40,000/- on all counts for the death of the wife, and Rs. 15,000/-for the death of the daughter. In all Rs. 60,000/-was awarded with interest at 6 per cent per annum and a decree was granted jointly and severally against all the respondents.
In this appeal as the full amount claimed, i.e., Rs. 75,000/- was not granted, the claimant filed cross-objections and in the cross-objections it was claimed that the various deductions made by the Tribunal from the probable earnings of the deceased are not proper and compensation should have been awarded for loss of consortium also. The cross-objections are indicated as Rs. 69,000/-. A court fee of Rs. 10/- was paid.
In these two connected appeals and the cross-objections Mr. LA. Naidu appearing for the appellant insurance company contends that as the injured person and the deceased persons were travelling in the lorry which is a goods vehicle the insurance policy does not cover risk to such passengers. He claims that these persons are gratuitous passengers and hence there is no liability for the insurance company. He relies upon a number of decisions in support of his argument. He further contends that under any circumstances the liability of the insurance company is limited to a total amount of Rs. 50,000/-. The Tribunal is not justified in granting compensation which is in excess of this limit. He also contends that u/s 95 (2) the limit of Rs. 50,000/-applies for one accident and it is not applicable to each original petition arising out of the accident.
On behalf of the respondents it is contended that in these cases the persons involved in the accident are labourers who are employed by the owner of the lorry who is also a contractor. They were travelling in the lorry as coolies who are expected to load and unload the goods in the lorry. Hence they are the employees who have necessarily to travel in the lorry and the insurance policy certainly covers risk to them. It is also contended that u/s 96 (2) the insurance company is not entitled to raise the defence regarding the quantum of damages. Whatever the insured is liable to pay as per the court''s decree, the insurance company is bound to pay. It is also contended that the limit of the insurance policy applies to each original petition arising out of the accident and it does not apply to all the original petitions arising out of the accident. Reference is made to a decision reported in Motor Owners'' Insurance Co. Ltd. v. Jadavji Keshavji Modi 1981 ACJ 507 (SC) and claimed that the Supreme Court has explained the meaning of the words ''any one accident'' and it is with reference to the view of the injured person who met with the accident and it is not a case of limit for all the original petitions arising out of the accident.
The points that arise for determination in these two C.MAs. are:
(1) Whether the insurance company is liable to pay compensation in these two original petitions?
(2) Whether the liability of the insurance company is limited to Rs. 50,000/- as claimed by the appellant or whether it is limited to Rs. 50,000/- for each original petition or whether the liability is unlimited?
(3) Whether the cross-objections in C.M.A No. 300 of 1985 are liable to be allowed?
Point Nos. 1 and 2:
A reading of the record reveals that the owner of the lorry gave evidence as RW1 and he clearly deposed that he is the owner of the lorry and that he is a contractor by profession and that the persons involved in the accident were travelling in the lorry as contract labourers engaged by him for loading and unloading the load of gravel that was being carried in the lorry. They are not gratuitous passengers as claimed by the insurance company. It is the claim of RW1, the owner of the lorry, that the insurance policy covers the risk to these persons who are engaged as labourers in connection with the load carried in the lorry. They are also employees of the owner of the lorry who is the contractor utilising the lorry for his own purposes. The claim of the insurance company that they are gratuitous passengers is totally demolished. On behalf of the claimants also there is evidence to show that they were travelling in the lorry at the time of the accident as labourers engaged for loading and unloading the gravel. The insurance company cannot claim that they are gratuitous passengers. They are the employees of R-2 travelling in the lorry for the purpose of loading and unloading the goods in the lorry.
It is now admitted that at a turning, the lorry turned turtle and several people died and several people received injuries in this accident. The driver of the lorry was prosecuted and he was convicted for the offences under Sections 304A and 337, Indian Penal Code by the Judicial First Class Magistrate, Sultanabad. There is ample evidence to show that the accident is the direct result of rash and negligent driving of the driver of the lorry APR 4546. While negotiating a turning at a high speed, the lorry turned turtle and met with the accident.
It should be remembered that the insurance company is entitled to raise only such defences as are specified u/s 96 (2) of the Motor Vehicles Act. I shall now deal with the legal contentions raised with reference to the case law relied upon by both the parties.
Point No. 2:
It is contended on behalf of the appellant that the total liability of the insurance company is limited to Rs. 50,000/-regarding the entire accident and the Tribunal is not justified in awarding huge amounts in each original petition. On behalf of the respondents it is contended that the limit of Rs. 50,000/- is not applicable and the insurance company is not entitled to question the quantum of compensation. The insurance company''s defences are limited to the specified grounds mentioned in Section 96 (2) of the Motor Vehicles Act (hereinafter referred to as ''the Act''), and the insurance company is bound to pay whatever is decreed against the insured, viz., the owner of the lorry. In view of these rival contentions it becomes necessary to examine Sections 95 and 96 of the Act. u/s 95 of the Act, the requirements of policies and limits of liability are given. According to Section 95 (2) of the Act, subject to the proviso to Sub-section (1), a policy of insurance shall cover ''any liability'' incurred in respect of ''any one accident'' upto the following limits. Under Clause (a) where the vehicle is a goods vehicle, a limit of Rs. 50,000/-is prescribed. Subsequent to the amendment in October 1982 the limit has been raised to Rs. 1,50,000/-. These two Sections have been considered by the Supreme Court in the decision reported in Motor Owners'' Insurance Co. Ltd. v. Jadavji Keshavji Modi 1981 ACJ 507 (SC). The meaning and significance of the words ''in all'' and ''any one accident'' have been explained. The court after extracting the unamended Sections 95 and 96 as per the amended Act 56 of 1969 discussed the question of limits and the meaning of ''in all'' and ''any one accident'' in paras 14 to 17 and observed as follows at page 513:
Clause (a) of Section 95 (2) does not stand alone and is not the only provision to be considered for determining the outside limit of the insurer''s liability.
Then after dealing with the scope and effect of Clauses (a) to (d) read in conjunction with Clause (a) the court observed in para 15 at page 513 as follows:
The expression ''any one accident'' is susceptible of two equally reasonable meanings or interpretations. If a collision occurs between a car and a truck resulting in injuries to five persons, it is as much plausible to say that five persons were injured in one accident as it is to say that each of the five persons met with an accident. A bystander looking at the occurrence objectively will be right in saying that the truck and the car met with an accident or that they were concerned in one accident. On the other hand, a person looking at the occurrence subjectively, like the one who is injured in the collision, will say that he met with an accident. And so will each of the five persons who were injured. From their point of view, which is the relevant point of view, ''any one accident'' means ''accident to any one''. In matters involving third party risks, it is subjective considerations which must prevail and the occurrence has to be looked at from the point of view of those who are immediately affected by it.
Then after dealing with the question of objective point of view the court observed at the end of para 15 as follows:
A consideration of preponderating importance in a matter of this nature is not whether there was any one transaction which resulted in injuries to many but whether more than one person was injured, giving rise to more than one claim or cause of action, even if the injuries were caused in the course of one single transaction. If more than one person is injured during the course of the same transaction, each one of the persons has met with an accident.
Then the Supreme Court dealt with the ambiguity in the language used by the legislature in Section 95 (2) and observed that the doubt arising out of the correlation of that language with the words ''in all'' which occur in Clause (a), must be resolved by having regard to the underlying legislative purpose of the provisions contained in Chapter VIII of the Act which deals with third party risks. That is a sensitive process which has to accommodate the claims of the society as reflected in the legislative purpose. Indeed it is in this area of legislative ambiguities, unfortunately not receding, that courts have to fill gaps, clear doubts and mitigate hardships. It observed in the end portion of para
16 as follows:
We are of the opinion that it is appropriate to hold that the word ''accident'' is used in the expression ''any one accident'' from the point of view of the various claimants, each of whom is entitled to make a separate claim for the accident suffered by him and not from the point of view of the insurer.
In view of this weighty pronouncement of the Supreme Court it is quite clear that the limit of liability is with regard to each injured person in the accident and it is not limited to all the insured who were injured in one accident. Following the Supreme Court decision I hold that the liability of the insurance company cannot be limited to Rs. 50,000/- for all the persons injured in the accident as claimed by the insurance company.
It is argued for the claimants that the insurance company has no right to question the quantum by virtue of Section 96 (2) of the Act and the insurance company u/s 96 (1) is bound to pay whatever is decreed under a judgment against the insured. If this interpretation is to be accepted then the words "being a liability covered by the terms of the policy" would have no meaning and the limits prescribed under the Act (section 95) would be a nullity. Considering the language of Section 95 and Section 96 and giving a harmonious construction I hold that as interpreted by the Supreme Court the limit of Rs. 50,000/- extends to each person injured in the accident though several persons might be injured in one accident. The liability of the insurance company cannot be said to be unlimited. I hold on point No. 2 that the liability of the insurance company is limited to Rs. 50,000/- for each person injured in the accident and it is not correct to say that the liability is unlimited. It is also not correct to say that the total liability of the insurance company is limited to Rs. 50,000/- for all the persons injured in one accident.
The next important question that has to be considered is whether the insurance company is liable to pay compensation in these two original petitions. Mr. Naidu relies upon a decision reported in Premier Insurance Co. Ltd. v. Vaddeswarapu Siromanamma 1984 ACJ 760 (AP), a Division Bench decision of the Andhra Pradesh High Court. That decision deals with a case of death of a gratuitous passenger in a lorry in an accident caused due to negligent driving of the driver. On facts it was found that the deceased was given a lift by the lorry driver and he was a gratuitous passenger. When the lorry dashed against another lorry and as a result of it the deceased died due to the injuries sustained by him, the court held that the insurance company is not liable. At page 763 after considering the various decisions of different High Courts, the court observed as follows:
It is further held that where free lifts are given by the drivers of goods vehicle or public service vehicle and if an event occurs which gives rise to a claim against the owner of the vehicle and against the insurer, such passengers who are not carried for hire or reward would have nothing to fall back upon except the claim against the owner of the vehicle.
At page 765 the court recorded its conclusion as follows:
In view of the finding by the court below that the passengers were travelling gratuitously the liability cannot be fastened upon the insurance company on the basis of the Act policy or compulsory insurance envisaged u/s 95 of the Act.
This particular decision is not applicable to the facts of our present case because it is now found as a matter of fact that the injured persons and the deceased were travelling in the lorry as contract labour employees of the owner of the lorry who is a contractor by profession. They were travelling in the lorry as they are required to do the loading and unloading of the gravel carried in the lorry. They cannot be treated on par with gratuitous passengers travelling in a goods vehicle. The decision in Oriental Fire & General Insurance Co. Ltd. v. M. Chandrarao 1987 ACJ 174 (AP), is an exhaustive decision of my learned brother M. Jagannadha Rao, J. His Lordship dealt with the scope of Sections 95 and 96 and the various types of passengers that would get involved in accidents both in the case of passenger vehicles as well as goods vehicles and then dealt with the liability of the insurance company with regard to each category of passengers. Under the heading (C) his Lordship dealt with who are passengers carried for ''hire or reward'' or ''by reason of a contract of employment''. Then relying upon M. Suryanarayana v. G. Satyavathi 1979 ACJ 513 (AP), observed at page 181 as follows:
Our High Court has considered the owner of the goods as a person carried under a contract of employment. Whatever be the reasoning, all the above High Courts hold the insurance company liable under the Act policy under Clause (ii) of the proviso to Section 95 (1) (b). On this point, the Division Bench judgment in M. Suryanarayana v. G. Satyavathi 1979 ACJ 513 (AP), holds the field in our High Court, making the insurance company liable.
Then dealing with the special category of employees of the owner of the goods the court observed at page 182 as follows:
Thus, if the persons carried are employees of a third party who has hired the vehicle, they will be covered by the Act policy and the insurance company will be liable. .. .Thus in respect of the employees of the owner of the goods or of the hirer, the insurance company is liable under the Act policy.
Then dealing with the third category employees of owner of goods vehicle the court held that the insurance company will be equally liable for risk to such passengers. In the present case the persons who were injured in the accident come both under the category of employees of owner of goods vehicle as well as the employees of the owner of the goods carried in the vehicle. The insurance company is certainly liable to pay compensation regarding their death and injury. In fact the court considered the question of passengers carried in a goods vehicle for hire or reward and came to the conclusion that the insurance company would be liable; only for gratuitous passengers the insurance company will not have any liability.
The decision in Kannekanti Varamma and Others Vs. Puli Ramakotaiah and Others, , lays down that even when more than six persons have been carried while using the vehicle on the public way for the purpose for which the permit was issued, it cannot be said that there is contravention of covenants of the policy, though there is a contravention of the conditions of the statute. If there is any contravention of the conditions, it is always open to the other party to take appropriate action, but that would not be a ground for holding that it is a breach of conditions of the contract of policy of the insurance, Section 96 (2) has no application and Section 95 (2) (a) does not prohibit the court to award the amount as damages. This decision aptly applies to the facts of our case because in this case more than six persons were being carried for the purpose of loading and unloading the gravel in the lorry. It is of course true that not more than six persons were injured and a claim is made only with regard to the four individuals injured or died in the accident. The decision reported in Mohd. Abdul Raheem v. Chakkala Parvatamma 1986 ACJ 785 (AP), is a decision of the Andhra Pradesh High Court where K. Ramaswamy, J. held that for the death of or injury to a passenger who was being carried in a goods vehicle for hire or reward though carrying of such a passenger is unauthorised under the Act and prohibited under the permit, the owner would be liable. This is a case where the driver and the manager of the owner of the goods vehicle carried the passenger in the goods vehicle collecting fare and then an accident took place when the vehicle turned turtle. It was held that the owner must be held liable for the tortious act of the driver. In that decision the appellant''s counsel conceded that the insurance company is not liable for payment of the amount and the claim was limited only to the owner and the driver of the lorry. The decision reported in Vemula Nancharayya v. Oliti Muthyalamma 1987 ACJ 274 (AP), lays down that the contract of employment found in Section 95 covers not only a contract with the owner of the insured vehicle but also persons who are on the vehicle in pursuance of a contract of employment with the owner of the goods carried on it--any breach of the conditions of the permit does not affect the rights of the third party to claim the amount of compensation. The court also observed that the insurance company is certainly liable and that any breach of the conditions of the permit does not affect the rights of the third party to claim the amount of compensation. The decision in Shaik Saida v. Veeramma 1987 (1) ALT 368, is a Bench decision of our High Court where the Division Bench held that for the death of employee of owner of goods travelling with permission of lorry driver, the insurance company is also liable to pay compensation.
In view of the various decisions just now discussed, I hold on point No. 1 that the insurance company is certainly liable to pay compensation in these two original petitions because the persons who died and the person who was injured were all travelling as labourers employed by the owner of the lorry who is also the contractor who was utilising the lorry for carrying gravel and these persons were being taken for the purpose of loading and unloading of the gravel in the lorry. They come within the category of employees of the owner as well as the employees of the owner of the goods carried in the lorry. The insurance company is certainly liable to pay compensation for the death or injury caused to them in an accident caused by rash and negligent driving of the lorry driver.
Point No. 3:
Cross-objections are filed in CM.A No. 300 of 1985 with regard to the amounts disallowed by the Tribunal. As earlier indicated C.M.A. No. 300 of 1985 deals with a case where the claimant Rajayya was injured in the accident and his wife Nagamma aged 35 years and his daughter Mariyamma aged 12 years died in the accident. A total compensation of Rs. 60,000/- was awarded when he claimed Rs. 75,000/-. Reading the cross-objections, I am unable to understand on what basis he claims that the amount disallowed is Rs. 65,000/- but para No. 3 of Memo, of grounds of cross-objections clearly mentions that the lower court ought to have granted Rs. 65,000/- towards loss of consortium and Rs. 4,000/- towards pain and suffering for the death of his wife and daughter. Nagamma who died was aged 35 years. The claimant Rajayya was aged about 40 years. I can understand his making a claim for loss of consortium. But I am not able to understand his claim made regarding Rs. 65,000/- towards loss of consortium and Rs. 4,000/- towards pain and suffering. In the order passed by the Tribunal for the death of the wife a total amount of Rs. 40,000/- was awarded for loss of the company of his wife and the loss of her earnings and for the loss of society of his wife. When Rs. 40,000/- awarded to him includes the loss of consortium, i.e., loss of the company of his wife, I am unable to understand how he can make a further claim for loss of consortium. I find that the cross-objections are without merit and the cross-objections are filed with regard to the amounts which have already been awarded by the Tribunal. I see no justification for allowing the cross-objections. I hold on point No. 3 that the cross-objections are liable to be dismissed.
In the result CM.A. No. 271 of 1985 is dismissed with the following rider: The judgment and decree are confirmed. The liability of the insurance company is restricted to Rs. 50,000/-. For the amount exceeding Rs. 50,000/-, the owner of the lorry is liable.
In the result C.M.A. No. 300 of 1985 is dismissed with the following rider: The judgment and decree are confirmed. The liability of the insurance company is limited to Rs. 50,000/- for each of the persons, viz., Nagamma and Mariyamma and it is also restricted to Rs. 50,000/- for the claim of Rajayya the claimant. In the net result the entire amount decreed in this original petition is liable to be paid by the insurance company because there are two dead persons and one injured person concerned in the original petition. The cross-objections filed in C.M.A. No. 300 of 1985 are dismissed. Each party shall bear its own costs in these appeals and in the cross-objections.