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Judgment
P.S. Dinesh Kumar, J.—Dependants of a passenger in an autorickshaw who succumbed to the injuries sustained in an accident which occurred on 02.02.2007 near Kalghatagi, Dharwad District, have preferred this appeal. For the sake of convenience, parties shall be referred as per their status in Tribunal.
The claimants presented a petition for compensation before the First Additional Civil Judge (Sr. Dn.) and Addl. MACT, Hubli (''Tribunal'' for short). The Tribunal by its judgment and award dated 13.08.2009 in M.V.C. No. 367/2007 awarded a compensation of Rs. 5,96,000/- with interest to be computed at 6% p.a. with a direction to pay 15% of compensation to the appellant No. 4 and 85% to be divided between the appellants No. 1 to 3 equally and to keep 50% of the amount in fixed deposit.
I have heard Shri Dinesh M. Kulkarni, learned counsel appearing for the appellant and Smt. Sharmila Patil for the respondent - Insurance Company and perused the records.
Learned counsel for the appellants has advanced two contentions. First contention is with regard to absolving the liability of the 2nd respondent - Insurance Company and saddling the liability upon the owner of the autorickshaw. Second contention is with regard to earning capacity and not adding any possible increments in the earning of the deceased while calculating the loss of earning. Amplifying these submissions, learned Counsel submits the Tribunal erred in absolving the insurance Company in as much as the passenger was at no fault. He submits that violation if any was on the part of the driver of autorickshaw and therefore the insurance Company is duly bound to satisfy the claim. He submits that the Tribunal has erred in not directing the Insurance Company to pay and recover from the owner.
As regards the earning capacity, the learned Counsel submits that the Tribunal erred in reckoning the earning capacity of the deceased as Rs. 4,000/-, whereas the claimants had placed a salary certificate Ex. P-8 which discloses that the deceased was earning Rs. 6,000/- at the material point of time.
In support of his first contention that the Insurance Company ought not to have been absolved of its liability, learned counsel for the appellants relies on the ruling of the Apex Court in the case of S. Iyyapan Vs. United India Insurance Company Ltd. and Another, .
In support of his second contention, that no addition was made to the possible increments of the deceased in his earning capacity, he places reliance on the ruling of the Supreme Court in the case of Rajesh and Others Vs. Rajbir Singh and Others, .
Per contra, Smt. Sharmila Patil, learned counsel appearing for the respondent - Insurer vehemently contends that the accident has occurred beyond the city limit of Hubli Dharwad Municipal Corporation; the autorickshaw in which the deceased was travelling had permit to ply only within Hubli Dharwad Municipal Area in a radius of 10 kms.
In reply to the contention that no increment is provided for in the earning capacity, she submits that the deceased was not having any permanent job and therefore, the Tribunal was right in not considering any increment in the earning capacity.
In support of her contention that the Insurance Company is not liable to pay and recover, she relies on the judgment of this Court in the case of Sri. Appayachari vs. K. Vadivel and The New India Assurance Company Ltd., Rep. by its Manager reported in LAWS (KAR) 2013-12-259. She draws the attention of this Court to paragraph No. 30 and contends that the condition precedent for application of rule ''pay and recover'' is that there should be a valid policy of insurance and there shall no breach of terms and conditions of the policy. Adverting to Section 149(2)(a)(i) of the M.V. Act she submits that since the vehicle in question was admittedly plying beyond the jurisdiction of Hubli-Dharwad Corporation area, it must be construed as plying without a valid permit and therefore the Tribunal was right in absolving the Insurance Company from liability as also in not directing to ''pay and recover''. She further submits that the owner has accepted the award as he has not challenged the award and in these circumstances, the appeal is devoid of merit and prays for dismissal of the same.
The facts in the case are in a narrow compass and not in dispute. Autorickshaw in which the deceased was travelling as a passenger had a valid permit. But according to the insurer, the accident has taken place beyond the limits of Hubli-Dharwad Municipal Corporation and therefore it must be absolved of the liability on the ground that there is violation of permit condition. The Tribunal has come to the conclusion that accident has occurred beyond limits of Municipal Corporation based on Ex. R1, the endorsement dated 13.03.2008 issued by the Regional Transport Officer, Dharwad, which states that the validity of permit is to ply the autorickshaw within 10 kms radius of Hubli - Dharwad Municipal Corporation limits. The Tribunal while dealing with this issue has held that distance between Hubli and Kalaghatagi is more than 25 kilometers, as per the knowledge of the Tribunal. Thus, the Tribunal has inferred that the vehicle has traveled beyond 10 km of Corporation limit. The Tribunal has further held that the records produced by the claimants show that accident has occurred at Kalaghatagi and the same is beyond 10 km. The endorsement at Ex. R1 which deals with validity of permit reads as follows:
"6. Area for which the permit valid: HDMC limits and beyond 10 kilometer radius only."
A plain reading of the endorsement leads to an irresistible inference that the auto-rickshaw under the said permit could ply within the limits of HDMC and 10 kilometers beyond. Therefore, the question is at what point the HDMC limit ends? If the Corporation has a radius of 15 kilometers, than the auto-rickshaw would have been within the limit prescribed in the endorsement.
Yet another aspect which needs to be considered is that, it is not the case of the Insurer that the auto-rickshaw was not covered by a valid policy. According to the insurer the auto-rickshaw had transgressed beyond prescribed limit and travelled some distance beyond the permitted area. According to the Tribunal, based on it''s own knowledge, it is beyond the area prescribed in the endorsement. The next question is as to whether or not the passenger had the knowledge of limitation of the movement of the autorickshaw in the prescribed area? There is no definite evidence on record either oral or documentary to prove the radius of Hubli Dharwad Municipal Corporation area and the exact location of accident to verify with the conditions of permit Ex-R1. To absolve the insurer of it''s liability, it ought to have proved with cogent and legal evidence that the accident has occurred in an area beyond the limit prescribed in the permit. In the absence of any evidence, the insurer cannot escape the liability. In the case on hand, if at all, there is any violation of permit condition, it is transgression of area prescribed in the endorsement Ex-R1. But such a transgression has not been proved by the insurance Company by placing evidence on record. Therefore, I am inclined to hold that the finding of the Tribunal that the Insurance Company is not liable to pay the amount is unsustainable in law and requires to be set aside.
The next question is with regard to possibility of increment in the earning capacity of the deceased. Admittedly the deceased at the time of accident and death was aged about 32 years. The learned counsel for the appellant submits that to substantiate the claim that the deceased was earning Rs. 6,000/- p.m. at the time of his death. Claimants have brought on record a certificate dated 22.03.2007 issued by M/s. Vishwanath Industries, which states that the deceased was working as Turner for last three years prior to the date of certificate and he was being paid Rs. 6,000/- p.m. This document has not been spoken to by either the author or any authorized person. The Tribunal has reckoned the earning capacity of the deceased at Rs. 4,000/- p.m. and accordingly, calculated the loss of future income. The appellants have contended before this Court that the deceased was a skilled worker and was working as a Turner, was earning Rs. 6,000/- p.m. It is further contended that, being young age, deceased had better opportunity of earning higher wages if he were to be alive. So far as earning capacity of the deceased at the relevant point of time, Ex. P8 could not have been considered as valid document as the same is not proved before the Tribunal in the manner known to law. Accident is of the year 2007. The Tribunal has also considered the income of deceased as Rs. 4,000/- and the same is just and fair. The question that now remains for consideration is with regard to increment in earning capacity. In Rajesh and Others Vs. Rajbir Singh and Others, Hon''ble Supreme Court, while considering the increment in future earning, has held as follows:
"8. Since, the Court in Santosh Devi Vs. National Insurance Company Ltd. and Others, actually intended to follow the principle in the case of salaried persons as laid down in Sarla Verma case and to make it applicable also to the self-employed and persons on fixed wages, it is clarified that the increase in the case of those groups is not 30% always; it will also have a reference to the age. In other words, in the case of self-employed or persons with fixed wages, in case, the deceased victim was below 40 years, there must be an addition of 50% to the actual income of the deceased while computing future prospects. Needless to say that the actual income should be income after paying the tax, if any. Addition should be 30% in case the deceased was in the age group of 40 to 50 years."
Thus, applying the ratio of above ruling, in my view, ends of justice will be met if an increment of at 50% is added and 1/4th of income is deducted towards personal expenses. Accordingly, loss of earning works out to Rs. 8,64,000/-. So far as compensation towards conventional heads is concerned, claimants shall be entitled to Rs. 70,000/- as is uniformly paid in cases of death. In all, the claimants shall be entitled to a compensation of Rs. 9,34,000/- (8,64,000 + 70,000).
The learned Counsel for the respondent has also adverted to Section 149 of the M.V. Act to contend that insurance company cannot saddled with the liability. Section 149(2)(a) deals with the conditions of policy and breach of conditions by insured inures to the benefit of the Insurer. The relevant provision reads as follows:
Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.-
(1) XXXXX
(2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:-
(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:-
(i) a condition excluding the use of the vehicle-
(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
Clause (a), excludes use of the vehicle on hire or reward, where the vehicle is not covered by a permit. Ex-R1, endorsement amply proves that the vehicle in question possessed a permit. The controversy in issue is whether or not it had transgressed the area of its operation within which the vehicle was permitted to ply. From the material on record, it is not discernable that the vehicle in question was at a distance beyond 10 kilometers from Hubli Dharwad Municipal Corporation. In the circumstances, I am inclined to hold that Section 2(a) in Sub-clause 1(a) does not inure to the benefit of the Insurance Company.
In the result, the appeal stands allowed. Claimants shall be entitled for compensation of Rs. 9,34,000/- as against Rs. 5,96,000/- awarded by the Tribunal with interest at the rate of 6% p.a., from the date of filing claim petition till the date of payment. The Insurance Company shall be liable to pay the said sum and is directed to pay within three months from the date of receipt of a copy of this order. Needless to mention that the Insurance Company may proceed against the owner and recover in separate proceedings in case the Insurance Company is otherwise entitled in law.
Ordered accordingly. No costs.