UNITED INDIA INSURANCE CO. LTD. vs KALLESHAPPA S/O MALIYAPPA, & ORS.

Since these appeals arise out of common judgment and order of the Motor Accident Claims Tribunal, Tarikere [the ''Tribunal'', for short] involving the same accident, the same are clubbed together, heard and disposed by this common judgment.

The insurance company is in appeal

challenging the impugned judgment and order,

primarily on the ground that the offending vehicle insured with the appellant-insurance company was required to carry 3+1 persons as per the seating capacity of the vehicle. The appellant-insurance company has issued a policy of insurance in respect of Autorikshaw (offending vehicle) on the terms that maximum three passengers should be carried in the vehicle which was an implicit condition and the insured was bound to follow it meticulously in order to seek indemnification. But indisputably, more than three passengers (4) were traveling at the relevant point of time which indicates that there was willful breach of terms and conditions of the policy resulting in violation of the terms and conditions. It is the grievance of the insurance company that the Tribunal has not addressed this vital aspect while deciding the liability. Thus, the liability fastened on the insurance company is unsustainable. Learned counsel Sri.A.N.Krishna Swamy, elaborating the arguments on these points, contended that the Tribunal grossly erred in fastening the liability on the insurance company, overlooking the aspect of breach of terms and conditions of the policy.

Learned counsel Sri.Ravi.H.K., for Sri.H.Kantharaja, appearing for the claimants placing reliance on the judgment of the Hon''ble Apex Court in the case of UNITED INDIAN INSURANCE CO. LTD., V/S. K.M.POONAM AND OTHERS reported in 2011 AIR SCW 2802, contends that the liability of the insurance company cannot be exonerated merely for the reason that excess number of persons were carried in the offending vehicle at the time of the accident. Even admitting the fact that no premium had been paid for the policy for the four persons, the insurer would be liable to make the payment of the compensation amount as far as three persons to whom the premium was paid. However, as the fourth person is concerned, though entitled to 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.

Heard the learned Counsel for the parties and perused the material on record.

The factum of accident, the nature of the injuries sustained by the claimants and the quantum of compensation are not in dispute. The fulcrum of dispute revolves round the liability of the insurer in as much as the offending vehicle - Autorikshaw, indisputably carrying four persons at the time of the accident in excess of its seating capacity and the premium paid for the coverage of the insurance with respect to three persons. Merely for the reason that the passengers in the Autorikshaw at the time of the accident were in excessive would not be treated as a disqualification for the insured or a ground for the insurance company to escape the liability. The liability of the insurer as far as three persons for whom the premium is collected requires to be discharged. However, the liability of the insurer would be confined to the number of persons covered by the insurance policy and not beyond the same. In the present case, since the insurance policy of the owner of the vehicle covered three occupants of the vehicle in question, the liability of the insurer would be confined to three persons only notwithstanding large number of persons carried in the vehicle. This view is fortified by the judgment of the Hon''ble Apex Court in

the case of K.M.POONAM AND OTHERS (supra) referred to, by the learned counsel appearing for the claimants. It is the arguments canvassed by the learned counsel for the claimants that the insurance company is liable to pay the compensation amount awarded by the Tribunal even in respect of the fourth person and is at liberty to recover the same from the insured. This argument of the learned counsel appearing for the claimants cannot be countenanced by this Court for the reason that such direction of power of pay and recover from the insured can be exercised by the Hon''ble Apex Court under Article 142 of the Constitution of India which power neither this Court nor the Tribunal can exercise. This is the view expressed by the recent Division Bench of this Court in SMT.RATHNAMMA AND OTHERS V/S. NAGARAJU AND ANOTHER in M.F.A.No.3374/2016 (D.D 23rd February 2017) wherein, another Division Bench Judgment of this Court in the case of THE ORIENTAL INSURANCE CO., LTD., Vs. SRI.

K.C. SUBRAMANYAM AND ANOTHER reported in ILR 2012 KAR 5241 is followed. For the aforesaid, this Court rejects the contention of the claimants on these aspects.

Now, the next question would be regarding determination of the compensation payable by the insurance company i.e., the insurer cannot pick and choose the number of persons to be compensated being in excessive of the number of person to whom the premium must paid. In such circumstances, the Hon''ble Apex Court in the case of NATIONAL INSURANCE COMPANY CO. LTD., V/S. ANJANA SHYAM AND OTHERS reported in AIR 2007 SC 2870 has categorically held that since there is no means of ascertaining who out of the overloaded passengers constitute the passengers covered by the insurance policy as permitted to be carried by the permit itself, the purpose of the Act is to bring benefit to the third parties who are either injured or dead in an accident which is a social purpose and

keeping that in mind, it would be practical and proper course 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. In the light of the said judgment, the insurer is liable to pay compensation to the three higher of the amounts of compensation awarded i.e., in M.V.C.NO.17/2008, M.V.C.No.18/2008 and M.V.C.No.23/2008 as awarded by the Tribunal with interest at the rate of 6% per annum from the date of the petition till the date of deposit. However, the claimant in M.V.C.No.16/2008 is at liberty to recover the compensation from the registered owner of the offending vehicle.

For the reasons aforesaid, the appeals stand disposed of accordingly.

The amount in deposit shall be transferred to the jurisdictional Tribunal for disbursement in M.F.A.Nos.7187, 7188 and 7189/2010. The amount deposited in M.F.A.No.7186/2010 shall be refunded to the appellant-insurance company forthwith.