United India Insurance Company vs Surinder Kumar and Others

Deepak Gupta, J.—Both these appeals, one filed by the Insurance Company and one filed by the owner, are being disposed of by a common judgment, since they arise out of the same award.

Briefly stated, the facts of the case are that the Petitioner, Surinder Kumar, who was working as a mason, was travelling in Mahindra Pick Up No. HP-40-1839, which was owned by Shri Gian Singh. The vehicle was being driven by Ajay Kumar and it is alleged that he also has another alias, i.e. Maan Singh. The vehicle met with an accident due to the rash and negligent driving of the driver as a result of which the Petitioner suffered injuries. He remained in Hospital at Dharamshala from 13.09.2003 to 10.10.2003. Thereafter, he went to PGI Chandigarh, where he was treated as Out Door Patient for about five days. He alleges that he has become permanent handicapped and claimed compensation of Rs. 5,00,000/-.

The Insurance Company filed written statement and set up various defences, but the main defence with which this Court is concerned is the defence that the vehicle was being used in violation of the terms of the policy, since gratuitous passengers were being carried in the vehicle, which was a goods vehicle.

The learned Tribunal assessed the total compensation at Rs. 3,62,750/-and awarded the same with interest @ 71/2% per annum from the date of filing of the petition till the date of actual payment. The learned Tribunal came to the conclusion that the workers were being carried in the vehicle, which had been hired by the contractor and, therefore, they could not be treated as gratuitous passengers. He, however, went out to hold that there was violation of the terms of the policy and, therefore, directed the Insurance Company to first satisfy the award, but held that the Insurance Company was entitled to recover the amount from the owner.

The owner and the Insurance Company both have filed appeals. The appeal filed by the Insurance Company is FAO No. 413 of 2008 and the appeal of the owner is FAO No. 450 of 2008. The main ground raised by the Insurance Company is that it could not be held liable to pay the compensation since there was a violation of one of the basic conditions of the policy and the Petitioner was travelling in the vehicle as a gratuitous passenger. The vehicle was a goods vehicle and No. person other than the owner of the goods or his agent could be carried in such a vehicle.

The policy, which has been proved on record as Ex. RX, clearly shows that the policy was issued in respect of a goods carriage vehicle. No. premium has been charged for carriage of any passenger, though the liability under the Workmen Compensation Act is covered for three employees. The Registration Certificate of the vehicle is Ex. RY and it shows that the vehicle is a Mahindra Open Bodied Vehicle having a sitting capacity of two including the driver. This clearly indicates that the vehicle was solely meant for use of carriage of goods and not passengers.

The law by now is well settled that the passengers cannot be carried in a goods vehicle and the Insurance Company cannot be held liable in respect of passengers being carried in a goods vehicle. The question is whether the Insurance Company could have been asked to satisfy the award and then recover the amount from the owner. In my view, this cannot be done because the Apex Court has held that when unauthorized passengers are carried in a goods vehicle, then the Insurance Company cannot be asked to satisfy the award.

In fact, this Court in The Oriental Insurance Company Ltd. v. Smt. Meera and Ors. Latest HLJ 2010 (HP) 156, has held as follows:

As noted above, in Deddappa''s case (supra), theApex Court gave the directions in exercise of thejurisdiction vested in it under Article 142 of the Constitution. In Zaharulnisha''s case (supra), the ApexCourt specifically followed the law laid down in Deddappa''s case. Therefore, it can be said that in Zaharulnisha''s case also, the orders were passed by the apex Court in exercise of jurisdiction vested in it by Article 142 of the Constitution of India. In Suresh''s case (supra), though the apex Court has not specifically referred to Article 142, it is apparent that the directions have been given in the facts peculiar to that case.

On the other hand, in Kaushalya Devi''s case (supra), the apex Court has set aside the directions given by this Court directing the Insurance Company to deposit the amount. It specifically held that if the amount had not been withdrawn by the Insurance Company, it would be refunded to the Company and the claimant would recover the amount from the owner of the vehicle. This is the latest judgment cited before me and I am bound by the same.

In view of the above discussion, I am of the considered opinion that only the owner can be held liable to pay the award amount and this Court has no power to direct the Insurance Company to satisfy the award. Consequently, I am of the considered view that the award of the learned Tribunal in so far as it holds the Insurance Company liable to pay the compensation has to be set-aside.

Therefore, I am of the considered view that the learned Tribunal has erred in directing the Insurance Company to satisfy the award first. Therefore, the award of the learned Tribunal is partly modified and the Insurance Company is exonerated from its liability and the owner and the driver alone shall be jointly and severally liable to pay the compensation. In case, if any amount has been paid to the claimants out of the amount deposited by the Insurance Company, then the Insurance Company shall not recover the same from the claimants, but only from the owner.

Ms. Ambika Kotwal, learned Counsel appearing on behalf of the owner, strenuously urged that the amount of compensation awarded is highly excessive. She submits that the learned Tribunal has gravely erred in awarding Rs. 2,50,000/-as lump sum amount for future loss of income to the Petitioner.

It may be true that the learned Tribunal had not followed a proper method in assessing the compensation because he has neither worked out the prospective loss of income nor applied any multiplier and such lump sum amount could not have been awarded. However, the award is, in my view, in fact, on the lower side. The Petitioner was a workman and has suffered 60% permanent disability. In the case of a mason, this 60% disability may even cause him greater loss of income. Even in the year 2003, a mason would have been earning at least Rs. 200/-per day and even if some provision is made for not getting work on each and every day, his income could not have been less than Rs. 4500/-per month. Even if, the loss of income is taken at Rs. 2500/-per month, i.e. Rs. 30,000/-per annum, the amount of Rs. 2,50,000/-is less than what should have been actually awarded. Therefore, I find No. merit in the appeal filed by the owner and the same is dismissed.

In view of the above discussion, the appeal filed by the Insurance Company is allowed and the award of the learned Tribunal is partly modified and the appeal filed by the owner of the vehicle is dismissed. The amount deposited by the Insurance Company shall be released in its favour by remitting the same to its bank account, details whereof shall be furnished by its learned Counsel. No. costs.

CMP No. 470 of 2011 in FAO No. 413 of 2008

The application is disposed of in view of the disposal of the main appeal(s) with liberty reserved to the claimant to apply for execution of the award against the owner and the driver.