Rakesh R Kammath v Santosh, Sajo Joseph, ICCI Lombard General Insurance Co. Ltd.

``` 2025:KER:28044 ``` **==> picture [58 x 58] intentionally omitted <==** ## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT`** ## **`THE HONOURABLE MR. JUSTICE EASWARAN S.`** ``` THURSDAY, THE 3[RD] DAY OF APRIL 2025 / 13TH CHAITHRA, 1947 ``` ## **`MACA NO. 2067 OF 2021`** ``` AGAINST THE AWARD DATED 26.06.2020 IN OPMV NO.682 OF 2014 OF MOTOR ACCIDENT CLAIMS TRIBUNAL, ERNAKULAM. ``` ## **`APPELLANT/PETITIONER:`** ``` RAKESH R KAMMATH AGED 32 YEARS S/O. RAMDAS, POKKAMTHAZHATH HOUSE, KUNJATTUKARA, EDATHALA P.O., PIN-683561, ERNAKULAM DISTRICT. ``` ``` BY ADV K.V.RAJAN ``` ## **`RESPONDENTS / RESPONDENTS:`** - **`1 SANTHOSH S/O.RAJAN, 7/348 (10/343), MUTHIRAKKATTUMUGAL, EDATHALA P.O., ERNAKULAM-683561.`** - **`2 SAJO JOSEPH, S/O. JOSEPH M.A., MUKKOTTIMUKAL HOUSE, AKG NAGAR, NAD P.O., ERNAKULAM-683101.`** - **`3 ICCI LOMBARD GENERAL INSURANCE CO. LTD., 3RD FLOOR, KANNANKERI ESTATE, SHANMUGHAM ROAD, MARINE DRIVE, KOCHI-682031.`** ``` BY ADVS. A.T.Anilkumar A.T. jacob mathew p V.SHYLAJA(K/1281/1995) ``` ``` THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 07.03.2025, THE COURT ON 03.04.2025 DELIVERED THE FOLLOWING: ``` MACA No.2067/2021 2 **==> picture [58 x 58] intentionally omitted <==** ``` 2025:KER:28044 ``` ## **EASWARAN S., J.** ## **--------------------------------------------------------MACA No.2067 OF 2021** **----------------------------------------------------------** ## **Dated this the 3[rd] day of April, 2025** This appeal arises out of the award passed by the Motor Accidents Claims Tribunal, Ernakulam, in OP(MV)No.682/2014. 2. The brief facts necessary for the disposal of the appeal are as follows: The appellant, who is stated to be doing a partnership business in flex board met with an accident on 09.04.2013 at about 4 AM. The claimant along with his partner Sumesh, hired a Tata Ace goods carriage bearing Reg.No.KL-41-G-3107 belonging to the 1[st] respondent and were travelling along with the goods in the platform of the vehicle. The accident occurred due to the rash and negligent driving of the driver of the vehicle and therefore he claimed compensation towards the injuries sustained by him in the road traffic accident. It was contended that the appellant was earning a monthly income of Rs.10,000/per month. However, the Tribunal proceeded to fix the notional income at Rs.9,000/- and then granted the following MACA No.2067/2021 3 **==> picture [58 x 58] intentionally omitted <==** ``` 2025:KER:28044 ``` ## compensation: |**Heads**|**Amount**<br>**claimed**<br>**(in Rupees)**|**Amount**<br>**awarded**<br>**(in Rupees)**|| |---|---|---|---| |Loss of earnings|120000|45000|| |Transport to hospital and back to home|2000|10000|| |Extra nourishment|10000|20000|| |Damage to clothes and articles|1000|1000|| |Bystander Expenses|5000|8750|| |Treatment Expenses|200000|172200|| |Compensation forpain and sufferings|100000|80000|| |Compensation for continuing or permanent<br>disability|887400|563760|| |Compensation for future treatment expenses|30000|0|| |Compensation for loss of amenities and<br>comforts|50000|130000|| |**Total**|**14,05,400/-**|**10,30,710/-**|| |Claim limited to Rs.13,00,000/-|||| 3. While granting the aforesaid compensation, the Tribunal accepted the contention of the Insurance Company that the claimant was a gratuitous passenger in the vehicle and therefore was not entitled to claim compensation from the Insurance Company. Therefore, the owner of the vehicle was mulcted with the liability. It is as against the findings of the Tribunal exonerating the Insurance Company from the liability and also claiming enhancement of the compensation, that the claimant has approached this Court in the present appeal. MACA No.2067/2021 4 **==> picture [58 x 58] intentionally omitted <==** ``` 2025:KER:28044 ``` 4. Heard Sri.KV Rajan – learned counsel appearing on behalf of the appellant and Sri.P.Jacob Mathew – learned counsel appearing for the Insurance Company. 5. On a consideration of the rival submissions raised across the Bar, this Court finds that the claimant is entitled to succeed on the question of enhancement of the compensation as well as on the question as to whether the Insurance Company is liable to indemnify the owner for the reasons to follow. 6. It is seen that the Tribunal discarded the averment of the claimant that he was earning a monthly income of Rs.10,000/- per month and proceeded to fix the notional income at Rs.9,000/-. In _**Sanjay Kumar v. Ashok Kumar and Another**_ [2014 (5) SCC 330], the Hon'ble Supreme Court has held that if the claim of income is reasonable and in tune with the ground realities, the Tribunal is bound to apply the same without insisting on the documentary evidence. Therefore, this Court is of the considered view that the claimant having claimed only an amount of Rs.10,000/- per month, the same can be fixed as the income. MACA No.2067/2021 5 **==> picture [58 x 58] intentionally omitted <==** ``` 2025:KER:28044 ``` 7. Once the income of the claimant is fixed as above, necessarily under the various non-conventional heads also, the claimant is entitled to enhancement. 8. A perusal of the award passed by the Tribunal shows that the Tribunal has awarded compensation under the head loss of earnings only for a period of five months. Considering the nature of injuries and also the avocation of the claimant, this Court is of the opinion that the compensation for loss of earnings can be increased to period of eight months. 9. Although this Court has found the entitlement of the claimant for enhancement, this Court need to address the most pivotal issue in this appeal. As noticed above, the Tribunal had exonerated the Insurance Company from its liability on the premises that the claimant was a gratuitous passenger in the vehicle and was not covered under the policy. This finding is also questioned by the claimant in the present appeal. The counsel for the appellant relied on the decision of this Court in _**Mani and Others v. Joby John and Others**_ [(2017) ACJ 392], _**United India Insurance Company Ltd. v. Suresh**_ [2006 (4 )KLT 333] and the decision of the Hon’ble Supreme Court in _**Shivawwa**_ MACA No.2067/2021 6 **==> picture [58 x 58] intentionally omitted <==** ``` 2025:KER:28044 ``` _**and Another v. Branch Manager, National India Insurance Company Ltd. and Another**_ [(2018) ACJ 1288]. 10. The learned counsel for the Insurance Company, on the other hand, vehemently points out that since the claimant was travelling in the platform of the vehicle, he is not covered under the policy. In support of his contention, he relied on the decision of the Hon’ble Supreme Court in _**Sanjeev Kumar Samrat v. National Insurance Company Ltd.**_ [2013 (1) KLT 41 (SC)]. 11. This Court has bestowed its anxious consideration to the rival contention and also the relevant clause in the policy. Ext.B2 is the certificate of insurance policy which contains the following details: |**Premium Details**|**Premium Details**|**Premium Details**|**Premium Details**| |---|---|---|---| |**OWN DAMAGE(A)**|**₹**|**LIABILITY(B)**|**₹**| |Basic OD Premium|-4745|Basic Third PartyLiability|10902| |IMT-23 Loading|1105|**Total**|**10902**| |**Sub Total**|**-4745**|**Add:**|| |||PA Cover for Owner Driver|100| |||Legal Liabilityfor Employee|100| |||**Sub-Total**|**200**| |**Total Own Damage**<br>**Premium(A**)|**-4745**|**Total Liability Premium(B)**|| |||**Total Package Premium(A+B): -4745**|| MACA No.2067/2021 7 **==> picture [58 x 58] intentionally omitted <==** ``` 2025:KER:28044 ``` Service Tax (Inclusive of education cess &higher education cess): 1833 **Total Premium Payable in** ₹ **16663** 12. Coming to the limits of liability as prescribed under the contract of insurance, one can find the following clause, “The policy does not cover….3) Use of carrying passengers in the vehicles;’ except employees (other than the driver) not exceeding the number permitted in the registration document and coming within the purview of the Workmen’s Compensation Act, 1923.” In this case, apparently there is a conflict in the two clauses in the policy. Firstly, the insurer has paid a third party premium of Rs.10,902/-. He has also paid the premium for personal coverage of the owner and the legal liability for the employees. After accepting the premium for the third party, the insurer had included a clause. It is in the above pretext of Clause 3 of limits of liability of the insurance policy that the learned counsel for the Insurance Company vehemently opposed the plea of the appellant that the Insurance Company cannot be mulcted with the liability of payment of compensation under the policy. 13. The apparent conflict in the policy needs to be MACA No.2067/2021 8 **==> picture [58 x 58] intentionally omitted <==** ``` 2025:KER:28044 ``` resolved by this Court in order to find out the question as to whether there is any statutory liability under Section 147(1)(i) of the Motor Vehicles Act, 1988, on the Insurance Company to cover the risk of a gratuitous passenger. In _**New India Assurance Company Ltd. v. C.M.Jaya and Others**_ [2002 ACJ 271], the Hon'ble Supreme Court held that even though the statutory liability cannot be more than what is required in the statute itself, there is no provision in the Act prohibiting the parties from creating a higher liability to cover a wider risk. Therefore, in such cases, it will have to be held that the insurer will be bound by the terms of contract. 14. A Division Bench of this Court in _**Mary and Others v. United India Insurance Company Ltd. and Another**_ [(2014) 1 KLJ 805] held that, even if the owner of the vehicle is not expected to carry any person on the platform, if there is a coverage for covering the liability of the person carried in the vehicle, he can only carry such persons. Although the insured would have violated the terms and conditions of the policy by carrying the persons on the platform, the insurer cannot escape the liability of payment of amount under the contract and MACA No.2067/2021 9 **==> picture [58 x 58] intentionally omitted <==** ``` 2025:KER:28044 ``` therefore, held that the Insurance Company is liable to satisfy the award in respect of the claim and recover the amount from the insurer/owner of the vehicle. 15. In _**United India Insurance Company Ltd. v. K.M. Poonam and Others**_ [2015 (15) SCC 297], the Hon'ble Supreme Court held that when a private vehicle was used as a public service vehicle and the insurance policy permitting carriage of six persons including the driver, the passengers in excess of six would be considered as third parties and since no payment was made towards third party premium, the insurer was entitled to recover the amount from the insured. It is expedient to extract paragraph 28 and 36 of the said judgment. “28. While the aforesaid judgment was delivered on 5-12004, on the very next day, another three-Judge Bench of this Court rendered a decision in _**National Insurance Co. Ltd. v. Baljit Kaur**_ [(2004) 2 SCC 1], in the context of the provisions of Section 147(1)(b) of the 1988 Act after its amendment in 1994. While referring to the earlier decision in the reference decided in _**New India Assurance Company Ltd. v. Asha Rani**_ [(2003) 2 SCC 223], their Lordships held that in spite of the amendment effected to Section 147(1)(b) in 1994, the position remained the same in respect of persons other than the owner of the goods and his authorised representative being carried in the goods vehicle. It was held that: (Baljit Kaur case, SCC p.8, para 20.) "20. it was not the intention of the legislature to provide for the liability of the insurer with respect to passengers, especially gratuitous passengers, MACA No.2067/2021 10 **==> picture [58 x 58] intentionally omitted <==** ## `2025:KER:28044` who were neither contemplated at the time the contract of insurance was entered into, nor was any premium paid to the extent of the benefit of insurance to such category of people." It was, therefore, felt that the interest of justice would be subserved if the Insurance Company satisfied the awarded amount and recovered the same from the owner of the vehicle and for the said purpose it would not be necessary for the Insurance Company to file a separate suit, but to initiate a proceeding before the executing court as if the dispute between insurer and the owner was the subject-matter of the determination before the Tribunal which had decided in favour of the insurer and against the owner of the vehicle. ## *** 36. 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 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.” 16. The same view has been reiterated by the Hon'ble Supreme Court in _**Shivawwa**_ (supra) and by the Division Bench of this Court in _**Mani**_ (supra). 17. Having analysed the principles governing the liability MACA No.2067/2021 11 **==> picture [58 x 58] intentionally omitted <==** ``` 2025:KER:28044 ``` of Insurance Company qua the violation of the policy conditions, this Court needs to address one more glaring issue which has presented itself before it. In the present case, the insured has undertaken to cover the liability of third parties and has accepted the premium towards the same. However, there is a clause in the contract of insurance which apparently stands in conflict with the general purpose for which the contract was intended to, that is Clause No.3 under the limits of liability, which creates a negative covenant on the insured/owner not to carry any passengers other than what is provided in the policy. Therefore, though the Insurance Company has agreed to indemnify the owner for any liability arising out of the use of the vehicle qua third parties, this Court cannot remain oblivious to the fact that the contract prohibits the insured from carrying any person on the platform. Apparently, in the present case, going by the evidence adduced by the parties before the Tribunal, it is evident that the claimant was travelling in the platform of the vehicle in question and thus there is a breach in the conditions of the insurance policy. 18. It is now settled law that all breach of policy MACA No.2067/2021 12 **==> picture [58 x 58] intentionally omitted <==** ``` 2025:KER:28044 ``` conditions will not ultimately lead to exonerating the liability of the Insurance Company. The exoneration of the liability of the Insurance Company would always depend upon the facts presented in each case and depending upon the construction of the contract of insurance. In the present case, on construction of the contract of insurance - Ext.B2, this Court is of the view that the Insurance Company having undertaken to cover the liability of the third parties, cannot plead that they are not liable to indemnify the owner. At the same time, since there occurred a breach of policy condition as held by this Court in _**Mary**_ (supra), the Insurer has to be given a liberty to recover the amounts from the owner. As an upshot of the above discussion, the appellant is entitled to succeed. Hence, the appeal is allowed and the appellant is entitled for enhanced compensation as follows: |**Heads**|**Amount awarded**<br>**by the Tribunal**|**Total**<br>**compensation**<br>**awarded in**<br>**appeal**|**Enhanced amount**<br>**of compensation**| |---|---|---|---| |Notional income of the appellant is fixed at Rs.10,000/-. Adding 40% future<br>prospects, the income would come to Rs.14,000/-|||| |Loss of earnings|45,000/-|80,000/-<br>[10000x8]|35,000/-<br>[80000-45000]| |Compensation for<br>pain and sufferings|80,000/-|1,05,000/-|25,000/-<br>[105000-80000]| |Compensation for|5,63,760/-|8,76,960/-|3,13,200/-| MACA No.2067/2021 13 **==> picture [58 x 58] intentionally omitted <==** ``` 2025:KER:28044 ``` |continuing or<br>permanent<br>disability||[14000x12x18x29/<br>100]|[876960-563760]| |---|---|---|---| |Compensation for<br>loss of amenities|1,30,000/-|2,92,320/-<br>[1/3rd of<br>compensation for<br>permanent<br>disability]|1,62,320/-| |**Total enhanced amount of compensation**|||**5,35,520/-**| Accordingly, the appellant/claimant is awarded an additional compensation of **Rs.5,35,520/-** (Rupees five lakhs thirty five thousand five hundred twenty only) over and above the compensation awarded by the Tribunal with interest @9% per annum from the date of petition till realization together with proportionate costs. The Insurance Company is directed to deposit the aforesaid amount within a period of one month from the date of receipt of a copy of this judgment. The Insurance Company is however given liberty to recover the entire amount awarded as compensation from the owner of the vehicle in question. The appeal is ordered accordingly. Sd/- **EASWARAN S. JUDGE** ACR