The United India Insurance Company Ltd. v. P.M. Chandran and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE J.B.KOSHY** **& THE HONOURABLE MRS. JUSTICE K.HEMA** **TUESDAY, THE 20TH NOVEMBER 2007 / 29TH KARTHIKA 1929** **MFA.No. 52 of 1998(B)** **-------------------------------** - **(O.P(MV).NO.587/1992 OF MOTOR ACCIDENT CLAIMS TRIBUNAL, PALAKKAD)** **....................** ## **APPELLANT:** **-------------------** **THE UNITED INDIA INSURANCE COMPANY LTD., MAIN ROAD, NENMARA, REPRESENTED BY ITS DEPUTY MANAGER, THIRD PARTY CLAIMS CELL, M.G. ROAD, ERNAKULAM.** - **BY ADV. SRI.SIBY MATHEW, ADV. SRI.RAJENDRA KUMAR.** ## **RESPONDENTS/ PETITIONER & RESPONDENTS 1 TO 5:** **--------------------------------------------------------------------------------** **1. P.M. CHANDRAN, S/O. MAYAN, AGED 34 YEARS, RESIDING AT PADINCHAREKATTIL HOUSE, MUDAPPALLOOR AMSOM, ALATHUR TALUK.** **2. K. MALLIKA, W/O. C.K. MADHAVAN, AGE NOT KNOWN, CHEMBRA HOUSE, P.O. THAVANOOR, KEECHERRY, THRISSUR DISTRICT, (R.C. OWNER OF BUS NO. KRH 5459).** **3. C. SAHADEVAN, S/O. CHAMI, AGED 34 YEARS, PAZHATHARA VEEDU, CHERAMANGALAM, ALATHUR TALUK, (DRIVER OF BUS NO. KRH 5459)** **4. THE NEW INDIA ASSURANCE CO. LTD., KUNNAMKULAM, THRISSUR DISTRICT, I.C. NO. 317603025/831, (INSURER OF BUS NO. KRH 5459)** **M.F.A. NO. 52/1998:** **5. K.M. MOHAMMED, S/O. MANU, AGE NOT KNOWN, KARIMBA, P.O. KARIMBA, MANNARGHAT, PALAKKAD DIST. (R.C. OWNER OF TAXI-JEEP NO. KLM 8366).** **6. R. RADHAKRISHNAN, SON OF RAGHAVAN, AGED 25 YEARS, AYAKKAD, PORUVAYI HOUSE, VADAKKANCHERRY, ALATHUR TALUK, (DRIVER OF TAXI JEEP NO. KLN 8366).** **BY ADV. SRI.N.P.SAMUEL, SRI.LAL GEORGE, SRI.SHEJI.P.ABRAHAM, SMT.I.SHEELA DEVI.** **THIS MISC. FIRST APPEAL HAVING BEEN FINALLY HEARD ON 20/11/2007, ALONG WITH MFA NO.83/1998 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **ORDER ON C.M.P. NO. 289/1998 IN M.F.A. NO. 52/1998** **DISMISSED SD/- J.B.KOSHY, JUDGE, 20/11/2007. SD/- K.HEMA, JUDGE.** **//TRUE COPY//** **prv.** ## **J.B. KOSHY & K.HEMA, JJ. ---------------------------------M.F.A.Nos.52, 83, 84, 85, 86 and 87 of 1998** ## **----------------------------------Dated this the 20th day of November, 2007** ## **Judgment** ## **Koshy,J.** M.F.A. No.52 of 1998 is filed by the insurance company which has insured the jeep bearing registration No.KLM 8366. The above jeep collided on a bus bearing registration No.KRH 5459 on 2.12.1996. As a result of the accident, several persons who were passengers in the bus and jeep were injured and three persons died. Dependents of the deceased persons and injured persons filed claim petitions before the Motor Accidents Claims Tribunal and all the applications were disposed of by a common award dated 30.9.1997. The tribunal after considering the evidence found that the accident occurred due to the negligence of both drivers. Negligence was apportioned at 60% on the part of the bus driver and 40% on the part of the jeep driver. The bus was insured by the insurance company which was arrayed as third respondent before the tribunal. Appellant insurance company insured the jeep which was arrayed as sixth respondent before the tribunal. The only contention raised in ## **M.F.A.Nos.52/98 and connection** 2 these appeals is that the jeep has got only a passenger capacity of five persons plus driver. But, the jeep was overloaded as 12 persons including the driver were travelling. Since the jeep was overloaded, the insurance company is not liable to pay the compensation. In these appeals, the following are the amounts awarded and the liability of the appellant: |------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------| |---|---|---|---|---| |M.F.A.|<br>O.P.(MV)|Injury/|Amount|Liability of| |Nos.|Nos.|death|awarded|the appellant| |------------------------------------------------------------------------------------------------||||| |52/98|587/92|Injury|Rs.48,550/-|Rs.19,420/-| |83/98|850/92|Injury|Rs.67,300/-|Rs.26,920/-| |84/98|416/92|Death|Rs.50,500/-|Rs.20,200/-| |85/98|285/92|Injury|Rs.38,550/-|Rs.15,420/-| |86/98|446/92|Death|Rs.52,000/-|Rs.20,800/-| |87/98|445/92|Death|Rs.152700/-|Rs.61,080/-| ------------------------------------------------------------------------------------------------ In other claims, amounts awarded were ranging from Rs.820/- to Rs.5,180/- and amounts awarded were below Rs.10,000/-. However, in some of the cases, writ petitions were filed and those writ petitions were already dismissed. 3 **M.F.A.Nos.52/98 and connection** 3. Section 149 (2) of the Motor Vehicles Act reads as follows: "149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks: xx xx xx xx (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 -- xx **==> picture [157 x 8] intentionally omitted <==** (c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle" or **==> picture [241 x 9] intentionally omitted <==** Corresponding provision in the Motor Vehicles Act, 1939 was section 96 (2). In Kesavan Nair v. State Insurance Officer and others (1971 **M.F.A.Nos.52/98 and connection** 4 KLT 380), a bus, which was overloaded, met with an accident resulting in loss of seven lives and injuries to many others. The insurer took the contention basing on section 96 (2) (b) (c) that it is absolved of its liability to pay compensation, in view of section 96 (20 (b) (c) of the Motor Vehicles Act, 1939 which is similarly worded as Section 149 (2) (a) (i) (c) of the Motor Vehicles Act, 1988. While rejecting the above contention, **Krishna Iyer, J.** observed as follows: "....... I am afraid, the argument is fallacious and confuses between the purpose for which the vehicle is used and the conditions subject to which such purpose is effectuated. The purpose of the stage carriage was to carry passengers and, in this case, it is obvious that the bus was carrying passengers. If lit had been used not for carrying human beings but goods like a truck, there might have been user for an unwarranted purpose. On the other hand, if in carrying out the sanctioned purpose, namely, transporting passenger, any conditions are violated either by overspeeding or overloading, for example, there may be a violation of the conditions of the permit, but one cannot say that by that breach, the vehicle is used for a purpose different from the one authorised by the permit." The above view quoted and approved by **Venkataramiah, J.** (as he then was) in a Bench decision of the Karnataka High Court, The Madras Motor and General Insurance Co. Ltd. and another v. 5 **M.F.A.Nos.52/98 and connection** Nanjamma and others (AIR 1977 Kar.46). The Supreme Court again considered the matter in B.V. Aagaraju v. M/s.Oriental Insurance Co. Ltd., Divisional Office, Hassan (AIR 1996 SC 2054) and held that mere overloading of the vehicle is not a ground of denying the liability of insurance company unless that is the cause of accident. The Apex Court observed as follows: "......... the misuse of the vehicle was somewhat irregular though, but not so fundamental in nature so as to put an end to the contract, unless some factors existed which, by themselves, had not gone to contribute to the causing of the accident." The above view was followed by this Court in United India Insurance Co. Ltd. v. Sabeer Ali (1999 (3) KLT 700) and Parukutty v. KSRTC (2004 (1) KLT 663). 4. In this case, there is no contention by the insurance company that the accident occurred because of the overloading of the jeep. Therefore, the observations of the Supreme Court in B.V.Aagaraju's case (supra) is squarely applicable and all these appeals are liable to be dismissed. 5. It was pointed out by the counsel for the appellant insurance company that in National Insurance Co. Ltd. v. Anjana Shyam (2007 (3) KLT 993 SC) a different view was taken. In that 6 **M.F.A.Nos.52/98 and connection** case, a bus fell off the road into a nullah leading to the death of 26 persons and injuring 63 persons. 98 claim petitions were filed. Insurance company took the contention that the accident occurred due to the overloading of the bus. In that context, the Apex Court held as follows: "..... In the case on hand, 42 passengers were the permitted passengers sand they are the ones who have been insured by the insurance company. 90 persons have either died or got injured in the accident. Awards have been passed for varied sums. The Tribunal should take into account, the higher of the 42 awards made, add them up and direct the insurance company to deposit that lump sum. Thus, the liability of the insurance company would be to pay the compensation awarded to 42 out of the 90 passengers. It is to ensure that the maximum benefit is derived by the insurance taken for the passengers of the vehicle, that we hold that the 42 awards to be satisfied by the insurance company would be the 42 awards in the descending order starting from the highest of the awards. In other words, the higher of the 42 awards will be taken into account and it would be the sum total of those higher 42 awards that would be the amount that the insurance company would be liable to deposit. It will be for the Tribunal thereafter to direct distribution of the money so deposited by the insurance company proportionately to all the claimants, here all the 90, and leave all the claimants to recover the balance from the owner of the vehicle. In such cases, it will be necessary for the Tribunal, even at the initial stage, to make appropriate orders to ensure that the amount could be recovered from the 7 **M.F.A.Nos.52/98 and connection** owner by ordering attachment or by passing other restrictive orders against the owner so as to ensure the satisfaction in full of the awards that may be passed ultimately." It was argued that in these cases, no contention was taken that the accident occurred due to the overloading of the jeep. In that case, it was contended that overloading of the bus was a contributory cause. It was pointed out by the counsel for the respondents that the decision of the Supreme Court in B.V. Aagaraju's case (supra) was not placed before the Hon'ble Supreme Court in the subsequent case. In any event, we are of the view that the facts are distinguishable. In these cases, O.P. (M.V.) No. 285 of 1992 (M.F.A.No.85 of 1998) was filed by a passenger in the bus. Liability of the insurance company to the passenger in the bus was only third party liability. So, the jeep was overloaded is not a ground for denying third party liability as it was found that there is negligence on the part of the driver of the jeep. Even if the contention of the insurance company is accepted, there is no ground in interfering with the compensation awarded in the impugned order in O.P. (M.V.) No.285 of 1992 which is impugned in M.F.A.No.85 of 1998. The rest are only five cases in respect of passengers travelling in the jeep. The amount awarded with regard to the other passengers 8 **M.F.A.Nos.52/98 and connection** in the jeep were very meagre. Even though the appellant filed O.P.Nos.2155 of 1998 and connected, the original petitions were dismissed on the following terms: "The issue raised in these original petitions is as to whether there is breach of permit condition if the vehicle covered by the insurance policy carries more passengers than the permitted number. It is now settled by the Bench decision of this Court in United India Insurance Company Limited v. Sabeer Ali reported in 1999 (3) KLT 700 that such a situation will not amount to breach of condition. It is also held in the decision that breach of condition will arise only if the use of the vehicle is for a purpose not allowed by the permit. The position being thus covered against the petitioners, these original petitions are dismissed." No appeal is filed and as far as these appeals are concerned, the above finding has become final. We have also noticed in this case that there is no contention that overloading of the jeep is not the cause of accident. We also note that only in five cases with respect to the passengers in the jeep, appeals were filed as five passengers are permitted in the jeep. In other cases, amounts awarded were negligible. Even with regard to those five cases, the entire liability was not made on the appellant insurance company. 60% of the amount awarded was ordered to be paid by the insurance company which insured the bus 9 ## **M.F.A.Nos.52/98 and connection** and, therefore, only 40% of the amount was payable by the appellant. We also note that in these appeals several of the claimants died. The accident occurred in the year 1991. 16 years have passed. Even though appeal was admitted and issued notice on 16.1.1998, notices sent to several claimants were returned stating that some of the claimants died. In all the cases, there is one defect or another regarding service of notice and service is not yet completed. In the above circumstances, on the facts of these cases, we see no ground to interfere with the award of the tribunal. All the appeals are dismissed. **J.B.KOSHY JUDGE** **K. HEMA JUDGE** vaa **M.F.A.Nos.52/98 and connection** 10 **J.B. KOSHY AND K.HEMA,JJ.** --------------------------------------M.F.A. Nos.52, 83, 84, 85, 86 and 87 of 1998 --------------------------------------- **Judgment** Dated:20th November, 2007