JUDGMENT
D.G. Karnik, J.
1. Both the appeals are directed against the judgment and order dated 5-12-1989 passed by the Motor Accident Claims Tribunal (for short, the Tribunal) awarding compensation of Rs. 31,000/-.
2. First Appeal No. 198 of 1990 is filed by the owner of the motor vehicle who submits that the compensation awarded is excessive and exorbitant and further contends that the order limiting the liability of the Insurance Company to Rs. 5,000/- was erroneous. First Appeal No. 210 of 1990 is filed by the injured for enhancement of compensation claiming that the amount of compensation is too low.
3. The facts giving rise to these two appeals are briefly stated below.
The appellant in First Appeal No. 198 of 1990 (hereinafter referred to as the owner) owns a motor vehicle a jeep bearing registration No. MAB-4054. At the relevant time, the owner himself was driving the jeep. The respondent No. 1 in First Appeal No. 198 of 1990 (hereinafter referred to as the injured) was travelling in the jeep as a gratuitous passenger and was sitting on the cleaner’s side of the jeep. On 26th May, 1988, when the accident occurred, the owner and the injured were travelling in the jeep from village Deoni to Bider. At about 9 km. from the village Deoni near the crossing of Bider Udgir road, the owner took the jeep to the extreme left hand side of the road. The jeep was taken so much to the left that the left leg of the injured, which was protruding out, hit the milestone on the left hand side of the road causing a crush injury to the left leg. The injured was removed to the hospital where he was admitted as an indoor patient and was operated upon. After discharge, the injured filed the Claim Petition No. 9 of 1989 claiming compensation of Rs. 1,50,000/- from the owner. The respondent No. 2 Insurance company was also joined as a party respondent. After recording the evidence, the Tribunal held that the accident was caused on account of the negligent driving of the owner. It, however, held that there was contributory negligence of the injured inasmuch as he had kept his left leg slightly outside the vehicle. The Tribunal assessed the total loss suffered by the injured at Rs. 50,000/- and reduced it by a fourth to Rs. 37,500/-, on account of contributory negligence of the injured. The Tribunal further reduced it to Rs. 31,000/- for lumpsum payment and awarded a compensation of Rs. 31,000/- to the injured. The Tribunal held that the insurance company was liable to the extent of Rs. 5,000/- under Section 95 of the Motor Vehicles Act, 1939 (for short, the Act) and directed that the insurance company to pay compensation of Rs. 5,000/- out of the total compensation of Rs. 31,000/-. Being aggrieved, the owner as well as the injured have filed these two appeals as mentioned above.
Regarding Limitation :
4. Learned counsel for the owner firstly submits that the Tribunal ought to have dismissed the claim as barred by limitation. The accident took place on 26th May, 1988 and the claim application was filed on 28th July, 1989 i.e. after a lapse of six months from the date of accident. Relying upon the decision of the Supreme Court in the case of Vinod Gurudas Raikar v. National Insurance Co. Ltd. and Ors., , learned counsel submits that though the accident had taken place when the old Act of 1939 was in force as the claim was filed after the new Act of 1988 has come into force, the period of limitation would be governed under the Motor Vehicles Act, 1988, which at the relevant time provided limitation of one year. The claim application filed after expiry of the period of one year was barred by limitation. Along with the claim application, the injured had filed an application bearing Misc. Application No. 9 of 1989 for condonation of delay. By an order dated 5-12-1989, the Tribunal has condoned the delay. No appeal has been filed against the said order which has become final. In the circumstances, it is not open to the owner to contend that the application should have been dismissed as barred by limitation. Even otherwise, no ground has been made out to interfere in the discretion exercised by the Tribunal in condoning the delay. Therefore, the contention that the Tribunal ought to have dismissed the claim application as barred by limitation, has to be rejected.
Regarding Quantum of Compensation :
5. The learned counsel for the owner submits that the compensation awarded is excessive and exorbitant. Per contra, the learned counsel for the injured contends that the compensation awarded is too less and prays for enhancement of the compensation. The injured examined himself and stated that he was earning salary of Rs. 700/- p.m. He further stated that he was a partner in a firm but was drawing a salary of Rs. 700/- from the firm. The Tribunal held that as a partner the respondent was not entitled to draw a salary and, therefore, disbelieved the case that the respondent was drawing a salary of Rs. 700/- p.m. However, taking into consideration the physical capacity and personality of the injured, the Tribunal came to the conclusion that as an able bodied man the injured would have easily earned Rs. 600/- to Rs. 700/- p.m. and held that his earning capacity was about Rs. 700/- p.m.
6. Firstly, neither under the Indian Partnership Act, 1932 nor under the Indian Income Tax Act, 1961, there is any prohibition for a partner to draw a salary. In fact, Indian Income Tax Act recognizes that a partner can draw a salary and the salary drawn by a partner is allowed as a deduction from the expenses of the firm to the extent specified under the Indian Income Tax Act. Therefore, the Tribunal erred in disbelieving the case of the injured that he was drawing a salary of Rs. 700/- p.m. from the firm. However, since the Tribunal has otherwise come to the conclusion that the injured was capable of earning an income of Rs. 700/- p.m. and has computed the compensation on the basis that the injured was earning Rs. 700/- p.m., I need not dilate further on this aspect, especially so as the learned counsel for the owner does not dispute the finding of the Tribunal that the injured was earning or was able to earn an income of Rs. 700/- p.m. I, therefore, proceed on the basis that the injured was earning income of Rs. 700/- p.m.
7. The injured has produced on record a medical certificate showing that there is a permanent damage to his left leg. The doctor has certified that the permanent disability suffered by the injured was to the extent of 20%. This medical certificate of disability was not disputed by the owner before the Tribunal and relying upon the owner’s evidence as well as the undisputed medical certificate, the Tribunal came to the conclusion that the injured suffers from a permanent disability of 20%. The Tribunal also came to the conclusion that the injured would suffer 20% loss of income on account of this permanent disability. It is true that the loss of income is not necessarily proportionate to the percentage of disability. For example, a driver of a motor vehicle who permanently loses eye sight of one eye or one leg, may be disabled totally for driving a motor vehicle. If his only avocation is to drive a motor vehicle, there will be 100% loss of earning capacity. Though loss of one eye or one limb may not result in a total permanent disability, it may result in 100% loss of income. It is possible that the loss of income would not necessarily be proportionate to the percentage of disability. However, in the present case, the Tribunal has proceeded on the assumption that 20% disability would result in 20% loss of income and this assumption is not challenged before me by the learned counsel for the parties. I, therefore, proceed on the assumption that 20% permanent disability has resulted in 20% loss of income of the injured.
8. Taking into consideration the age of the injured, which was 26 years, applying the multiplier of 17 years, 100% loss of income would be Rs. 700 x 12 x 17 = Rs. 1,42,800/-. Therefore, 20% loss of earning capacity would come to Rs. 28,560/-. The Tribunal has awarded compensation of Rs. 10,000/- as special damages towards pain and sufferings. The said amount cannot be said to be unreasonable and I see no reason to interfere. The Tribunal has also held that the injured had spent about Rs. 7,000/- to Rs. 8,000/- for medical expenses, as per the bills. However, in the calculations, I notice that the amount spent for medical expenses was not taken into consideration by the Tribunal. Therefore, this amount will have to be taken into consideration while calculating the total amount of compensation. For the reasons mentioned above and adding Rs. 10,000/- towards damages for pain and sufferings and Rs. 8,000/- towards reimbursement of the medical bills to the amount of loss of earning capacity, the total amount of compensation comes to Rs. 46,560/-.
Regarding Liability of the Insurance Company :
9. Learned counsel for the insurance company submits that under Section 95(2)(b) of the Act, the liability of the insurance company is limited to Rs. 10,000/-. Sub-section (2) of Section 95 of the Act reads as under :
“Section 95(2) : Subject to the proviso to Sub-section (1), a policy of insurance shall cover any liability incurred in respect of any one accident upto the following limits, namely :
(a) Where the vehicle is a goods vehicle, a limit of fifty thousand rupees in all, including the liabilities, if any, arising under the Workmen’s Compensation Act, 1923 in respect of the death of or bodily injury to employees (other than the driver), not exceeding six in number, being carried in the vehicle.
(b) Where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment —
(i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all;
(ii) in respect of passengers —
(1) a limit of fifty thousand rupees in all where the vehicle is registered to carry not more than thirty passengers;
(2) a limit of seventy five thousand rupees in all where the vehicle is registered to carry more than thirty but not more than sixty passengers;
(3) a limit of one lakh rupees in all where the vehicle is registered to carry more than sixty passengers; and
(4) subject to the limits aforesaid, ten thousand rupees for each individual passenger where the vehicle is a motor cab and five thousand rupees for each individual passenger in any other case;
(c) save as provided in Clause (d), where the vehicle is a vehicle of any other class, the amount of liability incurred;
(d) irrespective of the class of the vehicle, a limit of rupees two thousand in all in respect of damage to any property of a third party.”
The statutory liability of the insurance company under Clause (b) of Sub-section (2) of Section 95 of the Act is limited to Rs. 10,000/- in respect of each person other than a passenger carried for hire and reward. The injured was a gratuitous passenger and was not carried for hire and reward. It is, therefore, contended that the statutory liability of the insurance company was limited to Rs. 10,000/- for an individual passenger and maximum of Rs. 50,000/- for all the passengers together. The policy of insurance was not a statutory policy of insurance covering only the statutory liability but was a policy of comprehensive insurance. Though the original insurance policy stated to have been produced before the Tribunal, was not found in the record, learned counsel for the insurance company handed over to me a copy of the certificate of insurance issued in respect of the said jeep. Learned counsel for the parties do not dispute the correctness of this copy of certificate of insurance. Perusal of the certificate of insurance shows that it was a policy covering comprehensive risk. A premium of Rs. 2,813/- was charged under the heading “Own damage basic”. A further premium of Rs. 180/- was charged under the head “Liability to public risk”. A premium of Rs. 60/- was charged for personal accident benefit and a premium of Rs. 8/- was charged for liability to the driver. Thus a total premium of Rs. 3,061/- was calculated and after 5% discount, the total premium of Rs. 2,908/- was paid by the owner to the insurance company. Learned counsel for the insurance company submits that the premium under the head “Own damage basic” covers only a premium for risk to the motor vehicle itself and does not cover the risk to the passengers. As regards the liability to public risk, an additional premium of Rs. 180/- was charged. It does not mention that the public risk was restricted only to cover the statutory liability under the Act. The learned counsel for the owner submits that this premium of Rs. 180/- was for covering the unlimited risk to the public and, therefore, the insurance company is liable to pay the entire amount of compensation. He relies upon a decision of the Supreme Court in the case of Amrit Lal Sood v. Kaushalya Devi Thapar and Ors., . In that case, the Supreme Court held that the terms of a contract of insurance can be wider than that prescribed by a statute or by the Motor Vehicles Act, 1939. It is possible for an insurer to agree to indemnify the owner of the motor vehicle in respect of the risks other than those covered by the Motor Vehicles Act, 1939. In the present case, the insurance company had agreed to indemnify the owner of the vehicle for the risk to public without any restriction under the heading “liability to public risk”. The insurance company had charged a premium of Rs. 180/- without specifying that the premium was only to cover the statutory risk covered under the Act. As there was no rider that the liability to public risk was in any way limited, the insurance company is liable to an unlimited extent. As held by the three Judges Bench of the Apex Court in the case of Amrit Lal (supra), it was open to the insurance company to cover unlimited risk which the insurance company had done in the present case.
10. Learned counsel for the insurance company relies upon a latter judgment of the Supreme Court in the case of Dhanraj v. New India Assurance Co. Ltd., 2004 AIR SCW 5438 which is rendered by a Bench of two Judges. In that case it was held that the statutory liability of an insurance company under the Motor Vehicles Act, 1988 is only for the purpose of indemnifying the injured against the liabilities incurred towards third persons or in respect of damage to the property and the insurance company is not liable for any injury to the owner himself under the head “Own damages”. In my view, the said case has no application to the facts of the present case. In the case at hand, the compensation is not claimed for any injury suffered by the owner but compensation is claimed for the injuries suffered by a third person. Indemnity is claimed not under a head “Own damage” but under the head “Liability to public risk” which in the present case was not restricted to the limit specified in the Act. As held by the three Judges Bench of the Supreme Court in the case of Amrit Lal (supra), the words “any person” would include even a gratuitous passenger travelling in the motor vehicle. Therefore, the insurance company cannot escape the liability to indemnify the owner in respect of a claim made on the owner by the injured person who was a gratuitous passenger lawfully travelling in the vehicle without contravening any provision of a statute or the contract of insurance. It is not a case where the gratuitous passenger was travelling in a goods vehicle contrary to a statute or contract but the vehicle was a passenger vehicle and the injured was lawfully travelling in it as a gratuitous passenger. The Tribunal, therefore, erred in restricting the liability of the insurance company to the extent of Rs. 5,000/-. In the circumstances, both the appeals are partly allowed and following order is passed.
The original claimant (appellant in First Appeal No. 210 of 1990 and respondent No. 1 in First Appeal No. 198 of 1990) is entitled to compensation of Rs. 46,560/- together with interest at the rate of 9% p.a. from the date of accident i.e. 26th May 1988 till payment. The respondents Nos. 1 and 2 before the tribunal (i.e. respondents Nos. 1 and 2 in First Appeal No. 210 of 1990) shall, jointly and severally, be liable to pay the said amount of compensation. The amount deposited in this Court/Tribunal shall be adjusted towards the principal amount of the claim.
Taking into consideration the mixed success, the parties are left to bear their own costs throughout.