JUDGMENT
M. Ramakrishna, J
1. These five Appeals arise out of the common judgment and award passed on 3-1-1985 by the Motor Accidents Claims Tribunal-ll, Bijapur, in M.V.C.Nos. 1, 13, 14, 2 and 15 of 1984 respectively, fixing the liability of making good the compensation awarded to the ctaimants on the appellant herein and one Ahamrnad, owner and the driver of the tempo bearing registration No. MXI 569 respectively, involved in the accident that took place on 11-11-83 at about 6-45 A.M. on Bijapur-Sholapur Road near Badrekar Police Quarters, First Gate, Bijapur, resulting in the death of Sumitra Bai wife of claimant-1 in M.V.C.No. 1 of 1984 (M.F.A.No.660 of 1985) aqd injuries to the claimants in the other cases.
2. There were five Claim Petitions before the Tribunal for compensation for the death and injuries suffered in the accident. The claims were opposed by the appellant – insured, the insurer and the driver of the vehicle in question. On the completion of the pleadings, the learned Member of the Tribunal raised common issues and additional issues. The common issues are:
(1) Whether the petitioner proves that the accident was the result of rash and negligent driving of the vehicle by its driver? (2) Whether the petitioner proves that respondent-1 was the driver and respondent-2 was the owner of the vehicle in question? The common additional issues were: (1) Whether the accident was due to the sudden bursting of the tyre as contended by the respondents? (2) Whether the deceased and the injured were the passengers having paid the hire charges?
While answering additional issue-1 in the negative/the learned Member of the Tribunal held that the accident was due to rash and negligent driving of the vehicle by the driver and that respondent-2, appellant herein, was the owner thereof. On the basis of these findings, he awarded compensation in a sum of Rs. 15,000/-, 5,000/-, 8,000/-, 5,000/- and 8,000/- respectively in favour of the claimants. On the question as to who has to pay these amounts, the learned Member of the Tribunal answering additional issue-2 in the affirmative, held that the appellant, owner of the vehicle, and its driver have to pay jointly and severally the said amounts. Consequently, he dismissed the Petitions as against the insurer. Aggrieved by this finding making the insured liable for compensation, the appellant has preferred these Appeals.
3. We have heard the learned Counsel on both sides.
4. Sri S Gurushettappa, learned Counsel for the appellant, having taken us through the pleadings, the judgment under Appeal in particular paragraph-15 dealing with additional issue-2 and the evidence on record, argued that the learned Member of the Tribunal erred in not considering the policy, Ex.D-1, produced by the appellant – insured, in its proper perspective with reference to the provisions of Section 95 of the Motor Vehicles Act, 1939 (the Act for short). Elaborating his arguments, he submitted that admittedly the appellant contributed a sum of
Rs. 106/- towards 12 passengers in addition to other contributions payable in accordance with law. This factum had been admitted in the written statement filed on behalf of the insurer. That being so, in the absence of any rebuttal evidence, the Tribunal ought to have accepted the documentary evidence produced by the insured and held against the insurer. This having not been done, the conclusion reached on additional issue-2 thereby holding the insured liable for compensation cannot be sustained Therefore, he submitted that these are the fit cases for reversing the finding of the Tribunal on additional issue No. 2.
5. Per contra, Sri Srishaila, learned Counsel for the contesting respondent (insurer), argued in support of the finding against the insured.
6. The only Question therefore that arises for our Consideration in these Appeals is whether the Tribunal was justified in holding the appellant liable for the compensation awarded on the ground that the deceased as well as the injured were paid passengers travelling in the vehicle in question at the time of the accident in violation of the conditions imposed in the policy covering the said vehicle.
7. Before proceeding to the merits of the case, we take for consideration l.A.No. III filed by the appellant for permission to produce additional evidence, viz., certified copy of the policy No. 42213/0/0/ 026049/MV/1296/83 in respect of BAJAJ Tempo MXI 569 valid for the period from 12-8-1983 to 11-8-1984. This application was opposed by the insurer by filing objections.
8. Sri Gurusettappa, learned Counsel for the appellant, submitted that the policy now sought to be produced was nothing but a replica of the policy, a copy of which had already been produced at Ex. D-1 before the trial Court by the insurer, that the appellant was not seeking to make out any new case by filing this application under Order 41 Rule 27 C.P.C., but to enable the Court to correctly analyse the factual position and to record a proper finding on the relevant issue and that therefore the application might be allowed.
9. Sri Srishaila, learned Counsel for the insurer objecting to the application argued that the appellant – insured did possess the policy, issued by the insurer, at the time of trial, which he could have produced before the Trial Court if at all he wanted to make out a case against the insurer based on it, but he failed to do so and that suppressing the fact of his being in possession of the policy at the relevant point of time, the appellant would like to make out a case against the insurer by producing now the said document in the Appellate Court. Therefore, the application (I.A.No. lll) was liable to be dismissed.
10. However, the fact remains that it is not the case of the appellant that he filed this application on the ground that he did not possess the policy at the time of the trial. On the other hand, his case is that he was unable to lay his hand on it at the relevant point of time, that the contents of the policy sought to be produced by him do not differ from those of the policy, Ex. D-1, produced by the insurer in the Court below as both are one and the same and that therefore he may be permitted to produce it that the conditions incorporated therein may throw some light on the Court to appreciate the contentions on the issue and to record an appropriate finding thereon, and nothing more.
11. In view of the above and regard being had to the scope and ambit of the provisions of Order 41 Rule 27 C.P.C., we are of the view that this application deserves to be allowed. It is accordingly allowed.
12. We will now consider the conditions imposed in the policy issued by the insurer, covering the vehicle in question. Perusal of the policy now produced by the appellant along with the application (I.A.No.III) and the policy, Ex.D-1, produced by the insurer in the Court below makes it manifest that it is nothing but the replica of Ex. D-1. In other words, there is no difference between the two – one produced by the appellant and the other by the insurer. To that extent, there is no dispute. Before proceeding to the conditions of the policy, let us see what are all the contributions of money by way of premiums paid by the appellant. The schedule of the policy discloses the contributions made by the appellant in respect of the vehicle in question as follows:
“THE
SCHEDULE
Policy
No.42213/0/0/026049/MV/l 296/83
Name of
insured: Shri B.S. Kori,
c/o
B.S. Kori Co.
Period
of insurance: from 12th August 1983 to 11th August, 1984
XXX
XXX
XXX
Reg. Mark
MXI 569
Make
BAJAJ TEMP
XX XX
Subject to Endt. l.M.T.
Nos. 16, 21,23, 57 Arb.CI.
Attached
hereto
Basic premium
Rs.1,720.00
Basic
180.00
Less: for excess
12
106.00
1/4% RSD
238.00
passengers
1,959.00
Driver
8.00
294.00
Less 45% NCB
881.55
1,077.45
Add: T.P. Prem.
294.00
1,371.45
Less: 10% Spl. Dis.
137.14
1,234.31
Round off:
Rs.
1,234.00
Limitations to use: Use only for social and pleasure purposes and for the Insured’s business.”
XXX XXX XXX
At page-5 of the policy, clause I.M.T.13(a) deals with the Legal Liability to passengers excluding Liability for Accidents to employees of the insured arising out of and in the course of their employment. Though the column “additional premium of Rs. …” is left blank, the Court will have to verify the agreement entered into between the insured and the insurer to find out whether the latter has undertaken liability to make good the compensation awarded for the death of or bodily injury to the passengers travelling in the vehicle in question.
13. The argument of the learned Counsel for the insurer is that no liability has been undertaken by the insurer for the death of or bodily injury to the passengers travelling in the vehicle, as, according to him, the vehicle in question was insured as “private car” and not as “passenger vehicle”. Therefore he submits that if any passenger travelling in the vehicle in violation of the condition of the policy suffers death or bodily injury in the accident involving the said vehicle, the insurer cannot be made liable for compensation arising therefrom. It is for this reason, he submits, that the finding of the Tribunal must be upheld.
14. In this Court the learned Counsel for the insurer has produced documents such as an endorsement and a copy of the policy in respect of the vehicle in question issued by the insurer. They are dated 13-11-1992. It is seen from the policy that it is titled as “COMMERCIAL VEHICLES (INDIA) IZ 301”. Therefore, prima facie it is not possible to accept the contention of the learned Counsel that the vehicle was insured only as “private car”. Further the policy discloses under the head “B-LIABILITY TO PUBLIC RISK” that a sum of Rs. 106/- has been paid by the insured as additional premium for LL to authorised non-fare 12 passengers as per END IMT 14(b). When a question was posed to the insurer with reference to this, the stand taken by him in the written statement filed in the Court below was:
“…. This respondent is not required to indemnify the insured-owner against any liability which may be incurred by him in respect of death or bodily injury to any person travelling in the vehicle as a paid passenger. In fact, this respondent has not undertaken to indemnify the insured-owner against any liability which may be incurred by him in respect of death or bodily injury to any person travelling in the vehicle as a paid passenger or when the vehicle is being used for hire or reward. It is illegal and violation of the terms, conditions and limitations as to use, enumerated in the policy of insurance issued to the Insured-owner of the vehicle. The Insured-owner has violated terms and conditions of policy of Insurance by carrying paid passengers and by using the vehicle bearing Registration No. MXI 569 for hire or reward.”
In paragraph-4 thereof it is stated:
“In case the Honourable Tribunal comes to conclusion that the petitioner is entitled for any compensation and in case the Honourable Tribunal comes to conclusion that this respondent is liable to pay compensation, if any, the liability of this respondent will be only to the extent as per terms and conditions of the policy of insurance and as per Sec.95, 96 and other provisions of the Motor Vehicles Act, 1939.”
15. In the objections to I.A.No. Ill referred to above, the specific stand taken by the insurer is as follows:-
“…… by a bona fide mistake, the company has issued to the Insured ‘the Private Car Comprehensive Policy’ on a different format namely ‘Commercial Vehicle Comprehensive’ but is respectfully submitted that the Tariff collected for the Insurance is for ‘a Private Car Comprehensive policy’ only.”
It is further stated therein:
“Even the Code I.X. 1.291200 found in the copy of the policy now produced by the appellant relates to Private Car Comprehensive Policy. The Policy copy filed by the appellant discloses that it is I.Z.301 which will be issued only in case of Goods Vehicles.”
Therefore, an attempt has been made by the insurer to make out a case that the vehicle was covered with the policy called “Private Car Comprehensive Policy” and not “Commercial Vehicles Comprehensive (India) Policy”. In other words, the specific stand taken by the insurer before this Court is that by bona fide mistake he issued the policy on a different format, viz., ‘Commercial Vehicle Comprehensive but in fact it was ‘Private Car Comprehensive Policy’.
16. In the light of the foregoing, the Court will have to verify as to what was the intention of the parties at the time of issuing the policy. As we have already observed, at the top of the policy issued by the insurer, the vehicle was shown as “Commercial Vehicle (India) IZ 301”. Secondly, a sum of Rs. 106/- has been received by the insurer being additional premium for covering liability of 12 passengers. Of course, as we have already observed, in clause I.M.T. 13(a) of the policy produced by the insurer in the Court below, column relating to additional Premium is left blank. Though that part of the endorsement which relates to the liability of passengers has been scored out, it is without the initials of the Officer authorised to do so. But in the policy produced before this Court by the insured, that part of the endorsement has not been scored out. The learned Counsel for the insurer has no explanation to clarify these matters. Further, the insurer did not choose to examine any witness on his behalf to show that the policy issued as ‘Commercial Vehicle (India) IZ 301’ was by bona fide mistake instead of ‘Private Car Comprehensive Policy’ and that the said sum of Rs. 106/- as shown therein as additional premium in respect of authorised non-fare paying 12 passengers was, in fact, not received by him. Therefore, in the absence of the specific evidence to the contrary, the Tribunal ought to have accepted the case of the appellant – insured. Even if there had been oral evidence adduced by the insurer in support of his case, it would not have outweighed the documentary evidence discussed above which is in favour of the appellant. Moreover, it is not open to the learned Counsel now to contend before this Court contrary to the provisions of the Act that there was a mistake crept in the endorsement. Therefore, it is not possible to concede to the arguments of the learned Counsel for the insurer.
17. Dealing with Section 124 of the Contract Act (9 of 1872) read with Section 95 of the Act, the Supreme Court in NARCHINVA v. KAMAT AND ANR. , with reference to the liability undertaken by the Insurance Company at the time of issuing the policy covering a motor vehicle, in paragraphs 10, 12 and 13 held that when the insurer failed to prove a breach of contract as alleged, the contract of insurance would afford no protection and the insurance company having collected the premium would wriggle out of a loophole and that it cannot be absolved of its liability under the policy, In paragraph-15 therein, the Supreme Court concluded as follows:-
“15. To sum up the insurance company failed to prove that there was a breach of the term of the contract of insurance as evidenced by the policy of insurance on the ground that the driver who was driving the vehicle at the relevant time did not have a valid driving licence. Once the insurance company failed to prove that aspect, its liability under the contract of insurance remains intact and unhampered and it was bound to satisfy the award under the comprehensive policy of insurance.”
18. In the instant case also, despite opportunity was given to the insurer to prove that there was a breach of condition imposed in the policy covering the vehicle in question, he never chose to enter into the witness box to adduce evidence in support of his case, muchless he has taken any action to cancel the policy in accordance with law immediately after coming to know that he issued a wrong policy by over-sight. Having failed to do so, he cannot now contend that he issued the policy in a different format by mistake and that therefore he was not liable for compensation awarded.
19. In PUSHPABAI PARSHOTTAM UDESHI AND OTHERS v. RANJIT GINNING AND PRESSING CO., PVT., LTD., AND ANR. , dealing with the requirements of policies under Section 95(1)(a) and (b)(i) of the Act, the Supreme Court in paragraph-20 held as foflows:-
“Sections 95(a) and 95(b)(i) of the Motor Vehicles Act adopted the provisions of the English Road Traffic Act, 1960, and excluded the liability of the insurance company regarding the risk to the passengers. Section 95 provides that a policy which insures the persons against any liability which may be incurred by him in respect of death or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place. The plea that the words “third party” are wide enough to cover all persons except the person and the insurer is negatived as the insurance cover is not available to the passengers made clear by the proviso to subsection which provides that a policy shall not be required:
“(ii) except 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, to cover liability in respect of the death of or bodily injury to person being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises.”
Therefore it is not required that a policy of insurance should cover risk to the passengers who are not carried for hire or reward. As under Section 95 the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured the plea of the counsel for the insurance company will have to be accepted and the insurance company held not liable under the requirement of the Motor Vehicles Act,”
In paragraph-21 thereof, the Supreme Court held as follows :
“The insurer can always take policies covering risks which are not covered by the requirements of Section 96. In this case the insurer had insured the risk to the passengers. By an endorsement to the policy the insurance company had insured the liability regarding the accidents to passengers in the following terms :
“In consideration of the payment of an additional premium it is hereby understood and agreed that the company undertakes to pay compensation on the scale provided below for bodily injury as hereinafter defined sustained by any passenger….” The scale of compensation is fixed at Rs. 15,000. The insurance company is ready and willing to pay compensation to the extent of Rs. 15,000 according to this endorsement but the learned counsel for the insured submitted that the liability of the insurance company is unlimited with regard to risk to the passengers. The clause relied on is extracted in full:
“Section II, Liability to Third parties.-
1. The Company will indemnify the insured in the event of accident caused by or arising out of the use of the Motor Car against all sums including claimant’s costs and expenses which the insured shall become legally liable to pay in respect of
(a) death of or bodily injury to any person but except so far as is necessary to meet the requirements of Section 95 of the Motor Vehicles Act, 1939, the Company shall not be liable where such death or injury arises out of and in the course of employment of such person by the insured.”
Considering the submissions in this behalf the Supreme Court held
“…..The meaning of this sub-clause becomes clear when we look to the other clauses of the insurance policy. The policy also provides for insurance of risks which are not covered under Section 95 of the Act by stipulating payment of extra premium…..”
In paragraph-22 of the Judgment in the above case, the Supreme concluded as follows:
“On a construction of the insurance policy we accept the plea of the insurance company that the policy had insured the owner only to the extent of Rs. 15,000 regarding the injury to the passenger. In the result we hold that the liability of the insurance company is restricted to Rs. 15,000. There shall be a decree in favour of the claimants/appellants to the extent of Rs. 27,500 against the respondents out of which the liability of the insurance company will be restricted to Rs. 15,000. The appeal is allowed with the costs of the appellant which will be paid by the respondents in equal share.”
20. In the present case, admittedly the insured-owner of the vehicle in question has paid additional premium of Rs. 106/- to cover the risk of 12 passengers also. Applying the Decisions of the Supreme Court in the above two cases to the facts of the case on hand, it is clear that the insurer is liable to pay the compensation awarded in these cases. But the question is to what extent he is liable. In clause I.M.T. 13(a) of the policy covering the said vehicle, like the additional premium column, the column relating to limitation of liability of the insurer is left blank. Therefore, in the absence of limited; liability undertaken by the insurer, the presumption-is, that he has unlimited liability. This is one aspect. The other aspect is in these cases the compensations awarded are not much. For the. death of Sumitrabai, compensation in a sum of Rs. 15,000 has been awarded in M.V.C. No. 1 of 1984 (M.F.A. No. 660 of 1985) and for the injured claimants Rs. 5,000/- each in M.V.C.Nos. 2 and 13 of 1984 (M.F.As.Nos. 846 and 844 of 1985 respectively) and Rs. 8,000 each in M.V.C.Nos. 14 and 15 of 1984 (M.F.As.Nos.845 and 794 of 1985 respectively).
21. In view of our discussion as above, we hold that the insurer has to pay the entire amount of compensation awarded in all these cases and that the Tribunal was not justified in saddling the insurec with the liability of paying those amounts. Hence, we make the following:
ORDER
All these Appeals are allowed. The judgment and award under Appeal in so far as they relate to the fixing up of the liability of making good the compensation awarded thereunder on the insured are set aside. We direct the insurer, the Oriental Fire and General Insurance Company Limited, Bijapur Branch, to pay the entire amount of compensation awarded in these cases. The rest of the judgment and award appealed against remain intact.
In the circumstances, we award costs against the insurer, Advocates fee Rs. 1000/-.