1. The above miscellaneous first appeal is directed against the judgment and award passed by the district judge, Chitradurga, in M.V.C. 12/71 dated November 5, 1976, fixing the liability of the insurer at Rs. 10,000 out of the total of the compensation of Rs. 25,048 and the owner of the vehicle bearing number MYT 3887 for payment of the balance amount to respondents Nos. 1 to 4.
2. The appellant is the owner of the lorry bearing No. MYT 3887. Respondents Nos. 1 to 4 are the claimants. Respondent No. 5 is the insurer. Respondent No. 6 is the driver.
3. The claimants instituted a petition before the Motor Accidents Claims Tribunal at Chitradurga, claiming a compensation of a lakh of rupees for the death of one Mohammed Ameer, the husband of the 1st claimant and father of the respondents Nos. 2 to 4, arising out of the motor accident which took place on 13th March, 1971, when he (deceased) was traveling in the said goods vehicle from Davanagere to Hariyur with his goods loaded in the said vehicle.
4. Facts of the case are that Mohammed Ameer was travelling from Davanagere to Hariyur with his goods loaded in the vehicle No. MYT 3887. At 101/2 milestone near Vani Vilas Sugar Mills, Hariyur Town, the lorry dashed against another vehicle bearing No. HMT 2672, which was parked for some repairs, as a result of which Mohammed Ameer sustained injuries. He was removed to Hariyur hospital and from there he was removed to the hospital at Chitradurga in a car where he succumbed to the injuries. According to the claimants the death was due to the rash and negligent driving by the 6th respondent.
5. The owner and the driver in their written statement have denied the fact of the deceased travelling in their vehicle by paying charges. They denied that the alleged accident was due to rash and negligent driving by the 6th respondents.
6. The insurer by its the rash and negligent driving on the part of the driver and stated that the accident was a case of vis major. It pleaded that there was no statutory obligation to insure the risk resulting to persons in goods vehicles and that there is no coverage of insurance relating to the deceased person. Further, it has averred that there was no coverage of insurance for non-fare paying passenger.
7. Upon the pleadings, the following issued were framed by the Claims Tribunal :
(1) Whether the petitioners prove that the deceased died in an accident near Vani Vilas Sugar Mills on Bangalore-Dharwar Road, when he was travelling in vehicle No. MYT 3887 ?
(2) Whether the accident was due to rash and negligent driving of the driver of vehicle No. MYT 3887 ?
(3) Whether the petitioners prove that they are heirs to the deceased ?
(4) Whether they prove that the deceased was aged 35 years and a merchant with an income of Rs. 300 per month ?
(5) Whether they prove that they are entitled to the quantum of damage claimed ?
(6) What order ?
8. The claimants examined seven withnesses in support of their case. No defence witness was examined on behalf of the respondents.
9. The Claims Tribunal upon a consideration of the evidence on record found that Mohammed Ameer died due to the motor accident, in which vehicle No. MYT 3887 was involved, and that the accident was due to the rash and negligent driving of the vehicle. It further held that the claimants were the rightful heirs of the deceased, that the income of the deceased was Rs. 150 per month, and that the claimants were entitled to the compensation. in that view of the matter, it awarded compensation of Rs. 25,048 payable by the owner and driver. It held that the insurer was not liable for the payment of any compensation.
10. Aggrieved by the said judgment and award the present appellant owner filed Miscellaneous Appeal No. 333 of 1976 challenging the order of the Claims Tribunal for exonerating and not holding the insurer liable to pay compensation to the claimants. The other findings were not challenged in that appeal.
11. A Division Bench of this court, of which one of us (K.B.J.) was a member, set aside the award passed by the Claims Tribunal only to the extent it exonerated the insurer from the liability to pay compensation and remanded the case to the Claims Tribunal below to decide the question whether the insurer was liable to pay the amount of compensation determined by it or not afresh, after giving a reasonable opportunity to all the parties to file additional pleadings, if any. In other respects the award passed by the Claims Tribunal was affirmed.
12. Thus the only question referred to the Tribunal for a decision by this court was whether the insurer was liable to indemnify the insured in so far as the amount of compensation that it was liable to pay to the claimants on account of the death of a person who was carried on a goods vehicle along with us goods in the vehicle in question.
13. After remand, the Claims Tribunal determined this question and held that the insurer was liable to pay Rs. 10,000 out of the total amount of compensation awarded and the owner was liable to pay the balance of compensation.
14. Aggrieved by this judgment and award, the owner has filed this above miscellaneous first appeal.
15. Therefore, the only question for determination is whether the Claims Tribunal is justified in law in fixing the liability of the insurer to an extent of Rs. 10,000 and holding the owner liable to pay the balance of compensation.
16. The learned advocate for the appellant contended that the insurer, the 5th respondent, undertook to pay compensation in respect of the death of or bodily injuries to a third party who was travelling in the lorry along with his goods, as per the terms of the third party risk as contemplated under s. 95 of the Motor Vehicles Act, 1939 (to be called “the Act”). He further urged that the liability of the insurer, the 5th respondent, was limited to the extent of Rs. 50,000 as the appellant has paid additional premium as per notice, Ex. R-2, and, therefore, he urged that the 5th respondent, the insurer, was liable to indemnify the appellant to the entire extent of liability under the award under the policy in force at the time of the accident.
17. The counsel for the 5th respondent-insurer sought to support the order under appeal and he urged that the insurance policy in question did not cover the non-fare paying passengers. However, as an alternative, he argued that the fastening on the insurer of a liability in respect of the death of or bodily injuries to a non-fare paid passenger was restricted to the extent of Rs. 10,000 only according to the terms of endorsement 14 (b) attached to the policy and, therefore, he justified the award limiting the liability of the insurer to the extent of Rs. 10,000. He relied upon certain decision in support of his contention. It is unnecessary to consider them in view of the judgment of a Division Bench, of which one of us (K.B.J.) was a member in MFA 227 of 1975 and MFA 363/1975 (Channappa Channaveerappa Katti v. Laxman Bhimappa Bajentri (see p. 609 supra). The material facts in that case were :
A goods vehicle bearing No. MTR 3739 was being used by its owner, a public carrier, for the carriage of goods from Bijapur to Talikot. On 3rd March, 1973, when the said vehicle was carrying goods from Bijapur to Talikot, it met with an accident at 6 p.m. near a place called Hitnalli as the driver of the vehicle failed in his attempt to successfully negotiate the vehicle in a sharp curve on the road. As a result of the accident, six person in the vehicle including one Sonappa Mallappa Nidagundi of Talikot, the owner of certain goods, who had hired the vehicle for carrying the goods, and Balappa Bajentri, the cleaner of the vehicle sustained fatal injuries and died of these injuries. The legal representatives of Sonappa Mallappa Nidagundi claimed compensation in a sum of Rs. 4,24,000 for the death of Sonappa Mallappa Nidagundi (owner of the goods). The insurer took the stand of non-liability for the claim of compensation made in respect of the death of the owner of the goods on the ground that the risk of such a person was not covered by the insurance policy issued in respect of the vehicle inasmuch as such risk was not required to be insured against compulsorily under the Act.
18. In the above decision this court, after a careful examination of the relevant provisions of s. 95 of the Act and r. 161 of the Mysore (Karnataka) Motor Vehicle Rules, 1963 (to be called “the Rules”), observed thus :
“It has to be mentioned at the outset that the policy of the law in making provision for compulsory insurance of vehicles is to cover the risk of innocent third parties. If we consider the case of the owner of the goods (hirer of the goods vehicle), who wants to convey his goods through a public goods vehicle, will he be an innocent third party when he dies or suffers injury while accompanying his goods carried by a public goods vehicle, in the course of the use of the vehicle ? Our answer to this question can only be in the affirmative for the simple reason that when the owner of the goods wants to convey his goods in a public goods vehicle hired by him and accompanying the goods in a public goods vehicle hired by him and accompanying the goods for their safety, in the normal course of things, it would not be possible for him to ascertain the financial stability of the user of the vehicle, the expertise of the driver of the vehicle in driving it, or the road-worthy condition of the vehicle, as would ensure safety. When such a person travels as a passenger in goods vehicle which is used to advance the business interests of its owner and is permitted by law, it cannot be said that it is not a vehicle meant for carrying passengers for hire or reward, for in the exception to the first part of the prviso. In fact, in our opinion, the hire payable for carrying the goods must be deemed to include the hire for carrying the owner of the goods or his agent or servant who travels in the vehicle along with the goods for their safety, inasmuch as it is impossible for us (not ?) to think of a binding obligation on the part of the owner of the goods vehicle for carrying the goods (with the owner of the goods) who hires the goods vehicle for carrying the goods. Moreover, such obligation to carry the owner of the goods along with his goods in a goods vehicle can be only as a business proposition as opposed to a gratuitous proposition. Hence, we have no doubt in our minds that the legislature by enacting the exception contained in the first part of the proviso has thought of compulsory coverage by insurance the risk of owners of goods, who are entitled to travel in goods vehicle along with their goods in the event of any risk arising in the course of the user of the vehicle.
From this, it would follow that the goods vehicle with which we are concerned was a goods vehicle which was meant to carry along with the goods passengers for hire or reward and fell within the exception contained in the first part of the proviso so as to require coverage of risk of the owners of goods travelling as passengers by compulsory insurance required to be taken in respect of the vehicle under chapter VIII of the Act and Ex. D-1 is the policy of insurance which has been taken accordingly.
In this context, we consider it necessary to deal with another point which has a bearing on the question under consideration. From the terms and conditions of the insurance policy which have been extracted hereinbefore it will be seen that under the heading “Limitation” it is stated that the policy does not cover “use for the conveyance of passengers for hire or reward”. But the said limitation, in our view, if upheld, will have the effect of nullifying the provisions contained in the exception in the first part of the proviso and, therefore, the insurer cannot be allowed to take advantage of the same to deny its liability to indemnify the insured for the compensation payable in respect of the death of the owner of the goods, who travelled in the goods vehicles …
The proviso to r. 161 (1) of the Rules, since specifically authorises the use to the goods vehicle for carrying the owners of goods carried in the vehicle as passengers, it cannot be said that the vehicle which carries such passengers is not the one covered by a permit to ply for hire or reward. In the said view of the matter, the term relating to the limitation of liability contained in the policy adverted to by us, does not enable the insurer to escape its liability for the risk of the owner of the goods.”
19. Thus, it is clear from the above decision that the insurer does not escape its liability for the risk of the owner of the goods travelling in the vehicle along with his goods.
20. The next question for determination is as to the limits of the liability of the insurer under the policy of insurance.
21. Sub-section (2) of s. 95 of the Act, which has a bearing on the point, reads thus :
“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 up to the following limits, viz. :
(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, employee (other than the driver) not exceeding six in number, being carried in the vehicle.”
22. Hence, we are of the opinion that the liability of the insurance company for the death of a passenger in a goods vehicle has to be fixed with reference to the terms in clause (a) of sub-s. (2) of s. 95 of the Act and the terms referred to in the policy.
23. Thus, its clear that the limits of liability of the insurer in the case passengers carried for hire or reward in a goods vehicle who die or suffer bodily injury the limit of liability cannot exceed fifty thousand rupees as provided in the case. When the Legislature has made a specific provision for fixing the liability of the insurer in respect of the goods vehicle, we are of the view that the liability for the death of the passengers in the goods vehicle has to be made good by the insurer in its entirety if the amount does not exceed Rs. 50,000, as provided for specifically in clause (a) of s. 95 (2) of the Act. Therefore, in the instant case, the legal position is that the limit of liability of the insurer in respect of a passenger shall be up to Rs. 50,000. Therefore, the view taken by the Claims Tribunal that the deceased in the instant case was only a non-fare paying passenger travelling in the lorry and the liability of the insurance company is limited to Rs. 10,000 is unsustainable in law. It is, therefore, set aside.
24. In the view that we have taken the insurer, 5th respondent, is liable to indemnify the insured up to the extent of Rs. 50,000. In the instant case the Claimants Nos. 1 to 4 have been awarded compensation of Rs. 25,048 together with interest at the rate of 6 per cent. from the date of petition till the date of payment. The insurer, 5th respondent, is liable to pay the entire amount. Accordingly, it is ordered and the award modified.
25. In view of the above modification in the award, the appellant insured is not liable to pay any amount towards compensation awarded to respondents Nos. 1 to 4 by the Claims Tribunal.
26. In the result, miscellaneous first appeal is allowed. In the facts and circumstances of the case parties are directed to bear their own costs.