@JUDGMENTTAG-ORDER
1. This order shall also govern the disposal of CMAs. 1549, 324, 326 and 1553 of 1992 because all the claims have arisen out of the same accident.
2. It is no longer in dispute before me that on 15-4-1988, the deceased Dilli Alivelu, the deceased Bharathamma, the deceased Gogireddy Butchi Reddy were travelling with other persons in Ihe trailor bearing No.AEB 2524 of tractor bearing No.AEB 2523 for attending the marriage at Raiprolu. They were also carrying 4 bags of rice, 10 qtls. of fire wood and ''Vistarikattalu'' and had paid Rs.500/- as hire charges. It turned turtle due to the rash and negligent driving of Sriramula Sathaiah, the tractor Driver at about 4 a.m. due to which all these three persons suffered grievous injuries and later died. The said tractor and the trolly were owned by Boddu Muralidhar Reddy and was insured with the appellant-Insurance Company.
3. The legal heirs of the deceased Butchi Reddy filed a petition in OP 536 of 1988 for compensation of Rs.1,00,000/-. The legal heirs of the deceased Aliveltt aged about 9 years had filed a petition for compensation of Rs.50,000/- in OP 382 of 1988. The legal heirs of the deceased Bharathamma had filed OP 384 of 1988 for compensation of Rs.70,000/-.
4. The learned Tribunal on assessment of the evidence on record found that the claimants in OP 536 of 1988 are entitled to compensation of Rs.77,436/-. It also found that the owner of the tractor has contravened the terms of the insurance policy, Ex.A1, and, therefore, the insurance company is not liable to pay the compensation except under no fault basis. Holding so it ordered the Insurance Company to pay Rs.15,000/- with interest at the rate of 15 per cent per annum from 9-10-1990 under no fault basis and the remaining compensation was ordered to be paid by the other respondents. The learned Tribunal found that the claimants in OP 382 of 1988 are entitled to compensation of Rs.25,000/-. On the same reasoning, it fastened the liability on the insurance company to the extent of Rs. 15,000/- under no fault basis. The Tribunal found in OP 384 of 1988 that the claimants are entitled to compensation of Rs.39,348/- and on the same reasoning it found that the Insurance Company is liable to pay only Rs. 15,000/-with interest under no fault basis.
5. The claimants in OP 384 of 1988 have preferred CMA 324 of 1992 for enhancement of compensation and for making the Insurance Company also liable to pay the entire amount of compensation, while the Insurance Company has preferred CMA 1553 of 1992 challenging the order of the learned Tribunal whereby it has held It liable to pay compensation of Rs.15,000/ - under no fault basis. The claimants in OP 382 of 1988 have preferred CMA 323 of 1992 for enhancement of compensation and for making the Insurance Company also liable to pay the entire amount of compensation while the Insurance Company has preferred CMA 1549 of 1992 being aggrieved by the order of the Tribunal whereby it has held it liable to pay the amount of Rs. 15,000/- under no fault basis: The claimants in OP 536 of 1988 have preferred CMA 326 of 1992 for enhancement of compensation and for making the Insurance Company also liable to pay the entire amount of compensation.
6. I have heard the learned Counsel of the appellants as also of the respondents.
7. The learned Tribunal has taken the average monthly income of the deceased Butchi Reddy at Rs. 1,200/- because he was found working as a motor winding mechanic. Looking to the nature of the job of the deceased, taking the average monthly income at Rs.1,200/- as against Rs.1,500/- claimed by the claimants, does not appear to be incorrect. But the learned Tribunal without giving any reason has found that the deceased might have been contributing Rs.300/- per month for the maintenance of his wife and two children. It is too well settled that 1/3rd of the monthly income should be deducted as the amount spent on the earning member of the family and the remaining should be taken as the amount of contribution for the maintenance of the family. Thus the learned Tribunal has fallen in error in holding that the deceased was spending only Rs.300/- per month for the maintenance of the claimants. The monthly dependency is thus taken as Rs.800/- per month or Rs.9,600/- per annum. The deceased was aged about 30 years at the time of his death and, therefore, the multiplier of 16 appears to be proper. Thus, the total dependency comes to Rs. 1,53,600/ -. In addition to mat, the wife is entitled to loss of consortium of Rs.15,000/- as against Rs.3,000/- awarded by the learned Tribunal. The Tribunal has rightly awarded Rs.15,000/- under the head of loss of estate to the claimants. Thus, the total amount of compensation to which the appellants-claimants are entitled is Rs.1,83,600/- but the appellants-claimants have claimed a total compensation of Rs.1,00,000/- only and, therefore, they are entitled to Rs.1,00,000/- only as compensation.
8. The deceased Alivelu was aged about 9 years at the lime of her death. The learned Tribunal has awarded a compensation of Rs. 25,000/- to the appellants-claimants looking to the age of the deceased and relying on the case of Y. Varalakshmi and others v. M. Nageswara Rao and others, 1988 ACJ 354. Therefore, no fault can be found with the finding of the learned Tribunal and it cannot be said that the compensation awarded is on the lower side.
9. The learned Tribunal has observed that the deceased Bharathamma was doing part time vegetable business and, therefore, her monthly income, though claimed by PW1 to be Rs.600/- to Rs.700/-, has taken it to be Rs,300/- per month. As no corroborative evidence has been adduced by the appellants-claimants, the finding of the learned Tribunal that the monthly income of the deceased by doing part time vegetable business was about Rs.300A cannot be said to be on the lower side. The Tribunal has observed that the monthly dependency of Dilli Krishna Reddy and Dllli Linga Reddy was Rs.100/-. The respondent-claimant Dilli Krishna Reddy is aged about 25 years and the respondent-claimant Dilli Linga Reddy is his son. Under these circumstances, the monthly dependency of Rs.100/- cannot be said to be on the lower side. The learned Tribunal has thus assessed the annual dependency at Rs.1, 200/- and has applied the multiplier of 17.95 to arrive at the total dependency at Rs.21, 341/-. It has awarded Rs.3,000/-for loss of consortium which appears to be on the lower side. The Tribunal should have awarded an amount of Rs.15,000/-for loss of consortium to the claimant-husband, Dilli Krishna Reddy. It has rightly awarded an amount of Rs. 15SOOOA for loss of estate. Thus, the total amount of compensation to which the claimants are entitled to comes to Rs.51,348/- rounded off to Rs.51,350/-.
10. The unamended Section 95 of the Motor Vehicles Act, 1939 reads as under :
"95. Requirements of policies and limits of liability -- (1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which -
(a) is issued by a person who is an authorised insurer or by a cooperative society allowed u/s 108 to transact the business of an insurer; and
(b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2) against any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place :
Provided that a policy shall not except as may be otherwise provided under subsection (3) be required -
(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen''s Compensation Act, 1923, (8 of 1923), in respect of the death of, or bodily injury to, any such employee -
(a) engaged in driving the vehicle, or
(b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets in the vehicle, or
(c) if it is a good vehicle, being carried in the vehicle, or
(ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward/by reason of or in pursuance of a/or contract of employment to cover liability in respect of the death of or bodily injury to persons 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, or
(iii) to cover any contractual liability."
11. The Apex Court, in the case of Smt. Mallawwa etc. v. The Oriental Insurance Co. Ltd. & others; 1998(9) Supreme 70, interpreting Section 95 of the Motor Vehicles Act, 1939, has held that:
"What is important to be noted is that the Legislature, after providing generally in Clause (b) of sub-section (1) in wide terms so as to include ''any person'' and every motor ''vehicle'' within its sweep, carved out certain exception by adding a proviso to that clause. By proviso (ii), it restricted the generality of the main provision by confining the requirement to cases 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." In absence of the proviso, the main provision would have included all classes of vehicle including goods vehicles and all passengers whether carried for hire or reward or by reason of or in pursuance of a contract of employment or otherwise. That is the reason why there is a reference to different classes of vehicles in proviso (i). It refers to ''vehicle'', ''public service vehicle'' and ''goods vehicle''. The words ''any person'' in the main provision would have included the employee of the person insured, and therefore an exception was made by enacting proviso (i) so as to restrict liability of the insurer in respect of his employees. Both those exceptions were made as the Legislature did not want to widen the liability of the insurer and the insured by making it more than what it was under the English Act, upon which Section 95 was based. As rightly pointed out by this Court in
"19. As Section 95 of the Motor Vehicles Act, 1939, as amended by Act 56 of 1969 is based on the English Act it is useful to refer to that. Neither the Road Traffic Act, 1960, or the earlier 1930 Act required users of motor vehicles to be insured in respect of liability for death or bodily injury to passengers in the vehicle being used except a vehicle in which passengers were carried for hire or reward or by reason of or in pursuance of a contract of employment, In fact sub-section 203(4) of the 1960 Act provided that the policy shall not be required to cover liability in respect of death of or bodily injury to persons being carried in or upon, or entering or getting on to or alighting from the vehicle at the time of occurrence of the event out of which the claims arise. The provisions of the English Act being explicit the risk to passengers is not covered by the insurance policy. The provisions under the English Road Traffic Act, 1960 were introduced by the amendment of Section 95 of the Indian Motor Vehicles Act. The law as regards general exclusion of passengers is stated in Halsbury''s Laws of England, Third Edition, VI.22 at P.368 as follows:
"Subject to certain exceptions a policy is not required to cover liability in respect of the death of or bodily injury to, a person being carried in or upon, or entering into or alighting from, the vehicle at the time of occurrence of the event out of which the claim arises."
20. It is unnecessary to refer to the subsequent development of the English Law and as the subsequent charges have not been adopted in the Indian statute. Suffice it to say that the Motor Vehicles (Passenger Insurance) Act, 1971 made insurance cover for passenger liability compulsory by repealing paragraph (a) and the proviso of sub-section 203(4). But this Act was repealed by Road Traffic Act, 1972 though u/s 145 of 1972 Act the coming into force of the provisions of Act 1971 covering passenger liability was delayed under December 1, 1972, (Vide Binghams Motor Claims Cases, 7th Edn., P. 704).
21. Section 95(1) and 95(b)(1) of the Motor Vehicles Act adopted the provision of the English Road Traffic Act, 1960 and excluded the liability of the insurance company regarding the risk to ihe passengers. Section 95 provides that a policy of insurance must be 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 is made clear by the proviso to sub-section 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 a reasons of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons 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."
Again turning back to proviso (ii), we find that it in clear terms restricted the scope of the main provision by confining its application to that vehicle which is a "vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment". In the first instance, the vehicle had to be a vehicle of that class in which passengers were carried. If that was not the intention of the Legislature, it would not have used the phraseology "the vehicle is a vehicle in which passengers are carried" and would have simply provided that "except where passengers are carried for hire or reward....." So also the compulsory coverage was not intended for all passengers and, therefore, it was provided that "passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment."
Thus, the confinement of the operation of the provision was in respect of vehicles and also passengers. And that was consistent with the English Law on which Section 95 was based.
9. As stated earlier, Section 95 was amended by Act 56 of 1969. Clause (b) was substituted by a new clause. The relevant part read as under :
"(b) Insures the person or classes of persons specified in the policy to the extent specified in sub-section (2) -
(i) against any liability which may be incurred by him in respect of the death of 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;
(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place."
The proviso remained as it was. The object of the Legislature in making that amendment was to cover the risk in respect of passengers of public service vehicles. The Legislature, therefor, made a special provision in sub-clause (ii) of clause (b), leaving the rest of sub-section (I) including the proviso as it was. If this background is kept in mind, it becomes apparent that the Legislature did not want to make any change in the petition of law except to provide specifically for covering risk to passengers of public service vehicles. We quote below the amended clause (b) for ready reference :
"(b) insures the persons or classes of persons specified in the policy to the extent specified in sub-section (2) -
(i) against any liability which may be incurred by him in respect of the death of 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;
(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place :
Provided that a policy shall not be required :
(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen''s Compensation Act 1923 (8 of 1923), in respect of the death of, or bodily injury to, any such employee -
(a) engaged in driving vehicle, or
(b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle, or
(c) if it is a goods vehicle, being carried in the vehicle, or
(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 persons 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, or
(iii) to cover any contractual liability.
Explanation : for the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damages to any property of a third party shall be deemed to have been caused by, or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place."
Though apparently, it looked as if the Legislature by introducing two sub-clauses in clause (b) had tried to make a distinction between passengers and non-passengers, that was not really so. Though the proviso appeared after sub-clause (ii) or clause (b), it really remained a proviso to the earlier clause (b) which after the amendment became clause (b)(i). Neither the object of introducing sub-clause (ii) in clause (b) nor the language of the proviso indicate that the proviso was to act as a proviso to sub-clause (ii) also. Even earlier, the passengers of a public service vehicle were required to be covered compulsorily as they answered the description of passengers carried for hire or reward. The only effect of making a special provision for passengers of a public service vehicle was that proviso (ii) thereafter remained applicable vehicles other than public service vehicles.
10. For the purposes of Section 95, ordinarily a vehicle could have been regarded as a vehicle in which passengers have carried if the vehicle was of that class. Keeping in mind the classification of vehicles, by the Act, the requirement of registration with particulars including the class to which it belonged, requirement of obtaining a permit for using the vehicle for different purposes and compulsory coverage of insurance risk, it would not be proper to consider a goods vehicle as a passenger vehicle on the basis of a single use or use on some stray occasions at that vehicle for carrying passengers for hire or reward. For the purpose of construing a provision like proviso (ii) to Section 95(i)(b), the correct test to determine whether a passenger was carried for hire or reward, would be whether there has been a systematic carrying of passengers. Only if the vehicle is so used then that vehicle can be said to be a vehicle in which passengers are carried for hire or reward.
12. We will now consider whether the decision of this Court in Pashpabai ''.v case (supra) requires reconsideration. Thai was a case of a passenger travelling in a motor car. He was not travelling for hire or reward. The vehicle was neither a public service vehicle nor a goods vehicle. It was in thai context that this Court made the following observations in Paragraphs 21 and 22 :
".....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 is made clear by the proviso to sub-section 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 a reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons 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.
22. 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 u/s 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 requirements of the Motor Vehicles Act."
12. Interpreting Section 95 of the Motor Vehicles Act, 1939, the Apex Court was pleased to dispose of the Civil Appals No.3659 of 1993, 880/86, 1478/87, 6001/ 90, 6002/90, 2098/96, 5872/94, SLP (C) Nos.10745, 10747, 10748 of 1995 and SLP (C) No.9727/1989 through the common judgment. In Civil Appeal No.3659 of 1993 and 880/1986, the deceased were the owners of the goods and as such were carried in the goods vehicle which had met with the accident. In SLP (C) No.9727/ 1989, the deceased was a gratuitous passenger while in the aforementioned other cases, the deceased were travelling in goods vehicles as passengers on payment of fare. The Apex Court was pleased to exonerate the Insurance Company of its alleged liability to pay compensation to the claimant in all the aforesaid cases.
13. The position of law thus emerges is that when the vehicle is used for a systematic carrying of passengers, it can be said to be a vehicle in which passengers carried for hire or reward within the meaning of provision (ii) to Section 95(1)(c) of the Motor Vehicles Act, 1939. The owner of the goods who has hired a goods vehicle, does not become a person travelling on the vehicle in pursuance of a contract of employment and even if he is carrying his goods after hiring the vehicle, does not become a vehicle for carrying passengers for hire or reward and consequently would not come within the purview of Section 95(1)(b). Proviso to Section 95(1)(b) does not apply to persons carried in a goods vehicle for hire or reward as it is restricted to a passenger carried in public service vehicle. Insurance Company is not liable for the death of or bodily injury suffered by persons carried for hire or reward in a goods vehicle.
14. The insurance policy in question restricts the user of the tractor and trolley for any other purpose except for agricultural purposes. The respondents-claimants have alleged that they were carrying four bags of rice, 10 qtts. of fire wood and ''vistarikallalu'' in the trolley of the tractor at the relevant time against payment of charges. Thus, there is a breach of a specific term of the policy and as such the order of the learned Tribunal cannot be faulted with that the Insurance Company is not liable to pay the compensation u/s 110-A of the Motor Vehicles Act, 1939. Even otherwise, in alt the three claim cases on hand, the tractor and the trolley being the goods vehicles, the deceased could not be treated as authorised passengers with or without their gods for hire reward. They were not entitled to travel in the trolley of the tractor in question. They were unauthorised passengers and, therefore, the appellant-Insurance Company is not liable to indemnify the owner of the tractor and the trolley.
15. In the case of
16. For the foregoing reasons, disagreeing with the learned Tribunal, I hold that the Insurance Company is not liable to pay any amount of compensation even under Sections 92-A and 92-B of the Motor Vehicles Act, 1939 under no fault basis.
17. In the result, CMAs 1553/92 and 1549/92 are allowed. The order of the learned Tribunal that the appellant-Insurance Company is liable to pay compensation to the extent of Rs.15,000/-under no fault basis is set aside and the Insurance Company is exonerated of its liability to pay the amount of compensation of Rs. 15,000/- to the respondents-claimant under no fault basis. If any amount of compensation has been paid or deposited by the appellant-Insurance Company but has not been disbursed to the claimants, the same shall be refunded to it and in case any amount of compensation paid or deposited by the appellant-Insurance Company has already been disbursed to the respondents-claimants, the owner and Driver of the tractor and trolley shall refund that amount with uplo date interest to. the Insurance Company which shall be entitled to recover that amount from them in the event they commit a default. CMA 324/92 is partly allowed. The amount of compensation of Rs.39,348/- is enhanced to Rs.51,350/- (Rupees Fifty One Thousand Three Hundred Fifty Only). Out of his amount, the appellant No.2 shall be entitled to claim Rs.30,000/- and the first appellant shall be entitled to claim the remaining amount of Rs.21,350/-. These amounts shall carry interest at the rate of 12 per cent per annum from 16-10-1990 till the date of payment or realisation. The respondents-owner and Driver of the tractor and trolley shall be jointly and severally liable to pay the compensation to the appellants-claimants. The learned Tribunal is directed to disburse the amount as per the guidelines given in the case of the
