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TMI Blog2011 (2) TMI 1475X X X X Extracts X X X X X X X X Extracts X X X X ..... g capacity of six persons, including the driver, for the period covering 23rd July, 2004 to 22nd July, 2005. In other words, besides the driver, the vehicle was entitled to carry a maximum number of five passengers. 5. On 18th August, 2004, the aforesaid vehicle carrying fifteen passengers from Village Nansu to Dharkot Thapli, while being driven by Bharat Singh Rawat, the father of the respondents herein, fell into a ditch resulting in his death and the death of the majority of the passengers while causing serious injuries to the remaining passengers. The Respondent Nos.1 to 4 as the legal representatives of the deceased filed an application for compensation before the Motor Accident Claims Tribunal, Pauri. On the basis of the pleadings filed by the parties, the following issues were framed :- 1 Whether on 18.8.2004 the deceased Bharat Singh was driving the vehicle No.UP.-06/6244 on Jakheti-Nansu Road and due to the mechanical fault in the vehicle the jeep met an accident due to which Bharat Singh died ? 1 Whether the aforesaid accident occurred due to the negligence of the deceased? 1 Whether on the date of accident the alleged vehicle was being plied according to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observing that carrying a larger number of passengers than was permitted in terms of the Insurance Policy, did not amount to breach of the terms and conditions of the Policy and the Insurance Company would still be liable since the vehicle was legally insured. 9. As far as the fourth issue is concerned, the first Respondent, Kumari Poonam, stated on oath that both her parents had died in the same accident and that her father as driver was earning ₹ 4,000/- per month. Although, the claimants did not file the income certificate of the deceased, the Tribunal initially assessed his annual income at ₹ 25,000/- and applying the multiplier of 16 arrived at a figure of ₹ 4,03,200/- payable as compensation. After deductions, the total amount of compensation was assessed as ₹ 1,86,200/-, along with interest @9% per annum. On the claimants' cross-appeal being allowed, the Tribunal assessed his income to be ₹ 36,000/- per annum and since the age of the deceased was taken as 43 years at the time of the accident, applying the multiplier of 15 indicated in the Table of Section 163A of the Motor Vehicles Act, 1980, the total compensation was re-assessed as & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 SCC 445] decided on 20th August, 2007. While considering the provisions of Section 147(1)(b)(ii) and (2) and Section 149(1)(2) and (5) of the 1988 Act in relation to an insurer's liability, their Lordships came to the conclusion that the insurer's liability was limited by the insurance taken out for the number of permitted passengers and did not extend to paying amounts decreed in respect of other passengers. Taking recourse to a harmonious construction of the relevant provisions, their Lordships held that the total amount of compensation payable should be deposited by the Insurance Company which could be proportionately distributed to all the claimants, who could recover the balance of the compensation amounts awarded to them from the owner of the vehicle. 12. Reliance was also placed on another two-Judge Bench decision of this Court in National Insurance Co. Ltd. Vs. Challa Bharathamma Ors., 2004 AIR SCW 5301, in which, while taking note of the earlier decisions rendered by a two-Judge Bench of this Court in New India Assurance Company Vs. Satpal Singh Ors. [(2000) 1 SCC 237] and a three-Judge Bench in New India Assurance Co. Ltd. Vs. Asha Rani Ors., [(2003) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of the use of the vehicle in a public place. 15. On an interpretation of the aforesaid provisions of Section 147 of the 1988 Act, it was held that under Sub-section (2) there is no upper limit for the insurer regarding the amount of compensation awarded in respect of death or bodily injury of a victim of the accident. It was, therefore, apparent that the limit contained in the old Act having been removed the policy should insure the liability incurred and cover injury to any person, including the owner of the goods or his authorized representative, carried in the vehicle. Their Lordships concluded that as a result of the provisions of the new Act, the earlier decisions rendered under the 1939 Act were no longer relevant and an insurance policy covering third party risk was not required to exclude gratuitous passengers in a vehicle, no matter that the vehicle was of any type or class. 16. The said view which had followed an earlier three-Judge Bench decision of this Court in Mallawwa Ors. Vs. Oriental Insurance Co. Ltd. Ors. [(1999) 1 SCC 403], came up for consideration once again in a batch of appeals filed by different insurance companies, including the present Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods carriage, being carried in the vehicle, or (ii) to cover any contractual liability. It was also noticed that as far as employees of the owner of the motor vehicle were concerned, an insurance policy was not required to be taken in relation to their liability, other than arising in terms of the provisions of the Workmen's Compensation Act, 1923. On the other hand, Proviso (ii), included under Section 95 of the 1939 Act, imposed a liability upon the owner of the vehicle to take out an insurance policy to cover the liability in respect of a person who was travelling in a vehicle pursuant to a contract of employment. The same was conscious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that inspite of the amendment effected to Section 147(1)(b) in 1994, the position remained the same in respect of persons other than the owner of the goods and his authorized representative being carried in the goods vehicle. It was held that it was not the intention of the legislature to provide for the liability of the insurer with respect to passengers, especially gratuitous passengers who were neither contemplated at the time the contract of insurance was entered into, nor was any premium paid to the extent of the benefit of insurance to such category of people. It was, therefore, felt that the interest of justice would be subserved if the Insurance Company satisfied the awarded amount and recovered the same from the owner of the vehicle and for the said purpose it would not be necessary for the Insurance Company to file a separate suit, but to initiate a proceeding before the executing Court as if the dispute between insurer and the owner was the subject matter of the determination before the Tribunal which had decided in favour of the insurer and against the owner of the vehicle. 20. The law as regards the liability of insurers towards third parties killed or injured in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pensation to the extent of at least six of the occupants of the vehicle, including the driver. 23. Sub-section (1) of Section 149 of the Motor Vehicles Act, 1988, makes it amply clear that once a certificate of insurance is issued under sub-section (3) of Section 147, then notwithstanding that the insurer may be entitled to avoid or cancel the policy, it shall pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured, payable thereunder, as if he was the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments. Sub-section (2), however, places a fetter on the payment of any sum by the insurer under sub-section (1) in respect of any judgment or award unless, the insurer had notice of the proceedings in which the said judgment or award is given and an insurer to whom such notice is given shall be entitled to be made a party thereto and to defend the action on the grounds enumerated therein involving a breach of a specified condition of the policy. 24. The liability of the insurer, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, excluding the driver, in respect of whom compensation would be payable by the Insurance Company, to meet the ends of justice we may apply the procedure adopted in Baljit Kaur's case (supra) and direct that the Insurance Company should deposit the total amount of compensation awarded to all the claimants and the amounts so deposited be disbursed to the claimants in respect to their claims, with liberty to the Insurance Company to recover the amounts paid by it over and above the compensation amounts payable in respect of the persons covered by the Insurance Policy from the owner of the vehicle, as was directed in Baljit Kaur's case. 27. In other words, the Appellant Insurance Company shall deposit with the Tribunal the total amount of the amounts awarded in favour of the awardees within two months from the date of this order and the same is to be utilized to satisfy the claims of those claimants not covered by the Insurance Policy along with the persons so covered. The Insurance Company will be entitled to recover the amounts paid by it, in excess of its liability, from the owner of the vehicle, by putting the decree into execution. For the aforesaid purpose, the tot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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