N.V. Dabholkar, J.
1. This appeal under Section 173 of Motor Vehicles Act, 1988 is directed against the judgment and award passed by the Member, Motor Accident Claims Tribunal, Jalgaon in M.A.C. Petition No. 194/2000. By the impugned judgment and award, the learned Member has granted compensation of Rs. 13,03,320/- to the claimant with interest at the rate of 6% p.a. from the date of petition (2-3-2000) till the date of actual payment or deposit in the Court. Original Respondents No. 2 and 3 (owner and Insurance Company) are directed to satisfy the liability.
2. The present appeal being by Insurance Company, henceforth for the sake of convenience and brevity, we shall refer to the parties as claimant, owner and Insurance Company. Present respondent No. 1 was the petitioner before the Tribunal and he is the claimant/person injured in the accident in question. Present respondent No. 3 is the owner of the vehicle involved in the accident which was insured with the appellant Insurance Company.
The accident in question took place on 19th August, 1997 at about 7.30 p.m. The claimant is a Lawyer by profession. At the material time, he was travelling along with Shri K.D. Patil, Chairman of the Maharashtra Co-operative Agricultural and Rural Development Bank Limited and one Dinkar Dayaram Patil to Aurangabad for the purpose of attending a case pertaining to the said Bank in the High Court. Present respondent No. 2 was the driver of the vehicle. It is contended that the vehicle was driven in a rash and negligent manner by the driver, as a result of which it slipped away from the road, turned turtle and fell in a ditch. Petitioner suffered severe injuries including fracture of right side thigh bone. He was initially admitted in a hospital at Parola and then shifted to Jalgaon in the hospital of Dr. Pratap Jadhav and ultimately he was also required to take some treatment at J.J. Hospital, Bombay. On three occasions, he was subjected to surgical treatment. Even after treatment, he has suffered permanent disability. He is unable to bend his right leg which is now become marginally short.
Petitioner was aged 50 years at the time of accident. He has been practising in the Courts at Parola, Dhule, Amalner and Jalgaon on Civil, Criminal, Revenue and Co-operative sides. Due to prolonged treatment, his legal practice was adversely affected. He also could not pay attention to his agricultural land. Consequently, petitioner claimed compensation of Rs. 5,00,000/-. He had also expressed willingness to pay additional Court fee in the event, the Tribunal was pleased to award higher amount of compensation.
3. Owner and driver, in spite of service, did not file any written statement. The petition was mainly contested by the Insurance Company, which denied the claim of the claimant in toto for want of information and requested that the claimant be put to strict proof of all the allegations, without raising any specific defence.
4. Heard respective Counsel for respective parties.
5. The learned Counsel for the Insurance Company has raised a twofold challenge. Firstly, he has challenged the quantum of compensation and on this count, the Lawyer of the owner is with the Lawyer of the Insurance Company. As a second line of argument, it was submitted that the liability of Insurance Company is limited to the extent of liability as imposable by additional premium paid, as indicated in the policy document and, therefore, the entire liability cannot be saddled upon the Insurance Company as joint and several liability of the owner and Insurance Company. It is the claim of the Insurance Company that the injured was occupant of the vehicle and, therefore, he is not a 'third person', as contemplated by Section 147 and, therefore, the Insurance Company is not liable to satisfy the entire compensation amount. On this count, the owner is in conflict with the Insurance Company and he falls on the side of the claimant in praying that the Insurance Company cannot escape the liability to indemnify the entire amount that is required to be paid by the owner to the claimant by way of compensation. So far as second aspect is concerned, the Lawyers have placed reliance upon judicial precedents, to which, we shall refer while discussing the reasons for our finding on that issue of conflict.
6. So far as quantum is concerned, the Tribunal has awarded the compensation as follows:
1. Rs. 19,000/- : Hospital bill (for the period 20-8-1997 to20-10-1997)2. Rs. 10,850/- : Hospital bill (for the period 24-11-2002 to5-12-2002)3. Rs. 54,470/- : Medicines purchased and produced at Exhibit-54before the Tribunal4. Rs. 24,000/- : Two Bombay trips for treatment at J.J. Hospital.5. Rs. 10,000/- : Jalgaon trips from Parola6. Rs. 57,000/- : Expenses of attendant7. Rs. 20,000/- : Special diet.
So far as amount at Sr. Nos. 1 to 3 above, the claimant has produced bills and the learned Member has awarded the compensation to the extent expenditure is reflected from the said bills. Consequently the Insurance Company does not have any reason to challenge the compensation paid on these counts.
So far as amount of Rs. 24,000/- for journey to and fro Bombay for two trips, we feel the amount to be exorbitant. The parties were in agreement that journey by road from Parola to Bombay would be a journey of about 500 KMs. In the year 1997, private vehicles used to charge around Rs. 6/- per KM. Two trips to Bombay and back is a journey of nearly 2000 KMs and at the rate of Rs. 6/- per KM, it would cost about Rs. 12,000/-. To leave the margin for error, in our calculation, as amount of Rs. 14,000/- would be more than just and proper and, therefore, the compensation, or this count, is required to be reduced by Rs. 10,000/-. We have ventured to interfere with this amount because from the discussion in para 12 of the Tribunal, pertaining to the expenditure of two trips to Bombay, it is evident that the learned Member has believed the word of the claimant without production of any receipt of such huge amount paid as charges for the journey by Ambulance.
So far as item at Sr. No. 5 is concerned, claimant has deposed that he had nearly 20 trips for follow up treatment with Dr. Jadhav at Jalgaon and he was required to spend an amount of about Rs. 500/- per trip. Jalgaon-Parola admittedly being a distance of about 50 KMs, this claim does not seem to be exorbitant and, therefore, was not seriously challenged by the learned Counsel for Insurance Company.
In all fairness, the Counsel for the Insurance Company also did not challenge amount of Rs. 20,000/- awarded by way of special diet. However, he has taken an exception to the amount of Rs. 57,000/- awarded as compensation towards attendant's expenses.
From the evidence, it could be gathered that the petitioner was hospitalised at Bombay for 38 days and at Jalgaon for 71 days. Even considering that he was attended by couple of attendants i.e. wife and father-in-law, an amount of Rs. 500/- per day at Bombay and Rs. 300/- per day at Jalgaon, for both attendants together, would be just and proper. Consequently, compensation on this count can be calculated to be Rs. 500/- x 38 : Rs. 19,000/- plus Rs. 300 x 71 : Rs. 21,300/-. Thus the total amount of expenditure on attendants need not exceed Rs. 40,000/-. The compensation awarded under sixth debit head in the table above is, therefore, required to be reduced by Rs. 17,000/-. Thus, out of Rs. 1,95,320/-, awarded towards actual expenses, by reducing an amount of Rs. 27,000/-, as discussed hereinabove, the claimant should be entitled to Rs. 1,68,320/-.
7. The Tribunal has awarded further compensation as follows:
1. Rs. 3,15,000/- : Loss of income for three and half years;2. Rs. 6,93,000/- : Loss of future income; and3. Rs. 1,00,000/- : Special damages due to inconvenience, hardship,discomfort, mental stress, etc._______________Total Rs. 11,08,000/-_______________
Since it is the claim of the claimant that he could not attend the Court nearly for three and half years, taking monthly income of the Lawyer to be Rs. 7500/- per month, the learned Member has calculated loss of income for 42 months as Rs. 3,15,000/-. We have not been able to find any convincing reasons in the argument of the learned Counsel for Insurance Company for causing reduction in this amount. We are also not inclined to disturb the amount of compensation of Rs. 1,00,000/- granted by way of special damages i.e. for suffering inconvenience, hardship, discomfort, mental stress and loss of amenities. This compensation is not calculable in terms of money and, therefore, we leave the amount of Rs. 1,00,000/- undisturbed.
8. Taking monthly income of the claimant to be Rs. 7500/-, his annual income is taken by the Tribunal to be Rs. 90,000/-. Since permanent disability suffered is 70%, the learned Member has calculated loss of future income at the rate of Rs. 63,000/- per year (70% of Rs. 90,000/-). Taking into consideration that the claimant was aged 50 years at the time of accident, the learned Member has taken multiplier of 11 from the End Schedule below Section 163A of the Act and thus calculated the future loss of income to be Rs. 6,93,000/-. The learned Counsel for the Insurance Company has taken serious exception to this. According to him, when an amount of Rs. 3,15,000/- is already awarded by way of loss of income for three and half years, these three and half years ought to have been deducted from the multiplier. This is because the claimant is nearly about 55 years old after taking into consideration these three and half years from the date of accident. Eventually for age group 50 to 55 years, the multiplier is 11. Here, we must take into consideration that the multiplier provided by IInd Schedule can be used as a guideline. The Court is not required to apply the multiplier in strictness in the applications under Section 166. Consequently, while applying the multiplier in a petition under Section 166, the Courts would be justified in taking a multiplier on lower side, because future income of future years is being paid to the claimant in lump sum in immediate future. We are also in agreement with the learned Counsel that once the petitioner is paid an amount by way of compensation towards loss of entire income of three and half years, the multiplier for the age group 50 to 55 years should not have been used. Multiplier for the age group 55 to 60 years is 8 and that should have been used. With the logic referred hereinabove, we should use multiplier lesser than 8, say 5 or 6. However, in this case, it cannot be ignored that the claimant is a practising Lawyer and for practising Lawyer, there can be no age of retirement as in the case of serving people. Lawyers, practising even at the advance age and after crossing the age of 70 years, are not far and few and, therefore, we are not inclined to reduce the multiplier below 8. Taking the multiplier of 8, the amount of loss of future income would calculate Rs. 63,000 x 8 i.e. Rs. 5,04,000/-.
9. As a result of above reductions, the compensation payable can be indicated as hereinbelow. In the two columns, we are indicating the amount as awarded by the Tribunal and the amount which we feel to be just and proper.
__________________________________________________________________Sr. No. Description Amount awarded Amountby the Tribunal approved by us(in Rupees)__________________________________________________________________1. 2. 3. 4.1. Hospital and medical expenses 1,95,320/- 1,68,320/-incurred2. Loss of income for 3,15,000/- 3,15,000/-3. Loss of future income 6,93,000/- 5,04,000/-4. Special damages 1,00,000/- 1,00,000/-_________________________________Total Rs. 13,03,320 10,87,320/-__________________________________________________________________
To round up, an amount of Rs. 10,87,000/- would be just and proper. Naturally, interest @ 6% p.a. from the date of petition till actual deposit will be chargeable on this reduced amount.
10. It was submitted by advocate Shri Chapalgaonkar for appellant, that admittedly vehicle was owned by the respondent bank. As narrated by claimant himself, he was travelling in the vehicle of the bank from Jalgaon to Aurangabad for the purpose of some Court work of the bank. Thus claimant was a gratuitous passenger in a private vehicle. Hence, by relying upon observations of the Supreme Court in a recent judgment in the matter of United India Insurance Company Ltd. Shirnla v. Tilak Singh and Ors. AIR 2006 SCW 1822, the bank is not liable to pay the compensation, if the policy is Act only policy. This is because, Act only policy under Section 147 of the Act, as laid down by Hon'ble Apex Court, does not cover the risk of a gratuitous passenger in a private vehicle. By referring to copy of the policy at Exhibit-42 in the record of the Tribunal, he pointed out that insured has paid additional premium of Rs. 100/- in order to cover the risk of passengers, to the tune of Rs. 50,000/- and maximum of 4 passengers. To explain these details he has relied upon extract or IMT-5 (Indian Motor Tariff) made available for ready reference and claimed that liability of Insurance Company, under the policy, is Rs. 25,000/-.
11. Learned Counsel for claimant as also of the bank have pointed out that the accident in the matter of Tilak. Singh (supra), relied upon by Advocate for Insurance Company, was dated 31-10-1989. The Motor Vehicles Act has undergone amendment in the year 1994. The accident in our case has taken place in the year 1997 and, therefore, ratio laid down in the said case would not be applicable to the matter at hands.
Reliance was placed upon observations of the Supreme Court in the matter of Padma Srinivasan v. Premier Insurance Co. Ltd. : [1982]3SCR244 . Observations in para 6, which are relied upon, read thus:
If the parties to a contract agree that one shall pay to the other, damages for breach of contract, in accordance with the law contained in any particular statute, without identifying the law as the provision which is in force on the date of the contract, the law which will apply for determining the quantum of damages is the one which is in force on the date on which the breach of contract is committed, that being the date on which the cause of action arises, and not the law which was in force on the date on which contract was made.
In the reported matter, Insurance Company had undertaken 'liability as the one under Chapter VII of Motor Vehicles Act 1939'. It was held that the Insurer's liability for third party risks under the statutory policy would not be limited to Rs. 20,000/- according to the relevant legal provision as it existed on the date on which the policy came into force but would be extended to Rs. 50,000/- in accordance with the legal provision as it stood on the date of the accident, when the accident occurred during currency of the policy.
12. Advocate Shri Chapalgaonkar has not disputed legal proposition that the legal provision applicable would be those as on the date of accident. He pointed out that Section 147 of the Act deals with the requirements (statutory) of the policy and limits of liability. That is the provision relied upon by Counsel for owner as also claimant. As a result of amendment by Act 54 of 1994, brought into force with effect from 14-11-1994. Section 147 has not undergone extensive amendment. In Section 147(1)(b)(i) words 'injury to any person' are substituted by 'injury to any person, including owner of the goods or his authorised representative carried in the vehicle'. Thus portion underlined (in italics) is the only addition to the said section, as a result of which it is clarified that Act only policy would cover the risk of owner of the goods or his authorised agent travelling in a goods vehicle carrying his goods for hire would be covered. This has not brought any change in the position of a gratuitous passenger travelling in a private vehicle. And therefore, law, as laid down by the reported case of Tilak Singh, would be applicable, even if that accident had occurred prior to the date of amendment. This argument is required to be upheld, because Section 147 as it stood prior to 1994 amendment and as it stands after said amendment, as applicable to a gratuitous passenger in a private vehicle, has not undergone any change.
13. Relying upon the text of Section 147(1)(b)(i) and 147(2)(a) the lawyers for claimant and owner have pleaded that insurer is bound to bear entire liability incurred by the owner. The provisions relied upon may usefully be reproduced for ready reference.
147. 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)...
(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, including owner of the goods or the authorised representative carried in the vehicle 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)...
Provided that a policy shall not be required....
Explanation --....
(2) Subject to the proviso to Sub-section (1), a policy of insurance referred to in Sub-section (1) shall cover any liability incurred in respect of any accident, upto the following limit, namely:
(a) Save as provided in Clause (b) the amount of liability incurred;
(b) in respect of damage to any property of a third party, a limit of rupees six thousand.
Provided that....
Placing reliance upon the words 'any person' in Section 147(1)(b)(i) and 'the amount of liability incurred' occurring in Sub-section 2(a), it was submitted by lawyers of claimant and owner that policy ought to cover liability to any person and to the extent incurred. Apart from relying upon couple of reported judgments in addition to that of Tilak Singh, advocate Shri Chapalgaonkar for Insurance Company drew our attention to the fact that Section 147 is incorporated in Chapter XI of Motor Vehicles Act, 1988 and the said Chapter is titled as 'Insurance of Motor Vehicles Against Third Party Risks'. The Chapter being pertaining to provisions of third party risk, words 'any person' used in Section 147(1)(b)(i) cannot be interpreted to give widest amplitude, to cover each and every person, as tried to be done by the advocates for owner and the claimant.
In Ramashray Singh v. New India Assurance Co. Ltd. : (2003)IIILLJ740SC , following observations from para 14 were relied upon:
The appellant's final submission was that as the policy was a comprehensive one, it would cover all risks including the death of the Khalasi. The submission is unacceptable. An insurance policy only covers the person or classes of persons specified in the policy. A comprehensive policy merely means that the loss sustained by such person/persons will be payable upto the insured amount irrespective of the actual loss suffered.
14. Learned Counsel for the Insurance Company, mainly placed reliance upon the observations of the Supreme Court in the matter of United India Insurance Co. Ltd. v. Tilak Singh and Ors. AIR 2006 SCW 1822. The question as to whether a gratuitous passenger would be covered by a statutory insurance policy, is discussed in paras 14 to 21. Position as under the 1939 Act is discussed in paras 15 to 18, whereas that under 1988 Act is dealt with in paras 19 to 21. In the reported matter, it was claim for compensation towards death of pillion rider Rajinder Singh. The insurance policy covering the scooter did not contain endorsement of IMT-70 which was necessary for covering liability of pillion passengers. It was one of the contentions of the Insurance Company that the deceased was pillion rider and insurance policy did not cover the liability towards a pillion rider.
Referring to observations in earlier judicial pronouncements in the matter of Pushpabai v. Ranjit Ginning and Pressing Co. (P) Ltd. : [1977]3SCR372 and Dr. T.V. Jose v. Chacko P.M. (2001)8 SCC 748, it was observed in para 18:
Thus, even under the 1939 Act, the established legal position was that unless there was a specific coverage of the risk pertaining to a gratuitous passenger in the policy, the insurer was not liable.
Hon'ble Supreme Court referred to the contra view taken in the case of New India Assurance Co. v. Satpal Singh and Ors. : AIR2000SC235 where after contrasting the language of Section 95(1) of the 1939 Act with the provisions of Section 147(1) of the 1988 Act, the Supreme Court had held that under the new Act, an insurance policy covering third party risk is not required to exclude gratuitous passengers in a vehicle, no matter that the vehicle is of any type or class. Further a note is taken of the fact that the view expressed in Satpal Singh's case has been specifically overruled in the subsequent judgment of a Bench of three Judges in New India Assurance Company v. Asha Rani and Ors. (2003)2 SCC 223 and the position as under 1988 Act is concluded in para 21 thus:
In our view, although the observations made in Asha Rani's case (supra) were in connection with carrying passengers in a goods vehicle, the same would apply with equal force to gratuitous passengers in any other vehicle also. Thus, we must uphold that contention of the appellant-insurance company that it owed no liability towards the injuries suffered by deceased Rajinder Singh who was a pillion rider, as the insurance policy was a statutory policy, and hence it did not cover the risk of death of or bodily injury to gratuitous passengers.
Thus even under 1988 Act, Act only policy under Section 147 of the said Act did not cover the risk of gratuitous passenger. As already discussed in para 12 ante, Act 1994 has only added clause 'including owner of the goods or his authorised representative carried in the vehicle' after the words 'injury to any person', which does not cause any change so far as position of a gratuitous passenger as under the Act before said amendment. The argument of Advocate Shri Chapalgaonkar, that insurance company is not liable to cover the risk of claimant, as he was a gratuitous passenger, is therefore required to be upheld.
15. Learned Counsel for the owner and the claimant vehemently opposed consideration of such a proposition submitted by advocate for the insurance company, by contending that the same was neither pleaded nor pressed into service, before the Tribunal. It was not controverted that proposition denying the liability because victim was a gratuitous passenger, was not advanced before the Tribunal. But learned Advocate for insurance company only pointed out that the judgment of the Supreme Court relied upon by him was delivered on 4-4-2006 and was not available to be relied upon prior to its reporting in April, 2006. Moreover this Court is dealing with the decision of the Tribunal as first Appeal Court and therefore all questions of fact and law can be agitated by the parties and considered by this Court. Reliance on the judgment of the Apex Court is for the purpose of arriving at correct interpretation of Section 147 of the Act and thus determine the extent of liability of the insurance company, in the light of the same. It requires no discussion on questions of fact, as claimant himself has deposed to be a passenger in the private vehicle without payment of any hire charges. A copy of the policy, if at all the same is required to be referred, was placed on record before the Tribunal at Exhibit-42. Thus although proposition is raised for the first time before this Court, where owner bank has engaged lawyer of its choice to defend itself, it has neither caused any prejudice to owner nor there is denial of an opportunity to meet the same. The owner had its opportunity to demonstrate as to what is correct legal position about extent of liability of the insurance company as under the Act and the policy in question. We are, therefore, not inclined to uphold the contention of the lawyers of owner and the claimant that such a proposition cannot be considered, because it is raised for the first time in this first appeal.
16. Referring to policy at Exhibit-42 in the record of the Tribunal, it was pointed out by learned Counsel for the insurance company that a premium of Rs. 100/- is paid by the insured under IMT-5 under which Personal Accident benefits upon Rs. 50,000/- for 4 passengers, including the driver, can be conferred upon the insured. The text of IMT-5 is made available for ready reference (marked 'X'). Total liability of the insurance company towards passengers, due to payment of extra premium of Rs. 100/- is Rs. 50,000/- and as per IMT-5, personal accident benefits are 100% of it in case of death or loss of sight of both eyes, physical separation of two entire hands or two entire legs or loss of one hand + one leg or one eye + one hand or one leg. In case of total and irrecoverable loss of use of hand or foot without physical separation, liability extends to 50%. Although it is the case of claimant that he suffered fracture of leg, it is not a case of total separation but a case of total irrecoverable loss of use of a leg. The liability of insurance company, therefore, shall be 50% of Rs. 50,000/- i.e. Rs. 25,000/-.
17. The appeal of insurance company will therefore have to be allowed accordingly.
We direct that claimant shall be entitled to compensation of Rs. 10,87,000/- (Rs. Ten lacs eighty seven thousand) with interest @ 6% per annum on the same, from the date of institution of the petition till deposit in either Court or actual payment to claimant. However liability of insurance company shall be limited to Rs. 25,000/- and interest thereon for the period as above. In case insurance company has already deposited in the Court and/or paid to the claimant amount exceeding its liability, it shall be entitled to recover the same from owner bank and in case claimant has received amount exceeding what he is held entitled to, he shall repay the excess to the owner bank.
Appeal is allowed as above and disposed of.