J.P. Singh, J.
1. Mohd. Ashraf, Mohd. Talib and Mohd. Arif minors had filed a claim application seeking an amount of Rs. 25,00,000 as compensation for the death of their father Mushtaq Ahmed who had died because of the injuries received by him when vehicle No. JK 02-G 6807 driven rashly and negligently by its driver had met with an accident at village Omala on Udhampur Ghordhi/Barmeen Road.
2. Deceased was 28 years of age and had been earning an amount of Rs. 6,000 per month by rearing goats and sheep.
3. The Motor Accidents Claims Tribunal, Udhampur, considered the minors claim on the basis of the evidence led by them because the appellant insurance company had opted not to lead any evidence in the case on the issues which for facility of reference are reproduced hereunder:
(1) Whether on 31.12.1999, vehicle bearing No. JK 02-G 6807 met with an accident near village Umala, Udhampur due to rash and negligent driving of its driver in consequence of which deceased Mushtaq Ahmed aged 28 years, who was also travelling in the said vehicle died on the spot in the accident? OPP
(2) Whether the monthly income of the deceased was about Rs. 6,000 which amount was being spent by him on the welfare of his family members? OPP
(3) Whether the petitioners being the heirs of the deceased are entitled to total compensation amount of Rs. 25,00,000, if so, on what counts? OPP
(4) Whether the driver of the offending vehicle was not holding a valid and effective driving licence at the time of the accident as such non-applicant No. 2 is not liable to pay compensation? OPR2
(5) Whether the compensation claimed is highly excessive and inflated as such the petitioner is not entitled to the said amount? OPP
(6) Relief.
4. Issue Nos. 4 and 5 were decided against the appellant and while deciding issue Nos. 1 to 3 in favour of the claimants, the Tribunal had awarded an amount of Rs. 4,34,052 as compensation to the minors for the death of their father.
5. Aggrieved by award of 6.12.2006 of the Tribunal, the appellant insurance company has filed this appeal raising similar question that had been raised by it in other appeals arising out of the awards passed in respect of the same accident.
6. The appellant's counsel says that the impugned award was bad in law because the owner had been plying the vehicle, carrying 66 passengers, i.e., beyond the authorised maximum capacity of 42+2, i.e., 44 passengers and had thus violated the terms and conditions of the insurance policy and in that view of the matter appellant insurer was not liable to indemnify the owner and pay the amount awarded in favour of the claimants.
7. I find appellant's counsel's submission to be misconceived, for no such plea on the basis whereof the appellant insurance company has raised this argument had been taken by it in their objections before the Tribunal and it was because of this reason that the plea of overloading had not figured in the issues which had been framed by the court.
8. Appellant cannot thus be permitted to take up this new plea in the first appeal when no basis therefor had been set up by it before the Tribunal.
9. Even otherwise the question raised by appellant's counsel in the appeal is no longer res Integra in view of the law laid down by Hon'ble Supreme Court of India in National Insurance Co. Ltd. v. Anjana Shyam : AIR2007SC2870 and the view taken by this Court in Oriental Insurance Co. Ltd. v. Dhanwanti Devi . The appellant cannot deny its liability to pay the awarded amount to the claimants because number of awards made in claim cases arising out of the accident in respect of vehicle No. JK 02-G 6807, as admitted by its counsel, is far less than the authorised capacity of passengers insured as such by the appellant insurance company.
10. The view taken by Hon'ble Apex Court of India in National Insurance Co. Ltd. v. Anjana Shyam : AIR2007SC2870 and by this Court in Oriental Insurance Co. Ltd. v. Dhanwanti Devi , is reproduced seriatim hereunder for facility of reference:
(15) In spite of the relevant provisions of the statute, insurance still remains a contract between the owner and the insurer and the parties are governed by the terms of their contract. The statute has made insurance obligatory in public interest and by way of social security and it has also provided that the insurer would be obliged to fulfil his obligations as imposed by the contract and as overseen by the statute notwithstanding any claim he may have against the other contracting party, the owner and meet the claims of third parties subject to the exceptions provided in Section 149(2) of the Act. But that does not mean that an insurer is bound to pay amounts outside the contract of insurance itself or in respect of persons not covered by the contract at all. In other words, the insured is covered only to the extent of the passengers permitted to be insured or directed to be insured by the statute and actually covered by the contract. The High Court has considered only the aspect whether by overloading the vehicle, the owner had put the vehicle to a use not allowed by the permit under which the vehicle is used. This aspect is different from the aspect of determining the extent of the liability of the insurance company in respect of the passengers of a stage carriage insured in terms of Section 147(1)(b)(ii) of the Act. We are of the view that the insurance company can be made liable only in respect of the number of passengers for whom insurance can be taken under the Act and for whom insurance has been taken as a fact and not in respect of the other passengers involved in the accident in a case of overloading.
(16) Then arises the question, how to determine the compensation payable or how to quantify the compensation since there is no means of ascertaining who out of the overloaded passengers constitute the passengers covered by the insurance policy as permitted to be carried by the permit itself? As this Court has indicated, the purpose of the Act is to bring benefit to the third parties who are either injured or dead in an accident. It serves a social purpose. Keeping that in mind, we think that the practical and proper course would be to hold that the insurance company, in such a case, would be bound to cover the higher of the various awards and will be compelled to deposit the higher of the amounts of compensation awarded to the extent of the number of passengers covered by the insurance policy. Illustratively, we may put it like this. In the case on hand, 42 passengers were the permitted passengers and they are the ones who have been insured by the insurance company. 90 persons have either died or got injured in the accident. Awards have been passed for varied sums. The Tribunal should take into account, the higher of the 42 awards made, add them up and direct the insurance company to deposit that lump sum. Thus, the liability of the insurance company would be to pay the compensation awarded to 42 out of the 90 passengers. It is to ensure that the maximum benefit is derived by the insurance taken for the passengers of the vehicle, that we hold that the 42 awards to be satisfied by the insurance company would be the 42 awards in the descending order starting from the highest of the awards. In other words, the higher of the 42 awards will be taken into account and it would be the sum total of those higher 42 awards that would be the amount that the insurance company would be liable to deposit. It will be for the Tribunal thereafter to direct distribution of the money so deposited by the insurance company proportionately between all the claimants, here all the 90 and leave all the claimants to recover the balance from the owner of the vehicle. In such cases, it will be necessary for the Tribunal, even at the initial stage, to make appropriate orders to ensure that amount could be recovered from the owner by ordering attachment or by passing other restrictive orders against the owner so as to ensure the satisfaction in full of the awards that may be passed ultimately.' [See 2007 ACJ 2129 (SC)].
Section 149(2) of the Motor Vehicles Act, 1988, permits the insurance company to avoid a claim for compensation arising out of the use of the motor vehicle on any of the grounds which are as follows:
(a) that there has been breach of specified condition of the policy, being one of the following conditions, namely:
(i) a condition excluding the use of the vehicle:
(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
(d) without side-car being attached where the vehicle is a motor cycle; or
(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or
(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or
(b) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular.'
In other words, the liability could be avoided by an insurer only if it could bring its case in any of the conditions prescribed under Section 149(2) of the Motor Vehicles Act, 1988. The insurance company cannot avoid its liability to pay compensation arising out of the use of motor vehicle for any other violation.
This view finds support from National Insurance Co. Ltd. v. Swaran Singh : AIR2004SC1531 and this Court judgment in Oriental Insurance Co. Ltd. v. Allahdin . Overloading of a motor vehicle does not attract the breach contemplated by Section 149(2) of the Motor Vehicles Act.
Plea raised by Mr. Chouhan that the vehicle was overloaded and the insurer was not liable to compensate the claimants by indemnifying the owner is thus rejected.
11. In view of the above legal position, I do not find any merit in this appeal, which is, accordingly, dismissed.
12. Registrar Judicial is directed to summon the minors for releasing the awarded amount along with interest accrued thereon in their favour by account payee cheques.