The National Insurance Co Ltd Vs. Laxmibai W/O Yallappa Bilagi - Court Judgment

1 R IN THE HIGH COURT OF KARNATAKA, GULBARGA BENCH DATED THIS THE10H DAY OF JUNE, 2014 BEFORE THE HONOURABLE MR.JUSTICE ANAND BYRAREDDY MISCELLANEOUS FIRST APPEAL NO.12587/2007 (MV) C/w MISCELLANEOUS FIRST APPEAL NO.13450/2006 BETWEEN:

1.

2. 3.

4. Laxmibai W/o Yallappa Bilagi Age:

38. years, Occupation: House hold R/o Balabatii Taluka: Muddebihal District: Bijapur. Hanamanth S/o Yallappa Bilagi Age:

24. years, Occupation: Student, R/o Balabatii Taluka: Muddebihal District: Bijapur. Srishail S/o Yallappa Bilagi Age:

21. years, Occupation: Student, R/o Balabatii Taluka: Muddebihal District: Bijapur. Bouramma D/o Yallappa Bilagi Age:

19. years, Occupation: Student, 2 R/o Balabatii Taluka: Muddebihal District: Bijapur. … APPELLANTS (Shri H.R. Malipatil and J.S. Shetty, Advocates) AND:

1. Shantappa P. Kamat Age: Major R/o Itagi, Now residing at Muddebihal behind the Syndicate Bank, Reshma Building Muddebihal Naragund Taluk Naragund, District: Gadag.

2. Branch Manager National Insurance Company Limited Porwal Building, Siddeshwar Cross Road, Bijapur. (Smt. Preeti Patil, Advocate for respondent-2 Smt. Saroj S. Patil and Shri G.B.Yadav, Advocate for respondent-2 (v/k not filed) … RESPONDENTS This Miscellaneous First Appeal is filed under Section 173 (1) of Motor Vehicles Act, 1988 against the Judgement and Award dated 01.08.2006 passed in MVC No.54/2004 on the file of the Motor Accident Claims Tribunal, Muddebihal, partly allowing the claim petition and seeking further enhancement of compensation. 3 MFA1345006 BETWEEN: The National Insurance Company Limited Divisional Office, Porwal Building, Siddeswara Cross Road, Bijapur, represented by Bangalore Regional Office, By its authorised officer, Shubharam Complex, II Floor, No.144, Mahatma Gandhi Road, Bangalore – 560 001. (Smt. Preeti Patil, Smt. Saroja S. Patil and Shri C.S. Kalburgi, Advocates) … APPELLANT AND:

1.

2. 3.

4. Laxmibai W/o Yallappa Bilagi Age:

37. years, Occupation: House hold work, Hanamant S/o Yallappa Bilagi Age:

23. years, Occupation: Student, Srishail S/o Yallappa Bilagi Age:

20. ears, Occupation: Student, Bouramma D/o Yallappa Bilagi Age:

18. years, All are R/o Balabatti 4 Taluka: Muddebihal-586 212 Bijapur District.

5. Shantappa P. Kamat Age: Major, Occupation: Business and Agriculture R/o Itagi, Now Residing at Muddebihal, Behind the Syndicate Bank, Reshmi Building, Muddebihal. (Shri S.S. Shetty, Advocate for respondent-1 to

5) … RESPONDENTS This Miscellaneous First Appeal is filed under Section 173 (1) of Motor Vehicles Act, 1988 against the Judgement and Award dated 01.08.2006 passed in MVC No.54/2004 on the file of the Civil Judge (Senior Division), Member, Motor Accident Claims Tribunal, Muddebihal, a compensation of Rs.2,74,600/- with interest at 6% p.a. from the date of petition till date of realisation. awarding These appeals coming on for Hearing this day, the Court delivered the following: JUDGMENT

Heard the learned Counsel for the appellants and the learned Counsel for the respondents.

2. The present appeals are filed in respect of the same judgment and award. The appeal in MFA125872007 is filed by the claimants seeking enhancement of compensation that is 5 awarded and the connected appeal in MFA134502006 is filed questioning the liability fastened on the Insurance Company in respect of payment of compensation.

3. The brief facts are as follows:- The claimants are the widow and children of deceased Yallappa Bilagi, who was said to be travelling in a tractor and trailer bearing No.KA-28/T-37 and 38 from Balabatti to his field and the trailer was loaded with fertilizer. When the tractor had reached Hullur cross, it is claimed that on account of the tractor being driven in a rash and negligent manner, Yallappa Bilagi was thrown out of the trailer and he was run over by the trailer and his head was crushed. He died on the spot. It is in this background that a claim for compensation was lodged by his widow and children, claiming that he was working as a coolie and he was earning about Rs.8000/- per month and the accident was caused on account of the rash and negligent driving of the tractor, which belonged to respondent no.1 in the present appeal and the tractor was duly insured with the second 6 respondent – Insurance Company. The claim petition was contested and the following issues were framed on the basis of the pleadings. “1. Whether the petitioners prove that, husband of petitioner No.1 by name Yallappa Hanamant Bilagi has died on 5-7-2002 due to dashing of tractor and its trailer bearing Reg.No.KA-28/T-37 and 38 near Hullur Cross, wherein Yallappa was travelling in the said tractor and trailer from Hullur to Balabatti loading fertilizer in the trailer of tractor for his lands and that driver of the said tractor drove it in a rash and negligent manner so as to endanger human life at the date, time and place of accident?.

2) Whether petitioners prove that Yallappa Hanamant Bilagi was aged 45 years and was earning Rs.8,000/- per month by doing agriculture and coolie?.

3) Whether petitioners proves that, petitioner are entitled to compensation?. If so, how much ?. and from whom?.” The Tribunal, on consideration of the material evidence that was produced and the rival contentions, has proceeded to hold that as on the date of the accident, the deceased was 7 travelling in a tractor trailer and apart from this, it is shown that the tractor was carrying fertilizer and it was intended to be unloaded on the field of the deceased and hence, the presence of the deceased in the trailer was sought to be explained and further that the tractor and trailer was being used for an agricultural purpose at the time of the accident and the vehicle was duly insured at the time of the accident and there was no mechanical defect, as per the Motor Vehicle Inspector’s Report, to the tractor at the time of the accident. Therefore, it was held that the accident has apparently occurred only on account of the rash and negligent driving act of the driver. In the above circumstances, the Tribunal has allowed the claim and has awarded a compensation of Rs.2,49,600/- towards loss of future income, on the basis that the deceased was aged about 45 years and was working as a coolie and though it was claimed that he was earning Rs.8,000/- per month, the Tribunal has chosen to adopt Rs.2,400/- per month as the notional income, and has applied the multiplier of ‘13’ and deducted one-third 8 of the income, while also awarding compensation under other conventional heads amounting to Rs.25,000/-, thus amounting to a total compensation of Rs.2,74,600/-. It is that which is sought to be questioned by the claimants as well as the insurer.

4. Addressing the contention on behalf of the insurer, the learned Counsel for the appellant – insurer in MFA134502006 would firstly point out that the policy of insurance that was issued was a Farmers Package Insurance Policy. In the said insurance policy, the coverage of the tractor, is only on behalf of the owner and that it shall be used only for the purpose of agriculture by the owner. The question of hiring out the tractor to third-parties or permitting workmen to be carried on a tractor was impermissible. It is evident from the record that there was a report lodged with the jurisdictional Police of the accident and the complainant was none other than the son of the deceased and who was also said to be travelling on the trailer at the time of the accident, he has categorically stated 9 that the vehicle had been taken on lease by his father to carry fertilizer to his field. This would clearly indicate that it was not being used for his own purpose by the insured, but had been let on hire. Further, the tractor is treated as a non- transport vehicle and there is no provision for carrying any person on the trailer. It was to be used only for agricultural purposes. Hence, the question of carrying passengers or persons on the trailer did not arise. Further it is pointed out that the deceased was not an agricultural labourer and was not employed by the insured nor was allowed to travel on the tractor trailer as a passenger or the owner of goods, accompanying the goods. The tractor trailer is not a goods carriage vehicle and it was to be used for the purpose of agricultural operations. There is no seating capacity which would on the face of it indicate that the trailer could not carry any passengers in the cargo compartment nor could it be said that the deceased was a third-party, on whose death, a claim could be raised by his legal representatives for compensation. 10 The Tribunal merely having proceeded on the basis that the tractor was being used for agricultural operations at the time of the accident and that it was covered under an insurance policy by itself , would not be sufficient to attract the liability of the insurance company unless it was being used for agricultural operations of the insured. The learned Counsel would also point out that the Tribunal, in its judgment, has not indicated as to how and under which provision of the contract, the insurance company has become liable to pay compensation. In the absence of any such liability to be found either in the policy or under the provisions of the Motor Vehicles Act,1988 (Hereinafter referred to as the ‘MV Act’, for brevity), the fastening of liability on the insurance company is untenable and unjust. The learned Counsel has also produced the Guidelines issued when the Scheme of a Farmers Package Insurance policy was first introduced and with reference to the same, it is pointed out that the package included coverage in respect of the farmer’s tractor 11 and had covered only the risk of third-parties and unless it was shown that the deceased was a third-party, the question of covering the risk did not arise. The learned Counsel has placed reliance on the decisions in the case of National Insurance Company Limited vs. Chinnamma, Civil Appeal No.5478/2004 dated 25.8.2004, which is referred to and applied in Divisional Manager vs. Akkavva, ILR2007Kar.1382, to emphasize that the liability of a insurance company is not attracted in respect of death or injury to persons travelling in a tractor trailer and therefore, would submit that the impugned judgment be set aside in so far as it fastens liability of payment of compensation, jointly and severally on the appellant – Insurance company. The learned Counsel for the Insurance Company would contend that the owner has not been examined, who was the best person to speak about the manner in which the deceased was present on the vehicle and hence, the claim ought to have been rejected and seeks that the appeal be allowed. 12 5. While the learned Counsel for the claimants would contend that the Certificate of Insurance which was alone marked in evidence, does not contain any restriction on the manner in which a tractor trailer, which is covered in the insurance policy, shall be utilised, except to indicate that it shall be used only for agricultural purposes, it is not in dispute that a fully worded contract pertaining to the Farmers Package Insurance policy was not produced before the court below. In the absence of a fully worded contract placing such restriction on the usage of the tractor trailer and such contract not being produced even before this court, it would not be open for the counsel for the insurance company to contend that the contract was circumscribed by such restrictions. Though the learned counsel for the insurance company has now produced the Guidelines, which are said to indicate the detailed conditions, covering the Farmers Package Policies in so far as the tractor trailer is concerned, the liability of the insurance company being restricted to third-parties, would squarely apply in so far 13 as the deceased is concerned. Even according to the insurance company and the complaint that was lodged in the first instance, the vehicle was being used for agricultural operations and it was being used to carry fertilizer to the field of the deceased. The deceased was travelling in the tractor along with other men, including the complainant, who was his son, in order to carry such fertilizer to his field. Therefore, if the deceased was travelling in the tractor trailer to carry fertilizer to his field along with other workmen, he was certainly assisting the workmen in carrying his own goods and therefore, he was a third-party in so far as the contract of insurance between the insurance company and the insured is concerned. Further, under Rule 100 of the Karnataka Motor Vehicle Rules, 1999, it is not impermissible for loaders being carried in such vehicles. The owner of the goods also functioning as a loader cannot be ruled out. If he was sitting on the fertilizer in the trailer, he was joining hands with the loaders in carrying the goods. Therefore, it cannot be characterised as the deceased 14 being an unauthorised person travelling in the tractor trailer. In any event, there is no provision contained either in the Certificate of Insurance or in the Guidelines pertaining to the Farmers Package Insurance prohibiting such user of the tractor trailer. On the other hand, the only restriction that is spoken to by RW.1, an officer of the Insurance Company, was that the tractor trailer could not be used for any purpose other than agricultural purposes. It is not denied by the insurance company that at the time of the accident, it was being used to carry fertilizer to the field of the deceased and therefore, it was being used for an agricultural purpose. The further contention that such agricultural purpose should relate to the insured alone is not a condition prescribed either in the Certificate of Insurance or under the guidelines. Hence, the several contentions on behalf of the insurer, to hold that the insurance company is absolved of its liability on account of the tractor being treated as a non-transport vehicle and there is no provision for carrying any person on the trailer and that it 15 should be used only for agricultural purposes and hence, the question of carrying passengers or persons on the trailer did not arise; or that the deceased was not an agricultural labourer and was not employed by the insured nor was allowed to travel on the tractor as a passenger or owner of goods accompanying the goods; and that the tractor trailer is not a goods carriage vehicle and that there is no seating capacity, which would on the face of it indicate that the trailer could not carry any passengers in the cargo compartment nor can it be said that the deceased was a third-party, on whose death, a claim could be raised by his legal representatives for compensation, etc., it is contended, as not being relevant. Attention is also drawn to Section 149 of the MV Act, to the effect that the restrictions as to the manner in which the insurer’s liability would be absolved is prescribed. It does not contain any prohibition that the vehicle insured ought not to be used by anyone other than the owner of the vehicle, in taking away the liability of the insurance company. In so far as the 16 judgments relied upon by the learned Counsel for the appellant is concerned, the counsel would seek to contend that they are authorities for the cases decided therein and on facts and circumstances, there is a clear distinction in the circumstances pertaining in those cases and hence cannot be applied mechanically to the facts and circumstances of the present case.

6. In the light of the above facts and circumstances, as rightly contended by the learned Counsel for the respondent, the Certificate of Insurance itself offers no clue as to the restriction of the liability of the insurance company. This is evident from a plain reading of the Certificate of Insurance, which is reproduced hereunder:- “CERTIFICATE OF INSURANCE OF MISCELLANEOUS AND SPECIAL TYPE OF VEHICLES Form 51 of the Central Motor Vehicles Rules 1989 Policy Number:

60260. /47/03/6300192 Certificate No:

60260. /47/03/6300192 Farmers Package Insurance Development Officer/Agent:

60260. /90091097 Insured’s name : Sri. Shantappa P. Kamat Address : A/P Itagi, Tq: B.Bagewadi Dist: Bijapur, Insurer Code:

60260. Email: nicbro@vsnl.com Address: S.S.Cross Road Bijapur – 586101 Karnataka-586101 Telephone No.251171, 251999 Fax No:

0. 17 Premium: Rs.3,091 S.Tax; Rs.242 Tot Premium Rs.3,333 (RUPEES THREE THOUSAND THREE HUNDRED AND THIRTY THREE ONLY) Particulars of vehicle Insured : Vehicle IDV: Rs.75,000 ------------------------------------------------------------------------------------------ Registered Mark No.Make Year of Mft/ Chassis No.Engine No.------------------------------------------------------------------------------------------ KA-28/T-0037 Swaraj Tractor 1994 94H565079 97 1203/G94556------------------------------------------------------------------------------------------ Hire/Hypo/Lease : NONE Name of the Registration Authority: R.T.Office, R.T.O. Geographical Area INDIA Bijapur Effective date of commencement of Insurance for the purpose of the Act From 00:00 o’clock on 19/07/2003 To Midnight Of 18/07/2004 Subject to IMT endorsement printed herein/attached hereto:

21. 48,36,24,17,40 Persons or classes of Persons entitled to drive: Any person including Insured provided that a person driving holds an effective driving licence at the time of the accident and is not disqualified from holding or obtaining such a licence. Provided also that the person holding an effective Learner’s Licence may also drive the vehicle and such a person satisfies the requirements of Rule 3 of Central Motor Vehicle Rule, 1989.-.----------------------------------------------------------------------------------------- The Policy covers use only under a permit within the meaning of the Motor Vehicles Act, 1988 or such a carriage falling under Sub-Section 3 of Section 66 of the Motor Vehicles Act, 1988. The policy does not cover use for a. Organised Racing b. Pace making 18 c. Reliability Trails d. Speed Testing ------------------------------------------------------------------------------------------ Limit of Liability Limit of the amount of the company’s Liability Under Section II-1(i) in respect of any one accident: as per Motor Vehicles Act, 1988. Limit of the amount of the Company’s Liability Under Section II-1(i) in respect of any one claim or series of claims arising out of one event: UPTO Rs.750000 I/We hereby certify that the policy to which the certificate relates as well as the certificate of Insurance are issued in accordance with provisions of Chapter X and XI of M. V. Act, 1988. For and on behalf of National Insurance Company Limited Sd/- Duly Constituted Attorney(s).” Policy No:

60260. /47/03/6300192 Dept: Rural Sector Business Farmer’s Package Insurance Agriculture Tractor Premium Detail Other covers Premium One damage premium: (Rs.) Third party premium: (Rs.) Bonus/Malus (%): Rs.1,250 Rs.1,457 Rs. 0.00 AGRICULTURAL TRACTORS2707” xx “Policy Number:602601/47/03/6300192 Dept: Rural Sector Business Farmer’s Package Insurance Insured’s Name: Sri. Shantappa P. Kamat Address:: A/P Itagi, Tq: B.Bagewadi Address: S. S. Cross Road, Issuing Officer: Unit 602601 19 Dist: Biajpur, Karnataka – 586101 Bijapur – 586101 Telephone:

25117. , 251999, Fax:

0. email:n D0evelopment Officer/Agent:

60260. /90091097 Date of proposal and declaration:

18. 07/2003 Policy Period:

00. 00 Hrs on 19/07/2003 to midnight of 18/07/2004 Receipt date No:

18. 07/2003 1/2003/01038 Net Premium (Rs.):

3. 091 (RUPEES THREE THOUSAND NINETY ONE ONLY) Service tax (Rs.):

242. Total premium (Rs.):

3. 333 Serial .No.Type of cover Cover Description Sum Insured Basic (Rs.) Premium (Rs.) 1.

2. 3.

4.

5.

6. 7. Fire allied perils and Terrorism (1) Fire allied perils and Terrorism (2) Burglary house Breaking Building 1,25,000.00 88 Contents 40,000.00 124 Burglary 40,000.00 Baggage Baggage 2,100.00 JPA/GAP JPA100,000.00 Tractor details Trailer details 75,000.00 25,000.00 96 16 60 8.

9. 10.

11. Live stock details Animal cart details Poultry details Agricultural pumpset ------------------------------------------------------------------------------------------ Total sum insured:

4. 07,100.00 Details of trailer 20 Purpose Trailer Chassis No.Registration No.G.S.002/94-95 KA-28/T/39 Details of PA (JPA/GAP) SlL. No.Name Occupation Date of birth Age Existing Nominee Sum 1 KAMAT AGRI Disability Name Insured (Rs.) NA100,000 For and on behalf of National Insurance Company Limited Sd/- Authorised Signatory. xx National Insurance Company Limited Regd. & Head Office:

3. Middleton Street, Post Box. No.9229, Kolkata-700071 NATIONAL INSURANCE COMPANY LTD., BIJAPUR BD S.S.CROSS ROAD, BIJAPUR-586101 CERTIFICATE IN RESPECT OF COMPLIANCE OF SECTION64VB OF INSURANCE ACT1938Re: Policy No:602601/47/03/6300192 Insured : SRI SHANTAPPA P. KAMAT ------------------------------------------------------------------------ a) Date of commencement of risk:

19. 07/2003 Policy Number :

60260. /47/03/6300192 Date:18/07/2003 21 b) Actual premium payable under the policy/renewal/cover note: -------------------------------------------------------------------------------------- Policy number Endorsement. Amount of Receipt Number Receipt Date Endt Start Date No.Premium ---------------------------------------------------------------------------------------------------------------- 602601/47/03/ 6300192 3,333.00 1/2003/01038 18/07/2003 c) Whether the premium paid was provisional or final and if provisional, reason thereof --------------------------------------------------------------------------------------- Payment Mode Amount BG No.BG Exp Date Apd/BG Balance Branch Realized on ------------------------------------------------------------------------------------------------------------------ Cash 3,333.00 f) Whether Bank Guarantee was invoked: Date of invocation: g) Payment of premium under Bank Guarantee: --------------------------------------------------------------------------------------- B.G.No Collection number Collection Date Amount paid Collection particulars ----------------------------------------------------------------------------------------------------------------- h) In view of the details (a) to (g) above whether Section 64 VB of Insurance Act is complied with.” The learned Counsel for the appellant – insurer was pointedly called upon to produce a fully worded contract relating to the Farmers Package Insurance policy. Inspite of her best efforts, she was not able to secure one and has been able to secure only the Guidelines pertaining to the Farmers Package Insurance. It is noticed that Section 14 of the Guidelines, which 22 is in respect of agricultural tractors and particularly with respect to liability to third-parties, reads as follows:- “Subject to the Limits of Liability as laid down in the Schedule hereto the Company will indemnify the Insured against all sums including claimant’s cost and expenses which the insured shall become legally liable to pay in respect of i. death or bodily injury to any person caused by or arising out of the use (including the loading and/or unloading) of the agricultural tractor. ii. damage to property caused by the use (including the loading and/or unloading) of the tractor.” (emphasis supplied) It is evident that the death or the actual bodily injury to any person caused by or arising out of the use by the tractor would attract the insurer’s liability. This would include any expenditure occurring during loading or unloading. Hence, apart from this, there is no indication that the usage of the tractor is restricted in the manner as sought to be contended by the learned Counsel for the insurer. In the absence of any 23 specific restriction, the liability of the insurance cannot be taken away. A serious contention as regards the tractor trailer not being a transport vehicle has been raised by the learned Counsel for the insurer, apparently drawing sustenance from the judgment of this court in Divisional Manager vs. Akkavva, supra, wherein the facts were that a tractor trailer was being used to carry over 60 people and an accident having occurred, the insurance company was absolved of its liability on the footing that the tractor was apparently being used as a passenger vehicle. And though under Section 66 of the MV Act, such vehicles can be used for carrying persons, provided there was prior permission obtained from the competent authority, but and no such permission having been obtained, the tractor trailer could not be used to ferry such number of persons and it is in that circumstance that it was held that the tractor trailer not being a passenger vehicle, could not be utilised for carrying persons and the liability of the insurance 24 company was absolved. Similarly, the decision in National Insurance Company vs. Chinnamma, supra, the apex court had found that the tractor trailer involved was being utilised for the business activity of the owner in carrying vegetables and the mere fact that it was carrying vegetables could not be characterised as being used exclusively for agricultural purposes and since the owner of the tractor was a dealer in vegetables, it was held that it was not being used in the course of agricultural operations. Therefore, as rightly pointed out by the learned Counsel for the claimants, these are decisions which are relied upon by the learned counsel for the insurer would be authorities for cases that were decided and in the absence of any restriction as to the manner in which a tractor could be used, except that it could not be used for a purpose other than agriculture purposes and apparently in the present case, it was being used for an agricultural purpose, albeit for the benefit of the deceased, it cannot be said that the tractor was being used for any purpose other than agricultural purposes. Therefore, 25 either with reference to the Certificate of insurance, the guidelines, or the provisions of the MV Act, the insurance company cannot be said to be absolved of its liability. Accordingly, the appeal in MFA134502006 filed by the insurance company stands dismissed. Insofar as the claim for enhancement is concerned, the Tribunal has awarded a total compensation of Rs.2,74,600/-. This is on the basis that the notional income of the deceased was taken at Rs.2,400/- per month and after deducting one-third towards his personal expenses, has applied the multiplier of ‘13’. This is on the lower side. Though the notional income could have been higher, in the absence of any evidence and given the vehement opposition to the claim petition, any enhancement of compensation on that ground, would probably lead to further acrimony, in the insurer possibly carrying this judgment in appeal to the Supreme Court. Hence, it is felt prudent not to enhance the income that is adopted, except that 26 the multiplier should have been ‘14’ instead of ‘13’ which leads to a partial enhancement under the head of loss of dependency and the appellants claimants are entitled to additional compensation of Rs.19,200/- Insofar as the loss of consortium is concerned, the Tribunal has restricted the compensation to a sum of Rs.5,000/-. This is an abysmally low amount and should be enhanced reasonably. Therefore, the claimants are held entitled to a nominal additional compensation of at least Rs.15,000/- under this head. In so far as the funeral expenses are concerned, the Tribunal has awarded a sum of Rs.3,000/- and in the opinion of this court, it should be enhanced by another sum of Rs.17,000/-. Therefore, the claimants are held entitled to a marginal enhancement of compensation of Rs.51,200/-, which shall be paid as additional compensation with interest at 6% per annum from the date of the petition till the date of payment. The 27 amount in deposit to be transferred to the Tribunal for the benefit of the claimants. The appeal in MFA125872007 is allowed in part. nv Sd/- JUDGE