National Insurance Co. Ltd. Vs. Lalita Prabhakar and ors. - Court Judgment

R.L. Khurana, J.

1. The above noted appeal and cross-objections arising out of the award dated 27.7.88 of the learned Motor Accidents Claims Tribunal (III), Kangra at Dharamshala, hereinafter referred to as the Tribunal, under Section 110-A, Motor Vehicles Act, 1939, are proposed to be disposed of by this single judgment.

2. In an accident involving motor cycle No. PBO 5575 and an army truck bearing tag No. 257 and a bus belonging to Himachal Road Transport Corporation bearing registration No. HPK 5713, which took place on 25.1.1987 at about 2 p.m. at Thakurdwara near Palampur, one A.D. Prabhakar, son of Khushi Ram of Dehra, District Kangra, had sustained multiple grievous injuries and he died while being carried to P.G.I., Chandigarh.

3. Respondent Nos. 1 to 6 before this Court are the widow and minor daughters of the deceased A.D. Prabhakar. They are being hereinafter referred to as the claimants.

4. Respondent Nos. 7 and 8 are the driver and owner, respectively, of the motor cycle, while appellant before this Court is the insurer thereof. They are being referred to as driver of motor cycle, owner and the insurance company, respectively, hereinafter.

5. Respondent Nos. 9 and 10 are, respectively, the driver and owner of the bus HPK 5713 and are being hereinafter referred to as the driver of the bus and Corporation. Respondent No. 11 is the Union of India, the owner of the army truck.

6. The claimants by way of a petition under Section 110-A, Motor Vehicles Act, 1939, approached the learned Tribunal seeking compensation of Rs. 10,00,000/- for the death of A.D. Prabhakar.

7. The facts, as averred in the petition are these. The deceased A.D. Prabhakar was a young man of about 39 years of age. Besides being an ex-serviceman, he was a practising advocate and was having a monthly income of Rs. 5,000/- per month from all sources. On the relevant day he was going to Palampur from Dehra on motor cycle No. PBO 5575 as a pillion rider. The said motor cycle was being driven by Naresh Kumar, the driver of the motor cycle at a high speed in a rash and negligent manner. At the place of accident bus No. HPK 5713 belonging to the Corporation was parked on the wrong side of the road in front of the workshop. It was parked in such a manner that besides occupying a fairly large portion of the metalled road, it was causing obstruction and danger to the free flow of vehicular traffic. When the driver of the motor cycle tried to cross the parked bus, a speeding army truck while coming from the opposite direction dashed into the motor cycle as a result the same was pushed towards the left side underneath the parked bus. The deceased as well as the driver of the motor cycle sustained injuries. The deceased succumbed to the injuries while being carried to P.G.I., Chandigarh. The claimants, while seeking the compensation, averred that the accident was as a result of the composite negligence of the drivers of the motor cycle, bus and the army truck.

8. The driver of the motor cycle admitted the accident and death of the deceased A.D. Prabhakar therein. He, however, denied rash and negligent driving on his part. He averred that the accident was as a result of composite negligence of the drivers of the bus and the army truck.

9. The insurance company resisted the petition and denied its liability on the ground that the driver of the motor cycle was not holding a valid driving licence and that it had no liability under the policy in respect of death of or injuries to a pillion rider.

10. The driver of the bus and the Corporation vide two separate written statements took a common stand. They averred that the accident was due to the rash and negligent driving on the part of the driver of the motor cycle. They denied that the bus was parked dangerously on the wrong side of the road and was causing hindrance to the free flow of vehicular traffic.

11. The Union of India denied the accident. It was pleaded that no army truck was involved in the accident on 25.1.1987.

12. The owner of the motor cycle did not prefer to file any written statement though throughout during the proceedings before the learned Tribunal, he was being represented by a counsel.

13. On the basis of the pleadings of the parties, issues were framed by the learned Tribunal. While deciding such issues, the learned Tribunal came to the conclusion that the accident was as a result of composite negligence of the drivers of the motor cycle and the army truck. No rash and negligent driving/act was attributed to the driver of the bus. The claimants were found entitled to total compensation of Rs. 2,43,000/-. The owner, driver and insurance company of the motor cycle as well as Union of India were held jointly and severally liable to pay the amount of compensation along with costs quantified at Rs. 200/- and interest at the rate of 12 per cent per annum from the date of petition till the realisation of the amount.

14. Feeling aggrieved by the impugned award of the learned Tribunal, the insurance company has come up in appeal being F.A.O. No. 182 of 1988, before this Court. The impugned award has been assailed on the ground that the motor cycle concerned was sold by the owner to the driver thereof about three or four months before the accident. The insurance policy never came to be transferred in favour of the vendee of the motor cycle in accordance with law and the rules. Therefore, the insurance company could not be fastened with any liability. The accident was not caused due to rash and negligent driving on the part of the driver of the motor cycle. The quantum of compensation awarded is on the higher side inasmuch as there is no evidence in respect of the income of the deceased.

15. The claimants also feeling dissatisfied with the quantum of compensation awarded in their favour, have come up before this Court by way of cross-objections, being C.O. No. 109 of 1989. They have claimed that compensation of Rs. 5,00,000/- be awarded in their favour by enhancing the amount as awarded by the learned Tribunal.

16. We have heard the learned Counsel for the parties and have also gone through the record of the case.

17. Be it stated that Union of India had also assailed the impugned award by way of an appeal being F.A.O. No. 110 of 1989. Such appeal was dismissed by a Division Bench of this Court on 6.11.1991 consequent upon the failure of the Union of India to deposit the amount under the award in terms of the orders of this Court. This Court, therefore, had no occasion to go into the merits of the case in the said appeal.

18. It is well settled that it is not open to the insurance company to question the findings of the learned Tribunal either as to rash and negligent driving on the part of the driver or on the point of quantum of compensation awarded. Such findings have not been assailed either by the owner or driver of the motor cycle by way of an appeal or otherwise. Therefore, such findings have become final and are not open to challenge by the insurance company.

19. The first contention raised on behalf of the insurance company is to the effect that the owner had sold and transferred the motor cycle in favour of the driver thereof about three or four months before the accident. The insurance policy was never transferred in favour of such vendee, therefore, the liability of the insurance company came to an end and it cannot be fastened with such a liability. It was argued that the driver of the motor cycle, Naresh Kumar, while appearing as RW 1 has admitted having purchased the motor cycle from the owner Anil Kumar about three months prior to the accident. It was contended that the contract of insurance is a contract of personal indemnity and insured cannot transfer the policy without any express agreement with the insurance company. The insurance policy therefore stood lapsed with the transfer of the motor vehicle.

20. Learned counsel for the claimants, on the other hand, contended that such a plea was never raised by the insurance company before the Tribunal, therefore, it cannot be allowed to be raised for the first time in appeal before this Court. It was further argued that even otherwise such a defence is not available to the insurance company under Section 96(2) of the Motor Vehicles Act, 1939, corresponding to Section 149(2) of the Motor Vehicles Act, 1988.

21. The Apex Court in British India General Insurance Co. Ltd. v. Captain Itbar Singh AIR 1959 SC 1331: 1958-65 ACJ 1 (SC), while dealing with the scope of defence available to the insurance company, has observed:

Apart from the statute an insurer has no right to be made a party to the action by the injured person against the insured causing the injury. Sub-section (2) of Section 96, however, gives him the right to be made a party to the suit and to defend it. The right, therefore, is created by statute and its content necessarily depends on the provisions of the statute. Sub-section (2) clearly provides that an insurer made a defendant to the action is not entitled to take any defence which is not specified in it. When the grounds of defence have been specified, they cannot be added to. The only manner of avoiding liability provided for in Sub-section (2) is through the defences therein mentioned. Therefore, when Sub-section (6) talks of avoiding liability in the manner provided in Sub-section (2), it necessarily refers to these defences. It cannot be said that in enacting Sub-section (2), the legislature was contemplating only those defences which were based on the conditions of the policy.

22. A single Judge of this Court in Oriental Insurance Co. Ltd. v. Bishan Dass 1988 ACJ 106 (HP), following the ratio laid down by the Apex Court, has held:.The contract between the insurer and the insured may permit the insurer to avoid his liability under various circumstances. However, if those circumstances do not fall within the purview of Sub-section (2) of Section 96 of the Act, the insurer cannot invoke them in aid and escape liability for the third party risk. The terms of the contract between the insurer and the insured, which determine their inter se rights and liability, are not and should not be confused with the statutory liability of the insurer for the third party risk. The remedy available to the insurer in such a case is to proceed against the insured for the breach of the contract and to claim reimbursement of the amount paid to satisfy the award.

23. In Madineni Kondaiah v. Yaseen Fatima 1986 ACJ 1 (AP), a Full Bench of the High Court of Andhra Pradesh had the occasion of dealing with the question whether the insurance company could raise the defence of lapse of insurance policy due to the sale of the vehicle, it was held:

Insurance company cannot raise the defence that the policy had lapsed because of the sale of the vehicle, it cannot contend that accident happened due to negligence on the part of the transferee and insurance company is not liable; it cannot contend that its contract is with the transferor and it is not responsible to redeem the compensation payable by the transferee, because such defences are not contemplated by Section 96(2).

24. A similar view has been taken by the Rajasthan High Court in National Insurance Co. Ltd. v. Kastoori Devi 1988 ACJ 8 (Rajasthan), in Santosh Rani v. Sheela Rani 1988 ACJ 299 (Rajasthan) and in New India Assurance Co. Ltd. v. Avinash 1988 ACJ 322 (Rajasthan).

25. We are in agreement with the proposition of law enunciated above and hold that the liability of the insurance company would continue in spite of the transfer of vehicle unless the insurance company has cancelled its liability under the law.

26. At this stage it would be appropriate to refer to the provisions of Section 157(1) of the Motor Vehicles Act, 1988. It reads:

(1) Where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of this chapter transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, the certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of its transfer.

Explanation.-For the removal of doubts, it is hereby declared that such deemed transfer shall include transfer of rights and liabilities of the said certificate of insurance and policy of insurance.

27. These provisions lay down that the certificate of insurance and the policy described therein would be deemed to have been transferred in favour of the person to whom the vehicle is transferred from the date of transfer. Therefore, in the present case, assuming the motor cycle was transferred by the registered owner prior to the accident, the policy of insurance would be deemed to have also been transferred in favour of the transferee with effect from the date of transfer, and the insurance company's liability would continue during the subsistence of the policy irrespective of the transfer of the vehicle.

28. The case can be looked at from another angle also. Assuming that such a defence is available under the law to the insurance company, it is significant to note that such a defence was never raised by the insurance company before the learned Tribunal. It is being sought to be raised for the first time before this Court in the present appeal.

29. The question-whether the transfer of the motor cycle was there or not-is a pure question of fact, which has to be specifically pleaded and proved. If such objection was never raised by the insurance company before the Tribunal, it cannot be allowed to be raised for the first time in appeal before this Court.

30. The learned Counsel for the insurance company has next contended that the learned Tribunal after having come to the conclusion that the accident was due to the composite negligence of the drivers of the motor cycle and the army truck, it ought to have apportioned the liability towards payment of the amount of compensation between the owners, drivers and insurance company of the two vehicles.

31. There is no merit in the contention of the learned Counsel. In composite negligence, the wrong-doers are other than the injured or the deceased person. The injured or the deceased person does not contribute to the events leading to the accident which results in injuries or death. Therefore, the considerations of allowance on account of contributory negligence are extraneous in case of composite negligence for the obvious reason that no contribution of negligence can be attributed to the injured or the deceased and that it is the wrong doers only who are jointly and severally liable for the whole loss.

32. It is well settled that where the accident has taken place as a result of the composite negligence of the drivers of two or more vehicles and without any negligence on the part of the injured or the deceased person, the drivers of such two or more vehicles are joint tortfeasors and they are liable to pay compensation jointly and severally.

33. It is equally well settled that where there is a joint and several liability, it is always open to the claimant to sue any of the person so liable without making the other a party. The claimant can sue the joint tortfeasors, either jointly or severally, and can have a complete redress for the loss suffered by him from either of them.

34. In K. Gopalakrishnan v. Sankara Narayanan 1969 ACJ 34 (Madras), it has been held that it is not necessary to apportion the negligence in the case of composite negligence. To the similar effect it has been held in Golak Chandra Das v. Kousalya Nayak 1978 ACJ 48 (Orissa), in Karunakar Pradhan v. Sarojini Mishra 1980 ACJ 121 (Orissa) and in A. Shivarudrappa v. General Manager, Mysore Road Trans. Corporation 1973 ACJ 302 (Mysore).

35. In Kundan Bala Vora v. State of U.P. 1984 ACJ 99 (Allahabad), the facts were that an accident took place between a bus and car while crossing each other. The accident was held to have taken place due to the composite negligence of both the drivers. An award was made in favour of the claimants therein holding the drivers of the two vehicles jointly and severally liable for payment of the entire amount of compensation. It was held that it was for the joint tortfeasors. to seek contribution from each other.

36. In the present case as well since the driver, owner and insurance company of the motor cycle as well as Union of India being the owner of the army truck have been held to be jointly and severally liable for payment of entire amount of compensation to the claimants, it is for the insurance company to seek contribution from the other joint tortfeasors in accordance with law. The impugned award cannot be said to be bad on account of failure of the Tribunal to apportion the liability amongst the joint tortfeasors.

37. Insofar as the cross-objections of the claimants are concerned, the same are liable to be dismissed as being not maintainable. It has been held by a Division Bench of this Court, to which one of us (R.L. Khurana, J.) was a party, in National Insurance Co. Ltd. v. Rukmani Devi F.A.O. (MVA) No. 88 of 1988; decided on 4.9.1996, that no cross-objections by the claimants seeking enhancement in the amount of compensation are maintainable in an appeal filed by the insurance company in view of the fact that it is not open to the insurance company to dispute the quantum of compensation.

38. No other point was urged before us by the learned Counsel for the parties.

39. Consequently, the appeal filed by the insurance company as well as the cross-objections preferred by the claimants are dismissed, leaving the parties to bear their own costs.