w w w . L a w y e r S e r v i c e s . i n



Branch Manager, National Insurance Co. Ltd., Chitradurga & Others v/s D. Mallappa & Another


Company & Directors' Information:- NATIONAL INSURANCE COMPANY LIMITED [Active] CIN = U10200WB1906GOI001713

Company & Directors' Information:- NATIONAL CO LTD [Strike Off] CIN = U51909WB1917PLC002781

Company & Directors' Information:- NATIONAL CORPORATION PVT LTD [Not available for efiling] CIN = U51909PB1942PTC000480

Company & Directors' Information:- I.N. INSURANCE COMPANY PRIVATE LIMITED [Strike Off] CIN = U67200DL1994PTC062554

Company & Directors' Information:- INSURANCE OF INDIA LTD [Strike Off] CIN = U67200WB1936PLC008634

Company & Directors' Information:- NATIONAL CORPORATION PRIVATE LIMITED [Not available for efiling] CIN = U99999MH1950PLC009913

    M.F.A. Nos. 11337 to 11339 of 2008 (MV)

    Decided On, 21 September 2020

    At, High Court of Karnataka

    By, THE HONOURABLE MR. JUSTICE H.P. SANDESH

    For the Appellant: C.M. Poonacha, M/s. Lexplexus, Advocates. For the Respondents: R1, Patel D. Karegowda, R2, V.B. Siddaramaiah, Advocates.



Judgment Text

(Prayer: This M.F.A is filed Under Section 173(1) of MV Act against the judgment and award dated 19.06.2008 passed in MVC.No.433/2006 on the file of the Civil Judge (Senior Division) and Member, Additional MACT, Hiriyur, awarding a compensation of Rs.75,000/- with interest at 6% p.a.This M.F.A is filed Under Section 173(1) of MV Act against the judgment and award dated 19.06.2008 passed in MVC.No.32/2006 on the file of the Civil Judge (Senior Division) and Member, Additional MACT, Hiriyur, awarding a compensation of Rs.40,500/- with interest at 6% p.a.This M.F.A is filed Under Section 173(1) of MV Act against the judgment and award dated 19.06.2008 passed in MVC.No.33/2006 on the file of the Civil Judge (Senior Division) and Member, Additional MACT, Hiriyur, awarding a compensation of Rs.51,750/- with interest at 6% p.a.)1. These appeals are filed by the Insurance Company challenging the judgment and award dated 19.06.2008, passed in M.V.C.Nos.433/2006, 32/2006 and 33/2006 respectively, on the file of the Civil Judge (Sr.Dn.) and Member, Additional MACT, Hiriyur, ('the Tribunal' for short), questioning the liability and quantum of compensation.2. The parties are referred to as per their original rankings before the Tribunal to avoid the confusion and for the convenience of the Court.3. The factual matrix of the case is that on 21.08.2004, the petitioners in M.V.C.Nos.33/2006 and 433/2006 were proceeding in an auto rickshaw bearing registration No.KA- 16/5008 from Pitialy-Nandihalli side towards Hiriyur Town. When the said auto rickshaw was proceeding at Adivala Village near Nandihally Cross, the driver of the auto rickshaw drove the same in a rash and negligent manner and dashed against another auto rickshaw bearing registration No.KA-16/5998, which was coming from the opposite direction. The petitioner in M.V.C.No.32/2006 was traveling in the auto rickshaw bearing registration No.KA- 16/5988. The occupants of both the auto rickshaws have claimed the compensation before the Tribunal contending that they have sustained grievous injuries.4. In the claim petitions, only the owner and the insurer of auto rickshaw bearing registration No.KA-16/5008 are arrayed as parties to the proceedings. The owner and Insurance Company of the auto rickshaw bearing registration No.KA- 16/5998 are not arrayed as parties to the proceedings. The Tribunal issued notice against the respondents. Respondent No.1 i.e., the owner of the auto rickshaw bearing registration No. KA- 16/5008 remained absent and he was placed exparte. Respondent No.2 - Insurance Company appeared through its counsel and filed the written statement denying the averments made in the claim petitions and specific defence was taken that the accident was on account of rash and negligent driving of the driver of the auto rickshaw bearing registration No.KA-16/5998. Apart from that, it is contended that the compensation claimed is highly excessive, abnormal and without any basis. It is also contended that the owner of the auto rickshaw bearing registration No.KA-16/5008 had knowingly and intentionally plied the vehicle in the said route without permit and in violation of policy and permit conditions. It is the specific defence that the RTO had given the permit to ply the vehicle within Hiriyur Town limits and the accident occurred outside Hiriyur Town limits. Hence, liability, if any, is subject to terms and conditions of the policy.5. In pursuance of the claim petitions, the claimants have examined themselves as P.Ws.1 to 3 and also examined two doctors as P.Ws.4 and 5. The respondents have also examined R.W.1 doctor and also another witness as R.W.2, who is the official of the Insurance Company. The claimants have got marked the documents at Exs.P.1 to 31(a). On the other hand, the respondents have got marked the documents at Exs.R.1 to 3 i.e., the copy of the attendance register, policy copy and permit extract issued by the RTO.6. The Tribunal after considering both oral and documentary evidence placed on record allowed the claim petitions granting compensation of Rs.75,000/-, Rs.40,500/- and Rs.51,750/-, respectively with interest at the rate of 6% per annum from the date of petition till realization and directed respondent Nos.1 and 2 to pay the compensation. It further directed respondent No.2 Insurance Company to deposit the compensation amount within six weeks.7. Being aggrieved by the judgment and award passed in the said claim petitions, the Insurance Company - respondent No.2 before the Tribunal, has preferred these appeals contending that Ex.P.1 - FIR discloses that auto rickshaw bearing registration No.KA-16/5008 was driven at a place 8 kms. outside Hiriyur Town. The permit extract issued by the RTO which has been marked as Ex.R.3 discloses that the auto rickshaw was permitted to ply within the Hiriyur Town limits. Despite the same, the Tribunal erred in fastening the liability on the Insurance Company.8. The other contention of the Insurance Company is that the compensation awarded by the Tribunal is exorbitant and the Tribunal erroneously relied upon the evidence of the doctor and granted higher compensation. Hence, it requires interference of this Court.9. The learned counsel for the appellant Insurance Company has filed an application under Order 41 Rule 27 of CPC praying this Court to permit the appellant to produce the additional evidence of endorsement issued by the Town Municipality, Hiriyur. The learned counsel for the appellant in his argument vehemently contend that the accident took place outside Hiriyur Town limits and there is a clear violation of policy conditions. The Tribunal failed to consider the same and erroneously fastened the liability on the Insurance Company. Even if the Court comes to the conclusion that the claimants are entitled for compensation, the Court can only order to pay and recover the same from the insured.10. In support of his contentions, the learned counsel for the appellant relied upon the judgment of the Hon'ble Apex Court in the case of AMRIT PAUL SINGH AND ANOTHER v. TATA AIG GENERAL INSURANCE COMPANY LIMITED AND OTHERS reported in (2018) 7 SCC 558. Referring this judgment, the learned counsel would submit that no owner of a motor vehicle shall use or permit the use of the motor vehicle as a transport vehicle in any public place without permit and there is a prohibition under Section 66(1) of the MV Act. The Apex Court in this judgment ordered the insurer to pay the compensation and recover the same from the insured.11. The learned counsel also relied upon the judgment of the Hon'ble Apex Court in the case of SHAMANNA AND ANOTHER v. DIVISIONAL MANAGER, ORIENTAL INSURANCE COMPANY LIMITED AND OTEHRS reported in (2018) 9 SCC 650. Referring this judgment, the learned counsel would submit that only an order to pay and recover can be passed against the Insurance Company.12. The learned counsel also relied upon the Hon'ble Apex Court's judgment in the case of NATIONAL INSURANCE COMPANY LIMITED v. PARVATHNENI AND ANOTHER reported in (2009) 8 SCC 785. Referring this judgment, the learned counsel would submit that in this case also the Apex Court directed the Insurance Company to pay the compensation and recover the same from the owner. However, doubted the propriety of such directions given in earlier cases and the matter was referred to constitute a larger Bench. The larger Bench in the said case reported in (2018) 9 SCC 657 held that the questions of law raised in this petition are kept open to be decided in an appropriate case.13. The learned counsel for respondent No.2 - insured in his argument vehemently contend that though the Insurance Company took the defence that the vehicle was plying outside Hiriyur Town limits, the same was not proved. He further contend that the Insurance Company in a claim petition filed by the driver of the auto rickshaw, paid the compensation. Hence, the Insurance Company is estopped from taking the contention that the Company is not liable to pay the compensation.14. The learned counsel for respondent No.2 relied upon the judgment of this Court in the case of MANAGER, ORIENTAL INSURANCE CO. LTD. v. PRASANNA KUMAR S. AND OTHERS reported in 2014 ACJ 2736. Referring this judgment, the learned counsel would submit that the Insurance Company had settled the own damage claim of the owner of offending vehicle with respect to the accident before the Consumer Forum, therefore the Insurance Company is estopped from avoiding its liability to compensate the injured claimants.15. The learned counsel relied upon the decision of this Court in the case of B.U. CHAITANYA v. MANAGING DIRECTOR, BANGALORE METROPOLITAN TRANSPORT CORPORATION AND ANOTHER reported in 2013 ACJ 1423.16. The learned counsel also relied upon the judgment of the Hon'ble Supreme Court in the case of RUKMANI AND OTHERS v. NEW INDIA ASSURANCE CO. AND OTHERS reported in (1998) 9 SCC 160. Referring this judgment the learned counsel would contend that the burden of proof is on the Insurance Company to prove the defence that the vehicle was plied outside Hiriyur Town limits. Hence, the judgment of the Apex Court is applicable to the case on hand since the Apex Court also held that burden of proof is on the Insurance Company to prove the same.17. The learned counsel also relied upon the decision of this Court in the case of LEGAL MANAGER, IFFICO TOKIO GIC LTD. BANGALORE v. SMT. NAGENDRAM LACHI AND OTEHRS reported in ILR 2019 KAR 5361. Referring this judgment the learned counsel would contend that the Insurance Company took the defence that there was no valid and effective driving licence. The learned counsel would contend that in this judgment also the Division Bench held that the burden lies on the Insurance Company to prove the same as similar to the case on hand. The defence of the Insurance Company is that there was no permit to ply the vehicle in the particular place and the same has to be proved by the Insurance Company and the same has not been proved by placing the relevant material on record.18. The learned counsel appearing for respondent No.2 - owner/insured would submit that an application in I.A.No.1/2017 is filed under Order 41 Rule 27 of CPC to place the additional documents before this Court i.e., copy of the claim petition in W.C.No.540/2004, copy of the objections filed by the Insurance Company in W.C.No.540/2004 and copy of the joint memo filed by the Insurance Company in W.C.No.540/2004. The learned counsel would submit that these documents are very much necessary to decide the issue involved in the case on hand.19. The learned counsel for the claimants would reiterate the grounds urged by the learned counsel appearing for the insured/owner. He further submits that it is only a deviation and there is no fundamental breach and hence the Company is liable to pay the compensation.20. Having heard the arguments of the learned counsel for the appellant and also the learned counsel for the insured and the claimants, the points that arise for the consideration of this Court are:(i) Whether the Tribunal has committed an error in fastening the liability on the Insurance Company and it requires interference of this Court?(ii) Whether the Tribunal has committed an error in awarding excessive compensation as contended in the respective appeal memorandums?(iii) Whether the learned counsel for the appellant has made out the ground to allow the applications filed under Order 41 Rule 27 of CPC, which is numbered as I.A.No.1/2018 in all the appeals?(iv) Whether the insured has made out a ground to allow the application filed under Order 41 Rule 27 of CPC, which is numbered as I.A.No.17 in all the appeals?Point Nos.(iii) and (iv):21. The Insurance Company has filed an application in I.A.No.1/2018 under Order 41 Rule 27 of CPC. Along with the application, an endorsement issued by the Town Municipality, Hiriyur is placed on record. The contention of the learned counsel for the appellant is that the said document is very much necessary to prove that the accident had occurred outside the Town limits of Hiriyur.22. Per contra, the learned counsel for the insured orally opposed the said application contending that no effort was made to produce the said document before the Tribunal. The Insurance Company has to satisfy the Court with regard to the grounds which are set out in Order 41 Rule 27 of CPC that they were diligent in conducting the case.23. The learned counsel for the appellant would submit that the settlement arrived before the Workmen's compensation Court will not fetter the right of the Insurance Company to question the liability and the same was a statutory liability. He also does not dispute the additional documents produced along with I.A.No.1/2017.24. The learned counsel for the insured disputes the endorsement issued by the Town Municipality, Hiriyur. It is also his contention that the Insurance Company did not make any efforts to place the same before the Tribunal and the same cannot be allowed. If the same is allowed, it is nothing but an attempt made to defeat the legitimate claim of the claimants. The Insurance Company has not made out any grounds to allow the additional evidence.25. Having considered the documents, which are enclosed along with I.A.No.1/2017, the Insurance Company does not dispute the claim made by the driver of the auto rickshaw claiming the compensation and the same is settled before the Workmen's compensation Court. When the Insurance Company does not dispute the same, the question of marking does not arise.26. Insofar as I.A.No.1/2018 with regard to the endorsement issued by the Hiriyur Town Municipality is concerned, it is the main contention of the Insurance Company that the vehicle was plied outside the Town limits of Hiriyur. Though the said defence was taken before the Tribunal, except examining R.W.1 and producing the document Ex.R.3 - permit, in order to substantiate the defence neither the RTO nor any document has been produced before the Tribunal. Hence, the Tribunal has come to the conclusion that the Insurance Company has not proved the defence. There is no dispute with regard to the principles laid down in the judgments referred by the learned counsel for the insured. The burden is on the Insurance Company to prove the same and the same has not been done. When no material is placed before the Tribunal that there was a violation of permit condition, mere producing of the certificate issued by the Town Municipality, will not help the Insurance Company in order to arrive at a conclusion that the place of accident is outside the Town limits of Hiriyur. The said document will not come to the aid of the Insurance Company and furthermore the grounds set out in I.A.No.1/2018 filed under Order 41 Rule 27 of CPC has not been made out that the Insurance Company was diligent in conducting the case.27. The accident is of the year 2004 and the matters are pending before the Tribunal and this Court for more than one and half decade. Having taken note of the grounds urged in the applications for production of the additional evidence and the additional evidence sought to be placed before the Court will not tilt the decision of the Court, on that ground also, the application cannot be entertained. Apart from the decisions of Co-ordinate Benches of this Court in the cases of Durgamma, Jayamma and Kenchanna (supra), reported in the year 2017, 2018, even if the vehicle is plied outside the jurisdiction, it amounts to deviation and not fundamental breach.28. In view of the observations made above, I am of the opinion that both the Insurance Company as well as the insured have not made out any grounds to allow the applications. I have already held that there is no dispute with regard to the document produced along with I.A.No.1/2017 and Insurance Company was not diligent in conducting the case in placing the material before the Court to prove the same and also the principles laid down in the referred judgments above, the result will not change in entertaining the application and hence accordingly, I.A.Nos.1/2017 and 1/2018 are disposed of as does not require additional evidence to decide the issue invoked between the parties.Point No.(i):29. The main contention of the Insurance Company is that there was a deviation and permit was given to ply the vehicle within the Town limits of Hiriyur and the accident took place outside the Town limits of Hiriyur. On perusal of Ex.P.1 - FIR, it is specifically mentioned that the distance between the place of accident and Police Station is 8 kms. The Insurance Company also produced the document Ex.R.3 - permit and as per the permit, he was authorized to ply the vehicle only within the Hiriyur Town limits. On perusal of Ex.R.3 - permit extract issued by the RTO, it is stated that the permit was given to ply the vehicle within the Hiriyur Town and the accident has taken place at a place called Nandihalli Cross, which is near to Adivala. It is the contention of the Insurance Company that the place of accident is 12 kms. away from Hiriyur. P.W.3 in his evidence says that the same is only 3 kms. away. The Insurance Company also examined R.W.2 and he reiterated the averments of the written statement. But in the cross-examination, he admits that he has not produced any documents to show that Town limits of Hiriyur in kilometers. On perusal of Ex.R.3 permit, the extent of Hiriyur Town limit is not specified, except mentioning the same that the vehicle can ply within the Hiriyur Town limit. R.W.2 has categorically admitted that he has not produced any document. Now the question before this Court is whether the Insurance Company is liable to pay the compensation or not. The main contention of the Insurance Company is that there is a fundamental breach of policy condition and it is an infraction. Hence, the Company is not liable to pay the compensation.30. The Insurance Company relied upon the judgment of the Hon'ble Apex Court in the case of Amrit Paul Singh (supra). On perusal of the said judgment, it is clear that in the said case there was no permit at all and no deviation. Hence, the Apex Court came to the conclusion that there is a clear violation of the policy conditions. However, ordered the Insurance Company to pay the compensation and recover the same from the insured. The facts and circumstances of the case of Amrit Paul Singh (supra) is not applicable to the case on hand. In the reported case, there was no permit. In the case on hand, there was permit and the vehicle plied beyond limit of Hiriyur Town.31. The learned counsel for the Insurance Company also relied on the judgment of Apex Court in the case of Shamanna (supra). In the said case, there was no driving licence. Hence, the Apex Court directed the Insurance Company to pay and recover. Shamanna's case is not applicable to the case on hand. In the case on hand, there is only a deviation of permit.32. This Court would like to refer to the judgment of a Co- Ordinate Bench of this Court in the case of DURUGAMMMA v. S.G.NARESH AND OTHERS reported in 2017 (1) KLR 251. This Court referring Section 207 of MV Act held that Section 207 empowers any police officer or other authorized person to seize and detain the vehicle for the contraventions of Sections 3, 4 or 39 or without the permit required by sub-section (1) of Section 66 or in contravention of any condition of such permit relating to the route on which or the area in which or the purpose for which the vehicle may be used. This Court also observed that violation of permit condition are contemplated in Section 86 of the Act where the permit can be cancelled, penalty can be imposed under Section 192-A of the Act. Section 207(1) of the Act contemplates power to detain vehicles used without certificate of registration permit.33. This Court also distinguished the judgment in the case of NATIONAL INSURANCE CO. LTD. v. CHALLA BHARATHAMMA AND OTHERS reported in 2004 AIR SCW 5301. In the said case also there was no permit. However, ordered the Insurance Company to pay the compensation and recover the same.34. The Co-ordinate Bench of this Court in the case of THE DIVISIONAL MANAGER, UNITED INDIA INSURANCE CO. LTD., v. SMT. JAYAMMA AND OTHERS reported in ILR 2018 KAR 1849 also held that the deviation does not amount to fundamental breach and the same cannot be a infraction and hence the Insurance Company is liable to pay the compensation.35. The Co-ordinate Bench of this Court in the case of S.N. KENCHANNA v. SMT. ANITHA AND OTHERS reported in ILR 2018 KAR 3921 in paragraph Nos.26, 27 and 28 has held that the deviation of route permit would not absolve the liability of the insurer as the same did not come within the purview of Section 149(2) of the Act. Apart from fact that the exemption under Section 66(2)(p) would be applicable in the present facts, even otherwise, violation of permit conditions such as violation of route permit would not result in exoneration of the liability of the insurer.36. Having taken note of the judgment referred supra and also the principles laid down in the judgments quoted by both the Insurance Company as well as the insured, even assuming that the vehicle is plied outside the Hiriyur Town, it is only a deviation and not a fundamental breach. This Court cannot come to a conclusion that it is an infraction and statutory provisions are made to take action against the owner of the vehicle, who plied the vehicle outside the permit. The Apex Court, where there was no permit, ordered the Insurance Company to pay and recover the same from the insured. The factual aspects of the case is different and I have already pointed out that it was only a deviation and the same is not a fundamental breach. Even the Insurance Company has not proved the said fact of deviation and no effort was made before the Tribunal to prove the breach as held by this Court in several judgments referred supra. However, I have already pointed out that it is only a deviation and it will not amount to any fundamental breach and the statutory action can be taken against the owner. No doubt there was a policy and the policy was in force and also there was permit and the vehicle was plied little bit outside Hiriyur town. Hence, I am of the opinion that the Tribunal has not committed any error in coming to the conclusion that the Insurance Company has not proved the defence. Even assuming that the vehicle was plied outside the place of permit, the Insurance Company is liable to pay the compensation and there cannot be an order for pay and recovery, as contended by the Insurance Company in view of the judgments of this Court in the cases of Durgamma, Jayamma and Kenchanna (supra).37. The other contention of the insured is that the claim petition filed by the driver of the auto rickshaw was satisfied and the same has not been disputed by the Insurance Company but contended that satisfying the amou

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nt under the Workmen's Compensation Act does not estop the Insurance Company to contest the claim in respect of the occupants of the auto rickshaw. No doubt this Court in the judgment in the case of Prasanna Kumar (supra) held that when the Insurance Company has settled the own damage claim of the owner of the offending vehicle with respect to the accident before the Consumer Forum, therefore it is estopped from avoiding its liability to compensate the injured claimants.38. In view of the factual circumstances of the case and also this Court came to the conclusion that it is not a fundamental breach and the same does not amount to an infraction and held the liability against the Insurance Company, the said contention of the Insurance Company does not survive for consideration.39. In view of the discussion made above, I answer point No.(i) as negative.Point No.(ii):40. It is the main contention of the Insurance Company that the Tribunal has awarded higher compensation and before this Court the claimants had also filed M.F.A.Nos.10067/2008, 10068/2008 and 9441/2008 and this Court vide order dated 31.01.2012 allowed the said appeals in part enhancing the compensation and those orders have not been challenged by the Insurance Company. Only the insured has sought for an order to set aside the earlier order passed in M.F.A.Nos.11339/2008, 11337/2008 and 11338/2008 by filing review petition Nos.175/2014, 176/2014 and 177/2014 and the order passed in M.F.A.Nos.10067/2008, 10068/2008 and 9441/2008 dated 31.01.2012 was set aside. In the review petition, order is very clear that in view of the fact that the order has been passed without hearing the petitioner the order dated 31.01.2012 is recalled and the appeals are restored to file. There is no order with regard to the other claimants' appeal and the order of this Court in respect of other appeals filed by the present claimants has not been set aside. Hence, the question of reconsidering the matter with regard to the quantum of compensation awarded by the Tribunal as contended in the present appeal does not arise. Hence, I answer point No.(ii) accordingly.41. In view of the discussions made above, I pass the following:ORDER(i) The appeals are dismissed.(ii) Consequently, I.A.Nos.1/2017 and 1/2018 filed by the insured and the Insurance Company under Order 41 Rule 27 of CPC are also dismissed.(iii) The amount in deposit, if any, be transmitted to the concerned Tribunal, forthwith.(iv) The Registry is directed to send the records to the concerned Tribunal, forthwith.
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