National Insurance Company Limited vs Adiveppa Appanna Naik

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2018 Supreme(Kar) 87

IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH
KRISHNA S.DIXIT, J.
The National Insurance Company Limited - Appellant
Versus
Shri. Adiveppa Appanna Naik - Respondent
M.F.A. No.104088 of 2017 [MV] C/w. M.F.A. No.103690 of 2017 [MV]
Decided On : 27-02-2018

Advocates Appeared:
For the Appellant : Sri. Rajashekhar S. Arani Adv.
For the Respondents: Sri. Smt Geetha K.M. @ Pawar Adv. Smt. P.R. Bentur Adv.

Headnote:MOTOR VEHICLES ACT, 1988 [C.A. No. 59/1988] - Section 149 & Karnataka Motor Vehicles Rules, 1989 - Rule 149 - Violation of Rule - Ipso factor whether such violation absolve Insurance Company from its liability ? - Whether Insurance Company can deny its liability on the ground that insured or any one claiming the benefit of insurance has himself violated the mandate of Rule 143 of Karnataka Motor Vehicles Rules, 1989? - Held, No. The liability of the insurance company arises in a contract of insurance which stipulates terms and conditions. The said contract is regulated by the provisions of the Act. The Parliament has enacted sub section (2) of Section 149 of the Act only as a limited defence Clause restricting the scope of defence available to an insurance company to resist the claim. It speaks of a breach of specified condition of policy of insurance and such a condition should relate to one of the items enumerated under Clause (a) of sub-section (2). In other words, it is not open to the insurance company to take a defence de hors the provisions of sub-section (2)(a) of Section 149 at all. The fact that the insured or anyone seeking the benefit of insurance has violated the provisions of the Motor Vehicles Act or any of the Rules made there under, per se does not fit into the limited defence clause enacted under sub-section (2) of Section 149 of the Act. The contention of the learned Counsel for the insurance company that awarding of compensation for the violators of law virtually amounts to placing premium on illegality appears to be attractive on the face of it. But, when the same is treated in the rigor of Limited Defence Clause enacted under sub-section (2) of Section 149 of the Act, all it's attraction ceases. If this arguments is accepted the same would widen the scope of Limited Defence Clause enacted under sub-section (2) of Section 149 of the Act which the Court in the interpretation process cannot do. Therefore, this argument is also liable to be rejected since it militates against the scheme of Section 149 of the Act.
MOTOR VEHICLES ACT, 1988 [C.A. No. 59/1988] - Section 168 - Determination of Compensation - No specific material as to occupation and income, Notional Income at Rs.9,000/- taken into account.
MOTOR VEHICLES ACT, 1988 [C.A. No. 59/1988] - Liability of Insurer - Carrying of two pillion rider in a two wheeler - Does violation of Motor Vehicles Act would ipso facto absolve the liability or give scope to have contributory negligence to reduce the liability - Held, No. A condition in a contract requiring the parties to abide by the law is nothing more than reminding the parties to follow the law. Cicero the great Roman lawyer/philosopher has said 'Let havens fall down, law should be obeyed'. The term of a contract requiring the parties not to disobey the law in nothing more than reminding them their duty to obey the law. In substance, such term is only a remainder and even in the absence of such term, the duty cast on all the citizens/persons to obey the law nevertheless continues. Therefore, the duty to obey the law even when it is stipulated as a bargain between the parties cannot treated as a condition of contract. It is more so when the Act and the Rules in question leave no discretion to disobey. Therefore, I am not inclined to accept the contentions of the Insurance company that term/condition of contract of Insurance is violated and this violation per se results into repudiation of Insurer's liability which otherwise would have been fastened on the Insurance Company.

ORDER :

1. MFA No.104088/2017 filed by the insurance company and MFA No.103690/2017 filed by the claimants are directed against the judgment and award dated 18.09.2017 made by the Additional Motor Accidents Claims Tribunal, Belagavi (for short ‘MACT’) in MVC No.2542/2016 whereby a compensation of Rs.13,87,400/- with interest at the rate of 6% per annum thereon from the date of petition till realization has been awarded.

2. The insurance company in MFA No.104088/2017 challenged the liability fastened on it as well as the quantum of compensation awarded by the Tribunal, whereas the claimants in their appeal MFA No.103690/2017 have sought for enhancement of compensation.

3. The parties will be referred to as per their rankings before the MACT.

4. The brief facts of the case are:

In a vehicular accident that happened on 21.10.2016 involving a motor cycle bearing registration No.KA-22/EQ-8960, Smt. Kasturi, the wife of the claimant No.1 and mother of claimant nos.2 and 3 sustained fatal injuries and succumbed to the same on 23.10.2016.

5. In the claim for compensation presented before the MACT, the claimants’ side examined PW-1 Adiveppa Appanna Naik and eight documents were got marked as Ex.P-1 to Ex.P-8. From the side of the Insurance Company, one Mr. Umesh Gunda Bhat, who was working as Administrative Officer was examined as RW-1. The insurance policy was got marked as Ex.R-1. The jurisdictional MACT made the judgment and award which is now in question.

6. The learned counsel for the Insurance Company vehemently contended that the Tribunal grossly erred in fastening the liability on the insurance company when the insured was proved to have been carrying two pillion riders even though carrying even one was prohibited by the provisions of Rule 143 of the Karnataka Motor Vehicle Rules 1989 (for short ‘KMV Rules’). Sub-rule (3) of Rule 143 reads as under:

“143. Attachment to motor cycle.—(1) xxx

(2) xxx

(3) No pillion seat shall be attached to a motorcycle with less than 100 cc engine.”

7. The learned counsel submits that the order of the Tribunal in fastening the liability on the insurer for the benefit of the violator of statutory mandate contained in the aforesaid Rule virtually amounts to placing premium on illegality. He submits that the contract of insurance being regulated by the provisions of Motor Vehicles Act, 1988 (for short ‘the Act’), the violator of law should not be permitted to take the benefit of his violation.

8. The learned counsel for the appellant brought to my notice the decisions of this court i.e., the judgment dated 25.02.2016 in MFA No.654/2013 (MVC) (The Branch Manager, New India Insurance Co. Ltd. Vs. M. Prasilla D’souza & others) and MFA No.655/2013 (MVC) (The Branch Manager, New India Insurance Co. Ltd. Vs. Marco Fernandis & others) and read out paragraph 3 of the same which is as under:

“5. Perusal of the record reveals that the scooty had engine capacity of 75cc. In such cases, no pillion seat shall be attached to a motorcycle. But in the present case, the pill ion seat was attached and the same was not disputed by the respondents-claimants. So, this itself proves that there was more than one pillion riders traveling in the scooty and this was the cause for the accident. Hence, they should be made liable for some negligence. Hence, I hold that the negligence has to be fixed for the pillion riders of two wheeler to the extent of 25% and remaining 75% shall be borne by the insurance company.”

9. The learned counsel for the insurance company also brought to my notice a relevant portion of paragraph 2 of another decision dated 01.01.2003 rendered by this Court in MFA Nos.2059 of 1996 (P.S.Somaiah and Another Vs. The Director, Bangalore Diary and Others) and connected matters, which reads as under:

“2. …….Secondly, the Insurance Companies shall make it a point that in everyone of the Insurance policies issued in the c

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2018 Supreme(Kar) 87

IN THE HIGH COURT OF KARNATAKA DHARWAD BENCHKRISHNA S.DIXIT, J.The National Insurance Company Limited - AppellantVersusShri. Adiveppa Appanna Naik - RespondentM.F.A. No.104088 of 2017 [MV] C/w. M.F.A. No.103690 of 2017 [MV]Decided On : 27-02-2018

Cases Referred (3)

IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH
KRISHNA S.DIXIT, J.
The National Insurance Company Limited - Appellant
Versus
Shri. Adiveppa Appanna Naik - Respondent
M.F.A. No.104088 of 2017 [MV] C/w. M.F.A. No.103690 of 2017 [MV]
Decided On : 27-02-2018