2007 Supreme(Bom) 421

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
(N.V. Dabholkar and M.G. Gaikwad, JJ.)
NEW INDIA ASSURANCE CO. LTD.- Appellant.
Vs.
RANGLAL PUNJU NIKAM and others - Respondents.
First Appeal No. 1252 of 2005
Decided on 23-3-2007.
Advocates Appeared
For appellant: S.G. Chapalgaonkar
For respondent No. 1 : L. V. Sangit holding for N.R. Katneshwarkar.
Respondent No.2 served and absent.
For respondent No.3: A.I. Deshmukh.

Headnote:Motor Vehicles Act, 1988 - Section 147 - Liability of insurer. - Insurer is not liable to cover risk of claimant as he was a gratuitous passenger travelling in a private vehicle.

       Advocate has not disputed legal proposition that the legal provision applicable would be those as on the date of accident. He pointed out that Section 147 of the Act deals with the requirements (statutory) of the policy and limits of liability. That is the provision relied upon by counsel for owner as also claimant. As a result of amendment by Act 54 of 1994, brought into force with effect from14.11.1994. Section 147 has not undergone extensive amendment. In Section 147(1)(b)(i) words "injury to any person" are substituted by "injury to any person including owner of the goods or his authorised representative carried in the vehicle - Thus portion underlined (in italics) is the only addition to the said section, as a result of which it is clarified that Act only policy would cover the risk of owner of the goods or his authorised agent travelling in a goods vehicle carrying his goods for hire would be covered. This has not brought any change in the position of a gratuitous passenger travelling in a private vehicle. And therefore, law, as laid down by the reported case of Tilak Singh, would be applicable even if that accident had occurred prior to the date of amendment. This argument is required to be upheld, because Section 147 as it stood prior to 1994 amendment and as it stands after said amendment, as applicable to a gratuitous passenger in a private vehicle, has not undergone any change.

       Counsel for the Insurance Company, mainly placed reliance upon the observations of the Supreme Court in the matter of United India Insurance Co. Ltd. v. Tilak Singh and others, 2006 AIR SCW 1822. The question as to whether a gratuitous passenger would be covered by a statutory insurance policy, is discussed in paras 14 to 21. Position as under the 1939 Act is discussed in paras 15 to 18, whereas that under 1988 Act is dealt with in paras 19 to 21. In the reported matter, it was claim for compensation towards death of pillion rider Rajinder Singh. The insurance policy covering the scooter did not contain endorsement of IMI-80 which was necessary for covering liability of pillion passengers. It was one of the contentions of the insurance company that the deceased was pillion rider and insurance policy did not cover the liability towards a pillion rider.

       Referring to observations in earlier judicial pronouncements in the matter of Pushpabai v. M/s. Ranjit Ginning and Pressing Co. (P) Ltd., (1977) 2 SCC 745 and Dr. T.V. Jose v. Chacko P.M., (2001) 8 SCC 748, it was observed in para 18 :

       "Thus, even under the 1939 Act, the established legal position was that unless there was a specific coverage of the risk pertaining to a gratuitous passenger in the policy, the insurer was not liable."

       Hon’ble Supreme Court referred to the contra view taken in the case of New India Assurance Co. v. Satpal Singh and others, 2000 (1) Mh LJ (SC) 740 : (2000) 1 SCC 237, where alter contrasting t he language of Section 95(1) of the 1939 Act with the provisions of Section 147(1) of the 1988 Act, the Supreme Court has held that under the new Act, an insurance policy covering third party risk is not required to exclude gratuitous passengers in a vehicle, no matter that the vehicle is of any type or class. Further a note is taken of the fact that the view expressed in Satpal Singh ’s case has been specifically overruled in the subsequent judgment of a Bench of three Judges in New India Assurance Company v. Asha Rani and others, (2003) 2 SCC 223 and the position as under 1988 Act is concluded in para 21 thus:-

       "In our view, although the observations made in Asha Rani’s case (supra ) were in connection with carrying passengers in a goods vehicle, the same would apply with equal force to gratuitous passengers in any other vehicle also. Thus, we must uphold that contention of the appellant insurance company that it owned no liability towards the injuries suffered by deceased Rajinder Singh who was a pillion rider, as the insurance policy was a statutory policy, and hence it did not cover the risk of death of or bodily injury to gratuitous passengers."

       Thus even under 1988 Act, Act only policy under Section 147 of the said Act did not cover the risk of gratuitous passenger. As already discussed in para 12 ante, Act 1994 has only added clause "including owner of the goods or his authorised representative carried in the vehicle" after the words "injury to any person" which does not cause any change so far as position of a gratuitous passenger as under the Act before said amendment. The argument of Advocate Shri Chapalgaonkar, that insurance company is not liable to cover the risk of claimant, as he was a gratuitous passenger, is therefore required to be upheld.

       Referring to policy at Exhibit-42 in the record of the Tribunal, it was pointed out by counsel for the insurance company that a premium of Rs. 100/- is paid by the insured under IMI-5 under which Personal Accident benefits upon Rs. 50,000/- for 4 passengers, including the driver, can be conferred upon the insured. The text of IMI-5 is made available for ready reference (marked ’X’). Total liability of the insurance company towards passengers, due to payment of extra premium of Rs. 100/- is Rs. 50,000/- and as per IMI-5, personal accident benefits are 100% of it in case of death or loss of sight of both eyes, physical separation of two entire hands or two entire legs or loss of one hand + one leg or one eye + one hand or one leg. In case of total and irrecoverable loss of use of hand or foot without physical separation, liability extends to 50%. Although it is the case of claimant that he suffered fracture of leg, it is not a case of total separation but a case of total irrecoverable loss of use of a leg. The liability of insurance company, therefore, shall be 50% of Rs. 50,000/- i.e. 25,000/-.

       Motor Vehicles Act, 1988 - Sections 147(1)(b)(i) and 147(2)(a) - Liability of insurer - Gratuitous passenger - Travelling in a private vehicle - Act only policy under Section 147 of Act not covers risk of gratuitous passenger - Insurer not liable for death of or bodily injury to gratuitous passenger. - Under 1988 Act, Act only policy under Section 147 of the said Act did not cover the risk of gratuitous passenger. As already discussed in para 12 ante, Act 1994 has only added clause "including owner of the goods or his authorised representative carried in the vehicle" after the words "injury to any person" which does not cause any change so far as position of a gratuitous passenger as under the Act before said amendment. The argument of Advocate Shri Chapalgaonkar, that insurance company is not liable to cover the risk of claimant, as he was a gratuitous passenger, is therefore required to be upheld.

       Motor Vehicles Act, 1988 - Section 166 - Award of compensation - Determination of - Procedure for - Court not required to apply multiplier in strictness in application under Section 166 of Act - Court would be justified in taking a multiplier on lower side - As future income of future years is being paid to claimant in lump sum in immediate future. - The multiplier provided by IInd Schedule can be used as a guide line. The Court is not required to apply the multiplier in strictness in the applications under Section 166. Consequently, while applying the multiplier in a petition under Section 166, the Courts would be justified in taking a multiplier on lower side, because future income of future years is being paid to the claimant in lump sum in immediate future.

       Motor Vehicles Act, 1988 - Section 166 - Claim of compensation. - While applying multiplier in a petition under Section 166 of Act, Court is justified in taking a multiplier on lower side because future income is being paid to claimant.

       Taking monthly income of the claimant to be Rs. 7,500/- his annual income is taken by the Tribunal to be Rs. 90,000/-. Since permanent disability suffered is 70% the member has calculated loss of future income at the rate of Rs. 63,000/- per year (70% of Rs. 90,000/-). Taking into consideration that the claimant was aged 50 years at the time of accident, the member has taken multiplier of 11 from the IInd Schedule below Section 163-A of the Act and thus calculated the future loss of income to be Rs. 6,93,000/-. The counsel for the insurance company has taken serious exception to this. According to him, when an amount of Rs. 3,15,000/- is already awarded by way of loss of income for three and half years, these three and half years ought to have been deducted from the multiplier. This is because the claimant is nearly about 55 years old after taking into consideration these three and half years from the date of accident. Eventua lly for age group 50 to 55 years, the multiplier is 11. Here, Court must take into consideration that the multiplier provided by IInd Schedule can be used as a guideline. The Court is not required to apply the multiplier in strictness in the applications under Section 166. Consequently, while applying the multiplier in a petition under Section 166, the Court would be justified in taking a multiplier or lower side, because future income of future years is being paid to the claimant in lump sum in immediate future. Court is also in agreement with the counsel that once the petitioner is paid an amount by way of compensation towards loss of entire income of three and half years, the multiplier for the age group 50 to 55 years should not have been used. Multiplier for the age group 55 to 60 years is 8 and that should have been used. With the logic referred hereinabove, Court should use multiplier lesser than 8, say 5 or 6. However, in this case, it cannot be ignored that the claimant is a practising Lawyer and for practising Lawyer, there can be no age of retirement as in the case of serving people. Lawyers, practising even at the advance age and after crossing the age of 70 years, are not far and few and, therefore, Court is not inclined to reduce the multiplier below 8. Taking the multiplier of 8, the amount of loss of future income would calculate Rs. 63,000 x 8 i.e. Rs. 5,04,000/-.

       Muslim Women (Protection of Rights on Divorce) Act, 1986 - Sections 147(1)(b)(i) and 147(2)(a) - Liability of insurer - Gratuitous passenger - Travelling in a private vehicle - Act only policy under Section 147 of Act not covers risk of gratuitous passenger - Insurer not liable for death of or bodily injury to gratuitous passenger. - Under 1988 Act, Act only policy under Section 147 of the said Act did not cover the risk of gratuitous passenger. As already discussed in para 12 ante, Act 1994 has only added clause "including owner of the goods or his authorised representative carried in the vehicle" after the words "injury to any person" which does not cause any change so far as position of a gratuitous passenger as under the Act before said amendment. The argument of Advocate Shri Chapalgaonkar, that insurance company is not liable to cover the risk of claimant, as he was a gratuitous passenger, is therefore required to be upheld.

       Muslim Women (Protection of Rights on Divorce) Act, 1986 - Section 166 - Award of compensation - Determination of - Procedure for - Court not required to apply multiplier in strictness in application under Section 166 of Act - Court would be justified in taking a multiplier on lower side - As future income of future years is being paid to claimant in lump sum in immediate future. - The multiplier provided by IInd Schedule can be used as a guide line. The Court is not required to apply the multiplier in strictness in the applications under Section 166. Consequently, while applying the multiplier in a petition under Section 166, the Courts would be justified in taking a multiplier on lower side, because future income of future years is being paid to the claimant in lump sum in immediate future.

       Muslim Women (Protection of Rights on Divorce) Act, 1986 - Section 166 - Claim of compensation. - While applying multiplier in a petition under Section 166 of Act, Court is justified in taking a multiplier on lower side because future income is being paid to claimant.

       Taking monthly income of the claimant to be Rs. 7,500/- his annual income is taken by the Tribunal to be Rs. 90,000/-. Since permanent disability suffered is 70% the member has calculated loss of future income at the rate of Rs. 63,000/- per year (70% of Rs. 90,000/-). Taking into consideration that the claimant was aged 50 years at the time of accident, the member has taken multiplier of 11 from the IInd Schedule below Section 163-A of the Act and thus calculated the future loss of income to be Rs. 6,93,000/-. The counsel for the insurance company has taken serious exception to this. According to him, when an amount of Rs. 3,15,000/- is already awarded by way of loss of income for three and half years, these three and half years ought to have been deducted from the multiplier. This is because the claimant is nearly about 55 years old after taking into consideration these three and half years from the date of accident. Eventually for age group 50 to 55 years, the multiplier is 11. Here, Court must take into consideration that the multiplier provided by IInd Schedule can be used as a guideline. The Court is not required to apply the multiplier in strictness in the applications under Section 166. Consequently, while applying the multiplier in a petition under Section 166, the Court would be justified in taking a multiplier or lower side, because future income of future years is being paid to the claimant in lump sum in immediate future. Court is also in agreement with the counsel that once the petitioner is paid an amount by way of compensation towards loss of entire income of three and half years, the multiplier for the age group 50 to 55 years should not have been used. Multiplier for the age group 55 to 60 years is 8 and that should have been used. With the logic referred hereinabove, Court should use multiplier lesser than 8, say 5 or 6. However, in this case, it cannot be ignored that the claimant is a practising Lawyer and for practising Lawyer, there can be no age of retirement as in the case of serving people. Lawyers, practising even at the advance age and after crossing the age of 70 years, are not far and few and, therefore, Court is not inclined to reduce the multiplier below 8. Taking the multiplier of 8, the amount of loss of future income would calculate Rs. 63,000 x 8 i.e. Rs. 5,04,000/-.