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2007 (1) CPR 32 (NC)
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION,
NEW DELHI
M.B. Shah, President and Rajyalakshmi Rao, Member
Vadodara Municipal Corporation—Appellant
versus
Purshottam V. Murjani etc. etc.
& Ors.—Respondents
First Appeal No. 464 of 2002 connected with other 21 appeal Nos. 488 of 2002, 197 of 2003, 61 to 77 of 2003, 210 of 2003, 211 of 2003, 212 of 2003, 213 of 2003, 214 of 2003, 215 of 2003, 216 of 2003, 217 of 2003, 218 of 2003, 219 of 2003, 220 of 2003, 221 of 2003, 222 of 2003, 223 of 2003, 224 of 2003, 225 of 2003, 226 of 2003 and 288 to 300 of 2004
All decided on 2-11-2006
For the Appellant (Vadodara Municipal Corporation):A.N. Haksar, Senior Advocate with Mr. K.S. Nagra, Mr. V. Jain and Ms. Reeta Mishra, Advocates.
For the Respondent (Ripple Aqua Sports):Mr. S. Sanyal, Advocate for Mr. R.S. Suri, Advocate.
For the Original Complainant:Mr. K.L. Janjani, Mr. V.N. Tiwari and Mr. P.K. Singh, Advocates.
For the Insurance Company:Mr. P.K. Seth, Advocate.
IMPORTANT POINT
Both Contractor and Vadodara Municipal Corporation are jointly and severally liable to pay compensation to the complainants for boat accident in “Sur Sagar Lake” near city of Vadodara under Consumer Protection Act, 1986.
Headnote:(i) Consumer Protection Act, 1986 —Section 19—Appeal to National Commission—Contract between Municipal Corporation and Aqua Sports Contractor for the activity of playing boats for Joy rides in ‘Sur Sagar Lake’ near the city of Badodara—Boat ride over loaded with passengers—Accident—22 passengers dying—Liability for compensation—State Commission holding Corporation and Contractor are liable jointly and severally—Whether correct? (Yes)—State Commission directing payment of interest @ 10% p.a. from date of accident till payment—Whether correct? (Yes).
Held: From the facts stated above, it is apparent that in a boat having sitting capacity of 20, 38 passengers were taken, and, this has resulted in the catastrophe of boat being capsized in the lake. Despite the efforts to save the drowning passengers, 22 passengers died. For this catastrophe there cannot be any doubt that the ‘Aqua Sports’ is liable for the damages. The primary liability to compensate the victims or the heirs of the victims rest upon the ‘Aqua Sports’. (Para 10)
Held Further: It is rightly contended by the learned Counsel for the Complainants that the officers of the Corporation were required to check the boating equipment and were also required to see that the contractor (i.e. the Aqua Sports) uses the boat as per the sitting capacity. In our view, it is careless conduct on the part of officers of the Corporation in not keeping any vigil in enforcing the term of the license deed whereby it was not open to the licensee to carry persons in excess of the capacity of the boat. Much care and caution was expected on a holiday when there would be heavy rush from the officers of the Corporation and the Manager of the Aqua Sports to carry persons in excess of the capacity of the boat. (Para 20)
Undisputedly, boating activity in such a big lake was having inherent risk. There should be appropriate provisions for life guards and life saving equipments so as to protect the passengers in case of accident when the boat is in deep waters of the lake. It has come on record that the Corporation has not appointed any life guards/swimmers or no life saving equipments were made available in the boat or in the vicinity to enable the saving of the human life in case of occurrence of an accident. (Para 21)
Held consequently: the Ripple Aqua Sports and the Vadodara Municipal Corporation are jointly and severally liable to pay the compensation to the Complainants as awarded;
The rest of the order passed by the State Commission directing payment of interest at the rate of 10% p.a. from the date of the incident, i.e. from 11.8.1993 till the date of payment of compensation is confirmed. (Para 86)
(ii)Consumer Protection Act, 1986—Section 17—Jurisdiction of State Commission—Bombay Provincial Municipal Corporation Act, 1949—Sections 63 and 66—Statutory function of the Vadodara Municipal Corporation under—Corporation as licence or of playing boats for joy rides in ‘Sur Sagar Lake’ giving licence to contractor Aqua Sports—Boat accident—Complainants to State Commission—Whether maintainable? (Yes). (1997) 9 SCC 552 rel. on.
Held: Before the State Commission, it was contended that complaint was not maintainable before the Consumer Fora because Corporation was carrying out its statutory obligations under Section 63/66 of the Municipal Corporation Act to provide joy ride boating facility in the Sur Sagar Lake. (Para 12)
The State Commission rightly negatived the said contention of the Corporation that the complaints were not maintainable because Corporation was discharging its statutory duty in carrying out boating activity in Sur Sagar Lake. (Para 13)
(iii) Consumer Protection Act, 1986—Section 14—Compensation—Extent of liability of Insurance Company—Two policies on record—22 persons dying—State Commission directing Insurance Company to indemnify a sum of Rs. 1 lakh per person—Initial policy providing Rs. 20 lakh for each accident but in aggregate to Rs 80 lakh—unilateral charge of material terms of contract by Insurance Company without consent of insured—Whether binding? (No). (1996) 6 SCC 428 foll.
Held: In our view, the insurance policy which was first issued limiting the liability of the Insurance Company to Rs. 20 lakhs for any accident and Rs. 80 lakhs in aggregate for the period of policy is to be accepted as it is. This part of the policy is core of the contract and we are not modifying it by any interpretation. It is to be remembered that the concept of good faith i.e. uberrima fides is not only applicable to the insured but also to the insurer. That is the law laid down by the Supreme Court in the case of Pushpalaya Printers (supra). (Para 41)
In our view, the limit of indemnity for one accident would be Rs. 20 lakhs and for one period of insurance, it would be Rs. 80 lakhs. So, in all, the maximum limit of liability would be Rs. 80 lakhs. (Para 43)
(iv) Consumer Protection Act, 1986—Sections 19 and 14—Cross appeals for enhancement of compensation—State Commission awarding in six cases according to income age and correct multiplier—Whether needs any enhancement? (No)
Held: A. In our view, the order passed by the State Commission, in First Appeal No. 488 of 2002; First Appeal No. 289 of 2004; First Appeal No. 290 of 2004; First Appeal No. 292 of 2004; First Appeal No. 295 of 2004; and, First Appeal No. 296 of 2004, does not call for interference, because the State Commission has awarded compensation on the basis of the income and by adopting correct multiplier. In addition, the State Commission has also awarded compensation after taking into consideration the other relevant factors such as the age of the deceased, the dependency benefit, etc. In all these appeals, the prayer is to award the compensation as prayed in the complaint before the State Commission. (Para 44)
(v) Consumer Protection Act, 1986—Sections 19 and 14—Compensation in case of minor—Motor Vehicles Act, 1988—Second Schedule—State Commission assuming that after marriage, girls would not contribute anything to the assets of the parents—Whether correct? (No)—Compensation modified.
Held: For determining compensation in case of minor there cannot be any definite criteria. However, it would be just and reasonable to adopt the formula given by the second Schedule to the Motor Vehicles Act, 1998. Second Schedule to the Motor Vehicles Act, in case of minor or non-earning persons, provides notional income for determining compensation. For non-earning persons it is stated at Rs. 15,000 per annum. Again, for the minor upto the age of 15 multiplier prescribed is 15. That would mean that in such cases compensation can be upto Rs. 15,000 x 15 = Rs. 2,25,000 and one-third is to be deducted for self-maintenance. That would come to Rs. 1,50,000. However, the State Commission has awarded either Rs. 50,000 or Rs. 60,000 on the assumption that after marriage, girls would not contribute anything to the assets of the parents. In our view, this is on an erroneous assumption. Girls are also assets to the parents. They can also contribute from their income in case of necessity. Second Schedule to the Motor Vehicles Act does not discriminate between boy and girl and it specifically provides that compensation shall not be less than
Rs. 1,00,000. So, we adopt this figure of
Rs. 1 lakh in case of minor girls. (Para 61)
Held Consequently: It is held that the complainants are entitled to have compensation of:
(i) Rs.1 lakh in each Appeal Nos. 288 of 2004; 291 of 2004. and 294 of 2004;
(ii) Rs. 1,25,000 in each Appeal Nos. 297 of 2004 and 299 of 2004;
(iii) Rs. 1,50,000 in each Appeal Nos. 293 of 2004; 298 of 2004; and 300 of 2004. (Para 91)
Result: Appeal disposed of accordingly.
M.B. Shah, President—The undisputed facts as found by the State Commission are:
There is a lake known as ‘Sur Sagar Lake’ near the city of Vadodara which has been under the control and management of Opposite Party No. 1 Vadodara Municipal Corporation (hereafter referred to as the Corporation). Initially, it started the activity of plying boats for joy rides and boating club, but subsequently for the period commencing from 26.9.92, it entrusted the activity of plying boats to Opposite Party No. 2 Shri Patheja of Ripple Aqua Sports (hereinafter referred to as the Aqua Sports) under a contract. The Corporation is, admittedly, having consideration from the Aqua Sports for carrying on the activity of recreation and/or entertaining the citizens/passengers by way of boat rides/joy rides in the boat(s) provided by the Opposite Party No. 1, Corporation to the Aqua Sports.
2. Under the contract entered into between the Opposite Party Nos. 1 and 2, appropriate cover of insurance was to be taken by the Aqua Sports and it had taken an insurance policy in question from the opposite Party No. 3 M/s. Oriental Insurance Co. Ltd. (hereinafter referred to as the Insurance Company).
3. On the fateful day, i.e. 11.8.1993, being a public holiday on account of the holy festival of Janmashthami, many inhabitants of the city of Vadodara had gone for boat ride at the Sur Sagar Lake. One Mr. Panikar, Supervisor of the Aqua Sports issued entry tickets to the passengers and each ticket was issued for a consideration of Rs. 3 per passenger. Admittedly, the capacity of the boat was of 20 passengers and on the aforesaid occasion 38 passengers were accommodated in the boat. It is not in dispute that the boat capsized while it was at a place near/opposite Pratap Talkies and Sagar Hotel in the lake. Mr. Paniker and the 22 passengers who could not swim
and who could not be saved by the saving operation undertaken by the swimmers
out of the people collected nearby the
lake and the persons from the fire brigade, died.
4. Hence, Complaint Nos. 21 of 1994 and others were filed before the State Commission, Gujarat. By judgment and order dated 23.9.2002 the complaints were partly allowed and the Vadodara Municipal Corporation, Opposite Party No. 1, and Shri Patheja, Ripple Aqua Sports Opposite Party No. 2, were directed to pay the amount as determined by it with interest at the rate of 10% p.a. from the date of the incident, i.e. from 11.8.1993 till its payment. It is also directed that in each complaint Opposite Parties No. 1 and 2 would pay costs quantified at Rs. 1,000.
5. The Insurance Company, Opposite Party No. 3, before the State Commission, was directed to indemnify a sum of Rs.1 lakh per person who died in the accident and for whom the insurance claim has been preferred by the Complainants and in whose case a sum over and above Rs.1 lakh is awarded subject to the rider that where the amount awarded by the State Commission is less than Rs.1 lakh, the Insurance Company would deposit that amount with the Commission. It was also clarified that liability of paying the interest would be in addition to the award of Rs.1 lakh per person. The balance amount was directed to be deposited by the Opposite Parties Nos. 1 and 2. It was also clarified that Vadodara Municipal Corporation was entitled to recover such balance amount from the Opposite Party No. 2.
6. Against that judgment and order, the Vadodara Municipal Corporation has preferred Appeal Nos. 464 of 2002; and, 61-77 of 2004; the contractor has preferred Appeal Nos. 197, 210-226 of 2003 and, the Complainants have preferred cross-appeals No. 488 of 2002; and Nos. 288-300 of 2004 seeking enhancement of compensation. All these appeals are heard together and are being disposed by this Commission by this common judgment and order.
Submissions of the Corporation
7. At the time of hearing of these appeals, learned Senior Counsel Mr. Haksar appearing on behalf of the Corporation submitted that the order passed by
