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High Court Of Allahabad
K. C. Agrawal, O. P. Saxena, JJ.
Divisional Manager, Life Insurance Corporation Of India, Varanasi : Appellant
Versus
Raj Kumari Mittal : Respondent
F.A.F.O. No. 425 of 1980
Decided On : Nov 11, 1983
MOTOR VEHICLES ACT - SECTION 110-B - LIABILITY OF OWNER - SECTION 2(19) - DEFINITION OF OWNER - HIRE PURCHASE AGREEMENT - INSURANCE - LIABILITY OF INSURANCE COMPANY - SECTION 96(2) - BURDEN OF PROOF.
Fact of the Case:
A fatal accident occurred involving an Ambassador car driven by R. K. Ahuja, resulting in the death of Santosh Behari Mittal, an advocate. The deceased's family filed a petition under Section 110-A of the Motor Vehicles Act, claiming compensation from the car owner, Divisional Manager, Life Insurance Corporation of India, Varanasi (opposite party 1), the insurer, Oriental Fire and General Insurance Co. Ltd. (opposite party 2), and the driver, R. K. Ahuja (opposite party 3).
Finding of the Court:
The Tribunal held R. K. Ahuja responsible for the accident due to rash and negligent driving and imposed joint liability on all opposite parties to pay compensation of Rs. 2,10,500/- to the claimants. The compensation included amounts for the deceased's death, loss of conjugal rights, mental torture, and loss of fatherly love and care. The Tribunal directed opposite party 1 to pay Rs. 1,40,500/-, opposite party 2 to pay Rs. 50,000/-, and opposite parties 3 and 4 to pay Rs. 10,000/- each.
Issues: 1. Whether the Divisional Manager, Life Insurance Corporation of India, Varanasi, is liable to pay compensation as the owner of the vehicle under Section 110-B of the Motor Vehicles Act, despite the existence of a hire purchase agreement? 2. Whether the Insurance Company is liable to indemnify the owner for third-party risk, considering the driver's lack of a valid license and the breach of policy conditions? 3. Whether the compensation awarded by the Tribunal is excessive or inadequate?
Ratio Decidendi: 1. The Court interpreted Section 2(19) of the Motor Vehicles Act, which defines 'owner' in relation to a hire purchase agreement. It held that for the purposes of the Act, the person in possession of the vehicle under a hire purchase agreement is deemed to be the owner, excluding the general law owner. Therefore, the Divisional Manager, Life Insurance Corporation of India, was not liable to pay compensation as the owner. 2. The Court analyzed the insurance policy and found that the Insurance Company was aware of the hire purchase agreement and that Sri B. S. Ahuja, the person in possession of the vehicle, was co-insured. The Court held that the Insurance Company could not avoid liability based on the owner's non-liability since the other insured person was liable and there was a covenant to indemnify in case of accidents. 3. The Court determined that the compensation awarded by the Tribunal was excessive and reduced it to Rs. 1,53,200/-. It also clarified that the Insurance Company's liability extended to the full amount of liability incurred, not limited to Rs. 50,000/- as per the Tribunal's order.
Final Decision: The Court dismissed the appeal filed by the claimants seeking an increase in compensation. It allowed the appeal filed by the Divisional Manager, Life Insurance Corporation of India, and dismissed the petition against him with costs. The Court partly allowed the appeals filed by the Insurance Company and Sri B. S. Ahuja, modifying the Tribunal's award to Rs. 1,53,200/- with interest and costs. The Court directed the Insurance Company to indemnify Sri B. S. Ahuja and deposit the entire amount in Court within three months, allowing the claimants to withdraw their respective shares.
O. P. Saxena, J.
1. THESE are four connected FAFOs against the order dated 8-5-80 passed by the Motor Accident Claims Tribunal (II Additional District Judge), Allahabad.
2. THE petition related to an accident in which Sri Santosh Behari Mittal, Advocate, received serious injuries and succumbed to the same. THE accident took place on the 6th of July 1975 at about 9 a. m. on the crossing of Sarojini Naidu Marg and Mahatma Gandhi Marg which is in the form of a circle around the Church in the centre. THE place of the accident was on the southwestern sector of the circle near the turning of Mahatma Gandhi Marg. THE deceased was on his way home from the Allahabad Junction Railway Station. He was going on a rickshaw. Ambassador car UPF 6720 dashed against the rickshaw from the rear side. THE rickshaw was on the left side of the road and the car was driven rashly and negligently. No horn was blown. As a result of the accident the rickshaw was smashed and the deceased received severe injuries. THE car was being driven by opposite party No. 3 R. K. Ahuja at a very high speed and he could not bring it to a stop for a considerable distance. Claimant No. 1 is the widow. Claimants 2 and 3 are the minor sons of the deceased. It was said that the deceased was earning not less than Rs. 1,000/- per mensem as a practising lawyer of the Allahabad High Court. THE car was registered and insured in the name of opposite party No. 1 Divisional Manager, Life Insurance Corporation of India, Varanasi. THE car was in actual use of opposite party No. 4 B. S. Ahuja who was employed as Assistant Branch Manager, Life Insurance Corporation of India, Gyanpur Branch. A sum of Rs. 3,00,000/- was claimed as compensation.
Opposite party No. 1 contested the petition with the allegations that it had no knowledge of the accident, that opposite party No. 4 Sri B. S. Ahuja was for all practical purposes the owner of the car, that there was a Hire Purchase Agreement between the opposite party No. 1 and opposite party No. 4, in accordance with which the opposite party No. 1 advanced the money for the purchase of the car to opposite party No. 4 who was an employee of the Life Insurance Corporation of India, that under section 2 (19) of the Motor Vehicles Act, opposite party No. 4 was the owner and was responsible, that the compensation claimed is highly excessive, that the Oriental Fire and General Insurance Co. Ltd. was the insurer of the vehicle for third party risk and that the opposite party No. 1 is not liable for any damages.
3. OPPOSITE party No. 2 Oriental Fire and General Insurance Co. Ltd. contested the petition with the allegations that it had no knowledge of the accident, that the car was in the possession of opposite party No. 4 B. S. Ahuja subject to a Hire Purchase Agreement, that opposite party No. 3 R. K. Ahuja had no driving licence, that the opposite party No. 2 is not liable to pay any compensation under the Insurance Policy, that the death was not caused due to rash and negligence driving of the car and that the compensation claimed is highly excessive.
4. OPPOSITE party No. 3 R. K. Ahuja contested the petition on a plea of denial. His case was that he was not driving the vehicle and no accident was caused by him.
Opposite party No. 4 B. S. Ahuja also contested the petition on a plea of denial. It was said that no accident was caused by UPF 6720.
5. THE Tribunal held that opposite party No. 3 R. K. Ahuja was driving the car rashly and negligently and the accident was caused as a result thereof, that all the opposite parties are liable to pay compensation under section 110-A of the Motor Vehicles Act and that claimants are entitled to get a total sum of Rupees 2,10,500/- as compensation as per details given below :- Rs. 1,30,500/- for death of Sri Santosh Behari Mittal. 30,000/-For loss of conjugal rights and comforts suffered by applicant No. 1 Smt. Raj Rumari Mittal. 20,000/- For mental torture and agony caused to applicant No. 1 Smt. Raj Kumari
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