Case Name: United India Insurance Company Limited v. Chandrakant Vishandas Harwani & Ors.
Case Number: R/First Appeal No. 602 of 2013 with R/Cross Objection No. 85 of 2013
Date: Tuesday, Twenty-Second of September, Two Thousand and Twenty-Six
Court: High Court of Gujarat at Ahmedabad
Quorum: Justice N.S. Sanjay Gowda and Justice J.L. Odedra
FACTS
On 07.05.1990, the Claimant was travelling in a truck owned by his brother-in-law when an accident occurred and the truck turned turtle which caused him grievous injuries. On 09.11.1998, about eight years after the accident, he filed a claim petition contending that he had become permanently disabled and paraplegic. The Insurer contested the claim on the ground that on the date of the accident it was under no liability to cover the risk of occupants in the truck, and also argued that the amount claimed was excessive. The Motor Accident Claims Tribunal held that the accident was caused due to the negligence of the truck driver and held the Insurer liable while awarding compensation of Rs. 13,06,000. For the same, the Claimant’s monthly income was assessed at Rs. 2,250. Aggrieved, the Insurer filed this Appeal before the High Court, while the Claimant filed Cross Objection seeking enhancement.
LEGAL ISSUES
- Whether the Insurer could be made liable for injuries to an occupant of a goods vehicle when the liability was said to have been fastened on insurers only from 1994 by an amendment to Section 147(1)(b)(i)?
- Whether the compensation awarded by the Tribunal required enhancement?
LEGAL PROVISIONS
- Section 147(1)(b)(i) of the Motor Vehicles Act, 1988- Mandates a policy of insurance to insure the persons or classes of persons against liability in respect of death or bodily injury, damage to the property of a third party which is caused by the use of the motor vehicle in a public place.
- Rule 122(1) of the Gujarat Motor Vehicles Rules, 1989- Bars the carriage of persons in a goods carriage but it permits the owner, the hirer, or a bona fide employee of the owner or hirer to be carried free of charge.
ARGUMENTS
INSURER (APPELLANT)- The Insurer argued that no liability was cast on them to cover the risk of an occupant of a truck since this liability was fastened on insurers only from 1994 by amending Section 147(1)(b)(i). It was submitted that the Tribunal’s award should not bind the Insurer and that it was always open to the Claimant to proceed against the owner of the truck. It was further argued that there was no credible evidence that the Claimant was travelling with his goods in the truck. The Insurer also contended that the sums awarded were excessive and relied on The New India Assurance Company Limited v. Asha Rani 202 (0) AIJEL-SC 19625.
CLAIMANT (RESPONDENT)- The Claimant argued that the policy covered the risk of occupants in the truck, since its limitations required that the vehicle be used only as permitted under the public carriers’ permit. Relying on Rule 122 of the Gujarat Motor Vehicles Rules, it was submitted that the owner of goods could be carried free of charge in a goods carriage and that there was clear evidence that the Claimant was travelling with his goods. Hence, the Insurer was contended to be held liable. Additionally, the compensation was argued to be inadequate as Future Prospects had not been granted and, the Claimant being completely disabled and paraplegic, reasonable sums were required for Attendant Charges and Loss of Amenities.
ANALYSIS
On the facts, the Court found that the Claimant had specifically pleaded that he was travelling in the truck with fire bricks and clay items to be sold in Madhya Pradesh. His wife stated in cross-examination that he earned his livelihood by selling these commodities and was carrying them in his brother-in-law’s truck to Indore. The Insurer did not even suggest that this was false. Therefore, the Court held that the Claimant was not a gratuitous passenger and was entitled to be carried in the truck free of charge.
On the law, the Court observed that although Rule 122(1) imposes a bar on carrying any person in a goods carriage, the hirer of the goods or his employee is permitted to be carried in the truck free of charge. Reading Section 147(1)(b) in conjunction with Rule 122(1) and its proviso, the Court held that the owner of the truck was entitled to carry the hirer of his vehicle free of charge. Section 147(b) consequently requires the Insurer to cover the liability for such persons carried in a goods carriage. Additionally, the Court noted that the policy was admittedly a comprehensive policy, under which the occupants of the vehicle would also be covered. The Insurer’s arguments on liability were therefore rejected.
On quantum, the Court found no fault with the Tribunal’s assessment of monthly income at Rs. 2,250 in the absence of documentary evidence. The Court added 40% relying on National Insurance Company Limited v. Pranay Sethi, (2017) 16 SCC 680 as Future Prospects, taking the monthly income to Rs. 3,150. Applying a multiplier of 18 for the Claimant’s age of about 25 years, Loss of Future Income came to Rs. 6,80,400. Lastly, since the Claimant had become a paraplegic and bedridden, the Court enhanced the compensation by Rs. 5,74,400.
JUDGEMENT
The Gujarat High Court dismissed the Insurer’s appeal and allowed the Claimant’s cross-objection in part. The compensation was enhanced to the total of Rs. 18,80,400. Interest at 9% per annum is payable only on Rs. 4,74,400 from the date of the claim petition till the date of payment, and the Insurer was granted ten weeks to deposit the amount.
CONCLUSION
The Court held that where the Motor Vehicles Rules permit the owner of goods to be carried free of charge in a goods carriage and the policy covers use of the vehicle under the public carrier permit, the Insurer cannot avoid liability for such a person on the plea that he was a gratuitous passenger.
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Read the Judgment copy below : UNITED INDIA INSURANCE COMPANY LIMITED Versus CHANDRAKANT VISHANDAS HARWANI & ORS
