NATIONAL INSURANCE CO LTD Vs. ANJANA SHYAM

JUDGEMENT

(1.) Delay condoned and leave granted in SLP(C) No.14167 of 2001.

(2.) A bus bearing registration No. HP-06-1245, owned by the Tehsil Co-operative Union and insured with the appellant met with an accident on 4.3.1996. The vehicle had a carrying capacity of 42 passengers, one driver and one conductor and in terms of Section 147(1)(b) (ii) of the Motor Vehicles Act (hereinafter "the Act") was insured for the 42 passengers. It goes without saying that the route permit of the vehicle was for carrying 42 passengers other than the driver and the conductor.

(3.) On the day of the accident, the materials indicate that the bus was overloaded. There were at least 90 passengers. The bus fell off the road into a nullah leading to the death of 26 including the one who was driving the vehicle and injuring 63 persons. The legal representatives of the deceased and the injured, all approached the Motor Accident Claims Tribunal claiming compensation and seeking its adjudging on applications made under Section 166 of the Motor Vehicles Act, 1988. The claim was resisted by the owner, the insured and by the insurance company. The insurance company mainly contended that the bus was overloaded; that it was being driven not by an authorized driver at the time of the accident; and that the insurance company had no liability. Alternatively, it was sought to be pleaded that the owner having permitted the vehicle to be overloaded had committed a fundamental breach of the contract of insurance and therefore the insurance company could repudiate the policy and hence was not liable for the compensation that may be adjudged. The Tribunal had brushed aside these objections and passed various awards on the various claims and made the insurance company liable for paying the amounts covered by all the awards exceeding the 42 covered by the insurance. Feeling aggrieved, the insurance company filed 38 appeals challenging the awards. In the appeals, an application was made seeking impleadment of the State of Himachal Pradesh. This was on the basis that the authorities under the State had failed to check the overloading of the bus and it was due to the negligence of the authorities of the State in not checking overloading and adherence to the conditions of the permit by the owner of the vehicle and the relevant provisions of the Act that the accident had occurred and hence the State must be found to be liable in contributory negligence and for that purpose it was just and necessary to implead the State as a party to the proceedings. An amendment of the written statement of the company was also sought for to introduce the plea that the bus carried 90 passengers at the time of the accident as against the sitting capacity of 42 including the driver and the conductor and in that situation the liability should be apportioned between the insurance company, the owner and the State and the insurance company could be found liable only to the extent of the insurance it had provided and it was bound to provide in terms of Section 147 of the Act and in terms of the conditions of the permit held by the owner of the bus. The Insurance Company also sought permission to raise other contentions which were not normally open to it, by invoking Section 170 of the Act. The High Court taking the view that overloading of the bus which had a permit to ply on the route with only 42 passengers, did not amount to violation of the route permit or any other law for which the State Government could be held to be contributorily negligent and that the insurance company was liable to pay the amounts as awarded by the Tribunal since it could not also question the quantum of compensation awarded. Thus, the High Court dismissed the appeals filed by the insurance company. It also dismissed the three appeals filed by three different claimants seeking enhancement of compensation in their respective cases. The insurance company has filed Civil Appeal Nos. 2422-2459 of 2001 challenging the decision of the High Court.