Cases Referred:

Advocates Appeared:
Advocate For Appellant: V.S. Malhotra
Advocate For Respondent: Ch. Inder Dass
Advocate For Respondent: Ishwar Singh

Bhat J,

(1) This appeal as well as the cross-objections to the appeal arise out of a decree passed by the learned District Judge Jammu on 22-2-65 whereby he has passed a decree for Rs. 6685.37 and costs in favour of the respondent No. 1 against defendants 1 and 2. The decree was exparte against defendant 1. The third defendant was absolved from any liability under the terms of this decree.

The facts giving rise to the present litigation are that the plaintiff, who is an Excise & Taxation Officer Jammu, was going on his scooter alongwith Balbir Singh PW from Shankar Talkies to the city on 20-2-61 at 10-30 PM When he reached the crossing near the Jewel Talkies, defendant 1 Dwarika Nath was driving a truck No. 8446 J & K on the BC Road on the wrong side at a very high speed rashly and negligently ; and, while negotiating the bend at the crossing, his scooter was dashed by the truck. Both the plaintiff Sudesh Kumar and his companion were thrown off the scooter and sustained injuries. The plaintiff suffered from the fracture of his left thigh femur which permanently disabled him. He also received other injuries and his scooter was badly damaged. He was sent to the Civil Hospital at Jammu for treatment. He was kept an indoor patient there and his leg was set right ; but after he was discharged from the hospital it was discovered that the fracture had been wrongly set. He had afterwards to go for medical treatment to Amritsar. He was practically confined to bed for more than five months. According to the plaintiff, defendant 2 Roshan Lal Bhalla was the owner of the truck, defendant 1 its driver and defendant 3 the insurance company with which the truck was insured. The plaintiff claimed a decree for Rs. 10,000 on the following grounds : -

1) Rs. 1000 on account of damage caused to the scooter.

2) Rs. 1500 on account of expenses incurred on the medical treatment of the plaintiff.

3) Rs. 7500 on account of injuries actually received shortening the expectancy of his life and person.

(3) The defendant 1 the driver remained exparte and he has continued so even in this appeal. The other two defendants 2 and 3 put in separate written statements, but the defences taken by them were more or less common. The defendant No. 2 denied the ownership of the truck and both defendants denied that the defendant 3 was at all liable for any amount to the plaintiff. About the accident it was stated that defendant 1 was not at all responsible for causing the accident; he never drove the truck rashly or negligently. The plaintiff was alleged to be guilty of negligence and it was further averred that the accident was the result of the negligence of the plaintiff. Defendant 3 took the further plea that the truck was insured with Shri Tek Chand Nanda. The quantum of damages claimed was also challenged.

(4) The following issues were framed by the court:

1. Whether the defendant No. 1 was driving the truck No 8446 J & K rashly and negligently and was on the wrong side at the time of the accident ? OPP

2. Whether the scooter of the plaintiff was badly damaged and the repairs have cost Rs. 1000, OPP

3. Whether the plaintiff has been disabled permanently ? OPP

4. Whether the plaintiff is entitled to Rs. 1500 alleged to have been spent on his treatment ? OPP

5. Whether the defendant No. 2 is the owner of the truck and is liable for damages. OPP

6. Whether the plaintiff is entitled to Rs. 7500 on account of shortening of expectancy of life and personal suffering? OPP

7. Relief.

(5) On issues the finding of the trial court was as under. It held issue 1 proved in favour of the plaintiff. It allowed Rs. 185,37 as the cost of the repairs of the scooter. About the permanent disability of the plaintiff it held that there was a permanent disability of 10 degree flexion of the left knee of the plaintiff due to the accident. Issue 4 was held proved in favour of the plaintiff and Rs. 1500 were allowed to him as the cost of his treatment. On issue 5 the finding of the trial court was that defendant 2 was the owner of the truck and was liable for damages. About issue 6 the trial court awarded Rs. 5000 to the plaintiff as general damages and damages on account of personal suffering etc. The trial court, therefore, decreed the suit for Rs 6635.37 against defendants 1 and 2. No decree was passed against the insurance company defendant 3.

An appeal has been preferred against this decree of the trial court by defendant 2 claiming the dismissal of the suit and similarly the respondent Sudesh Kumar plaintiff has filed cross-objections to the effect that the decree passed by the trial court be enhanced by Rs. 2500.

(6) We have heard the learned counsel for the parties. Mr. Malhotra, learned counsel for the appellants Roshan Lal and Tilak Raj raised an argument that the trial court had been wrong in allowing defendant 3 to raise pleas which in law it could not. Further he prayed that if any decree were to be passed, a decree should be passed against insurance company also. According to Mr. Malhotra the number of defences that could be taken by an insurer were limited in terms of S. 96 of the Motor Vehicles Act No. 12 of 1941. Beyond that an insurer could not defend a suit on merits. In support of this argument he has relied on a Supreme Court authority reported as AIR 1959 SC 1331 which lays down that apart from the statute, an insurer has no right to be made a party to the action by an injured person against the insured causing the injury. S. 96 (2) gives him a right to be made a party to the suit and to defend it. This right is created by the statute and is circumscribed by the Statute itself. This subsection clearly provides that an insurer to an action is not entitled to take any defences which are not specified in this section. When the grounds of defences have been specified, they cannot be added to. The only manner of avoiding liability provided for in sub-S. (2) is through the defences therein mentioned. Therefore when sub-S (6) talks of avoiding liability in the manner provided in Sub-S. (2) it necessarily refers to a defence. It cannot therefore be said that-in enacting the sub-section the legislature was contemplating only those defences which were based on the conditions of the policy.

(7) According to Mr. Malhotra the insurance Company could not defend the suit on merits and could not take any plea which was not covered by S. 96 (2), clauses (a) (b) and (c) of that sub-section. Therefore the trial court was wrong in allowing the insurance company to defend the suit on its merits The insurance company was liable according to him for making the payment of the decretal amount if any to the plaintiff. While appreciating the originality of the argument, we are afraid that the argument as advanced has no substance. The defences enumerated in S. 96 (2) which are open to an insurer are subject to the provisions of S. 95 of the same Act. S. 96 lays down that a policy of insurance must be (a) issued by a person who is an authorised insurer, (b) must insure the person or class of persons specified in the policy etc. Sub-S. (2) of S. 95 lays down the limits of the responsibility of the insurer. S. 95 (3) further lays down that a policy shall be of no effect unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance or a cover note in the prescribed form containing the particulars of any condition subject to which the policy is issued. Therefore reading sub-Ss. (1) (b) and (3) of S. 95 together or even independently, it is necessary that there must be an insurer and there must be a definite person in whose favour the insurance has been effected. He must have a certificate or a cover note to that effect.

(8) In this case the insurer defendant 3 is there, but the whole thing that is material for the disposal of this appeal and this argument of the learned counsel is that the certificate of insurance must be in favour of the person by whom the policy is effected and it must favour that particular person. In this case the certificate of insurance is in favour of Shri Tek Chand Nanda through Roshan Lal Bhalla, which shows that the person in whose favour the insurance has been effected is Mr. Tek Chand Nanda. Roshan Lal according to the insurance certificate is or had been only an agent of Mr. Tek Chand Nanda. This fact is further proved from the statement of Narendra Kumar PW, office Assistant of the Zenith Insurance Co. According to him the vehicle under reference, J & K 8446, was insured in the name of Shri TC Nanda. Rs. 1158 88 were claimed in respect of injury to this truck and Mr. Nanda was paid Rs. 375 on the basis of this claim. Mr Roshan Lal when he appeared as a witness tried to state that he had received the insurance money, but towards the end of his statement he says that he does not remember whether the cheque was issued in favour of Tek Chand Nanda by the insurance company or in his favour. In view of this statement, the limitation placed by S. 96 (2) of the Motor Vehicles Act cannot be helpful to the appellant. The condition precedent for the enforcement of that limitation is that there must be no dispute on the point as to who is the insurer and who is the insured 5 otherwise if the argument of Mr. Malhotra were accepted, it would result sometimes in a very anomalous position. One can visulize a case brought by a certain insured person against an insurance company which had nothing to do with the person insured and which had not at all insured that particular person or his property. If some person, may be the insured or some other person who would sue the insured were to bring a suit against the insured as well as against an insurance company which had nothing to do with the insured it would be a mockery of justice if the insurance company were not allowed to plead that they had nothing to do with the person alleged to have been insured and had not issued any certificate in his favour. This interpretation of law is clearly supported by the Supreme Court authority referred to by Mr. Malhotra himself. Para 4 of that judgment begins with the words it may be stated that the policies that were stated were in terms of that Act and the certificate mentioned in S. 96 had been duly issued, which shows that there was no dispute between the insurer and the insured in that case. When the very basis of the insurance as to the respective parties to the insurance is disputed, an insurance company can very safely take the plea that the certificate of insurance issued by it does not favour the person alleged to be insured. Moreover in our opinion this argument of the learned counsel is not tenable for the following ground also.

(9) When the suit was brought the defence of both the defendants, i e., Roshan Lal and the insuarance company was that Mr. Roshan Lal was not the owner of the truck and both were in agreement in stating unequivocally that the insurance company was not liable towards the plaintiff at all. Reference may be made to para 11 of the written statement of Roshan Lal and the same paragraph of the written statement of the insurance company. At that time both the defendants were out to defeat the plaintiff challenging all the allegations made by him. Now that defendant 2 has been found liable for a particular sum he has changed his stand that if the claim of the plaintiff is to be decreed it is sought to be decreed against the insurance company also. The relevant paragraph in the ground of appeal also is para 8 which makes only an indirect reference to respondent No. 2 which is the Zenith Insurance Co. The relief para of the appeal does not at all state that if any decree be passed, the respondent 2, the insurance company should be made liable. The only relief claimed is that the suit be dismissed with costs. Therefore this argument of the learned counsel for the appellant that the decree should be passed against respondent 2 is without any force and is rejected.

(10) Mr. Inder Das learned counsel for the plaintiff respondent also tried to support Mr. Malhotra on this ground, but his argument also does not deserve any consideration in view of the above findings. Moreover he has not sought any modification in the decree of the trial court so far as respondent 2 is concerned. He has not prayed for any decree against the insurance company ; he has only claimed an enhancement of the decretal amount by Rs. 2500 and nothing more.

(11) We might now take up the finding on issue 1. (Note : The court then discussed the evidence and proceeded--Editor) It has discussed the statements of the witnesses produced by the defendants and in our opinion their statements have been rightly rejected. We need not repeat the grounds of the rejection of their evidence.

(12) Issue 2. (Note : The court then discussed the evidence on the issue and proceeded. -Editor). We think that the trial court has given very good reasons for allowing only this much amount for the repairs of the scooter to the plaintiff. Therefore we confirm the finding on issue 2.

(13) Issue 3. (Note : The court discussed the evidence on the issue and proceeded-Editor). In the opinion of these doctors there is a permanent disability in the left leg of the plaintiff in that he has got a 10 degree flexion of the left knee which was the result of this accident.

(14) Issue 4. (Note : the court discussed evidence on the issue and held-Editor). In view of these expenses the trial court has rightly allowed the claim of the plaintiff for Rs. 1500 on this score.

(15) Issue 5.

About the fifth issue the defendant No. 2 has taken contradictory positions. In the written statements both the defendants 2 and 3 deny that the truck belonged to defendant 2, but when defendant 2 appeared as his own witness he admitted that he was the owner of the truck. The truck used the permit of T.C Nanda. There was some sort of partnership between Nanda and Roshan Lal which had been dissolved and this truck was the exclusive property of defendant 2. The defendant 2 further admitted both in the written statement and in his statement that Dwarka Nath defendant 1 was the driver of the truck on the relevant date.

Some other points were argued which have a bearing on this issue, but they will be discussed after the findings on the different issues are recorded because those matters being connected with this issue are, also covered by the last issue which pertains to relief.

Issue 6. (Note : The court then discussed the evidence and proceeded-Editor). In this case it has further been found that the plaintiff remained confined to bed. He got a fracture resulting in a permanent disability of his leg as indicated above. The question of quantum of damages has to be determined generally on certain broad principles. There can be no exact measure of awarding damages in cases of injury to persons and mental suffering. If the tort is in relation to property, assessment of damages is comparatively easier because the damages are then determined by the pecuniary loss suffered, but when the injury to a person is the subject matter of a suit for tort it becomes rather difficult to assess in actual monetary terms the quantum of damages. It is however well settled that damages must not be too remote. Consequences which are reasonable and probable and are the direct result of an unlawful act will not be very remote and can be taken into consideration in determining the quantum of damages.

(16) In a case reported as (1879) 4 QBD 406 an award of £ 3000 for physical and mental suffering was held to be a modest assessment of damages on the facts of that case. As was said in AIR 1960 Mysore 222 the computation of compensation for injury to ones health and disability would be to some extent a matter of conjecture.

(17) In a very recent case H. West & Son v. Shaphard (1963) 2 A 11. ER 625 their Lordships discussed the question of general damages. The trial court had awarded £ 1750O for general damages in addition to other damages which were not the subject matter of appeal. The appellants questioned this amount of general damages It was held that the appellants were liable for damages and that the figure was not excessive so as to justify the appellate courts interference. In this case a number of cases decided till then were discussed, including Phillips v. London & SW Railway Co., 5 QBD 78 which is a case often quoted as showing the right direction to be given to a jury when they are awarding compensation for personal injuries.In his direction to the jury Field J. said : -

......it has been pointed out for centuries, and it is the principle of foreign jurisprudence as well as ours, that in actions for personal injuries of this kind as well as in many others, it is wrong to attempt to give an equivalent for the injury sustained. I do not mean to say that you must not do it, because you are the masters and are to decide ; but I mean that it would operate unjustly, and in saying so I am using the language of the great Baron Parke in 18 QB 93 whose opinion was quoted with approval in Rowleys case in LR 8 Esch. 221 at page 231. Perfect compensation is hardly possible, and would be unjust."

In the Rowleys case (Supra) Brett J had approved and laid down the rule as declared by Baron Parke that the jury "must not attempt to give damages to the full amount of a perfect compensation for the pecuniary injury, but must take a reasonable view of the case and give what they considered under all the circumstances a fair compensation."

The words what is meant by compensation that is fair and yet not full have been interpreted as what would a fair minded man, not a milionaire, but one with a sufficiency of means to discharge all his moral obligations feel called upon to do for a plaintiff whom by his careless act he has reduced to so pitiable a condition.

In this case the appellants were liable for negligence that caused grievous injuries to the respondent, a woman who, at the time of the accident in 1959, was forty one years of age and the mother of three children. As a result of her injuries she become permanently bedridden and in need of continuous nursing attention in hospital ; she was unable to speak, but could appreciate the difference between articles of food that she liked or disliked, showing her likes and dislikes by facial expressions She could recognize her relatives and the members of the nursing staff, and she could respond to commands by moving her right hand The expectation of her life from the date of the accident was seven years. In this case although two of the learned JJ Lords Reid and Devlin dissented, the majority upheld the damages because they found no error in principle and further held that though the figure of £ 17500 might seem high, it was neither unreasonable nor so excessive as to justify the appellate courts interference.

(18)Therefore computation of damages on this score is more or less usually arbitrary. It cannot be ruled out with any greater force of logic or reasoning that Rs, 7500 claimed by the plaintiff are too high. But the trial court has been in a better position to see the plaintiff itself and taking into consideration all the attendant circumstances of the case, the disability suffered by the plaintiff, his general condition of health, his status and position in life, it has come to the conclusion that Rs. 5000 should be the proper amount awarded to the plaintiff. As in the above case of H West v. Shaphared, we also think that we should not interfere with this finding of the trial court and uphold the finding of the trial court on this issue.

(19) The plaintiff also has come up in cross-objections in regard to the above amount awarded on this ground. The same remarks would apply to his cross-objections with which we have disposed of the appeal of the appellant.

(20) Two more propositions of law were argued on behalf of the appellant before us One was whether defendant 2 was liable as owner of the truck for the accident caused by his driver Dwarka Nath The case of the appellant has been that-the driver was driving the truck without the knowledge of the appellant at an untimely hour and therefore the master is not liable for the action of the servant. The defendant 2 however admitted that the truck was being used for military supplies The truck would be parked for the night in the premises of R. L. Kochar & Co, He did not know wherefrom the truck was being driven The defendant had not gone to see the truck himself. He could not further say whether the driver had taken the truck without permission on the relevant date, nor had he ever inquired of the driver upto the time of his statement where the driver was taking this truck at that time. The above statement of the defendant would show that there is nothing to warrant that defendant 1 was using the truck against the positive instructions of the owner. The case law on the responsibility of an owner for an accident caused by his employee, particularly his driver, has been the subject matter of so many judicial pronouncements that it is not necessary to discuss in any detail the authorities on the subject. The Supreme Court has had occassion to discuss in numerous authorities this point. In AIR 1966 SC 1697 the law laid down is that a master is vicariously liable for the act of his servant acting in the course of his employment. For the masters liability to arise, the act must be a wrongful act authorized by the master or a wrongful and unauthorized mode of doing some act authorized by the master. The tort must be committed by the servant either under the actual control of his master or while acting in the course of his employment. The doctrine that the act of the servant must be for the masters benefit cannot be subscribed to., for the word benefit is vague and it is better to adhere to the words course of employment or the scope of authority. Their Lordships have considered a number of English and Indian cases in this authority. This was the majority view. Subha Rao J (as he then was) went to the extent of holding that an owner of a car would be liable for damages for an accident caused by his servant in the course of his employment and he would also be liable if the effective cause of the accident was that the driver in the course of his employment committed a breach of his duty in either not preventing another person from driving the car or neglecting to see that the said person drove it properly. For this enunciation of law his Lordship relied upon 1961.2 All. ER 785, (1869) 4 QB 476, (1915) 1 KB 644 and 1897-1 Q. B. 240.

The facts of this case were that the defendant had entrusted his car to one Mohd Yakub Haji for plying the same as a taxi. Mohd. Yakub Haji was not only the driver but was in entire charge of plying the taxi. Yakub had appointed the third defendant as a cleaner for the taxi.

Mohd. Yakub had trained the third defendant to drive the car and took him to R. T. A. for obtaining a driving license. When the RTA was conducting the test of the third defendant, the third defendant without giving signal took a sudden turn and injured the plaintiffs leg. and his leg had later to be amputated. The majority judgment held that the action of the third defendant was outside the scope of the authority of the driver. Therefore the owner was not liable for damage to the plaintiff.

The authorities cited by Subha Rao J need not be recapitulated here because his Lordship has considered them at great length. The ratio decidendi of those English authorities is that the owner of a car when he takes it or sends it on journey for his own purposes owes a duty of care to other road users, and if any of them suffers damage from negligent driving of the car, whether by the owner himself or by an agent to whom he had delegated the driving, the owner is liable. To this rule Cockburn C. J. has added a limitation in Story v. Ashton, (1869) 4 QB 476 at p. 479 : -

"The true rule is that the master is only responsible so long as the servant can be said to be doing the act, in the doing of which he is guilty of negligence, in the course of his employment as servant."

In view of the pronouncement of the courts both in India and England, it can safely be said that the owner of the truck is liable for the accident caused by his driver when the driver was acting in the course of his employment. If the driver has acted against the instructions of his owner, the case would be different.

Here, there is nothing on record to show that the truck was not being driven by the driver at the relevant time in the discharge of the duty enjoined upon him by virtue of his employment with defendant 2. Therefore in our opinion both defendants 1 and 2 are liable for damages to the plaintiff for the injury sustained by him as a result of the accident.

(21) The next question that was argued before us has been partly considered in the opening part of this judgment, namely, the responsibility for the satisfaction of this amount of the defendant 3, the Zenith Insurance Company We pointed out that on the facts of this case the responsibility of fastening the liability on the insurance company did not arise in view of the pleadings of the defendants. The present appellant, defendant 2, now prays that the decree should be passed against the third defendant, but in his written statement he took a categorical stand that the Zenith Insurance Co. was not at all liable. The plaintiff as well as the defendants have produced evidence on this count The argument of the learned counsel for the insurance company is that the truck was insured by Tek Chand Nanda in the name of Tek Chand Nanda. A cheque for Rs 375 was issued in the name of Tek Chand Nanda for damages to this truck vide the statement of Narindra Kumar P. W. and Iqbal Nath DW who checked the documents of insurance and found that the truck was insured in favour of Tek Chand Nanda. According to the trial court the plaintiff relied upon some copy of a partnership deed alleged to have been executed on 1st April 1961. In the first place this partnership deed was not at all proved. Secondly it was entered into after the date of the accident. A reference was made to some previous partnership deed but without the previous partnership deed having been placed on the file, one cannot say what the terms of that partnership deed were. According to the plaintiffs learned counsel in the trial court and the counsel for the plaintiff and the appellant in this court the truck was held in partnership by Tek Chand Nanda and Roshan Lal Bhalla. By means of a dissolution of partnership the truck became the property of defendant 2 alone. The dissolution of partnership also is not proved as also the original partnership. But the least that can be said is that there has been some transfer of this truck from Tek Chand Nanda to Roshan Lal Bhalla. The law that has been relied upon by the learned counsel for the insurance company is very clear. It is to the effect that when there is a change or a transfer of ownership of the vehicle, the same must be conveyed to the insurer and accepted by him otherwise the liability of the insurer under the policy is extinguished

(22) In AIR 1951 Punjab 114 it has been held that a motor insurance policy does not remain in force if there is a change in the ownership of the car insured unless there is an agreement between the company and the new owner that the policy shall remain in force.

(23) Similarly in AIR 1963 MP 164 it has been held that a motor insurance policy is a contract of personal indemnity and the assured cannot claim the insurance amount when he does not suffer from loss or damage. Where a car insured against damage, third party risks etc. is transfer red by the owner to another person, the owner himself retaining no interest in the car, and if subsequently the car is involved in an accident causing damage to it and injury to others, the owner cannot recover from the insurer any amount in as much as he cannot be said to have suffered any loss. Again the purchaser of a car cannot also in the absence of any assignment of the policy in his favour or a special statutory provision claim the insurance amount from the insurer. There is no such statutory provision either in the Motor Vehicles Act or in the Insurance Act about the transferees right under a motor insurance policy. Such a policy being a contract of personal indemnity cannot be assigned ; when it is transferred, there is only a novation of the contract by which the original assured is released and a new assured is accepted.

(24) Similarly in a very recent authority reported as AIR 1966 Madras 244 the facts were that a car owned by V was insured in his name under a comprehensive policy covering third party risks. During the currency of the policy V sold the car to W. The Insurance company had no knowledge of the sale. Subsequently the car knocked down the plaintiff and injured him. In a suit by the plaintiff the question arose whether the insurance company was liable co pay the plaintiffs claim. It was held that the insurance company was not liable. S. 96 (1) of the MV Act itself presupposed and proceeded on the basis that there was a subsisting policy. In the absence of an express stipulation to the contrary in the policy the continued ownership of the car with the insured was basis to the subsistence of the Policy. Once the subject matter of the policy was gone as when parted with by the insured by sale or transfer, the policy automatically lapsed and there was nothing for the insurer to avoid it.

In view of the settled law in this point, the insurance company stood totally absolved legally when L, Tek Chand Nanda transferred the truck to defendant 2.

We, therefore, are of the opinion that there is no force in this appeal or the cross-objections and we hereby dismiss both, leaving the parties to bear their own costs.