Balesh Basavanneppa Hattaraki vs The Divisional Manager, National Insurance Co. Ltd. and Others

L. Narayana Swamy, J.—The claim petition filed under Section 166 of MV Act seeking compensation for the motor vehicle accident in respect of death of the deceased. The claimants are the wife and children. On 25.05.2008, at about 10:30 hours, when the deceased was returning from Kolavi to Tavag in a jeep bearing No. KA-23/M-2692, which belongs to respondent No. 1, the vehicle has met with an accident because of rash and negligent driving of the driver of the jeep. The respondent No. 2 - Insurance Company has filed objections and denied the liability to pay the compensation. The income, as claimed by the petitioner is also denied and it is their case that the accident had taken place not because of rash and negligent driving on the part of the driver and further it is stated that the driver was not having valid driving licence to drive the vehicle and hence the terms of the policy have been violated.

On the basis of the submission of the parties, the Tribunal has framed the issues, of which issue No. 1 is as to whether the jeep was driven in rash and negligent manner, resulting in death, in which the deceased was travelling, and has answered the said issue in the affirmative. The second issue is whether the second respondent proves that it is not liable to pay compensation. As regard this issue, the Tribunal has fastened the liability on the owner by accepting the objections of the Insurance Company to the effect that the driver was not having valid driving licence and the deceased was gratuitous passenger. On behalf of the claimants, the wife of the deceased was examined as PW1, the officer of the Insurance Company has been examined as RW1 and copy of the insurance policy was marked as Ex. R1. The claimants have marked the documents to support the accident resulting in death of the deceased. Spot panchanama, inquest panchanama, hospital bills and medical bills have been produced before the Court to arrive at a conclusion that the deceased was gratuitous passenger. The Tribunal has relied on the evidence of PW. 1, In her chief examination nowhere she has stated that her husband was inmate of the vehicle. In spite of the same, the Tribunal has reached the conclusion that the deceased was travelling as gratuitous passenger. The version of the widow - wife of the deceased cannot be accepted in that regard since no credibility is given to her statement, she being not an eyewitness.

The learned counsel for the respondent - Insurance Company produced Ex. R1, which is an act policy. The Tribunal has held that the policy is issued as Act Policy and no additional premium has been paid to cover the risk of the inmates of the vehicle to hold that the liability is on the owner and not on the insurance company. The question whether the liability is to be fixed on the owner or the Insurance Company is an academic matter. The learned counsel has relied on the judgment of the Hon''ble Supreme Court in the case of Amrit Lal Sood and Another Vs. Smt. Kaushalya Devi Thapar and Others, , wherein at para 6 and 8 it is held as under:

"6. The relevant clauses in the policy before us are found in ''SECTION - II LIABILITY TO THIRD PARTIES''. They are:--

"1. The Company will indemnify the Insured in the event of accident caused by or arising out of the use of the Motor Car against all sums including claimant''s costa and expenses which the Insured shall become legally liable to pay in respect of

(a) death of or bodily injury to any person but except so far as is necessary to meet the requirements of Section 95 of the Motor Vehicles Act, 1939, the Company shall not be liable where such death or injury arises out of and in the course of the employment of such person by the insured.

(b) damage to property other than property belonging to the Insured or held in trust by or in the custody or control of the insured.

The Company will pay all costs and expenses incurred with its written consent.

In terms of and subject to the limitations of the indemnity which is granted by this Section to the insured the Company will indemnify and Driver who is driving the Motor Car on the insured order or with his permission provided that such Driver

(a) is not entitled indemnity under any other Policy

(b) shall as though he were the Insured observe fulfil and be subject to the terms exceptions conditions and limitations of this policy in so far as they can apply."

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Thus under Section 111(a) of the policy the insurer has agreed to indemnify the insured against all sums which the insured shall become legally liable to pay in respect of death of or bodily injury to any person.'' The expression ''any person'' would undoubtedly include an occupant of the car who is gratuitously traveling in the car. The remaining part of clause (a) relates to cases of death or injury arising out of and in the course of employment of such person by the insured. In such cases the liability of the insurer is only to the extent necessary to meet the requirements of Section 95 of the Act. In so far as gratuitous passengers are concerned there is no limitation in the policy as such. Hence under the terms of the policy, the insurer is liable to satisfy the award passed in favour of the claimant. We are unable to agree with the view expressed by the High Court in this case as the terms of the policy are unambiguous."

By extracting the said provision, it is held by the Hon''ble Supreme Court that examination in chief would undoubtedly include an occupant of the car who is gratuitous passenger in the car. Further, the liability of the insurer is only necessary to meet the requirement of Section 95 of the earlier Act. Insofar as the gratuitous passenger is concerned, there is no limitation under the Act by relying on the judgment referred above. The limits of the liability as referred in the policy Ex. R1 also covers the risk of the gratuitous passenger. When such being the case, the Tribunal has committed an error in fastening the liability on the owner by referring the policy as an Act Policy, which does not cover the risk of the gratuitous passenger. In view of the above, I hold that fixing of the liability on the owner by considering the fact that the Policy is an Act policy, is an error. I also hold that the Tribunal has committed an error in fastening the liability on the ground that the husband of the claimant is travelling as gratuitous passenger. P.W. 1 is neither an eyewitness nor an inmate of the vehicle. In this circumstance, the evidence of PW1 has no value to that effect. In that view of the matter, I hold that the order of the Tribunal is to be modified. Accordingly, the same is modified and the liability is shifted on the Insurance Company. It is further directed to satisfy the award within a period of six weeks from the date of receipt of a copy of this order.

The amount deposited by the owner is to be refunded.