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Judgment
Dr. A.K.Rath, J
Both the appeals involve common question of facts and law were heard together and are disposed of by this common judgment.
Shorn of unnecessary details, the brief facts of the case are that on 3.6.2013 at about 11.30 A.M while Rahas Bihari Samal was returning to his
house from Thermal market by the auto riskshaw bearing registration number OR-19-A-4823 with his driver Alekha Bhutia, the auto riskshaw dashed
against the backside of another auto bearing registration number OR-19-P-7906 which was parked on the left side of the road. Due to accident, he
succumbed to the injuries on the spot. With this factual scenario, the dependants of the deceased filed MAC Case No.13 of 2014 under Sec.166 of the
Motor Vehicles Act („M.V.Act‟) before the learned 3rd M.A.C.T., Talcher claiming compensation of Rs.14,60,000/-. The claimants assert that the
accident took place due to rash and negligent driving by the driver of the auto bearing registration number OR-19-A-4823. The deceased was earning
Rs.14000/- per month. He was aged about 45 years at the time of accident. The offending auto was validly insured with the insurance company. The
driver of the offending auto had valid driving licence on the date of accident.
The opposite party-insurance company entered contest and filed a written statement denying the liability. It was stated that the deceased was the
owner of the offending auto riskshaw. He was not a third party and as such, the claim case is not maintainable.
Stemming on the pleadings of the parties, learned Tribunal struck five issues. To substantiate the case, the claimants had examined three witnesses
and on their behalf, fourteen documents had been exhibited. No evidence was adduced by the opposite party-insurance company. On an anatomy of
pleadings and evidence on record, learned Tribunal came to hold that the accident took place due to rash and negligent driving of the driver of the auto
riskshaw. The policy of the offending vehicle is a comprehensive policy. The opposite party-insurance company is liable to pay the compensation.
Held so, it awarded an amount of Rs.10,58,000/- on 16. 9.2015 and directed the insurance company to pay the same with interest @ 7.5% per annum
from the date of filing of the claim application. Assailing the award, the insurer has filed MACA No.1358 of 2015. The claimants have filed MACA
No.1425 of 2015 for enhancement of compensation.
Heard Mr.G.P. Dutta, learned counsel for the insurance company and Mr. Dhananjaya Mund on behalf of Mr. Sunil Kumar Panda, learned counsel
for the claimants.
Mr. Dutta, learned counsel for the insurance company argued with vehemence that as per Sec.149(1) of the M.V Act, the liability against the
appellant can be enforced only when the award is obtained against the owner/insured. The owner had not paid any premium of personal accident
cover for himself. He had paid premium of Rs.50/- for personal accident to the passengers under which the maximum liability of the insurer towards
passengers is one lakh. The deceased being the owner of the auto riskshaw and not a passenger, the insurer is not liable to pay any compensation. To
buttress the submission, he placed reliance on the decisions in the case of Oriental Insurance Co. Ltd. v. Sunitra Rathi and others, (1998) 1 SCC 365,
Dhanraj v. New India Assurance Co. Ltd. and another, (2004) 8 SCC 553, New India Assurance Co. Ltd. V. Meera Bai and others, (2006) 9 SCC
174, Ningamma and another v. United India Insurance Co. Ltd., (2009) 13 SCC 710, New India Assurance Company Ltd. v. Sadanand Mukhi &
others, AIR 2009 SC 1788 and National Insurance Company Ltd. v. Balakrishnan and another, AIR 2013 SC 473.
Per contra, Mr. Mund, learned counsel for the claimants submitted that the vehicle was registered as passenger carrying commercial vehicle and
was duly insured with the appellant. The policy in question is a comprehensive package policy. Due to rash and negligent driving of the offending
vehicle, the owner of the vehicle who was travelling as a passenger, died. Since the deceased was a passenger, learned Tribunal is justified in saddling
the liability on the insurer. He placed reliance on the decisions of the apex Court in the case of National Insurance Company Ltd. v. Balakrishnan and
another, AIR 2013 SC 473 and Rajesh v. Rajbir Singh, 2013 (9) SCC 54 and the decision of the Madras High Court in the case of the National
Insurance Co. Ltd. v. Krishnan, (CMA No.3006 of 2012 disposed of on 15.3.2013).
The seminal point that hinges for consideration is whether the owner of the offending vehicle, who was travelling in the vehicle, died in the accident
without involving any other vehicle can be construed as a passenger qua the offending vehicle and the insurer is liable to pay compensation to his legal
representatives ?
In Sunitra Rathi, the apex Court held that the liability of the insurer arises only when the liability of the insured has been upheld for the purpose of
indemnifying the insured under the contract of insurance.
In Ningamma, the deceased was travelling in Hero Honda motor cycle, which he borrowed from the real owner. When the said motor cycle was
proceeding on Ilkal-Kustagl, National Highway, a bullock cart proceeding ahead of the said motor cycle carrying iron sheet suddenly stopped and
consequently deceased Ramappa who was proceeding on the said motor cycle dashed against it. Consequent to the aforesaid incident, he sustained
fatal injuries over his vital part of body and on the way to Government hospital he died. The widow and son of the deceased filed an application under
Sec.163A of the M.V Act before the Tribunal claiming compensation. Learned Tribunal awarded compensation. The insurance company preferred
first appeal before the High Court on the ground that the accident occurred due to the fault of the deceased and the claim application was not
maintainable as Sec.163A of the M.V Act is not applicable unless there was another vehicle involved in the accident. The High Court allowed the
appeal holding that the claim application was not maintainable as there was no tort-feasor involved. Review application filed by the claimants was
dismissed. The matter travelled to the apex Court. The question arose before the apex Court is whether the legal representatives of a person, who
was driving a motor vehicle, after borrowing it from the real owner meets with an accident without involving any other vehicle, would be entitled to
compensation under Sec.163A of the M.V Act or under any other provisions of law and also whether the insurer who issued the insurance policy
would be bound to indemnify the deceased or his legal representatives? The apex Court held that the legal representatives of the deceased who have
stepped into the shoes of the owner of the motor vehicle could not have claimed compensation under Section 163-A of the M.V Act. It was held that
undoubtedly, Section 166 of the M.V Act deals with ""Just Compensation"" and even if in the pleadings no specific claim was made under Section 166
of the M.V Act, a party should not be deprived from getting ""Just Compensation"" in case the claimant is able to make out a case under any provision
of law. The M.V Act is beneficial and welfare legislation. In fact, the court is duty bound and entitled to award ""Just Compensation"" irrespective of
the fact whether any plea in that behalf was raised by the claimant or not. However, whether or not the claimants would be governed by the terms
and conditions of the insurance policy and whether or not the provisions of Section 147 of the M.V Act would be applicable in the present case and
also whether or not there was rash and negligent driving on the part of the deceased, are essentially a matter of fact which was required to be
considered and answered at least by the High Court. The matter was remitted back to the High Court.
In Dhanraj, the appellant along with certain other persons was travelling in his own jeep. The jeep met with an accident. In the accident, the
appellant as well as other passengers received injuries. A number of claim petitions came to be filed. The appellant also filed a claim petition. The
Tribunal held that the driver of the jeep responsible for the accident. In all the claim petitions filed by other passengers, the Tribunal directed that the
appellant (as the owner) as well as the driver and insurance company were liable to pay compensation. In the claim application filed by the appellant,
the Tribunal directed the driver and the insurance company to pay compensation to the appellant. The insurance company filed appeal before the High
Court. The same was allowed. It was held that the appellant was the owner of the vehicle, the insurance company is not liable to pay him any
compensation. The apex Court held that that the policy had not covered any risk for injury to the owner himself. The premium was paid towards
damage to the vehicle and not for injury to the person of the owner. An owner of a vehicle can only claim provided a personal accident insurance has
been taken out. In that case, there was no such insurance. The appeal was allowed.
In Sadanand Mukhi, the first respondent was owner of a motor cycle. The vehicle was insured with the appellant company for the period 9.9.1999
and 8.9.2000. On 8th September, 2000, Tasu Mukhi, son of the insured, while driving the motor cycle met with an accident and died. The accident
allegedly took place as a stray dog came in front of the vehicle. A First Information Report was also lodged. Respondents filed a claim petition.
Amongst them, first respondent, who is the owner of the insured vehicle, was the applicant. The insurer appellant raised a specific contention that
keeping in view the relationship between the deceased and the owner of the motor vehicle i.e. father and son, he was not a third party. The apex
Court held:
“15. Contract of insurance of a motor vehicle is governed by the provisions of the Insurance Act. The terms of the policy as also the quantum of the premium
payable for insuring the vehicle in question depends not only upon the carrying capacity of the vehicle but also on the purpose for which the same was being used
and the extent of the risk covered thereby. By taking an `act policy', the owner of a vehicle fulfils his statutory obligation as contained in Section 147 of the Act. The
liability of the insurer is either statutory or contractual. If it is contractual its liability extends to the risk covered by the policy of insurance. If additional risks are
sought to be covered, additional premium has to be paid. If the contention of the learned counsel is to be accepted, then to a large extent, the provisions of the
Insurance Act become otiose. By reason of such an interpretation the insurer would be liable to cover risk of not only a third party but also others who would not
otherwise come within the purview thereof. It is one thing to say that the life is uncertain and the same is required to be covered, but it is another thing to say that we
must read a statute so as to grant relief to a person not contemplated by the Act. It is not for the court, unless a statute is found to be unconstitutional, to consider
the rationality thereof. Even otherwise the provisions of the Act read with the provisions of the Insurance Act appear to be wholly rational.
Only because driving of a motor vehicle may cause accident involving loss of life and property not only of a third party but also the owner of the vehicle and the
insured vehicle itself, different provisions have been made in the Insurance Act as also the Act laying down different types of insurance policies. The amount of
premium required to be paid for each of the policy is governed by the Insurance Act. A statutory regulatory authority fixes the norms and the guidelines.
Keeping in view the aforementioned Parliamentary object, let us consider the fact of the present case so as to consider as to whether the insurer is liable to pay
the amount of compensation in relation to the accident occurred by use of the vehicle which was being driven by the son of the insured.
We may, for the said purpose, notice certain decisions covering different categories of the claims.
In United India Insurance Co. Ltd. v. Tilak Singh, [(2006) 4 SCC 404] this Court considered the provisions of the Motor Vehicles Act, 1939 as also 1988 Act and inter
alia opined that the insurance company would have no liability towards the injuries suffered by the deceased who was a pillion rider, as the insurance policy was a
statutory policy which did not cover the gratuitous passenger.
In Oriental Insurance Co. Ltd. v. Jhuma Saha, [(2007) 9 SCC 263 ], it was held :-
The deceased was the owner of the vehicle.
For the reasons stated in the claim petition or otherwise, he himself was to be blamed for the accident. The accident did not involve motor vehicle other than the one
which he was driving. The question which arises for consideration is that the deceased himself being negligent, the claim petition under Section 166 of the Motor
Vehicles Act, 1988 would be maintainable.
Liability of the insurer Company is to the extent of indemnification of the insured against the respondent or an injured person, a third person or in respect of
damages of property. Thus, if the insured cannot be fastened with any liability under the provisions of the Motor Vehicles Act, the question of the insurer being
liable to indemnify the insured, therefore, does not arise."" It was furthermore held :-
The additional premium was not paid in respect of the entire risk of death or bodily injury of the owner of the vehicle. If that be so, Section 147(b) of the Motor
Vehicles Act which in no uncertain terms covers a risk of a third party only would be attracted in the present case.
The matter came up for consideration yet again in Oriental Insurance Co. Ltd. [(2007) 5 SCC 428] wherein it was observed :-
As we understand Section 147(1) of the Act, an insurance policy thereunder need not cover the liability in respect of death or injury arising out of and in the
course of the employment of an employee of the person insured by the policy, unless it be a liability arising under the Workmen's Compensation Act, 1923 in respect
of a driver, also the conductor, in the case of a public service vehicle, and the one carried in the vehicle as owner of the goods or his representative, if it is a goods
vehicle. It is provided that the policy also shall not be required to cover any contractual liability. Uninfluenced by authorities, we find no difficulty in understanding
this provision as one providing that the policy must insure an owner against any liability to a third party caused by or arising out of the use of the vehicle in a public
place, and against death or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of vehicle in a public place.
The proviso clarifies that the policy shall not be required to cover an employee of the insured in respect of bodily injury or death arising out of and in the course of
his employment. Then, an exception is provided to the last foregoing to the effect that the policy must cover a liability arising under the Workmen's Compensation
Act, 1923 in respect of the death or bodily injury to an employee who is engaged in driving the vehicle or who serves as a conductor in a public service vehicle or an
employee who travels in the vehicle of the employer carrying goods if it is a goods carriage. Section 149(1), which casts an obligation on an insurer to satisfy an
award, also speaks only of award in respect of such liability as is required to be covered by a policy under clause (b) of sub- section (1) of Section 147 (being a
liability covered by the terms of the policy). This provision cannot therefore be used to enlarge the liability if it does not exist in terms of Section 147 of the Act.
The object of the insistence on insurance under Chapter XI of the Act thus seems to be to compulsorily cover the liability relating to their person or properties of
third parties and in respect of employees of the insured employer, the liability that may arise under the Workmen's Compensation Act, 1923 in respect of the driver,
the conductor and the one carried in a goods vehicle carrying goods. On this plain understanding of Section 147, we find it difficult to hold that the Insurance
Company, in the case on hand, was liable to indemnify the owner, the employer Company, the insured, in respect of the death of one of its employees, who according
to the claim, was not the driver. Be it noted that the liability is not one arising under the Workmen's Compensation Act, 1923 and it is doubtful, on the case put
forward by the claimant, whether the deceased could be understood as a workman coming within the Workmen's Compensation Act, 1923. Therefore, on a plain
reading of Section 147 of the Act, it appears to be clear that the Insurance Company is not liable to indemnify the insured in the case on hand.
The said principle was reiterated in United India Insurance Co. Ltd. v. Davinder Singh, [ (2007) 8 SCC 698 ] holding :-
It is, thus, axiomatic that whereas an insurance company may be held to be liable to indemnify the owner for the purpose of meeting the object and purport of the
provisions of the Motor Vehicles Act, the same may not be necessary in a case where an insurance company may refuse to compensate the owner of the vehicle
towards his own loss. A distinction must be borne in mind as regards the statutory liability of the insurer vis-a-vis the purport and object sought to be achieved by a
beneficent legislation before a forum constituted under the Motor Vehicles Act and enforcement of a contract qua contract before a Consumer Forum.
In Balakrishnan, the question arose for consideration was whether the policy was an “Act Policy†or “Comprehensive/Package Policyâ€.
Since there was no discussion either by the Tribunal or the High Court in this regard, the finding of the High Court and the Tribunal as regards the
liability of the insurer was set aside and the matter was remitted back to the Tribunal to scrutinize the policy in a proper perspective.
In Oriental Insurance Co. Ltd. v. Jhuma Saha (Smt) and others, (2007) 9 SCC 263, the deceased was the owner of an insured vehicle bearing
registration number TR-03-2304, a maruti van. While he was driving the said vehicle, allegedly, in order to save a goat which was running across the
road, the steering of the vehicle failed and it dashed with a tree on the road side. He suffered injuries. He later on succumbed thereto. On the
aforementioned premise, a claim petition under Section 166 of the M.V Act was filed. The insurer resisted the claim petition, inter alia, contending as
under that as per M.V Act and Rules the owner is not entitled to get any compensation if he drives the vehicle and falls in an accident as the
insurance policy is a third party in nature. The contract between the insured and insurer is that if any accident occurred out of the use of motor vehicle
then only third party is entitled to get compensation. The insurer and insured is the first and second party and other than the all are third party. But in
this case as per the version of the petition the deceased was the owner of the vehicle and was driving the vehicle and he met with an accident.
Though the deceased had valid driving licence still he is not the third party as per Rules and Acts. Hence the petitioners are not entitled to get any
compensation. The contention of the appellant, however did not find favour with the Tribunal which, inter alia, held that the vehicle being insured and
an additional premium for the death of the driver or conductor having been paid, the liability was covered by the Insurance Policy. The appellant
preferred appeal before the High Court. The contention of the respondents that in view of the decision of this Court in National Insurance Co. Ltd.,
Chandigarh v. Nicolletta Rohtagi and others, [2002] 7 SCC 456, the appeal was not maintainable, was accepted. The matter went to the apex Court.
On an interpretation of Section 147(1)(b) of the M.V Act, the apex Court held :
“10. The deceased was the owner of the vehicle. For the reasons stated in the claim petition or otherwise, he himself was to be blamed for the accident. The
accident did not involve motor vehicle other than the one which he was driving, the question which arises for consideration is that the deceased himself being
negligent, the claim petition under Section 166 of the Motor Vehicles Act, 1988 would be maintainable.
Liability of the insurer-Company is to the extent of indemnification of the insured against the respondent or a injured person, a third person or in respect of
damages of property. Thus, if the insured cannot be fastened with any liability under the provisions of Motor Vehicles Act, the question of the insurer being liable to
indemnify insured, therefore, does not arise.
In Dhanraj v. New India Assurance Co. Ltd. and another, [2004] 8 SCC 553, it is stated as follows :
Thus, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his
authorised representative) carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle. Section 147 does not
require an insurance company to assume risk for death or bodily injury to the owner of the vehicle.
xxx xxx xxx
In this case, it has not been shown that the policy covered any risk for injury to the owner himself. We are unable to accept the contention that the premium of Rs.
4989 paid under the heading ""Own damage"" is for covering liability towards personal injury. ""Under the heading ""Own damage"", the words ""premium on vehicle and
non-electrical accessories"" appear. It is thus clear that this premium is towards damage to the vehicle and not for injury to the person of the owner. An owner of a
vehicle can only claim provided a personal accident insurance has been taken out. In this case there is not such insurance.
The additional premium was not paid in respect of the entire risk of death or bodily injury of the owner of the vehicle. If that be so, Section 147(b) of the Motor
Vehicles Act which in no uncertain terms covers a risk of a third party only would be attracted in the present case.â€
The same view was reiterated in National Insurance Company Limited v. Ashalata Bhowmik and others, (2018) 9 SCC 801.
The commercial vehicle package policy has been filed by the insurer as well as the claimants. On a cursory perusal of the same, it is evident that
premium of Rs.100/- was paid under the head legal liability to the driver. Rs.50/- was paid towards legal liability to employees. No premium was paid
to the personal accident of the owner. Admittedly the deceased was the owner of the offending vehicle. He was travelling in the said vehicle. He
cannot be construed as a third party qua the offending vehicle. No extra premium was paid by him to cover the accident under the personal accident.
In view of the same, the claim application filed by the legal representatives of the deceased is not maintainable.
The decision of the Madras High Court in the case of Krishnan is distinguishable on facts. In the said case, the owner was insured with the
insurance company for his personal accident cover and paid compulsory personal accident cover premium of Rs.100/-, besides additional personal
accident cover premium of Rs.250/-.
In the instant case, no premium was paid towards personal accident.
The logical sequitur of the analysis made in the preceding paragraphs is that no liability can be fastened on the insurer. The impugned award is set
aside. The appeal filed by the insurance company is allowed and the appeal filed by the claimants is dismissed. There shall be no order as to costs.
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