Meena Khaitan And Another vs Bijay Laxmi Bhanja And Another

DR.A.K.RATH, J

This appeal by the claimants assails the nil award passed by the 1st Motor Accident Claims Tribunal, Keonjhar in M.A.C.Case No.130 of 2010.

One Parameswar Khaitan borrowed an Indica Car bearing registration no.OR-05-R-7739 on 27.11.2007 from his friend Aurobinda Mohanty and

his wife, Bijay Laxmi Bhanja, the owner of the car. He was driving the vehicle and travelling with his relatives from Jharsuguda to Sundargarh. At

about 4.30 P.M., near village Masnikani on SH-10, due to failure of break, he could not control the vehicle, as a result of which, the vehicle dashed

against a road side tree. He along with the occupants sustained grievous injuries. He succumbed to the said injuries on the spot. With this factual

scenario, the claimants, who are widow and minor son of the deceased, filed an application under Section 166 of the Motor Vehicles Act, 1988

(‘M.V.Act’) before the 1st Motor Accident Claims Tribunal, Keonjhar for compensation, which was registered as M.A.C.Case No.130 of

2010. According to the claimants, the deceased had a transport business. He was the proprietor of M/s.Friends Carrier and also owner of Truck and

earning Rs.45,000/- per month. He was 38 years of age at the time of accident. Due to his sudden demise, the family received a sudden setback.

Opposite party no.1, owner of the vehicle, filed written statement admitting the claim. It was stated that the vehicle was insured with opposite party

no.2. Opposite party no.2, owner of the vehicle, filed written statement denying its liability.

Stemming on the pleadings of the parties, learned Tribunal struck two issues. Parties led evidence, oral and documentary. On an analysis of the

evidence on record, learned Tribunal came to hold that the accident occurred due to rash and negligent driving of the driver i.e. Parameswar Khaitan.

The deceased stepped into the shoes of the owner and, as such, the claimants are not entitled to compensation.

Criticizing the award, Mr.Biranchi Narayan Rath, learned counsel for the appellants submits that the deceased was not the owner of the vehicle.

He had borrowed the vehicle from his friend. He can be termed as a passenger of the vehicle. He further submits that finding of the learned Tribunal

that the deceased was negligent in driving the vehicle is perverse. The wife of the deceased was travelling in the said vehicle. She was an eyewitness

to the occurrence. She was examined as P.W.1. She stated that due to failure of break, the vehicle dashed against a roadside tree. He further submits

that the insurer has taken extra premium to cover the risk of unknown passenger. In view of the same, the learned Tribunal fell into patent error in not

awarding any amount towards compensation. The Tribunal could have awarded an amount of Rs.50,000/- towards no fault liability. He places reliance

on a decision of the apex Court in the case of Naveen Kumar v. Vijay Kumar and others, AIR 2018 SC 983.

Countering the submissions, Mr.Goutam Mishra, learned counsel for the insurer submits that by no stretch of imagination, the deceased can be

termed as a passenger of the vehicle. Evidence on record reveals that the deceased was negligent in driving the vehicle. In view of the same, learned

Tribunal is justified in passing nil award. The insurer had not taken any premium to cover the risk of the owner. To buttress the submissions, he places

reliance on the decisions of the apex Court in the case of Oriental Insurance Co. Ltd. v. Sunita Rathi and others (1998) 1 SCC 365, New India

Assurance Company Limited v. Sadanand Mukhi and others (2009) 2 SCC 417 and Ningamma and another v. United India Insurance Company

Limited (2009) 13 SCC 710.

Before adverting to the contentions raised by the parties, it is apt to refer the relevant provision of M.V.Act. Section 2(30) of the M.V.Act reads

thus:

“2(30) “owner†means a person in whose name a motor vehicle stands registered, and where such person is a minor, the guardian of such minor, and in relation

to a motor vehicle which is the subject of a hire-purchase, agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the

vehicle under that agreement.â€​

Section 2(30) of the M.V.Act was the subject matter of interpretation in Naveen Kumar. The apex Court held that The person in whose name a

motor vehicle stands registered is the owner of the vehicle for the purposes of the Act. The use of the expression ‘means’ is a clear indication

of the position that it is the registered owner who Parliament has regarded as the owner of the vehicle. In the earlier Act of 1939, the expression

‘owner’ was defined in Section 2(19) as follows:

“11…2. (19) ‘owner’ means, where the person in possession of a motor vehicle is a minor, the guardian of such minor, and in relation to a

motor vehicle which is the subject of a hire-purchase agreement, the person in possession of the vehicle under that agreement.†Evidently,

Parliament while enacting the Motor Vehicles Act, 1988 made a specific change by recasting the earlier definition. Section 2(19) of the earlier Act

stipulated that where a person in possession of a motor vehicle is a minor the guardian of the minor would be the owner and where the motor vehicle

was subject to a hire purchase agreement, the person in possession of the vehicle under the agreement would be the owner. The Act of 1988 has

provided in the first part of Section 2(30) that the owner would be the person in whose name the motor vehicle stands registered. Where such a

person is a minor the guardian of the minor would be the owner. In relation to a motor vehicle which is the subject of an agreement of hire purchase,

lease or hypothecation, the person in possession of the vehicle under that agreement would be the owner. The latter part of the definition is in the

nature of an exception which applies where the motor vehicle is the subject of a hire purchase agreement or of an agreement of lease or

hypothecation. Otherwise the definition stipulates that for the purposes of the Act, the person in whose name the motor vehicle stands registered is

treated as the owner.

In Ningamma, the deceased was travelling in a 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 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 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 view of the decisions cited above, the inescapable conclusion is that the deceased cannot be termed as a passenger of the vehicle.

On an anatomy of the pleadings and evidence on record, learned Tribunal came to hold that the deceased was negligent in driving the vehicle.

Accident occurred due to rash and negligent driving of the driver of the offending vehicle. To maintain the application under Section 166 of the

M.V.Act, proof of rashness and negligence on the part of the driver of the vehicle is a sine qua non as held by the apex Court in the case of Oriental

Insurance Company Limited v. Premlata Shukla and others, (2007) 13 SCC 476

 14. Counsel for the parties admit that no extra premium was taken to cover the risk of the owner of the vehicle. But then the contention of

Mr.Rath, is that extra premium was taken to cover the risk of unknown passenger and as such the liability can be fastened on the insurer. As held

above, the deceased cannot be termed as a passenger of the vehicle.

The logical sequitur of the analysis made in the preceding paragraphs is that the appeal, sans merit, deserves dismissal. Accordingly, the same is

dismissed. There shall be no order as to costs.

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