New India Assurance Company Ltd vs Smt. Pompi Nath & Ors.

Heard Mr. R. K. Bhatra, learned counsel appearing for the appellant and Mr. M. Talukdar, learned counsel appearing for the respondent/claimant Nos. 1 to 4.

2] By way of this appeal filed under Section 173 of the Motor Vehicles Act, 1988 (as amended), the appellant has challenged the judgment and award dated 21.02.2014 passed by the learned Member, Motor Accident Claims Tribunal, Cachar at Silchar (hereinafter referred to as the “Tribunal”) in MAC Case No. 894 of 2011, whereby the learned Tribunal awarded a sum of Rs. 6,51,600/- in favour of the respondent/claimants Nos. 1 to 4, along with interest @ 9 % per annum from the date of filing of the claim petition till payment.

3] The brief facts of the case are that the deceased, Suraj Nath, while riding a motorcycle bearing Registration No. AS-11-C-8911, owned by respondent No. 5, met with an accident when the motorcycle dashed against a stationary truck. As a result of the accident, the deceased sustained severe head injuries and subsequently succumbed to the same. In connection with the aforesaid incident, Sonai P.S. U.D. Case No. 14/2011 was registered. However, upon completion of investigation, the police submitted Final Report.

4] The respondent/claimants thereafter instituted a claim petition before the learned Motor Accident Claims Tribunal seeking compensation on account of the death of the deceased, impleading the owner of the motorcycle as well as the appellant/insurer as parties. Written statements were filed on behalf of the appellant-insurer and respondent No. 5/owner of the motorcycle.

5] The respondent No. 1/claimant thereafter entered the witness box and adduced evidence. The F.I.R., Police Report, certified copy of the Final Report, certified copy of the Inquest Report, Registration Certificate of the motorcycle, Insurance Policy and Driving Licence were exhibited before the learned Tribunal. The appellant cross-examined the claimant’s witness but did not adduce any evidence in defence.

6] Upon consideration of the pleadings, evidence and materials available on record, the learned Tribunal held the appellant liable to pay compensation to the respondent-claimants and accordingly awarded a sum of Rs.6,51,600/- along with interest @ 9% per annum from the date of filing of the claim petition till payment. Aggrieved by the aforesaid judgment and award, the present appeal has been preferred by the insurer.

7] Mr. R. K. Bhatra, learned counsel appearing for the appellant/insurer submits that the learned Tribunal committed an error of law in fastening liability upon the appellant by overlooking the fact that the deceased himself was driving the motorcycle insured with the appellant. It is submitted that the deceased, having borrowed the motorcycle from respondent No. 5 and having been in possession and control thereof at the relevant time, stepped into the shoes of the owner and, consequently, could not be treated as a third party for the purpose of Section 163A of the Motor Vehicles Act, 1988 (herein referred to as, “the MV Act”).

7.1.] According to the learned counsel, although Section 163A incorporates the principle of no-fault liability and does not require the claimant to plead or establish negligence, the provision nevertheless contemplates a claim by a person other than the owner of the vehicle against the owner or authorised insurer. Therefore, a person who, having borrowed the vehicle, assumes the character of the owner for the purpose of Section 163A, cannot maintain a claim against the owner or insurer of the very vehicle which he was driving.

7.2] It is further submitted that the owner, driver and insurer of the stationary truck involved in the accident were not impleaded before the learned Tribunal and, therefore, the claim petition was also bad for non-joinder of necessary parties.

7.3.] In support of his submissions, he relies upon the decisions of the Apex Court in: -

8] Per contra, Mr. M. Talukdar, learned counsel appearing for respondent Nos. 1 to 4/claimants submits that the appellant did not lead any evidence before the learned Tribunal to establish that the deceased had borrowed the motorcycle from respondent No. 5 or that he was in such possession and control of the vehicle as would make him step into the shoes of the owner. It is submitted that there is no specific plea in the written statement of the appellant that the deceased was a borrower of the motorcycle or that he was otherwise occupying the status of the owner.

8.1] Learned counsel submits that mere use of a motorcycle belonging to another person cannot, by itself, result in the deceased being treated as the owner for the purposes of Section 163A of the MV Act. The relationship between the deceased and the owner and the nature of possession and control over the vehicle, according to learned counsel, must be established by satisfactory evidence. It is further submitted that the appellant having failed to adduce any defence evidence cannot now seek to establish such relationship merely on the basis of suggestions put to the claimant’s witness in cross-examination.

8.2] In support of the aforesaid submission, he relies upon the following decisions: -

9] I have given my thoughtful consideration to the submissions advanced by learned counsel appearing for the parties and have carefully perused the materials available on record, including the claim petition, the written statements, the evidence led before the learned Tribunal and the insurance policy. I have also duly considered the authorities relied upon by learned counsel.

10] Perusal of the claim petition, which has been called for from the learned Tribunal, shows that the respondent/claimants sought compensation on account of the death of Suraj Nath arising out of an accident involving motorcycle bearing Registration No. AS-11-C-8911 on 10.04.2011. Significantly, no specific provision of the MV Act has been mentioned in the claim petition as the provision under which the claim was instituted.

11] In response to Column No. 23 of the claim petition, the claimants stated that on 10.04.2011 at about 8.00 p.m., the deceased, while riding the aforesaid motorcycle along with his elder brother as pillion rider, was returning from Nutan Bazar towards his residence at Narshingpur. On the way, owing to the condition of the road, the deceased could not control the motorcycle, which dashed against a parked truck standing on the extreme left side of the road. The deceased sustained severe head injuries and was taken to Silchar Medical College and Hospital, where he succumbed to his injuries on the same day. It was further stated in the claim petition that the accident arose out of the use of the motor vehicle and that, since the life of the deceased was duly insured with the appellant/insurer, the appellant was liable to pay compensation.

12] The claim petition thus proceeded on the basis that the death had occurred in an accident arising out of the use of the insured motorcycle and that the insurer was liable under the insurance cover. During the proceedings before the learned Tribunal, both the appellant/insurer and respondent No. 5, the owner of the motorcycle, filed their respective written statements. The written statement filed by respondent No. 5 assumes significance. In paragraph 7 thereof, the owner specifically stated as under:

13] The owner further stated that the deceased possessed a valid driving licence and that, at the relevant time, the motorcycle was duly insured with the appellant/insurer. The aforesaid pleading of the owner makes the factual position clear. The deceased had taken possession of the motorcycle with the permission of its owner for his own personal purpose. It was not a case where the deceased was driving the motorcycle in the course of his employment or under the direction and control of the owner.

14] The claimant No. 1, namely, the wife of the deceased, also entered the witness box. In her examination-in-chief, she stated that her husband was riding the motorcycle belonging to his friend, respondent No. 5, when the accident occurred. She further stated that the motorcycle was insured with the appellant and that additional premium had been paid towards the relevant personal accident coverage. During cross-examination, the witness clarified that the owner of the motorcycle was respondent No. 5 and that the deceased was not an employee of respondent No. 5. She further denied the suggestion that the deceased had taken the motorcycle without the permission of its owner.

15] It is thus evident from the pleadings and evidence available on record that the deceased was not an employee of respondent No. 5 and that he was using the motorcycle with the permission of its owner. The learned Tribunal, upon consideration of the materials, however, treated the claim as one under Section 163A of the MV Act and awarded compensation to the claimants.

16] The principal question which arises for consideration in the present appeal is whether a person who, with the permission of the owner, borrows a motor vehicle and drives the same, and dies in an accident arising out of its use, can maintain a claim under Section 163A of the MV Act against the owner and insurer of the very vehicle which he was driving.

17] Section 163A of the MV Act provides for payment of compensation on a structured-formula basis in cases of death or permanent disablement arising out of an accident arising from the use of a motor vehicle. Sub-section (2) thereof makes it unnecessary for the claimant to plead or establish that the death or permanent disablement was occasioned by any wrongful act, neglect or default of the owner of the vehicle or of any other person. The provision, therefore, incorporates the principle of no-fault liability. However, the fact that proof of negligence is dispensed with does not dispense with the other foundational requirements for maintaining a claim under the provision.

18] In Ningamma (supra), the Apex Court considered the case of a person who had borrowed a motorcycle from its real owner and met with an accident while driving the same. The Court held that such a person steps into the shoes of the owner of the vehicle and, consequently, the legal representatives of the deceased could not maintain a claim under Section 163A against the owner and insurer of the said vehicle.

19] The principle was reiterated in Ramkhiladi (supra), wherein the Apex Court, while recognising that Section 163A is based upon the principle of no-fault liability and that negligence need not be established, nevertheless held that the deceased borrower/driver cannot maintain a claim under Section 163A against the owner and insurer of the vehicle driven by him, since he would be in the shoes of the owner.

20] In Ramkhiladi (supra), the Apex Court also observed that where another vehicle was involved in the accident, the claimants could have maintained a claim against the driver, owner and insurer of such other offending vehicle, they being third parties in relation to the vehicle driven by the deceased.

21] The principle emerging from the aforesaid decisions is that the no-fault character of Section 163A does not convert the insurer’s statutory liability towards the owner or a person occupying the position of the owner into a liability towards such person himself. A person cannot, for the purpose of the statutory liability under Section 163A, occupy the position of the owner and simultaneously claim against the owner/insurer of the same vehicle as a third party.

22] Before applying the aforesaid principle to the present case, it is necessary to determine whether, on the facts available on record, the deceased can be said to have stepped into the shoes of the owner of the motorcycle.

23] The expression “steps into the shoes of the owner” cannot be applied mechanically merely because a person happens to be driving a vehicle belonging to another. The relevant consideration is the nature of his possession and control over the vehicle at the time of the accident. Where a person has obtained possession of the vehicle from its owner with permission and is himself exercising possession and control over the vehicle for his own purpose, and is not driving the vehicle in the course of his employment or under the direction and control of the owner, he assumes the character of a borrower/permissive user and, for the purposes of Section 163A of the MV Act, steps into the shoes of the owner.

24] In the present case, there is sufficient material on record to establish precisely such a relationship. The wife of the deceased, in her examination-in-chief, stated that the deceased was riding the motorcycle belonging to respondent No. 5. During cross-examination, she clarified that the deceased was not an employee of respondent No. 5. She further denied the suggestion that the deceased had taken the motorcycle without the permission of its owner. More importantly, respondent No. 5, the owner of the motorcycle, himself stated in his written statement that the deceased had taken his motorcycle with his permission to go to Natun Bazar for purchasing baby food and medicines for his children. Thus, the deceased had possession of the motorcycle with the permission of its owner and was exercising actual control over the vehicle for his own personal purpose.

25] The material available on record therefore establishes three significant facts: first, the motorcycle belonged to respondent No. 5; second, the deceased was not an employee of the owner; and third, the deceased had obtained possession of the motorcycle with the permission of the owner and was himself driving and controlling the vehicle for his personal purpose. The possession and control of the motorcycle were therefore with the deceased at the time of the accident, and such possession was that of a borrower/permissive user and not of an employee or a person driving under the control of the owner.

26] The submission of learned counsel for the claimants that the insurer was required to establish the relationship between the deceased and the owner by leading evidence cannot be accepted as an inflexible proposition. The question is one to be determined on the basis of the entire material available on record.

27] In the present case, the necessary factual foundation is not sought to be established merely from the fact that the deceased was driving the motorcycle. It emerges affirmatively from the evidence of the claimant’s witness and, more significantly, from the pleading of the owner himself. The absence of evidence from the insurer or the owner does not render the aforesaid material irrelevant, particularly when the owner himself has pleaded that the deceased had borrowed the motorcycle for his personal use.

28] The decision of the Coordinate Bench of this Court in Bibek Barhoi (supra) is clearly distinguishable on facts. In the said case, the material available before the Court did not establish, in the manner in which it does in the present case, that the deceased had obtained possession of the vehicle from its owner and was exercising actual possession and control over it as a borrower. Here, the factual position is unequivocal. The deceased had taken the motorcycle with the owner’s permission, was himself in possession and control of the vehicle, was not an employee of the owner and was using it for his own personal purpose.

29] Thus, applying the test of possession and control to the facts available on record, this Court is of the considered view that the deceased was a borrower and permissible user of the motorcycle and, consequently, stepped into the shoes of the owner. The legal representatives of the deceased, therefore, could not maintain a claim under Section 163A of the MV Act against the owner and insurer of the very motorcycle which was being driven by the deceased. The finding of the learned Tribunal fastening statutory liability upon the appellant under Section 163A of the MV Act accordingly cannot be sustained.

30] The aforesaid conclusion, however, does not bring the matter to an end. The claimants have also relied upon the personal accident cover contained in the insurance policy. The distinction between statutory liability under Section 163A of the MV Act and contractual liability arising from a personal accident cover is required to be maintained. The liability under Section 163A is a statutory liability and, for the reasons already recorded, the deceased, being in the position of the owner, cannot invoke such liability against the insurer of the motorcycle. The personal accident cover, on the other hand, arises from the contract of insurance and has to be determined strictly in accordance with the terms of the policy.

31] In the present case, the insurance policy placed on record specifically records payment of an additional premium of Rs.50/- towards personal accident coverage for the owner/driver. The policy also provides the applicable limit of liability and makes the insurance cover subject to the applicable Indian Motor Tariff guidelines. Thus, the IMT provisions relied upon by the learned counsel appearing for the appellant for determining the extent of the personal accident cover are not being introduced as an extraneous guideline or as an internal instruction of the insurer. They stand incorporated into the insurance contract itself by the terms of the policy.

32] The decision relied upon by learned counsel for the claimants in Manjusha (supra) do not advance the case of the claimants on this aspect. In Manjusha (supra), the Apex Court noticed that the insurance policy was not before it and that the insurer had not pleaded the alleged limited liability either before the Tribunal or in the memorandum of appeal before the High Court. The Court, therefore, declined to permit the insurer to rely upon such alleged limitation at that stage. The Apex Court further observed that although the Indian Motor Tariff regulates the issuance of insurance policies, it cannot bind the insured unless its terms are specified in the insurance policy.

33] The factual position in the present case is materially different. Here, the insurance policy itself is on record and expressly makes the insurance cover subject to the applicable IMT guidelines. The relevant IMT provision is, therefore, not sought to be relied upon dehors the contract. It forms part of the contractual terms by virtue of its incorporation in the policy itself. Consequently, the very condition which the Apex Court found absent in Manjusha (supra) is satisfied in the present case. The limitation is not being introduced for the first time by reference to IMT guideline; it is a term incorporated into the policy itself binding the contractual relationship between the insured and the insurer.

34] Though there is no quarrel to the principle laid down in Manjusha (supra) that an insurer cannot rely upon a limitation which is neither incorporated in the policy nor otherwise established, however, the said principle cannot be invoked to enlarge the contractual liability of the appellant beyond the coverage actually undertaken under the policy.

35] Perusal of the insurance policy further shows that respondent No. 5 had paid an additional premium of Rs.50/- towards the personal accident cover for the owner/driver. The applicable limit under such cover was Rs.1,00,000/-. The liability of the appellant to the extent of Rs.1,00,000/- therefore does not arise under Section 163A of the MV Act. It arises independently from the contractual personal accident cover for which additional premium was paid by the insured.

36] Having held so, the claim for Rs.6,51,600/- awarded by the learned Tribunal cannot be sustained as a statutory claim under Section 163A, since the deceased, having actual possession and control of the borrowed motorcycle, had stepped into the shoes of the owner and was not a third party in relation to the insured vehicle. At the same time, the deceased was covered under the personal accident benefit incorporated in the policy, and the insurer’s liability under that contractual cover is limited to Rs.1,00,000/- in accordance with the terms of the policy.

37] In view of the foregoing discussion, the finding of the learned Tribunal fastening liability upon the appellant for payment of Rs.6,51,600/- under Section 163A of the MV Act cannot be sustained. However, the deceased was covered, to the extent of Rs.1,00,000/-, under the personal accident cover forming part of the insurance policy for which the requisite additional premium had been paid.

38] Accordingly, the respondent/claimants shall be entitled to receive a sum of Rs.1,00,000/- from the appellant under the contractual personal accident cover, in terms of the policy.

39] Accordingly, the appeal is allowed in part.

40] The judgment and award dated 21.02.2014 passed by the learned Member, Motor Accident Claims Tribunal, Cachar at Silchar, in MAC Case No. 894/2011, is modified to the aforesaid extent.

41] The award of Rs.6,51,600/- with interest, insofar as it fastens statutory liability upon the appellant under Section 163A of the MV Act, is set aside. However, the respondent/claimants shall be entitled to receive a sum of Rs.1,00,000/- from the appellant/insurer under the personal accident cover contained in the insurance policy.

42] It is needless to clarify that if any amount has been deposited by the appellant before the Registry pursuant to the impugned award, the same shall be adjusted towards the aforesaid contractual liability of Rs.1,00,000/- and the balance amount, if any, remaining thereafter shall be refunded to the appellant/insurer.

43] The appeal stands disposed of in the aforesaid terms. No order as to costs.