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Judgment
T.S. Sivagnanam, J.—These revision petitions are filed under Article 227 of the Constitution of India by the Insurance Company against the
common award passed by the Learned Motor Accidents Claims Tribunal and Additional District Judge Cum Chief Judicial Magistrate''s Court,
Tiruvannamalai in MACTOP Nos. 300, 302, 304, 305, 307, 310, 312, 315, 316, 317, 318, 322, 323 of 2001 dated 31.12.2002.
The 1st Respondent in all these appeals are the claimants and the 2nd Respondent is the owner of the vehicle. The facts are that on 10.06.2001
at about 10.a.m., when the claimants were proceeding on Thiruvannamalai Polur main road in the lorry owned by the 2nd Respondent bearing
Registration No. TN 21B 5074, the lorry capsized and on account of the accident, the claimants who are travelling in the lorry were injured.
According to the claimants, the accident occurred due to the rash and negligent driving of the driver of the lorry. A criminal case was also
registered in Crime No. 202 of 2001 against the driver of the lorry before the Kalasapakkam Police Station. The claimants contention is that they
are all coolies and they were travelling in the vehicle to reach the workspot and because of the injury sustained on account of the accident, they had
lost their livelihood and therefore, they filed individual claim petitions claiming various sums as compensation.
The learned Counsel for the Petitioner submits that totally 32 persons travelled in the vehicle out of which 22 persons filed claim petitions and
the Insurance Company has preferred these 13 revision petitions as against the awards passed by the Tribunal in cases where the compensation
amount awarded exceeded the sum of Rs. 10,000/-. The Insurance company resisted the claim petition by filing a counter affidavit interalia
contending that the persons who travelled in the lorry were not coolies but they were gratuitous passengers as they were travelling to attend a
marriage and the date on which the accident occurred namely 10.06.2001, which was a marriage day. Further, the Insurance company also
contended that the amount claimed under various heads are excessive. The owner of the lorry though served remained exparte before the Tribunal.
The claimants examined P.W.1 to P.W.24 and marked 44 documents and on the side of the Respondents one witness was examined as R.W.1
who is the Senior Assistant of the Insurance Company.
Based on the above pleadings and contentions raised, the tribunal framed three points for consideration namely,
1) Whether the accident has taken place only due to the rash and negligent not of the driving of the driver of the first Respondent''s lorry?
2) Whether the second Respondent is obsolved from liability to pay compensation, as the injuried-victims have travelled in the said lorry as
unauthorised passengers, as against the terms and conditions of the insurance policy?
3) Whether the Petitioner in each application is entitled to compensation, and if so what is the quantum?
In respect of the Point No. (1) the Tribunal came to the conclusion that the accident occurred due to the rash and negligent driving of the driver
of the lorry. As against this conclusion there is no serious contest by the Petitioner Insurance Company in these revisions and therefore the finding
of the Tribunal on this point is confirmed.
In respect of the Point No. (2) the Tribunal held that the Insurance Company is liable to pay the compensation. In support of its finding, the
Tribunal placed reliance on the decision of the Hon''ble Supreme Court in New India Assurance Co. v. Satpal Singh, reported in 200 A.C.J (1),
wherein the Hon''ble Supreme Court has held as follows:
The result is that under the new Act an insurance policy covering third party risk is not required to exclude gratuitous passenger in a vehicle, no
matter that the vehicle is of any type or class. Hence the decisions rendered under the old Act viz-a-vis gratuitous passengers are of no avail while
considering the liability of the insurance company in respect of any accident which occurred of would occur after the new Act came into force
In respect of the Point No. (3) the Tribunal considered the evidence available on record and awarded various compensation amounts. In
respect of the quantum awarded, there is no serious contention in these revision petitions and therefore the quantum of compensation awarded by
the Tribunal in all the cases stands confirmed.
The learned Counsel for the Petitioner would submit that the Tribunal ought to have considered that under proviso to Section 147(i)(c) of the
Motor Vehicles Act 1994 a policy of Insurance shall not be required to cover things which are being carried in the vehicle and there is no liability
to Insurance Company for payment of compensation to such persons carried in a goods vehicle. The Learned Counsel placed reliance on the
decision of the Hon''ble Supreme Court in New India Assurance Co. Ltd. Vs. Asha Rani and Others, wherein the Hon''ble Supreme Court
overruled the decision in the case of New India Assurance Company v. Satpal Singh, referred supra.
Though the owner of the vehicle, the second Respondent in all these revisions has been served and names have been printed in the cause list,
none appears for the second Respondent.
I have carefully considered the submissions of the learned Counsel for the Petitioner and perused the materials available on record. The only
issue for consideration in all these revision petitions is as to whether the tribunal was justified in directing the payment of compensation to the
injured persons by the Insurance Company without granting them liberty to recover from the owner of the vehicle. Moreso when the Insurance
Company have raised a plea that they are not liable to compensate the persons who were gratuitous passengers travelling in a goods vehicle. The
sheet anchor of the arguments of the learned Counsel for the Insurance company is that admittedly the vehicle is a goods carriage vehicle and as
per the policy conditions, the Insurance Company is not liable to honour the compensation claim in respect of the passengers who are carried in
goods vehicle, therefore, the tribunal ought not to have directed the Insurance Company to pay the compensation. It is no doubt true that when the
Tribunal passed the award, the decision of the Hon''ble Supreme Court in Satpal Singh held the field. Therefore, the award having been passed at
the relevant point of time, no error could be attributed. However, the fact remains that the Hon''ble Supreme Court in the case of Asha Rani
referred supra overruled the decision in Satpal Singh''s case. The operative portion of the judgment of the Hon''ble Supreme Court reads as
follows:
In Satpal''s case (supra), the Court assumed that the provisions of Section 95(1) of Motor Vehicles Act, 1939 are identical with Section 147(1)
of the Motor Vehicles Act, 1988, as it stood prior to its amendment. But a careful scrutiny of the provisions would make it clear that prior to the
amendment of 1994 it was necessary for the insurer to insure against the owner of the goods or his authorised representative being carried in a
goods vehicle. On an erroneous impression this Court came to the conclusion that the insurer would be liable to pay compensation in respect of the
death or bodily injury caused to either the owner of the goods or his authorised representative when being carried in a goods vehicle the accident
occurred. If the Motor Vehicles Amended Act of 1994 is examined, particularly Section 46 of Act 6 of 1991 by which expression ''injury to any
person'' in the original Act stood substituted by the expression ''injury to any person including owner of the goods or his authorised representative
carried in the vehicle'' the conclusion is irresistible that prior to the aforesaid Amendment Act of 1994, even if widest interpretation is given to the
expression ''to any person'' it will not cover either the owner of the goods or his authorised representative being carried in the vehicle. The objects
and reasons of Clause 46 also states that it seeks to amend Section 147 to include owner of the goods or his authorised representative carried in
the vehicle for the purposes of liability under the Insurance Policy. It is no doubt true that sometimes the legislature amends the law by way of
amplification of an inherent position which is there in the statute, but a plain meaning being given to the words used in the statute, as it stood prior to
its amendment of 1994, and as it stands subsequent to its amendment in 1994 and bearing in mind the objects and reasons engrafted in the
amended provisions referred to earlier, it is difficult for us to construe that the expression ''including owner of the goods or his authorised
representative carried in the vehicle which was added to the pre-existed expression ''injury to any person'' is either clarificatory or amplification of
the pre-existing statute. On the other hand it clearly demonstrates that the legislature wanted to bring within the sweep of Section 147 and making it
compulsory for the insurer to insure even in case of a goods vehicle, the owner of the goods or his authorised representative being carried in a
goods vehicle when that vehicle met with an accident and the owner of the goods or his representative either dies or suffers bodily injury. The
judgment of this Court in Satpal''s case, therefore must be held to have not been correctly decided and the impugned judgment of the Tribunal as
well as that of the High Court accordingly are set aside and these appeals are allowed. It is held that the insurer will not be liable for paying
compensation to the owner of goods or his authorised representative on being carried in a goods vehicle when that vehicle meets with an accident
and the owner of goods or his representative dies or suffers any bodily injury.
In view of the above pronouncement, the finding of the tribunal holding that the insurer is liable requires interference.
However, the learned Counsel for the Petitioner would fairly submit that the compensation amounts have been paid to the victims and in such
cases, the Hon''ble Supreme Court has always permitted the Insurer to pay the compensation amount with liberty to recover it from the insured.
Therefore, the learned Counsel submits that such liberty should be granted.
The concept regarding pay and recovery came up for consideration before a Hon''ble Division Bench before this Court in which I was a party.
The Hon''ble Division Bench in the case of The United India Insurance Co. Ltd. Vs. S. Saravanan (Infirmity) rep. by his wife, NF.S. Lalitha and
Ravi, after discussions of the guamate of case laws on the issue held as follows:
Considerring the above decisions and the facts as seen from the records, the owner has breached the policy condition. At the same time, as far
as the third party risk is concerned, the consistent view has been, as can be seen from the above, that the insurer must pay the third party and then
take a decision whether to proceed against the owner. This is in consonance with the spirit of the Act. It would be the only just and reasonable
course since the claimant, an intelligent young man, has been reduced to nothing in one moment of negligence. The continuous care and support he
needs must be taken note of. It is virtually a life sentence that has been imposed on the claimant and his wife and his children too - a sentence of
living death on the claimant, and a life sentence on the wife, to care and nurture for 24 hours a dear husband, who is no more than a vegetable
now. And, to require them to proceed against the owner would be rubbing salt in their raw wounds. We, therefore, feel that we must ask the
Appellant - insurance company to pay the compensation to the claimant and recover it from the owner for his breach of the policy conditions.
emphasis supplied
Subsequently a Hon''ble Two Judge Bench of the Hon''ble Supreme Court doubted the correctness of the principle of ""pay and recovery"" and
made reference to the Hon''ble Chief Justice of India for reference to a Larger Bench. Therefore, a contention was raised that this pay and
recovery should not be adopted after reference to a Larger Bench has been made by the Hon''ble Supreme Court. Infact this very objection came
up for consideration before the Hon''ble First Bench of this Court in which I was a party and the Hon''ble First Bench in C.M.A. No. 315 of 2009
dated 02.09.2010 held as follows:
Chapter 11 of the Motor Vehicles Act provides for compulsory insurance of vehicles in relation to the matters specified therefor. The provision
for compulsory insurance has been made with a view of protect the right of a third party. The Hon''ble Supreme Court in the case Sohan Lal Passi,
referred above took note of the fact that the road accidents in India have touched a new height and in majority of cases due to rash and negligent
driving and innocent persons become victims of such accidents because of which their dependants in many cases are in the streets. Therefore, their
Lordships observed that the question of payment of compensation in respect of motor accidents has assumed great importance for public as well
as for Courts. The Hon''ble Supreme Court in the case of Oriental Insurance Co. Ltd. V. Swaran Singh, referred supra, took note of the various
decisions of the Hon''ble Supreme Court including that of the decision in Sohan Lal Passi, and their Lordships held as follows:
The intention of Parliament became further evident when in the Motor Vehicles Act, 1939, a new chapter being Chapter VII-A dealing with
insurance of motor vehicles against third-party risks was introduced and the beneficent provisions contained in the Motor Vehicles Act, 1939 were
further made liberal by reason of the Motor Vehicles Act, 1988 and the amendments carried out therein from time to time in aid of the third-party
claims by way of grant of additional or new rights conferred on the road accident victims.
Under the common law a person injured by reason of another person''s wrongdoing had no right of action against insurers who undertook to
indemnify the wrongdoer. The first invasion of this principle took place by reason of the Third Parties (Rights against Insurers) Act, 1930. The
British Parliament in the light of the aforementioned Act enacted the Road Traffic Act, 1930 which has since been replaced by the Road Traffic
Act, 1988.
The Third Parties (Rights against Insurers) Act, 1930 was enacted with a view to correct injustice effecting a statutory assignment of the rights
of the assured to the injured person as prior thereto the right of a person to be indemnified under a contract of insurance against claims made
against him by persons whom he might have injured was one personal to himself, and there was no privity of any sort between the injured person
and the insurers. The injured person had no interest either at law or in equity in the insurance money, either before or after it was paid by the
insurers to the assured. In a case where the assured became bankrupt and if the injured person had not already obtained judgment and levied
execution of his claim for damages, his only right was to move in the bankruptcy or the winding-up proceedings. The beneficial provisions of the
aforementioned English statutes were incorporated by the Parliament of India while enacting the Motor Vehicles Act, 1939 which has also since
been repealed and replaced by the Motor Vehicles Act, 1988.
Concededly, different types of insurance covers are issued containing different nature of contracts of insurance. We are, however, in this batch
of cases mainly concerned with third-party right under the policy. Any condition in the insurance policy, whereby the right of the third party is taken
away, would be void.
Indisputably, such a benefit to a third party was provided under the statute keeping in view the fact that the conditions in the assured''s policy
may be of little or no effect in relation to a claim by a person to whom an assured was under a compulsorily insurable liability.
In this context, it is necessary to consider as to what is a third-party right. A third-party claim arises when a victim of an accident suffers a
bodily injury or death as a result thereof or his property is damaged. An accident is not susceptible to a very precise definition.
The popular and ordinary sense of the word was ""an unlooked-for mishap or an untoward event which is not expected or designed
In R. v. Morris10 the Court of Appeal defined the word as an ""unintended occurrence which has an adverse physical result"". The Supreme
Court of Canada in Pickford & Black Ltd. v. Canadian General Insurance Co.11 stated the law thus:
The meaning to be attached to the word ''accident'' as employed in the body of an insurance policy was thoroughly explored by Mr Justice Pigeon
in the reasons for judgment which he delivered on behalf of the majority of this Court in Canadian Indemnity Co. v. Walkem Machinery &
Equipment Ltd.12 In the course of these reasons at p. 5 he adopted the views expressed by Mr Justice Freedman, in a dissenting opinion in the
Court of Appeal of Manitoba in Marshall Wells of Canada Ltd. v. Winnipeg Supply and Fuel and R. Litz & Sons Co. v. Canadian General
Insurance Co.13, at p. 665 where that learned Judge said:
With respect, I am of the view that what occurred here was an accident. One must avoid the danger of construing that term as if it were equivalent
to ''inevitable accident''. That a mishap might have been avoided by the exercise of greater care and diligence does not automatically take it out of
the range of accident. Expressed another way, ''negligence'' and ''accident'' as here used are not mutually exclusive terms. They may coexist. After
expressing the view that even an occurrence which is the result of a calculated risk or of a dangerous operation may come within the meaning of the
word ''accident'', Mr Justice Pigeon went on to say at p. 6: While it is true that the word ''accident'' is sometimes used to describe unanticipated or
unavoidable occurrences, no dictionary need be cited to show that in everyday use, the word is applied as Halsbury says ... to any unlooked-for
mishap or occurrence ... this is the proper test....
In Halsbury''s Laws of England, 4th Edn. Reissue, it is stated:
An injury caused by the wilful or even criminal act of a third person, provided the assured is not a party or privy to it, is to be regarded as
accidental for the purposes of the policy, since from the assured''s point of view it is not expected or designed.
In Colinvaux: Law of Insurance, 6th Edn., p. 304, the following illustration is given:
If a man walks and stumbles, thus spraining his ankle, the injury is accidental for while he intends to walk he does not intend to stumble. In Hamlyn
v. Crown Accidental Insurance14 the assured''s injury was due to stooping forward to pick up a marble dropped by a child as it rolled away from
him. He stood with his legs together, separated his knees, leaned forward and made a grab at the marble, and in doing so, wrenched his knee. The
injury was held by the Court of Appeal to be accidental, on the ground that the assured did not intend to get into such a position that he might
wrench his knee.
At para 17-13 of the said treatise it is stated:
Accident includes negligence It makes no difference that the accident was caused by the negligence of the assured (as opposed to his intentional
act). Thus there is an accident where the assured crosses a railway line without exercising due care and is knocked down by an approaching train.
In fact, one of the commonest causes of accidents is negligence, and an accident policy applies, excepted perils apart, whether the injury is caused
by the negligent act of the assured himself or of a third party.
The right of the victim of a road accident to claim compensation is a statutory one. He is a victim of an unforeseen situation. He would not
ordinarily have a hand in it. The negligence on the part of the victim may, however, be contributory. He has suffered owing to wrongdoing of
others. An accident may ruin an entire family. It may take away the only earning member. An accident may result in the loss of her only son to a
mother. An accident may take place for a variety of reasons. The driver of a vehicle may not have a hand in it. He may not be found to be negligent
in a given case. Other factors such as unforeseen situation, negligence of the victim, bad road or the action or inaction of any other person may lead
to an accident.
A person suffering grievous bodily injury may require money for his survival/medical treatment. Statutory compensation paid to the next of kin
of the victim of an accident may, thus, bring to a large number of families the only ray of light at the end of the tunnel.
In other words, what would also be covered by the contract of insurance vis-�-vis the beneficent statutory provisions like Sub-section (2)
[sic (1)] of Section 149 of the said Act would be when a death or bodily injury has been caused as a result of the assured''s own voluntary act.
Even an unforeseeable result of the assured''s deliberate act may come within the purview of the accident. Even if an accident has occurred due to
negligent driving of the assured person, it may not prevent recovery under the policy and certainly thereby a third party would not be non-suited.
Thus in view of the law enuntiated above and taking note of the facts of the case, it is appropriate for this Court to issue direction to enable the
Petitioner Insurance Company to recover the compensation amount paid by them as being the insurer of the 2nd Respondent in the same
proceedings. Except for this liberty being granted to recover the compensation amount from the owner of the vehicle, the 2nd Respondent, the
award passed by the Tribunal stands confirmed in all other respects.
In the result, these Civil Revision petitions are partly allowed to the extent indicated above by permitting the Petitioner Insurance Company to
recover the compensation paid to the claimants from the second Respondent/Insured in the same proceedings. No costs. Consequently, the
connected miscellaneous petitions are closed.