The Legal Manager, Sriram General Insurance Company Limited vs Basavaraju S.K. and Others

Ram Mohan Reddy, J.—1. The insurer of the motor vehicle in question aggrieved by the finding directing it to pay and then recover compensation from the insured by judgment and award dated 4th June 2014 in MVC 499/2012 of the Senior Civil Judge and Motor Accident Claims Tribunal (for short ''MACT'') has presented this appeal.

There is no dispute that on 15.5.2011 the claimant in MVC 499/12 was travelling in a goods pickup auto bearing certificate of registration KA-11-7704 proceeding towards Muthathi to perform a pooja, which when driven by one Harish, in a rash and negligent manner, caused the accident, due to which the claimant suffered grievous injuries. That goods auto, it is not in dispute, was insured by the appellant is a statutory policy indemnifying the owner against risk of third parties and the workmen under the employees compensation Act. Before the MACT, the appellant arraigned as respondent advanced a plea that driver of goods auto did not possess a valid and effective driving licence to drive a transport vehicle, since Goods Auto is described as transport vehicle, while the policy of insurance was in respect of a transport vehicle, in addition to a plea that claimant was an unauthorized passenger travelling in the Goods Auto not covered under the policy of insurance. In the trial, the appellant/insurance company examined one of its officers as R.W. 1 who spoke to the terms and conditions of the policy of insurance, Ex. R1 and introduced in evidence a copy of the driving licence extract, of the driver, as Ex. R2. In the cross examination R.W. 1 denied the suggestion that the claimant was employed as loader and unloader of coconuts by the owner/insured and was permitted to travel in the Goods Auto.

The MACT, having regard to the material on record and the evidence both oral and documentary, accepted as credible evidence the testimony of R.W. 1 to hold that the claimant was an unauthorized passengers since in the claim petition he asserted to have travelled in the Goods Auto to go to Muttathi to perform pooja, as an occupant of Goods Auto, while in the cross examination of RW 1 the suggestion for the first time was made that he was employed as loader cum unloader of coconut. The MACT declined to accept the plea of the claimant that he was an unauthorized passenger in the Goods Auto. MACT also noticed that Ex. R2 driving licence did not contain an endorsement to drive a transport vehicle but was specifically issued for non-transport vehicle, hence declined to fasten liability on the appellant insurer to pay compensation. However, the MACT "to meet the ends of justice" directed the appellant to deposit the compensation and recover the same from the insured/owner by the judgment and award impugned.

There is force in the submission of learned counsel for the appellant that the claimant not being an authorized passenger in the Goods Auto since the seating capacity of auto was only for the driver of the Goods Auto and not for a passenger, the indemnity under the policy of insurance Ex. R1 was unavailable to the insured as regards claim of the claimant.

Although learned counsel for the claimant seeks to support the direction of the MACT to the appellant to deposit and recover compensation from the owner by placing reliance upon the decision in S. Iyappan v. M/s. United India Assurance Company Ltd. and another, (Civil Appeal No. 4834/2013, disposed on 1st July, 2013), is noticed only to be rejected.

In Iyappan''s case, the Apex Court noticed its earlier decision in National Insurance Co. Ltd. v. Annappa Irappa Nesaria @ Nesargi and others , (2008) 3 SCC 464, wherein, facts were that vehicle in question was a matador with a goods carriage permit, insured with the insurance company and the issue was whether the driver of the vehicle did not possess effective driving licence to drive a transport vehicle? The tribunal held that the driver was holding a valid driving licence and allowed the claim while in the appeal filed by the Insurance Company, High Court dismissed the same holding that the claims were third parties and that on the terms and conditions of policy of insurance, the insurance company cannot be permitted to contend that it had no liability. The Apex Court after considering relevant provisions of the Motor Vehicle Act, 1988 and the definition of light goods carriage'', light motor vehicle'', ''heavy goods vehicle'' concluded that the driver was holding a valid and effective licence to drive light motor vehicle'' hence, entitled to drive light goods carriage vehicle'' namely matador. At paragraph 17 of the said judgment, the Apex Court observed that the expression "Insurance of Motor Vehicles against Third Party Risks" in Chapter XI of Motor Vehicles Act, 1988 (Chapter VIII of 1939 Act) shows the intention of the legislature to make third party insurance compulsory and to ensure that victims of accident arising out of use of motor vehicles would be able to get compensation for the death or injuries suffered; that the provision is inserted to protect persons travelling in the vehicles or using the road from the risk attendant upon the user of the motor vehicles on the road and to overcome ugly situation, hence the legislative mandate that no motor vehicle shall be used unless a third party insurance is in force.

In paragraph 18, the Apex Court observed that under Sections 146 and 147 of the Motor Vehicles Act, in certain circumstances, the insurer''s right is safeguarded but in any event, has to pay compensation when a valid certificate of insurance is issued, notwithstanding the fact, that the insurer may proceed against the insured for recovery of the amount.

The aforesaid decision, in the facts of this case, is inapplicable. As noticed supra, the MACT, on the basis of evidence on record held that the seating capacity was only one for the driver; that the claimant was not an authorized passenger in the Goods Auto and; the risk of the claimant was not covered by statutory policy of insurance issued in the light of Section 147 (1) of the ''MV Act''. In other words, policy of insurance does not cover the risk of any passenger travelling in the Goods Auto.

In the circumstances, the decision of the Apex Court, relating to pay and recover in the event the driver did not possess a valid and effective driving license to drive a transport vehicle, does not aid the case of the claimant to support the direction issued by the MACT in the judgment and award impugned.

In the result, the appeal is allowed. The Judgment and Award directing the appellant to deposit the compensation and recover the same from the owner/insured is set-aside and in all other respects, remains unaltered.

The amount in deposit is directed to be refunded to the appellant.