State of Gujarat v. Hansa Visanji Rana — 1985 DIGILAW 91 (GUJ)

JUDGMENT : B.S. Kapadia, J. The present appeal is filed by the State of Gujarat against the award passed by the learned Motor Accident Claim Tribunal, Amreli, on 30th October, 1980 in M. A. C. Petition No. 2 of 1978. By the said Award the learned Tribunal held that the applicants who are the respondents Nos. 1 to 3 in the present appeal against whom the present appeal is dismissed at the time of admission were entitled to recover Rs. 90,500 with running interest at the rate of 6% per annum from the date of application till full realisation together with proportionate costs thereon from the opponents Nos. 1 and 2 i. e. the present appellant and Manubhai B. Pandya, who was the driver of the vehicle involved in the accident (who shall be jointly and severally liable to pay the amount of compensation). By the said award it was also ordered that so far as the opponent No. 3 i. e. the New India Assurance Company, who is the respondent No. 5 in the present appeal was concerned, its liability or otherwise to indemnify the opponent No. 1 will depend upon the fact as to whether the vehicle namely, the Jeep bearing No. GRA 9129 was insured to cover third party risk and it was also directed that the opponent No. 2 to bear its own costs. The officer portion of the order with regard to the apportionment, investment and disbursement is not necessary for the purpose of deciding this appeal. 2. Respondent No. 5 i.e. the Insurance Company is exonerated as the Award is passed against the original opponents Nos. 1 and 2. Still however, the Insurance Company has filed Cross-objections contending that the Tribunal has erred in not arriving at a conclusion that a Government employee travelling in a Government Jeep is not required to be covered and in fact not covered by the insurance policy and further contended that passenger travelling in the Government Jeep is not a third party in view of the judgment of the Supreme Court in the V. Pushpabai Parshottam Udeshi and others v. Mis. Raniit Ginning and Pressing Co. Pvt. Ltd. reported in AIR 1977 SC 1735 . 3. The fact leading to this appeal are as under :- "Visanji Shamji Rana was serving as a Fisheries Officer in the Fisheries Department of the State of Gujarat. Raniit Ginning and Pressing Co. Pvt. Ltd. reported in AIR 1977 SC 1735 . 3. The fact leading to this appeal are as under :- "Visanji Shamji Rana was serving as a Fisheries Officer in the Fisheries Department of the State of Gujarat. For the purpose of office work said Visanji Shamji Rana alongwith others left Anjar at about 10.00 p. m. on 2-8-1978 by Jeep Car No. GRA 9129 for going to Bhavnagar. The said vehicle was of the ownership of the State of Guj. and it was driven by one Manubhai B. Pandya. Who is the respondent No. 4 herein. Said Manubhai B. Pandya is serving as a driver of the State of Gujarat. On 3-8-1978 at about 2-00 a. m. the said Jeep came to Rajkot. They took rest for half an hour and then left Rajkot for the purpose of going to Bhavnagar. At that time said Manubhai B. Pandya, the respondent No. 4 was driving the said vehicle in rash and negligent manner and at excessive speed. When the said jeep was about to approach village Charkha the jeep which was going from the left side of the road and when it was going from a nallah (culvert) at about 3-30 a. m. it dashed violently against the wall of the nallah with the result that the said wall was broken and ultimately the jeep fell down from the height of 20 and deceased Visanji Rana and others sustained injuries. Visanji had received serious injuries and he died as a result of these injuries suffered by him. The present respondents Nos. 1, 2 and 3 who are the widow and minor sons of deceased Visanji filed the M. A. C. Petition No. 2 of 1979 before the learned Motor Accident Claim Tribunal at Amreli and claimed Rs. 2,00,000 as compensation consisting of Rs. 1,20,000 for the loss of monetary advantage which they suffered, Rs. 60,000 for the loss of estate and Rs. 20,000 for the pain, shock and suffering to the deceased. After considering the contentions of the parties and the evidence on record the learned Tribunal passed the aforesaid Award." 4. In the present case the controversy is between the appellant on one hand and the respondent No. 5 on the other hand. As per the contentions raised by the learned A. G. P., Mr. After considering the contentions of the parties and the evidence on record the learned Tribunal passed the aforesaid Award." 4. In the present case the controversy is between the appellant on one hand and the respondent No. 5 on the other hand. As per the contentions raised by the learned A. G. P., Mr. K. T. Dave, the Insurance Company is liable to indemnify the amount which the State Government has to pay as per the award. It is submitted by Mr, Dave that the vehicle involved in the accident was the Jeep bearing No. GRA 9129, but in the Insurance Policy which is produced at Exh. 44 its old Number MRB 465 is mentioned and accordingly in the Certificate of Insurance at Exh. 43 the same old number is mentioned and therefore, it should be held that the vehicle involved in the accident was already insured and therefore, the present respondent No. 5 should be held liable to pay the amount awarded. 5. During the course of hearing Mr. Dave, the A.G.P. has given an application to produce additional evidence namely, the certificate issued by the R.T.O. dated 21-1-1981. Alongwith the said application the original certificate is produced. There is no reason for giving false certificate by the R.T.O. In the said certificate it is mentioned that the temporary registration number was MRB 465 and the said vehicle was given No. GRA 9129 on 7-5-1978. Therefore, the said application is granted and the certificate of R. T. O. is taken on record of the case. On perusal of the certificate of insurance at Exh. 43 as also the Insurance Policy at Exh. 44 it is clear that it was for a period from 3-5-1978 to 2-5-1979. It is therefore, clear that at the time when this old number was changed to new number insurance of the vehicle bearing old No. MRB 465 was already taken and the vehicle involved in the accident on 3-8-1978 has the new number in operation. It is therefore, natural that the old number is mentioned in the Insurance Policy as well as the Insurance Certificate. It is therefore, natural that the old number is mentioned in the Insurance Policy as well as the Insurance Certificate. This R. T. O. certificate clearly gives the important evidence about the identity of the vehicle which was insured and therefore, we hold that though in the Insurance Policy old number MRB 465 is mentioned while in reality after the policy was taken the number of the vehicle was changed from MRB 465 to GRA 9129 and therefore, the said vehicle was insured. Accordingly, we hold that the policy which is produced at Exh. 44 is in respect of the Jeep bearing No. GRA 9129 which is involved in the accident. 6. The next question that arises would be in spite of the said Policy Exh. 44 whether the Insurance Company would be liable. Mr. R.H. Mehta, the learned Advocate appearing for the Insurance Company submits that the policy would not cover the liability of deceased who was the employees of the person insured and relies on clause 1 of the Schedule II of the policy. Relevant part of clause 1 is as under : "The company shall not be liable where the death or injury arises out of and in the course of employment of such person by the insured." This clause prima facie appears to be in favour of the respondent No. 5 to avert the liability of the deceased. But it is contended that the said clause to the extent that it affects the passengers carried in pursuance of contract of employment, is illegal. But it is contended that the said clause to the extent that it affects the passengers carried in pursuance of contract of employment, is illegal. Sub-section (1) of section 95 of the Motor Vehicles Act alongwith its proviso reads as under :- "95 (1) In order to comply with the requirements of this Chapter, a policy of Insurance must be a policy which- (a) is issued by a person who is an authorised insurer (or by a co-operative society) allowed under section 108 to transact the business of an insurer), and (b) insures the person or classes of persons specified, in the policy to the extent specified in sub-clause (2)- (i) against any liability which be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place ; (ii) against the death of or body injury to any passenger of a public vehicles caused by or arising out of the use of the vehicle in a public place : Provided that a policy shall not be required- (i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment (other than a liability arising under the Workmens Compensation Act, 1923 (8 of 1923) in respect of the death of, or bodily injury to, any such employee- (a) engaged in driving the vehicle, or (b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods vehicle, being carried in the vehicle, or (ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence or the event out of which a claim arises, or (iii) to cover any contractual liability." 7. Looking to the provisions of sub-section (1) of section 95 alongwith its proviso and the exception to the said proviso, it is clear that proviso to section 95 (1) (b) first brings out that feature and in grafts exception thereon on the provisos. Proviso (1) exempts from the requirement of the insurance cover for liability in respect of death or bodily injury arising out of and in the course of employment of the employee of the person insured by the policy. Proviso (2) exempts from the requirement of insurance to cover liability in respect of death of bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of occurrence of the event out of which the claim arises. Proviso (3) exempts from the requirement of insurance to cover any contractual liability. If these would have been the only proviso without any exceptions thereto it would not have been necessary to have the compulsory insurance effected against the liability to persons who would have a claim against the insurer as their employer. However, the saving clause introduced to proviso (1) provides for compulsory insurance in favour of three classes of persons for liability arising under the Workmens Compensation Act : (1) employee driving a vehicle ; (2) conductors and ticket examiners in v. public service vehicle, and (3) employee carried in the goods vehicle. Similarly, by the exception to proviso (2) it is compulsory to insure against the liability to the passengers in a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of contract of employment. Hence, the insurance policy of the passenger vehicle will include the liability of passengers carried for hire or reward or by reason of or in pursuance of the contract of employment. In this case, it is abundantly clear from the evidence on record that deceased Visanji Rana was travelling in the Jeep in pursuance of the contract of employment. Hence, the clause in the policy to that extent is illegal. Hence, we do not find any merit in this contention raised on behalf of the Insurance Company. 8. That brings us to the question of quantum of liability involved in the present case. Mr. Dave, the learned A. G. P. submits that the Insurance Company should be made liable to pay Rs. 50,000 while Mr. Hence, we do not find any merit in this contention raised on behalf of the Insurance Company. 8. That brings us to the question of quantum of liability involved in the present case. Mr. Dave, the learned A. G. P. submits that the Insurance Company should be made liable to pay Rs. 50,000 while Mr. R. H. Mehta, the learned Advocate appearing for the Insurance Company submits that at the most the Insurance Company would be liable to pay Rs. 10,000 as provided in clause 4 of section 95 (2) (b) of the M. v. Act. Mr. Dave submits that the deceased was travelling in a passenger vehicle in pursuance of the contract of employment and that he was not a passenger for hire or reward and therefore, the deceaseds case will be governed by sub-clause (1) of section 95 (2) (b) of the M. v. Act. 9. With a view to appreciate the aforesaid contention it is necessary to have a look at sub-section (2) of section 95 of the M. V. Act which reads as under ; "Section 95 (2) Subject to proviso to sub-section (1) a policy of insurance shall cover any liability incurred in respect of any one accident up to the following limits, namely :- (a) where the vehicle is a goods vehicle a limit of (fifty) thousand rupees in all, including the liabilities, if any, arising under the Workmens Compensation Act, 1923, in respect of the death of or bodily injury to, employees (other than the driver), not exceeding six in number, being carried in the vehicle) ; (b) where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment,- (i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all ; (ii) in respect of passengers,- (1) a limit of fifty thousand rupees in all where the vehicle is registered to carry not more than thirty passengers. (2) a limit of seventy-five thousand rupees in all where the vehicle is registered to carry more than thirty but not more than sixty passengers. (2) a limit of seventy-five thousand rupees in all where the vehicle is registered to carry more than thirty but not more than sixty passengers. (3) a limit of one lakh rupees in all where the vehicle is registered to carry more than sixty passengers, and (4) subject to the limits aforesaid ten thousand rupees for each individual passenger where the vehicle is a motor cab, and five thousand rupees for each individual passenger in any other case. (c) save as provided in clause (d) where the vehicle is a vehicle of any other class, the amount of liability incurred ; (d) irrespective of the class of the vehicle a limit of rupees two thousand in all in respect of damage to any property of a third party." 10. Reading sub-section (2) as a part of section 95 of the Act, it is clear that just section 95 (1) embodies the policy of the Legislature for taking compulsory insurance for third parties as well as the passengers carried for hire or reward or by reason of any in pursuance of the contract for employment. Sub-section (2) prescribes the limit of liability for the third parties as well as the persons who are excepted from the proviso to sub-section (1) namely, the passengers carried for hire or reward or by reason of or in pursuance of the contract of employment. It prescribes the liability according to the nature of the vehicle namely, if it is a goods vehicle the limit prescribed at the relevant time was Rs. 50,000 which would also include the liability of the persons being carried in the vehicle not exceeding six in number, clause (b) which is a relevant clause for the purpose of the present case prescribes the liability of the passenger vehicle wherein the passengers are carried for hire or reward or by any reason of or in pursuance of the contract of employment Rs. 50,000 in all for persons (passengers) other than passengers and in respect of passengers they prescribed double ceiling in respect of the vehicles registered for different capacities. If passenger vehicle is a vehicle registered to carry not more than 30 passengers the limit of Rs. 50,000 is prescribed while for the passenger vehicle registered to carry more than 30 but less than 60 persons, the limit prescribed is Rs. 75,000. If passenger vehicle is a vehicle registered to carry not more than 30 passengers the limit of Rs. 50,000 is prescribed while for the passenger vehicle registered to carry more than 30 but less than 60 persons, the limit prescribed is Rs. 75,000. Similarly, for the passenger vehicle registered to carry more than 60 passengers the limit prescribed is Rs. 1 lakh, but subject to the aforesaid limit they have also prescribed the limit of liability of each individual passenger at Rs. 10,000 where the vehicle is a motor cab and Rs. 5,000 for each individual in any other case. As in the present case we are only concerned with the passengers vehicle it is not necessary to consider clauses (c) and (d) of sub-section (2) of section 95 of the M. v. Act. 11. On this point the first case cited before us is the full Benchs v. the Punjab High Court in the v. Northern India Transporters Insurance Co. Ltd. v. Smt. Amra Wati, wife of Narindar Nath and another, AIR 1966 Punj 288. In the said case also there was controversy as regards the meaning of clause (b) of section 95 (2) of the M. v. Act. The Full Bench observed that the straight forward course is to take the language of the Act as it stands and a reading of that leaves no doubt that in the v. a bus carrying more than six passengers the limit of the liability is Rs. 20,000 in all and there is a further limit in respect of each individual passenger which is Rs. 2,000. The answer given by the Full Bench was that if an insurance policy is taken in respect of large passenger bus and is limit to the terms of section 95 of the Motor Vehicles Act and that bus meets with an accident resulting in the injuries to several persons, the liability of the insurer not to exceed Rs 20,000 in respect of passengers taken together and it is not to exceed Rs. 2,000 in respect of each injured passenger. It was also held that if the compensation recoverable from the insurer has to be apportioned among the injured, then the distribution must be made in proportion to the compensation awarded to each passenger by the Tribunal. 12. 2,000 in respect of each injured passenger. It was also held that if the compensation recoverable from the insurer has to be apportioned among the injured, then the distribution must be made in proportion to the compensation awarded to each passenger by the Tribunal. 12. The said decision was challenged before the Supreme Court and the Supreme Court has decided in the v. M/s. Sheikhupura Transport Co. Ltd- v. Northern India Transporters Insurance Co. Ltd. and another reported in AIR 1971 SC 1624 . The Supreme Court dismissed the appeal. The Supreme Court also held that reading of the provisions together it is clear that the statutory liability of the insurer to indemnify the insured is as prescribed in section 95 (2) of the Act. It further held that the High Court was right in its conclusion that the liability of the insurer in the present case only extents up to Rs. 2,000 each in the v. Bachan Singh and Narinder Nath. Thus, the Full Bench judgment of the Punjab High Court has been approved by the Supreme Court on the point of interpretation of section 95 (2) (b) in respect of liability of the insurer to indemnify the insured when the vehicle which met with an accident was registered for carrying more than six passengers. 13. It may be stated that the Full Bench was considering the language of section 95 (2) (b) before the amendment of the said sub-section made by the Amending Act No. 56 of 1969 which was made effective from 2-3-1970. It may be stated that the intention of the Legislature in amending the subsection was to raise the limit and instead of Rs. 20,000 the limit for the passengers in the passenger vehicle was increased as stated hereinabove, in clauses (1) to (4) clause (2) of section 95 (2) (b) of the M. v. Act. 14. It is also important to note that the said Full Bench decision of the Punjab High Court was also considered by the Full Bench of the Madras High Court in the v. Jayalakshmi and others v. The Ruby General Insurance Co., AIR 1971 Mad 143 . In the said case the question was with regard to the liability of the Insurance Company under section 95 (2) (b) of the Act. At the relevant time the liability of the goods vehicle was limited to Rs. In the said case the question was with regard to the liability of the Insurance Company under section 95 (2) (b) of the Act. At the relevant time the liability of the goods vehicle was limited to Rs. 20,000 under clause (a) of sub-section (2) of section 95 of the Act. One of the arguments advanced in the said case was that sub-section (2) of section 95 and the context was only fixing the liability with reference to the classes of persons excepted from the proviso to section 95 (1) and the emphasis was placed on the opening words of section 95 (2) "subject to the proviso to sub-section (1)". 15. After discussing the scope of section 95 (1) of the Act, its provisos and also the exceptions thereto while considering the contention based on the opening words of section 95 (2) the Full Bench observed "in our opinion, the qualifying words at the beginning of section 95 (2) are there only to emphasise that certain risks are exempted from compulsory insurance by the proviso, and there are exceptions thereto which have to be covered by the policy. The qualifying words are there as a matter of abundant caution emphasising a sound rule of construction that the enacting part and the proviso must be read as a whole, each part throwing light on the other, as all the parts of the section are inter-related. The Full Bench further observed that the proper principle of construction to be adopted in a case like the present one is to get at the meaning of the section on a comprehensive view of the enacting provision, that provisions and the exceptions therefrom are taken as a whole and interpreted together. Ultimately, the Full Bench held that there is nothing in the proviso that would control the plain language of sub-clauses (a) and (b) of sub-section (2) that the amounts specified therein are for the total liability incurred in respect of any one accident and not just the liability incurred in respect of classes of persons mentioned in the clauses. 16. The Full Bench has further observed with regard to the phrase in the clause 95 (2) (b) "persons other than passengers" in respect of whom the limit of Rs. 20,000 is provided (at the relevant time Rs. 50,000) in its setting read with the other provisions of the Chapter manifestly refers to third parties. 16. The Full Bench has further observed with regard to the phrase in the clause 95 (2) (b) "persons other than passengers" in respect of whom the limit of Rs. 20,000 is provided (at the relevant time Rs. 50,000) in its setting read with the other provisions of the Chapter manifestly refers to third parties. Clause (b) indicates that the word "passengers" would but for the specific exclusion include also the driver. Ultimately, the Full Bench held that with reference to section 95 (2) (b) it would be misleading the qualifying words at the beginning subjecting the sub-section to the proviso to section 95 (1) as confining the limit of the liability only to the classes of persons excepted from the proviso to section 95 (1) (b). With this discussion, the Full Bench opined that where an insurance company insured the owner of the goods vehicle under section 95 of the M. v. Act, 1939, against the liability which the owner may incur in respect of death of a third party caused by the use of the vehicle in a public place, the policy being simple one confirming to the requirements of the Act, the liability of the Insurance Company is limited to Rs. 20,000 under section 95 (2) of the Act. 17. In the v. Pushpabai Parshottam Udeshi and others v. M/s. Ranjit Ginning and Pressing Co. Pvt. Ltd., reported in AIR 1977 SC 1735 , the Supreme Court held that it is not required that the Policy of Insurance to cover the risk of the passengers who are not carried for hire or reward or by reason of or in pursuance of contract of employment. In the said case the plea that the words "third party" are wide enough to cover all persons except the person and the insurer is negatived on the ground that the insurance cover was not available to the passengers which is made clear by the proviso to sub-section (1) of section 95 of the Act. 18. In the said case the plea that the words "third party" are wide enough to cover all persons except the person and the insurer is negatived on the ground that the insurance cover was not available to the passengers which is made clear by the proviso to sub-section (1) of section 95 of the Act. 18. In view of the aforesaid authorities it is clear that passengers in a passenger vehicle may be gratutious passengers for which the risk is not required to be taken in the compulsory insurance under the Act, but the passengers who are carried for hire or reward or by reason of or in pursuance of the contract of employment, the risk is to be covered under the insurance policy along with the risk of the third parties. So far as the limit of the third parties are concerned, it is provided in sub-clause (1) of clause (b) of sub-section (2) of section 95 of the Act, and for the passengers the limit is prescribed in sub-clause (2) of clause (b) of sub-section (2) of section 95 of the Act. In that view of the matter the argument that the deceased was a third party cannot be accepted because the deceased was a passenger in a Jeep in pursuance of the contract of employment with the State Government and hence, the individual liability qua the deceased, of the Insurance Company would be governed by clause (4) where the limit prescribed is at Rs. 10,000 for individual passenger subject to the maximum of Rs. 50,000 as provided in sub-clause (1) of section 95 (2) (b) (2) of the Act. When we hold that the said sub-clause (1) of section 95 (2) (b) (2) prescribes t he limit for the third parties, the only clause which would be applicable to the deceased in the present case would be in respect of passenger which is clause (2) of section 95 (2) (b) of the M. v. Act. Under the circumstances, the argument of the learned A. G. P. that the Insurance Company should be made liable in pursuance of clause (1) of section 95 (2) (b) of the Act cannot be accepted. Under the circumstances, the argument of the learned A. G. P. that the Insurance Company should be made liable in pursuance of clause (1) of section 95 (2) (b) of the Act cannot be accepted. We hold that as the Jeep met with an accident, the case is governed by sub-clause (4) of clause (2) of section 95 (2) (b) of the Act and therefore, the liability of the Insurance Company qua the deceased would be of Rs. 10,000 as contended by Shri R. H. Mehta, the learned Advocate appearing for the Insurance Company. 19. We accordingly confirm the order passed by the learned Tribunal with the modification that the opponent No. 3-New India Assurance Co. Ltd. who is the respondent No. 5 in the present appeal, would be liable to pay to the original claimants Rs. 10,000 out of Rs. 90,500 for which award is passed against the present appellant and the respondent No. 4. The respondent No. 5 New India Assurance Co. would be also liable to pay interest at the rate of 6% per annum on the amount of Rs. 10,000 from the date of the application till payment and proportionate costs of the petition in the trial Court as well as that of appeal in this Court. In case the original claimants i.e. the present respondents Nos. 1 to 3 have already recovered the amount from the present appellant, the respondent No. 5 will reimburse the appellant herein, the aforesaid amount of Rs. 10,000 with interest and costs as stated hereinabove. Thus, the appeal stands allowed with the aforesaid modification. 20. In view of the above order in the appeal the cross-objections are dismissed with no order as to costs. Order Accordingly.