Research › Search › Judgment

J&K High Court · body

2002 DIGILAW 161 (JK)

New India Assurance Co. Ltd. v. Thoru Ram

2002-05-16

S.K.GUPTA, T.S.DOABIA

body2002
PER S.K. GUPTA, JUDGE: 1. We have heard Mr. R.K. Gupta, learned advocate for the appellant, at length. 2. This Letters Patent Appeal is directed against the judgment dated: 23rd December, 1996 propounded by learned Single Judge in CIMA No. 52/1993. By the aforesaid judgment, the learned Single Judge did not find merit and dismissed the appeal against the judgment of Presiding Officer, Motor Accident Claims Tribunal Jammu, dated 14th January, 1993. 3. On 28-08-1989, accident involving death of Rachpal Chand occurred by the use of the offending vehicle bearing Registration No. 3715-JKR. in which the deceased was travelling as passenger. The bus was driven by the driver rashly and negligently. The offending vehicle was insured with the New India Assurance Company at the time of the accident. A claim petition came to be filed by the respondents-1 to 4 in terms of Section 166 of the Motor Vehicles Act in respect of the death of Rachpal Chand son of respondent-1 and 2 and brother of respondent-3 and 4. The Insurance Company took a specific stand in its demurrer filed before the presiding officer, Motor Accident Claims Tribunal with regard to its limited liability to the extent of Rs. 15,000/- per passenger only under the provisions of Motor Vehicles Act. 1939 applicable at the time of the accident. The Motor Accident Claims Tribunal. Jammu, however, awarded a sum of Rs. one lace in favour of respondents-1 to 4 as compensation vide its judgment dated: 14-01-1993 to be satisfied by the Insurance Company, appellant, with whom the vehicle stood insured at the time of the accident. The Insurance Company being dissatisfied with the liability of satisfying the award fastened on it in entirety, impugned its correctness in appeal before the learned Single Judge. The learned Single Judge after hearing the parties and scanning the material on record did not find any merit in the contentions raised by the appellant and penultimately dismissed the appeal. This is how the appellant. Insurance Company, is before us in Letters Patent Appeal to assail the validity of the judgment passed by the learned Single Judge, by virtue of which the award of compensation made by the Presiding Officer of the Motor Accident Claims Tribunal has been confirmed. 4. The admitted facts emerging out of the record are that, the accident involving Bus No. JKR-3715 took place on 28-08-1989. 4. The admitted facts emerging out of the record are that, the accident involving Bus No. JKR-3715 took place on 28-08-1989. It is also not dispute that Rachpal Chand, a passenger, travelling in the bus sustained injuries and penultimately succumbed to it. It is also not disputed that the offending vehicle stood insured with the Appellant Company at the time of the occurrence. It is also not disputed that the deceased happened to be the son of respondents-1 and 2 and brother of respondents-3 and 4, by whom a petition for compensation has been commenced under Section 166 of the Motor Vehicles Act. The grounds taken by the Appellant-Insurance Company, before the Appellate Court have been reiterated before us in submitting that liability of the Insurance Company was limited to the extent of Rs. 15,000/- per passenger as per the terms and conditions of the policy. Section 95 (2) (b) (ii) clearly envisages that where the vehicle in which passengers are carried for hire or reward, the limit of Rs. 15,000/-for each individual passenger is fixed so far as risk covered by the Appellant is concerned. It was also submitted by the appellants counsel, Mr. R.K. Gupta, that the passenger could not be included in the definition of a third party and since the risk of third party has been enhanced to Rs. 1.50 lacs by an additional payment of premium of Rs. 50/-by the insured. The Insurance Company cannot be fastened with the entire liability of satisfying the whole award amount of Rs. one lac. Lastly, it was submitted that to include the passenger within the definition of third party is contrary to the spirit of Section 95 (2) (b) (ii) and the view taken by the learned Single Judge that the passengers are third party in the matter of liability to pay compensation is not sustainable in law. 5. The spinal question that falls for determination in this appeal is, as to whether a passenger is a third party and that Insurance Company after acceptance of additional premium of Rs. 50/- from the owner of the offending vehicle and covering the risk of a third party after enhancing the risk, to Rs. 1.50 lacs, can be extended to a passenger including deceased Rachpal Chand. 50/- from the owner of the offending vehicle and covering the risk of a third party after enhancing the risk, to Rs. 1.50 lacs, can be extended to a passenger including deceased Rachpal Chand. The term Third Party in its common parlance cannotes a party other than a contracting party to the contract of insurance for first party being insurer and second the insured. Therefore, what is to be required to be seen in contemplation of the Insurance Policy of the Motor Vehicles Act is, what is the status of the passenger travelling in a bus at the time of the accident who sustained injuries and penultimately succumbed to it, if is not a third party. In Blacks Law Dictionary, Fifth Edition, the meaning of word Third Party has been given as "One not a party to an agreement or a transaction but who may have right therein"; Third Party beneficiary", One for whose benefit a promise is made in a contract but who is not a party to the contract. Chitlik Vs. Allstate Ins. Co., 34 Ohio Apo. 2d 293. 299 N.E. 2n 295, 297, 63 O.O. 2p 364. A person not a party to an insurance contract who has legally enforceable rights there under. 6. The term "Third Party means, according to its derivation, that insurer is one party to the contract, the Policy Holder another party, and the claim made by others in respect of the negligent use of the vehicle naturally described as claimants by third parties. It, therefore, follows that a claimant is a third party. The narrow concept of third party as put across by Mr. R.K. Gupta does not include passenger, if accepted would put to jeopardy the very proposition of the third party risks. As identical controversy arose and attempt was made to exclude a passenger travelling in the goods vehicle from the definition of a "third party and the High Court of Madhya Pradesh, while referring to the case entitled Kishori Vs. Chairman Tribunal Sendee Cooperative Society Ltd., Sendhwa and others, AIR 1988 M.P. 38, held as under:- "7. All the same all such persons whose risk on account of the use of the vehicle is required to be covered are third party" in the sense that they are other than the first party the insurer and the second party the insured. The use of the word third party" in Ch. All the same all such persons whose risk on account of the use of the vehicle is required to be covered are third party" in the sense that they are other than the first party the insurer and the second party the insured. The use of the word third party" in Ch. VIII entitled an Insurance of Motor Vehicle against third partys risk is apparently in relation to the insurer and the insured person who are first and second parties to the contract of insurance. Section 95 (1) (b) (i) of the Act requires the insurer to cover in its policy of insurance risk of liability of the insured in respect of the death, bodily injury to a person or damage to property of a third party but the proviso to that section makes certain exceptions to the requirement of coverage by policy in respect of persons who also fall in the category of third party. A passenger in a vehicle whose owner is insured is also a third party qua the insurer. The learned counsel for the Insurance Company seemed to suggest that the passenger in a vehicle of the insured does not fall in the category of third party, and so also the owner in respect of the goods which were under transport in the vehicle of the insured as in the instant case, cannot be called a third party. Learned counsel, in my opinion, is not right in his submission. In this connection, reference may be made to the following observations of the Supreme Court in M.K. Kunhi Mohammad Vs. PA Ahmad Kutty (1987) 2 ACC 346: )AIR 1987 SC2158). "We also do not find any justification for contiruing the distinction between the liability of the insurer to pay compensation to passengers and the liability of the insurer to pay compensation to other third parties under the said provisions." (Emphasis supplied) 7. The aforesaid observations make it clear that the passengers are the third parties in the matter of liability to pay compensation, on which the Tribunal has also placed reliance. In this case, admittedly the insured had paid additional premium of Rs. 50/- and the risk of the third party was enhanced to Rs. 1.50 lacs. The aforesaid observations make it clear that the passengers are the third parties in the matter of liability to pay compensation, on which the Tribunal has also placed reliance. In this case, admittedly the insured had paid additional premium of Rs. 50/- and the risk of the third party was enhanced to Rs. 1.50 lacs. Taking all the facts and circumstances in its cumulative and in the light of observations made by the Madhya Pradesh High Court and the Apex Court referred supra and looking from any angle, a limit of a risk of third party covered by the Insurance Policy includes the passengers liability as well, who happens to be a third party. The entire amount awarded by the Tribunal is, therefore, payable by the Insurance Company in terms of the Insurance Policy. The contentions raised by Mr. R.K. Gupta. appellants counsel, neither factually nor legally hold good. In this view of the matter, the view expressed by the Tribunal and confirmed by the learned Single Judge cannot be faulted. 8. Having considered the facts and circumstances of the case discussed above, there is, in our view, nor merit in this appeal and is accordingly dismissed.