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Madhya Pradesh High Court · body

2010 DIGILAW 351 (MP)

Oriental Insurance Co. v. Janpat and 7

2010-03-25

SANJAY YADAV

body2010
JUDGMENT Sanjay Yadav, J. 1. The issue for determination in this appeal at the instance of the Insurance Company, the insurer of the offending tractor is whether, the Claims Tribunal is justified in holding it liable for compensation in lieu of death of Ramjas Patel when the fact borne out from the record reveals that the deceased was travelling in a trolley at the time when the accident occurred. 2. Facts briefly are that, on 7-5-2004 Respondent No. 5 while driving tractor and trolley bearing registration No. MP-19-D/7276 and MP 19-H/0362 belonging to Respondent Nos. 5 and 6 respectively, from Uchhera to Poddi carrying straw and grain on his way allowed 7-8 persons who were going to join barat to board the tractor. 3. Later on the tractor and trolley turned turtle causing death of Ramjas Patel. 4. The legal representatives of Ramjas Patel brought the Claim Petition MCC No. 77/2004 for compensation of Rs. 11,50,000/- in lieu of his death in the Court of First Additional Motor Accident Claims Tribunal, Satna. The Claims Tribunal after considering the entire evidence on record held that Ramjas died due to accident arising out of use of motor vehicle and awarded compensation of Rs. 1,94,500/- holding the driver, owner and Insurance Company, Appellant herein jointly, and severally liable for compensation vide award dated 19-9-2005. 5. The Claims Tribunal while deciding the issue as to whether there was a breach of policy held that, since the offending vehicle was not used for the purpose of carrying passenger but the grain and straw was being carried, there was no breach of policy. 6. The Tribunal further observed that, merely because some passers by were given lift in the vehicle it will not tantamount that the vehicle was used in contravention of policy. The Claims Tribunal held that Ramjas was merely a third party and accordingly held the Insurance Company liable to indemnify the insured. 7. Assailing the findings, learned Counsel for the Appellant submits that, Ramjas was travelling as a gratuitous passenger in the trolley when the same over turned causing his death. It is urged that, the Insurance Company, in case of gratuitous passenger owes no liability. To substantiate the submissions learned Counsel for the Appellant placed reliance on Oriental Insurance Co. Ltd. v. Brij Mohan and Ors. (2007) 7 SCC 56 , United India Insurance Co. Limited v. Serjerao and Ors. It is urged that, the Insurance Company, in case of gratuitous passenger owes no liability. To substantiate the submissions learned Counsel for the Appellant placed reliance on Oriental Insurance Co. Ltd. v. Brij Mohan and Ors. (2007) 7 SCC 56 , United India Insurance Co. Limited v. Serjerao and Ors. (2008) 7 SCC 425 , Bhav Singh v. Savirani and Ors. 2008 (1) MPLJ 72 and Kamla Bai and Ors. v. Kamlesh and Ors. 2009 (1) MPLJ 110 , cannot be doubted. 8. The proposition of law laid down in the cases referred to that a person who is neither an owner or driver nor a person whose risk is specifically covered, if sustains injury or dies while travelling as gratuitous passenger in a goods vehicle due to accident, he/she or his/her legal representatives though may be entitled for compensation, but in such cases the insurer is exempted from the liability, because travelling in the goods vehicle as a gratuitous passenger has been held to be in contravention to the insurance policy. 9. The issue in the present case is some what different, i.e., when the driver, ignorant of the term of contract of the insurance between owner and the Insurance Company, and without prior consent of the owner of vehicle allow certain person to board the vehicle, tractor in the present case, without charging any money, and the owner having no knowledge of such arrangement made by driver during his sojourn for the agricultural work, can the Insurance Company as a matter of right claim exoneration and deny to indemnify the insured in case of death of third party, the said passenger ? 10. The answer would lie in the interpretation of the provisions of the Motor Vehicles Act, 1988. 11. Section 147 of the Motor Vehicles Act, 1988 stipulates: 147. 10. The answer would lie in the interpretation of the provisions of the Motor Vehicles Act, 1988. 11. Section 147 of the Motor Vehicles Act, 1988 stipulates: 147. Requirement of policies and limits of liability.- (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; and (b) insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2)- (i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including owner of the goods or his authorised representative carried in the vehicle 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 bodily injury to any passenger of a public service vehicle 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 this 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 Workmen's 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 carriage, being carried in the vehicle, or (ii) to cover any contractual liability. Explanation: For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place. (2) Subject to the proviso to Sub-section (1), a policy of insurance referred to in Sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely: (a) save as provided in Clause (b), the amount of liability incurred, (b) in respect of damage to any property of a third party, a limit of rupees six thousand: Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier. (3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases. (4) Where a cover note issued by the insurer under the provisions of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the Registering Authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe. (5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons. 12. Sub-clause (i) of Clause (b) of Sub-section (1) of Section 147 stipulates that a policy of insurance must be a policy issued by a person who is authorised insurer and insures the person a class of persons against any liability which may be incurred by him in respect of the death of "any person" caused by on arising out of the use of the vehicle in a public place. 13. It is not the case of the Appellant herein that no policy of insurance was issued. The case is that under expression "any person", the gratuitous passenger will not be covered. This contention though is supported by the case of Brij Mohan (supra), wherein it is held: 11. Although the effect of 1994 amendment in the Motor Vehicles Act did not call for consideration in Asha Rani, a three-Judge Bench of this Court had the occasion to consider the said question in National Insurance Co. Ltd. v. Baljit Kaur in the following terms: (SCC pp. 7-8, Paras 17-19) 17. By reason of the 1994 amendment what was added is 'including owner of the goods or his authorised representative carried in the vehicle'. The liability of the owner of the vehicle to insure it compulsorily, thus, by reason of the aforementioned amendment included only the owner of the goods or his authorised representative carried in the vehicle besides the third parties. The intention of Parliament, therefore, could not have been that the words 'any person' occurring in Section 147 would cover all persons who were travelling in a goods carriage in any capacity whatsoever. If such was the intention, there was no necessity of Parliament to carry out an amendment inasmuch as the expression 'any person' contained in Sub-clause (i) of Clause (b) of Sub-section (1) of Section 147 would have included the owner of the goods or his authorised representative besides the passengers who are gratuitous or otherwise. 18. If such was the intention, there was no necessity of Parliament to carry out an amendment inasmuch as the expression 'any person' contained in Sub-clause (i) of Clause (b) of Sub-section (1) of Section 147 would have included the owner of the goods or his authorised representative besides the passengers who are gratuitous or otherwise. 18. The observations made in this connection by the Court in Asha Rani case to which one of us, Sinha, J., was a party, however, bear repetition: (SCC p. 235, Para 26) 26. In view of the changes in the relevant provisions in the 1988 Act vis-a-vis the 1939 Act, we are of the opinion that the meaning of the words 'any person' must also be attributed having regard to the context in which they have been used, i.e., 'a third party'. Keeping in view the provisions of the 1988 Act, we are of the opinion that as the provisions thereof do not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured for any passenger travelling in a goods vehicle, the insurers would not be liable therefor. 19. In Asha Rani, it has been noticed that Sub-clause (i) of Clause (b) of Sub-section (1) of Section 147 of the 1988 Act speaks of liability which may be incurred by the owner of a vehicle in respect of 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. Furthermore, an owner of a passenger-carrying vehicle must pay premium for covering the risks of the passengers travelling in the vehicle. The premium in view of the 1994 Amendment would only cover a third party as also the owner of the goods or his authorised representative and not any passenger carried in a goods vehicle whether for hire or reward or otherwise. 12. Interpretation of the contracts of insurance in terms of Sections 147 and 149 of the Motor Vehicles Act came up for consideration recently before a Division Bench of this Court in National Insurance Co. Ltd. v. Laxmi Narain Dhut, wherein it was held: (SCC p. 174, Paras 23-24) 23 [24]. As noted above, there is no contractual relation between the third party and the insurer. Ltd. v. Laxmi Narain Dhut, wherein it was held: (SCC p. 174, Paras 23-24) 23 [24]. As noted above, there is no contractual relation between the third party and the insurer. Because of the statutory intervention in terms of Section 149, the same becomes operative in essence and Section 149 provides complete insulation. 24 [25]. In the background of the statutory provisions, one thing is crystal clear, i.e., the statute is beneficial one qua the third party. But that benefit cannot be extended to the owner of the offending vehicle. The logic of fake licence has to be considered differently in respect of the third party and in respect of own damage claims." It was further observed: (SCC pp. 718-19, Paras 33-35) 33 [36]. It is also well settled that to arrive at the intention of the legislation depending on the objections for which the enactment is made, the Court can resort to historical, contextual and purposive interpretation leaving textual interpretation aside. 34 [37]. Francis Bennion in his book Statutory Interpretation described 'purpose interpretation' as under: A purposive construction of an enactment is one which gives effect to the legislative purpose by- (a) following the literal meaning of the enactment where that meaning is in accordance with the legislative purpose, or (b) applying a strained meaning where the literal meaning is not in accordance with the legislative purpose. 35. ([38]. More often than not, literal interpretation of a statute or a provision of a statute results in absurdity. Therefore, while interpreting statutory provisions, the Courts should keep in mind the objectives or purpose for which statute has been enacted. Justice Frankfurter of US Supreme Court in an article titled as 'Some Reflections on the Reading of Statutes' (47 Columbia Law Review, 527), observed that,- legislation has an aim, it seeks to obviate some mischief, to supply an adequacy, to effect a change of policy, to formulate a plan of Government. That aim, that policy is not drawn, like nitrogen, out of the air; it is evidenced in the language of the statutes, as read in the light of other external manifestations of purpose. 14. However, the question as posed above is different in this case. 15. The policy in the case at hand is a Kissan Package Insurance Policy (Exh. D-7). Under Sub-section II of the policy, the stipulation is in respect of liability to third parties providing thereunder: 1. 14. However, the question as posed above is different in this case. 15. The policy in the case at hand is a Kissan Package Insurance Policy (Exh. D-7). Under Sub-section II of the policy, the stipulation is in respect of liability to third parties providing thereunder: 1. Subject to the limit of liability as laid down in the schedule hereto the company will indemnify the insured against all sums including claimants costs and expenses which the insured shall become legally liable to pay in respect of,- (i) death or bodily injury to any person caused by or arising out of the use (including the loading and/or unloading) of the agricultural tractor. 16. Under "Special Exceptions" the policy does mention that "the company shall not be liable under this Section in respect of": 3. Any accident loss/damage and/or liability caused sustained or incurred whilst the tractor is: (a) being used otherwise in accordance with the limitations as to use, (b) being driven by any person other than driver as stated in the Drivers Clause. 17. In the case at hand, it is nobody's case that, the driver of the tractor was not having effective and valid licence or that the vehicle was being used for other purpose than the purpose for which it was insured. Evident it is from the record that the tractor was carrying grains and straw and the deceased was neither the owner of goods nor was he travelling as a passenger after paying the fare and was third party as per policy itself. 18. In Oriental Insurance Co. Ltd. v. Rajni Devi (2008) 5 SCC 736 , it is held: 7. It is now a well settled principal of law that in a case where third party is involved, the liability of the Insurance Company would be unlimited. Where, however, compensation is claimed for the death of the owner or another passenger of the vehicle, the contract of insurance being governed by the contract qua contact, the claim of the Insurance Company would depend upon the terms thereof. The Tribunal, in our opinion, therefore, was not correct in taking the view that while determining the amount of compensation, the only factor which would be relevant would be merely the use of the motor vehicle. 19. In Amrit Lal Sood v. Kaushalya Devi Thaffar and Ors. (1998) 3 SCC 744 , it was held: 8. The Tribunal, in our opinion, therefore, was not correct in taking the view that while determining the amount of compensation, the only factor which would be relevant would be merely the use of the motor vehicle. 19. In Amrit Lal Sood v. Kaushalya Devi Thaffar and Ors. (1998) 3 SCC 744 , it was held: 8. Thus, under Section III(a) of the policy the insurer has agreed to indemnify the insured against all sums which the insured shall become legally liable to pay in respect of death of or bodily injury to 'any person'. The expression 'any person' would undoubtedly include an occupant of the car who is gratuitously travelling in the car. The remaining part of Clause (a) relates to cases of death or injury arising out of and in the course of employment of such person by the insured. In such cases the liability of the insurer is only to the extent necessary to meet the requirements of Section 95 of the Act. In so far as gratuitous passengers are concerned there is no limitation in the policy as such. Hence under the terms of the policy, the insurer is liable to satisfy the award passed in favour of the claimant. We are unable to agree with the view expressed by the High Court in this case as the terms of the policy are unambiguous. 20. In this context, worth it would be to take note of judgment rendered by the Supreme Court in Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan and Ors. AIR 1987 SC 1184 , wherein Their Lordships were pleased to observe: 14. Section 96(2)(b)(ii) extends immunity to the Insurance Company if a breach is committed of the condition excluding driving by any named person or persons or by any person who is not fully licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification. The expression 'breach' is of great significance. The dictionary meaning of 'breach' is 'infringement of violation of a promise or obligation' (See Collins English Dictionary). It is, therefore, abundantly clear that the insurer will have to establish that the insured is guilty of an infringement or violation of a promise that a person who is not (sic) duly licensed will have to be in charge of the vehicle. It is, therefore, abundantly clear that the insurer will have to establish that the insured is guilty of an infringement or violation of a promise that a person who is not (sic) duly licensed will have to be in charge of the vehicle. The very concept of infringement or violation of the promise that the expression 'breach' carries within itself induces an inference that the violation or infringement on the part of the promisor must be a wilful infringement or violation. If the insured is not at all at fault and has not done anything he should not have done or is not amiss in any respect how can it be conscientiously posited that he has committed a breach ? It is only when the insured himself places the vehicle in charge of a person who does not hold a driving licence, that it can be said that he is 'guilty' of the breach of the promise that the vehicle will be driven by a licensed driver. It must be established by the Insurance Company that the breach was on the part of the insured and that it was the insured who was guilty of violating the promise or infringement of the contract. Unless the insured is at fault and is guilty of a breach the insurer cannot escape from the obligation to indemnify the insured and successfully contend that he is exonerated having regard to the fact that the promisor (the insured) committed a breach of his promise. Not when some mishap occurs by some mischance. When the insured has done everything within his power inasmuch as he has engaged a licensed driver and has placed the vehicle in charge of a licensed driver, with the express or implied mandate to drive himself it cannot be said that the insurer is guilty of any breach. And it is only in case of a breach or a violation of the promise on the part of the insured that the insured can hide under the umbrella of the exclusion clause. In a way the question is as to whether the promise made by the insured is an absolute promise or whether he is exculpated on the basis of some legal doctrine. 21. In United India Insurance Co. Ltd. v. Gian Chand AIR 1997 SC 3824 , it was observed by Their Lordships - 8. In a way the question is as to whether the promise made by the insured is an absolute promise or whether he is exculpated on the basis of some legal doctrine. 21. In United India Insurance Co. Ltd. v. Gian Chand AIR 1997 SC 3824 , it was observed by Their Lordships - 8. In order to resolve this controversy between the parties, it must be observed at the outset that the aforesaid decisions clearly indicate two distinct lines of cases. The first line of cases consists of fact situations wherein the insured are alleged to have committed breach of the condition of Insurance Policy, which required them not to permit the vehicle to be driven by an unlicensed driver. Such a breach is held to be a valid defence for the Insurance Company to get exonerated from meeting the claims of third parties who suffer on account of vehicular-accidents which may injure them personally or which may deprive them of their bread winner on account of such accidents caused by the insured vehicles. The other line of cases deals with the insured owners of offending motor vehicles that cause such accidents wherein the insured owners of the vehicles do not themselves commit breach of any such condition and hand over the vehicles for driving to licensed drivers who on their own and without permission, express or implied, of the insured, hand over vehicles or act in such a way that the vehicles get available to unlicensed drivers for being driven by the latter and which get involved in vehicular accidents by the driving of such unlicensed drivers. In such cases, the Insurance Company cannot get benefit of the exclusionary clause and will remain liable to meet the claims of third parties for accidental injuries, whether fatal or otherwise. The decisions of this Court in Skandia Insurance Co. AIR 1987 SC 1184 (supra), and in Sohan Lal Passi, AIR1996 SCW 3271 (supra), represent this second line of cases while the decisions of this Court in New India Assurance Co.AIR 1996 SCW 702 (supra), and in Kashiram Yadav (1989) 4 SCC 128 (supra), represent the first line of cases. 9. In the case of Skandia Insurance Co. AIR 1987 SC 1184 (supra), and in Sohan Lal Passi, AIR1996 SCW 3271 (supra), represent this second line of cases while the decisions of this Court in New India Assurance Co.AIR 1996 SCW 702 (supra), and in Kashiram Yadav (1989) 4 SCC 128 (supra), represent the first line of cases. 9. In the case of Skandia Insurance Co. Ltd. v. Kokilaben Chandravan (1987) 2 SCC 654 : AIR 1987 SC 1184 (supra), a Bench of two learned Judges of this Court speaking through Thakkar, J. held that when the insured had handed over vehicle to be driven by licensed driver and even if the licensed driver on his own and because of his negligence had allowed an unlicensed cleaner to drive the vehicle it could not be said that there was any breach committed by the insured, so as to attract the exclusion clause in favour of the Insurance Company as contemplated under Section 96(2)(b) of the Motor Vehicles Act, 1939. 22. In the case at hand, there is sufficient evidence on record that the owner of offending vehicle was not aware of the fact that driver of the tractor who was carrying grain and straw, on his way has given lift to certain persons and later on one of them succumbed to the injuries sustained due to over turning of the tractor. 23. In such an event, it cannot be perceived there is a breach of policy at the instance of the owner/insured as is contended by the Appellant/Insurance Company. 24. In view of above, no interference is warranted. The appeal being devoid of substance is hereby dismissed.