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2012 DIGILAW 778 (GAU)

New India Assurance Co. Ltd. v. Rup Mal Das

2012-06-22

SUBHASIS TALAPATRA

body2012
JUDGMENT Subhasis Talapatra, J. 1. This appeal filed under Section 173 of the Motor Vehicles Act, 1988, is directed against the judgment and award dated 07.06.2006 as passed by the learned Member, Motor Accident Claims Tribunal, Silchar in MAC Case No. 1056/2004. The fundamental ground that has been taken in this appeal is that the appellant cannot be saddled with any liability arising on account of injury or death of any gratuitous passenger in the private vehicle, being carried in the vehicle which is a private transport vehicle. 2. For appreciating the challenge as projected in this appeal, though the facts are not in dispute, but the skeleton of the facts may be laid for making necessary reference. On 13.07.2004, when one Harilal Das was travelling by the Maruti Van bearing registration No. AS-11-4856, at the request of the owner to see the flood water on the road at Salchapra area, due to rash and negligent driving of the driver of the vehicle it skidded off the road near Churikandi at about 12.30 am and plunged into the road-side water causing death of said Harilal Das and another Sudip Barman. The dependents, the claimant-respondents herein filed a claim under Section 166 of the Motor Vehicles Act, 1988 for compensation. 3. For the claimants-respondents, Smt. Rup Mala Das (P.W. 1), the mother of the deceased namely, Harilal Das narrated how the accident took place and her son died. She stated that the deceased was 25 years of age and was earning a sum of Rs. 5,000/- per month. Another Kumud Ranjan Das (P.W. 2), who was fishing nearby the place of occurrence, witnessed the entire incident and he corroborated the narrative of the P.W. 1. 4. For the appellant, one Nilutpal Sengupta was examined and he stated that the insurance policy was an 'Act Only Policy' and the claimants would not be entitled to any compensation. However, in cross-examination he admitted that in the policy (Exbt.-A), there is no mention that the occupants of the vehicle would not be entitled to compensation. He further admitted that the premium was paid for the insurance coverage for the third party liability and it is extended to Rs. 7,50,000/- for one incident or for separate incident. 5. The learned Tribunal, on analysis of the evidence as led by the claimants, assessed the compensation at Rs. He further admitted that the premium was paid for the insurance coverage for the third party liability and it is extended to Rs. 7,50,000/- for one incident or for separate incident. 5. The learned Tribunal, on analysis of the evidence as led by the claimants, assessed the compensation at Rs. 2,92,500/- and directed the New India Assurance Company Ltd., the appellant herein to make payment of the said sum with interest @ 6% per annum from the date of filing of the claim petition. 6. Exbt.-A document indubitably is an 'Act only Policy' and there is no mention of the special coverage for the occupants but it is evident from the clauses entered into the Certificate of Insurance (Exbt.-A document) that the limit of the amount of the Company's liability under Section II-1(ii) in respect of any one accident as per Motor Vehicles Act, 1988 and the limit of the amount of the Company's liability under Section II-1(ii) in respect of one claim or series of claims arising out of one event upto Rs. 7,50,000/-. Except the Certificate, no other policy documents were produced before the court. 7. It is required to mention that Section 147(1) of the M.V. Act, 1988 provides that in order to comply with the requirements of this Chapter, a policy of insurance must be a policy which insures the person or classes of persons specified in the policy to the extent specified in sub-section (2) 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 authorized 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. In sub-section (3) of Section 147, it is categorically mentioned that a policy shall be of no effect for the purposes of this Chapter unless and until that 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. No doubt, the policy in question was issued under Chapters X and XI of the Motor Vehicles Act, 1988, meaning thereby it is an 'Act only Policy'. 8. Mr. K.K. Bhatta, learned counsel appearing for the appellant contended with sufficient force that the occupants of the private vehicle cannot be treated as the third party as this question is no more res integra. In support of his contention, he referred to United India Insurance Co. Ltd., Shimla Vs. Tilak Singh & Ors., as reported in (2006) 4 SCC 404 , where the Apex Court surveyed the previous decisions in the following manners: 15. In Pushpabai Purshottam Udeshi v. Ranjit Ginning & Pressing Co. (P) Ltd. (1977) 2 SCC 745 , the insurance company had raised the contention that the scope of statutory insurance under Section 95(1)(a) read with 95 (1)(b)(i) of the Motor Vehicles Act, 1939 does not cover the injury suffered by a passenger and, since there was a limited liability under the insurance policy, the risk of the insurance company would be limited to the extent it was specifically covered. After referring to the English Road Traffic Act, 1960, and Halsbury's Laws of England, (3rd Edn.) this Court came to the conclusion that Section 95 of the 1939 Act required that the policy of insurance must be a policy insuring the insured against any liability incurred by him in respect of death or bodily injury to a third party and rejected the contention that the words "third party" were wide enough to cover all persons except the insured and the insurer. This Court held as under: (vide SCC p.760, para 20): Therefore it is not required that a policy of insurance should cover risk to the passengers who are not carried for hire or reward. As under Section 95 the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured the plea of the counsel for the insurance company will have to be accepted and the insurance company held not liable under the requirements of the Motor Vehicles Act. 16. In Amrit Lal Sood v. Kaushalya Devi Thapar (1998) 3 SCC 744 , it was held that in that particular case that the terms of the policy were wide enough to cover a gratuitous passenger and therefore there was liability towards the gratuitous person. 17. 16. In Amrit Lal Sood v. Kaushalya Devi Thapar (1998) 3 SCC 744 , it was held that in that particular case that the terms of the policy were wide enough to cover a gratuitous passenger and therefore there was liability towards the gratuitous person. 17. In T.V. Jose (Dr.) v. Chacko P.M. (2001) 8 SCC 748 , Variava, J. had an occasion to survey the law with regard to the liability of insurance companies in respect of gratuitous passengers. Alter referring to a number of decisions of this Court the learned Judge observed (vide SCC p. 757, para 19) "the law on this subject is clear, a third-party policy does not cover liability to gratuitous passengers who are not carried for hire or reward." The insurer company was held not liable to reimburse the appellant. 18. Thus, even under the 1939 Act the established legal position was that unless there was a specific coverage of the risk pertaining to a gratuitous passenger in the policy, the insurer was not liable. We find that clause (ii) of the proviso to Section 95(1) has been eliminated while drafting Section 147 of the 1988 Act. Under sub-section (1)(b) under the 1988 Act, compulsory policy of insurance required under the statute must now provide against any liability which may be incurred by the owner of the vehicle in respect of the death of or bodily injury to any person including owner of the goods or authorized 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. 19. The argument that the risk pertaining to a third party would extend to a person other than the parties to the insurance contract was raised in New India Assurance Co. v. Satpal Singh (2000) 1 SCC 237 , where after contrasting the language of Section 95(1) of the 1939 Act with the provisions of Section 147(1) of the 1988 Act this Court held: 11. The result is that under the new Act an insurance policy covering third party risk is not required to exclude gratuitous passengers in a vehicle, no matter that the vehicle is of any type or class. The result is that under the new Act an insurance policy covering third party risk is not required to exclude gratuitous passengers in a vehicle, no matter that the vehicle is of any type or class. Hence the decisions rendered under the old Act vis--vis gratuitous passengers are of no avail while considering the liability of the insurance company in respect of any accident which occurred or would occur after the new Act came into force. 20. The view expressed in Satpal Singh's case however, has been specifically overruled in the subsequent judgment of a Bench of three judges in New India Assurance Co. Ltd. v. Asha Rani (2003) 2 SCC 223 . In that case the discussion arose in connection with carrying passengers in a goods vehicle. This Court after referring to the terms of Section 147 of the 1988 Act, as contrasted with Section 95 of the 1939 Act, held that the judgment in Satpal Singh's case had been incorrectly decided and that the insurer will not be liable to pay compensation. In the concurring judgment of Sinha, J. after contrasting the language used in the 1939 Act with that of the 1988 Act, it has been observed (vide SCC p. 235, paras 25 and 27): 25. Section 147 of 1988 Act, inter alia, prescribes compulsory coverage against the death of or bodily injury to any passenger of "public service vehicle". Proviso appended thereto categorically stales that compulsory coverage in respect of drivers and conductors of public service vehicle and employees earned in a goods vehicle would be limited to the liability under the Workmen's Compensation Act, It does not speak of any passenger in a 'good carriage'. 27. Furthermore, sub-clause (i) of clause (b) of sub-section (1) of Section 147 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, whereas sub-clause (ii) thereof deals with liability which may be incurred by the owner of a vehicle 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. 9. 9. After the said survey of the precedents made, the Apex Court in Tilak Singh (supra), in no uncertain terms, discarded the proposition of Satpal Singh case, reported in (2000) 1 SCC 237 , as was overruled by Asha Rani case, reported in (2003) 2 SCC 223 , holding that the contention of the appellant Insurance Company that it owed no liability towards the injuries of the deceased Rajinder Singh who was a pillion rider, as the insurance policy was a statutory policy, and hence it did not cover the risk of death of or bodily injury to a gratuitous passenger. In Tilak Singh (supra), the deceased was a pillion rider, who died in the accident and the dependants claimed for compensation. Ultimately, the Apex Court held that though the compensation is payable to the dependants of the deceased, but the liability was not with the Insurance Company as the vehicle was insured with the statutory policy. 10. Mr. Bhatta further relied a decision of the Apex Court in Uttar Pradesh State Road Transport Corporation Vs. Kulsum & Ors., as reported in (2011) 8 SCC 142 , where the Apex Court held: 31. The liability to pay compensation is based on a statutory provision. Compulsory Insurance of the vehicle is meant for the benefit of the Third Parties. The liability of the owner to have compulsory insurance is only in regard to Third Party and not to the property. Once the vehicle is insured, the owner as well as any other person can use the vehicle with the consent of the owner. Section 146 of the Act does not provide that any person who uses the vehicle independently, a separate Insurance Policy should be taken. The purpose of compulsory insurance in the Act has been enacted with an object to advance social justice. 32. Third-party rights have been considered by this Court in several judgments and the law on the said point is now fairly well settled. 33. The Apex Court in the case of Guru Govekar v. Filomena F. Lobo (1988) 3 SCC 1 has held that: (SCC pp. 6-7 & 11, paras 8 & 13-14) 8. 32. Third-party rights have been considered by this Court in several judgments and the law on the said point is now fairly well settled. 33. The Apex Court in the case of Guru Govekar v. Filomena F. Lobo (1988) 3 SCC 1 has held that: (SCC pp. 6-7 & 11, paras 8 & 13-14) 8. ...Thus, if a policy is taken in respect of a motor vehicle from an insurer in compliance with the requirements of Chapter VIII of the Act, the insurer is under an obligation to pay the compensation payable to a third party on account of any injury to his/her person or property or payable to the legal representatives of the third party in case of death of the third party caused by or arising out of the use of the vehicle at a public place. The liability to pay compensation in respect of death of or injury caused to the person or property of a third party undoubtedly arises when such injury is caused when the insured is using the vehicle in a public place. It also arises when the insured has caused or allowed any other person (including an independent contractor) to use his vehicle in a public place and the death of or injury to the person or property of a third party is caused on account of the use of the said vehicle during such period, unless such other person has himself taken out a policy of insurance to cover the liability arising out of such an accident. 13. ...This meant that once the insurer had issued a certificate of insurance in accordance with sub-section (4) of Section 95 of the Act the insurer had to satisfy any decree which a person receiving injuries from the use of the vehicle insured had obtained against any person insured by the policy. He was liable to satisfy the decree when he had been served with a notice under sub-section (2) of Section 96 of the Act about the proceedings in which the judgment was delivered. 14. ...Any other view will expose innocent third parties to go without compensation when they suffer injury on account of such motor accidents and will defeat the very object of introducing the necessity for taking out insurance policy under the Act. 11. 14. ...Any other view will expose innocent third parties to go without compensation when they suffer injury on account of such motor accidents and will defeat the very object of introducing the necessity for taking out insurance policy under the Act. 11. It appears that Section 146 of the M.V. Act, 1988 gives complete protection to the third party in respect of death or bodily injury or damage to the property while using the vehicle in public place, but the gratuitous occupants in a private vehicle unfortunately does not come within the purview of the definition of the third party as appearing in Section 147 of the M.V. Act, 1988. 12. This Court with excruciating anxiety observes that the Insurance Regulatory Authority, commonly known as the regulators must take notice of this aspect of the matter that for the insurance of the private vehicle, mere statutory policy as it stands now would not serve the purpose of the object for which the amendment to the Motor Vehicles Act was brought in the year 1988. The occupants of the vehicle must also be included in the policy coverage, otherwise the innocent occupants when suffer bodily injury or death, they or their dependants cannot have the benefit of this Act. This aspect of the matter is required to be taken into consideration with sufficient expedition to bring about a beneficial change of the motor accident victims of another class who are not covered by the phrase 'the third party' as is appearing in Section 147 of the Motor Vehicles Act. To note, one provision of Indian Motor Tariff (IMT) defies reason. An act policy and the package have the same. Premium rating but there is great difference in cover. Unless as an interim measure, these two policies are made at par, the distress of the motor accident victims of another class will continue unabated. 13. On the other hand, Mr. K.K. Dey, learned counsel appearing for the claimants-respondents submitted that the finding of the learned Tribunal cannot be faulted with inasmuch as D.W. 1 (Nilutpal Sengupta), in cross-examination stated: There is nothing in Exhibit-A that the occupants of the vehicle are not covered by this policy. For the 3rd party liability premium was received for Rs. 500/-. What Mr. K.K. Dey, learned counsel appearing for the claimants-respondents submitted that the finding of the learned Tribunal cannot be faulted with inasmuch as D.W. 1 (Nilutpal Sengupta), in cross-examination stated: There is nothing in Exhibit-A that the occupants of the vehicle are not covered by this policy. For the 3rd party liability premium was received for Rs. 500/-. What Mr. Dey, learned counsel for the claimants-respondents submitted faintly that unless there is exclusion of the persons expressly made in the insurance policy, all the persons shall be considered to be included in the policy for purpose of coverage. D.W. 1 categorically stated that: No premium of the said policy was paid by the owner to the insured for the coverage of any passenger or occupants in the said vehicle and the Company under such policy is not liable for the death or bodily injuries of any occupant or passenger of the said vehicle. The terms and conditions of the said policy qualifies the details. Exhibit-A is the said policy (true copy) and Exhibit-B is the terms and conditions of the said policy (specimen). So, the deceased of the case is not covered by this policy and the Insurance Company is not liable to pay any compensation to the claimants of the case. For a matter of contract for indemnity, the rule of construction is that those who would be expressly named, they only would be taken as the covered not otherwise. 14. In view of this, this Court does not find any substance in the submission of Mr. K.K. Dey, learned counsel for the claimants-respondents and as a result this Court, is constrained to hold that the Insurance Company has no liability to satisfy the award under the said Policy. And hence, the appeal succeeds and the same is allowed, holding that the appellant has no liability to satisfy the award, rather the award has to be satisfied by the owner of the vehicle, the respondent No. 6 namely, Sri Santosh Kumar Nath, within period of 2 (two) months from this date without fail with interest as indicated in the judgment and award i.e. a sum of Rs. 2,92,500/- (rupees two lakhs ninety two thousand and five hundred) with 6% interest per annum from the date of filing of the petition till the date of payment, to the claimants-respondents. 15. With this observation and direction, this appeal shall stand disposed of. 2,92,500/- (rupees two lakhs ninety two thousand and five hundred) with 6% interest per annum from the date of filing of the petition till the date of payment, to the claimants-respondents. 15. With this observation and direction, this appeal shall stand disposed of. In the fact and circumstances of the case, there shall be no order as to costs. Send down the LCRs forthwith.