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Himachal Pradesh High Court · body

2014 DIGILAW 929 (HP)

Oriental Insurance Co. Ltd. v. Puni Ram

2014-07-18

MANSOOR AHMAD MIR

body2014
JUDGMENT Mansoor Ahmad Mir, J. 1. All these 14 appeals have been preferred by the Insurance Company against the awards, passed on different dates, in Claim Petitions, which were the outcome of accident involving one vehicle i.e. Tempo Trax bearing registration No. HP-01A-3255. Thus, I deem it proper to determine all these appeals by a common judgment. 2. Appeal Nos. 364 of 2010, 361 of 2010, 362 of 2010, 363 of 2010 & 365 of 2010, arise out of the impugned awards passed by Motor Accident Claims Tribunal-II, Kinnaur at Rampur Bushahr, in which insurer was fastened with the liability, while Appeal Nos.173 of 2011, 174 of 2011, 175 of 2011, 176 of 2011, 280 of 2011, 281 of 2011, 282 of 2011 & 4153 of 2013, arise out of the impugned awards passed by Motor Accident Claims Tribunal, Kinnaur at Rampur Bushahr, in which the liability of insurer was restricted to satisfy only 11 awards. In FAO No.481 of 2012, the liability to indemnify the impugned award was fastened on the insurer by the Motor Accident Claims Tribunal, Kinnaur at Rampur Bushahr. 3. The claimants, being the victims of vehicular accident caused by the driver, namely, Madan Lal, while driving the vehicle i.e. Tempo Trax bearing registration No. HP-01A-3255, preferred claim petitions for grant of compensation, on the ground that on 2.12.2007 at about 1.45 a.m., the driver of the offending vehicle, while driving the vehicle rashly and negligently, could not control the same and the vehicle rolled down the road, resulting into the death of 16 occupants, including the driver/owner, while one occupant sustained injuries and one could not be traced. Thus, the claimants filed Claim Petitions for grant of compensation, as per the break-ups given in the respective petitions. 4. Respondent No.1 (widow of the owner/driver of the vehicle) and Respondent No.2 (insurer) resisted the Claim Petitions by filing separate replies. 5. On the pleadings of parties, following similar issues were settled by the Tribunal in all the Claim Petitions: 1. Whether on 2.12.2007 at about 1.45 a.m. at Arpu deceased Man Dassi died on account of rash and negligent driving of vehicle bearing No. HP-01A-3255 (Tempo Trax) by its driver? OPP 2. If issue No.1 is proved, whether the petitioners are entitled to compensation, if so to what amount and at what rate of interest? OPP 3. Whether on 2.12.2007 at about 1.45 a.m. at Arpu deceased Man Dassi died on account of rash and negligent driving of vehicle bearing No. HP-01A-3255 (Tempo Trax) by its driver? OPP 2. If issue No.1 is proved, whether the petitioners are entitled to compensation, if so to what amount and at what rate of interest? OPP 3. Whether the petition is not maintainable as the vehicle in question was being plied in violation of policy conditions i.e. over loading, if so its effect? OPR 4. Whether the driver of the vehicle in question was not possessing a valid and effective driving license at the time of accident? OPR 5. Whether the vehicle in question was being driven without registration-cum-fitness certificate and permit etc. at the time of accident? OPR 6. Relief. 6. The claimants and the respondents have led evidence. The Tribunal, after scanning the evidence, allowed the claim petitions and saddled the insurer with the liability vide awards impugned in FAO Nos.364 of 2010, 361 of 2010, 362 of 2010, 363 of 2010, 365 of 2010 and 481 of 2012. However, in the other awards, impugned in FAO Nos.173 of 2011, 174 of 2011, 175 of 2011, 176 of 2011, 280 of 2011, 281 of 2011, 282 of 2011 and 4153 of 2013, it was held that the insurer is liable to indemnify the compensation amount only in respect of 11 awards, since the seating capacity of the offending vehicle was 11 persons. It was also held that the accident was not the outcome of overloading, as claimed by the insurer and, in fact, it was due to the rash and negligent driving of the driver. 7. The insured/legal representative of the deceased owner/driver and the claimants have not questioned the findings recorded by the Tribunal, have attained finality qua them. 8. Only the insurer has challenged the impugned awards on the sole ground that the Tribunals below have wrongly fastened the liability on the insurer. Thus, the sole question to be determined in all these appeals is – whether the insurer has been wrongly saddled with the liability? 9. During the course of hearing, the learned counsel for the insurer submitted that the accident was the outcome of overloading and thus, the insurer is not liable. Thus, the sole question to be determined in all these appeals is – whether the insurer has been wrongly saddled with the liability? 9. During the course of hearing, the learned counsel for the insurer submitted that the accident was the outcome of overloading and thus, the insurer is not liable. Admittedly, 18 persons, including the driver, were sitting in the offending vehicle at the time of accident, out of which 16 persons, including the driver, died. The insurer has not led any evidence that the accident was the outcome of overloading. The Tribunal below has also held that the cause of accident was the rash and negligent driving of the driver and not overloading, which findings are upheld in the absence of any evidence led by the insurer to that effect. 10. The next argument of the learned counsel for the appellant was that at the time of accident there were 18 persons traveling in the offending vehicle, against the seating capacity of 11 persons. Thus, it was submitted that the offending vehicle was being plied in violation of the terms of the insurance policy. The Tribunal, while fastening the insurer with the liability, has ignored this fact and therefore, it was submitted that the impugned awards deserve to be set aside. In the alternative, it was also submitted that the seating capacity of the offending vehicle was only 11 persons, therefore, the insurer, at the most, could have been fastened with the liability of indemnifying 11 claims only. 11. The learned counsel for the insurer-appellant, in support of his submissions, relied upon the decision in National Insurance Co. Ltd. vs. Anjana Shyam & other, AIR 2007 SC 2870 , in which it was held that the liability of the insurance company is limited to the extent of number of passengers authorized to be carried in the vehicle. 12. Adverting to the cases in hand, it is apt to record herein that in terms of Section 146 of the Motor Vehicles Act, the owner is under legal obligation to have insurance policy of the vehicle. Insurance is a mutual contract between the owner/insured and the insurer. Insurance policy of the offending vehicle is proved on the record as Ext.RW-2/B, which is not in dispute, rather, admitted by all the parties. 13. The liability of the insurer-appellant flows out from the insurance contract. Insurance is a mutual contract between the owner/insured and the insurer. Insurance policy of the offending vehicle is proved on the record as Ext.RW-2/B, which is not in dispute, rather, admitted by all the parties. 13. The liability of the insurer-appellant flows out from the insurance contract. A glance of Insurance Policy Ext.RW-2/B clearly shows that it is mentioned in the said policy document that the risk of passengers “Not Exceeding 18” is covered under the said policy. 14. During the course of hearing, the learned counsel for the appellant-insurer was asked whether the Insurance Company has rectified the insurance policy by making correction to the effect that the risk of only 11 passengers, instead of 18, was covered, to which the reply was in the negative. He was also asked whether the Insurance Company questioned the insurance contract on this count in any proceeding or whether it has cancelled the same. The answer was again in the negative. 15. I have gone through the reply filed by the Insurance Company to the Claim Petitions. It is nowhere pleaded by the insurer that the insurance contract is void or is not legal one. Therefore, once it is clearly mentioned in the policy document Ext.RW-2/B that the risk of passengers “Not Exceeding 18” is covered under the said policy, the insurer/appellants cannot escape the liability of indemnifying the insured and satisfy 18 claims. 16. I derive support from the decision of the Apex Court in United India Insurance Co. Ltd. vs. K.M. Poonam and others, 2011 ACJ 917. It is profitable to reproduce paragraph 24 of the said decision hereunder: “24. The liability of the insurer, therefore, is confined to the number of persons covered by the insurance policy and not beyond the same. In other words, as in the present case, since the insurance policy of the owner of the vehicle covered six occupants of the vehicle in question, including the driver, the liability of the insurer would be confined to six persons only, notwithstanding the larger number of persons carried in the vehicle. Such excess number of persons would have to be treated as third parties, but since no premium had been paid in the policy for them the insurer would not be liable to make payment of the compensation amount as far as they are concerned. Such excess number of persons would have to be treated as third parties, but since no premium had been paid in the policy for them the insurer would not be liable to make payment of the compensation amount as far as they are concerned. However, the liability of the Insurance Company to make payment even in respect of persons not covered by the insurance policy continues under the as it provisions of sub-section (1) of Section 149 of the Act, would be entitled to recover the same if it could prove that one of the conditions of the policy had been breached by the owner of the vehicle. In the instant case, any of the persons travelling in the vehicle in excess of the permitted number of six passengers, though entitled to be compensated by the owner of the vehicle, would still be entitled to receive the compensation amount from the insurer, who could then recover it from the insured owner of the vehicle.” 17. Thus, the facts of the cases in hand and the decision relied upon by the learned counsel for the appellants-insurer are distinguishable. 18. Coming to another aspect of the case, admittedly, the insurance policy Ex.RW-2/B is a “package policy”/“comprehensive policy” which covers the risk of all the occupants of the vehicle. While going through the insurance policy Ext.RW-2/B, it also appears that the insured has paid premium for package policy. 19. The Apex Court in a case titled National Insurance Company Ltd. versus Balakrishnan and another, reported in 2012 AIR SCW 6286, has discussed the purpose and concept of Comprehensive Policy/Package Policy and Act policy and held that Comprehensive Policy/Package Policy covers occupant of the insured vehicle, third party and the owner-insured also. It is apt to reproduce para 21 of the judgment herein: “21. In view of the aforesaid factual position, there is no scintilla of doubt that a “comprehensive policy/package policy” would cover the liability of the insurer for payment of compensation for the occupant in a car. There is no cavil that an “Act Policy” stands on a different footing from a “Comprehensive/Package Policy”. As the circulars have made the position very clear and the IRDA, which is presently the statutory authority, has commanded the insurance companies stating that a Comprehensive/ Package Policy covers the liability, there cannot be any dispute in that regard. There is no cavil that an “Act Policy” stands on a different footing from a “Comprehensive/Package Policy”. As the circulars have made the position very clear and the IRDA, which is presently the statutory authority, has commanded the insurance companies stating that a Comprehensive/ Package Policy covers the liability, there cannot be any dispute in that regard. We may hasten to clarify that the earlier pronouncements were rendered in respect of the “Act Policy” which admittedly cannot cover a third party risk of an occupant in a car. But, if the policy is a “Comprehensive/Package Policy”, the liability would be covered. These aspects were not noticed in the case of Bhagyalakshmi (2009 AIR SCW 5325) (supra) and, therefore, the matter was referred to a larger Bench. We are disposed to think that there is no necessity to refer the present matter to a larger Bench as the IRDA, which is presently the statutory authority, has clarified the position by issuing circulars which have been reproduced in the judgment by the Delhi High Court and we have also reproduced the same.” 20. I was dealing with a case of the like nature as Judge of the Jammu and Kashmir High Court, where the award of Rs.1,68,09,089/- was made, wherein it was held that the insurer should resist itself from contesting the Claim Petition in which insurance cover is provided under the comprehensive policy/package policy. The said judgment was delivered in case titled as New India Assurance Co. Ltd. versus Shanti Bopanna and others, decided on 8.3.2013. It is apt to reproduce paras 1, 2 and 16 of the judgment herein. “1. Does the Comprehensive Policy of Insurance exempts the Insurance Company from its liability of paying compensation to the victim of a vehicular accident who is traveling in a vehicle which is covered under such policy, at the time of accident, is but the only important point, raised in the instant appeal which seeks setting aside of Award dated 26th April, 2012, for short as impugned Award, passed by Motor Accidents Claims Tribunal Samba, for short as Tribunal? 2. No is possible the only answer for the reasons those would flow from the narration of events below.” 3 to 15…………………… ………..………… 16. 2. No is possible the only answer for the reasons those would flow from the narration of events below.” 3 to 15…………………… ………..………… 16. Having regard to the ratio laid down by the Hon’ble Apex Court, Hon’ble High Courts of Delhi and Punjab and Haryana read with statement of the insurance official, S.K. Gupta, the appellant has rightly been saddled with the liability.” 21. Guidelines/circulars have also been issued by the IRDA, in which the Insurance Companies have been asked not to contest the Claim Petitions where the Insurance Policy is package policy. In the context, I also deem it proper to reproduce paras 10, 19, 21, and 26 of the judgment of the Apex Court titled as National Insurance Company Ltd. Versus Balakrishnan and another reported in (2013) 1 SCC 731 , hereunder: “10. As per the command of Section 146 of the Act, the owner of a vehicle is obliged to obtain an insurance for the vehicle to cover the third party risk. Section 147 deals with the requirements of policies and limits of liability. Section 147 (1) which is relevant for the present purpose is reproduced below:- “147. Requirements 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 authorized insurer. (b) Insurers 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 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. (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 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 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. (b) If it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle. (c) If it is a goods carriage, being carried in the vehicle. (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.” On a scanning of the aforesaid provision, it is evident that the policy of insurance must be a policy which complies with the conditions enumerated under Section 147 (1) (a) & (b). It also provides where a policy is not required and also stipulates to cover any contractual liability. 11 to 18 ………….. …………..………. 19. On a perusal of the aforesaid paragraph, it is clear as crystal that the decisions that have been referred to in Bhagyalakshmi (supra) involved only “Act Policies”. The Bench felt that the matter would be different if the Tariff Advisory Committee seeks to enforce its decision in regard to coverage of third party risk which would include an occupant in a vehicle. The Bench felt that the matter would be different if the Tariff Advisory Committee seeks to enforce its decision in regard to coverage of third party risk which would include an occupant in a vehicle. It is worth noting that the Bench referred to certain decisions of Delhi High Court and Madras High Court and thought it appropriate to refer the matter to a larger Bench. Be it noted, in the said case, the Court was dealing with comprehensive policy which is also called a package policy. In that context, in the earlier part of the judgment, the Bench had stated thus:- “The policy in question is a package policy. The contract of insurance if given its face value covers the risk not only of a third party but also of persons traveling in the car including the owner thereof. The question is as to whether the policy in question is a comprehensive policy or only an Act policy.” 20. ……………….. …………………. 21. At this stage, it is apposite to note that when the decision in Bhagyalakshmi was rendered, a decision of High Court of Delhi dealing with the view of the Tariff Advisory Committee in respect of “comprehensive/package policy” had not come into the field. We think it apt to refer to the same as it deals with certain factual position which can be of assistance. The High Court of Delhi in Yashpal Luthra and another vs. United India Insurance Co. Ltd. and another 2011 ACJ 1415, after recording the evidence of the competent authority of Tariff Advisory Committee (TAC) and Insurance Regulatory and Development Authority (IRDA), reproduced a circular dated 16.11.2009 issued by IRDA to CEOs of all the Insurance Companies restating the factual position relating to the liability of Insurance companies in respect of a pillion rider on a two-wheeler and occupants in a private car under the comprehensive/package policy. 22 to 25.………….……….……… 26. In view of the aforesaid factual position, there is no scintilla of doubt that a “comprehensive/package policy” would cover the liability of the insurer for payment of compensation for the occupant in a car. There is no cavil that an “Act Policy” stands on a different footing from a “Comprehensive/Package Policy”. 22 to 25.………….……….……… 26. In view of the aforesaid factual position, there is no scintilla of doubt that a “comprehensive/package policy” would cover the liability of the insurer for payment of compensation for the occupant in a car. There is no cavil that an “Act Policy” stands on a different footing from a “Comprehensive/Package Policy”. As the circulars have made the position very clear and the IRDA, which is presently the statutory authority, has commanded the insurance companies stating that a “Comprehensive/Package Policy” covers the liability, there cannot be any dispute in that regard. We may hasten to clarify that the earlier pronouncements were rendered in respect of the “Act Policy” which admittedly cannot cover a third party risk of an occupant in a car. But, if the policy is a “Comprehensive/Package Policy” the liability would be covered. These aspects were not noticed Bhagyalakshmi and, therefore, the matter was referred to a larger Bench. We are disposed to think that there is no necessity to refer the present matter to a larger Bench as the IRDA, which is presently the statutory authority, has clarified the position by issuing circulars which have been reproduced in the judgment by the Delhi High Court and we have also reproduced the same.” 22. Following the same principle, this Court in case titled as New India Assurance Company Ltd. vs. Smt. Anuradha and others, FAO No. 71 of 2011, decided on 10.1.2014), has held the insurer liable to pay compensation since the offending vehicle was covered under the Comprehensive/Package Policy. 23. In view of the above discussion, all the appeals are dismissed and as a consequence, the insurer is held liable to pay the compensation amount, as awarded by the Tribunals below, in all the claim petitions. 24. The Registry is directed to release the deposited amount in favour of the claimants strictly in terms of the impugned awards. Registry is also directed to place a copy of this judgment on each file.