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2016 DIGILAW 1110 (KER)

United India Insurance Company Limited v. George

2016-12-15

A.HARIPRASAD

body2016
JUDGMENT : A. Hariprasad, J. These three appeals are heard together and disposed by this common judgment as the questions of law arising are common. 2. M.A.C.A. No.1373 of 2015 is filed by the United India Insurance Company Ltd., the 3rd respondent in O.P. (MV) No.93 of 2010 on the file of the Motor Accidents Claims Tribunal, North Paravur. 3. In M.A.C.A. No.662 of 2016, the award passed in O.P.(MV) No.56 of 2015 on the file of the Motor Accidents Claims Tribunal, Taliparamba is assailed by owner of the vehicle involved in the road accident, who was the 1st respondent before the Tribunal. 4. M.A.C.A. No.1678 of 2016 is against the award passed in O.P. (MV) No.959 of 2007 on the file of the Motor Accidents Claims Tribunal-III, Pathanamthitta. The 3rd respondent in the claim petition (National Insurance Company Ltd.) is the appellant herein. 5. Case pleaded in O.P.(MV) No.56 of 2015 is that on 16.11.2005, while the claimant was accompanying the goods carried in a goods auto-rickshaw bearing No.KL-13 M-4943, the vehicle overturned and the claimant sustained extensive head injury, contusion on temporal region affecting the left ear, contusion on the neck, shoulder and left thigh. According to her, the accident was due to the rash and negligent driving of the auto-rickshaw by the appellant, who is the owner-cum-driver of the vehicle. She claimed compensation from the respondents in the claim petition. 6. The appellant filed a written statement denying rashness and negligence alleged against him. But he admitted the fact that he was the owner-cum-driver of the auto-rickshaw involved in the accident. Appellant contended that the vehicle was insured with the respondent insurance company and it had issued a composite insurance policy. Ext.B1 is the policy produced. The policy produced was incomplete. According to the appellant, Ext.B1 did not prohibit carrying the owner of the goods. Ext.B1 policy did not show that it permitted only the driver to travel, as it is silent as to the number of people permitted to travel. So, the company cannot get extricated itself from the liability to pay compensation. It is also contended by the appellant that in respect of the same vehicle, another insurance company later issued a policy showing the seating capacity 1 + 1. The injured travelled in the auto-rickshaw not as a gratuitous passenger. So, the company cannot get extricated itself from the liability to pay compensation. It is also contended by the appellant that in respect of the same vehicle, another insurance company later issued a policy showing the seating capacity 1 + 1. The injured travelled in the auto-rickshaw not as a gratuitous passenger. She hired the vehicle to carry coconuts belonged to her and she was accompanying the goods. Therefore, the company is liable to pay compensation. 7. The respondent insurance company admitted that the auto-rickshaw involved in the accident was insured with them on the date of accident. Insurance company disputed the quantum of claim raised by the claimant. The investigation conducted by their officers revealed that the claimant was travelling in the goods auto-rickshaw as a passenger. Since the above vehicle is a goods vehicle, the claimant's journey in the vehicle was in violation of the terms of policy as well as the stipulations in the Motor Vehicles Act, 1988 (In short, "the MV Act"). The claimant was only a gratuitous passenger. The investigation conducted by the insurance company revealed that the seating capacity of the auto-rickshaw is one and no person other than the driver was allowed to travel in the auto-rickshaw. There was a permit violation also. 8. Initially the Tribunal awarded compensation and directed the insurance company to recover the same from the owner-cum-driver. Aggrieved by the said direction, an appeal was preferred before this Court. On a consideration of the matters, this Court remanded the case to the Tribunal to reconsider the question whether there was any breach of the terms of policy. Thereafter, the Tribunal considered the question and passed the award. In the second round also Tribunal permitted the insurance company to recover the amount of compensation from the owner-cum-driver of the auto-rickshaw. Hence he is in appeal. 9. M.A.C.A. No. 1678 of 2016 is filed by the 3rd respondent insurance company in O.P.(MV) No.959 of 2007, which was preferred by the injured claiming compensation for the injuries sustained in an accident on 15.02.2005. The claimant had hired the goods auto-rickshaw involved in the accident for transporting bamboo poles belonged to him. After unloading the goods, the claimant was travelling back to his house. While returning, the auto-rickshaw met with an accident and it capsized causing serious injuries to the claimant. The claimant had hired the goods auto-rickshaw involved in the accident for transporting bamboo poles belonged to him. After unloading the goods, the claimant was travelling back to his house. While returning, the auto-rickshaw met with an accident and it capsized causing serious injuries to the claimant. The accident was due to the rash and negligent driving of the auto-rickshaw by the driver. The vehicle was insured with the appellant insurance company. 10. The insurance company filed a written statement contending that the claim petition is not maintainable and the company has no liability to compensate the claimant. The claimant was travelling in a goods auto-rickshaw. It was not meant for carrying passengers. The registration certificate of the auto-rickshaw showed that its seating capacity is two, including the driver. The claimant was standing on platform of the goods auto-rickshaw at the time of accident. Another person was sitting in the cabin of the auto-rickshaw along with the driver. Therefore, the claimant was a gratuitous passenger. The records relating to criminal case would show that the vehicle had been plied violating the policy conditions. Hence the company is not liable to compensate. 11. Tribunal directed the insurance company to pay compensation and recover the same from respondents 1 and 2. Denying the liability to compensate, the insurance company has come up in appeal. 12. Award in O.P.(MV) No.93 of 2010 is challenged in M.A.C.A. No.1373 of 2015 by the 3rd respondent insurance company. The case pleaded is that on 20.10.2009, while the claimant was travelling in a goods auto-rickshaw driven by the 2nd respondent in the petition, due to the rash and negligent driving, it turned turtle and the claimant sustained injuries. He was taken to hospital and treated. 13. The owner and driver refuted the allegation of negligence. They contended that the auto-rickshaw was a goods vehicle and the claimant travelled in it without the consent of the owner of the vehicle. If at all the claimant is entitled to any compensation, the insurance company has to pay it. 14. The insurance company filed a written statement contending that the offending vehicle was a goods auto-rickshaw and therefore no passenger was allowed to travel in it. Therefore, the company is not liable to indemnify the owner of goods auto-rickshaw. No extra premium was collected to carry persons in the auto-rickshaw. 15. 14. The insurance company filed a written statement contending that the offending vehicle was a goods auto-rickshaw and therefore no passenger was allowed to travel in it. Therefore, the company is not liable to indemnify the owner of goods auto-rickshaw. No extra premium was collected to carry persons in the auto-rickshaw. 15. Tribunal granted compensation to the claimant and directed the insurance company to pay the same, which direction is challenged in the appeal. 16. Heard the learned Senior Counsel appearing for the appellant in M.A.C.A. No.1373 of 2015 and respondent in M.A.C.A. No.662 of 2016. Learned counsel for the appellant in M.A.C.A. No.1678 of 2016, learned counsel for the appellant in M.A.C.A. No.662 of 2016 and the learned counsel for the respondents are also heard. 17. The legal questions arising for consideration are: (i). Whether the insurance company is liable to compensate the injured, who travelled in a goods auto-rickshaw? (ii). If the registration certificate of the vehicle shows that only one person can travel in the auto-rickshaw, is it permissible for the owner of the goods to accompany the same, sharing the seat of the driver? (iii). What is the liability of an insurance company in respect of injury to a passenger travelling on the platform of a goods auto-rickshaw? (iv). Can it be contended by the owner-cum-driver of a goods auto-rickshaw that the insurance company should be held liable, if number of persons covered by the policy is not specifically shown? 18. Learned counsel for the appellant in M.A.C.A. No.662 of 2016 contended that permission granted by the Tribunal in favour of the insurance company to recover compensation from the appellant under Section 149(4), proviso to the MV Act is unsustainable. According to him, the insurance company is liable to pay the amount of compensation awarded to the claimant and it cannot exercise the right to recover. Per contra, learned Senior Counsel for the insurance company, contended that the Tribunal went wrong in fixing liability on the insurance company to pay compensation as the company has no liability under the provisions of the MV Act. Relevant portion of Section 147 of the MV Act reads as follows: "147. Requirements of policies and limits of liability. Per contra, learned Senior Counsel for the insurance company, contended that the Tribunal went wrong in fixing liability on the insurance company to pay compensation as the company has no liability under the provisions of the MV Act. Relevant portion of Section 147 of the MV Act reads as follows: "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 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 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, 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." 19. Section 149 of the MV Act deals with the duty of the insurers to satisfy judgments and awards against persons insured in respect of third party risks. Section 149 of the MV Act deals with the duty of the insurers to satisfy judgments and awards against persons insured in respect of third party risks. Sub-section (2) of Section 149 of the MV Act reads as follows: "(2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:- (a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:- (i) a condition excluding the use of the vehicle- (a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or (b) for organized racing and speed testing, or (c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or (d) without side car being attached where the vehicle is motor-cycle; or (ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving license during the period of disqualification; or (iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or (b) that the policy is void on the ground that it was obtained by the nondisclosure of a material fact or by a representation of fact which was false in some material particular." 20. Learned Senior Counsel contended that the claim of the appellant in M.A.C.A. No.662 of 2016 is legally unsustainable as there was a breach of the terms of the policy. So, it is a case where the company has no liability at all. Learned Senior Counsel contended that the claim of the appellant in M.A.C.A. No.662 of 2016 is legally unsustainable as there was a breach of the terms of the policy. So, it is a case where the company has no liability at all. However, the company has not preferred any appeal challenging the direction of the Tribunal. It is therefore contended by him that the recovery right ceded to the insurance company may not be disturbed. 21. Learned counsel for the appellant in M.A.C.A. No.662 of 2016 contended that the company is liable to pay compensation as there was no violation of the terms of policy. 22. Let us examine the judicial pronouncements relevant in this case. In New India Assurance Co. Ltd. v. Asha Rani (2003 (1) KLT 165 (SC)) the question raised was whether the insurer is liable to pay compensation to the dependents of a deceased passenger while the deceased was travelling in a goods vehicle. In that case the vehicle met with an accident, on account of which the passenger died. The Supreme Court after considering the relevant issues held as follows: "In Satpal's case (supra) the Court assumed that the provisions of Section 95(1) of Motor Vehicles Act, 1939 are identical with Section 147(1) of the Motor Vehicles Act, 1988, as it stood prior to its amendment. But a careful scrutiny of the provisions would make it clear that prior to the amendment of 1994 it was not necessary for the insurer to insure against the owner of the goods or his authorised representative being carried in a goods vehicle. On an erroneous impression this Court came to the conclusion that the insurer would be liable to pay compensation in respect of the death or bodily injury caused to either the owner of the goods or his authorised representative when being carried in a goods vehicle the accident occurred. On an erroneous impression this Court came to the conclusion that the insurer would be liable to pay compensation in respect of the death or bodily injury caused to either the owner of the goods or his authorised representative when being carried in a goods vehicle the accident occurred. If the Motor Vehicles Amendment Act of 1994 is examined, particularly Section 46 of Act 6 of 1994 by which expression 'injury to any person' in the original Act stood substituted by the expression 'injury to any person including owner of the goods or his authorised representative carried in the vehicle' the conclusion is irresistible that prior to the aforesaid amendment Act of 1994, even if widest interpretation is given to the expression 'to any person' it will not cover either the owner of the goods or his authorised representative being carried in the vehicle. The objects and reasons of clause 46 also states that it seeks to amend Section 147 to include owner of the goods or his authorised representative carried in the vehicle for the purposes of liability under the insurance policy. It is no doubt true that sometimes the Legislature amends the law by way of amplification and clarification of and inherent position which is there in the statute, but a plain meaning being given to the words used 1 in the statute, as it stood prior to its amendment of 1994, and as it stands subsequent to its amendment in 1994 and bearing in mind the objects and reasons engrafted in the amended provisions referred to earlier, it is difficult for us to construe that the expression 'including owner of the goods or his authorised representative carried in the vehicle' which was added to the preexisted expression 'injury to any person' is either clarificatory or amplification of the pre-existing statute. On the other hand it clearly demonstrates that the Legislature wanted to bring within the sweep of Section 147 and making it compulsory for the insurer to insure even in case of a goods vehicle, the owner of the goods or his authorised representative being carried in a goods vehicle when that vehicle met with an accident and the owner of the goods or his representative either dies or suffers bodily injury. The judgment of this Court in Satpal's case, therefore must be held to have not been correctly decided and the impugned judgment of the tribunal as well as that of the High Court accordingly are set aside and these appeals are allowed. It is held that the insurer will not be liable for paying compensation to the owner of goods or his authorised representative on being carried in a goods vehicle when that meets with an accident and the owner of goods or his representative dies or suffers any bodily injury." The changes made by substitution of Section 147 of the Act by Section 46 of the Act 54 of 1994 (w.e.f. 14.11.1994) was considered by the Supreme Court in the above decision. 23. Supreme Court in National Insurance Co. Ltd. v. Ajit Kumar and others ( AIR 2003 SC 3093 ) also considered the ratio in New India Assurance Co. Ltd. v. Satpal Singh ( AIR 2000 SC 235 ) and found that it has no application after the amendment of Section 147 of the MV Act. In National Insurance Co. Ltd. v. Chinnamma (2004 (3) KLT 397), the Supreme Court, presided over by three learned Judges, considered the question whether the owner of goods travelling in a trailer attached to the tractor was entitled to the insurance coverage before the amendment of Section 147 of the MV Act. The court held that an insurance for an owner of the goods or his authorised representative travelling in a vehicle became compulsory only with effect from 14.11.1994, i.e., from the date of coming into force of amending Act 54 of 1994. Other questions decided in the above decision may not be of relevance to this case. 24. The Supreme Court in National Insurance Co. Ltd. v. Cholleti Bharatamma ( (2008) 1 SCC 423 ) held that it is now well settled that the owner of the goods means only the person who travels in the cabin of the vehicle (see paragraphs 8 to 19). 25. The Supreme Court in another case, viz., United India Insurance Co. Ltd. v. Suresh (2008 (4) KLT 552) considered the question whether a person who hired a goods carriage would come within the purview of Section 147(1) of the MV Act although no goods as such were carried in the vehicle at the time of accident. 25. The Supreme Court in another case, viz., United India Insurance Co. Ltd. v. Suresh (2008 (4) KLT 552) considered the question whether a person who hired a goods carriage would come within the purview of Section 147(1) of the MV Act although no goods as such were carried in the vehicle at the time of accident. In the above case, this Court had taken a view that such a person also will be covered under Section 147(1) of the Act. That decision was challenged before the Supreme Court. The Supreme Court held as follows: "If the claimant had not been travelling in the vehicle as owner of the goods, he shall not be covered by the policy of the insurance. In any view of the matter in a three wheeler goods carriage, the driver could not have allowed anybody else to share his seat. No other person whether as a passenger or as a owner of the vehicle is supposed to share the seat of the driver. Violation of the condition of the contract of insurance, therefore, is approved." The Supreme Court after holding so, allowed the appeal and reversed the judgment of this Court. Another decision relevant in this context is pronounced by a Division Bench of this Court in United India Insurance Co. Ltd. v. Manoj ( 2011 (1) KLT 502 ). The appellant insurance company challenged the award contending that it should have been exonerated from the liability for the reasons that the claimant was not the owner of the goods carried in the goods vehicle and that the owner and driver of the vehicle were not supposed to allow the claimant to travel in the vehicle, be as the owner of the goods or a gratuitous passenger. After considering the law on the point and also the decision of the Supreme Court in National Insurance Co. Ltd. v. Baljit Kaur (2004 (1) KLT 938) this Court held as follows: "Their Lordships of the Supreme Court in United India Insurance Co. Ltd. v. Suresh (2008 (4) KLT 552 (SC)) has taken such a view. The question that came up for consideration in the above case was whether a person who hired a goods vehicle would come within the purview of Section 147(1) of the Act, although no goods were being carried at the time of the accident. Ltd. v. Suresh (2008 (4) KLT 552 (SC)) has taken such a view. The question that came up for consideration in the above case was whether a person who hired a goods vehicle would come within the purview of Section 147(1) of the Act, although no goods were being carried at the time of the accident. While reiterating the well settled legal position as laid down in National Insurance Co. Ltd. v. Baljit Kaur (2004) 2 SCC 1 ) that the term "any person" envisaged under Section 147(1)(b)(i) shall not include any gratuitous passenger, their Lordships held that if the claimant had not been travelling in the vehicle as owner of the goods, he shall not be covered by the policy of insurance. To put it differently, no gratuitous passenger can be allowed to travel in a goods vehicle and not even the owner of the vehicle can share the seat of the driver in a goods auto-rickshaw. But, it was held that if the owner of the goods is allowed to share the seat of the driver, it will be only at the risk and peril of the owner/insured of the vehicle." 26. Learned counsel relying on Lakhmi Chand v. Reliance General Insurance ( (2016) 3 SCC 100 ) contended that the insurance company has not taken up a defence of breach of policy in the written statement. This submission is opposed by the learned Senior Counsel for the insurance company. The insurance company has specifically contended in the written statement that the auto-rickshaw in question was permitted to carry only one person, ie., the driver alone. Ext.B2 is the RC particulars in respect of the goods auto-rickshaw, which shows that only the driver alone was permitted to travel in it. Ext.B1 is the insurance policy. Learned Senior Counsel placed reliance on Ext.B1 to contend that no premium covering either owner of the goods or his authorised representative was collected from the appellant. 27. Insurance is a contract between the insured and insurer. It is an unchallengeable proposition that without paying the required premium, the insured cannot claim any benefit in respect of the policy. Exts.B1 and B2 would show that the goods auto-rickshaw in question in M.A.C.A. No.662 of 2016 was designed to carry only one person in the cabin. 27. Insurance is a contract between the insured and insurer. It is an unchallengeable proposition that without paying the required premium, the insured cannot claim any benefit in respect of the policy. Exts.B1 and B2 would show that the goods auto-rickshaw in question in M.A.C.A. No.662 of 2016 was designed to carry only one person in the cabin. The submission made by the learned counsel relying on Ext.B3, that on 19.02.2009, another insurance company had issued a policy in respect of the goods auto-rickshaw covering the risk of two persons, is of no consequence for deciding this case. It is because Ext.B1 policy does not show that they have collected additional premium for a passenger in the cabin. Secondly, contract entered into with another insurance company cannot be looked into to resolve the liability of the insurer under Ext.B1. In the light of the observations made in the Baljit Kaur's case (supra), which is followed by a Division Bench of this Court in Manoj's case, I am of the view that the appellant should not have permitted the claimant to travel in the goods auto-rickshaw sharing his seat, even if she was the owner of the goods carried in the vehicle. It amounts to violation of permit condition as well as violation of policy condition. Therefore, the learned Senior Counsel for the insurance company is justified in arguing that the Tribunal should not have directed the company to pay compensation to the claimant and recover the same from the insured. In the absence of any appeal preferred by the company, I do not wish to disturb the said direction. Further, I find no legal infirmity in directing the appellant to reimburse the insurance company by invoking Section 149 of the MV Act. Therefore, M.A.C.A. No.662 of 2016 is devoid of any merit. It is dismissed. 28. M.A.C.A. No.1373 of 2015 is also an identical case. But the Tribunal has not even allowed the company to recover the amount. In the light of the above discussion, I am of the view that the company is not liable to pay compensation to the claimant and the liability is purely on respondents 1 and 2 in the claim petition. Therefore the appeal is allowed and the direction passed by the Tribunal against the appellant insurance company is set aside. In the light of the above discussion, I am of the view that the company is not liable to pay compensation to the claimant and the liability is purely on respondents 1 and 2 in the claim petition. Therefore the appeal is allowed and the direction passed by the Tribunal against the appellant insurance company is set aside. The amount of compensation shall be recovered from the owner and driver of the offending vehicle. 29. In M.A.C.A. No.1678 of 2016, in an identical situation as in other cases, I find that the appellant insurance company is not liable to pay compensation and therefore, the direction given to the appellant to pay and recover the same from the owner and driver is set aside. The award is modified to the extent that the insurance company has no liability to pay compensation and owner and driver of the offending vehicle shall pay the compensation to the claimant as per the terms of the award. Appeal is allowed as above. All pending interlocutory applications will stand closed.