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2016 DIGILAW 567 (GAU)

New India Assurance Co. Ltd. v. Deepa Mall

2016-06-17

PARAN KUMAR PHUKAN

body2016
JUDGMENT AND ORDER : Paran Kumar Phukan, J. These appeals have arisen out of the MAC Case No. 43 of 2009 between the same parties involving common questions of law and fact and as such, both these appeals are taken up together for discussion and decision for the sake of convenience and brevity and it is proposed to dispose of the appeals with a common judgment. For convenience, hereinafter, the parties are called claimant and insurer. 2. The MAC Appeal No. 7 (K)/2015 has been preferred by the insurer New India Assurance Company Ltd. against the respondents who are the appellants in MAC Appeal No. 5(K) of 2015. 3. The claim case depicts a strange picture, absurdities looming large on the face of records The claimant knocked the doors of the learned Member, Motor Claims Tribunal, Dimapur u/s 166 of the Motor Vehicles Act claiming compensation for the death of her husband, a professional doctor, in a road traffic accident involving a vehicle owned by her minor daughter and the daughter of the deceased and insured with New India Assurance Company Ltd. The deceased doctor himself was driving the vehicle and was proceeding towards Shillong from Dimapur to bring his family but unfortunately near the Nambar Reserve Forest the vehicle dashed against a roadside tree allegedly due to bursting of a rear wheel tyre, as a result of which the deceased sustained grievous injuries and succumbed to the injures on the way to hospital. The fault of the accident has been attributed to the caretaker of the vehicle, who was looking after the vehicle, on behalf of the minor daughter. 4. The factum of death of the deceased in the accident involving vehicle No. N L-07/0096 (Wagon R) which was insured with New India Assurance Co. Ltd. has not been disputed. There is also no dispute that the deceased himself was driving the vehicle at the time of the accident and it dashed against a roadside tree due to sudden bursting of a rear wheel tyre. It is also not disputed that the deceased was a professional doctor and at the relevant time he was working in a nursing home at Dimapur. 'Hie vehicle involved in the accident at the relevant time was insured with a package policy and additional premium of Rs. 25/- was paid covering the risk of one employee of the owner. It is also not disputed that the deceased was a professional doctor and at the relevant time he was working in a nursing home at Dimapur. 'Hie vehicle involved in the accident at the relevant time was insured with a package policy and additional premium of Rs. 25/- was paid covering the risk of one employee of the owner. The policy has been produced during the trial before the Tribunal and no dispute has been raised regarding the risk coverage of the policy. 5. The insurer resisted the claim of the claimant on the ground that the deceased himself being the owner, the insurance company has no liability to pay compensation to the claimant. The insurance company also took the plea that there was no risk coverage for the injury or death of the deceased who was neither a driver nor an employee of the owner. It was further pleaded that the petition u/s 166 of the Motor Vehicles Act is not maintainable inasmuch as no rash and negligent driving has been established in the case. 6. The learned Member, Motor Accident Claims Tribunal, Dimapur allowed the claim of the claimant and awarded compensation of Rs.25,83,500/-vide judgment dated 7.7.2009 against which the insurer preferred appeal before the High Court and the High Court vide judgment and order dated 17.12.2010 passed in MAC Appeal No. 11 (K)/2009 remanded the case to the Tribunal for fresh disposal with the directions to arrive at a finding regarding negligence, purchase of the offending vehicle by the grandmother of the respondent Ms. Nidhi Mall and to prove the salary certificate of the deceased with a further direction to dispose of the case within a period of 3 months. The learned Tribunal after remand of the case allowed the parties to adduce further evidence of witnesses and thereafter, vide judgment and order dated 13.05.2015 awarded compensation of Rs. 43,63,500/in favour of the claimant. This judgment of the Tribunal has been assai led by the claimant seeking enhancement of the awarded amount and by the insurer for setting side the award on the ground that the insurer is not liable to pay compensation. 7. I have heard Mr. Imti Imsong, learned counsel appearing for the insurer. New India Assurance Co. and Mr. R.D. Lal, learned counsel for the claimants. 8. 7. I have heard Mr. Imti Imsong, learned counsel appearing for the insurer. New India Assurance Co. and Mr. R.D. Lal, learned counsel for the claimants. 8. The core issue to be decided in these appeals is whether the policy of insurance in respect of vehicle involved in the accident cover the risk of the deceased who was admittedly a doctor by profession. Admittedly, the policy was a package policy which covers not only risk of the Third Parties but also the occupants of the private car. An extra liability can be created by payment of additional premium. The policy produced during the trial reveals that it was a package policy and Ms. Nidhi Mall minor daughter was the insured of the said policy which was being insured with New India Assurance Co. Ltd. From the policy it appears that additional premium of Rs. 25/- was realized covering the risk of one employee carried in the vehicle. 9. Mr. Imsong, learned counsel for the insurer submits that the deceased and the owner of the vehicle being the father and minor daughter, the relationship of employer and employee between them did not arise at all. The deceased being a professional doctor also cannot be said to be a workman under Section 2 (1) (k) of the Workmen’s Compensation Act. Pointing out the policy he submits that it was a packaged policy and liability of the insurer extends to the risk covered by the policy. The additional premium of Rs. 25/-was realized for one employee of the owner carried in the vehicle. Since the deceased was neither an employee nor a paid driver, the question of indemnification of the owner does not arise at all. 10. Mr. Lal, learned counsel for the claimant submits that although the deceased was not a driver by profession, on the relevant date, He was driving the vehicle for the purpose of bringing his family and his daughter from Shillong which ultimately met with an accident resulting his death. Therefore, the death of the deceased would be covered by the insurance policy in view of payment of extra premium for an employee. Mr. Lal further submits that the deceased was engaged to drive the vehicle on the date for bringing the family from Shillong and for the purpose of covering the risk it is not required to prove that he was a paid driver. Mr. Lal further submits that the deceased was engaged to drive the vehicle on the date for bringing the family from Shillong and for the purpose of covering the risk it is not required to prove that he was a paid driver. But the nature of the work undertaken by him amply shows that on that date, he was engaged as a driver to bring his family from Shillong. He also contends that t he insurance policy under the Head “persons or class of persons entitled to drive” speaks of any person including the insured provided that the person driving holds an effective driving license at the time of accident and is not disqualified from holding or obtaining such a license. The policy itself shows that it covers the risk of the deceased also who was driving the vehicle at the time of accident. He was having a valid driving license and therefore, the claim that he was not a paid driver cannot sustain and the compensation cannot be denied to the claimant. 11. M.r. R.D. Lal further argued that the insurance policy is under the Private Car Package Policy. Referring to Section II “Liability to Third Parties” submitted that subject to limits of liability as laid down in the schedule thereto, the company will indemnify the insured in the event of an accident caused by or arising out of the use of the motor vehicle against all sums which the insured shall become legally liable to pay in respect of:- “death of or bodily injury to any person including occupants carried in the vehicle (provided such occupants are not carried for hire or reward). Except so far it is necessary to meet the requirement of Motor Vehicles Act, the company shall not be liable where such death or injury arises out of and in course of the employment of such person by the insured.' 12. Referring to sub-section 3, Mr Lal submits that the company is liable to indemnify any driver having a valid driving license on the insured’s order or with insured’s permission provided that such driver shall as though he was the insured observe, fulfill and be subject to the terms, exceptions and conditions of this policy in so far as they apply. Referring to sub-section 3, Mr Lal submits that the company is liable to indemnify any driver having a valid driving license on the insured’s order or with insured’s permission provided that such driver shall as though he was the insured observe, fulfill and be subject to the terms, exceptions and conditions of this policy in so far as they apply. Taking recourse to Section II it was argued that the company is obliged to indemnify the insured in the event of an accident caused by or arising out of the use of the motor vehicle on account of death, bodily injury etc. including the driver, who is driving the vehicle on the insured’s order or permission. Since the deceased was driving the vehicle with insurer’s order or permission, he can be regarded as driver of the said vehicle. Since the insured paid premium for an employee, the appellant company is liable to indemnify the owner. Referring to IMT 29. Mr. Lal submits that since the additional premium of Rs.25/-has been realized, the insurer is liable to indemnify the insured at common law and the statutory' liability under the Fatal Accidents Act, 1885 for compensation, for death or bodily injury to any employee. This being the provisions under the Private Car Package Policy and the insurance of the vehicle and the conditions thereof remaining within its parameters, the appellant company now, cannot plead that the company is not liable to indemnify the registered owner, the insured, his or her insured employees. 13. Before adverting to the submissions of the learned counsels, it is appropriate to discuss the law relating to liability of the insurer vis-a-vis the policy of the insurance. As per provisions of the Motor Vehicles Act, the owner of a vehicle is mandatorily required to obtain an insurance for the vehicle to cover the third party risk. Section 147 of the Motor Vehicles Act deals with the requirements of the policies and limits of liability-. As per provisions of the Motor Vehicles Act, the owner of a vehicle is mandatorily required to obtain an insurance for the vehicle to cover the third party risk. Section 147 of the Motor Vehicles Act deals with the requirements of the policies and limits of liability-. This Section is reproduced below: "Requirements of policies and limits of liability.— (I) 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; 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 27 [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, or (b) if it is a public service vehicle engaged as 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. 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 (i), 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 properly 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 there-under 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.” 14. It emerges from the aforesaid provisions that the Act provides for two types of insurance - one statutory and the other contractual. In case of statutory' or act policy which is also sometimes called “Third Party Policy”, the insurer is bound to compensate the owner or the driver of the motor vehicle in case any person dies or suffers injury as a result of an accident. If the owner of the vehicle or others are proposed to be covered, an additional premium is required to be paid for covering their life and property and the liability incurred by the insurer in such cases is contractual liability. Section 147 shows that it is comprehensive in scope and meaning and fulfill the legislative edict is to be given wider and effective meaning. 15. It follows, therefore, that the liability' of the insurer is either statutory' or contractual. If it is contractual its liability extends to the risk covered by the policy of insurance. If additional risk are sought to be covered, additional premium has to be paid. 16. Keeping in view the legislative edict as mentioned above, let me now consider the facts of the present case to determine as to whether the insurer, in the facts and circumstances of the present case, is liable to pay the amount of compensation in relation to the accident caused by use of the vehicle which was being driven by the deceased who was the husband of the claimant and a professional doctor. 17. The fact remains that the deceased while proceeding towards Shillong from Dimapur to bring his family from Shillong to Dimapur, his vehicle dashed against a roadside tree due to sudden bursting of a rear wheel tyre and he died soon thereafter as a result of the injuries sustained. But admittedly at that time he was a doctor working in a nursing home at Dimapur. But admittedly at that time he was a doctor working in a nursing home at Dimapur. The vehicle involved in the accident was owned by his minor daughter and it was allegedly given to her by her grandmother for her exclusive use and for maintaining the vehicle the cousin brother of the deceased was retained who also acted as her guardian. The case of the claimant is that since the deceased was having a valid and effective driving license and not disqualified to hold the same and was driving the vehicle as per instruction of the owner and with her permission, he is to be treated as a driver and the insurer is liable to pay compensation for his death. 18. Mr. Lal, learned counsel for the claimants by referring to various judgment of the Apex Court and the High Courts and by relying on the evidence adduced by the two insurance officials examined by the insurer, has strenuously submitted that compensation cannot be denied to the claimant on the ground that he was a professional doctor and not a driver. Additional premium of Rs. 25/- has been realized by the insurer for covering his risk and as such, the insurer is liable to indemnify the owner. He has placed reliance on the following judgments: (i) United India Assurance Co. Ltd. v. Paresh Saikia & Anr [2013(2) CLT 942: 2013 (2) GLR 826] (ii) New India Insurance Co. Ltd. v. S. K. Roy Choudhury & Anr. [2014 (3) GLT 372] (iii) New India Assurance Co. Ltd. v. Indra Devi & Ors. (2013 ACJ 258) (iv) New India Assurance Co. Ltd. v. G.D. Dengi & Anr ( 2009 ACJ 168 ) (v) United India Insurance Co. Ltd. v. Smti. N. Bujji @ Manemma [2012 (2) TAC 526] (vi) Bhagyalakshmi & Ors. v. United India Insurance Co. Ltd. & Anr. (vii) National Insurance Co. Ltd. v. Balakrishnan & Anr. (viii) Oriental Insurance Co. Ltd. v. Surendra Nath Loomha (ix) Yashpal Luthra v. United India Insurance Co. Ltd. & Anr. (x) United India Insurance Co. Ltd. v. Urmila Chand 2016 (I) GLT 211 (xi) Mafisuddin Khadim v. National Insurance Co. Ltd. [2011 (1) GLT 309] 19. Mr. Lal relying heavily on the aforesaid decisions has contended that package/comprehensive policy covers everybody in a private car including the owner and the driver and in a scooter the driver and the pillion rider. Ltd. v. Urmila Chand 2016 (I) GLT 211 (xi) Mafisuddin Khadim v. National Insurance Co. Ltd. [2011 (1) GLT 309] 19. Mr. Lal relying heavily on the aforesaid decisions has contended that package/comprehensive policy covers everybody in a private car including the owner and the driver and in a scooter the driver and the pillion rider. The insurance company charges maximum amount in a package policy and they cannot be absolved from paying compensation. 20. I have gone through the judgments and what I have found is that none of the decisions is applicable to the facts of the present case. No doubt the policy in respect of the vehicle involved in the accident was a package policy and additional premium of Rs. 25/- was paid for the employee of the owner carried in the vehicle. There was no coverage for the driver. Since the deceased was a professional doctor, he also would not come within the purview of the W.C. Act and he cannot be said to be an employee of his minor daughter who was the owner of the car. Merely because he was driving the vehicle at the request or permission of his minor daughter, he cannot be said to be her employee. The policy in question clearly stipulates that additional premium of Rs. 25/- was realized for covering the risk of one employee carried in the vehicle. 21. Law is well settled that occupants of a private car and pillion rider in a two wheeler covered by a package/comprehensive policy are liable to be compensated by the insurer which has been clarified by the Insurance Development Regulatory Authority which got the stamp of approval from the courts with the initiative taken by the Delhi High Court. In the instant case, the deceased cannot be said to be an occupant of the vehicle and there was no coverage in the policy for an unpaid driver. 22. Situated thus, the insurance company cannot be saddled with liability to indemnify the owner of the vehicle. 23. There are several other important aspects of the case. The claim of the claimants is that the vehicle was given to her minor daughter by her grandmother. Now the question is how the minor daughter aged about 10/12 years could have entered into a contract with the insurer for getting her vehicle insured. 23. There are several other important aspects of the case. The claim of the claimants is that the vehicle was given to her minor daughter by her grandmother. Now the question is how the minor daughter aged about 10/12 years could have entered into a contract with the insurer for getting her vehicle insured. According to the insurer her deceased father took all the requisite steps for getting the vehicle insured in her name. There is always a doubt regarding the validity of the policy itself. Moreover, fault for the accident has been attributed to the so called caretaker/guardian of the minor owner. It was sought to be established that it was his duty to maintain the vehicle in proper condition and due to his negligent act, the accident occurred. He himself filed affidavit stating that he was the guardian of the owner of the car and if that is accepted to be true there was no relationship of master and servant between the two. No guardianship certificate has been produced and it is a mystery how he could have been allowed to act as her guardian during the life time of her natural guardian. Even if he is accepted to be her guardian then also for his negligent act, the minor owner of the vehicle cannot be saddled with liability. All these aspects have not been considered by the Tribunal during the trial. Moreover, from the judgment of the learned Member of the Tribunal dated 13.5.2015, it appears that the Tribunal while deciding the issue No. 2 has held that the insurer has no liability' towards the claimant in the present case. It was also held that it was not appropriate to claim that the deceased was the paid driver of his minor daughter (registered owner of the vehicle), and as such, in the instant case, the deceased cannot be treated as the driver of the vehicle in question nor there is any cover under the policy to accommodate coverage of the deceased. But subsequently there was change of mind and the insurer was held liable to pay compensation. 24. In any view of the matter, the fact re-mains that the vehicle in question was covered by a package policy and there was no coverage for unpaid driver. An additional premium of Rs. 25/- was realized only for one employee carried in the vehicle. 24. In any view of the matter, the fact re-mains that the vehicle in question was covered by a package policy and there was no coverage for unpaid driver. An additional premium of Rs. 25/- was realized only for one employee carried in the vehicle. The deceased was neither an employee nor a paid driver and even though he was holding an effective driving license, he cannot be said to be a driver under the employment of the owner who was her minor daughter. He was not even required to obtain permission from the minor daughter to drive the vehicle. The insurance policy did not cover the risk of the deceased who was a professional doctor and the insurer is not liable to pay any compensation to the claimant for the death of her husband in the accident. 25. Resultantly, the appeal filed by the insurer, New India Assurance Co. Ltd. is allowed. The judgment and award dated 13.05.2015 passed by the learned Member, Motor Accident Claims Tribunal, Dimapur is set aside. 26. In view of the judgment passed in the appeal preferred by the insurer, the appeal of the claimants for enhancement becomes redundant and is dismissed. 27. Send down the LCR.