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2018 DIGILAW 1274 (GAU)

New India Assurance Co. Ltd v. Bibek Barhoi

2018-08-29

MIR ALFAZ ALI

body2018
JUDGMENT & ORDER : Mir Alfaz Ali, J. This statutory appeal under section 173 of the MV Act is filed by the Insurance Co. against the judgment and order dated 31-3-2014 passed by MACT, Tezpur in MAC Case No. 120/2010. 2. The brief facts of the case were that on 18-9-2009 one Biswajit Baroi (since deceased) visited the house of his uncle, where the respondent No. 1, the owner of the vehicle bearing registration No. AS-12/D -2485 was also present. From the house of his uncle, the deceased Biswajit Baroi proceeded by riding the motorcycle of the respondent No. 1 for some works. While he was proceeding by riding the motorcycle, suddenly, a cow tried to cross the road and in order to save the cow, when he applied the break, the motorcycle capsized and consequently, he fell down. As a result of the accident, he sustained injury and died on the spot. The parents of the deceased filed an application praying for compensation and the learned tribunal by the impugned judgment, awarded a compensation of Rs. 4,45,000/- with interest @ 7.5% from the date of filing of the claim petition. 3. Aggrieved by the award, the Insurance Co. preferred the appeal. 4. Mr. K. K. Bhatta, learned counsel for the appellant and Mr. A. Ganguly, learned counsel for the respondent No. 3 were heard. 5. The counsel for the appellant/Insurance Co. submitted that there was no other vehicle involved in the instant case and the accident occurred due to fault of the deceased himself and as such, the parents of the deceased were not entitled to compensation. Further contention of the learned counsel for the Insurance Co. was that the deceased borrowed the vehicle from the owner/insured and therefore, he would stand in the shoes of the owner and as such, no claim for compensation could be maintained under section 163-A M.V. Act for death of the deceased who was not a third party. 6. Thus, the impugned award is challenged by the Insurance Co. on two counts, i.e., (i) accident took place due to fault of the deceased himself, as no other vehicle was involved, and as such, the owner/insurer were not liable to pay any compensation. (ii) deceased was not a third party inasmuch as, he borrowed the vehicle and thereby stepped into the shoes of the owner/insured, and as such, claim petition was not maintainable. (ii) deceased was not a third party inasmuch as, he borrowed the vehicle and thereby stepped into the shoes of the owner/insured, and as such, claim petition was not maintainable. Point No. 1 7. Learned counsel for the respondent/claimant, Mr. Ganguly submitted that in a claim petition under section 163-A of the MV Act, the claimant is not under any obligation to plead or prove fault or negligence of the defendant. If the owner or the Insurance Co. seeks to avoid the liability, pleading fault on the part of the deceased, burden would lie with the owner or Insurance co. to prove such fault or act of rashness or negligence on the part of the deceased and in absence of such proof, the Insurance Co. cannot avoid the liability to satisfy the award under the policy. In support of his submission, learned counsel placed reliance on a decision of the Apex Court in National Insurance Co. Ltd. v. Sinitha and Ors., AIR 2012 SC 797 . 8. The claim petition in the instant case was filed under section 163-A of the M.V. Act. The question, whether a claim under section 163-A is based on fault liability principle is no longer res-integra. The Apex Court, in National Insurance Co. Ltd. v. Sinitha and Ors., after having discussed extensively the distinction between claim under section 140 M.V. Act. based on no fault liability principle and claim under section 163-A, held, that a claim under section 163-A is based on fault liability principle. The Apex Court observed that "we have no hesitation in concluding that it is open to the owner or Insurance Company, as the case may be, to defeat a claim under section 163-A of the Act by pleading and establishing through cogent evidence a fault ground ('wrongful act' or 'neglect' or 'default'). It is therefore, doubtless that section 163-A of the Act is founded under the fault liability principle". 9. However, expressing doubt about the above proposition of law that claim under section 163-A M.V. Act is on the fault liability principle as held by the Apex Court in National Insurance Co. It is therefore, doubtless that section 163-A of the Act is founded under the fault liability principle". 9. However, expressing doubt about the above proposition of law that claim under section 163-A M.V. Act is on the fault liability principle as held by the Apex Court in National Insurance Co. Ltd. v. Sinitha, a co-ordinate bench of the Apex Court referred the issue to larger bench for an answer to the following question - "Whether in a claim proceeding Under section 163 A of the Motor Vehicles Act, 1988 (hereinafter referred to as the "the Act") it is open for the Insurer to raise the defence/plea of negligence ?" 10. A three judge bench of the Apex Court in United India Insurance Co. Ltd v. Sunil Kumar and Anr. (supra) overruled the dictum of Sunita's case and answered the reference as under :- "For the aforesaid reasons, we answer the question arising by holding that in a proceeding Under Section 163A of the Act it is not open for the Insurer to raise any defence of negligence on the part of the victim." 11. Recently another three judge bench of the Apex Court in a judgment delivered on 09/08/2018 in the case of Shivaji and Anr. v. Divisional Manager, United India Insurance Co. Ltd. and Ors. (Civil Appeal No. 2816/2018) reiterated the view of Sunil Kumar's case and observed that in a proceeding under section 163-A of the Act the insurer cannot raise any defence of negligence on the part of the claimant or victim to counter a claim of compensation. Subsection (2) of Section 163 absolved the claimant from pleading any negligence or fault on the part of the defendant in a claim under section 163-A, which is required to be determined on the basis of structured formula. What therefore, follows from the above authorities is that in a claim under section 163-A of the Act, question of fault or negligence is irrelevant and neither the claimant is required to plead or prove any fault of the owner or driver, nor the owner/insurer is entitled to raise any plea of fault on the part of the victim or claimant. Thus, a claim under section 163-A cannot be defeated even if the accident occurs due to negligence or fault of the claimant or the victim himself. Thus, a claim under section 163-A cannot be defeated even if the accident occurs due to negligence or fault of the claimant or the victim himself. In view of the dictum of the Apex Court in Sunil Kumar's case as well as the case of Shivaji and Anr. v. Divisional Manager, United India Insurance Co. Ltd. and Ors. (supra), it needs no mention that the plea of the insurance co. that the accident having taken place for the negligence of the deceased, his legal heirs are not entitled to compensation can no longer stand. Accordingly, the point no. 1 is decided in favour of the claimant respondent. Point No. II 12. Learned counsel Mr. K.K. Bhatta submitted by placing reliance on a decision of the Supreme Court in Ningamma & Anr. v. United India Insurance Co. Ltd. reported in (2009) 13 SCC 710 as well as New India Assurance Co. Ltd. v. Sadanand Mukhi and Ors. reported in (2009) 2 SCC 417 , that deceased borrowed the vehicle from the owner and thereby stepped into the shoes of the owner and as such, the owner could not raise a claim against the insurance Co. in a third party policy. Because the insurance co. needs to indemnify the liability incurred by the insured/owner to third party. The owner himself or his legal heirs cannot claim compensation from the insurance co. under section 163-A M.V. Act. Resisting the above submission, learned counsel for the claimant Mr. Ganguly, placing reliance on a decision of the Apex Court in National Insurance Co. v. Sinitha (supra), contended, that the insurance co. did not adduce any evidence to establish the relationship between the owner/insured and the deceased driver, and as such, the deceased could not be deemed to be owner. Learned counsel for the respondent/claimant, Mr. Ganguly further submitted that the policy in the instant case was a comprehensive policy of two wheeler, which covered the risk of the driver as well as the pillion rider, and as such, the Insurance Co. could not avoid the liability to indemnify the insured for the death of the victim who was driving the vehicle. Learned counsel contended referring to section II of the standard form of package policy of two wheeler, that as per terms and condition of the package policy of a two wheeler, the insurance co. could not avoid the liability to indemnify the insured for the death of the victim who was driving the vehicle. Learned counsel contended referring to section II of the standard form of package policy of two wheeler, that as per terms and condition of the package policy of a two wheeler, the insurance co. is bound to indemnify the owner/insured for death or injury of driver (rider). 13. Before adverting to the submission of the learned counsel on the question of deemed ownership, it would be beneficial to have a look at the definition of the term 'owner' as provided in section 2 (30) of the M.V. Act which reads as under : ""owner" means a person in whose name a motor vehicle stands registered, and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase, agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement;" 14. A plain reading of the above definition makes it clear that the meaning of "owner" of a motor vehicle as defined in Section 2 (30) is not confined to the registered owner, and it also brings within it's sweep the persons, other than the registered owner under certain circumstances. The Apex Court in Rajasthan State Road Transport Corporation v. Kailashnath Kuthari reported in AIR 1997 (SC) 3444 observed that in respect of awarding compensation, in reference to an accident by a vehicle hired with driver, hirer at the time of actual possession and control of the vehicle would fall within the definition of the owner and would be vicariously liable to pay compensation for tort committed by driver, though the driver is employee of the registered owner. Thus, when the vehicle remains in actual possession or control of any person, other than the registered owner as borrower or hirer, by virtue of any agreement for lease or otherwise and the owner ceased to have control over the vehicle, such hirer of the vehicle also comes within the ambit of definition of 'owner'. Thus, when the vehicle remains in actual possession or control of any person, other than the registered owner as borrower or hirer, by virtue of any agreement for lease or otherwise and the owner ceased to have control over the vehicle, such hirer of the vehicle also comes within the ambit of definition of 'owner'. Therefore, what is important to note is that in order to bring a person, other than a registered owner, within the ambit of the definition of 'owner', the tribunal needs to ascertain at the first instance, the relationship between the actual owner of the vehicle and the person in actual possession of the vehicle. Once the relationship is ascertained, that the person in possession hired the vehicle from the real owner, the next step should be to ascertain the nature of possession, whether the person in possession has actual control over the vehicle, reason being that, in order to treat the hirer of the vehicle as owner by making him to stand in the shoes of the registered owner, two conditions need to be satisfied. Firstly, the hirer is in actual possession and control over of the vehicle. Secondly, the registered owner ceased to have control over the vehicle. Therefore, one cannot be deemed as owner of a motor vehicle automatically invoking the principle of stepping into the shoes and each and every case has to be considered on the basis of facts of the case. 15. In the case of Ningamma & Anr. v. United India Insurance Co. Ltd (supra), the Apex Court after having reiterated the principle, that the liability under Section 163-A being on the owner of the vehicle, for death or injury caused to a third party, the owner of the vehicle himself or his legal heirs cannot raise a claim under section 163-A of the Act, observed that a borrower of a vehicle steps into the shoes of the owner, and therefore, the borrower of a vehicle or her/his legal heirs are not entitled to compensation from the insurer of the vehicle, under section 163-A of the Act. In the case of Ningamma the claimant admitted that the deceased borrowed the vehicle from the owner and on the facts of the said case, the Apex Court held as under :- "In the case of Oriental Insurance Company Ltd. v. Rajni Devi and Others, (2008) 5 SCC 736 , wherein one of us, namely, Hon'ble Justice S.B. Sinha is a party, it has been categorically held that in a case where third party is involved, the liability of the insurance company would be unlimited. It was also held in the said decision that where, however, compensation is claimed for the death of the owner or another passenger of the vehicle, the contract of insurance being governed by the contract qua contract, the claim of the claimant against the insurance company would depend upon the terms thereof. It was held in the said decision that Section 163-A of the MVA cannot be said to have any application in respect of an accident wherein the owner of the motor vehicle himself is involved. The decision further Page 11 of 20 held that the question is no longer res integra. The liability under section 163-A of the MVA is on the owner of the vehicle. So a person cannot be both, a claimant as also a recipient, with respect to claim. Therefore, the heirs of the deceased could not have maintained a claim in terms of Section 163- A of the MVA. In our considered opinion, the ratio of the aforesaid decision is clearly applicable to the facts of the present case. In the present case, the deceased was not the owner of the motorbike in question. He borrowed the said motorbike from its real owner. The deceased cannot be held to be employee of the owner of the motorbike although he was authorised to drive the said vehicle by its owner, and therefore, he would step into the shoes of the owner of the motorbike." 16. In New India Assurance Co. Ltd. v. Sadanand Mukhi and Ors.(supra), son of the registered owner, while driving the motorcycle, met with accident and died. Keeping in view the relationship between the deceased and the owner of the vehicle, i.e., father and son, the plea of the insurance co. that deceased was not a third party was accepted by the Apex Court. Ltd. v. Sadanand Mukhi and Ors.(supra), son of the registered owner, while driving the motorcycle, met with accident and died. Keeping in view the relationship between the deceased and the owner of the vehicle, i.e., father and son, the plea of the insurance co. that deceased was not a third party was accepted by the Apex Court. Therefore, this decision is of no help to the appellant, inasmuch as, the relationship of the victim with the owner of the vehicle was palpable. 17. The question of deemed ownership in respect of a person driving a two wheeler belonging to another person, covered by "Act Policy" was considered by the Apex Court in National Insurance Co. v. Sinitha (supra), wherein the Apex Court held as under : "To substantiate his second contention, it would be essential for the petitioner to establish, that Shijo having occupied the shoes of the owner, cannot be treated as the third party. Only factual details brought on record through reliable evidence, can discharge the aforesaid onus. During the course of hearing, despite our queries, learned counsel for the petitioner could not point out the relationship between Shijo and the owner of the motorcycle involved in the accident. Shijo is not shown to be the employee of the owner. He was not even shown as the representative of the owner. In order to establish the relationship between Shijo and the owner, the petitioner-Insurance Company could have easily produced either the owner himself as a witness, or even the claimants themselves as witnesses. These, or other witnesses, who could have brought out the relationship between the owner and Shijo, were not produced by the petitioner herein, before the Tribunal. The petitioner has, therefore, not discharged the onus which rested on its shoulders. Since the relationship between the Shijo and the owner has not been established, nor the capacity in which he was riding the vehicle has been brought out, it is not possible for us to conclude, that Shijo while riding the motorcycle on the fateful day, was an agent, employee or representative of the owner. It was open to the petitioner to defeat the claim for compensation raised by the respondents by establishing, that the rider Shijo represented the owner, 39and as such, was not a third party, in terms of the judgment rendered by this Court in Oriental Insurance Company Limited case (supra). It was open to the petitioner to defeat the claim for compensation raised by the respondents by establishing, that the rider Shijo represented the owner, 39and as such, was not a third party, in terms of the judgment rendered by this Court in Oriental Insurance Company Limited case (supra). The petitioner failed to discharge the said onus. In view of the above, it is not possible for us to accede to the second contention advanced at the hands of the learned counsel for the petitioner. 18. From the definition of "owner" and the authorities aforementioned, there is no doubt, that a borrower of the vehicle stands in the shoes of the actual owner. Therefore, when a person not being the owner drives a two wheeler covered by "Act Policy" and meets with an accident, the insurer can raise a plea to defeat the claim raised by such person or his legal heir, that the victim or claimant was not a third party, rather owner of the vehicle, by virtue of his relationship with the owner or being borrower of the vehicle. Necessarily burden in such case would be on the insurer to establish the relationship between the actual owner and the victim or claimant, who was driving the vehicle, in order to invoke the principle of 'stepping into the shoes'' for holding a driver/rider to be deemed owner of a two wheeler. There must be pleadings and evidence to establish the relationship between the registered owner and the person driving the vehicle and the capacity in which he was driving the vehicle. To put it differently, there must be evidence and materials on record to prove that the driver or rider of the two wheeler not being the registered owner borrowed the vehicle and it was under his control and also the actual owner ceased to have any control over it. To put it differently, there must be evidence and materials on record to prove that the driver or rider of the two wheeler not being the registered owner borrowed the vehicle and it was under his control and also the actual owner ceased to have any control over it. In absence of pleadings and evidence establishing the relationship between the owner and the driver or the capacity in which he was driving the vehicle, there cannot be an automatic presumption of ownership in favour of a person, not being registered owner, driving a two wheeler by invoking the principle of "stepping into the shoes." When the insurer seeks to avoid the liability to pay compensation raising the plea that the claimant or deceased, being a borrower of the vehicle, stands in the shoes of the owner, burden necessarily would lie on the insurer to establish the relationship between the registered owner and such person in actual possession of the vehicle. 19. In the instant case, evidently the registered owner/insured of the vehicle was respondent No. 1, Mohan Upadhya, and the deceased, who was driving the vehicle and met with accident was not the owner of the vehicle. Apparently no evidence was adduced by the Insurance Co. to prove the relationship between the deceased and the registered owner or that the deceased was driving the vehicle as representative of the owner, or that he borrowed the vehicle, and as such, it was not possible to presume that the deceased became the deemed owner by stepping into the shoes of the actual owner. 20. A policy of insurance of motor vehicle may be a statutory policy or a contractual policy and as such, the liability of the insurer is statutory as well as contractual. Insurance against third party risk is a statutory requirement as per Section 146 of the M.V. Act and the liability under a statutory policy or "Act Policy" is governed by Section 147 of the M.V. Act. When the owner of the vehicle takes a policy covering the risk beyond the statutory limit, as provided by Section 146/147 of the M.V. Act, such policy is termed as "comprehensive" or package policy. Liability of the insurer under a 'package policy' to indemnify the insured is governed by contract qua contract and depends on the terms and conditions of contract. Liability of the insurer under a 'package policy' to indemnify the insured is governed by contract qua contract and depends on the terms and conditions of contract. Looking from that angle, i.e., the nature of policy, apparently in the case of Ningamma & Anr. v. United India Insurance Co. Ltd (supra) or in Sadanand Mukhi's case, the policy was "Act policy" of two wheeler. Whereas, the policy proved in the instant case (Ext- 4) was admittedly a package policy of two wheeler. Section II of the Standard Form of Package Policy for two wheeler under the caption "liability to third party" provides that, the Insurance Co. will indemnify any driver, who is driving the vehicle on insured's order or with insured's permission, provided that such driver as he/she was the insured, observes all the formalities and subject to the terms and conditions of this policy in so far as they apply. Therefore, apparently the coverage of a package policy of a two wheeler is extended to not only the occupant/pillion rider, it also extends to the driver or rider, who is allowed to drive the vehicle by the owner. 21. A Division Bench of the Kerala High Court, in New India Assurance Co. Ltd. v. Radhika reported in (2009) 3 TAC 216 Kerala, held that as per Section II of the standard form of package policy providing for "liabilities to third party" of a package policy, covers the risk of driver, when the driver drives the vehicle with the permission and order of the insured. Since the policy was admittedly a package policy of two wheeler and the deceased, who was driving the vehicle was evidently not the owner/insured of the vehicle, the insurance co. was certainly liable to indemnify the owner for the death of the driver (rider) of the two wheeler, having a package policy. If the insurance co. wants to avoid the liability raising any plea relating to violation of any condition of the policy, burden would necessarily lie on the insurance co. to establish the same by pleading and evidence. Apparently in the case at hand, no pleading or evidence to that effect is available either from the side of the insurance co. or the owner of the vehicle. In absence of pleading and evidence that the deceased was riding the vehicle against the will of the owner or without his consent, insurance co. Apparently in the case at hand, no pleading or evidence to that effect is available either from the side of the insurance co. or the owner of the vehicle. In absence of pleading and evidence that the deceased was riding the vehicle against the will of the owner or without his consent, insurance co. cannot avoid the liability to indemnify the insured for death or injury to a driver/rider of a two wheeler covered by package policy. Therefore, the hypothetical concept of deemed ownership on the principle of stepping into the shoes of the owner cannot be applied to a driver (rider) of a two wheeler covered by package policy. 22. When the policy was apparently a package policy and the Insurance Co. could not establish the relationship between the owner and the deceased rider to invoke the principle of 'stepping into the shoes' of the owner, the Insurance Co. in the facts and circumstances of the case and the terms and conditions of the policy, could not avoid the liability to indemnify the insured to satisfy the award in the present case, and as such, the present appeal appears to be devoid of merit and deserves to be dismissed. Accordingly, the appeal is dismissed. 23. Appellant insurance co. shall satisfy the award within six weeks, by depositing the awarded amount with interest with the tribunal within six weeks. 24. Send back the LCR.