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2023 DIGILAW 1082 (GUJ)

Oriental Insurance Company Ltd. v. Arunbhai Shambhubhai Prajapati

2023-09-12

ILESH J.VORA

body2023
JUDGMENT : (Ilesh J. Vora, J.) 1. Being dissatisfied with the fastening of the liability to pay the amount of compensation awarded by the Mehsana, MACT (Aux.), the Oriental Insurance Company Limited has filed the present appeal, to set aside the findings so far liability part is concerned. 2. On 23.10.2003 the claimant Arun Shambhubhai along with his brother Ashok Shambhubhai, met with an accident, as a result of which being a pillion of Suzuki bike, he sustained fracture injuries resulting into permanent disablement. The claim Tribunal, Mehsana (MACP No.1380 of 2003), after considering the oral as well as documentary evidence by allowing claim petition, awarded the amount of compensation of Rs.64,900/- with interest at the rate of 7.5% and the appellant Insurance Company was directed to pay the amount of compensation. The appellant Insurance Company had raised the technical issue of liability, inter alia stating that the applicant being owner of the vehicle cannot claim any amount of compensation against his Insurance Company. The learned Tribunal did not consider the defence set up by the Insurance Company and directed to pay the amount of compensation to the claimant. 3. In the aforesaid facts, the Insurance Company of the bike, i.e. the Oriental Insurance Company Limited has preferred appeal under section 173 of the Motor Vehicles Act. 4. This Court has heard learned counsel Mr. Maulik Shelat and Mr. R.V. Soni for the respective parties. 5. The parties to this appeal is referred to as per their ranks in the claim petition for the sake of convenience. 6. The factum of accident and involvement of the vehicle is not in dispute. The injured claimant is owner of the involved vehicle, insured with the appellant Insurance Company. 7. Mr. Maulik Shelat, learned counsel appearing for the Insurance Company would urge that the Tribunal was not justified in directing the appellant/insurer to pay the compensation, as the Insurance policy covers the liability incurred by the company in respect of death or bodily injury to third party and, therefore, he submitted that when the insured himself is claimant, the claim petition is not maintainable. He would further urge that when the liability arises between the parties by virtue of contract and in case of breach of contract, party to the contract can avail remedy is either before the competent civil Court or before the competent consumer forum but he cannot maintain the claim petition before the claim Tribunal constituted under the Motor Vehicles Act. 8. In nutshell, it is the submission for and on behalf of the Insurance Company that the Insurance Company cannot be made liable as per the terms and contract of the policy so far insured i.e. the owner of the vehicle is concerned. 9. The next contention of the Insurance Company is that the Insurance Company is liable to make payment of compensation for the nature of injury stated in the personal accident clause of the policy only, as in the present case, based on the premium paid for the personal accident, covering the risk of Rs.100,000/- the claimant insured had sought compensation for which the Tribunal should have taken into account the nature of injury stated in the policy only and, therefore, in the present case, when the injuries do not fall under any clause of the personal accident policy, the Tribunal has no jurisdiction to award the amount of compensation. 10. In view of the aforesaid contention, learned counsel Mr. Shelat submitted that the judgement and award is contrary to the provision of the law and is not sustainable in law and the same deserves to be set aside. 11. On the other hand, countering to the submission, learned counsel Mr.R.B.Soni has submitted that once the claimant paid additional premium for personal accident claim, then the Insurance Company cannot escape from its liability and, therefore, the Tribunal has rightly awarded the amount of compensation and has not committed any illegality or irregularity. 12. Having heard the learned counsel for the respective parties, the issue is raised for the determination of this appellate Court is as to whether the Tribunal is justified in passing the judgement and award by fastening the liability on the appellant Insurance Company. 13. In the facts of the present case, the claimant is the owner of the vehicle and the same was driven by his brother and due to his negligence, the alleged accident occurred. 14. Before adverting to the contention raised by the parties, let us analyze the decisions on the issue. 13. In the facts of the present case, the claimant is the owner of the vehicle and the same was driven by his brother and due to his negligence, the alleged accident occurred. 14. Before adverting to the contention raised by the parties, let us analyze the decisions on the issue. a) In the case of Dhanraj vs. New India Assurance Co.Ltd, 2005 ACJ 1 (SC), the Apex Court held as under: "8. Thus, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an 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. Section 147 does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle. 9. In the case of Oriental Insurance Co. Ltd. versus Sunita Rathi it has been held that the liability of an insurance company is only for the purpose of indemnifying the insured against liabilities incurred towards a third person or in respect of damages to property. Thus, where the insured i.e. an owner of the vehicle has no liability to a third party the insurance company has no liability also.” b) The Oriental Insurance Company Limited vs. Jumma Shah, 2007(9) SCC 263 , the Apex Court held that the liability of the Insurance Company is to the extent of indemnification of the insured against the third party or in respect of damages of property and, therefore, the question of insurer being liable to indemnify the insured does not arise. c) The Apex Court in the case of Oriental Insurance Co.Ltd. vs. Rajni Devi, 2008 ACJ 1441 (SC) held as under: “(6). It is now a well settled principle of law that in a case where third party is involved, the liability of the insurance company would be unlimited. 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 insurance company would depend upon the terms thereof. 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 insurance company would depend upon the terms thereof. (7)The Tribunal, in our opinion, therefore, was not correct in taking the view that while determining the amount of compensation, the only factor which would be relevant would be merely the use of the motor vehicle. xxx xxx (10.) The liability under Section 163-A of the Act is on the owner of the vehicle as a person cannot be both, a claimant as also a receipient. The heirs of Janakraj could not have maintained a claim in terms of Section 163-A of the Act. For the said purpose only the terms of the contract of insurance could be taken recourse to." d) In the case of New India Assurance Co.Ltd.vs Sadanand Mukhi, 2009 ACJ 998 , the Apex Court held as under: “(3) The admitted fact of the matter is as under :- Respondent no.1 was owner of a motor cycle. He got the said vehicle insured with the appellant company; the policy being valid for the period 9.9.1999 and 8.9.2000. On 8th September, 2000 Tasu Mukhi, son of the insured, while driving the motor cycle met with an accident and died. The accident allegedly took place as a stray dog came in front of the vehicle. A First Information Report was also lodged. Respondents herein filed a claim petition. Amongst them, first respondent, who is the owner of the insured vehicle, was the applicant. xxx xxx xxx (15) Contract of insurance of a motor vehicle is governed by the provisions of the Insurance Act. The terms of the policy as also the quantum of the premium payable for insuring the vehicle in question depends not only upon the carrying capacity of the vehicle but also on the purpose for which the same was being used and the extent of the risk covered thereby. By taking an `act policy', the owner of a vehicle fulfils his statutory obligation as contained in Section 147 of the Act. 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 risks are sought to be covered, additional premium has to be paid. 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 risks are sought to be covered, additional premium has to be paid. If the contention of the learned counsel is to be accepted, then to a large extent, the provisions of the Insurance Act become otiose. By reason of such an interpretation the insurer would be liable to cover risk of not only a third party but also others who would not otherwise come within the purview thereof. It is one thing to say that the life is uncertain and the same is required to be covered, but it is another thing to say that we must read a statute so as to grant relief to a person not contemplated by the Act. It is not for the court, unless a statute is found to be unconstitutional, to consider the rationality thereof. Even otherwise the provisions of the Act read with the provisions of the Insurance Act appear to be wholly rational. (16) Only because driving of a motor vehicle may cause accident involving loss of life and property not only of a third party but also the owner of the vehicle and the insured vehicle itself, different provisions have been made in the Insurance Act as also the Act laying down different types of insurance policies. The amount of premium required to be paid for each of the policy is governed by the Insurance Act. A statutory regulatory authority fixes the norms and the guidelines. xxx xxx xxx The said principle was reiterated in United India Insurance Co. Ltd. v. Davinder Singh, [ (2007) 8 SCC 698 ] holding :- (10) It is, thus, axiomatic that whereas an insurance company may be held to be liable to indemnify the owner for the purpose of meeting the object and purport of the provisions of the Motor Vehicles Act, the same may not be necessary in a case where an insurance company may refuse to compensate the owner of the vehicle towards his own loss. A distinction must be borne in mind as regards the statutory liability of the insurer vis-a-vis the purport and object sought to be achieved by a beneficent legislation before a forum constituted under the Motor Vehicles Act and enforcement of a contract qua contract before a Consumer Forum." e) In the case of Ningamma vs. united India Insurance Co. Ltd, 2009 ACJ 2020 (SC), the Apex Court held as under: "(19) We have already extracted Section 163-A of the MVA hereinbefore. A bare perusal of the said provision would make it explicitly clear that persons like the deceased in the present case would step into the shoes of the owner of the vehicle. In a case wherein the victim died or where he was permanently disabled due to an accident arising out of the aforesaid motor vehicle in that event the liability to make payment of the compensation is on the insurance company or the owner, as the case may be as provided under Section 163-A. But if it is proved that the driver is the owner of the motor vehicle, in that case the owner could not himself be a recipient of compensation as the liability to pay the same is on him. This proposition is absolutely clear on a reading of Section 163-A of the MVA. Accordingly, the legal representatives of the deceased who have stepped into the shoes of the owner of the motor vehicle could not have claimed compensation under Section 163-A of the MVA. (20) When we apply the said principle into the facts of the present case we are of the view that the claimants were not entitled to claim compensation under Section 163-A of the MVA and to that extent the High Court was justified in coming to the conclusion that the said provision is not applicable to the facts and circumstances of the present case. However, the question remains as to whether an application for demand of compensation could have been made by the legal representatives of the deceased as provided in Section 166 of the MVA. However, the question remains as to whether an application for demand of compensation could have been made by the legal representatives of the deceased as provided in Section 166 of the MVA. The said provision specifically provides that an application for compensation arising out of an accident of the nature specified in sub-section (1) of section 165 may be made by the person who has sustained the injury; or by the owner of the property; or where death has resulted from the accident, by all or any of the legal representatives of the deceased; or by any agent duly authorised by the person injured or all or any of the legal representatives of the deceased, as the case may be When an application of the aforesaid nature claiming compensation under the provisions of Section 166 is received, the Tribunal is required to hold an enquiry into the claim and then proceed to make an award which, however, would be subject to the provisions of Section 162, by determining the amount of compensation, which is found to be just. Person or persons who made claim for compensation would thereafter be paid such amount. When such a claim is made by the legal representatives of the deceased, it has to be proved that the deceased was not himself responsible for the accident by his rash and negligent driving. It would also be necessary to prove that the deceased would be covered under the policy so as to make the insurance company liable to make the payment to the heirs." 15. In light of the settled position of law, the claim petition by the owner respondent claimant, based on the premium paid of personal accident, is not maintainable under the provision of the Motor Vehicles Act and the remedy is available either before the Civil Court or before the Consumer Court and, therefore, this Court is of the considered view that the Tribunal was not justified in directing the appellant to pay the amount of compensation. However, this Court is of the view that the accident in question was being arise on 20.10.2003 and after 20 years, it is not proper to relegate the claimant to approach the competent forum for availing the compensation under the personal accident policy. However, this Court is of the view that the accident in question was being arise on 20.10.2003 and after 20 years, it is not proper to relegate the claimant to approach the competent forum for availing the compensation under the personal accident policy. The amount has already been deposited by the Insurance Company and, therefore, considering the peculiar facts and circumstances of the present case, more particularly, the smallness of the amount, no interference is called for. 16. The Tribunal shall disburse the amount. Decree be drawn accordingly.