Karnataka High Court
New India Assurance Company vs Smt. Kusum And Ors. on 17 February, 2003
Equivalent citations: 2003ACJ1992, 2003(4)KARLJ545
Author: A.V. Srinivasa Reddy
Bench: A.V. Srinivasa Reddy
JUDGMENT A.V. Srinivasa Reddy, J.
1. The present appeal by the insurance company arises from an order dated 10th February, 1998 of the Motor Accidents Claims Tribunal, Bijapur in M.V.C. No. 266 of 1996 allowing the petition filed before it and granting a compensation of Rs. 1,19,500/- and foisting the liability of paying the compensation on the insurance company. Aggrieved, the insurance company has preferred this appeal claiming that it is not liable to pay the compensation.
2. The claim petition was laid before the Tribunal by the legal representatives of the deceased claiming compensation, of Rs. 4,30,000/- for the death of Balakrishna in an accident which occurred on 7-3-1996 at about 4 p.m. in the jeep in which the deceased was travelling. It was claimed by the petitioners that the jeep was being driven in a rash and negligent manner as a result of which the jeep skidded off the road and turned turtle. In the resultant impact two of the travellers inside the jeep died on the spot and two others succumbed to the injuries in the hospital. The Tribunal formulated the following four points for its consideration:
1. Whether petitioners prove that on 7-3-1996 at about 1600 hours near Kanamadi Village the driver of the jeep No. MHO 3/B-2592 drove it in high speed, rash and negligent manner and caused the accident pleaded?
2. Whether the petitioners further prove that on the said date, time and place the deceased Balakrishna met with an accident and succumbed to grievous injuries?
3. Whether the petitioners are entitled for compensation? If so, what amount from which respondent?
4. What order?
The Tribunal answered points 1 and 2 in the affirmative and in regard to point 3 the Tribunal found that the vehicle was insured with the insurance company and therefore the insurance company was liable to pay the compensation amount. Hence, the present appeal by the insurance company.
3. The sole point that arises for my consideration in this appeal is:
Whether the Tribunal was right in foisting the liability to pay compensation on the insurance company?
4. I have heard the learned Standing Counsel Mr. Jaiprakash for the insurance company and Mr. Ashok R. Kalyan Shetty for respondent 7, the owner of the jeep in question.
5. Mr. Ashok R. Kalyan Shetty very strenuously submitted that after amendment of Section 147 by Act 54 of 1994 on 14-11-1994, irrespective of the fact whether the vehicle involved in the accident is a goods vehicle or a private vehicle, the insurance company is liable to pay compensation because the insurance company is required under Section 147 of the Motor Vehicles Act, to compulsorily cover all persons travelling in a vehicle. He relied on several decisions of the Apex Court and this Court in support of his submission. However, the learned Standing Counsel Mr. Jaiprakash, on the other hand, submitted that the insurance company is not liable to pay damages in respect of death or bodily injury suffered by a gratuitous passenger travelling in a private vehicle.
6. The entire thrust of the argument of Mr. Kalyan R. Shetty is based on interpretation of the words 'any person' as occurring in Sub-clause (i) of Clause (b) of Section 147. In order to better understand the import of the provision and the context in which the words 'any person' have been employed, I quote Section 147 of the Act. It reads:
"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 equired- (i) ......... ......... .......... (ii) ......... ....................
(2) Subject to the proviso to Sub-section (1), a policy of insurance referred to in Sub-section (1), shall cover any liability incurred in respect of any accident, upto the following limits, namely.--
(a) save as provided in Clause (b), the amount of liability incurred; (b) in respect of damage to any property of a third party, a limit of rupees six thousand:
Relying on the expression 'any person' in Sub-clause (i) of Clause (b) of Section 147 Mr. Kalyan R. Shetty vehemently contends that it means 'every person' including a gratuitous passenger travelling in a private vehicle. This very expression 'any person' is interpreted by the Apex Court in New India Assurance Company Limited v. Asha Rani and Ors., 2002 AIR SCW 5259 while dealing with the question whether the expression 'any person' as was found in Section 147 prior to its amendment by Act 54 of 1994 would cover a owner of the goods or his authorised representative. Disagreeing with such contention raised before it, the Apex Court remarked:
"If the Motor Vehicles Amended Act of 1994 is examined, particularly Section 46 of Act 6 of 1991 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 authorized representative carried in the vehicle' the conclusion is irresistible that prior to the aforesaid amendment Act of 1994, even if the 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".
(emphasis supplied) The import of the said observation of the Apex Court is that in the absence of inclusion of a owner of the goods or his authorised representative in Section 147 prior to its amendment by Act 54 of 1994, the expression 'any person' could not, even if the widest interpretation is to be given to it, be construed as including the owner of the goods or his authorised representative. It is in that view of the matter the Apex Court held that the decision in New India Assurance Company Limited v. Satpal Singh and Ors., was erroneous because it proceeded on the assumption that the provisions of Section 95(1) of the Motor Vehicles Act, 1939 are identical with Section 147(1) of the Motor Vehicles Act, 1988 prior to its amendment, when actually it was not so. As the principle laid down was an outcome of such wrong assumption of the existence of a, provision, the Apex Court in Asha Rani's case, supra, held that the law laid down in Satpal Singh's case, supra, to the effect 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 authorized representative when being carried in a goods vehicle involved in the accident is no longer a good law. The Legislature, may be, realising the need to cover the owner of the goods and his authorised representative had thought it fit to amend the provision so as to include even the owner of the goods or his authorised representative. There was absolutely no need for the amendment if the Legislature understood the expression, 'any person' to mean any and every person including the owner of the goods or his authorised representative. The very fact that the provision was amended to include the owner of the goods and his authorised representative would go to show that even the Legislature understood the expression, 'any person' as to mean only a third party who meets with death or suffers bodily injury arising out of the use of a vehicle in a public place and not a owner of the goods or an authorised representative and definitely not 'a gratuitous passenger'. The correctness of this view gets substantiated when we look at the observations made by his Lordship Justice S.B. Sinha while concurring with the judgment and order delivered in Asha Rani's case, supra. In the observations made by his Lordship while concurring with the judgment delivered by the Hon'ble Chief Justice on behalf of the Bench at para 17, his Lordship amplified what the inherent meaning of the expression 'any person' is:
"In view of the changes in the relevant provisions in 1988 Act vis-a-vis 1939 Act, we are of the opinion that the meaning of the words 'any person' must also be attributed having regard to the context in which they have been used i.e., 'a third party'".
7. The Sub-clause (b) has been subjected to misinterpretation in the light of the expression 'any person' contained therein, but if we examine Clause (i) of Sub-clause (b) closely we find that the expression 'any person' relates and refers to a third party which term finds mention in the very clause. At the cost of repetition, I quote Clause (i) which reads:
"(i) against any liability which may be incurred by him in respect of any death of or bodily injury to any person....... or damage to any property of a third party....".
The phrase 'in respect of any death of or bodily injury to any person' and the phrase 'damage to any property' relate to a third party and not to any and every person who may suffer an injury or whose property may suffer a damage by an accident arising out of the use of the vehicle in a public place. If we read the expression, 'any person' with reference to the term, 'third party' occurring later on in the clause then, it becomes clear that the argument now advanced by Mr. Ashok R. Kalyan Shetty to the effect that the words 'any person' should include 'any and every person' is without basis. The question as to who is a 'third party' had also come up for consideration in Jabanananda Mohanty v. Artatrana Misra, before the Division Bench of the Orissa High Court The Division Bench after a thorough examination of the contentions urged by the opposite sides and after referring to the meanings of the expression 'third party' given in legal dictionaries and discounting the submission canvassed that every person not party to the policy of insurance is a third party, reached the following conclusion on the aspect of who could be termed as a 'third party':
"The plea that any person, whatever be his manner of entry into the vehicle involved in an accident is covered by expression 'third party', is not tenable".
In Oriental Fire and General Insurance Company Limited v. M. Bhanumathi and Ors., a Division Bench of the Andhra Pradesh High Court expounded the meaning of the term 'third party' in the following manner:
"Sub-clause (i) of Section 95(1)(b) (new Section 147) refers to death or bodily injury to any person or damage to any property of a third party. Sub-clause (i) refers to third parties i.e., pedestrians, passers-by etc., or damage to the property of a third party. "Any person" used in Sub-clause (i) does not include a person carried in the vehicle. If that be so, Sub-clause (ii) of Section 95(1)(b) (new Section 147) which refers to passengers in a public service vehicle would be superfluous. No specific mention need be made of passengers carried in the vehicle. The liability contemplated under Sub-clauses (i) and (ii) of Section 95(1)(b) (new Section 147) has no relation to persons carried in a non-public service vehicle such as a lorry.
The decisions of this Court in United India Insurance Company Limited v. Jahur Begaum and Ors., 2001(1) Kar. L.J. 316 : ILR 2000 Kar. 3796 and in New India Assurance Company Limited, Bangalore v. Rajendra Singh and Ors., 2000(2) Kar, L.J. 207 : ILR 2000 Kar. 886 on the point are arrived at by placing reliance of the decision in New India Assurance Company's case, supra, which decision itself is now held to be no longer a good law in the light of the decision in Asha Rani's case, supra. The Orissa High Court in Jabanananda Mohanty's case, supra, also referred to the recommendation of the Tariff Advisory Committee which aspect also was considered by the Division Bench of this Court in the case of Rajendra Singh's case, supra, to hold that 'any person' includes a gratui tous passenger also. The Orissa High Court did not probe this aspect further because the vehicle involved in the said accident was not a passenger vehicle. The vehicle involved in the present case no doubt is a passenger vehicle but I do not think this would alter the position in any way considering the fact that the Division Bench in Rajendra Singh's case, supra, did not place reliance on this aspect of the matter to reach the conclusion it ultimately reached, which was primarily arrived at by placing reliance on the decision in Satpal Singh's case, supra. This be comes obvious if we refer to the remarks made by the Division Bench in the penultimate paragraph of the decision which is to the following effect:
"It is not in dispute that the T.A.C. being a statutory body created under Section 64-U of the Insurance Act, 1938, its instructions have statutory force and are binding on all insurers by virtue of Section 64-UC thereof. However, this point being purely of academic interest in this appeal and in view of the law declared by the Supreme Court in the case of Satpal Singh, supra, that by virtue of Section 147 of the New Act, suffice it for us to state that by omission of Clause (ii) of proviso to Section 95(1)(b) of the Old Act therefrom (i.e., Section 147 of the New Act) the said statutory instruction of the T.A.C. has received a formal statutory recognition under the New Act".
In my considered opinion such a direction by the Advisory Committee cannot be made a basis to foist the liability on the insurance company so long as the said direction is not reflected in the insurance agreement entered into by the specified party with the insurance company. Whether or not such a direction has statutory force and is binding on the insurance company are matters which are extraneous for the purpose of deciding the issue whether the insurance company is liable to pay damages in respect of death or bodily injury suffered by a gratuitous passenger because, certain exceptions are carved out with regard to the liability of the insurer under Section 147 and the Court has to take note of these exceptions while deciding this question. The language in which the section is coined goes to show that the expression 'third party' does not take within its sweep anybody and everybody involved in an accident and is always subject to the limitations prescribed in Section 147 as to its applicability. This question having been conclusively determined by the Apex Court in Asha Rani's case, supra, the said two decisions of this Court would be of no avail to the respondent-owner to establish that the insurance company is liable to pay the compensation even in respect of a gratuitous passenger.
8. In Ramesh Kumar v. National Insurance Company Limited and Ors., relied on by learned Counsel Mr. Ashok R. Kalyan Shetty, the Apex Court steered clear of the controversy regarding the liability of the insurer to pay the compensation in respect of gratuitous passengers. That the Apex Court declined to enter into any discussion touching this aspect of the matter becomes clear from the following observations of the Apex Court:
"This Court in this case, while interpreting Section 147(1)(i) and (ii) of the New Act holds the insurance company liable to pay the compensation both for the owner and his representative and also for the gratuitous passengers travelling in a goods vehicle. In this third category, in spite of the said declaration the claimants have confined their claim only for the owner or his representative who were travelling in a goods vehicle and not for the gratuitous passengers. Since Satpal Singh's case, supra, confers right over gratuitous passengers also, which is not claimed by any of the claimants under this category, thus declaration of law in Satpal Singh's case, supra, is not required to be considered for this category, as claim for the owner and his representative is not disputed even by the learned Counsel for the insurance company, after its aforesaid 1994 amendment.... ".
I am at a loss to know how this decision of the Apex Court advances the case of the respondent-owner when the Apex Court in the said decision steered clear off the controversy involved herein.
9. Under the terms of policy taken out under Section 147 the insurance company would be liable to indemnify the insured, in the present case the owner of the jeep, only in respect of death or bodily injury to a third party whose risk alone is covered under Section 147. Sub-section (5) of Section 147 amplifies and clarifies this position in law more explicitly while specifying as to what exactly is covered under a policy taken under Section 147. The provision reads:
"(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".
(emphasis supplied) Thus, there can be no dispute about the fact that a policy under Section 147 only covers a third party risk. The expression, 'any person' as occurring in Section 147, exclusively means and refers to a third party, in respect of whom the insured has taken out a policy to cover any liability that may be incurred by him (the insured) by death or bodily injury of a third party. If we take out from the purview of a 'third party' a person travelling in the private vehicle gratuitously, then it is not open to contend, placing reliance on the literal meaning of the expression, 'any person' that the liability incurred by the insured in respect of such a gratuitous passenger also should be indemnified by the insurer. If such an argument is to be accepted, then there was absolutely no need for the Legislature to enact Sub-clause (ii) of Clause (b) of Sub-section (1) of Section 147 in order to cover the death or bodily injury of a passenger of a public service vehicle as it would be rendered superfluous if the expression, 'any person' is to be understood as to cover any and every person because Sub-clause (i) does not make any distinction between a private or a public vehicle. The Legislature has taken care to bring within its sweep even such class of persons who are not third parties but who are co-passengers travelling in the offending vehicle but whose interests the Legislature wanted to protect by making it compulsory for the person specified to take out a policy under the Act to cover the risks involved to these persons. The fact that a 'gratuitous passenger' does not figure as one of those persons is ample proof of the intention of the Legislature not to cover a "gratuitous passenger" under the policy. Thus, I find that the finding recorded by the Tribunal foisting liability on the insurance company is incorrect and is liable to be set aside.
10. In the result, the appeal is allowed and the finding recorded by the Tribunal that the insurance company is liable to pay the compensation awarded to the claimants is set aside. It is held that the owner of the jeep (respondent 7 herein) alone is liable to make payment of the compensation amount. The amount presently in deposit is directed to be returned to the insurance company.
There will be no order as to costs in this appeal.