Himachal Pradesh High Court
Icici Lombard General Insurance ... vs Murari Lal And Others on 3 March, 2025
Author: Tarlok Singh Chauhan
Bench: Tarlok Singh Chauhan
1 2025:HHC:4177 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.
RSA No.196 of 2016 a/w RSA Nos.
521, 529 and 530 of 2017 Reserved on: 28.02.2025 Date of decision:03.03.2025.
1. RSA No. 196 of 2016 ICICI Lombard General Insurance Company Ltd.
...Appellant Versus Murari Lal and others ...Respondents
2. RSA No. 521 of 2017 ICICI Lombard General Insurance Company Ltd.
...Appellant Versus Pratap Singh and others ...Respondents
3. RSA No. 529 of 2017 ICICI Lombard General Insurance Company Ltd.
...Appellant Versus Kamal Deshta and others ...Respondents 4. RSA No. 530 of 2017 ICICI Lombard General Insurance Company Ltd.
...Appellant
Versus
Ram Chand and others ...Respondents
Coram
The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge. Whether approved for reporting? No. For the Appellant(s): Mr. Jagdish Thakur, Advocate in RSA No. 196/2016 and 521 & 529/2017.
Mr. Y.P. Sood, Advocate in RSA No. 530/2017.
2
2025:HHC:4177 For the Respondents: Mr.Virender Chauhan, Sr. Advocate with Mr. Arsh Chauhan, Advocate for respondent No.1 in all the appeals.
Mr. Dalip K. Sharma, Advocate for respondent No.2 in all the appeals.
Ms. Ranjana Chauhan, Advocate, Court Guardian for respondent No.3.
Tarlok Singh Chauhan, Judge Since all these appeals arise out of same accident, therefore, they were taken up together for arguments and are being disposed of by way of common judgment.
2. The facts are not in dispute.
3. The plaintiffs in all these cases i.e. Murari Lal, Pratap Singh, Kamal Deshta and Ram Chand have apple orchards and had send their respective consignments for sale through truck bearing registration No. HP-12C-6864 owned by one Narender Kumar S/o Sh. Ram Singh.
4. Defendant No.2 Arnu Sharma S/o late Sh. Nand Lal Sharma was driver of the said vehicle. The vehicle was carrying consignment not only of the plaintiff(s) herein but also some other orchardists.
5. The aforesaid vehicle on the intervening night of 20-21.08.2009met with an accident when it reached between Umla Dawar and Ghanasidhar and went off the road. As a 3 2025:HHC:4177 result thereof, the apple cases of the plaintiff(s) and other persons were completely damaged and destroyed.
6. The vehicle in question was insured with defendant No. 3 i.e. the appellant(s) herein, in all these appeals, w.e.f. 25.06.2009 to 24.06.2010 and according to the plaintiff(s) as also the owner and driver of the vehicle, it was the insurance company that was liable to make good the loss of the goods.
7. One of the issues framed by the learned Court in all these cases; "Whether no privity of contract existed between the plaintiff and defendant No.3, if so, its effects? OPD3".
8. After answering the same against the defendant- insurance company, the learned Trial Court fastened the liability jointly and severally upon all the defendants.
9. As regards the owner, I have been informed at the Bar that certain other cases had also been filed against him, in which the Insurance Company was eventually exonerated and the liability was fastened upon the owner and no appeal against those judgments and decrees has been filed.
10. Be that as it may, even in these appeals, the owner has not chosen to file any separate appeal even though 4 2025:HHC:4177 his liability is joint and several with that of defendant No.3 i.e. Insurance Company.
11. The Insurance Company aggrieved by the judgments and decrees passed by the learned Trial Court, filed appeals before the learned first Appellate Court, but the same were dismissed, constraining the Insurance Company to file the instant appeals.
12. RSA Nos. 196 of 2016 was admitted on 05.07.2016 on the following substantial question of law:-
"Whether there is privity of contract between the appellant-defendant No. 3 and the insurer-defendant No. 1 and that the provision of the certificate of insurance Ext.PW1/D have been misconstrued and mis- appreciated, the judgment and decree under challenge in the main appeal being perverse and vitiated is not legally sustainable?"
Whereas RSA Nos. 521, 529 and 530 of 2017 were admitted earlier on 14.12.2017 on the following substantial question of law:-
"Whether on account of misappreciation of the pleadings and misreading of the oral as well as documentary evidence available on record the findings recorded by both Courts below are erroneous and as such the judgment and decree impugned in the main appeal being perverse is vitiated and no legally sustainable?"
13. There is no dispute between the parties with the substantial question of law involved in these appeals revolves 5 2025:HHC:4177 around the "certificate of insurance", which admittedly is a general policy of insurance relating to third party risk as is required under Section 147 (1) & (2) of Motor Vehicles Act, 1988 (for short the M. V. Act).
14. Section 146 of the Act makes it compulsory for every owner of a vehicle to ensure that his vehicle is covered by a policy of insurance complying with the requirements of Chapter XI of the M. V. Act. A policy which covers the liability, only statutorily coverable under the M. V. Act, is called an "Act Policy". When an Insurance Company issues an "Act Policy", it undertakes to indemnify insurer of all losses which are payable under the terms of the M.V. Act. The Insurance Company by charging extra premium, may cover other liabilities also, but in the instant case, there was no such premium paid so as to cover other liabilities.
15. Now, the moot question as to whether the insurance policy would cover the risk in relation to goods being carried in the goods vehicle, and whether these goods can be held to be belonging to a third party or not?
16. This issue is no longer res-integra and has been answered by a learned Full Bench of this Court in Jagdish Chand Sharma & etc vs. Bachan Singh & Ors. AIR 2010 HP 49, wherein it was held that when a person sends his goods by goods vehicle, he enters into a contract with the 6 2025:HHC:4177 owner of the goods vehicle and, therefore, the owner of the goods vehicle becomes contractually liable to transport the goods in a safe condition. This is a "contractual liability"
covered under the Carriers Act and does not in any manner fix liability covered under the M.V. Act. The owner of the goods cannot by any stretch of imagination be said to be a third party vis-a-vis the insured. It is a contracting party with the insurer and the risk cannot be said to be that of a third party.
17. It was further held that when it comes to damage to property, both in Section 147(b)(1) as well as in Section 165 of the M.V. Act, the legislature in its wisdom has specifically used the phrase 'property of a third party' and thereafter the Court concluded that "any property of a third party" occurring in Sections 147 and 165 of the M.V. Act will mean property, which is outside the goods vehicle and not being carried in the goods vehicle and the goods of the consignor/consignee being carried in a goods vehicle cannot be termed to be the property of a third party.
18. The learned Trial Court while answering issue No. 3 (quoted above in para-7), observed as under:-
"42. On the basis of discussion on facts and law, while giving findings on issue No. 1, this court has already pointed out that in such cases express contract between insurance company and claimant is not required. However, as per the language of overleaf of the policy itself, as discussed above and for the 7 2025:HHC:4177 provisions of Carriers Act, 1865; Insurance Act, Sale of Goods Act, 1930, contract Act, 1872 etc., this court safely concludes that there in implied privity of contract between the plaintiff and defendant no. 3. As already pointed out that since other leaves of Insurance Policy is not legally exhibited this court can't interpret the other clauses of the same for obvious difficulties and remain helpless in giving findings on the same and under the peculiar facts and circumstances. It is rather constrained to draw adverse inference against the Insurance Company as per the combined effect of Se. 114 (g) & (h) r/w S. 148(4) of Evidence Act, 1872. for impliedly withholding the material documents from the court. Accordingly, even this issue is decided in favour of plaintiff and against the defendant no. 3."
19. Whereas the learned first Appellate Court while affirming the findings of the learned Trial Court observed as under:-
"28. .....There is again no dispute of the fact that the truck no. HP-12C-6864 was duly registered with registering and licensing authority, Nalagarh and it was insured vide insurance certificate cum policy no. 3003/54357559/ 01/000 with ICICI Lombard General Insurance Company. It was a goods carrying vehicle package policy valid w.e.f. 25.6.2009 to 24.6.2010, the policy also covered basic third party liability. The premium towards the third party has also been paid. Therefore, this court can arrive at safe conclusion that under the policy, it was agreed upon to indemnify to ensure the event of an accident caused by or arising out of the use of the vehicle, against all sums including cost, expenses, which the insurance company shall be legally liable to pay in respect of the damage to the 8 2025:HHC:4177 property, in the event of accident caused by or arising out of use of the vehicle."
20. The reasoning accorded by the learned Courts below for negating the claim of the Insurance Company cannot withstand judicial scrutiny given the fact that the insurance policy obtained by the owner of the vehicle only covers the "third party risk" under the Act. It did not in any manner cover the consequential loss arising out of the damage to the property of the owner of the goods. As held in Jagdish Chand Sharma's case supra, "damage of any property of a third party" is different from "damage arising out of the loss of any property". The difference is clear and sharp.
21. In case, the owner of the goods desired the insurance company to pay or for that matter, in case, the insured wanted the liability of the present kind to be fastened upon the Insurance Company, then they are bound to prove on record that any one of them had obtained a separate "transit insurance cover/policy". For the policy of insurance obtained in compliance to Section 146 of the Act, as stated above, stands issued in respect of offending vehicle by the insurance company and does not cover the damages caused to the goods and other property belonging to the plaintiff(s).
22. As a necessary corollary and in order to fix liability on the appellant(s) to pay compensation for the damage caused to the goods belonging to the plaintiff(s) while in 9 2025:HHC:4177 transit, the insurance policy should and was required to have a separate "transit insurance policy" and since the policy was not obtained, the risk sustained by the plaintiff(s) on account of the damage caused to the property loaded in the truck was not covered by the existing policy of insurance Ext. PW1/D.
23. It is more than settled that a contract of insurance is and always continues to be one for indemnity of the defined loss, no more, no less. What is defined loss has to be determined in each case upon interpretation of the terms of the policy in question. Assured/insured person cannot seek to profit by seeking amount beyond the define loss, be it one policy or multiple policy covering the same peril. (Ref. United India Insurance Co. Ltd. vs. Levis Strauss (India) (P) Ltd. (2022) 6 SCC 1.
24. In view of the aforesaid discussion, the substantial question of law is answered by holding that both the courts below have misappreciated, misinterpreted the policy of insurance and have wrongly come to the conclusion that there was a privity of contract between the insurance company and the owner of the goods and have further erred in coming to the conclusion that the certificate of insurance Ext.PW1/D covered the insurance of goods belonging to the plaintiff(s).
25. Consequently, I find merit in these appeals and the same are allowed and the judgments and decrees passed 10 2025:HHC:4177 by both the courts below holding the appellant(s)-Insurance Company to be jointly and severally liable to pay the decreetal amount are set aside. However, it is made clear that the judgments and decrees so passed against the owner and driver of the vehicle remain intact and the plaintiff(s) are at liberty to execute the same against them or any one of them.
(Tarlok Singh Chauhan) Judge 03.03.2025 (sanjeev)