Madras High Court
United India Insurance Company Limited vs K.Shanmugam on 25 April, 2008
Equivalent citations: AIR 2009 (NOC) 298 (MAD.), 2009 AIHC (NOC) 625 (MAD.)
Author: V. Periya Karuppiah
Bench: V. Periya Karuppiah
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 25.04.2008 CORAM: THE HON'BLE MR. JUSTICE V. PERIYA KARUPPIAH C.M.A.No.2419 of 2002 United India Insurance Company Limited, Salem ... Appellant vs. 1.K.Shanmugam 2.S.Selvaraj ... Petitioners Appeal filed under Section 173 of the Motor Vehicles Act, 1998 against the judgment and decree dated 20.02.2002 passed in M.C.O.P.No.56 of 1998 on the file of the Motor Accidents Claims Tribunal (Sub Judge), Sankari. For appellant : Mr.S.Arun Kumar For first respondent : Mr.V.Anandamoorthy For second respondent : (Died) J U D G M E N T
This appeal is filed at the instance of the Insurance Corporation against the award passed by the Motor Accident Claims Tribunal, Sankari in M.C.O.P.No.56 of 1998 dated 08.03.2002 praying to set aside the award of the tribunal.
2. The Tribunal after having considered the oral and documentary evidence adduced on either side had passed an award of Rs.65,000/- with interest at 9% p.a. as against the claim of Rs.1,50,000/-
3. The appellant corporation (insurer) was the second respondent before the tribunal. The second respondent herein (insured) was the first respondent before the tribunal. . The petition was filed claiming a compensation of Rs.1,50,000/- by the claimant, the first respondent herein for the injuries sustained in a road accident due to the rash and negligent driving of the driver of the lorry of the second respondent herein.
4. The case of the first respondent/claimant in brief is as follows:- That on 08.05.1997 at about 2.00 a.m. petitioner was going in his lorry bearing Regn. No. TN 28 Y 7029 as a substitute driver of the lorry and when the lorry was proceeding near Kudukuli Privu Road on its way to Salem from Bangalore laden with goods , the lorry which was coming from opposite in a rash and negligent manner over took another lorry and on seeing the same, the driver of the lorry in which the petitioner was proceeding lost his control and over turned the lorry in a rash and negligent manner and in that manner the door of the lorry got opened and the petitioner was thrown out of the lorry which resulted in the accident. In the accident, the petitioner sustained fracture on his right femur and grievous injuries all over his body. Therefore, the petition claiming compensation under various heads in all Rs.1,50,000/- from the respondents therein together with interest.
5. The first respondent before the tribunal remained set exparte.
6. The second respondent insurance company before the tribunal filed their counter resisting the claim of the petitioner and contending that the petition himself was an insured and as such petition for compensation is not maintainable. There is a delay of 10 days in giving the first information to the police. It is alleged that the petitioner traveled in the lorry as a substitute driver at the time of the accident and sustained injuries in the accident. However, it is surprised to note that the driver who was actually on the wheel did not sustain any injury. This would show that the driver (1st respondent before the tribunal) was not at fault. The driver of the petitioner has not preferred any police complaint. Despite there were number of hospitals nearby the accident spot, the petitioner was not admitted in any of such hospital. These would show that the claim form has been prepared only after making ready all the documents for laying the claim. The door was happened to be opened only due to the improper maintenance of the lorry by its owner, the petitioner. Therefore, the respondent corporation is not liable to pay any compensation. In any event, the claim of the petitioner is exhorbitant. The petitioner is put to strict proof of his age, avocation, income, nature of injuries, period of treatment, medicinal expenses, disabilities sustained due to accidental injuries and their consequent impact on his day to day life and style. Hence,t he petition is liable to be dismissed.
7. The appellant is the insurance company who questioned the liability of the insurer to pay the compensation to the claimant, who himself happened to be the owner of the lorry involved in the accident.
8. Mr.S.Arun Kuamr, the learned counsel for the appellant/insurance company would submit in his argument that the tribunal had not considered the position of law in respect of granting of compensation for the owner of the vehicle himself but had wrongly granted the compensation. He would further submit in his argument that the accident is said to have taken place at 2.00 a.m. according to the evidence of the first respondent/claimant, but during the course of cross examination he had admitted that the accident had taken place at 12.00 noon and on that score itself, the entire liability of the insurance company is liable to be ceased. He would also submit in his argument that it is a well settled law that the insurance company who had entered into a contract of indemnification with the insured, is liable to indemnify the insured only by virtue of the contract against the third party liability and the said insured being the owner of the vehicle cannot be treated as a third party and he himself cannot claim compensation either statutorily or through contract of indemnification.
9. The learned counsel for the appellant would further submit in his argument that the tribunal had lost sight of proposition of law as settled down by the Apex Court in Chimajirao Kanhojirao Shrike and another Vs. Oriental Fire and General Insurance Company Limited 2001 (1) L.W. 516 wherein the insured had entered into a separate contract with the insurance company for covering the personal accident and the tribunal had not distinguished the present case with that of the case mentioned in the precedent and had thereby erroneously ordered for compensation to the injured. Further the tribunal was blamed to have not followed the judgments reported in ACJ 1989 Kerala 21, AIR 1990 Madras 108 and 390 , ACJ 1991 176, ACJ 2000 134 and 2002 TLNJ 97 and in those judgments it has been categorically found that the injured (owner) of the motor vehicle cannot claim compensation for the personal injuries either statutorily or on a contract indemnifying the injured to cover liability to the third parties. Therefore, the learned counsel would submit that the award passed by the tribunal cannot be sustained and therefore, the same is liable to be set aside by allowing this appeal.
10. Mr.V.Anandamoorthy, learned counsel appearing for the first respondent/claimant would submit in his argument that the petitioner even though being the owner of the vehicle in question was traveling in the vehicle at the time of the accident as one of the substitute drivers for the employed driver and since he had sustained injuries in the accident, he has to be compensated by the insurance company as a third party. He would further submit that the tribunal has rightly appreciated the judgment reported in Chimajirao Kanhojirao Shrike and another Vs. Oriental Fire and General Insurance Company Limited 2001 (1) L.W. 516 and had decided the case according to law by granting a just and reasonable compensation. He would also submit that the liability of the insurance company is wide enough to cover the compensation payable to the injured person without any payment of compensation and therefore,t he award passed by the tribunal can be upheld and the appeal may be dismissed.
11. On considering the arguments advanced on either side, the fact that the accident had taken placed on 8.5.1997 at the wee hours (at about 2.00 a.m.) involving the lorry bearing registration No. TN 28 Y 7029 was not seriously disputed. The only point raised by the learned counsel for the appellant was that the insurance company was not liable to pay the compensation to the petitioner who himself happened to be the owner of the lorry. The admitted facts are to be necessarily set out for the purpose of considering the arguments advanced on either side. The petitioner is the owner of the lorry which was involved in the accident on the fateful day. He traveled along with the driver of the lorry as one of the substitute driver as claimed by him. He had sustained injuries and thereafter a complaint was given to the police belatedly and the petitioner had also taken treatment in the hospital for the fractures sustained by him in the accident. Under the given circumstances, the petitioner had filed the claim petition under appeal against the insurance company and the driver of the lorry for grant of compensation. Admittedly, the contract of insurance policy between the owner of the lorry (petitioner) and the insurance company was in respect of the liability to third party. It has not been extended to a comprehensive policy nor a contract of indemnifying for the personal injuries to the owner of the vehicle. In the light of these facts, we have to consider further the arguments advanced on either side.
12. The learned counsel for the appellant/insurance company in support of his argument would rely upon the judgment from the Constitutional bench of the Supreme Court reported in New India Assurance Company Limited Vs. C.M.Jaya and others, 2002 ACJ 271. He would also draw the attention of this court to the relevant passages viz., Paragraphs 5 and 11 in the above said judgment which run as follows:-
" 5. Thus, a careful reading of these decisions clearly shows that the liability of the insurer is limited, as indicated in section 95 of the Act, but is is open to the insured to make payment of additional higher premium and get higher risk covered in respect of third party also. But in the absence of any such clause in the insurance policy the liability of the insurer cannot be unlimited in respect of third party and it is limited only to the statutory liability. This view has been consistently taken in the other decisions of this court.
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11. In the premise, ...
In the case of insurance company taking any higher liability by accepting higher premium for payment of compensation to a third party, the insurer would be liable to the extent limited under section 95 (2) of the Act and would not be liable to pay the entire amount."
13. Similarly, he would also place his reliance on the judgement reported in Oriental Insurance Company Limited V. Meena Variyal and others 2007 ACJ 1284 (SC) and draw the attention of this court to the relevant passages viz., Paragraphs 14 and 20 which run as follows:-
" 14. It is difficult to apply the ratio of this decision to a case not involving a third party. The whole protection provided by Chapter XI of the Act is against third party risk. Therefore, in a case where a person is not a third party within the meaning of the Act, the insurance company cannot be made automatically liable merely by resorting to Swaran Singh's case, 2004 ACJ 1 (SC) , ratio. This appears to be the position. This position was expounded recently by this court in National Insurance Company Limited V. Laxmi Narain Dhut, 2007 ACJ 721 (SC). This court after referring to Swaran Singh's case (Supra) and discussing the law summed up the position thus:
"In view of the above analysis the following situations emerge:
(1) The decision in Swran Singh's case (supra), has no application to cases other than third party risks. (2) ..........
(3) In case of third party risks the insurer has to indemnify the amount and if so advised to recover the same from the insured. (4) ............
The High Courts/Commissions shall now consider the matter afresh in the light of the position in law as delineated above.
20. We are thus satisfied that based on the ratio in Swaran Singh's case, 2004 ACJ 1 (SC), the insurance company cannot be made liable in the case on hand to pay the compensation first and to recover it from the insured, the owner of the vehicle. ............................................"
14. Apart from that he would also rely upon the judgment reported in Dhanraj Vs. New India Assurance Company Limited and another 2004(7) Supreme 164 and would draw the attention of this court to the relevant passages which run as follows:-
" 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 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. Section 147 does not require an Insurance Company to assume risk for death or bodily injury to the owner of the vehicle.
9........
10. In this case, it has not been shown that the policy covered any risk for injury to the owner himself. We are unable to accept the contention that the premium of Rs.4,989/- paid under the heading "Own damage" is for covering liability towards personal injury. Under the heading, "Own damage", the words " premium on vehicle and non-electrical accessories " appear. It is thus clear that this premium is towards damage to the vehicle and not for injury to the person of the owner. An owner of a vehicle can only claim provided a personal accident insurance has been taken out. In this case, there is no such insurance."
15. On the other hand the learned counsel for the first respondent/petitioner would submit in his argument that the tribunal had rightly passed the award following the judgment reported in Chimajirao Kanhojirao Shrike and another Vs. Oriental Fire and General Insurance Company Limited 2001 (1) L.W. 516 and the facts mentioned in the said judgment are squarely applicable to the present case and therefore, the judgment relied upon by the learned counsel for the appellant is not applicable to the present case. He would also draw the attention of this court to the relevant passage mentioned in para (8) of the payment which runs as follows:-
" 8. This stand is contrary to the submission made by the learned counsel for the respondent. It has not been the case of the Insurance Company that notwithstanding the word used therein, namely, 'unlimited personal injury' it would in terms of the policy would be limited to the liability of a third party. On the contrary , faced with the submission that such words would make the insurer liable even to the insured personally, the said plea and submission was made in the trial Court. Once the submission and the stand is that the writing is on account of oversight and mistake, the aforesaid submission made before us cannot be sustained.
9. In view of the aforesaid conclusion, we have no hesitation to hold that the High Court committed an error in setting aside the finding given by the trial Court, specially in view of the said specific plea taken in the written statement. The High Court felt that since it is a legal matter it could be adjudicated notwithstanding a different stand in his pleading. This approach was not proper. Once a stand in fact is taken that fact could not be controverted by any legal proposition. In the present case, the Insurance Company has not led any evidence to dissolve the stand taken in the written statement that it was done by mistake nor there was any application to amend such pleadings. In view of this, the High Court was not correct to decide the issue through legal inferences dehors of and without adverting to the glaring facts on the record."
16. On a careful consideration of the submissions made by both sides, it is categorically found through the evidence adduced in this case that the contract of indemnification as entered into between the petitioner being the owner of the vehicle and the insurance company (appellant herein) was in respect of the cover of third party liability. The argument advanced by the learned counsel for the first respondent/petitioner would be that even though there was no special contract for covering the personal injuries, he would be covered as a third party since he traveled in the vehicle as a substitute driver and therefore, he would be covered under the said contract of indemnification. He had alternatively insisted that the contract of indemnification would also cover the damages sustained by him in the accident. Therefore, the insurance company is liable under the contract of insurance policy entered into between the petitioner and the insurance company was produced under Ex.R.1. On a careful perusal of the said contract this court could see that it is not a comprehensive insurance policy. It covers the liability of the third party only. According to the judgment of the Apex Court reported in New India Assurance Co. Limited Vs. C.M. Jaya and others 2002 ACJ 271, the liability of the insurance company under Section 95 (2) of the M.V. Act would be extended to the limited liability as mentioned in the policy when there was no contract for a higher liability by accepting a higher premium. Similar dictum laid down in New India Assurance Company Limited 2004 (7) Supreme 164 would be that unless the insured had entered into any special contract along with the other coverages for personal injury, for the injury sustained by the owner of the vehicle being the injured cannot claim compensation. Therefore, it is clear that the petitioner being the owner of the vehicle ought to have entered into a special contract for covering personal injuries sustained by him in the accident along with third party liability. Even otherwise, the petitioner (insured) being the owner of the vehicle, if could be treated as a third party so as to make the insurance company liable to pay the compensation as a third party has to be considered. According to the judgment reported in Oriental Insurance Company Limited Vs. Meena Variyal and others 2007 ACJ 1284, this court could see that Chapter-XI of the M.V. Act is in respect of third party risk and it cannot be made automatically liable to any person including the injured merely by resorting to Swaran Singh's case reported in 2004 ACJ 1 (SC). The said decision of law reported in Swaran Singh's case has been distinguished and it has been held that according to Section 147 of the M.V. Act it did not enjoin in statutory liability on the owner of the vehicle for any passenger traveling in a goods vehicle, the insurers would not be liability therefor for. It is also been found that any person mentioned in the said provision has to be understood as a third party. It is also found that insurance company on the basis of a contract of insurance, which is purely in the nature of indemnification made the insurer entitled for recovery of the compensation paid to the third party from the insured and therefore in a case where third parties are not involved, the insurance company cannot be made liable to pay compensation first and to recover it from the insured, the owner of the vehicle cannot be made possible.
17. Applying the above ratio, this court could find that the petitioner is none other than the insured ( owner of the vehicle ) has claimed compensation for the injuries sustained by him in the accident. He cannot be considered as a third party in order to invoke the provisions of Section 95 (2) of the M.V. Act. He had not entered into any special contract for indemnifying his personal injuries along with third party liability as mentioned in Ex.R1. Therefore, the judgment cited by the learned counsel for the first respondent/petitioner reported in 2001 (1) L.W. 516 which deals with unlimited personal injuries in the contract of indemnification cannot be made applicable to the present case. In the absence of any special contract for personal injuries entered into by the insured with the insurer for personal injuries, it is not feasible for the petitioner to claim compensation against the insurance company as in the third party risk contract. The petitioner is liable to pay compensation to third parties and the insurance company is at liberty to claim contribution against the insured (petitioner) which could not be possible if compensation is granted against the insurance company. Therefore, the concept of law as laid down by the High Court in 2007 ACJ 1284 , 2002 ACJ 271, 2004(7) Supreme 64 , 2007 AC 1284 are squarely applicable to the present case and the claim of the first respondent/petitioner being the owner of the vehicle cannot notionally liable against himself and also against the insurance company on the basis of the contract of indemnification. The tribunal was not correct in coming to the conclusion that the insurance company is liable for payment of compensation to the petitioner despite he being the owner of the vehicle involved in the accident on the basis of judgment reported in 2001-1-L.W. 516 as there is no contract for indemnification of personal injury of the petitioner. Therefore, the award passed by the tribunal is not correct and it is against law and therefore, it is liable to be set aside. The insurance company is not liable to pay any compensation to the 1st respondent /petitioner who being the owner (injured) of the vehicle involved in the accident on the basis of the contract of indemnification towards liability of the third parties.
18. For the foregoing reasons, the appeal is allowed and the award passed by the tribunal is set aside. The amount deposited by the appellant/insurance company into the tribunal in the credit of the case is ordered to be released in favour of the appellant forthwith. In the peculiar circumstances of this case, no order as to costs.
kmk To The Motor Accidents Claims Tribunal (Sub Judge), Sankari