Rajasthan High Court - Jaipur
National Insurance Co. Ltd. vs Nirmala Bai And Ors. on 11 January, 1999
Equivalent citations: 2000ACJ932, 1999WLC(RAJ)UC529
JUDGMENT D.C. Dalela, J.
1. Brief facts of the case are that on 6.8.1993 a car No. RNQ 900 turned down and met with accident while going from Jaipur to Jodhpur near Beawar in which an occupant Prakash Rai died. The car was driven by the respondent No. 5 and owned by the respondent No. 6. The vehicle was insured with the appellant National Insurance Co. Ltd. Legal heirs of the deceased claimant-respondent Nos. 1 to 4, preferred a claim petition before the learned Motor Accidents Claims Tribunal, Beawar (for short 'the Tribunal'). The respondent Nos. 5 and 6 contested the claim petition and contended that the accident was due to vis major. The learned Tribunal framed five issues and after taking the evidence and hearing both the sides, awarded a total compensation of Rs. 7,69,000 with Rs. 1,500 expenses and interest at the rate of 12 per cent per annum vide award dated 28.1.95. The liability to pay the compensation was made jointly and severally of the appellant and the respondent Nos. 5 and 6. Being aggrieved by the impugned award, the appellant has preferred this appeal.
2. Both the sides have admitted at Bar before me that the insurance policy in question was 'Act only' policy, and, it covered the third party risk only according to the Motor Vehicles Act, 1988.
3. The learned counsel for the appellant has argued that the deceased was a gratuitous passenger, and, as such, cannot be said to be a third party and that the insurance company cannot be held liable to pay compensation. The learned counsel has relied upon the decisions of the Himachal Pradesh High Court in Kaushalya Devi v. Dr. Lakhbir Sood 1994 ACJ 12 (HP), and, of Gauhati High Court in Rash-bihari Prasad v. Parbati Kedia 1994 ACJ 532 (Gauhati), to support his argument that the insurance company is not liable to indemnify the claim with regard to the death of gratuitous passenger travelling in the car. The learned counsel for the appellant has also referred to a decision of this court passed in National Insurance Co. Ltd. v. Paras 1994 ACJ 563 (Rajasthan), in which it was held that the passengers who are carried gratis are not compulsorily required to be covered by the policy under the provisions of Section 95 of the Motor Vehicles Act 1939, and, as such, the insurance company is not liable to pay the amount of compensation awarded.
4. The learned counsel for the respondents, on the other hand, has contended that the decisions cited by the learned counsel for the appellant, are with regard to the provisions of the old Motor Vehicles Act, 1939, and, in the present case in hand, the accident took place in 1993 when the old Act was repealed, and, the new Motor Vehicles Act, 1988, was in force. According to the learned counsel, Section 147 of the new Motor Vehicles Act, 1988, has completely changed the position of law which was occurring in Section 95 of the old Motor Vehicles Act, 1939. According to the learned counsel, the provisions which were occurring in proviso (ii) to Section 95(1)(b) of the old Motor Vehicles Act, stand omitted in Section 147 of the new Motor Vehicles Act, 1988. According to the learned counsel for the respondents, the insurance company is not absolved from the liability in respect of the person carried in or upon the vehicle. According to the learned counsel, the term 'any person' used in Section 147(1)(b)(i) of the new Motor Vehicles Act, 1988, includes every person who incurs death caused by or arising out of the use of the motor vehicle and passenger in the vehicle is covered by the third party risk. He has cited a decision of this court in the case of Abdul Jabbar v. Kesar 1998 (1) TAC 187 (Rajasthan). A perusal of Section 147 of the new Motor Vehicles Act, 1988, and, the corresponding Section 95 of the old Motor Vehicles Act, 1939, would show that in the new Act the clause which excludes the coverage for death of or bodily injury to a person carried in or upon the vehicle, has been dropped. This means that such person cannot, now, be excluded from the policy. The result is when a policy of insurance is an 'Act only' policy, it does not mean that the insurance company is absolved from the liability in respect of the person carried in or upon the vehicle.
5. Section 147 of the new Motor Vehicles Act, 1988, lays down that in order to comply with the requirements of Chapter XI, a policy of insurance must be a policy which is issued by an insurer and insures the person specified in the insurance policy against (i) any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place; and (ii) 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.
6. The expression 'third party' has not been defined. Then, what is the meaning of expression 'third party'. Normally and ordinarily, a contract of insurance has two parties to it, the insurer and the insured. Therefore, any party other than the contracting party of the contract of insurance becomes and can be called as third party. The use of the words and expression 'third party' clearly indicates that it refers to a party who is neither the first party nor the second party to a contract of insurance. Therefore, the expression 'third party' includes everyone be it a person travelling in vehicle itself or any other vehicle or one walking on the road. Section 147(1)(b)(i) of the new Motor Vehicles Act, 1988, directs that the insurance policy must insure the insured "against any liability which may be incurred by him in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place". The term 'any person' used in the above provision would include every person who incurs death caused by or arising out of the use of the vehicle and the passenger in the vehicle is covered by the third party risk. In the case of Amrit Lal Sood v. Kaushalya Devi Thapar 1998 ACJ 531 (SC), Hon'ble Supreme Court has observed that "the expression 'any person' would undoubtedly include an occupant of the car who is gratuitously travelling in the car". Hon'ble Supreme Court has further held that "once the company had undertaken liability to third parties incurred by the persons specified in the policy, the third parties' right to recover any amount under or by virtue of the provisions of the Act is not affected by any condition in the policy". Thus, the proposition that the policy does not cover the liability in respect of a passenger, including a gratuitous person, passenger travelling in the car in question itself, cannot be accepted because the statutory requirement of a policy under Section 147 is that the policy should insure against any liability which may be incurred by the owner in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place.
7. The decisions relied upon by the learned counsel for the appellant being with regard to the old Motor Vehicles Act, 1939, and, as such, are not applicable in the present case in hand which is governed by the new Motor Vehicles Act, 1988.
8. In my opinion, the learned Tribunal has committed no error in holding that the appellant insurance company is liable to pay the compensation.
9. No other point has been argued and pressed before me.
10. Consequently, this appeal is, hereby, dismissed.