Himachal Pradesh High Court
National Insurance Co. Ltd. vs Shakuntla Devi And Ors. on 18 July, 2005
Equivalent citations: IV(2005)ACC688, III(2006)ACC395, 2006ACJ2732
Author: Deepak Gupta
Bench: Deepak Gupta
JUDGMENT Deepak Gupta, J.
1. By this judgment two appeals, being F.A.O. (MVA) Nos. 237 of 1999 and 148 of 2000, are being disposed of, as they arise out of the same accident and similar points are involved in these appeals.
2. In F.A.O. No. 237 of 1999, deceased was one Gopal Singh Negi. He was travelling in truck No. HIA 8266. The claim set up in the claim petition is that the deceased had paid fare for travelling in the truck. Driver did not file any reply. The owner in his reply took up the stand that he was not aware as to in what capacity the deceased was travelling in the vehicle. It was further stated that the deceased was not travelling with the consent of the owner. The insurance company took up the plea that the deceased was an unauthorised passenger in a goods vehicle and, as such, it was not liable to pay compensation.
3. In F.A.O. No. 148 of 2000, the facts are that the deceased was employed as chowkidar with Himachal Pradesh State Forest Corporation. He was posted at the depot of Forest Corporation at Chaura. In the claim petition it was alleged that he sat in the vehicle to guide the driver of the truck and to point out the site from where the vehicle was to turn back so that the timber could be loaded therein. The owner in his reply denied this fact. The insurance company took up the plea that the deceased was an unauthorised passenger in a goods vehicle and, as such, the insurance company was not liable.
4. Motor Accidents Claims Tribunal, Kinnaur (hereafter referred to as 'the Tribunal') in both cases held the insurance company liable to pay the compensation. Insurance company has filed the present appeals.
5. Mr. Ashwani Sharma, learned Counsel for the appellant insurance company in both the appeals, argued that so far as the deceased Gopal Singh is concerned, it is clear that he was an unauthorised passenger in the vehicle. Even as per averments made in the claim petition, the case set up was that he had paid fare for sitting in the goods vehicle. According to him, no passengers can be carried in a goods vehicle and the insurance company is not liable for any passenger being carried in the goods vehicle except driver, cleaner, employees of the insured and the owner of the goods or his authorised representative.
6. So far as the case of deceased Rattan Singh is concerned, Mr. Ashwani Sharma has contended that no goods were being carried in the vehicle at the relevant time. He further submits that the deceased was only a chowkidar and it was no part of his duty to sit in the vehicle to show the driver the point from where the truck was to be turned. According to him, the deceased cannot be said to be the authorised representative of the owner of the goods.
7. On the other hand, Mr. Ajay Sood, learned Counsel for owner, has submitted that insurance company is liable to pay the compensation. According to him, Rattan Singh, deceased in F.A.O. No. 148 of 2000, was travelling as authorised representative of the owner of the goods. He further submits that due to the fact that the law at that time was different, the owner did not appear in the witness-box. He submits that at best the insurance company should be asked to pay the compensation and the case should be remanded to the Tribunal where the parties be permitted to lead evidence to show whether there was breach of policy on the part of the owner or not. He further contends that insurance company has failed to prove that insured knowingly breached the terms of the policy of insurance.
8. The accident in the case occurred on 26.6.1998. The Motor Vehicles Act, 1988 came into effect from 1.7.1989. At that time it was not necessary for the insurance company to cover liability in respect of the owner of the goods or his authorised representative being carried in the vehicle. The relevant portion of Section 147, as amended in 1994, reads as follows:
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 required
(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, any such employee
(a) engaged in driving the vehicle, or
(b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle, or
(c) if it is a goods carriage, being carried in the vehicle, or
(ii) to cover any contractual liability.
(Emphasis supplied) The portion for which the emphasis has been supplied was introduced by Motor Vehicles (Amendment) Act, 1994 w.e.f. 14.11.1994.
9. The Apex Court has considered both the unamended as well as the amended provisions of the Act in a number of cases. The law with regard to the liability of the insurance company in respect of passengers being carried in a goods vehicle is now settled. A three-Judge Bench of Apex Court in New India Assurance Co. Ltd. v. Asha Rani , considered the question whether it is compulsory for the insurance company to cover the liability in respect of passengers travelling in a goods vehicle. This decision was in the context of the unamended Act. The Apex Court overruled its earlier judgment in New India Assurance Co. Ltd. v. Satpal Singh . It held as follows:
...It is held that the insurer will not be liable for paying compensation to the owner of goods or his authorised representative on being carried in a goods vehicle when that vehicle meets with an accident and the owner of goods or his representative dies or suffers any bodily injury.
10. Justice S.B. Sinha in his concurring judgment held as follows:
(25) Section 147 of 1988 Act, inter alia, prescribes compulsory coverage against the death of or bodily injury to any passenger of 'public service vehicle'. Proviso appended thereto categorically states that compulsory coverage in respect of drivers and conductors of public service vehicle and employees carried in a goods vehicle would be limited to the liability under Workmen's Compensation Act. It does not speak of any passenger in a 'goods carriage'.
(26) 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'. Keeping in view the provisions of 1988 Act, we are of the opinion that as the provisions thereof do not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured for any passenger travelling in a goods vehicle, the insurers would not be liable therefor.
11. This matter again came up for consideration in Oriental Insurance Co. Ltd. v. Devireddy Konda Reddy . The Hon'ble Supreme Court considered the difference between the definition of 'goods vehicle' appearing in the Motor Vehicles Act, 1939 and 'goods carriage' appearing in the Motor Vehicles Act, 1988. It held as follows:
The difference in the language of the 'goods vehicle' as appearing in the old Act and 'goods carriage' in the Act is of significance. A bare reading of the provisions makes it clear that the legislative intent was to prohibit goods vehicle from carrying any passenger. This is clear from the expression 'in addition to passengers' as contained in definition of 'goods vehicle' in the old Act. The position becomes further clear because the expression used is 'goods carriage' is solely for carriage of goods. Carrying of passengers in a goods carriage is not contemplated in the Act.
12. Thus, the Apex Court held that the passengers cannot be carried in a goods vehicle.
13. In National Insurance Co. Ltd. v. Baljit Kaur , the Apex Court considered the impact of the amendment to the Motor Vehicles Act made in 1994. The Apex Court held that after the amendment of 1994, insurance company was bound to cover liability with respect to owner of the goods or his authorised representatives. However, it further held that no passenger can be carried in a goods vehicle and the insurance company was not liable to pay compensation with respect to passengers especially gratuitous passengers. The Apex Court held thus:
(20) It is, therefore, manifest that in spite of the amendment of 1994, the effect of the provision contained in Section 147 with respect to persons other than the owner of goods or his authorised representative remains the same. Although the owner of the goods or his authorised representative would now be covered by the policy of insurance in respect of a goods vehicle, it was not the intention of the legislature to provide for the liability of the insurer with respect to passengers, especially gratuitous passengers, who were neither contemplated at the time the contract of insurance was entered into, nor was any premium paid to extend the benefit of insurance to such category of people.
14. The Supreme Court considered this point in National Insurance Co. Ltd. v. Ajit Kumar . After considering the definitions and various provisions of the Motor Vehicles Act both amended and unamended, the Apex Court held as follows:
The difference in the language of the 'goods vehicle' as appearing in the old Act and 'goods carriage' in the Act is of significance. A bare reading of the provisions makes it clear that the legislative intent was to prohibit goods vehicle from carrying any passenger. This is clear from the expression 'in addition to the passengers' as contained in definition of 'goods vehicle' in the old Act. The position becomes further clear because the expression used is 'goods carriage' is solely for the carriage of goods. Carrying of passengers in goods carriage is not contemplated in the Act. There is no provision similar to Clause (ii) of the proviso appended to Section 95 of the old Act prescribing requirement of the insurance policy. Even Section 147 of the Act mandates compulsory coverage against death of or bodily injury to any passenger of 'public service vehicle'. The proviso makes it further clear that compulsory coverage in respect of both drivers and conductors of public service vehicle and employees carried in goods vehicle would be limited to liability under Workmen's Compensation Act, 1923 (in short 'WC Act'). There is no reference to any passenger in 'goods carriage'.
15. Following the aforesaid judgments, a similar view was taken by the Supreme Court in National Insurance Co. Ltd. v. V. Chinnamma .
16. In view of the aforesaid clear enunciation of law laid down by the Apex Court, the position of law may be summarized as follows:
Under Motor Vehicles Act, 1988, prior to its amendment in 1994, which came into effect from 14.11.1994, insurance company was not liable in case of any passenger being carried in a goods vehicle. The only liability of the insurance company was to indemnify the insured with regard to the amount payable under the Workmen's Compensation Act in respect of death or bodily injury to any employee engaged in driving the truck or being carried in the vehicle. The only