Orissa High Court
Iffco Tokio General Insurance vs Sumitra Samal & Others on 18 February, 2019
Equivalent citations: AIRONLINE 2019 ORI 214, (2019) 2 TAC 388 (2020) 1 ACJ 503, (2020) 1 ACJ 503
Author: A.K.Rath
Bench: A.K.Rath
HIGH COURT OF ORISSA: CUTTACK
MACA Nos.1358 & 1425 of 2015
From the award dated 16.9.2015 passed by the learned 3rd M.A.C.T,
Talcher in MAC Case No.13 of 2014.
-----------
In MACA No.1358 of 2015
IFFCO Tokio General Insurance
Co. Ltd. .... Appellant
Versus
Sumitra Samal & others .... Respondents
In MACA No.1425 of 2015
Sumitra Samal & others .... Appellants
Versus
IFFCO Tokio General Insurance
Co. Ltd. .... Respondents
For insurance company ... Mr. G.P. Dutta, Adv.
For claimants ... Mr. D. Mund, Adv.
PRESENT:
THE HONOURABLE DR. JUSTICE A.K.RATH
Date of hearing : 8.2.2019 : Date of judgment : 18.02.2019
Dr. A.K.Rath, J Both the appeals involve common question of facts and
law were heard together and are disposed of by this common
judgment.
2. Shorn of unnecessary details, the brief facts of the case
are that on 3.6.2013 at about 11.30 A.M while Rahas Bihari Samal
was returning to his house from Thermal market by the auto
2
riskshaw bearing registration number OR-19-A-4823 with his driver
Alekha Bhutia, the auto riskshaw dashed against the backside of
another auto bearing registration number OR-19-P-7906 which was
parked on the left side of the road. Due to accident, he succumbed to
the injuries on the spot. With this factual scenario, the dependants of
the deceased filed MAC Case No.13 of 2014 under Sec.166 of the
Motor Vehicles Act („M.V.Act‟) before the learned 3rd M.A.C.T., Talcher
claiming compensation of Rs.14,60,000/-. The claimants assert that
the accident took place due to rash and negligent driving by the
driver of the auto bearing registration number OR-19-A-4823. The
deceased was earning Rs.14000/- per month. He was aged about 45
years at the time of accident. The offending auto was validly insured
with the insurance company. The driver of the offending auto had
valid driving licence on the date of accident.
3. The opposite party-insurance company entered contest
and filed a written statement denying the liability. It was stated that
the deceased was the owner of the offending auto riskshaw. He was
not a third party and as such, the claim case is not maintainable.
4. Stemming on the pleadings of the parties, learned
Tribunal struck five issues. To substantiate the case, the claimants
had examined three witnesses and on their behalf, fourteen
documents had been exhibited. No evidence was adduced by the
opposite party-insurance company. On an anatomy of pleadings and
evidence on record, learned Tribunal came to hold that the accident
took place due to rash and negligent driving of the driver of the auto
riskshaw. The policy of the offending vehicle is a comprehensive
policy. The opposite party-insurance company is liable to pay the
compensation. Held so, it awarded an amount of Rs.10,58,000/- on
16.9.2015 and directed the insurance company to pay the same with
interest @ 7.5% per annum from the date of filing of the claim
3
application. Assailing the award, the insurer has filed MACA No.1358
of 2015. The claimants have filed MACA No.1425 of 2015 for
enhancement of compensation.
5. Heard Mr.G.P. Dutta, learned counsel for the insurance
company and Mr. Dhananjaya Mund on behalf of Mr. Sunil Kumar
Panda, learned counsel for the claimants.
6. Mr. Dutta, learned counsel for the insurance company
argued with vehemence that as per Sec.149(1) of the M.V Act, the
liability against the appellant can be enforced only when the award is
obtained against the owner/insured. The owner had not paid any
premium of personal accident cover for himself. He had paid
premium of Rs.50/- for personal accident to the passengers under
which the maximum liability of the insurer towards passengers is
one lakh. The deceased being the owner of the auto riskshaw and not
a passenger, the insurer is not liable to pay any compensation. To
buttress the submission, he placed reliance on the decisions in the
case of Oriental Insurance Co. Ltd. v. Sunitra Rathi and others,
(1998) 1 SCC 365, Dhanraj v. New India Assurance Co. Ltd. and
another, (2004) 8 SCC 553, New India Assurance Co. Ltd. V. Meera
Bai and others, (2006) 9 SCC 174, Ningamma and another v. United
India Insurance Co. Ltd., (2009) 13 SCC 710, New India Assurance
Company Ltd. v. Sadanand Mukhi & others, AIR 2009 SC 1788 and
National Insurance Company Ltd. v. Balakrishnan and another, AIR
2013 SC 473.
7. Per contra, Mr. Mund, learned counsel for the claimants
submitted that the vehicle was registered as passenger carrying
commercial vehicle and was duly insured with the appellant. The
policy in question is a comprehensive package policy. Due to rash
and negligent driving of the offending vehicle, the owner of the vehicle
who was travelling as a passenger, died. Since the deceased was a
4
passenger, learned Tribunal is justified in saddling the liability on the
insurer. He placed reliance on the decisions of the apex Court in the
case of National Insurance Company Ltd. v. Balakrishnan and
another, AIR 2013 SC 473 and Rajesh v. Rajbir Singh, 2013 (9) SCC
54 and the decision of the Madras High Court in the case of the
National Insurance Co. Ltd. v. Krishnan, (CMA No.3006 of 2012
disposed of on 15.3.2013).
8. The seminal point that hinges for consideration is
whether the owner of the offending vehicle, who was travelling in the
vehicle, died in the accident without involving any other vehicle can
be construed as a passenger qua the offending vehicle and the
insurer is liable to pay compensation to his legal representatives ?
9. In Sunitra Rathi, the apex Court held that the liability of
the insurer arises only when the liability of the insured has been
upheld for the purpose of indemnifying the insured under the
contract of insurance.
10. In Ningamma, the deceased was travelling in Hero Honda
motor cycle, which he borrowed from the real owner. When the said
motor cycle was proceeding on Ilkal-Kustagl, National Highway, a
bullock cart proceeding ahead of the said motor cycle carrying iron
sheet suddenly stopped and consequently deceased Ramappa who
was proceeding on the said motor cycle dashed against it.
Consequent to the aforesaid incident, he sustained fatal injuries over
his vital part of body and on the way to Government hospital he died.
The widow and son of the deceased filed an application under
Sec.163A of the M.V Act before the Tribunal claiming compensation.
Learned Tribunal awarded compensation. The insurance company
preferred first appeal before the High Court on the ground that the
accident occurred due to the fault of the deceased and the claim
application was not maintainable as Sec.163A of the M.V Act is not
5
applicable unless there was another vehicle involved in the accident.
The High Court allowed the appeal holding that the claim application
was not maintainable as there was no tort-feasor involved. Review
application filed by the claimants was dismissed. The matter
travelled to the apex Court. The question arose before the apex Court
is whether the legal representatives of a person, who was driving a
motor vehicle, after borrowing it from the real owner meets with an
accident without involving any other vehicle, would be entitled to
compensation under Sec.163A of the M.V Act or under any other
provisions of law and also whether the insurer who issued the
insurance policy would be bound to indemnify the deceased or his
legal representatives? The apex Court held that the legal
representatives of the deceased who have stepped into the shoes of
the owner of the motor vehicle could not have claimed compensation
under Section 163-A of the M.V Act. It was held that undoubtedly,
Section 166 of the M.V Act deals with "Just Compensation" and even
if in the pleadings no specific claim was made under Section 166 of
the M.V Act, a party should not be deprived from getting "Just
Compensation" in case the claimant is able to make out a case under
any provision of law. The M.V Act is beneficial and welfare legislation.
In fact, the court is duty bound and entitled to award "Just
Compensation" irrespective of the fact whether any plea in that
behalf was raised by the claimant or not. However, whether or not
the claimants would be governed by the terms and conditions of the
insurance policy and whether or not the provisions of Section 147 of
the M.V Act would be applicable in the present case and also whether
or not there was rash and negligent driving on the part of the
deceased, are essentially a matter of fact which was required to be
considered and answered at least by the High Court. The matter was
remitted back to the High Court.
6
11. In Dhanraj, the appellant along with certain other
persons was travelling in his own jeep. The jeep met with an
accident. In the accident, the appellant as well as other passengers
received injuries. A number of claim petitions came to be filed. The
appellant also filed a claim petition. The Tribunal held that the driver
of the jeep responsible for the accident. In all the claim petitions filed
by other passengers, the Tribunal directed that the appellant (as the
owner) as well as the driver and insurance company were liable to
pay compensation. In the claim application filed by the appellant, the
Tribunal directed the driver and the insurance company to pay
compensation to the appellant. The insurance company filed appeal
before the High Court. The same was allowed. It was held that the
appellant was the owner of the vehicle, the insurance company is not
liable to pay him any compensation. The apex Court held that that
the policy had not covered any risk for injury to the owner
himself. The premium was paid 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 that case, there was no such insurance. The appeal was
allowed.
12. In Sadanand Mukhi, the first respondent was owner of a
motor cycle. The vehicle was insured with the appellant company for
the period 9.9.1999 and 8.9.2000. On 8th September, 2000, Tasu
Mukhi, son of the insured, while driving the motor cycle met with an
accident and died. The accident allegedly took place as a stray dog
came in front of the vehicle. A First Information Report was also
lodged. Respondents filed a claim petition. Amongst them, first
respondent, who is the owner of the insured vehicle, was the
applicant. The insurer appellant raised a specific contention that
keeping in view the relationship between the deceased and the owner
7
of the motor vehicle i.e. father and son, he was not a third party. The
apex Court held:
"15. Contract of insurance of a motor vehicle is governed
by the provisions of the Insurance Act. The terms of the
policy as also the quantum of the premium payable for
insuring the vehicle in question depends not only upon
the carrying capacity of the vehicle but also on the
purpose for which the same was being used and the
extent of the risk covered thereby. By taking an `act
policy', the owner of a vehicle fulfils his statutory
obligation as contained in Section 147 of the Act. The
liability of the insurer is either statutory or contractual. If
it is contractual its liability extends to the risk covered by
the policy of insurance. If additional risks are sought to
be covered, additional premium has to be paid. If the
contention of the learned counsel is to be accepted, then
to a large extent, the provisions of the Insurance Act
become otiose. By reason of such an interpretation the
insurer would be liable to cover risk of not only a third
party but also others who would not otherwise come
within the purview thereof. It is one thing to say that the
life is uncertain and the same is required to be covered,
but it is another thing to say that we must read a statute
so as to grant relief to a person not contemplated by the
Act. It is not for the court, unless a statute is found to be
unconstitutional, to consider the rationality thereof. Even
otherwise the provisions of the Act read with the
provisions of the Insurance Act appear to be wholly
rational.
16. Only because driving of a motor vehicle may cause
accident involving loss of life and property not only of a
third party but also the owner of the vehicle and the
insured vehicle itself, different provisions have been made
in the Insurance Act as also the Act laying down different
types of insurance policies. The amount of premium
required to be paid for each of the policy is governed by
the Insurance Act. A statutory regulatory authority fixes
the norms and the guidelines.
17. Keeping in view the aforementioned Parliamentary
object, let us consider the fact of the present case so as to
consider as to whether the insurer is liable to pay the
amount of compensation in relation to the accident
occurred by use of the vehicle which was being driven by
the son of the insured.
18. We may, for the said purpose, notice certain decisions
covering different categories of the claims.
8
In United India Insurance Co. Ltd. v. Tilak Singh,
[(2006) 4 SCC 404] this Court considered the provisions
of the Motor Vehicles Act, 1939 as also 1988 Act and
inter alia opined that the insurance company would have
no liability towards the injuries suffered by the deceased
who was a pillion rider, as the insurance policy was a
statutory policy which did not cover the gratuitous
passenger.
In Oriental Insurance Co. Ltd. v. Jhuma Saha,
[(2007) 9 SCC 263 ], it was held :-
"10. The deceased was the owner of the vehicle.
For the reasons stated in the claim petition or otherwise,
he himself was to be blamed for the accident. The
accident did not involve motor vehicle other than the one
which he was driving. The question which arises for
consideration is that the deceased himself being
negligent, the claim petition under Section 166 of the
Motor Vehicles Act, 1988 would be maintainable.
11. Liability of the insurer Company is to the extent of
indemnification of the insured against the respondent or
an injured person, a third person or in respect of
damages of property. Thus, if the insured cannot be
fastened with any liability under the provisions of
the Motor Vehicles Act, the question of the insurer being
liable to indemnify the insured, therefore, does not arise."
It was furthermore held :-
"13. The additional premium was not paid in respect of
the entire risk of death or bodily injury of the owner of the
vehicle. If that be so, Section 147(b) of the Motor Vehicles
Act which in no uncertain terms covers a risk of a third
party only would be attracted in the present case."
The matter came up for consideration yet again
in Oriental Insurance Co. Ltd. [(2007) 5 SCC 428] wherein
it was observed :-
"13. As we understand Section 147(1) of the Act, an
insurance policy thereunder need not cover the liability in
respect of death or injury arising out of and in the course
of the employment of an employee of the person insured
by the policy, unless it be a liability arising under the
Workmen's Compensation Act, 1923 in respect of a
driver, also the conductor, in the case of a public service
vehicle, and the one carried in the vehicle as owner of the
goods or his representative, if it is a goods vehicle. It is
provided that the policy also shall not be required to cover
any contractual liability. Uninfluenced by authorities, we
find no difficulty in understanding this provision as one
providing that the policy must insure an owner against
any liability to a third party caused by or arising out of
9
the use of the vehicle in a public place, and against death
or bodily injury to any passenger of a public service
vehicle caused by or arising out of the use of vehicle in a
public place.
The proviso clarifies that the policy shall not be
required to cover an employee of the insured in respect of
bodily injury or death arising out of and in the course of
his employment. Then, an exception is provided to the
last foregoing to the effect that the policy must cover a
liability arising under the Workmen's Compensation Act,
1923 in respect of the death or bodily injury to an
employee who is engaged in driving the vehicle or who
serves as a conductor in a public service vehicle or an
employee who travels in the vehicle of the employer
carrying goods if it is a goods carriage. Section 149(1),
which casts an obligation on an insurer to satisfy an
award, also speaks only of award in respect of such
liability as is required to be covered by a policy under
clause (b) of sub- section (1) of Section 147 (being a
liability covered by the terms of the policy). This provision
cannot therefore be used to enlarge the liability if it does
not exist in terms of Section 147 of the Act.
14. The object of the insistence on insurance under
Chapter XI of the Act thus seems to be to compulsorily
cover the liability relating to their person or properties of
third parties and in respect of employees of the insured
employer, the liability that may arise under the
Workmen's Compensation Act, 1923 in respect of the
driver, the conductor and the one carried in a goods
vehicle carrying goods. On this plain understanding
of Section 147, we find it difficult to hold that the
Insurance Company, in the case on hand, was liable to
indemnify the owner, the employer Company, the
insured, in respect of the death of one of its employees,
who according to the claim, was not the driver. Be it
noted that the liability is not one arising under the
Workmen's Compensation Act, 1923 and it is doubtful, on
the case put forward by the claimant, whether the
deceased could be understood as a workman coming
within the Workmen's Compensation Act, 1923.
Therefore, on a plain reading of Section 147 of the Act, it
appears to be clear that the Insurance Company is not
liable to indemnify the insured in the case on hand."
The said principle was reiterated in United India
Insurance Co. Ltd. v. Davinder Singh, [ (2007) 8 SCC 698
] holding :-
"10. It is, thus, axiomatic that whereas an insurance
company may be held to be liable to indemnify the owner
10
for the purpose of meeting the object and purport of the
provisions of the Motor Vehicles Act, the same may not be
necessary in a case where an insurance company may
refuse to compensate the owner of the vehicle towards his
own loss. A distinction must be borne in mind as regards
the statutory liability of the insurer vis-a-vis the purport
and object sought to be achieved by a beneficent
legislation before a forum constituted under the Motor
Vehicles Act and enforcement of a contract qua contract
before a Consumer Forum."
13. In Balakrishnan, the question arose for consideration was
whether the policy was an "Act Policy" or "Comprehensive/Package
Policy". Since there was no discussion either by the Tribunal or the
High Court in this regard, the finding of the High Court and the
Tribunal as regards the liability of the insurer was set aside and the
matter was remitted back to the Tribunal to scrutinize the policy in a
proper perspective.
14. In Oriental Insurance Co. Ltd. v. Jhuma Saha (Smt) and
others, (2007) 9 SCC 263, the deceased was the owner of an insured
vehicle bearing registration number TR-03-2304, a maruti van. While
he was driving the said vehicle, allegedly, in order to save a goat
which was running across the road, the steering of the vehicle failed
and it dashed with a tree on the road side. He suffered injuries. He
later on succumbed thereto. On the aforementioned premise, a claim
petition under Section 166 of the M.V Act was filed. The insurer
resisted the claim petition, inter alia, contending as under that as
per M.V Act and Rules the owner is not entitled to get any
compensation if he drives the vehicle and falls in an accident as the
insurance policy is a third party in nature. The contract between the
insured and insurer is that if any accident occurred out of the use of
motor vehicle then only third party is entitled to get compensation.
The insurer and insured is the first and second party and other than
the all are third party. But in this case as per the version of the
11
petition the deceased was the owner of the vehicle and was driving
the vehicle and he met with an accident. Though the deceased had
valid driving licence still he is not the third party as per Rules and
Acts. Hence the petitioners are not entitled to get any compensation.
The contention of the appellant, however did not find favour with the
Tribunal which, inter alia, held that the vehicle being insured and an
additional premium for the death of the driver or conductor having
been paid, the liability was covered by the Insurance Policy. The
appellant preferred appeal before the High Court. The contention of
the respondents that in view of the decision of this Court in National
Insurance Co. Ltd., Chandigarh v. Nicolletta Rohtagi and others,
[2002] 7 SCC 456, the appeal was not maintainable, was accepted.
The matter went to the apex Court. On an interpretation of Section
147(1)(b) of the M.V Act, the apex Court held :
"10. The deceased was the owner of the vehicle. For the
reasons stated in the claim petition or otherwise, he himself
was to be blamed for the accident. The accident did not
involve motor vehicle other than the one which he was
driving, the question which arises for consideration is that
the deceased himself being negligent, the claim petition
under Section 166 of the Motor Vehicles Act, 1988 would be
maintainable.
11. Liability of the insurer-Company is to the extent of
indemnification of the insured against the respondent or a
injured person, a third person or in respect of damages of
property. Thus, if the insured cannot be fastened with any
liability under the provisions of Motor Vehicles Act, the
question of the insurer being liable to indemnify insured,
therefore, does not arise.
12. In Dhanraj v. New India Assurance Co. Ltd. and another,
[2004] 8 SCC 553, it is stated 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
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. Section 147 does not require an
insurance company to assume risk for death or bodily injury
to the owner of the vehicle.
12
xxx xxx xxx
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.
4989 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 not such insurance."
13. The additional premium was not paid in respect of the
entire risk of death or bodily injury of the owner of the
vehicle. If that be so, Section 147(b) of the Motor Vehicles Act
which in no uncertain terms covers a risk of a third party
only would be attracted in the present case."
15. The same view was reiterated in National Insurance
Company Limited v. Ashalata Bhowmik and others, (2018) 9 SCC
801.
16. The commercial vehicle package policy has been filed by
the insurer as well as the claimants. On a cursory perusal of the
same, it is evident that premium of Rs.100/- was paid under the
head legal liability to the driver. Rs.50/- was paid towards legal
liability to employees. No premium was paid to the personal accident
of the owner. Admittedly the deceased was the owner of the offending
vehicle. He was travelling in the said vehicle. He cannot be construed
as a third party qua the offending vehicle. No extra premium was
paid by him to cover the accident under the personal accident. In
view of the same, the claim application filed by the legal
representatives of the deceased is not maintainable.
17. The decision of the Madras High Court in the case of
Krishnan is distinguishable on facts. In the said case, the owner was
insured with the insurance company for his personal accident cover
13
and paid compulsory personal accident cover premium of Rs.100/-,
besides additional personal accident cover premium of Rs.250/-.
18. In the instant case, no premium was paid towards
personal accident.
19. The logical sequitur of the analysis made in the preceding
paragraphs is that no liability can be fastened on the insurer. The
impugned award is set aside. The appeal filed by the insurance
company is allowed and the appeal filed by the claimants is
dismissed. There shall be no order as to costs.
.............................
DR. A.K.RATH, J.
mo Orissa High Court, Cuttack. Dated 18th February, 2019/PKS.