Gauhati High Court
New India Assurance Co Ltd vs Uttara Phukan on 3 August, 2012
Author: S. Talapatra
Bench: S. Talapatra
1
IN THE GAUHATI HIGH COURT
(THE HIGH COURT OF ASSAM, NAGALAND, MEGHALAYA, MANIPUR,
TRIPURA, MIZORAM AND ARUNACHAL PRADESH)
MAC App. No. 204 of 2004
Appellant:
The New India Assurance Co. Ltd., having
its registered office at New India
Assurance Building 87, Mahatma Gandhi
Road, Fort, Bombay-400023 and Regional
and Branch office, Divisional office at
several places.
By Advocate :
Mr. S. Dutta.
Claimant-Respondents :
1. Mrs. Uttara Phukan, wife of Late Ujjal Kr. Phukan, Village-
Choladhara, P.O. Jorhat, P.S. Jorhat.
2. Md. Abdul Hussain, son of Late Afzal Hussain, Village-
Chenikuthi, P.S. Chandmari, Guwahati-781003.(Owner of the Maruti Van No. AS-01/D-3813.)
3. Md. Mukibul Haque, son of Wajuddin Ali, Village-Bhaskar Nagar, P.O. Guwahati.
By Advocates :
Mr. S.K. Goswami.
BEFORE THE HON‟BLE MR. JUSTICE S. TALAPATRA Date of hearing & : 3rd August,2012. Judgment J U D G M E N T AND O R D E R(oral) Heard Mr. S. Dutta, learned counsel appearing for the appellant as well as Mr. S.K. Goswami, learned counsel for the respondent No.1. There is no representation from the other respondents despite due notice from this Court.MAC App. No. 204 of 2004 Page 1 of 12 2
[2] This is an appeal by the New India Assurance Co. Ltd.
under Section 173 of the Motor Vehicle Act, 1988 against judgment and award dated 23.07.2004 as passed by the Motor Accident Claims Tribunal, Nagaon in MAC Case No. 12 of 1998.
[4] The findings as returned by the Tribunal as regard the accident that occurred on 04.07.1997, involvement of the offending vehicle bearing registration No. AS-01-D 3813(Maruti Van) and its rash and negligent driving as well as injuries as received in the accident by the claimant respondent No. 1 are not in dispute by either of the parties or in the appeal and as such those findings stand affirmed by this Court. Hence, no further appraisal of those findings is required.
[5] The question that has been projected in the appeal is that the appellant has no liability in paying the award as directed by the insurance company in as much as the offending vehicle was not at any point of time insured by the appellant. Mr. Dutta, learned counsel severely criticized the finding of the leaned trial Court wherein the Tribunal held that:
"9. The learned counsel for the O.P. Insurance Company has argued that the vehicle was covered by Act policy covering the risks of the third party only. The occupants of the vehicle were not covered by Act Policy. The claimant‟s case is that the vehicle was not taken on hire or for reward. The claimant has examined her father D.N. Borthakur, who arranged the vehicle. He has stated that the owner of the vehicle is his friend and requested him to provide the vehicle for carrying the claimant and her family to Jorhat. The Insurance Company examined D.W.3, who is MAC App. No. 204 of 2004 Page 2 of 12 3 the owner of P.B. Maruti Engineering workshop. He has stated that the vehicle belonged to one Abdul Hussain. The vehicle was repaired at his garage. The witness is not aware as to the arrangement of the vehicle. It is crystal clear that the claimant was gratuitous passenger of the offending vehicle. The learned counsel has argued that liability of the occupants of the Maruti Van were not covered under the Act policy. In this connection the learned counsel has referred to a decision of the Hon‟ble Supreme court reported in 2001 ACJ 2059. The Apex Court has held that the third party policy does not cover liability to gratuitous passengers, who are not carried for hire or for reward. D.W. 1, the Asstt. Administrative Officer of the O.P. Insurance Company has stated that the policy was an Act policy. Ext. A is the said policy. He has stated that the Act policy is a statutory policy. It covers only third party risk except the occupants of the insured vehicle. He has further stated t hat the vehicle in question was a private car. Policy does not cover the use of the vehicle for hire or for reward etc. Premium paid at Rs. 168/- for third party risk. No extra premium was also paid by the insured. In view of the decision of the Hon‟ble Supreme Court (supra), we come to the conclusion that a gratuitous passenger travelling in a private vehicle is not entitled to insurance coverage if the policy is taken only to cover the risk compulsorily coverable under the Statute.
10. The accident had happened. The Claimant was injured. The vehicle was not used for hire or for reward. The claimants is a gratuitous passenger of the offending vehicle. The vehicle is covered by Act Policy only. The insurer is not liable to indemnify the insured, but the owner of the vehicle would be liable to compensate t he injured.
11. In a very recent decision in M/s. National Insurance Co. Ltd. Vs. Baljit Kour and MAC App. No. 204 of 2004 Page 3 of 12 4 others, 2004(1) TAC-366, the Hon‟ble Supreme Court has observed:
"We, therefore, are of the opinion that the interest of justice will be subserved if the appellant herein is directed to satisfy the awarded amount in favour of the claimant, if not already satisfied, and recover the same from the owner of the vehicle."
12. In the instant case there is no evidence as to violation of policy condition. The claimant has lost her husband in the accident. Relying upon the decision of the Apex Court, I have arrived at a conclusion that justice will be done if the Insurance Company is directed to satisfy the award and recover the same from the owner of the vehicle."
Mr. S. Dutta, learned counsel submits that in the written statement the insurance company has taken a categorical stand that:
"That the opposite Party No. 2 states that in assessing the liability of the insurer the terms of the policy have to be considered. It is further stated that an insurance contract may cover risks which are in excess of or beyond the statutory limit set by section 147 of the M.V. Act. The parties may agree to terms and conditions for a larger cover or to include more classes of persons including requirement. But in the instant case the insured took „Act policy‟ only and they did not go for larger coverage of policy, and, as such, the Insurance Company cannot be made liable for paying any compensation to the claimant. In the instant case policy obtained was „Act‟ policy covering third party risk. It is not a comprehensive policy covering third party risks. The premium paid was Rs. 168.00.MAC App. No. 204 of 2004 Page 4 of 12 5
There are no endorsements as payment of premium to cover injuries to cover occupants of the van."
The vehicle was private vehicle and the deceased was a gratuitous passenger. As such the occupants of the vehicle were not covered by the said 'Act Policy'. From the written statement as filed by the owner it is apparent, Mr. Dutta learned counsel continues to submit that only for acquaintance the owner allowed the vehicle to be used by the injured for attending some ceremony. There is no dispute that the policy is the 'Act Policy'. It only covers "third party risk" within the meaning of Section 147 of the Motor Vehicle Act. As such the direction of the Tribunal is absolutely perverse and unsustainable. In support of his contention, Mr. Dutta, refers the decision of the Apex Court in Dr. T.V. Jose Vrs. Chacko P.M alias thankachan and Others, reported in (2001) 8 SCC 748 where the Apex Court held in para 13 as under:
"13. Mr. Iyer relied upon the authority in the case of Amrit Lal Sood V. Kaushalya Devi Thapar whereunder it has been held that the term "any person" would include an occupant of the car who was gratuitously travelling in the car. However, at this stage, it must be noted that this Court has in para 4 of this judgment held as follows(SCCp.747) "4.The liability of the insurer in this case depends on the terms of the contract between the insured and the insurer as evident from the policy. Section 94 of the Motor vehicles Act, 1939 compels the owner of a motor vehicle to insure the vehicle in compliance with the requirements of Chapter VIII of the Act. Section 95 of the Act provides that a policy of insurance must be one which insures the person against any liability MAC App. No. 204 of 2004 Page 5 of 12 6 which may be incurred by him in respect of death of bodily injury to any person or damage to any property of third party caused by or arising out of the use of the vehicle in a public place. The section does not however require a policy to cover the risk to passengers who are not carried for hire or reward. The statutory insurance does not cover injury suffered by occupants of the vehicle who are not carried for hire or reward and the insurer cannot be held liable under the Act. But that does not prevent an insurer from entering into a contract or insurance covering a risk wider than the minimum requirement of the statute whereby the risk to gratuitous passengers could also be covered. In such cases where the policy is not merely a statutory policy, the terms of the policy have to be considered to determine the liability of the insurer."
The finding that the term " any person" would include an occupant who is gratuitously travelling in the car is clearly in respect of a comprehensive policy and not in respect of a third party policy." (emphasis added). He also relied National Insurance Co. Ltd. Vrs. Bommithi Subbhayamma and Others, reported in (2005) 12 SCC 243 where the Apex court held that:
"11. In view of the aforementioned authoritative pronouncements of this Court, the impugned judgment of the High Court cannot be sustained which is set aside, accordingly. This appeal is allowed. We, however, make it clear that the claimant respondents will be entitled to recover the amount of compensation granted in their favour by the Motor Vehicles Accidents Claims Tribunal from the owner of the vehicle."MAC App. No. 204 of 2004 Page 6 of 12 7
In another decision, National Insurance Company Limited Vrs. Prema Devi and Others, reported in (2008) 5 SCC 403 the Apex Court held that:
"8. Above being the position, the impugned order of the High Court is not sustainable and is set aside. It is open to the claimant to recover the amount awarded from the owners of the offending vehicles".
In that case also the High Court directed to make payment of the compensation for a gratuitous passenger in a goods carriage holding that the insurer had the liability to satisfy the award by operation of the act only policy.
Mr. Dutta also relied a decision of this Court in National Insurance Co. Ltd. Vrs. Mintu Debnath and Ors., reported in 2007 (2) GLT 490 where it has been hold that:
"on survey of the relevant decisions on the point involved, as disclosed above, go to show that the law as it stands today is that the Insurance Company is not liable to indemnify an Award passed in favour of a gratuitous passenger travelling in a goods vehicle, if he is not the owner or representative of the goods carried in the vehicle."
The same principle would be applied also in case of private vehicle in case of gratuitous passenger. Unless the occupants are covered by payment of the special premium by way of a contract arrangement, the act only policy will not cover any risk of such gratuitous occupants of the private vehicle. Moreover, Mr. S. Dutta, learned counsel with sufficient vehemence submitted that when there is MAC App. No. 204 of 2004 Page 7 of 12 8 no contract by way of payment of the special premium the appellant cannot be asked by the Tribunal to satisfy the award even for a temporary period.
[6] On the other hand, Mr. S. K. Goswami, learned counsel appearing for the respondent No. 1 submitted that this Court may not take any decision in the appeal in view of the reference as made by the Supreme Court to a larger bench on the issue of liability of the Insurance Company on the gratuitous passenger. Mr. Goswami has made a reference to a decision of Bhagyalakshmi and Others Vrs. United Insurance Company Limited and Another, reported in (2009) 7 SCC 148. In that case the policy was a package policy. The contract of insurance if given its face value covers the risk not only of a third party but also of persons travelling in the car including the owner thereof. In the same decision the Apex Court held that a passenger would not be a third party within the meaning of the provisions of the 1988 Act. In the earlier decisions however, the nature of the policies which come up for consideration were Act Policies. The Court did not deal with a package policy. If the Tariff Advisory Committee seeks to enforce its decision in regard to coverage of the third party risk which would include all persons including occupants of the vehicle and the insurer having entered into a contract of insurance in relation thereto, the matter may require a deeper scrutiny. In the Bhagyalakshmi and Others(supra) the Apex Court held as under:
"27. The question as to whether gratuitous passengers travelling in a private car or pillion riders carried on two-wheelers are automatically covered under a package policy/comprehensive policy came up also MAC App. No. 204 of 2004 Page 8 of 12 9 before the Madras High Court recently in Royal Sundaram Insurance Co. Ltd. v. V. A. Meenakshi (CMA No. 312 of 2009). The Division Bench of the Court, after observing the judgment of this Court and various High Courts on the subject, dismissing the appeal filed by the Insurance Company and affirming the order of the Tribunal awarding compensation of Rs. 19.10 lakhs to the legal representatives of the deceased passenger of the insured vehicle, held that:
"29. Therefore it is clear from the Act itself, the words of the policy and the decision in Amrit Lal Sood case that a comprehensive policy covers the risk of a gratuitous passenger to the extent of the liability incurred. We may imagine what will happen in a case where the owner is driving his car covered by a comprehensive policy. He is accompanied by his wife and children. There is an accident as in this case. The wife and children are permanently disabled by the injuries.
If we agree with the appellant Insurance Company, those pathetic claimants will not get any compensation. The law never intended t his to happen. That is why the TAC explicitly came out with the clarificatory circular in 1978. We cannot forget that the words used are „third party‟ and „comprehensive‟, so we cannot deny this relief to the third-party occupant in a car covered by a comprehensive policy."
[See also the decisions of the High Court of Karnataka in National Insurance Co. Ltd. v. Pattabhi Ramaiah (MFAs Nos. 5921 and 7045 of 2006 [MV] and the Delhi High Court in United India Insurance Co. Ltd. V. Alka Mangla.] MAC App. No. 204 of 2004 Page 9 of 12 10
28. We, therefore, are of the opinion that the matter requires consideration by a larger Bench. We order accordingly. Let the papers be placed before the learned Chief Justice for appropriate orders."
It is, therefore, clear that the reference as made by the Apex Court to the larger bench relates to the package policy/comprehensive policy, not to the Act Policy, therefore, submission of Mr. Goswami, learned counsel for the respondent No. 1 does not carry any substance at all.
[7] From a scrutiny of the impugned judgment and order it would appear that in a tearing off mode, the following part of the judgment as rendered by the Apex Court in National Insurance Co. Ltd. Vrs. Baljit Kaur and others, reported in (2004) 2 SCC 1 has been placated out of the context:
"We, therefore, are of the opinion that the interest of justice will be subserved if the appellant herein is directed to satisfy the awarded amount in favour of the claimant, if not already satisfied, and recover the same from the owner of the vehicle."
The said direction was given by the Apex Court under Article 142 of the Constitution of India for doing the complete justice but the said power is neither available to the Tribunal nor to this Court and as such exercise of the said power by the tribunal was without jurisdiction and authority and, accordingly, the said direction is set aside.
[8] On considering the decision as cited by Mr. S. Dutta, this Court has also looked into the decision as rendered by the Apex Court MAC App. No. 204 of 2004 Page 10 of 12 11 in National Insurance Company Limited Vrs. Parvathneni and another, reported in (2009) 8 SCC 785 where the Apex Court held as under:
"2. In this case, the allegation of the petitioner, Insurance Company is that there was no valid insurance coverage on the date of the accident i.e. 30.11.2003. The cheque towards premium for renewal of the policy was issued on 29.11.2003 but the same was dishonoured. Hence, the contention of the Insurance Company is that it has no liabllity to pay any compensation amount to the claimants since there was no insurance coverage on the date of the accident. Despite this, the High Court has directed the Insurance Company to pay the compensation amount to the claimants with liberty to the Insurance Company to recover the same from the owner of the vehicle.
3. Prima facie, we are of the opinion if the Insurance Company proves that it has no liability to pay compensation to the claimants, the Insurance Company cannot be compelled to make payment and later on recover it from the owner of the vehicle.
4. No doubt, there are some decisions which have taken the view that even if the insurance company has no liability, yet it must pay and later on recover it from the owner of the vehicle. [See for example National Insurance Co. Ltd. v. Yellamma, Samundra Devi V. Narendra Kaur (vide SCC p. 104. Para 16), Oriental Insurance Co. Ltd. V. Brij Mohan (vide SCC p. 64. Para 13) and New India Insurance Co. V. Darshana Devi (vide SCC p. 424, para 21), etc.] We have some reservations about the correctness of the aforesaid decisions of this Court.
5. If the Insurance Company has no liability to pay at all, then, in our opinion, it MAC App. No. 204 of 2004 Page 11 of 12 12 cannot be compelled by order of the Court in exercise of its jurisdiction under Article 142 of the Constitution of India to pay the compensation amount and later on recover it from the owner of the vehicle. In our view, Article 142 of the Constitution of India does not cover such type of cases."
It transpires from a collective appreciation of these decisions as cited, the appellant had no liability to cover risk of the gratuitous occupants of a private vehicle which was under coverage of the act only policy. The alternative for the injured or the dependant of the deceased is to recover the damages from the owner of the vehicle, if they so desire.
[9] For the reasons as aforesaid, the appeal stands allowed. The direction that the appellant shall satisfy the award and recover the same from the owner of the vehicle stands set aside and quashed. The respondent No. 1 would be at liberty to recover the awarded compensation from the owner of the vehicle, the respondent No. 2. The respondent No. 2 is directed to deposit the awarded sum within a period of two months from today in the Tribunal. [10] There shall be no order as to costs. Send down the LCRs forthwith.
JUDGE d.de.
MAC App. No. 204 of 2004 Page 12 of 12