Andhra HC (Pre-Telangana)
New India Assurance Co. Ltd. vs Guddi Venkanalla Akkamma And Ors. on 24 June, 1994
Equivalent citations: II(1995)ACC55, 1996ACJ814, 1995(1)ALT86, [1995]83COMPCAS449(AP)
JUDGMENT G. Radhakrishna Rao, J.
1. This letters patent appeal is filed by the New India Assurance Company Limited aggrieved by the order of the learned single judge passed in A.A.O. No. 1401 of 1986 on August 8, 1991.
2. The facts of the case are that the wife and the children of the deceased one Guddi Venkataiah filed O.P. No. 141 of 1983, on the file of the Motor Accidents Claims Tribunal (District Judge), Nizambad, under section 110A of the Motor Vehicles Act claiming a total compensation of Rs. 1,29,900 on the ground that the deceased, who was travelling in the lorry, bearing No. APL 2454, died when the said lorry met with an accident that took place on January 19, 1983, at 12.30 p.m. near Brahmajiwadi Krishnajiwadi Village, Kamareddi Taluk, due to the rash and negligent driving of the driver of the said lorry.
3. The Tribunal awarded a total compensation of Rs. 33,000 fixing joint and several liability on the respondents therein to pay the said compensation to the claimants.
4. On appeal filed by the appellant herein, the learned single judge held that the deceased was a gratuitous passenger and that the insurance company is liable in regard to "no-fault liability" under section 92A of the Motor Vehicles Act, 1939, and, accordingly, allowed the appeal in part limiting the liability of the appellant to Rs. 15,000 and dismissed the cross-objections. Hence, this Patent Appeal by the assurance company.
5. The main contention of Sri Kota Subba Rao, learned standing counsel for the appellant, is that as the deceased was a gratuitous passenger, the appellant insurance company is not liable. In support of his contention, he relied on Section 96 of the Motor Vehicles Act, 1939 (corresponding to section 149 of the Motor Vehicles Act, 1988). The said section deals with the duty of insurers to satisfy the judgments and awards against the persons insured in respect of third part risks.
6. In Premier Insurance Co. Ltd. v. Vaddeswarapu Siromanamma [1984] ACJ 760; [1986] 59 Comp Cas 445, a Division Bench of this court held that to decide as to whether a policy covers the liability of the insurer in respect of a gratuitous passenger, it requires a perusal of the policy. As the policy was not filed, the case was remanded to the trial court.
7. In K. Ramulu v. Shaik Khaja [1991] 1 ACJ 359, a learned single judge of this court found that the insurance company is liable to pay compensation under "no-fault liability" in the case of hire paid passengers. The learned judge further found that even if it is ultimately established that the insurer is not liable in regard to the amount awarded as per section 110B, still the insurance company is not entitled to recover the amount paid towards "no-fault liability". It follows that to the extent of "no-fault liability", the insurer is liable even in cases where it is not liable for the amount awarded under section 110B.
8. In Oriental Five and General Insurance Co. Ltd. v. Matta Chandra Rao [1987] 1 ACJ 174, a learned single judge of this court, after a very elaborate consideration of sections 95 and 96 of the old Act, held that the insurance company is not liable to pay compensation in respect of the two policemen who were carried gratuitously in a goods vehicle of whom one died and the other was injured, and that the insurance company would have been liable under the Act policy in respect of passengers carried for hire or reward.
9. In Oriental Five and General Insurance Co. Ltd. v. M. Bhanumathi [1990] 2 SCJ 1043, a Division bench of this court held that where a passenger is carried for hire or reward in a lorry which is a goods vehicle, the insurer is not liable for death or bodily injury to such a passenger. Here, Siramonamma's case [1986] 59 Comp Cas 445 (AP) was distinguished and Chandra Rao's case [1987] 1 ACJ 174 (AP) was dissented from.
10. In United India Insurance Co. Ltd. v. Immam Aminasab Nadaf [1990] 67 Comp Cas 287, a Full Bench of the Karnataka High Court found that as regards the insurance company, the liability to pay compensation would arise only if the insurance company had issued the policy which was in force on the date of the accident and if, under the policy, the particular risk was covered.
11. In National Insurance Co. Ltd. v. Jugal Kishore [1988] 63 Comp Cas 847, the Supreme Court held that in case the insurance company wishes to take a defence in a claim petition, it should file a copy of the insurance policy along with its defence.
12. After hearing the arguments and scanning through the relevant provisions and the case law relied on and the material on record, we draw the following conclusion :
13. In the case of non-gratuitous passengers, the decisions are to the effect that the insurance company is also liable to pay compensation under "no-fault liability". In the decisions cited before us, nowhere has the liability of the insurance company under "no-fault liability" in regard to gratuitous passengers been considered. On the other hand, in those judgments the courts treated gratuities passengers as a separate class. So, in all, we are not having a direct decision dealing with "no-fault liability" in respect of gratuitous passengers.
14. It is a well-settled proposition of law that if the policy covers a particular risk, the insurance company is also liable. But, whether that policy covers a particular risk or not, is a matter to be decided with reference to the evidence and the material adduced by the insurance company to that effect. Unless and until a particular risk is covered by the policy, the question of the insurance company's liability does not arise. The Karnataka High Court Full bench decision in United India Insurance Co. Ltd. v. Immam Aminasab Nadaf [1990] 67 Comp Cas 287 also laid stress on the risk factors that have been mentioned in the policy.
15. In the event of death of a person, the statute has made a provision for payment of an amount, which is called instantaneous payment, which is a "no-fault liability" claim. That "no-fault liability" claim has to be paid by the owners. If there is a policy, the insurance company is also liable to pay. The word used in the relevant provisions of the Act is "owners". But, the Legislature never made a mention of the insurance company. But, if there is a policy, the insurance company is liable to pay. So, in a matter arising where it is a gratuitous passenger, the burden is on the insurance company to establish that the particular risk is not covered in the case of a gratuitous passenger, if that is established, the insurance company is not liable under "no-fault liability". It is to be noted that generally, the persons who are claimants, are not expected to be aware of the terms and conditions that have been stipulated in the policy between the owner and the insurance company, a the policy is between those two. The claimants are third parties. So, the burden is on the insurance company to avoid the liability. In the case of payment of "no-fault liability", they are not liable basing on the policy that has been issued. Invariably, the owners are absent. However, the burden falls on the insurance company. So, as the insurance company is having a copy of the policy with them, they may produce the same and adduce evidence to that effect. If the insurance company produces the same, the Tribunal is liable to fix joint liability, even "no-fault liability", even with regard to the gratuitous passenger, basing on the evidence adduced on behalf of the claimants. The view that has been taken by us with regard to the burden and the defence of the insurance company, has also been taken by the Supreme court in Jugal Kishore's case [1988] 63 Comp Cas 847. So, the conclusion is that the burden is on the insurance company in the case of gratuitous passengers under "no-fault liability". As the law was not clear, and as we have now clearly laid down the circumstances under which the insurance company can avoid, the amounts already paid need not be recovered from the claimants. But, at the same time, subject to limitation the insurance company can claim against the owner.
16. Now, coming to the present case, notice to the owner has been dispensed with since he remained ex parte throughout. The insurance company does not make attempts to produce the policy. When the insurance company filed to produce the policy and did not adduce evidence and the Tribunal passed the award and the appeal was filed, the question of remand at this stage does not arise. The insurance company has already deposited the amount and the claimants received it. The said amount should not be recovered from the claimants.
17. However, it is left open to the insurance company to recover the said amount from the owner as per law subject to limitation.
18. The letters patent appeal is admitted and disposed of accordingly.