Patna High Court
Kanhai Rai And Ors. vs Dharampal And Ors. on 16 May, 2001
Equivalent citations: I(2002)ACC260, II(2002)ACC648, 2002ACJ260, AIR2001PAT205, 2001(49)BLJR1687, AIR 2001 PATNA 205, (2001) 3 EASTCRIC 490, (2001) 4 CIVLJ 193, (2001) 3 TAC 424, (2001) 2 BLJ 690, 2001 BLJR 3 1687, (2001) 3 PAT LJR 103, (2002) 2 ACC 648, (2002) 1 ACJ 260
JUDGMENT Nagendra Raj, J.
1. The appellants have filed the present appeal under Clause 10 of the Letters Patent of the Patna High Court against the order dated 22-8-2000, passed by a learned single Judge, by which he has allowed the appeal (M.A. No. 494 of 1999) filed by the New India Assurance Co. Ltd. (respondent herein) against the order dated 25-6-1999 passed by the Motor Accidents Claims Tribunal (for short 'the Tribunal') under Section 140 of the Motor Vehicles Act 1988, (hereinafter referred to as 'the Act') directing it to pay the Interim compensation on no fault basis and further held that the Insurance Company is not liable to pay the interim compensation under the aforesaid section and it is the owner alone who is liable to pay the same.
2. The facts giving rise to the present appeal lie in a narrow compass. Respondent Dharampal owned a truck bearing registration No. DL-1 G-A/9319. On 18-8-1997, he look an Insurance Policy from respondent No. 2 in terms of the provisions of the Act, which was valid from 18-8-1987 to 17-8-1998. While the said vehicle was coming from Muzaffarpur side on 28-6-1998, it dashed against Sukhiya Devi, wife of appellant No. 1 and mother of appellants Nos. 2 and 3, resident of village Fakuli P.S. Kurhani, District Muzaffarpur, as a result of which she died. The vehicle was being driven rashly and negligently in a very high speed by the driver thereof. Her husband and other heirs, who are appellants before this Court, filed a claim case being Claim Case No. 93 of 1998 before the Tribunal under Section 166 of the Act against the owner and insurer of the vehicle. In the said claim case, the Insurance Company (respondent No. 2) also appeared. In the meantime, the appellants filed a petition under Section 140 of the Act claiming compensation on no-fault basis. The Tribunal after hearing the petitioner directed for payment of Rs. 50,000/- on the principle of no fault to the appellants- The respondent-Insurance Company filed an appeal before the learned Single Judge, who, as stated above, held that the liability to pay interim compensation under Section 140 of the Act is of the owner and not of the respondent Insurance Company.
3. Learned counsel for the appellants submitted that though in terms of Section 140 of the Act, in case of death or permanent disablement of a person having resulted from an accident arising and of the use of a motor vehicle, owner shall be liable to pay compensation in respect of such death or disablement, but the conjoint reading of the said provision and the provisions contained in Chapter XI of the Act, which deals with the insurance of motor vehicles against the third party risks, clearly shows that the liability in relation to death of or bodily in-Jury to any person is covered by the Insurance Policy includes the liability under Section 140 of the Act also and as such the owner or the insurer or both can be fastened with the liability to pay the interim compensation under Section 140 of the Act.
4. Learned counsel for the respondent-Insurance Company, on the other hand, submitted that the provision of Section 140 of the Act is clear and explicit and it requires payment of interim compensation in case of death or permanent disablement as a result of the accident by the use of a motor vehicle by owner only and in view of the specific provision contained in Section 144, under Chapter X of the (under which Section 140 also falls), to the effect that the provision of this Chapter shall have effect notwithstanding anything contained in the Act or in any law for the time being in force, the provisions of Chapter XI dealing with Insurance of vehicle against the third party risks could not be resorted to for fixing liability on the insurer under Section 140 of the Act.
5. Both the parties have relied upon the provisions of the Act as well as upon the decisions rendered by the Apex Court as well as by the different High Courts, which will be referred to at the appropriate places.
6. Thus, the only point, that falls for consideration in this appeal, is as to whether an insurer is liable to pay interim compensation or not under Section 140 of the Act, which provides for payment of compensation on the principle of no-fault. At the very outset, it would be apt to refer to the statutory provisions having a relevancy to the point in controversy. The common law principle is that in case of death or permanent disablement arising out of a motor vehicle accident, the claimant should establish negligence on the part of the owner or driver of the vehicle before claiming compensation. The principles for grant of compensation under the Motor Vehicle Act, 1939 (hereinafter referred to as "1939 Act") was based on this common law.
7. The Apex Court in the case of N.K.V. Bros. (P.) Ltd. v. M. Karumal Anmal, reported in AIR 1980 SC 1354 as well as in the case of Motor Owners' Insurance Co. Ltd. v. J. K. Modi reported in AIR 1981 SC 2059. observed that the State should consider the desirability of bringing a legislation of no-fault liability and, thereafter, amendment was brought in the 1939 Act and Chapter VIIA containing Sections 92A to 92E, which correspond to Sections 140 to 144 of Chapter X of the Act, was incorporated providing for compensation on no-fault liability.
8. The object and reasons for Incorporating the aforesaid provisions were that due to rapid development of road transport in the country, the number of road accidents have also increased. Under the law, remedy of compensation can be availed only on proof of wrongful act or negligence on the part of the owner or driver. In view of the circumstances under which the accident took place, it is noticed that it was difficult to give adequate evidence to prove the wrongful act and negligence and as such with a view to make strict proof of road safety measures and also to make as a measure, of social justice suitable provisions for compensation without proof of fault or negligence on the part of the owner or driver should be made. The aforesaid amended provisions were considered by the Apex Court in the case of Gujarat State Road Transport Corporation, Ahmedabad v. Ramanbhai, reported in AIR 1987 SC 1690 and in paragraph No. 8, it was held as follows :--
"When the Fatal Accidents Act, 1855 was enacted there were no motor vehicle on-the roads in India. Today, thanks to the modern civilization, thousands of motor vehicles are put on the road and the largest number of injuries and deaths are taking place on the roads on account of the motor vehicles accident. In view of the fast and constantly Increasing volume of traffic, the motor vehicles upon the roads may be regarded to some extent as coming within the principle of liability defined in Rylands v. Fletcher, (1868) LR 3 HL 330, 340. From the point of view of the pedestrian, the roads of this country have been rendered by the use of the motor vehicles highly dangerous. 'Hit and run' cases where the drivers of the motor vehicles who have caused the accidents are not known are increasing in number. Where a pedestrian without negligence on his part is injured or killed by a motorist whether negligently or not, he or his legal representatives as the case may be should be entitled to recover damages, if the principle of social justice should have any meaning at all. In order to meet to some extent the responsibility of society to the deaths and injuries caused in road accidents there has been a continuous agitation throughout the world to make the liability for damages arising out of motor vehicles accidents as a liability without fault. In order to meet the above social demand on the recommendation of the Indian Law Commission, Chapter VIIA was introduced in the Act."
It was further held in the said paragraph that this part of the Act is clearly a departure from the usual common law principle that a claimant should establish negligence on the part of the owner or driver of the motor vehicle before claiming any compensation for the death or permanent disablement caused on account of a motor vehicle accident. To that extent the substantive law of the country stands modified.
9. The said 1939 Act was repealed and the present Act was brought into existence. Provisions contained in Sections 140 to 144 of the Act falling under Chapter X of the Act correspond to Sections 92A to 92E of Chapter VIIA of 1939 Act. Section 140 provides, inter alia, that in case of death or permanent disablement of any person as a result of an accident arising out of the use of a motor vehicle, the owner shall be liable to pay interim compensation on the principle of no-fault as detailed, in Sub-section (2) thereof. The claimant it is not required to prove wrongful act, negligence or default cf the owner or owners of the vehicle or vehicles or of any other person. To maintain a claim of interim compensation, the negligence or default on the part of the person in respect of whose death or permanent disablement, the claim has been made, is no ground to deny the interim compensation nor is the owner protected from the liability to pay compensation under any other law in force. In case compensation is awarded to the claimant under any general law, the amount of interim compensation will be reduced to the extent of payment of interim compensation. Section 141 of the Act provides that right of interim compensation is in addition to any other right for compensation except the claim of compensation under Section 163A. In other words, the payment of interim compensation is not an impediment on the right of the claimant to claim compensation on the principle of fault under the Act or any other provisions for the time being in force. Sub-section (2) of Section 141 of the Act provides for expeditious disposal of the application. Section 144 of the Act provides that the provisions of Chapter X have overriding effect notwithstanding any other provisions of this Chapter or of any other law for the time being in force.
10. Chapter XI of the Act deals with the Insurance of Motor Vehicles against third party risks and Section 145(c), which falls thereunder, defines word "liability", according to which wherever word liability is used in relation to the death of or bodily injury to any person, it includes liability in respect thereof under Section 140. Section 146 of the Act provides for necessity for insurance against third party risk. According to the said provision, the owner or any person on his behalf cannot use the motor vehicle at a public place. He is required to have policy of insurance in terms of the provisions of the said Chapter. The object of this provision is to ensure insurance of all vehicles, which are being used at public places so that it the third party suffers; damage due to the use of the motor vehicle at public place, he will get the compensation from the Insurance Company and the payment of compensation will not depend upon the financial position or availability of owner of the vehicle or driver of the vehicle. The provision of the said section is mandatory so far as the third party risk is concerned. Section 147, which corresponds to Section 95 of 1939 Act contains a provision regarding requirements of policies and limits of liability. It provides, inter alia, that a policy of insurance must be a policy, which is issued by a person, who is an authorised Insurer and it insures the person or classes of persons specified in the policy to the extent specified in subsection (2) 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 damages to any property of a third party caused by or arising out of the use of the vehicle in a public place and against the death of or body injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place. Sub-section (2) of the said section provides that the policy of insurance shall cover any liability incurred in respect of any accident up to limits mentioned in Clauses (a) and (b).
11. Thus, in view of the provisions contained in Section 147, a duty is cast on the Insurance Company to idemnify the insured (owner in the case of a motor vehicle) in respect of liability covered by the policy. Section 149 of the Act casts a duty on the insurer to satisfy the judgments and awards against the person insured in respect of third party risks provided there is a notice to the insurer where he can raise defence as provided under Section 149(2) of the Act. Section 168 of the Act contains a provision with regard to payment of just compensation on the basis of fault proved by the claimant. Provisions have been made under Section 140 of the Act to provide immediate help to the claimants in case of death or permanent disablement by a motor vehicle accident so that there may not be undue hardships to the claimants after happening of the accident. Provision has been made for payment of quantified amount as interim award without proof of wrongful act or negligence or fault on the part of the owner and driver of the vehicle. Even the fault or negligence on the part of the victim is no ground to deny the demand of interim compensation. The amount of interim compensation once paid is not to be refunded even the case ultimately fails.
12. No doubt, Section 140 provides that the interim compensation is to be paid by the owner but once an insurance policy in terms of Chapter XI is in force with regard to the motor vehicle covering liability against the third party risk then by virtue of definition of liability under Section 145(c), the interim compensation is also included or covered by the said policy and the Insurance Company also becomes liable to pay interim compensation. If this view is not taken, the social purpose for which the provision of Section 140 was enacted will be frustrated. In many cases, there will be difficulty in passing the order of compensation against the driver or owner of the vehicle because they may not be in a position to pay the interim compensation. To obviate such situation and to provide speedy help to the needy claimants, the Legislature appears to have also Included 'liability' under Section 140 of the Act within the definition of a liability under Section 145(c) of the Act. Thus, there is no difficulty in coming to the conclusion that once an insurance policy is in force with regard to use of motor vehicle at a public place covering liability against the third party risk then the insurer is also liable to pay the interim compensation even though he is not classified as one of the persons against whom an order can be passed under Section 140 of the Act.
13. The view which I have taken finds support from the catena of decisions rendered by the Hon'ble Judges of the majority of High Courts in the country. Reference in this connection may be had of (he decisions in (i) Oriental Fire and General Insurance Co. Ltd. v. Beasa Devi, reported in 1985 Acc CJ 1 : (AIR 1985 Punj and Har 96), (ii) New India Assurance Co. Ltd. v. Chotinabee, reported in 1986 Ace CJ 120 (AP). (iii) Oriental Fire and General Insurance Co. Ltd. v. Aleixo Fernandcs. reported in 1986 Ace CJ 1137 : (AIR 1986 Bom 280), (iv) Babban Tiwari v. Usha Ranjan Chakraborty, reported in 1987 (2) Acc CJ 863 (Gauhati), (v) New India Assurance Co. Ltd. v. Member, Motor Accidents Claims Tribunal, reported in 1988 Acc CJ 612 (Gauhati), (vi) National Insurance Co. Ltd. v. K. Savitri, reported in 1990 (2) Ace CJ 768 (Kerala). (vii) Mohinl Mohan Sen v. Jyotsna Nag, reported in 1991 (2) Acc CJ 1089 (Calcutta), (viii) K. Ramulu v. Shaik Khaja, reported in 1991 (1) Ace CJ 359 (AP), (ix) United India Insurance Co. Ltd. v. Sukhiabai, reported in AIR 1992 Madh Pra 53, (x) National Insurance Company, Jabalpur v. Thaglu Singh, reported in AIR 1994 Madh Pra 177, (xi) United India Insurance Co. Ltd. v. C. D. Munirathanam Reddy, reported in 1994 (2) Ace CJ 1074 (AP) and (xil) New India Insurance Company Limited v. Bhajnu. reported in 1996 Ace CJ 367 (HP).
14. Learned counsel for the respondent-Insurance Company relied upon the judgment of the Apex Court in the case of R. Nand Kumar v. Managing Director, Thanthal Periyar Transport Corporation, reported in (1996) 2 SCC 736 : (AIR 1996 SC 1217) in support of the fact that it is the liability of the owner to pay the interim compensation under Section 92-A of the 1939 Act. corresponding to Section 140 of the Act. From a perusal of the said judgment, it appears that the Madras High Court has rejected the claim of payment of interim compensation under Section 92-A of the 1939 Act of the appellant before the Apex Court on the ground that he was negligent. The Apex Court held that under Section 92-A of the 1939 Act. which deals with no fault compensation, the claim cannot be disallowed on the ground that the person, who has died or suffered, has been negligent. While deciding the aforesaid point in paragraph 4, the Apex Court has held that by reason of Sub-section (1) of Section 92-A of the 1939 Act. an absolute liability is cast upon the owner of a vehicle to pay compensation in respect of death or permanent disablement resulting from an accident arising out of its use. The question whether the insurer is liable to pay the interim compensation under Section 140 of the Act or not in view of the other provisions of the Act was not in issue in that case. Similarly, in the case of National Insurance Company Limited v. Jethu Ram. reported in (1999) 9 SCC 62, the question, which falls for consideration in this appeal, was not for determination. It is well settled that the ratio of the decision has to be understood in the background of the facts of the case and the decision is an authority for what it actually decides and not what logically follows from it. The binding precedent is the ratio of the decision and not the conclusion. Thus, the question involved in this appeal was not in issue for adjudication before the Apex Court in the said cases. From perusal of the facts of the aforesaid case (Jethu Ram), it appears that the Tribunal at the time of disposing of the matter of final compensation came to the conclusion that under the policy of Insurance, the insurer was not liable to pay the compensation in question and ordered that the compensation awarded to the claimant has to be recovered from the owner of the vehicle. While the claim case was pending under Section 92-A of the 1939 Act, corresponding to Section 140 of the Act, the interim compensation was paid by the insurer to the claimant. The question for consideration was whether the insurer would be at all liable to pay the Interim compensation in view of the finding of the Tribunal that the insurer has no liability under the policy of insurance to-pay compensation in question. The Tribunal held that the aforesaid amount cannot be refunded to the insurer. The matter was carried in appeal to the High Court and the High Court after Interpreting Section 92-A of the 1939 Act (140 of the present Act), came to the conclusion that liability arising under the aforesaid provision is independent of the liability to pay compensation under Section 110-A of the 1939 Act (168 of the present Act) and such liability under Section 92 has to be borne by the insurer. Dealing with the aforesaid matter, the Apex Court held that if at the time of final determination, it is found that under the policy of insurance, the insurer is not liable to pay compensation but it has already paid the Interim compensation under Sections 92-A and 92-B of the 1939 Act, then it is entitled to get it reimbursed from the owner. In other words, in such a case, the insurer is not liable to pay even the interim compensation. It is apt to quote paragraph 2 of the said judgment, which runs as follows :--
"2. On a close scrutiny of the aforesaid provisions, we do not, find anything contained therein which would suggest that the liability which accrues under the provisions of Section 92-A has to be borne by the insurer even if it is ultimately held that under the policy of insurance, the insurer is not liable to pay the compensation in question. In our considered opinion, the Tribunal and the High Court have misread the aforesaid provisions of the Motor Vehicles Act. In the aforesaid premises, the impugned judgment of the Tribunal and the High Court cannot be sustained so far as they relate to the liability of the Insurer arising under Sections 92-A and 92-B of the Act. These appeals are allowed. The insurer having paid the amount under the aforesaid provisions is entitled get it reimbursed from the owner."
15. Thus, in the said case interim compensation was paid by the insurer and ultimately it was found at the time of final determination that it was not liable to pay compensation, then the Apex Court held that the said amount be reimbursed from the owner.
16. Learned counsel for the respondent-Insurance Company also relied upon the judgment rendered by learned single Judges of this Court reported in New India Assurance Company v. Turki Hi alias Kui, reported in 1995 BBCJ 419 and National Insurance Company Ltd. v. Smt. Neela Singh, reported in 1999 (3) PLJR 489.
17. In the case of Turki Hi alias Kui (1995 BBCJ 419) (supra), the learned single Judge in paragraph No. 7 of thejudgment held that the liability to pay the ad interim compensation is only of the owner and not of the insurer. It appears that the proTislons of Chapter XI where the word 'liability' has been defined, was not brought to the notice of the learned single Judge. While coming to the aforesaid conclusion, the learned single Judge has relied upon a decision of the Division Bench of this Court in the case of National Insurance Co. v. Lachminiya Devi, reported in 1987 BLT (Rep) 274. In the said case, the matter for consideration was with regard to final award rendered by the Tribunal and the question was whether the Insurance Company was liable to pay compensation on the death or bodily injury of an illegal occupant of the vehicle and it was held that the Insurance Company is not liable to pay compensation in such a case. Thus, the question as to whether under Section 92-A of the 1939 Act, which corresponds to Section 140 of the Act, only the owner is liable to pay the interim compensation or the insurer was not at all the subject-matter of determination before the Division Bench.
18. In the case of Smt. Neela Singh (1999 (3) Pat LJR 489) (supra), the learned single Judge coming to the conclusion that only owner ts liable to pay Interim compensation, relied upon the judgment of the Apex Court in the case of Jethu Ram (1999 (9) SCC 62) (supra), which, as stated above, did not decide the point in controversy in this appeal, on the other hand, there the question for consideration was quite different and the Supreme Court has not held that the interim order of compensation cannot be passed against the insurer under Section 140 of the Act.
19. Thus, with respect to the learned single Judges, who rendered the judgments in the said two cases, I find myself unable to agree with the views taken by them.
. 20. In view of my conclusions arrived at above, it is clear that the insurer cannot escape from the liability to pay the interim compensation under Section 140 of the Act provided other conditions, as enumerated above, are fulfilled. Once it is found that the insurance policy is in force with regard to use of a motor vehicle at a public place, the Tribunal can pass order against the insurer also. However, at the stage of considering an application under Section 140 of the Act, the Court has to take prima facie view in the sense that once on the basis of the materials on record, it is proved that there is Insurance policy in force in terms of provision contained in Chapter XI of the Act against the liability of a third party risk, the Tribunal may pass an order for payment of interim compensation against the insurer. At that stage, the Tribunal cannot hold a mini enquiry nor can it take into consideration the defence, which is available to the Insurer, which has to be considered at the time of final determination of the said question under S, 168 of the Act. If at the stage of Section 140, the Insurer is allowed to take defence as provided under Section 149(2). then that will frustrate the very object, for which the provision has been made as it cannot be disposed of expeditiously in terms of the statutory provision and the proceeding will linger and in all purposes will assume the character of determination of a final compensation under Section 168 of the Act.
21. Thus, after considering the question involved in this appeal from different angles, I am of the considered view that the order under Section 140 of the Act can be passed against the insurer also in view of the discussions made above. If ultimately, it is found at the time' of final determination of the question of compensation that the insurer is not liable to pay compensation, then the insurer is not loser or remediless as an order can be passed for reimbursement of the amount from the owner as held in the case of Jethu Ram (1999 (9) SCC 62) (supra).
22. In the result, this appeal is allowed, the order passed by the learned single Judge is set aside and the order passed by the Tribunal is restored.
S.K. Katriar, J.
23. I agree.