Kerala High Court
National Insurance Co. Ltd. vs Abdul Latheef on 20 January, 2004
Equivalent citations: II(2004)ACC282, 2004ACJ1561, 2004(1)KLT747
JUDGMENT R. Rajendra Babu, J.
1. The question that has come up for consideration is whether the insurer can be directed to pay compensation to an injured in a motor traffic accident when the insured has been found not liable for the compensation.
2. Abdul Latheef, the first respondent, herein was travelling as a passenger in a bus bearing Reg. No. KEF 7990. The vehicle was owned by the 3rd respondent and the 2nd respondent was the driver of the bus. A lorry hit against the bus and thereby the first respondent sustained injuries. The lorry which hit against the bus could not be traced out. The injured claimed Rs. 50,000/- towards compensation against the driver, owner and insurer of the bus as OP (MV) 2950/90 before the Motor Accidents Claims Tribunal, Perumbavoor. The owner, driver and the insurer of the bus contended that there was no negligence on the part of the driver of the bus in causing the accident and hence they were not liable for the compensation. After considering the evidence, the Tribunal found that there was no negligence from the part of the driver of the bus in causing the accident and as such the driver and owner of the bus were not liable to compensate the injured. But placing reliance on the decision of a Single Judge of the High Court of Bombay in Peter Morris Lobo and Anr. v. Sonal Maganlal Shingala and Ors. (1991 ACJ 215), the Tribunal found that the insurer of the bus was liable for the compensation. The Tribunal assessed the total compensation to be paid to the injured at Rs. 28,653/- and directed the Insurance Company, the appellant, to pay the compensation amount. Aggrieved by the above award passed by the Motor Accidents Claims Tribunal, Perumbavoor in OP (MV) 2950/90, the insurer, the National Insurance Company Ltd., the 3rd respondent in the OP filed this appeal.
3. The main argument advanced by the learned counsel for the Insurance Company, the appellant was that when the Tribunal found the driver and owner of the bus not liable for compensation, the Tribunal should not have found the insurer of the above vehicle alone liable for the compensation, as the liability of the insurer was to reimburse the liability incurred by the insured. It was further submitted that the claim for compensation was based on the principles of common law that the injured should establish negligence on the part of the driver or owner of the vehicle. But a Single Judge of the High Court of Bombay in 1991 ACJ 2115 held:
"Section 95(1)(b)(i) evidently makes the insurance company liable against any liability which may be incurred by the insured and since the insured is not or cannot be made liable in this case as he or his driver is not found negligent, the case will not fall under Sub-clause (i) of Clause (b) of Sub-section (1) of Section 95. Sub-clause (ii) of Clause (b) of Sub-section (1) of Section 95, however, uses a different expression. It does not make the insurance company liable in respect of liability which may have been incurred by the insured. It makes the insurance company liable straightway against the death of or bodily injury to any passenger of a public service vehicle in a public place. The emphasis in this sub-clause is on the nature and situation of the vehicle at the time of the accident rather than on the liability of the insured in respect of the vehicle".
The learned Judge of the High Court of Bombay was placing reliance on an observation made by the Supreme Court in Minu B. Media and Anr. v. Balkrishna Ramchandra Nayan and Anr. (1977 ACJ 118) in support of his view. In the above case, the Supreme Court observed that having regard to the changed conditions of modern society where a large number of motor vehicles were put on road exposing a large number of innocent third parties to grave accidents it was necessary in public interest to take the view that proof of negligence was unnecessary on the part of drivers of motor vehicles before claiming compensation. But in a later decision in Gujarat State Road Transport Corporation, Ahmedabad v. Ramanbhai Prabhatbhai and Anr. (AIR 1987 SC 1690) the Supreme Court held that the above observation in 1977 ACJ 118 was only obiter dicta. There the Supreme Court while considering the no fault liability held:
"Sub-section (3) of Section 92A provides that in any claim for compensation under Sub-section (1) of Section 92A, the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person. It is thus seen that to a limited extent relief has been granted under Section 92 A to the legal representatives of the victims who have died on account of motor vehicles accidents. Now they claim Rs. 15,000/- without proof of any negligence on the part of the owner of the vehicle or of any other person. 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".
The above decision also would make it clear that the liability of the Insurance Company was to reimburse the liability of the insured, the owner of the vehicle. It is settled law that before a person is made liable to pay compensation for any injury or damages caused by his action, it is necessary that the person injured or damaged should be able to establish that he has some cause of action against the party responsible and such cause of action may arise out of actions for wrongs under the common law or for breaches of duties laid down by statutes. The master also becomes liable for the conduct of the servant when the servant is proved to have acted negligently in the course of his employment. In the present case it was held that the accident was not due to any negligence from the part of the driver of the bus and as such the driver and owner of the vehicle were not at all liable for compensation. Even then the insurer was found liable for compensation.
4. The learned counsel for the appellant submitted that under Section 140 of the Motor Vehicles Act the owner of the vehicle would be liable to pay compensation even if there was no fault from the part of the driver or owner of the vehicle. It was further submitted that the liability under the principles of no fault also is on the owner of the vehicle and the liability of the insurer is to reimburse the insured. Section 140 of the Motor Vehicles Act reads:
"140. Liability to pay compensation in certain cases on the principle of no fault.
(1) Where death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of this section.
(2) The amount of compensation which shall be payable under Sub-section (1) in respect of the death of any person shall be a fixed sum of (fifty thousand rupees) and the amount of compensation payable under that sub-section in respect of the permanent disablement of any person shall be fixed sum of (twenty five thousand rupees).
(3) In any claim for compensation under Sub-section (1), the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person.
(4) A claim for compensation under Sub-section (1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim has been made nor shall the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement.
(5) Notwithstanding anything contained in Sub-section (2) regarding death or bodily injury to any person, for which the owner of the vehicle is liable to give compensation for relief, he is also liable to pay compensation under any other law for the time being in force.
Provided that the amount of such compensation to be given under any other law shall be reduced from the amount of compensation payable under this section or under Section 163A".
The above provision would make it clear that the liability to pay compensation to the injured on a claim under Section 140 of the M.V. Act is on the insured. If there is a valid insurance, naturally the insurer will have to reimburse the insured.
5. The learned counsel for the appellant submitted that the liability under Section 140 would arise in cases of death or cases of permanent disablement caused as a result of the accident. So far as the present case is concerned, no disability certificate has been produced by the insured to establish that he suffered any permanent disablement as defined under Section 142 of the Act. The first respondent sustained some injury, to one of his eyes and there was some loss of vision and the Tribunal assessed disability at 5%. I do not think that the above assessment could be accepted to be a permanent disablement as defined under Section 142 of the Act. For claiming compensation under Section 140, there was no evidence to show that there was disablement which would come within the ambit of Section 142 of the Act. A Division Bench of this Court in National Insurance Co. Ltd. v. Sasilatha (2000 ACJ 661) held that for awarding compensation under no fault liability, there should be finding that the insured had suffered permanent disablement within the ambit of Section 142 of the Act. In the absence of any such evidence, it is not possible to hold that the first respondent was entitled to compensation under Section 140 of the Motor Vehicles Act. The liability of the insurer is to reimburse the insured. When once the insured is found not liable for the compensation, the insurer is also not liable and insurer cannot be held liable independently. Thus the award passed by the Tribunal directing the Insurance Company to pay compensation to the injured after entering a finding that the driver and owner of the vehicle were not liable to compensate the injured was unfounded and was liable to set aside and this appeal has only to be allowed.
In the result this appeal is allowed. The award passed by the Tribunal directing the Insurance Company to pay the compensation amount is set aside. It is made clear that this judgment shall not prevent the petitioner in making a claim under Section 163 of the Act, if so advised.