Kerala High Court
United India Insurance Co. Ltd. vs Rukiya on 7 July, 2006
Equivalent citations: II(2007)ACC728, 2007ACJ698, 2006(4)KLT192
Author: J.B. Koshy
Bench: J.B. Koshy, M. Sasidharan Nambiar
JUDGMENT J.B. Koshy, J.
1. Insurance Company is the appellant herein. The husband of the 1st respondent while travelling in a Maruti Car bearing Registration No. KAOM/M.3035, the car went out of control and hit against a tree causing death of the insured. He was the owner of the car and he himself was the insured. A claim petition was filed under Section 163(A) of the Motor Vehicles Act, 1988, by the legal representatives of the deceased that the monthly salary was Rs. 10,000/- and he was an income tax payee. The Tribunal found that his income was only Rs. 3,000/-. The contention of the Insurance Company is that the deceased himself was the insured, and therefore, owner or his legal representatives cannot claim compensation in the absence of a personal accident coverage. Insurance Company cannot be held liable to pay compensation of the insured, as policy was taken only for indemnifying the liability of the owner of the vehicle to pay damages or compensation for causing injuries to other persons. The contention raised by the claimant was that such a defence cannot be taken by the Insurance Company in view of the decision of the Full Bench in National Insurance Co. Ltd. v. Malathi C. Salian . Contention of the Insurance Company was not accepted by the Tribunal and awarded compensation. Hence Insurance Company filed this appeal.
2. The first contention is that application under Section 163(A) will not lie as the deceased was drawing more than Rs. 40,000/- in an year. Apex Court in Koppula Venkat Rao v. State of A.P. and in Deepal Girishbhai Soni v. United India Insurance Co. Ltd. 2004 (2) KLT 395 (SC) held that remedies under Section 163(A) is available only if annual income of the accident victim is below Rs. 40,000/- and others can file claim petition only under Section 166. But in this case the Tribunal has found that his monthly income was only Rs. 3000/-. If that is so, application filed by legal representatives cannot be rejected on that ground as yearly income of the deceased was only Rs. 36,000/-.
3. The main contention of the Insurance Company is that Ext.B 1 insurance policy taken in this case only covers vehicle damages, third party liability and drivers liability and not insured's liability. It is true that it is a comprehensive policy. The total policy amount was Rs. 4,702/-. Split up is as follows:
A. OWNDAMAGE Premises on vehicle and non-electrical accessories Rs. 4488.00 LIABILITY-Basic Rs. 1-60.00 Legal liability to paid driver Rs. 15.00 Increased Third Party Property Limit Rs. 50.00
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Rs. 4713.00 Discount 255 Special Discount 234
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Rs. 4702.00 For own damage Rs. 4,488/- was paid. But own damage coverage is only on vehicle and non-electrical accessories. For third party liability Rs. 160/- was paid. In the top of the policy it is stated that liability is as per Motor Vehicles Act, 1988. Additional compensation is paid only for driver's liability and increased third party liability for property damages and no additional premium is paid for covering personal accident.
4. It is submitted that application filed by the Insurance Company itself is not maintainable. But Apex Court in National Insurance Co. Ltd. v. Swaran Singh and Ors. it is held as follows:
(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with his paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object.
(ii) Insurer is entitled to raise a defence in a claim petition filed under Section 163-A or Section 166 of the Motor Vehicles Act, 1988 inter alia in terms of Section 149(2)(a)(ii) of the said Act.
Absence of coverage of insurance is a defense available to the Insurance company under Section 149(2) of the Act. Therefore insurance company can take up the defence that it has no liability to pay compensation for death of the owner himself in the accident in the absence of personal accident coverage. Even though its policy in this case is comprehensive, personal accident liability for the injuries occured to the owner is not covered in the policy and therefore, for the injuries suffered by the owner, Insurance company is not be liable to pay any compensation. Insurance Company cannot be held liable to pay compensation for injuries on the insured if there is no personal accident coverage in the insurance policy as held in Dhanraj v. New India Assurance Co. Ltd. and Anr. . It was held by the Hon'ble Supreme Court as follows:
Thus, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including and 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.
In the case of Oriental Insurance Co. Ltd. v. Sunitha Rathi it has been held that the liability of an insurance company is only for the purpose of indemnifying the insured against liabilities incurred towards a third person or in respect of damages to property. Thus, where the insured i.e. An owner of the vehicle has no liability to a third party the insurance company has not liability also.
Comprehensive policy will not cover all risks that is possible. Only statutory liability and liability for risks for which additional premium are paid covered. In this case no additional amount was paid to cover personal accidental risks of owner. In this case we also refer to the constitutional decision of the Apex Court in New India Assurance Co. Ltd. v. C.M. Jaya 2002 (1) KLT 596 (SC) : 2002 AIR SCW 259.
5. Full Bench of this Court in Malathi's case (supra) only held that when a claim is filed by claimant under Section 163(A), compensation cannot be denied on the ground of contributory negligence. In other words Insurance company or owner of the vehicle cannot defeat a claim on the ground that death or injury had occurred due to the wrongful act, negligence or default on the part of the deceased or injured person. Objects of Section 163A is to provide a speedy remedy for motor accident victim. If accident is accepted, and death or permanent disability is occurred in the accident, in a claim under Section 163A parties need not waste time by adducing evidence on the aspects of negligence etc. Compensation also has to be calculated on the structured formula as mentioned in Section 11 and no data need be adduced except monthly income and age of the victim apart from the factum of accident and percentage of disability. Claim made by driver or his legal representatives cannot be dismissed on the ground that accident occurred due to his own negligence. Under Section 163(A), owner of the motor vehicle or his insurer cannot plead the absence of negligence on their part and no evidence can be adduced on negligence aspect. Absolute liability is fixed under Section 163 (A). Whether there is negligence of the owner or driver is proved or not. Section 163(A) reads as follows:
163-A. Special provisions as to payment of compensation on structured formula basis: - (1) Notwithstanding anything contained in this Act or in any other law for the time being in force or instrument having the force of law, the owner of the motor vehicle of the authorised insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be.
The person liable to pay compensation under Section 163A is the owner and if there is insurance for personal injury of the owner, he cannot claim compensation from himself. Hence insurance company also cannot be held liable to pay compensation for personal injuries or by his legal representatives for his death in the absence of personal accident coverage of owner in the policy. Hence compensation ordered to be paid by the Insurance Company for the death of the insured owner is set aside. However, on the facts and circumstances of the case, Rs. 25,000/- ordered to be disbursed to the claimants at the time of admission shall not be recovered by the Insurance company. This M.AC.A. is allowed to the above extent.