Bombay High Court
* The New India Assurance Company vs Lilabai Shrimant Misal on 7 July, 2014
Author: T.V. Nalawade
Bench: T.V. Nalawade
1 FA 1638 of 2013
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
First Appeal No.1638 of 2013
* The New India Assurance Company
Ltd., having its Divisional office
at Adalat Road, Aurangabad
Through its Manager (Legal Hub)
& Authorised signatory. .. Appellant.
Versus
1) Lilabai Shrimant Misal,
Age 40 years,
Occupation ; Household,
R/o Shrikrishnanagar,
Kalpataru Colony,
New Mondha Road,
House No.5, New Jalna,
District Jalna.
2) Prathmesh Shrimant Misal,
Age 3 years, under guardianship of
respondent No.1.
3) Antikabai Kundlik Misal,
Age 72 years,
Occupation ; Nil,
R/o As above.
4) Sarvar Ali Ahmed Ali,
Age 58 years,
Occupation : Business,
R/o Nilkanthnagar,
Kucharwata, Old Jalna,
District Jalna. .. Respondents.
--------
Shri. Ajit B. Kadethankar, Advocate, for appellant.
Shri. R.V. Gore, Advocate, for respondent Nos.1 and 2.
Shri. Amit K. Chitnis, Advocate, for respondent No.4.
--------
::: Downloaded on - 08/07/2014 23:50:27 :::
2 FA 1638 of 2013
CORAM: T.V. NALAWADE, J.
Judgment reserved on : 25th JUNE 2014
Judgment pronounced on : 7th JULY 2014.
JUDGMENT:
1) Admit.
2)
Notice after admission made returnable
forthwith. Heard both the sides for final disposal.
3) The appeal is filed against the judgment and award of MACP No.256 of 2010 which was pending before the Claims Tribunal, Jalna. The petition filed by present respondent Nos.1 to 3 under section 166 of the Motor Vehicles Act, 1988 (hereinafter referred to as "the Act") is allowed and the compensation of Rs.7.5 lakh with interest at the rate of 7.5% per annum is granted by the Tribunal and the Insurance Company is made liable jointly and severally to pay the amount of compensation along with the owner.
::: Downloaded on - 08/07/2014 23:50:27 :::3 FA 1638 of 2013
4) The petition was filed in respect of death of Shrimant Misal, who was husband of respondent No.1.
Respondent No.2 is minor son of deceased and respondent No.3 is widowed mother of the deceased.
5) It is the case of the claimants that the deceased and his two colleagues had taken a Toyoto Qualis jeep bearing No.MH-15-A-9349 on hire basis from the owner and they were proceeding to Jalna. This jeep allegedly collided with one unknown vehicle at 10 to 11 p.m. near Pulgaon. Shrimant died in the incident. It is contended by the claimants that the accident took place due to fault of the drivers of both the vehicles. The claim was made only against the owner and the Insurance Company of Jeep No.MH-15-A-9349.
6) The owner admitted the fact of the accident. He contended that his son was driving the vehicle at the relevant time and he was holding valid driving licence.
The owner took the defence that there was no fault on the part of the driver of his vehicle and the accident took place due to fault of the driver of the unknown vehicle.
::: Downloaded on - 08/07/2014 23:50:27 :::4 FA 1638 of 2013 The owner contended that, the vehicle was insured with respondent No.2 Insurance Company of the claim petition and the Insurance Company must indemnify him in view of the insurance.
7) The Insurance Company, appellant, filed Written Statement and contested the petition. It is the case of the Insurance Company that the deceased was a passenger in a private vehicle. It is contended that the risk to the passengers in the vehicle was not covered under the policy and so the Insurance Company is not liable to pay anything by way of compensation.
8) The claimants examined witnesses to prove the negligence of the driver of the jeep and to prove the income. The owner of the jeep and the Insurance Company did not examine witnesses. The record like police papers and policy of insurance was produced before the Tribunal. The Tribunal held that the driver of the jeep and the driver of the unknown vehicle were equally responsible for the accident. The Tribunal relied on the observations made by the Andhra Pradesh High Court in ::: Downloaded on - 08/07/2014 23:50:27 ::: 5 FA 1638 of 2013 the case reported as 2010 (3) T.A.C. 480 (New India Assurance Company Ltd. Secunderabad v. Palamoni Suresh). On the basis of the observations made by the Andhra Pradesh High Court, the Tribunal held that passengers in a private vehicle need to be treated as "third party". In view of this, the Tribunal held the Insurance Company jointly and severally liable to pay the compensation even when the Tribunal found that it was "Act Only Policy".
9) The submissions made and the contentions raised show that the Insurance Company has challenged the aforesaid findings of the Tribunal. It was submitted that when the owner had purchased "Act Only Policy", no premium was paid in respect of the passengers of the jeep, there was no cover to the risk to the passengers.
10) The learned counsel for the appellant -
Insurance Company has placed reliance on many reported cases. He also relied on the case of the Andhra Pradesh High Court reported as LAWS (APH)-2011-10-40 (ALT-
2012-1-778) (New India Assurance Company Lt. v.
Palamoni Suresh). It appears that the aforesaid decision ::: Downloaded on - 08/07/2014 23:50:27 ::: 6 FA 1638 of 2013 given by the Andhra Pradesh High Court referred by the Tribunal was subjected to the review in Review Petition No.1921 of 2011. The same Hon'ble Judge of the Andhra Pradesh High Court decided the review petition and held that the aforesaid finding given was not correct. The appeal was decided on 18-2-2010 and the review petition was decided on 21-10-2011. It appears that the claim petition was decided by the Tribunal on 8-4-2013 but unfortunately the aforesaid decision given in review petition was not brought to the notice of the Tribunal. It was the duty of the learned counsel representing the claimants and the owner to bring to the notice of the Tribunal that, the decision given by the learned Single Judge was reviewed and it was set aside. In the first place it was not proper on the part of the learned counsel to place reliance on the aforesaid case of the Andhra Pradesh High Court when the decision was set aside. In the review petition, the Andhra Pradesh High Court considered the ratio of the case reported as 2001 ACJ 2059 (Dr. T.V. Jose v. Chacko P.M.) decided by the Apex Court and held that in such a case the Insurance Company cannot be held liable.
::: Downloaded on - 08/07/2014 23:50:27 :::7 FA 1638 of 2013
11) The learned counsel for the Insurance Company placed reliance on the case of Dr. T.V. Jose (cited supra).
This case was decided by the Apex Court on 27-9-2001.
Learned counsel for the Insurance Company placed reliance on one more case reported as AIR 2009 SC 626 (General Manager, United Insurance Co. Ltd. v. M. Laxmi). On the other hand, learned counsel for the present respondents placed reliance on the case reported as 2011 AIR SCW 2802 (United India Insurance Co. Ltd.
v. K.M. Poonam).
12) The case of K.M. Poonam cited by learned counsel for the respondents was decided by two Hon'ble Judges of the Supreme Court on 18-2-2011. The facts of the reported case show that a public transport vehicle was involved in the accident dated 18-8-2004. There was permission to carry six persons and the insurance cover was given in respect of six persons (driver plus five persons). At the time of the accident, there were excess number of persons / passengers in that vehicle. The Apex Court held that when there was such breach and the excess number of passengers were not covered under the ::: Downloaded on - 08/07/2014 23:50:27 ::: 8 FA 1638 of 2013 policy, the Insurance Company can be made liable to pay first and it may be allowed to recover the excess amount paid by it from the owner of the vehicle. There were two points involved like absence of cover to persons who were above the permitted limit of six and also circumstances that more persons than the permitted person were travelling in the vehicle. Basically it was a transport vehicle and under the provision of the Act (Section 147) there was statutory liability of the owner to purchase insurance in respect of the passengers. In view of these circumstances, the case of Poonam (cited supra) is of no help to the owner of the vehicle in the present case.
13) It is the case of the Insurance Company that as "Act Only Policy" was purchased by the owner and as there was no statutory requirement to purchase the policy in respect of the passengers in the jeep / private vehicle, the Insurance Company cannot be made liable to pay compensation. The policy is on the record and the terms and conditions are not disputed. The Tribunal has held that it is "Act Only Policy". In the present proceeding, two questions are posed by the learned counsel for the ::: Downloaded on - 08/07/2014 23:50:27 ::: 9 FA 1638 of 2013 respondents. It was submitted that the persons travelling in private car either gratuitously or fare paid need to be treated as "Third Party". It was submitted that this point is not decided. Another submission was made by the learned counsel for the respondents that even if it was "Act Only Policy", in view of the provision of the Act (Section 149) the Insurance Company can be made liable to pay first in such claim petitions and it can be allowed to recover the amount paid by it from the owner and driver of the vehicle. This Court is considering the aforesaid submissions.
14) The answer to the aforesaid two points raised by the learned counsel for the respondents can be found in the provisions of Chapter XI of the Act and in particular in the provisions like Sections 147 and 149. In the case of New India Assurance Co. Ltd. v. Asha Rani (AIR 2003 SC
607) a Bench of three Hon'ble Judges of the Apex Court has interpreted provision of Section 147 of the Act. The Apex Court had occasion to compare provision of Section 95 of the Motor Vehicles Act, 1939 with the provision of Section 147 of the Act (Pre-1994 and Post-1994). The Apex ::: Downloaded on - 08/07/2014 23:50:27 ::: 10 FA 1638 of 2013 Court was also required to consider the ratio laid down in the case of New India Assurance Co. v. Satpal Singh, 1999 AIR SCW 4337, which was decided by the Bench of two Hon'ble Judges of the Apex Court. in the case of Satpal Singh interpretation of the term "any person" used in the provisions of section 147 was made and indirectly it was held that the Insurance Company is liable to pay compensation in respect of passengers travelling in goods carrier. In the case of Asha Rani, the Apex Court has overruled this decision and the Apex Court has laid down that the term "any person" used in this provision mean "third party" not passenger. The Apex Court has further laid down in Asha Rani's case that in the new provision of the Act (Post-1994) also there is no statutory liability on the owner of the vehicle to get insurance for any passenger travelling in goods vehicle. In view of this, it is further laid down that in such a case, the insurer cannot be made liable to pay compensation in respect of such passengers. The Apex Court has discussed the statutory liability to give cover to the risk to "third party" and it has also discussed the statutory liability to give cover to the risk to the passengers of public service vehicle. The ::: Downloaded on - 08/07/2014 23:50:27 ::: 11 FA 1638 of 2013 provisions of Section 147 (1) (b) (i) and (ii) of the Act are discussed and interpreted. It is further laid down by the larger Bench, in Asha Rani's case that if owner of a passenger carrying private vehicle wants to cover the risk of such passengers, he must pay premium for covering such risk and that liable can be undertaken by Insurance Company but that liability will be contractual liability and not the statutory liability. Thus, it has been laid down that passengers in a private vehicle are not to be treated as "third party".
15) In the case of Dr. T.V. Jose (supra) the Apex Court had already decided that "third party policy" / "Act Only Policy" does not cover the risk to gratuitous passengers who are not carried for hire or reward in transport vehicle. The case of Jose was in respect of the provisions of the Act of 1939. But the ratio laid down in the case of Asha Rani shows that the law in this regard has not changed. In the case reported as AIR 2009 SC 626 (United Insurance Co. Ltd. v. M. Laxmi) the Apex Court has referred to the case reported as (2006) 4 SCC 404 (United India Assurance Co. Ltd. v. Tilak Singh) . In this ::: Downloaded on - 08/07/2014 23:50:27 ::: 12 FA 1638 of 2013 case the Apex Court has laid down that the Insurance Company has no statutory liability to cover the risk of gratuitous passengers in any vehicle including pillion rider of a scooter. The observations made by the Apex Court in this case show that when it is a statutory policy, "Act Only Policy" it does not cover the risk to passenger from a private vehicle.
16) From the aforesaid discussion it can be said that it is settled law that if no premium is paid in respect of passenger of a private car, there will not be coverage to the risk to them. When there is no coverage of risk, no premium is paid, liability cannot be fastened on the Insurance Company to pay compensation.
17) The discussion made above shows that the point of pay and recover does not arise in the case like the present one. In the case reported as (2004) 3 SCC 297 (National Insurance Co. Ltd. v. Swaran Singh) the provisions of Sections 149(1), 149(4) and 149(5) of the Act are interpreted and the circumstances in which the ::: Downloaded on - 08/07/2014 23:50:27 ::: 13 FA 1638 of 2013 Insurance Company can be made to pay are discussed.
That case also does not show that when there is no insurance cover like in the present case, the Insurance Company can be made to pay first. In view of this position of law, this Court holds that the Tribunal has committed error in holding the Insurance Company liable to pay the compensation jointly and severally with the owner in the present case. To that extent, the decision of the Tribunal needs to be set aside.
18) In the result, the appeal is partly allowed. The judgment and award of the Tribunal against the appellant
- Insurance Company making it liable to pay compensation jointly and severally is hereby set aside. The claim against the Insurance Company stands dismissed. The claimants are, however, entitled to recover the compensation from the owner of the vehicle. The civil application filed by the claimants for permission to withdraw the the amount stands dismissed. The amount deposited by the Insurance Company is to be returned to it. If any amount is already paid by the Insurance Company on the principle of "No Fault Liability" that amount with interest, if any, is allowed ::: Downloaded on - 08/07/2014 23:50:27 ::: 14 FA 1638 of 2013 to be recovered by the Insurance Company from the owner by using the present decision.
Sd/-
(T.V. NALAWADE, J.) rsl ::: Downloaded on - 08/07/2014 23:50:27 :::