Kerala High Court
Th New India Assurance Co. Ltd vs S.Mohammed Ali on 17 July, 2009
Author: S.Siri Jagan
Bench: S.Siri Jagan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE S.SIRI JAGAN
&
THE HONOURABLE MR. JUSTICE K.RAMAKRISHNAN
THURSDAY, THE 31ST DAYOF OCTOBER 2013/9TH KARTHIKA, 1935
MACA.No. 534 of 2010 ( )
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AGAINST THE AWARD IN OPMV 409/2004 of M.A.C.T., PALAKKAD
DATED 17-07-2009
APPELLANT(S)/2ND RESPONDENT:
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TH NEW INDIA ASSURANCE CO. LTD.,
REGIONAL TOWERS, KANDAMKULATHY TOWERS, M.G.ROAD
ERNAKULAM, REPRESENTED BY ITS DULY AUTHORISED
OFFICER.
BY ADV.SRI.VPK.PANICKER
RESPONDENT(S)/1ST RESPONDENT & PETITIONERS:
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1. S.MOHAMMED ALI, S/O. SYED MOHAMMED,
BANGALAPPRAMBU, MEPPARAMBA, PALLIPPURAM
PALAKKAD.
2. KHADEEJA.M., W/O. SYED MOHAMMED
BANGALAPPRAMBU, MEPPARAMBA, PALLIPPURAM
PALAKKAD.
3. S.SAFIYA, W/O. ABDUL MAJEEB,
SOFI MANZIL, ALATHUR PALAKKAD.
4. S.SHAHEEDA, W/O. K.SIDHEEQ,
IRRUPPAKKAD HOUSE, PIRAYIRI, PALAKKAD.
5. S.RABIYA, W/O. JAFFER.K.K.
BANGALAPPRAMBU, MEPPARAMBA, PALLIPPURAM
PALAKKAD.
6. S.RAHMATH, W/O. KAMALUDHEEN,
YOUSEF MANZIL, NEAR DAILYMARKET, ALATHUR
PALAKKAD.
7. S.KAMARUNNISA, W/O. ABDUL RAFEEQ,
ANOCODE, PULIKKAL HOUSE, KARIYAMKODE
KOTTAYI, PALAKKAD.
8. S.ABUTHAHIR, S/O. SYED MOHAMMED
BANGALAPPRAMBU, MEPPARAMBA, PALLIPPURAM
PALAKKAD.
9. S.IBRAHIM, S/O. SYED MOHAMMED,
BANGALAPPRAMBA, MEPPARAMBA, PALLIPPURAM
PALAKKAD.
R1-9 BY ADV. SRI.BINOY VASUDEVAN
R1-9 BY ADV. SRI.R.MANIKANTAN
R1-9 BY ADV. SMT.P.G.BABITHA
THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 31-10-
2013, THE COURT ON THE SAME DAYDELIVERED THE FOLLOWING:
S.SIRI JAGAN & K.RAMAKRISHNAN, JJ.
--------------------------------------------------------------- M.A.C.A.No.534 of 2010
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Dated this, the 31st day of October 2013 Judgment Ramakrishnan, J.
The insurance company in O.P.(M.V).No.409/04 on the files of the Motor Accidents Claims Tribunal, Palakkad, is the appellant herein. Respondents 2 to 9, who are the wife and daughters of deceased Syed Mohammed, filed the claim petition, seeking compensation for the death of their breadwinner, who died in a motor vehicle accident, caused on account of the rash and negligent driving of a vehicle by its driver, owned by the first respondent and insured with the appellant. After considering the evidence on record, the Tribunal found that the accident occurred due to the negligent driving of the vehicle by its driver and awarded a total compensation of Rs.1,79,000/- under various heads as follows :
MACA 534/10 2
Head Amount
Loss of dependency 153,600.00
Funeral expenses 3,000.00
Loss of estate 2,500.00
Loss of consortium 10,000.00
Loss of love and affection 10,000.00
Total 179,100.00
A contention was raised by the appellant that the deceased was a gratuitous passenger, carried in a goods vehicle and since no extra premium was collected to cover the risk of the non-fare paying passenger carried in a goods vehicle, they are not liable to indemnify the insured in such cases. But, the Tribunal took a view that since the policy was a package/comprehensive policy, the risk of such persons is also covered and made the appellant liable to pay the amount by indemnifying the insured-the first respondent. Aggrieved by the finding regarding liability, the appellant has come before this court with the above appeal.
2. The learned counsel for the appellant submitted that the Tribunal, after finding that the deceased was neither the owner of the goods nor the representative of the owner of the goods, accompanying the goods at the time of accident, on the wrong MACA 534/10 3 assumption that package/comprehensive policy will cover such risk as well, made the insurance company liable, which finding is not correct. A gratuitous passenger carried in a goods vehicle is not covered by such policy and only persons carried in a private car and a pillion rider carried in a two-wheeler are covered by such a policy, by virtue of the circulars issued by the statutory regulatory authorities, presently, the I.R.D.A. and so, the finding of the Tribunal that the appellant is liable to indemnify the insured because it is a package/comprehensive policy, is not correct and that finding is liable to be set aside, is the contention raised by the appellant.
3. We have considered the contentions of the parties in detail.
4. It is an admitted fact that the vehicle involved in this case is a goods vehicle. Ext.B1 policy will go to show that it is a commercial goods vehicle (open). It is also an admitted fact that the accident occurred when the deceased was travelling in the goods vehicle. There is no case for the claimant that he was either the owner of the goods or that he was an authorised representative MACA 534/10 4 of the owner of the goods carried in the vehicle and he was accompanying the goods in that capacity or he was an employee of the owner of the vehicle, employed in the vehicle at the time of accident.
5. Section 147 of the Motor Vehicles Act deals with the liability of the insurance company, which reads as follows :
"147. Requirements of policies and limits of liabilities :-- (1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy, which -
(a) is issued by a person, who is an authorised insurer ; and
(b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2) -
(i) 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 damage to any property of a third party caused by or arising out of the use of the vehicle in a public place ;
(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place;
Provided that a policy shall not be required -
(I) to cover liability in respect of the death, arising out of land in the course of his employment or the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923, (8 of 1923) in respect of the death of or bodily injury to any such employee -
(a) engaged in driving the vehicle, or MACA 534/10 5
(b) if it is a public service vehicle engaged as a conductor of the vehicle or in examining tickets on the vehicle, or
(c) if it is a goods carriage, being carried in the vehicle, or
(ii) to cover any contractual liability."
It is clear from the above provision that only the owner of the goods carried in the vehicle or authorised representative of the owner of the goods, who was accompanying the goods are covered by the above provision. An employee of the owner of the vehicle, carried in the vehicle in the course of employment also will be covered under the policy.
6. It is settled law that persons, who are not falling under the categories of owner of the goods or authorised representative of the owner of the goods, accompanying the goods or the employee of the owner of the vehicle, are not covered by the policy issued to cover the liability under the Act. So, a gratuitous passenger carried in a goods vehicle is not covered under Section 147 of the Act and as such, the insurance company is not liable to indemnify the liability of such persons and they are not liable to indemnify the insured in the event of any compensation being awarded for the personal injury or death of such persons. This was MACA 534/10 6 so held in the decisions reported in National Insurance Company Limited v. Baljit Kaur (2004(1) KLT 938 (SC). The same view has been reiterated in the decisions reported in United India Insurance Company Limited v. Suresh (2008(4) KLT 552 (SC), National Insurance Company Limited v. Cholleti Bharatamma and others (2008(1) SCC 423 and New India Assurance Company Limited v.Abdul Rahaman (2012(3) KHC 478).
7. It is true that Ext.B1 is a package policy. Though premium was collected for covering 'employee others', that will only mean that that will cover those employees not liable to be covered under the Workmen's Compensation Act and employed by the owner of the vehicle and carried in the vehicle. The claimants have no case that the deceased was falling under that category. There is no extra premium collected for covering the liability of non-fare paying passengers carried in the vehicle. The Tribunal came to the conclusion that since it is a package policy, the insurance company is liable to indemnify the insured in the case of compensation payable to the insured or death caused to a gratuitous passenger carried in the goods vehicle. This is a misconception on the part of MACA 534/10 7 the Tribunal.
8. In the decision reported in National Insurance Company Limited v. Balakrishnan and another (2013(1) SCC
731), it has been held that in the case of package/comprehensive policy, even gratuitous passengers carried in a private car and two- wheelers will be covered and that was by virtue of the circulars issued by the statutory regulatory authority, presently I.R.D.A. Dated 16.11.2009 and 3.12.2009. In that decision, the circulars were extracted in paragraphs 22 and 23 of the decision, which read as follows :
"22. The relevant portion of the circular which has been reproduced by the High Court is as follows :
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY Ref : IRDA/NL/CIR/F&U/073/11/2009 Dated 16.11.2009 To, CEOs of all general insurance companies Re : Liability of insurance companies in respect of occupants of a private car and pillion rider on a two-wheeler under the Standard Motor Package Policy (also called 'the Comprehensive Policy').
Insurers' attention is drawn to wordings of Section II(1)(ii) of Standard Motor Package Policy (also called 'the Comprehensive MACA 534/10 8 Policy') for private car and two-wheeler under the (erstwhile) India Motor Tariff (IMT). For convenience, the relevant provisions are reproduced hereunder :
Section II - Liability to Third Parties (1) Subject to the limits of liabilities as laid down in the Schedule hereto the company will indemnify the insured in the event of an accident caused by or arising out of the use of the insured vehicle against all sums which the insured shall become legally liable to pay in respect of -
(i) death or bodily injury to any person including occupants carried in the vehicle (provided such occupants are not carried for hire or reward) but except so far as it is necessary to meet the requirements of the Motor Vehicles Act, the Company shall not be liable where such death or injury arises out of an din the course of employment of such person by the insured.' It is further brought to the attention of insurers that the above provisions are in line with the following circulars earlier issued by the TAC on the subject :
(i) Circular M.V.No.1 of 1978 dated 18.3.1978 (regarding occupants carried in private car) effective from 25.3.1977.
(ii) MOT/GEN/10 DATED 2.6.1986 (regarding pillion riders on a two-wheeler) effective from the date of the circular.
The above circulars make it clear that the insured's liability in respect of occupant(s) carried in a private car and pillion rider carried on a two-wheeler is covered under the Standard Motor Package Policy. A copy of each of the above circulars is enclosed for ready reference.
The Authority vide Circular No.066/IRDA/F&U/Mar-08 dated 26.3.2008 issued under File and Use Guidelines has reiterated that pending further orders, the insurers shall not vary the coverage, terms and conditions, wording, warranties, clauses and endorsements in respect of covers that were under the erstwhile tariffs. Further, the Authority, vide Circular No.019/IRDA/NL/F&U/Oct.08 dated 6.11.2008 has mandated that insurers are not permitted to abridge the scope of standard covers available under the erstwhile tariffs beyond the options permitted in the erstwhile tariffs. All general insurers are advised to adhere to the aforementioned circulars and any non- MACA 534/10 9 compliance with the same would be viewed seriously by the Authority. This is issued with the approval of competent authority.
23. The High Court has also reproduced a circular issued by IRDA dated 3.12.2009. It is instructive to quote the same :
"INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY Ref : IRDA/NL/CIR/F&U/078/12/2009 Dated 03.12.2009 To, CEOs of all general insurance companies (except ECGC, AIC, Staff Health, Apollo) Re : Liability of insurance companies in respect of occupants of a private car and pillion rider on a two-wheeler under the Standard Motor Package Policy (also called 'the Comprehensive Policy').
Pursuant to the order of the Delhi High Court dated 23.11.2009 in Yashpal Luthra v. United India Insurance Co. Ltd, the Authority convened a meeting on 26.11.2009 of the CEOs of all the general insurance companies doing motor insurance business in the presence of the counsel appearing on behalf of the Authority and the learned amicus curiae.
Based on the unanimous decision taken in the meeting by the representatives of the general insurance companies to comply with the IRDA circular dated 16.11.2009 restating the position relating to the liability of all the general insurance companies doing motor insurance business in respect of the occupants in a private car and pillion rider on a two-0wheeler under the Comprehensive/Package Policies which was communicated to the court on the same day i.e. 26.11.2009 and the court was pleased to pass the order (dated 26.11.2009) received from the Court Master, Delhi High Court, is enclosed for your ready reference and adherence. In terms fo the said roder and the admitted liability of all the general insurance companies doing motor insurance business in respect of the occupants in a private car and pillion rider on a two-wheeler under the Comprehensive/Package Policies, you are advised to confirm to the Authority, strict compliance with the circular dated 16.11.2009 of the High Court. Such compliance on your part would also MACA 534/10 10 involve :
(i) withdrawing the plea against such a contest wherever taken in the cases pending before the MACT and issue appropriate instructions to their respective lawyers and the operating officers within 7 days ;
(ii) with respect to all appeals pending before the High Courts on this point, issuing instructions within 7 days to the respective operating officers and the counsel to withdraw the contest on this ground which would require identification of the number of appals pending before the High Courts (whether filed by the claimants or the insurers) on this issue within a period of 2 weeks and the contest on this ground being withdrawn within a period of four weeks thereafter ;
(iii) with respect to the appeals pending before the Hon'ble Apex Court, informing, within a period of 7 days, their respective Advocates-on-Record about the IRDA Circulars, for appropriate advice and action. Your attention is also drawn to the discussions in the CEOs meeting on 26.11.2009, when it was reiterated that insurers must take immediate steps to collect statistics about accident claims on the above subject through a central point of reference decided by them as the same has to be communicated in due course to the Honourable High Court.
You are, therefore, advised to take up the exercise fo collecting and collating the information within a period of two months to ensure necessary and effective compliance with the order of the court. The information may be centralised with the Secretariat of the General Insurance Council and also furnished to us. IRDA requires a written confirmation from you on the action taken by you in this regard.
This has the approval of the competent authority."
9. It is clear from the above circulars that the I.R.D.A. had clarified that in the case of package/comprehensive policy, the insurance company is liable to indemnify the insured for the injuries or death caused to a person carried in a private car or pillion rider carried in a two-wheeler and it was not extended further. So, MACA 534/10 11 merely because it was a package/comprehensive policy, it will not ipso facto cover the liability of all gratuitous passengers carried in all types of vehicles, including goods vehicles. Unless extra premium is collected by the insurance company for covering the liability of such persons, the insurance company cannot be mulcted with the liability of indemnifying the insured in such cases. In this case, admittedly, the vehicle involved is a goods vehicle and the deceased was a gratuitous passenger carried in the goods vehicle and the liability of such persons was not covered as per the terms of the policy. Under such circumstances, the Tribunal was not justified in making the insurance company liable to pay the amount by way of indemnifying the insured on the assumption that package/comprehensive policy will cover the liability of such persons as well and the finding of the court below to that extent is liable to be set aside. The question of paying the amount and recovering the amount under Section 149(4) of the Motor Vehicles Act from the owner will arise only if there is liability for the Insurance Company to pay the amount as per the provisions of the policy, unlike in the case of exoneration of liability on account of MACA 534/10 12 violation of policy condition. In this case, there is no liability for the insurance company to cover the risk of gratuitous passengers carried in a goods vehicle and so, no question of directing the insurance company to pay the amount and then recover the same from the insured also arises. So, the finding of the Tribunal, making the insurance company liable is liable to be set aside and we do so. The appellant-insurance company is exonerated from the liability. We direct the first respondent-owner of the vehicle to pay the amount to the claimants.
With the above modification of the impugned award of the Tribunal, the appeal is disposed of. If any amount has been deposited by the insurance company as a condition for maintaining the appeal before the Tribunal, the Tribunal shall return the same to the insurance company.
S.SIRI JAGAN, JUDGE
K.RAMAKRISHNAN,JUDGE
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MACA 534/10 13
MACA 534/10 14