Karnataka High Court
Oriental Insurance Company Limited vs Dyaneshwar Laxman Chellikeri And Anr. on 22 November, 2005
Equivalent citations: II(2006)ACC563, 2006ACJ1185, 2006(1)KARLJ499, AIR 2006 (NOC) 749 (KAR), 2006 (3) ALL LJ NOC 483, 2006 (3) ALJ 483, 2006 (2) AIR KANT HCR 190, 2006 A I H C 1011, (2006) 1 KANT LJ 499, (2006) 3 TAC 148, (2006) 3 RECCIVR 284, (2006) 2 RENCR 32, (2006) 1 KCCR 601, (2006) 2 ACC 563, (2006) 2 ACJ 1185, 2006 (2) AIR KAR R 190
Author: V. Jagannathan
Bench: P. Vishwanatha Shetty, V. Jagannathan
JUDGMENT V. Jagannathan, J.
1. In this appeal, the Oriental Insurance Company has assailed the legality of the judgment and award passed by the Motor Accident Claims Tribunal, Saundatti ('the Tribunal' for short) granting a compensation of Rs. 6,30,000/- to the claimant.
2. 2nd respondent-claimant filed a petition under Section 116 of the Motor Vehicles Act, 1988 ('the Act' for short), claiming compensation for the injuries sustained by him in a motor accident that had taken place on 30th April, 1994 and it was his case before the Tribunal that the jeep bearing No. KA-23/M-2015 was driven in a rash and negligent manner by the 1st respondent-driver and due to the said fact the vehicle lost control and dashed to a pole on the left side of the road. The claimant sustained claimant sustained injuries in the accident and he suffered disability to the extent of 90 per cent and hence he claimed Rs. 8,00,000/- as compensation.
3. The Tribunal, based on the pleadings of the parties and after appreciation of the evidence led in by the claimants and the doctor and documents produced by the claimant as per Exhibits P. 1 to P. 33, recorded a finding that the accident took place on account of the rash and negligent driving of the jeep by its driver. So far as the compensation is concerned, on appreciation of the evidence, having regard to the gravity of the injuries sustained by the claimant awarded a sum of Rs. 6,30,000/- to the claimant and fastened the liability to satisfy the award amount on the appellant-insurance company. Aggrieved by the said award passed by the Tribunal, the appellant is before us.
4. We have heard the learned Counsels appearing for the parties.
5. The learned Counsel appearing for the insurance company contended that the vehicle in question was owned by the claimant himself and the policy that was produced before the Tribunal covered only the risk of third parties and therefore, the claimant himself being the insured and being one of the contracting parties to the policy, no liability can be fastened on the insurance company as the policy did not cover the risk of the personal injury of the insured himself. It was also contended that unless the instired is made liable at the first instance, the question of the insurer being saddled with the liability does not arise in view of the provisions of Chapters X and XI of the Act. Since the claimant being the insured and not being a third party, the policy in question does not cover the risk of the insured himself. Therefore, the Tribunal erred in holding that the insurance company is liable and the said finding is contrary to the provisions of the Act as well as law laid down by the Apex Court.
6. Having regard to the contentions urged before us, the only point for consideration is whether having regard to the facts and circumstances of the case, any liability can be fastened on the insurance company.
7. It is well-settled law that the liability of the insurer arises only when there is a liability on the insured in respect of the risk of third parties. In other words, provisions of the Act, in particular Chapters X and XI, go to establish that a policy of insurance is required to cover the risk of death or injury of any person of a third party and therefore, there is no requirement under the Act for the insurance company to cover the risk of death or fatal injury to the owner of the vehicle (the insured). This is clear from a bare perusal of Section 147 of the Act. The said section reads as follows:
147. Requirements of policies and limits of liability.--(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 and in the course of his employment, of 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
(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.
Explanation.--For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.
(2) Subject to the proviso to Sub-section (1), a policy of insurance referred to in Sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely.--
(a) save as provided in clause (b), the amount of liability incurred;
(b) in respect of damage to any property of a third party, a limit of rupees six thousand:
Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier.
(3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases.
(4) Where a cover note issued by the insurer under the provisions of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe.
(5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insvirance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons.
8. It is therefore very clear from the above provisions that the insurance company is not required to cover the risk of death or fatal injury to the owner of the vehicle. The only liability of the insurance company, from a reading of the above provisions, is that it has to indemnify the insured against liabilities incurred towards third parties or in respect of damages to property. In other words, if the owner has no liability to third party, the insurance company also cannot be made liable. This is the position in law as has been laid down by the Hon'ble Supreme Court in the case of Dhanraj v. New India Assurance Company Limited and Anr. .
9. In the case on hand, the policy, Ex. P. 26 is in respect of liability towards third parties and it does not cover the risk of death or injury caused to the insured himself. Unless the policy in question covers the risk of any injury to the owner himself, it is not permissible in law to saddle the insurance company with liability, even in respect of death or fatal injury caused to the owner of the vehicle. The Tribunal has clearly observed that the policy in question covers the risk of third parties only. Such being the case, no liability can be fastened on the insurance company in respect of death or fatal injury caused to the owner of the vehicle.
10. It is also a settled position in law as has been laid down in the case of Oriental Insurance Company Limited v. Sunita Rathi and Ors. , that no liability of the insurer arises for the purpose of indemnifying the insured without liability being fastened on the insured at the first instance. In the case on hand, the claimant himself is the insured. Since the insured himself has made the claim, he ought to have mentioned in his claim petition that he is the owner of the vehicle in question, and that his liability as regards injury to him is also covered by the policy. No such averment is forthcoming in the pleading. The policy in question does not cover the risk of personal injury caused to the insured himself
11. Having regard to the above discussion and the law bearing on the point and in view of this Court having taken a similar view with regard to the liability of the insurance company in M.F.A. No. 5262 of 1999 connected with M.F.A. No. 5111 of 1999, the question of saddling the liability on the insurance company will not arise. Accordingly, the judgment and award impugned in this appeal is liable to be set aside as being unsustainable in law. For the foregoing reasons, the appeal is allowed and the judgment and award dated 8th May, 1998 made in M.V.C. No. 1094 of 1998 is set aside. The amount in deposit shall be refunded to the insurance company forthwith.