Rajasthan High Court - Jaipur
National Insurance Co. Ltd. And Anr. vs Paras And Ors. on 4 August, 1993
Equivalent citations: 1994ACJ563
JUDGMENT R. Balia, J.
1. In all these 8 appeals by the insurance company a common question of law is involved, hence they are disposed of by a common judgment.
Facts of Appeal No. 125 of 1992:
2. This appeal is directed against the award passed by M.A.C.T., Balotra, dated 28/29.11.1991 in M.A.C.T. Case No. 25 of 1989. Oat Singh with other passengers was travelling in Nissan Jonga No. RRQ 7577, which was driven by defendant-respondent No. 4, Hassan Ali. In an attempt to overtake truck No. RRW 321, it collided with the truck, as a result of which Oat Singh suffered injuries and died on 18.9.1988. The claimant-respondent Nos. 1 to 3 who are the legal representatives of deceased lodged a claim of Rs. 14,36,000/- against the driver and the owner of the vehicle as well as the insurance company with whom the jeep was insured. The Tribunal awarded a sum of Rs. 47,000/- as compensation. The insurance company was held responsible for the entire sum awarded.
Facts of Appeal No. 126 of 1992:
3. This appeal is directed against the award passed by M.A.C.T., Balotra, dated 28/29.11.1991 in M.A.C.T. Case No. 29 of 1989. Lala Ram with other passengers was travelling in Nissan Jonga No. RRQ 7577, which was driven by defendant-respondent No. 4, Hassan Ali. In an attempt to overtake the truck No. RRW 321, it collided with the truck, as a result of which Lala Ram suffered injuries and died on 18.9.1988. The claimant-respondent No. 1 who is the legal heir of the deceased lodged a claim of Rs. 9,36,000/-. The Tribunal awarded a sum of Rs. 10,000/- as compensation. The insurance company was held responsible for the entire sum awarded.
Facts of Appeal No. 127 of 1992:
4. This appeal is directed against the award passed by M.A.C.T., Balotra, dated 28/29.11.1991 in M.A.C.T. Case No. 31 of 1989. Pata Ram with other passengers was travelling in Nissan Jonga No. RRQ 7577, which was driven by defendant-respondent No. 4, Hassan Ali. In an attempt to overtake the truck No. RRW 321, it collided with the truck, as a result of which Pata Ram received multiple injuries. He lodged a claim for Rs. 5,34,000/- for compensation against the driver and owner of the vehicle and the insurance company, with whom the jeep was insured. The Tribunal awarded a sum of Rs. 10,000/- as compensation and held insurance company liable for the entire sum awarded.
Facts of Appeal No. 233 of 1992:
5. This appeal is directed against the award passed by M.A.C.T., Balotra, dated 28.11.1991 passed in M.A.C.T. Case No. 27 of 1989. Lala Ram with other passengers was travelling in Nissan Jonga No. RRQ 7577, which was driven by defendant-respondent No. 4, Hassan Ali. In an attempt to overtake the truck No. RRW 321, it collided with the truck, as a result of which Lala Ram died. His legal representatives and dependants who are respondent Nos. 1 to 5 lodged a claim of Rs. 3,84,010/-. Tribunal awarded a sum of Rs. 80,000/- as compensation in favour of the claimants and held insurance company liable for the entire sum awarded.
Facts of Appeal No. 373 of 1991:
6. This appeal is directed against the award of M.A.C.T., Udaipur, dated 17.9.1991 in M.A.C.T. Case No. 113 of 1989. On 22.10.1988 truck No. RSJ 6171 which was driven by Guari Lal and was carrying Ganga Ram, Lala and two other tribal men met with an accident. As a result of that accident Ganga Ram and Lala, the occupants of the truck, died. Respondent Nos. 1 and 2 who are the parents of deceased Lala lodged a claim of Rs. 4,50,000/- as damages suffered as a result of death of Lala. By its award dated 17.9.1991 the Tribunal awarded a sum of Rs. 35,000/- as compensation including claim under Section 92-A and held the insurance company liable for the entire sum. It was found that deceased was travelling as an owner of animals (ox) carried in the truck on payment of hire. The truck was a goods vehicle. The insurance company was held liable for the entire sum awarded.
Facts of Appeal No. 374 of 1991:
7. This appeal is directed against the award of M.A.C.T., Udaipur, dated 17.9.1991 in M.A.C.T. Case No. 214 of 1989. On 22.10.1988, truck No. RSJ 6171 which was driven by Guari Lal and was carrying Ganga Ram, Lala and two other tribal men met with an accident, as a result of which Ganga Ram and Lala, the occupants of the truck, died. Respondent Nos. 1 to 5 who are the legal heirs of deceased Ganga Ram lodged a claim of Rs. 6,60,000/- as damages suffered as a result of death of Ganga Ram. By its award dated 17.9.1991, the Tribunal awarded a sum of Rs. 1,00,000/- as compensation including claim under Section 92-A and held insurance company liable for the entire sum. It was found that deceased was travelling as an owner of animals (ox) carried in the truck on payment of hire. The truck was a goods vehicle.
Facts of Appeal No. 375 of 1991:
8. This appeal is directed against the award of M.A.C.T. (Addl. Distt. Judge) No. 2, Udaipur, passed on 30.9.1991 in M.A.C.T. Case No. 143 of 1990. On 24.11.1988 Bali along with her son Ganesh Lal was travelling in jeep No. RJJ 3570 to her village Kherwara. The jeep was driven by respondent Jagdish Chandra. The jeep overturned. As a result of the accident Bali was thrown out of the jeep and she died on the spot. The respondent Nos. 1 to 3 as her legal representatives lodged a claim of Rs. 1,07,200/- as damages suffered by them on account of death of Bali. The Tribunal awarded a sum of Rs. 50,000/- as damages to the claimants and held the insurance company liable for the entire sum. The Tribunal held that deceased was travelling in the jeep on payment of hire.
Facts of Appeal No. 376 of 1991:
9. This appeal is directed against the award passed by M.A.C.T., Udaipur, on 17.9.1991 in M.A.C.T. Case No. 289 of 1988. On 19.5.1988 Tulsi Ram, claimant, was travelling in Tempo No. RSY 7365 from Suraj Pole to Krishi Upaj Mandi. The Tempo struck against footpath and was overturned, as a result of which the claimant-respondent Tulsi Ram suffered multiple injuries. He lodged a claim before the Tribunal for a sum of Rs. 12,00,000/- as compensation. The Tribunal awarded a sum of Rs. 70,000/- as compensation by the impugned award by holding the claimant to be a third party for the purpose of risk covered under the insurance policy.
10. The only question that has been argued on behalf of appellants, insurance companies, is that in all cases where the passengers are carried in a vehicle irrespective of the nature of the vehicle, the liability of the insurance company is limited to the extent provided under Section 95 (2) of the Motor Vehicles Act, 1939. It may be noticed that the accidents in all cases out of which the claims have arisen have occurred prior to 1.7.1989, that is to say, prior to the commencement of the Motor Vehicles Act, 1988 and the claims are governed by the provisions of Motor Vehicles Act, 1939 and the vehicle involved in each of the cases is not a public service vehicle.
11. Contention on behalf of the insurance company is that the Tribunal has committed a legal error in fastening unlimited liability on the insurance company by holding the passengers of the vehicle as 'third party' and the risk of the liability to the claimants in case of death or injury to the passengers has been equated with the liability to pay compensation to the third party.
12. On the other hand, learned counsel for the respondents contends that in view of Full Bench decision of this court rendered in Santra Bai v. Prahlad 1985 ACJ 762 (Rajasthan), any person who has been carried for hire or reward in a vehicle is covered by the insurance policy under the statutory provisions of Section 95 (2) (b). It will be appropriate to reproduce Section 95 of the Act of 1939. Section 95 reads:
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 or by a co-operative society allowed under Section 108 to transact the business of an 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 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 public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle, or
(c) if it is a goods vehicle, being carried in the vehicle, or
(ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises, or
(iii) 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 shall cover any liability incurred in respect of any one accident up to the following limits, namely--
(a) where the vehicle is a goods vehicle, a limit of one lakh and fifty thousand rupees in all, including the liabilities, if any, arising under the Workmen's Compensation Act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, employees (other than the driver), not exceeding six in number, being carried in the vehicle;
(b) where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment,--
(i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all;
(ii) in respect of passengers, a limit of fifteen thousand rupees for each individual passenger;
(c) save as provided in clause (d), where the vehicle is a vehicle of any other class, the amount of liability incurred;
(d) irrespective of the class of the vehicle, a limit of rupees six thousand in all in respect of damage to any property of a third party.
(4) xxx xxx xxx (4-A) xxx xxx xxx (5) xxx xxx xxx
13. After having carefully considered the scheme of Section 95 and the decision referred to by the learned counsel, I am of the opinion that there is force in the contention raised by the appellant. It is to be noticed that Sub-section (1) of Section 95 provides what risks are to be covered by the insurance policy as per the statutory requirement. Sub-section (2) of Section 95 provides the limit of liability up to which the insurance company is liable to indemnify the insured to the minimum extent for the risk which is obligatory to be covered by a policy under Section 95 (1). Therefore, the limit of liability in any case fixed under Sub-section (2) is related to such risk which is required to be covered by the insurance policy under Sub-section (1). Section 95 (1) (b) (i) provides the coverage of liability which may be incurred by the insured in respect of death of or bodily injury to any person or damage to any property of a 'third party' caused by or arising out of use of the insured vehicle in a public place, whereas Section 95 (1) (b) (ii) provides the coverage in the case of death or bodily injury to any 'passenger' of 'public vehicle' caused by or arising out of of use of vehicle in a public place. These two clauses give a clear indication that two types of risk which are envisaged to be covered under insurance policy. First is in respect of injury caused to 'third party' as a result of accident and secondly, in respect of 'passengers' of a public service vehicle as a result of use of vehicle in a public place. It is in respect of these two types of liability, for the coverage by which insurance policy is issued by the insurance company, the limit of liability has been prescribed under Sub-section (2). Section 95 (1) makes a clear distinction between 'third party' and 'passenger'. The two terms have been used in relation to vehicle and not in relation to the owner of the vehicle. Therefore, subsection (2) has to be read in the context of the risk that is required to be covered. That depends on the fact in what capacity the insured has suffered injury. If the person has received injury in his capacity as a 'third party' the limit of liability under Sub-section (2) shall be that as has been prescribed in respect of 'third party', whereas if the injury has been suffered as an occupant or passenger of the vehicle then the liability will be to the extent as has been made applicable to the passengers under Sub-section (2). On further scrutiny of provisions, it will be pertinent to note that under the proviso (ii) to the Section 95 (1) it has been made clear that no insurance policy is required to cover the risk in respect of death or bodily injury to persons who are being carried in or by entering or alighting from the vehicle at the time of occurrence of the event other than the passengers who are carried for hire or reward where the vehicle is a vehicle in which passengers are carried for hire or reward or in pursuance of a contract of employment that person is occupant of vehicle. To say in plain words, the passengers who are carried gratis are not compulsorily required to be covered by the policy under the provisions of Section 95 of the Act of 1939; and an occupant or passenger of the vehicle cannot be termed as a 'third party'.
(Emphasis added)
14. I am fortified in my aforesaid view by a decision of their Lordships of the Supreme Court in Pushpabai Purshottam Udeshi v. Ranjit Ginning & Pressing Co. 1977 ACJ 343 (SC). Their Lordships after alluding to the history of proviso to Section 95 (1), which was inserted in 1969, rejected the plea that the 'act policy' covers the risk arising out of injury to the passenger of the insured vehicle, by referring to the proviso (ii) of Section 95 (1). Their Lordships held as under:
The plea that the words 'third party' are wide enough to cover all persons except the person and the insurer is negatived as the insurance cover is not available to the passengers is made clear by the proviso to Sub-section which provides that a policy shall not be required;
(ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by a reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises.
(22) Therefore, it is not required that a policy of insurance should cover risk to the passengers who are not carried for hire or reward. As under Section 95 the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured, the plea of the counsel for the insurance company will have to be accepted and the insurance company held not liable under the requirements of the Motor Vehicles Act.
15. Therefore, the Claims Tribunal was apparently not justified in fastening the entire liability on the insurance company by holding that the passenger's risk is otherwise covered under the terms of Section 95 (2) as a 'third party'. To that extent the award of the Tribunal cannot be sustained.
16. Learned counsel for the respondents then urged that since the judgment in Pushpabai Purshottam Udeshi v. Ranjit Ginning & Pressing Co. Pvt. Ltd. 1977 ACJ 343 (SC), the report of Tariff Advisory Board, which is a statutory body, has come into existence and its recommendations are binding on the insurance company, the policy is now otherwise to contain the coverage of risk of passengers de hors the provisions of the Motor Vehicles Act and, therefore, the liability is covered under the policy notwithstanding that it is not required to be covered under the provisions of Motor Vehicles Act. In this connection, he placed reliance on Sagar Chand Phool Chand Jain v. Santosh Gupta 1985 ACJ 585 (Delhi), a decision of Delhi High Court.
17. The position of law in this connection is settled that Motor Vehicles Act does not prohibit the covering of risks which are not statutorily required to be covered under the Act of 1939 or under the Act of 1988. The insured can always take policy covering risks which are not covered by the requirement of Section 95. Whether the policy in a particular case covers the risk beyond the risk covered by Section 95 of the Act of 1939 or not is a matter of investigation by the Tribunal on the basis of terms of policy and other material placed before it.
18. Without expressing any opinion on the question whether the recommendations of Tariff Advisory Board are binding on the insurance company and result in coming into a contract by its own force to cover the risk beyond the one prescribed under Section 95 of the Motor Vehicles Act, 1939, it must be said that the answer to it depends upon the exact nature of recommendation made, and whether its terms have been actually implanted as terms of the policy in question. It may further be noticed that the coverage of risk beyond the one prescribed under Section 95 may take many forms. It may come in the shape of endorsement on the policy, it may come in the form of payment of additional premium for specified risk coverage or it may come in the form of statutory provision or binding directions from a competent authority, as has been held by the Delhi High Court in Sagar Chand Phool Chand Jain's case 1985 ACJ 585 (Delhi). There cannot be exhaustive list of circumstances in which a contract for additional risk coverage can be inferred or established. Be that as it may, as in the present case the Tribunal has fixed the liability of the insurance company on a wholly erroneous premise by holding the passenger carried in the private vehicle to be a 'third party' without considering the policy conditions, it would be appropriate that the case be remanded back to the Tribunal to decide the question of the extent of liability of the insurance company under the existing policy after giving the parties an opportunity to place their respective cases in all perspective before it including giving the parties opportunity to lead evidence and summon necessary information from the insurance company in this regard.
19. It may also be mentioned here that learned counsel for the insurance company was candid in his submission that whenever it is found that the deceased or injured was carried in a vehicle for hire or reward, irrespective of the nature of registration of the vehicle, the liability of the insurance company is to the extent provided under Section 95 (2). In that view of the matter this question is not further examined as to the liability of the insurance company in respect of the person carried for hire or reward in a private vehicle. The minimum liability to the extent provided under Section 95 (2) of the Motor Vehicles Act, 1939, is accepted by the appellant in all cases where it is found that the deceased/injured was travelling in a vehicle on payment of hire or reward. In appeal Nos. 126 of 1992 and 127 of 1992, the compensation awarded is Rs. 10,000/- in each case. That sum is much below the extent of liability accepted by the appellant.
20. It is made clear that the amount that has been paid by the insurance company to the claimants, or the amount that has been deposited by the insurance company before the Tribunal and paid to the claimants shall not be refunded. The amount which remains in the custody of the court shall be returned to the insurance company for the present, subject to final decision of the claims.
21. As a result, Appeal Nos. 126 and 127 of 1992 are dismissed. No order as to costs.
22. Appeal No. 125 of 1992 is allowed. Award is set aside and the case is remanded to M.A.C.T., Balotra, for deciding the extent of liability of the insurance company under the policy existing at the time of accident in the light of observations made above.
23. Appeal No. 233 of 1992 is allowed. Award is set aside and the case is remanded to M.A.C.T., Balotra, for deciding the extent of liability of the insurance company under the policy existing at the time of accident in the light of observations made above.
24. Appeal No. 373 of 1991 is allowed. Award is set aside and the case is remanded to M.A.C.T., Udaipur for deciding the extent of liability of the insurance company under the policy existing at the time of accident in the light of observations made above.
25. Appeal No. 374 of 1991 is allowed. Award is set aside and the case is remanded to M.A.C.T., Udaipur for deciding the extent of liability of the insurance company under the policy existing at the time of accident in the light of observations made above.
26. Appeal No. 375 of 1991 is allowed. Award is set aside and the case is remanded to M.A.C.T., Udaipur for deciding the extent of liability of the insurance company under the policy existing at the time of accident in the light of observations made above.
27. Appeal No. 376 of 1991 is allowed. Award is set aside and the case is remanded to M.A.C.T., Udaipur for deciding the extent of liability of insurance company under the policy existing at the time of accident in the light of observations made above.
28. There will be no order as to costs.