Madhya Pradesh High Court
Bhav Singh vs Smt. Savirani And Ors. on 11 October, 2007
Equivalent citations: 2008ACJ1043, AIR2008MP1, [2008(2)JCR159(MP)], 2007(4)MPHT460, AIR 2008 MADHYA PRADESH 1, 2008 (1) AIR JHAR R 217, 2008 (1) AIR KAR R 314, 2008 A I H C 386, (2008) 3 ACC 162, (2008) 1 MPLJ 72, (2008) 3 TAC 134, (2007) 4 MPHT 460, (2008) 2 ACJ 1043, (2008) 1 JAB LJ 134, 2008 (1) AJHAR (NOC) 217 (M. P.) = AIR 2008 MADHYA PRADESH 1 FULL BENCH, 2008 A I H C 386 2008 (1) AIR KANT HCR 314, 2008 (1) AIR KANT HCR 314
Bench: Chief Justice, A.M. Sapre
ORDER A.K. Patnaik, C.J.
1. The relevant facts leading to this reference are that Hariram was a labour working for the owner of the tractor-trolley bearing registration NO.M.P.15/T-1184 and while traveling in the tractor- trolley met with an accident and died. His legal heirs filed M.A.C.T. Case No. 29 of 1998 and by award dated 6.3.1999, the First Additional Motor Accident Claims Tribunal, Sagar awarded a sum of Rs. 2,84,332/- with interest as stated therein against the owner of the vehicle but absolved the insurer of the tractor-trolley, the New India Assurance Company Limited. Aggrieved by the award of the Tribunal, the appellant who is the owner of the tractor-trolley has filed the present appeal.
2. When the appeal was heard by the Division Bench, a Full Bench decision of this Court in Jugal Kishore and Anr. v. Ramlesh Devi and Ors. 2003 (4) MPLJ 546 was cited by learned Counsel for the appellant before the Division Bench to contend that a policy of insurance satisfying the requirements of Section 147 of the Motor Vehicles Act, 1988 (for short 'the Act') would cover liability of the insurer to any passenger of the tractor-trolley who may be a 'third party' within the meaning of the expression as used in Section 145(a) of the Act. Learned Counsel for the appellant also cited before the Division Bench a decision of a Division Bench of this Court in National Insurance Co. Ltd. v. Sarvanlal and Ors. 2004 (4) MPHT 404 (DB) in which the Division Bench after citing paragraphs 17 and 18 of the judgment of the Full Bench of this Court in Jugal Kishore (supra) held that the insurer is liable to indemnify for the death of the deceased as a passenger was a third party within the meaning of Section 145(g) of the Act. The Division Bench, in the present appeal, passed an order dated 16.2.2007 saying that the law laid down in case of Jugal Kishore (supra) specially in paragraphs 17 and 18 thereof and the law laid down in the case of Sarvanlal (supra), which states that the expression 'third party' would cover a passenger, requires re-consideration by an appropriate larger Bench.
3. We have heard Mr. B.K. Rawat, learned Counsel for the appellant, Ms. Nirmala Raikwar, learned Counsel for respondents 1 to 4, Mr. S.K. Rao, learned Senior Counsel for the respondent No. 6 and Mr. Sanjay Agrawal, Advocate as Amicus Curiae.
4. Sub-section (1) of Section 147 of the Act which states that in order to comply with the requirements of Chapter XI, the policy of insurance must cover the liabilities as indicated in Sub-section (1), is quoted herein below:
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 authorized insurer; or
(b) insurer 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 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 of 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.
5. We find on a perusal of the decision of the Full Bench in Jugal Kishore(supra) and particularly paragraphs 17 and 18 of the judgment that the Full Bench has taken a view that the expression 'third party' would mean a party other than the contracting parties to the insurance policy and would include everyone, be it a person traveling in another vehicle, one walking on the road or a passenger in the vehicle itself which is the subject matter of the insurance policy.
In a Full Bench judgment delivered by us in Smt. Sunita Lokhande and Ors. v. The New India Assurance Co. Limited and Ors. I.L.R. (2007) M.P. 1145, we have quoted paragraph 17 of the judgment of the Full Bench in Jugal Kishore (supra) to hold that the insured who is a party to the insurance is not a third party for the purpose of Chapter XI of the Act, particularly Section 147 thereof.
Thus, any person other than the insurer and the insured who are parties to the insurance policy is a 'third party'. The insurer, however, would not be liable for any bodily injury or death of a third party in an accident unless the liability is fastened on the insurer under the provisions of Section 147 of the Act or under the terms and conditions of the policy of insurance. Hence, the mere fact that a passenger is a third party would not fasten liability on the insurer unless such liability arises under Section 147 of the Act or under the terms and conditions of the insurance policy.
6. This will be clear from the judgment of the Supreme Court in Pushpabai Purshottam Udeshi v. Ranjit Ginning and Pressing Co. 1977 ACJ 343 (SC) in which the provisions of Section 95(a) and 95(b)(i) of the Motor Vehicles Act, 1939 were considered and it was held by the Supreme Court that the plea that the words 'third party' are wide enough to cover all persons except the insured and the insurer is negatived as the insurance cover is not available to the passengers as would be clear from the provisions of Section 95 of the Motor Vehicles Act, 1939. Paragraphs 21 and 22 of the judgment of the Supreme Court in Pushpabai Purshottam Udeshi (supra) are quoted herein below:
21. Section 95(a) and 95(b)(i) of the Motor Vehicles Act adopted the provisions of the English Road Traffic Act, 1960 and excluded the liability of the insurance company regarding the risk to the passengers. Section 95 provides that a policy of insurance must be a policy which insures the persons against any liability which may be incurred by him in respect of death 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. 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.
7. We are thus of the opinion that the observations of the Full Bench in Jugal Kishore (supra) with regard to the meaning of 'third party' in Chapter-XI of the Act has to be understood in the manner in which we have explained above.
8. Similarly, an employee is a third party inasmuch as he is not a party to the insurance policy. But merely because an employee is a third party, the insurance company would not be liable to compensate in case such employee suffers bodily injury or dies in an accident in which the motor vehicle is involved unless Section 147 of the Act fixes such liability on the insured or unless the terms and conditions of the contract of insurance fixes liability on the insurer. Section 147(1)(b) of the Act provides that in order to comply with the requirements of Chapter XI of the Act, a policy of insurance must be a policy which insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2) against the liabilities mentioned in Clauses (i) and (ii) thereunder. The Proviso to Sub-section (1) of Section 147 of the Act, however, states that a policy shall not be required to cover liability other than the liability arising under the Workmen's Compensation Act, 1923 in respect of the death of, or bodily injury to any of the three categories of employees mentioned in Sub-clauses (a), (b) and (c) of Clause (i) of the proviso to Sub-section (1) of Section 147 of the Act. Hence, even if an employee is a passenger or a person traveling in a motor vehicle which is insured as per the requirements of Sub-section (1) of Section 147 of the Act, the insurer will not be liable to cover any liability in respect of death or bodily injury of such employee unless such employee falls in one of the categories mentioned in Sub-clauses (a), (b) and (c) of Clause (i) of the Proviso to Sub-section (1) of Section 147 of the Act and further in cases where such employees fall under categories mentioned in Sub-clauses (a), (b) and (c) of Clause (i) of the Proviso to Sub-section (1) of Section 147 of the Act, the insurer is liable only for the liability under the Workmen's Compensation Act, 1923.
9. This position of law has been clarified by Supreme Court in National Insurance Co. Limited v. Prembai Patel . The relevant portion of the judgment of the Supreme Court in Prembai Patel (supra) from paragraph 12 of the judgment as reported in the AIR is extracted below:
Clause (b) of Sub-section (1) of Section 147 provides that a policy of insurance must be a policy which insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2) against any liability which may be incurred by him in respect of death of, or bodily injury to any person or passenger or damage to any property of a third party caused by or arising out of the use of the vehicle in public place. Sub-clauses (i) and (ii) of Clause (b) are comprehensive in the sense that they cover both 'any person' or 'passenger'. An employee of owner of the vehicle like a driver or a conductor may also come within the purview of the words 'any person' occurring in Sub-clause (i). However, the proviso (i) to Clause (b) of Sub-section (1) of Section 147 says that a policy shall not be required to cover liability in respect of 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 Act if the employee is such as described in Sub-clauses (a) or (b) or (c). The effect of this proviso is that if an insurance policy covers the liability under the Workmen's Act in respect of death of or bodily injury to any such employee as is described in Sub-clauses (a) or (b) or (c) of proviso (i) to Section 147(1)(b), it will be a valid policy and would comply with the requirements of Chapter XI of the Act.
10. Sub-section (5) of Section 147 of the Act, however, provides that notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under Section 147 of the Act shall be liable to indemnify a 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 classes of persons. Thus, if the policy of insurance covers any liability in addition to the liability under Section 147(1) of the Act, the insurer will be liable to indemnify the insured in case of any liability not because of the provisions of Sub-section (1) of Section 147 but because of the terms and conditions of contract of insurance between the insurer and the insured. Therefore, if the contract of insurance provides for a liability to a passenger or to an employee other than the liabilities provided under Sub-section (1) of Section 147 of the Act, the insurer would be liable to indemnify the insured against such liability.
11. This position of law has been stated by us in our judgment in Smt. Sunita Lokhande and Ors. v. The New India Assurance Co. Limited and Ors. (supra). Paragraph 12 of our judgment in Smt. Sunita Lokhande and others (supra) is quoted herein below:
12. This is not to say that the owner of the vehicle would not be entitled to any loss suffered in an accident from the insurer. All that we have held is that a policy only satisfying the requirements of Section 147 of the Act does not cover such loss suffered by the owner of the vehicle. But Sub-section (5) of Section 147 of the Act makes it clear that a policy of insurance may contain terms and conditions under which the owner can claim loss suffered by him in the accident from the insurer notwithstanding anything contained in any law for the time being.
12. Regarding the Division Bench judgment in Sarvanlal and Ors. (supra), we find that the Division Bench has relied on not only the judgment of the Full Bench in Jugal Kishore (supra) but also Clause (vii) of Rule 97 of the Motor Vehicles Rules, 1994 (for short 'the Rules of 1994') made by the State of M.P. So far as the judgment of the Full Bench in Jugal Kishore (supra) is concerned, we have already clarified the position of law. Regarding Clause (7) of Rule 97 of the Rules of 1994, we find that the Rules of 1994 have been made by the State of M.P. under Section 96 of the Act and in particular Sub-section (2)(xxxi) which provides that without prejudice to the generality of the foregoing power, rules under Section 96 may be made with respect to the carriage of persons other than the driver in goods carriages. Section 96 is placed in Chapter-V of the Act which relates to 'Control of Transport Vehicles'. Sub-section (1) of Section 96 of the Act states that the State Government may make rules for the purpose of carrying into effect the provisions of Chapter-V. Hence, Rule 97 of the Rules of 1994 has been made by the State Government to give effect to the provisions of Chapter-V of the Act, which, as we have seen, relates to 'control of transport vehicles'. These rules obviously cannot have a bearing in interpreting the provisions of Chapter-XI of the Act including Sections 145 and 147 of the Act. As we have indicated above, the liability of the insurer to indemnify the insured in respect of death or bodily injury suffered by a passenger or an employee would be covered by the provisions of Section 147 of the Act or the terms and conditions of the insurance policy. Thus, the decision of the Division Bench in Sarwan Lal (supra) in so far as it relies on Rule 97 of the Rules of 1994 to hold the insurer liable for death or bodily injury suffered by the passenger does not lay down the correct law.
Since we have answered the reference, the appeal will now be listed before the appropriate Division Bench for hearing and disposal in accordance with law.