Rajasthan High Court - Jodhpur
Smt. Phena Devi And Ors vs Mukesh And Anr on 24 July, 2024
Author: Nupur Bhati
Bench: Nupur Bhati
[2024:RJ-JD:28624]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Misc. Appeal No. 1414/2017
1. Smt. Phena Devi, Widow Of Late Shri Ram Chandra,
2. Pooja, Daughter Of Late Shri Ram Chandra,
3. Bhawna, Daughter Of Late Shri Ram Chandra,
4. Jitendra, Son Of Late Shri Ram Chandra, Appellant Nos. 2
To 4 Minor, Thorugh Their Natural Guardian, Mother Smt.
Phena Devi, Appellant No. 1., Residents Of Village Bijpur,
Tehsil Sojat, District Pali.
----Appellants
Versus
1. Mukesh, Son Of Shri Ota Ram Jat, Resident Of Jaton Ka
Bas, Village Kanawas, Tehsil Sojat, District Pali. ... Owner
2. National Insurance Company Limited, Through Its
Regional Office, Sun Tower, Pal Road, Jodhpur. Insurer
----Respondents
For Appellant(s) : Mr. Anil Bhandari
Mr. Dinesh Choudhary
For Respondent(s) : Mr. Anil Kaushik
HON'BLE DR. JUSTICE NUPUR BHATI
ORDER
Reportable Reserved on- 08/07/2024 Pronounced on- 24/07/2024
1. This misc. appeal under Section 173 of the Motor Vehicle Act, 1988 ('MV Act') has been filed by the appellants/claimants assailing the award and judgment passed by the Motor Accident Claims Tribunal, Pali ('Tribunal') vide order dated 11.04.2017 in MAC Case No. 191/2015 whereby the learned Tribunal has rejected the claim filed by the appellants/claimants under Section 163A of the MV Act.
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2. Briefly stated, the facts of the case are that the appellant was an employee of respondent no. 1 and while complying with instructions given by the employer on 19.03.2015, was going on a motor cycle with the no. RJ-22-SW-7210, when his motorcycle slipped and he sustained head injury leading to his death on 20.03.2015. Thereafter, the appellant filed a claim petition before the learned Tribunal and in response, respondent no. 1 and 2 filed their reply. On behalf of the appellants, AW 1, Phena Devi, wife of the deceased appeared in evidence and her statements were recorded on behalf of the non-claimants NAW 1, Mr. Rajiv Jain and NAW 2, Mr. Mukesh appeared in evidence and their statements were recorded.
3. After hearing the parties, learned Tribunal framed four issues including:
(a) आया मत ृ क रामचन्द्र ने दिनांक 19.03.2015 को समय शाम के करीब 06.00 बजे शनिधाम मंदिर नेशनल हाईवे नंबर 14 पर वाहन मोटरसाईकिल संख्या आर.जे.-22-एस.डब्ल्यू.-7210 को उसके स्वामी अप्रार्थी सं. एक मुकेश के नियोजन एवं नियंत्रण में रहते हुए काम में व उपयोग में लिये जाने के दौरान दर्घ ु टना कारित हुई, जिसमें उक्त वाहन मोटरसाईकिल पर सवार मत ृ क रामचन्द्र के चोटे कारित होकर उनसे उसकी मत्ृ यु हुई ? -प्रार्थीगण-
(b) आया अप्रार्थी सं. दो बीमा कंपनी अपने जवाब प्रार्थनापत्र के प्रारम्भिक विधिक आपत्तियों के आधार पर प्रस्तुत इस प्रतिकर प्राप्ति के प्रार्थना पत्र में प्रार्थीगण को प्रतिकर अदायगी के अपने दायित्व से मुक्त होने योग्य है ? - अप्रार्थी सं.दो-
(c) आया प्रार्थीगण प्रतिकर प्राप्ति हे तु प्रस्तुत इस प्रार्थना पत्र में चाही गई प्रतिकर राशि या अन्य कोई न्यायसंगत प्रतिकर राशि अप्रार्थीगण से प्राप्ति के अधिकारी है , यदि हों तो किस कदर? -प्रार्थीगण-
(d) अनुतोष ?
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4. In light of the issues raised, learned Tribunal observed that
(a) The appellant/claimant sustained head injury in the accident which occurred on 19.03.2015 during the course of his employment under respondent no. 1, on account of which he died on 20.03.2015 and thus, this issue had been decided against respondent no. 1.
(b) The preliminary objection made by the respondent no. 2 had been allowed since, a bare perusal of the Insurance policy revealed that the insurance policy had been issued in respect to the motorcycle and not the person who had been driving the motorcycle. It was also observed that, since the claimant was authorized to drive the said vehicle, he had stepped into the shoes of the owner and that, the owner and recipient are the same person, the claimant cannot be entitled to compensation and therefore, this issue had been decided against the appellant/claimant.
(c) In light of the insurance policy, it was found that since there was no premium charged against the driver of the vehicle and therefore, the appellant/claimant is not entitled to any compensation.
5. Thus, aggrieved of the judgment and award passed by the learned Tribunal dated 11.04.2017 whereby the learned Tribunal has dismissed the claim filed by the claimants under Section 163- A of the MV Act, the appellants/claimants have preferred this appeal seeking the compensation on account of death caused during the course of employment under respondent no. 1.
6. Learned counsel for the appellants/claimants submitted that the said insurance policy (Exb. N.A. 1) is a "Two Wheeler Package (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (4 of 22) [CMA-1414/2017] Policy" wherein the clause 1(i) under Section II- Liability of the Third Parties, clearly specifies the liability of the insurance company even in the case of death or bodily injury caused to any person including the occupants in the insured vehicle and in the present case, the deceased was traveling by the insured vehicle when he sustained injury leading to his death, therefore the learned Tribunal had erred in exonerating the insurance company on the ground that the liability of respondent no. 2, insurance company does not extend to the person driving the vehicle insured.
7. Learned counsel for the appellants/claimants also submitted that the learned Tribunal erred in rejecting the claim on the ground that the claimant and recipient are the same person in light of the judgment passed by the Hon'ble Apex Court in the case of Ningamma & Anr. v. United India Insurance Company Limited reported in (2009) 13 SCC 710, wherein it was observed that when the employee had been authorized by the owner to drive the vehicle, he steps into the shoes of the owner and therefore, no compensation can be claimed where the owner and the recipient are the same person, because, the owner in the present case is a company and although company being a legal person, the vehicle being insured in the name of the company, however the said vehicle is to be driven by the employee only. He also placed reliance upon the judgment passed by the Coordinate Bench of this Court in the case of Manager, M/s JK Trust Gramin Vikar Yojana, Jodhpur v. ICICI Lombard General Insurance Company Ltd. & Anr. [S.B. Civil Misc Appeal No. 1757 of 2013, decided on 19.01.2014].
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8. Learned counsel for the appellants also submitted that the deceased had been the employee of respondent no. 1 and when the accident took place, the deceased had been acting in accordance with the instructions of respondent no. 1, therefore, the said accident which took place on 19.03.2015 wherein the deceased suffered head injury as a result of which he died, had occurred during the course of employment under respondent no. 1, employer. He further relied on the judgment passed by Hon'ble Apex Court in the case of Ramkhiladi and Ors. v. The United India Insurance Company and Ors. reported in AIR 2020 SC 527, wherein it has been observed that claim under Section 163A of the MV Act is based on the principle of 'No Fault Liability' wherein the claimant need not plead or establish the negligence of the owner of the vehicle concerned, however, the deceased has to be a third party, and not a borrower who steps into the shoes of the owner, but contrary to this, the parties are governed by the contract of insurance and under the contract of insurance, the liability of the insurance company has to be qua third party only. He also submitted that in light of the said observation, the Hon'ble Apex Court in the case of Ramkhiladi (supra.) upheld that an insurance policy covered the liability incurred by the insured in respect of death or bodily injury to any person carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle. The relevant paras of the judgment is reproduced as under:
"5.4. An identical question came to be considered by this Court in the case of Ningamma (supra). In that case, the (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (6 of 22) [CMA-1414/2017] deceased was driving a motorcycle which was borrowed from its real owner and met with an accident by dashing against a bullock cart i.e. without involving any other vehicle. The claim petition was filed Under Section 163A of the Act by the legal representatives of the deceased against the real owner of the motorcycle which was being driven by the deceased. To that, this Court has observed and held that since the deceased has stepped into the shoes of the owner of the vehicle, Section 163A of the Act cannot apply wherein the owner of the vehicle himself is involved. Consequently, it was held that the legal representatives of the deceased could not have claimed the compensation Under Section 163A of the Act. Therefore, as such, in the present case, the claimants could have even claimed the compensation and/or filed the claim petition Under Section 163A of the Act against the driver, owner and insurance company of the offending vehicle i.e. motorcycle bearing registration No. RJ 29 2M 9223, being a third party with respect to the offending vehicle. However, no claim Under Section 163A was filed against the driver, owner and/or insurance company of the motorcycle bearing registration No. RJ 29 2M 9223. It is an admitted position that the claim Under Section 163A of the Act was only against the owner and the insurance company of the motorcycle bearing registration No. RJ 02 SA 7811 which was borrowed by the deceased from the opponent-owner Bhagwan Sahay. Therefore, applying the law laid down by this Court in the case of Ningamma (supra), and as the deceased has stepped into the shoes of the owner of the vehicle bearing registration No. RJ 02 SA 7811, as rightly held by the High Court, the claim petition Under Section 163A of the Act against the owner and insurance company of the vehicle bearing registration No. RJ 02 SA 7811 shall not be maintainable. 5.5. It is true that, in a claim Under Section 163A of the Act, there is no need for the claimants to plead or establish the negligence and/or that the death in respect of which the claim petition is sought to be established was due to wrongful act, neglect or default of the owner of the vehicle concerned. It is also true that the claim petition Under (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (7 of 22) [CMA-1414/2017] Section 163A of the Act is based on the principle of no fault liability. However, at the same time, the deceased has to be a third party and cannot maintain a claim Under Section 163A of the Act against the owner/insurer of the vehicle which is borrowed by him as he will be in the shoes of the owner and he cannot maintain a claim Under Section 163A of the Act against the owner and insurer of the vehicle bearing registration No. RJ 02 SA 7811. In the present case, the parties are governed by the contract of insurance and under the contract of insurance the liability of the insurance company would be qua third party only. In the present case, as observed hereinabove, the deceased cannot be said to be a third party with respect to the insured vehicle bearing registration No. RJ 02 SA 7811. There cannot be any dispute that the liability of the insurance company would be as per the terms and conditions of the contract of insurance. As held by this Court in the case of Dhanraj (supra), an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorized 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 the said decision, it is further held by this Court that Section 147 does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle."
9. Per contra, learned counsel for the respondent no. 2 submitted that though the deceased was an employee of respondent no.1, he was not appointed as a driver or he was not engaged in driving by the employer, respondent no. 1, employer. He further submitted that there are two types of premium charged, one for the vehicle insured and the other for the driver of the vehicle, however a bare perusal of the Exb.4, the Schedule for Premium mentions only one type of premium which has been (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (8 of 22) [CMA-1414/2017] charged for the vehicle insured and therefore, in the absence of the premium charged for the driver of the vehicle, respondent no. 2, company cannot be held liable to pay the compensation.
10. Learned counsel for the respondents also submitted that the deceased is not a third party and therefore, cannot claim compensation as when he had taken the vehicle as a borrower, he had stepped into the shoes of the owner of the vehicle and the owner and recipient of the compensation cannot be the same person. He further relied on the judgment passed by the Hon'ble Apex Court in the case of Ningamma (supra.). The relevant paras of the judgment are reproduced as under:
"21. In our considered opinion, the ratio of the decision in Oriental Insurance Co. Ltd. case is clearly applicable to the facts of the present case. In the present case, the deceased was not the owner of the motorbike in question. He borrowed the said motorbike from its real owner. The deceased cannot be held to be an employee of the owner of the motorbike although he was authorised to drive the said vehicle by its owner and, therefore, he would step into the shoes of the owner of the motorbike. We have already extracted Section 163A of the MVA hereinbefore. A bare perusal of the said provision would make it explicitly clear that persons like the deceased in the present case would step into the shoes of the owner of the vehicle.
22. In a case wherein the victim died or where he was permanently disabled due to an accident arising out of the aforesaid motor vehicle in that event the liability to make payment of the compensation is on the insurance company or the owner, as thee case may be as provided under Section 163A. But if it is proved that the driver is the owner of the motor vehicle, in that case the owner could not himself be a recipient of compensation as the liability to pay the same is on him. This proposition is absolutely clear on a regarding of Section 163A of the MVA. Accordingly, the legal (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (9 of 22) [CMA-1414/2017] representatives of the deceased who have stepped into the shoes of the owner of the motor vehicle could not have claimed compensation under Section 163A of the MVA."
11. Learned counsel for the respondents also submitted that in the absence of premium being charged for the person other than driver or any person who is not covered under the policy, the insurance company is not liable to pay the compensation. He further relied upon the judgment passed by the Hon'ble Apex Court in the case of Manager, National Insurance Co. Ltd. v. Saju P. Paul and Anr. reported in AIR 2013 SC 1064. The relevant paras is reproduced as under:
"16. In the present case, Section 147 as originally existed in 1988 Act is applicable and, accordingly, the judgment of this Court in Asha Rani MANU/SC/1105/2002 : (2003) 2 SCC 223 is fully attracted. The High Court was clearly in error in reviewing its judgment and order delivered on 09.11.2010 in review petition filed by the claimant by applying Section 147(1)(b)(i). The High Court committed grave error in holding that Section 147(1)(b)(i) takes within its fold any liability which may be incurred by the insurer in respect of the death or bodily injury to any person. The High Court also erred in holding that the claimant was travelling in the vehicle in the course of his employment since he was a spare driver in the vehicle although he was not driving the vehicle at the relevant time but he was directed to go to the worksite by his employer. The High Court erroneously assumed that the claimant died in the course of employment and overlooked the fact that the claimant was not in any manner engaged on the vehicle that met with an accident but he was employed as a driver in another vehicle owned by M/s. P.L. Construction Company. The insured (owner of the vehicle) got insurance cover in respect of the subject goods vehicle for driver and cleaner only and not for any other employee. There is no insurance cover for the spare driver in the policy. As a matter of law, the claimant (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (10 of 22) [CMA-1414/2017] did not cease to be a gratuitous passenger though he claimed that he was a spare driver. The insured had paid premium for one driver and one cleaner and, therefore, second driver or for that purpose 'spare driver' was not covered under the policy.
17. The High Court misconstrued the proviso following Sub- section (1) of Section 147 of the 1988 Act. What is contemplated by proviso to Section 147 (1) is that the policy shall not be required to cover liability in respect of death or bodily injury sustained by an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act; 1923. The claimant was admittedly not driving the vehicle nor he was engaged in driving the said vehicle. Merely because he was travelling in a cabin would not make his case different from any other gratuitous passenger."
12. Learned counsel for the respondents further submitted that even under Section 147 of the MV Act, unless it is a liability under the Workmen's Compensation Act, 1923 in respect of a driver, conductor or the one who is carried in a public service vehicle as owner of the goods or his representative in a goods vehicle, the insurance policy need not cover the liability in respect of death or injury arising out of and in the course of the employment of an employee of the person insured by the policy, and in the present case, the deceased did not fall under any of these categories. He also placed reliance upon the judgment of Hon'ble Apex Court in the case of the Oriental Insurance Company Limited v. Meena Variyal and Ors. reported in AIR 2007 SC 1609. The relevant paras of the judgment are reproduced as under:
"10. Chapter XI of the Act bears a heading, "Insurance of Motor Vehicles against third party risks". The definition of "third party" is an inclusive one since Section 145(g) only (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (11 of 22) [CMA-1414/2017] indicates that "third party" includes the Government. It is Section 146 that makes it obligatory for an insurance to be taken out before a motor vehicle could be used on the road. The heading of that Section itself is "Necessity for insurance against third party risk". No doubt, the marginal heading may not be conclusive. It is Section 147 that sets out the requirement of policies and limits of liability. It is provided therein that in order to comply with the requirements of Chapter XI of the Act, a policy of insurance must be a policy which is issued by an authorised insurer; or 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 the owner in respect of the death of or bodily injury or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place. With effect from 14.11.1994, injury to the owner of goods or his authorised representative carried in the vehicle was also added. The policy had to cover 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. Then, as per the proviso, the policy shall not be required 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 in respect of the death of, or bodily injury to, an employee engaged in driving the vehicle, or who is a conductor, if it is a public service vehicle or an employee being carried in a goods vehicle or to cover any contractual liability. Sub-section (2) only sets down the limits of the policy.
As we understand Section 147(1) of the Act, an insurance policy thereunder need not cover the liability in respect of death or injury arising out of and in the course of the employment of an employee of the person insured by the policy, unless it be a liability arising under the Workmen's Compensation Act, 1923 in respect of a driver, also the conductor, in the case of a public service vehicle, and the (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (12 of 22) [CMA-1414/2017] one carried in the vehicle as owner of the goods or his representative, if it is a goods vehicle. It is provided that the policy also shall not be required to cover any contractual liability. Uninfluenced by authorities, we find no difficulty in understanding this provision as one providing that the policy must insure an owner against any liability to a third party caused by or arising out of the use of the vehicle in a public place, and against death or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of vehicle in a public place. The proviso clarifies that the policy shall not be required to cover an employee of the insured in respect of bodily injury or death arising out of and in the course of his employment. Then, an exception is provided to the last forgoing to the effect that the policy must cover a liability arising under the Workmen's Compensation Act, 1923 in respect of the death or bodily injury to an employee who is engaged in driving the vehicle or who serves as a conductor in a public service vehicle or an employee who travels in the vehicle of the employer carrying goods if it is a goods carriage. Section 149(1), which casts an obligation on an insurer to satisfy an award, also speaks only of award in respect of such liability as is required to be covered by a policy under Clause (h) of Sub- section (1) of Section 147, (being a liability covered by the terms of the policy). This provision cannot therefore be used to enlarge the liability if it does not exist in terms of Section 147 of the Act."
12. Heard learned counsel for the parties, perused material available on record and judgments cited at the Bar.
13. This Court observes that the Insurance Policy (Exb.4) clearly prescribes the type of policy that insures the vehicle, i.e. it is a 'TWO-WHEELER PACKAGE POLICY' and thus it is different from the 'Act Policy' which was the subject matter in the cases relied upon by the respondents. The difference between an 'Act Policy' and a 'Comprehensive/Package Policy' has been also observed by (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (13 of 22) [CMA-1414/2017] the Hon'ble Apex Court in the case of National Insurance Company Ltd. v. Balakrishnan and Ors. reported in AIR 2013 SC 473, wherein it was held that, contrary to the 'Act Policy;' which does not cover a third party risk of an occupant under a Comprehensive/Package Policy, the liability has to be fastened upon the insurer. The relevant paras of the judgment read as under:
"21. In view of the aforesaid factual position, there is no scintilla of doubt that a "comprehensive/package policy"
would cover the liability of the insurer for payment of compensation for the occupant in a car. There is no cavil that an "Act Policy" stands on a different footing from a "Comprehensive/Package Policy". As the circulars have made the position very clear and the IRDA, which is presently the statutory authority, has commanded the insurance companies stating that a "Comprehensive/Package Policy" covers the liability, there cannot be any dispute in that regard. We may hasten to clarify that the earlier pronouncements were rendered in respect of the "Act Policy" which admittedly cannot cover a third party risk of an occupant in a car. But, if the policy is a "Comprehensive/Package Policy", the liability would be covered. These aspects were not noticed in the case of Bhagyalakshmi (supra) and, therefore, the matter was referred to a larger Bench. We are disposed to think that there is no necessity to refer the present matter to a larger Bench as the IRDA, which is presently the statutory authority, has clarified the position by issuing circulars which have been reproduced in the judgment by the Delhi High Court and we have also reproduced the same.
22. In view of the aforesaid legal position, the question that emerges for consideration is whether in the case at hand, the policy is an "Act Policy" or "Comprehensive/Package Policy". There has been no discussion either by the tribunal or the High Court in this (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (14 of 22) [CMA-1414/2017] regard. True it is, before us, Annexure P-1 has been filed which is a policy issued by the insurer. It only mentions the policy to be a "comprehensive policy" but we are inclined to think that there has to be a scanning of the terms of the entire policy to arrive at the conclusion whether it is really a "package policy" to cover the liability of an occupant in a car.
23. In view of the aforesaid analysis, we think it apposite to set aside the finding of the High Court and the tribunal as regards the liability of the insurer and remit the matter to the tribunal to scrutinize the policy in a proper perspective and, if necessary, by taking additional evidence and if the conclusion is arrived at that the policy in question is a "Comprehensive/Package Policy", the liability would be fastened on the insurer. As far as other findings recorded by the tribunal and affirmed by the High Court are concerned, they remain undisturbed."
14. This Court also takes into consideration the judgment passed by the Coordinate Bench of this Court in the case of The New India Assurance Company Ltd. v. Smt. Saroj Kejriwal, wherein the appeal filed by the insurance company for exonerating the liability was dismissed to the extent of imposing the liability of the insurance company in a package/comprehensive policy for the death or injury caused to even a third party, in the light of the judgment passed by the Hon'ble Apex Court in the case Balakrishnan (supra.). The relevant paras of the judgment passed by the Coordinate Bench of this Court in the case of Saroj Kejriwal (supra.) is reproduced as under:
"The Hon'ble Apex Court in the case of Balakrishnan (supra) has dealt with the identical issue involved in this appeal in para No. 19 as under:-
"It is extremely important to note here that till 31 st December, 2006 the Tariff Advisory Committee and, thereafter, from 1st January, 2007, IRDA functioned as the statutory regulatory authorities and they are entitled to fix (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (15 of 22) [CMA-1414/2017] the tariff as well as the terms and conditions of the policies by all insurance companies. The High Court had issued notice to the Tariff Advisory Committee and the IRDA to explain the factual position as regards the liability of the insurance companies in respect of an occupant in a private car under the "comprehensive/ package policy". Before the High Court, the Competent Authority of IRDA had stated that on 2nd June, 1986, the Tariff Advisory Committee had issued instructions to all the insurance companies to cover the pillion rider of a scooter/motorcycle under the "comprehensive policy" and the said position continues to be in vogue till date. It had also admitted that the "comprehensive policy" is presently called a "package policy". It is the admitted position, as the decision would show, the earlier circulars dated 18th March, 1978 and 2nd June, 1986 continue to be valid and effective and all insurance companies are bound to pay the compensation in respect of the liability towards an occupant in a car under the "comprehensive/package policy" irrespective of the terms and conditions contained in the policy. The competent authority of the IRDA was also examined before the High Court who stated that the circulars dated 18th March, 1978 and 2nd June, 1986 of the Tariff Advisory Committee were incorporated in the Indian Motor Tariff effective from 1st July, 2002 and they continue to be operative and binding on the insurance companies. Because of the aforesaid factual position, the circulars dated 16th November 2009 and 3rd December, 2009, that have been reproduced hereinabove, were issued."
The aforesaid issue has been set at rest by the Hon'ble Apex Court in the above case. Thus, this Court cannot take any other view than the view already taken by the Hon'Ble Apex Court in the case of Balakrishnan (supra)."
15. This Court also finds that although the Insurance Policy (Exb. N.A. 1) clearly carves out an exception in its clause 1.(i) under Section II-Liability to Third Parties that, in compliance with the provisions of the MV Act, the company shall not be liable in cases where such death or injury cases have arisen out of and in the course of employment of such person by the insured. The relevant para of the Insurance Policy is reproduced as under:
"SECTION II - LIABILITY TO THIRD PARTIES ...
(i) death of or bodily injury to any person including occupants carried in the insured vehicle (provided such (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (16 of 22) [CMA-1414/2017] occupants are not carried for hire or reward) but except so far as it is necessary to meet the requirements of Motor Vehicles Act, the Company shall not be liable where such death or injury arises out of and in the course of the employment of such person by the insured,"
However, it is pertinent to note that in the case of Balakrishnan (supra.), the same condition has been mentioned in the policy in question, verbatim and the Hon'ble Apex Court upheld that the said provisions under the Policy were in line of the Circulars earlier issued by the Tariff Advisory Committee ('TAC') on the subject, including the Circular MOT/GEN/10 dated 02.06.1986 regarding the pillion rider carried on two-wheeler) to be effective from the date of the circular. The Hon'ble Apex Court further observed that the said circulars had observed that the insured liability with respect to occupant(s) carried in a private car and pillion rider carried on a two-wheeler is covered under Standard Package Policy. Thus, in light of the judgment passed by the Hon'ble Apex Court in the case of Balakrishnan (supra.), there remains no iota of doubt, and the insurance companies are bound to pay the liability towards an occupant in a car or pillion rider in a two- wheeler under comprehensive/package policies. The relevant paras of the judgment passed by the Hon'ble Apex Court in the case of Balakrishnan (supra.) reads as under:
"17. At this stage, it is apposite to note that when the decision in Bhagyalakshmi (supra) was rendered, a decision of High Court of Delhi dealing with the view of the Tariff Advisory Committee in respect of "comprehensive/package policy" had not come into the field. We think it apt to refer to the same as it deals with certain factual position which (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (17 of 22) [CMA-1414/2017] can be of assistance. The High Court of Delhi in Yashpal Luthra and Anr. v. United India Insurance Co. Ltd. and Anr. MANU/DE/3174/2009 : 2011 ACJ 1415, after recording the evidence of the competent authority of Tariff Advisory Committee (TAC) and Insurance Regulatory and Development Authority (IRDA), reproduced a circular dated
16.11.2009 issued by IRDA to CEOs of all the Insurance Companies restating the factual position relating to the liability of Insurance companies in respect of a pillion rider on a two-wheeler and occupants in a private car under the comprehensive/package policy. The relevant portion of the circular which has been reproduced by the High Court is as follows:
xxxx Insurers' attention is drawn to wordings of Section (II) 1
(ii) of Standard Motor Package Policy (also called Comprehensive Policy) for private car and twowheeler under the (erstwhile) India Motor Tariff. 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 Motor Vehicles Act, the Company shall not be liable where such death or injury arises out of and in 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 18th March, 1978 (regarding occupants carried in Private Car) effective from 25th March, 1977.
(ii) MOT/GEN/10 dated 2nd June, 1986 (regarding pillion riders in a two-wheeler) effective from the date of the circular. The above circulars make it clear that the insured liability in respect of occupant(s) carried in a private car and pillion rider carried on twowheeler is covered under the Standard Motor Package Policy. A copy each of the above circulars is enclosed for ready reference.
xxxx xxxx (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (18 of 22) [CMA-1414/2017]
19. It is extremely important to note here that till 31st December, 2006 the Tariff Advisory Committee and, thereafter, from 1st January, 2007, IRDA functioned as the statutory regulatory authorities and they are entitled to fix the tariff as well as the terms and conditions of the policies by all insurance companies. The High Court had issued notice to the Tariff Advisory Committee and the IRDA to explain the factual position as regards the liability of the insurance companies in respect of an occupant in a private car under the "comprehensive/package policy". Before the High Court, the Competent Authority of IRDA had stated that on 2nd June, 1986, the Tariff Advisory Committee had issued instructions to all the insurance companies to cover the pillion rider of a scooter/motorcycle under the "comprehensive policy" and the said position continues to be in vogue till date. It had also admitted that the "comprehensive policy" is presently called a "package policy". It is the admitted position, as the decision would show, the earlier circulars dated 18th March, 1978 and 2nd June, 1986 continue to be valid and effective and all insurance companies are bound to pay the compensation in respect of the liability towards an occupant in a car under the "comprehensive/package policy" irrespective of the terms and conditions contained in the policy. The competent authority of the IRDA was also examined before the High Court who stated that the circulars dated 18th March, 1978 and 2nd June, 1986 of the Tariff Advisory Committee were incorporated in the Indian Motor Tariff effective from 1st July, 2002 and they continue to be operative and binding on the insurance companies. Because of the aforesaid factual position, the circulars dated 16th November 2009 and 3rd December, 2009, that have been reproduced hereinabove, were issued."
16. Upon perusal of the Insurance Policy (Exb. N.A. 1), clause 3 of the Section II- 'Liability to Third Parties', it has been clearly stipulated that the Company will indemnify any driver who is driving the vehicle on the insured's order or with insured's (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (19 of 22) [CMA-1414/2017] permission, provided that such driver shall as though he/she was the insured, observe, fulfill and be subject to the terms exceptions and conditions of this Policy in so far as they apply. In the present case too, the deceased had taken the vehicle for the purpose of the firm, M/s Mukesh Trading and was driving the said vehicle when he met with an accident and succumbed to his injuries. Thus, taking into consideration the clear stipulations in the Insurance Policy (Exb. N.A.1), the insurance company could not be exonerated from its liability. The relevant provision of the Insurance Policy (Exb. N.A.1) is reproduced as under:
"SECTION II - LIABILITY TO THIRD PARTIES ...
3. In terms of and subject to the limitations of the indemnity granted by this section to the insured, the Company will indemnify any driver who is driving the vehicle on the insured's order or with insured's permission provided that such driver shall as though he/she was the insured observe fulfill and be subject to the terms exceptions and conditions of this Policy in so far as they apply."
17. This Court further finds that the submission of learned counsel for the respondents that the deceased is not covered under any of the three categories mentioned under Proviso to Section 147(1) limits the liability of the Insurance Policy as upheld in the case of Meena Variyal (supra.) is devoid of merit, since judgments cited by the learned counsel for the respondents pertain to the matters wherein "Act Policy" was existing, however the present case concerns a "Package Policy" wherein the Hon'ble (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (20 of 22) [CMA-1414/2017] Apex Court had held a clear stance that the insurance company is liable to pay compensation to the occupant in a car and a pillion rider on a two-wheeler. It is also seen that the judgment passed by the Coordinate Bench of this Court in the case of Manager, M/ s JK Trust (supra.) is not applicable to the present case, since in the M/s JK Trust (supra.), the vehicle was insured in the name of the company which is not the case here.
18. Thus, in the light of the aforementioned provisions and the judgments, it is seen that the deceased is a third party who was not engaged by the respondent no. 1, employer for the purpose of driving the vehicle, or engaged as conductor in a public vehicle or was being carried away in a goods vehicle. The deceased was merely an employee of respondent no. 1, proprietor of the firm, M/s Mukesh Trading who took the vehicle in order to complete some work related to the firm, when he met with an accident and succumbed to his injuries. It is also seen from the Insurance Policy (Exb. N.A.1), that under such circumstances, where the driver was driving the vehicle under insured's order or with insured's permission, the Insurance Company has to indemnify the driver. Furthermore, the present case is squarely covered by the judgment passed by the Hon'ble Apex Court in the case of Balakrishnan (supra.), wherein it has been categorically held that the Package/Comprehensive Policy would cover third party risks also and therefore, in the light of the said judgment, the learned Tribunal erred in exonerating the respondent no. 2, insurance company from its liability when the vehicle had been insured under Package/Comprehensive Policy. (Downloaded on 26/07/2024 at 09:44:24 PM) [2024:RJ-JD:28624] (21 of 22) [CMA-1414/2017]
19. Therefore, upon perusal of the Insurance Policy (Exb.3) and in the light of the judgment passed by the Hon'ble Apex Court in the case of Balakrishnan (supra.), reiterated by the Coordinate Bench of this Court in the case of Saroj Kejriwal (supra.), this Court deems it fit to impose the liability of death of the deceased, Late Sh. Ram Chandra upon the insurance company, and imposes a liability of Rs. 8,93,280/-, under the following heads, in the light of the judgments passed by the Hon'ble Apex Court in the case of National Insurance Company Limited. Versus Pranay Sethi And Others reported in 2017 SCC Online SC 1270 and Sarla Verma v. Delhi Transport Corp.& Anr. reported in AIR 2009 SC 3104:
Income of the deceased (as accepted Rs. 3,300/- per month by respondent no. 2, employer in his i.e. Rs. 39,600/- per annum statement, N.A.W-2) Deduction of personal expenses by Rs. 39,600 ÷ 4 = Rs. 9,900 1/4th (4 family members including a wife, two daughters and a son) Income after personal deductions Rs. 39,600-9,900= Rs. 29,700 per annum Applying future prospects of income 40% of Rs. 29,700 = Rs. 11,880 per at 40% annum Income now Rs. 29,700 + Rs. 11,880 = Rs. 41,580 per annum Applying a multiplier of 16 (age of Rs. 41,580 x 16 = Rs. 6,65,280/- the deceased at the time of accident was 34 years) Therefore, the income of the deceased as calculated in the light of the judgments passed by the Hon'ble Apex Court in the case of Pranay Sethi (supra.) and Sarla Verma (supra.), is Rs.
6,65,280/- per annum.
Heads Awarded by the Court
Calculated Income of the Rs. 6,65,280/-
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deceased
Loss of Estate Rs. 18,000/-
Loss of Consortium (wife and 3 Rs. 48,000/- x 4 = Rs.
children) 1,92,000/-
Funeral Expenses Rs. 18,000/-
Total Rs. 8,93,280/-
20. Thus, it is held that the appellants/claimants are entitled to get the award of Rs. 8,93,280/- from the respondent no. 2, insurance company, which shall be payable along with the interest @ 6% per annum from the date of filing the petition till actual payment is made, failing which the same shall carry interest @ 7.5% per annum for the subsequent period (i.e. after three months from today) till actual payment is made.
21. The misc. appeal is allowed in part. All pending applications also stand disposed of. Record of the Tribunal be sent back forthwith.
(DR.NUPUR BHATI),J 128-ajayS/-
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