Karnataka High Court
The Divisional Office, vs Neelavva W/O Shivanand Masalannavar, on 17 December, 2018
Author: B.V. Nagarathna
Bench: B.V. Nagarathna
1
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 17 T H DAY OF DECEMBER, 2018
PRESENT
THE HON'BLE MRS. JUSTICE B.V. NAGARATHNA
AND
THE HON'BLE MR. JUSTICE BELLUNKE A.S.
M.F.A. NO.23571 OF 2012 (MV)
BETWEEN
THE DIVISIONAL OFFICE,
UNITED INDIA INSURANCE CO., LTD.,
BIJAPUR,
REP. THROUGH ITS
DIVIONAL OFFICE,
LEA COMPLEX, DHARWAD.
..... APPELLANT
(BY SRI NAGANGOUDA R KUPPELUR, ADV. )
AND
1. NEELAVVA W/O SHIVANAND MASALANNAVAR,
AGE: 33 YEARS, OCC: MASON,
2. MADHU D/O SHIVANAND MASALANNAVAR,
AGE: 15 YEARS, OCC: STUDENT,
3. MALATI D/O SHIVANAND MASALANNAVAR,
AGE: 13 YEARS, OCC: STUDENT,
4. VANDANA D/O SHIVANAND MASALANNAVAR,
AGE: 10 YEARS, OCC: STUDENT,
RESPONDENT NO.2 TO 4 BEING MINORS
REP. BY THEIR MOTHER RESPONDENT NO.1
2
ALL ARE R/O. KESHWAPUR, HUBLI.
5. SIDDAPPA A KATAGI,
AGE: MAJOR, OCC: BUSINESS,
R/O: RAM MANDIR ROAD, BIJAPUR.
(OWNER OF CAR KA-02/M-7671)
..... RESPONDENTS
(BY SRI NAVEEN CHATRAD, ADV. FOR
SRI MAHESH WODEYAR, ADV. FOR R-1,
R-2 TO R-4 MINORS REP. BY R-1,
R-5 HELD SUFFICIENT)
THIS MFA IS FILED U/SEC.173(1) OF MV ACT,
AGAINST THE JUDGMENT AND AWARD DTD:25-09-2009
PASSED IN MVC.NO.738/2004 ON THE FILE OF THE II-
ADDL. CIVIL JUDGE (SR.DN) AND MEMBER, MACT, HUBLI,
AWARDING THE COMPENSATION OF RS.4,57,000/- WITH
INTEREST AT THE RATE OF 6% P.A., FROM THE DATE OF
PETITION TILL REALISATION.
THIS APPEAL COMING ON FOR ADMISSION THIS
DAY, NAGARATHNA, J., DELIVERED THE FOLLOWING:
J U D G M E N T
Though this appeal is listed for admission, with the consent of learned counsel on both sides, it is heard finally.
2. Insurance company has preferred the appeal assailing the judgment and award passed in M.V.C.No.738/2004 by the Court of the II Additional Civil Judge (Sr.Dn.) & Motor Accident Claims 3 Tribunal ('Tribunal' for short), Hubballi, on the question of fastening of liability to satisfy the award.
3. For the sake of convenience, the parties shall be referred to in terms of the status before the Tribunal.
4. Claimants filed the claim petition under Sections 166 of the Motor Vehicles Act, 1988 seeking compensation on account of death of Shivanad Masalannavar on 14.07.2004 in a road traffic accident. According to the claimants, Shivanand along with his friends Kallappa, Manjunath and Mahantesh were travelling in Maruti 800 car bearing registration No.KA.02/M-7671 on National Highway-
30. When the said car was near Kudalasangam Cross, the driver of the said Car drove it in high speed and in a rash and negligent manner and tried to overtake another vehicle and as a result of which, dashed to a lorry which came from opposite 4 direction. As a result of which, Shivanand died on the spot.
5. According to the claimants, deceased Shivanand was hale and healthy; he was doing mason work and earning a sum of Rs.4,500/- per month and he was maintaining his family out of the said earnings. Contending that, they had lost the bread earner of the family, claimants filed the claim petition seeking compensation on various heads.
6. Despite service of notice, respondent No.1 owner of the car did not appear and he was placed ex parte by the Tribunal.
7. Insurance company appeared through counsel and filed statement of objections, inter alia contended that the driver of Maruti 800 car was driving it at a moderate speed and that there was no negligence on the part of the driver of the Maruti Car. That the deceased was travelling in the Maruti Car as an inmate whose risk was not covered under 5 the insurance policy. That the insurance company was not liable to indemnify the insured by satisfying the award, if any, to be passed by the Tribunal, Insurance Company sought for dismissal of the claim petition.
8. On the basis of the rival pleadings, the Tribunal framed the following issues for its consideration.
"1. Whether the petitioners prove that on 14.07.2004 at about 5.00 p.m., on Hungund-Almatti road on N.H.13 near Sangam Cross, when deceased Shivanand was traveling in Maruti Car bearing No.KA.02 M-7671 from Vijapur to Hubli, due to rash and negligent driving of the car by its driver in high speed, he went wrong side and tried to over take the vehicle going ahead and dashed to the lorry coming from opposite direction and as a result Shivanand died on the spot?6
2. Whether petitioners are entitled for the compensation? If so, what amount from whom relief sought
3. What order or award?"
9. In support of their case, the claimants let in the evidence of PW.1 Neelavva, the wife of the deceased. She produced six documents which were marked as Exs.P.1 to P.6. On behalf of the insurance company RW.1 let in his evidence. Ex.R1, copy of the insurance policy was marked in his evidence.
10. On the basis of the evidence on record, the Tribunal answered Issue No.1 in the affirmative, issue No.2 partly in the affirmative and awarded compensation of Rs.4,57,000/- with interest at the rate of 6% per annum from the date of claim petition till realization. The Tribunal directed the insurer of the Maruti Car to deposit the compensation amount with interest within three 7 months from the date of the said order and after payment, it can recover the said compensation amount with interest from the date of petition till realization from respondent No.1.
11. Being aggrieved by the judgment and award of the Tribunal, the United India Assurance Company Limited has preferred this appeal.
12. We have heard learned counsel for the insurance company and learned counsel for the claimants and perused the material on record.
13. During the course of submission, learned counsel for the insurer contended that no doubt the insurance company had issued policy in respect of car in question bearing registration No.KA.02/M- 7671, but the said policy was an 'Act Policy' covering only the statutory risk under the provisions of the Motor Vehicles Act, 1988, the risk of the passengers or inmates of the car was not covered. Therefore, the Tribunal could not have fastened the 8 liability on the insurance company jointly and severally along with the insured. He contended that the liability was solely on the owner of the vehicle in the absence of there being any coverage of the risk of the passengers of the vehicle of the car in question.
14. In this regard, learned counsel for the insurance company placed reliance on two judgments of the Hon'ble Supreme Court in the case of United India Insurance Co. Ltd., Vs. Tilak Singh and others reported in 2006 ACJ 1441 and New India Assurance Company Limited Vs. Sadanand Mukhi and others (2009) 2 SCC 417 to contend that the risk of a pillion rider of a motorcycle as well as the inmate of a car is not covered under an act policy and only if an additional premium is paid, that the risk of such persons are covered. Therefore, he contended that the insurance company may be exonerated of its liability. 9
15. Learned counsel for the appellant also placed reliance on another decision of the Division Bench of this Court in the case of the Branch Manager, The New India Assurance Co.Ltd Vs. Mahadev Pandurang Patil and another reported in ILR 2011 KAR 850 wherein this Court has explained the meaning of the expression 'third party' and observed that it does not include an inmate or passenger of a car and that a third party is a person who is outside the offending vehicle. He therefore submitted that the appeal filed by the insurance company may be allowed and liability may be fastened solely on the owner of the vehicle that is the insured.
16. Learned counsel for the appellant also drew our attention to another judgment of the Hon'ble Supreme Court in the case of National Insurance Co. Ltd. Vs. Balakrishnan and another reported in 2013 ACJ 199 wherein, it 10 has been held that risk of an occupant of a private car is not covered under an 'Act Policy'.
17. Per contra, learned counsel for the claimants placed reliance on earlier decision of the Hon'ble Supreme Court in case of Amrit Lal Sood and another Vs. Smt.Kaushalya Devi Thaper and others reported in 1998 (1) G.L.H 842 to contend that the expression 'any person' found in the policy would include an occupant travelling gratuitously in the insured's care and therefore the risk of such a passenger is covered. He therefore contended that the liability was rightly fastened on the insurer in the instant case and therefore the appeal filed by the insurance company may be dismissed.
18. By way of reply, learned counsel for the appellant - insurer contended that the decision of the Hon'ble Supreme Court in the case of Amrit Lal Sood has been considered in the subsequent 11 decisions relied upon by him and that the latest dictum of the Hon'ble Supreme Court in the case of Balakrishnan's case may be applied to the instant case.
19. Having heard learned counsel for the respective parties, the following points would arise for our consideration:
1. Whether the Tribunal was right in fastening the liability to satisfy the award on the appellant - insurance company jointly and severally with owner of the car in question?
2. What order?
20. The detailed narration of facts and contentions would not call for reiteration. The respondents- claimants established that Shivanand died in a road traffic accident that occurred on 14.07.2004, when he was traveling along with his friends in Maruti 800 car bearing registration No.KA.02/M-7671 on National-Highway-30. The car 12 belonged to the 1 st respondent Sidramappa. It was insured with the appellant-insurance company. Ex.R.1 is the copy of the policy issued by the insurance company in respect of the car in question.
21. On perusal of Ex.R.1, it is noted that it is an 'Act Policy'. The premium that has been paid on the said vehicle is Rs.500/- for third party basic insurance and the loading on TP premium (third party premium) is Rs.500/-. The total premium paid is only Rs.1,000/-. On perusal of the policy, it is noted that no additional premium has been paid to cover the risk of the inmates or the passengers of Maruti-800 car in question which is the offending vehicle. In the absence of additional premium being paid so as to cover the risk of the passengers of the car in question, it must be construed that there is no consideration paid on that aspect of the contract of insurance. In the circumstances, the risk of the inmate of the car is not covered under Ex.R.1 13 policy, which is a 'statutory policy' or an 'act policy'. It is not what is called a 'comprehensive policy' as no additional premium has been paid to cover the risk of the passenger of the car. Therefore, the Tribunal was not right in fastening the liability to cover the risk of the passenger travelling in the car on the insurance company, particularly having regard to the judgment of the Hon'ble Supreme Court in the case of Tilak Singh.
Therefore, liability of the insurance company does not extend to a pillion rider of a motorcycle unless the requisite premium is paid covering his/her risk. That the pillion rider on two wheelers is not treated as a third party when the accident takes place owing to the rash and negligent riding of a scooter or motorcycle and not on the part of the driver of other vehicle.
14
22. Similarly in Sadanand Mukhi's case, the Hon'ble Supreme Court at paragraph Nos.13 and 14 held as under:
13. Contract of insurance of a motor vehicle is governed by the provisions of the Insurance Act. The terms of the policy as also the quantum of the premium payable for insuring the vehicle in question depends not only upon the carrying capacity of the vehicle but also on the purpose for which the same was being used and the extent of the risk covered thereby. By taking an "act policy", the owner of a vehicle fulfils his statutory obligation as contained in Section 147 of the Act. The liability of the insurer is either statutory or contractual.
If it is contractual its liability extends to the risk covered by the policy of insurance. If additional risks are sought to be covered, additional premium has to be paid. If the contention of the learned counsel is to be accepted, then to a large extent, the provisions of the Insurance Act become otiose. By reason of such an interpretation the insurer would be liable to cover risk of not only a third party but also others who would not otherwise come within the purview thereof. It is one thing to say that life is uncertain and the same is required to be 15 covered, but it is another thing to say that we must read a statute so as to grant relief to a person not contemplated by the Act. It is not for the court, unless a statute is found to be unconstitutional, to consider the rationality thereof. Even otherwise the provisions of the Act read with the provisions of the Insurance Act appear to be wholly rational.
14. Only because driving of a motor vehicle may cause accident involving loss of life and property not only of a third party but also the owner of the vehicle and the insured vehicle itself, different provisions have been made in the Insurance Act as also the Act laying down different types of insurance policies. The amount of premium required to be paid for each of the policy is governed by the Insurance Act. A statutory regulatory authority fixes the norms and the guidelines.
By referring to Tilak Singh's case, it observed that the risk of a pillion rider of a motorcycle is not covered under an act policy. However, in the case of Balakrishnan, the vehicle involved was a car. The Hon'ble Supreme Court analyzed Section 147 of the Act and on considering Tilak Singh's case and 16 other decisions such as Oriental Insurance Co. Ltd. Vs. Sudhakaran K.V. and others reported in 2008 ACJ 2045 (SC) as well as Sadanand Mukhi referred to above as well as other decision held at paragraph No.16 is as under:
"16. Thus, it is quite vivid that the Bench had made a distinction between the 'Act Policy' and 'comprehensive policy/package'. We respectfully concur with the said distinction. The crux of the matter is what would be the liability of the insurer if the policy is a 'comprehensive/package policy'. We are absolutely conscious that the matter has been referred to a larger Bench, but, as is evident, the Bench has also observed that if would depend upon the view of the Tariff Advisory Committee pertaining to enforcement of its decision to cover the liability of an occupant in a vehicle in a 'comprehensive/package policy' regard being had to the contract of insurance."
Pursuant to the observations at paragraph No.16 that there is distinction between an 'Act Policy' and a 'Comprehensive Policy' or 'Package 17 Policy', at paragraph No.21, it has observed 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 (2009) 7 SCC 148 and, therefore, the matter was referred to a larger Bench. We are disposed to think that there is no necessity to refer the 18 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 Delhi High Court and we have also reproduced the same.
The Apex Court remanded the matter to the Tribunal to give a finding as to whether it was an 'Act Policy' or a 'Comprehensive Policy'.
23. In the case of Mahadev Pandurang Patil, the Division Bench of this Court (Circuit Bench at Gulbarga now Kalaburagi) observed as under :
15. Therefore, the passenger of a vehicle which is not meant for public service is not covered under this Section. The said passenger in the case of a two wheeler is the pillion rider and in the case of three wheeler and four wheeler the occupants of such vehicle who are not carried in the said vehicle for hire or reward. Therefore, the insurance policy taken in respect of a vehicle, in which they are travelling as such passengers are not treated as third parties and such an insurance do not cover the risk of such 19 persons. The reason is Section 147 does not require a policy to cover the risk to passengers who are not carried for hire or reward. The statutory insurance does not cover injuries suffered by occupants of the vehicle who are not carried for hire or reward and the insurer cannot be held liable under the Act. The occupants/ passengers/inmates of a private vehicle do not fall within the definition of the word third party. Therefore, the legal obligation arising under Section 147 of the Act cannot be extended to an injury or death of the owner of the vehicle, passengers in such private vehicle or a pillion rider in the case of a two wheeler. Gratuitous passengers who are not carried for hire or reward in a vehicle other than a public service vehicle, cannot be construed as third parties.
16. If the risk of an occupant of a car, inmate of a vehicle or passenger in a private car, is to be covered, additional premium has to be paid. If no additional premium is paid, their risk is not covered. The statutory liability under Sections 146 and 147 of the Act has to be read with the terms of the insurance policy issued under Section 146 of the Act. But that does not prevent an insurer from entering into a contract of insurance covering a risk wider than the minimum requirement of the statute, whereby 20 the risk to gratuitous passengers could also be covered. A third party policy does not cover liability to gratuitous passengers who are not carried for hire or reward. If a liability other than the limited liability provided for under the Act is to be enhanced under an insurance policy, additional premium is required to be paid. The liability is restricted to the liability arising out of the statutory requirements under Section 146 only.
17. In view of the authoritative pronouncement of the Apex Court holding that an occupant/inmate/passenger in a private car, is not a third party, the finding recorded by the tribunal that the insurance policy issued covers the risk of such persons and therefore the insurance company is liable to pay compensation amount is illegal and contrary to the law declared by the Apex Court. In fact, in the policy, no additional premium is received by the insurance company to cover the risk of such persons. It is clear from the terminology used in the policy which fact is not in dispute. In one of the cases, additional premium is collected to loading the risk of third party only, as is clear from the policy that loading was not meant to cover risk of inmates of a private car and therefore, merely because an additional 21 premium is collected under the said policy, it cannot be inferred that the risk of inmates of a car are covered. The words are specific that the loading is done in order to cover only third party risk, it is not a case of additional premium being collected to cover the risk of inmates along with third parties. Therefore, in the facts of this case, we are satisfied, as the insured has not paid additional premium and the insurance company has not collected any additional premium, the risk of the occupants of a private car was not covered. Therefore, liability foisted on the insurance company cannot be sustained and accordingly, it is hereby set aside. The meaning of the expression "loading on third party premium" was explained and it was held that it was only in respect of third party that the passenger of vehicle or a car is not a third party and hence the insurer could not be fastened or foisted with the liability.
24. Learned counsel for the respondents claimants has relied upon Amrit Lal Sood and another Vs. Smt.Kaushalya Devi Thaper and 22 others to contend that the expression 'any person' would include the occupant of a car who gratuitously travels in the car by referring to Section II(1)(a) of the policy. The said judgment has been considered in the case of Balakrishnan at Paragraph No.15. It is also been referred to in Paragraph No.8 of Tilak Singh's and after making reference to the decision in Tilak Singh's case, analogy of the pillion rider of a motorcycle the risk of the pillion rider of a motorcycle not being covered under an act policy has been expanded to apply to a passenger or inmate of a car. In the circumstances, we place reliance on the recent dictum of the Hon'ble Supreme Court and hold that Ex.P1-policy did not cover the risk of the passengers of the Maruti 800 car in question. Therefore, the Tribunal was not right in fastening the liability to satisfy the award on the Insurance Company. Hence, the appeal filed by the insurer is allowed. 23
25. The amount in deposit to be refunded to the appellant/Insurance Company. Accordingly, Point No.1 is answered in favour of the insurance company.
26. Before parting with this point, we note that under Section 147 of the Act, only the risk of a third party is covered and it is a statutory liability or coverage of a statutory risk. The same would include the inmates of a public service vehicle. But as far as private service vehicle is concerned, there is no compulsory coverage of the passengers of a private service vehicle. That is a matter of contract between the insurer and the owner of the vehicle. In such circumstances, it is the duty of the insurer to make known to the owner of the vehicle, the different kinds of risks which could be covered apart from statutory risks. If such information is disclosed to the owner of the vehicle, it would be left to the choice of or an option to the owner of the vehicle to 24 pay additional premium to cover the risk de hors statutory coverage. We also think that having regard to the increasing number of road traffic accidents particularly on highways as well as on the bye lanes in cities and in country side, the increasing number of vehicles that are plying as well as the increase in the volume of road traffic and having regard to the deaths and serious injuries that occur on Indian roads, it is time that the coverage of the risk of a passenger of a private service vehicle is made a compulsory or a statutory coverage, in the same manner as the risk of an inmate or a passenger of public service vehicle is covered under Section 147 of the Act.
27. In the result, the appeal is allowed. The judgment and award dated 25.09.2009 passed in MVC.No.738/2004 by the Court of the II Additional Civil Judge (Sr.Dn.) & Motor Accident Claims 25 Tribunal, Hubballi, directing the appellant-insurance company to satisfy the award and recover the same from the owner of the vehicle is set aside. The appellant-insurer is exonerated of its liability under the terms and conditions of the policy. In the circumstances, respondent/owner of the vehicle is solely responsible to satisfy the award and directed to deposit the compensation.
The amount in deposit before this Court be refunded to the appellant.
Parties to bear their costs.
Sd/-
JUDGE Sd/-
JUDGE Naa