Karnataka High Court
The Branch Manager vs Mahadev Pandurang Patil on 4 October, 2010
Equivalent citations: 2012 AAC 2993 (KAR), 2012 (4) AIR KAR R 257
Bench: N.Kumar, Subhash B Adi
IN THE HIGH COURT or KARNATAKA CIRCUI1'. ]3E:NCH
AT GULBARGA W -.
DATED THIS '1m«': 04": DAY OF 0c'1'013}.2;:.':F§'. -- "
PREsEN§
THE HON'BLE
THE HON'BLE' BEVADI
V _:v:.1:r.A.:§J0L":0993' V_200?_''{MV3
, .... "~..v%"I\A.i'é?3Av.N0's;:i'0990 , 10991, 10992,
' .. 9500 &_~.=1n'1_917'O'1'«' 2007 [MV]
MFA
BET\NEEN*.._ " " "
, 1. .. BRANC-E~I_l\/EANAGER
A - 'I'H.E NEW 1N01A'AssURANcE co LTD
* -» _ BIJAPLER'; Now REP BY 08 REGIONAL
)3/:A;:\1AG}5R,_lf1'HE NEW INDLA ASSURANCE co
. '-.,L'rD. _."_RF;'GiONAL OFFICE, UNITY BUILDING
' AN1\IEX-15,0? KALINGA RA0 ROAD.
BA-3NGA.L0RE -27 APPELLANT
V " [By Sri. A N K.RISi--INA SWAMY. ADVOCATE}
1' MAIv£A1)::+:v PANDURANG PA'm.
NOW AGED AI-BOUI' 29 YEARS
000: AGRICULTUIAQAL 0001.15:
R/O. DFIOKALE DADDI
BIJAPUR T ALUK.
Ix)
ABDULRAJAK IIUSSAIN.JA.M.A.K.HANWALE '
AGE MAJOR
occ: OWNER OFJEEIP V * ~
R/O. UMARANI ROAD, JAT}-I
SANGLIDIST _ " ~
MAnARASm'RA STA'I'E." _ I REASPGIVJDENTS
{By Sri. BABU H ME_'I'Afi}_U--DDA '1:'G.1§{_'R1}'fg
MFA FILED U/S 17.3{1]G--.0? MV AGAINST THE
JUDGEMENT AND AWARD"V»I)ATEI)' '1.S.05'-.2007 PASSED IN
MVC No.1021.._/2.004 C1-N fl"HE ~FILE._O'E"':i'\/IEMBER, MAcT--1H,
BIJAPUR. Aw3.AR1§ING.,A C_0MpE:NSA*1'IG'N OF RS.3,05,260/-
WITH 1N'i'E;RE,'E5_T @"3E30/c)"-P--;.A;'~~.F£?_Oi'/I THE DATE OF PETI'I'ION
FILLDEPOS£f1'.'5.. ;j_ ' ' .
MFA :G990}"20.oF/': _
BETWEENV_" _ ' I' 4' "
THE BRANCH A/1ANAG'ER"" I
THE?' INDIA ASSURANCE co LTD
' I 'BIJAPUER; NOW REPWBIY ITS REGIONAL
*MA-NAGEP, '7EfI:IE}_ NEW INDIA ASSURANCE} CO
-.L"i'1Z>..I IGN,ALj..oFI«'1c£2. UNITY BUILDING
ANNEXE.' --KA;LTNGA RAO ROAD.
BANGALO +27 ... APPELLANT
'' '3{By Sri. A N KRISHNA SWAMY. ADVOCATE]
I :5 KAMAL
W/O I'AI\IDURANG BANDAGAR
NOW AGED A80 UT 48 YEARS _
OCC;COOLIE3
R/O AN KDIIIIAL
NOW R/AT BIJAPUR
Ex.)
ROOPALI D /O PANOLIRANO BANDAGAR "
MINOR REPTD BY NATURAL C}-UARD LAN _
MOTHER THE IST RESPONDENT L:~Ra:IN.
R/O ANKDHAL ,
NOW R/AT BIJAPUR ' ' '-
3. ABDULRAJAK. HUSSAIN JAMKHANWALEV ii
AGE MAJOR *
OCQOWNER OF JL:I:'P__ I
R/O LIMARANI ROAD
JATI1.SAI\:GL1II)ISf2.--._*- ' 2
MAHARASHTRA Sf['AT_,Ej: ' RI3SPONDENTS
[By Sn.BAISU..I%1".v-IvII3'IAO--LII3{)A_I?'OR_R1 SI R2: R3 SERVED)
M_P'A--_ '1*']'LI313"I-_VU','S"»1n'Fv3(i}~ OF MV ACT, AGAINST THE
JUDGEMEN1' ANI3j1IjAWA_RI>,.~~DAT13O 16.06.2007 PASSED 1N
MVC NO_6S'41"/2004 'ON.I""..TI»II: FILE OF MEMBER, MACT~l1l.
BIJAFUR, AWARIJIINO-A"COMPENSATION OF RS.3.63'200/--
" IN*IfE?RI:S'T AT 6%..1?.._A= FROM THE DATE OF' PETITION TILL
D1§;I'3OSIT'. ~
' ..MI<'_A 'NO: ,.1:00"9i 007:
THE IIRANCII MANAO ER
_ NEW INDiA ASSURANCE CO LTD
BIJAPUR. NOW REP BY ITS REGIONAL
I _ ' --Iv:AN.AOER, "FHE NEW INDIA ASSURANCE CO
1;jfI).. REGIONAL OFFICE. UNITY BUILDING
__A.NNExI«:, P KALINGA RAO ROAI),
BANGALORE ~-27 APPELLANT
4%
(By Sri. A N KRISHNA SVVAMY. ADVOCATE}
AND
1. JAYAVVANTH PARASURAIVI CHAVAN
NOW AGED ABOUT 63 YEARS
OCQAGRICULTURAL COOLIE
R/O RANJANI NOW R/A KANAMADI A
BLJAPUR TALUK : A ' H "
rug
PARU BAI w/0 JAYAwANt1' cHA'vrAN_
NOW AGED ABOUT 58 YEARS '
OCQHOUSEI--IOLD VVORK'~, " -« .
R/O RANJAN1 NOW R /A KANAMADI
BIJAPUR TALUK , -
3. BAGYASHRI D /0 RAi\1Am--xf{1:'c1~:{A'vim§i'
NOW AGE1).;ABoL;T--1--9.3<EAR:3 " "
QC'C"'{S="1*L.i'Vi3_1rs:N5F:f _ _
R/_O Fu'3LNJ}'v\.N_!_VNQVV»'R"/P;'K15\NPL1\/[ADI
BIJAPUR "1?A1;U__i<V_ w A'
4. VINAYAK RAM-AHAR'}--'CHAvAN
_;N"<>W AGEDABOUT 17 YEARS
EN-*1aev1IN0R REP BY THEIR NATURAL
. 3 GL1A'£2_1:)iA_N FATHER JAYAWANTH PARASURAM
T 'V VCI*-iAV'.{X1\E. R/O RANJANI NOW R/A KANAMADI
B1'JAP_UR."TAI.LJK
5. SH__AiLE'SH RAMAHARI CHAVAN
NOW AGED ABOUT 16 YEARS
A' O(3C:S'"I'UI_)ENT..
HA/IINOR REP BY 'I'I~IEIR NATURAL
.tGUAR13;AN FAT1~1ER JAYAWANTH PARASURAM
CI"-IAVAN, R/O RANJANI NOW R/A KANAMADI
BIJAPUR TALUK /'
E I
3/'
C31
6. ABDULRAJAKHUSSAIN
JAMK1-I-IANWAIIE
AGE MAJOR
Occ;OwNER OF JFZEP
R/O UMARAMANI ROAD. JATI~l~~--._ _
SANGLI DIST. MAHARASHTRA ' RES__PQNDENTS
[By Sri. BABU H METAG_UDDA_EOR V
R~4 & R~5 ARE I\/IINQRS REP. BY
R-6 SEIWED ) =
MFA FILED U/S'~..i73{'1] O-F Ivw ACT AGAINST THE
JUDGMENT AND AWARD_.D.A'I:I5D:'I5;-06.2007 PASSED IN
MVC NO.907/2004 ON "IfIIE'-FILE__..OEf~ME.MBER, MAc'1"--III.
BIJAPUR. AWARDING A~<:.OIvIREIxISA*IiIO'I\I.'IOF RS.1,52.000/w
WITH IN'1*ERES"I*A'E TI~;E RA::'E-4.OE'_jS0/e RA. FROM THE DATE
OE PE"l'I'FION I:IfII.I.;'DD_EI?OSI"I'. '
MFA NQ:.iA09~9?I*2'O07O§ '. '
BETWE_E_N_ O O O' .
THE
THE NEW INDIA ASSURANCE: CO LTD
BIJAPGR. NOW REP BY ITS REGIONAL
1\/£AV_.E\fi3I(3gE3'R. V TH E 'NI4:I_7_I__/_. INDIA ASSU RANGE CO
REGIONAI. OEEICE, UNITY BUILDING
'ANN.Ex.,E; I P 'KALINGA RAO ROAD.
~..EANGA.I;O.R'I-D. APPELLANT
Sn. A N I<RISI-INA SWAMY, ADVOCATE}
.- °;JAYAwAN'I*I-I PARASURAM CI-IAVAN
NOW AGED ABOUT 63 YEARS
OCC:AGRICLEIfI'URAL COOLIE
R/O RANJANI NOW R/A KANAMADI
BIJAPUR TALUK KL
O 'O SANGLI DIST. IVIAHARASHTRA
6
PARU BAI W / O JAYAWANT CHAVAN
NOW AGED ABOUT 58 YEARS
OCGHOUSEHOLD WORK
R/O RANJANI NOW R/A KANAMADE
BIJAPUR TALUK
BAGYASHRI D/O RAMARAR1 CRAVAN
NOW AGED ABOUT 19 YEARS
OCC:STUDE1\T1' G -- V
we RANJANI NOW R/A KANAMADI G -:
BIJAPUR TALUK ..
VINAYAK RAMAHAR1 CRAVAN
NOW AGED ABOUT 17 YEARS, .
OCC;S'i'UDENT, MINOR REPBY THEIR NATURAL
GUARDIAN FATH}3R,IAYAWANTH'*RARAsURAM
CHAVAN. R/G RANJAN1N0:Ar.R;4A..RKANAMAD1
BZEJAI5UAR::GVTAI.;{:'§fK ' -
s"RA1L,Es::-1 _' :3 HAVAN
NOW '.A*(3ED- AJ3.QuT--- .1 6 YEARS
_OCC:STU'D.ENT. INOR REP BY THEER NATURAL
__; GUARD IAN" FATH ER JAYAWANTI---I PARASURAM
C;_I:{A'JAN, R /~----~-RANJAN1 NOW R/A KANAMADI
BIJARUR TALUK
- LARAJAK HUSSAIN
' ' JAMI';HANWALE
AGE;-MAJOR
~OC1_C:OVVNER OF J I-BEEP
R f' O UMARAMANI ROAD, JATH
RESPONDENTS
{By Sri. EBABU H METAGUDDA FOR R~1 TO R«5)
3
{Q
MFA NQ9500/2007:
IBETWEEN
1. THE) ORIENTAL INSURANCE Go I;I'.Dj; "
GULBARGA D 0 "
THROUGH IIS REGIONAL .(_)FF1C.P_J
LEO SHOPPING COMPLEX_ "
44/45 RESIDENCY ROAD I
BANGALORE 25
REP.BYI'1'S M.ANA_GI~:R 5 _ .
SR1 KVARADARAJANy- '-- A} §;~»._APPE3LLAN"F
{By S:I"i..__SAi\I'JAY' III 2II):If{I5CA'I'E)
AND
W./O M 'SvR;_I..I<A;i2IVMIIIANGI --
AGED ABOUT ~ '
R/AT PLOT Nc;._VIVS8'~\{I'MAIN
V CROSS RAJA f?AJE,SI*iWARl NAGAR
ABANGALQVREV. '
- SR1-A MO HAN AG 'MAJOR
. V .. _S/O'ARAMACHANDRAPPA MARGUTTI
" I _ 'R,/_AT::0NA:r'H TQ
~. "1..VGU'I;}3A_RG-A DIST
' 0wNE:R_.0F JEEP No.IvII«~ImI7/AM2 I71 RESPONDENTS
[By Sn'. 8 S SAJJAN SI-"IETTY FOR C/R1}
jfI\/II«'A FILED U/S 173(1) OF MV ACT, AGAINST THE
- J~UDGEI\/IENT AND AWARD DATED 24.05.2007 PASSED IN
~ "'(SR.I>N.} &_ IVIACT. GUI.I3AI'2GA. AWARDING A COMPENSATION
I\/IIVC NO370/2006 ON "III--{I13 FILE OF PRINCIPAL CIVIL JUDGE
"I t-O
OF RS.3.32._OOO/-- INTEREST AT 8% P.A. FROM T1--1E"_OE
PET1TlON TILL RE3A.L1SA'l'1ON. O' .
MFA NO. '1 191 7/2007:
BETWEEIN
1. SMTMRAO1-1A V
W/OM.SR1KARMUT1'ANG1.._ V
AGE 47 YEARS, OCC:SYN'DIC--A'I'E BANE,
EMPLOYEE, R/O PLOT NO. 188, '--
v1MA1N.vcROss,~~__ _
RAJ RAJESHWAR NAGAR "
BANGALORE ' = "-.f'»._';.--..APPELLAN'I'
[By :":'~_ 5 AEVVVOCATE]
AND ' % V
1. M\:;1AA1Ar§'E3}A'EE?A_
3/ O KALE'-EAYAPPA.jl'E.NGAL1
AG}: 40 YEARS, 'OCc;__:)*RIvE:R
R/ O VSONAT1-1 "E1LLA.OE{sONT1-v1)
TQ D1sfr%CyULBAR(3A_}~
.. AMOHAN S/O .RAM.ACHANDRAPPA MARO UTFI
- OGC.:OW'NER OFJEEP NO MM 17 A 2171
_ R/O.S*QN--AT1---I[SONTH)Vll',1;AGE
_ TQ'-D1:5T..(3'L.;1.£3AR(}A
3. ' '1'HE».O'R_I'ENTAI, INSURANCE CO LTD
Tl~E--RO'{;"Gi*1 {rs DIVISIONAL MANAGER
N,G;. COMPLEX. IST FLOOR
STATiON ROAD
" , "~«OULBAROA RESPONDENTS
[By Sri. SANJAY E\/LJOSHI FOR R3:
NOTICED TO RI DISPENSEIJ W1']"I--1: R2 SERVED ) E
MFA 1:113:31) U/S 173(1) OF MV ACT. AGAI'i\is_'*"§ 'THE
JUDG1«;i\/11«:N'1* AND AWARD DATED 24.o5.200?'~~--P.AesiEii3_ IN
Mvc: NO.37()/2006 ON '1':--{E FILE OF PRINCIPAEQ 'e1v1L-JUDGE.
{SR.DN'.). MEMBER. l\/E.AC'l.'. GULBARGA. PA._m5i;y'ALLlQxv1'1<cg
THE CLAIM PE'i'l"l'lON FOR COMPENSATI(')N _Ar-21> SE__i:',Kl'NG'i. '
em-~1ANci31v1E:N*'1*F0R CC)MPENSA'l';ION._ ' " -I' " i '
'1'm«:s1~: MFAS. CCJMING ON FOR"'OR.IJEi2S.::j4iiI€3 u[§A_Y'.*.
KUMAR J.. DEIJVERED THE i**.Qi;.LOWI'NG:' A-
.gM_1; D
MFA Nos. 10993/2007'. i"o99_01/_2.c5Q;_7. 10991 /2007.
10992 /2007 a.11<'il.#9:5OO}/i preferred by the
insurance fasteri1iI1g of the liability on
them re*s'pe»ciV.'vel:' Gillie occupants of a private. car.
MFA N0. 1ul9_'l"?/ appeal filed by the claimant who is
:'esp<::;nfilex.1ie iii IVi.I'1'A______l&\'lr.).9500/2007 seeking enhancement of
"g ~ 23613.1pe:.1sa.t.i*Qri".~-- . _
2. '~"fTl?;'e. question involved in all these cases is
ide'nt1<:al;.. They are taken up for eorisideration together and
A iiisposed of by this conimon order.
3. In all these cases. the cleeeased were occupants in
21. j.)I"i\'I:1l,t'. ('E1I'. The owner' of the Car had te,-lken a policy of
10
insurance as stipulated under Section 146 of _4vth:e-.._4TMotor
Vehicles Act. 1988 (hereinafter referred to
'Liability Only Policy' the policy' undei'>"Whic_hllhe "sotz.§h't.Lll"'
coverage for third party' risk only.
4. In the claim petiti'o}'1. irisura.nce._ c:o_Ii"ipany was
made a party. They did not disput»e__t.l1e accident, they also did
not dispute the coverage" the Lve.hfclle.linyol.yed in the accident.
The specific defence tialgfil/1\.4;_}.r:a'S Vthspg.t_, haye issued a policy.
in terms of ytrerel to cover the risk of
only tliirdllvpa,rties.'7f in "o.§he1' *.A}foi"c[s. it is their case that, an
occupant in at privaiteVcarl'is_ln.ot a third party. The insured has
not paid an"y..additi'onal premiuni to cover risk of an occupant.
.__as the ---------- claims are preferred by the legal
Vreprese'ntatives' of the occupants of a private car, the insurance
con'ipianylisti'i1nder no obligation to indemnify the insured and
pay conipensatioii to the claimants in terms of Section 149 of
l..:i:i»thei;A,ct. The Motor Accident Claims Tribunal, without properly
a'p'preciating this contention of the insurance company,
proceeded on the assumption that, the insurance policy issued
11
covers the risk of an inmate of a car and therefore. insurance
company is liable to pay co1'npensai.ion awarded an2ll'thei*e'i'"orei
it proceeded to pass an award directing the irlsurance
to pay the amount awarded. Agg'1'ieved__by 'the'
insurance company is before this co'art..?:_'li '7
5. The learned co'unsell.'i7o1' the ap'p..3llantI~-.}3"insurance
company, assailing thai. portion the: award-..covntends, the
insurance policy issued 'the._ins'L1ranlceucompany covers the
risk of third pasfucs. '§i'heV'oo(,alpani'V_ oi-' ijrivate car is not a
third party t.'ri~<{}\.pexllConrt. Therefore, they are not
liable toipay the awarded in terms of the award
passed by the rribu.nai,. '.l7l~.<1"e tribunal committied a serious error
..n_1°is~;iiite1fpreting~--.t.h.e terms oi' the insurance policy and in
Vholding,thai;'~.tlie_ insurance policy covers the risk of inmates of
the 'car wl1iE.:'h.i's factually incorrect and therefore. he contended
that,' award of the tribunal in so far as fastening the
»liabi.l.it'y on the i11S1.E1"c111CC company is liable to be set, aside.
6. Per co1'1ira. learned counsel appearing for the
claimants contended. the word 'third party' has been defined to
s
ll /'"
L/
.12
mean. it includes the G0Ver1'11't1e:<it. The insured
party, insi.ii'ai1ce company being the second
persons fail within the phraseology Qf.1.h_ird pari,y"[ ~
when once 21 third party risk is ccixreredias
Sections 146 and 147 of
iiable to answer the elairn of are the iegai
heirs of the deceased Car. He "further
submitted. in the ;itidgnievi1--t:.re|ieti_ei'_i 'iearned counsel for
the insui'anee not considered the
scope of of the Tariff for Private
Car the, judgment oi' the Apex Court
has no a'pupi'icAat.ie.ii of this case. He also relies on
the te.r_ms Vpc.:--iiey.. itiiiich categorically states the limit of
of the-e.<1.H'1p211'1y liabiiity under Section [ii)~1[}) in
'resp.eet:.._oif '£1,115/'V __o1ie accident as per Rules and therefore. he
'.t?0i*il'€1}dS«,'V"_'{hti~,:.UCiCL1p&i"11. of a private car is a third party and
legal a.11Vd'i~d<) not call for any interference.
aCC().fdiI§g'i}?i:?E.A1]€ iiability foisted by the tribunal is valid and
13
7. In the light of the aforesaid contei1_tio.rist.'
that arises for our eonside1*-ation in this appeal --,?.s.:'as "
Whether an occupant/
private car is (1 third_ partti/'i__V_'.defirie_fiA"
Section 145(9) r/w. S€(5:!t:}:fi~..i46 ofthe aeiirf
8. Chapter Xifioi' the with of motor
vehicles against third» 'third party' has
been defined under" SeCt;i'o1':.« as under:
.1 trieit:d:e3i--t'Fie Government.
SeCti0ri"i_&1Z1-fe_3 states. deals with 'necessity for
insurancexaghaiiilst-thireivgiarty risk'. Section 147 of the Act
V. y_ deaEs.vuji_t.h the 'req11.i1ietnent of the policies and limits of liability'
VSeie_vtfior1.._i2i$_3_ deals with the 'duty of the insurers to satisfy
the'judgm-ents=Vand awards against persons insured in respect
of party risks'. No person shall use, except as a
V' passenger. or cause or allow any other person to use, a motor
'V'-ehiele in a public: piaee. uniess there is any force in
"relation to the use of the vehicie by that person or that otheg/__
14
person. as the case may be. a policy of insurance complying
with the requirements of this Chapter. Once thet..iri-saurance
policy is issued by a person who is an authorized'ins_ure'r;arid
such policy is issued. insuring persons 1'efcr.red.V in stiiig
section [i) of Section 147, then, the liaiailjitygoifnthei'insurerdis '
unlimited as far as third partyis coricerned arid respect of,
the damage to any property concerrred ':pa:r:§ty, it is up
Rs.6,000/-. So it is';iafi"«.thi.s ¢.d:iie;ii;'~~s_ye hayefl to find out
whether an ir1mate/ passepnggei' of a private car
is a third
'E;//, ' The the case of New India Assurance
Co.Ltd. vs'.»._Sa.t:paa'singh Ors. reported in 2000 AG} 1 SC
. _ A exp.lainin*g the Vnieaning of the word 'third party' held as under:
result is that under the new Act an
'7.__tirisiipmrice'Jdpoticy covering third party risk is not
required to exclude gratuitous passenger in a
've__hicie. no matter that the vehicle is of any type or
it «.,_ciass. Hence the decisions rendered under the old
Act Ul:S"(f1rU?:S gratuitous passengers are of no avail
while considering the liability of the insurance
company in respect: of any accident which occii£rret:iT
or would occu.r qjier ihe new Aci came i:1i'()_j{f)rce."'.;.:' h 0.
10. However, the said judgment-*"wv2i:s.. spe«.::AiI'ic_ei1i3f
overruled by subsequent jLzdg_2;r11eIi=i_ of-.1h.e "Cotiifi'c.__.in;vL.i'1e
Case of New India Assurance ,_Co.LiVd._ As;»h.ogRani VOrS'.;
reported in 2003 AG} I as LEI1d(;f.'=.i_V'h' _
"It wasfeli. toi'1.A'.LJi"'~A,*:/ize the court' in New
India Assurance Co.L-toi. ::';;;"s;Vai;a.¢:i:- .Smgf_i1. 2000 AG}
1 {SC}. reqmres recon's~idera:i:or1. :'§yg.r:° larger Bench
and if'i_Vci«:V i.S';?."V'.1(.)l.I.!, 'i.!'1i_1s=. _bun.ch~ Vo;"Vdp}9eals had been
jzriczced Bench. (2001 ACJ 1847]
{SC}: "Fhis.' inieirnf'neceésiiates interpretation of the
'provisions in-vs;2c_zhh:o;.~{147 of ihe Motor Vehicle Act.
iiteireirxqftervreferred to as 'the Act') as it stood
amendrneni in 1994. It may be stated
"l,?FO1.3f.Sl'.()fIS of Section 147 of the Aci.
to Section 95 of the Motor Vehicles Act,
1939;'
" xxzoc xxxx goooc
In Mallai.01.L>a z,:5;. Orienial i'r1.surariCe C0.Lid.
"E999 AG} 1 {SC} iuhile approving the earlier
decision Qf the court in Pushpabai Purshottam
Udeshi us. Ranjii Ginn.i'.ng and Pressing Co. 1977
E,»
16
ACJ 343 {SC}, the court. constriied. the pr'oiiisi'o:ns-of_:.V'
Section 95{l}(b) of the Motor' Vehicles Act,
held that whi'le the expression 'any
expression 'every motor vefiiiolet baiefi in i.uicle"
but by proviso {it} It r'est--riots.'trliefigeviteraltty.of
main provision by confinir1g_Vil1e re=c;itirerne'nt tocases
where the vehicle is a in passengers
are carried _for hi're_or r-c;2ii>'arr:l'*or9"';b.y reason of or in
pursuance of a conir-aic't.yQ}f ';;:;}i;;1i¢;gni;en:, therefore,
the vehicle__h.ad 'i.2ehV.icle i'n' passengers
are carrj!et:i:.«._VVVyfTheE:conI-t..ffu'rf'lier_" that the goods
vehicle" c'a'niAiot';V--_Vbe to-7 a » passenger vehicle
even l"_f':Vl'Ji:':f'f?1:.;tJ'C"llL?iIQ'~ to be used on some
stray _o&?ot_isi'oii.s for"ear'ryi_r1g passengers for hire or
reward. _ _ y
";.:}oo_fi 9' ';\{,)C}§.7( XXXX
in E§alVp'a'l'scase. 2000 AG} 1 (so) court
"":'ClLf_5Sl1I7~?§fCi that""'the provisions Qf Section 95(1) of
tvilotforfx/ei1.icles Act. I 939. are identical with Section
Motor Vehicles Act. .1939, as it stood
prio*r_vt_o arnendment. But a careful scrui:in.y of t.he
j:IrO'iJisic)ris would make it Clear that prior to the
A amendment of 1994 it. was not necessary for the
insurer to i.n.su.re against the ou.vn.er of the goods or
his aiithorized representicitiue being carried in a
goods vehicle. On an erroneous impression this
3/"
18
and as ii' stands subsequent lo its arnenClme.hii'._lgr1g"
I994 c'u'tci beou'i.ng in mind. the objecis ar'1d¢._ret1;so}g'isgl 3'
engrcgfied in {he amended provisions,_iii.is"=eliflleu._li'
for us to crorlsirue ihai ihe'Jex,o"I'eS_sior1.;<'i.rieludihg*
owner of the goods or his ai.ii'hori3eCi r'e;t:re's»:2ni'aiiyje._A7
carriea'. in. the vehicle' 1;:-pvltiicli. i,L.aozs_ clilddgedjiilo ]i;'~v1eHpgrc_;é--
existed expression 'ff'ljIiI'lg""..V'lV"{lily glfllersorit-'V5 iTsl;:ei.ih.er
classi/icaiorg or -"'€I..iT1pll'f{"CCll'l.f:?i'i. l("g,"7_. ihellpi'e>e')lisiing
sial'1ii:e. On ihe ol'herf-- .l'1l(1i--:I_1cl--,.l :fl.l.(lflv£:?V:(;':lf'l\Lj'.. demonstrates
thou. the lA€3'glSlCll.iAi_I'.r3V:._Li.iCi1"i.l€el. 'iog i5fihg" within the
sweep ion 4?' Compulsory for
the i'rjisi{;=,3_f .i:}_Vzs'Li«r:e,ei3eh Qfa goods vehicle,
them oz1;ri1ei':.;_;:,v_Q/'l or his aul'horized
zfeprese'ri?ioi'iiie=.beihg~earried in a goods vehicle when
ijhrii u.ehic'--le'r:hei :'li<«'..i'1'.:'ll'i.,'(1VI~1 accidehi and the owner of
the of hisfé;ofeser'1iaiive either dies or suffers
_ 2 l bodily iriiui'_yl I
X300; H xxxx xxxx
iheid that ihe insurer will not be liable for
pagr.'hg lc;olr1'1per'1saii'on lo the owner of the goods or
h.{SLir.ill'1ori'zed represeniaime on being carried in a
g.o_o~d.s vehicle when {hot uehicle meets Luiih an
llficiccridehi and the owner of goods or his
A represeniciiiue dies or 3l.i_f]efS arig bodily injury.
XXXX XXXX XX.\'.X
E9
28. Art ()li.?n(3i' ofa passenger carrying L"€l'l1'E7*fT:l'E?V
musi pay premium for covering the i'islcs__ of 5'
passengers. If a li.abi.lii'y oiher than..l:,lfle,li2~niiea
liability proi.»icleCl_]or under ll'1.e;V}'ici"i'5 'io'..»be,;
under an insurance policy, addilio:'ial1pren1iurn~
required to be paid. Ba!'-if ihellralio Qf"l'll'l:3j':CQllFlil3
decision in New India Assilrarice Co.~L_i7Ci.e es. lfgaipal
Singh. 2000 AG} 01 {SC)" is_:'--i.laT}€eri "His «logical
conclu.si.on. aliihoi,igl7:L[o1*~sLien U16 owner
of a goods car-ried_V_nee(i insurance
policy, l'l'.lt3_'L_.f,._Lnl'_'_'>OLll0.l be 'lo been covered
i.inder«*ilie_ l.i.:g_iie.re]E.jre.'veoen no premium is
1'(2C]uiré3d l3b'.f_5l;. 0' V V
_l "7'L7..~'rl=i.a1_;--.consi(ler mailer from anoiher
ar:.gle.. Seelion':sr.i2;iQl2}._l2§" the 1988 Act enables the
iiisiirers to raise cl.e_._/l.f3r'ic*es against the Claim of the
claimarii.s...ln lerms of clause [a}{i]{c) of subsection
(2;'*.of'l' Sc=ciio7ill"'l749 of ihe Aci one of ihe dcjences
_i.iJl1:.ii;il:1v"'is'2available lo the insurer is lhai the vehicle
' --. inqi_i_eslion has been usedfor a purpose not allowed
by' 'll'ie*7 permit. under wliicli the vehicle was used.
I'3iié':li a si.ai:'ui:'ory defence available to the insurer
«,_iuoi.ild be obliieralecl in view of the decision of this
c:ou.ri' in Salpal Singifs case, 2000 ACJ 1 {SC}. "
ii,
L.//
20
11. Following the a.l"ox'esaici jt,:dgme1'ai,, the
in the case of United India. Insurance Co.Li.d., Ti_'__la.k
Singh & Ors. reported. in AIR 2006 so 1576 rhiejdiéisi u.nde;§¥: ~ V.
"19. The argiuneni that the r;sk..j9er£;ai'nif:ng
third party would extend .to a joerson ()lh.Ver* {lie V
parties to (he insurance coniaracr iL:cts.rai.s_"ed
India Assurance A_Compaxn--y Sa._ipa.l Smgh Ors.
(2000) 1 sec ehegg lafiijevri'contrasting the
language of Seciion ih--'e,ll with the
proL:L9i.og1:;tQ}7_ lh'e~ 988 Act this
couri :
_ -- 'Al'VIl'Vl"17e ~~i'es.u_li___(;hai under the new Act: an
i.n:'?ilrai1ce third party risk is not
_ requi'r'ecl" gra(:uil"ous passengers in a
oehicle. n'(3..;nai_er that the vehicle is of any type or
'flerice [he decisions rendered. under the old
- gratuitous passengers are of no avail
l l.L..'ll'z1'lV'c-.?'j_ cor'1side:'ir1g lhe liability of the insurance
Coriipariy in respect ofany accident which occurred
or iuoiild. occur after the new ACT." came iniioforce.'
20. The ivieu: expressed. in Saipal Si.ngh's
case {supra} however, has been specifically
overruled in {he S1lbS€q'li€T1l._jl.IdQ'TTl€TT.{. of a Bench of
21
three judges in New India Assurance Company.
Asha Rani and others (2003) 2 SCC 223_.j""'Iflf.f?ih¢l': ;. l
case Qf' discussion arose in COI1n€Cl'iQnv::LUlliE. 9
carrging passengers in a gooclsrwvehicle. co'ur_ij_
after referring to the terms 'of the it
1988 Act. as contrasteal with~--g.Slectiong,Q:3loft' the
1939 Act held that tl1eju_dgV:j1entl.z:1. .Sa.tp_"a
case {supra} had been incorrecilg deeided_'anrl that
the insurer will Compensation.
In the concurring J.. after
contrastrir;.gDt,l1e iglrlglgage 'in "1 939 Act with
that of _9_88_Lii' haisilaeenllllobserved {vide
he ' V'
* 4' *25;: of 1988 Act. inter alia,
prescribesl"coi'npul.s'e.rg coverage against the death
.-- orllboclilg" to any passenger of 'public
service vehicle'. Proviso appended. thereto
categorically states that compulsory coverage in
. respectvl.l'gQ,l"'drivers and conductors of public service
vehicljeland employees carried in a goods vehicle
l ..u}oitld be limited to the liability under the
Workmen's Compensation Act. It does not speak of
" any passenger in a 'goods carriage'.
27'. Furthermore, sulrclause [i] of Clause (19)
of si.tb~sect'ion (1) Qi" Section 147 speaks of liability
§;
-~-Cf:o.Li.cl. vs. Surlhalcaran. K.'/. 8:. Ors. reported in 2008 ACJ 2045,
u
22
which n":.ay be incurred' by the owner of a
respect ofoleat.'l'I of or bodily lf'_ljl.lT'J to arIy__f;'Jfersoil°l 3'
damage to an 3; property of a third party. by
or arising out of the use bifiehicle in
place. whereas sub--clause lliij
liability which may bev'ii'lctir'i'ecl'-bl} the
vehicle against the deaI'li'li'Qflor_boclily iijl;'1Vir'l; to any
passenger of a pttlolic se'ri,iic:e lreriicle cause/Vlby or
arising out of the in a public
place' _ '-
'2.I§--., , ':1J!'.(3:.l2-l.{V. observations
n1ad.le__ ii1_uf_Asli:'1 {supra} were in
:coiir1erc.li'o_r1 :l'c1ai'i'3:;iri'cjVljjassengers in a goods
v:;?el1'l.cle; "apply with equal _force to
graluilmls'paiaseiigersx in any other vehicle also.
.,TllllS'."" il)e'V..ri11is'i. tlfiphold the contention of the
(f.pV.pC.','_llClI'll.x¥'~i!3«§£tlI'ClI1C€ company that it owed no
towards the ir1_ifi.lr'ies stgflered by the
it olec--:e:Vci3:fec.l-:'Raji.n.cler Singh who was a pillion rider.
ir1.surance policy was a statutory policy. and
..l'l(3.I1(?Ve ii dia' not cover the risk of death of or bodily
l.l:ljlll'y to _CjI'(1lI.l.ll'()I.lS passengers."
' '£2. The Apex Court in the erase of Oriental Insurance
23
dealing with the obligai..ion oi' the insurer to indemnify--.:£in_e"claim
on account of the death of the pillion rider oniiiie scvovoierraifteir
referring to the various judgn1eni'.s_»oi'._i,he herd
under in para 19:
"19. The law ii=iii_efi~._emerges
decisions. is: {i} the liabliliigw insjarance
company in a caseof is not levjéioerided to
a pillion rider ihe" unless the
requisite C1.l71OI..£T1l'i"'Qf:~]§I'€lTii.i:I»I}1'li$'_ ii:-aid"._f%)r covering
his / her' legal' .ob'ligar-rion arising under
Secitfori " :ili-e.>;[':--..A"c~i:.__ be extended to an
vir1j'u:';;_floj;f deicijlh (Jii,ifi'€'i" vehicle or the pillion
:if'l'd(-?I',"' a.ricl:.('E-ii)"fi'h:e*;oiiiiToi: "rider on a two wheel was
n.o:__io beir.ea'i'ed party when the accident
_ has i[alcen.pl-.:ice=_owing to rash and negligent: riding
{he sco'o:.e_rj___aizd not on the pari. of ihe driver of
o1her._ Vuehicle. "
Apex Court in the ease of Dr.T.V.Jose vs.
chacm__"P ix/i"'& Ors. reported in 2001 ACJ 2059 explaining the
nleanirlgs of the word 'third party' in the context whether it
"Ai_r1'(:l'Lides a gmiiiiious passenger in a car held as under:
The seciion does noi, however. require a
policy io (rover the risk io passengers who are not K
iii,»
24
carried for hire or I'C'1i.lCtI'Cl. The statittory li1SLi'F>(;lI1('f;E"._.V'
does not cover iryury sttffered by occupariis
vehicle who are not carried for hire ()if.ireiLtiara'--.and
the insurer cannot' be held liabhlel i.tha'er<.i:'he
that does not prevent an ir'tsiei.rEir_];rorit 3?
contract of insurance coiieiiihg at i-'isle i.hva.h_the
miriiniimi requirement of Sl,C'lfltl.€3. the
risk to grati.iit'ous p.assehg'er'sVe_:cotlleialsolbecoirered.
In such cases. itihere -not merely a
sr'aiu.t'ory policy, the..:'i'_errn's. have to be
corlstcierea' «tofdeie_rrii1irie~': the try the i as arer.
T'l'%.<:'V"l9t§:;rgiiinability " res§t'ri'ct'ed to clause {Ma}
tuliitrli. 1s1icI.':.e_g;_that«tli.e___ind.er7ii1ity is in relation to the
legal liabi--lityV respect' of death of or bodily
U'_ifLiI:_t"j~.._V to anyfl_oers.or'i but except so far as is
riecesscti'y to meet. the requirements of Section 95 of
"rite Motor Act. the company shall not be
_lia.l_9le. 'lTLz.7l'l€~"(3 such death or irijury arises out of and
in th"e..coiirse of the employment' of such person. by
the i-:rs"i,z1'eci. Clauses {1} and {Uta} are not very
clearly worded but the words 'except so far as is
H necessary to meet the requirerrients of Section 95 of
the Motor V'ehi'cles Act. .i:?).'.r3Ef}' woi.tid indicate that
the li.abilit'y is restricieci to the liability arising out of
the siaI'i.ti'ory requi.rement:s itI'ld(-3!' Section 95.
Nu'
U1
goooc xxxx xxxx » L_ _
These clauses would themselves indicale_.--i§haiavhal"
was inlended to be covered under
{I}{a) is the risk required to be cote;-c;d..Aiir1delr
95 Qflhe Motor-Vehicles Act. I A' in ii
Ir: this case only sheei. {he gdolicy is
on record. This ;--clear'lii.i'slioivsu'il1ai ihe'_policy is a
third party policy:.h.i :1 condiiions
governing _ihis poliQu:._a.re'V.;1cii, What was
shown 3.10 . ,.Cflgufl.. condition.s of a
con1;;I'ehei1s.i.L=e relaliriq to private cars. These
carinoi lo the absence of terms
'and 'g>'O"r),<.Efi'.'1iI"ig this policy it is not
gaosslble to *!fiéfAS~~iLl3IT1iSSiOI1 Ql'Mr.Iyer that this
poli.cg_Vhcovi2ei-edAl.iai>«i!iiy to occupanis of the car. As
oui herienabove, the law on this
. sAid:3iecl«_ is a third party policy does not cover
_ lo graiuiioiis passengers who are not
' hire or reward. The respondeni No.8
compcir1_i; will. "therefore. not". be liable to reimburse
" appellaniz. "
From the scheme of Chapter XI. the statuiiory
insurance which is mantle ma1'1claio1'y is only to protect the
\}/,i
l lai' as they are (..'OI1C€'l'1'1€Cl is limited to the liability under the
l/
interest. oi" third parties. Section 1463 deals with tl*s:el"net:.es.sity
for insurance against third party risks. Section.l47.deealsi..{yitlfi.
the requirements of policies and livi1I1'l.Es~~£)f 'Slt1bl.--felaopse' j
[i] of Clause (b) of subwseetion (ill'.Vol':'..A.Seletioii
liability which may be ii1{)LIll"i'-\';T'(l}""..l.)).F the .owner._oi'..:a""veliicle in
respect of death of or bodily may damage to
any property of a out of the
use of the V€l'1l'(",lVC .1'11 q."plLi'bli¥e sub--clause (ii)
thereof deals. lbleWin.c1irred by the owner
of a or bodily injury to any
vehicle caused by or arising out of
the use veh.iol"edirLlarpijblie place. Section 2{35} of the Act
defines wliat" 21» pL1blic.".sei*\rice vehicle means. i.e.._ any motor
3_._use_d oi'"'adopied to be used for the carriage of
' pas'sengers for hire or reward and includes a maxi cab. a motor
"'eab'.__ Coiitract:uearriage and stage carriage. Proviso appended
thereto ea't@V,g§oric:ally statics that Compulsory coverage in respect
drivers and CO1'1dll('lOI'S of public sewice vehicle. and
"fen1p'l'c_~.yees carried in a goods VCl'1l(..'lL". however the liability in so
/"
27
Workmens Cornpensation Act. It does not spe.ak.""of any
J.
passenger in a 'goods carriage'. Therefore. _i_:,'.W'is--« .f_'c-1.e_ar..V the
statutory insurance is confined to the death~e:: injury to
any passenger of a public serviceZzyehjcle}cansed'=byuor arising''
out of the use of the Vehicle in a public rflace. j _ y
15. Therefore, the passerrger' of vehic1e"*:wh'ich is not
meant for public serviceis 1'1Q.*."C(JV@'€dH1,11'1d€I' "[§i1iS~S€CtiOI}. The
said passenger in the case_'of'aftwo whee1er.is the pinion rider
and in the vc.asev.._ot' §_'t.hree wheeler 'and four wheeler the
occupants who are not carried in the said
vehicle for hireV"'ora"reward; Therefore, the insurance policy
111 resp"ec_t_'fo'i' anvehicle. in which they are travelling as
V' su_ch passengers are not treated as third parties and such an
3ns';trance_ydoV.f'no"t cover the risk of such persons. The reason is
Seetionr' does not require a policy to cover the risk to
° passengers who are not carried for hire or reward. The
stattztory insurance does not cover injuries suffered by
_ occupants of the vehlcie who are not carried for hire or reward
and the insurer cannot be held liable under the Act. The
oeeupaiii,s/ passengers / iimiates of a private vehieiejlall
Within the defiliition of the word third
legal obligation arising under Seetio'1*1 E.»-fly? i.
extended to an injury or death *owfier_:"or_
passengers in such private or a' the case
of a two wheeler. Gi'at.uitous passengeijs who are ndt carried for
hire or reward in a service Vehicle,
cannot be eoiistru ed as't'hi1"d:pa1=ii'e.s.
16. {if th§f:'~r'risk"-of7aur1 o4ee._u"'ai'it:*"'of a car, inmate of a
Vehicle 01' _ lf)éi'sse1rigcti*--_iri_V a _ private Car. is to be Covered.
additional }3reIx1iti'rri'~has__tote paid. if no additional prerniurri
is paid, their risk is r-toil 'c.ovei'ed. The statutory liability under
Seet;ioi1s' 146 the Act has to be read with the terms
ofthe *ii1stii<a.nLée policy issued under Section 146 of the Act.
_ Bu_tIl't.h'atddoes "-}_1()t prevent an insurer from entering into a
'(:C)ritraCt.' ovfyj'i11'su1"z1n(?cr e()Verii"1g a risk wider than the Iriinimum
1*eqkuire*rnei1t':V of the stattite. whereby the risk to gratuitous
passerigers Could also be eovered. A third party policy does not
'_ eovéi' hability to §_{ra1L1i'tous passengers who are not carried for
ia,,/ a
I'~\«
iiiei'ely b€('.E':1LlS(:', d1'1 ziddii:ioi'ia} pi'em.ii1m collected imder iihe
iii /'
29
hire or reward. If a liabilii.y other than the limiiedi:"--1_ia*bility
provided for under the Act is to be ('3i1l'ia1."i{'!€d_'Vii-fldeih'-sari
insurance policy. additional pi'ei1ii_L.i.m__is r_eqLiii'ed» to p2iid.g l
The liability is i'esi.rieied 1.0 iihe Z"-vliab'_il1t.y a17is'i*:i_:g
statutory reqL1irei1ienis i.ii1de';'l_Seg:i'ioh"E-4: onlyfl '
17. In View of the aui.h'o.i.f_ii1at_ive 1o'i*oii'o'i,ineei1ieIii, of the
apex Court holding i'liai:"=:--:1ii (_3AeCu:;_)"a--r1i.«,/ylhmate /passenger in a
private Car. is 1101 a i.hird'l' recorded by the
tribunal l1l'1al;"llit?KllI'1S1,i:1f21l"£(E(3"xpdligfyd-lS.SL1§d covers the risk of
such }V";e1's._onsV a7hdu.__tl'ie irisuranee company is liable to
pay corzipei'1.sai:ioi'1l:{i*noLii1'E"i's illegal and Contrary to the law
declared apex C"OL1l:l.. In figici. in the policy. no additional
pre'i'r:i:iu:i1_5i i'eeeive,.d....by the insurance Company io cover the
Ol',Sii.('?l1_'[3'&?i'S(_)l'1S. Ii. is clear frorri the temlirzology used in
the".__pol'i.e.y'awliiyeh. fact is not in dis_pui.e. In one of the Cases.
addi__i.ior_1_.al _i'_)4:':"(:;'l"I1lLl1I1 is collected to lciaciiiig the risk of third
V._pari.y"oril1y. as clear from the policy ihat. loading was not
fmeaiii to cover risk oi' l1'i1'I'1af'.C€~3 of a private Car and therefore.
i /
Bl
of compensation at the instance oi' the claimant. IrI:en:"C'e_."we do
not see any merit in the said appeal also.
19. lt was submitted l..hE11._.*if1».,l\/IFA'.
insurance company had already
so. insurar1ee company is to the
owner of the vehicle to It was also
submitted that 50% of in fixed deposit. The
said amount. shall not.-"beiigiyenttodluvtheiixelaimants, they are
entitled to zfeoeive'§)erio'd.ioal inizmfest. "The insurance company
is entitled to agaiiist the owner of the vehicle and to
recovefthe. ainiotinis.wh.io'ii,they have paid to the Claimants.
Only in eyem"oit.he""inst1i'ai'1ee company not being able to
.,_AI'E'Gt)l?€Ijs..i';ht3.l.whOle?'€ti'1'1OVL1I1'£. from the owner of the vehicle, they
'c:an"the'n_«'p1"0c:eCd against'. the claimant and recover the money
f1"oin' the ai;o_reasa1id deposit. Till they exhaust all their remedies
to reooveif the money from the owner of the vehicle, they shall
not "proceed against the deposit in the name of the Claimants.
20. For the atoresaid reasons, we the following:
E
32
ORDER
(1) MFA Nu.1.1917/2007 is disI1'1issed. .
(ii) AH other appeals g,-we 'a1E.QW_ed foisted on the aside. The ofi."Lh_e '0\§rfie13':..,§:f"ti";e vehicle S[E1I]dS._,. .. V ' . h V {iii} The e11f1dL1r1l."- deposited by the iiiesvurancfé'"c::$ie:1pa.1iy_ at'. time of p1*efer1"i;n.g """ tiiesxsr. appeals 'i's'e1*de1'ed to be refunded to the ii';5%urémvced._et;:11;5a11y as they have succeeded in M .tihe.se7.i:1ppe:1Is. Sd/---4 IUDGE sd/=~ EUDGE .,_Cm/«