National Insurane Co Ltd vs Jitendra Kumar & Ors on 19 December, 2012

[Cites 12, Cited by 7]

Rajasthan High Court - Jaipur

National Insurane Co Ltd vs Jitendra Kumar & Ors on 19 December, 2012

1.All these appeals filed under section 173 of Motor Vehicles Act, 1988 (hereinafter referred as the the said Act)arise out of the common award dated 19.5.2000 passed by the Presiding Officer, Motor Accident Claims Tribunal, Beawar District- Ajmer (hereinafter referred to as the Tribunal) in MACT Case no.108 of 1997 and others, whereby the Tribunal has awarded compensation to the concerned respondents-claimants for the injuries sustained by them in the accident alleged to have taken place on 3.11.1996, when they were travelling in the offending Truck bearing no.MH-12/0783, and further held the appellant insurance company liable to pay the said compensation.

2.The accident in question had allegedly taken place on 3.11.1996 when the respondent no.2 Praveen Kumar in all appeals was driving his offending Truck,carrying the claimants as the passengers therein and when the said Truck turned turtle due his rash and negligent driving. Resultantly, the claimants sustained injuries and therefore they filed their respective claim petitions before the Tribunal claiming compensation against the respondent no.2 who was the owner and driver of the offending Truck and against the appellant insurance company with whom the said Truck was ensured.

3.The said claim petitions were resisted by the appellant insurance company by filing their reply contending interalia that the vehicle in question was insured as public goods carrier and the respondent no.2 who was the driver and owner of the said Truck had committed breach of conditions of the policy by permitting passengers to travel in the said vehicle. According to the appellant company, the claimants were the gratuitous passengers and offending vehicle having been used for the purpose other than the purpose for which it was insured, as per the cover note, the insurance company could not be held liable to pay any compensation. The respondent no.2 though duly served did not appear before the Tribunal. The Tribunal passed the impugned order awarding compensation to respective claimants holding the appellant-insurance company liable to pay the compensation. Being aggrieved by the same, present appeals have been filed by the insurance company.

4.It has been sought to be submitted by Mr. Tej Prakash Sharma learned counsel for the appellant-insurance company that the offending Truck being public goods carrier as per the cover note Ex.67, the same was to be used solely for the purpose of the carriage of goods and not for the passengers. Taking the court to the evidence produced before the Tribunal, Mr. Sharma submitted that even as per the FIR Ex.-62, the respondent No.2 who was the owner and driver of the said Truck had permitted 30-32 passengers in the said vehicle, and thereby had committed the breach of terms of the policy. Placing reliance upon the judgment of the Apex Court in the case of New India Assurance Co. Ltd. Vs Asha Rani and others, AIR 2003 SC 607(1), Mr. Sharma submitted that the judgment in the case of New Indian Assurance Co. vs Satpal Singh, on which the Tribunal had placed reliance, has been overruled by the Apex Court and it has been held that the insurer could not be held liable for paying the compensation to the passengers traveling in the goods vehicle.Mr. Sharma has also relied upon upon the decision of the Apex Court in the case of New Indian Assurance Co. Ltd. Vs Vedwati and Ors, AIR 2007 SC 1334(1), in support of his submissions.

5.Nobody has filed any appearance on behalf of the respondent claimant in all the appeals, however, Mr. JP Gupta has appeared for the respondent No.2, the owner and driver of the offending vehicle. According to Mr. Gupta, the claimants were traveling in the offending Truck after paying hire charges and therefore their risk would be covered under the policy in question. While not disputing that the cover note Ex.67 was issued by the appellant insurance company as the offending vehicle was newly purchased and the respondent-owner had not received the policy at the time of accident in question, he submitted that it was for the insurance company to prove that the risk of the passengers in goods vehicle was not covered under the policy, which the appellant insurance company had failed to prove in the instant case. Relying upon the decision of the Apex Court in the case of Narcinva vs Kamat and Anr., AIR 1985 SC 1281, he submitted that the liability of insurance company under the contract would remain intact and it was bound to satisfy the award under the comprehensive policy of insurance. Mr. Gupta has also relied on the judgments of the other High Courts to buttress his submissions that if the insurance company had not placed on record the document pertaining to the contract of insurance, it cannot be absolved from the liability to pay the compensation.

6.In the instant case, it is not disputed that the respondent-Praveen Kumar son of Shri Bhanwar Lal Nahar was the owner of the offending Truck and he himself was driving the said Truck when the accident took place on 3.11.1996. It further transpires from the oral evidence of the respondents-claimants that the said respondent no.2 was driving the Truck very rashly and negligently which resulted into the accident and sustaining of injuries to the claimants who were travelling therein. In the FIR (Ex.62) registered with regard to the said accident also, it was alleged that the respondent no.2 was driving the Truck rashly and negligently which had resulted into the accident. Thus, it has been rightly held by the Tribunal that the accident had taken place because of the rash and negligent driving of the respondent no.2 only.

7.It further transpires from the cover note Ex.67 produced by the appellant insurance company before the Tribunal that the said offending Truck was got insured by the respondent no.2 with the appellant insurance company for being used as a public goods carriage. At this juncture, it is pertinent to note that as per the definition contained in section 2(14) of the said Act, goods carriage means any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods. Thus,the legislative intent appears to prohibit the goods vehicle from carrying any passenger, either for hire or reward or otherwise.

8.It cannot be gainsaid that section 147 of the said Act deals with the statutory liability of the insurance company to cover the risk of the persons mentioned therein. As per the said section, the policy of insurance insures the person or classes of person specified in the policy to the extent specified therein, against any liability which may be incurred by him in respect of the death or or bodily injury to any person, including owner of the goods or his authorized representative carried in the vehicle or damage to any property of a third party by or arising out of the use of the vehicle in a public place or against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place. Proviso to the said section 147 of the said Act stipulates that the policy is not required to cover the liability in respect of the death arising out of and in the course of his employment, of the employee of a person insured by 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 contingencies mentioned in the three clauses therein and such policy also is not required to cover any contractual liability.

9.Thus, on the combined reading of the definition of goods carriage as contained in Sec. 2(14) of the Act, and liability of Insurance Company as specified in Sec. 147 of the Act, it clearly transpires that carrying of passengers in a goods carriage is not permissible under the Act. In Sec. 147, there is no reference of any passenger in the goods carriage, which would require compulsory coverage in the policy. Hence, if some passengers are carried in the goods carriage, the Insurance Company could not be made liable to pay the compensation under the Policy.

10.It is also pertinent to note that if the vehicle in question is used for the purpose not allowed to be used under the policy, in that case the insurance company can take such defence as contemplated in section 149 of the said Act. In the instant case, the appellant-insurance-company, right from the beginning and in its reply to the claim petitions had taken up the contentions that the Truck in question was goods vehicle and there was breach of conditions of policy committed by the respondent no.2 who was the owner and the driver of the offending vehicle by permitting the passengers in the goods carriage. This court therefore finds much substance in the submissions of Mr. Tej Prakash Sharma for the appellant insurance company that the offending Truck having been insured as the goods carriage as per the cover note Ex.67, and the respondent no.2 having permitted the passengers to travel in the said Truck, had used the Truck in question for the purpose other than the one for which it was permitted to be used, apart from the fact that he himself was negligent in driving the said Truck. At this juncture, it is significant to note that the decision in the case of New India Assurance Co. vs Satpal Singh (supra) relied upon by the Tribunal has already been overruled by the Apex Court in the case of New India Assurance co. Ltd. vs Asha Rani and others (supra) in which it has been observed:

In Satpal's case (supra) the Court assumed that the provisions of Section 95(1) of Motor Vehicles Act 1939 are identical with Section 147(1) of the Motor Vehicles Act 1988, as it stood prior to its amendment. But a careful scrutiny of the provisions would make it clear that prior to the amendment of 1994 it was necessary for the insurer to insure against the owner of the goods of his authorised representative being carried in a goods vehicle. On an erroneous impression this Court came to the conclusion that the insurer would be liable to pay compensation in respect of the death or bodily injury caused to either the owner of the goods or his authorised representative when being carried in a goods vehicle the accident occurred. If the Motor Vehicle Amended Act of 1994 is examined, particularly Section 46 of the Act 6 of 1991 by which expression 'injury to any person' in the original Act stood substituted by the expression 'injury to any person including owner of the goods or his authorised representative carried in the vehicle the conclusion is irresistible that prior to the aforesaid amendment Act of 1994, even if widest interpretation is given to the expression 'to any person' it will not cover either the owner of the goods or his authorised representative being carried in the vehicle. The objects and reasons of Clause 46 also states that it seeks to amend Section 147 to include owner of the goods or his authorised representative carried in the vehicle for the purposes of liability under the Insurance Policy. It is no doubt true that sometimes the legislature amends the law by way of amplification of and an inherent position which is there in the statute, but a plain meaning being given to the words used in the statute, as it stood prior to its amendment of 1994, and as it stands subsequent to its amendment in 1994 and bearing in mind the objects and reasons engrafted in the amended provisions referred to earlier, it is difficult for us to construe that the expression 'including owner of the goods or his authorised representative carried in the vehicle which was added to the pre-existed expression 'injury to any person' is either clarificatory or amplification of the pre-existing statute. On the other hand it clearly demonstrates that the legislature wanted to bring within the sweep of Section 147 and making it compulsory for the insurer to insure even in case of a goods vehicle, the owner of the goods or his authorised representative being carried in a goods vehicle when that vehicle met with an accident and the owner of the goods or his representative either dies or suffers bodily injury. The judgment of this Court in Satpal's case, therefore must be held to have not been correctly decided and the impugned judgment of the Tribunal as well as that of the High Court accordingly are set aside and these appeals are allowed. It is held that the insurer will not be liable for paying compensation to the owner of goods or his authorised representative on being carried in a goods vehicle when that vehicle meets with an accident and the owner of goods or his representative dies or suffers any bodily injury.

11.The Apex Court in the case of New India Assurance Co. Ltd. Vs Vedwati and Ors (supra) has also considered the case of Asharani (supra) and held as under:

13.The difference in the language of "goods vehicle" as appear in the old Act and "goods carriage" in the Act is of significance. A bare reading of the provisions makes it clear that the legislative intent was to prohibit goods vehicle from carrying any passenger. This is clear from the expression "in addition to passengers" as contained in definition of "good vehicle" in the old Act. The position becomes further clear because the expression used is "good carriage" is solely for the carriage of goods. Carrying of passengers in a goods carriage is not contemplated in the Act. There is no provision similar to Clause (ii) of the proviso appended to Section 95 of the old Act prescribing requirement of insurance policy. Even Section 147 of the Act mandates compulsory coverage against death of or bodily injury to any passenger of "public service vehicle". The proviso makes it further clear that compulsory coverage in respect of drivers and conductors of public service vehicle and employees carried in goods vehicle would be limited to liability under the Workmen's Compensation Act, 1923 (in short 'WC Act"). There is no reference to any passenger in "goods carriage".

14.The inevitable conclusion, therefore, is that provisions of the Act do not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured for any passenger travelling in a goods carriage and the insurer would have no liability therefor.

12.In view of the settled legal position, it is required to be held that Sec. 147 of the Act does not enjoin any statutory liability on the owner of the vehicle to get his vehicle insured for any passenger travelling in a goods carriage and therefore the Insurance Company also could not be held liable to pay compensation to such passengers travelling in the goods carriage. Though Mr. Gupta has relied upon the decision of the Apex Court in the of Narcinva vs Kamat and Anr (supra), the said decision has no application to the facts of the present case inasmuch as the accident in question in the said case had taken place in the year 1976, which was governed by the old Motor Vehicles Act, 1939. However thereafter much water has flown and the provisions of old Act and the new Act have already been interpreted by the Apex Court in number of decisions, few of which have been referred to above. Respondent no.2, though was duly served before the Tribunal, had not bothered himself to file reply or to step into the witness box to say as to whether there was any contractual liability of the appellant insurance company to pay compensation to the passengers carried in the offending truck, which was specifically to be used as goods carriage, as per the cover note Ex.67.Under these circumstances, this court has no hesitation in holding that the Tribunal has committed gross error in not holding the respondent no.2 and in holding the insurance company liable to pay compensation to the claimants.

13.The appeals therefore deserve to be allowed. The impugned award of the Tribunal is set aside to the extent it has made the appellant Insurance Company liable to pay the compensation.

14.The appellant insurance company shall be at liberty to recover the amount of compensation if deposited/paid as per the impugned award, from the respondent no.2. All the appeals stand allowed accordingly.

(BELA M. TRIVEDI) J.

om All corrections made in the judgment/order have been incorporated in the judgment/order being emailed.

Om Prakash P

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Rajasthan High Court - Jaipur