Jharkhand High Court
Gray Hound Transport Company vs Union Of India And Ors. on 28 September, 2001
Equivalent citations: 2003ACJ869, AIR 2002 JHARKHAND 47, 2002 AIR - JHAR. H. C. R. 173, (2003) 3 TAC 834, (2002) 1 JLJR 6, (2002) 1 ACC 464, (2003) 2 ACJ 869, (2002) 1 BLJ 427
Author: M.Y. Eqbal
Bench: M.Y. Eqbal
JUDGMENT M.Y. Eqbal, J.
1. In this writ application the petitioner has prayed for issuance of an appropriate writ directing the respondents to pay compensation on account of total loss and damage to the vehicle caused by explosion and fire by the terrorists/extremists and also for payment of hire charges and damages.
2. The petitioner is the owner of the vehicle namely 'Tipper' having registration No. 20G/5275. The vehicle was requisitioned by the respondents and seized on 14.9.99 at Khelari in the district of Ranchi for the purpose of Parliamentary Election, 1999. On 16.9.99 said vehicle was sent to Palamau in the custody and possession of respondent No. 5, the Deputy Commissioner-cum-Returning Officer, Palamau. On 18.9.99 while the said vehicle was on election duty, it was completely damaged and destroyed by explosion caused by terrorists/extremists at Balumath police station. During the relevant time the said vehicle was carrying the officers and election materials for conducting election. In the said incident some of the officials also died. A criminal case was registered being Balumath PS case No. 29/99. The vehicle was further set on fire by the terrorists who also took away some of the parts of the vehicle. Since the aforesaid vehicle was completely destroyed, it was not released from requisition and possession thereof was not delivered to the petitioner. The petitioner, therefore, lodged a claim for payment of compensation for the loss and damage caused to the said vehicle. The petitioner also claimed hire charges at the rate of Rs. 1000/- per day from 14.9.99 till the date of payment. The petitioner also served legal notice to the respondents to pay compensation amounting to Rs. 6,00000/- (six lacs) being the value of the Tipper and also the hire charges. The respondents neither replied nor paid the compensation and hire charges.
3. Respondents 2 to 4 filed their counter affidavit wherein it was admitted that in the general election of Lok Sabha, 1999 the vehicle in question was requisitioned under Section 160 of the Representation of People Act, 1951 and the vehicle was sent to respondent No. 5 and it was damaged and destroyed by explosion caused by the terrorists/extremists within the jurisdiction of Balumath police station. However, it is stated that the petitioner has not disclosed the fact whether the vehicle was insured or not. If so, the Insurance, company may be held liable for payment of compensation. It is stated that the respondents are liable only for payment of hire charges for the dumper driven by the driver and the khalasi.
4. In a seperate counter affidavit filed by respondent No. 5, the Deputy Commissioner, Palamau, it is stated that although the petitioner has right to get adequate compensation but the same is payable by the Insurance Company. In support of their case the respondents have annexed a letter dt. 10.3.98 issued by the Secretariat of Election Commission of India.
5. When the matter was heard at the first instance this Court directed the petitioner to file a supplementary affidavit stating about the insurance of the vehicle and also whether compensation has been paid by the Insurance Company. In compliance of the said order a supplementary affidavit has been filed by the petitioner stating that the vehicle was lying in the garrage for carrying out mechanical job. The vehicle was previously insured with United India Insurance Company Limited which was valid from 4.9.98 to 3.9.99. Since the vehicle was lying in the garrage from 2.9.99 for carrying out some mechanical and other works, insurance policy was not renewed after expiry of 3.9.99.
6. From the pleadings of the parties, the question that falls for consideration is whether the petitioner is entitled to get compensation for the loss and damages caused to the vehicle and if so, whether the respondents or the insurance Company is liable to pay the compensation.
7. Before answering the question. I would first like to refer relevant provisions Representation of People's Act, 1951. Section 160 of the said Act empowers the State Govt. to requisition any premises, vehicle, vessel or animal in connection with Election held within the State. Requisition shall be effected by order in writing addressed to the person deemed by the State Govt. to be the owner or the person in possession of the property. Section 161 lays down the provision for payment of compensation. It provides that whenever in pursuance of requisition made under the aforesaid provisions by the State Govt. the owner shall be paid compensation which shall be determined by the State Govt. on the basis of fares or rates prevailing in the locality for the hire of such vehicle, vessel or animal. There is no specific provisions under the Act for making payment of compensation due to loss or damages caused to the vehicle, vessel or animal.
8. The question whether the respondent-State or the Insurance Company is liable to pay compensation for the loss and damages caused to the vehicle has been set at rest by the decision of the Full Bench of the Patna High Court in the case of "Ram Narayan Slngh v. Election Commission" (1996) 1 PLJR 621. In that case, the vehicle (Jeep) was requisitioned by the District Magistrate-cum-Returning Officer, Muzaffarpur for Election duty. The vehicle was insured with the Oriental Insurance Company Ltd. While the Jeep was on election duty, met with accident with a running train. When the jeep was released by the GRP men, the petitioner made a claim before the Addl. District Magistrate, Musaffarpur for payment of hire charges and also compensation for the loss and damages caused to the vehicle due to accident. The Addl. District Magistrate wrote a letter to the Divisional Manager, Oriental Insurance Company to inform whether any payment in shape of compensation was made, since the jeep had met with a accident. The Divisional Manager of the Insurance Company informed the Addl. District Magistrate that as per the "General exceptions" of the policy the company was not liable for the loss or damages sustained or incurred during the period of requisition of a vehicle by the Government. The Deputy Election Officer, thereafter informed the petitioner that there was no provision for payment of compensation for the loss or damages of the vehicle during the period of requisition for election duty. Petitioner challenged the aforesaid order by filing writ petition and sought appropriate direction to the State for payment of compensation. Their Lordships of the full Bench after considering various decisions of different High Courts have come to the conclusion that there always remain a General exception clause in the insurance Policy wherein the Insurance Company does not take the obligation for payment of compensation for the loss or damage sustained or caused to the vehicle during the period of requisition by the Government. Their Lordships observed. "Admittedly, the vehicle in question met with an accident while on election duty. I have noticed if the world 'owner' in this case is to be liberally interpreted, while the vehicle was requisitioned, for the purpose of liability, the Government becomes "owner" of the vehicle. There is no dispute that as per the condition No. 7 of the exception clause of the policy, the Insurance Company cannot be held liable for payment of damages or loss caused to the vehicle when requisitioned by the Government for election purposes. It is obvious if the vehicle was not requisitioned by the Government in case of accident, in terms of the policy the petitioner would have been entitled for "Compensation" of damages etc. from the Insurance Company. Their Lordships further observed :
"Therefore, in the background of the facts noticed above, as well as the views of different Courts and also having regard to clause 7 of the General Exceptions of the Insurance Policy, to conclude the answers, it has to be held that in such cases, the State Government alone can be held liable for compensation for the loss and damage caused to the vehicle on account of accident."
9. In the instant case, it has been stated by the petitioner that the vehicle was lying in the garrage for carrying out mechanical job. The said veh ie was requisitioned and seized on 14.9.99 from the garrage at Khelari by the State Government through the Officer Incharge. Khelari Police Station for the purpose of Parliamentary election, 1999. It was further stated that the vehicle was previously insured with the United India Insurance Company for the period from 4.9.98 to 3.9.99. Since the vehicle was lying in the garrage from 2.9.99 for repair, the Insurance Policy was not renewed after expiry of 3.9.99. These facts have not been denied by the respondents in the counter-affidavit. The question therefore arises whether the respondent-State can disowned its liability and refuse to pay compensation on the ground that on the date of requisition the vehicle was not insured which was the mandatary requirements of law.
10. Chapter XI of the Motor Vehicles Act. 1988 deals with the requirements of Insurance of Motor Vehicles Section 146 of the said Act reads as under:
"Necessity for insurance against third party risk : (1) No person shall use, except as a passenger, or cause or allow other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this chapter :
Provided that in the case of a vehicle carrying or meant to carry, dangerous or hazardous goods there shall also be a policy of insurance under the Public Liability Insurance Act. 1991 (6 of 1991) Explanation : A person driving a motor vehicle merely as a paid employee, while there is in force in relation to the use of the vehicle no such policy as is required by this sub-section shall not be deemed to act in contravention of the sub-section unless he knows or has reason to believe that there is no such policy in force. (2) Sub-section (1) shall not apply to any vehicle owned by the Central Government or a State Government and used for Government purposes unconnected with any commercial enterprise. (3) The appropriate Government may. by order, exempt from the operation of Sub-section (1) any vehicle owned by any of the following authorities, namely:
(a) .....
(b) .....
(c) .....
Explanation: For the purposes of this Sub-section, "appropriate Government" means the Central Government or a State Government, as the case may be, and--
(i) .....
(ii) .....
(iii) .....
11. From the reading of the aforesaid provisions, it is clear that before using a motor vehicle in a public place there must be a policy of insurance complying with the requirement provided therein. However, such policy of Insurance of the vehicle is not required in respect of vehicle owned by the Central Government or the State Government and used for government purposes unconnected with commercial enterprises.
12. Section 147 of the Act provides requirements of policy and limits of liability. Section 147 reads as under:
"Requirements of policies and limits of liability: (1) In order to comply with the requirements of this chapter, a policy of insurance must be a policy which:--
(a) is issued by a person who is an authorised insurer; and
(b) insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2)--
(i) against any liability which may be incurred by him in respect of the death of or bodily (injury to any person, including owner of the goods or his authorised representative carried in the vehicle) or damages to any property of a third party caused by or arising out of the use of the vehicle in a public place;
(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place;
Provided that a policy shall not be required:--
(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act. 1923 (8 of 1923) ,in respect of the death of, or bodily injury to, any such employee--
(a) engaged in driving the vehicle, or
(b) if it is a public service vehicle engaged as a conductor of the vehicle or in examining tickets on the vehicle, or
(c) if it is a goods carriage, being carried in the vehicle, or
(ii) to cover any contractual liability. Explanation: .....
(2) Subject to the proviso to Sub-section (1), a policy of insurance referred to in Sub-section (1), shall cover any liability incurred in respect of any accident, upto the following limits, namely:
(a) .....
(b) .....
(3) .....
(4) .....
(5) .....
13. Reading both the sections together, it is manifest that the owner or the person in possession of a vehicle can not use it in a public place unless vehicle is insured covering minimum risk provided therein. Such policy must cover the risk and liability in respect of death or bodily injury to a third party and also in respect of damage of any goods or any property of a third party caused by or arising out of the use of the motor vehicle in a public place. However, there is exception to these mandatary provisions and that is if the vehicle is owned by the Central Government or the State Government and used for government purposes unconnected with any commercial enterprises then it is not incumbent to get the vehicle insured and to cover risk and liability. Admittedly, the State became the owner of the vehicle on the date when vehicle was seized on the basis of order of requisition passed by the District Magistrate and therefore merely because the period of insurance by that time expired and it was not renewed, respondent-State cannot disowned its liability on the ground that on the relevant date of accident the vehicle was not covered by valid Insurance policy.
14. Be that as it may, as noticed above, it is mandatary for a person to obtain policy of insurance of the vehicle before it is used in a public place and such policy of insurance must comply with the requirements and covers limits of liability provided under Section 147 of the said Act. Minimum requirements is that such policy of insurance must cover the risk in respect of death or bodily injury of any person and also damages to any property of a third party. The law docs not coast a mandate on the owner of the vehicle to obtain a policy of insurance covering the liability in respect of loss and damages caused to the vehicle.
15. In other words, any person or owner of the vehicle before using it in a public place must obtain policy which cover the risk of person and property of a third party against any death or bodily injury or damage caused to the property by or arising out of use of motor vehicle. In addition to the above, the owner of the vehicle may also obtain comprehensive policy which includes the loss and damage caused to the vehicle insured. In the case of National Insurance Co. Ltd. v. Jugal Kishroe and others (1988) 1 SCC 626, the Apex Court while considering the question of Insurer's liability under the Act observed:
"Even though it is not permissible to use a vehicle unless it is covered at least under an "art only" policy it is not obligatory for the owner of a vehicle to get it comprehensively insured. In case, however, it is got comprehensively insured a higher premium than for an "act only" policy is payable depending cm the estimated value of the vehicle. Such insurance entitles the owner to claim reimbursement of the entire amount of loss or damage suffered up to the estimated value of the vehicle calculated according to the rules and regulations framed in this behalf. Comprehensive insurance of the vehicle and payment of higher premium on this score, however, do not mean that the limit of the liability with regard to third party risk becomes unlimited or higher than the statutory liability fixed under Sub-section (2) of Section 95 of the Act."
16. From the discussion of facts and law 1 arrived at the following conclusion:
(i) By reason of the requisition of the vehicle under Section 160 of the Representation of Peoples' Act, the State became the owner of the vehicle so long as it remain under acquisition.
(ii) If the vehicle is owned by the Central Government or the State Government and used for government purposes unconnected with commercial enterprises then it is not mandatary for the government to get vehicle insured and complying with the requirements of Chapter XI of the Motor Vehicles Act. 1988.
(iii) It is a mandatary requirements of the Motor Vehicles Act for a person to obtain insurance policy of the vehicle before using it in a public place and such policy must cover the risk of death and bodily injury to a third party and loss and damages to the goods and property of a third party.
(iv) It is not necessary for the owner of the vehicle to obtain a comprehensive policy which covers the risk of loss and damages caused to the said vehicle due to the accident.
17. From the aforesaid conclusion it can be safely held that merely because on the relevant date the vehicle was not insured, the respondent-State can not disowned its liability for payment of compensation. Had it been a ease where the compensation was claimed from the respondent-State in respect of death or bodily injury to a third party or loss and damage of the properly of a third party then the State would have disowned its liability for want of Insurance of the vehicle. However, I have not expressed my opinion as to whether in such circumstances respondent-State would have liability or not.
18. Having regard to the discussion made herein above, this Court is of the considered view that respondent-State is liable to pay compensation. Accordingly, this writ application is allowed and the respondent-State is directed to pay compensation to the petitioner in respect of loss and damages caused to the vehicle after obtaining estimate of loss and damages from the competent authority including the surveyor. Such compensation must be paid within two months from the date of receipt/production of copy of this order.
19. Writ application allowed.