Punjab-Haryana High Court
Sushila W/O Late Sh. Muna Lal Ji And ... vs Sh. Pankaj Mahajan And Another on 10 December, 2012
Author: K. Kannan
Bench: K. Kannan
FAO No.4848 of 2010 -1-
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT
CHANDIGARH
X Obj No.86-CII of 2011 (O&M) and
FAO No.4848 of 2010
Date of Decision. 10.12.2012
Sushila w/o late Sh. Muna Lal Ji and others .....Appellants
Versus
Sh. Pankaj Mahajan and another .....Respondents
Present: Ms. Ekta Thakur, Advocate
for the appellants.
Mr. Nitin Mittal, Advocate for
Mr. Subhash Goyal, Advocate
for the respondents-cross objectors.
CORAM:HON'BLE MR. JUSTICE K. KANNAN
1. Whether Reporters of local papers may be allowed to see the
judgment ? No
2. To be referred to the Reporters or not ? No
3. Whether the judgment should be reported in the Digest? No
-.-
K. KANNAN J.(ORAL)
I. The scope of lis
1. The appeal is at the instance of the deceased rider of the motor cycle, who, while travelling on his motor cycle borrowed from the owner met with a fatal injury on account of alleged mechanical defect of the motor vehicle. The petition was, therefore, filed under Section 163A of the Motor Vehicles Act.
2. The Tribunal while determining the issue for compensation arising on account of the claim by parent applied differential multiplier and differential income for the first few years assuming that the contribution to the family would have been larger and reducing the contribution by applying a different multiplier after a few year when there ought to have been prospect of marriage. Learned counsel would argue that in petition filed under Section 163-A calculation ought to FAO No.4848 of 2010 -2- have been with reference to the income, deduction and multiplier in the manner suggested by Schedule II itself and there could not have been the assessment in the manner in which it has been done. II. Strict liability principle-the statutory provision
3. In appeal, I requested the counsel to advance the argument as to how claim under 163-A was possible when the death was not on account of any one's negligence, which aspect was not required to be proved under Section 163-A and how mechanical defect, which caused death would give a cause of action for the claim. Learned counsel appearing for the appellant refers me to the Section, which according to her, would allow for prosecuting any claim so long as the death or injury was on account of "use of a motor vehicle". The consideration of this aspect would require appraisal of Section 163-A itself by its reproduction:-
"163-A. Special provisions as to payment of compensation on structured formula basis:- (1) Notwithstanding anything contained in this Act or in any other law for the time being in force or instrument having the force of law, the owner of the motor vehicle of the authorized insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be. Explanation.- For the purpose of this sub-section, "permanent disability" shall have the same meaning and extent as in the Workmen's Compensation Act, 1923. (2) In any claim for compensation under sub-section (1), the claimant shall not be required to plead or establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act or neglect or default of the owner of the vehicle or vehicles concerned or of any other person.
(3) The Central Government may, keeping in view the cost of living by notification in the Official Gazette, from time to time amend the Second Schedule."
III. The philosophical underpinning of theory of liability FAO No.4848 of 2010 -3-
4. The first portion of Section 163-A contains that anything in this Act or in any other law for the time being in force or instrument having the force of law, the owner of the motor vehicle or the authorized insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle. The whole scheme of the provisions of the Motor Vehicles Act must be understood always in the realm of law of tort with such modification as statute itself provides. The fundamental precept in the law of tort is that there was a duty of care in favour of the victim on whose behalf a petition is prosecuted against a person who owed that care.
5. The exceptions are to be seen from what the Section itself provides. The user for motor vehicle is a sine qua non for a claim under the Motor Vehicles Act. This user must be by a person, who fulfills a particular status that allows him to claim for compensation. To that extent the actual negligence of the claimant himself or the person claiming through such person could still be taken as statutorily recognized. The outstanding illustration would be a case of injury or death resulting to a workman, who may still have a valid claim to prosecute against his employer although the injury or death had resulted by his own negligent act. Here, the very principle involved is not principle of tort but it is a principle involving a particular social purpose of protecting workman in a labour market where a person is employed by an employer to secure employment and therefore, to that extent the employer binds himself to protect the workman for any consequences of an act which is not free from danger. The Workmen's Compensation Act FAO No.4848 of 2010 -4- stipulates that certain types of claims would still not be possible such as a workman does an act against the express instructions of the employer. The permissible exception under the Act itself is such instruction not resulting in death. The expressions used under Section 3 of the Workmen's Compensation Act, which cast a liability on the employer for compensation under the Workmen's Compensation Act is in respect of any injury not resulting in death that is attributable to three situations outlined under Section 3 (b) (i) (ii) and (iii) namely, under the influence of liquor, on account of willful disobedience by the workman to an order given and willful removal and disregard of the workman of any safety guard.
IV. Theory of fault, an inbuilt principle even for claim under Section 163-A
6. The Motor Vehicles Act contains, therefore, an amalgam of provisions of the Workmen's Compensation Act also, in at least two specific clauses which are stipulated: (i) under Section 147 of the Motor Vehicles Act that requires a policy of insurance to cover the risk to a workman as well and (ii) a provision under Section 167 allowing for an option for a workman to claim either under the Workmen's Compensation Act or under the Motor Vehicles Act. All this is only to show that a workmen's claim against an employer marks the only exception where even the negligence of his own act can give rise to action for damages against the owner. In every other situation involving an accident, the prosecution for the claim ought to be not merely the involvement of a motor vehicle but also the actual negligent act of some person other than the claimant himself. The requirement of proof of FAO No.4848 of 2010 -5- negligence is statutory inbuilt although the same expression does not find place under Section 166, 167 and 168 of the Motor Vehicles Act for determination of just compensation. When Section 163-A was introduced, it was recognizing a strict liability claim under which the liability relating a person, who had to show the negligence to yet another person before making a claim was relieved of such obligation. This is not to state that even in the absence of any form of negligence of any one individual, a person who invites upon himself the death by, say, dashing against a tree or driving into a river that he would still make a claim for compensation against his owner. It would be possible, as I have observed above, if the claim emanated from a workman or his representative against his employer and if death or injury has caused in course or out of employment.
7. Section 140 of the Motor Vehicles Act, which provides for a no fault liability is yet another exception to the requirement of person having to prove negligence of another person. Here the user of the vehicle itself is sufficient to make possible a claim, which is statutorily kept to ` 50,000/- in case of death and ` 25,000/- in case of permanent disablement. The distinction between what is contained under Section 140 and 163-A was recently recognized by the Supreme Court in a judgment in National Insurance Company Limited Vs. Simitha 2012(2) SCC 356 where the Supreme Court was dealing with situation of a person, who hit against a culvert and died and where the claim for compensation was made against the insurance company. The Court was examining the requirement of having to prove negligence and also saw in that context whether a contributory negligence could abate any part of FAO No.4848 of 2010 -6- the claim. The details of policy of insurance and the issue of whether contractual terms allowed for sustaining the claim against the insurance company were not examined by the Supreme Court, the task which we have undertaken now. The Supreme Court took the finding of High Court as fully establishing that accident as not resulting from the driver's negligence. It was examining the issue of negligence from the point of view whether there would be contributory negligence attributed to the driver. The contention that had been taken before the Supreme Court was that an issue of contributory negligence itself would be irrelevant if a claim under Section 163-A was made. The Supreme Court made a comparison with the language used under Section 140 under Chapter X and the language, which was used under Section 163-A, which was in a succeeding chapter in Chapter XI. The Court held that even in a claim under Section 163-A, a plea of contributory negligence would still obtain relevance, for, strict liability did not take away the plea that was possible for the respondent in that case to contend that the injured claimant or the deceased could himself be shown to have contributed to the accident and to that extent a claim under Section 163-A itself would obtain an abatement. 'Strict liability' is different from 'no fault liability'. The distinction is statutorily recognized. 'No fault' involves the least, irreducible liability, when alone his own negligence is irrelevant. If in this case a person uses a vehicle and on account of a mechanical defect of the vehicle, which he was driving, comes by serious harm that results in death, all that the law would allow for, would be to secure a compensation of what is statutorily the maximum on no fault liability basis. This was considered by the Supreme Court in Eshwarappa @ FAO No.4848 of 2010 -7- Maheshwarappa and Anr. Vs. C. S. Gurushanthappa and Anr 2010(8) SCALE 263 and Indra Devi Vs. Bhagda Ram (2010) 12 SCC 249. This itself was that could have been provided in case where a person comes by death on account of mechanical failure of the vehicle. V. Extent of liability of owner for mechanical failure - A distinct possibility for claim.
8. A claim could also be made against the owner of the vehicle, if it were to be made against the owner of the vehicle, if the claimant were to prove that the owner had not maintained the vehicle and the accident was the result of such disrepair or non-repair. It is essentially a matter of evidence. A person dashing against a tree by his negligence or to avoid a pedestrian or a stray animal may have no cause against the owner. However, if that accident was attributable to the poor upkeep of the vehicle, the owner would be liable for his negligence. Here, we are reaffirming the theory of liability, viz; the owner's duty of care to keep the vehicle motorable to allow any person to use his vehicle.
VI. Liability of insurance is traced to contract to the extent that law sanctions
9. Learned counsel appearing on behalf of the appellant wants to make out distinction and says that the policy for insurance provided for insurance cover to an owner, driver or a passenger under package policy and all that was necessary was that the driver must be a person, who was licensed to drive. In this case, according to the learned counsel, the death had been occasioned by the use of a motor cycle and he was a person who had a valid driving licence. This, according to her, read in the context of term in a package policy would secure to him FAO No.4848 of 2010 -8- legitimacy of claim under Section 163-A of the Motor Vehicles Act. I would hold the argument to be without merit, for it misses the point of what I have outlined, for liability which the insurer undertakes is a liability which is required to be undertaken by a contract of insurance. The contract of insurance that provides for a policy cover to an owner or driver who is not a workman under the owner of the car is to be understood in the context of what liability the law requires him to cover. It ought to be with reference to user of a motor cycle that results in accident on account of negligent act. It is not possible to dissect a clause from the policy of insurance out of context that what the scheme of the Motor Vehicles Act itself is. This requires us to examine some statutory provisions.
10. Section 147 of the Motor Vehicles Act compels an owner to cover the risk to a person, who suffers injury or death by the use of a motor vehicle. It also requires a compulsory insurance cover to a workman, whose, is required to be compensated under the Workmen's Compensation Act, other than these compulsory insurance provisions, any other policy of insurance is contract driven, which again has a statutory sanction. The Insurance Act of 1938 introduced through Part 2A and Part 2B provisions. What the insurance company shall provide, the types of policy to be taken and how the tariffs shall be worked out. The types of policy and the tariffs are worked through the provisions under Part 2B and through regulations notified by the statutorily established Tariff Advisory Committee under Section 64 of the Act. The insurance business in India is controlled business. What was wholly State controlled was later given room to private players also through Insurance FAO No.4848 of 2010 -9- Regulatory and Development Authority Act, 1999. The Insurance Companies' Contracts of Insurance are, therefore, driven by statutes and Regulations enacted through statutory committees.
11. The Indian Motor Tariff Regulations are issued by the Tariff Committee. They have, therefore, statutory effect as law. Some of the provisions are reproduced, to the extent that they are relevant. They are classified as General Regulations in Paragraphs (GR1, GR2, etc.) and the tariffs covered for distinct categories are referred to as India Motor Tariffs (IMT-1, IMT-2 etc.). GR-3 prescribes two types of policies:-
"GR.3. Policy Forms:
Policies insuring Motor Vehicles are to be issued only as per the Standard Form(s) given in Section 6 of the INDIA MOTOR TARIFF.
A. Types of Policies There are two types of Policies :
(i) Liability Only Policy: This covers Third Party Liability for bodily injury and/ or death and Property Damage. Personal Accident Cover for Owner-Driver is also included.
(ii) Package Policy: This covers loss or damage to the vehicle insured in addition to (i) above.
Restricting the scope of cover under Section-I (loss of or damage to the vehicle insured) of the Package policy without any reduction in Tariff rates is permitted. Excepting this, no alteration or extension of any of the Covers, Terms, Conditions, Exclusions, etc. of any of the Policies/Endorsements laid down in this tariff is permitted without prior approval of the TAC.
B. Rating:
Rates provided under this Tariff are minimum rates. Loading on tariff premium rates by 100% may be applied for adverse claims experience of the vehicle insured and individual risk perception as per the insurer‟s assessment. If the experience continues to be adverse, a further loading of 100% on the expiring premium may be applied. No further loading shall apply."FAO No.4848 of 2010 -10-
The types of policies include what Section 147 of the Motor Vehicles Act mandates and what parties could do beyond what is mandated.
Personal accident cover is not statutorily mandated. It is optional. A package policy that provides insurance cover to own damage to vehicle or damage beyond the statutory minimum of Rs.6,000/- could come through special package terms under a 'package'.
12. The personal accident cover is compulsory for owner-driver and optional through a package policy. It is to be seen alongside GR 36, which informs the extent of insurance that is possible:-
"GR.36. Personal Accident (PA) Cover under Motor Policy. (not applicable to vehicles covered under Section E, F and G of Tariff for Commercial Vehicles) A. Compulsory Personal Accident Cover for Owner-Driver Compulsory Personal Accident Cover shall be applicable under both Liability Only and Package policies. The owner of insured vehicle holding an „effective‟ driving license is termed as Owner-Driver for the purposes of this section.
Cover is provided to the Owner-Driver whilst driving the vehicle including mounting into/ dismounting from or traveling in the insured vehicle as a co-driver.
NB. This provision deals with Personal Accident cover and only the registered owner in person is entitled to the compulsory cover where he/she holds an effective 18 driving license. Hence compulsory PA cover cannot be granted where a vehicle is owned by a company, a partnership firm or a similar body corporate or where the owner-driver does not hold an effective driving license. In all such cases, where compulsory PA cover cannot be granted, the additional premium for the compulsory P.A. cover for the owner - driver should not be charged and the compulsory P. A. cover provision in the policy should also be deleted. Where the owner-driver owns more than one vehicle, compulsory PA cover can be granted for only one vehicle as opted by him/her.FAO No.4848 of 2010 -11-
TYPE OF CAPITAL SUM PREMIUM (Rs.) COVER
VEHICLES INSURED
(Rs.)
Motorised Two 1 lakh 50/- i) 100% of CSI for Death, Loss of
Wheelers Two Limbs or sight of both eyes
or one limb and sight of one
eye.
ii) 50% of CSI for Loss of one
Limb or sight of one eye.
iii)100% for Permanent Total
Disablement from injuries other
than named above.
Private Cars 2 lakhs 100/- i)100% of CSI for Death, Loss of
Two Limbs or sight of both eyes
or one limb and sight of one
eye.
ii)50% of CSI for Loss of one
Limb or sight of one eye.
iii)100% for Permanent Total
Disablement from injuries other
than named above.
Commercial 2 lakhs 100/- i) 100% of CSI for Death, Loss of
vehicles Two Limbs or sight of both eyes
or one limb and sight of one
eye.
ii) 50% of CSI for Loss of one
Limb or sight of one eye.
iii)100% for Permanent Total
Disablement from injuries other
than those named above.
B. Optional Personal Accident Cover for persons other than Owner-Driver The cover under this section is limited to maximum Capital Sum Insured (CSI) of Rs. 2 lacs. per person.
Cover is available only in respect of the following persons:-
1. Private Cars including three wheelers rated as Private cars and motorized two wheelers with or without side car (not for hire or reward): For insured or any named person other than the paid driver and cleaner.
Endorsement IMT - 15 is to be used.
2. Private Cars, three wheelers rated as Private cars and FAO No.4848 of 2010 -12- Motorized Two Wheelers (not used for hire or reward) with or without side car : For unnamed passengers limited to the registered carrying capacity of the vehicle other than the insured, his paid driver and cleaner.
Endorsement IMT - 16 is to be used.
3. In respect of all classes of vehicles: For paid drivers, cleaners and conductors.
Endorsement IMT - 17 is to be used.
4. Motorized Two Wheelers with or without side car( used for hire or reward ): For unnamed hirer/ driver.
Endorsement IMT - 18 is to be used.
DESCRIPTION OF % OF CAPITAL SUM PREMIUM FOR EVERY UNIT OF CSI OF BENEFITS INSURED Rs.10,000/- OR PART THEREOF (IN Rs) Pvt.Car Mot.TwoWheeler Com.Veh.
i) Death only 100% 5 7 6 ii) Loss of Two 100% 5 7 6 Limbs or sight of two eyes or one limb and sight of one eye iii) Loss of one 50% 5 7 6 Limb or Sight of one eye iv) Permanent 100% 5 7 6 Total Disablement from injuries other than named above
13. The reference to owner-driver must be understood as owner, who is capable of driving and who is driving the vehicle at the relevant time. It shall not be understood as owner/driver (owner or driver). This is evident from regulations that require that owner-driver to be duly licensed to drive the vehicle. The optional cover could include unnamed passenger in a private vehicle also. (The question of unlimited liability or extent of liability for a passenger in a private vehicle has come through independent directions relating to package policy but they are not discussed here as not relevant to our case). FAO No.4848 of 2010 -13- VII. Decisions cited , how inapplicable to the issues involved
14. Learned counsel refers me a decision in United India Insurance Company Ltd. vs. Lakhwinder Singh and others 2010(3) RCR (Civil) 33 where the Court was dealing with the case of deceased, who was sleeping on the truck, which was parked on the road side. The deceased fell down from truck, came under wheels and died. This will be considered to be a death which was caused on account of use of motor vehicle. This was perfectly and legitimately so, for a loadman or a third party to the vehicle that was being was always entitled to risk coverage. A third party's claim which the law provides for ought not to be treated as falling at par with a claim made on behalf of the representatives of the deceased-rider of a motor cycle. Here the rider of the motor cycle is not a third party as wrongly assumed by the leaned counsel for the appellant. Learned counsel also refers me a decision of the Supreme Court in Shivaji Dayanu Patil and another Vs. Vatschala Uttam More (Smt) (1991) 3 SCC 530 where the Court was dealing with the case of death resulting from an accident arising out of use of motor vehicle where the use was notionally excluded to include the period when the vehicle was in stationary position due to break down mechanical defect or accident. This decision applied to any situation of claim arising by a third party. The Supreme Court was considering the situation of several persons, who had collected around a petrol tanker to collect the petrol, which was spilt from the motor vehicle. Inflammable material caught on fire and the persons, who were collecting petrol were seriously injured or died. All those claim petitions, which were prosecuted at the instance of persons, who were representatives of the FAO No.4848 of 2010 -14- deceased victims in the incident were all third parties. The third party itself has a particular technical connotation in the field of insurance. The first party is the insured and the second party is the insurer. The third party is a person, who is not the insurer or the insured. The driver is not a third party. A driver has his own status and obtains a right to claim as third party if yet another vehicle was involved or he claims as party vis-a-vis his employer in his status as workman. To claim compensation on behalf of driver as third party for claim arising on account of user of his own vehicle with no other vehicle intervening is a misunderstanding of the law of insurance and the law of Motor Vehicles Act.
VIII. Disposition.
15. The insurance company has filed cross objection challenging the award. For the reasoning made already, the award passed by the Tribunal assessing the compensation in the manner in which it did was erroneous. All that the Tribunal could have provided was to allow for ` 50,000/- as compensation as payable to the claimant under no fault liability under Section 140 of the Motor Vehicles Act in the manner contemplated by the Supreme Court in Eshwarappa's case referred to above.
16. The award of the Tribunal stands modified and the appeal is dismissed. The cross objection filed by the insurance company is allowed to the above extent.
(K. KANNAN) JUDGE December 10, 2012 Pankaj*