Gujarat High Court
New India Assurance Co. Ltd vs Parulben Wd/O Bankimbhai Nanalal Patel on 27 February, 2018
Author: A.G.Uraizee
Bench: S.R.Brahmbhatt, A.G.Uraizee
C/FA/3539/2014 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
FIRST APPEAL NO. 3539 of 2014
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE S.R.BRAHMBHATT
and
HONOURABLE MR.JUSTICE A.G.URAIZEE
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1 Whether Reporters of Local Papers may be allowed to
see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law
as to the interpretation of the Constitution of India or any
order made thereunder ?
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NEW INDIA ASSURANCE CO. LTD
Versus
PARULBEN WD/O BANKIMBHAI NANALAL PATEL
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Appearance:
MR AJAY R MEHTA for the PETITIONER
DELETED for the RESPONDENT
MR JIGAR M PATEL for the RESPONDENTS No. 1,2,3,4
RULE NOT RECD BACK for the RESPONDENTS No. 1,2,3,4,5,6,7,8
RULE SERVED for the RESPONDENTS No. 1,2,3,4,5,7,8
RULE UNSERVED for the RESPONDENT No. 6
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CORAM: HONOURABLE MR.JUSTICE S.R.BRAHMBHATT
and
HONOURABLE MR.JUSTICE A.G.URAIZEE
Date : 27/02/2018
Page 1 of 15
C/FA/3539/2014 JUDGMENT
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE A.G.URAIZEE)
1. By this Appeal under Section 173 of the Motor Vehicles Act, 1988 ('M.V. Act', for short), the appellant - Insurance Company has assailed the judgment and award dated 29.4.2014 passed by the M.A.C. Tribunal, (Aux), Ahmedabad in M.A.C.P No. 288 of 2003 whereunder, it is directed to pay sum of 25% of compensation to respondent nos. 1 to 4 - original claimants.
2. Brief facts giving rise to appeal as could be gathered from the impugned judgment and award are that :
3. Deceased Bankimbhai Nanalal Patel was returning home along with others on 22.1.2002 at about 7-30 PM by driving Maruti Car bearing registration No GJ-1-BP-5561 registered in the name of respondent no. 8 herein and insured with present appellant. When the car was passing on Highway near Bavla, truck bearing registration No. HR-47-A-6014 coming from opposite direction and dashed with Motorcar, as a result thereof, deceased Bankimbhai Nanalal Patel suffered serious injuries, so that he was taken to SAL Hospital, where he succumbed to injury. The truck which dashed with car is insured with respondent no. 7 herein and the respondent nos 1 to 4 being legal heirs of deceased, preferred claim petition under Section 166 of the Motor Vehicles Act to recover compensation of Rs.38,00,000/- from the appellant and respondent nos. 5 to 8. By impugned judgment and award, the Tribunal held the deceased contributory negligent to the extent of 25% and partly allowed the claim petition and held that claimants are entitled to compensation of Rs.13,25,000/- with 9% interest. The respondent nos. 1 to 3, who were the driver, owner and Insurance Company of offending truck were held liable to pay 75% Page 2 of 15 C/FA/3539/2014 JUDGMENT of the compensation to the claimants, while the appellant and respondent no. 8 were held jointly and severally to pay 25% to deceased, though was contributory negligent to the extent of 25%. The legal heirs are entitled to compensation from the owner i.e. respondent no. 8 as the deceased was presumed to be a paid driver for whom the comprehensive policy premium towards paid driver was accepted by the appellant. The insurance Company of the motorcar being aggrieved by and dissatisfied with the fastening of the liability to the extent of payment of 25% of the compensation, has preferred present appeal.
4. Heard Mr. Ajay Mehta, learned advocate for the appellant and Mr. Jigar Patel, learned advocate for respondent nos. 1 to 4 - original claimants. Rest of respondents, though served, have not chosen to enter any appearance.
5. The sole ground on which the impugned judgment and award is assailed by Mr. Ajay Mehta, learned advocate for appellant that deceased was working as a Sales Manager and therefore was not a paid driver, therefore, when the Tribunal has recorded a finding of contributory negligence of the accident to the tune of 25% on the part of the deceased, the appellant could not have been fastened with the liability of payment of compensation to the extent to 25% on the ground that deceased was a driver. He also states that total compensation determined by the Tribunal has to be reduced to 25% towards contributory negligence of the deceased. He therefore, urged that the Appeal may be allowed and appellant Insurance Company be absolved from liability of payment of compensation of impugned award. Mr. Ajay Mehta, learned advocate for appellant, in support of his submission, has placed reliance on Page 3 of 15 C/FA/3539/2014 JUDGMENT unreported decision of this Court dated 5/11.11.2014 in First Appeal No. 3555 of 2009.
6. Mr. Jigar Patel, learned advocate for respondent nos. 1 to 4 - original claimants has resisted this Appeal. He submits that the deceased was driving car belonging to his Company and appellant Insurance Company has accepted additional premium of Rs.50/- towards risk of paid driver and therefore, Tribunal has not committed any error in fastening the liability of payment of compensation to the extent of 25% on the appellant Insurance Company, more particularly when the insurance policy was comprehensive also. He also submits that the fastening of 25% of contributory negligence on the part of deceased by the Tribunal is erroneous in view of panchnama of place of accident, which reveals that Motor car in which the deceased was traveling was completely smashed and therefore, there was no negligence on the part of deceased. He therefore, urges that Appeal is devoid of merits and may be dismissed.
7. In view of rival contentions raised before us, the sole issue that requires to be considered is whether the Tribunal was justified in holding that the deceased, though was working as Sales Manager, was presumed to be a 'paid driver' in view of the fact that he was driving car belonging to his employer.
8. It is an undisputed fact that based on pleadings and evidence led by claimant that deceased was working as a Sales Manager with Gopal Iron and Steel Company Limited, the respondent no. 1 - widow of deceased, who was examined at Exh. 48 has reiterated this fact in her affidavit in view of examination-in-chief and has admitted in cross examination on behalf of appellant that the car, Page 4 of 15 C/FA/3539/2014 JUDGMENT which the deceased was driving, was of the ownership of her paternal father-in-law, which was given to deceased for commuting to office. She has categorically admitted in her cross-examination that deceased was not paid driver. If that is be so, in our considered opinion, the Tribunal has clearly fallen in error in recording the finding that deceased can be presumed to be a paid driver, though he was working as a Sales Manager. It would be out of context to reproduce the finding recorded by Tribunal in para-31 of the impugned award.
"Para-31: In view of above, any person other than the owner, is driving the vehicle, in as much as he is employee of owner of offending vehicle, it can be presumed that he is authorized driver of the vehicle and owner of the vehicle has entrusted him the vehicle to drive. In the present case, it is not denied in evidence by the insurance company that deceased Bankimbhai Nanalal Patel was not the paid driver of opponent no. 4. In that circumstances, according to the provision when the insurance company is charging additional premium of Rs.50/- for covering the risk of driver, insurance company is liable to pay the compensation for self negligence of the driver of the maruti fronti car. It is also important to note that none for the New India Insurance Company stepped into the witness box to establish that deceased was not paid driver or authorized driver of the opponent no. 4. Therefore, in absence of any such evidence, this Tribunal held that insurance company of the maruti fronti car is also liable to pay the compensation."
9. The above finding recorded by Tribunal is counter to the proposition of law, laid by Division Bench of this Court in decision Page 5 of 15 C/FA/3539/2014 JUDGMENT rendered on 5/11.11.2014 in First Appeal No. 3555 of 2009, relied upon by Mr. Ajay Mehta, learned advocate for the appellant. The useful portion of said decision is reproduced hereunder for ready reference:
"Few things emerge from the evidence of this witness. He himself was the driver and eye-witness. His evidence that the accident took place because of sudden crossing of the road by an animal was not seriously disputable. Though the Insurance Company did try to suggest in the cross-examination that he himself was driving the vehicle rashly which was the cause of the accident, no evidence in this respect was produced. It is undisputed that the injured was a relative of the owner and not the paid driver. We would proceed on the basis of such established facts.
The question is in view of the terms of the insurance policy, whether the Insurance Company was liable to cover the risk of the injured. In this context, twin aspects of the insured himself being the driver, but not a paid driver of the owner would become relevant. With this background, we may peruse the terms of the insurance policy more closely.
The certificate of insurance shows payment of additional premium of Rs.25/- for covering the liability of a paid driver as per IMT 28. It also shows payment of premium of Rs.400/- to cover the personal accident benefits of unnamed passengers as per IMT 16. The private car package policy containing the schedule accompanying the certificate of insurance had certain terms which need to be interpreted. Section II pertained to the liability to third parties. Clause 3 thereof reads as under:Page 6 of 15
C/FA/3539/2014 JUDGMENT
3. In terms of and subject to the limitations of the indemnity granted by this section to the insured, the Company will indemnify any driver who is driving the private car on the insureds order or with insureds permission provided that such driver shall as though he/she was the insured observe fulfill and be subject to the Terms Exceptions and Conditions of this Policy in so far as they apply.
Section III pertained to personal accident cover for owner- driver, relevant portion of which reads as under:
Section III Personal accident cover for Owner-Driver. The Company undertakes to pay compensation as per the following scale for bodily injury/death sustained by the Owner-Driver of the Private Car in direct connection with the Private Car insured or whilst driving or mounting into/dismounting from the Private Car insured or whilst traveling in it as co-driver, caused by violent accidental external and visible means which independent of any other cause shall within six calendar months of such injury result in.
IMT 16 referred to earlier pertained to personal accident to unnamed passengers other than the insured and the paid driver and reads as under:
IMT 16. Personal accident to unnamed passengers other than insured and the paid driver. In consideration of the payment of an additional premium it is hereby understood and agreed that the insurer undertakes to pay compensation on the scale provided below for bodily injuries hereinafter defined sustained by any passenger other than the insured and/or paid drivers and/or a person in the employ of the insured coming with the scope of the Workmens Compensation Act, 1923 and subsequent amendments of the said Act and engaged in and upon the service of the insured at the time such injury is sustained whilst mounting into, dismounting from or travelling in but not driving the insured private car and caused by Page 7 of 15 C/FA/3539/2014 JUDGMENT violent accidents, external and visible means which independently of any other cause shall within three calendar months of the occurrence of such injury result in.
IMT 28 which is the relevant section for our purpose reads as under:
IMT 28. Legal liability to paid Driver employed in connection with the operation of insured private car:
In consideration of an additional premium as stated in the Schedule notwithstanding anything to the contrary contained in the policy it is hereby understood and agreed that the insurer shall indemnify the insured against the insureds legal liability under the Workmens Compensation Act, 1923, the Fatal Accidents Act 1855 or at Common Law and subsequent amendments of these Acts prior to the date of this Endorsement in respect of personal injury to any Paid Driver whilst engaged in the service of the insured in such occupation in connection with the Private Car insured herein and will in addition be responsible for all costs and expenses incurred with its written consent.
Provided always that
1. this Endorsement does not indemnify the insured in respect of any liability in cases where the insured holds or subsequently effects with any insurer or group of insurers as policy of insurance in respect of liability as herein defined for insureds general employees:
2. the insured shall take reasonable precautions to prevent accidents and shall comply with all statutory obligations:
3. In the event of the policy being canceled at the request of the insured no refund of the premium paid in respect of this Endorsement will be allowed.
Subject otherwise to the Terms Exceptions Conditions and limitations of the Policy except so far as necessary to meet the requirements of the Motor Vehicles Act, 1988.
11.11.2014
Page 8 of 15
C/FA/3539/2014 JUDGMENT
On the basis of the materials on record, the learned counsel for the appellant Insurance company submitted that the Claims Tribunal committed a serious error in fastening the liability on the Insurance Company to cover the risk of the deceased who was not a paid driver.
We patiently waited for Mr.Satta, counsel for the claimants after hearing the counsel for the Insurance Company and also after beginning our judgment on 5.11.2014. However, so far he has not put up any appearance.
The contract of insurance is one of indemnity. Motor accident insurance is a hybrid contract governed by the statutory provisions as well as the contractual terms. Under the Motor Vehicles Act, 1988, the insurance of a motor vehicle has certain statutory requirements particularly those contained in section 147 of the said Act. In addition to such requirements, it is open for the contracting parties to agree to cover wider risks. In the case of New India Assurance Company Limited v. Sadanand Mukhi, (2009) 2 SCC 417, the Supreme Court delved deep into these aspects and highlighted the distinction between contractual and statutory insurance and observed as under:
The provisions of the Act, therefore, provide for two types of insurance - one statutory in nature and the other contractual in nature. Whereas the insurance company is bound to compensate the owner or the driver of the motor vehicle in case any person dies or suffers injury as a result of an accident; in case involving owner of the vehicle or others are proposed to be covered, an additional premium is required to be paid for covering their life and property.
xxxx
Page 9 of 15
C/FA/3539/2014 JUDGMENT
13.Contract of insurance of a motor vehicle is governed by the provisions of the Insurance Act. The terms of the policy as also the quantum of the premium payable for insuring the vehicle in question depends not only upon the carrying capacity of the vehicle but also on the purpose for which the same was being used and the extent of the risk covered thereby. By taking an 'act policy', the owner of a vehicle fulfills his statutory obligation as contained in Section 147 of the Act. The liability of the insurer is either statutory or contractual. If it is contractual its liability extends to the risk covered by the policy of insurance. If additional risks are sought to be covered, additional premium has to be paid. If the contention of the learned counsel is to be accepted, then to a large extent, the provisions of the Insurance Act become otiose. By reason of such an interpretation the insurer would be liable to cover risk of not only a third party but also others who would not otherwise come within the purview thereof. It is one thing to say that the life is uncertain and the same is required to be covered, but it is another thing to say that we must read a statute so as to grant relief to a person not contemplated by the Act. It is not for the court, unless a statute is found to be unconstitutional, to consider the rationality thereof. Even otherwise the provisions of the Act read with the provisions of the Insurance Act appear to be wholly rational.
In the present case, the insurance policy was wider than the Act policy or in other words, covered the risk wider than the statutory requirements under section 147 of the Act. We would, therefore, have to ascertain whether the risk of bodily injury or death to the unpaid driver would be covered either under the statutory requirements of section 147 or under the contractual terms of the policy of insurance. The first part of this question is possible of a summary answer. Section 147 of the Act nowhere requires the insurance to cover the risk of bodily injury or death of the owner and is confined to indemnifying the insured against the liability incurred towards third party or in respect of damage to property. The Supreme Court in the case of Dhanraj v. New Page 10 of 15 C/FA/3539/2014 JUDGMENT India Assurance Co. Ltd., (2004) 8 SCC 553, it was held and observed as under:
8. Thus, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorized representative) carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle. Section 147 does not require an Insurance Company to assume risk for death or bodily injury to the owner of the vehicle.
9. In the case of Oriental Insurance Co. Ltd. v. Sunita Rathi and Ors. [1998 ACJ 121] it has been held that the liability of an Insurance Company is only for the purpose of indemnifying the insured against liabilities incurred towards third person or in respect of damages to property.
Thus, where the insured i.e. an owner of the vehicle has no liability to a third party the Insurance Company has no liability also.
In the present case, the deceased being the driver himself, the owner had no liability to pay compensation to him and in turn the statutory policy would not cover the risk of the owner when the owner himself was not liable to any damages.
Second aspect of the issue is whether in the extended format, the insurance policy covered the risk of the driver. We have noted the relevant terms of the insurance policy. Clause 3 of section II though pertains to the covering of the risk of a driver who is driving a private car on the insureds order or with his permission, the same has reference to the third party risk as is apparent from the said section itself. Section III pertains to personal accident cover of the owner-driver and does not include a driver other than the owner. IMT 16 pertains to personal accident to unnamed passengers other than insured and the paid driver and includes any injury sustained while mounting into, Page 11 of 15 C/FA/3539/2014 JUDGMENT dismounting from or traveling in but not driving the insured private car. Therefore, the injury to the driver was not covered under the said clause.
Lastly, IMT 28 pertains to legal liability to paid driver employed in connection with the operation of insured private car and it indemnified on consideration of additional premium paid by the insured against the liability under the Workmens Compensation Act, Fatal Accidents Act, or at common law towards personal injury to a paid driver while engaged in service of the insured.
It can thus be seen that the clauses mentioned above though extended the terms of the policy beyond the statutory requirements did not cover the risk of an unpaid driver. Rather unfortunately in the present case, the injured was neither the owner nor a paid driver. In other words, he was an unpaid driver other than the owner. We do not find any clause under which his risk was covered under the insurance policy. The Tribunal misread IMT 28 which confined to the legal liability of the Insurance Company to cover the risk of the owner with respect to bodily injury suffered by the paid driver which risk would arise when the liability of the owner would arise under the Workmens Compensation Act, Fatal Accidents Act or other relevant law.
Somewhat similar issue came up for consideration before a Division Bench of the Kerala High Court in the case of United India Insurance Co. Ltd. v. Vijayarajan, AIR 2009 Kerala 205 where the deceased had borrowed a motorcycle from its owner and while riding the motorcycle, he dashed against an electric pole resulting into injuries causing his death. The Court held that the deceased was neither the registered owner nor the insured Page 12 of 15 C/FA/3539/2014 JUDGMENT named in the policy. He was one who had borrowed the vehicle from the owner and he, therefore, cannot be treated as driver withing the meaning of personal accident cover. The Insurance Company was not liable to cover his risk."
10. We are therefore of the opinion that liability of payment of 25% compensation forming part of contributory negligence on the part of deceased have been wrongly fastened on the appellant Insurance Company.
11.The contention of Mr. Patel, learned advocate for respondents original claimants that considering the panchnama of place of accident, the Tribunal has committed error in attributing 25% contributory negligence on the part of deceased, it cannot be continuanced. We have carefully examined the panchnama of place of accident which reveals that at the time of accident, the truck was found on the edge of road and front portion thereof was damaged to the extent of Rs.2500/-. Merely because the front portion of the motor car was badly smashed, damaged its machine would per se would not sufficient to record the finding that the deceased was not at all negligent in the happening of the accident.
12.The holistic reading of panchnama would reveals that the Tribunal has not committed any error in recording that there was head on collision between truck and car and in our opinion, the Tribunal has rightly attributed 75% negligence to the truck being heavy vehicle and 25% negligence towards deceased having small car.
13. We are, therefore, of the considered view that Tribunal has completely fallen in error in directing the appellant to pay 25% of the compensation to the claimants ignoring the evidence of widow Page 13 of 15 C/FA/3539/2014 JUDGMENT of deceased that deceased was working as a Sales Manager and car, in which the deceased was travelling was provided to him by respondent no. 4 for commuting to the office. She has emphatically admitted in the cross examination that her deceased husband was not paid driver of respondent no. 8. In light of the pleadings and evidence of widow of deceased and admitted facts that deceased was working as a Sales Manager and was not a paid driver, it is very surprising that Tribunal has chosen to presume deceased as a paid driver to mulct liability on the appellant - Insurance Company as in the comprehensive policy, premium towards paid driver is accepted. The findings recorded by the Tribunal cannot be countenanced. In fact, the Tribunal ought to have deducted 25% from the total compensation determined towards contributory negligence of the deceased claimant and ought to have exonerated the appellant Insurance Company and respondent no. 8 from any liability of payment of compensation to the claimants.
14. For the foregoing reasons, the Appeal succeeds and is hereby allowed. The judgment and award dated 29.4.2014 passed by M.A.C.T (Aux), Ahmedabad in M.A.C.P No. 288 of 2003 is hereby modified and the appellant Insurance Company is absolved and exonerated of its liability to pay 25% of the awarded compensation to respondent nos. 1 to 4 - original claimants. It is clarified that liability of respondent nos. 5, 6 and 7 - original opponent nos. 1 to 3, to pay 75% of the compensation is maintained and is not disturbed, so also the ratio of disbursement so awarded in favour of the claimants.
15.By virtue of order dated 17.11.2014 the appellant has deposited 25% of proportionate cost with interest in the Tribunal, which is invested in the Fixed Deposit Receipt, which is retained in the Page 14 of 15 C/FA/3539/2014 JUDGMENT custody of Nazir, the said F.D.Rs along with accrued interest thereon is ordered to be paid to appellant - Insurance Company.
16.In the facts of case, there shall be no order as to costs.
17.R&P, if summoned, is ordered to be remitted to Tribunal forthwith.
(SRB, J) (AGU, J) P.S. JOSHI Page 15 of 15