Gujarat High Court
H D F C Ergo General Insurance Co Ltd vs Sharmilaben Gopalbhai Vasava on 17 March, 2022
C/FA/71/2014 CAV JUDGMENT DATED: 17/03/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 71 of 2014
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE SANDEEP N. BHATT
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1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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H D F C ERGO GENERAL INSURANCE CO LTD
Versus
SHARMILABEN GOPALBHAI VASAVA & 6 other(s)
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Appearance:
ADITI S RAOL(8128) for the Appellant(s) No. 1
MR MTM HAKIM(1190) for the Defendant(s) No. 1,2,3,4,5,6
RULE SERVED for the Defendant(s) No. 7
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 17/03/2022
CAV JUDGMENT
1. The present First Appeal, under Section 173 of Motor Vehicles Act, 1988, is preferred by appellant - insurance company (Original Opponent No.2), being aggrieved and dissatisfied with the judgment and award dated 31.07.2013 passed by the Motor Accident Claims Tribunal (Main), Narmada at Rajpipla in Motor Accident Claim Page 1 of 12 Downloaded on : Thu Mar 17 23:26:10 IST 2022 C/FA/71/2014 CAV JUDGMENT DATED: 17/03/2022 Petition No.209 of 2010, by which the Tribunal has awarded Rs.4,17,500/- with 9% per annum interest to the claimants, by holding opponent Nos.1 and 2 i.e. owner and insurance company, jointly and severally.
2. Brief facts of the case are as under:
2.1 On 15.07.2017 at about 7:30 p.m., the deceased-Sharmilaben Gopalbhai Vasava was returning from Rajpipla to her home by travelling on motorcycle bearing registration No.GJ21-G-1458, as a pillion rider, at that time, when motorcycle reached near turning of Village Khuta Amba, a Truck came from the opposite side and dashed with the motorcycle even though motorcycle was stationary.
As a result, the deceased-Sharmilaben Gopalbhai Vasava fallen down from the motorcycle and sustained grievous injuries and died on the spot. At the time of accident, deceased was aged about 35 years old and was earning Rs.40,000/- p.m. by doing job of running flour machine and doing household works. Due to her sudden death, the applicants have suffered loss of love, affection and company beside financial loss by way of her future income. Therefore, the claimants have filed the claim petition for compensation of Rs.4,50,000/- from Opponent Nos.1 and 2 i.e. owner and insurer of the vehicle.
2.2 Summons were issued to the opponents i.e. owner and insurance company of the motorcycle by the Tribunal. The opponent No.1 had appeared through his advocate but did not choose to file any written statement. Opponent No.2-insurance company has filed Page 2 of 12 Downloaded on : Thu Mar 17 23:26:10 IST 2022 C/FA/71/2014 CAV JUDGMENT DATED: 17/03/2022 its written statement at Exh.20 by denying the averments made in the claim petition and also averred that as per the contract of the insurance company, the insured has obtained the policy from insurance company which is 'Liability Only' policy and the risk of the pillion rider, carried in the motorcycle, cannot be covered.
2.3 The Tribunal has framed the issues and proceeded further by recording the evidence of claimant No.1-Gopalbhai Jatriyabhai Vasava, who has also been cross-examined by the insurance company. The insurance company has also examined his manager- Alpesh M. Patel (assistant manager) at Exh. 43 and was cross examined by learned advocate for the applicant. The documentary evidence; like copy of F.I.R. at Exh.33, copy of Panchnama at Exh.34, copy of Inquest Panchnama at Exh. 35, copy of P.M. report at Exh.36, copy of R.C. Book of motor cycle at Exh.37, copy of driving licence of applicant at Exh.38, copy of insurance policy of vehicle at Exh.23 is produced on record.
2.4 The Tribunal, after considering the oral and documentary evidences, came to the conclusion that the claimant is entitled to get compensation of Rs.4,17,500/- with 9% per annum interest, by holding opponent Nos.1 and 2 i.e. owner and insurance company, jointly and severally.
2.5 Hence, the present appeal is filed by the insurance company before this Court.
3.1 Heard learned advocate Ms. Shikha D. Panchal for Ms. Aditi Page 3 of 12 Downloaded on : Thu Mar 17 23:26:10 IST 2022 C/FA/71/2014 CAV JUDGMENT DATED: 17/03/2022
S. Raol for the appellant-insurance company has submitted that the main contention of the appellant-insurance company, in the present appeal is regarding the liability of the insurance company as the policy is issued by the insurance company, is 'Act Only Policy' and insurance company cannot be held liable in absence of any premium collected for the risk of pillion rider. Further, she has pointed out the insurance policy from the record of the Tribunal by indicating that no additional premium to cover the risk of the pillion rider is taken by the insurance company.
3.2 She has relied upon the decision of the Hon'ble Apex Court in the case of United India Insurance Co. Ltd. v. Tilak Singh & Ors. reported in (2006) 4 SCC 404 and also relied upon the decision of the Hon'ble Apex Court in the case of United Insurance Co. Ltd. v. M. Laxmi & Ors. reported in (2009) 17 SCC 301, where the liability of the insurer to pay the amount of compensation, in case of death of the pillion rider, cannot be fastened on the insurance company as the pillion rider cannot be considered as third party and more particularly, in the present case also, the insurance company has not received any premium towards the risk of pillion rider of the motorcycle. Further, she has placed reliance on the decision of this Court in the case of Oriental Insurance Co. Ltd. Vs. Jamnaben Parshottam Patel & Ors. rendered in First Appeal No.2209 of 2010 & other connected matters, dated 16.02.2022 whereby, this Court has also considered the issue of the 'Act Only Policy' and has held that insurance company cannot be held liable and was exonerated from the liability of payment of compensation. Therefore, he prays Page 4 of 12 Downloaded on : Thu Mar 17 23:26:10 IST 2022 C/FA/71/2014 CAV JUDGMENT DATED: 17/03/2022 that the present appeal my be allowed.
4.1 Per contra, learned advocate Mr. H.T.M. Hakim for the claimants has submitted that the Tribunal has passed the impugned judgment and order in just and reasonable manner and liability of the insurance company is rightly on the insurance company, as the deceased, who was travelling as a pillion rider, cannot be considered as a third party.
4.2 He has placed reliance upon the decision of Hon'ble Apex Court in the case of Hemendrasinh Manish Jadav Vs. Samjaybhai Govindbhai Dabhi & Ors. rendered in 2019 (2) GLR 983, whereby, this Court has considered the various decisions under Section 147 of the Motor Vehicles Act, 1988, which covers the risk of gratuitous passenger in a private car. Therefore, the same analogy can be applicable to the pillion rider of the motorcycle in the present case. He has submitted as per the above decision, the third party insurance policy also referred to as 'Act Only Policy', which is statutorily relevant under the Act and this Court has held in that judgment that expression 'Third Party' is not with reference to car but it is with reference to contract of insurance. Therefore, it was held in that judgment that occupant/passenger in a private car is included within a third party insurance cover or 'Act Only Policy'.
4.3 Further, he has produced on record copy of order passed by Hon'ble Apex Court against the said decision of this Court in the Samjaybhai Govindbhai Dabhi & Ors.(supra), by way of Special Leave Application to Appeal No.3762 of 2019 where also, the Page 5 of 12 Downloaded on : Thu Mar 17 23:26:10 IST 2022 C/FA/71/2014 CAV JUDGMENT DATED: 17/03/2022 Hon'ble Apex Court by order darted 25.08.2021 has dismissed the Special Leave Petition. Further, he has pointed out that the other High Courts have also taken similar views where also, the Hon'ble Apex Court has admitted the petition, which is pending for adjudication. Therefore, he has submitted that the pillion rider of the motorcycle can certainly be considered as a third party, his risk is covered by 'Act Only Policy'.
4.4 Further, he has drawn my attention from the record, by pointing out the deposition of the officer of the insurance company at Exh.43 and he has pointed out from his cross-examination, where the officer has admitted that there is no information that the proposal form of two wheeler insurance is not having any provision about pillion rider. Further, he has shown his ignorance about the question put by the claimants regarding the premium of the pillion rider, is provided in the motor tariff or not. Therefore, he has submitted that there is no provision in the proposal form of the insurance policy of the two wheeler itself. Then, there is no question to disbelieve the fact that pillion rider must be considered as a third party and his risk is certainly covered in the 'Act Only Policy'. Therefore, he prays that this appeal may be dismissed.
5.1 I have considered the rival submission of learned advocate for the respective parties. I have heard learned advocates at length. I have also perused the record and proceedings. I have also perused the pleadings of the parties. The moot questions arises from the consideration of this Court only regarding the main controversy, which is required whether under the 'Act Only Policy', the risk of Page 6 of 12 Downloaded on : Thu Mar 17 23:26:10 IST 2022 C/FA/71/2014 CAV JUDGMENT DATED: 17/03/2022 the pillion rider is covered in absence of any extra premium, which is paid by the insured to the insurance company. The Hon'ble Apex Court as well as this Court has taken view of that the risk of the pillion rider cannot be covered under the 'Act Only Policy' as the pillion rider cannot be considered as a third party.
5.2 Further, the Tribunal has placed reliance upon the decision of Hon'ble Apex Court in the case of New India Assurance Co. Ltd. v. P. Saguna & Ors. reported in 2009 ACJ 1733, while deciding the compensation under Section 163A application, the Tribunal was not competent to consider own negligence of the firmed and the petition under Section 166 of the Act is not a condition precedent to the duty of the Tribunal to decide the compensation. Therefore, the Tribunal has not considered the issue about the negligence of the driver of the vehicle. It is also pertinent to note that it is true that it is debatable issue whether the pillion rider cannot be considered as third party or not and this Court has taken the different view in 2019 as well as in the recent judgment in 2022, the fact remain that in 2019 judgment, which is carried to the Hon'ble Apex Court, the special leave petition preferred against that judgment, is dismissed. Moreover, the present claim petition, which is filed by the claimant, is filed under Section163A of the Motor Vehicles Act, 1988 and keeping that fact in the mind, the issue about the liability and when the Division Bench of this Court in the case of Jamnaben Parshottam Patel & Ors. (supra) has held that the insurance company cannot be held liable in case where the additional premium is not paid towards the risk of the occupant in the car. Para 10 and 11 of that judgment is Page 7 of 12 Downloaded on : Thu Mar 17 23:26:10 IST 2022 C/FA/71/2014 CAV JUDGMENT DATED: 17/03/2022 relevant, which are reproduced for the ready reference.
"10. Upon re-appreciation of the evidence on record, it deserves to be noted that the insurance policy of the Maruti car involved in the accident was valid from 13.02.1998 to 12.02.1999 and the said policy was for private car (Zone A), policy A Act only. The policy also further indicates that the owner had paid premium for CSI upto Rs.1 lakh for four occupants. Thus, it is an admitted position that the policy of the vehicle involved in the accident, i.e., the Maruti car bearing registration no. GJ-1-PP-2953 is an 'Act only' policy and hence, the risk of the claimants who were occupants in the car would not be covered except to the limited liability of Rs. 1 lakh each as CSI premium is paid. To appreciate the aforesaid contention, it would be apt to refer to the judgment of the Apex Court in the case of Oriental Insurance Co. Ltd. Vs. Sudhakaran K.V. (supra) in cases where the coverage was by an Act only policy, has observed thus -
"22. The contract of insurance did not cover the owner of the vehicle, certainly not the pillion rider. The deceased was travelling as a passenger, stricto sensu may not be as a gratuitous passenger as in a given case she may not be a member of the family, a friend or other relative. In the sense of the term which is used in common parlance, she might not be even a passenger. In view of the terms of the contract of insurance, however, she would not be covered thereby.
23. It is not necessary for us to deal with large number of precedents operating in this behalf as the question appears to be covered by a few recent decisions of this Court. In United India Insurance Company Ltd. v. Serjerao & Ors.Page 8 of 12 Downloaded on : Thu Mar 17 23:26:10 IST 2022
C/FA/71/2014 CAV JUDGMENT DATED: 17/03/2022 [2007 (13) SCALE 80], it was held as under:
"16....When a statutory liability has been imposed upon the owner, in our opinion, the same cannot extend the liability of an insurer to indemnify the owner, although in terms of the insurance policy or under the Act, it would not be liable therefor.
17. In a given case, the statutory liability of an insurance company, therefore,either may be nil or a sum lower than the amount specified under Section 140 of the Act. Thus,when a separate application is filed in terms of Section 140 of the Act, in terms of Section 168 thereof, an insurer has to be given a notice in which event, it goes without saying, it would be open to the insurance company to plead and prove that it is not liable at all.
18. Furthermore, it is not in dispute that there can be more than one award particularly when a sum paid may have to be adjusted from the final award. Keeping in view the provisions of Section 168 of the Act, there cannot be any doubt whatsoever that an award for enforcing the right under Section 140of the Act is also required to be passed under Section 168 only after the parties concerned have filed their pleadings and have been given a reasonable opportunity of being heard. A Claims Tribunal, thus, must be satisfied that the conditions precedent specified in Section 140 of the Act have been substantiated, which is the basis for making an award.
19. Furthermore, evidently, the amount directed to be paid even in terms of Chapter-X of the Act must as of necessity, in the event of noncompliance of directions has to be Page 9 of 12 Downloaded on : Thu Mar 17 23:26:10 IST 2022 C/FA/71/2014 CAV JUDGMENT DATED: 17/03/2022 recovered in terms of Section 174 of the Act. There is no other provision in the Act which takes care of such a situation. We, therefore, are of the opinion that even when objections are raised by the insurance company in regard to it liability, the Tribunal is required to render a decision upon the issue, which would attain finality and, thus, the same would be any award within the meaning of Section 173 of the Act."
It was furthermore held as under:
"6. So far as the question of liability regarding labourers travelling in trollies is concerned, the matter was considered by this Court in Oriental Insurance Company Ltd. Vs. Brij Mohan and Ors. (2007) 7 SCALE 753 and it was held that the Insurance Company has no liability...""]
25. The law which emerges from the said decisions, is: (i) the liability of the insurance company in a case of this nature is not extended to a pillion rider of the motor vehicle unless the requisite amount of premium is paid for covering his/her risk (ii) the legal obligation arising under Section 147 of the Act cannot be extended to an injury or death of the owner of vehicle or the pillion rider; (iii) the pillion rider in a two wheeler was not to be treated as a third party when the accident has taken place owing to rash and negligent riding of the scooter and not on the part of the driver of another vehicle."
Similar view is taken by this Court in First Appeal No. 3735/09 with First Appeal No. 786 of 2009.
11. Again coming back to the case on hand, as the policy is an 'Act only' policy with CSI cover limited to Rs. 1 lakh for four Page 10 of 12 Downloaded on : Thu Mar 17 23:26:10 IST 2022 C/FA/71/2014 CAV JUDGMENT DATED: 17/03/2022 occupants, the appellant insurance company cannot be saddled with the liability as if it is a comprehensive policy. Thus, we hold that the insurance company is not liable to indemnify the award as awarded by the Tribunal, except to the limit of Rs. 1 lakh each. Even the technical issue raised by Mr. Hakim does not deserve any merits as the very backbone of the contention is, the policy in question and the said question can be considered by this Court in this appeal as well."
5.3 Further, though the legal issue involved in the matter, is still kept open as per the order passed by the Hon'ble Apex Court rendered in SLP No.3762 of 2019, this Court has to follow the binding decision of the Division Bench of this Court in the Case of Jamnaben Parshottam Patel & Ors. (supra), by holding that the insurance company cannot be held liable to pay the amount of compensation. Accordingly, the present appeal is required to be allowed by exonerating the insurance company from its liability of payment of compensation, which is already awarded by the Tribunal of Rs.4,17,500/- with 9% p.a. interest in Motor Accident Claims Tribunal (Main), Narmada at Rajpipla in Motor Accident Claim Petition No.209 of 2010 dated 31.07.2013. Accordingly, the present appeal deserves to be succeeded. The appellant-insurance company is exonerated from the liability of payment of compensation, which would meet, the ends of justice.
6. With the above observations, the following order is passed:
6.1 The present First Appeal No.71 of 2014 is allowed by exonerating the appellant-insurance company from its liability for Page 11 of 12 Downloaded on : Thu Mar 17 23:26:10 IST 2022 C/FA/71/2014 CAV JUDGMENT DATED: 17/03/2022 payment of compensation, with no order as to costs.
6.2 The amount, which is paid to the claimants in pursuant to the earlier order passed by this Court on 09.04.2014 in the present appeal, 30% of the awarded amount paid to the claimants shall not be recovered from the claimants as agreed by insurance company and rest of 70% of the awarded amount, which is lying in the FDR and/or with the Tribunal shall be refunded back to the insurance company. However, it is clarified that the periodical interest, which is paid to the claimants on the 70% of awarded amount shall not be recovered from the claimants. The Tribunal shall pay the 70% amount lying in FDR to the appellant-insurance company herein, within four weeks from the date of receipt the order, by following due procedure, by way of account payee cheque, after proper verification.
6.3 Record and Proceedings be sent back to the concerned Tribunal, forthwith.
(SANDEEP N. BHATT,J) DIWAKAR SHUKLA Page 12 of 12 Downloaded on : Thu Mar 17 23:26:10 IST 2022