Karnataka High Court
Veenadevi Jalan Owner Of Krishna Agency vs Boregowda S/O. Shivegowda And United ... on 25 July, 2007
Equivalent citations: 2007(6)KARLJ589, 2007 (6) AIR KAR R 27, 2008 A I H C 255, (2008) 63 ALLINDCAS 641 (KAR), (2007) 6 KANT LJ 589, (2008) 2 TAC 564, (2008) 4 ACC 603, (2008) 4 ACJ 2396
Author: Anand Byrareddy
Bench: Anand Byrareddy
JUDGMENT Anand Byrareddy, J.
Page 1712
1. Heard the counsel for the appellant and the counsel for respondents.
2. The present appeal is filed by the owner of the vehicle involved, in challenge to the award for payment of compensation on the ground that the liability has been fastened on him. It is his primary contention that the as a result of the accident an injury has occurred to a gratuitous passenger carried in a goods vehicle. The Tribunal has proceeded on the footing that the insurer does not cover the risk, of the gratuitous passenger carried in a goods vehicle and has proceeded to fasten the entire liability on the owner. The counsel for the appellant would submit that though in terms of Section 147 of the Motor Vehicles Act, 1988, as it stood prior to the Amendment Act No. 54 of 1994, the insurer was not required to cover the risk, of a Charterer of the goods vehicle or his representative, or any gratuitous passenger in a vehicle. The terms of the policy in the case on hand, under which the risk was covered, included the risk to non fare paying passengers on the collection of additional premium paid by the appellant. This was in terms of an Endorsement "IMT 14", which is one of the conditions under which the policy is issued and the some reads as under:
IMT 14: Legal Liability to Non-Taxes Paying Passengers who are not employees of the insured In consideration of the payment of an additional premium of Rs. 150/-and notwithstanding anything to the contrary contained in Section II-I (C) it is hereby understood and agreed that the Company will indemnify the Insured against his legal liability other than liability under Statute (except Fatal Accident Act, 1855) in respect of death of Page 1713 or bodily injury to any person not being an employee of the insured and not a carried for hire or reward provided that the person is:
(a) Charterer or representative of the Charterer or of the truck;
(b) Any other person directly connected with the Journey in one form or the other being carried in or upon or entering or mounting or alighting from the Motor Vehicle described in the Schedule of this Policy.
Subject otherwise to the terms exception conditions and limitations of this Policy.
Hence, the Tribunal has completely overlooked this special condition which would cover the risk to a non-fare paying passenger who would include a gratuitous passenger and therefore, the liability fastened on the owner would be do hors this condition by which the insurer was bound and therefore, the award be set aside insofar as it fastens the liability on the appellant.
3. Per contra, the learned Counsel for the Insurance Company would contend that the policy is issued in terms of the requirement under low. Admittedly, the accident has occurred in the year 1993 and well prior to the Amendment Act 54 of 1994. It is only after the amendment that Section 147 of the Motor Vehicles Act requires the appellant to cover oven the risk of the owner of the goods or his representative, carried in a goods vehicle. The law does not require the insurer to cover the risk of a gratuitous passenger in a goods vehicle. The injured person in the accident being a gratuitous passenger, the liability did not require coverage of any such risk. The contention of the appellant that additional premium was paid to cover the risk of non-fare paying passengers would not include a gratuitous passenger. Under the said condition-IMT 14, the risk to be included in respect of the owner of the goods and his representative or a person connected with the journey, which pre-supposes that the Charterer having hired the vehicle the same would be under his custody and would only contemplate carriage of persons engaged to load and unload the vehicle and cannot include third parties such as a gratuitous passenger and since the person admittedly was not there at the instance of the Charterer of the vehicle, his presence could not be said to be connected with the journey as he was an outsider and would not be covered under the risk which is required to be covered by payment of additional premium. In this regard reliance is placed on the judgment of this Court in New India Assurance Company, Bijapur v. Smt. Kusum and Ors. reported in 2003(3) T.A.C.423 (Kant.) which followed the judgment of Asharani's case to hold that prior to 1994, the expression 'any person' could not include the owner of the goods and the strict interpretation of Section 147, as it stood prior to amendment, would certainly not include a gratuitous passenger. The endorsement IMT 14 certainly does not, therefore, take into its ambit unauthorized passengers. Therefore, the counsel would submit that the reliance placed on endorsement IMT 14 would not advance the appellant's case either in terms of the liability as it stood prior to Amendment Act 54 of 1994 or subsequently. As a gratuitous passenger's risk is never covered by the policy issued by the insurer. The non-fare paying passenger in respect Page 1714 of whom additional premium is paid can only mean such persons connected with the journey of the insured or chartered of the vehicle. The gratuitous passenger would therefore be outside the scope of such risk.
4. By way of reply the counsel for the appellant would emphasise that since the additional premium paid is in order to ensure and cover the risk of his employee driver inadvertently carrying passengers. The insurer having employed specific nomenclature insofar as the "charterer", "representative of charterer" and "workman employed by the charterer", the non-fare paying passenger is a term employed to cover such passengers who may be gratuitous passengers and this is apparently the reason the appellant has paid the additional premium to cover such risk. Therefore, the Tribunal was in error in overlooking this glaring circumstance in proceeding to hold that the risk is not covered under the policy. This would be the position if the policy was one which was issued purely under the terms of Section 147 of the Motor Vehicles Act. In the light of collection of additional premium to cover the risk of a non-fare paying passenger, it is not open for the insurer to contend that such a passenger would only be the person on the vehicle at the instance of the charterer or the insured. This exception could neither be gauged from the endorsement IMT 14 nor from the terms of the policy. Hence, the risk would certainly be covered and the Tribunal was in error in holding otherwise.
5. On these rival contentions, a plain reading of Section 147 as it stood prior to Amendment Act 54 of 1994, the insurer was not required to cover the risk of the owner of the goods or his representative and was also not required to cover the risk of a gratuitous passenger. It is this, as rightly pointed by the counsel for the appellant, which compelled the appellant to pay additional premium of RS. 150/- in terms of the endorsement IMT 14 to cover the risk, of the Charterer and his representative and such other persons who are connected with the journey.
The II clause in IMT 14 cannot be given a narrow interpretation as sought to be pressed into service by the counsel for the insurer. The tenor of the said endorsement does warrant the widest interpretation being given, to cover persons other than contemplated in Section 147 of the Motor Vehicles Act as it stood prior to Amendment Act 54 of 1994 and would therefore, cover such other person including a gratuitous passenger who is there to the knowledge of the charterer and driver of the vehicle which would bring such person within the definition of person connected with the journey. It would not include any person such as a stowaway or such other unauthorized passenger who hay have embarked on the vehicle without the knowledge of the charterer or the driver of the vehicle. Hence, in the instant case, it cannot be said that the risk to the injured was not covered under the policy.
6. Accordingly, the appeal is allowed. The liability of the appellant is absolved. The insurer shall be liable to pay the amount. In the event that the appellant has already suffered the claim and has satisfied it, the insurer shall reimburse the amount with appropriate interest. The amount in deposit be refunded to the appellant.