Punjab-Haryana High Court
National Insurance Co. Ltd vs Geeta Rani And Others on 23 December, 2014
Author: B.S. Walia
Bench: B.S. Walia
FAO No. 460 of 2012 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
FAO No. 460 of 2012
Date of Decision : 23.12.2014
National Insurance Company Ltd. ... Appellants
Versus
Geeta Rani & ors. ... Respondents
FAO No. 2707 of 2012
Geeta Rani ... Appellants
Versus
Pawan Kumar and another ... Respondents
CORAM:- HON'BLE MR. JUSTICE B.S. WALIA
Present: Mr. RC Kapoor, Advocate,
for the appellants.
Mr. AS Ahluwalia, Advocate,
for respondent No.1.
1. To be referred to the Reporters or not?
2. Whether the judgment should be reported in the Digest?
B.S. WALIA, J.
This order will decide FAO No. 460 of 2012 titled as "National Insurance Company Ltd. vs. Geeta Rani and others" and FAO No. 2707 BANITA CHUGH of 2012 titled as "Geeta Ran vs. Pawan Kumar and another" as both 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 2 these appeals arise out of the same award dated 20.9.2011passed by the Motor Accidents Claims Tribunal, Bathinda (for short 'Tribunal') awarding compensation of Rs.1,98,000/- along with interest @ 7% per annum from the date of filing of the claim petition till realization on account of death of one Sunil Kumar.
While FAO No. 460 of 2012 has been filed by the Insurance company for setting aside the award passed by the Tribunal and exonerating it from liability to pay compensation to the respondent- claimant, FAO No. 2707 of 2012 has been filed by the claimant seeking enhancement of compensation as awarded by the Tribunal as per claim before the Tribunal.
Brief facts of the case as set out in the grounds of appeal are that on 04.01.2009, one Sunil Kumar, aged 24 years, an unmarried youth received multiple injuries in an accident while travelling in Car No. DL-C68-7453 owned by the claimant, which was driven by respondent No. 1 - Pawan Kumar when it was hit by an unknown tractor trolley coming from the opposite side on account of respondent No.1 i.e. driver of the Maruti car not being able to see properly due to bright lights of other approaching vehicle resulting in death of Sunil Kumar on 08.01.2009.
The facts that the deceased was the son of the claimant and that the vehicle in which the deceased was travelling was owned by the claimant, are a matter of record. The only question is whether in such a situation, the claimant would be entitled to maintain a claim for compensation in view of the Maruti car in which the deceased was travelling being covered under Act Policy only. Mother of the deceased BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 3 filed claim petition u/s 163-A of The Motor Vehicles Act, Act 1988 ( for short 'Áct') before the Tribunal claiming compensation of Rs.20.00 lacs. After evidence was led by the parties, the Tribunal assessed the income of the deceased as Rs.3000/- per month, dependency as Rs.1500/- per month after applying a cut of 50% and then applying the multiplier of 7 as per the age of the mother, i.e. 65 years, awarded compensation of Rs.1,98,000/- including Rs.5,000/- for funeral expenses and Rs.67,000/- for medical expenses of the deceased prior to his death.
Learned counsel for the appellant-Insurance Company also submitted that initially the claim petition was filed by the brother of the deceased by impleading the mother of the deceased as a respondent. However, the same was withdrawn, whereafter the second claim petition was filed by the mother of the deceased as claimant against the Insurance Company u/s 163-A of the Act. Learned counsel for the appellant further contends that being a petition u/s 163A of the Act, only the factum of accident was required to be proved on account of use of the insured vehicle and that since there was only statutory Act Policy in the instant case and the claimant had not taken comprehensive policy, the same did not cover the claim in respect of a gratuitous passenger travelling in the insured vehicle.
The grievance of the appellant Insurance Company is that while fastening liability on it for payment of compensation, the Tribunal has gravely erred in not appreciating and considering the nature of the insurance policy (Ex. C-26) as the same being a statutory "Act Policy"
and the deceased Sunil Kumar, who was travelling in the car being a BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 4 gratuitous passenger, was not covered for the risk of his death in the accident which had taken place.
The Insurance Company has relied upon the decision of the Hon'ble Supreme Court in case titled as United India Insurance Co. Ltd. Vs. Tilak Singh & ors., (2006) 4 SCC 404, to contend that when the offending vehicle was insured under the statutory "Act Policy" which did not contain any endorsement of payment of additional premium for covering the risk of occupants of the car, then the Insurance Company was not liable for death or bodily injury to a gratuitous passenger travelling in the offending vehicle. The Hon'ble Supreme Court clearly held that risk of death or injuries to a gratuitous passenger carried in a private vehicle was not covered in insurance policy under Section 147 of the Act. Relevant extract of the judgment is reproduced below :-
"19. The argument that the risk pertaining to a third party would extend to a person other than the parties to the insurance contract was raised in New India Assurance Co. v. Satpal Singh where after contrasting the language of Section 95(1) of the 1939 Act with the provisions of Section 147(1) of the 1988 Act this Court held: "11. The result is that under the new Act an insurance policy covering third-party risk is not required to exclude gratuitous passengers in a vehicle, no matter that the vehicle is of any type or class. Hence the decisions rendered under the old Act vis-à-vis gratuitous passengers are of no avail while considering the liability of the insurance company in respect of any accident which occurred or would occur after the new Act came BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 5 into force."
20. The view expressed in Satpal Singh's case, however, has been specifically overruled in the subsequent judgment of a Bench of three Judges in New India Assurance Co. Ltd. v. Asha Rani. In that case the discussion arose in connection with carrying passengers in a goods vehicle. This Court after referring to the terms of Section 147 of the 1988 Act, as contrasted with Section 95 of the 1939 Act, held that the judgment in Satpal Singh case had been incorrectly decided and that the insurer will not be liable to pay compensation.........
21. In our view, although the observations made in Asha Rani case were in connection with carrying passengers in a goods vehicle, the same would apply with equal force to gratuitous passengers in any other vehicle also. Thus, we must uphold the contention of the appellant Insurance Company that it owed no liability towards the injuries suffered by the deceased Rajinder Singh who was a pillion rider, as the insurance policy was a statutory policy, and hence it did not cover the risk of death of or bodily injury to a gratuitous passenger."
Learned counsel for the appellant has also relied on the decision rendered by the Punjab & Haryana High Court in case titled as New India Assurance Co. Ltd. V. Sewa Singh and another - 2013 ACJ 1573, to contend that risk of a gratuitous passenger is not covered under Act Policy. Relevant extract of the judgment in. Sewa Singh's case (supra) is reproduced below:-
BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 6
"11. Though the provisions of the Act with regard to grant of compensation to the victims of road side accidents are beneficial provisions, yet no compensation can be awarded on compassionate grounds unless the same could be allowed under the provisions of the Act.
12. Being an employee of respondent No. 2, M/s. Vikas Concast Private Limited, respondent No. 1 was availing the facility of the motorcycle which was owned by M/s. Vikas Concast Private Limited. No terms of grant of this facility have come on the record and in the absence of the same, claimant would step into the shoes of the owner with regard to the insurance company. As under section 163-A of the Act, the liability to pay the compensation is upon the owner of the vehicle, the owner cannot both be a claimant and a tort-feasor. It is so laid down by Hon'ble Supreme Court in Ningamma's case (supra).
13. An employee to escape the ratio of Ningamma's case (supra) should be a person employed by the employer as driver of the said vehicle. In the instant case, the claimant appears to have been authorized to drive the motorcycle by the owner in relation to his employment with the owner and, therefore, he would step into the shoes of the owner of the motorcycle. The point involved in this appeal has been discussed threadbare in Ningamma's case (supra) and although the decision under appeal was set-aside and the matter was remitted to the High Court for fresh decision, yet it was for consideration as to whether the claim could be maintainable under the provisions of section 166 of the Act." BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 7
Learned counsel for the appellant has also relied upon the decision of the Hon'ble Supreme Court in case titled as Oriental Insurance Co. Ltd. v. Surendra Nath Loomba, (2012) 13 SCC 792. In Surendra Nath Loomba's case (Supra), the Hon'ble Supreme Court was pleased to hold that liability of insurance company qua gratuitous passenger would depend upon the nature of policy and that in case of comprehensive / package policy, insurance company would be liable but not so in the case of an Act Policy. Relevant extract of the same is reproduced below :-
"14. We have quoted in extenso to reiterate the legal position. In the case at hand, the policy has not been brought on record. The learned counsel for the appellant-insurer would submit that it is an "Act Policy". The learned counsel for the respondent would seriously dispute and submit that extra premium might have been paid or it may be a "Comprehensive/Package Policy". When Certificate of Insurance is filed but the policy is not brought on record it only conveys that the vehicle is insured. The nature of policy cannot be discerned from the same. Thus, we are disposed to think that it would be appropriate to remit the matter to the tribunal to enable the insurer to produce the policy and grant liberty to the parties to file additional documents and also lead further evidence as advised, and we order accordingly.
15. It needs no special emphasis to state that whether the insurer would be liable or not would depend upon the nature of the policy when it is brought on record in a manner as required by law." BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 8
Learned counsel has also placed reliance on the decision of the Hon'ble Supreme Court in National Insurance Co. Ltd. v. Balakrishnan, (2013) 1 SCC 731. In the said case, distinction between Act Policy and a Comprehensive / Private Car Package Policy has been dealt with. Relevant paragraphs of the decision of the Hon'ble Supreme Court in Balakrishnan's case (Supra) are reproduced below :-
10. As per the command of Section 146 of the Act, the owner of a vehicle is obliged to obtain an insurance for the vehicle to cover the third-party risk. Section 147 deals with the requirements of policies and limits of liability. Section 147(1) which is relevant for the present purpose is reproduced below:
"147. 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 damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;
BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 9
(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.--For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 10 which led to the accident occurred in a public place." On a scanning of the aforesaid provision, it is evident that the policy of insurance must be a policy which complies with the conditions enumerated under Sections 147(1)(a) 147(1)( and (b).
). It also provides where a policy is not required and also stipulates to cover any contractual liability.
11. In United India Insurance Co. Ltd. v. Tilak Singh this Court referred to the concurring opinion rendered in a three-Judge Judge Bench decision in New India Assurance Co. Ltd. v. Asha Rani and ruled thus:
"21.
21. In our view, although the observations made in Asha Rani case were in connection with carrying passengers in a goods vehicle, the same would apply with equal force to gratuitous passengers in any other vehicle also. Thus, we must uphold the contention of the appellant Insurance Company that it owed no liability towards the injuries suffered by the deceased Rajinder Singh who was a pillion rider, as the insurance policy was a statutory policy, and hence it did not cover the risk of death of or bodily in injury jury to a gratuitous passenger."
It is worthy to note that in the said case the controversy related to a gratuitous passenger carried in a private vehicle.
12. In Oriental Insurance Co. Ltd. v. Jhuma Saha the controversy related to fastening of liability on o the insurer for the death of the owner of a registered vehicle, Maruti BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 11 van. The Court observed that the accident did not involve any other motor vehicle than the one which he was driving and as the liability of the insurer company is to the extent of indemnification emnification of the insured against the respondent or an injured person, a third person or in respect of damages of property, the insured cannot be fastened with any liability under the provisions of the Motor Vehicles Act, and, therefore, the question of the insurer being liable to indemnify the insured does not arise. Thereafter, the Bench referred to the decision in Dhanraj v. New India Assurance Co. Ltd. and ruled thus:
"13.
13. The additional premium was not paid in respect of the entire risk of death or bodily injury of the owner of the vehicle. If that be so, Section 147(1)(b) 147(1)( of the Motor Vehicles Act which in no uncertain terms covers a risk of a third party only would be attracted at in the present case."
13. In National Insurance Co. Ltd. v. Laxmi Narain Dhut, after elaborately referring to the analysis made in Asha Rani,, the Bench stated thus:
"17.
17. Section 149 is part of Chapter XI which is titled 'Insurance of motor vehicle vehicless against third-party third risks'. A significant factor which needs to be noticed is that there is no contractual relation between the insurance company and the third party. The liabilities and the obligations relatable to third parties are created only by fiction ion of Sections 147 and 149 of the Act."
In the said case, it has been opined that although the BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 12 statute is a beneficial one qua the third party, yet that benefit cannot be extended to the owner of the offending vehicle.
14. In Oriental Insurance Co. Ltd. v. Meena Variyal the facts were that a Regional Manager of the company, which was the owner of the vehicle, was himself driving a vehicle of the company and met with an accident and eventually succumbed to the injuries. It was contended by the insurer before this Court that the policy did not cover the employee of the owner who was driving the vehicle while attending the business of the employer company and the deceased was not a third party in terms of the policy or in terms of the Act. It was also urged that the same would be the position even if the deceased was only travelling in the car in his capacity as a Regional Manger of the owner company and the vehicle was being driven by the driver. This Court observed that a contract of insurance is ordinarily a contract of indemnity and when a car belonging to an owner is insured with the insurance company and it is being driven by a driver employed by the insured, when it meets with an accident, the primary liability under law for payment of compensation is that of the driver. Once the driver is liable, the owner of the vehicle becomes vicariously liable for payment of compensation. It is this vicarious liability of the owner that is indemnified by the insurer. Dealing with the said liability, the Bench analysed the language employed under Section 147(1) of the Act and observed as follows:
BANITA CHUGH2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 13
"14.
14. The object of the insistence on insurance under Chapter XI of the Act thus seems to be to compulsorily cover the liability relating to their person or properties of thir thirdd parties and in respect of employees of the insured employer, the liability that may arise under the Workmen's Compensation Act, 1923 in respect of the driver, the conductor and the one carried in a goods vehicle carrying goods. On this plain understanding understandin of Section 147, we find it difficult to hold that the Insurance Company, in the case on hand, was liable to indemnify the owner, the employer Company, the insured, in respect of the death of one of its employees, who according to the claim, was not the driver.
d Be it noted that the liability is not one arising under the Workmen's Compensation Act, 1923 and it is doubtful, on the case put forward by the claimant, whether the deceased could be understood as a workman coming within the Workmen's Compensation Act, 1923. Therefore, on a plain reading of Section 147 of the Act, it appears to be clear that the Insurance Company is not liable to indemnify the insured in the case on hand."
15. After so stating, the Bench in Meena Variyal case adverted to the decisi decisions in National Insurance Co. Ltd. v.
Swaran Singh Singh, Laxmi Narain Dhut,, Asha Rani and Tilak Singh and opined that a policy in terms of Section 147 of the Act does not cover persons other than third parties. Eventually, it ruled thus:
"29.
29. ... The victim was the Regional Manager of the BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 14 Company that owned the car. He was using the car given to him by the Company for use. Whether he is treated as the owner of the vehicle or as an employee, he is not covered by the insurance policy taken in terms of the Act--without any special contract--since there is no award under the Workmen's Compensation Act that is required to be satisfied by the insurer. In these circumstances, we hold that the appellant Insurance Company is not liable to indemnify the insured and is also not obliged to satisfy the award of the Tribunal / Court and then have recourse to the insured, the owner of the vehicle."
16. In Oriental Insurance Co. Ltd. v. Sudhakaran K.V. a two-Judge Bench, while dealing with the issue whether a pillion rider on a scooter would be a third party within the meaning of Section 147 of the Act, after referring to a number of authorities, stated 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 (sic) 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.
* * *
25. The law which emerges from the said decisions, is: BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 15
(i)) the liabili liability ty 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 two-wheeler 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."
17. In New India Assurance Co. Ltd. v. Sadanand Mukhi the son of the owner of the insured while driving the motorcycle met with an accident and died.
d The accident allegedly took place as a stray dog came in front of the vehicle. The stand of the insurance company was that in view of the relationship between the deceased and the owner of the vehicle being father and son, the deceased was not a thir thirdd party. The Bench relied on the decisions in Tilak Singh Singh, Jhuma Saha, Meena Variyal, Variyal Laxmi Narain Dhut and United India Insurance Co. Ltd. v. Davinder Singh and came to hold that the insurance company was not liable to indemnify the owner.
18. At this jun juncture, cture, we may refer with profit to a two-
two Judge Bench decision in Bhagyalakshmi v. United Insurance Co. Ltd. wherein the learned Judges took note of the contention of the learned Senior Counsel for the appellant claimant which was to the effect that after the t deletion of BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 16 the second proviso appended to Section 95(1)(b) of the Motor Vehicles Act, 1939 in the 1988 Act, the liability of a passenger in a private vehicle must also be included in the policy in terms of the provisions of the 1988 Act. The Bench reproduced the policy, referred to Section 64-B of the Insurance Act, 1938, took note of the role of the Tariff Advisory Committee and referred to the decisions in Amrit Lal Sood v. Kaushalya Devi Thapar, Asha Rani, Tilak Singh, Jhuma Saha and Sudhakaran K.V. and observed thus:
"25. Before this Court, however, the nature of policies which came up for consideration were Act policies. This Court did not deal with a package policy. If the Tariff Advisory Committee seeks to enforce its decision in regard to coverage of third-party risk which would include all persons including occupants of the vehicle and the insurer having entered into a contract of insurance in relation thereto, we are of the opinion that the matter may require a deeper scrutiny."
19. On a perusal of the aforesaid paragraph, it is clear as crystal that the decisions that have been referred to in Bhagyalakshmi involved only "Act policies". The Bench felt that the matter would be different if the Tariff Advisory Committee seeks to enforce its decision in regard to coverage of third-party risk which would include an occupant in a vehicle. It is worth noting that the Bench referred to certain decisions of the Delhi High Court and the Madras High Court and thought it appropriate to refer the matter to a larger Bench. Be it noted, in the said case, the BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 17 Court was dealing with comprehensive policy which is also called a package policy. In that context, in the earlier part of the judgment, the Bench had stated thus "13. The policy in question is a package policy. The contract of insurance if given its face value covers the risk not only of a third party but also of persons travelling in the car including the owner thereof. The question is as to whether the policy in question is a comprehensive policy or only an Act policy."
20. Thus, it is quite vivid that the Bench in Bhagyalakshmi case had made a distinction between the "Act policy" and "comprehensive policy / package policy". We respectfully concur with the said distinction. The crux of the matter is what would be the liability of the insurer if the policy is a "comprehensive / package policy". We are absolutely conscious that the matter has been referred to a larger Bench, but, as is evident, the Bench has also observed that it would depend upon the view of the Tariff Advisory Committee pertaining to enforcement of its decision to cover the liability of an occupant in a vehicle in a "comprehensive / package policy" regard being had to the contract of insurance.
21 to 24 XX XX XX XX
25. It is also worthy to note that the High Court, after referring to individual circulars issued by various insurance companies, eventually stated thus:
"27. In view of the aforesaid, it is clear that the comprehensive / package policy of a two-wheeler covers BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 18 a pillion rider and comprehensive / package policy of a private car covers the occupants and where the vehicle is covered under a comprehensive / package policy, there is no need for the Motor Accidents Claims Tribunal to go into the question whether the insurance company is liable to compensate for the death or injury of a pillion rider on a two two-wheeler wheeler or the occupants in a private car. In fact, in view of the TAC's directives and those of the IRDA, such a plea was not permissible and ought not to have been raised as, for instance, it was done in the present case."
26. In view of the aforesaid factual position, there is no scintilla of doubt that a "comp "comprehensive rehensive / package policy"
would cover the liability of the insurer for payment of compensation for the occupant in a car. There is no cavil that an "Act policy" stands on a different footing from a "comprehensive / package policy". As the circulars have made the position very clear and IRDA, which is presently the statutory authority, has commanded the insurance companies stating that a "comprehensive / package policy"
covers the liability, there cannot be any dispute in that regard. We may hasten to clarify clar that the earlier pronouncements were rendered in respect of the "Act policy" which admittedly cannot cover a third-party third risk of an occupant in a car. But, if the policy is a "comprehensive / package policy", the liability would be covered. These aspects were not noticed in Bhagyalakshmi and, therefore, the matter was referred to a larger Bench. We are disposed BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 19 to think that there is no necessity to refer the present matter to a larger Bench as IRDA, which is presently the statutory authority, has clarified the position by issuing circulars which have been reproduced in the judgment by the Delhi High Court and we have also reproduced the same."
In New India Assurance Company Ltd. vs. Sadanand Mukhi and others (2009) 2 SCC 417, the Hon'ble Supreme Court was pleased to hold that Section 146 of the Act lays down the requirements for insurance against third party risk and where a third party risk is involved, an insurance policy is required to be mandatorily taken out. The provisions of the Act provide for two types of insurance, one statutory in nature and the other contractual in nature. By taking an "Act Policy" the owner of a vehicle fulfill his statutory obligation as contained in Section 147 of the Act 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. However, if the 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. If the liability of the Insurer 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.
In the aforementioned case, the claimant was owner of a motor cycle which was insured with the insurance company. The son of the insured while driving the motor cycle met with an accident and died whereupon claim was filed by the insured. The insurance company raised a specific contention that keeping in view the relationship between BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 20 the deceased and owner of the vehicle, i.e. father and son, he was not a third party and could not claim compensation on the basis of the provisions of the Act. The Tribunal held the insurance company liable to pay compensation, whereas the appeal filed against the order of the Tribunal was dismissed by the High Court. However, the Hon'ble Supreme Court allowed the appeal filed by the Insurance company and held that the Insurance company was not liable.
On the other hand, learned counsel for the respondent-claimant has vehemently argued that the Act Only Policy would cover the claim in the instant case also and further that the insurance company had not taken the plea of the deceased being a gratuitous passenger in the written statement, therefore, it is not open to the insurance company to take this plea at this stage. In support of his contention, learned counsel for the respondent has relied upon the following judgments :-
i) Rani Gupta v. United India Insurance Co. Ltd., (2009) 13 SCC 498 ;
ii) Baljeet @ Sunda vs. Angrejo 2002 (2) RCR (Civil) 659 ;
iii) Senior Branch Manager, National Insurance Co. Ltd.
vs. Namita Dixit and others 2011 ACJ 600 Counsel for respondent No.1 / claimant has laid emphasis on the fact that for claim u/s 163A of the Act, the claimant is not required to prove negligence and that in the written statement filed by the Insurance company, i.e. appellant before the Tribunal, the Insurance Company had not taken the plea that the deceased was a gratuitous passenger in the BANITA CHUGH private car which was involved in the accident. 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 21
I have given my careful consideration to the above mentioned contention of the counsel for respondent No.1-claimant. Both the pleas of the counsel for respondent No.1-claimant are devoid of merit. It is well settled law that the claim of the victim of the accident or other legal representatives has to be examined and decided in the light of the terms and conditions of the policy of the vehicle involved in the accident. In the case in hand, the car involved in the accident was insured under the Act Only Policy, which did not cover the risk of the gratuitous passenger. Learned counsel for respondent No.1 - claimant has not been able to dispute the stand of the counsel for the appellant that the policy in question was an Act Only Policy and that no additional premium had been paid to cover the risk of the passenger travelling in the said vehicle.
In Rani Gupta's case (Supra), the Insurance Policy was "Private Car Package Policy" and claim was u/s 166 of the Motor Vehicles Act. In the instant case, it is a Act Only Policy. The distinction between Act Only Policy and a Comprehensive / Private Car Package Policy has been dealt with by the Hon'ble Supreme Court in the case titled as "National Insurance Company Ltd. vs. Balakrishnan and another" ( 2013) 1 SCC 731 and it has been held that an "Act policy" admittedly cannot cover a third-party risk of an occupant in a car. But, if the policy is a "comprehensive / package policy", the liability would be covered.
Thus, the ratio of Rani Gupta's case (Supra) is not attracted to the facts of the instant case. The other contention of the learned counsel for respondent No.1-claimant that the Insurance Company had not taken plea of gratuitous passenger in its written statement filed before the Tribunal, is also not legally sustainable since it is a legal plea which can BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 22 be taken at any stage. In the light of the judgments, referred to above, it is well settled that claim on account of gratuitous passenger in respect of Act Policy, is not admissible.
Likewise, the decision of the Punjab and Haryana High Court in Baljeet @ Sunda's case (Supra), holding that the insurance policy covering third party risk is not required to exclude gratuitous passengers in vehicle of any type or class, in the light of the decision of the Hon'ble Supreme Court in case titled as New India Assurance Co. V. Satpal Singh, (2000) 1 SCC 237 is also of no avail to the respondent - claimant, in view of the judgment of Satpal Singh's case (Supra ) having been overruled by the Hon'ble Supreme Court in case titled as New India Assurance Co. Ltd. v. Asha Rani, (2003) 2 SCC 223.
The judgment of Sikkim High Court in Namita Dixit's case (Supra) in support of the stand that objection regarding deceased having been gratuitous passenger, therefore, claimant not being entitled to any compensation on account of the Insurance Policy being Only Act Policy, not having been raised before the Tribunal, the appellant was not entitled to raise the same for the first time in appeal to my mind is not attracted in the facts of the instant case. Admittedly, the claim petition was filed on account of death of Sunil Kumar s/o Purshotam Dass and the claimant on account of accident involving Maruti car No. DL-C68- 7453 owned by the claimant being driven by respondent No.1 and the accident having occurred on account of a tractor trolley coming from the opposite side and respondent No.1 driver of the Maruti car not being able to see on the road properly on account of bright lights of other approaching vehicle, resulting in the tractor trolley hitting the Maruti car. BANITA CHUGH 2014.12.24 15:33 The fact that the deceased was the son of the claimant and that the I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 23 vehicle in which the deceased was traveling was owned by the claimant, are a matter of record. The only question is whether in such a situation in view of well settled law, the claimant would be entitled to maintain a claim on account of death of her son travelling in the car owned by her which was being driven by respondent No.1.
No doubt, the objection aforesaid was not raised before the Tribunal, but in view of admitted factual position on record and the law on the subject being well settled, the point being a legal issue can be raised in appeal.
The Punjab and Haryana High Court in case titled as New India Assurance Co. Ltd. vs. Sewa Singh and another 2013 ACJ 1573, was pleased to hold that claimant was availing facility of motor cycle which was owned by a Private Limited Company and that no terms for grant of the facility had come on record and in the absence of the same claimant would step into the shoes of the owner with regard to the insurance company. As u/s 163-A of the Act, the liability to pay compensation is upon the owner of the vehicle, the owner cannot be both a claimant and a tort-feasor, in view of the law laid down by the Hon'ble Supreme Court in case titled as Ningamma v. United India Insurance Co. Ltd., (2009) 13 SCC 710. In the circumstances, the claim made u/s 163A of the Act, was held to be not maintainable. Consequently, the award made by the learned Tribunal was set aside.
The issue with regard to non admissibility of claim on account of death of a gratuitous passenger in case of Act Only Policy stands settled by the Hon'ble Supreme Court.
BANITA CHUGH 2014.12.24 15:33 I attest to the accuracy and authenticity of this document chandigarh FAO No. 460 of 2012 24
In view thereof, FAO No. 460 of 2012 is allowed. Award of the learned Motor Accidents Claims Tribunal, Bathinda, in favour of the claimant-respondent is set aside. Resultantly, FAO No. 2707 of 2012 titled as Geeta Rani vs. Pawan Kumar and another i.e. appeal filed by the claimant for enhancement of compensation and for payment of compensation as claimed before the Tribunal, is dismissed. No order as to costs.
December 23, 2014 (B.S. WALIA)
Monika/chugh JUDGE
BANITA CHUGH
2014.12.24 15:33
I attest to the accuracy and
authenticity of this document
chandigarh