Gujarat High Court
United India Insurance Company Ltd vs Meenaben Mahendrabhai Chavda on 1 July, 2022
C/FA/1349/2008 JUDGMENT DATED: 01/07/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1349 of 2008
FOR APPROVAL AND SIGNATURE: Sd/-
HONOURABLE MRS. JUSTICE MAUNA M. 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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UNITED INDIA INSURANCE COMPANY LTD
Versus
MEENABEN MAHENDRABHAI CHAVDA & 3 other(s)
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Appearance:
MR MAULIK J SHELAT(2500) for the Appellant(s) No. 1
RULE SERVED for the Defendant(s) No. 1,2.1,2.2
RULE UNSERVED for the Defendant(s) No. 3
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CORAM:HONOURABLE MRS. JUSTICE MAUNA M. BHATT
Date : 01/07/2022
ORAL JUDGMENT
1. The Insurance Company as appellant has filed this appeal under Section 173 of the Motor Vehicles Act, 1988 ("the Act" for short) challenging the judgment and award dated 29.09.2007, by the Motor Accident Claim Tribunal Page 1 of 11 Downloaded on : Thu Jul 07 20:46:27 IST 2022 C/FA/1349/2008 JUDGMENT DATED: 01/07/2022 (Main) Bharuch in Motor Accident Claim Petition No.620 of 1994.
2. The facts in brief are:
2.1 That the accident took place on 24.07.1993. The original claimants filed claim petition for the death of Mahendrasinh Bhagwansinh Chavda, who was driving the Jeep No.GJ-02-T-3312 along with other passengers. It was case of the original claimants that the accident occurred on account of negligence on the part of owner of the jeep as the jeep was not kept in a motorable condition. It was their case that, on several occasions, the driver (the deceased) had complained to the owner in relation to maintenance of jeep and required to change the various parts of the vehicle to keep it motorable. It was further their case that the owner was negligent and failed in keeping the vehicle in a motorable condition because of which the accident took place. For the said accident, the original claimants filed claim petition under Section 166 of the Act seeking compensation of Rs. 4,65,482/- with interest and proportionate cost.
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C/FA/1349/2008 JUDGMENT DATED: 01/07/2022 2.2 The FIR was lodged by Shri Santoshsing Virendrasing, at Exh.-51, who was one of the passenger in a jeep, and had narrated the incident. It was stated by Santoshsing that the driver lost control over the steering because of which, the jeep turned turtled. The panchnama of scene of accident at Exh.-52 is also on record.
2.3 The Tribunal after appreciation of evidence on record and after hearing the parties awarded total compensation of Rs.2,52,500/- with interest at the rate of 9% from the date of filing of petition till its realization.
For negligence, the Tribunal held that because of negligence on the part of jeep owner, the deceased (driver of jeep) sustained injuries and succumbed to the same.
2.4 Aggrieved, by the judgment and award dated 29.09.2007, present appeal is filed by the Insurance Company mainly on the ground that the driver himself was negligent for the accident in the present case, and therefore, the claimants were not entitled for any compensation.
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3. I have heard learned advocate Mr. Maulik J. Shelat for the appellant-Insurance Company. Though served, none appeared for the respondents (original claimants).
4. Appearing for the appellant, learned advocate Mr. Shelat contended that the Tribunal is in error in holding that the owner was negligent to keep the vehicle for motorable use because of which the accident occurred. In support of his submission, referring to the FIR, he contended that there is nothing on record except bare version of the claimants that the jeep was not kept in a good condition. The panchnama as well as other evidence on record does not refer to the condition of the jeep, and therefore, the finding given by the Tribunal merely on the version of the claimants is beyond the evidence on record.
4.1 Be that as it may, he fairly submitted that even if the finding recorded by the Tribunal is held to be erroneous and even if the owner of the jeep is not held to be negligent for occurrence of the accident, the fact of additional premium paid by the owner of the jeep to cover the risk of driver can not be ignored. He further submitted Page 4 of 11 Downloaded on : Thu Jul 07 20:46:27 IST 2022 C/FA/1349/2008 JUDGMENT DATED: 01/07/2022 that this issue is now covered by the recent decision of this Court (full bench decision) in the case of Valiben Laxmanbhai Thakore (Koli) and others Vs. Kandla Dock Labour Board and another reported in 2022(1) GLR 440. In the said decision of this Court, it has been held as under:
"12. The Division Bench of this Court in the case of Saberabibi Hisammiya Umarvmiya (supra) has observed thus:
"21. Then comes the question of liability of the United India Insurance Co., so far as truck driver is concerned. It was submitted by the learned counsel for the Insurance Co. that the dependents of deceased truck driver cannot get compensation from the Insurance Co. in view of the finding of the tribunal that the driver was 100% negligent. It was submitted by Mr. Nanavati that in view of the above finding recorded by the tribunal and affirmed by this Court, neither the owner nor the Insurance Co. can be directed to make payment of compensation towards the claim of the death of Riyajuddin. Mr. Nanavati submitted that recording of finding of negligence is a sine qua non for getting compensation in any motor accident case. Heavy reliance was placed by Mr. Nanavati in this connection on the decision of the Hon'ble Supreme Court in the case of Minu B. Mehta vs. Balkrishna Ramchandra Nayan, reported in AIR 1977 SC 1248. In that case, the Hon'ble Supreme Court held that a person is not liable unless he contravenes any of the duties imposed on him by common law or by a statute. In a motor accident, the owner is only liable for negligence. If there was no negligence on the part of the owner, the Insurance Company cannot be held liable for the payment of compensation in a motor accident claim case. Mr. Nanavati submitted that since the driver himself was negligent, he cannot claim any compensation from the owner and the Insurance Co. can be held liable only if the owner is liable in law and, hence, the Insurance Co. must be exonerated.
22. Mr. Shah, on the other hand, submitted that in the instant case, as per the policy Exh. 282, additional premium Page 5 of 11 Downloaded on : Thu Jul 07 20:46:27 IST 2022 C/FA/1349/2008 JUDGMENT DATED: 01/07/2022 of Rs.16/- as per I.M.T. 16 has been paid covering the risk of driver and cleaner subject to I.M.T. 16. Mr. Shah, therefore, submitted that the claim is based on policy and since as per the terms and conditions of the policy, a driver is covered, the Insurance Company is liable and the tribunal ought to have held the company liable.
23. Looking to the provisions of Section 95 of the Act and the policy, Exh. 288, it is clear that the policy covers the risk of driver and cleaner and additional payment of Rs.16/- was paid. In view of payment of additional premium of Rs.16/-, the Insurance Co. is liable as per the terms of policy and the ratio laid down in Minu Mehta's case (supra) cannot be attracted and pressed in service by the Insurance Co. because of payment of additional premium, the Insurance Company has extended the coverage for the risk of driver and cleaner. In our opinion, therefore, the Insurance Co. cannot be absolved from liability by contending that the claimants were not entitled to compensation since there was 100% negligence on the part of the driver. The claimants are entitled to get compensation from the Insurance Co. for the death of driver on the ground that the case is covered under the terms of policy irrespective of negligence on his part.
24. Mr. Nanavati then submitted that in that case, the provisions of Section 95 (1) of the Act would apply, and the claimants will be entitled to get compensation in respect of death or bodily injury arising out of and in the course of employment as payable under the provisions of the Workmen's Compensation Act of Harivadan Maneklal Modi & Anr. Vs. Chandrasinh Chhatrasinh Parmar & Ors., reported in 28 (2) GLR 1274, Mr. Nanavati submitted that the compensation can be claimed either under the Motor Vehicles Act or under the Workmen's Compensation Act, but not under both. He submitted that, in the instance case, since the driver was 100% negligent, he could not have claimed compensation under the Motor Vehicles Act. At the most, therefore, an application could have been filed under the Workmen's Compensation Act before the Commissioner for Workmen's Compensation. Since it is not done, the claim is liable to be dismissed. In our opinion, the contention has no merit. Reliance placed on Harivadan's case (Supra) is also ill-founded. What the Division Bench in Harivadan's case (Supra) held was that a person cannot file a petition in both the forums, namely, by invoking provisions of the Motor Vehicles Act as well as the Workmen's Compensation Act. At the sametime, however, if the driver could have made claim Page 6 of 11 Downloaded on : Thu Jul 07 20:46:27 IST 2022 C/FA/1349/2008 JUDGMENT DATED: 01/07/2022 under the Motor Vehicles Act and is otherwise entitled to get compensation under that Act, such application cannot be rejected on the ground that the application could have been made before the Commissioner for Workmen's Compensation. In our opinion, when the policy has covered the risk of driver, a petition under the Motor Vehicles Act is maintainable. Sub-Section (1) of Section 95 merely provides the extent of liability. It clearly lays down that if the case falls under SubSection (1) of Section 95, the extent of liability would be to the extent to which it would arise under the provisions of the Workmen's Compensation Act. From that it cannot be said that such a person will have to approach the Commissioner for Workmen's Compensation and file an application only before that forum. Since the additional coverage is given in policy Exh.282, the liability of the Insurance Co. arises. In our opinion, if the application is made before the Commissioner for Workmen's Compensation as also before the Motor Accident Claims Tribunal, the person is not entitled to get benefit from both the forums. In the instant case, no such application was filed before the Commissioner for Workmen's Compensation under the Workmen's Compensation Act, and hence, the claimants are entitled to claim compensation under the Motor Vehicles Act. In our view, the claim petition requires to be allowed and the Insurance Co. must be held liable to pay compensation to the claimants for the death of driver Riyajuddin.
25. First Appeal Nos. 1013 of 1984 and 1383 of 1994 are also required to be allowed. Admittedly, the deceased were traveling in the truck. True it is that the accident took place because of the sole negligence on the part of the truck driver. The tribunal for that reason, relying upon the decision of the Full bench in Nathiben's case (supra) held that all the conditions laid down by the Full Bench having been satisfied by the Insurance Co., the Insurance Co. could successfully disclaim the liability to pay compensation to the claimants. But Mr. Shah drew our attention to a recent decision of the Full bench in the case of New India Assurance Co. vs. Kamlaben widow of Sumantrai, and others, reported in 34(1) GLR 779, wherein after considering a number of decisions including the decision in Nathiben's case (supra) laid down that in order to successfully disclaim the liability, the Insurance Co. has to satisfy the following conditions: (I) that on the date of the contract of insurance, the insured vehicle was expressly or implicitly not covered by a permit to carry any passenger for hire or reward, Page 7 of 11 Downloaded on : Thu Jul 07 20:46:27 IST 2022 C/FA/1349/2008 JUDGMENT DATED: 01/07/2022
(ii) that there was a specified condition in the policy which excluded the use of the insured vehicle for the carriage of any passenger for hire or reward,
(iii) that the vehicle was, in fact, used in breach of such specified condition on the occasion giving rise to the claim by reason of the carriage of the passenger therein for hire or reward, and
(iv) that the vehicle was used by the insured or at his instance in breach of specific conditions including a condition that in the goods vehicle passengers for hire or reward were not to be carried. If it is done without knowledge of the insured by the driver's acts or omission, the insurer would be liable to indemnify the insured."
The said observation is the basis of this Reference. The provisions of the Act prescribes statutory liability as provided under Sections 147 and 149 of the Act. The same stands modified to the extent of Common Law Liability by adding certain beneficial features for claimants. Under Common Law, a person could recover compensation only in case of proof of negligence on the part of the alleged tortfeasor. The Act under Section 140 and 163-A provides for No Fault Liability and no such equivalent provision is found in Common Law. Thus, under the Act certain burdens are imposed on the insurer which would not be there if the liability had been determined under Common Law. Section 149 of the Act also postulates that the insurer to first pay to the third party and then only recover from the owner of the vehicle in case of a breach of the policy. However, such principle would not be applicable if the liability had been determined under Common Law. Thus, when the owner of a vehicle pays additional premium to cover the Legal Liability of the paid Driver, the legal heirs of Driver have option either to file Claim application under the Employees Compensation Act, 1923 which no fault liability or under the Act as provided under Section 167 of the Act. Thus, the Act provides that option is left to the person entitled to compensation to choose a Page 8 of 11 Downloaded on : Thu Jul 07 20:46:27 IST 2022 C/FA/1349/2008 JUDGMENT DATED: 01/07/2022 particular remedy. In the case of Prembai Patel (supra), the Hon'ble Supreme Court has clearly held that when the Policy is Act Only and additional premium for Legal Liability for paid Driver and Conductor is not paid then the appropriate remedy would be under the Employees Compensation Act for Compensation. However, when additional premium for legal liability of the paid Driver or Conductor is paid by the Owner, the insurance company on accepting additional liability for payment of compensation for such class of person, a claim petition under the Act would be available and the claimants have right to chose appropriate forum as per Section 167 of the Act.
13. Thus, when the owner of a vehicle pay additional premium and same is accepted by the Insurance Company, liability of the Insurance Company gets extended under the Motor Vehicles Act. Section 147 of the Act clearly prescribes for statutory liability to cover risk of paid Driver and Conductor under the Insurance Policy, which is a matter of contract. On payment of such additional premium by the owner, the liability of the owner shifts upon the Insurance Company. Thus, the risk of paid Driver and Conductor would be covered under the Insurance Policy. Only when the additional premium is not paid, liability would be as per the Employees Compensation Act, 1923 and in such cases, compensation would be computed as prescribed under the Act which is limited to the extent provided under provisions of the Act. However, when owner pays additional premium to cover the legal liability of his paid driver and conductor to the Insurance Company, as such, the Insurance Company is enlarging the scope for unlimited liability for payment of compensation, when additional premium is accepted. The liability of the Insurance Company gets extended and it has no right to raise issue of self negligence or otherwise of the such class of the Page 9 of 11 Downloaded on : Thu Jul 07 20:46:27 IST 2022 C/FA/1349/2008 JUDGMENT DATED: 01/07/2022 driver of the Insured vehicle. By accepting additional premium as per the IMT 28, the Insurance Company expressed its willingness to extend its liability under the Clause of Legal Liability to the Paid driver and conductor as envisaged under Section 147 of the Act. Thus, in our opinion, Insurance Company has no legal right to avoid its legal liability under the indemnity clause arising from the contract of insurance towards the insured - owner of such classes of vehicles.
14. The judgments relied upon by the learned counsel for the Insurance Company would not be applicable in the instant case and therefore, it is not necessary to be dealt with. The other judgments which are cited by the learned counsels for the respective parties, deal with different facts & situations and are not relevant to the question referred to this Bench and hence they are not dealt with individually.
15. In our opinion, by accepting additional premium, the Insurance Company indemnifies the owners for paid Driver and / or Conductor and risk of Driver / Conductor is covered under it. Upon death or injury caused to the paid Driver and / or Conductor, the Insurance Company would be liable to satisfy such claim irrespective of the self negligence. Thus, the observations made by the Division Bench in the case of Saberabibi Hisammiya Umarvmiya & Anr (supra) lays down the correct law. Reference is thus, answered accordingly."
5. In view of the above facts as well as proposition of law, it is not in dispute that the additional premium was paid to cover the risk of driver, therefore, when the owner of the vehicle has paid the additional premium and the same is being accepted by the Insurance Company, the Page 10 of 11 Downloaded on : Thu Jul 07 20:46:27 IST 2022 C/FA/1349/2008 JUDGMENT DATED: 01/07/2022 liability of the Insurance Company gets extended under the Act.
6. In view of the above facts, particularly, the payment of additional premium being paid by the owner of the vehicle, which has not been denied by the Insurance Company, in my opinion, in the present case, the decision of this Court in the case of Valiben Laxmanbhai Thakore (Supra) would squarely applicable.
7. Thus, the appeal of the appellant-Insurance Company does not deserve consideration and hence, the same is dismissed with no order as to costs. The claim amount, lying with the Bank in the form of FDRs either with the Tribunal or with the Nazir Branch of the Court, may be disbursed in favour of the original claimants after due verification by way of an Account Payee Cheque and/or RTGS and/or NEFT. The apportionment of the awarded amount, shall be in the very terms, as ordered by the Tribunal in the original award. Record and proceedings be sent back forthwith.
Sd/-
(MAUNA M. BHATT,J) T. J. Bharwad Page 11 of 11 Downloaded on : Thu Jul 07 20:46:27 IST 2022