ORDER
Neelam Sanjiva Reddy, J.
1. The claimant in O.P.No. 32/87 on the file of the Motor Accidents Claims Tribunal-cum-District Judge, Ranga Reddy District, preferred this appeal against the order passed on 8-9-1988.
2. R. Kamala, the claimant, aged about 28 years and working as a teacher on a monthly remuneration of Rs. 1,520/- at Tandur, sustained grievous injuries on 10-9-86 in a motor vehicle accident caused due to rash and negligent driving of the lorry AAA 9720 by its driver. She was admitted in Govt. Hospital at Tandur on 10-9-86 and then referred to Osmania General Hospital, Hyderabad for expert treatment. After discharge from Osmania General Hospital on 24-9-86, she was again admitted at the Govt. Hospital, Tandur, on the same day and was treated as in-patient till 2-1-87. The crush injury of her right ankle joint extending from the dorsum of the foot to the sole of the foot measuring 12″ x 2″ x2″ resulted in shortening of foot and its disfigurement and the said permanent disability was assessed at 20% to 25%. She preferred the above claim for a total compensation of Rs. 10,00,000/- from the owner and insurer of the lorry involved in the accident. The claim was resisted. The tribunal, after due enquiry, found that the accident occurred due to rash and negligent driving of the lorry AAA 9720 by its driver and awarded a total compensation of Rs. 53,000/-, with interest at 9% p.a. from the date of petition till payment. The claimant, dissatisfied with the amount of compensation awarded, preferred this appeal for enhancement.
3. During pendency of this appeal, the owner, the first respondent in the appeal died. The appeal as against R-l was dismissed. The order dated 25-7-97 reads:
“The learned Counsel for the appellant represents that in spite of all efforts made, the details of the Legal Representatives of the deceased-1st respondent could not be obtained by him and in the circumstance CMA143/89 may be treated as having abated against the first respondent i.e. the owner of the vehicle. He relies on a decision of a Division Bench of this Court in Haji Zakaria v. Naoshir Cama, 1976 ACJ 320 (D.B.) (A.P.). and contends that the appeal does not abate against the Insurance Company – the 2nd respondent. However, that is the matter to be gone into when the appeal comes up for final hearing. CMA shall stand dismissed as against R-1.
In the circumstances, office is directed to post this CMA immediately for final hearing before the appropriate Bench hearing the final appeals”.
Consequent upon the above order, the appeal has been posted for hearing.
4. The preliminary question to be answered before proceeding with the merits of the case for enhancement is whether the appeal is maintainable against the insurer-second respondent only without adding legal representatives of the deceased insured, the first respondent, to represent his estate.
5. Mr. Kota Subba Rao, learned Counsel for the appellant submitted that the appellant does not claim any relief as against the estate of the insured and that the appellant presses her claim for enhancement of the compensation as against the insurer only.
6. Mr. M. Srinivasa Rao, learned Counsel for the insurer, submitted that the insurer is liable to satisfy any judgment and decree passed against the insured and that unless and until such judgment and decree is passed against the deceased insured by properly representing the estate of the deceased, the insurer is not bound under the contract and law to pay the enhanced compensation, if any, in this appeal.
7. Section 155 of the Motor Vehicles Act, 1988 (New Act) relates to Section 102 of the Motor Vehicles Act, 1939 (Old Act). It deals with the effect of death on certain causes of action. It runs:
“Notwithstanding anything contained in Section 306 of the Indian Succession Act, 1925 (39 of 1925), the death of a person in whose favour a certificate of insurance had been issued, if it occurs after the happening of an event which has given rise to a claim under the provisions of this Chapter, shall not be a bar to the survival of any cause of action arising out of the said event against his estate or against the insurer”.
It is quite patent from the above that the death of the insured would not affect the contract entered into between the insured and the insurer and that the cause of action survives against the estate of the insured or against the insurer.
8. The appellant is not seeking any relief against the estate of the insured, but he is seeking relief i.e. enhancement of the compensation, against the insurer only without taking steps for proper representation of the estate of the insured in this appeal.
9. Rule 473 of the Andhra Pradesh Motor Vehicles Rules, 1989 relates to Rule 531 of the Andhra Pradesh Motor Vehicles Rules, 1964. It provides the extent of applicability of Code of Civil Procedure to the cases arising under the Motor Vehicles Act. It runs:-
“Code of Civil Procedure to apply in certain cases:- The following provisions of the First Schedule to the Code of Civil Procedure, 1908 (Central Act 5 of 1908), shall so far as may be, apply to proceedings before the Claims Tribunal namely, Order V, Rules 9 to 13 and 15 to 30; Order IX, Order XIII, Rules 3 to 10; Order XVI, Rules 2 to 21; Order XVII and Order XXVIII, Rules 1 to 3”.
10. Motor Vehicles Act and Rules contain both substantive and procedural laws. By implication of the above rule, the application of Order XXII of the Code of Civil Procedure, which deals with the creation, assignment or devolution of interest occasioned by the death of a party etc., during the pendency of a lis, is ruled out.
11. Learned Counsel for the appellant fairly submitted that if the appellant seeks any reliefs against the estate of the insured, the estate has to be properly represented by the legal representatives of the deceased. But, his main thrust is that the appellant seeks relief against the insurer only and in view of Section 155 of the Motor Vehicles Act, there is no need to take steps for proper representation of the estate of the insured. In the absence of any specific provision of law applicable to the situation arising in the case of this nature, it is necessary to look to the other provisions in Chapter XI relating to insurance of Motor Vehicles against third party risks.
12. Sections 146,147, and 149 of the New Act relate to Sections 94, 95, and 96 of the Old Act. Section 146 deals with necessity for insurance against third parties, Section 147 deals with requirements of policies and limits of liability and Section 149 deals with the duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks. Section 149 is extracted for better appreciation of the question involved. It reads:-
“Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks:- (1) If, after a certificate of insurance has been issued under Sub-section (3) of Section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under Clause (b) of Sub-section (1) of Section 147 (being a liability covered by the terms of the policy) (or under the provisions of Section 163-A) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment-debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.
(2) No sum shall be payable by an insurer under Sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or m respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of following grounds, namely:-
(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:-
(i) a condition excluding the use of the vehicle-
(a) for hire or reward, where the vehicle is on the date pi the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
(d) without side-car being attached where the vehicle is a motor cycle; or
(ii) a condition excluding driving by a named person or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or
(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or
(b) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular.
(3) Where any such judgment as is referred to in Sub-section (1) is obtained from a Court in a reciprocating country and in the case of a foreign judgment is, by virtue of the provisions of Section 13 of the Code of Civil Procedure, 1908 (5 of 1908) conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act, 1938 (4 of 1938) and whether or not he is registered under the corresponding law of the reciprocating country) shall be liable to the person entitled to the benefit of the decree in the manner and to the extent specified in Sub-section (1), as if the judgment were given by a Court in India:
Provided that no sum shall be payable by the insurer in respect of any such judgment unless, before the commencement of the proceedings in which the judgment is given, the insurer had notice through the Court concerned of the bringing of the proceedings and the insurer to whom notice is so given is entitled under the corresponding law of the reciprocating country, to be made a party to the proceedings and to defend the action on grounds similar to those specified in Sub-section (2).
(4) Where a certificate of insurance has been issued under Sub-section (3) of Section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in clause (b) of Sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under Clause (b) of Sub-section (1) of Section 147, be of no effect:
Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this Sub-section shall be recoverable by the insurer from that person.
(5) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person.
(6) In this section the expression “material fact” and “material particular” means, respectively a fact or particular of such nature as to influence the judgment of a prudent insurer in determining whether he will take the risk and, if so, at what premium and on what conditions, and the expression “liability covered by the terms of the policy” means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy.
(7) No insurer to whom the notice referred to in Sub-section (2) or Sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in Sub-section (1) or in such judgment as is referred to in Sub-section (3) otherwise than in the manner provided for in Sub-section (2) or in the corresponding law of the reciprocating country, as the case may be.
Explanation:- For the purpose of this section, “Claims Tribunal” means a Claims Tribunal constituted Under Section 165 and “award” means an award made by that Tribunal Under Section 168″
From a reading of the above provisions of law, it is evident that the primary liability is that of the insured and the insurer comes into the picture to indemnify the liability of the insured. It is therefore obvious that if the owner has not incurred any liability in respect of death or bodily injury to any person or damage to property of third party, there is no liability to be covered by the insurer. It is quite apparent that in case of payment of compensation on the principle of ‘fault liability’, the insurer is bound under the law and the contract of insurance to indemnify the liability of the insured after such liability is fixed in terms of the provisions of Chapter XI of the Motor Vehicles Act, 1988. The liability of the insurer is not independent of that of the insured. Insurer’s liability arises only when the liability of the insured is fixed as per the provisions of Chapter XI of the Act.
13. For assessing the liability of the deceased insured, it is necessary that his estate is represented by his legal representatives or in the absence of any legal representative, State has to be added as a party representing deceased-insured’s estate for the reason that if the insured dies intestate leaving no heir, his property devolves on the Government or escheats to the State subject to all the obligations and liabilities of a heir.
14. In Magadri Satyanamyana v. B. Jayamma Rao and Ors., this Court held:
“…..though the owner remained ex parte in the tribunal below still the claimant or the person seeking relief in this Court as the appellant is not absolved of its/his duty to taking out notice to the affected parties, the owner or the insurance company and impleading them. Since the claimant has not taken out any notice and has been expressly stating that the owner is not a necessary party, this Court cannot go into the merits as against the insurance company since the liability of the insurance company is joint and several as against the owner. Unless there is a decree and a finding binding on the insured, viz., the owner, the insurance company cannot be made liable. Under these circumstances, I hold that the absence of notice militates against the appellant for asking any relief on merits”.
15. In Rajappa and Ors. v. Andalammal and Ors. ., while considering the import of Section 102 and the necessity of bringing legal representatives of the insured on record, it was opined:-
“The clear intention of the legislature in enacting Section 102 seems to be that the benefit of the action should survive against the deceased person’s legal representatives and be made available to the injured persons and not merely that the cause of action should survive against the ‘estate’ of the deceased. The estate of the deceased must remain in the hands of the legal representatives of the deceased and it is definitely contemplated that notwithstanding the fact that the person against whom the action was laid had died pending the suit, the injured party must be able to recover damages from out of the estate that may remain with the legal representatives”.
“There cannot be a decree against an estate; an estate cannot face any litigation or satisfy any decree unless it is held by some owner or his representatives in his absence. Therefore, survival of cause of action can be only against representatives of the deceased who hold the estate and not against the estate as such. The section cannot be construed to mean that the Legislature intended that the action should survive against the “estate”, which estate is not a person nor a legal representative of a person but only an inanimate object defined as an inheritance or as assets and properties combined, of the deceased person, which may be available to any creditor to enforce his right in order to recover what he is entitled to under any decree passed in his favour. If that were not the intention the Legislature need not have enacted this section at all, though it is couched in loose language lacking precision and exactness”.
16. Learned Judge in the said case, after considering the rival contentions in detail, permitted the claimants to bring the legal representatives of the deceased owner of the vehicle, the insured, on record.
17. Learned Counsel for the appellant drew my attention to a Division Bench decision of this Court in Haji Zakaria and Ors. v. Naoshir Cama (1 supra), wherein it held:-
“We see nothing either in the statute or in the actual terms and conditions of the policy which was still in force on the date of the accident which would prevent the legal heirs from succeeding to the car as well as the rights thereunder. For these reasons. We disagree with the Tribunal and reject the contention of the insurer that its liability to cover third party risk lapsed with the death of the insured.”
The above decision has no relevance to the question involved in this case.
18. In Minu B. Mehta and Anr. v. Balakrishna Ramchandra Nayan and Anr., . the Supreme Court opined:-
“…..The purpose of enactment of Road Traffic Acts and making insurance compulsory is to protect the interests of the successful claimant from being defeated by the owner of the vehicle who has not enough means to meet his liability. The safeguard is provided by imposing certain statutory duties namely the duty not to drive or permit a car to be driven unless the car is covered by the requisite form of third party insurance”.
Under Section 95 (1) (b) (i) of the Act it is required that policy of insurance must be a policy which insures the person against any liability which may be incurred by him in respect of death or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place. It may be noted that what is intended by the policy of insurance is insuring a person against any liability which may be incurred by him. The insurance policy is only to cover the liability of a person which he might have incurred in respect of death or bodily injury. The accident to which the owner or the person insuring is liable is to the extent of his liability in respect of death or bodily injury and that liability is covered by the insurance. It is therefore obvious that if the owner has not incurred any liability in respect of death or bodily injury to any person there is no liability and it is not intended to be covered by the insurance…..The expression “liability which may be incurred by him” is meant as covering any liability arising out of the use of the vehicle. It will thus be seen that the person must be under a liability and that liability alone is covered by the Insurance Policy”.
“Section 96 of the Act also makes the position clear. It provides that when a judgment in respect of such a liability as is required to be covered by a policy is obtained against any person insured by the policy, then the insurer shall pay to the person entitled the benefit of the decree as if he were a judgment-debtor. The liability is thus limited to the liability as is covered by the policy”.
19. Learned Counsel for the appellant, in support of his submission, relied on decisions in Natha Singh v. Gurdial Singh and Ors. 1982 ACJ 95., New India Assurance Company Ltd v. H. Siddalinga Naika and Ors., 1985 ACJ 89., and Shiv Chandra and Anr. v. Jasvinder Singh and Ors. 1992 ACJ 747. In these decisions, the learned Judges, merely placing reliance on Section 102 of the Act, found that the cause of action survives against the insured’s estate or against the insurer and that there is no need to bring the legal representatives of the insured on record. There is no dispute about the survival of the cause of action in case of death of the insured as contemplated Under Section 102 of Old Act or Section 155 of New Act. With due regard to the learned Judges, I am of the view that in the said decisions, they missed to consider the relevant provisions under Chapter VIII of Old Act or under Chapter XI of New Act, underlying the principle that the insurer is only bound to indemnify the liability of the insured and satisfy judgment and decree passed against the insured. Therefore, unless the liability of the insured is found, the question of binding the insurer to indemnify the liability of the insured does not arise. Hence, I am of the opinion that the estate of the insured has to be represented by proper party to fix his liability in order to bind the insurer, and consequently the said decisions do not help the learned Counsel for the appellant in persuading this Court to accept his submission.
20. For the aforesaid reasons, the preliminary question is answered against the claimant-appellant and consequently the appeal is dismissed. In the circumstances of the case, the parties shall bear their own costs.
