CASE NO.: Appeal (civil) 1232 of 2008 PETITIONER: The New Indian Insurance Company RESPONDENT: Darshana Devi & Ors DATE OF JUDGMENT: 12/02/2008 BENCH: S.B. Sinha & V.S. Sirpurkar JUDGMENT:
J U D G M E N T
S.B. Sinha, J.
1. Leave granted.
2. This appeal is directed against a judgment and order dated 13.02.2004
passed by a Division Bench of the Punjab and Haryana High Court whereby
and whereunder the appeal preferred by the appellant herein against the
judgment and order dated 3.12.2003 passed by the Motor Accident Claims
Tribunal, Hoshiarpur under Section 166 of the Motor Vehicles Act, 1988 ,
was summarily dismissed.
3. The facts necessary to be noticed for the present appeal are that the
tractor bearing Registration Number PB-070-1026 was owned by three
brothers, namely, Mahinder Singh, Joginder Singh and Jagdev Singh.
Ajay Kumar son of Mahinder Singh was driving the said vehicle on
18.10.2000. He did not have a driving licence. The accident occurred at
about 7.00 pm on the aforementioned date. The deceased, Baldev Singh,
was said to have been travelling on the mudguard of the said tractor which
was going to Hoshiarpur loaded with ‘safeda’ wood. Owing to rash and
negligent driving by Ajay Kumar, the deceased fell down and came
underneath the said tractor.
A claim petition was filed before the Motor Vehicle Accident Claims
Tribunal on 19.07.2001 by the heirs and legal representatives of the said
deceased.
Appellant, in its written statement, inter alia, raised the following
contentions :
(1) The deceased being a passenger in the said tractor, was not a third
party within the meaning of the provisions of Section 147 of the
Motor Vehicles Act.
(2) As he was travelling on the mudguard of the tractor in breach of
conditions of contract of insurance, the insurance company was not
liable to reimburse the owner of the vehicle; and
(3) Ajay Kumar, being the son of one of the owners of the tractor and
having no licence to drive the same, the case comes within the
purview of the exeption as regards the liability of the insurer as
envisaged under sub-section (2) of Section 149 of the Motor Vehicles
Act.
4. The Tribunal in the said proceedings, inter alia, framed the following
issues :
“(2) Whether the respondent No.1 was not having
any valid driving licence at the time of accident?
OPR-2”
The findings of fact arrived at by the Tribunal are as under :
(i) Mohinder Singh, Baldev Singh and Jagdev Singh son of Pannu
were the owners of the tractor.
(ii) Ajay Kumar is son of Mahinder Singh, co-respondent.
(iii) The tractor used to be plied on hire.
(iv) At the relevant time, it was not being used for agricultural
purposes for which it was insured.
(v) Although the owners had contravened the contracts of
insurance, the insurance company cannot escape its liability in
regard to third party risk but was entitled to recover the amount
of compensation from the insurer, namely, the owner of the
offending vehicle.
The Tribunal awarded a sum of Rs.2,04,000/- by way of
compensation in favour of the claimants.
5. As indicated hereinbefore, a Division Bench of the High Court
dismissed the appeal preferred by the insurance company summarily.
6. Ms.Kiran Suri, learned counsel appearing on behalf of the appellant,
submitted that the Tribunal committed a serious error in passing the
impugned judgment insofar as it failed to take into consideration that in a
case of this nature, the insurance company was not liable at all in terms of
the provisions of the Motor Vehicles Act, 1988.
7. Mr. Bakshi, learned counsel appearing on behalf of the respondent, on
the other hand, urged that although no exception to the legal proposition can
be taken but it is not a fit case where this Court should exercise its
discretionary jurisdiction under Article 136 of the Constitution of India.
8. The liability of an insurance company to recompense the owner and
driver of a vehicle, who are primarily responsible for payment of
compensation to a victim or dependent of a deceased arising out of use of a
motor vehicle, is statutory in nature.
Whereas an owner of a motor vehicle is under a statutory obligation to
get it compulsorily insured, the defence of an insurance company is limited.
Sub-section (2) of Section 149 of the Motor Vehicles Act, 1988 reads thus :
“(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 of 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 in 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 the
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 of the contract of
insurance a vehicle not covered by
a permit to ply for hire or reward, or
(ii) a condition excluding driving by a named
person or persons 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 nondisclosure of a
material fact or by a representation of fact
which was false in some material particular.”
9. Extent of liability of an insurance company in terms of the said
provision came up for consideration before this Court in a large number of
decisions. We may notice some of these.
In Dhanraj v. New India Assurance Co. Ltd. & Anr. [(2004) 8 SCC
553], this Court held :
“In the case of Oriental Insurance Co. Ltd. v.
Sunita Rathi [(1998) 1 SCC 365] it has been held
that the liability of an insurance company is only
for the purpose of indemnifying the insured against
liabilities incurred towards a third person or in
respect of damages to property. Thus, where the
insured i.e. an owner of the vehicle has no liability
to a third party the insurance company has no
liability also.”
In United India Insurance Co. Ltd., Shimla v. Tilak Singh & Ors.
[(2006)4 SCC 404], it was opined :
“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.”
10. This Court, inter alia, opined that in a case where the driver has no
licence to drive a particular category of motor vehicle, the insurance
company would not be liable. [See National Insurance Company v. Swaran
Singh & Ors. [(2007) 3 SCC 297, para 84].
11. We may also take notice of a few recent pronouncements of this
Court.
12. In New Indian Insurance Company Ltd. v. Vedwati & Ors. [2007 (3)
SCALE 397], this Court held that passenger of a motor vehicle is not a third
party, stating :
“The difference in the language of “goods vehicle”
as appear in the old Act and “goods carriage” in
the Act is of significance. A bare reading of the
provisions makes it clear that the legislative intent
was to prohibit goods vehicle from carrying any
passenger. This is clear from the expression “in
addition to passengers” as contained in definition
of “good vehicle” in the old Act. The position
becomes further clear because the expression used
is “good carriage” is solely for the carriage of
goods. Carrying of passengers in a goods carriage
is not contemplated in the Act. There is no
provision similar to Clause (ii) of the proviso
appended to Section 95 of the old Act prescribing
requirement of insurance policy. Even Section 147
of the Act mandates compulsory coverage against
death of or bodily injury to any passenger of
“public service vehicle”. The proviso makes it
further clear that compulsory coverage in respect
of drivers and conductors of public service vehicle
and employees carried in goods vehicle would be
limited to liability under the Workmen’s
Compensation Act, 1923 (in short ‘WC Act”).
There is no reference to any passenger in “goods
carriage”.
11. The inevitable conclusion, therefore, is that
provisions of the Act do not enjoin any statutory
liability on the owner of a vehicle to get his vehicle
insured for any passenger travelling in a goods
carriage and the insurer would have no liability
therefor.”
In Oriental Insuirance Co. Ltd. v. Smt. Jhuma Saha & Ors. [AIR 2007
SC 1054], it was held :
“11. Liability of the insurer-company is to the
extent of indemnification of the insured against the
respondent or an injured person, a third person or
in respect of damages of property. Thus, if the
insured cannot be fastened with any liability under
the provisions of Motor Vehicles Act, the question
of the insurer being liable to indemnify insured,
therefore, does not arise.”
{See also New India Assurance Co. Ltd. v. Asha Rani & Ors. [(2003)
2 SCC 428}.
In Oriental Insurance Co. Ltd. v. Meena Variyal & Ors. [(2007) 5
SCC 428], this Court held :
“It is Section 147 that sets out the requirement of
policies and limits of liability. It is provided
therein that in order to comply with the
requirements of Chapter XI of the Act, a policy of
insurance must be a policy which is issued by an
authorised insurer; or which insures the person or
classes of persons specified in the policy to the
extent specified in Sub-section (2) against any
liability which may be incurred by the owner in
respect of the death of or bodily injury or damage
to any property of a third party caused by or
arising out of the use of the vehicle in a public
place. With effect from 14.11.1994, injury to the
owner of goods or his authorised representative
carried in the vehicle was also added. The policy
had to cover 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. Then, as per the proviso, the policy shall not
be required 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 in respect of the death of,
or bodily injury to, an employee engaged in
driving the vehicle, or who is a conductor, if it is a
public service vehicle or an employee being
carried in a goods vehicle or to cover any
contractual liability. Sub-section (2) only sets
down the limits of the policy. As we understand
Section 147(1) of the Act, an insurance policy
thereunder need not cover the liability in respect of
death or injury arising out of and in the course of
the employment of an employee of the person
insured by the policy, unless it be a liability arising
under the Workmen’s Compensation Act, 1923 in
respect of a driver, also the conductor, in the case
of a public service vehicle, and the one carried in
the vehicle as owner of the goods or his
representative, if it is a goods vehicle. It is
provided that the policy also shall not be required
to cover any contractual liability.”
Swaran Singh (supra) was also distinguished stating that therein the
vehicle involved having a third party risk stating :
“17. It is difficult to apply the ratio of this
decision to a case not involving a third party. The
whole protection provided by Chapter XI of the
Act is against third party risk. Therefore, in a case
where a person is not a third party within the
meaning of the Act, the insurance company cannot
be made automatically liable merely by resorting
to the Swaran Singh (supra) ratio. This appears to
be the position. This position was expounded
recently by this Court in National Insurance Co.
Ltd. v. Laxmi Narain Dhut [2007 (4) SCALE 36].
This Court after referring to Swaran Singh (supra)
and discussing the law summed up the position
thus:
In view of the above analysis the following
situations emerge:
1. The decision in Swaran Singh’s case (supra) has
no application to cases other than third party risks.
2. Where originally the licence was a fake one,
renewal cannot cure the inherent fatality.
3. In case of third party risks the insurer has to
indemnify the amount and if so advised, to recover
the same from the insured.
4. The concept of purposive interpretation has no
application to cases relatable to Section 149 of the
Act.
The High Courts/Commissions shall now consider
the mater afresh in the light of the position in law
as delineated above.
We are in respectful agreement with the above
view.”
Asha Rani (supra) was followed.
Yet again, in Oriental Insurance Co. Ltd. v. Brij Mohan & Ors. [2007
(7) SCALE 753], wherein one of us (S.B. Sinha, J.) was a member, this
Court noticed Asha Rani and other decisions. Following the same, it was
stated :
“10. Furthermore, respondent was not the owner of
the tractor. He was also not the driver thereof. He
was merely a passenger travelling on the trolley
attached to the tractor. His claim petition,
therefore, could not have been allowed in view of
the decision of this Court in New India Assurance
Co. Ltd. v. Asha Rani and Ors. [(2003) 2 SCC
223] wherein the earlier decision of this Court in
New India Assurance Co. v. Satpal Singh [(2000)
1 SCC 237] was overruled. In Asha Rani (supra) it
was, inter alia, held:
’25. Section 147 of the 1988 Act, inter alia,
prescribes compulsory coverage against the
death of or bodily injury to any passenger of
“public service vehicle”. Proviso appended
thereto categorically states that compulsory
coverage in respect of drivers and
conductors of public service vehicle and
employees carried in a goods vehicle would
be limited to the liability under the
Workmen Compensation Act. It does not
speak of any passenger in a “goods
carriage”.
26. In view of the changes in the relevant
provisions in the 1988 Act vis-`a-vis the
1939 Act, we are of the opinion that the
meaning of the words “any person” must
also be attributed having regard to the
context in which they have been used i.e. “a
third party”. Keeping in view the provisions
of the 1988 Act, we are of the opinion that
as the provisions thereof do not enjoin any
statutory liability on the owner of a vehicle
to get his vehicle insured for any passenger
travelling in a goods vehicle, the insurers
would not be liable therefor.
27. Furthermore, Sub-clause (i) of Clause
(b) of Sub-section (1) of Section 147 speaks
of liability which may be incurred by the
owner of a vehicle in respect of death of 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, whereas Sub-clause (ii) thereof deals
with liability which may be incurred by the
owner of a vehicle 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.’
[See also National Insurance Co. Ltd. v. Bommithi
Subbhayamma and Ors. [(2005) 12 SCC 243];
United India Insurance Co. Ltd., Shimla v. Tilak
Singh and Ors. [(2006) 4 SCC 404]; Prem Kumar
& Ors. v. Prahlad Dev & Ors. [2008 (1) SCALE
531] and Oriental Insurance Co. Ltd. v. Prithvi Raj
[2008 (1) SCALE 727]”
Having said so, we must take notice of the fact that the deceased
Baldev Singh was labourer. The Tribunal has found that besides being a
labourer, he also used to deal in Safeda wood. He was the owner of the
‘Safeda’ wood which was being transported to the market for its sale. The
first respondent, Darshana Devi, in her deposition, stated that the deceased
used to purchase wood from the State of Himachal Pradesh on contract
basis. Only Gurdial Singh and Ravinder Singh were accompanying him as
labourer. His income was assessed only at Rs.2,400 per month.
13. In this view of the matter, we are of the opinion that it is not a fit case
where this Court should exercise its discretionary jurisdiction under Article
136 of the Constitution of India. Even in Brij Mohan (supra), this Court
held :
“13. However, respondent No. 1 is a poor labourer.
He had suffered grievous injuries. He had become
disabled to a great extent. The amount of
compensation awarded in his favour appears to be
on a lower side. In the aforementioned situation,
although we reject the other contentions of Ms.
Indu Malhotra, we are inclined to exercise our
extraordinary jurisdiction under Article 142 of the
Constitution of India so as to direct that the award
may be satisfied by the appellant but it would be
entitled to realize the same from the owner of the
tractor and the trolley wherefor it would not be
necessary for it to initiate any separate proceedings
for recovery of the amount as provided for under
the Motor Vehicles Act.
14. It is well settled that in a situation of this nature
this Court in exercise of its jurisdiction under
Article 142 of the Constitution of India read with
Article 136 thereof can issue suit directions for
doing complete justice to the parties.”
14. We, therefore, while dismissing the appeal would direct that for the
purpose of realization of dues, the insurance company need not file a
separate execution petition against the owner. If an application is filed for
realization or recovery of dues before the Tribunal, the Tribunal shall take
appropriate steps in this behalf. The appeal is disposed of accordingly. No
costs.