IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 18.01.2011 CORAM: THE HONOURABLE MR.JUSTICE B.RAJENDRAN C.M.A. Nos.684 and 685 of 2006 and C.M.P.Nos.2828 and 2829 of 2006 United India Insurance Co. Ltd. Rep. by its Divisional Manager, Christo Building, Bank Road, Ooty ... Appellant in both the appeals Versus 1. N.Sivappan ... 1st respondent in C.M.A.No.684/2006
2. Menaga ... 1st respondent in C.M.A.No.685/2006 3. Kutty @ Annadurai ... 2nd respondent in both the appeals Appeals filed under Section 173 of the Motor Vehicles Act, 1988 against the Judgment and award dated 19.10.2005, made in M.C.O. P.Nos.18 & 19 of 2005 respectively on the file of the Motor Accidents Claims Tribunal, Ooty. For Appellant : Mr. M.B.Raghavan in both the appeals For Respondents : Mr.S.K.Raghunathan for R1 in both the appeals COMMON JUDGMENT The Insurance Company has come forward with these two appeals as against the Judgment and award dated 19.10.2005, made in M.C.O. P.Nos.18 & 19 of 2005 respectively on the file of the Motor Accidents Claims Tribunal, Ooty. 2. By consent of both sides, the appeals are taken up together for disposal inasmuch as the appeal involves common points for consideration and the claimants, being husband and wife, have sustained injuries in one and the same accident.
3. The facts which gave rise for filing of the MCOP Nos. 18 and 19 of 2005 is that the claimant in MCOP No. 18 of 2005 arranged a Tour to South Indian temples along with his family and relatives and left his native village on 05.02.2004 in a Tata Sumo Jeep bearing Registration No. TN 43 A 1539 owned by him. During his pilgrimage, on 09.02.2004 at about 5.30 am when the vehicle was coming near Rajiv Nagar, Pogalur in Annur-Mettupalayam Road, the driver of the jeep lost control and dashed against a tree. In the impact, the claimant sustained fracture in his left hip, tenderness in the left hip and tenderness in right wrist. The claimant was immediately taken to K.S.P. Hospital, Mettupalayam where he was admitted as an in-patient on 09.02.2004 and subsequently, he was shifted to Ganga Hospital, Coimbatore where he was admitted as an in-patient from 09.02.2004 to 22.02.2004. According to the claimant, for the purpose of taking treatment, he had taken a house on rent at Karundampalayam, Coimbatore for four months from 23.02.2004 onwards and taken treatment as an out-patient from 23.02.2004. He was also subsequently admitted as in-patient from 20.03.2004 to 23.03.2004 for treatment. The wife of the claimant also sustained injuries and taken treatment in a hospital. According to the claimant, at the time of accident, he was 48 years old. The claimant is a land lord cum agriculturist besides an Agent of Leaf Tea business thereby he earned Rs.10,000/- per month. Due to the accident, he could not continue his business as before and therefore, he filed the claim petition claiming a sum of Rs.4,00,000/- as compensation.
4. MCOP No. 19 of 2005 was filed by Menaga, wife of the claimant in MCOP No. 18 of 2005, who also sustained injuries in the accident on 09.02.2004. According to the claimant, she sustained facial abrasion below lower hip, right wrist tenderness, wrist joint fracture and skull fracture. She was immediately taken to K.P.S. Hospital, Mettupalayam and admitted as an in-patient on 09.02.2004. Subsequently, she was taken to Ganga Hospital, Coimbatore and due to wrist joint fracture, clip was attached in the wrist. She was admitted as an in-patient in Ganga Hospital from 09.02.2004 to 12.02.2004 for treatment. The claimant would further claim that due to injuries in the jaw, the entire teeth got damaged and lost its grip, with the result, she is taking liquid food. The claimant also stayed along with her husband, claimant in MCOP No. 18 of 2005, in a rented house at Karundampalayam, Coimbatore for four months and taken further treatment. At the time of accident, the claimant was 43 years old and she is a house wife. Therefore, for the injuries sustained by her, she filed the claim petition claiming Rs.2,00,000/- as compensation.
5. The insurance company resisted the claim petitions on the ground that the insurance coverage is not available to the claimant in MCOP No. 18 of 2005 since he is the owner of the vehicle and therefore, they prayed for dismissal of MCOP No. 18 of 2005. As far as MCOP No. 19 of 2005 is concerned, the insurance company contended that it is liable to be dismissed for not impleading the owner of the Jeep as a party respondent to the claim petition. Further, the accident had occurred not due to the rash and negligent driving of the driver of the Jeep but due to the fact that the driver was made to drive the vehicle day and night without any rest, thereby the claimant themselves have contributed to the accident. Further, the driver does not possess a valid licence at the time of accident.
6. The court below, considering the oral and documentary evidence has awarded a sum of Rs.1,39,250/- for the claimant in MCOPNo. 18 of 2005 and Rs.57,900/- for the claimant in MCOP No. 19 of 2005 with interest at 7.5% per annum. As against the same, the present appeals have been filed by the insurance company questioning the liability to pay the compensation amount.
7. The learned counsel appearing for the appellant/insurance company would vehemently contend that the claimant in MCOP No. 18 of 2005 (CMA No. 684 of 2006) himself was the owner of the vehicle as well as an occupant in the vehicle at the time of accident, therefore, he is not entitled for any compensation from the appellant/insurance company. Further, the owner has not paid any additional premium so as to cover the risk, if any, for himself and in the absence of the same, the Court below ought not to have fastened the liability on the insurance company. The policy is only a contract of indemnity covering liability of the owner to third parties and therefore also, the insurance company is not liable to pay the compensation.
8. In the next case, namely, in C.M.A.No.685 of 2006 (MCOP No. 19 of 2005) the learned counsel for the appellant would contend that the claim was made by the wife of the owner, who was a co-passenger along with the owner of the vehicle and she cannot be construed as a third party. When it is admitted that the vehicle was driven by the paid driver and in the absence of any third party liability, the claim petition itself is not maintainable. Moreover, in the claim petition filed by the wife, the husband/owner of the vehicle was not impleaded as a party respondent and in the absence of the same, the claim petition itself is liable to be dismissed for non-joinder of necessary party.
9. The learned counsel appearing for the claimant/first respondent would fairly submit that insofar as the first case in C.M.A.No.684 of 2006 is concerned, the claimant was under the impression that the policy taken from the appellant is a comprehensive policy and it would include coverage for the owner automatically. Further, separate premium was paid for the risk, if any, for the driver of the vehicle. Merely because separate premium was not paid for covering the risk of the owner, the insurance company cannot disown their liability to pay compensation to the owner and occupant of the vehicle.
10. As far as the claim of the wife is concerned, the learned counsel appearing for the claimant/first respondent would only contend that there is no need or necessity to implead the owner of the vehicle inasmuch as when the driver of the vehicle was impleaded as a party to the claim petition. The Driver of the vehicle was an authorised person to drive the vehicle and he is a paid employee of the owner. When separate premium was paid to cover the risk of the driver of the vehicle and who has also been added as a party to the claim petition, it cannot be said that the claim petition is liable to be dismissed for non-joinder of owner of the vehicle as a party. In such circumstances, impleading the owner of the vehicle is unnecessary and it will not disentitle the claimant from maintaining the claim petition.
11. Heard the learned counsel appearing for the appellant and the learned counsel appearing for the respondents. The short point arises for consideration in these appeals is
a) Whether the insurance company is liable to pay compensation for the injuries sustained by the owner of the vehicle without payment of an additional premium for the owner.
b) Whether the non inclusion of the owner of the vehicle is fatal to the case of the claimant, when the driver alone was impleaded as party to the case.
c) Whether the insurance company is liable to pay compensation in respect of the injuries sustained to the third party, being the wife of the owner.
12. The admitted facts in the case is that the claimant in MCOP No. 18 of 2005 namely N.Sivappan is the owner of the commercial vehicle viz. Tata Sumo Jeep. It is also admitted that the vehicle was duly insured and comprehensive policy has been taken at the relevant point of time. It is further admitted that in so far as the driver is concerned, he is a paid employee and he is permitted to drive the vehicle. The owner had also paid separate premium for covering the risk, if any, for the driver and he also got valid licence to drive the vehicle.
13. In so far as question of liability is concerned, the Insurance Company would mainly contend that insofar as owner of the vehicle is concerned, even though he sustained injuries, inasmuch as he has not paid separate premium to cover any injuries to himself, the insurance company cannot be fastened with any liability to pay compensation.
14. In this case, admittedly, no premium was paid by the owner to cover his own risk. Ex.B1 is the certified copy of the policy with receipt for payment, which categorically proves beyond any reasonable doubt that as per the policy condition, no premium was paid by the owner to cover his own risk. Unfortunately, as rightly pointed out by the learned counsel for the first respondent, many owners, whenever they take a policy namely comprehensive policy, are under the impression that the policy would automatically cover the risk, if any, caused to the owner, either in the event of injury or death. Many owners are not aware of the additional premium to be paid to get insurance coverage to the owner of the vehicle. Even though this argument of the learned counsel for the first respondent is palpable, it must be noted that when the policy contains certain terms and conditions, the owner must subject himself to such terms and conditions. Ignorance of law cannot be an excuse. It is true that the owner only pays the premium in respect of a policy, but he himself gets uncovered in the event of any injury or death for himself.
15. In this context, the learned counsel for the appellant/Insurance Company would rely upon the judgment of the Supreme Court reported in (New India Insurance Company Limited vs. Sadanand Mukhi and others) 2009 2 SCC 417 wherein in para-13 and 14 it was held thus:-
“13. Contract of insurance of a motor vehicle is governed by the provisions of the Insurance Act. The terms of the policy as also the quantum of the premium payable for insuring the vehicle in question depends not only upon the carrying capacity of the vehicle but also on the purpose for which the same was being used and the extent of the risk covered thereby. By taking an “Act policy”, the owner of a vehicle fulfils his statutory obligation as contained in Section 147 of the Act. The liability of the insurer is either statutory or contractual. If it 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. If the contention of the learned counsel is to be accepted, then to a large extent, the provisions of the Insurance Act become otiose. By reason of such an interpretation the insurer would be liable to cover risk of not only a third party but also others who would not otherwise come within the purview thereof. It is one thing to say that life is uncertain and the same is required to be covered, but it is another thing to say that we must read a statute so as to grant relief to a person not contemplated by the Act. It is not for the court, unless a statute is found to be unconstitutional, to consider the rationality thereof. Even otherwise the provisions of the Act read with the provisions of the Insurance Act appear to be wholly rational.
14. Only because driving of a motor vehicle may cause accident involving loss of life and property not only of a third party but also the owner of the vehicle and the insured vehicle itself, different provisions have been made in the Insurance Act as also the Act laying down different types of insurance policies. The amount of premium required to be paid for each of the policy is governed by the Insurance Act. A statutory regulatory authority fixes the norms and the guidelines.”
16. As per the decision of Supreme Court, it is very clear that the liability of the insurer is either statutory or contractual. If it is contractual, its liability extends to the risk covered by the policy of insurance. As rightly pointed out by the learned counsel appearing for the appellant, the policy contract does not cover the risk, if any, to the owner of the vehicle. Therefore, following decision of the Supreme Court, I hold that the defence taken by the Insurance Company is sustainable especially, when there is no premium cover available to the owner of the vehicle. Therefore C.M.A. 684 of 2006 is allowed, the compensation amount awarded by the Court below in M.C.O.P.No.18 of 2005 is set aside. No costs. The amount, if any deposited by the Insurance Company is permitted to be withdrawn with accrued interest.
17. The next appeal namely C.M.A.No.685 of 2006, arise out of MCOP No. 19 of 2005, relates to the injuries sustained by the wife of the owner of the vehicle, who travelled in the vehicle as a co-passenger. The learned counsel for the appellant would vehemently contend that the claim petition itself is not maintainable inasmuch as the owner of the vehicle was not impleaded as a party to the claim petition. According to the learned counsel for the appellant, even though the wife can be treated as a passenger covered under the policy, unless the owner is liable to pay the compensation amount, by impleading him as a party, there cannot be any indemnifying factor fastened on the Insurance Company to pay the compensation. Therefore, when there is no liability on the owner, the question of payment of compensation by the Insurance Company does not arise.
18. In this case, it is clear that as per the policy, the owner is entitled to have his paid employee to drive the vehicle. It is further clear from the records that the driver had a valid licence at the time of accident and there is no violation in the policy condition. Under these circumstances, when the driver was impleaded as a party to the claim petition, it has to be seen whether the non-impleadment of the owner of the vehicle would be fatal to the claim of the claimant. In this connection, it is worthwhile to extract one of the clauses namely Clause 3 of section 2 of the policy, which reads as follows:
3. In terms of and subject to the limitations of the indemnity granted by this section to the insured the Company will indemnify any driver who is driving the insured vehicle on the insured’s order or with insured’s permission provided that such driver shall as though he/she were the insured observe fulfil and be subject to the terms exceptions and conditions of this policy in so far as they apply.
4. The Company may at its own option
a) arrange for representation at any Inquest or Fatal Inquiry in respect of any death which may be the subject of indemnity under this Section;
and
undertake the defence of proceedings in any court of law in respect of any act or alleged offence causing or relating to any event which may be the subject of indemnity under this Section.
19. A reading of this clause would make it abundantly clear that the Insurance Company will have to indemnify any driver provided that such driver has not violated any policy condition. In that case, he will be treated as though he was insured for any risk. Therefore, whenever the policy condition is not violated and the driver has valid authority to drive the vehicle, merely because the owner of the vehicle was not impleaded, it will not disentitle the claimant from making a claim. In this case, the driver was at fault, against whom First Information Report came to be registered. It is also evident that he pleaded guilty and paid the fine amount in the Criminal Court. Therefore, the Insurance Company has to indemnify the driver on behalf of the owner of the vehicle. In this connection, I am fortified by the judgment of three bench Judges of the Supreme Court reported in (New Asiatic Insurance Co. Ltd. vs. Pessumal Dhanamal Aswani and others) 1958-65 ACJ 559 wherein it was held as follows:
“17. The whole question then is whether Pessumal comes within the terms of para 3 of Section II of the policy.
18. Under this paragraph, the company indemnifies any person who is driving the motor-car on the insured’s order or with his permission. Pessumal was driving the car with the permission of Asnani who had effected the policy and therefore the company undertook to indemnify Pessumal in accordance with this provision of para 3. The appellant, however, contends that this provision should not be read as defining by itself the class of persons insured under it, in view of the further classification of this class of drivers by proviso (a). It is contended that only such drivers were indemnified as were not entitled to indemnity under any other policy and thus drivers who were entitled to indemnity under any other policy were taken out of the general class of drivers driving the car on the insured’s order or with his permission. We do not agree with this contention.
19. The proviso is not really a classification of drivers but is a restriction on the right of the driver to recover any damages he had to pay, from the company. The driver who can get indemnity from any other company under any other policy is under this contractual term, not to get indemnity from the company. The proviso thus affects the question of indemnity between a particular driver and the company and has nothing to do with the liability which the driver has incurred to the third party for the injuries caused to it and against which liability was provided by Section 94 of the Act and was effected by the policy issued by the Company. The company, by agreeing with the person who effects the policy, to insure him against liability to third parties, takes upon itself the entire liability of the person effecting the insurance. It is open to the insurer not to extend this indemnity to the insured to other persons but if it extends it to other persons, it cannot restrict it vis-a-vis the right of the third party entitled to damages, to recover them from the insured, a right which is not disputed. A proviso meant to exempt certain persons from the general classification will have to be related to considerations affecting it and is not to be related to such classified person’s right to indemnity from any other insurer. In this connection reference may be made to proviso (b) which cannot in any case be proviso relating to the classification of persons to be indemnified. It provides that the person indemnified under para 3 will observe, fulfil and be subject to the terms, exceptions and conditions of the policy in so far as they can apply to him.
20. …..
21. …..
22. Thus the contract between the insured and the company may not provide for all the liabilities which the company has to undertake vis-a-vis the third parties, in view of the provisions of the Act. We are of opinion that once the company had undertaken liability to third parties incurred by the persons specified in the policy, the third parties right to recover any amount under or by virtue of the provisions of the Act is not affected by any condition in the policy. Considering this aspect of the terms of the policy, it is reasonable to conclude that proviso (a) of para 3 of section II is a mere condition affecting the rights of the insured who effected the policy and the persons to whom the cover of the policy way extended by the company, and does not come in the way of third-parties’ claim against the company on account of its claim against a person specified in para 3 as one to whom cover of the policy was extended.
23. It has been contended for the appellant that it was not incumbent on the owner of a car to take out a policy of insurance indemnifying himself or any person permitted to drive the car and that if he does not insure the car and uses it he runs the risk of prosecution under section 125 of the Act. This is true, but has no relevant effect on the question for decision before us. Asnani did insure his car with respect to liability against third persons. We have to see whether the company, on account of undertaking that liability can be said to have insured Pessumal on account of his driving the car with the permission of Asnani. The same may be said about the other contention for the appellant that there is nothing in the Act which makes it compulsory for an insurer to insist that the owner of the car takes out a policy in the widest terms possible covering any person who drives the car with his permission. The company did agree under the policy to indemnify drivers who drove the car with the insured’s permission. The question is whether that undertakings covers Pessumal.
24. …….
25. We are of opinion that the High Court rightly held that the company had insured Pessumal in view of para 3 of Section II of the policy and that it comes within the expression ‘insurer’ in Section 96 of the Act. We, therefore, dismiss the appeals with costs, of hearing one set.”
20. The Honourable Supreme Court, after extracting Paras 3 and 4 of the clauses of the policy, which is identical to the case on hand, held that the insurance company indemnified any person who drives the car on the order of the insured or with his permission, while so, the liability which the driver has incurred to third party for the injuries caused by him has to be compensated by the insurance company. In this case, due to the negligent driving of the driver of the vehicle, the claimant in MCOP No. 19 of 2005 sustained injuries. Inasmuch as the driver is duly covered by the terms and conditions of the policy, the liability of the driver to pay compensation has to be fulfilled by the appellant insurance company. In such view of the matter, when the driver was impleaded as a party to the claim petition, the claimant is not under an obligation to implead the owner of the vehicle and non-impleadment of owner of the vehicle is not fatal to the case of the claimant. Accordingly, the claim petition filed by the claimant in MCOP No. 19 of 2005 is maintainable. Inasmuch as the insurance company has not questioned the quantum of compensation awarded by the court below, I am not inclined to deal with the same. Moreover, the court below awarded only a sum of Rs.57,900/- as compensation for the injuries sustained by the claimant in MCOP No. 19 of 2005.
21. In the result, C.M.A.No. 685 of 2006 is dismissed and the award passed by the Court below in MCOP No. 19 of 2005 is confirmed. No costs. It is stated that the insurance company had deposited the entire compensation amount. If so, the claimant/first respondent is permitted to withdraw the entire compensation amount with accrued interest.
ogy/rsh
To
The Motor Accidents Claims Tribunal,
Ooty