MANAGER, NATIONAL INSURANCE CO. LTD v. SAJU P. PAUL & Anr.

Judgment

2 S.C.R. 1 2 SUPREME COURT REPORTS [2013] 2 S.C.R. MANAGER, NATIONAL INSURANCE CO. LTD. v. SAJU P. PAUL AND ANOTHER (Civil Appeal No. 5 of 2013) JANUARY 3, 2013 [R.M. LODHA AND ANIL R. DAVE, JJ.] Motor Vehicles Act, 1988 - s. 147 - Motor accident of goods vehicle - Injury to the claimant, who was travelling in the vehicle and claiming to be a spare driver - Liability of the insurance company - Held: Insurance company not liable to pay compensation - Spare driver was not covered under the policy - He was admittedly not driving the vehicle nor was engaged for driving the said vehicle - Thus he was a gratuitous passenger - In the facts of the case, Insurance Company directed to pay the compensation and later to recover the same from the owner-insured. The question for consideration in the present appeal was as to whether the insurance company was liable to pay compensation for the bodily injury caused to the claimant who was travelling in a goods vehicle as a spare driver, though he was employed as a driver in another vehicle owned by the vehicle owner-insured. Allowing the appeal, the Court HELD: 1.1 The impugned judgment is founded on misconstruction of s. 147 of the Motor Vehicles Act, 1988. The High Court was wrong in holding that the insurance company was liable to indemnify the owner of the vehicle and pay the compensation to the claimant [Para 18] [15-F]

1.2 The High Court committed grave error in holding that s.147(1)(b)(i) takes within its fold any liability which may be incurred by the insurer in respect of the death or bodily injury to any person. The High Court erroneously assumed that the claimant died in the course of 1 A B C D E F G H A B C D E F G H employment and overlooked the fact that the claimant was not in any manner engaged on the vehicle that met with an accident, but he was employed as a driver in another vehicle. The insured (owner of the vehicle) got insurance cover in respect of the subject goods vehicle for driver and cleaner only and not for any other employee. Therefore, second driver or for that purpose 'spare driver' was not covered under the policy. As a matter of law, the claimant did not cease to be a gratuitous passenger though he claimed that he was a spare driver. [Para 16] [14-G-H; 15-A-C] New India Assurance Co. Ltd. v. Asha Rani and Ors. (2003) 2 SCC 223:2002 (4) Suppl. SCR 543; National Insurance Co. Ltd. v. Cholleti Bharatamma and Ors. (2008) 1 SCC 423:2007 (11) SCR 531; Oriental Insurance Co. Ltd. v. Devireddy Konda Reddy and Ors. (2003) 2 SCC 339:2003 (1) SCR 537 - relied on. New India Assurance Company v. Satpal Singh and Ors. (2000) 1 SCC 237:1999 (5) Suppl. SCR 149 - referred to.

1.3 The High Court misconstrued the proviso following sub-section (1) of s. 147 of the Act. What is contemplated by proviso to s.147 (1) is that the policy shall not be required to cover liability in respect of death or bodily injury sustained by an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923. The claimant was admittedly not driving the vehicle nor he was engaged in driving the said vehicle. Merely because he was travelling in a cabin, would not make his case different from any other gratuitous passenger. [Para 17] [15-D-E]

#2. In the peculiar facts of the present case, a direction is issued to the insurance company to first satisfy the awarded amount in favour of the claimant and recover the same from the owner of the vehicle. The insurance company has already deposited the entire awarded [2013] 2 S.C.R. 1 2 SUPREME COURT REPORTS [2013] 2 S.C.R. MANAGER, NATIONAL INSURANCE CO. LTD. v. SAJU P. PAUL AND ANOTHER (Civil Appeal No. 5 of 2013) JANUARY 3, 2013 [R.M. LODHA AND ANIL R. DAVE, JJ.] Motor Vehicles Act, 1988 - s. 147 - Motor accident of goods vehicle - Injury to the claimant, who was travelling in the vehicle and claiming to be a spare driver - Liability of the insurance company - Held: Insurance company not liable to pay compensation - Spare driver was not covered under the policy - He was admittedly not driving the vehicle nor was engaged for driving the said vehicle - Thus he was a gratuitous passenger - In the facts of the case, Insurance Company directed to pay the compensation and later to recover the same from the owner-insured. The question for consideration in the present appeal was as to whether the insurance company was liable to pay compensation for the bodily injury caused to the claimant who was travelling in a goods vehicle as a spare driver, though he was employed as a driver in another vehicle owned by the vehicle owner-insured. Allowing the appeal, the Court HELD: 1.1 The impugned judgment is founded on misconstruction of s. 147 of the Motor Vehicles Act, 1988. The High Court was wrong in holding that the insurance company was liable to indemnify the owner of the vehicle and pay the compensation to the claimant [Para 18] [15-F]

1.2 The High Court committed grave error in holding that s.147(1)(b)(i) takes within its fold any liability which may be incurred by the insurer in respect of the death or bodily injury to any person. The High Court erroneously assumed that the claimant died in the course of 1 A B C D E F G H A B C D E F G H employment and overlooked the fact that the claimant was not in any manner engaged on the vehicle that met with an accident, but he was employed as a driver in another vehicle. The insured (owner of the vehicle) got insurance cover in respect of the subject goods vehicle for driver and cleaner only and not for any other employee. Therefore, second driver or for that purpose 'spare driver' was not covered under the policy. As a matter of law, the claimant did not cease to be a gratuitous passenger though he claimed that he was a spare driver. [Para 16] [14-G-H; 15-A-C]