Mankunwar Ravi and Others v. the New India Insurance Company Limited and Another), whereby
Case Details
1 2025:CGHC:1036 NAFR RUKHSAR BANO Digitally signed by RUKHSAR BANO Date: 2025.01.10 17:46:55 +0530 HIGH COURT OF CHHATTISGARH AT BILASPUR MAC No. 506 of 2017 The New India Insurance Company Limited Divisional Office Transport Nagar Korba, District Korba, Chhattisgarh, Through Authorized Signatory For The New India Assurance Company Limited Divisional Office Bilaspur (CG). ... Appellant versus 1 - Mankunwar Ravi Wd/o Vishwanath, Aged About 50 Years Originally R/o Village Basantpur, Tehsil Wadraf Nagar District Balrampur, Chhattisgarh, Present Address Govardhapur, Tehsil Pratappur District Surajpur, Chhattisgarh. 2 - Ramchandra Ravi S/o Vishwanath, Aged About 35 Years Originally R/o Village Basantpur, Tehsil Wadraf Nagar District Balrampur, Chhattisgarh, Present Address Govardhapur, Tehsil Pratappur District Surajpur, Chhattisgarh. 3 - Shivlal Ravi S/o Vishwanath, Aged About 31 Years Originally R/o Village Basantpur, Tehsil Wadraf Nagar District Balrampur, Chhattisgarh, Present Address Govardhapur, Tehsil Pratappur District Surajpur, Chhattisgarh (Claimants) 4 - Dilip Kumar S/o Radheshyam, Aged About 35 Years R/o Village Mendhari Post Karamdiha Tehsil Wadraf Nagar District Balrampur, Chhattisgarh (Owner/ Driver) ... Respondents (Cause title, as taken from CIS) For Appellant : Mr. B. N. Nande, Advocate For Respondent No.4 : Mr. D. N. Prajapati, Advocate (Hon’ble Shri Justice Naresh Kumar Chandravanshi) 06/01/2025 Order on Board 1. The appellant/Insurance Company has preferred this appeal under Section 173 of the Motor Vehicle Act, 1988 (henceforth referred as “MV Act”) challenging the impugned award dated 10.01.2017 passed by Additional Motor Accident Claims Tribunal, Pratappur, District Surajpur 2 (for brevity “the Claims Tribunal”) in MACT Case No.37/2016 (Mankunwar Ravi and Others vs. the New India Insurance Company Limited and Another), whereby appellant/Insurance Company has been exonerated from the payment of amount of award holding breach of policy conditions, but it has further been directed that since offending pickup vehicle was insured with the appellant/Insurance Company, therefore, the Insurance Company has been directed to pay amount of award to the claimants and recover the same from respondent No.4 (owner/driver).
Legal Reasoning
2. Facts of the case, in brief, are that on 05.6.2016 at about 11.30 am, deceased Vishwanath was travelling in a Tempo bearing No. CG-15- CV-3780 (for short “Tempo”), while going from Basantpur to Wadraf Nagar. When their tempo arrived at Kolhua Bhodar turning, a Pickup bearing Registration No. UP-64-T-8940 (for short “offending vehicle”) came there, with which, a cement mixture machine was being transported towing it with rope. The offending vehicle was driven rashly and negligently by respondent No.4/Dilip Kumar, who was owner also, therefore, rope, with which cement mixture machine was attached to offending vehicle, had broken, resultantly, cement mixture machine turned turtle and collided with Tempo. In that accident, Vishwanath sustained injuries and succumbed to the same. Wife and children of deceased Vishwanath filed application under Section 166 of the MV Act for grant of compensation to the tune of Rs.10,56,000/-. The Claims Tribunal awarded compensation of Rs.3,29,200/- in favour of the claimants along with interest of 5% from the date of filing application to date of award and 9% from the date of award to its actual payment. 3. The Tribunal, on a close scrutiny of evidence led, material placed and 3 submissions made by the parties, held that the accident had occurred due to rash and negligent driving of offending Pickup vehicle by its driver/owner Dilip Kumar (respondent No.4 herein), which attached cement mixture machine being transported by him while towing it with the offending vehicle, which dashed the Tempo, as its rope was broke. Consequently, deceased- Vishwanath sitting on the Tempo, sustained injuries and succumbed to the same in the said accident. Aforesaid offending vehicle was insured with the appellant/Insurance Company, but the Tribunal exonerated the Insurance Company from the payment of compensation holding therein that since, respondent No.4/owner/driver was using offending vehicle violating policy conditions, therefore, the Insurance Company is not liable to pay the compensation and the same is payable by respondent No.4 (owner of the offending pickup vehicle). But, since deceased was ‘third party’ to the offending vehicle, as such, it is directed that appellant/Insurance Company shall pay the compensation to the claimants and the same shall be recovered from the respondent No.4/Dilip Kumar. Being aggrieved from the aforesaid order and further order issued by the learned Tribunal, that amount of compensation shall carry interest of 9% per annum from the date of award, has also been challenged by the Insurance Company. 4. Learned counsel appearing for the appellant/Insurance Company would submit that at the time of accident, respondent No.4, who was owner/driver of the offending vehicle, was transporting a cement mixture machine with offending vehicle by towing it through rope and on the spot, that rope was broken and cement mixture machine dashed Tempo. The aforesaid fact clearly shows that respondent No.4 was well 4 aware of the fact that by attaching cement mixture machine with the offending vehicle such incident may occur. Further, towing mixture machine with the offending vehicle was not permissible as it was a cargo vehicle, which was not permissible for transporting the other vehicle/apparatus i.e. mixture machine by towing it through rope, as such, it is a clear cut case of violation of policy conditions, therefore, the order of the Tribunal in respect of ‘pay and recover’ is illegal, hence, the same is not sustainable. He further submitted that the Tribunal has granted interest to the tune of 5% from the date of filing of application, till date of award i.e. on 10.1.2017, but thereafter, it has granted interest to the tune of 9% per annum, which is on higher side, therefore, it may be reduced to the extent of applicable bank interest i.e. 6% per annum. Hence, it is prayed that this appeal may be allowed and pay and recover order passed by the Tribunal may be set aside.
Legal Reasoning
5. In reply, learned counsel appearing for respondent No.4 referring to his cross appeal filed under Order 41 Rule 22 of the CPC would submit that, the said offending vehicle was insured with the appellant/Insurance Company and respondent No.4 was also having effective driving licence. At the time of accident, cement mixture machine was transported by towing it with the offending vehicle through rope, hence, it was a part of offending vehicle, which was insured with appellant/Insurance Company and was driven by respondent No.4, having valid and effecting driving licence, as such, the Tribunal ought not have held that the offending vehicle was being driven violating policy conditions, therefore, complete liability ought to have been fastened upon appellant/Insurance Company. Hence, it is prayed that the order of pay and recover passed by the Tribunal may be set aside 5 and complete liability be fastened upon the appellant/Insurance Company to indemnify the award. 6. I have heard learned counsel appearing for the parties and perused the record of Claims Tribunal along with the material available in this appeal. 7. It is not in dispute that for the date of accident, offending pickup vehicle was insured with appellant/Insurance Company. At the time of accident, a cement mixture machine was being transported by towing it with pickup through rope and the towing rope broke at the place of accident, as such, mixture machine turned turtle and collided with the tempo coming there. Consequently, deceased- Vishwanath sitting in the tempo, sustained injuries and succumbed to the same in the accident. 8. In the impugned award, learned Tribunal itself has held that respondent No.4 (owner/driver of the offending vehicle) using pickup violated terms & conditions of the Insurance Policy (Ex. D-3-C), as he was transporting a cement mixture machine by towing it with the pickup, which was not permissible under the policy conditions, as pickup was meant for transporting the goods and not meant for towing any machine or apparatus like mixture machine. As such, I do not find any infirmity or illegality in the impugned award exonerating the appellant/Insurance Company at first instance and shifting liability upon the respondent No.4 (owner/driver) to pay compensation, hence, the same is affirmed and the cross appeal filed by respondent No.4 is rejected. But, considering the status of deceased, who was ‘third party’ for the offending vehicle, order of ‘pay and recover’ passed by the learned Tribunal is not found to be perverse or illegal in the opinion of this Court. 6 9. Considering the issue raised by appellant/Insurance Company, relevant provisions contemplated under Sections 146, 147 & 150 of the MV Act, are apt to be noted here, which reads thus:- “146. Necessity for insurance against third party risk. - (1) No person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force, in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this Chapter: Provided that in the case of a vehicle carrying, or meant to carry, dangerous or hazardous goods, there shall also be a policy of insurance under the Public Liability Insurance Act, 1991. Explanation.- For the purposes of this sub- section, a person driving a motor vehicle merely as a paid employee, while there is in relation to the use of the vehicle no such policy in force as is required by this sub-section, shall not be deemed to act in contravention of the sub-section unless he knows or has reason to believe that there is no such policy in force. XXX XXX XXX XXX XXX XXX 147. Requirements of policies and limits of liability. - (1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which - (a) is issued by a person who is an authorised insurer; and 7 (b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2) - (I) against any liability which may be incurred by him in respect of the death of or bodily injury to any person including owner of the goods or his authorised representative carried in the motor vehicle or damage to any property of a third party caused by or arising out of the use of the motor vehicle in a public place; (ii) against the death of or bodily injury to any passenger of a transport vehicle, except gratuitous passengers of a goods vehicle, caused by or arising out of the use of the motor vehicle in a public place. Explanation. - For the removal of doubts, it is hereby clarified that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place, notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place. (2) Notwithstanding anything contained under any other law for the time being in force, for the purposes of third party insurance related to either 8 death of a person or grievous hurt to a person, the Central Government shall prescribe a base premium and the liability of an insurer in relation to such premium for an insurance policy under sub-section (1) in consultation with the Insurance Regulatory and Development Authority. (3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected, a certificate of insurance in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases. (4) Notwithstanding anything contained in this Act, a policy of Insurance issued before the commencement of the Motor Vehicles (Amendment) Act, 2019 shall be continued on the existing terms under the contract and the provisions of this Act shall apply as if this Act had not been amended by the said Act. (5) Where a cover note issued by the insurer under the provisions of this Chapter or the rules or regulations made thereunder is not followed by a policy of insurance within the specified time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority or to such other authority as the State Government may prescribe. (6) Notwithstanding anything contained in any other law for the time being in force, an insurer 9 issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons. 150. 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 164 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 award any sum not exceeding the sum assured payable thereunder, as if that person were the decree holder, 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. XXX XXX XXX XXX XXX XXX.” 10. Perusal of aforesaid provisions shows that, Section 146 provides necessity for insurance of a vehicle in respect of ‘third party’, as such, no person can use motor vehicle in a public place unless the same is 10 insured under the policy of insurance complying with the requirements of chapter XI of the MV Act. Section 147 contemplates provisions with regard to the requirement of policies and its limitation in respect of liability. Section 150 provides duty of insurers to satisfy judgments and awards against person in respect of third party risks. 11. According to aforesaid provisions, when any motor vehicle is used in public place, then it ought to have been insured to cover third party risk. Once it is ensured by any Insurance Company by issuing policy of insurance, then law in respect of third party is complied with as provided under Section 146 & 147 of the MV Act, and therefore, the Insurance Company is duty bound to satisfy the judgment and award against person insured in respect of third party risk. If offending vehicle found to be plied violating policy conditions, then such fact is between the insurer and insured. Such fact, i.e. violation of policy conditions, does not effect interest of third party as soon as vehicle is insured, interest of ‘third party’ is protected under Section 146 of the MV Act and violation of terms of policy comes thereafter, which is issue between the insurer and insured. Therefore, if deceased comes in category of third party, then despite violation of policy conditions, pay and recover order can be passed in suitable cases. 12. In the case of Manuara Khatun & Ors. Vs. Rajesh Kumar Singh & Ors. and other connected case reported in (2017) 4 SCC 796, deceased died in the motor accident due to rash and negligent driving of a private vehicle i.e. Tata Sumo. Victim was travelling as “gratuitous passenger” in that vehicle. On these facts, exonerating the insurer of the offending vehicle, award passed by courts below only against the owner of the offending vehicle i.e. the person insured. In that case, Hon’ble Supreme Court has observed in para 13, 14 & 15 as under:- 11 “13. The only question, which arises for consideration in these appeals, is whether the appellants are entitled for an order against the Insurer of the offending vehicle, i.e., (respondent No. 3) to pay the awarded sum to the appellants and then to recover the said amount from the insured (owner of the offending vehicle-Tata Sumo)-respondent No.1 in the same proceedings. 14. The aforesaid question, in our opinion, remains no more res integra. As we notice, it was subject matter of several decisions of this Court rendered by three Judge Bench and two Judge Bench in past, viz., National Insurance Co. Ltd. vs. Baljit Kaur & Ors., (2004) 2 SCC 1, National Insurance Co. Ltd. vs. Challa Upendra Rao & Ors., (2004) 8 SCC 517, National Insurance Co. Ltd. vs. Kaushalaya Devi & Ors., (2008) 8 SCC 246, National Insurance Co. Ltd. vs. Roshan Lal, (2017) 4 SCC 803 and National Insurance Co. Ltd. vs. Parvathneni & Anr., (2009) 8 SCC 785. 15. This question also fell for consideration recently in National Insurance Company Limited vs. Saju P. Paul & Anr., (2013) 2 SCC 41 wherein this Court took note of entire previous case law on the subject mentioned above and examined the question in the context of Section 147 of the Act. While allowing the appeal filed by the Insurance Company by reversing the judgment of the High Court, it was held on facts that since the victim was travelling in offending vehicle as "gratuitous passenger" and hence, the Insurance Company cannot be held liable to suffer the liability arising out of accident on the strength of the insurance policy. However, this Court keeping in view the 12 benevolent object of the Act and other relevant factors arising in the case, issued the directions against the Insurance Company to pay the awarded sum to the claimants and then to recover the said sum from the insured in the same proceedings by applying the principle of “pay and recover”.” 13. Facts of the instant case is much better than the case of Manuara Khatun & Ors. (Supra), as in the instant case, deceased- Vishwanath, was ‘third party’ sitting in the Tempo, which was passing/crossing to the offending vehicle and due to broken rope, towed cement mixture machine with the pickup dashed Tempo, as such, it is clear that in this case, deceased was third party in respect of offending vehicle, hence, I do not find any perversity or illegality in the impugned order of pay and recover passed by the learned Tribunal against the appellant/Insurance Company, though, aforesaid offending vehicle was being driven by violating its policy conditions. As such, order of pay and recover passed by learned Tribunal against the appellant/Insurance Company is upheld/affirmed. 14. So far as, rate of interest is concerned, learned Tribunal has granted 5% interest on amount of award from the date of filing of claim petition till the date of award i.e. 10.1.2017 and 9% from the date of award to its final realization. Since there is no contract between the parties in respect of grant of interest, therefore, learned Claim Tribunal ought to have granted interest at the prevailing bank rate in view of provision of Section 171 of the MV Act, which is said to be 7% at the time of accident. 15. Having considered aforesaid provisions & facts of the case and further 13 considering the prevailing rate of interest given by Nationalized Bank, instead of rate of interest granted by the Claims Tribunal, it is directed that claimants are entitled to get interest @ 7% per annum on the amount of award, which shall be payable to them from date of filing of claim petition, till its final realization. 16. Accordingly, appeal filed by the appellant/Insurance Company is partly allowed and rate of interest granted by learned Tribunal on the amount of compensation is modified to the extent indicated hereinabove. 17. The award stands modified to the above extent. The appellant/Insurance Company is directed to pay the entire amount of compensation along with interest, within a period of 60 days from today, if the same or part has not paid. No order as to cost(s). 18. Copy of this order be placed on record of MACT Case No.37/2016. Sd/- (Naresh Kumar Chandravanshi) JUDGE Rukhsar