Manisha Shah and Ors v. Pramod Kumar Shah and Anr.), whereby the liability of payment
Case Details
1 2025:CGHC:4015 AFR HIGH COURT OF CHHATTISGARH AT BILASPUR MAC No. 894 of 2017 1 - Divisional Manager, Oriental Insurance Company Limited Rajendra Park Chowk, Durg, Chhattisgarh. (Insurer Of Offending Vehicle No. C.G. 07 M.A. 8303) ... Appellant versus 1 - Manisha Shah Wd/o Late Manoj Shah, Aged About 33 Years R/o L I G, Hudco House No. 222, Bhhilai Nagar, Tahsil And District Durg, Chhattisgarh. 2 - Ku. Jyoti Shah D/o Late Manoj Shah, Aged About 11 Years Minor Through Natural Guardian Mother, Respondent No.1, R/o L I G, Hudco House No. 222, Bhhilai Nagar, Tahsil And District Durg, Chhattisgarh. 3 - Ku. Divya Shah D/o Late Manoj Shah, Aged About 7 Years Minor Through Natural Guardian Mother, Respondent No.1, R/o L I G, Hudco House No. 222, Bhhilai Nagar, Tahsil And District Durg, Chhattisgarh. 4 - Mohit Shah S/o Late Manoj Shah, Aged About 3 Years Minor Through Natural Guardian Mother, Respondent No.1, R/o L I G, Hudco House No. 222, Bhhilai Nagar, Tahsil And District Durg, Chhattisgarh. 5 - Deleted (Satyanarayan Shah) (Died) Hon’ble Court Order Dated 08/12/2023. 6 - Pramod Kumar Shah S/o Satyanarayan Shah, R/o L I G, Hudco House No. 222, Bhhilai Nagar, Tahsil And District Durg, Chhattisgarh. (Driver Of Offending Vehicle No. C.G.07 M.A. 8303) (Cause title, as taken from CIS) ... Respondents For Appellant : Mr. Raj Awasthi, Advocate For Respondents No.1 to 4 : Mr. Sanjay Kumar Agrawal, Advocate
Legal Reasoning
(Hon’ble Shri Justice Naresh Kumar Chandravanshi) 15/01/2025 Order on Board 1. The appellant/Insurance Company has preferred this appeal under Section 2 173 of the Motor Vehicle Act, 1988 (for short ‘MV Act’) challenging the impugned award dated 31.3.2017 passed by the Sixth Additional Motor Accident Claims Tribunal (henceforth referred as “Claims Tribunal”), Durg, District Durg (CG) in MACT Case No.41/2014 (Manisha Shah and Ors. Vs. Pramod Kumar Shah and Anr.), whereby the liability of payment of compensation has been fastened upon the appellant/Insurance Company to indemnify the award of Rs.18,55,899/- along with interest @ 9 percent per annum from the date of filing of claim petition, till its realization. 2. Facts of the case, in brief are that, on 22.7.2013, Manoj Shah was coming from Maroda to his house along with his brother-Pramod Kumar Shah/respondent No.6 herein and other family members in Indica Car bearing Registration No. CG-07-MA-8303 (henceforth referred as “offending vehicle”). Aforesaid car was owned by Manoj Shah and at the time of accident, it was driven by respondent No.6/Pramod Kumar Shah (henceforth referred as “driver”). On the way, cow was sitting on the road, therefore, driver could not control the offending vehicle, as such, it dashed with a tree on roadside. Manoj Shah (owner of the offending vehicle) and other persons sustained grievous injuries, subsequently, Manoj Shah succumbed to those injuries. FIR was lodged by police. Wife, children and father of the the deceased -Manoj Shah filed application under Section 166 & 140 of the MV Act against the appellant/ Insurance Company and respondent No.6 for grant of compensation to the tune of Rs.34,89,000/-. 3. The appellant/ Insurance Company filed written statement, in which, he denied liability fastened upon it and also raised objection that, since deceased -Manoj Shah was owner of the offending vehicle, as such, his status was not as ‘third party’, therefore, claim petition filed by his legal heirs under Section 166 of the MV Act is not maintainable. Various other objections were also raised in respect of breach of policy conditions. 4. Respondent No.6/driver (brother of deceased) also filed written statement, 3 stating inter alia that excessive claim has been sought for. 5. The Tribunal, on a close scrutiny of evidence led, material placed and submissions made by the parties, held that the accident had occurred due to rash and negligent driving of offending vehicle by its driver Pramod Kumar Shah /respondent No.6, who dashed tree on roadside, therefore, deceased - Manoj Shah succumbed to those injuries sustained in the accident. The appellant/ Insurance Company, who is insurer of offending vehicle was held liable for payment of compensation to the claimants, as insurance company could not establish the violation of policy conditions, as such, the Tribunal awarded aforesaid sum as compensation to the claimants. 6. Learned counsel appearing for the appellant/Insurance Company would submit that, it is not in dispute that deceased- Manoj Shah was owner/insured of the offending vehicle and the same was driven by his brother/respondent No.6 herein, as such, deceased was not ‘third party’ to the offending vehicle, therefore, application filed by legal heirs of deceased under Section 166 & 140 of the MV Act, is not maintainable, but this fact has not been considered by learned Claims Tribunal. 6.1 Learned counsel further referring to the provisions of Section 147 of the MV Act submitted that, under the insurance policy, liability in respect of ‘third party’ is covered. Further, in respect of circular dated 16.11.2009 issued by Insurance Regulatory and Development Authority (henceforth referred as “IRDA”), if policy issued was a comprehensive/package policy, then liability of insurance companies in respect of occupants of a private car and pillion rider on a two-wheeler has also been directed to be covered. In instant case, though insurance policy (Ex. D-1) was a package policy, but risk of owner/insured was not covered even under the package policy. Rather, under aforesaid policy, since owner had paid extra premium of Rs.100/-, therefore, his risk only to the extent of 2,00,000/- was covered and that amount was paid on 12.3.2014 vide voucher 4 (Ex. D-5) by the appellant/ Insurance company to the wife of deceased. This fact has been proved by Administrative Officer- Santuram Sahu (DW-1) in his deposition and the same has not been controverted by the claimants in his cross-examination. Learned counsel further submitted that since deceased was owner/insured of the offending vehicle, therefore, claim petition filed by his legal heirs under Section 166 and 140 of the MV Act was not maintainable at all, as such, liability also cannot be fastened upon the appellant / Insurance Company. In this regard, he relied in the case of New India Assurance Company Ltd. Vs. Sadanand Mukhi and Ors. reported in 2009 (1) T.A.C. 425 (SC) and New India Assurance Company Ltd. Vs. Prabha Devi and Ors. reported in (2013) (II) D.M.P. 3 (SC) {equivalent citation i.e. (2013) 14 SCC 719}. 6.2 Learned counsel further submitted that in compliance of the order dated 17.7.2017 passed by this Court, 50% amount of award has been paid by the appellant/ Insurance Company to the claimants on 10.8.2017 before the concerned Claims Tribunal. Since appellant is not liable to indemnify the award, therefore, amount paid by appellant to the claimants/respondents No.1 to 4 may be directed to be refunded along with mandatory deposit amount. 7. In reply, learned counsel appearing for the respondents No.1 to 4 would submit that since insurance policy issued by appellant for the offending vehicle was a package policy, therefore, complete risk was covered including covering the risk of owner/insured also, hence, he submitted that award passed by the Claims Tribunal fastening liability upon appellant/ Insurance Company is just and proper, which does not call for any interference of this Court. In this regard, he relied in the case of National Insurance Company Ltd. Vs. Balakrishnan and Anr. reported in (2013) 1 SCC 731. 8. I have heard learned counsel appearing for the parties and perused the material available on record as well as record of the Claims Tribunal. 5 9. Admittedly, deceased -Manoj Shah was owner/insured of the offending vehicle and it was driven by his brother/respondent No.6 i.e. in stepping into the shoes of owner/insured. 10. Section 146 of the MV Act lays down the requirements for insurance against third party risk. Where a third party risk is involved, an insurance policy is required to be mandatorily taken out. 11. The requirements of policies and the limits of liability, however, have been stated in Section 147 of the MV Act, which reads as under:- “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 (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 6 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 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 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.” 7 12. The provisions of the MV Act, therefore, provide for two types of insurance policy - one Statutory in nature and the other contractual in nature. Now in the light of circular dated 16.11.2009 and 03.12.2009 issued by IRDA, one other type of policy is being issued, popularly known as package policy/comprehensive policy. Under the policy of insurance, the insurance company is bound to compensate the owner or the driver of the motor vehicle in case any person dies or suffers injury as a result of an accident; in case involving owner of the vehicle or others are proposed to be covered, an additional premium is required to be paid for covering their life and property. In package policy/comprehensive policy, liability of occupants of a private car and pillion rider on a two-wheeler is also covered. 13. In the case of National Insurance Company Ltd. Vs. Balakrishnan (Supra), Hon’ble Apex Court has an occasion to examine the difference between “act policy” and “comprehensive/package policy” as below:- “19. It is extremely important to note here that till 31st December, 2006 the Tariff Advisory Committee and, thereafter, from 1st January, 2007, IRDA functioned as the statutory regulatory authorities and they are entitled to fix the tariff as well as the terms and conditions of the policies by all insurance companies. The High Court had issued notice to the Tariff Advisory Committee and the IRDA to explain the factual position as regards the liability of the insurance companies in respect of an occupant in a private car under the “comprehensive/ package policy”. Before the High Court, the Competent Authority of IRDA had stated that on 2nd June, 1986, the Tariff Advisory Committee had issued instructions to all the insurance companies to cover the pillion rider of a scooter/motorcycle under the “comprehensive policy” and the said position continues to be in vogue till date. It had also admitted that the “comprehensive policy” is presently called a “package policy”. It is the admitted position, as the decision would show, the earlier circulars dated 18th March, 1978 and 2nd June, 1986 continue to be valid and effective and all insurance companies are bound to pay the 8 compensation in respect of the liability towards an occupant in a car under the “comprehensive/package policy” irrespective of the terms and conditions contained in the policy. The competent authority of the IRDA was also examined before the High Court who stated that the circulars dated 18th March, 1978 and 2nd June, 1986 of the Tariff Advisory Committee were incorporated in the Indian Motor Tariff effective from 1st July, 2002 and they continue to be operative and binding on the insurance companies. Because of the aforesaid factual position, the circulars dated 16th November 2009 and 3rd December, 2009, that have been reproduced hereinabove, were issued. 21. In view of the aforesaid factual position, there is no scintilla of doubt that a “comprehensive/package policy” would cover the liability of the insurer for payment of compensation for the occupant in a car. There is no cavil that an “Act Policy” stands on a different footing from a “Comprehensive/Package Policy”. As the circulars have made the position very clear and the IRDA, which is presently the statutory authority, has commanded the insurance companies stating that a “Comprehensive/Package Policy” covers the liability, there cannot be any dispute in that regard. We may hasten to clarify that the earlier pronouncements were rendered in respect of the “Act Policy” which admittedly cannot cover a third party risk of an occupant in a car. But, if the policy is a “Comprehensive/Package Policy”, the liability would be covered.” 14. In instant case, insurance policy (Ex. D-1) issued in the name of deceased / owner / insured shows that it was a private car package policy and by paying extra premium of Rs.125, risk for five unnamed passengers had been covered and as contractual liability, Rs.100 as extra premium was also received to cover the risk of personal accident of owner and Rs.50 for driver. 15. In the case of Oriental Insurance Company Ltd. Vs. Jhuma Saha and Ors. reported in 2007 (2) T.A.C. 12 (SC), owner-cum-driver of offending vehicle had died when it dashed against a tree on roadside. His legal heirs had filed claim petition under Section 166 of the MV Act. Hon’ble Supreme Court in that case has observed in para 12 as under:- 9 “12. In Dhanraj Vs. New India Assurance Company Ltd. reported in (2004) 8 SCC 553, it is stated as follows: 8. Thus, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorised representative) carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle. Section 147 does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle. ” Relying aforesaid observation of the case of Dhanraj (supra), claim petition under Section 166 of the MV Act filed by claimants in the case of Oriental Insurance Company Ltd. Vs. Jhuma Saha (supra) was dismissed by the Hon’ble Supreme Court. 16. Hon’ble Apex Court in the case of United India Insurance Company Ltd. vs. Serjerao and Ors. reported in 2008 (1) T.A.C. 6, has further held as under:- “7. ……...When a statutory liability has been imposed upon the owner, in our opinion, the same cannot extend the liability of an insurer to indemnify the owner, although in terms of the insurance policy or under the Act, it would not be liable therefor.” 17. In the case of New India Assurance Company Ltd. Vs. Prabha Devi (supra), view taken by Hon’ble Supreme Court in the case of Dhanraj (supra) has further been reiterated. 18. Hon’ble Apex Court in the case of Oriental Insurance Co. Ltd. vs. Sunita Rathi reported in (1998) 1 SCC 365, 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 10 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. 19. In instant case, though offending vehicle was covered vide package policy (Ex. D-1), but as per the circular dated 16.11.2009 and 03.12.2009 issued by IRDA under package policy/comprehensive policy, liability of occupants of a private car and pillion rider on a two wheeler including third party is covered but even in policy of said nature i.e. package policy/comprehensive policy, risk of owner / insured is not covered, as such, contention of learned counsel for the respondents no.1 to 4/ claimants, since it was package package policy, hence, liability of deceased owner/insured was also covered, is not sustainable, and therefore, finding recorded by the Claims Tribunal fastening liability upon appellant /Insurance Company to indemnify the impugned award is perverse and illegal, hence, the same is set aside. 20. In the present case, vide insurance policy (Ex. D-1), personal accident of owner/insured was covered by payment of Rs. 100 against such contractual liability. It is proved that vide Ex.D-5, legal heirs of deceased owner/insured has received Rs.2,00,000/- from the appellant/ Insurance Company vide claim payment voucher dated 12.3.2014 through Cheque No.95171 dated 12.3.2014 against personal accident. Thus since, deceased was not a ‘third party’ against the offending vehicle/its insurance policy, therefore, his legal heirs/claimants/respondents no.1 to 4 herein are neither entitled to receive any compensation nor claim petition filed by them under Section 166 and 140 of the MV act is maintainable. 21. In view of above discussion, the impugned award passed by learned Claims Tribunal fastening liability upon the appellant/ Insurance company is perverse and illegal, hence, the same is set aside and claim petition filed by legal heirs of deceased -Manoj Shah under Section 166 & 140 of the MV Act is dismissed, as not maintainable. 11 22. Since appellant/ Insurance company has paid 50% amount of award to the respondents No.1 to 4 herein /claimants in compliance of the order dated 17.7.2017 passed by this Court and claimants are not entitled to receive any compensation from appellant / Insurance company, therefore, claimants are directed to return the said amount within a period of 90 days, which they have received from appellant along with amount of mandatory deposit, else appellant is entitled to recover the amount through due process of law. 23. Accordingly, this appeal is allowed to the above extent. No order as to cost(s). Sd/- (Naresh Kumar Chandravanshi) JUDGE Rukhsar RUKHSAR BANO Digitally signed by RUKHSAR BANO Date: 2025.01.23 10:53:24 +0530