Nafr High Court
Case Details
-1- 2025:CGHC:36078 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR MAC No. 1782 of 2019 Divisional Manager The Oriental Insurance Company Limited, Division Office, Manendragarh Road, Nearby Ambedkar Chowk, Nagar Police Station And Tahsil Ambikapur, District- Surguja, Chhattisgarh............ (Non-Applicant No.3) --- Appellant (s) versus 1 - Sanjay Kumar Rajwade S/o Shivram Rajwade Aged About 44 Years Occupation Agriculture 2 - Smt. Gulpati Rajwade W/o Sanjay Kumar Rajwade Aged About 38 Years Occupation Housewife Both R/o Village Katkolo (Majhipara), Police Station Darima, Tahsil Ambikapur, District- Surguja, Chhattisgarh..........(Claimants) 3 - Hemant Kumar Rajwade S/o Ramratan Rajwade Caste Rajwar, R/o Village Baroudhi, Police Station And Tahsil Bhatgaon, District- Surajpur, Chhattisgarh......(Driver) (Non-Applicant No.1) 4 - Kanhaiya Lal Rajwade S/o Dilbodh Rajwade Aged About 63 Years Occupation Agriculture, R/o Village Kotkalo (Uparwara), Police Station Darima, Tahsil Ambikapur, District- Surguja, Chhattisgarh.........(Owner) (Non-Applicant No.2) --- Respondent(s) __________________________________________________________ For Appellant (s) : Mr. Pankaj Agrawal, Advocate For Respondents No. 1 & 2 : Mr. Nishikant Sinha, Advocate For Respondents No.3 & 4 : None appears ___________________________________________________________ Digitally signed by PRAVEEN KUMAR SINHA Date: 2025.08.12 10:25:58 +0530 -2- MAC No. 1780 of 2019 Divisional Manager The Oriental Insurance Company Limited, Division Office, Manendragarh Road, Nearby Ambedkar Chowk, Nagar Police Station And Tahsil Ambikapur, District- Surguja, Chhattisgarh............ (Non-Applicant No.3) --- Appellant (s) Versus 1 - Dashrath Ram Banwasi S/o Vijay Banwasi Aged About 31 Years Occupation Agriculture
Legal Reasoning
"Before this Court, however, the nature of policies which came up for consideration were Act policies. This Court did not deal with a package policy. If the Tariff Advisory Committee seeks to enforce its decision in regard to coverage of third-party risk which would include all persons including occupants of the vehicle and the insurer having entered into a contract of insurance in relation thereto, we are of the opinion that the matter may require a deeper scrutiny." On a perusal of the aforesaid paragraph, it is clear as crystal that the decisions that have been referred to in Bhagyalakshmi (supra) involved only "Act Policies". The Bench felt that the matter would be different if the Tariff Advisory Committee seeks to enforce its decision in regard to coverage of third party risk which would include an occupant in a vehicle. It is worth noting that the Bench referred to certain decisions of Delhi High Court and Madras High Court and thought it appropriate to refer the matter to a larger Bench. Be it noted, in the said case, the Court was dealing with comprehensive policy which is also called a package policy. In that context, in the earlier part of the judgment, the Bench had stated thus:- "The policy in question is a package policy. The contract of insurance if given its face value covers the risk not only of a third party but also of persons travelling in the car including the owner thereof. The question is as to whether the policy in question is a comprehensive policy or only an Act policy." 16. Thus, it is quite vivid that the Bench had made a distinction between the "Act policy" and "comprehensive policy/package policy". We respectfully concur with the said distinction. The crux -9- of the matter is what would be the liability of the insurer if the policy is a "comprehensive/package policy. We are absolutely conscious that the matter has been referred to a larger Bench, but, as is evident, the Bench has also observed that it would depend upon the view of the Tariff Advisory Committee pertaining to enforcement of its decision to cover the liability of an occupant in a vehicle in a "comprehensive/package policy" regard being had to the contract of insurance.” 14. In the aforementioned decision, learned Claims Tribunal has not specifically recorded a finding as to policy under question was whether Act Policy or Comprehensive/Package Policy and therefore Hon'ble Supreme Court remanded back the case to Claims Tribunal and observed thus: “22. In view of the aforesaid legal position, the question that emerges for consideration is whether in the case at hand, the policy is an "Act Policy" or "Comprehensive/Package Policy" There has been no discussion either by the tribunal or the High Court in this regard. True it is, before us, Annexure P-I has been filed which is a policy issued by the insurer It only mentions the policy to be a "comprehensive policy" but we are inclined to think that there has to be a scanning of the terms of the entire policy to arrive at the conclusion whether it is really a "package policy" to cover the liability of an occupant in a car. 23. In view of the aforesaid analysis, we think it apposite to set aside the finding of the High Court and the tribunal as regards the liability of the insurer and remit the matter to the tribunal to scrutinize the policy -10- in a proper perspective and, if necessary, by taking additional evidence and if the conclusion is arrived at that the policy in question is a "Comprehensive /Package Policy", the liability would be fastened on the insurer. As far as other findings recorded by the tribunal and affirmed by the High Court are concerned, they remain undisturbed.” 15. In the aforementioned quoted paragraph of decision in case of Balakrishnan (supra), Hon’ble Supreme Court has clearly observed that “if the conclusion is arrived at that, the policy in question is Comprehensive/Package Policy, liability would be fastened on insurer”, which means that for the Act only Policy or Act Policy, there is no liability upon insurance company to cover risk of occupant of offending vehicle. 16. Hon'ble Supreme Court in case of Manuara Khatun & Ors. Vs. Rajesh Kumar Singh and Ors. (2017) 4 SCC 796 has considered the issue with regard to passenger being carried in a private car and considering its earlier decisions in the cases of Oriental Insurance Co. Ltd. Vs. Nanjappan (2004) 13 SCC 224, Bhagyalakshmi Vs. United Insurance Co. Ltd. (2009) 7 SCC 148 and National Insurance Co. Ltd. vs. Saju P. Paul (2013) 2 SCC 41 and other decisions held as under: “15. This question also fell for consideration recently in National Insurance Co. Lid. v. Saju P. Paul 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 -11- 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.”…………. 17. For aforementioned discussions and aforementioned decisions of Hon'ble Supreme Court, in the opinion of this Court, learned Claims Tribunal erred in holding that deceased/ occupant of the vehicle are third party and fastened liability upon insurance company to satisfy the award of compensation which is not sustainable and is accordingly set aside. 18. At this stage, learned counsel for claimants would submit that claimants are poor persons who have lost their child in an accident which happened in the year 2018 and since last about seven years they did not get the entire compensation awarded by Claims Tribunal till date and therefore as the offending vehicle was insured with insurance company a direction of pay and recover be issued. 19. Hon'ble Supreme Court in case of Saju P. Paul (supra) and Manuara Khatun (supra), even after exonerating the insurance company from its liability to satisfy the award of compensation considering that vehicle was being used for hire and reward, as in this case, and the deceased therein were the occupants of vehicle, has issued a direction to insurance company to first pay amount of compensation and thereafter recover the same from owner of the offending vehicle. 20. It is also apparent that in all the three appeals by way of interim order appellant-insurance company has already deposited 50% of the compensation awarded to claimants and as submitted by learned counsel for the appellant, order of this Court has already been -12- complied with, considering the entirety of facts of case as also decision of Hon'ble Supreme Court in case of Saju P. Paul (supra) and Manuara Khatun (supra), appellant insurance company is directed to first satisfy the amount of compensation and thereafter recover the same from owner of offending vehicle. For recovery of the amount from owner of offending vehicle, insurance company need not file any separate proceedings and it can recover the amount by moving an application in the same proceedings pending before the execution Court in terms of directive issued by Hon'ble Supreme Court in the case of Oriental Insurance Co. Ltd. Vs. Nanjappan & Ors. (2004) 13 SCC 224. 21. So far as the submission of learned counsel for the appellant with regard to penal interest is concerned, under the provision of Act of 1988, there is no provision to award penal interest. Therefore, award of penal interest by learned Claims Tribunal is set aside. It is directed that amount of compensation awarded to claimants shall carry interest @ 7% per annum from the date of filing of claim application till its realization as awarded by learned Claims Tribunal. Any amount of compensation already paid to the claimants shall be adjustable from the total amount of compensation awarded by learned Claims Tribunal. Rest of conditions of impugned award shall remain intact.f 2 22. All the three appeals are accordingly allowed to the extent and in the manner indicated above. Sd/- (Parth Prateem Sahu) Judge Praveen
Arguments
2 - Smt. Sonwa Banwasi W/o Dashrath Ram Banwasi Aged About 39 Years Occupation Housewife Both R/o Village Katkolo (Sarnapara), Police Station Darima, Tahsil Ambikapur, District- Surguja, Chhattisgarh...........(Claimants) 3 - Hemant Kumar Rajwade S/o Ramratan Rajwade Aged About 23 Years Caste Rajwar, R/o Village Baroudhi, Police Station And Tahsil Bhatgaon, District- Surajpur, Chhattisgarh......(Driver) (Non-Applicant No.1) 4 - Kanhaiya Lal Rajwade S/o Dibodh Rajwade Aged About 63 Years Occupation Agriculture, R/o Village Kotkalo (Uparwara), Police Station Darima, Tahsil Ambikapur, District- Surguja, Chhattisgarh.........(Owner) (Non-Applicant No.2) --- Respondent(s) __________________________________________________________ For Appellant (s) : Mr. Pankaj Agrawal, Advocate For Respondents No. 1 & 2 : Mr. Nishikant Sinha, Advocate For Respondents No.4 : Mr. D.N. Prajapati with Mr. Kirshna Kant Prajapati, Advocates ___________________________________________________________ MAC No. 1783 of 2019 Divisional Manager, The Oriental Insurance Company Limited, Division Office, Manendragarh Road, Nearby Ambedkar Chowk, Nagar Police Station And Tahsil Ambikapur, District - Surguja Chhattisgarh -3- Versus --- Appellant (s) 1 - Santosh Kumar Rajwade S/o Karansai Rajwade, Aged About 33 Years Occupation Agriculture 2 - Smt. Rachna Rajwade W/o Santosh Kumar Rajwade Aged About 31 Years Occupation Housewife Both R/o Village Katkalo ( Sarnapara ), Police Station Darima, Tahsil Ambikapur District Surguja Chhattisgarh (Claimants ) 3 - Hemant Kumar Rajwade S/o Ramratan Rajwade Aged About 23 Years Caste Rajwar, R/o Village Baroudhi, Police Station And Tahsil Bhatgaon, District - Surajpur Chhattisgarh. (Driver ) Non - Applicant No.1 4 - Kanhaiya Lal Rajwade S/o Dilbodh Rajwade Aged About 63 Years Occupation Agriculture, R/o Village Katkalo ( Uparwara) , Police Station Darima, Tashil Ambikapur District - Surguja Chhattisgarh. (Owner ) Non - Applicant No. 2 --- Respondent(s) __________________________________________________________ For Appellant (s) : Mr. Pankaj Agrawal, Advocate For Respondents No. 1 & 2 : Mr. Nishikant Sinha, Advocate For Respondents No.3 & 4 : Mr. D.N. Prajapati with Mr. Kirshna Kant Prajapati, Advocates ___________________________________________________________ S.B.: Hon'ble Shri Parth Prateem Sahu, Judge Judgment On Board 25/07/2025 1. As all three appeals i.e. MAC No.1782 of 2019, MAC No. 1780 of 2019 and MAC No. 1783 of 2019 are arising out of same accident, though from different claim case, involvement of the vehicle is also one and the same, therefore, all the three appeals are being considered and -4- deciding by this common order. 2. All the three appeals have been filed by appellant - Insurance Company challenging impugned award dated 19.06.2019 passed by learned Motor Accidents Claims Tribunal, Ambikapur, District-Sarguja in Motor Accidents Claim Case No.247 of 2018, Claim Case No.249 of 2018 and Claim Case No.248 of 2018 on the ground that learned Claims Tribunal overlooking the insurance policy of offending vehicle to be Act only policy/Private Car Liability Only Policy, no premium was paid for the occupant of vehicle, has fastened liability upon non- applicant No.3/Insurance company to satisfy the award of compensation . 3. Mr. Pankaj Agrawal, learned counsel for the appellants submits that in these appeals, multiple grounds have been raised, however, he is pressing upon the ground that learned Claims Tribunal erred in fastening liability upon insurance company and further that the interest awarded of 9% per annum is on higher side. 4. Facts relevant for disposal of these appeals are that Arjun Rajwade, Kishan Kumar Rajwade, Rohit Kumar Banwasi were travelling on Bolero vehicle CG-15-B-4186 along with others on 28.04.2018 and while returning their home after attending marriage, offending vehicle Bolero met with an accident. Occupants of vehicle suffered grievous injuries, however, Arjun Rajwade, Kishan Kumar Rajwade, Rohit Kumar Banwasi succumbed to injuries. Claimants who are parents of the deceased have filed their respective applications under Section 166 of the Act of 1988 seeking compensation against death of their child. -5- 5. Claim application was resisted by appellant-insurance company /non- applicant No.3 and it has been specifically pleaded that offending vehicle was being driven in violation of the policy condition because non-applicant No.1/ driver of offending vehicle was not possessed with valid and effective driving licence. On the date of accident offending Bolero was being plied for hire and reward and vehicle was being used for commercial purpose. At the time of accident, many persons were travelling in the offending vehicle, whereas, insurance policy was not issued covering risk of passengers. In criminal case, police after investigation, submitted charge sheet for offence under Section 39/192, 66/192 of the Act of 1988 also along with other offence. 6. Non-applicant No. 1 & 2, Driver and Owner of the offending vehicle, have also contested the case by filing reply to claim application pleading therein that non-applicant No.1 /driver of offending vehicle was possessed with valid and effective driving licence. There was no breach of conditions of insurance policy and as the offending vehicle was insured, liability to satisfy the amount of compensation is upon non-applicant No.3 /Insurance company. 7. Learned Claims Tribunal upon appreciation of pleading and evidence brought on record by respective parties allowed all the claim applications i.e. Claim Case No.247 of 2018, Claim Case No.249 of 2018 and Claim Case No.248 of 2018 and awarded compensation of Rs.3,85,000/- in each of the claim case, fastened liability to satisfy the award of compensation jointly and severally upon non-applicants . 8. Learned counsel for the appellant – Insurance Company submits that award of penal interest of 9% per annum if the amount of -6- compensation is not deposited within one month is erroneous . He submits that there is no provision under the Act of 1988 to award penal interest. Claims Tribunal erred in recording a finding that once the insurance policy is issued, insurance company is having statutory liability to satisfy the award, overlooking the nature of policy which was purchased by owner of offending vehicle, which is Private Car Liability Only Policy Zone-B. He submits that liability towards occupants can only be fastened, if the insurance policy was ‘comprehensive package policy’ and further vehicle not being used for hire and reward. From the policy available on record it is apparent that vehicle was plied for carrying passengers to attend marriage and accident occurred while returning from marriage. He next contended that learned Claims Tribunal considered the occupant of the offending vehicle to be third party and have fastened liability upon the insurance company which is erroneous. Person travellling in the offending vehicle would not fall into the category of third party in any manner. 9. Mr. D.N. Prajapati, Advocate submits that he is not having ‘vakalatnama’ to appear on behalf of owner and driver in MAC No.1782 of 2019. However, he is representing owner and driver in other two appeals i.e. MAC No.1780/2019 and MAC No183/2019. He contended that award passed by learned Claims Tribunal is just and proper in the facts of case. Learned Claims Tribunal relied upon the decision of Hon'ble Supreme Court in case of National Insurance Company Ltd. Vs. Balakrishnan & Anr. (2013 ACJ 199) and held that deceased were third party and therefore under the policy, insurance company is liable to satisfy the award of compensation. -7- 10. Mr. Nishikant Sinha, learned counsel appearing for the claimants would support the impugned award. 11. I have heard learned counsel for the parties and also perused the record of claim case. 12. So far as the first ground raised by learned counsel for the appellant- insurance company with regard to nature of policy issued is concerned, insurance company has filed the insurance policy as Ex.D-1 in the claim proceedings before the Claims Tribunal. Perusal of the policy would show that policy is issued under the head of "Private Car Liability Only Policy Zone-B". Under the schedule of premium, premium was paid towards Basic Third Party cover, added personal accident coverage for owner driver and added legal liability towards paid driver. No premium is paid covering risk of occupants of vehicle. 13. Hon’ble Supreme Court in case of Balakrishnan (supra), relied upon by learned counsel and also considered by Claims Tribunal in para-19 of its award, clearly distinguishes between the ‘Act Policy’ and ‘Comprehensive Policy’ and held thus : “15. At this juncture, we may refer with profit to a two- Judge Bench decision in Bhagyalakshmi and others v. United Insurance Company Limited and another[(2009) 7 0 148)] wherein the learned Judges took note of the contention of the learned senior counsel for the claimant-appellant which was to the effect that after the deletion of the second proviso appended to Section 95(1)(b) of the Motor Vehicles Act, 1939 in the 1988 Act, the liability of a passenger in a private vehicle must also be included in the policy in terms of the provisions of the 1988 Act. The Bench reproduced the policy, referred to Section 64-B of the -8- Insurance Act, 1938, took note of the role of the Tariff Advisory Committee and referred to the decisions in Amrit Lal Sood and Another v. Kaushalya Devi Thapar and Others[(1998) 3 scc744]. Asha Rani (supra), Tilak Singh (supra), Jhuma Saha (supra) and Sudhakaran K. V. and Others (supra) and observed thus:-