United India Insurance Company Ltd. v. Motor Accident Claims Tribunal

The findings as returned by the Tribunal as regards the accident which occurred on 10.01.2003, causing death of one Bhuban Chandra Buragohain, w ho was returning home by his son’s motor cycle bearing registration No.NL-04/860 4 after attending his official duties near Alichinga under Golaghat police stati on, the collision between the said motor cycle and the vehicle bearing registrat ion No. AS-05/3970 (Bus) and the insurance cover of the motor cycle by the appel lant as well as of the other vehicle (Bus) by the National Insurance Company Ltd ., the respondent No.4, are not in dispute by either of the parties or in the ap peal. As such, those findings are affirmed and fresh appraisal thereof is dispen sed with. 3. The questions those have raised in the appeal are related to whe ther the appellant has any liability of paying the equal proportion of the award ed compensation to the extent of Rs.7,60,000/- with interest @ 6% per annum from the date of filing of the petition and as regards the assessment as made by the Tribunal under Section 163-A of the Motor Vehicles Act, 1988. Mr. S. Dutta, learned counsel appearing for the appellant submit 4. ted that the claim has been raised under Section 163-A of the Motor Vehicles Act , 1988 claiming compensation for the damages that the claimant-respondent No.1 h as suffered for the death occurred in the said accident. By filing the written statement, the appellant herein has stated in para -4 that (cid:28)O.P. Insurance Co. admit that the vehicle No.NL-04/8604 in question inv olved in the alleged accident was insured with the O.P’s Insurance Co. The Polic y issued by Insurance Co. is an act policy. The driver of the vehicle No.NL-04/8 604 is not within the definition of (cid:28)Third party (cid:29). As such according to policy c onditions O.P. No.5 is not liable to indemnify the insured i.e. O.P. No.4 making payment of any compensation arising out of the use of vehicle No.NL-04/8604 (cid:29).

5. Mr. Dutta, learned counsel for the appellant further submitted t hat the vehicle was owned by the respondent No.3 in the appeal and the policy vi de No.130404/31/02/02301, for the risk period from 07.08.2002 to 06.08.2003, was opened in the name of the respondent No.3 herein.

6. At no point of the proceeding in the Tribunal the appellant aban doned that plea that they have no liability for indemnifying the insured for the damages as emerged from the said accident. The Tribunal also, in the impugned j udgment and award has recorded such plea of the appellant herein and abruptly ob served that the appellant is liable to pay the 50% of the awarded sum by holding as under : (cid:28)Shri Shrimanta Mazumdar, DW.1 is the Branch Manager of the OP No.5. He deposed that the deceased was not the owner/driver of the motor cycle and as such, they are not liable to pay compensation. It is an admitted fact that the deceased was driving the motor cycle at the time of the accident and he had possessed the va lid and effective driving licence at the time of the accident as evident from th e certified copy of the seizure list produced. Ex-A is the copy of the policy, w hich shows that there was the P.A. coverage of the motor cycle. Hence both the i nsurers are liable to pay compensation at the ratio of 50 : 50. (cid:29) Mr. S. Dutta, learned counsel appearing for the appellant, the U 7. nited India Insurance Company Ltd. submitted that the said finding of the Tribun al is against the settled position of law and as such it warrants to be interfer ed with. In support of his contention, Mr. Datta placed some decisions of the Su preme Court. 8. in (2004) 8 SCC 553, the Apex Court held as under : In Dhanraj Vs. New India Assurance Co. Ltd. & Anr., as reported In the case of Oriental Insurance Co. Ltd. v. Sunita Rathi : (1998) 1 SC (cid:28)9. C 365, it has been held that the liability of an insurance company is only for t he purpose of indemnifying the insured against liabilities incurred towards a th ird person or in respect of damages to property. Thus, where the insured i.e. an owner of the vehicle has no liability to a third party the insurance company ha s no liability also. (cid:29) On the facts of this case, there is no finding that Mahmood Hasan, anoth In Oriental Insurance Co. Ltd. Vs. Meena Variyal & Ors., as rep 9. orted in (2007) 5 SCC 428, the Apex Court has further enunciated the law as unde r : (cid:28)29. er employee of the owner was driving the vehicle. Even if he was, there is no fi nding of his negligence. The victim was the Regional Manager of the Company that owned the car. He was using the car given to him by the company for use. Whethe r he is treated as the owner of the vehicle or as an employee he is not covered by the insurance policy taken in terms of the Act- without any special contract- since there is no award under the Workmen’s Compensation Act that is required to be satisfied by the insurer. In these circumstances, we hold that the appellant Insurance Company is not liable to indemnify the insured and is also not oblige d to satisfy the award of the Tribunal/Court and then have recourse to the insur ed, the owner of the vehicle. The High Court was in error in modifying the award of the Tribunal in that regard. (cid:29) The law which emerges from the said decisions, is: (i) the liability of

10. In another decision as rendered in Oriental Insurance Co. Ltd. V s. Sudhakaran K.V. & Ors., as reported in (2008) 7 SCC 428, the Apex Court held as under : (cid:28)25. the insurance company in a case of this nature is not extended to a pillion-ride r of the motor vehicle unless the requisite amount of premium is paid for coveri ng his/her risk; (ii) the legal obligation arising under Section 147 of the Act cannot be extended to an injury or death of the owner of the vehicle or the pill ion-rider; (iii) the pillion-rider in a two-wheeler was not to be treated as a t hird party when the accident has taken place owing to rash and negligent riding of the scooter and not on the part of the driver of another vehicle. (cid:29)

11. Mr. Dutta, learned counsel for the appellant has also placed his reliance on New India Assurance Company Ltd. Vs. Sadanand Mukhi and Ors., as re ported in (2009) 2 SCC 417, where the Apex Court considered the Meena Variyal(su pra) and held as under : (cid:28)18. The said principle was reiterated in United India Insurance Co. Ltd. v. Davinder Singh : (2007) 8 SCC 698, holding : (cid:28)10. It is, thus, axiomatic that whereas an insurance company may be held to be liable to indemnify the owner for the purpose of meeting the object and purport of the provisions of the Motor Vehicles Act, the same may not be necessary in a case where an insurance company may refuse to compensate the owner of the vehicl e towards his own lost. A distinction must be borne in mind as regards the statu tory liability of the insurer vis-a-vis the purport and object sought to be achi eved by a beneficent legislation before a forum constituted under the Motor Vehi cles Act and enforcement of a contract qua contract before a Consumer Forum. (cid:29) Learned counsel for the respondents would contended that the object and purport of the Act being to cover the risk to life of any person, the said decision shou ld be applied in this case also. We do not think that it would be a correct read ing of the said judgment as therein National Insurance Co. Ltd. v. Laxmi Narain Dhut : (2007) 3 SCC 700 has been followed. In Laxmi Narain Dhut a distinction be tween a statutory policy and a contractual policy has clearly been made out. The se decisions, clearly, are applicable to the facts of the present case. In view of the aforementioned authoritative pronouncements, we have no h 19. esitation to hold that the Insurance Company was not liable. The impugned judgme nt, therefore, cannot be sustained. It is set aside accordingly. The appeal is a llowed. (cid:29) In Ningamma & Anr. Vs. United India Insurance Co. Ltd., as repor

12. ted in (2009) 13 SCC 710, the Apex Court held as under : (cid:28)33. d Mukhi : (2009) 2 SCC 417 wherein the son of the owner was driving the vehicle, who died in the accident, was not regarded as third party. In the said case the Court held that neither Section 163-A nor Section 166 would be applicable. There are indeed cases like New India Assurance Company Ltd. Vs. Sadanan

13. In Sadanand Mukhi(supra) and Ningamma(supra), the Apex Court had categorically held that who steps into the shoes of the owner cannot be treated as the ’third party’ for purpose of determining the liability by virtue of the insurance policy, which covers the benefits and privileges of Section 147(1) of the Motor Vehicles Act. As such, the finding of the Tribunal that there was P.A. coverage and the proceeding under Section 163-A of the Motor Vehicles Act was i n other words maintainable and the appellant has liability to indemnify the owne r for the said damage, cannot sustain the scrutiny of law and accordingly the sa id finding is set aside. It is held, as corollary to this, that the appellant ha s no liability to indemnify the owner for the damage that emerged from the said accident. From the policy (Exbt.-B) though it is found that an amount of Rs.50/- (Exbt.-A(2)) was paid for passengers, but at the same time below the words (cid:28)ADD : PA to passengers (cid:29) it is found (cid:28)Number 0, Amount 0 (cid:29). Therefore there was no co verage as such as found by the Tribunal. Therefore, no liability whatsoever has emerged against the appellant from the said accident. As regards the assessment of the compensation, Mr. S. Dutta, lea 14. rned counsel for the appellant submitted that he would not press the said ground as taken in the memorandum of appeal. However, he added that the assessment of the compensation on account of funeral expenses, loss of consortium and loss of estate as awarded by the Tribunal is not in tune with the Second Schedule as fra med under Section 163-A of the Motor Vehicles Act. 15. On the other hand, Mr. T.J. Mahanta, learned counsel appearing f or the claimant-respondent No.1 submitted that the submission of the learned cou nsel appearing for the appellant if accepted, would deprive an accident victim f rom his legitimate due. The victim is not barred from realising the damage from the owner of the vehicle, but not from the appellant. 16. This Court does not find any substance in the submission of Mr. T.J. Mahanta, learned counsel for the claimant-respondent No.1, who supported st outly the judgment and award as passed by the Tribunal. 17. extent as indicated above. 18. As consequence thereof, the impugned judgment and award so far t he direction to pay the 50% of the awarded sum by the appellant, United India In surance Company Ltd. is concerned is set aside. Needless to say, the National In surance Company Ltd. shall pay the 50% of the awarded sum as per the impugned ju dgment and award and the terms thereof by deducting the sum, if any paid by this time, within a period of 30(thirty) days from today. The statutory deposit be r For the reasons as aforesaid, this appeal stands allowed to the eturned to the appellant forthwith. There shall be no order as to costs. Send down the LCRs forthwit h.