HONOURABLE MR v. CHAMPABEN @ CHOCHIBEN JERAMBHAI HAPALIYA & 5

The Tribunal negatived the contention of the appellant- insurance company on the ground that the deceased, who was driving the motor-cycle in question, was not the owner of the said vehicle, that means he was not the insured of the vehicle in question and, therefore, he was a third party in the application under Section 140 of the Act. The Tribunal held that the deceased died in the motor vehicle accident involving the motor-cycle insured by the appellant and the Skoda car and, therefore, the owner as well as insurance companies of both the vehicles were jointly and severally liable to pay compensation under Section 140 of the Act. Accordingly, the impugned order came to be passed on 10.7.2006 whereby the Tribunal directed all the four opponents to pay jointly and severally a sum of Rs.50,000/- with interest at the rate of 10% p.a. from the date of the claim petition till payment, subject to final adjustment. The appellant has challenged the said order in First Appeal No.3158 of 2006. FACTS IN FIRST APPEAL No. 3208 of 2006

3.1 First Appeal No.3208 of 2006 arises from Claim Petition No.948 of 2005 wherein also the Tribunal has passed a similar order under Section 140 of the Act. On 13.9.2005, the deceased was riding a motor-cycle and sustained serious injuries in the accident between the bus of the Gujarat State Road Transport Corporation and the motor-cycle insured by the present appellant. In this case also, the motor-cyclist sustained serious injuries and succumbed to the injuries. The widow and six minor children of the deceased filed Claim Petition No.948 of 2005 for compensation of Rs.40 lakhs. The said claimants also filed an application for interim compensation of Rs.50,000/- under Section 140 of the Act on the basis of the principle of 'no fault liability'. FA/3158/2006 JUDGMENT

3.2 In this case also, the insurance company contended that the policy did not cover the risk of the driver of the motor-cycle insured by the appellant – insurance company and, therefore, it was not liable to pay compensation either under Section 166 of the Act or under Section 140 of the Act.

3.3 In this case also, the Tribunal passed order dated

19.6.2006 directing all the three opponents i.e. the Gujarat State Road Transport Corporation, as well as the owner of the motor- cycle and the present appellant (insurer of the motor-cycle) to pay jointly and severally a sum of Rs.50,000/- with interest at the rate of 10% p.a. from the date of the claim petition till payment, subject to final adjustment. The appellant is, therefore, in appeal against the said order also. CONTENTIONS ON BEHALF OF APPELLANT-INSURANCE COMPANY

4. Mr Vibhuti P Nanavati, learned counsel for the appellant-insurance company has submitted that - (i) in each case the deceased himself was driving the concerned motor-cycle and, therefore, the deceased himself was the tort-feasor. Hence, the claimants are not entitled to receive any compensation either under Section 166 of the Act or under Section 140 of the Act. It is submitted that the Tribunal erred in not correctly interpreting the expression “third party” by treating the driver as the third party merely because he was not the insured. Strong reliance is placed on the decision of this FA/3158/2006 JUDGMENT Court in United India Insurance Co. Ltd. vs. Jagatsinh Valsinh, 1986 GLH 573. Reliance is also placed on the following decisions of the Apex Court - (a) Dhanraj vs. New India Assurance Co. Ltd., 2005 ACJ 1; (b) Oriental Insurance Co. Ltd. vs. Sunita Rathi, 1998 ACJ 121; (c) New India Assurance Co. Ltd. vs. Sita Bai, AIR 1999 SC 3577. (ii) It is also alternatively contended that the insurance policy issued by the appellant in each of these two cases did not cover any liability for compensation payable to the driver of the insured vehicle and that unless extra premium is paid for covering the risk of the driver/owner of the vehicle, the appellant-insurance company cannot be held liable to pay even interim compensation under Section 140 of the Act. DISCUSSION

5. Section 140 of the Motor Vehicles Act, 1988 reads as under:- “140 Liability to pay compensation in certain cases on the principle of no fault- (1) Where death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of this section. FA/3158/2006 JUDGMENT (2) (3) (4) (5) The amount of compensation which shall be payable under sub-section (1) in respect of the death of any person shall be a fixed sum of fifty thousand rupees and the amount of compensation payable under that sub- section in respect of the permanent disablement of any person shall be a fixed sum of twenty-five thousand rupees. In any claim for compensation under sub-section (1), the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person. A claim for compensation under sub-section (1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim has been made nor shall the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement. Notwithstanding anything contained in sub-section (2) regarding death or bodily injury to any person, for which the owner of the vehicle is liable to give compensation for relief, he is also liable to pay compensation under any other law for the time being in force. Provided that the amount of such compensation to be given under any other law shall be reduced from the amount of compensation payable under this section or under section 163A. (emphasis supplied) Contention (i)

6. With the insertion of Section 92-A in the Motor Vehicles Act, 1939 and embodiment of the said principle in Section 140 of the Motor Vehicles Act, 1988, in an application under Section 140 FA/3158/2006 JUDGMENT of the Act, the heirs of the deceased or the injured claimant are not required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person. This is clearly provided in sub-section (3) of Section 140. Sub-section (4) of Section 140 then clarifies that a claim for compensation under sub- section (1) of Section 140 shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement, the claim has been made nor shall the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement. In other words, even the injured claimant who was himself responsible for causing the accident by his neglect or wrongful act or default is entitled to claim compensation from the owner of the vehicle under sub-section (1) of Section 140. Similarly, if the driver of the vehicle has died on account of the injuries received in a motor vehicle accident caused by his own wrongful act or neglect or default, even then his heirs are entitled to claim compensation under sub-section (1) of Section 140. This clarification given in sub-section (4) of Section 140 is a complete answer to the doubt sought to be raised on behalf of the insurer.

7. The very object of providing no fault liability through insertion of Section 92A in the Motor Vehicles Act, 1939 and through enactment of Section 140 in the Motor Vehicles Act, 1988 was to provide quick relief to the heirs of the deceased driver or to the injured driver, without undertaking any inquiry about his alleged negligence, default or wrongful act. The law in this behalf is already well-settled as per the decision of the Apex Court in K. Nandakumar vs. Managing Director, Thanthai Periyar Transport Corpn. Ltd., 1996 ACJ 555 = AIR 1996 SC 1217 = (1996) 2 SCC FA/3158/2006 JUDGMENT 736 wherein the Apex Court has explained the object underlying the provisions of Section 92-A of the Motor Vehicles Act, 1939 which is an absolute liability cast upon the owner of the vehicle to pay compensation in respect of death or permanent disablement resulting from an accident arising out of its use. In that case the claimant was riding a motor-cycle which collided with a bus belonging to the respondent. The claimant suffered permanent disablement and claimed compensation of Rs.2 lacs. The Tribunal as well as the High Court held the claimant to be negligent and on that ground refused to award even the compensation under Section 92A. The Apex Court held that on a plain reading of Section 92A, particularly sub-section (4), the claim for compensation on the basis of no fault principle could not have been defeated.

8. Very recently, the Scheme of Chapter X of the Act of 1988 containing Section 140 and other allied provisions has been examined by a Full Bench of this Court in United India Insurance Co. Ltd. vs. Kadviben Udabhai Rathwa, 2006 (2) GLR 1257 and it has been held that an application under Section 140 of the Act is maintainable without filing an application for compensation under Section 166 or 163A of the Act, but if an application under Section 166 or 163A is filed, the compensation awarded under Section 140(1) shall be adjusted against any higher or equal amount of compensation awarded under Section 166 or 163A of the Act. In any case, the amount paid under Section 140 is not required to be refunded merely because a claim petition under Section 166 of the Act is dismissed on account of negligence of the claimant himself. In Payalben Jayeshbhai Yagnik vs. Jayeshbhai G Yagnik, 2003 (2) GLH 555, one of us (K.M. Mehta, J) sitting as a Single Judge also had an occasion to examine the scope of Section 92A of the Motor Vehicles Act, 1939 and Section 140 of the Motor Vehicles FA/3158/2006 JUDGMENT Act, 1988, and observed as under:- “The no fault provision as propounded in Section 92A of old Act (New Section 140) of the Motor Vehicles Act is in the nature of a beneficial legislation enacted with a view to confer the benefit of expeditious payment of a limited amount by way of compensation to the victims of an accident arising out of the use of a motor vehicle on the basis of no fault liability. In the matter of interpretation of a beneficial legislation the approach of the Courts is to adopt a construction which advances the beneficent purpose underlying the enactment in preference to a construction which tends to defeat that purpose.”

9. It is thus clear that the decision of this Court in United India Insurance Co. Ltd. vs. Jagatsinh Valsinh, 1986 GLH 573 (the accident there took place in 1981) and the decision of the Apex Court in Dhanraj vs. New India Assurance Co. Ltd. 2005 ACJ 1 dealt with claim petitions filed under Section 110B of the Motor Vehicles Act, 1939/Section 166 of the Motor Vehicles Act, 1988. These decisions will, therefore, not apply to cases where the applications are filed under Section 92A of the 1939 Act or under Section 140 of the 1988 Act.

10. In Oriental Insurance Co. Ltd. v. Sunita Rathi, 1998 ACJ 21 = 1998 (1) SCC 365, the Court was dealing with a motor vehicle accident which occurred on 10.12.1991 at 2-20 PM. The cover note was issued by the Insurance Company at 2-55 PM. The Tribunal and the High Court simply assumed that the owner of the vehicle was not liable and that the insurer alone was liable. Disapproving the said conclusion, the Apex Court held that the liability of the insurer arises only when the liability of the insured has been upheld for the FA/3158/2006 JUDGMENT purpose of indemnifying the insured under the contract of insurance. The Court held that in the facts of the case, the insurance commenced after the accident and, therefore, the insurance company was not liable under the contract to indemnify the insured. However, in the facts of that case, since the insurer had already paid compensation to the claimants, the insurer did not pressed for refund of the amount from the claimants to the insurer. The same view was taken in New India Assurance Co.