United India Insurance Co. Ltd. v. Smt. N. Laxmi

The appeal is directed against the award in O.P. No.1728 of 2000 on the file of the Motor Accidents Claims Tribunal-cum-Chief Judge, City Civil Court, Hyderabad, dated 15-07-2002. Vishwanatha Sastry, husband of the claimant, was going as a pillion rider on AP 25N 4508 scooter, which was being driven by the 1st respondent to the claim, who is the owner of the scooter and son of Vishwanatha Sastry. On the scooter hitting another scooter and Vishwanatha Sastry falling on the ground sustaining fractures, he was taken to C.D.R. hospital and expired after three days on 14-01-2000. The police registered a case and the wife claimed Rs.1,50,000/- as compensation from her son and the insurer of the scooter. While the 1st respondent/son remained ex parte, the insurer denied any rashness and negligence on the part of the 1st respondent and claimed that the deceased aged more than 60 years was a retired person without any avocation or income. The Tribunal framed issues on the responsibility for the accident and the entitlement of the claimant to compensation and during enquiry, P.Ws.1 and 2 were examined and Exs.A.1 to A.12 were marked. The Tribunal rendered impugned judgment

firstly accepting the evidence of P.W.2, the eye witness, corroborated by Ex.A.1 first information report, Ex.A.2 charge-sheet and Ex.A.5- Motor Vehicles Inspector’s report and concluding that the accident was due to the rash and negligent driving by the 1st respondent. The Tribunal assessed the compensation awarding Rs.6,700/- towards the blood purchased, Rs.51,449-98 ps. towards medical expenses proved by bills, Rs.50,000/- towards loss of dependency, Rs.10,000/- towards loss of consortium, funeral expenses, loss of estate, etc., and on the total compensation of Rs.1,18,349-98 ps., the Tribunal awarded interest at 9 per cent per annum and proportionate costs. The insurer preferred the present appeal contending that the deceased is the father and the claimant is the mother of the 1st respondent, owner of the scooter/rash and negligent driver, and the deceased could not have been treated as a third party to the vehicle of his son.

The insurer contended that the vicarious liability undertaken to be indemnified by the insurance policy is the liability, which an employer incurs in respect of any act of his servant, but not the own act of the owner of the vehicle itself. The insurer also contended that no separate premium was paid to cover the insured, his family members and their heirs. Hence, the insurer desired that the claim shall be dismissed. Pending the appeal, interim stay was granted on deposit of half of the amount plus interest plus costs including Rs.25,000/- already deposited earlier under Section 173 of the Motor Vehicles Act and the 1st respondent/claimant was permitted to withdraw Rs.50,000/- out of the said amount without furnishing any security. Sri A.V.K.S. Prasad, learned counsel for the appellant submitted that the condition was complied with. While the matter was coming on for hearing, as none entered appearance on behalf of the 1st respondent/claimant, a notice was again issued for appearance of the 1st respondent by the Court, to the 1st respondent and also her counsel by special messenger.

But neither the counsel nor the 1st respondent appeared before the Court during hearing even today. Heard Sri A.V.K.S. Prasad, learned counsel appellant. The relationship between the parties is not in dispute and the deceased and the claimant are the parents of the 1st respondent, the owner and offending driver of the scooter involved in the accident, which was insured with the appellant. The 1st respondent himself did not enter appearance before this Court or the Tribunal and did not contest the claim. Sri Prasad, learned counsel drew the attention of this Court to New India Assurance Company Limited v. Sadanand Mukhi and others[1], wherein the son of the insured died in an accident while driving the insured motor vehicle. The insurer raised the same contention that the son of the insured is not a third party and his claim does not come within the provisions of Sections 165(1) and 147(1) of the Motor Vehicles Act, 1988.

The Tribunal and the High Court did not express any opinion about the contention that the deceased son was not a third party to the insured. The Apex Court, with reference to the provisions of the Motor Vehicles Act, 1988, observed that the Act provides for two types of insurance-- one statutory and the other contractual in nature and in a case involving the owner of the vehicle or others, if they are proposed to be covered, an additional premium is required to be paid for covering their life and property. That was a claim under Section 166 of the Motor Vehicles Act, 1988 arising under an Act policy and the Apex Court after referring to the precedents on the aspect, concluded that only the risk of a third party is covered by the Act policy and in the absence of payment of additional premium, the risk of death or bodily injury of the owner of the vehicle are not covered. The learned counsel also relied on the decision of a Division Bench of this Court (to which I was a party) in Jayavarapu Rajamma v.

Jayavarapu Laxminarayana[2], wherein a reference on a similar question was answered by the Division Bench. The Division Bench concluded that Section 147 of the Motor Vehicles Act, 1988 does not require an insurance company to assume risk for death of or bodily injury to the owner of the vehicle and the kith and kin of the insured for injuries and their legal representatives in the event of their death in the accident can sustain claims for compensation as third party claims, provided the relevant policy of insurance covers such a risk. The Division Bench concluded that the terms of the insurance policy determine the liability of the insurer in each case. In the present case, the terms and conditions of the policy of insurance were not the subject of consideration in the impugned award and it was nowhere stated that the policy of insurance had an additional premium paid for covering the risk of the owner of the scooter or his kith and kin.

While the statutory liability of the insurer under the policy is only to compensate the owner or the driver of the vehicle in case any person dies or suffers injury as a result of an accident, no additional premium was alleged or proved to have been paid for covering the risk of life or property of the owner or his kith and kin to create any contractual liability for the insurer. In the absence of proof of the liability of the insurer to compensate the claimants in terms of the insurance policy either due to payment of any additional premium or otherwise due to any specified terms and conditions of the policy, the kith and kin of the insured for their injuries or their legal representatives in case of their death in the accident could not have maintained a claim for compensation as a third party. The insurer had specifically denied the allegations of the claimant and specifically pleaded that the deceased could not have been treated as a third party in respect of the insured so as to maintain a claim under insurance policy under circumstances.