Mr. M. R. Deshmukh, Advocate for the AppellantMr. S v. Suraywanshi
Legal Reasoning
Judgment-FA-3885-2017.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADFIRST APPEAL NO. 3885 OF 2017United India Insurance Co. Ltd.,Through Its Branch Manager,2nd Floor, Dayawan Complex,Near Hotel Rajdhani, Station Road,ParbhaniThrough its Authorized Signatory/Divisional Manager, Divisional Officer, Osmanpura, Aurangabad...Appellant(Ori. R. No. 2)Versus1.Saminabegum W/o. Jarifkhan PathanAge: 31 years, Occ: Household,2.Sayamabee D/o Jarifkhan PathanAge: 17 years, Occ: Nil,(Being Minor u/g of RespondentNo. 1)R/o. Beldarpura, Near Pola Maroti, Hingoli. Tq & Dist. Hingoli.3.Trimbak S/o. Pandurang Gangawane,Age: 54 years, Occ: Business,R/o. Khed, Tq. Dist. Hingoli4.Shaikh Ahmad S/o Shaikh Rajjak,Age: Major, Occ: Labour,R/o. Beldarpura, Hingoli,Tq & Dist. Hingoli...Respondents***Mr. M. R. Deshmukh, Advocate for the AppellantMr. S. V. Suraywanshi, Advocate for Respondents***Page 1 of 12 Judgment-FA-3885-2017.odtCORAM:R.M. JOSHI, J.RESERVED ON:JANUARY 22, 2024PRONOUNCED ON:FEBRUARY 07, 2024JUDGMENT1.This First Appeal raises questions as towhether the insurer is liable to pay compensation inrespect of death of deceased who was travelling in aprivate car, insured under act policy & as to whetherthe order of pay and recover can be passed againstinsurer.2.Deceased Jarif Khan was one of the gratuitouspassengers travelling in Jeep bearing No. MH-02-A-7307.Owing to the negligent driving of the said vehicle byits driver, deceased was thrown out of the vehicle andowing to the injuries caused therein, he died. Theclaim for the compensation under Section 166 of theMotor Vehicles Act, 1988 (for short ‘said Act’) wasfiled against owner and insurer of the vehicle.3.Insured vehicle was covered by act policy andadmittedly no additional premium was paid by theinsured in respect of coverage of the passenger in thevehicle. Learned Tribunal by passing impugned judgmentand award held owner and insurer jointly and severallyPage 2 of 12 Judgment-FA-3885-2017.odtliable to pay compensation of Rs. 7,01,000/- withinterest @ 8% pa. Insurer being aggrieved by this awardhas preferred Appeal under Section 173 of the Act.4.Learned Counsel for the insurer submits thatonce it is proved that the vehicle is covered by theact policy, the insurer would not be liable to pay anycompensation except to the third party and that in thiscase deceased is not third party. In order to supporthis submissions, he placed reliance on the judgment ofthis Court in case of New India Assurance Co. Ltd Vs.Lilabai Shrimant Misal and Others, 2014 (2) TN MAC 397(Bom). Thus, according to him, learned Tribunal hascommitted error in holding insurer jointly andseverally liable to pay compensation to the claimants.It is his further submission that even no order of payand recover can be passed against insurer, in the factsand circumstances of the case.5.Learned Counsel for the claimants opposed thesaid submissions by relying upon the judgment of fullbench of Madhya Pradesh High Court in case of JugalKishore and Another Vs. Ramlesh Devi and Others, 2003(4) M.P.L.J. 546, wherein according to him it is heldPage 3 of 12
Legal Reasoning
Judgment-FA-3885-2017.odtthat the passenger of private vehicle is third partyand hence, insurer is liable to satisfy award. Byreferring to Section 2(33) of the Act it is contendedthat the vehicle involved in the accident in questionwas permitted to carry more than six persons and itbeing a private vehicle, the passenger is also coveredeven under the act policy. He further submitted thatthe Hon’ble Apex Court has held that it is open for theTribunal to direct the order of pay and recovery and assuch, the same deserves to the followed in this case.To support his submissions, he placed reliance onfollowing judgments: United India Insurance Co. Ltd Vs.Sukumarbai and Others, 2019 SCC OnLine Bom 1469,Shivaraj Vs. Rajendra and Another, 2019 (4) Mh.L.J. 16,Manuara Khatun and Others Vs. Rajesh Kumar Singh andOthers, (2017) 4 SCC 796, Jugal Kishore and Another Vs.Ramlesh Devi and Others, 2003 (4) M.P.L.J. 546. Withoutprejudice to his contentions, finally he urges thathaving regard to the fact that the claimants have losttheir bread earner on death of deceased, order to payand recover be passed.6.It is now no more res integra that in case ofPage 4 of 12 Judgment-FA-3885-2017.odtAct policy insurer will not be liable for payingcompensation when a private car meets with an accidentand a gratuitous passenger dies as a consequence of theaccident. In this regard reference can be made tojudgments of Hon’ble Apex Court in case of Dr. T. V.Jose V. Chacko P. M. Alias Thankachan and Others, AIR2001 SC 3939 & United India Assurance Co. Ltd Vs. TilakSingh and Others, 2006 (4) SCC 404. It is held in T. V.Jose (supra) that:In this case only the first sheet of thepolicy is on record. This clearly showsthat the policy is a third party policy.The terms and conditions governing thisPolicy are not on record. What was shown toCourt was terms and conditions of acomprehensive policy relating to privatecars. These cannot apply to this policy. Inthe absence of terms and conditionsgoverning this policy it is not possible toaccept the submission of Mr. Iyer that thispolicy covered liability to occupants ofthe car. As has been set out hereinabove,the law on this subject is clear, a thirdparty policy does not cover liability togratuitous passengers who are not carriedfor hire or reward. The 8th RespondentCompany will, therefore, will not be liableto reimburse the Appellant. Since in the instant case the vehicle inquestion was not covered by comprehensive/packagePage 5 of 12 Judgment-FA-3885-2017.odtpolicy but under Act policy, and as deceased wasgratuitous passenger travelling in a private car, theinsurer would not be liable to pay compensation to theclaimants for death of deceased for want of coverage ofhis risk under the policy. Thus, the Tribunal could nothave held the insurer liable for payment ofcompensation and as such order of fastening joint andseveral liability of insurer cannot sustain. 7.Now question arises as to whether there wouldbe an order of ‘pay and recover’ against insurer inthis case. In order to decide this issue it would berelevant to take into consideration relevant provisionsof Section 146, 147 and 149 of the Act.8.Section 146 of the Act provides for compulsoryinsurance against third party risk. This provision aimsat giving protection to a third party in respect ofdeath, bodily injury or damage caused to the propertyby use of the vehicle in a public place. This provisionneeds to be read with Section 147 which deals with thestatutory requirement as well as contractualobligations of insurer and insured. Thus, once a validinsurance policy is issued, which provides forPage 6 of 12 Judgment-FA-3885-2017.odtcompulsory insurance of motor vehicle, insurerundertake its liability to third parties and the rightof third party is not affected by any other conditionin the policy or failure of compliance of any conditionby insured.9.As regards contract policy, Section 147 speaksabout the requirements of policy and limits of theliability. The liability of insurer is subject to sub-section (1) and (2) of Section 147 of the Act. In casescovered by sub-section (1) of Section 149 read withSection 147 insurer steps into shoes of insured and isbound to pay compensation awarded to third party. Incase of contractual policy or act policy, liability ofinsurer to satisfy the award qua third party isabsolute.10.According to Section 149(1) and (2), apartfrom the contract otherwise than legal requirementsthose conditions must be stipulated specifically tobind contracting parties. As per law of contract incase of breach of condition of contract/policy byinsured, there would be no liability of insurer toindemnify the injured. However, insurer can avoid suchPage 7 of 12 Judgment-FA-3885-2017.odtliability only on grounds mention under Section 149(2)of the Act. Section 149(5) covers a situation whereinpay and recover order can be issued. It enables insurerto recover the amount payable exceeds liability coveredby policy from insured.11.Hon’ble Apex Court in case of NationalInsurance Co. Ltd. v. Swaran Singh 2004(3) SCC 297, hasdealt in details above referred provisions and heldthat Tribunal has power under section 165 read withSection 168 of the Act to decide not only claimsbetween claimants on one hand and insured, driver andinsurer on other, but has power to decide disputesinter se between insurer and insured including theenforceability of award. When the insurer has provedits defence in accordance with Section 149(2) & (7) itis open for Tribunal to compel insurer to paycompensation to third party and recover the same frominsured. Thus, insurer would be liable to paycompensation and cannot avoid to do so, unless thebreach of conditions is fundamental in nature. In caseof Shamanna Vs. Divisional Manager and Others, AIR 2018SC 3726, in the light of Section 147 and 149 has beenPage 8 of 12 Judgment-FA-3885-2017.odtheld that in case of third party award passed againstthe insured the some has to be paid by insurer andrecovered from insured.12.Having regard to the relevant provisions ofthe Act and law settled by Hon’ble Apex Court an orderof “pay and recover” can be passed even by Tribunal andHigh Court. However, such order must be passed takinginto consideration the facts and circumstances of eachcase and only in cases where there would be statutoryobligation of insurer to pay compensation in spite ofbreach of conditions of policy and to recover it frominsured later on.13.From above discussion and having regard to theprovisions of the Act and binding precedents adistinction will have to be drawn from the facts andcircumstances/situations to call upon insurer to paycompensation or satisfy award, which can be summarizedas under:(i)To the extent of third party claim inrespect of Act as well as contractualpolicy irrespective of any defenceavailable for insurer to limit/deny itsliability, insurer is bound to satisfyaward.Page 9 of 12 Judgment-FA-3885-2017.odt(ii)In case of breach of policy, which isnon fundamental, insurer would be liable topay compensation to person or classes ofpersons covered by policy and recover thesame from insured.(iii)In case of any person or class ofpersons not specified / covered in thepolicy, contractual or Act policy but notthird party, insurer cannot be held liablefor payment of compensation or even tosatisfy the award with condition of pay andrecover.14.Thus, Tribunal or even this Court would havepower to pass order of pay and recover only in case ofsituation (ii) envisaged above and not otherwise.Needless to record that every accident is unfortunateand it affects the claimants in terms of emotions,finances etc. In spite of having all sympathy towardsthe claimants, it would not be open for Tribunal or tothis Court to direct pay and recover which would beinconsistent with the statutory provisions. As far asjudgments cited on behalf of claimants indicatesexercise of powers by Hon’ble Apex Court under Article142 of the Constitution of India. This Article confersunique power to Apex Court to pass such order inexercise of its jurisdiction to do complete justice inPage 10 of 12 Judgment-FA-3885-2017.odtany cause or matter pending before it. Therefore, itwould not be open for the claimant to contend that thisCourt can exercise powers akin to Article 142 of theConstitution of India as exercised by Hon’ble ApexCourt in various cases on considering peculiar factsand circumstances of each case.15.Considering the aforesaid position of law andhaving regard to the admitted facts and circumstancesof the case, since the deceased cannot be treated asthird party and as this is case of coverage of vehicleunder ‘act policy’ he would not get covered under theinsurance policy issued by insurer to owner/insured, noorder ought to have been passed by learned Tribunalholding insurer for payment of compensation to theclaimants. Even no order of pay and recover can bepassed in the facts and circumstances of the case asthere was no liability at all of the insurer to satisfyaward for want of coverage of the deceased as apassenger of the offending vehicle and he being notthird party.16.Learned Counsel for original claimants havesought enhancement of compensation. Admittedly, noPage 11 of 12
Decision
Judgment-FA-3885-2017.odtappeal or cross-objection has been filed by theclaimants. No doubt, it is open for the claimants toseek enhancement of compensation in appeal filed by theother side raising exception to the impugned judgmentand award. In the instant case, however, present appealis filed by the insurer and not by the owner. It isheld that the insurer is not liable for payment of anycompensation to the claimants. In such circumstances,in the absence of any appeal filed by the owner, itwould not be open for this Court to consider therequest of claimants for enhancement of compensation.Hence, the same cannot be granted. 17.In view of above, appeal is allowed withmodification of award. Hence, the order:O R D E R(a)First Appeal is allowed. (b)Impugned judgment and award dated17.06.2016 passed in MACP No. 180 of 2008is modified. Respondent No. 1 shall paycompensation to the claimants as determinedby Tribunal.(c)Rest of judgment and award to remainunchanged.(d)No order as to costs.(e)In view of disposal of Appeal, pendingapplication, if any, is also disposed of. (R. M. JOSHI, J.)MalaniPage 12 of 12