Bashir Ahmad Bhat vs United India Insurance Co. Ltd And Others

Impugned in this Appeal is Award dated 24th June 2013, passed by Motor Accident Claims Tribunal, Srinagar (“Tribunal†for short) on a Claim

Petition bearing File no.116/06, titled Dildar Ahmad Mir and another v. Ghulam Nabi Jan and others, directing payment of compensation by United

India Insurance Company, Regal Chowk, Srinagar, with the right to recover the same from appellant/owner of offending vehicle, on the grounds

mentioned therein.

A claim petition under Section 166 of the Motor Vehicles Act, 1988, , as is coming forth from perusal of the file, was filed by claimants -

respondents 3&4 before the Tribunal, stating therein that on 20th March 2006, deceased, namely, Mehraj-u-Din Mir son of Dildar Ahmad Mir, while

traveling in offending vehicle, bearing Registration no.JK01J-4379 (Tata Indo) from Srinagar to Jammu, when driver of said vehicle drove it rashly and

negligently and fell down into a deep Nalla near Banihal, resulting in death of deceased on the spot. FIR no.41/2006 was registered by concerned

police. Claimants/ respondents, on the basis of case set up before the Tribunal, prayed for grant of Rs.76.00 Lacs. Parties filed their respective written

statement.

Given the pleadings of parties, the Tribunal framed following Issues for adjudication:

1) Whether on 20.03.2006 respondent no.1 Gh. Nabi Jan was plying o/v bearing registration No.JK01J-4379 (TATA Indigo) rashly and negligently

from Srinagar to Jammu as a result of which at Chaloras National Highway (Banihal) the same fell into the deep gorge as a result of which Mehraj u

din Mir who was travelling in the same suffered fatal injuries, as a result of which he expired on spot? OPP

2) Whether the respondent no.1, i.e., driver of the offending vehicle was not holding a valid Driving Licence on the date of accident and the vehicle

was without R/P and other relevant documents as such the Insurance Company cannot be saddled with any liability because insured has committed

breach of policy stipulations? OPR-3

3) Whether the deceased was travelling unauthorizedly in the offending vehicle as a gratuitous passenger which was not covered under the Insurance

policy and as such the Insurance Company cannot be saddled with any liability? OPR-3

4) Whether the offending vehicle was not involved in the accident, if so, then what will be its effect on the claim petition? OPR-2

5) In case issue no.1 is proved in affirmative, to what amount of compensation the petitioner is entitled to, from whom and in what proportion?

Parties adduced and examined witnesses in support of their respective stand before the Tribunal. By impugned Award, Tribunal granted

compensation of Rs.3,50,000/- along with interest @ 6% till realization, to be paid by respondent Insurance Company with right to recover the same

from owner of offending vehicle â€" appellant herein. It is this Award of this appellant is aggrieved and seeks its setting-aside.

Heard and considered.

Learned counsel for appellant has stated that appellant â€" owner of offending vehicle (Tata Indigo) bearing Registration no.JK01J/4379, had a

valid insurance policy and permitted driver, who was holding valid and effective driving licence at the time of accident to drive the vehicle and

appellant/owner of offending vehicle has not committed any breach of policy condition and therefore, appellant is entitled to be indemnified by insured.

To substantiate his submission, learned counsel for appellant has invited attention of this Court to Driving Licence (Annexure A to Appeal). He also

avers that witness, adduced by Insurance Company, did not raise any objection qua driving licence of driver of offending vehicle.

Learned counsel for appellant has also averred that offending vehicle, admittedly, was duly insured, which fact is also evident from the statement

given by witness of Insurance Company before the Tribunal, in which he has deposed that offending vehicle was incurred for O/D Claim (Own

Damage), Third Party, Owner/Driver. According to learned counsel, number of occupants mentioned in the insurance policy were four inasmuch as

respondent Insurance Company charged Rs.15,000/- as insurance premium and, therefore, occupant of offending vehicle was third party and fully

covered under insurance policy issued by respondent Insurance Company. The said fact, according to learned counsel, has not been taken into

consideration by the Tribunal while passing impugned Award.

Another important submission of learned counsel for appellant is that since the vehicle was fully and comprehensively insured, appellant, being

owner of offending vehicle, approached the Consumer Protection Forum, Srinagar, for claiming Own Damage. The complaint of appellant was

decided by Consumer Forum in favour of appellant and against Insurance Company. While saying this, learned counsel has said that respondent

Insurance Company has not objected complaint before Consumer Forum on the ground of driving licence and even driver of offending vehicle while

being cross-examined by counsel for respondent Insurance company was directed to submit his driving licence before Consumer Forum for perusal

and that driving licence of driver was examined and found genuine. Appellant is said to have received Own Damage claim from respondent Insurance

Company. However, Tribunal while passing impugned Award has not relied on the law correctly and has given right of recovery to respondent

Insurance Company. It is contended that driver of offending vehicle â€" respondent no.2 herein, was holding valid and effective driving licence at the

time of accident. In support of his submissions, learned counsel for appellant has placed reliance on National Insurance Company v. Balakrishnan

(2013) 1 SCC 731; Yashpal Luthra v. United India Insurance Company, 2011 ACJ 1415; New India Assurance Company v. Sh. Thokru Ram and

others 2002 (2) SLJ 617; National Insurance Company Ltd Bangalore v. Smt. Rasheeda and another, 1998 ACJ 1404; and Oriental Insurance Co. Ltd

v. Ajayakumar and ors, 1999 ACJ 1499.

According to learned counsel for respondent Insurance Company the insurance policy in question was only an Act Policy and therefore, liability of

Insurance Company does not arise. She has relied upon decisions in New India Insurance Company v. Asha Rani, 2003(2) SCC 223.

Given submissions made herein above, it may be mentioned that the Supreme Court in United India Insurance Co. Ltd. Shimla v. Tilak Singh and

others, (2006) 4 SCC 404, referred to concurring opinion rendered in a three Judge Bench decision in New India Assurance Co. Ltd v. Asha Rani

(2003) 2 SCC 223, and ruled thus:

“In our view, although the observations made in Asha Rani case were in connection with carrying passengers in a goods vehicle, the same would

apply with equal force to gratuitous passengers in any other vehicle also. Thus, we must uphold the contention of the appellant Insurance Company

that it owed no liability towards the injuries suffered by the deceased Rajinder Singh who was a pillion rider, as the insurance policy was a statutory

policy, and hence it did not cover the risk of death of or bodily injury to a gratuitous passenger.â€​

It is worthy to note in the said case, controversy related to gratuitous passenger carried in a private vehicle.

In Oriental Insurance Company Ltd v. Jhuma Saha (Smt.), (2007) 9 SCC 263, the Supreme Court has said thus:

“The additional premium was not paid in respect of the entire risk of death or bodily injury of the owner of the vehicle. If that be so, Section 147 (b)

of the Motor Vehicles Act which in no uncertain terms covers a risk of a third party only would be attracted in the present case.â€​

In National Insurance Co. Ltd v. Laxmi Narain Dhut, (2006) 3 SCC 700, after elaborately referring to analysis made in the case of Asha Rani

(supra), the Supreme Court rules thus:

“Section 149 is part of Chapter XI which is titled “Insurance of Motor Vehicles against Third-Party Risksâ€. A significant factor which needs

to be noticed is that there is no contractual relation between the insurance company and the third party. The liabilities and the obligations relatable to

third parties are created only by fiction of Sections 147 and 149 of the Actâ€​.

In the said case it has been opined that although the statute is a beneficial one qua third party but that benefit cannot be extended to owner of

offending vehicle. The said principle was reiterated in Oriental Insurance Company Ltd v. Meena Variyal and others, (2007) 5 SCC 428; Oriental

Insurance Company Ltd v. Sudhakaran K.V. and others, (2008) 7 SCC 428; and New India Assurance Company Ltd v. Sadanand Mukhi and others,

(2009) 2 SCC 417.

It is apposite to note here that the Supreme Court in Bhagyalakshmi and others v. United Insurance Company Limited and another, (2009) 7 SCC

148, after dealing with various facets and considering the authorities in Amrit Lal Sood and another v. Kaushalya Devi Thapar and others, (1998) 3

SCC 744; Asha Rani (supra); Tilak Singh (supra); Jhuma Saha (supra); Sudhakaran K.V. and others (supra) has observed as under:

“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.â€​

The Supreme Court in the case of Balakrishnan (supra), after referring to various decisions and copiously to the decision in Bhagyalakshmi

(supra), has held that there is a distinction between “Act Policy†and “Comprehensive / Package Policyâ€. The Supreme Court also took note

of a decision rendered by Delhi High Court in the case of Yashpal Luthra (supra), in which the High Court had referred to circulars issued by Tariff

Advisory Committee (TAC) and Insurance Regulatory and Development Authority (IRDA). The Supreme Court referred to the portion of circulars

dated 16th November 2009 and 3rd December 2009, which had been reproduced by the Delhi High Court and eventually held as follows:

“19. It is extremely important to note here that till 31st December, 2006 Tariff Advisory Committee and thereafter from 1st January, 2007, IRDA

functioned as the statutory regulatory authorities and they are entitled to fix the tariff as well as the terms and conditions of the policies by all

insurance companies. The High Court had issued notice to the Tariff Advisory Committee and the IRDA to explain the factual position as regards the

liability of the insurance companies in respect of an occupant in a private car under the “comprehensive/ package policyâ€. Before the High Court

the Competent Authority of IRDA had stated that on 2nd June, 1986 the Tariff Advisory Committee had issued instructions to all the insurance

companies to cover the pillion rider of a scooter/motorcycle under the “comprehensive policy†and the said position continues to be in vogue till

date. He had also admitted that the comprehensive policy is presently called a package policy. It is the admitted position, as the decision would show,

the earlier circulars dated 18th March, 1978 and 2nd June, 1986 continue to be valid and effective and all insurance companies are bound to pay the

compensation in respect of the liability towards an occupant in a car under the “comprehensive/package policy†irrespective of the terms and

conditions contained in the policy. The competent authority of the IRDA was also examined before the High Court who stated that the circulars dated

18th March, 1978 and 2nd June, 1986 of the Tariff Advisory Committee were incorporated in the Indian Motor Tariff effective from 1st July, 2002

and they continue to be operative and binding on the insurance companies. Because of the aforesaid factual position the circulars dated 16th

November 2009 and 3rd December, 2009, that have been reproduced hereinabove, were issued.

It is also worthy to note that the Delhi High Court, after referring to individual circulars issued by various insurance companies and eventually,

stated thus:

“In view of the aforesaid, it is clear that the comprehensive/package policy of a two-wheeler covers a pillion rider and comprehensive/ package

policy of a private car covers the occupants and where the vehicle is covered under a comprehensive/package policy, there is no need for Motor

Accident Claims Tribunal to go into the question whether the Insurance Company is liable to compensate for the death or injury of a pillion rider on a

two-wheeler or the occupants in a private car. In fact, in view of the TAC’s directives and those of the IRDA, such a plea was not permissible

and ought not to have been raised as, for instance, it was done in the present case.â€​

In view of aforesaid factual position, there is no scintilla of doubt that a “comprehensive/package policy†would cover liability of insurer for

payment of compensation for occupant in a car. There is no cavil that an “Act Policy†stands on a different footing than a “Comprehensive/

Package Policyâ€. As circulars have made the position very clear and the IRDA (statutory authority), has commanded insurance companies stating

that a “Comprehensive/Package Policyâ€​ covers liability, there cannot be any dispute in that regard.

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 Policyâ€

or “Comprehensive/Package Policyâ€. There has been no verbose and elaborate discussion made by the Tribunal while deciding Issue no.3, given

stout and vehement assertions made by learned counsel for appellant herein before.

I have reiterated at length the legal position. In the case at hand, insurance policy has not been brought on record. Learned counsel for respondent

Insurance Company would submit that insurance policy is an “Act Policyâ€. However, learned counsel for appellant would seriously dispute and

submit that extra premium has been paid inasmuch as insurance policy, in the present case, is a “Comprehensive / Package Policyâ€. Perusal of

file reveals that Insurance Policy vis-Ã -vis offending vehicle has not been placed on record. Thus, I am disposed to think that it would be appropriate

to remit the matter to the Tribunal to enable Insurance Company to produce the policy and grant liberty to the parties to file additional documents and

also lead further evidence as advised. Ordered accordingly.

It needs no special emphasis to mention that whether Insurance Company would be liable or not, would depend upon the nature of policy when it is

brought on record in a manner as required by law.

In the result, the Appeal is allowed to the extent as indicated hereinabove and to that extent the Award is set-aside and the matter is remitted to

the Tribunal. In the given facts and circumstances of the case, impugned Award qua computation of compensation need not be interfered with.

Disposed of in terms of above.

Copy of this judgement be sent down.