Bhamabai Shankar Barve and Others vs Ranganath Ganpat Bankhele and Others

A.S. Oka, J.—Heard the learned counsel appearing for the appellants and the learned counsel appearing for the third respondent. The appellants are the claimants in a claim petition filed u/s 166 of the Motor Vehicles Act, 1939 (hereinafter referred to as "the said Act of 1939").

The claim was made for compensation on account of the death of one Shankar Laxman Barve in a motor accident on 19th August, 1983. The case made out by the appellant is that at the relevant time the deceased was travelling by goods truck. It is their case that the deceased entered into the truck at Chase Narudi along with the goods which were to be carried to Pune. The first respondent is the owner of the said truck and the second respondent is the driver of the truck. The third respondent is the Insurer of the said Truck. The Tribunal found that the driver of the truck was negligent. The Tribunal granted compensation of Rs. 1,38,000/- with interest at the rate of Rs. 12% per annum. The learned member of the Tribunal by relying upon the decision of the Apex Court in the case of Smt. Mallawwa Etc. Vs. The Oriental Insurance Co. Ltd. and Others, held that the risk of the passenger or a person who is travelling along with the goods is not covered by the policy.

The learned counsel appearing for the appellants placed reliance on a decision of learned Signal Judge of this Court in the case of Balasaheb Shamrao Salunkhe, Decd. thru'' Lilavati B. Salunkhe and Others Vs. Laxmibai Yashwant Jadhav and Others, . He placed reliance on a decision of the Division Bench in the case of Nasibdar Suba Fakir vs. Adhia & Company & others, 1983 Mh.L.J. 647. He submitted that the view taken by the Division Bench is that when a hirer of a goods vehicle hired for carriage of his goods is travelling by the said vehicle in connection with the carriage of the goods with the consent of the driver or owner of the goods vehicle in question, he must be deemed to be a passenger whose risk is required to be covered under the policy of insurance. He submitted that in view of the law laid down by the Division Bench which is followed by this Court, the Tribunal has erred by dismissing the claim against third respondent insurer.

The learned counsel appearing for the third respondent relied upon a decision of the Apex Court in the case of Mallawwa & others (supra) and submitted that the insurance company is not liable for payment of compensation on account of death or injuries sustained by persons carried in a goods vehicle either along with their goods or by paying fare. He submitted that in view of the decision of the Apex Court, the decisions of this Court cannot be read as binding precedents.

I have carefully considered the submissions. The claim petition will governed by the said Act of 1939. It will be necessary to make a reference to section 95 of the said Act of 1939 which reads thus:

95(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which-

(a) is issued by a person who is an authorized insurer or by a cooperative society allowed u/s 108 to transact the business of an insurer], and

[(b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)

(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;

(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:]

Provided that a policy shall not 1 *** be required-

(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment [other than a liability arising under the Workmen''s Compensation Act, 1923, in respect of the death of, or bodily injury to, any such employee--

(a) engaged in driving the vehicle, or

(b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets in the vehicle, or

(c) if it is a goods vehicle, being carried in the vehicle, or

(ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of occurrence of the event out of which a claim arises, or

(iii) to cover any contractual liability.

[Explanation - For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of accident, if the act or omission which, led to the accident occurred in a public place.]

(2) Subject to the proviso to sub-section (1), a policy of insurance shall cover any liability incurred in respect of any one accident up to the following limits, namely:

[(b) where the vehicle is goods vehicle, a limit of one lakh and fifty thousand rupees in all, including the liabilities, if any, arising under the Workmen''s Compensation Act, 1923, in respect of the death of, or bodily injury to, employees (other than the driver), not exceeding six in number, being carried in the vehicle;]

[(b) where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment,

(i) in respect of persons other than passengers carried for. hire or reward, a limit of fifty thousand rupees in all;

(ii) in respect of passengers, a limit of fifteen thousand rupees for each individual passenger;

(2) a limit of seventy five thousand rupees in all where the vehicle is registered to carry more than thirty but not more than sixty passengers;

(3) a limit of one lakh rupees in all where the vehicle is registered to carry more than sixty passengers; and

(4) subject to the limits aforesaid, ten thousand rupees for each individual passenger where the vehicle is a motor cab, and five thousand rupees for each individual passenger in any other case;

(c) save as provided in clause (d), where the vehicle is a vehicle of any other class, the amount of liability occurred;

(d) irrespective of the class of the vehicle, a limit of rupees six thousand in all in respect of damage to any property of a third party.]

(4) A policy shall be of an effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance *** in the prescribed form and containing the prescribed particulars of any conditions subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases.

[(4A) Where a cover note issued by the insurer under the provisions of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribed.]

(5) Notwithstanding anything elsewhere contained in any law, a person issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of person.

In the case of Mallawwa & others (supra) a reference was made to a larger Bench of the Apex Court by a Division Bench. The order of the Division Bench quoted in the decision reads thus:

What we are concerned with in these matters is the correct interpretation of section 95 of the Motor Vehicles Act, 1939. The question arises, specifically, in the context of the death of the owner of goods being carried in a goods vehicle and the question is whether the insurer of the goods vehicle is liable to pay the compensation awarded to his legal heirs. We note that there are divergent views expressed by the High Courts. Apart from that, in our View, a decision of a Bench of two learned Judges in Pushpabai Purshottam Udeshi and Others Vs. Ranjit Ginning and Pressing Co. (P) Ltd. and Another, , needs to be reconsidered in greater detail. In these circumstances, it is appropriate that these matters should be heard and disposed of by a Bench of three learned Judges.

In view of the question referred, the larger Bench of the Apex Court dealt with section 95 of the said Act of 1939 as amended by Act No. 56 of 1969. While dealing with section 95, the Apex Court observed thus:

Though apparently, it looked as if the legislature by introducing two sub-clauses in clause (b) had tried to make a distinction between passengers and non-passengers, that was not really so. Though the proviso appeared after sub-clause (ii) of clause (b), it really remained a proviso to the earlier clause (b) which after the amendment became clause (b)(i). Neither the object of introducing sub-clause (ii) in clause (b) nor the language of the proviso indicate that the proviso was to act as a proviso to sub-clause (ii) also. Even earlier, the passengers of a public service vehicle were required to be covered compulsorily as they answered the description of passengers carried for hire or reward. The only effect of making a special provision for passengers of a public service vehicle was that proviso (ii) thereafter remained applicable to vehicles other than public service vehicles.

In paragraph No. 10 of the Judgment, the Apex Court noted that the divergent views have been expressed by the different High Courts. The Apex Court made a reference to a decision of the Full Bench of the Orissa High Court in the case of New India Assurance Company Ltd. Vs. Kanchan Bewa and Others, . The Apex Court quoted paragraph No. 22 and 23 of the decision of the Full Bench of the Orissa High Court which read thus:

Thus, to find out whether an insurer would be liable to indemnify an owner of a goods vehicle in a case of present nature, the mere fact that the passenger was carried for hire or reward would not be enough; it shall have to be found out as to whether he was the owner of the goods, or an employee of such an owner, and then whether there were more than six persons in all in the goods vehicle and whether the goods vehicle was being habitually used to carry passengers. The position would thus become very uncertain and would vary from case to case. Production of such result would not be conducive to the advancement of the object sought to be achieved by requiring a compulsory insurance policy.

There is another aspect of the matter which had led us to, differ from the Full Bench decision of Rajasthan High Court. The same is what finds place in sub-section (2) of section 95. That sub-section specifies the limits of liability and clause (a) deals with goods vehicle; and insofar as the person travelling in goods vehicle is concerned, it has confined the liability to the employees only. This is an indicator, and almost a sure indicator, of the fact that legislature did not have in mind carrying of either the hirer of the vehicle or his employee in the goods vehicle, otherwise, clause (a) would have provided a limit of liability regarding such persons also.

(Underline supplied)

Thus, the Full Bench of Orissa High Court come to the conclusion after considering section 95 that insofar as the persons travelling in a goods vehicle are concerned, the liability of the insurer is confined only to the employees of the insured.

In paragraph No. 11 of the said decision, the larger Bench of the Apex Court expressly confirmed the view taken by the Orissa High Court by, holding that :

Though, the conclusion was arrived at after taking into consideration the Orissa Motor Vehicles Rules, in our opinion the said view is correct, even otherwise also. In view of what we have said, the contrary view expressed by other High Courts has to be regarded as incorrect.

The Apex Court clarified that the view taken was only as regards section 95 of the said Act of 1939. Thus, the view taken is that section 95 of the said Act of 1939 did not require an insurer to cover liability of the owner of the goods travelling in goods vehicle along with the goods. It must be also noted here that in the subsequent Judgment of the Apex Court in the case of New India Assurance Co. Ltd. Vs. Asha Rani and Others, , the Apex Court has referred to the decision in the case of Mallawwa & others (supra) with approval.

Now turning to the decision of the Division Bench of this Court in the case of Nasibdar Suba Fakir (supra), in paragraph No. 61, the Division Bench held thus:

"We are of the view that the better view as between the two sets of authorities is the one to which we have arrived upon the analysis of the statutory provisions. We are of the view that when a hirer of a goods vehicle for carriage of his goods is travelling by the said vehicle in connection with the carriage of the goods with the consent of the driver or owner of the goods vehicle in question, he must be deemed to be a passenger on the vehicle for reward within the meaning of clause (ii) of the proviso to section 95(1) of the Act and hence the tortious liability of the owner towards him must be covered by the insurance policy contemplated by the said section.

The decision of the learned Single Judge in the case of Balasaheb (supra) expressly relies upon the decision of the Division Bench in the case of Nasibdar Suba Fakir (supra).

In view of what is held by the Apex Court in the decision in the case of Mallawwa & others (supra), the decisions of the Division Bench and Single Judge of this Court cannot be read as binding precedents.

Hence, the learned Member of the Tribunal was right in holding the third respondent is not liable.

The learned counsel appearing for the appellants relied upon clause (c) of Section (II) of the Policy of the Insurance. The said clause (c) in fact reiterates that even in case of goods vehicle, the liability only to the extent covered under the Workmen''s Compensation Act, 1923 is required to be covered by the policy and hence, the clause (c) will not help the appellants.

There is no merits in the Appeal and the same is accordingly dismissed with no order as to costs.