Branch Manager H.D.F.C. Ergo General Ins. Co. Ltd vs Gajendra Singh Deshmukh

Amitendra Kishore Prasad, J

This is an appeal by the appellant insurance company of the offending vehicle against the award dated 14.11.2017 passed by the 4th Additional Motor Accidents Claims Tribunal, Durg (C.G.) in Claim Case No.2545 of 2012, in which compensation of Rs.28,428/- has been granted in favour of the claimants fastening liability upon the insurance company.

Facts of the present case in brief are that the respondent No.1 (claimant) filed a claim application under Section 166 of the Motor Vehicles Act, 1988, seeking compensation of ₹8,40,000/- for injuries sustained in a motor vehicle accident, alleging that the appellant was the insurer of the Tractor bearing registration no. CG-07-NA-2903, while respondent Nos.2 and 3 were its driver and owner respectively, and respondent Nos. 4 and 5 were the owner and insurer of the attached trolley bearing registration no. CG-07-ZC-0634 (hereinafter collectively referred to as the "offending vehicles"). It was pleaded that on 13.01.2012, while the claimant was travelling with others in the offending vehicles near Komal Badi, Village Khapra, Dhamdha Main Road, respondent No.2 drove the vehicle in a rash and negligent manner, causing it to overturn and resulting in injuries to the claimant and other passengers. The incident was reported to Police Station Pusaur, whereupon a criminal case was registered against respondent no. 2, culminating in the filing of a final report before the concerned JMFC. The claimant, aged 25 years and stated to be a labourer earning ₹60,000/- annually, claimed compensation under various heads. Upon notice, respondents no. 2 to 5 and the appellant filed written statements denying the allegations. The appellant and respondent no. 5 contended inter alia that the claimant was a gratuitous passenger, whose risk was not covered under the relevant insurance policies or under Section 147 of the Act, and that the vehicle was being used in contravention of the Motor Vehicles Act, its registration terms, and Rule 28 of the Rules of the Road Regulations, 1989. It was further submitted that the driver lacked a valid and effective driving licence and that there was no seating provision for passengers in the vehicle. Based on the pleadings, the learned Tribunal framed issues and, upon adjudication, held that the claimant was indeed travelling in a tractor-trolley, thereby concluding that the offending vehicle was used in violation of Rule 28 of the Rules of the Road Regulations, 1989. The appellant has challenged the Tribunal's findings as arbitrary and contrary to law, asserting that the claimant does not fall within the definition of a "third party" under the Act.

Learned counsel for the appellant insurance company respectfully submits that the award passed by the Tribunal is patently erroneous, contrary to the evidence and facts on record, and bad in law. The Tribunal has misinterpreted the provisions of Sections 147 and 149 of the Motor Vehicles Act, 1988, and failed to appreciate that the claimant/respondent no.1, as per the FIR and Final Investigation Report, was travelling as a gratuitous passenger in the offending tractor-trolley, which had no seating capacity except for the driver. The Tribunal overlooked the admitted position and statutory restrictions under Rule 28 of the Rules of the Road Regulations, 1989, and Rule 220 of the Chhattisgarh Motor Vehicle Rules, 1994. The risk of such passengers is not covered under the policy nor within the scope of "third party" as defined under Section 147 of the Act. Furthermore, the Tribunal failed to consider that the vehicle was being used in violation of its registration conditions and the driver did not hold a valid and effective driving licence. No cogent evidence was adduced by the claimant to establish rash and negligent driving by respondent no. 2, who himself denied liability in his testimony. The appellant’s witness substantiated the defences raised in the written statement, and relevant case law cited was not properly appreciated by the Tribunal. The findings are perverse, arbitrary, and based on conjecture, warranting the setting aside of the award, with the liability to compensate the claimant resting solely on the owner and driver of the offending vehicle. The appellant, therefore, respectfully prays that this Court be pleased to quash and set aside the impugned award.

Learned counsel for claimant submits that the impugned Award passed by the learned Claims Tribunal is contrary to the law, facts, and circumstances of the case. He goes on to submit that the learned Tribunal has failed to award just, fair, and adequate compensation under various heads and has instead granted a grossly inadequate amount, thereby causing serious prejudice to the appellants. The Tribunal erred in assessing the compensation. In light of the above, the appeal filed by the appellant is liable to be dismissed and the amount of compensation is liable to be enhanced to ensure justice is done to the claimant.

Learned counsel for the New India Insurance Company Ltd., respectfully submits that it is not liable to indemnify any compensation in the present case, as the trolley bearing registration no. CG-07-ZG-0634 was insured under an Act Only Policy, which provides coverage only for third-party risks. As per the pleadings and evidence, including the deposition of the insurer’s witness Mr. Deepak Malik and the insurance policy marked as Exhibits D-1 and D-5, the said trolley had zero seating capacity and was being used for the transportation of bricks. It is an admitted fact in the pleadings that the injured claimant, Gajendra Singh, was travelling in the offending vehicle as a gratuitous passenger, who does not fall within the definition of a "third party" under Section 147 of the Motor Vehicles Act. Moreover, no premium was paid to cover any occupants, and thus the insurance coverage was limited strictly to third-party liability. Additionally, it is on record that the vehicle was being driven by Mithlesh Kumar without a valid driving licence, which constitutes a fundamental breach of policy conditions. In view of the judgment of the Hon’ble Supreme Court in Shivraj v. Rajendra , (2018) 10 SCC 432, and Jagtar Singh v. Sanjeev Kumar , (2018) 15 SCC 189, where the insurer was held not liable under similar circumstances, he further prays that the liability, if any, may be fastened on the owner and driver of the vehicle, and alternatively, in the interest of justice, a direction to "pay and recover" may be issued against them.

In a motor accident claim case, what is important is that, the compensation to be awarded by the Courts/Tribunals should be just and proper compensation in view of the facts and circumstances of the case. It should neither be a meager amount of compensation, nor a Bonanza.

In view of the facts and circumstances of the case and upon careful consideration of the pleadings, evidence, and submissions of the parties, this Court finds no merit in the appeal filed by the appellant insurance company. The learned Tribunal has duly considered the relevant provisions of the Motor Vehicles Act, 1988, and the Rules of the Road Regulations, 1989, and has appropriately fastened liability on the insurer after evaluating the evidence on record. The appellant’s contentions regarding misinterpretation of law and non-coverage of the claimant as a third party have been rightly negatived by the Tribunal.

The claim for compensation was supported by adequate evidence, including the FIR and Final Investigation Report, establishing negligence and resulting injury to the claimant. The insurer’s plea of non-liability under an Act Only Policy and breach of conditions is a matter between the insurer and the owner and driver does not absolve the liability to compensate the claimant. Considering the settled principles that the claimant is entitled to just and fair compensation, this Court finds that the impugned award does not warrant interference.

Accordingly, the appeal is dismissed with no order as to costs.