Branch Manager, Oriental Insurance Co. Ltd. vs Kunti Devi and Others

M.Y. Eqbal, J.—This appeal by the appellant insurance company is directed against the judgment and award dated 18.7.2006 passed by the Motor Accidents Claims Tribunal, Palamau, Daltonganj in M.V. Case No. 9 of 2003, whereby he has awarded a sum of Rs. 94,500 to the claimants for the death caused in a motor vehicle accident.

The facts of the case lie in a narrow compass:

On 14.10.2002 one Lalita Devi along with her son Manoj Kumar and other relatives were going on a jeep No. CG 15-8526 to see Durga Mandap during festival season. While those persons were moving on the vehicle, due to negligent driving, the vehicle fell down from the bridge, as a result of which Lalita Devi and Manoj Kumar died instantly at the spot receiving grievous injuries. The jeep was owned by respondent Jagnarain Dixit, father-in-law of the deceased Lalita Devi. The heirs of the deceased filed application for grant of compensation. The heirs of Lalita Devi filed M.V. Case No. 7 of 2003 whereas the heirs of Manoj Kumar filed M.V. Case No. 9 of 2003. The deceased Manoj Kumar was aged about 20 years and said to be the only bread-earner in the family. On being noticed, the appellant insurance company contested the case by filing written statement denying and disputing the liability of the insurance company. The Tribunal held that the accident took place due to rash and negligent driving of the jeep. The Tribunal further held that the insurance company is liable to pay the compensation amount.

Mr. A. Allam, learned senior counsel appearing for the appellant insurance company assailed the impugned award as being contrary to law and the evidence available on record. Learned Counsel firstly submitted that the vehicle was insured as a private vehicle and at the relevant time it was being used in violation of the contract of insurance policy. Learned Counsel submitted that since the vehicle was being used at the relevant time by the persons other than the owner of the vehicle, the insurance company shall have no liability. Learned Counsel further submitted that occupants of the vehicle were not covered under the policy. In this connection reliance has been placed on the decision of the Apex Court in the case of The Oriental Insurance Company Limited Vs. Meena Variyal and Others, and in the case of New India Assurance Co. Ltd. Vs. Asha Rani and Others, .

From perusal of the judgment, it appears that the Tribunal has considered the issue raised by the appellant and discussed it in paras 24, 25 and 26 of the judgment, which reads as under:

(24) An argument has been advanced so far payment of compensation is concerned as to who will pay the compensation, if awarded. The learned Counsel for the applicants have contended that since the insurance has not been denied, it will be incumbent upon the insurance company to pay the amount of award but the learned Counsel appearing on behalf of the insurance company, opposite party No. 2, had argued that since the insurance policy is of a private vehicle and deceased of M.V. Case No. 7 of 2003 is near relative of the owner while the deceased of M.V. Case No. 9 of 2003 was travelling on the said vehicle as mohalla people and the circumstance shows that vehicle has been lent for to earn something and thus it is violation of the policy and in the circumstance payment can be made only by the opposite party No. 1. It is argued also that since the deceased in both the cases were said to be traveller in the vehicle and cannot be termed to be third party under law thus their right cannot be attracted by the insurance company and submits that the amount of compensation whatever may be assessed can be paid only by the opposite party No. 1.

(25) The terms third party in the parlance with the use of this term in Motor Vehicles Act or under the Insurance Act means third party to the agreements. The first party and second party will be insurer and insured and all other persons who are neither first party nor second party can be said to be third party. It is admitted fact that the offending vehicle was insured with the opposite party No. 2 and the said vehicle was owned by the opposite party No. 1 and thus opposite party Nos. 1 and 2 can be said to be first party or second party and vice versa. It is admitted that deceased in M.V. Case No. 7 of 2003 was daughter-in-law of the opposite party No. 1 while deceased of M.V. Case No. 9 of 2003 was neighbourer of opposite party No. 1. On the ill-fated day both the deceased besides other persons who have also been examined in this case as witnesses had gone to see Durga idol and met with an accident in which two of them died. In such context of the matter none of the deceased can be said to be first or second party and in law they can be termed as third party.

(26) In Exh. 7 there is limitation for the use of the vehicle which runs as follows:

Use only for social, domestic and pleasure purpose and insured''s own business. The policy does not cover use for hire or reward. Organised racing, speed testing and carriage of goods (other than samples) in common and trade of business of use for any purpose in connection with motor trade.

Limited clause itself shows that vehicle can be used for social, domestic and pleasure purposes. The facts of the case which has been stated earlier shows that the vehicle was being used for social, domestic and pleasure purposes and thus the limitation clause can be attracted in the circumstances of the case.

In our view, the Tribunal has not correctly appreciated the law laid down in the recent decisions of the Supreme Court. In the case of United India Insurance Co. Ltd., Shimla Vs. Tilak Singh and Others, , after considering the decisions in New India Assurance Company Vs. Shri Satpal Singh and Others, and New India Assurance Co. Ltd. Vs. Asha Rani and Others, , the Apex Court held as under:

(21) In our view, although the observations made in New India Assurance Co. Ltd. Vs. Asha Rani and Others, , 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 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.

In The Oriental Insurance Company Limited Vs. Meena Variyal and Others, , the Supreme Court considered the provision of Section 147 of the Motor Vehicles Act. In that case, the deceased, who was employed as Regional Manager in a company which was the owner of the vehicle. The vehicle was insured with the insurance company. The deceased while travelling in the said vehicle, met with an accident and died. The widow and the daughter filed a claim petition before the Tribunal for compensation. The claim was filed against the owner of the motor vehicle and the insurance company. The insurance company contested the case asserting that the insurance company has no liability. The Supreme Court after holding that the insurance company has no liability observed as under:

(11) The object of the insistence on insurance under Chapter XI of the Act thus seems to be to compulsorily cover the liability relating to their person or properties of third parties and in respect of employees of the insured employer, the liability that may arise under the Workmen''s Compensation Act, 1923, in respect of the driver, the conductor and the one carried in a goods vehicle carrying goods. On this plain understanding of Section 147, we find it difficult to hold that the insurance company, in the case on hand, was liable to indemnify the owner, the employer company, the insured, in respect of the death of one of its employees, who according to the claim, was not the driver. Be it noted that the liability is not one arising under Workmen''s Compensation Act, 1923 and it is doubtful, on the case put forward by the claimant, whether the deceased could be understood as a workman coming within the Workmen''s Compensation Act, 1923. Therefore, on a plain reading of Section 147 of the Act, it appears to be clear that insurance company is not liable to indemnify the insured in the case on hand.

In the case of Oriental Insurance Co. Ltd. Vs. Smt. Jhuma Saha and Others, , the fact of the case was that the deceased was the owner of the vehicle, a Maruti van. While he was driving the said vehicle, it dashed with a tree and the owner of the vehicle succumbed to the injuries. A claim case was filed by the legal representatives of the deceased for compensation. The insurance company contested the claim and denied its liability on the ground that no additional premium was paid covering the risk of the owner of the vehicle. The Apex Court observed:

(13) The additional premium was not paid in respect of the entire risk of death of or bodily injury to the owner of the vehicle. If that be so, Section 147 (1) (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.

In the instant case, as noticed above, there is nothing on the record to show that the owner and the occupants of the vehicle were covered under the policy. In the light of the decisions of the Supreme Court, we have no option but to hold that the appellant insurance company is not liable to pay compensation for the death and injury caused to the occupants of the vehicle.

This appeal is, therefore, allowed and the impugned judgment and award is set aside. However, in the facts of the case, there shall be no order as to costs.