National Insurance Co. Limited vs Thirakappa Ramappa Itagi and Another

T.N. Vallinayagam, J.—The second Respondent has taken notice twice. Hence, service on him is held sufficient under Order 5, Rule 19(a) Code of Civil Procedure.

Though this Miscellaneous First Appeal is posted for orders, it is taken up for disposal by consent.

The Insurance Company is the appellant challenging the compensation awarded and the liability as well as the policy fixed on them by the Tribunal in respect of an accident that has taken place when the claimant on 1.8.1987 at about 3 p.m. was unloading the soil from the tractor of his owner. At that time, the trailer bearing No. MEZ 27781-82 suddenly started and due to the said act, the claimant fell down from the Tractor-trailer and sustained grievous injuries.

Claiming that the accident has occurred solely due to the rash and negligent driving of the driver of the tractor a sum of Rs. 50,000/- was claimed as compensation for the injury sustained by the injured on the date of accident.

The Tribunal gave the finding fixing negligence on the part of the driver and also fixed compensation of Rs. 20,000/- taking into consideration the injuries sustained by the claimant. The contention raised by the Insurance Company before the Tribunal was that the claimant was not travelling in the Tractor. But he was standing in the trailer working as Hamal as per the FIR and other documents. Therefore, the Insurance company is not liable to pay any compensation. It is further contended that the tractor is only meant for agricultural and forestry purpose, but it is used for loading and unloading the soil for the construction of the irrigation tank. Hence, this act is totally deviation of breach of contract with the insurance company and as such the policy conditions have been violated by the owner of tractor-trailer. Thus, it is pleaded for his discharge from the liability. The Court below relying upon the decision reported in Oriental Insurance Co. Ltd. Vs. Hanumantappa and others, interpreting the claim and the vehicle was insured and held that the contention of the insurance company is untenable and made them liable. It is against that finding the matter has come before this Court in an appeal.

The only point that arises in this appeal is:

Whether the person travelling or sitting in the trailer of a tractor is entitled for compensation under Motor Vehicles Act as against the Insurance Company when the tractor alone is insured and not the trailer? 7. Heard the respective Counsel. The first case decided on this aspect is Oriental Insurance Co. Ltd. Vs. Hanumantappa and others, where a Division Bench of this Court raising the very same question answered the question in the following manner. The question raised by the Division Bench is:

(i) Whether the Insurance Company with which a Tractor and a Trailer propelled by the tractor are insured, is liable to pay compensation in respect of death of or bodily injury to persons travelling in the trailer?

This has been answered in the following fashion by the Division Bench:

The Insurance Company with which a Tractor and a Trailer attached thereto are insured,is liable to pay compensation in respect of death of or bodily injury to employees travelling in the trailer.

In the case before the Division Bench, the Court considered the definition of motor vehicle, occurring under Section 2 (18)(30)(32) and also transport vehicle and goods vehicle occurring Section 2(33) and ultimately held

...There can be no doubt that a trailer is constructed for the purpose of carriage of the goods and when it is pulled by a tractor, both together constitute a transport vehicle i.e., a goods vehicle.

The Division Bench has also considered the India Motor Tariff made pursuant to Section 64(v) of the Insurance Act.

...That the trailers are covered under the commercial vehicle tariff. The relevant portion of the same reads as under:

CLASS ''A(3)'' - TRAILERS i.e., any truck, cart, carriage or other vehicle without means of self-propulsion including agricultural implements drawn or hauled by any self-propelled vehicle, Policies may be extended or a separate Policy issued to cover trailers at the following rates subject to such trailers and towing vehicles being insured on identical terms with the same Company. The premium must be calculated at the rate applicable to the highest rated class of vehicle that will tow the trailer(s) at any time.

The Division Bench followed the view of the Full Bench reported in National Insurance Co. Ltd. Vs. Dundamma and others, to hold that Tractor-trailer is goods vehicle.

Considering the tariff separately available for the trailers under Clause ''A(3)'', the Division Bench was of the view that both Tractor and Trailer be independently considered as motor vehicle and should be individually insured. The Insurance Cover made available to the Tractor cannot be automatically extended to the trailer, and the trailer also should be separately insured within the meaning of Clause A(3) available under Section 64(V) of the Insurance Act. That is how the word ''are'' used as against the noun called as ''A tractor and trailer'' attached thereto. By deliberately using the word ''are'' means that both the tractor and the trailer must have been insured.

This view has been followed by Mr. Justice Venkataraman in the case of The Oriental Insurance Co. Ltd. Vs. N. Chandrashekaran and Others, . The learned Judge has also considered Section 2 (18) and (30) apart from Section 2(32) and held that:

...As a trailer is also a motor vehicle the Statute requires that it should also be insured before it can be used in a public place. As a trailer can move only if it is drawn by a tractor and if it is to be held that the insurer of the tractor is liable to indemnify the owner of the tractor as well as the trailer for any compensation payable on account of an accident arising out of the use of both tractor and trailer even if the trailer is not insured, then the statutory provisions requiring even a trailer to be insured become redundant. An interpretation which would render some provisions of the Statute redundant should be avoided.

In that case the finding that the vehicle insured was only a tractor and not the trailer and deriving support from the above Division Bench ruling, ultimately it is held that:

...It is only if both tractor and trailer are insured the insurer would be liable to indemnify the owner against claims arising out of the use of tractor and trailer. This view would be in conformity with the other statutory provisions which require even a trailer to be insured.

Another Single Judge of this Court has followed the above view in the unreported case in Miscellaneous First Appeal No. 2603 of 1998 disposed of on (sic). As against this, the learned Counsel appearing for the Respondent relied upon the dictum of another Single Judge of this Court Mr. Justice Mohamed Anwar in the case of United India Insurance Co. v. Peeramma and Ors. reported in ILR 1999 Kar 2869 the learned Judge though referred to the Division Bench ruling mentioned above has relied upon Section 95(1)(b)(i) read with Sub-clause (c) of Section 95(2) of the Act of 1939 held that the trailer is a goods vehicle. The learned Judge held that:

...the tractor-cum-trailer does not fall within the categories of vehicles treated in Clause (a) and (b) of Section 95(2) nor do they attract the circumstances envisaged by proviso to Sub-clause (d) of Section 95(2) deals with the limit of liability in respect of damage caused to any property of a third party, and holding that it was a goods vehicle, the learned Judge ultimately held that the policy of the appellant insurer with respect thereof being an Act policy, the insurer cannot escape its liability.

This view in my opinion is contrary to the view taken by the Division Bench. Two learned Judges of this Court Justice Venkataraman and Justice Manjula Chellur have correctly followed the decision of the Division Bench and confirmed that both the trailer and tractor must be insured separately to fasten any liability on the insurance company. The view taken by Justice Mohamed Anwar with due respect, does not reflect the view of the Division Bench.

So far as the learned Single Judge does not follow the Division Bench ruling, the question of referring the case to any other Judge does not arise.

Even otherwise, as the other two judges of this Court have taken the same view which I am taking in this case, I hold that:

If there is a tractor and the trailer both of them must be individually insured to fasten any liability on the Insurance Company.

In this view, I find that the appeal has to be allowed and the liability of the Insurance Company has to be deleted.

I find that while passing the award the Tribunal has directed the claimant only i.e., the Insurance Company. That portion of the order is modified and the claimant-Respondent who was a Petitioner before the Tribunal is permitted to claim the entire amount awarded with interest from the owner.

In this view the appeal is allowed. The amount deposited by the Insurance Company shall be refunded to them.