New India Assurance Co. Ltd. vs Kannammal and Others

Ratnam, J.—This appeal has been preferred by the New India Assurance Company Limited, against the award of the Motor Accident Claims Tribunal (Sub Court), Dharapuram, in M.C.O.P. No. 53 of 1984. Respondents 1 to 3, are the wife, son and daughter, respectively of one Duraisami, who met with an accident while driving his Matador Van TDC 8362 near Thalavoi Pattinam on Udumalpet-Dharapuram road and lost his life.

In the claim petition filed by the respondents, against the appellant, they had stated that Duraisami, the owner-cum-driver of the van met with an accident as he was driving the loaded vehicle and sustained head injuries and died. It was also further stated that the accident was not due to the negligence of the deceased, but as there was rain, the vehicle skidded while negotiating a turn and therefore, there was no negligence or rashness that could be attributed to the driver, who lost his life in that accident. In respect of the death of Duraisami in that accident, the respondents prayed that compensation in a sum of Rs. 40,000/- should be awarded to them.

In the counter filed by the appellant, the claim put forward by respondents 1 to 3, was resisted on the ground that the respondents were put to proof that the vehicle TDC 8362 was insured with the appellant on the date of accident. The accident, according to the appellants owning to the skidding of the vehicle on account of rain, while negotiating a turn was due to negligent driving of the vehicle on the part of its driver and as the deceased owner was driving the vehicle at the time of the accident, there was no liability on the part of the appellant to pay any compensation. A further plea was also put forward by the appellant that respondents 1 to 3, being the legal representatives of deceased Doraisami, who was driving the vehicle at the time of the accident, are not entitled to claim any compensation against the appellant, as insurer of the vehicle.

Before the Tribunal, on behalf of the respondents, Exs. A. 1 and A. 2 were marked and the 1st respondent and another gave evidence, as P. W. 1 and 2, while, on behalf of the appellant, the policy alone was marked as Ex. B. 1. The Tribunal, on a consideration of the oral as well as documentary evidence, found that at the time of the accident, it was raining and the Matador van driven by the deceased, skidded and capsized and the driver was caught under and sustained injuries and died and that the accident was not due to the negligent driving of the van. Considering the question of the liability of the appellant-Insurance Company, though the Tribunal took the view that as the deceased was the owner as well as driver of the vehicle involved in the accident, respondents 1 to 3 would not be entitled, as legal representatives of the deceased, to claim any compensation, it was held that under the terms of the policy issued by the appellant, the risk to the driver and cleaner had been covered and as deceased Doraisami was owner-cum-driver at the time of the accident, respondents 1 to 3 would be entitled to recover compensation against the appellant. Computing the compensation awardable to respondents 1 to 3, the Tribunal determined that amount at Rs. 30,000/- together with interest. Certain other directions were also given by the Tribunal regarding the apportionment of the compensation. It is the correctness of the award so passed fastening liability on the appellant-Insurance Company for the payment of compensation to respondents 1 to 3 that is disputed in this appeal.

Learned Counsel for the appellant, referring to the policy issued by it under Ex. B. 1, submitted that the policy covered third party risks and there was, under its terms, no coverage of any risk to the owner-cum-driver of the vehicle involved in the accident. It was also further contended that the inclusion of the insured (deceased) under the column ''driver'' in the policy, was only to include the arising of risks to third parties, while the vehicle was driven by the owner/insured in addition to any other person employed by the insured and driving under his authority or order or with his permission and that would not take in the risk to the owner-cum-driver himself, unless the policy was in the nature of a personal accident policy, which, Ex. B. 1 was not. A further submission was also made by learned Counsel that the contract of insurance being essentially one of indemnity, the insurer could at best be made liable to indemnify the insured in respect of his liability to pay compensation for the death of or injury to others and that with reference to the death of the driver-cum-owner, as in this case, there can be no question whatever of any. right of the insured to be indemnified at all and, therefore, the Tribunal fell into an error in fastening liability on the appellant-Insurance Company. Reference in support of the aforesaid submissions was made to the decisions reported in Chanchalben v. Shailesh Kumar Pandurao Thakore 1974 ACJ 393, Mallika v. S.V. Alagarami 1982 ACJ 272, Akkavva M. v. New India Assurance Company 1988 (1) TAC 281; Mathew Koshy v. Oriental Insurance Co. Ltd. 1989 ACJ 21 and United India Insurance Co. Ltd. Vs. Lakshmi and others, .

On the other hand, learned Counsel for the respondents submitted that the policy, under Ex. B. 1, also covered the risk to the driver and the cleaner and as the insured himself was the driver and lost his life in the accident, the appellant cannot disown its liability for the payment of compensation. Reliance was also placed on endorsement No. 16 found as part of the policy, Ex. B. 1 to contend that the Tribunal was justified in its view that the owner-cum-driver would also be covered under the policy, justifying the award of compensation to respondents 1 to 3 against the appellant.

From a careful perusal of the policy, marked as Ex. B. 1, it is seen that what has been covered is public risk and no more, subject to the terms and conditions mentioned in the policy. Under the column relating to ''driver'' found in the policy, the insured and any other person, provided he is in the insured''s employ and is driving on his Order or with his permission, have been shown. In the schedule of premium, on payment of a sum of Rs. 16/legal liability to driver and cleaner had also been included. Endorsement 16 appended to the policy is to the effect that the appellant indemnifies the insured against his legal liability under the Workmen''s Compensation Act and its subsequent amendments, Fatal Accidents Act and the liability under common law in respect of personal injury to any paid driver or cleaner, whilst engaged in the service of the insured in such occupation in connection with the motor vehicle. The endorsement also winds up by saying that the policy is subject to the terms, exceptions and conditions, as necessary to meet the requirements of Section 95 of the Motor Vehicles Act (hereinafter referred to as the Act). From the terms and conditions incorporated in the policy, it is seen that the policy is essentially a third party policy and it is also not the case of respondents 1 to 3 that it was not so. Basically, therefore, Ex. B. 1 is an Act policy, to conform to the requirements of Section 94 of the Act. The risk covered is the risk to the public, arising out of the use of vehicle TDC 8362 to third parties. Such a risk may arise by the use of the vehicle either by the driver of the vehicle of the insured or by any other person provided he was in the employ of the insured and was driving on his order or with his permission. In other words, the inclusion of the insured under the colum, ''driver'' in the policy, was only to cover the risk arising to third parties while the vehicle was being driven by the driver-cum-insured or by a driver authorised by the insured, as provided. Merely on the basis of the inclusion of the insured under the column ''driver'' in Ex. B. 1, it cannot be understood that there was a coverage of the risk to the driver-cum-owner of the vehicle involved in the accident, as put forward by learned Counsel for respondents. Besides, the coverage of the legal liability to the driver and cleaner on payment of an additional premium of Rs. 16/- was to cover the liability of the insured under the Workmen''s Compensation Act, Fatal Accidents Act and common law. Endorsement 16 appended to the policy providing for the insured being indemnified is only to this effect and the right of indemnity is to the insured against his legal liability for the payment of compensation under the Workmen''s Compensation Act, Fatal Accidents Act and under the common law. In this case, the insured being the owner-cum-driver, cannot be termed as a workman. Under the Act, persons like paid driver, cleaner, coolies have been provided with a cover with regard to the liability under the Workmen''s Compensation Act and by the collection of an additional premium of Rs. 16/-, as in this case, what is covered is only a wider liability under the Workmen''s Compensation Act, Fatal Accidents Act, or under the common law and not any other. It has also to be remembered that in this case, the vehicle TDC 8362, at the time of the accident, was driven by the owner-cum-driver, who cannot be treated as a third party. In other words, a risk to the deceased in this case, has not been specifically covered by the terms of the policy, as he cannot be regarded either as a workman or even as a third party. There is yet another angle, from which the liability of the appellant-Insurance Company may be considered. Essentially, a contract of insurance is only a contract of indemnity, in and by which, the Insurance Company agrees on payment of a premium, to indemnify the owner of the vehicle against his liability in respect of the use of such motor vehicle in a public place. It, therefore, follows that before the Insurance Company can be made liable, the insured must be liable. The liability of the Insurance Company is a dependent liability, in that, it would arise only in the event of the liability of the insured to pay compensation or to make good the loss to property. In this case, the claimants are the dependents of the deceased in a claim against the Insurance Company and it is extremely difficult to perceive any right of indemnity, as such, arising in favour of the insured so as to fasten liability on the Insurance Company. View ed thus, respondents 1 to 3 cannot maintain even an application against the appellant-Insurance Company for the recovery of compensation in, respect of the death of Doraisami in the accident took place on 26.9.1981, while the vehicle, which he was driving as owner-cum-driver, met with an accident and he lost his life.

It now remains to make a brief reference to the decisions relied on by learned Counsel for the appellant. In Mallika v. S.V. Alagarsami 1982 ACJ 272 a Division Bench of this Court pointed out that when a claim is made by a tort-feasor or any person claiming under the tort-feasor, the question of vicarious liability will not arise and as the deceased was not in the employment of the owner of the vehicle as a driver, there was no liability to pay compensation under the provisions of the Workmen''s Compensation Act and that there was no other statutory provision, under which, the owner of the vehicle can be made liable for the death, which had resulted by the tortious act of the deceased himself. Though in that case, the car belonging to one person, was driven by another and thus, it was not a case of the owner-cum-driver losing his life in an accident, yet, that decision clearly establishes that a tort-feasor cannot take advantage of his tortious act and claim compensation and that unless the owner of the vehicle has become legally liable to pay compensation, there is no question of the insured being indemnified by the insurer. This decision would undoubtedly support the stand taken by learned Counsel for the appellant in this case. In Akkavva M. v. The New India Assurance Co. Ltd. 1988 (1) TAG 281 the Karnataka High Court pointed out that u/s 95(1)(b) of the Act, an insurer issuing a policy, is compulsorily required to indemnify the owner against any legal liability arising out of the death of or bodily injury to a third party and under an Act policy, it is unnecessary for the insurer to undertake the liability to pay compensation in respect of the death of insured person himself in an accident involving the vehicle in an accident. It had also been further laid down that a contract of insurance is one of indemnity and a contract stipulating for payment of compensation for the death of the insured person himself, cannot be a contract of indemnity and that if the owner of the vehicle, who has only the benefit of indemnity, is not covered by the policy, his representatives, unless he be an employee covered by the first proviso to Section 95(1)(b) of the Act, is in no better position to the insurer''s obligation or the absence of it. In Mathew Koshy v. Oriental Insurance Co. Ltd. 1989 ACJ 21 the owner-cum-driver of an auto-rickshaw, which was involved in an accident, claimed compensation in respect of the injuries sustained by him in an accident against the Insurance Company. The Insurance Company disputed its liability for payment of compensation on the ground that under the policy issued by it, which was not a comprehensive policy, only third party risk was covered. The Tribunal found that the application praying for the award of compensation was not maintainable and the correctness of the view so taken, was challenged. In upholding the view of the Tribunal, the Kerala High Court pointed out that the compulsory insurance contemplated u/s 95 of the Act, was to indemnify the owner of the vehicle from liability and if the owner himself suffered injuries in an accident, he did not acquire any right to get compensation from the Insurance Company, under the policy issued to him and that the liability of the insurer depended upon the liability of the insured. It was also further pointed out that the policy issued was not in the nature of a personal accident policy and therefore, the liability of the claimant was not covered. Again a Division Bench of this Court, in United India Insurance Co. Ltd. Vs. Lakshmi and others, considered the liability of the Insurance Company for the payment of compensation in respect of an accident that took place between two vehicles MED 4639 and KPE 9368, in which the owner of the lorry MED 4639, who was travelling in that, died. The Tribunal fastened liability on the Insurance Company for payment of compensation to the legal representatives of the deceased owner of the lorry MED 4639. In considering the correctness of the award so passed, the Division Bench pointed out that the policy issued was in accord with Section 95(1)(b)(i) of the Act and thereunder, there was no question of the liability of the Insurance Company in respect of the death of the insured himself in the accident caused by his own driver and there was also no liability on the part of the legal representatives of the deceased, and as such, no liability could be fastened on the Insurance Company. Ultimately, the Division Bench deleted the liability on the Insurance Company. This decision also establishes that if the policy is in respect of the coverage of the risk to third parties, that would cover only the liability of the insured to third parties and not to the insured himself and therefore, an application for compensation at the instance of the legal representatives of the deceased, cannot be entertained. The view so expressed also clearly supports the case of the appellant. In Chanchalben v. Shaidesh Kumar Randurao Thakore 1974 ACJ 393 the Gujarat High Court considered the conditions precedent to the passing or enforcing a decree against the insurer and laid down that the decree or the award must first be obtained against the insured and when there is such a claim made and decreed against the insured, the liability, which falls on such insured is to be made good by the insurer and if no claim could be made and obtained against the insured, his insurer cannot be made liable, even though there was negligence on the part of the insured, which had contributed to the accident. To highlight the principle involved and so enunciated, the Court pointed out that an insurer is like the branch of a tree, of which its insured is the trunk and a branch cannot stand unless there is a trunk. From the principles of the decisions referred to above, it is clearly established that short of a personal accident policy, the legal representatives of the deceased, cannot under the terms of an Act policy, seek to fasten liability on the Insurance Company in respect of a compensation payable for the death of the insured and further that, in the absence of the fastening of liability on the insured himself, the insurer cannot be made liable on the principle of indemnity. On a careful examination of the terms and conditions of the policy and in the light of the legal principles noticed earlier, the Tribunal was in error in having awarded to respondents 1 to 3 compensation in a sum of Rs. 30,000/- together with interest, as stated earlier and fastening liability on the appellant-Insurance Company for the payment of such amount. The C.M.A. is, therefore, allowed and the award of the Tribunal is set aside and M.C.O.P. No. 53 of 1984 on the file of the Motor Accident Claims Tribunal, Dharapuram, will stand dismissed. There will be no order as to costs.