New India Issurance Company Ltd. vs Mamta Devi and Others

Amir Das, J.—This Misc. Appeal is by New India Insurance Company, Chaibasa and directed against the order dated 28.8.1991 passed by Motor Vehicle Accident Claims Tribunal-cum-1st Additional District Judge, Singhbhum at Chaibasa in M.J.C. Case No. 89/89, whereby he directed the Insurance Company to pay a sum of Rs. 25,000/- to the applicants u/s 140 of the Motor Vehicles Act, 1988 by way of ad interim compensation on account of the death of Ratan Ram.

It is said that deceased Ratan Ram was returning from Tatanagar by a truck having registration No. BRS-2521 and when the said truck reached the main gate of Chaibasa College, an accident took place resulting which several persons died and several others sustained injuries. The heirs of the deceased namely, mother and wife and minor son made an application before the Motor Vehicle Accident Claims Tribunal, Singhbhum claiming compensation of Rs. 3,50,000/-, which was numbered as M.J.C. Case No. 89 of 1989.

The claim of the opposite party-respondents was contested by the Insurance Company mainly on the ground that the deceased was one of the unauthorised and unlawful occupant of the truck and so the death caused due to the accident is not covered under the policy.

After hearing both the sides and relying upon a case law reported in 1990 A.C.J. 763, the learned Claims Tribunal passed the impugned order directing the applicant-Insurance Company to pay the said amount u/s 140 of the Motor Vehicles Act, 1988 (hereinafter referred to as the said Act).

Mr. M.Y.Eqbal, the learned Counsel appearing on behalf of the appellant-Insurance Company challenging the legality and propriety of the impugned order mainly on the ground that u/s 140 of the Act, the owner or the owners, as the case may be, are only liable for the compensation and not the Insurance Company. He has further argued that the vehicle was a truck and the driver was carrying on the passenger unlawfully. In such situation, any damage either to the life or property of the unauthorised passenger carried by the truck is not covered under the policy. He has further argued that there is consistent view of Karnataka and Kerala High Courts as well as other High Courts that the risk of unauthorised passenger is not covered under the policy, if the vehicle insured is used is used altogether in violation of the terms and conditions of the Insurance Policy.

None appears on behalf of the respondents.

Section 140 of the Act clearly lays down that where death or permanent disablement of any person resulted from an accident arisen out of the use of a motor vehicle or motor vehicles the owner of the vehicle shall or as the case may be the owners of the vehicle shall jointly and severally be liable to pay compensation in respect of death or disablement in accordance with the provisions of this section. The Legislature has not introduced the liability of the Insurance Company. In view of such provision, unless the death or disablement of any person resulted from an accident is proved to have been caused in course of his employment by the owner of the truck, the Insurance Company cannot be held liable.

In this case, the statement of the opposite party is that the deceased Ratan Ram was earning livelihood by selling domes in different markets. Nowhere, it has been stated that he was employed by the owner of the truck for the purpose of any business. In this view of the matter, there is difficulty to say that the deceased Ratan Ram was employed by the owner of the truck. The learned Tribunal, no doubt, has relied upon a case law reported in National Insurance Co. Ltd. Vs. K. Savithri and Others and Lalitha and Others, but hr has not applied his mind to the facts of the reported case which is quite distinct and different from the facts of the case in hand. In the reported case, the Insurance Company contested the case/claim on the ground that the insurance policy became invalid as a consequence of violation of the condition in the policy. In the case in hand, the fact is that the ill-fated vehicle was a truck and not a passenger bus authorised for carrying passengers. I, therefore, find the Tribunal to have failed to apply his mind to the fact of the reported case.

In National Insurance Company Ltd. Vs. Lachminiya Devi and Others, , it was held that no compensation should have been awarded to the claimants for the accident in question, as the deceased was an illegal occupant of the vehicle in question.

A Full Bench of the Karnataka High Court has observed the same view in the case of M/s. United India Insurance Company, Bangalore Vs. Imman Aminasab Nadaf and others, . In that case, the vehicle was a truck and while carrying several passengers made an accident which caused death of a number of persons. The Full Bench has observed as follows:

Therefore, in cases, on looking into the facts alleged in the petition and going through the policy, a finding at once can be recorded to the effect that the risk was not covered by the policy, the Tribunal cannot refuse to look into the contents of the insurance policy which patently establishes no liability on the Insurance Company and blindly makes an award directing the Insurance Company to pay the amount of compensation awarded u/s 92-A of the Act stating that a direction would be made in the final award directing the Insurance Company to file a suit against the owner and recover the same from him. Just as a person impleaded as a respondent to a claim petition as owner, cannot be made liable to pay compensation u/s 92-A of the Act, if he were to show that he was not the owner of the vehicle, the Insurance Company also cannot be asked to pay the compensation if it were to make out that patently the policy did not cover the risk. There is no justification to foist the liability on the Insurance Company if it is in a position to show that patently the risk was not covered by the policy." Such view has been expressed by the Full Bench of the Kamataka High Court after discussing the case of National Insurance Co. Ltd. v. Dundamma and Ors. 1992 (2) ACC 162 (FB). The Full Bench has given a negative answer to the question as to whether by force of Clause 2 of the proviso to Section 5(1) of the Motor Vehicles Act, 1939, the Insurance Company is liable to pay compensation in respect of death or bodily injury to any person traveling in the vehicle, though it is not a vehicle constructed and meant in law for carrying passengers for hire or reward.

Considering the nature of the claim and the unauthorised traveling of the deceased on a truck and in view of the discussed law, I have no option but to hold that the learned Tribunal has failed to give correct approach, resultant he has wrongly held the Insurance Company liable to pay compensation and so, the impugned order cannot be sustained.

In the result, the appeal succeeds and accordingly, it is allowed. The impugned order passed by the learned Tribunal is set aside.

However, in the facts and circumstances of the case, there, will be no order as to cost.