United India Insurance Co. Ltd. vs Valliammal

S.M. Abdul Wahab, J.—The first appeal, that is, C.M.A. No. 35 of 1988 has been preferred by the insurance company against the award

of compensation for the death of one Palanisamy in a motor accident that took place on 21.9.1985. A compensation was claimed at Rs. 1,25,000.

But the Tribunal has awarded Rs. 30,000 to the claimant, the mother of the deceased Palanisamy. The insurance company has preferred the first

appeal contending that there is no liability on its part since insured was the driver of the vehicle at the time of the accident. The other appeal

C.M.A. No. 336 of 1988 has been filed for higher compensation.

The question to be decided in both the appeals is important. Whether a person who is the owner of a vehicle, if met with an injury or death, is

liable to be indemnified? In this case, the fact is that Palanisamy was driving the truck and he was the owner of the same which is not disputed. The

accident has taken place on account of the rain and the truck skidded and dashed against a tamarind tree, resulting in the death of Palanisamy and

causing permanent disablement to another by name Ramasamy.

Section 95 of the Motor Vehicles Act directs a person using the motor vehicle in a public place to take a policy of insurance. Section 95 of the

Act states what for the policy should be obtained. The relevant portion of Section 95 for the purpose of this case, is extracted below.

Requirements of policies and limits of liabilities.-(1) In order to comply with the requirements of this chapter, a policy of insurance must be a

policy which-

(a) is issued by a person who is an authorised insurer, (or by a co-operative society allowed u/s 108 to transact the business of an insurer); and-

(b) insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2)-

(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third

party caused by or arising out of the use of the vehicle in a public place;

(ii) against the death or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:

Provided that a policy shall not be required-

(i) to cover liability in respect of the death, arising out and in the course of his employment, of the employee of a person insured by the policy or in

respect of bodily injury sustained by such an employee arising out of and in the course of his employment (other than a liability arising under the

Workmen''s Compensation Act, 1923 (VIII of 1923) in respect of the death of, or bodily injury to any such employee:

(a) engaged in driving the vehicle, or

(b) if it be a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle, or

(c) if it be a goods vehicle, being carried in the vehicle, or

(ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of

employment, to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting

from the vehicle at the time of the occurrence of the event out of which a claim arises; or

(iii) to cover any contractual liability.

Explanation.-For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third

party shall be deemed to have been caused by or to have arisen out of the use of a vehicle in a public place notwithstanding that the person who is

dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the

accident occurred in a public place.

A reading of Section 95(1)(b)(i) shows that the policy should be taken for any liability which may be incurred by him in respect of the death of

or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place.

Therefore, emphasis is on incurring liability. For a person who himself drives the vehicle and gets injured or dead, there is no question of his

incurring liability. Of course, it is open to him to have policy for his life but such a policy is not contemplated u/s 95.

In Thilagavathy v. Sundaram 1974 ACJ 491 (Madras), a Bench of this Court held thus:

Before making the insurer liable, it is necessary for the claimant to prove that the insured has become legally liable to pay any compensation in

respect of the deceased. The insured would be legally liable if the deceased had been his employee. He may also be legally liable if the deceased

had committed a tortious act against third parties. But, in this case, we have found that the deceased was not the employee of the insured. The case

of the claimants themselves is that the deceased was not guilty of any rashness and negligence and did not commit any tortious act. It would,

therefore, follow that no foundation has been laid for the vicarious liability of the insured.

In this case, also there is no question of negligence on the part of the deceased.

In New India Assurance Co. Ltd. Vs. Susamma Varghese, , a similar view has been taken by a Division Bench of the Kerala High Court, which

has been set out in the following terms:

(5) The principle behind the contract of indemnity is that where the owner of a motor vehicle is compelled to pay a compensation to persons who

suffered injury or damage on account of an accident involving the vehicle, the insurer will indemnify the owner. We cannot take it that when the

owner who happens to be the driver is guilty of rash and negligent driving, the contract of indemnity will hold good. Either way the claim against the

insurer cannot succeed.

(6) If the claimant''s husband was guilty of rash and negligent driving and such driving caused the accident, his widow who is his representative

cannot put forward a claim against the insurer. There is nothing for the insurer to indemnify if the claimant''s husband was not driving the vehicle in a

rash or negligent manner and if the accident was an inevitable or an unavoidable one, there cannot be a claim under the law of Tort in India and a

claim cannot be put forward u/s 110-A of the Motor Vehicles Act.

In Minu B. Mehta v. Balkrishna Ramchandra Nayan 1977 ACJ 118 (SC), the Apex Court, while interpreting Section 95(1)(b)(i) has observed

as follows:

It is, therefore, obvious that if the owner has not incurred any liability in respect of death of or bodily injury to any person, there is no liability and it

is not contended to be covered by the insurance.

In this case also, I directed the learned Counsel on both sides to look into the policy marked as Exh. R-2 and find out whether the policy covers

the death of the owner of the vehicle while the owner himself is driving. They are not in a position to point out any such clause in the policy to the

said effect.

In the said circumstances, following the aforesaid decisions, C.M.A. No. 35 of 1988 is allowed and the award of the Tribunal is set aside.

C.M.A. No. 336 of 1988 is dismissed. However, there will be no orders as to costs.