AI Structured Summary
Not yet generated for this judgment
Judgment
N. Kumar, J.—In both these cases, the Insurance Company is challenging their liability to satisfy the award passed by the MACT in MVC 683 and 684/04.
The facts in brief are as under:
Petitioner Prabhakar in MVC 683/04 is the father and Vijay Kumar in MVC 684/04 is the son of the said Prabhakar. Father and son were proceeding in a moped bearing No. KA-05-EM-2204 near Hosakerehalli. An auto rickshaw bearing No. KA-05-A-7676 which was driven in a rash and negligent manner at about 7.30 pm on 25.12.2003 near Vinayaka Hospital, 80 feet ring road, Bangalore came from the opposite direction and dashed against the moped. Both the father and son sustained severe grievous injuries. Prabhakar sustained commuted fracture of upper l/3rd right tibia with displacement and his son Vijay Kumar sustained simple injury in the accident. They were treated at Vinayaka Hospital. They claim that they have spent Rs. 40,000/- and Rs. 10,000/- respectively for treatment. They preferred a claim petition seeking compensation before the Motor Accident Claims Tribunal. To the said petition, they have arrayed 1st, 3rd and 4th respondents who according to them are the "Owners" and the 2nd respondent which is the Insurance Company as parties. Respondents 1, 3 and 4 remained exparte. It is only the Insurance Company i.e., the 2nd respondent which filed the statement of objections. It was contended that the autorickshaw originally belonged to 1st respondent Ashok Kumar. He sold it to 3rd respondent K. Velayuddan on 2-1-2003 who in turn sold it to 4th respondent K. R. Ramesh on 23-9-2003. It was specifically contended that the Insurance policy referred to in the claim petition covering the vehicle in question has been obtained in the name of the 1st respondent herein by misrepresentation of material fact as to ownership of the vehicle and as such the policy in question is void abinitio. The accident took place by the composite negligence of drivers of both the vehicles. The claim is exhorbitant. Therefore, it was contended that the respondents are not necessary parties and cannot be held liable and therefore they sought for dismissal of the writ petition.
The tribunal framed issues. Prabhakar was examined as PW1. They examined a witness by name P N Prakash and PW3 Ashok. They marked documents Exs.P.1 to P. 19. On behalf of the respondents, an official of the Insurance Company by name Sathya Murthy was examined as RW1 and they have produced the B extract and policy as Exs R1 and R2 respectively.
The trial Court on appreciation of the evidence on record held that the father Prabhakar is entitled to Rs. 70,000/- as compensation and for the son Vijay Kumar Rs. 5000/- was awarded as compensation.
MFA 2705/06 is preferred by the Insurance Company against the award in favour of Prabhakar. As the amount awarded to the son is less than Rs. 10,000/-, no appeal lies, therefore, they have preferred this writ petition. This is how both these cases are listed together for arguments.
Sri O Mahesh, learned Counsel appearing for the Insurance Company contends that in the Motor Vehicles Act, 1988, for short hereinafter referred to as "the Act" u/s 2(30) the "Owner" has been defined, where a slight departure is made by the Parliament when compared to the definition of the "Owner" in 1939 Act. Under the Old Act, even a person in possession of the vehicle at the time of the accident was held to be the "Owner" whereas under the Present Act, the "Owner" is the person in whose name the vehicle stands registered. Therefore, he contends that when admittedly K R Ramesh was the "Owner" of the vehicle in question on the date of the accident, the Insurance Policy was not taken in his name, it was taken in the name of the first respondent Mr. Ashok Kumar.
Therefore, while obtaining the policy Ashok Kumar was not the "Owner", but by non-disclosure of the material fact and by a representation of fact which was false, the policy was obtained and therefore it is void and unenforceable. Though, this point was raised and argued, tribunal did not consider the same and therefore, he seeks for setting-aside the award of the tribunal to the extent of fastening the liability on the Insurance Company.
Per contra, learned Counsel appearing for the respondents supported the order.
In order to appreciate the aforesaid contentions, it is necessary to see the relevant provisions of the Act.
"Owner"is defined u/s 2(30) of the Act which reads as under:
"Owner" means a person in whose name a motor vehicle stands registered, and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement".
Section 147 of the Act deals with requirements of policies and limits of liability which reads as under:
(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; 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, including owner of the goods or his authorised representative carried in the vehicles) or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place; against the death of or bodily injury to any passenger of a public service vehicle cause by or arising out of the use of the vehicle in a public place
(2) Subject to the proviso to Sub-section (1), a policy of insurance referred to in Sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits namely, -
(a) save as provided in Clause (b) the amount of liability incurred;
(b) in respect of damage to any property of a third party, a limit of rupees six thousand:
Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement or till the date of expiry of such policy whichever is earlier.
It is Section 149 which casts an obligation on the Insurance Company to satisfy the judgment and award which reads as under:
Section 149: Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks
(1) If, after a certificate of insurance has been issued under Sub-section (3) of Section 147 in favour of the person by whom a policy has been effected, judgement or award in respect of any such liability as is required to be covered by a policy under Clause (b) of Sub-section (1) of Section 147 (being a liability covered by the terms of the policy) (or under the provisions of Section 163A) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.
Chapter XI of the Act deals with insurance of motor vehicle against third party risk. It contemplates a third party who is not a signatory or a party to the contract of insurance but is, nevertheless, protected by such contract. The rights of the third party to get indemnified can be exercised only against the insurer of the vehicle. The third party is not concerned and does not come into the picture at all in the matter of payment of premium. Whether the premium has been paid or not is not the concern of the third party, who is only concerned with the fact that, there was a policy issued in respect of the vehicle involved in the accident and it is on the basis of this policy that the claim can be maintained by the third party against the insurer.
Section 146(1) contains a prohibition of the use of the motor vehicle without an insurance policy having been taken in accordance with Chapter XI of the Motor Vehicles Act. The manifest object of this provision is to ensure the third party, who suffers injuries due to the use of the motor vehicle, to get damages from the owner of the vehicle and recoverability of the damages may not depend on the financial condition or solvency of the owner of the vehicle which caused accident or driver of the vehicle who has caused the injuries. The aforesaid provision do not make compulsory insurance to the vehicle or to the owners. Thus, it is manifest that the compulsory insurance is for the benefit of third parties. The scheme of the Act shows that an insurance policy can cover three kinds of risks, i.e., owner of the vehicle, the vehicle and the third party. The liability of the owner to have compulsory insurance is only with regard to the third party and not to the property. Once the Company had undertaken the liability to the third party incurred by the persons specified in the policy, the third parties'' right to recover any amount under or by virtue of the provisions of the Act is not affected by any condition in the policy.
Section 147 of the Act which deals with the requirements of policies and limits of liability provides, a policy of insurance must be a policy which is issued by a person who is an authorised insurer and insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2). Once such a policy is issued u/s 147(2), the duty of the insurer to satisfy the judgments and awards against persons insured in respect of third party risk arises u/s 149 of the Act. Both Section 147 and 149 refers to insuring the person or issuing the certificate of insurance in favour of the person by whom the policy has been effected. It does not specifically state that the person insured should be the owner of the vehicle.
Section 149 provides that once a certificate of insurance in the prescribed form and containing prescribed particulars is issued in favour of the person by whom a policy has been effected, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of Section 149, pay to the person who is entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if the insurer is the judgment debtor.
The grounds on which insurer can defend the claim is clearly set out in Sub-section (2) of Section 149. Sub-section (6) defines the expression ''material fact'' and the material particular'' referred to in Sub-clause (b) of Sub-section (2) of Section 149. It provides, the fact or particular of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk and if so, at what premium and on what conditions.
Section 156 deals with effect of certificate of insurance. Section 157 deals with transfer of certificate of insurance. By deeming clause, in Sub-section (1) of Section 157 when the insured transfers the ownership of the motor vehicle, certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of transfer. Thus, the object of law is to protect the interest of third parties under all circumstances, provided there is a valid certificate of insurance.
Before a liability could be foisted on the Insurance Company, there should be a policy of insurance as contemplated u/s 147 of the Act. It should be a policy issued by an authorised insurer insuring the person or classes of persons specified in the policy to the extent specified in Section 2 against any liability. The Parliament has consciously used the expression "Issued by the insurer in favour of the person by whom the policy is effected". Therefore, the policy to be issued is in favour of the person who pays the premium and not necessarily in favour of the "Owner". In the entire Section 147, or Chapter XI the word "Owner" is conspicuously missing. Therefore, in construing the aforesaid provision, one cannot read it in to the said section the definition of "Owner" to find out whether the policy issued is in the name of the "Owner".
In the entire policy the name of the OWNER of the vehicle is conspicuously missing. It is not without any reason. The whole principle underlying the concept of insurance is to indemnify the insured who pays the premium and covers the personal risk of himself. Once he takes a valid policy and pays the premium and covers the risk, he is entitled to be indemnified. Similarly, in a third party claim, when the claimant makes the insured a party to the claim petition and obtains a judgment or award, he is entitled to be paid the compensation awarded under statute as contained in Section 149 of the Act. In either event, no question of ownership of the vehicle insured arises. What is germane is, whether the vehicle involved in the accident is validly insured, whether insured is made a party to the claim petition and whether any judgment or award is passed against the insured. Once these conditions are satisfied, the Insurance Company is liable to indemnify the insured and pay the amount to the claimants. Any other interpretation would not serve the object or purpose of the Act, which is a social as well as a welfare legislation.
A copy of the insurance policy issued by the insurance company is produced. It contains the policy number, name and address and business of the insured, geographical area, reg. No. , engine No. , Chasis No. , make, year of manufacturing, type of body, capacity of seats and other particulars of the vehicle. It also provides for the amount of premium paid and the value of the vehicle, limitation as to use, persons or classes of persons entitled to drive, limits of liability, name of the financier under hire purchase agreement and other particulars. It discloses that the policy is issued in the name of Mr. Ashok Kumar on 21-9-2003 who is described as the insured and not the "Owner".
Therefore, the said policy is issued in terms of Section 147 of the Act and was in force on the date of the accident. The said insured is made a party to the claim petition and the tribunal has passed an award even against the 1st respondent. Once the 1st respondent i.e., the policy holder suffers a judgment and award at the hands of the claims tribunal and once he has taken a policy as required u/s 147 of the Act by virtue of Section 149 of the Act, the Insurance Company is bound to indemnify the said insured. The said insured need not be the "Owner" of the vehicle on the date of the accident. Therefore, the tribunal committed no illegality in foisting the liability on the insurance Company.
In terms of Section 149 of the Act though the tribunal has not given reasons for fastening the liability, as an appeal is a continuation of the original proceedings and the entire subject matter of the proceedings is before this Court and as a Court of first appeal, this Court has jurisdiction to record findings thereon which is purely in the nature of the question of law.
In that view of the matter, I do not see any merit in both the writ petition as well as in appeal. Accordingly, it is dismissed.
The amount which is deposited by the Insurance Company before this Court at the time of preferring the appeal, the same shall be transmitted to the tribunal forthwith for being paid to the claimants by the tribunal.