Sri Pramod Kumar Agrawal
and Anr Vs. Smt. Mushtari Begum & Ors  Insc 465 (18 August 2004)
Arijit Pasayat & C.K.
Thakker (Arising out of Slp) No. 6042/2002) Arijti Pasayat, J Leave Granted.
Challenge in this appeal is to the judgment of a Division Bench of the
Allahabad High Court which did not find any error in the judgment of the Motor
Accident Claims Tribunal, Bijnor (in short the 'Tribunal') either on facts or
law to warrant interference.
Background facts in a nutshell are as follows:
The present respondents 1 to 10 filed a Claim Petition in terms of Section
166 of the Motor Vehicles Act, 1988 (in short the 'Act') claiming compensation
from the present appellants and United India Insurance Company Ltd.,
(hereinafter referred to as the 'insurer').
According to the claimants, Amir Hassan (hereinafter referred to as the
'deceased') sustained injuries and subsequently died due to an accident on
11.11.2000 at about 4.00 p.m. The accident occurred on account of rash and
negligent driving by Kamal Kumar Agrawal (appellant No.2) who was the driver of
the vehicle No. UPN-8975 which was involved in the accident.
It was stated that appellant No.1 was the owner of the vehicle, and that the
vehicle was subject-matter of insurance with the insurer. Claim of Rs.
5,10,000/- was made as compensation.
The insurer took the plea that the driver had no valid or effective driving
licence, vehicle was not insured and the claim petition was filed in collusion
with the owner and the driver of the vehicle in question.
The Tribunal framed two issues which run as follows:
1) Whether the accident took place due to rash and negligent driving of
Truck No. UPN 8975 by O.P. No.2? 2) To what relief and compensation, if any,
are claimants entitled? The Tribunal found that the accident took place when it
was coming from Haridwar laden with sand. Thirty to forty persons were sitting
on the sand and at the place called 'Chandighat' the said persons climbed on
the truck and it overturned resulting in the accident. Three persons died
including the deceased and several others were injured. According to the
witnesses examined, none of them climbed on the truck forcibly. On the other
hand, they had paid fare for traveling in the truck. They stated that Rs.25/-
per passenger as fare was taken. The driver was examined as DW-1.
According to him, number of persons forcibly climbed on the truck and as a
result the truck met with an accident. He admitted that there was a conductor
in the vehicle who ran away from the place of accident. He also admitted in his
written statement that the persons forcibly climbed on the truck and 30 to 40
persons were in the truck. Analysing the evidence, the Tribunal came to hold
that the conductor of the truck had collected fare and the persons had not
climbed forcibly. In these circumstances, taking into account the age of the
deceased and his estimated income, it was held that that claimants were
entitled to Rs.2,06,000/- as compensation. It was further held that the vehicle
was a goods vehicle and the owner had not insured the vehicle for carrying
passengers in a goods vehicle. Only the driver, conductor and certain number of
labourers could be carried, but there was no scope for carrying any passenger.
Taking note of the terms and conditions of the policy note it was held that the
insurer was not liable to make payment of the compensation and it was the owner
who has to make the payment of the awarded amount with interest @9% p.a. from
the date of presentation of the claim petition. As noted above, the appeal filed
by the owner and the driver before the High Court did not bring any relief to
Learned counsel for the appellants submitted that the accident took place
after the amendment in 1994 in Section 147 of the Act and, therefore, the
insurer ought to have been made liable to indemnify the award.
Learned counsel for the insurer on the other hand submitted that the
position has not changed after amendment in 1994.
It is to be noted that in Ramesh Kumar v. National Insurance Co. Ltd.
and Ors. (2001 (6) SCC 713) it was held that though the vehicle concerned
was a goods vehicle yet the liability of the insurance company was not wiped
out. The decision was subsequently reversed by a three-Judge Bench of this
Court in New India Assurance Co. Ltd. v. Asha Rani and Ors. (2003 (2) SCC 223)
which was followed in Oriental Insurance Co. Ltd. v.
Devireddy Konda Reddy and Ors. (2003 (2) SCC 339). Recently in National
Insurance Co. Ltd. v. Baljit Kaur and Ors. (2004 (2) SCC 1) the effect of 1994
amendment vis-a-vis Section 147 of the Act was considered. It was observed as
"17- By reason of the 1994 amendment what was added is "including
owner of the goods or his authorised representative carried in the
vehicle". The liability of the owner of the vehicle to insure it
compulsorily, thus, by reason of the aforementioned amendment included only the
owner of the goods or his authorized representative carried in the vehicle
besides the third parties. The intention of Parliament, therefore, could not
have been that the words "any person" occurring in Section 147 would
cover all persons who were traveling in a goods carriage in any capacity
whatsoever. If such was the intention, there was no necessity of Parliament to
carry out an amendment inasmuch as the expression "any person"
contained in sub-clause (i) of clause (b) of sub- section (1) of Section 147
would have included the owner of the goods or his authorized representative
besides the passengers who are gratuitous or otherwise.
19- In Asha Rani's case (supra) it has been noticed that sub-clause (i) of
clause (b) of sub-section (1) of Section 147 of the 1988 Act speaks of
liability which may be incurred by the owner of a vehicle in respect of 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.
Furthermore, an owner of a passenger carrying vehicle must pay premium for
covering the risks of the passengers traveling in the vehicle. The premium in
view of the 1994 amendment would only cover a third party as also the owner of
the goods or his authorized representative and not any passenger carried in a
goods vehicle whether for hire or reward or otherwise.
20- It is, therefore, manifest that in spite of the amendment of 1994, the
effect of the provision contained in Section 147 with respect of persons other
than the owner of the goods or his authorised representative remains the same.
Although the owner of the goods or his authorized representative would now be
covered by the policy of insurance in respect of a goods vehicle, it was not
the intention of the legislature to provide for the liability of the insurer
with respect to passengers, especially gratuitous passengers, who were neither
contemplated at the time the contract of insurance was entered into, nor was
any premium paid to the extent of the benefit of insurance to such category of
people." The plea of the appellants has been rightly rejected both by the
Tribunal and the High Court.
Therefore, while upholding the judgment of the High Court we direct in terms
of what has been stated in Baljit Kaur's case (supra) that the insurer shall
pay the quantum of compensation fixed by the Tribunal, about which there was no
dispute raised, to the respondents-claimants within three months from today.
For the purpose of recovering the same from the owner the insurer shall not be
required to file a suit. It may initiate a proceeding before the concerned Executing
Court as if the dispute between the insurer and the owner was the subject
matter of determination before the Tribunal and the issue is decided against
the owner and in favour of the insurer.
Before release of the amount to the claimants, owner of the vehicle i.e.
appellant no.1 shall furnish security for the entire amount which the
insurer will pay to the claimants. The offending vehicle shall be attached, as
a part of the security. If necessity arises the Executing Court shall take
assistance of the concerned Regional Transport Authority. The Executing Court
shall pass appropriate orders in accordance with law as to the manner in which
the owner of the vehicle i.e. appellant no.1 shall make payment to the insurer.
In case there is any default it shall be open to the Executing Court to direct
realization by disposal of the securities to be furnished or from any other
property or properties of the owner of the vehicle, the insured (the appellant
The appeal is disposed of accordingly. No costs.