National Insurance Co. Ltd. Vs. Baljit Kaur & Ors  Insc 15 (6 January 2004)
V. N. Khare,S.B. Sinha & Dr. Ar. Lakshmanan.
out of S.L.P.[C] No.17763 of 2001) WITH CIVIL APPEAL NO.17/04 (@ SLP (C)
No.17837/01) CIVIL APPEAL NO.18/04 (@ SLP (C) No.18027/01) CIVIL APPEAL NO. 20/04
(@ SLP (C) No. 5220/02) CIVIL APPEAL NO. 27/04 (@ SLP (C) No. 5225/02) CIVIL
APPEAL NO. 28/04 (@ SLP (C) No. 6045/02) CIVIL APPEAL NO. 26/04 (@ SLP (C) No.
6046/02) CIVIL APPEAL NO. 25/04 (@ SLP (C) No. 6047/02) CIVIL APPEAL NO. 24/04
(@ SLP (C) No. 6048/02) CIVIL APPEAL NO. 23/04 (@ SLP (C) No. 6049/02) CIVIL
APPEAL NO. 22/04 (@ SLP (C) No. 6050/02) CIVIL APPEAL NO. 21/04 (@ SLP (C) No.
6051/02) V.N. KHARE, CJI.
question that arises for consideration in these appeals is whether an insurance
policy in respect of a goods vehicle would also cover gratuitous passengers, in
view of the legislative amendment in 1994 to Section 147 of the Motor Vehicles
first respondent herein preferred a claim petition for compensation before the
Motor Accident Claims Tribunal, Ludhiana (hereinafter referred to as 'the
Claims Tribunal'), in view of the death of her sixteen year old son, Sukhwinder
Singh, due to the allegedly reckless driving by the second respondent and
driver of the goods vehicle, bearing Number PB-10U-8937, on February 19, 1999.
It was found by the Claims Tribunal that the victim, who was returning in the
truck from a marriage ceremony, died as a result of the rash and negligent driving
by the driver of the goods vehicle, the second respondent herein. It was an
admitted fact that the said vehicle was insured with the appellant insurance
Claims Tribunal relying upon the decision of this Court in New India Assurance
Co. v. Satpal Singh (2000) 1 SCC 237, accepted the claim petition, and rejected
the contention of the appellant insurance company that the concerned vehicle
being a goods vehicle, it would not have to incur any liability with respect to
passengers transported in the vehicle. It further directed the appellant to pay
an amount of Rs.1,32,000/- as compensation, with interest at the rate of 9%
from the date of application. The High Court upheld the verdict of the Claims
Tribunal on appeal, with the further direction that in the event the owner, the
third respondent herein, had committed any breach, the appellant insurer would
be entitled to recover the amount of compensation from him.
be noticed at the outset that the Judgment rendered in Satpal Singh case
(supra) has been subsequently reversed by a three-judge Bench Devireddy Konda
Reddy (2003) 2 SCC 339.
in this connection may also be made to National Insurance Co. Ltd. v. Ajit
Kumar and Others [JT 2003 (7) SC 520].
held that the previous decision in Satpal Singh Case, was incorrectly rendered,
and that the words "any person" as used in Section 147 of the Motor
Vehicles Act, 1988, would not include passengers in the goods vehicle, but
would rather be confined to the legislative intent to provide for third party
risk. The question in the subsequent judgment in Oriental present case, the
liability of the insurance company in the event of death caused to a gratuitous
passenger traveling in a goods vehicle. The Court held that the Tribunal and
the High Court were not justified in placing reliance upon Satpal Singh case
(supra), in view of its reversal by Asha Rani (supra), and that, accordingly,
the insurer would not be liable to pay compensation to the family of the victim
who was traveling in a goods vehicle.
contended by the learned counsel appearing on behalf of the second and third
respondents, the driver and owner of the vehicle respectively, that the
decision in Asha Rani case (supra) and Konda Reddy case (supra) were delivered
with respect to the position prevailing prior to the amendment of Section 147
by the Motor Vehicles (Amendment) Act, 1994. As such, the effect of the
legislative amendment was not in question in the above cases, and therefore,
the law laid down by these decisions would not be considered as binding law in
view of coming into force of the said amendment. Since the accident in the
present instance occurred in 1999, this Court would now have to consider afresh
the impact of the 1994 amendment, and could not consider itself circumscribed
by the aforementioned decisions in the Asha Rani case (supra) and Konda Reddy
case (supra) which both involved motor accidents predating the said amendment.
the submission of the respondent vehicle owner and driver that the insertion,
by way of legislative amendment, of the words "including owner of the
goods or his authorized representative carried in the vehicle" in Section
147 would result in the inference that gratuitous passengers would as well be
covered by the scope of the provision. Any other construction, it was urged by
the learned counsel for the second and third respondents, would render the
effect of the words "any person" as completely redundant.
material portion of the provision contained in Section 147 of the Motor
Vehicles Act, 1988, as amended by the Motor Vehicles (Amendment) Act, 1994
reads as follows:
Requirements of policies and limits of liability-
order to comply with the requirements of this Chapter, a policy of insurance
must be a policy which- (a) (b) insures the person or classes of persons
specified in the policy to the extent specified in sub- section (2)
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 authorized
representative carried in the vehicle or damage to any property of a third
party caused by or arising out of the use of the vehicle in a public place;
* *" (emphasis added) Admittedly, it is incumbent upon a Court of law to
eschew that interpretation of a statute that would serve to negate its true
import, or to render the words of any provision as superfluous. Nonetheless, we
find no merit in the above submissions proffered by the learned counsel for the
respondent. The effect of the 1994 amendment on Section 147 is unambiguous.
Where earlier, the words "any person" could be held not to include
the owner of the goods or his authorized representative travelling in the goods
vehicle, Parliament has now made it clear that such a construction is no longer
possible. The scope of this rationale does not, however, extend to cover the
class of cases where gratuitous passengers for whom no insurance policy was
envisaged, and for whom no insurance premium was paid, employ the goods vehicle
as a medium of conveyance.
find ourselves unable, furthermore, to countenance the contention of the
respondents that the words "any person" as used in Section 147 of the
Motor Vehicles Act, would be rendered otiose by an interpretation that removed
gratuitous passengers from the ambit of the same. It was observed Asha Rani
(supra) that the true purport of the words "any person" is to be
found in the liability of the insurer for third party risk, which was sought to
be provided for by the enactment.
pertinent to note that a statutory liability enjoined upon an owner of the
vehicle to compulsorily insure it so as to cover the liability in respect of a
person who was travelling in a vehicle pursuant to a contract of employment in
terms of proviso (ii) appended to Section 95 of the 1939 Act does not occur in
Section 147 of the 1988 Act. The changes effected in the 1988 Act vis-`-vis the
1939 Act as regard definitions of 'goods vehicle', 'public service vehicle' and
'stage carriage' have also a bearing on the subject inasmuch as the concept of
any goods carriage carrying any passenger or any other person was not
situation of this nature, the doctrine of suppression of mischief rule as
adumbrated in Heydon's case [3 Co Rep 7a, 76 ER 637] shall apply.
an amendment was made by the Parliament consciously. Having regard to the
definition of 'goods carriage' vis-`-vis 'public service vehicle', it is clear
that whereas the goods carriage carrying any passenger is not contemplated
under the 1988 Act as the same must be used solely for carrying the goods.
Laws of England, Volume 44(1), fourth reissue, para 1474, pp 906-07, it is
intends that an enactment shall remedy a particular mischief and it is
therefore presumed that Parliament intends that the court, when considering, in
relation to the facts of the instant case, which of the opposing constructions
of the enactment corresponds to its legal meaning, should find a construction
which applies the remedy provided by it in such a way as to suppress that
mischief. The doctrine originates in Heydon's case where the Barons of the
Exchequer resolved that for the sure and true interpretation of all statutes in
general (be they penal or beneficial, restrictive or enlarging of the common
law), four things are to be discerned and considered:
was the common law before the making of the Act;
was the mischief and defect for which the common law did not provide;
remedy Parliament has resolved and appointed to cure the disease of the
true reason of the remedy, and then the office of all the judges is always to
make such construction as shall :
the mischief and advance the remedy; and
subtle inventions and evasions for the continuance of the mischief pro privato commodo
(for private benefit); and
force and life to the cure and remedy according to the true intent of the
makers of the Act pro publico (for the public good)."
Rule has been applied by this Court in a large number of cases in order to
suppress the mischief which was intended to be remedied as against the literal
rule which could have otherwise covered the field. [See for example, Smt. PEK Kalliani
Amma and Others vs. K. Devi and Others, [AIR 1996 SC 1963; Bengal Immunity Co.
Ltd. vs. State of Bihar and Others, AIR 1955 SC 661; and Goodyear India Ltd.
vs. State of Haryana and Another, AIR 1990 SC 781].
reason of the 1994 Amendment what was added is "including the owner of the
goods or his authorised representative carried in the vehicle".
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 authorised representative carried in the vehicle besides the third parties.
The intention of the Parliament, therefore, could not have been that the words
'any person' occurring in Section 147 would cover all persons who were travelling
in a goods carriage in any capacity whatsoever. If such was the intention there
was no necessity of the Parliament to carry out an amendment inasmuch as
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 authorised representative besides the passengers who are gratuitous or
observations made in this connection by the Court in Asha Rani case (supra) to
which one of us, Sinha, J, was a party, however, bear repetition:
In view of the changes in the relevant provisions in the 1988 Act vis-`-vis the
1939 Act, we are of the opinion that the meaning of the words "any
person" must also be attributed having regard to the context in which they
have been used i.e. "a third party". Keeping in view the provisions
of the 1988 Act, we are of the opinion that as the provisions thereof do not
enjoin any statutory liability on the owner of a vehicle to get his vehicle
insured for any passenger traveling in a goods vehicle, the insurers would not
be liable therefor." In Asha Rani (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 travelling 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 authorised representative and not any passenger carried in a
goods vehicle whether for hire or reward or otherwise.
therefore, manifest that in spite of the amendment of 1994, the effect of the
provision contained in Section 147 with respect to persons other than the owner
of the goods or his authorized 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 any premium was paid
to the extent of the benefit of insurance to such category of people.
upshot of the aforementioned discussions is that instead and in place of the
insurer the owner of the vehicle shall be liable to satisfy the decree. The
question, however, would be as to whether keeping in view the fact that the law
was not clear so long such a direction would be fair and equitable. We do not
think so. We, therefore, clarify the legal position which shall have
prospective effect. The Tribunal as also the High Court had proceeded in terms
of the decisions of this Court in Satpal Singh (supra).
said decision has been overruled only in Asha Rani (supra).
therefore, are of the opinion that the interest of justice will be sub- served
if the appellant herein is directed to satisfy the awarded amount in favour of
the claimant if not already satisfied and recover the same from the owner of the
vehicle. For the purpose of such recovery, it would not be necessary for the
insurer to file a separate suit but it may initiate a proceeding before the
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. We have issued the
aforementioned directions having regard to the scope and purport of Section 168
of the Motor Vehicles Act, 1988 in terms whereof it is not only entitled to
determine the amount of claim as put forth by the claimant for recovery thereof
from the insurer, owner or driver of the vehicle jointly or severally but also
the dispute between the insurer on the one hand and the owner or driver of the
vehicle involved in the accident inasmuch as can be resolved by the tribunal in
such a proceeding.
the aforementioned reasons, the appeals are partly allowed to the
aforementioned extent and subject to the directions aforementioned. But there
shall be no order as to costs.