Dhanraj Vs. New India
Assurance Co. Ltd. & Anr  Insc 575 (24 September 2004)
S. N. Variava & A. K.
Mathur (Arising out of S.L.P. (C) Nos.20826-20827 of 2003) S. N. Variava, J.
Special leave granted.
These Appeals arise out of a Judgment of the High Court of Madhya Pradesh
dated 21st July 2003.
Briefly stated the facts are as follows.
On 26th August 2000, the Appellant along with certain other persons was
traveling in his own Jeep. Around 6.30 A.M. the Jeep met with an accident. In
the accident, the Appellant as well as the other passengers received injuries.
A number of Claim Petitions came to be filed. The Appellant also filed a Claim
The Motor Accident Claims Tribunal (MACT) held the Driver of
the Jeep responsible for the accident. In all the Claim Petitions filed by
the other passengers MACT directed that the Appellant (as the owner)
as well as the Driver and Insurance Company were liable to pay compensation.
In these Appeals, we are not concerned with those Petitions and the Orders
In the Claim Petition filed by the Petitioner, the Motor Accident Claims
Tribunal directed the driver and the Insurance Company to pay compensation to
the Petitioner. The Insurance Company filed an Appeal. That Appeal has been allowed
by the impugned Judgment. It has been held that as the Petitioner was the owner
of the vehicle the Insurance Company is not liable to pay him any compensation.
We have seen the Policy. It is a comprehensive policy. The question that
arises is whether a comprehensive Policy would cover the risk of injury to the
owner of the vehicle also. Section 147 of the Motor Vehicles
Act, 1988 reads as follows:- "147. Requirements of policies and limits
of liability.(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
authorized insurer; or (b) insurer 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 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;
(ii) against the death of 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
Provided that a policy shall not be required (i) to cover liability in
respect of the death, arising out of 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 (8 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 is a public service
vehicle engaged as conductor of the vehicle or in examining tickets on the
vehicle, or (c) if it is a goods carriage, being carried in the vehicle, or
(ii) 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
(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
Provided that any policy of insurance issued with any limited liability and
in force, immediately before the commencement of this Act, shall continue to be
effective for a period of four months after such commencement or till the date
of expiry of such policy whichever is earlier." Thus, an insurance policy
covers the liability incurred by the insured in respect of death of or bodily
injury to any person (including an 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. Section 147 does not require an
Insurance Company to assume risk for death or bodily injury to the owner of the
Rathi & Ors. [1998 ACJ 121] it has been held that the liability of an
Insurance Company is only for the purpose of indemnifying the insured against
liabilities incurred towards third person or in respect of damages to property.
Thus, where the insured i.e. an owner of the vehicle has no liability to a
third party the Insurance Company has no liability also.
In this case, it has not been shown that the policy covered any risk for
injury to the owner himself. We are unable to accept the contention that the
premium of Rs.4,989/- paid under the heading "Own damage" is for
covering liability towards personal injury. Under the heading "Own
damage", the words "premium on vehicle and non-electrical
accessories" appear. It is thus clear that this premium is towards damage
to the vehicle and not for injury to the person of the owner. An owner of a
vehicle can only claim provided a personal accident insurance has been taken
out. In this case, there is no such insurance.
We, therefore, see no infirmity in the Judgment of the High Court. We see no
reason to interfere. The Appeals stand dismissed. There will be no order as to