Oriental Insurance Co. Ltd. Vs. Sudhakaran K.V.& Ors  INSV
974 (16 May
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE
JURISDICTION CIVIL APPEAL NO. 3634 OF 2008 (Arising out of S.L.P. (C)
No.19562/2006) Oriental Insurance Co. Ltd. ....Appellant Versus Sudhakaran K.V.
& Ors. ...Respondent
S.B.SINHA.J Leave granted.
1. This appeal is directed against
a judgment and order dated 22.3.2006 passed by the High Court of Kerala at
Ernakulam in M.F.A. No.
536 of 1999 whereby and whereunder
the appeal preferred by the appellant herein from the judgment and award dated
31.10.1998 passed by the Motor Accident Claims Tribunal, Perumbavoor awarding a
sum of Rs.1,18,900/-(Rupees One lakh eighteen thousand and nine hundred only)
together with interest thereon at the rate of 12% p.a. from the date of the
filing of the claim petition till date of realization of the amount against the
2 appellant as also against the owners of the vehicle was dismissed.
2. The basic fact of the matter is
not in dispute. Thankamani (hereinafter referred to as the deceased) was
travelling as a pillion rider on a scooter on 20.10.1993. She fell down from
the scooter and succumbed to the injuries sustained by her. In regard to the
said accident, a claim petition was filed.
Appellant having been served with
a notice, in its written statement, inter alia, raised a contention that she
being a pillion rider and, thus, a gratuitous passenger, the insurance policy
did not cover the risk of injury or death of such a passenger and, thus, it was
not liable to reimburse the owner of the scooter therefor.
It was, furthermore, contended
that the accident had taken place at a private place.
By reason of the impugned award,
the tribunal, however, opined:
The accident had taken place
due to rash and negligent riding of the scooter by Sebastian P.V.- respondent
No.1 to the 3 claim petition;
view the monthly income of the deceased which was estimated at Rs. 1200/- per
month as also age of the deceased assessed at 50 years; claimants were entitled
to compensation for a sum of Rs.1,05,600/-. A sum of Rs.5,000/- was allowed
towards compensation for pain and suffering; a sum of Rs.100/- was allowed
towards damage of clothing and articles, a sum of Rs.5,000/- was allowed towards
loss of love and affection and a sum of Rs.1,000/- was allowed towards mental
shock and agony.
3. As regards liability of the
appellant it was held as the existence of the insurance policy in respect of
the offending scooter is admitted, it was also liable.
4. Aggrieved by the said award,
the appellant filed an appeal before the High Court of Kerala under Section 173
of the Motor Vehicles Act, 1988 (for short "the Act"). On the
question as to whether the Insurance Company would be liable in a case of this
nature, the Division Bench opined as under:
4 "1. The appellant is the
third respondent in O.P.(MV) 119/94 on the file of the motor Accident Claims
Tribunal, Perumbavoor. Appellant was directed to pay
compensation for the death of the pillion rider of a motor cycle. The vehicle
was insured with the appellant.
2.It was contended that the
pillion rider would not come within the coverage of the Act policy. The
Tribunal repelled that contention. Hence this appeal.
3. The question whether the
pillion rider is covered by an Act policy stands settled by the decision of the
Full Bench of this Court in (2) KLT 886. Hence the appellant cannot
successfully take up a contention contrary to the above proposition in this
5. Ms. Aanchal Jain, learned
counsel appearing on behalf of the appellant, submits that as the deceased was
in a vehicle which was not covered by the contract of insurance must be held to
be a gratuitous passenger and as such the impugned judgment cannot be
Strong reliance, in this behalf,
has been placed on United India Insurance Co. Ltd.,Shimla v. Tilak Singh and
Ors. [(2006) 4 SCC 404].
6. Mrs. Purnima Bhat and Mrs.
K.Sarada Devi, learned counsel appearing on behalf of the respondents, on the
other hand, would urge:
5 the principles of law
deduced by this Court as regards gratuitous passenger should not apply in a
case of this nature;
in any event
this Court should exercise its jurisdiction under Article 142 of the
Constitution of India directing the appellant to pay the claimed amount to the
claimants and recover the same from the owner of the scooter.
7. Before embarking on the rival
contentions, we may notice the insurance policy. The contract of insurance was
entered into on or about 2.12.1992. It was 'A policy for act liability' meaning
thereby a third party liability.
The relevant clauses of the said
contract of insurance are as under:
"1. Subject to the Limit of
liability as laid down in the Motor Vehicles Act the Company will indemnify the
insured in the event of accident caused by or arising out of the use of Motor
Vehicle any where in India against all sums including claimant's costs and
expenses which the insured shall become legally liable to pay in respect of
death or bodily injury to any person and/or damage to any property of Third
6 Exception Except so far as
necessary to meet the requirements of the Motor Vehicles Act the Company shall
not be liable in respect of death arising out of and in the course of
employment of person in the employment of the insured or in the employment of
any person who is indemnified under this Policy or bodily injury sustained by
such person arising out of and in the course of such employment."
8. In terms of Section 147 of the
Act only in regard to reimbursement of the claim to a third party, a contract
of insurance must be taken by the owners of the vehicle. It is imperative in
nature. When, however, an owner of a vehicle intends to cover himself from
it is permissible to enter into a
contract of insurance in which event the insurer would be bound to reimburse
the owner of the vehicle strictly in terms thereof.
9. The liability of the insurer to
reimburse the owner in respect of a claim made by the third party, thus, is
statutory whereas other claims are not.
10. The only question which,
therefore, arises for our consideration 7 is as to whether the pillion rider on
a scooter would be a third party within the meaning of Section 147 of the Act.
Indisputably, a distinction has to
be made between a contract of insurance in regard to a third party and the
owner or the driver of the vehicle.
11. This Court in a catena of
decisions has categorically held that a gratuitous passenger in a goods
carriage would not be covered by a contract of insurance entered into by and
between the insurer and the owner of the vehicle in terms of Section 147 of the
Act. [See New India Assurance Co. Ltd. v. Asha Rani (2003) 2 SCC 223] 12. A
Division Bench of this Court in United India Insurance Co.
Ltd., Shimla v. Tilak Singh and Ors.
[(2006) 4 SCC 404] extended the said principle to all other categories of
vehicles also, stating as under:
"In our view, although the
observations made in Asha Rani case were in connection with carrying passengers
in a goods vehicle, the same would apply with equal force to gratuitous
passengers in any other vehicle also. Thus, we must uphold the contention of
the appellant Insurance Company that it owed no liability towards the injuries
suffered by the deceased Rajinder Singh who was 8 a pillion rider, as the
insurance policy was a statutory policy, and hence it did not cover the risk of
death of or bodily injury to a gratuitous passenger."
13. The submission of Mrs. Bhat,
learned counsel, however, is that this Court should not extend the said principle
to the vehicles other than the goods carriage. As at present advised, we may
not go into the said question in view of some recent decisions of this Court,
viz., National Insurance Co. Ltd. v. Laxmi Narain Dhut [(2007) 3 SCC 700],
Oriental Insurance Co. Ltd. v. Meena Variyal [(2007) 5 SCC 428] and New India
Assurance Co. Ltd. v. Ved Wati [(2007) 9 SCC 486].
14. The provisions of the Act and,
in particular, Section 147 of the Act were enacted for the purpose of enforcing
the principles of social justice. It, however, must be kept confined to a third
party risk. A contract of insurance which is not statutory in nature should be
construed like any other contract.
15. We have noticed the terms of
the contract of insurance. It was entered into for the purpose of covering the
third party risk and not the risk of the owner or a pillion rider. An exception
in the contract of 9 insurance has been made, i.e., by covering the risk of the
driver of the vehicle. The deceased was, indisputably, not the driver of the vehicle.
16. The contract of insurance did
not cover the owner of the vehicle, certainly not the pillion rider. The
deceased was travelling as a passenger, stricto sensu may not be as a
gratuitous passenger as in a given case she may not be a member of the family,
a friend or other relative. In the sense of the term which is used in common
parlance, she might not be even a passenger.
In view of the terms of the
contract of insurance, however, she would not be covered thereby.
It is not necessary for us to deal
with large number of precedents operating in this behalf as the question
appears to be covered by a few recent decisions of this Court.
17. In United India Insurance
Company Ltd. v. Serjerao & Ors.
[2007 (13) SCALE 80], it was held
"7....When a statutory
liability has been imposed upon the owner, in our opinion, the same cannot
extend the liability of an insurer to 10 indemnify the owner, although in terms
of the insurance policy or under the Act, it would not be liable therefor.
17. In a given case, the statutory
liability of an insurance company, therefore,either may be nil or a sum lower
than the amount specified under Section 140 of the Act. Thus,when a separate
application is filed in terms of Section 140 of the Act, in terms of Section
168 thereof, an insurer has to be given a notice in which event, it goes
without saying, it would be open to the insurance company to plead and prove
that it is not liable at all.
18. Furthermore, it is not in
dispute that there can be more than one award particularly when a sum paid may
have to be adjusted from the final award. Keeping in view the provisions of
Section 168 of the Act, there cannot be any doubt whatsoever that an award for
enforcing the right under Section 140 of the Act is also required to be passed
under Section 168 only after the parties concerned have filed their pleadings
and have been given a reasonable opportunity of being heard. A Claims Tribunal,
thus, must be satisfied that the conditions precedent specified in Section 140
of the Act have been substantiated, which is the basis for making an award.
19. Furthermore, evidently, the
amount directed to be paid even in terms of Chapter-X of the Act must as of
necessity, in the event of non- compliance of directions has to be recovered in
terms of Section 174 of the Act. There is no other provision in the Act which
takes care of such a situation. We, therefore, are of the opinion that even
when objections are raised by the insurance company in regard to it liability,
the Tribunal is required to render a decision upon the issue, which would
attain finality and, thus, the same would be any award within the meaning of
Section 173 of 11 the Act."
It was furthermore held as under:
"8. So far as the question of
liability regarding labourers travelling in trollies is concerned, the matter
was considered by this Mohan and Ors. (2007) 7 SCALE 753 and it was held that
the Insurance Company has no liability...""
18. Yet again in Ghulam Mohammad
Dar v. State of J&K and Ors.
[(2008) 1 SCC 422], this Court
opined that the words "injury to any person" as inserted by reason of
the 1994 Amendment would only mean a third party and not a passenger travelling
on a goods carriage whether gratuitous or otherwise. [See also The New India
Insurance Company v.
Darshana Devi & Ors. 2008 (2)
19. The law which emerges from the
said decisions, is: (i) the liability of the insurance company in a case of
this nature is not extended to a pillion rider of the motor vehicle unless the
requisite amount of premium is paid for covering his/her risk (ii) the legal
obligation arising under Section 147 of the Act cannot be extended to an injury
or death of 12 the owner of vehicle or the pillion rider; (iii) the pillion
rider in a two wheeler was not to be treated as a third party when the accident
has taken place owing to rash and negligent riding of the scooter and not on
the part of the driver of another vehicle.
20. For the views we have taken,
it is not necessary to refer to a large number of decisions cited at the Bar as
they are not applicable in a case of this nature.
21. For the reasons
aforementioned, the impugned judgment cannot be sustained. It is set aside
accordingly. The appeal is allowed. No costs ...............................J.
[S.B. Sinha] ................................J.
[Lokeshwar Singh Panta] New Delhi;