New India Assurance
Co.Ltd. Vs. Bismillah Bai & Ors  INSC 576 (20 March 2009)
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.1799 OF 2009 (Arising out
of SLP(C) No.14791 of 2006) New India Assurance Co. Ltd. ..Appellant versus
Bismillah Bai & Others ..Respondent
The Insurance Company
is before us, aggrieved by and dissatisfied with the judgment and order dated
07th February, 2006 passed by a Division Bench of the High Court of Madhya
Pradesh, Indore Bench, Indore in M.A. No.1377 of 2003, whereby and whereunder
the High Court has modified the judgment of the Motor Accident claims Tribunal,
Indore (for short 'the Tribunal') exonerating the Insurance Company- appellant
herein from paying any amount of compensation passed in Claim Case No. 285 of
1997 awarding a total sum of Rs.3,12,000/- with interest to the claimants for
the death of one Israel, in a motor vehicle's accident holding that the
Insurance Company is liable to pay the compensation to the claimants.
Facts of the case
giving rise to this appeal are:
The deceased-Israel was
travelling in a Jeep bearing No.MPA-09-1658 on 26.08.1995. The said Jeep
collided with a truck bearing No.MPF 07158 and Israel died of the injuries
suffered by his at the site of accident. His family members filed an
application under Section 166, 140 of the Motor Vehicles Act (for short 'the
Act') before the Tribunal for compensation.
The appellant raised
a contention in the said proceeding that since the driver of the jeep was not
responsible for causing the said accident, it was not liable to pay any
compensation to the claimants.
The Tribunal by
reason of the aforementioned award, inter alia, held in paras 22 & 23 as
due to want of averments of Petitioners in the application and from the
certified copy of charge sheets Ex.P-1 to Ex.P-5 produced by the Petitioners,
the Petitioners remained successful in proving that accident occurred due to
rash and negligent driving of truck by opposite party No.4.
23.Therefore on the
basis of evidence produced, the Petitioners remained successful in proving
their case against opposite party No.3 and 4 in lieu of opposite party No.1 and
2, and as per the record the jeep owner Raees Khan and Insurance company cannot
be held accountable to pay the compensation amount as the driver of jeep Israeel
was not -3- driving his jeep rashly and negligently and he had no fault."
It was also held by
the Tribunal that as the Insurance Company is not held accountable for payment
of compensation amount, it is entitled to receive the amount of Rs.25,000/-,
deposited with the Tribunal by an interim order, from the claimants with
interest at the rate of 9% per annum. However, an award for a sum of Rs.3,12,000/-
was passed against the driver and owner of the truck in question.
preferred an appeal against the said award.
The High Court by
reason of the impugned judgment set aside that part of the order of the
Tribunal whereby the appellant herein was exonerated from payment of any
liability for reimbursement of the claim so far as the driver and owner of the
jeep were concerned, stating:
"7. So far as
finding in relation exonerating of Insurance Company is concerned, we are
inclined to reverse the same in favour of claimants. Firstly, no evidence in
rebuttal was led by the Company and then for all practical purposes remained
exparte in the sense that except to file written statement, they did nothing.
On the other hand, the claimants led evidence and discharged their initial
burden. Israel was neither owner of the offending Jeep, not insurer. He was,
therefore, third party, as one of the person sitting in Jeep. Ajij was the
There is nothing on
record to -4- hold that Jeep was responsible for causing accident and hence,
claimants are not entitled to get any compensation. The driver of Truck was not
examined. We cannot conclude on the strength of evidence that Jeep was
responsible for the accident.
8. In this view of
the matter, we set aside the finding of the Tribunal on this issue and modify
the impugned award by passing the same also against the insurance company i.e. respondent
No.3/non applicant No.3."
A bare perusal of the
order clearly shows that no reason whatsoever has been assigned in support
thereof. The finding of the learned Tribunal and the material noticed by it for
the said purpose has not been considered by the High Court.
The question as to
whether the driver of the jeep or the truck and/or both of them were
responsible for negligence in driving their respective vehicles, which led to the
said accident is essentially a question of fact. While reversing the said
finding of fact, so as to fasten the liability on the insurance company, the
High Court was required to assign sufficient and cogent reasons. No such
finding to the effect that both driver as also the jeep contributed to the
negligence having been recorded by the High Court, the question of fastening
the joint liability by the insurance company did not arise. Only because the
truck was not insured, -5- the same by itself did not mean that the
appellant-insurance company can be held liable to reimburse the claim to the
claimants wherefor liability had been incurred by the owner and driver of the
truck and, thereofore, no liability has been incurred by the driver and owner
of the jeep is concerned. The Tribunal has categorically recorded a finding
that the driver of the jeep was not driving his jeep rashly and negligently and
he was not at fault and that the accident occurred due to rash and negligent
driving of truck by its driver.
Since, the High Court
has not reversed this finding of the Tribunal, fastening of the liability on
the insurance compnay which is the insurer of the jeep did not arise.
Even otherwise, the
insurance company cannot be held liable to pay compensation to the claimants in
view of the decision of this Court in Oriental Insurance Company Limited v.
Sudhakaran K.V. & Ors. [(2008) 7 SCC 428] wherein this Court opined:
"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. 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 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."
It was held:
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 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."
aforementioned reasons, the impugned judgment cannot be sustained and it is set
aside accordingly. The appeal is allowed. No costs.