Minu B. Mehta & ANR Vs. Balkrishna
Ramchandra Nayan & ANR [1977] INSC 34 (28 January 1977)
KAILASAM, P.S.
KAILASAM, P.S.
RAY, A.N. (CJ) BEG, M. HAMEEDULLAH
CITATION: 1977 AIR 1248 1977 SCR (2) 886 1977
SCC (2) 441
CITATOR INFO :
R 1979 SC1862 (17) E 1987 SC1690 (6)
ACT:
Motor Vehicles Act, 1939--S. 95(v) (b) (i)
and (ii)--Scope of--Claim for compensation in motor vehicle accidents Proof of
negligence of driver--If necessary.
Torts--Claim for compensation in motor
vehicle accidents--Proof of negligence of driver--If necessary.
HEADNOTE:
While the respondent was travelling in his
car, the appellant's truck, driven by a driver, hit the car and caused injuries
to the respondent and damaged the car. The Claims Tribunal awarded compensation
to the respondent, and the High Court upheld the Tribunal's award. In the
course of the judgment the High Court, however, observed that every person has
a right to security and safety of his person irrespective of the fault or
negligence or carelessness and that every person has a right to claim
compensation, irrespective of proof of negligence on the part of the driver.
It further observed that the perimeters of
liability in cls. (i) and (ii) of s. 95(1)(b) must be held to be the same
because in both, the liability of the owner of the driver exists and is made
compulsorily insurable and that it could not be said that the legislature
intended absolute liability in cases covered by cl. (ii) and not in cases
covered by cl. (i).
HELD: Proof of negligence is necessary before
the owner or the insurer could be held liable for payment of compensation in
motor vehicle accident claims. The High Court's views are opposed to basic
principles of the owner's liability for negligence of his servant and are based
on a complete misreading of the provisions of Chapter VIII of the .Motor
Vehicles Act. [900 F]
1. Before a person can be made liable to pay
compensation for any injuries and damage caused by his action. it is necessary
that the person injured should be able to establish that he has some cause of
action against the party responsible. In order to succeed in an action for
negligence the plaintiff must prove (1) that the defendant had, in the
circumstances, a duty to, take care and that duty was owed by him to the plaintiff
and (2) that there .was a breach of that duty and that as a result of the
breach damage was suffered by the plaintiff. The master also becomes liable for
the conduct of the servant when the servant is proved to have acted negligently
in the course of his employment. [895 C-D] 2(a) The purpose of making insurance
compulsory is to protect the interests of the successful claimant from being
defeated by the owner of the vehicle who has not enough means to meet his
liability. The safeguard is provided by imposing certain statutory duties,
namely, the duty not to.
drive or permit a car to be driven unless the
car is covered by third party insurance. 1895 F] (b) Under s. 95(1)(b)(i) of
the Act, the policy of insurance must be a policy which insures against any
liability which may be incurred in respect of death 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. The accident to which the owner or
the person insuring is liable is to the extent of his liability in respect of
death or bodily injury and that liability is covered by the insurance. It is,
therefore, obvious that if the owner has not incurred any liability in respect
of death or bodily injury to any person there is no liability and it is not
intended to be covered by the insurance. The liability contemplated arises
under the law of negligence and under the principle of vicarious liability. The
provisions of the section do not make the owner or the insurance company liable
for any bodily injury caused to a third party arising out of the use of the
vehicle unless the liability can be fastened on him. [896 D-F] 887 (c) Under
sub-cl. (ii) of s. 95(1)(b) of the Act the policy of insurance must insure a
person against death 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 place.
So far as the bodily injury caused to a passenger is concerned it need not be
due to any act or liability incurred by the person. The expression
"liability which may be incurred by him" in sub.-cl. (i) is meant to
cover any liability arising out of the use of the vehicle. Therefore, the
person must be under a liability and that liability alone is covered by the insurance
policy.
[896 F-H] (d) The owner's liability arises
out of his failure to discharge a duty cast on him by law. The right to receive
compensation can only be against a person who is bound to compensate due to the
failure to perform a legal obligation. If a person is not liable legally he is
under no duty to compensate anyone else. The Claims Tribunal is a tribunal
constituted by the State Government for expeditious disposal of the motor
vehicles claims. The general law applicable is only common law and the law of
torts. If under the law a person becomes legally liable then the person
suffering the injuries is entitled to be compensated and the tribunal is
authorised to determine the amount of compensation which appears to be just.
The plea that the Claims .Tribunal is entitled to award compensation which
appears to be just when it is satisfied on proof of injury to a third party
arising out of the use of a vehicle on a public place without proof of
negligence, if accepted, would lead to strange results. [897 E-F]
3. The power to constitute one or more Motor
Vehicle Claims Tribunals under s. 110(1) is optional and the State Government
may not constitute a Claims Tribunal for certain areas. When a claim includes a
claim for compensation, the claimant has an option to make his claim before the
Civil Court. In claims for compensation, therefore, in certain cases, Civil
Courts also have jurisdiction. If the contention put forward is accepted so far
as the Civil Court is concerned, it would have to determine the liability of
the owner on the basis of common law or torts while the Claims Tribunal can
award compensation without reference to common law or torts and without coming
to the conclusion that the owner is liable The concept of owner's liability without
any negligence is opposed to the principles of law.
The mere fact that a party received an injury
arising out of the use of a vehicle in a public place, cannot justify fastening
liability on the owner. It may be that a person bent upon committing suicide
may jump before a car in motion and thus get himself killed. In such cases, the
owner cannot be made liable. Proof of negligence remains the lynch pin to
recover compensation. [897 H; 898 A-B] Haji zakariaand others v. Naoshir Cama
and others A.I.R. 1976 A.P.171 and New India Assurance Co Ltd. v. Sumitra Devi
and others , 1971 A.C.J. 58 not approved.
Kesavan Nair v. State Insurance Officer, 1971
A.C.J. 219 and M/s. Ruby Insurance Co. Ltd. v. V. Govindaraj and others, A.A.O.
607 of 1973 and 296 of 1974 decided by the Madras High Court on December 13,
1976 referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 1249 of 1976.
Appeal by Special Leave from the Judgment and
Order dated the 23-3-1976 of the Bombay High Court in C. No. 449/75 from Original
Decree.
F.S. Nariman, I. M. Patel and B.R. Agarwala
for the Appellants.
R.D. Hattangadi, George Kurien and (Mrs.)
Urmila Sirur for.
Res. No. 1.
K. Singhvi and V.N. Ganpule for the
applicant/Intervener.
The Judgment of Court was delivered by This
appeal is by special leave under Article 136 of the Constitution by the two
appellants against the judgment of the 888 Bombay High Court dismissing their
appeal against the judgment of the Additional Motor Accidents Claims Tribunal
for Greater Bombay and confirming the award passed by the tribunal in favour of
the respondents and directing the Tribunal to decide the question of the
liability of the Insurance Company on its application that its liability is
limited to Rs. 20,000 under section 110E of the Motor Vehicles Act, 1939
referred to as the Act after giving opportunity to the parties.
The applicant in Application No. 727 of 1969
before the Motor Accidents Claims Tribunal for Greater Bombay is one Dr.
Balkrishna Ramchandra Nayan practising in Bombay and is the respondent in this
appeal. On 14th April, 1969 at about 1.00 p.m. the respondent was driving his car
No. MRC4450 towards Fort side on Dr. Annie Besant Road. With him was sitting on
the left side in the front seat Malati M. Deshmukh, his nurse. The road has
stone dividers in the middle of the road. When the car approached Lotus cinema
the truck owned by the appellants and insured with the Insurance Company who
were opposite parties 1 to 3 before the Motor Accidents Claims Tribunal came
from the opposite direction at a high speed and dashed against the right side
of the car. Due to the impact the car was damaged and the 1st respondent and
Malati M. Deshmukh were injucted. Respondent 1 had to undergo treatment. He was
operated on the day of the accident itself and was patient in his own Nursing
Home for a month till 15th May, 1969. According to him his right arm was
operated and kept in plaster and that he had become permanently disabled in
discharging his duties as a surgeon and that he had incurred a loss during the
closure of the Nursing Home rind loss of income due to permanent injury along
with other claims. He claimed a sum of Rs. 3 lakhs by way of general and
special damages with interest thereon from the date of his application. The
owners of the vehicle fried a written statement refuting the claim of the
applicant. According to them while the motor lorry was proceeding from Haji Ali
towards Worli, they had taken all precautions to keep the lorry in road worthy
condition and that at the material time the axle brake ring of the motor lorry
came out and the driver therefore lost control of the vehicle and because of
this defect which can develop in a running car the driver lost control of the'
steering wheel. According to them the lorry prior to the accident was being
driven at a moderate speed with due care and caution. They contended that the
accident did not occur on account of rash and negligent driving on the part of
the driver. They also denied the claim of various items of compensation made by
the applicant.
The Motor Accidents Claims Tribunal framed
four issues.
The first 2 issues were whether the applicant
had proved that the driver of the lorry was driving the vehicle in rash and
negligent manner and whether the opposite party had proved that at the time of
the accident the axle brake ring of the motor lorry came out and the driver
lost control of the motor lorry. The other 2 issues related to the question as
to whether the applicant received the injuries as a result of this accident and
whether he was entitled to the compensation claimed by him.
889 The applicant examined himself and Malati
M. Deshmukh who was travelling with him at the time of the accident regarding
the incident. He also examined P. Ws 2 and 3, P.W. 2 a nurse to prove his
income from his profession and P.W. 3 a doctor who treated him. On behalf of
the appellant 6 witnesses were examined in support of their case that the
accident was due to a mechanical failure and not due to any rashness or
negligence on the part of the driver.
The Tribunal after elaborately discussing the
oral and documentary evidence adduced before it found that the accident was due
to the rash and negligent driving of the driver of the lorry and the defence
set up that the accident was due to mechanical failure of the lorry was
unacceptable.
The Claims Tribunal accepting the evidence of
the applicant and a Customs Officer, Mr. Jawakar, who was examined as D.W.4 on
the side of the appellants, came to the conclusion that when the doctor was in
the traffic lane nearer to the road divider the lorry crossed the road divider
and hit the car. The defence witness himself stated that the lorry came after
crossing the central barricade. The lorry went off the track and went on the
wrong side and collided with the oncoming car of the applicant who was in his
car. Referring to his notes the witness stated that the right side of the lorry
went and hit the right side of the car of the applicant. The portion of the
lorry upto the driver's seat collided with the right side of the car. Both the
wheels of the front side of the lorry had crossed the central reservation tract
and so also the right rear wheel was on the wrong side and only the left rear
wheel was just near the edge of the central reservation tract towards Lotus
cinema. On the face of the evidence of the doctor and their own witness D.W.4
who was travelling in the lorry there could be no denying the fact that the
lorry crossed the middle of the road.
Relying on the evidence of the two witnesses
as well as the doctrine of resispa 1oquitur the Claims Tribunal rightly found
that the applicant had established rash and negligent driving on the part of
the driver and the lorry. The Accidents Claims Tribunal has also discussed
elaborately the defence set up on behalf of the owners of the lorry and
rejected it. The plea that was taken in the pleadings was that at the time of
the accident "Axle Brake Ring" of the lorry came out. The expert
examined on behalf of the owner, Jimmy Dara Engineer, D.W. 6, stated that he
had never heard of any such part as axle brake ring and he has never seen such
a part. The owners subsequently explained that what they meant by "Axle
Brake Ring" was drag link on the rod end. The Claims Tribunal also
referred to the evidence of the expert examined on behalf of the owners and
remarked that the nut on the pin could not be blown off all of a sudden and
that the driver, unless he was negligent, could feel the change if there was
anything wrong with the drag link end and can stop the vehicle immediately.
Rejecting the evidence of the driver and relying on the evidence of the expert
on the side of the defence that even if there was any defect the vehicle could
be stopped within 4 or 5 feet and need not cover the distance which it did, the
Claim Tribunal also found that the defect which the defence witness, Motor
Vehicle Inspector Partapsingh Chavan, D.W.I.
saw when he examined the 890 lorry on 22nd
April, 1969, could not be accepted as the owners of the lorry could have played
mischief and created evidence before inspection on 22nd April, 1969.
Criticising the conduct of the owners as unworthy of their status the Claims
Tribunal totally rejected the defence.
Regarding the compensation the Claims
Tribunal fixed the amount at Rs.1,43,400 together with interest at 6 per cent.
This sum was apart from a sum of Rs.500 which
was found payable to Malati M. Deshmukh who had sustained injuries.
The Claims Tribunal directed the owners as
well as the insurers jointly to pay the amount, to the respondent Dr. Balkrishna
Ramachandra Nayan. It also directed the opposite parties and insurers to pay Rs.
1000 as costs and Rs.100 as costs of Malati M. Deshmukh.
The Claims Tribunal fixed a sum of Rs. 73,779
as the loss sustained by the doctor for a period of 4 years from the date of
the accident. It also for a subsequent period of 7 years fixed the future loss
at Rs. 9,000 a year and a total amount of Rs. 63,000. In addition it awarded a
sum of Rs. 5,000 for discomfort and inconvenience suffered by the doctor. Thus
the total compensation that was granted amounted to Rs. 1,43,400. As already
stated the interest was awarded from the filing of the application till
payment.
The insurance company as well as the owners
of the lorry preferred appeal against the award of the Tribunal in Appeal No.
449 of 1975 before the High Court of Bombay.
Though the appeal was filed on behalf of the
insurance company and the owners of the lorry, during the hearing of the appeal
it was contended on .behalf of the insurance company that in any event the
liability of the insurance company under the policy could not exceed Rs.20,000.
The High Court on the question of whether there was negligence on the part of
the driver of the lorry or not found itself in complete agreement with the
Claims Tribunal and observed that it was for the lorry driver and owners to
establish as to how the lorry crossed the road dividers, went on the wrong side
and mounted on the Fiat Car coming 'from the opposite direction. Agreeing with
the Tribunal it found that the driver was negligent. The High Court concurred
with the reasons. and findings of the Tribunal. It also held in the
Circumstances of the case that the principle res ipsa loquitur applied. The
High Court also rejected the defence taken by the owners that the injury was
due to a mechanical defect and not due to the negligence. After referring to
the evidence and the reasoning of the Tribunal. on the defence set up by the
owners the High Court came to the conclusion that the plea about the breaking
of the tie rod was not proved satisfactorily by the owners. The High Court
regarding the defence raised found itself .in complete agreement with the
conclusion arrived at by the Tribunal observing that the Tribunal rightly
disbelieved the defence plea and came to the conclusion after careful
consideration of the evidence of the driver, Customs Officer and other evidence
in the case that it was the driver who was negligent.
891 Regarding the quantum of damages the High
Court expressed its opinion that the Tribunal had made best efforts and tried
to determine the compensation in a just manner on the facts and circumstances
of the case. It confirmed the amount as awarded by the Tribunal and dismissed
the appeal.
The High Court dismissed the appeal of the
owners and the insurance company and confirmed the award passed by the
Tribunal. But it gave liberty to the insurance company to apply to the Claims
Tribunal on depositing Rs. 20,000 with interest from the date of the
application to the date of the deposit for determination of the question that
the liability of the insurance company is limited only to Rs. 20,000. The High
Court directed the Tribunal to decide the question of the liability of the
insurance company on its application under section. 110E by giving opportunity
to the parties to put forward their cases.
Insurance company was directed to pay the
costs of all the parties. It also provided that the claimant was at liberty to
withdraw Rs. 20,000 with interest when deposited by the insurance company. The
order also made it clear that the right of the applicant to recover the balance
of the awarded amount from the other party or from the insurance company will
not in any way be affected.
The appeal to this court is preferred by the
owners.
The insurance company is impleaded as the
second respondent in the appeal before us.
Mr. Nariman, the learned counsel appearing
for the owners submitted that the High Court did not hear arguments on the
question whether the accident took place due to rash and negligent driving of
the lorry and therefore the question will have to be gone into by this Court or
remanded for fresh disposal. We find that the High Court has given a clear
finding in paragraph 30 of its judgment that the Tribunal rightly disbelieved
the plea and held that it was the. driver who was negligent and that they fully
concur with the reasons and findings of the learned Member of the Tribunal. In
the face of the clear finding we are unable to accept the plea of the learned
counsel that this question was not gone into by the High Court. We find
ourselves in complete agreement with the finding of the Tribunal and the High
Court that it was due to rash and negligent driving of the lorry that the car
in which the applicant and Malati M.
Deshmukh were travelling was hit causing
injuries to both of them. We accept the testimony of the doctor and D.W. 4
Jawakar that the lorry crossed the road dividers, ran into the wrong side and
hit the car which was driven by the applicant. We have no hesitation in
accepting the concurrent findings of the High Court and the Claims Tribunal
that the accident was due to the rash and negligent driving of the lorry
driver. We have also no hesitation in rejecting the testimony of the defence
that there was some mechanical defect which resulted in the tie rod end
breaking. We find ourselves in agreement with the reasoning of the Claims
Tribunal that the evidence on the side of the owners is contradictory and the
testimony of the expert destroys the plea of any mechanical defect set up by
them. In this connection we may also point out that in order to succeed in a
9--206SCI/77 892 defence that the accident was due to a mechanical defect the
owners will have to prove that they had taken all necessary precautions and
kept the lorry in a roadworthy condition.
No such attempt was made to establish that
all necessary precautions were taken-to keep the lorry in a roadworthy
condition and that the defect occurred in spite of the reasonable care and
caution taken by the owners.
In order to sustain a plea that the accident
was due to the mechanical defect the owners must raise a plea that the defect
was latent and not discoverable by the use of reasonable care. The owner is not
liable if the accident is due to a latent defect which is not discoverable by
reasonable care. The law on this subject has been laid down in Henderson v.
Henry E. Jenkins & Sons.(1). In that case the lorry driver applied the
brakes of the lorry on a steep hill but they failed to operate. As a result the
lorry struck and killed a man who was emerging from a parked vehicle.
The defence was that brake failure was due to
a latent defect not discoverable by reasonable care on driver's part. It was
found that the lorry was five years old and had done at least 150,000 miles.
The brakes were hydraulically operated. It was also found after the accident
that the brake failure was due to a steel pipe bursting from .7mm. to .1mm. The
corrosion had occurred where it could not be seen except by removing the pipe
completely from the vehicle and this had never been done. Expert evidence
showed' that it was not a normal precaution to do this if, as was the case, the
visible parts of the pipe were not corroded. The corrosion was unusual and
unexplained.
An expert witness said it must have been due
to chemical action of some kind such as exposure to salt from the roads in
winter or on journeys near the sea. The House of Lords held that the burden of
proof which lay on the defendants to show that they had taken all reasonable
care had been discharged. The defect remained undiscovered despite due care As
the evidence had shown that something unusual had happened to cause this
corrosion it was necessary for the defendants to show that they neither know
nor ought to have known of any unusual occurrence to cause the breakdown. (See
Bingham's Motor Claims Cases Seventh Ed., p. 219).
The burden of proving that the accident was
due to a mechanical defect is on the owners and it is their duty to show that
they had taken all reasonable care and that despite such care the defect
remained hidden. In this case in the written statement all that is pleaded is
that the axle brake ring of the lorry came out and the driver lost control of
the motor lorry and that the defect can develop in a running vehicle resulting
in the driver's losing control of the steering wheel. Though it was stated that
all precautions were taken-to keep the lorry in a road worthy condition it was
not specifically pleaded that the defect i.e. the axle brake ring coming out,
is a latent pleaded and could not have been discovered by the use of reasonable
care. This lack of plea is in addition to the lack of evidence and the fact
that the defence set up has been rightly rejected by the Tribunal.
(1) [1970] A.C.282[1969] 3 All E.R. 756 893
Mr. Nariman then submitted that the quantum of compensation awarded was very
high. He submitted that even according to the figures relied on by the High
Court it was in error in coming to the conclusion that for a period of 4 years
from the date of the accident the claimant has suffered a damage of Rs. 73,779.
The learned counsel submitted that though during the first year there was a
loss of Rs. 3,530 in subsequent years he earned various amounts and in one year
he earned Rs. 7,981 which would mean that during subsequent years his loss
would not have been. more than Rs.10,000 and as admittedly the Nursing Home was
kept as a going concern the award of Rs. 10,000 per year for the four years
would be very high. We have considered this contention carefully but taking all
the circumstances into account we do not feel called upon to interfere with the
quantum arrived at by the Tribunal and confirmed by the High Court.
The learned Counsel also submitted that the
provision for Rs. 63,000 for the 7 years as the likely loss due to the doctor's
disability is also very high. In this case also we do not feel called upon to
interfere with the quantum arrived at by the Tribunal as well as the High
Court. Lastly, the learned counsel submitted that in any event the interest
awarded from the date of the application is not justified. We do not think we
will be justified in interfering with the amount of interest awarded by the
High Court from the date of the filing of the application.
On the above findings we confirm the award
passed by the Claims Tribunal in favour of the applicant/respondent No. 1 for
Rs. 1,43,400 with interest at 6% per annum from the date of the filing of the
application and also a sum of Rs.500 granted to Malati M. Deshmukh and the
costs awarded. The liability of the owners and the insurance company will be
joint and several and the respondent would be at liberty to proceed against
either or both of them to realise the amount awarded in his favour.
We have now to consider the direction given
by the High Court regarding the determination of the liability as between the
insurance company and the owners. The owners and the insurance company were
represented by the same counsel before the Tribunal and before the High Court
the learned counsel on behalf of the insurance company pleaded that its
liability is limited to Rs. 20,000 only. The High Court has given liberty to
the insurance company to apply on depositing Rs. 20,000 with interest as
directed for determination of the question that the liability of the insurance
company is limited to Rs. 20,000. The High Court also directed the Tribunal to
decide the liability of the insurance company on the insurance company filing
such an application after giving notice to all the parties. The insurance
company has not appealed against the judgment and decree of the High Court and
we see no reason for interfering with the order. On the insurance company
complying with the directions of the High Court by depositing Rs. 20,000 with
interest as specified the matter will be remitted to the Tribunal for
determination of the question whether the liability of the insurance company is
limited to Rs.20,000 only. It is made clear that so far as the award made in
894 favour of the applicant/respondent is concerned he will be at liberty to
proceed against the owners as well as the insurance company jointly and
severally. With these directions the appeal is dismissed with the cost of the
first respondent.
This should normally conclude the judgment
but we feel it desirable that we must deal with the question of law that has
been dealt with at considerable length by the High Court as to whether it is
incumbent on the claimant to prove negligence before he would become entitled
to compensation.
The High Court after concurring with the
findings of the Tribunal and holding that the driver was negligent proceeded to
state that it would not have been necessary for them to say anything more but
for the fact that taking into account the importance of matter and in public
interest it would be appropriate to express its view that it is not necessary
to prove negligence on the part of a driver before claiming compensation.
Both the learned Judges have written lengthy
judgments fully discussing the matter and have come to the conclusion that the
fact of an injury resulting from the accident involving the use of a car on the
public road is the basis of a liability and that it is not necessary to prove
any negligence on the part of the driver. We find that a Bench of the Andhra
Pradesh High Court has held in Haji Zakaria and Others v. Naoshir Cama and
others (1) that the liability of the insured and consequently of the insurer to
compensate a third party dying or being injured on account of the use of the
insured vehicle is irrespective of whether the death, injury etc. has been
caused by rash and negligent driving.
Though this question does not arise in this
appeal as the two High Courts have expressed an opinion which in our view has
no basis either in the Legislative history or on a construction of the relevent
provisions of the Motor Vehicles Act we feel it necessary to state the position
of law.
The liability of the owner of the car to
compensate the victim in a car accident due to the negligent driving of his
servant is based on the law of tort. Regarding the negligence of the servant
the owner is made liable on the basis of vicarious liability. Before the master
could be made liable it is necessary to prove that the servant was acting
during the course of his employment and that he. was negligent. The number of
the vehicles on the road increased phenomenally leading to increase in road
accidents. To remedy the defect various steps were taken. In England the owners
of the vehicle voluntarily insured against the risk of injury to other road
users. With ' the increase of traffic and accidents it was found that in a
number of cases hardship was caused where the person inflicting the injury was
devoid of sufficient means to compensate the person afflicted. In order to meet
this contingency the Road Traffic Act, 1930, The Third Parties (Rights against
Insurers) Act, 1930 and the Road Traffic Act, 1934 were enacted in England. A
system of compulsory insurance was enacted by the Road Traffic Act, 1930. Its
object was to reduce the number of cases where judgment for personal injuries
(1) A.I.R.. 1976 A.P. 171.
895 obtained against a motorist was not met
owing to the lack of means of the defendant in the running-down action and his
failure to insure against such a liability. It is sufficient to state that
compulsory insurance was introduced to cover the liability which the owner of
the vehicle may incur.
The Indian law introduced provisions relating
to compulsory insurance in respect of third party insurance by introducing
Chapter VIII of the Act. These provisions almost wholly adopted the provisions
of the English law.
The relevant sections found in the three
English Acts, Road Traffic Act, 1940, the Third Parties (Right against Insurers)
Act, 1930 and the Road Traffic Act, 1934 were incorporated in Chapter VIII.
Before a person can be made liable to pay compensation for any injuries and
damage which have been caused by his action it is necessary that the.
person damaged or injured should be able to
establish that he has some cause of action against the party responsible.
Causes of action may arise out of actions for
wrongs under the common law or for breaches of duties laid down by statutes. In
order to succeed in an action for negligence the plaintiff must prove (1) that
the defendant had in the circumstances a duty to take care and that duty was
owed by him to the plaintiff, and that (2) there was a breach of that duty and
that as a result of the breach damage was suffered by the plaintiff. The master
also becomes liable for the conduct of the servant when the servant is proved
to have acted negligently in the course of his employment.
Apart from it in common law the master is not
liable for as it is often said that owner of a motor car does not become liable
because of his owning a motor car.
The purpose of enactment of Road Traffic Acts
and making insurance compulsory is to protect the interests of the successful
claimant from being defeated by the owner of the vehicle who has not enough
means to meet his liability. The safeguard is provided by imposing certain
statutory duties namely the duty not to drive or permit a car to be driven
unless the car is covered by the requisite form of third party insurance.
Section 94 of the Act, provides that no person shall use except as a passenger
or cause or allow any other person to use a motor vehicle in a public place
unless there is in force in relation to the use of the vehicle by that person
or that other person, as the case may be, a policy of insurance complying with
the requirements of the Chapter. Section 95 of the Act is very important and
that specifies the requirements of policies and limits of liability. Section
95(1)(a) and (b) of the Act are extracted.
They run as follows:
"95. (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 authorised insurer or by a co-operative society
allowed under section 108 to transact the business of an insurer, and 896 (b)
insures 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 or of 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;
(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 place:
* * * * *" Under section 95(1)(b)(i) of
the Act it is required that policy of insurance must be a policy which insures
the person, against any liability which may be incurred by him in respect of
death 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. It may be
noted that what is intended by the policy of insurance is insuring a person
against any liability which may be incurred by him.
The insurance policy is only to cover the
liability of a person which he might have incurred in respect of death or
bodily injury. The accident to which the owner or the person insuring is liable
to the extent of his liability in respect of death or bodily injury and that
liability is covered by the insurance. It is therefore obvious that if the
owner has not incurred any liability in respect of death or bodily injury to
any person there is no liability and it is not intended to be covered by the
insurance. The liability contemplated arises under the law of negligence and
under the principle of vicarious liability. The provisions as they stand do not
make the owner or the insurance company liable for any bodily injury caused to
a third party arising out of use of the vehicle unless the liability can be fastened
on him. It is significant to note that under sub clause (ii) of section
95(1)(b) of the Act the policy of insurance must insure a person against the
death 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 place. Under section 95
(1)(b) clause (ii) of the Act the liability of the person arises when bodily
injury to any passenger is caused by or use of the vehicle in a public place.
So far as the bodily injury caused to a passenger is concerned it need not be
due to any act or liability incurred by the person. It may be noted that the
provisions of section 95 are similar to section 36(1) of the English Road
Traffic Act. 1930, the relevant portion of which is to the effect that a policy
of insurance must be policy which insures a person in respect of any liability
which may be incurred by him in respect of death or bodily injury to any person
caused by or arising out of the use of the vehicle on road. The expression
"liability" which may be incurred by him" is meant as covering
any liability arising out of the use of the vehicle. It will thus be seen that
the person must be under a liability and that liability alone is covered by the
insurance policy.
897 Section 96 of the Act also makes the
position Clear. It provides that when a judgment in respect of such a liability
as is required to be covered by a policy is obtained against any person insured
by the policy, then the insurer shall pay to the person entitled the benefit of
the decree as if he were a judgment-debtor. The liability is thus limited to
the liability as is covered by the policy.
The main contention of Mr. Hattangodi, who
supported the view of the High Court that negligence need not be proved is that
Chapter VIII of the Act is a consolidating and amending Act relating to motor
vehicles and their use on a public place and as such it contains the entire
law, procedural as well as substantive, and that the common law or law of torts
is no more applicable and if death or bodily injury arises out of the use of
motor vehicles in a public place a liability arises. Strong reliance was placed
by him on section 110A of the Act which provides for application for compensation
arising out of an accident to the Claims Tribunal. The learned counsel would
submit that under section 110B the Claims Tribunal, after holding an inquiry,
may make an award determining the amount of compensation which appears to it to
be just and specifying the person or persons to whom the compensation shall' be
paid. According to counsel when an injury is caused by the use of the vehicle
in a public place the Claims Tribunal is at liberty to award an amount of
compensation which appears to it to be just.
This plea ignores the basic requirements of
the owner's liability and the claimant's right to receive compensation.
The owner's liability arises out of his
failure to discharge a duty cast on him by law. The right to receive
compensation can only be against a person who is bound to compensate due to the
failure to perform a legal obligation. If a person is not liable legally he is
under no duty to. compensate anyone else. The Claims Tribunal is a tribunal
constituted by the State Government for expeditious disposal of the motor
claims. The general law applicable is only common law and the law of torts. If
under the law a person becomes legally liable then the person suffering the
injuries is entitled to be compensated and the Tribunal is authorised to
determine the amount of compensation which appears to be just. The plea that
the Claims Tribunal is entitled to award compensation which appears to be just
when it is satisfied on proof of injury to a third party arising out of the use
of a vehicle on a public place without proof of negligence if accepted would
lead to strange results.
Section 110(1) of the Act empowers the State
Government to constitute, one or more Motor Accidents Claims Tribunals for such
area as may be specified for the purpose of adjudicating upon claims for
compensation in respect of accidents involving the death or bodily injury to
persons. The power is optional and the State Government may not constitute a
Claims Tribunal for certain areas. When a claim includes a claim for
compensation the claimant has an option to make his claim before the Civil
Court. Regarding claims for compensation therefore in certain eases Civil
Courts also have jurisdiction. If the contention put forward is accepted so far
as the Civil 898 Court is concerned it would have to determine the liability of
the owner on the basis of common law or torts while the Claims Tribunal can
award compensation without reference to common law or torts and without coming
to the conclusion that the owner is liable. The concept of owner's liability
without any negligence is opposed to the basic principles of law. The mere fact
that a party received an injury arising out of the use of a vehicle in a public
place, cannot justify fastening liability on the owner. It may be that a person
bent upon committing suicide may jump before a car in motion and thus get
himself killed. We cannot perceive by what reasoning the owner of the car could
be made liable.
The proof of negligence remains the lynch pin
to recover compensation. The various enactments have attempted to mitigate a
possible injury to the claimant by providing for payment of the claims by
insurance.
In Halsbury's Laws of England, 3rd Ed., Vol.
32, at paragraph 751 at p. 366 the nature of insurance required is stated as
follows :"The conditions to be fulfilled in order to render the use of a
motor vehicle lawful are (1) that there must be a policy of insurance. in force
in relation to the use of the vehicle on a road, and (2) that it must be a
policy complying with the relevant statutory requirements." At paragraph
752 at page 366 the general nature of liabilities required to be covered are
stated as under:
"In order to comply with the statutory
requirements, a policy must provide insurance cover in respect of any liability
which may be incurred by such person, persons or classes of persons as are
specified in the policy, in respect of the death of, or bodily injury to, any
person (subject to specific exceptions) caused by, or arising out of the use of
the vehicle on a road." The authorised insurers issuing a policy pursuant
to the statutory requirements are obliged to indemnify the person specified in
the policy in respect of any liability which the policy purports to cover in
the case of that person or classes of persons.***" (Paragraph 758 at p.
369). These passages clearly indicate that the nature of the liability required
to be covered is the liability which may be incurred by or arising out of the
use of a vehicle on a road by the person.
A person is not liable unless he contravenes
any of the duties imposed on him by common law or by the statute. In the case
of a motor accident the owner is only liable for negligence and on proof of
vicarious liability for the acts of his servant. The necessity to provide
effective means for compensating the victims in motor accidents should not
blind us in determining the state of law as it exists today.
Justice Vaidya in this judgment under appeal
after referring various decisions expressed his view as follows :-"It is
not necessary to discuss all these cases because, in any view, in none of those
cases was the question agitated 899 as to what exactly was meant by tort in the
context of automobile accidents and injuries resulting. there from, for which
more often than not human minds, hands or legs are not always accountable, in
the later half of the twentieth century. The question has engaged the minds of
jurists all over the common law world .... " The learned Judge proceeded
further to observe that whether we apply the test of torts or not the liability
to pay compensation arises when the injuries are caused by the use of the motor
vehicle and the Tribunal can adjudicate upon the liability and determine just
compensation. The learned Judge further observed: "In my opinion, public
good requires that everyone injured, viz., by the use of motor vehicle, must
immediately get compensation for the injury.
Every person has a right to safety and
security of his person irrespective of fault or negligence or carelessness or
efficient functioning of the motor vehicle. Every person has a right to claim
compensation so that is the only way of remedying the injury caused to him in a
modern urbanised, industrialised and automobile ridden life." In a
separate judgment Justice Mridul has expressed himself in the same tenor. The
learned Judge after referring to section 95(1)(b) (i) and (1)(b)(ii) of the Act
observed that perimeters of liability in clauses (i) and (ii) must be held to
be the same because to both the liability of the owner or the driver exists and
is made compulsorily insurable. The learned Judge while noting the difference
in the wording of the two, clauses observed that it is inconceivable that the
legislature would intend absolute liability in cases covered by clause (ii) and
not in cases covered by clause (i).
The reasoning of the two learned Judges is
unacceptable as it is opposed to basic principles of the owner's liability for
negligence of his servant and is based on a complete misreading of the
provisions of Chapter VIII of the Act. The High Court's zeal for what it
considered to be protection of public good has misled it into adopting a course
which is nothing short of legislation.
Equally unacceptable is the view of the Bench
of the Andhra Pradesh High Court in Haji Zakaria and others v. Nashir Cama and
others(1), wherein the court concluded without any hesitation that the liability
to compensate arises when death or bodily injury to any person or damage to any
property of a third party is caused by or arising out of the use of the vehicle
in a public place and to infer the qualifications or limitations that such
death or bodily injury should have been caused before such liability arises
only on account of rash and negligent driving would amount to introducing
something which is not there and would be violating and transgressing the Clear
provisions of the statute and intention of the legislature.
(1) A.I.R. 1975 A.P. 171.
900 The Patna High Court in New India
Assurance Co. Ltd.
v. Sumant Devi and Others(1) held that the
liability of the insurance company is absolute but is only limited to the
extent provided by the insurance policy. As against this view all the other
High Courts have held that the liability to compensate arises only on a finding
of negligence. It may not be out of place to mention that those automobile
accidents are subject to the law of negligence. Modern proposals consistently
favour the Social Insurance model under which benefits are payable directly by
the fund without any reference at all to the injurer while retaining an option
for the victim to claim either limited benefits on a nonfault basis or full damages
for negligence.
Consistent with this line of thinking is the
judgment of the Kerala High Court in Kesavan Nair v. State Insurance
Officer(2), where Justice Krishna Iyer expressed himself thus: "Out of a
sense of humanity and having due regard to the handicap of the innocent victim
in establishing the negligence of the operator of the vehicle a blanket liability
must be cast on the insurers." Modern legislation has also provided
insurance cover for all air and rail passengers and recently by amendment of
section 95 of the Act against death or bodily injury to passengers of a public
service vehicle caused by or arising out of the use of a vehicle in a public
place.
In a recent judgment of Madras High Court a
Division Bench is A.A.O. Nos. 607 of 1973 and 296 of 1974 M/s. Ruby Insurance
Co. Ltd. vs. V. Govindaraj and others, delivered on 13th December, 1976, has
suggested the necessity of having social insurance to provide cover for the
claimants irrespective of proof of negligence to a limited extent say Rs.250 to
Rs. 300 a month. It has also suggested that instead of a lump sum payment which
does not often reach the claimants a regular monthly payment to the dependants
by the nationalised insurance company or bank would be desirable. Unless these ideas
are accepted by the legislature and embodied in appropriate enactments Courts
are bound to administer and give effect to the law as it exists today.
We conclude by stating that the view of the
learned Judges of the High Court has no support in law and hold that proof of
negligence is necessary before the owner of the insurance company could be held
to be liable for the payment compensation in a motor accident claim case.
But as we have found that the vehicle owner
was liable for negligence of the driver and have upheld the amount of damages
awarded, we dismiss this appeal with cost to the first respondent.
P.B.R. Appeal dismissed.
(1) 1971 A.C.J. 58. (2) 1971 A.C.J. 219.
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