New India Assurance Company Vs. Shri
Satpal Singh & Ors [1999] INSC 411 (2 December 1999)
K.T.Thomas, M.B.Shah
THOMAS, J.
Leave granted.
A 10 year old girl met with her death in a
truck accident. Her name was Dupinder Kaur. The accident occurred while she was
travelling in the truck on 11.3.1990.
She died on the spot. Her father, brother and
sister made a joint claim for compensation under the Motor Vehicles Act, 1988
(for short the 'new Act). The Motor Accident Claims Tribunal before which the
claim was made passed an award in a sum of Rs.25,000/~ to the claimants. The
owner of the truck was found liable to pay the compensation amount. M/s. New
India Assurance Company, the insurer had been directed to make the amount good
with interest, as the vehicle was then covered by an insurance policy issued by
that company.
The claimants as well as the Insurance
Company challenged the said award. The farmer was dissatisfied with the quantum
of compensation awarded. The Insurance Company was aggrieved as the liability
was imposed on them. The Insurance Company put forward a contention that the
deceased Dupinder Kaur was a gratuitous passenger in the truck and hence no
liability can be fastened with the insurer, but that contention was repelled.
A Division Bench of the High Court dismissed
the appeal filed by the Insurance Company but allowed the other appeal by
doubling the compensation amount. Hence this appeal by special leave at the
instance of the Insurance Company. After hearing learned counsel for the
appellant we felt that it is not necessary to send notice to the respondents to
contest the appeal as there is no scope for absolving the Insurance Company
from liability.
Learned counsel for the appellant ' banked on
the decision of a three Judge Bench this Court in Mallawwa and SCC 403} to
disclaim liability on the premise that the victim of the accident was
gratuitous passenger in the vehicle covered by the insurance policy. But the
said decision was rendered under Section 95 of the Motor Vehicles Act, 1939
(which can be referred to as 'the old Act' ). The aforesaid provision contained
a rider in clause (ii) of the proviso to sub-section (1) which is abgent in the
corresponding provision in the New Act. To pinpoint the said distinction we
extract Section 95(1) of the old Act as under:
"95. Requirements of policies and limits
of liability.- (1) In order to comply with the requirements of this Chapter, a
policy of insurance may 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 (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 of
or bodily injury to any person or damage to any property of a third party
caused by 3 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;
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 employees 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, in respect of the death of, or bodily injury to, any
such employee- (a) engaged in driving the vehicle, or (b) it is a public
service vehicle, engaged as a conductor of the vehicle or in examining tickets
on the vehicle, or (c) if it is a goods vehicle, being carried in the vehicle;
or (ii) except where the vehicle is a vehicle in which passengers are carried
for hire or reward or by reason of or in pursuance of contract of employment,
to cover liability in respect of the death of or bodily injury to persons being
carried in or upon or entering or mounting or alighting from the vehicle at the
time of the occurrence of the event out of which a claim arises, or (iii) to
cover any contractual liability." As per ".the proviso when read .with
its clause (ii) It is clear that the policy of insurance shall not be required
to cover liability in respect of the death of or bodily injury to persons who
wore gratuitous passengers of that vehicle. This Court, has' held in Pushpabai
Parshottam Udeshi and others vs. M/s. Ranjit Ginning & Pressing Co.pvt.
Ltd. and anr. [AIR 1977 sc 1735 » 1977 (2) SCC 745) as under:
"Sections 95(a) and 95(b)(l) of the Motor
Vehicles Act adopted the provisions of the .English Road Traffic Act, 1960, and
excluded the liability or the insurance company regarding the risk to the
passengers. Section 95 provides that a policy of insurance must be a policy
which insures the persons against any liability which may be incurred by him in
respect of death or bodily injury be 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 plea that the words 'third
party",are wide enough to cover all persons except the person and the
insurer is negatived as the insurance cover is not available to the passengers
made clear by the proviso to sub-section which provides that a policy shall not
be required. ............ Therefore it is not required that a policy of insurance
should cover risk to the passengers who are no carried for hire or reward. As
under Section 95 the risk to a passenger in a vehicle who is not carried out
hire of reward is not required to be insured the plea of the counsel for the
insurance-. company will have to be accepted and the insurance company held not
liable under the requirements of the Motor Vehicles Act." in fact the said
ratio has been approved by the three Judge Banch in Mallava vs. Oriental
Insurance Co. Ltd.(supra). At .the same time learned Judges pointed out that
the old Act is now repealed by the new Acr and Section 147 of the new Act
correspondinq to Section 95 of the old Act has been siubstantially altered and
hence the above interpretation ,of Section 95 of the old Act will govern the
cases which have arisen under the old Act.
Provision to Section 147 (1) of the. new Act
'shows that it is a recast by provision by placng the erstwhile clause (iii) as
the present clause (ii) In- other words, clause (ii) of the proviso in Section
95(1) of the old Act is totally non-existent in the proviso to Section 147 (1)
of the new Act.
Under Section 147 of the new Act, the policy
must be a policy which 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 of or bodily {injury to any person,
including owner of the goods or his authorised 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 place.
The proviso to the said sub-section is not
relevant here a it pertains to death or bodily injury to the employee mentioned
therein. Sub-section (2) provides that a policy of insurance shall cover any
liability incurred in respect of any accident, up to the following limits,
namely:- (i). save as provided in clause (b) the amount of liability incurred;
(ii) in respect of damage to any property of
a third party, a limit: of rupees six thousand:
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.
Hence, under sub-section (2), there is no
upper limitation for the insurer regarding the amount of compensation awarded
in respect, of death or bodily injury of a victim to the accident, It is
therefore, apparent that the limit contained in the old Act has been removed
and the policy should insure the liability incurred and cover injury to any
person including owner of the goods or his authorised representative carried in
the vehicle. The Legislature has also taken care even the policies which were
in force on the date of commencement of the Act by specifically providing that
any policy of insurance containing any limit regarding insurer's liability
shall continue to be effective for a period of four months from commencement of
the Act or till the date of expiry of such policy, whichever is earlier.
This means, after the said period of four
months a new insurance policy consistent with the new Act is required to be
obtained.
The resuit is that under the new Act an
insurance policy covering third party risk is not required to exclude
gratuitous passengers in a vehicle, no matter chat the vehicle is of any type
or class. Hence the decisions rendered under the old Act vis-a-vis gratuitous
passengers are of no avail while considering the liability of the insurance
company in respect of any accident which occurred or would occur after the new
Act came into force.
The Division Bench of the High Court has
rightly repelled the contention of the appellant - insurance company on the
aforesaid score. We therefore, dismiss these appeals.
Back
