Ramesh
Kumar Vs. National Insurance Co. Ltd. & Ors [2001] Insc 400 (17 August 2001)
A.P.
Misra & U C. Banerjee Misra, J.
With C.A. No. 5051/1999 National Insurance Co. Ltd. vs. Ramesh
Kumar & Ors. C.A. No. 623/1997 National Insurance Co.
Ltd. vs. Smt. Krishni & Ors. C.A.
No. 40/1986 National Insurance Co. Ltd. vs. Pavankumar Keshavlal Shah &
Ors. C.A. No. 5457 of 2001 (arising out of
SLP © 20312/1997) National Insurance Co. Ltd. vs. Sushil Kumar & Ors. C.A. No. 5458 of 2001 National Insurance Co. Ltd. vs. (arising
out of SLP © No. 20313 of 1997) Sushil Kumar & Ors. Oriental Fire &
Gen. Ins. Co. Ltd. & Ors. C.A. No.
10846-10850 of 1996 New India Assurance Co. Ltd. vs. Manjulaben Virji &
Ors. ETC. C.A. No. 5459 of 2001 New India
Assurance Co. vs. (arising out SLP© No. 13954 of 2000) Lalitha & Ors. C.A. No. 5460 of 2001 National Insurance Co. Ltd. vs. (arising
out of SLP© No. 14855 of 2000) Lalitha & Ors. National Insurance Co. Ltd.
& Anr. vs. C.A. No. 1090 of 1999 New India
Assurance Co. vs. Hatuben & Ors. C.A.
No. 521 of 1993 National Insurance Co. vs. Dundaiah Shankaraiah Matapathi &
Anr. C.A. No. 522 of 1993 National Insurance
Co. Ltd. vs. Mallappa Mahadeva Walada & Anr. C.A. No. 523 of 1993 National Insurance Co. Ltd. vs. Ellappa
& Anr. C.A. No. 5461-62 of 2001 Bal Shantaben
& Anr. No. 15554-15555 of 2000) National Insurance Co. Ltd. & Ors. C.A. No. 1249 of 1999 New India Assurance Co. vs. Zansubai
& Ors. C.A. No. 1253 of 1999 New India
Assurance Co. vs. Jadiben & Ors. C.A.
No. 1255 of 1999 New India Assurance Co. vs. OD. Parubai Channa & Ors. C.A. No. 1254 of 1999 New India Assurance Co. vs. OD. Bai
Paru Khema & Ors. C.A. No. 1251 of 1999 New India
Assurance Co. vs. Rukhiben Pachanji Nai & Ors. C.A. No. 1252 of 1999 New India Assurance Co. vs. Ajmal Mafaji
Thakor & Ors. (arising out of SLP No. 3938 of 1996) Gangaben & Ors. Ramesh
Chand & Ors. Ramesh Chand & Ors. Ramesh Chand & Ors. Ramesh Chand
& Ors. (arising out of SLP © No. 9873 of 2000) Asha Rani & Ors. Bhag Devi
& Ors. ETC. Uttam Namdeo Patil & ANR. (arising out of SLP ©
No.4098-4122 of 2001) Ganeshlal Nathuji Chaudhary & 0rs. CA No. 5411-16 of
2001 Oriental Insurance Co. Ltd., A.P. (arising out of SLP © No. 11760 of 2001)
Potuganti Chimmannagari Basavamma & Ors. (arising out of SLP ©
No.10938-10947 of 2000) National Insurance Co. LTD. & Ors. C.A. No. 4458 of 1999 Vidha Devi (Dead) Thru Ram Prasad Mittan
C.A. Ndo. 5223 of 2000 New India
Assurance Co. Ltd. And Anr. VS. Chaman Lal & Anr. (arising out of SLP © No.
12889-93of 2001) Bharamavva & Ors. K.J. Abraham & Ors. (arising out of
SLP © No. 12627-38 of 2000) Lala & Ors. Roshni Devi & Ors. Shanti &
Ors. (arising out of SLP © No. 8116-220f 2001) Shanta Devi & Ors. (arising
out of SLP © No. 6956-57 of 2001) Lehri & Ors. (arising out of SLP © No.
10419-22 of 2001) Pagedala Venkata Narasamma & Ors. Etc. Etc. Ladhu Devi
& Ors. (arising out of SLP © No. 3408 of 2001) Bharati Naskar & Ors. (arising
out of SLP © No. 3409 of 2001) Krishan Mondal & Ors. Khiali Ram & Ors. (arising
out of SLP © No. 8765-66 of 2001) Sita & Ors. (arising out of SLP © No.
9892-93 of 2001) Bhanwaridevi & Ors.
J U D
G E M E N T
Leave
granted.
The
aforesaid sets of cases have been classified in three categories, which raises
common question about the liability of payment of compensation by the Insurance
Company under the Motor Vehicles Act.
Category
I CA No. 5010 of 1999, C.A. No. 5051/1999, C.A. No. 623/1997, C.A. No. 40/1986,
C.A. No. 5457 of 2001(arising out of SLP © 20312/1997), C.A. No. 5458 of
2001(arising out of SLP © No. 20313 of 1997), C.A. No. 3393-3395 of 1996, C.A.
No. 10846-10850 of 1996, C.A. No. 5459 of 2001 (arising out SLP© No. 13954 of
2000), C.A. No. 5460 of 2001 (arising out of SLP© No. 14855 of 2000), C.A. No.
950-957 of 1999, C.A. No. 1090 of 1999, C.A. No. 521 of 1993, C.A. No. 522 of
1993, C.A. No. 523 of 1993, C.A. No. 5461- 62 of 2001, (arising out of SLP© No.
15554-15555 of 2000), C.A. No. 1249 of 1999, C.A. No. 1253 of 1999, C.A. No.
1255 of 1999, C.A. No. 1254 of 1999, C.A. No. 1251 of 1999, C.A. No. 1252 of
1999, C.A. No. 5463 of 2001, (arising out of SLP No. 3938 of 1996), CA No. 6542
of 1994, CA No. 6543 of 1994, CA No. 6544 of 1994, and CA No. 6545 of 1994,
Category II CA No. 5385 of 2001 (arising out of SLP © No. 9873 of 2000), C.A. 16793-16796
of 1996, C.A. 229 of 1999, CA No.5386-5410 of 2001 (arising out of SLP ©
No.4098-4122 of 2001), CA No. 5411-16 of 2001, (arising out of SLP ©
No.11427-11432of 2001), CA No. 5417 of 2001 (arising out of SLP © No. 11760 of
2001), CA No. 5418-27 of 2001 (arising out of SLP © No.10938-10947 of 2000),
C.A. No. 4458 of 1999 , C.A. No. 5223 of 2000, CA No.5428-32 of 2001 (arising
out of SLP © No. 12889-93of 2001), C.A. No. 1697 of 1999, CA No. 5433-44 of
2001 (arising out of SLP © No. 12627-38 of 2000), C.A. No. 6237 of 1997, C.A. No.
272-77 of 1999, CA No. 5445-50 of 2001 (arising out of SLP © No. 8116-22 of
2001), CA No. 5451-52 of 2001 (arising out of SLP © No. 6956-57 of 2001),CA No.
5453-56 of 2001 (arising out of SLP © No. 10419-22 of 2001), and C.A. No.3843
of 2000, Category III CA No. 5464 of 2001(arising out of SLP © No. 3408 of
2001), CA No. 5465 of 2001(arising out of SLP © No. 3409 of 2001), C.A. NO. 6755
of 1999, CA No. 5466-67 of 2001(arising out of SLP © No. 8765-66 of 2001), and
CA No. 5468-69 of 2001(arising out of SLP © No. 9892-93 of 2001) The first
category of cases arise out of the Motor Vehicles Act, 1939 (hereinafter
referred to as Old Act). The question raised for this category is:
Whether
insurance company is liable to pay the compensation on account of the death or
bodily injury of the gratuitous passengers including owner or his
representative of the goods, travelling in a goods vehicle under Section 95 of
the said Act? The second category of cases arise out of the Motor Vehicles Act,
1988 (hereinafter referred to as New Act) prior to its amendment in 1994.
In
this category also similar question is raised. The third category of cases also
arise under the new Act but after its amendment by Act No.54 of 1994.
In
this category also the same question is raised Thus the question raised in all
these cases is about the liability of the insurance company, for the payment of
compensation to the claimants for those falling under the aforesaid field on
account of their death or bodily injury while travelling in a goods vehicle. We
are disposing of through this judgment, the group of cases falling under
category one and three respectively. So far cases covered under category two,
we will be dealing with it through a separate judgment and order.
The
category one cases are all in which a claim petition has been filed by the
claimants on account of death or bodily injuries of either the owners or his
representative or the gratuitous passengers. In all these cases claimant
claimed compensation under Section 95(1)(b)(i) and clause (ii) of the proviso
after its amendment in 1969 under the old Act. The submission is, it is the
insurance company, which is liable to pay the compensation not withstanding
that vehicle involved in the accident is a goods vehicle. On the other hand
submission for the insurance company is that they are not liable for those
passengers who travels by a goods vehicle, in view of the language used in
Section 95 of the old Act. The cases under this category need not detain us
long as this question has been directly raised and decided in the case of Mallawwa
(Smt.) and Ors. vs. Oriental Insurance Co. Ltd. and Ors.(1999) 1 SCC 403. In
this case the accidents were for the period between 1971 and 1985. This Court
held, the insurance company is not liable for any damage in cases the
gratuitous passengers including owner of the goods or his representative who travelled
in a goods vehicle. So the first category of cases are disposed of in term of
this declaration that liability to pay compensation to the claimants of such
person is not on the insurance company but on the owner of the goods vehicle.
In case insurance company had made part or full payment towards such
compensation awarded, the same shall not be refunded from the claimant but is
recoverable by the insurance company from the owners. In case the amount has
been withdrawn by the claimants on furnishing any security, the said security
shall stand discharge. In case no payment or part payment has been made by the
claimant, we direct the owners of the vehicle to pay the awarded compensation
to the claimant within a period of three months from today.
Accordingly
the first category of cases are disposed of.
This
takes us to the third category of cases where similar question is raised
regarding liability of the insurance company under the new Act after its 1994
amendment. The submission for the claimant is, the insurance company is liable
to pay the compensation both in view of the decision of this Court in New India
Assurance Company vs. Satpal Singh and Ors., (2000) 1 SCC 237 and also in view
of its 1994 amendment. This Court in this case, while interpreting Section
147(1)(i) and (ii) of the New Act holds, the insurance company liable to pay
the compensation both for the owner and his representative and also for the gratuitous
passengers travelling in a goods vehicle. In this third category, in spite of
the said declaration the claimants have confined their claim only for the owner
or his representative who were travelling in a goods vehicle and not for the
gratuitous passenger.
Since Satpal
Singh (supra) confers right over gratuitous passengers also, which is not
claimed by any of the claimants under this category, thus declaration of law in
Satpal Singh (Supra) is not required to be considered for this category, as claim
for the owner and his representative is not disputed even by the learned
counsel for the insurance company, after its aforesaid 1994 amendment, that
insurance company is liable to pay compensation for such person even when they
were travelling in a goods vehicle. This is in view of 1994 amendment in
sub-clause (I) of Section 147 (1)(b) of the new Act in which the following
words were brought in: injury to any person, including owner of the goods or
his authorised representative carried in a vehicle.
Thus
this category of cases are also disposed of by declaring that compensation
awarded in such cases where deceased or injured persons were travelling in a
goods carriage who were owner or his authorised representative, the insurance
company is liable to pay the compensation.
Any
compensation or part of it not paid shall be paid to the claimant by the
insurance company within eight weeks of this order. Any such amount withdrawn
by the claimant which was deposited by the Insurance Company on furnishing
security, such security stands discharged.
Leaned
counsel appearing for the insurance company has submitted that even though the
insurance company is liable to pay to the legal representatives of the owner or
authorised representative, the question is, whether those travelling were truly
owners of the goods or not? This in our considered opinion is a question of
fact which we need not advert. Only in cases it is recorded by the Tribunal
that they were not the owners then only insurance company could succeed that they
are not liable to pay. In any case if insurance company has not raised any such
issue they cannot be permitted to raise it now. Unless such an issue was
raised, foundation laid in the pleading and if not adjudicated by the Tribunal
thereafter if a ground is raised before the High Court yet not decided there
could be possibility of remanding the case otherwise it cannot be permitted to
be raised. We have not been shown in any of these cases to qualify for the
above. Accordingly we dispose of these cases falling under the third category,
by declaring that the insurance company is liable to pay the compensation for
the deceased or injured persons travelling in a goods carriage, who were either
the owner or his representatives. These appeals are disposed of accordingly.
..J
(A.P. Misra) ..J (U.C. Banerjee) August 17, 2001 IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION CA No. of 2001 (arising out of SLP © No. 9873 of
2000) New India Assurance Co. Ltd. Appellants Versus Asha Rani & Ors. Respondents
with Bhag Devi & Ors. ETC. Uttam Namdeo Patil & ANR. (arising out of
SLP © No.4098-4122 of 2001) Ganeshlal Nathuji Chaudhary & 0rs. CA No. of
2001 Oriental Insurance Co. Ltd., A.P. (arising out of SLP © No. 11760 of 2001)
Potuganti Chimmannagari Basabamma & Ors. (arising out of SLP ©
No.10938-10947 of 2000) National Insurance Co. LTD. & Ors. C.A. No. 4458 of 1999 Vidha Devi (Dead) Thru Ram Prasad C.A. Ndo. 5223 of 2000 New India Assurance Co. Ltd. And Anr.
VS. Chaman Lal & Anr. (arising out of SLP © No. 12889-93of 2001) Bharamavva
& Ors. K.J. Abraham & Ors. (arising out of SLP © No. 12627-38 of 2000) Lala
& Ors. Roshni Devi & Ors. Shanti & Ors. (arising out of SLP © No.
8116-220f 2001) Shanta Devi & Ors. (arising out of SLP © No. 6956-57 of
2001) Lehri & Ors. (arising out of SLP © No. 10419-22 of 2001) Pagedala Venkata
Narasamma & Ors. Etc. Etc. Ladhu Devi & Ors.
J U D
G E M E N T
MISRA,
J.
The
aforesaid sets of appeals were listed under category two out of the three
categories. The arguments were heard, compositively for all the three
categories. We have delivered judgment today for category one and three, while
we are passing this order for the appeals falling under category two.
The
appeals falling under first category were those which fell under the Motor
Vehicles Act, 1939 (hereinafter referred to as Old Act). The appeals falling
under second category are those which falls under Motor Vehicles Act 1988
(hereinafter referred to as new Act), prior to its 1994 amendment, while the
appeals falling under category three were those falling under the new Act but
those after the 1994 amendment.
Learned
counsel for the insurance company submits, that in New India Assurance Compay
vs. Satpal Singh and Ors. (2000) 1 SCC 227 this Court held that insurance
company is liable to pay compensation in all cases where the deceased or
injured persons are gratuitous passengers including owner or his representative
of the goods while travelling in a goods carriage under Section 147 of the new
Act. He seeks reference of this point to a larger Bench as it vitally affects
Insurance Company and as relevant provisions of the new Act were not placed
before this Court and if it were placed, a different conclusion would have
come.
This
Court in Satpal Singh (Supra) held:
The
result 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 that
the vehicle is of any type or class. Hence the decisions rendered under the old
Act vis-ą-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.
To
Section 95 of the old Act the corresponding section is Section 147 of the new
Act, which deals with liability to pay the compensation. The relevant portion
of Section 95 under the old Act and Section 147 of the new Act is quoted
hereunder:
Section
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 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 no 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 Workmens
Compensation Act, 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 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;
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 to 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 public place.]
(2)
Subject to the proviso to sub-section (1) a policy of insurance shall cover any
liability incurred in respect of any one accident up to the following limits,
namely :- [(a) where the vehicle is a goods vehicle, a limit of one lakh and
fifty thousand rupees in all, including the liabilities, if any, arising under
the Workmens Compensation Act, 1923, in respect of the death of, or bodily
injury to, employees (other than the driver), not exceeding six in number,
being carried in the vehicle;]
(b) where
the vehicle is a vehicle in which passengers are carried for hire or reward or
by reason of or in pursuance of a contract of employment, -
(i) in
respect of persons other than passengers carried for hire or reward, a limit of
fifty thousand rupees in all;
(ii)
in respect of passengers, a limit of fifteen thousand rupees for each
individual passenger;] (c) save as provided in clause (d), where the vehicle is
a vehicle of any other class, the amount of liability incurred;
(d)
irrespective of the class of the vehicle, a limit of rupees [six thousand] in
all in respect of damage to any property of a third party] Section 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 authorised insurer; or (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, including owner of the goods
or his authorised representative carried in the vehicle](brought in by
amendment through Act No. 54 of 1994) 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;
Provided
that a policy shall no 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 Workmens 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 a 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 public place.]
(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 one
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 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.
By
comparing these two sections, what emerges is that clause (ii) to the proviso
of Section 95(1)(b) under the old Act has been deleted and clause (iii) has
been re-numbered as (ii) in Section 147 of the new Act. Sub- Section (2) of
Section 95 is also modified under the new Act through sub- sections (2) of
Section 147, which refers to quantum of compensation to which we are not
concerned. The submission for the insurance company is, Ltd. & Ors., (1999)
1 SCC 403 held insurance company not liable to pay the compensation but it has
been distinguished in Satpal Singh (Supra) that it was under the old Act while
the case in hand is under the new Act. The submission is, mere deletion of
sub-clause (ii) to the proviso of Section 95 (1)(b) under the old Act by itself
would make no difference to hold the liability to fall on the insurance
company. This apart some of the distinguishing features in the new Act, to
which attention was not drawn would make a difference in drawing the
conclusion.
The
first striking distinguishing feature pointed out is with reference to the
definition of the goods vehicle as defined under the old Act and the goods
carriage as defined under the new Act. Section 2(8) of the old Act defines good
vehicle:
2(8):
goods vehicle means any motor vehicle constructed or adapted for use for the
carriage of goods, or any motor vehicle not so constructed or adapted when used
for the carriage of goods solely or in addition to passengers.
Under
the new Act goods vehicle is substituted by the words goods carriage. There is
no definition of goods vehicle. It is defined under Section 2(14) of the New
Act as hereunder:
Section
2(14): goods carriage means any motor vehicle constructed or adapted for use
solely for the carriage of goods, or any motor vehicle not so constructed or
adapted when used for the carriage of goods.
The
significant difference between the two definitions is that under the old Act
the definition includes or in addition to passengers, while these words are
deleted while defining the goods carriage under the new Act.
The
submission is, this exclusion itself is indicative that passengers are not to
travel in a goods carriage.. The second distinguished feature pointed out is
with reference to Section 149 under the new Act. The submission is, by virtue
of sub-section (2) of Section 149 the defence which is permissible to the
insurer is obliterated, in view of the declaration of law in Satpal Singh
(Supra). The relevant portion of Section 149 sub-section (2) is quoted
hereunder:
149: Duty
of insurers to satisfy judgments and awards against persons insured in respect
of third party risks (1)..
(2) No
sum shall be payable by an insurer under sub-section(1) in respect of any
judgment or award unless, before the commencement of the proceedings in which
the judgment or award is given the insurer had notice through the Court or, as
the case may be, the Claims Tribunal of the bringing of the proceedings, or in
respect of such judgment or award so long as execution is stayed thereon
pending an appeal; and an insurer to whom notice of the bringing of any such
proceedings is so given shall be entitled to be made a party thereto and to
defend the action on any of the following grounds, namely:-
(a) that
there has been a breach of a specified condition of the policy, being one of
the following conditions, namely:-
(i) a
condition excluding the use of the vehicle (a) for hire or reward, where the
vehicle is on the date of the contract of insurance a vehicle not covered by a
permit to ply for hire or reward, or
(b) for
organised racing and speed testing, or
(c) for
a purpose not allowed by the permit under which the vehicle is used, where the
vehicle is a transport vehicle, or
(d) without
side-car being attached where the vehicle is a motor cycle; or
(ii) a
condition excluding driving by a named person or persons or by any person who
is not duly licensed, or by any person who has been disqualified for holding or
obtaining a driving licence during period of disqualification; or
(iii)
a condition excluding liability for injury caused or contributed to by
conditions of war, civil war, riot or civil commotion; or
(b) that
the policy is void on the ground that it was obtained by the non-disclosure of
a material fact or by a representation of fact which was false in some material
particular.
The
submission is, Sub-section (2) declares that no sum is payable by the insurer,
if any of the grounds mentioned under various sub-clauses of the sub-section
(2) is proved to exist. For example, no sum is payable by the insurer under
sub-section (2) if there has been a breach of specified conditions of the
policy, namely, where the vehicle on the relevant date is not covered by a
permit to ply for hire or reward and if it plies for the same, i.e., in case
the insured uses the vehicle for a purpose not allowed by the permit. If a
permit for a goods carriage is not meant for the passengers to be carried and
if passengers travel, the insurer would not be liable to pay the compensation.
This defence of the insurer would not be available which stands negated in view
of the declaration of law in Satpal Singh (Supra).
This
apart, submission is also with reference to the deletion of sub- clause (ii) of
proviso to Section 95 (1)(b) of the old Act that this by itself would make no
difference for drawing conclusion different from what was declared by this
Court in Malwa (Smt.) supra, if various earlier decisions of courts and
amendment under the old Act is taken into consideration.
We may
usefully refer here the decision of the Karnataka High Court in Oriental
Insurance Co. Ltd. vs. Smt. Irawwa and Ors. AIR 1992 Karnataka 321. This
judgment has very significantly brought the difference between Section 147 of
the new Act and Section 95 of the old Act with reference to the definition
clause. It reads:
It may
be seen that S.147 of the 1988 Act, like S.95 of the 1939 Act, apart from
prescribing the compulsory coverage in respect of third party risks, prescribed
the compulsory coverage against death of or bodily injury to any passenger in a
Public Service Vehicle caused by or arising out of the use of the vehicle in a
public place. The proviso to S.147 of the 1988 Act which is similar to the
corresponding Proviso to S.95(1) of the 1939 Act, makes it clear that
compulsory coverage in respect of drivers of any motor vehicle, conductors of
public service vehicles and employees carried in a goods vehicle shall be
limited to the liability under the Workmens Compensation Act. Under S.147(2) of
the Act, while the liability in respect of damage to any property of third
party is limited to Rs. Six thousand as regards the liability in respect of
passengers as also third parties it is made equal to the liability incurred.
Section 2(35) of the 1988 Act which defines Public Service Vehicle is similar to
S. 2(25) of the 1939 Act and does not include a goods carriage. The difference
in the definition goods vehicle given in S.2(8) of the 1939 Act and the goods
carriage given in S.2(14) of the 1988 Act is significant. While the definition
given in the 1939 Act gave an indication, goods vehicle could carry some
passengers, the definition in 1988 Act omits the words in addition to
passengers and states that goods carriage means any motor vehicle constructed
or adapted for use solely for the carriage of goods.
Therefore,
the question whether risk in respect of passengers carried in a goods vehicle
should be covered by an insurance policy does not arise at all under the 1988
Act.
This
question of the liability of the insurance company in respect of gratuitous passengers
travelling in a goods vehicle has been in issue before various High Courts
under the old Act which has led to the conflicting judgments. As we have
recorded earlier, Satpal Singh (Supra) held, insurance company liable both for
the gratuitous passengers and the owners or his representative of the goods,
while interpreting Section 147 of the new Act. This was based on the fact of
deletion of Clause (ii) of the proviso of the Section 95(1) of the old Act. It
is relevant to refer to some of the decisions with brief background history
both of the interpretation and incorporation of the said sub-clause (ii) of
Section 95 of the old Act and its exclusion, to see whether the decision of Satpal
Singh (Supra) requires reconsideration. It is not in dispute in Mallawwa (Smt.)
and Ors. vs. Oriental Insurance Co. Ltd. and Ors. (1999) 1 SCC 403, this Court
while interpreting Section 95(1) including the said sub-clause (ii) held the
insurance company not liable to pay compensation either to the gratuitous
passengers or to the owners of the goods.
The
full Bench of the Karnataka High Court in National Insurance (ii) held that
this proviso takes care of passengers in public service vehicle only because of
the words used therein, namely, in which passengers are carried for higher or
reward. However, in view of proviso (i) it was held that insurer would be
liable to pay compensation to the employees and the owner of a goods vehicle.
Similar
question came before the full Bench of the Rajasthan High Court, Jaipur Bench
in Santra Bai and Ors. vs. Prahlad and Ors. 1985 ACJ 762. This decision
contains a detailed discussion on the question, whether the said proviso is
confined to public service vehicle only or takes within its hold goods vehicle
also. It was held that the owner of the goods or his employee, if he travels in
the goods vehicle, has to be taken to be a person carried for reward, if not
for hire. Then with reference to the definition of goods vehicle and with
reference to the words used in proviso (ii) it was pointed out that the
legislature has not used the term public service vehicle but used the words
where the vehicle is a public vehicle in which passengers are carried. It was
held, the word used therein would also include goods vehicle and such goods
vehicle can also carry passengers for hire or reward. Thereafter came the full
Bench of the Orissa. In New India (FB).
This full Bench considered the aforesaid two full Benches and came to the
conclusion different from what was held in the said two Benches. The Court held:
The
conclusion is irresistible unless a vehicle is a vehicle meant for carrying
passengers for hire or reward or the said vehicle by reason of or in pursuance
of contract of employment is required to cover the liability in respect of
death of or bodily injury to persons being carried in or upon, the insurer will
not be liable to pay compensation. Admittedly, the owner of goods who has hired
a goods vehicle does not become a person travelling on the vehicle in pursuance
of a contract of employment and even if he is carrying his goods after hiring
the vehicle, the vehicle does not become a vehicle meant for carrying
passengers for hire or reward and consequently, would not come within the
proviso (ii) to section 95(1)(b). To come under the first part of Section 95(1)(b),
proviso (ii), the vehicle in question must be a vehicle which is meant for
carrying passengers for hire or reward and consequently, a goods vehicle will
not come within the proviso. We, therefore, state that proviso to Section 95(1)(b)
did not apply to the passengers carried for hire or reward in a goods vehicle
and it is restricted to such passengers carried in a public service vehicle.
As
aforesaid, in view of the said conflict in the decision, when the matter came
before this Court it settled the issue in the case of Mallawwa (Smt.) (Supra).
This Court in this case approved the aforesaid full Bench decision of the Orissa
High Court. This Court held, while interpreting Section 95(1)(b)(i) and proviso
(ii) under the old Act, only a vehicle which is used for a systematically
carrying of passengers can be said to be a vehicle in which passengers are
carried for hire or reward, hence persons travelling in goods vehicle, whether
owners of the goods or passengers on payment of fare or gratuitous passengers,
could not be covered by proviso (ii) hence the insurer of the goods vehicle is
not liable to pay compensation. This decision also considered and affirmed the
decision of this Court in the case of Pushpabai Purshottam Udeshi and Ors. vs.
M/s. Ranjit Ginning & Pressing Co. (P) Ltd. and Anr. (1977) 2 SCC 745.
Then
came the new Act and the similar question is raised under it.
We
find corresponding to Section 95 of the old Act is Section 147 of the new Act.
The only difference we find in Section 147(1) of the new Act from Section 95(1)
of the old Act is that proviso (ii) which was under the old Act stands deleted
and (iii) is re-numbered as (ii). There is also amendment to sub-Section (2) to
Section 95 of the old Act in sub-section (2) of Section 147 of the new Act
which is in respect of quantum to which we are not concerned.
It is
because of this deletion of clause (ii) to the proviso to Section 95 (1)(b) of
the old Act has been interpreted in Satpal Singh (Supra) to bring liability on
the insurer to pay both for the gratuitous passengers and the owner or his
representative of the goods travelling in a goods carriage.
We
feel as some of the striking features of the new Act were not brought to the
notice of this Court which we are recording hereunder may have bearing to the
conclusion which was arrived at in Satpal Singh (Supra), Viz., (a) Difference
between the definition of Goods Vehicle under the old and Goods Carriage under
the new Act. Under the old Act goods vehicles is defined under Section 2(8) and
under the new Act Section 2(14) defines goods carriage. The significant difference
is, under the old Act the goods vehicle could be used for the carriage of goods
or in addition to passengers while in definition of goods carriage the words or
in addition to passengers stand deleted. The submission is, now goods carriage
cannot carry any passenger. The other striking feature is with reference to
Section 149(2) of the new Act. It is submitted that the defence available to
the insurer under it would be obliterated in view of the declaration of law in Satpal
Singh (Supra). Under New Act, it would be a breach of condition in case vehicle
is used for a purpose other than for which permit has been issued. Thus in a
case a permit is issued for a goods carriage it would not include any
passengers and in case they travel it would be contrary to the mandate of the
statute and thus in view of Section 149(2) no liability could be passed on to
the insurance company. This apart, the effect of the deletion of sub-clause (ii)
to the proviso to Section 95(1)(b) in the new Act also requires
reconsideration.
Accordingly
we feel it appropriate in view of what we have recorded above, Satpal Singh
(Supra) requires reconsideration by a larger Bench. Let this matter be placed
before Honble the Chief Justice for constituting a larger Bench.
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