Oriental Insurance Co. Ltd. vs Ashok Ramvilasji Vyas And Ors.
2004 Latest Caselaw 389 Bom

JUDGMENT

S.T. Kharche, J.

1. This first appeal filed by Oriental Insurance Co. Ltd. takes an exception to the award dated 16.3.1990 passed by the Member, Motor Accidents Claims Tribunal in M.A.C. Petition No. 7 of 1989 whereby the appellant insurance company and the owner of Matador involved in the accident were directed jointly and severally to pay compensation to the claimant-respondent No. 1.

2. Brief facts are required to be stated as under:

The accident occurred on 23.7.1988. On that day the claimant Ashok had boarded Matador bearing No. MZS 677 at Akola for going to Khamgaon along with other passengers after payment of Rs. 7 as fare. Respondent No. 2 is the driver of Matador who drove it in a rash and negligent manner and, therefore, when Matador reached at the spot of accident, it had given dash to truck bearing No. MBS 1755. Respondent No. 3 is the owner of Matador, whereas respondent No. 5 is the owner of the truck and respondent No. 4 is the driver of the truck. The respondent No. 6 is New India Assurance Co. Ltd. with whom the truck was duly insured. It is contended that the claimant Ashok sustained permanent partial disability in the said accident. The claimant took treatment in the hospital and thereafter instituted the claim under Section 110-A of Motor Vehicles Act, 1939 (for short 'the M.V. Act') seeking compensation. The appellant contested the claim by filing written statement and contended that the claimant Ashok was travelling as a passenger in Matador and Matador was not supposed to carry the passengers as per the terms and conditions of the insurance policy and, therefore, there is a breach of the insurance policy and as such Oriental Insurance Co. Ltd. would not be liable to pay the compensation. The parties adduced evidence before Claims Tribunal and on hearing the learned Counsel for the parties, the Tribunal negatived the contentions of the appellant insurance company and held that the appellant insurance company is liable jointly and severally along with the owner of Matador to pay compensation to the claimant. This award and the judgment passed by the Tribunal on 16.3.1990 is under challenge in this appeal.

3. Mr. Bapat, the learned Counsel for the appellant insurance company raised several grounds in this appeal and according to him the main ground on which finding of the Tribunal is challenged is that; there was breach of terms and conditions of the insurance policy. He contended that the claimant himself in the claim petition admitted that he was fare paying passenger and boarded the said Matador along with other passengers and paid Rs. 7 on account of fare for Akola to Khamgaon. Mr. Bapat further contended that the claimant in his deposition admitted that he boarded Matador on payment of fare and, therefore, this would amount to breach of the insurance policy condition. He contended that there were limitations for the use of Matador as indicated in the policy itself and Matador could not have been used for hire or reward. He contended that the owner of Matador did not produce on record any permit obtained by him in accordance with the provisions of the M.V. Act for carrying passengers and, therefore, there was clear breach of the terms and conditions of the insurance policy. He further contended that in the circumstances the appellant insurance company is not liable to pay any kind of compensation to the claimant and the impugned award passed by the Tribunal cannot be sustained in law. He further contended that the driver of Matador, respondent No. 2, was not driving the vehicle in a rash and negligent manner hence the insurance company cannot be held liable to indemnify the owner and this appeal may kindly be allowed. In support of these submissions he relied on the Full Bench decision of this court in case of Oriental Fire & General Ins. Co. Ltd. v. Hirabai Vithal Nikam 1988 ACJ 494 (Bombay). He also placed reliance on the decision of the Apex Court in the case of New India Assurance Co. Ltd. v. Asha Rani and in the case of Oriental Insurance Co. Ltd. v. Devireddy Konda Reddy .

4. Mr. Kaptan, the learned Counsel for the claimant contended that the owner of Matador did not produce any permit on record to show that Matador was supposed to carry passengers and, therefore, he was liable to pay compensation. He contended that Matador was duly insured with the insurance company for the period 25.6.1988 to 24.6.1989 which covers the third party risk on the date of the accident and in such circumstances the appellant insurance company cannot escape from the liability to pay compensation to the claimant. He contended that the Tribunal was perfectly justified in holding the appellant insurance company jointly and severally liable to pay the compensation and no case has been made out for interference in the impugned award and, therefore, the said appeal may kindly be dismissed. In support of these contentions, he relied on the decision of Gujarat High Court in the case of Oriental Fire & Genl. Ins. Co. Ltd. v. Yusuf Musa Chandki 1986 ACJ 500 (Gujarat).

5. This court has given thoughtful consideration to the contentions canvassed by the learned Counsel for the parties. It is not in dispute that in all two vehicles are involved in this accident, i.e., Matador bearing registration No. MZS 677 owned by the respondent No. 3 and it was being driven by the respondent No. 2 and the truck bearing registration No. MBS 1755 owned by respondent No. 5 and it was being driven by the deceased respondent No. 4. It is not in dispute that the said Matador was duly insured with the appellant insurance company for the period 25.6.1988 to 24.6.1989 which covers the third party risk on the date of the accident, i.e., on 23.7.1988. There is also no dispute that the latter vehicle, i.e., the truck was duly insured with New India Assurance Co. Ltd., respondent No. 6 and that it was made stationary on the road by the driver to which dash was given by Matador.

6. There is also no dispute that New India Assurance Co. Ltd., owner and driver of the truck had entered into compromise with the claimant Ashok and settled their dispute regarding payment of compensation in Lok Adalat and as such the appeal filed by New India Assurance Co. Ltd. was disposed of in terms of the compromise.

7. The undisputed position would reveal that the truck was made stationary on the road and the accident occurred in the midnight on Kothri-Taroda diversion, 25 km away from Akola. It is also an undisputed position that it was Matador which had given dash to the truck. The Tribunal also observed that it has been established by the claimant that the accident occurred due to composite negligence on the part of the driver of both the vehicles. The Claims Tribunal considered the evidence on record and recorded the finding that the accident occurred due to rash and negligent driving on the part of the driver of Matador and that the truck was made stationary on the road and was wrongly parked and, therefore, he concluded that the respondents in the claim petition would be jointly and severally liable to pay the compensation. On close scrutiny and taking into consideration the principle of res ipsa loquitur, there is no reason for this court to take a different view of the matter and, therefore, it is quite obvious that the accident did occur due to the rash and negligent driving of both the vehicles and the negligence attributable to the drivers of both vehicles, having regard to the nature of vehicles involved in the accident, would be assessed in the ratio of 50:50 and hence the contention of learned Counsel Mr. Bapat that accident did not occur due to rash and negligent driving of Matador is required to be rejected.

8. Now, so far as the next contention of Mr. Bapat is concerned, it is not in dispute that the insurance policy of Matador would show that Matador was insured for the period 25.6.1988 to 24.6.1989 and perusal of the insurance policy would reveal that the owner of Matador has paid the premium of Rs. 180 on account of the liability to public risk. The insurance policy covers third party risk and the limitations as to the use are also printed on the insurance policy in the following terms:

Limitation as to use:

Use only for the social, domestic and pleasure purposes and for the insured's business.

The policy does not cover use for hire or reward, or for organised racing, pace-making, reliability trial, speed-testing, the carriage of goods (other than samples) in connection with any trade or business or use for any purpose in connection with the motor trade.

9. In the case of Oriental Fire & Genl. Ins. Co. Ltd. v. Hirabai Vithal Nikam 1988 ACJ 494 (Bombay), the Full Bench of this court observed that: A passenger travelled for hire by consent of the driver in a goods vehicle. The contract of insurance entered into with the insurance company did not cover the carriage of passengers for hire or reward in the vehicle. The vehicle was not covered by a permit to ply for hire or reward. The vehicle was, therefore, used for a purpose not allowed by the permit under which it was used. Due to negligence of the driver, the truck in which the passenger was sitting dashed against a tree causing death of the passenger. The Motor Accidents Claims Tribunal awarded compensation of Rs. 75,000. In an appeal filed by the insurance company it was contended that the insurer was not liable and, therefore, this court held that by virtue of Section 96(2)(b)(i)(c) of the Motor Vehicles Act, the insurer was not liable for the tortious act of the owner of the vehicle. The order making the insurance company liable was, therefore, liable to be set aside.

10. In the case of New India Assurance Co. Ltd. v. Asha Rani , the Hon'ble Supreme Court took into consideration the earlier decisions of the Apex Court in the case of Mallawwa v. Oriental Insurance Co. Ltd. and New India Assurance Co. Ltd. v. Satpal Singh and held that the insurer will not be liable for paying compensation to the owner of goods or his authorised representatives on being carried in the goods vehicle when that vehicle meets with accident and the owner of the goods or his representative dies or suffers from any bodily injury.

11. In the case of Oriental Insurance Co. Ltd. v. Devireddy Konda Reddy , Supreme Court considered the law on the point as to whether the insurer would be statutorily liable to pay compensation to the passenger travelling in the goods carriage and held that in such cases the insurer would have no liability therefor in view of Section 95 of the Motor Vehicles Act.

12. This court may usefully refer the recent decision of the larger Bench of the Supreme Court in the case of National Insurance Co. Ltd. v. Baljit Kaur . The larger Bench of the Supreme Court considered the earlier decisions in Oriental Insurance Co. Ltd. v. Devireddy Konda Reddy ; National Insurance Co. Ltd. v. Ajit Kumar ; New India Assurance Co. Ltd. v. Asha Rani and New India Assurance Co. Ltd. v. Satpal Singh and held that:

The effect of the 1994 amendment on Section 147 is unambiguous. Where earlier, the words 'any person' could be held not to include the owner of the goods or his authorised representative travelling in the goods vehicle, Parliament has now made it clear that such a construction is no longer possible. The scope of this rationale does not, however, extend to cover the class of cases where gratuitous passengers for whom no insurance policy was envisaged and for whom no insurance premium was paid, employ the goods vehicle as a medium of conveyance. By reason of the 1994 amendment what was added is 'including owner of the goods or his authorised representative carried in the vehicle'. The liability of the owner of the vehicle to insure it compulsorily, thus, by reason of the aforementioned amendment included only the owner of the goods or his authorised representative carried in the vehicle besides the third parties. The intention of Parliament, therefore, could not have been that the words 'any person' occurring in Section 147 would cover all persons who were travelling in a goods carriage in any capacity whatsoever. If such was the intention there was no necessity of Parliament to carry out an amendment inasmuch as the expression 'any person' contained in Sub-clause (i) of Clause (b) of Sub-section (1) of Section 147 would have included the owner of the goods or his authorised representative besides the passengers who are gratuitous or otherwise. Judgment given prospective effect. To prevent prejudice to claimant insurer directed to pay awarded amount to claimant and recover it from owner.

For purpose of recovery he may initiate proceedings before executing court as if dispute between insurer and owner was subject-matter before Tribunal.

13. The Hon'ble Supreme Court in the case of National Insurance Co. Ltd. v. Ajit Kumar , clearly laid down that the difference in the language of 'goods vehicle' as appearing in the old Act and 'goods carriage' in the new Act is of significance. A bare reading of the provisions makes it clear that the legislative intent was to prohibit goods vehicle from carrying any passenger. This is clear from the expression 'in addition to passengers' as contained in definition of 'goods vehicle' in the old Act. The position becomes further clear because the expression used is 'goods carriage' 'is solely for the carriage of goods'. Carrying of passengers in a goods carriage is not contemplated in the Act. There is no provision similar to Clause (ii) of the proviso appended to Section 95 of the old Act prescribing requirement of insurance policy. Even Section 147 of the Act mandates compulsory coverage against death of or bodily injury to any passenger of 'public service vehicle'. The proviso makes it further clear that vehicle and employees carried in goods vehicle would be limited to liability under the Workmen's Compensation Act, 1923. There is no reference to any passenger in 'goods carriage'.

14. Thus, having regard to the settled law that the definition of the 'goods vehicle' as contemplated under Section 2 (8) of the M.V. Act, 1939, 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. Therefore, the passengers carried in the goods vehicle did not enjoin any statutory liability on the owner of the vehicle insured for any passenger travelling in a goods carriage and the insurer would have no liability therefor. But such is not the present case.

15. Now it would be necessary to reproduce the definition of public service vehicle and Sub-section (25) of Section 2 of the Motor Vehicles Act (Act IV of 1939) defines 'public service vehicle' to mean, any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward and includes a motor cab, contract carriage and stage carriage.

16. In the present case what reveals is that the claimant was travelling in Matador which was not a goods vehicle, but it was meant for carrying passengers and this would be more clear from the terms and conditions of the insurance policy itself, wherein it is mentioned that Matador could be used as a passenger vehicle but the policy did not cover use for hire or reward. Matador was not a goods vehicle and, therefore, it cannot be said that claimant was travelling in a goods vehicle. Simply because claimant paid the fare to the driver of Matador along with other passengers, it is not possible to accept the contentions of Mr. Bapat, the learned Counsel for the insurance company that there was breach of the terms and conditions of the insurance policy because this is not a case where the passenger was travelling in a goods vehicle.

17. The only objectionable thing would be that the passengers were being carried in a passenger vehicle without obtaining requisite permit under the provisions of the M.V. Act from the competent authority. But that by itself cannot be pressed into service to show that Matador was a goods vehicle and was not permitted to carry passengers in it. In such circumstances, this court is of the considered opinion that if the passenger is carried in a passenger vehicle for which no permit has been obtained for carrying passengers in accordance with the provisions of M.V. Act, meets with accident, the insurance company cannot escape the liability to pay compensation on the ground that there was breach of the terms and conditions of insurance policy. In that view of the matter, there is no error or illegality in the impugned award passed by the Tribunal except that the liability of the insurer and the owner of Matador would be limited in proportion of the negligence attributable to the driver which is to the extent of 50 per cent and, therefore, with this modification in the award, the appeal stands dismissed with costs.