Bombay High Court
The Manager, Hdfc Ergo General ... vs Kalpana Wd/O Shahajirao Bhoyar ... on 20 August, 2015
Bench: A.P. Bhangale
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR
FIRST APPEAL NO.777 OF 2014
The Manager,
HDFC Ergo General Insurance Co. Ltd.,
5th Floor, Kingsway Road, Shriram
Tower, Near N.I.T. Building, Nagpur,
Tah. and Distt. Nagpur. .......... APPELLANT
// VERSUS //
1.Kalpana wd/o. Shahajirao Bhoyar,
Aged 33 years, Occ. Housewife.
2.Manish Shahajirao Bhoyar,
Aged 13 years, Occ.Student.
3.Sonu Shahajirao Bhoyar,
Aged 11 years, Occ. Student.
4.Aniket s/o. Shahajirao Bhoyar,
Aged 10 years, Occ. Student.
R/o. Bamanvada, Post. Chunala,
Tah. Rajura, Distt. Chandrapur.
(Respondent No.1 herself and for
minor children natural guardian
mother, Nos. 2 to 4 being the
minor).
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5.Pocham Rajlingu Rahulawar,
Aged Major, Occ. Service,
r/o. Mahakali Collery,
Tah. and Distt. Chandrapur.
(Owner of Vehicle No.MH-34/T-481).
6.Mohan Raymalu Mithuwar,
Aged 45 years, Occ.Service,
r/o. Gowary Collery, Q. No.M-129,
Sasti Collery, Post Sasti, Tah.
Rajura, Distt. Chandrapur. .......... RESPONDENTS
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Mr.A.J.Pophaly, Adv. for the Appellant.
Mr.Ashish Kadukar, Adv. for Respondent No.1.
Mr.Rajnish Vyas, Adv. for Respondent Nos.5 and 6.
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Date of reserving the Judgment : 13.8.2015.
Date of pronouncing the Judgment : 20.8.2015.
********
CORAM : A.P.BHANGALE, J.
JUDGMENT :
1. Heard.
2. Admit .
3. Mr.Ashish Kadukar, learned Counsel waives service on
behalf of Respondent No.1 and Mr.Rajnish Vyas, learned
Counsel waives service on behalf of Respondent Nos.5 and 6.
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4. This appeal by the Insurance Company questions legality
and validity of the impugned order below Exh.2 in M.A.C.P.
No.149 of 2011 whereby the learned Chairman, Motor
Accident Claims Tribunal, Chandrapur by order dt.8.7.2014
allowed the application for interim compensation under
Section 140 of the Motor Vehicles Act, 1988 directing non-
applicant nos. 1 to 3 jointly and severally to pay a sum of
Rs.50,000/- with interest @ 9 % p.a. from 15.9.2012 till
realisation of the amount. On realisation of entire amount, the
amount of Rs.10,000/- each was directed to be invested in the
name of the minor claimants in fixed deposit in any
nationalised bank till they attain the age of majority and
balance amount was directed to be paid to the claimant no.1
Kalpana.
5. Brief facts are that, on 6.3.2011, Shahajirao Bhonduji
Bhoyar proceeding on a bicycle was dashed by offending
motor vehicle bearing registration No.MH-34/T-481. In the
accident, Shahajirao died in the hospital on 8.3.2011. The
motor cycle belonged to respondent no.5 Pocham Rajlingu
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Rahulawar and it was driven by respondent no.6 Mohan
Raymalu Mithuwar at the time of accident. Interim
compensation claim was resisted on the ground that the driver
was driving the motor vehicle under the influence of liquor
and that the owner of the offending motor cycle had relied
upon fake and bogus policy dt.3.3.2012. It is contended by the
appellant that no Insurance Policy, as produced, was issued by
the appellant and furthermore that it was fake and bogus. It
is, thus, submitted that the learned Chairman of the Tribunal
committed an error of law to award interim compensation
holding the appellant jointly responsible along with the owner
and driver of the offending motor cycle. According to the
learned Counsel for the appellant, it was primary duty of the
Tribunal awarding compensation u/s.140 of the Motor
Vehicles Act, 1988 to satisfy itself as to whether there was
privity of contract between the parties so that liability can be
saddled upon the Insurance Company. Secondly, it is
submitted that the motor cycle was driven without valid motor
driving license and therefore, discretion to award
compensation u/s.140 of the Motor Vehicles Act, 1988 was
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not exercised properly and therefore, the impugned order is
liable to be quashed and set aside.
6. Mr.A.J.Pophaly, learned Counsel for the appellant
referred to the ruling in the case of New India Assurance Co.
Ltd. vs. Babasaheb Anna Mali and Others reported in 2001
(4) Mh.L.J. 562 to argue that when extra premium was not
paid in the Insurance policy to cover pillion rider, the
expression "third party" in the policy would not cover the
pillion rider of the motor vehicle and therefore, the Insurer
could not have been saddled with no fault liability under
Section 92-A of the Motor Vehicles Act (4 of 1939). This
ruling appears under the old Act, u/s.92-A of the Old Act of
1939 and the Division Bench of the Bombay High Court has
considered Section 95 of the Act of 1939, also requirement of
policy contract and after considering the legal position then
prevailing, the Judgment of the Single Bench directing the
Insurer to deposit sum of Rs.3,500/- was held as legally not
sustainable and was set aside.
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7. Next ruling pointed out is also under the old Act in the
case of New India Assurance Co. Ltd. vs. Dinanath
Agrawalla and Others reported in I(2001) ACC 695 (Full
Bench). The Orissa High Court under the old Act took
identical view about the right to claim compensation u/s.92-A
of the old Act and the submission advanced on behalf of
Insurance Company that the insurer had no liability under the
policy was considered. It was held that where prima facie
there is material to show that the Insurance Company may
have liability to pay, order u/s.92-A of the Act can be passed
by the Tribunal asking the Insurance Company to make the
payment.
8. The ruling then relied upon is in the case of Yallwwa
(Smt.) and Others .vs. National Insurance Company Ltd
and another reported in (2007) 6 SCC 657. The Apex Court
considered Section 140 of the Motor Vehicles Act which
provides for no fault liability. The provision makes owner of
the offending motor vehicle liable and it was held that one of
the defences available to the Insurer is breach of condition
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specified in the policy. When such defence is raised, the
Tribunal is required to go into the said question. It is observed
by the Apex Court that
" one of the defences available to the Insurer is
breach of conditions specified in the policy. When
such defence is raised the Tribunal is required to go
into the said question. Section 140 of the Act does
not contemplate that an Insurance Company shall
also be liable to deposit the amount while it has no
fault (sic obligation) whatsoever in terms of sub-
section (2) of Section 147 of the Act.
In para no.15 of the above Judgment, ruling in the case of
Oriental Insurance Ltd. vs. Mohiuddin Kureshi reported in
(1994) 1 ACJ 74 is cited, in which it was observed that
Section 140 of the Motor Vehicles Act in Chapter X of the Act
provides for liability to pay compensation on the principle of
no fault. An owner of a vehicle thus would be liable to pay
compensation in case death or permanent disablement to any
person has resulted from an accident arising out of use of a
motor vehicle or vehicles and the amount of such
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compensation in terms of Section 140(2) is fixed as Rs.25,000
(Rs.50,000 w.e.f. 14.11.94 as amended) in case of death and
Rs.12,000 (Rs.25,000 w.e.f. 14.11.94 as amended) in case of
permanent disablement. Sub-section 3 of Section 140
postulates that the claimant shall not be required to plead and
establish that the death or permanent disablement in respect
of which claim was made was due to wrongful act, neglect or
default of the owner or owners of the vehicle or vehicles
concerned or of any other person. Section 141 of the Motor
Vehicles Act, 1988 requires disposal of claim u/s.140
expeditiously. It is, ofcourse, open for the Insurer to plead
and prove that it is not liable at all. No fault liability u/s.140
of the Motor Vehicles Act is distinguishable from the rule of
strict liability as it is a statutory liability created as "no fault
liability". The amount paid can be deducted from the final
amount awarded by the Tribunal. It was held in Yellava's case
(supra) that Award u/s.140 of the Act was appealable u/s.173
as it amounts to the Award.
9. Reliance is also placed upon the ruling in United
India Insurance Co. Ltd. vs. Serjerao and Others
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reported in I
(2009) ACC 434 (SC)
wherein, in the facts and
circumstances of that case, the Apex Court remitted the matter
to the High Court to consider the matter afresh in the light of
the rulings including Yellava's case (supra).
10. Mr.Pophaly, learned Counsel also placed reliance upon
the unreported Judgment and Order passed by the Single
Judge of this Court dt.3.9.2013 in First Appeal No.285 of
2012 and another, in which this Court held that the High
Court cannot in all cases issue a direction to any Insurance
Company, if it is not found liable to pay compensation. The
view was expressed that such direction is improper also
because owners of the private vehicles are thereby encouraged
to break law and to hire their vehicles for reward. Unless a
clear message is sent to owners of private vehicles they would
not stop using their vehicles as a Taxi. There are hundreds of
vehicles which are private but are used as a Taxi with
impunity. It is only because very few of them suffer accidents,
this lawless conduct goes unnoticed and unpunished. If the
owners of private vehicles are made to pay heavy
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compensation to occupants of their vehicles illegally hired for
reward, this malice of hiring private vehicles as Taxi would
not stop. In that view of the matter, direction to the Insurer to
pay first and recover later was quashed.
11. On the other hand, the learned Counsel for the
respondent made reference to the rulings in Rajendra
Ramkrishna Golait vs. Kalawati Sitaram Yedme and Others
reported in 2010 (6) Bom.C.R. 91 and Oriental Insurance
Co. Ltd. vs. Nargis Premlal Janghade and Others reported
in 2010 (2) Bom.C.R. 140. In the rulings cited on behalf of the
respondent, in relation to settled legal position at interim
stage of compensation claim u/s.140 r/w.166 of the Motor
Vehicles Act, 1988, it was held that, at ad interim stage, the
victim need not prove negligence or default of the owner or
any other person. Once it is shown that the driver is involved
in the accident caused by an insured motor vehicle, relief
against Insurer or owner has to be allowed to provide
expeditious relief to victim. Therefore, both owners and
Insurers are made jointly liable to pay interim no fault
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compensation u/s.140 of the Act. It was held that although
liability of Insurer u/s.140 of the Act is not direct, it may arise
vicariously if owner of the insured vehicle is liable to pay
compensation. Assuming for the sake of argument that
ultimately in the claim petition even if it is held that the
Insurer is not liable to compensate the claimant, it is possible
for the Insurer to recover amount paid by way of
compensation at an interim stage from the owner or/and
driver of offending motor vehicle in view of settled position of
law.
12. Legal position in view of Chapter VIII - Liability without
fault in certain cases under the Motor Vehicles Act, 1988 is
provided for u/s.140 of the Act on the principle of no fault.
Therefore, in any case, wherein it is prima facie shown that
death or permanent disablement has resulted from the motor
vehicle accident, the owner of the offending motor vehicle
shall be primarily liable to pay compensation if the vehicle is
insured as on the date of accident. According to the owner of
the offending motor vehicle, as on the date of accident, the
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insurer does have joint and several liability along with the
owner/driver of the offending motor vehicle to pay
compensation in the sum of Rs.50,000/- in case death has
resulted from the motor vehicle accident and in the sum of
Rs.25,000/- if permanent disablement has resulted arising
from the motor vehicle accident. In such cases, it is not
necessary for the claimant to plead and establish that death or
permanent disablement has resulted due to any wrongful act,
negligent or default of the owner of the offending motor
vehicle. The object of the provision u/s.140 of the Motor
Vehicle Act is to provide immediate help to the victim of the
motor vehicle accident or his or her dependents to meet the
urgent expenses and unless owner of the offending motor
vehicle and/or insurer and/or driver of the offending motor
vehicle are jointly and severally held liable to pay
compensation. At interim stage, the object of law to provide
immediate compensation to the victim of motor vehicle
accident or dependents of the victim would be defeated.
Ultimately, it is possible for the Insurer to plead that Insurance
contract was not binding upon it or on the ground that it was
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fake or bogus or on any such ground. It is for the Insurer to
establish the pleading at final hearing of the motor accident
claim petition filed u/s.166 of the Motor Vehicles Act, 1988 so
that the amount paid by way of interim compensation can be
recovered from the owner and/or driver of the offending
motor vehicle. The object of Section 140 can be served if
immediate compensation is made available on the principle of
"no fault liability" to the victim of the motor vehicle accident
or dependents of victim immediately or without delay because
the trial though heard in accordance with summary
procedure, may consume a lot of time for the parties to
adduce evidence as it is a fact of common knowledge and
experience that many such cases in respect of motor vehicle
accidents are pending in the Tribunal established or
constituted under the Motor Vehicle Act, 1988. Considering
the problem of increasing pendency of motor vehicle accident
cases, the view which is taken by the learned Chairman of the
Motor Vehicle Claims Tribunal, Chandrapur appears
sustainable.
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13. I agree with the view that the fact of breach of terms
and conditions of the insurance policy and the fact of fake and
bogus policy need not be considered at the interim stage and
shall be decided at the time of final decision of the Claim
Petition. The learned Chairman proceeded to award interim
compensation on the basis that there was prima facie material
to show that the driver of the offending motor vehicle was
driving it rashly and negligently and the accident took place,
as a result of which the deceased has sustained fatal injuries
and died. In my view, therefore, considering the provision
u/s.140 of the Motor Vehicles Act and its social purpose to
provide minimum assistance in the form of interim
compensation to the victim of motor vehicle accident or
dependents of the victim u/s.140 of the Motor Vehicles Act,
1988, liability is created on the basis of no fault. In other
words, claimant need not plead and prove the liability of the
Insurer and owner of the offending motor vehicle strictly in
accordance with law. It is always open for the Insurer making
interim payment of compensation u/s.140 of the Act to
recover the amount paid by way of compensation at interim
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stage from the owner of the offending motor vehicle
responsible in the motor vehicle accident. The pleadings by
the Insurer and the evidence led by the Insurer on record can
surely be considered by the Tribunal constituted under the Act
at final hearing of the Motor Accident Claim Petition u/s.166
of the Motor Vehicle Act. The Tribunal can make necessary
final award in respect of such Claim Application u/s.166 of
the Act on merits and in accordance with law.
14. For these reasons, in my opinion, no sufficient ground
has been made out to interfere with the impugned order
passed u/s.140 of the Motor Vehicles Act, 1988 on no fault
liability basis. However, it is desirable that the numerous
Motor Accident Claim Petitions filed u/s.166 of the Motor
Vehicles Act are required to be heard expeditiously as early as
possible preferably within six months from the date of such
Claim Petition. In the result, therefore, the appeal is dismissed
with the aforesaid directions.
JUDGE
jaiswal
