Bombay High Court

The New India Assurance Company ... vs Smt. Shantabai W/O Murlidhar ... on 8 July, 2016

Bench: Prasanna B. Varale

                                               1                                     FA348.16.odt




                                                                                          
      IN THE HIGH COURT OF JUDICATURE AT BOMBAY
               : NAGPUR BENCH : NAGPUR.




                                                                  
                              FIRST APPEAL NO. 348 OF 2016

    APPELLANT                 : The New India Assurance Co. Ltd.,




                                                                 
                                5th Floor, Shriram Shyam Towers,
                                S. V. Patel Road, Kingsway, Nagpur,
                                Presently through its Chief Regional Manager,
                                Regional Office, 4th Floor,
                                Dr. Ambedkar Bhawan, MECL Premises,




                                                  
                                Seminary Hills, Nagpur.
                                (Original non-applicant no.1)
                                ig             - VERSUS -
                              
    RESPONDENTS               : 1] Smt. Shantabai W/o Murlidhar Katekhaye,
                                   Aged 50 years, Occu. Household.

                                    2] Dinesh S/o Murlidhar Katekhaye,
                                       Aged 21 years, Occu. Education.
      


                                    3] Rajesh S/o Murlidhar Katekhaye,
   



                                       Aged 19 years, Occu. Education.

                                       All R/o Vitthal Gujri Ward, Pauni,
                                       Tah. Pauni, Dist. Bhandara.





                                       (Original claimant nos.1 to 3)

                                    4] Balkrishna S/o Waktuji Waghmare,
                                       Aged 50 years, Occu. Business,
                                       R/o  Vitthal Gujri Ward, Pauni,
                                       Tah. Pauni, Dist. Bhandara.





                                       (original non-applicant no.2)

                     -------------------------------------------------------------
    Mr. Gautam Chatterjee, Advocate for the appellant.
    Mr. S. A. Kalbande, Advocate for the respondent nos. 1 to 3.
    None appears for the respondent no.4, though served.
                     ------------------------------------------------------------

                      CORAM :    PRASANNA B. VARALE, J.

th Judgment Reserved on : 17 June, 2016.

                                                 th
                      Judgment Delivered on : 08    July, 2016




                                           2                                 FA348.16.odt




                                                                                  
    ORAL JUDGMENT

Heard. ADMIT. With the consent of the learned counsel

for the parties, the matter is taken up for final hearing disposal.

2. Being aggrieved by the judgment and award passed by the

learned Chairman, Motor Accident Claims Tribunal, Bhandara in Claim

Petition No. 82/2009, thereby allowing the claim petition filed by the

respondent nos.1 to 3/original claimants herein, the appellant -

Insurance Company is before this Court.

3. Brief facts giving rise to the present appeal can be

summarized as follows :

On 05.07.2008, the respondent no.4/original respondent

no.2 - Balkrishna Waghmare, the owner of motorcycle bearing

registration No. MH-36/A-7873 and rider of the said motorcycle, was

coming from Asgaon to Pawani. One Murlidhar Katekhaye was the

pillion rider. The respondent no.4 - Balkrishna was riding the

motorcycle in rash and negligent manner as a result of which the

motorcycle slipped and the pillion rider Murlidhar fell down. He

suffered serious injuries and died on the spot. Respondent no.4 -

Balkrishna also sustained injuries and was shifted to a private hospital

3 FA348.16.odt

at Nagpur for medical treatment. A criminal case was registered against

respondent no.4 -Balkrushna for committing offences punishable under

Sections 279, 337, 338, 304-A of the Indian Penal Code, as it was found

in the police enquiry that respondent no.4 - Balkrishna was riding the

motorcycle in high speed and negligent manner. It was also revealed

that vehicle motorcycle owned by him was insured with the appellant-

Insurance Company (original Resp.No.1).

4. The respondent nos.1 to 3/original claimants lodged claim

petition before the Motor Accident Claims Tribunal, Bhandara. It was

submitted that victim Murlidhar was 51 years of age at the time of his

death and was earning Rs.8,253/- per month. The claimants submitted

that though, they are entitled for compensation to the tune of

Rs.7,76,264/-, the claim was restricted to Rs.6,00,000/- due to financial

constraints of the claimants. The claimants thus put forth their claim

for Rs. 6,00,000/- with future interest at the rate of 18% per annum.

5. The appellant-Insurance Company resisted the claim by

filing written statement. It was submitted that the respondent no.4

herein was not possessing a valid driving licence at the relevant time i.e.

at the time of accident. The claim was also resisted on the ground that

4 FA348.16.odt

the risk of death of pillion rider was not covered under the insurance

policy of the motorcycle vehicle in question. The Claims Tribunal, on

the basis of the material presented before it and on the backdrop of the

submissions of the learned counsel for the respective parties framed the

issues. The issue as to whether accident took place due to rash and

negligent driving of the motorcycle by the driver on the date of accident

i.e. 05.07.2008, is proved by the claimants, is answered in affirmative.

The issue that death of victim Murlidhar was on account of rash driving

of the respondent no.4 is also answered in affirmative. The issue about

the entitlement of the claimants for compensation is answered in

affirmative by fastening the liability jointly and severally on the

appellant-Insurance Company and respondent no.4 herein (original

respondent nos.1 and 2) to pay to the tune of Rs.7,08,712/-.

6. Mr. Chatterjee, the learned counsel for the for the appellant

- Insurance Company vehemently submitted that the judgment and

award passed by the Claims Tribunal awarding the compensation and

fastening liability on the appellant is unsustainable on more than one

grounds. The learned counsel submitted that the rider of the

motorcycle i.e. respondent no.4 herein, himself was responsible for the

accident as he was driving the motorcycle in rash and negligent

5 FA348.16.odt

manner. The attack of the learned counsel for the appellant was on

other ground raised by him namely, the Insurance Company of the

motorcycle in question was covered under 'act only policy' and as such

the risk of death of pillion rider was not covered in the said policy. It is

submitted by the learned counsel that the appellant-Insurance Company

by tendering evidence of witness Shri Dilip Limaje proved the insurance

policy placed on record. The learned counsel further submitted that the

insurance policy placed on record of the motorcycle vehicle clearly show

that the premium of the said policy was paid for owner of the

motorcycle, who was rider of the motorcycle. He further submitted that

no separate premium was paid so as to cover the risk of pillion rider.

He further submitted that the Claims Tribunal has grossly erred in

holding that the insurance policy was covering risk of pillion rider

being a third party as the pillion rider was occupier. The learned

counsel further submitted that the Claims Tribunal also grossly erred by

fastening the liability on the appellant-Insurance Company relying on a

reported judgment, which is overruled. Thus, the submission of the

learned counsel was the Claims Tribunal has grossly erred in allowing

the claim petition by fastening the liability on the appellant on facts as

well as on point of law.

6 FA348.16.odt

7. Per contra, Mr. Kalbande, the learned counsel for the

respondent nos.1 to 3/original claimants supported the impugned

judgment and award of the Claims Tribunal. The learned counsel relied

on the judgment of the Apex Court reported in (2007) 9 Supreme

Court Cases 148 in the case of Bhagyalakshmi and others .vs. United

Insurance Company Limited and another.

In view of the above referred facts and the grounds raised

in the appeal, the point for consideration is

"Whether the Claims Tribunal was justified in fastening the liability of compensation on the

appellant - Insurance Company for death of pillion

rider of vehicle motorcycle when the vehicle was insured with 'act only policy' ?

9. With the assistance of both the learned counsel, I have

gone through the record and the reported judgments relied upon by the

learned counsel . The facts, which are not in dispute, are, accident took

place on 05.07.2008 at about 7.30 p.m., respondent no.4 - Balkrishna

was the rider and owner of motorcycle vehicle bearing registration No.

MH-36/A-7873 and one Murlidhar Katekhaye was the pillion rider. The

first information report was lodged in respect of said accident at Pauni

police station against rider of the motorcycle Balkrishna Waghmare on

7 FA348.16.odt

06.07.2008 for committing offences punishable under Sections 279,

337, 338, 304-A of the Indian Penal Code. Perusal of the copy of spot

panchanama placed on record shows that the motorcycle in question

slipped on muddy road. Pillion rider died on the spot and the rider

Balkrushna, who was injured, was shifted to hospital at Pauni initially

and subsequently at Nagpur. The motorcycle was lying on the spot.

Mirror of the vehicle motorcycle was found broken. Thus, the

undisputed facts emerged from the material are motorcycle bearing No.

MH-36/A-7873 was the vehicle owned by respondent no.4 - Balkrushna

Waghmare and he was the rider of that vehicle at the relevant time.

Murlidhar Katekhaye was victim deceased. An offence was registered

against rider of the motorcycle i.e. respondent no.4. The vehicle was

insured with the appellant-insurance company bearing Insurance Policy

No. 160100/31/08/02/00001550.

10. Mr. Chatterjee, the learned counsel for the appellant -

Insurance Company vehemently submitted that the Claims Tribunal

failed to appreciate the factum that the vehicle in question was insured

with the appellant under 'act only policy' and as the pillion rider is not

covered under the policy, the appellant ought not to have been fastened

with the liability of paying compensation. It would be necessary to

consider the material placed on record to that effect.

8 FA348.16.odt

11. Perusal of the insurance policy show that the vehicle was

insured with the appellant-insurance company for the period from

28.05.2008 to 27.05.2009. Premium of Rs.300/- was paid. It will be

useful to refer to the evidence of witness Shri Dilip Limaje examined by

the appellant-Insurance Company. The witness deposed that he was

serving as Divisional Manager of the insurance company at Nagpur. He

states that the policy was issued for covering the risk of third party and

owner as well as driver, but not occupier. In the cross-examination, he

denies the suggestion that the risk of pillion rider was covered by the

said policy at Exh.69, which was placed on record. To a Court query,

he replied that in comprehensive policy, risk of occupier is covered and

no premium is charged for covering risk of occupier. The policy

(Exh.69) placed on record show that the nature of said policy is 'act

only policy'.

12. The Claims Tribunal observed that the terms and

conditions are not attached to the cover and policy. It is further

observed that the pillion rider travelling on the motorcycle along with

the owner is nothing but 'third party' so far as the occupier and

insurance company are concerned. It is further observed that member

of general public to whom a dash of motorcycle is received can also be

9 FA348.16.odt

termed as 'Third Party'. The Claims Tribunal further observed that the

expression 'third party' is comprehensive which includes even a pillion

rider. Then by referring to Section 147 of the new Act, the Claims

Tribunal observed that the Insurance Company will not stand absolved

from liability in respect of pillion rider. The Claims Tribunal then relied

on the judgment of this Court reported in 2004 (2) Mh.L.J. 725 in the

case of Ajay Ramesh Bhoir .vs. Avinash Shantaram Jadial Shiravane and

another.

13. Mr. Chatterjee, the learned counsel for the appellant

submitted that the view adopted by the Claims Tribunal is

unsustainable in view of the judgment of the Apex Court, reported in

AIR 2006 Supreme Court 1576 in the case of United India Insurance

Co. Ltd., Shimla .vs. Tilak Singh and others. The learned counsel for the

appellant submitted that the judgment of this Court in Ajay Bhoir .vs.

Avinash Shiravane's case was relying on the judgment of the Apex Court

in Satpal Singh's case and the Apex Court in the judgment in United

India Insurance Co. Ltd, Shimla .vs. Tilak Singh, in clear words observed

that the view expressed in Satpal Singh's case has been overruled in

subsequent judgments. It will be useful to refer to the judgment of the

Apex Court in Tilak Singh's case (supra). The Apex Court, while

10 FA348.16.odt

considering the issue whether the gratuitous passenger would be

covered by the statutory insurance policy, by referring to view of the

Apex Court in 1977 and 1998, observed at paragraphs 17, 18, 19, 20

that -

"17. In Dr. T.V. Jose v. Chacko P.M. alias Thankachan and Ors., [2001] 8 SCC 748 Variava, J.

had an occasion to survey the law with regard to the liability of insurance companies in respect of

gratuitous passengers. After referring to a number of decisions of this Court the learned Judge observed

(vide para 20) "the law on this subject is clear, a third-party policy does not cover liability to

gratuitous passengers who are not carried for hire or reward." The insurer company was held not liable to

reimburse the appellant.

18. Thus, even under the 1939 Act the established

legal position was that unless there was a specific coverage of the risk pertaining to a gratuitous passengers in the policy, the insurer was not liable.

We find that clause (ii) of the proviso to Section 95(1) has been eliminated while drafting section 147 of the 1988 Act. Under sub-section (1)(b) under the 1988 Act, compulsory policy of insurance required under the statute must now provide against any liability which may be incurred by the owner of the vehicle "in respect of the death of or bodily injury to

11 FA348.16.odt

any person including owner of the goods or 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 vehicles in a public place."

B. The 1988 Act :

19. The argument that the risk pertaining to a third party would extend to a person other than the

parties to the insurance contract was raised in New

India Assurance Company v. Satpal Singh and Ors., [2000] 1 SCC 237 where after contrasting the

language of section 95 (1) of the 1939 Act with the provisions of section 147 (1) of the 1988 Act this Court 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-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."

20. The view expressed in Satpal Singh's case (supra) however, has been specifically overruled in the subsequent judgment of a Bench of three judges in New India Assurance Company v. Asha Rani and Ors., [2003] 2 SCC 223. In the case the discussion

12 FA348.16.odt

arose in connection with carrying passengers in a goods vehicle. This Court after referring to the terms

of section 147 of the 1988 Act, as contrasted with section 95 of the 1939 Act, held that the judgment in Satpal Singh's case (supra) had been incorrectly

decided and that the insurer will not be liable to pay compensation. In the concurring judgment of Sinha,

J. after contrasting the language used in the 1939 Act with that of the 1988 Act, it has been observed (vide

paras 25 and 27):

"25. Section 147 of 1988 Act, inter alia,

prescribes compulsory coverage against the death of or bodily injury to any passenger of "public service vehicle". Proviso appended thereto

categorically states that compulsory coverage in

respect of drivers and conductors of public service vehicle and employees carried in a goods vehicle would be limited to the liability under

the Workmen's Compensation Act. It does not speak of any passenger in a `goods carriage'.

27. Furthermore, sub-clauses (i) of Clause (b) of

sub-section (1) of Section 147 speaks of liability which may be incurred by the owner of a vehicle in respect of 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, whereas sub-clause (ii) thereof deals with liability which may be

13 FA348.16.odt

incurred by the owner of a vehicle 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." (emphasis supplied)

14. The Apex Court further observed at paragraph 21 that -

"21. In our view, although the observations made in

Asha Rani's case (supra) were in connection with carrying passengers in a goods vehicle, the same

would apply with equal force to gratuitous passengers in any other vehicle also. Thus, we must uphold the contention of the appellant-insurance company that it

owed no liability towards the injuries suffered by the

deceased Rajinder Singh who was a pillion rider, as the insurance policy was a statutory policy, and hence it did not cover the risk of death of or bodily injury to

gratuitous passengers." (emphasis supplied)

15. The facts as stated above in the present matter are that the

victim of the accident was pillion rider and the nature of the policy was

'act only policy' and not a comprehensive policy. Premium was paid for

the owner and third party. Considering the facts of the present matter

and observations of the Apex Court in Tilak Singh's case (supra), I find

merit in the submission of the learned counsel for the appellant that the

14 FA348.16.odt

Claims Tribunal has erred in fastening the liability of compensation on

the appellant - Insurance Company. Though, Mr. Kalbande, the learned

counsel for the respondents/claimants made an attempt to oppose the

appeal by relying on the judgment of the Apex Court in the case of

Bhagyalakshmi and others .vs. United Insurance Co. Ltd. (supra), perusal

of the said judgment shows that the Apex Court was of the opinion that

the matter requires consideration by a larger Bench and further

observed that the papers be placed before the learned Chief Justice for

appropriate orders. In spite of grant of opportunities to the learned

counsel for the respondents/claimants, he was unable to point out

whether the issue was placed before the larger Bench and/or any view

is taken by the larger Bench, if the issue is placed before the larger

Bench of the Apex Court. In view of these facts, it would not be out of

place to state that the issue is now covered by the judgment of the Apex

Court in United India Insurance Co. Ltd. .vs. Tilak Singh (supra) and, the

liability of the insurer in 'act only policy', risk of gratuitous passengers

or a pillion rider carried in a private vehicle, is not covered.