Delhi High Court

Oriental Insurance Co. Ltd. vs Smt. Madhu & Others on 6 December, 2010

Author: Reva Khetrapal

                                  REPORTED
*   IN THE HIGH COURT OF DELHI AT NEW DELHI


+                  MAC.APP. No. 155/2005


ORIENTAL INSURANCE CO. LTD.           ..... Appellant
                 Through: Mr. L.K. Tyagi, Advocate.


                   versus


SMT. MADHU & ORS.                                 ..... Respondents
                            Through:   Mr.M.M. Singh, Advocate, for
                                       the respondents no.1 to 3.


%                           Date of Reserve : November 22, 2010
                            Date of Decision : December 6, 2010



CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL

1. Whether reporters of local papers may be allowed
   to see the judgment?

2. To be referred to the Reporter or not?

3. Whether judgment should be reported in Digest?




MAC APP. No.155/2005                                   Page 1 of 15
                             JUDGMENT

: REVA KHETRAPAL, J.

The present appeal is directed against the award dated 18th

December, 2004 passed by the Motor Accident Claims Tribunal in

Claim Petition No. 69/2004 whereby the Tribunal awarded a sum of

` 4,80,000/- along with interest @ 5% per annum from the date of the

filing of the petition till realization, with a direction to the appellant to

pay the entire award amount within one month. The appellant was,

however, held entitled to recover the award amount from the

respondents no.4 and 5 herein (the respondents no.1 and 2 in the

Claim Petition).

2. The facts giving rise to the claim before the Motor Accident

Claims Tribunal were that on 25th January, 2003 at about 10.00 p.m.,

one Rishi Pal was going on his motorcycle bearing No. HR-51-1742

with his daughter Aarti. When he reached near Sector 11, Rohini,

Delhi, a scooter bearing No. DL-8S-2478 driven by the respondent

no.4 herein in a rash and negligent manner came from the opposite

side and hit the motorcycle. The result of the head-on collision was

that Rishi Pal (hereinafter referred to as „the deceased‟) suffered fatal

injuries. The claimants, being his widow and two minor daughters

allege that the accident had taken place due to the negligent driving of

the two-wheeler scooter by the respondent no.4 Manish Kumar.

3. The respondent driver Shri Manish Kumar and owner Shri

Mahinder Lal Arora of the offending scooter (the respondents No.4

and 5 herein) did not appear before the Tribunal despite service and

were proceeded ex parte. The respondent no.6 herein, Shri Rambir

Singh, the owner of the motorcycle No. HR-51E-1742, which was

being driven by the deceased at the time of accident was also

proceeded ex parte by the Tribunal. The appellant insurance

company, however, contested the case by filing a written statement

wherein it was specifically pleaded that the offending vehicle, the

scooter No. DL-8SD-2478 was not insured with the appellant

Insurance Company and as such the appellant insurance company was

not liable.

4. The learned Motor Accident Claims Tribunal, after framing the

issues and affording the parties opportunity to adduce evidence

thereon, on the aspect of negligence concluded as under: -

"14. In the present case, the testimony of PW2 (Ishwar Singh, the eye witness) clearly brings forth that the motor cyclist had applied sudden brakes and the scooterist who was coming from the opposite side had hit the motor cycle. It is, thus, evident that in fact, both the motor cyclist and the scooterist were negligent in driving their respective vehicles and both have contributed equally in causing the accident."

It further held: -

"16. It has already been held in Issue no. 1 that the scooterist who is the respondent no.1 had contributed in negligence which resulted in accident and thus, he is principally liable to pay the compensation. The said scooter was owned by the respondent no.2, under whose control and supervision, the scooter was being driven by the respondent no.1 and thus, respondent no.2 is vicariously liable to pay the compensation. The respondent no.4 is admittedly the owner of the motorcycle which was being driven by the deceased at the time of accident and who had also contributed in the negligence. The said motorcycle was insured with the respondent no.3 who is also liable to pay the compensation. The liability of all the respondents is thus, held to be joint and several, though the respondent

no.1 and 2 and the respondents no.3 & 4 are liable to share the responsibility equally."

5. On the quantum of compensation, the learned Motor Accident

Claims Tribunal, after perusal of the evidence on record, came to the

conclusion that the respondents no.1, 2 and 3 (who were the claimants

in the claim petition) were entitled to the sum of ` 9,30,000/-

towards loss of dependency and a further sum of ` 25,000/- towards

loss of love and affection and loss of consortium. With regard to the

apportionment of the liability to pay the aforesaid amount, the

Tribunal observed: -

"26. The total compensation which is thus, calculated comes to ` 9,55,000/-. However, the deceased himself had contributed towards negligence, he is entitled to half of the compensation. Thus, the total compensation payable to the petitioner is in the sum of ` 4,77,500/- which is rounded off to ` 4,80,000/- alongwith interest @ 5% p.a. from the date of filing of the petition till the date of realization on the said amount.

28. Since this is a case of contributory negligence involving two vehicles and the liability to pay compensation is joint and several. The respondent no.3 is directed to pay the entire compensation amount to the petitioners within one month, though, it shall be entitled to recover

50% from the other respondents No.1 and 2 as per law."

6. Aggrieved by the aforesaid direction of the Tribunal, the

appellant has preferred the present appeal on the ground that the

liability of the respondents no.4 and 5, viz., the driver and owner of

the two-wheeler scooter which was not insured could not be fastened

upon the appellant, which was the insurer of the motorcycle owned by

the respondent no.6 and driven by the deceased Rishi Pal at the time

of the accident.

7. In the above context, Mr. L.K. Tyagi, the learned counsel for

the appellant heavily relied upon the judgment of the Supreme Court

in the case of Tamil Nadu State Transport Corporation, Tanjore vs.

Natarajan and Ors. (2003) 6 SCC 137. In the said case the driver

under the appellant-Corporation while driving a bus of the

Corporation collided against a private bus coming from the opposite

direction, resulting in fracture of his right leg which had to be

ultimately amputated. The Motor Accident Claims Tribunal on his

claim petition found contributory negligence on the part of the drivers

of both the buses and apportioned their liability equally. A Single

judge of the Madras High Court upheld that award. In the Letters

Patent Appeal before a Division Bench of the High Court, however,

the Division Bench directed the compensation awarded to be borne

equally by the insurer of the private bus and the Corporation.

Aggrieved therefrom, the Corporation filed a Special Leave Petition

before the Supreme Court. The Supreme Court in paragraph 9 of its

judgment made the following pertinent observations: -

"9. From the facts of the case and nature of the claim stated above, we find absolutely no justification in law for the Division Bench of the Madras High Court in its impugned order imposing liability to the extent of 50% on the appellant/Corporation. The Division Bench of the High Court completely over-looked that the claimant himself was driver of the Corporation bus and was found negligent to the extent of 50% for causing accident. In view of the above finding of contributory negligence on the part of the claimant as driver of the Corporation bus, the Corporation as an employer cannot be held to be vicariously liable for the negligence of the claimant himself. The claim petition did not make the Corporation a party to the claim obviously because the claimant exercised option of approaching the Claims Tribunal under the Motor Vehicles Act against the owner and insurer of the private bus. He did not file any

claim under the Workmen Compensation Act against the employer. Since the Corporation was not at fault and the accident was caused because of the contributory negligence of the drivers of both the buses, the Corporation could not be held liable under the provision of Motor Vehicles Act. It was not a claim based on "no fault liability". It was a claim petition filed by the claimant against the owner and insurer of the private bus. The claimant is also represented before us and on his behalf it is stated that he has been given compassionate appointment on suitable alternative job and he never desired to obtain any other compensation from his employer. The Division Bench of the High court therefore committed a serious error in apportioning and fastening 50% liability of compensation on the appellant Corporation. This part of the award therefore deserves to be set aside. The liability of the respondent/insurance company as insurer of private bus is found to be only to the extent of 50% of the total compensation determined."

8. Mr. M.M. Singh, the learned counsel appearing for the

respondents no.1, 2 and 3 (the claimants in the claim petition) sought

to rebut the contentions of the learned counsel for the appellants by

relying upon the three-Judge bench decision of the Supreme Court in

the case of National Insurance Co. Ltd. vs. Baljit Kaur and Ors.

(2004) 2 SCC 1. He pointed out that in the said case the Supreme

Court while directing the appellant-insurance company, to satisfy the

award amount in favour of the claimants, gave to it the right to

recover the same from the owner of the vehicle. In order to facilitate

the recovery, the Supreme Court clarified that for the purpose of such

recovery, it would not be necessary for the insurer to file a separate

suit but it may initiate a proceeding before the executing court as if

the dispute between the insurer and the owner was the subject matter

of determination before the Tribunal and the issue had been decided

against the owner and in favour of the insurer.

9. The aforesaid reliance placed by the learned counsel for the

respondents no.1 to 3 on the judgment of the Hon‟ble Supreme Court

in Baljit Kaur's case (supra), in my opinion, is entirely misplaced.

The Court in the said case was dealing with the question as to whether

an insurance policy in respect of a goods vehicle covered even

gratuitous passengers. Examining the effect of the 1994 amendment

on Section 147, the Supreme Court observed that inspite of the

amendment of 1994, the effect of the provisions contained in Section

147 of the Motor Vehicles Act, 1988, with respect to persons other

than the owner of the goods or his authorized representatives remains

the same. Therefore, instead of and in place of the insurer the owner

of the vehicle shall be liable to satisfy the decree. In this background,

the Court observed that since the law was not clear so long, the legal

position clarified would have prospective effect; therefore, the interest

of justice would be subserved if the appellant-Insurance Company

was directed to satisfy the award amount in favour of the claimants

and recover the same from the owner of the vehicle subsequent

thereto. The judgment of the Supreme Court in the said case is in

consequence of no assistance to the claimants.

10. The facts in Natarajan's case (supra), on the other hand,

squarely fit the facts in the instant case and the law laid down therein

is, therefore, apposite. It can thus safely be said that the Tribunal

erred in fastening the liability of 50% of the compensation amount on

the appellant-Insurance Company. In view of the finding rendered by

the Tribunal of contributory negligence of the deceased in driving his

motor cycle to the extent of 50% as the respondents no. 4 and 5 alone

could have held liable for payment of the remaining 50% of the

compensation amount, in view of the fact that the scooter of which

the respondents No.4 and 5 were the driver and owner was not

insured.

11. I am fortified in coming to the aforesaid conclusion from the

decision of the Supreme Court rendered in Ningamma & Anr. vs.

United India Insurance Co. Ltd. 2009 (8) SCALE 244. In the said

case the question which fell for consideration was as to whether the

legal representatives of a person, who was driving a motor vehicle

after borrowing it from the real owner, who meets with an accident

without involving any other vehicle, would be entitled to

compensation under Section 163A of the Motor Vehicles Act or any

other provision of law, and also whether the insurer who issued the

insurance policy would be legally bound to indemnify the deceased or

his legal representatives. It was forcefully argued in the said case that

the claimants were not third parties and therefore, were not entitled to

claim any benefit under Section 163A of the Act. While referring to

the case of the Oriental Insurance Co. Ltd. vs. Rajni Devi (2008) 5

SCC 736 and New India Assurance Co. Ltd. vs. Sadanand Mukhi

and Ors. (2009) 2 SCC 417, the Supreme Court held as under: -

"18. In the case of Oriental Insurance Company Ltd. v. Rajni Devi and Ors. (2008) 5 SCC 736 , wherein one of us, namely, Hon'ble Justice S.B. Sinha is a party, it has been categorically held that in a case where third party is involved, the liability of the insurance company would be unlimited. It was also held in the said decision that where, however, compensation is claimed for the death of the owner or another passenger of the vehicle, the contract of insurance being governed by the contract qua contract, the claim of the claimant against the insurance company would depend upon the terms thereof. It was held in the said decision that Section 163A of the MVA cannot be said to have any application in respect of an accident wherein the owner of the motor vehicle himself is involved. The decision further held that the question is no longer res integra. The liability under Section 163A of the MVA is on the owner of the vehicle. So a person cannot be both, a claimant as also a recipient, with respect to claim. Therefore, the heirs of the deceased could not have maintained a claim in terms of Section 163A of the MVA. In our considered opinion, the ratio of the aforesaid decision is clearly applicable to the facts of the present case. In the present case, the deceased was not the owner of the motorbike in question. He borrowed the said motorbike from its real owner. The deceased cannot be held to be employee of the owner of the motorbike although

he was authorised to drive the said vehicle by its owner, and therefore, he would step into the shoes of the owner of the motorbike.

19. We have already extracted Section 163A of the MVA hereinbefore. A bare perusal of the said provision would make it explicitly clear that persons like the deceased in the present case would step into the shoes of the owner of the vehicle. In a case wherein the victim died or where he was permanently disabled due to an accident arising out of the aforesaid motor vehicle in that event the liability to make payment of the compensation is on the insurance company or the owner, as the case may be as provided under Section 163A. But if it is proved that the driver is the owner of the motor vehicle, in that case the owner could not himself be a recipient of compensation as the liability to pay the same is on him. This proposition is absolutely clear on a reading of Section 163A of the MVA. Accordingly, the legal representatives of the deceased who have stepped into the shoes of the owner of the motor vehicle could not have claimed compensation under Section 163A of the MVA."

12. The Supreme Court in the aforesaid case also examined the

issue as to whether the claim could be considered under the

provisions of Section 166 of the Motor Vehicles Act and held that

when such a claim is made by the legal representatives of the

deceased, it has to be proved that the deceased was not himself

responsible for the accident by his rash and negligent driving. It

would also be necessary to prove that the deceased would be covered

under the policy so as to make the insurance company liable to make

the payment to the heirs.

13. In this case it stands proved that the deceased was himself

responsible for the accident by his rash and negligent driving and the

learned Tribunal has held the deceased guilty of contributory