Delhi High Court
Oriental Insurance Co. Ltd. vs Harish Chand Anand & Ors on 2 February, 2016
$~3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 2nd February, 2016
+ MAC.APP. 348/2004
ORIENTAL INSURANCE CO. LTD. ..... Appellant
Through: Mr. L.K. Tyagi , Adv.
Versus
HARISH CHAND ANAND & ORS .....Respondents
Through: None.
CORAM:
HON'BLE MR. JUSTICE R.K.GAUBA
JUDGMENT
R.K.GAUBA, J (ORAL):
1. Harish Chand Anand (the first respondent herein) had filed the
petition under Section 166 of Motor Vehicles Act, 1988 (MV Act)
before the Motor Accident Claims Tribunal (the tribunal), which
registered it as Suit No. 67/2003, seeking compensation for injuries
suffered in a motor vehicular accident that had occurred on 21.8.99
around midnight while travelling in motor vehicle bearing registration
No. HR 38C 4790 (hereinafter the offending vehicle).
2. The case as presented by the first respondent before the tribunal
was that the offending vehicle was owned by Bhagat Ram (the second
respondent herein) and was driven in a rash/negligent manner at the
time of accident by Agya Ram @ Teja (the third respondent herein).
The offending vehicle concededly was insured against the third party
risk for the period in question, with the appellant insurance company, it
having been impleaded before the tribunal as party respondent No.3.
During the inquiry, the insurance company, inter alia, pleaded that the
first respondent (the claimant) was a gratuitous passenger in the
offending vehicle and since the vehicle was a goods transport vehicle,
the insurance company could not be held liable. Noticeably, the
claimant had claimed to be the representative of the owner of the
vehicle which fact was disputed by the latter. The defence taken by the
insurance company referred to the said denial of the status by the
insured to seek to be absolved.
3. The tribunal, upon inquiry, found that the claimant was entitled to
the compensation of ` 4,24,400/- which was granted along with interest
@ 7.5 % per annum from the date of filing of the petition. The
contention of the insurance company to above effect was rejected and it
was called upon to indemnify the insured.
4. The insurance company brought this appeal under Section 173 of
the MV Act contending that since the claimant had claimed to be an
employee of the owner he could not be covered under the insurance
policy and would be entitled to claim compensation only under the
Workmen Compensation Act, 1923 (now known as Employees
Compensation Act, 1923).
5. The learned Single Judge of this Court while hearing on the
appeal by order dated 5.3.2009 took note of the contention of the
insurance company in appeal that the liability of the insurance company
must be restricted to ` 2,17,644/- which would be the amount of
compensation payable in view of the disability certified to the extent of
75%. It was further submitted at that stage that the learned tribunal had
fallen into error by treating the disability affecting the loss of earning
capacity to the extent of 100%. For some reasons, the matter kept
getting adjourned before it reached the stage of hearing yet again on
23.3.2015 when it was submitted on behalf of the appellant insurance
company that the question for consideration essentially is as to whether
the claimant was travelling in the offending vehicle as an owner of the
goods or representative of the owner of goods or as an employee who is
entitled to compensation and would be governed by the provisions of
Employees Compensation Act, 1923.
6. Before coming to the contentions raised in this appeal, it needs to
be noted that the first respondent (the claimant) has generally shown
dis-interest in assistance in the hearing on the appeal at hand. Notices
were issued by order dated 11.08.2004 to all the three respondents in
appeal which include the driver, the owner, and the claimant. The
claimant appeared for the first time through counsel on 4.5.2005 and
thereafter has appeared or not appeared as per own convenience. The
second respondent (the owner of the vehicle or the person insured)
appeared in response to the notice on 4.5.2005 and after participating in
the proceedings on some of the subsequent dates, and similarly
appeared or not appeared as per own choice or convenience. The third
respondent (the driver) was served on 23.8.2006 but chose not to appear
at all.
7. The appeal has come up for hearing against the above backdrop,
more than 11 years after it having been preferred. Since none was
present for the respondents on the last date and none has appeared even
today, given the old pendency, there is no reason to defer the matter
once again.
8. The tribunal considered the contentions of the insurance company
in above regard in the impugned judgment in the following manner:-
"The counsel for insurance company has argued
at length on the point that Insurance Company is not
liable to pay any compensation as the petitioner was a
gratuitous passenger in vehicle no. HR-38-G-4790. It is
not disputed that offending vehicle was duly insured. It
is also a matter of record that offending vehicle is goods
vehicle. The certified true copy of insurance policy
which has been proved as Ex.RW1/A only proves that
Insurance Company is only liable to public and the legal
liability for paid driver/workman no. 1 has been added to
it.
It is a settled proposition that in view of the law
laid down in M/s National Insurance Co. Ltd. vs. Baljeet
Kaur & Ors. 2004 (1) Scale, the Apex Court has settled
that U/s 147 Motor Vehicle act besides third party only
the owner of the goods or his authorised representatives
travelling in the goods vehicle is covered under the
policy. It further clarifies that it does not extend to cover
the class of cases where gratuitous passenger for whom
Insurance Policy was not envisaged and for whom no
insurance premium was paid, employed the goods
vehicle as a medium of conveyance. It was further held
that in case of gratuitous passenger the owner of the
vehicle shall be liable to satisfy the decree. However, in
the interest of victims the insurer was directed to pay to
the claimants if not already paid and this decision was
held to be prospective in nature.
The question is that whether in the present case
the petitioner was a gratuitous passenger or not. In case
the petitioner is a gratuitous passenger, in view of the
law laid down above the Insurance Company shall not be
liable. But it the petitioner is not a gratuitous passenger
at all, then the Insurance Company can avoid its
liability. As I have discussed above the owner of the
goods or his representatives is covered specifically
stated on oath that he was the employee of R-1 who deals
in readymade garments and plastic goods in patri Bazar
in various areas of Delhi. The petitioner has further
stated on oath that he used to work as helper on the stall
of R.1 in patri Bazar, Pritam Pura. He further stated on
29/8/99 after closing the stall in night about 12.30 am he
was going with R.1 in TSR no. HR-38G-4790 from
Pritam Pura Patri Bazar to Rani Bagh (residence of R.1)
R.1 in his written statement has evasively denied
this fact. However, he did not come forward to disprove
that petitioner was not his employee nor did he come
forward to depose that petitioner was not travelling in
the TSR as his representative. The plea of the petitioner
is that he was travelling in the TSR as an
employee/representative of the owner of the goods. R.1
happens to be the owner of the offending vehicle.
This fact has not been repudiated either by the
Insurance Company nor by R.1. R.1 contested the case
only to the extent of filing the written statement and
thereafter did not come forward to rebut the case of the
petitioner. The Insurance Company on their part also
did not lead any evidence so as to contradict the case of
the petitioner. In the circumstances, there is no reason
to disbelieve the version of the representative of the
owner of the vehicle. Thus, Insurance Company shall be
liable to pay the compensation."
9. Whilst there is no reason to dissociate oneself from the finding
recorded by the tribunal that the claimant was travelling in the offending
vehicle as the representative of the owner of the vehicle, it is also clear
from the pleadings of the claimant himself that he was an employee of
the owner of the vehicle (i.e insured). In this view of the matter, as
pointed out by the learned counsel for the appellant, the provision
contained in the proviso to Section 147 (1) of MV Act would come into
play. The said provision of law may be taken note of as under:-
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; 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, including owner of
the goods or his 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
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 not be required--
(i) to cover liability in respect of the death, arising out of
and in the course of his employment, of the employee 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 Workmen's 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
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.
10. Similar question had arisen in case reported as National
Insurance Company Ltd. vs. Prembai Patel & Ors. II (2005)ACC 365
(SC), wherein a bench of three Hon'ble Judges of the Supreme Court
upheld similar contention raised by the insurance company in that case
with observations (in para Nos. 16 & 17) to the following effect:-
"16. The High Court, in the impugned judgment, has
held that if the legal representatives of the deceased
employee approach the Motor Accident Claims Tribunal
for payment of compensation to them by moving a
petition under Section 166 of the Act, the liability of the
insurance company is not limited to the extent provided
under the Workmen's Act and on its basis directed the
appellant insurance company to pay the entire amount of
compensation to the claimants. As shown above, the
insurance policy taken by the owner contained a clause
that it was a policy for "Act Liability" only. This being
the nature of policy the liability of the appellant would be
restricted to that arising under the Workmen's Act. The
judgment of the High Court, therefore, needs to be
modified accordingly.
17. The judgment of the High Court insofar as it relates
to quantum of compensation and interest, which is to be
paid to the claimants (respondent Nos. 3 to 6 herein) is
affirmed. The liability of the appellant insurance
company to satisfy the award would be restricted to that
arising under the Workmen's Act. The respondent Nos. 1
and 2 (owners of the vehicle) would be liable to satisfy
the remaining portion of the award".
11. It must be mentioned here that pursuant to the liberty granted, the
first respondent (the claimant) had submitted on 13.10.2015, a brief
synopsis of arguments, seeking to defend the view taken by the tribunal,
referring in this contest to the view taken by Supreme Court in National
Insurance Company Ltd. vs. Baljit Kaur & Ors. 1(2004) ACC 259 (SC).
Upon perusal, it is found that the view taken in Baljit Kaur &
Ors(supra) cannot come into aid either of the claimant or of the person
insured in view of the observations to the following effect:
"........It is therefore, manifest that in spite of the
amendment of 1994, the effect of the provision contained
in Section 147 with respect to persons other than the
owner of the goods or his authorized representative
remains the same. Although the owner of the goods or
his authorized representative would now be covered by
the policy of insurance in respect of a goods vehicle, it
was not the intention of the legislature to provide for the
liability of the insurer with respect to passengers,
especially gratuitous passengers, who were neither
contemplated at the time the contract of insurance was
entered into, nor any premium was paid to the extent of
the benefit of insurance to such category of people. The
upshot of the aforementioned discussions is that instead
and in place of the insurer the owner of the vehicle shall
be liable to satisfy the decree".
12. Thus, this Court, finds that in view of the admitted position of the
claimant that he was an employee of the owner of the offending vehicle
(the person insured) and was travelling in the vehicle in such capacity,
in the course of his employment, the liability of the insurance company
in terms of the insurance policy would have to be restricted to the one
enforceable under the Employees Compensation Act, 1923.
13. As pointed by the appellant insurance company, the
compensation payable to the claimant under the provisions of
Employees Compensation Act, 1923 would be to the tune of ` 2,17,
644/-
14. Thus, the appeal is allowed. The directions given by the tribunal
in the impugned judgment are modified to the effect that the insurance
company would be liable to satisfy the award in favour of the claimant
only to the extent of ` 2,17,644/- with proportionate interest at the rate
levied by the tribunal in the impugned judgment, the liability to pay the
balance being that of the registered owner of the vehicle (the person
insured) i.e. the second respondent herein.
15. The appellant insurance company was directed by order dated
11.08.2004 to deposit the entire awarded amount with upto date interest
in the court and out of the same amount 50% was allowed to be released
in favour of the first respondent (the claimant), the balance having been
kept in fixed deposit, interest bearing account for the specified period.
The said deposit was transferred to the tribunal by order dated 5.3.2009.
The tribunal shall calculate the balance liability of the insurance
company in terms of the award modified as above and release the said
amount in favour of the said first respondent and thereafter refund the
remaining to the insurance company.
16. Needless to add, the claimant would be at liberty to take out
appropriate execution proceedings to enforce the remaining liability
against the owner of the offending vehicle in accordance with law.
17. The statutory deposit, if made, shall be refunded.
18. Lower Court record be returned.
R.K. GAUBA
(JUDGE)
FEBRUARY 02, 2016/nk
