Delhi High Court
Icici Lombard General Insurance ... vs Munni Devi And Ors. on 30 May, 2016
$~R-117
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 30.05.2016
+ MAC.APP. 25/2008
ICICI LOMBARD GENERAL INSURANCE CO. LTD.
..... Appellant
Through Mr. Pankaj Seth, Adv. with Mr.
Shoumik Mazumdar, Adv.
versus
MUNNI DEVI AND ORS.
..... Respondent
Through None
CORAM:
HON'BLE MR. JUSTICE R.K.GAUBA
JUDGMENT
R.K.GAUBA, J (ORAL):
1. Suraj @ Suraj Pal son of the first and second respondents was
admittedly driving scooter bearing registration No.DL 7S AD 6202 (the
scooter) of Kherati Lal (third respondent) on 01.11.2005 with his friend
Sunder riding on the pillion. Both were returning from Subzi Mandi
Ghazipur, Delhi at about 7.30 PM in the area of Pushta Ganda Nala Road
behind police station Kalyanpuri, Delhi. The front wheel of the scooter got
burst as a result of which the person driving the said scooter (deceased) lost
control and the vehicle collided against the central verge making both
occupants of the scooter fall down. They sustained injuries and both died in
the consequence. Two accident claim cases including one (suit No.97/2006)
on behalf of the first and second respondents (claimants) were instituted,
seeking compensation under Section 163A of Motor Vehicles Act, 1988
(MV Act). Kherati Lal, the owner of the scooter and appellant insurance
company (insurer), having admittedly issued insurance policy covering third
party risk were impleaded as respondents. The motor accident claims
tribunal (tribunal) held inquiry and, by common judgment dated 06.10.2007,
allowed both the petitions. In the claim case preferred by the first and
second respondents herein, compensation in the sum of `4,22,280/- was
awarded with interest at 7% per annum , the liability having been fastened
on the insurer.
2. By the appeal at hand, the insurer questioned the liability fastened on
it in the case of compensation in favour of the first and second respondents
herein on the ground the deceased Suraj @ Suraj Pal, having borrowed the
scooter from Kherati Lal, had stepped into his shoes and thus he could not
be treated as third party vis-à-vis the appellant. Reliance is placed on
Ningamma v. United India Insurance Co. Ltd. AIR 2009 SC 3056.
3. An identical fact situation was brought before this Court in Oriental
Insurance Co. Ltd. v. Shakuntala (MAC.APP. No.142/2007) decided on
02.03.2016. This Court considered the issue thus :
4. The fact situation in the cases of Sadanand Mukhi
(supra) and Ningamma (supra) were similar. In Sadanand
Mukhi (supra), the motorcycle was owned by the father of the
deceased and an Act only policy had been taken out by him in
terms of Section 147 of the MV Act. The claim petition had
been filed by the parents arising out of death resulting from the
motorcycle having skidded on account of a street dog having
come in its way. In Ningamma (supra), the deceased was
travelling on a motorcycle which he had borrowed from its real
owner, it having struck against a bullock-cart that had come in
its path, resulting in death.
5. In Sadanand Mukhi (supra), the Supreme Court observed
as under:
"...Contract of insurance of a motor vehicle is governed
by the provisions of the Insurance Act. The terms of the
policy as also the quantum of the premium payable for
insuring the vehicle in question depends not only upon
the carrying capacity of the vehicle but also on the
purpose for which the same was being used and the
extent of the risk covered thereby. By taking an „act
policy', the owner of a vehicle fulfils his statutory
obligation as contained in Section 147 of the Act. The
liability of the insurer is either statutory or contractual.
If it is contractual its liability extends to the risk covered
by the policy of insurance. If additional risks are sought
to be covered, additional premium has to be paid. If the
contention of the learned counsel is to be accepted, then
to a large extent, the provisions of the Insurance
Act become otiose. By reason of such an interpretation
the insurer would be liable to cover risk of not only a
third party but also others who would not otherwise
come within the purview thereof. It is one thing to say
that the life is uncertain and the same is required to be
covered, but it is another thing to say that we must read a
statute so as to grant relief to a person not contemplated
by the Act. It is not for the court, unless a statute is found
to be unconstitutional, to consider the rationality thereof.
Even otherwise the provisions of the Act read with the
provisions of the Insurance Act appear to be wholly
rational.
Only because driving of a motor vehicle may cause
accident involving loss of life and property not only of a
third party but also the owner of the vehicle and the
insured vehicle itself, different provisions have been
made in the Insurance Act as also the Act laying down
different types of insurance policies. The amount of
premium required to be paid for each of the policy is
governed by the Insurance Act. A statutory regulatory
authority fixes the norms and the guidelines."
(emphasis supplied.)
6. While holding that the insurance company could not be
called upon to indemnify against the aforementioned fact
situation, the Supreme Court took note of the view taken earlier
in cases reported as Oriental Insurance Co. Ltd. v. Jhuma
Saha, (2007) 9 SCC 263 and United India Insurance Co. Ltd. v.
Davinder Singh, (2007) 8 SCC 698.
7. In Jhuma Saha (supra), the Supreme Court held thus:-
"10...The deceased was the owner of the vehicle. For the
reasons stated in the claim petition or otherwise, he
himself was to be blamed for the accident. The accident
did not involve motor vehicle other than the one which he
was driving. The question which arises for consideration
is that the deceased himself being negligent, the claim
petition under Section 166 of the Motor Vehicles Act,
1988 would be maintainable.
11. Liability of the insurer Company is to the extent of
indemnification of the insured against the respondent or
an injured person, a third person or in respect of
damages of property. Thus, if the insured cannot be
fastened with any liability under the provisions of
the Motor Vehicles Act, the question of the insurer being
liable to indemnify the insured, therefore, does not
arise."
8. It was furthermore held: (Jhuma Saha case, SCC pp,
265066, para 13)
"13. The additional premium was not paid in respect of
the entire risk of death or bodily injury of the owner of
the vehicle. If that be so, Section 147(b) of the Motor
Vehicles Act which in no uncertain terms covers a risk of
a third party only would be attracted in the present
case." (emphasis supplied)
9. In Davinder Singh (supra), it was held as under:-
" It is, thus, axiomatic that whereas an insurance
company may be held to be liable to indemnify the owner
for the purpose of meeting the object and purport of the
provisions of the Motor Vehicles Act, the same may not
be necessary in a case where an insurance company may
refuse to compensate the owner of the vehicle towards
his own loss. A distinction must be borne in mind as
regards the statutory liability of the insurer vis-a-vis the
purport and object sought to be achieved by a beneficent
legislation before a forum constituted under the Motor
Vehicles Act and enforcement of a contract qua contract
before a Consumer Forum." (emphasis
supplied)
10. In the case of Ningamma (supra), the Supreme Court
followed the view taken, inter-alia, in Sadanand Mukhi (supra)
and observed thus:-
" On the other hand, the counsel for the respondent
has argued that the High Court rightly set aside the
judgment and order of the Tribunal since in order to
become eligible for compensation for the loss caused
due to the use of motor vehicle as provided under Section
163-A of the MVA, the person who has suffered the loss
must be a third party under the MVA and since in the
present case the deceased or the appellants are not the
third party, therefore, judgment rendered by the High
Court did not call for any interference. It was further
submitted that the driver is a representative of the owner
if he was driving under the owner's instructions or
permission and is thus owner qua insurance company
and not a third party.
In the light of the aforesaid submissions, the
question that falls for our consideration is whether the
legal representatives of a person, who was driving a
motor vehicle, after borrowing it from the real owner
meets with an accident without involving any other
vehicle, would be entitled to compensation under Section
163-A of MVA or under any other provision(s) of law
and also whether the insurer who issued the insurance
policy would be bound to indemnify the deceased or his
legal representative?
In Oriental Insurance Company Ltd. v. Rajni Devi
and Others, (2008) 5 SCC 736, wherein one of us,
namely, Hon'ble S.B. Sinha, J. was 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 Oriental Insurance Co. Ltd. case
that Section 163-A 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 163-A 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 163-A of the
MVA.
In our considered opinion, the ratio of the decision
in Oriental Insurance Co. Ltd. case 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 an 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. We have
already extracted Section 163-A 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 163-A. 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 163-A 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 163-A of the MVA."
11. In view of the position of law to above effect, the
contention of the appellant must be upheld. The claim petition
under Section 163-A of the MV Act could not have been
brought against the insurance company in the fact situation
mentioned above."
8. The above view squarely applies to the case at hand. Thus, the appeal
must be allowed. The liability fastened against the insurer (appellant) is set
aside.
9. By order dated 15.01.2008, the insurance company had been directed
to deposit the entire awarded amount with Registrar General within the
period specified. By order dated 14.08.2008, 50% of the amount deposited
was allowed to be released subject to furnishing security to the satisfaction
of the Registrar General. On 17.03.2010, it was submitted on behalf of the
claimants that they were unable to furnish security as directed by the Court.
The Court noted that the insurance company had deposited the amount of
Rs.4,82,371/- with the Registrar General on 11.04.2008 and the said amount
was lying in civil court deposit (CCD) account. By order passed on the said
date (17.03.2010), the Registrar General was directed to release Rs.82,371/-
to the first claimant (first respondent), the balance directed to be held in
fixed deposit receipt in UCO Bank, Delhi High Court Branch for a period of
three years with right given to the first respondent to receive monthly
interest thereagainst.
10. In view of the above noted result of the appeal, the balance lying in
fixed deposit shall be refunded to the insurance company with accrued
interest. Apparently, the right to receive monthly interest is also vacated.
11. The insurance company is at liberty to take out appropriate
proceedings to recover the amount earlier released to the claimant.
12. The appeal is disposed of in above terms.
13. Statutory deposit, if made, shall be refunded.
14. A copy of this judgment shall be sent by the registry to the claimants
by registered post at their address.
(R.K. GAUBA)
JUDGE
MAY 30, 2016
VLD
