Gujarat High Court
National Insurance Co Ltd vs Bavkuben @ Dhirajbala Nagjitbhai ... on 13 January, 2022
Bench: Mauna M. Bhatt
C/FA/642/2013 ORDER DATED: 13/01/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 642 of 2013
With
R/FIRST APPEAL NO. 643 of 2013
==========================================================
NATIONAL INSURANCE CO LTD
Versus
BAVKUBEN @ DHIRAJBALA NAGJITBHAI GAMARA & 1 other(s)
==========================================================
Appearance:
MR SUNIL B PARIKH(582) for the Appellant(s) No. 1
RULE SERVED(64) for the Defendant(s) No. 1,2
==========================================================
CORAM:HONOURABLE MRS. JUSTICE MAUNA M. BHATT
Date : 13/01/2022
ORAL ORDER
1. Being aggrieved and dissatisfied by the common
judgment and award dated 03.07.2012, passed by Motor
Accident Claims Tribunal (Auxi), Gondal in M.A.C.P No.
123 of 2003 and M.A.C.P No 124 of 2003, the appellant
(Insurance Company) has filed present appeals under
Section 173 of the Motor Vehicles Act, 1988 ('the Act' for
short).
2. The facts emerging from the record of these appeals
are as under:
3. These Appeals are arising out of claim petitions being
MACP No 123 of 2003 and MACP No124 of 2003, due of
the same accident, which occurred on 17.04.2003 near
C/FA/642/2013 ORDER DATED: 13/01/2022
temple of Shitlamata, near village Patidad. MACP No 123
of 2003 was filed by original claimant Bavkuben and
MACP No 124 of 2003 was filed by original claimant
Santuben.
4. It was the case of both claimants in the claim
petitions that when they were traveling as pillion riders on
Motorcycle bearing registration No. GJ-3-HH-2756, the
same collided with a buffalo, near the temple of
Shitlamata, which resulted into serious injuries. Both the
claimants namely Bavkuben and Santuben sustained
injuries for which they underwent medical treatment. For
the said accident, both the claimants filed separate claim
petitions being MACP NO. 123 of 2003 and MACP No. 124
of 2003 respectively claiming compensation of Rs.
1,00,000/- each under Section 166 of the Motor Vehicles
Act, 1988. It was their case that they are entitled for the
compensation as prayed, because at the time of accident
the Motorcycle No. GJ-3-HH-2756 was insured with the
Insurance Company i.e National Insurance Co. Ltd.
5. The Tribunal after hearing the parties and upon
appreciation of evidence, passed an award granting
compensation of Rs. 38,000/- in MACP No. 123 of 2003
(for original claimant Bavkuben) and Rs. 52,060/- in MACP
C/FA/642/2013 ORDER DATED: 13/01/2022
No. 124 of 2003 (original claimant Santuben) with 7 per
cent interest from the date of claim petition till its
realization. The Tribunal in the order dated 3 July, 2012,
has accepted the contention of the Insurance Company that
the Policy of the Motorcycle is the 'Act only' and
therefore risk of the pillion riders was not covered under
the policy. The Insurance Company was thus exonerated
from its liability. The Tribunal has further observed that
on account of the Policy being the 'Act only', there is no
violation of any of the conditions stipulated in the said
Policy. However, as the policy was in existence on the
date of accident, the Tribunal directed the Insurance
Company to pay and then to recover from the owner of
the vehicle. Aggrieved by the said judgment and award,
the Insurance Company as appellant has filed the present
appeals.
6. Heard learned advocate Mr. Sunil B Parikh for the
appellant-Insurance Company. Though served, no one
appeared for respondent No. 1 (Original Claimant) and
respondent No. 2 (owner of the vehicle). Appearing for the
Insurance Company Learned Advocate Mr. Sunil B parikh
made following submissions:
(a) That the Tribunal has erred in directing the
C/FA/642/2013 ORDER DATED: 13/01/2022
Insurance Company to pay the award amount in
the first instance to the claimants and then
liberty is given to recover the same from the
owner of the Motorcycle. He submitted that once
the Insurance Company has been exonerated from
it's liability by holding that the risk of the pillion
rider, traveling on a Motorcycle, is not covered
by the "Act only" Policy, the direction to pay
first and then to recover from the owner of the
Motorcycle is bad in law.
(b) That the Tribunal has erred in directing to make
the payment first and then to recover from driver and
owner. The Tribunal ought to have directed the driver
and owner of the Motorcycle to pay the amount of
compensation as the Policy existed on the date of
accident was only the "Act only" Policy.
(c) That in the "Act only" Policy, the risk of the
pillion riders, traveling on a Motorcycle is not covered.
He relied upon the decision of Coordinate Bench in the
case of United India Insurance Co Ltd. Through
Authorise Signatory vs. Bakulkumar Prabhudas Patel &
5 Other (s) in First Appeal No. 3735 of 2009 and
submitted that the issue is now concluded by the
C/FA/642/2013 ORDER DATED: 13/01/2022
decision of this Court and, therefore, the present
appeal deserves to be allowed.
7. No other and further submissions are made on behalf of
the appellant.
8. I have gone through the evidence on record as well
as the record and proceedings. Upon re-appreciation of
evidence particularly the policy, at Exhibit 41, it is not in
dispute that the policy in existence on the date of accident
was the "Act only" Policy. Therefore, the risk of pillion
riders is not covered.
9. I have also considered the decision of this Court in case
of United India Insurance Co Ltd. Through Authorised
Signatory vs. Bakulkumar Prabhudas Patel & 5 Other (s) in
First Appeal No. 3735 of 2009. In the said decision, in
Para 4, 8 and 9 the court has observed as under:
"4. Mr. Shelat, learned counsel
appearing for the insurance company
has contended that the original claimant
was a pillion rider of the motorcycle
involved in the accident. Mr. Shelat
further relying upon the policy of the
C/FA/642/2013 ORDER DATED: 13/01/2022
Bajaj Scooter, contended that it was an
"Act only" policy and therefore, the
insurance company is not liable for the
claim raised of pillion rider as the risk
was not covered. Mr. Shelat further
contended that even the Tribunal has
noted the said fact, the same has not
been dealt with at all. Mr. Shelat in
order to buttress his arguments, relied
upon the judgment of the Apex Court
in the case of Oriental Insurance Co.
Ltd. Vs. Sudhakaran K.V. reported in
(2008) 7 SCC 428 and the judgment in
the case of National Insurance Co. Ltd.
Vs. Balakrishnan reported in (2013) 1
SCC 731 as well as the judgment of the
learned Single Judge (Coram : N.V.
Anjaria, J.) in FA No. 505 of 2015
dated 22.01.2021. Mr. Shelat further
contended that the insurance policy in
question was renewed in the name of
Bhavanbhai K. Patel, exhibit 36, the
original owner of the scooter, who
expired in the year 1996. Relying upon
the Division Bench judgment of this
C/FA/642/2013 ORDER DATED: 13/01/2022
Court reported in the case of The
United India Insurance Co. vs.
Manjulaben Purshottamdas Patel
reported in 1994(1) GLR 269, it was
contended by Mr. Shelat that as the
policy exhibit 36 was renewed in the
name of a dead person, no valid
contract exist and therefore, the
insurance company is not liable. On the
aforesaid two grounds, it was contended
by Mr. Shelat that the appeal deserves
to be allowed."
"8. Upon re-appreciation of the
evidence at exhibit 36, which is the
policy, the same clearly reveals that it
was renewed from 18.04.2000 to
17.04.2001 and the same was in the
name of Bhavanbhai K. Patel. The
insurance policy at exhibit 36 clearly
mentions that it is an Act only policy.
Sections 146 and 147 of the Act
provides as under -
"146. Necessity for insurance
C/FA/642/2013 ORDER DATED: 13/01/2022
against third party risks.--(1) No
person shall use, except as a
passenger, or cause or allow any
other person to use, a motor vehicle
in a public place, unless there is in
force, in relation to the use of the
vehicle by that person or that other
person, as the case may be, a policy
of insurance complying with the
requirements of this Chapter:
Provided that in the case of a
vehicle carrying, or meant to carry,
dangerous or hazardous goods, there
shall also be a policy of insurance
under the Public Liability Insurance
Act, 1991 (6 of 1991).
(2) The provisions of sub-section (1)
shall not apply to any vehicle
owned by the Central Government
or a State Government and used for
purposes not connected with any
commercial enterprise.
(3) The appropriate Government
may, by order, exempt from the
C/FA/642/2013 ORDER DATED: 13/01/2022
operation of sub-section (1), any
vehicle owned by any of the
following authorities, namely:--
(a) the Central Government or a
State Government, if the vehicle is
used for purposes connected with
any commercial enterprise;
(b) any local authority;
(c) any State Transport Undertaking:
Provided that no such order
shall be made in relation to any
such authority unless a fund has
been established and is maintained
by that authority in such manner as
may be prescribed by appropriate
Government."
"147. Requirement 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 -
C/FA/642/2013 ORDER DATED: 13/01/2022
(a) is issued by a person who is an
authorised insurer; and
(b) insurers 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
C/FA/642/2013 ORDER DATED: 13/01/2022
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 a 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."
"9. It is an admitted position that
the policy in question is Act only
policy. The contention raised by
Mr.Dave that the said contention was
not raised before the Tribunal is of no
C/FA/642/2013 ORDER DATED: 13/01/2022
avail. We find from the judgment that
the said question was raised but the
same has not been dealt with by the
learned Tribunal. The Hon'ble Apex
Court in the case of Oriental Insurance
Co. Ltd. Vs. Sudhakaran K.V. (supra) in
cases where the coverage was by an
Act only policy, has observed thus -
"22. The contract of insurance did
not cover the owner of the vehicle,
certainly not the pillion rider. The
deceased was travelling as a
passenger, stricto sensu may not be
as a gratuitous passenger as in a
given case she may not be a
member of the family, a friend or
other relative. In the sense of the
term which is used in common
parlance, she might not be even a
passenger. In view of the terms of
the contract of insurance, however,
she would not be covered thereby.
23. It is not necessary for us to deal
C/FA/642/2013 ORDER DATED: 13/01/2022
with large number of precedents
operating in this behalf as the
question appears to be covered by a
few recent decisions of this Court.
In United India Insurance Company
Ltd. v. Serjerao & Ors. [2007 (13)
SCALE 80], it was held as under:
"16....When a statutory liability has
been imposed upon the owner, in
our opinion, the same cannot extend
the liability of an insurer to
indemnify the owner, although in
terms of the insurance policy or
under the Act, it would not be
liable therefor.
17. In a given case, the statutory
liability of an insurance company,
therefore,either may be nil or a sum
lower than the amount specified
under Section 140 of the Act.
Thus,when a separate application is
filed in terms of Section 140 of the
Act, in terms of Section 168 thereof,
an insurer has to be given a notice
C/FA/642/2013 ORDER DATED: 13/01/2022
in which event, it goes without
saying, it would be open to the
insurance company to plead and
prove that it is not liable at all.
18. Furthermore, it is not in dispute
that there can be more than one
award particularly when a sum paid
may have to be adjusted from the
final award. Keeping in view the
provisions of Section 168 of the Act,
there cannot be any doubt
whatsoever that an award for
enforcing the right under Section
140 of the Act is also required to be
passed under Section 168 only after
the parties concerned have filed
their pleadings and have been given
a reasonable opportunity of being
heard. A Claims Tribunal, thus,
must be satisfied that the conditions
precedent specified in Section 140 of
the Act have been substantiated,
which is the basis for making an
award.
C/FA/642/2013 ORDER DATED: 13/01/2022
19. Furthermore, evidently, the
amount directed to be paid even in
terms of Chapter-X of the Act must
as of necessity, in the event of
noncompliance of directions has to
be recovered in terms of Section 174
of the Act. There is no other
provision in the Act which takes
care of such a situation. We,
therefore, are of the opinion that
even when objections are raised by
the insurance company in regard to
it liability, the Tribunal is required
to render a decision upon the issue,
which would attain finality and,
thus, the same would be any award
within the meaning of Section 173
of the Act."
It was furthermore held as under:
"6. So far as the question of liability
regarding labourers travelling in
trollies is concerned, the matter was
considered by this Court in Oriental
C/FA/642/2013 ORDER DATED: 13/01/2022
Insurance Company Ltd. Vs. Brij
Mohan and Ors. (2007) 7 SCALE 753
and it was held that the Insurance
Company has no liability...""
25. The law which emerges from
the said decisions, is: (i) the liability
of the insurance company in a case
of this nature is not extended to a
pillion rider of the motor vehicle
unless the requisite amount of
premium is paid for covering his/her
risk (ii) the legal obligation arising
under Section 147 of the Act cannot
be extended to an injury or death of
the owner of vehicle or the pillion
rider; (iii) the pillion rider in a two
wheeler was not to be treated as a
third party when the accident has
taken place owing to rash and
negligent riding of the scooter and
not on the part of the driver of
another vehicle."
9. Considering the policy of Motorcycle being the "Act
C/FA/642/2013 ORDER DATED: 13/01/2022
Only" Policy and the decision of co-ordinate Bench in the
case of United India Insurance Co Ltd. Through Authorise
Signatory vs. Bakulkumar Prabhudas Patel & 5 Other (s) in
F.A. No. 3735 of 2009, in my opinion, the Tribunal in it's
order dated 03.07.2012, in MACP No. 123 of 2003 and
MACP No 124 of 2003, has committed an error in
directing the Insurance Company to pay the award
amount in the first instance to the claimants and then at
liberty to recover the same from the owner of the
Motorcycle, particularly when the risk of pillion rider,
traveling on a Motorcycle, is not covered by the 'Act
only' Policy.
10. In view of the above, the appeals filed by the
appellant-Insurance Company are allowed. The appellants
are entitled for the amount, which has been deposited
before the Tribunal. The Tribunal is directed to refund the
amount deposited by the appellant within a period of 8
weeks with proportionate cost and interest.
(MAUNA M. BHATT,J)
MANISH MISHRA
