Himachal Pradesh High Court
Smt. Ramala Devi & Ors vs Royal Sundaram Alliance Insurance ... on 18 July, 2025
( 2025:HHC:23333 )
IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA
FAO No. 309 of 2017.
Decided on : 18th July, 2025.
.
Smt. Ramala Devi & Ors. ...Appellants.
Versus
Royal Sundaram Alliance Insurance Company Ltd.
....Respondent.
Coram:
The Hon'ble Mr. Justice Satyen Vaidya, Judge.
Whether approved for reporting?1
For the Appellants:
rMr. H.C. Sharma, Advocate.
For the respondent: Mr. Virender Sharma, Advocate.
Satyen Vaidya, Judge (Oral).
This appeal has been filed by the appellants under
Section 173 of the Motor Vehicles Act (for short "the Act")
against the order dated 15.03.2017 passed by the learned
Motor Accident Claims Tribunal (III) Shimla, in MACT Petition
No. 6-S.2/of 2017/2015.
2. Undisputed facts are that late Shri Gian Chand
while driving Maruti car No. HP-09C-0474 met with a fatal
accident on 05.02.2015. The claimants being legal
representatives and dependents of late Shri Gian Chand filed
petition under Section 166 of the Motor Vehicles Act for
compensation.
Whether reporters of the local papers may be allowed to see the judgment?
2 ( 2025:HHC:23333 )
3. The respondent filed a reply and contested the
claim on the ground that it was not maintainable.
.
4. Deceased Shri Gian Chand was the owner of the
vehicle which had met with an accident and thus, he being
not the third party, his claim was held not maintainable by
the learned Tribunal.
5. Thus, the issue that arise for consideration is
whether in the situation like this, the legal representatives
and dependents of the deceased owner-cum-driver of the
vehicle can claim compensation under Section 166 of the Act?
6. The issue involved in the instant appeal has
already been decided by this Court in FAO No.42 of 2013,
titled Neelam Kumari and others vs The National
Insurance Company, decided on 06.08.2021 reported in
2021(3) Shim. LC 1732 in the following terms:
"21. Insofar as the claim under Section 166 of the
Act raised by the appellants/claimants is concerned,
the same has been rightly denied by the learned
Tribunal. The conjoint reading of Sections 147, 149
and 165 of the Act, leads to inescapable conclusion
that the claim under Section 166 of the Act on behalf
of the legal representatives of the deceased, who
himself was owner of the vehicle was not
maintainable. The Act provides for the right of
insured to be indemnified by the insurer against the
third-party risk. The only exception being in respect
3 ( 2025:HHC:23333 )
of the claims which arise out of the special contract
between the insured and insurer beyond the
coverage of third-party risk.
.
22. There is no hesitation in holding that the claim
of the appellants/claimants on account of death of
Sunil Kumar was not maintainable as the deceased
Sunil Kumar was himself the owner-cum-driver of the
vehicle involved in the accident and hence his legal
representatives had stepped into his shoes,
therefore, were not entitled to seek indemnification
from the insurer.
23. Now the question that remains to be decided
is whether the Tribunal could have awarded a sum of
Rs 2,00,000/- to the appellants/claimants on account
of special contract existing between the parties? It is
not in dispute that respondent had received
premium for insuring the owner's personal risk to
the maximum limit of Rs. 2,00,000/-.
24. The Act mandates the policy coverage of third-
party risks but at the same time does not prohibit
the insurer to enter into a special contract of
insurance with insured to cover risks of the persons
and property over and above the statutory coverage
as provided under Sections 146 and 147 of the Act.
The expression used in proviso (ii) to Section 147 (1)
"Provided that the policy shall not be required to
cover any contractual liability", does not mean that
the insurer is prohibited by the Act to enter into a
special contract of insurance with the insured
beyond the statutory limit prescribed under the Act.
In other words, Sections 146 and 147 of the Act,
prescribe the minimum statutory requirement of the
insurance policy covering third party risks subject to
the limits provided under sub section (2) of Section
4 ( 2025:HHC:23333 )
147. In 9 addition, sub section (5) of Section 147 of
the Act, reads as under:
"(5) Notwithstanding anything contained in
.
any law for the time being in force, an insurer
issuing a policy of insurance under this
section shall be liable to indemnify the person
or classes of persons specified in the policy in
respect of any liability which the policy
purports to cover in the case of that person
or those classes of persons".
25. Section 165 of the Act enables the constitution
of Tribunals. Sub section (1) of Section 165 of the
Act cannot be said to be exhaustive for the reasons
that in explanation appended thereto, the claims
under Sections 140 and 163A of the Act have also
been included.
26. Sections 140 and 163A of the Act have their
applicability even without proof of negligence, which
otherwise is opposed to the very principle of strict
liability and vicarious liability under law of torts, on
which rests the entire edifice of jurisdiction of
Tribunals to award damages/compensation.
27. This Court is thus unable to concur with the
contention raised on behalf of the respondent that
even the claim of Rs.2,00,000/- on account of
personal accidental risk of the deceased covered
under the policy Ext. R-1 was not maintainable
before the Tribunal. Reference can be made to the
judgment 10 rendered in Dhanraj vs. New India
Assurance Company Ltd. and another AIR 2004 SC
4767 wherein Hon'ble Apex Court has held as under:
"8...In the case of Oriental Insurance
Co. Ltd. v. Sunita Rathi and Ors. [1998
ACJ 121] it has been held that the liability
of an Insurance Company is only for the
5 ( 2025:HHC:23333 )
purpose of indemnifying the insured
against liabilities incurred towards third
person or in respect of damages to
.
property. Thus, where the insured i.e. an
owner of the vehicle has no liability to a
third party the Insurance Company has no
liability also.
[9] In this case, it has not been
shown that the policy covered any risk for
injury to the owner himself. We are unable
to accept the contention that the premium
of Rs. 4,989/- paid under the heading "Own
damage" is for covering liability towards
r personal injury. Under the heading "Own
damage", the words "premium on vehicle
and non-electrical accessories" appear. It is
thus clear that this premium is towards
damage to the vehicle and not for injury to
the person of the owner. An owner of a
vehicle can only claim provided a personal
accident insurance has been taken out. In
this case, there is no such insurance."
28. Similarly, the Hon'ble Supreme Court in
National Insurance Company Ltd. Vs. Ashalata
Bhowmik and others (2018) 9 SCC 801 in para-9,
has held as under:
"9...Therefore, the High Court was not
justified in directing the appellant/insurer
to pay the compensation determined by
the Tribunal. Since the indemnification
extended to personal accident of the
deceased is limited to Rs.2,00,000/-under
the contract of insurance, the respondents
are entitled for the said amount towards
11 compensation. Hence, the appellant is
6 ( 2025:HHC:23333 )
directed to deposit the said sum of Rs.
2,00,000/- with interest @ 9 per cent per
annum from the date of the Claim Petition
.
till the date of deposit with the Tribunal
within a period of four weeks from today."
29. Even the judgment relied upon on behalf of the
respondent in Ramkhiladi and another vs. United
India Insurance Co. Ltd. and another 2020 ACJ, 627,
the Hon'ble Supreme Court has held in paras 5.9 and
6 as under:
"5.9. Now, so far as the submission made
on behalf of the claimants that in a claim
under Section 163A of the Act mere use of
r the vehicle is enough and despite the
compensation claimed by the heirs of the
owner of the motorcycle which was
involved in the accident resulting in his
death, the claim under Section 163A of the
Act would be maintainable is concerned, in
view of the decision of this Court in Rajni
Devi (supra), the aforesaid cannot be
accepted. In Rajni Devi (supra), it has been
specifically observed and held that the
provisions of Section 163A of the Act
cannot be said to have any application
with regard to an accident wherein the
owner of the motor vehicle himself is
involved. After considering the decisions of
this Court in the cases of Oriental
Insurance Co. Ltd. V. Jhuma Saha, 2007 9
SCC 263; Dhanraj (supra); National
Insurance Co. Ltd. V. Laxmi Narain Dhut,
2007 3 SCC 700 and Premkumari v.
Prahlad Dev, 2008 3 SCC 193, it is
ultimately concluded by this Court that the
7 ( 2025:HHC:23333 )
liability under Section 163A of the Act is on
the owner of the vehicle as a person
cannot be both, a claimant as also a
.
recipient and, therefore, the heirs of the
owner could not have maintained the claim
in terms of Section 163A of the Act. It is
further observed that, for the said purpose,
only the terms of the contract 12 of
insurance could be taken recourse to. In
the recent decision of this Court in the
case of Ashalata Bhowmik (supra), it is
specifically held by this Court that the
parties shall be governed by the terms and
r conditions of the contract of insurance.
Therefore, as per the contract of insurance,
the insurance company shall be liable to
pay the compensation to a third party and
not to the owner, except to the extent of
Rs.1 lakh as observed hereinabove.
[6] In view of the above and for the
reasons stated above, the present appeal
is partly allowed to the aforesaid extent
and it is observed and held that the
original claimants shall be entitled to a
sum of Rs.1 lakh only with interest @ 7.5
per cent per annum from the date of the
claim petition till realization. In the facts
and circumstance of the present case,
there shall be no order as to costs."
30. Even this Court in ICICI Lombard General
Insurance Company Ltd. Vs. Parul Sharma and
others 2018 ACJ 635 has held as under:
"21. The Apex Court in the case titled as
Oriental Insurance Co. Ltd. versus
Rajni Devi and others, 2008 ACJ 1441,
8 ( 2025:HHC:23333 )
held that where compensation is claimed
for the death of the owner or another
passenger of the vehicle, the claim of the
.
insurance company would depend upon
the terms of the insurance policy. It is
worthwhile to reproduce paras 6 and 11 of
the judgment herein:
"6. It is now a well settled principle of law
that in a case where third party is involved,
the liability of the insurance company
would be unlimited. Where, however,
compensation is claimed for the death of
the owner or another passenger of the 13
vehicle, the contract of insurance being
governed by the contract qua contract, the
claim of the insurance company would
depend upon the terms thereof. 7 to 10. Xx
xxx xxx 11. According to the terms of
contract of insurance, the liability of the
insurance company was confined to Rs.
1,00,000 (rupees one lakh). It was liable to
the said extent and not any sum exceeding
the said amount."
[22] Applying the test to the instant case,
the insurance policy of the offending
vehicle is on the record as Ext. R1E, the
perusal of which does disclose that the
owner insured has paid extra premium
covering the insurance of the owner to the
extent of Rs. 2,00,000/. As discussed
hereinabove, deceased Vijay Sharma had
stepped into the shoes of the owner, thus,
his risk was covered to the extent of Rs.
2,00,000/ and the claimants, being the
legal representatives of the owner, are
9 ( 2025:HHC:23333 )
entitled to compensation only in terms of
the conditions contained in the insurance
policy. [23] Viewed thus, it is held that the
.
claimants are entitled to compensation to
the tune of Rs. 2,00,000/ with interest @
7.5% per annum from the date of the claim
petition till its finalization."
7. Another undisputed fact that has emerged on
record is that the vehicle involved in the accident was insured
with the respondent herein at the time of accident. Copy of
certificate cum policy schedule finds place at page 34 of the
file of the learned Tribunal. Though, the document has not
been exhibited, yet the respondent has not denied its
authenticity or genuineness. The perusal of this document
reveals that the insurer has charged Rs.100/- as premium for
compulsory personal accident cover to the owner and for such
event, the liability has been restricted to Rs.2,00,000/-. That
being so, the claimants can be held entitled to a sum of
Rs.2,00,000/- only.
8. The impugned award reveals that this aspect of
the matter had not been taken into consideration by the
learned Tribunal. Learned counsel for the insurer has made
submission that the compensation on account of personal
accident cover can not be granted to the claimants by way of
10 ( 2025:HHC:23333 )
these proceedings and claimants have to seek their remedy
in accordance with law.
.
9. The contention so raised is rejected for the reason
firstly, that the technicalities, more particularly in beneficial
legislation, should not be allowed to override the substantive
rights of the parties and secondly, the accident had taken
place in the year 2015 and even after elapse of 10 years the
claimants have got no solace.
10. In result, the appeal is partly allowed. The
impugned award dated 15.03.2017 passed by the learned
Motor Accident Claims Tribunal (III) Shimla, in MACT Pet. No.
6-S/2 of 2017/15 is set aside and the claimants are held
entitled to compensation of Rs.2,00,000/- along with interest
@ 9% per annum from the date of filing of the petition till
actual realization. The appeal is accordingly disposed of.
(Satyen Vaidya)
Judge
18th July, 2025.
(jai)
