Karnataka High Court

The New India Assurance Co Ltd vs Nandan S Urs on 9 January, 2024

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                                                    MFA No. 6366 of 2015
                                                C/W MFA No. 6531 of 2015



                   IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                       DATED THIS THE 9TH DAY OF JANUARY, 2024

                                        BEFORE
                        THE HON'BLE MR JUSTICE C.M. POONACHA
                  MISCELLANEOUS FIRST APPEAL NO.6366 OF 2015(MV-I)
                                         C/W
                  MISCELLANEOUS FIRST APPEAL NO.6531 OF 2015(MV-I)


             IN MFA NO.6366/2015
             BETWEEN:

                   THE NEW INDIA ASSURANCE CO.LTD.,
                   BRANCH OFFICE, JLB ROAD,
                   MYSORE,
                   THROUGH MOTOR THIRD PARTY,
                   CLAIMS HUB, M.G. ROAD,
                   BANGALORE - 01.
                                                              ...APPELLANT
             (BY C.R. RAVISHANKAR, ADVOCATE FOR
                 SRI. K SURYANARAYANA RAO., ADVOCATE)

             AND:
Digitally
signed by
BHARATHI S   1.    NANDAN S URS,
Location:
HIGH               S/O K.M. SOMASHEKAR RAJE URS,
COURT OF
KARNATAKA          AGED ABOUT 19 YEARS,
                   R/O D-3/85, MARUTHINILAYA,
                   FORT STREET,
                   MADDUR TOWN,
                   MANDYA DISTRICT - 571 401.

             2.    DEEPAK R.R.,
                   S/O LATE RAMAIAH,
                   MAJOR IN AGE,
                   R/O 2ND CROSS,
                   K.H. NAGARA,
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                                           NC: 2024:KHC:1100
                                      MFA No. 6366 of 2015
                                  C/W MFA No. 6531 of 2015



     ST. ANNES CONVENT ROAD,
     MADDUR TOWN,
     MANDYA DIST.- 571 401.
                                              ...RESPONDENTS
(R1 SERVED AND UNREPRESENTED;
 VIDE ORDER DATED 24.07.2019, SERVICE OF NOTICE TO R2
 HELD SUFFICIENT)

     THIS MFA IS FILED U/S 173(1) OF MV ACT AGAINST THE
JUDGMENT AND AWARD DATED:4.6.2015       PASSED IN MVC
NO.940/2014 ON THE FILE OF THE SENIOR CIVIL JUDGE, MACT,
MADDUR, AWARDING A COMPENSATION OF RS.3,24,840/- WITH
INTEREST @ 7% P.A FROM THE DATE OF PETITION TILL
REALIZATION.
IN MFA NO.6531/2015
BETWEEN:

     THE NEW INDIA ASSURANCE CO.LTD.,
     BRANCH OFFICE, JLB ROAD,
     MYSORE,
     THROUGH MOTOR THIRD PARTY,
     CLAIMS HUB, M.G. ROAD,
     BANGALORE - 01.
                                                 ...APPELLANT
(BY C.R. RAVISHANKAR, ADVOCATE FOR
    SRI. K. SURYANARAYANA RAO, ADVOCATE)

AND:

1.   T.P. CHANDANA,
     S/O PUTTARAMU,
     AGED ABOUT 22 YEARS,
     R/O 2ND CROSS,
     K.H. NAGARA,
     MADDUR TOWN,
     MANDYA DIST.

2.   DEEPAK R.R.,
     S/O LATE RAMAIAH,
     MAJOR IN AGE,
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                                                         NC: 2024:KHC:1100
                                                     MFA No. 6366 of 2015
                                                 C/W MFA No. 6531 of 2015



         R/O 2ND CROSS,
         K.H. NAGARA,
         ST. ANNES CONVENT ROAD,
         MADDUR TOWN,
         MANDYA DIST.
                                                            ...RESPONDENTS
(R1 AND R2 SERVED AND UNREPRESENTED)

     THIS MFA IS FILED U/S 173(1) OF MV ACT AGAINST THE
JUDGMENT AND AWARD DATED:4.6.2015       PASSED IN MVC
NO.941/2014 ON THE FILE OF THE SENIOR CIVIL JUDGE, MACT,
MADDUR, AWARDING A COMPENSATION OF RS.2,48,680/- WITH
INTEREST @ 7% P.A FROM THE DATE OF PETITION TILL
REALIZATION.

     THESE APPEALS, COMING ON FOR ADMISSION, THIS DAY,
THE COURT DELIVERED THE FOLLOWING:
                                         JUDGMENT

Since, in both the above appeals filed by the insurer,

challenge is to the common judgment and awards dated

04.06.2015 passed in MVC.Nos.940/2014 and 941/2014 by the

Court of Senior Civil Judge and MACT, Maddur1, both the

appeals are taken up together for consideration.

2. The relevant facts necessary for consideration of the

above appeals are that on 22.03.2013 Respondents No.12 in

both the appeals were traveling in a car when the same hit a

rock causing the accident in question due which the claimants

suffered injures. Claiming compensation for the said injuries,

Hereinafter referred as 'Tribunal'

hereinafter referred as 'Claimant'

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the claimants have filed the claim petitions before the Tribunal,

arraying the owner and insurer of the car is Respondents.

3. The owner of the car remained ex-parte before the

Tribunal. The claim proceedings were contested by the insurer

who has taken a specific defence that policy of the insurance

was a liability only policy and the same does not cover the

liability of the occupant. Hence, since the claimants were

traveling in the said car as occupants at the time of the

accident, the insurer is not liable to pay the compensation

awarded.

4. The claimants examined themselves as PW.1 and PW.2

before the Tribunal. Ex.P.1 to Ex.P.16 were marked. The

representative of insurer was examined as RW.1 and marked

documents as Ex.R.1 to Ex.R.2. The Tribunal by its judgment

and award dated 04.02.2015 allowed the claim petition and

awarded a compensation of Rs.3,24,840/- to the claimant in

MVC.No.940/2014 and Rs.2,48,680/- to the claimant in

MVC.No.941/2014 together with interest at 7% per annum and

directed the insurer to pay compensation awarded. Being

aggrieved, the present appeals are filed.

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5. The sole contention put forth by the Appellant - insurer

in the appeals is that it is not required to cover the liability of

the claimants who are occupants in the car.

6. Learned counsel for the Appellant in support of the

ground urged in the above appeals submits that a specific

defence has been taken by the Appellant in the statement of

objections and evidence of RW.1 has also been adduced with

regard to the said defence. It is further contended that the

policy of insurance (Ex.R.1) specifically discloses that the

premium paid is in only respect of third party and the insurer is

not liable to pay compensation to the claimants who were

occupants in the car. In support of his submissions, he relies on

the judgment of Hon'ble Supreme Court in the case of UNITED

INDIA INSURANCE CO. LTD., SHIMLA V/S TILAK SINGH

AND ORS3.

7. The Respondents have been served and the service

have been held sufficient.

8. The contention of the for the Appellant has been

considered and the material on record including the records of

SC 2006 ACJ 1441

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the Tribunal have been perused. The question that arises for

consideration is 'whether appellant is liable to pay the

compensation awarded?'

9. It is forthcoming that the insurer has taken a specific

defence that it is not liable to pay compensation towards

occupants of the car. The defence is forthcoming in the

statement of objections filed before the Tribunal as well as in

the testimony of the RW.1. It is forthcoming from the insurance

policy (Ex.R.1) that the insurer has collected as third party

premium of Rs.943/- only and no premium has been received

to cover the risk of the occupants of the car.

10. The question as to whether the insurer is liable to pay

compensation for the occupants of a car is no longer

res-integra, inasmuch as the Hon'ble Supreme Court in the

case of THE BRANCH MANAGER, THE NEW INDIA

ASSURANCE CO. LTD., V/S MAHADEV PANDURANG PATIL

AND ANOTHER4 held as follows:

"15. Therefore, the passenger of a vehicle which is not meant for public service is not covered under this Section. The said passenger in the case of a two wheeler is the pillion rider and in the case of three wheeler and four wheeler the occupants of

ILR 2011 KAR 850

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such vehicle who are not carried in the said vehicle for hire or reward. Therefore, the insurance policy taken in respect of a vehicle, in which they are traveling as such passengers are not treated as third parties and such an insurance do not cover the risk of such persons. The reason is Section 147 does not require a policy to cover the risk to passengers who are not carried for hire or reward. The statutory insurance does not cover injuries suffered by occupants of the vehicle who are not carried for hire or reward and the insurer cannot be held liable under the Act. The occupants/passengers/inmates of a private vehicle do not fall within the definition of the word third party. Therefore, the legal obligation arising under Section 147 of the Act cannot be extended to an injury or death of the owner of the vehicle, passengers in such private vehicle or a pillion rider in the case of a two wheeler. Gratuitous passengers who are not carried for hire or reward in a vehicle other than a public service vehicle, cannot be construed as third parties.

16. If the risk of an occupant of a car, inmate of a vehicle or passenger in a private car, is to be covered, additional premium has to be paid. If no additional premium is paid, their risk is not covered. The statutory liability under Sections 146 and 147 of the Act has to be read with the terms of the insurance policy issued under Section 146 of the Act. But that does not prevent an insurer from entering into a contract of insurance covering a risk wider than the minimum requirement of the statute, whereby the risk to gratuitous passengers could also be covered. A third party policy does not cover liability to gratuitous passengers who are not carried for hire or reward. If a liability other than the limited liability provided for under the Act is to be enhanced under an insurance policy, additional premium is required to be paid. The liability is restricted to the liability arising out of the statutory requirements under Section 146 only."

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11. The Tribunal while considering the defence of the

insurer at para 30 of the judgment has merely noticed that the

policy of insurance is valid from the period 12.09.2012 to

11.12.2013 and since claimants are traveling in the car held

the insurer as liable to pay the compensation. The Tribunal has

not appropriately considered the specific defence raised by the

insurer as well as the evidence adduced as also the policy of

insurance.

12. Having regard to the aforementioned, it is clear that

the finding recorded by the insurer is erroneous and liable to be

interfered with.

13. In view of the factual matrix noticed above and the

settled for possession of law, the question that arises for

consideration is answered in the negative. Hence, the relief

sought for in the present appeals are liable to be granted.

14. In view of the aforementioned the following order is

passed:

ORDER

i. The above appeals are allowed.

ii. The judgment and award dated 04.06.2015 passed in MVC.Nos.940/2014 and 941/2014 by the

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Court of Senior Civil Judge and MACT, Maddur holding the Appellant - Insurer liable to pay compensation award is set aside.

iii. The compensation awarded by the Tribunal shall be payable by the owner of the vehicle who has been arrayed as Respondent No.1 before the Tribunal and Respondent No.2 in the present appeals.