Kerala High Court
United India Insurance Company ... vs Antony on 16 March, 2021
1
MACA.No.771 OF 2020
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.S.DIAS
TUESDAY, THE 16TH DAY OF MARCH 2021 / 25TH PHALGUNA, 1942
MACA.No.771 OF 2020(F)
AGAINST THE AWARD IN OPMV 923/2017 DATED 03-02-2020 OF MOTOR ACCIDENT
CLAIMS TRIBUNAL , IRINJALAKUDA
APPELLANT/S:
UNITED INDIA INSURANCE COMPANY LTD.,
FASHION TOWER, KANNUR REPRESENTED BY ITS ADMINISTRATIVE
OFFICER, A. SHOBHA, UNITED INDIA INSURANCE CO-LTD.,
REGIONAL OFFICE, SHARANYA, HOSPITAL ROAD, KOCHI-682011.
BY ADV. SRI.S.K.AJAY KUMAR
RESPONDENT/S:
1 ANTONY,AGED 63 YEARS, S/O. VAREETH, PAYYAPPILLY HOUSE,
VENDOOR DESOM, AMBALLUR VILLAGE AND P.O., MUKUNDAPURAM
TALUK, THRISSUR DISTRICT-680302.
2 ANNIE,AGED 54 YEARS, W/O. ANTONY, PAYYAPPILLY HOUSE,
VENDOOR DESOM, AMBALLUR VILLAGE AND P.O., MUKUNDAPURAM
TALUK, THRISSUR DISTRICT-680302.
3 ANCY BABY,AGED 28 YEARS, D/O. ANTONY, PAYYAPPILLY HOUSE,
VENDOOR DESOM, AMBALLUR VILLAGE AND P.O., MUKUNDAPURAM
TALUK, THRISSUR DISTRICT-680302.
4 SUVARNA,AGED 23 YEARS, D/O. ANTONY, PAYYAPPILLY HOUSE,
VENDOOR DESOM, AMBALLUR VILLAGE AND P.O., MUKUNDAPURAM
TALUK, THRISSUR DISTRICT-680302.
5 SHIDHIN SHAJI,AGE NOT KNWON, S/O.K.P. SHAJI, SINDHOORAM,
THAVAKKARA, CIVIL STATION P.O., KANNUR-670002.
6 VASUDEVAN,KATTIKULAM HOUSE, ALAGAPPA NAGAR P.O.,
THRISSUR DISTRICT-680302, NOW RESIDING AT KHB COLONY,
YELAHANKA TOWN, BANGALORE-560064.
R1-3 BY ADV. SRI.A.R.NIMOD
R1-3 BY ADV. SRI.M.A.AUGUSTINE
THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON
16.03.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
2
MACA.No.771 OF 2020
C.S.DIAS, J.
======================
MACA No.771 of 2020
======================
Dated this the 16 day of March, 2021
th
JUDGMENT
Can an Insurance Company be directed to pay
compensation to a pillion rider in a motor cycle covered by
a statutory policy is the question that emanates for
consideration in the appeal.
2. The relevant background facts for the determination
of the appeal are as follows:-
2.1. The appellant (Insurance Company) was the third
respondent in OP (MV) 923/2017 on the file of the Motor
Accidents Claims Tribunal, Irinjalakkuda. The respondents
1 to 4 in the appeal were the petitioners and the
respondents 5 and 6 were the respondents 1 and 2 in the
claim petition. The parties are, wherever the context so
requires, referred to as per their status in the claim
petition.
MACA.No.771 OF 2020
2.2. The petitioners had filed the claim petition under
Section 166 of the Motor Vehicles Act, 1988 (in short 'the
Act'), claiming compensation on account of the death of
one Issac Antony, who died in a motor accident on
30.9.2016.
2.3 The case of the petitioners was that, while the
deceased was travelling as a pillion rider on a motor cycle
bearing registration No.KL-13-Y-7323 on Major Sandeep
Unnikrishnan Road near Thirumala Daba from Yelahanka
New Town to M.S Palaya Road, the rider of the motor cycle,
by name, Adarsh rode the motor cycle in a rash and
negligent manner and lost control of the vehicle and hit the
motor cycle against a wall. As a result of the accident, Issac
Antony sustained fatal injuries and died on the spot. The
first respondent is the owner of the vehicle and the second
respondent is the legal representative of the deceased rider
and the third respondent is the insurer of the motor cycle.
The petitioners claiming themselves to be the legal
representatives of the deceased Issac Antony, claimed an
amount of Rs.25,00,000/- as compensation.
MACA.No.771 OF 2020
2.4. The respondents 1 and 2 did not contest the
proceedings.
2.5. The third respondent filed a written statement
admitting the insurance policy of the motor cycle.
However, the third respondent contended that the
insurance policy was only a 'Limited Liability Policy',
therefore, the third respondent was not liable to cover the
pillion rider. Hence the claim petition be dismissed.
2.6. The petitioners marked Exhibits A-1 to A-13 in
evidence. The third respondent marked Ext B1 ― copy of
the insurance policy ― in evidence.
2.7. The Tribunal by the impugned award allowed the
claim petition by holding that the respondents 1 and 2 were
jointly and severally liable to pay compensation of
Rs.14,90,800/- with interest @ 8% interest per annum
from the date of petition till the date of realisation with
proportionate costs. . The third respondent was directed to
deposit the amount and recover it from the first
respondent.
2.8. Aggrieved by the impugned award, the third
MACA.No.771 OF 2020
respondent is in appeal.
3. Heard Sri.S.K.Ajay Kumar, the learned Counsel
appearing for the appellant and Sri.A.R Nimod, the learned
counsel appearing for the respondents 1 t o 4.
4. The learned Counsel appearing for the appellant
drew the attention of this Court to Sections 147 and 149 of
the Motor Vehicles Act, 1988 and contended that under a
'Limited Liability Policy, unless additional premium is paid,
the Insurance Company is not liable to pay the
compensation to person(s) falling outside the purview of
Section 147 of the Act. Only when there is a
violation/breach of the Policy conditions, the Insurance
Company can be directed to pay the compensation to the
victim/dependents and then recover the amount from the
insured as provided under Section 149 of the Act.
According to him, in the present case, Exhibit B-1 is a
'Limited Liability Policy' and no additional premium was
paid to cover the pillion rider on the motor cycle.
Therefore, the impugned award is patently erroneous. He
placed reliance on the decisions of the Honourable
MACA.No.771 OF 2020
Supreme Court in New India Assurance Company Ltd
vs. Asha Rani and others [2003 (2) SCC 223] and United
India Insurance Co. Ltd, Shimla vs. Tilak Singh and
others [2006 (4) SCC 404] to fortify his contentions. He
prayed that the appeal be allowed and the Insurance
Company be exonerated.
6. Per contra, Sri.A.R.Nimod, the learned Counsel
appearing for the respondents 1 to 4 defended the
impugned award and contended that in National
Insurance Co Ltd vs. Saju P.Paul and Another [2013 (2)
SCC 41] the Honourable Supreme Court has held that
there is no embargo or prohibition in the Tribunal
directing the Insurance Company to pay the compensation
to the victim and recover it from the insured. He placed
strong reliance on the decision in Manuara Khatun and
others vs. Rajesh Kr. Singh and others [2017 (4) SCC
796] and argued that the Honourable Supreme Court
following Saju P.Paul (supra) had directed the Insurance
Company to pay the compensation to the victim and
recover the same from the insured. Finally, he placed
MACA.No.771 OF 2020
reliance on Shamanna and another vs. the Divisional
Manager, Oriental Insurance Co Ltd and others [ 2018
(4) KLT 367] and submitted that the Honourable Supreme
Court following the decisions in National Insurance
Co.Ltd vs. Swaran Singh and others [(2004) 3 SCC 297]
and National Insurance Co.Ltd vs. Laxmi Narain Dhut
[(2007) 3 SCC 700], has held that the proper course to be
adopted in matters of compensation is to direct the
Insurance Company to pay the compensation and recover
it from the insured. The learned counsel argued that the
law laid down in Asha Rani (supra) has got watered down
over the years, by the pronouncements in Saju Paul and
Manuara Khatun (supra) and, therefore, there is no
wrong in directing the Insurance Company to pay and
recover the compensation.
7. It is an undisputed fact that the deceased was a
pillion rider on the motor cycle bearing registration No.KL-
13-Y-7323. Exhibit B-1 is the insurance policy in respect
of the said motor cycle. Undisputedly, no additional
premium was paid to cover a pillion rider.
MACA.No.771 OF 2020
8. Sub-Sections (1) and (2) of Section 147 of the Motor
Vehicles Act, 1988, reads as follows:
"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 -
(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 motor vehicle or damage to any
property of a third party caused by or
arising out of the use of the motor
vehicle in a public place;
(ii) against the death of or bodily injury to
any passenger of a transport vehicle,
except gratuitous passengers of a
goods vehicle, caused by or arising
out of the use of the motor 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)
(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 clarified 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
MACA.No.771 OF 2020
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.
(2) Subject to the proviso to sub-section (1), a policy
of insurance referred to in sub-section (1), shall cover any
liability incurred in respect of any accident, up to the
following limits, namely:--
(a) save as provided in clause (b), the amount of liability
incurred;
(b) in respect of damage to any property of a third party, a limit
of rupees six thousand:
Provided that any policy of insurance issued with any limited liability
and in force, immediately before the commencement of this Act, shall
continue to be effective for a period of four months after such
commencement or till the date of expiry of such policy whichever is earlier".
(emphasis given)
9. Sub-Section (1) of Section 149 of the Motor Vehicles
Act, 1988, reads thus:
"149. Duty of insurers to satisfy judgments and awards against persons
insured in respect of third party risks.-- (1) If, after a certificate of
insurance has been issued under sub-section (3) of section 147 in
favour of the person by whom a policy has been effected, judgment
or award in respect of any such liability as is required to be covered
by a policy under clause (b) of sub-section (l) of section 147 (being
a liability covered by the terms of the policy) 1[or under the
provisions of section 163A] is obtained against any person insured
by the policy, then, notwithstanding that the insurer may be
entitled to avoid or cancel or may have avoided or cancelled the
policy, the insurer shall, subject to the provisions of this section,
pay to the person entitled to the benefit of the decree any sum not
exceeding the sum assured payable thereunder, as if he were the
judgment debtor, in respect of the liability, together with any
amount payable in respect of costs and any sum payable in respect
of interest on that sum by virtue of any enactment relating to
interest on judgments.
(emphasis given)
10. A three Judge Bench of the Honourable Supreme
Court in New India Assurance Company Ltd vs. Asha
MACA.No.771 OF 2020
Rani and others (supra), interpreting Section 147 of the
Act, in paragraphs 27 to 29 held as follows:
27. In view of the changes in the relevant provisions in 1988 Act
vis-a-vis 1939 Act, we are of the opinion that the meaning of the
words "any person" must also be attributed having regard to the
context in which they have been used i.e., 'a third party'. Keeping in
view the provisions of 1988 Act, we are of the opinion that as the
provisions thereof do not enjoin any statutory liability on the owner of
a vehicle to get his vehicle insured for any passenger travelling in a
goods vehicle, the insurers would not be liable therefor.
28. Furthermore, sub cls (i) of Cl.(b) of sub-s.(1) of S.147 speaks
of liability which may be incurred by the owner of a vehicle in respect
of death of or bodily injury to any person or damage to any property
of a third party caused by or arising out of the use of the vehicle in a
public place, whereas sub cl.(ii) thereof deals with liability which may
be incurred by the owner of a vehicle 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.
29. An owner of a passenger carrying vehicle must pay
premium for covering the risks of the passengers. 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. But if the ratio of this Court's decision
in New India Assurance Company v. Satpal Singh and others
(JT 1999 (9) SC 416) is taken to its logical conclusion,
although for such passengers, the owner of a goods carriage
need not take out an insurance policy, they would be deemed
to have been covered under the policy where for even no
premium is required to be paid".
11. Again in paragraph 21 in United India Insurance
Co. Ltd, Shimla vs. Tilak Singh and others (supra),
the Honourable Supreme Court held as follows:
" 21. In our view, although the observations made in
Asha Rani case were in connection with carrying passengers
in a goods vehicle, the same would apply with equal force to
gratuitous passengers in any other vehicle also. Thus, we
must uphold the contention of the appellant Insurance
Company that it owed no liability towards the injuries
suffered by the deceased Rajinder Singh who was a pillion
MACA.No.771 OF 2020
rider, as the insurance policy was a statutory policy, and
hence it did not cover the risk of death of or bodily injury to
a gratuitous passenger."
(emphasis given)
12. In United India Insurance Co. Ltd vs. M Laxmi
and others (supra) the Honourable Supreme Court has
reiterated the position that in an 'Act Policy', the Insurance
Company is not liable to pay any amount in the case of
injuries sustained by a pillion rider. The same view has
been taken in Jagtar Singh @ Jagdev Singh vs. Sanjeev
Kumar and others (supra) in respect of
occupants/gratuitous passengers in a passenger car.
13. On a careful analysis of the decision in National
Insurance Co Ltd vs. Saju P.Paul and Another (supra) it
is seen that the Honourable Supreme Court has, without
referring to Sections 147 and 149 of the Act or Asha Rani
and Tilak Singh, in exercise of its plenary powers under
Article 142 of the Constitution of India and taking into
consideration the peculiar facts and circumstances of
that case, directed the Insurance Company to pay the
compensation to the victim and recover the amount from
MACA.No.771 OF 2020
the insured.
14. Following Saju Paul (supra) the Honourable
Supreme Court in Manuara Khatun and others vs.
Rajesh Kr. Singh and others (supra) also in the peculiar
facts of the above cases, de-hors the fact that the victims
were gratuitous passengers, directed the Insurance
Companies to pay the compensation to the dependents of
the deceased and then recover the amount from the
insured.
15. In Shamanna and another vs. the Divisional
Manager, Oriental Insurance Co Ltd and others
(supra), the Honourable Supreme Court relying on its
earlier decisions in Swaran Singh and Laxmi Narain
Dhut (supra) directed the Insurance Company to pay
compensation and recover it from the insured. However,
these decisions were rendered in cases falling within the
sweep of Section 149 of the Act ― cases involving violation
of policy conditions. Therefore, the said decisions are not
applicable to present case.
16. The power of Honourable Supreme Court to direct
MACA.No.771 OF 2020
an Insurance Company to pay the compensation to the
victim and recover the amount from the insured, in
exercise of its powers under Article 142 of the Constitution
of India, was doubted and referred to a larger Bench in
National Insurance Co Ltd vs. Parvathneni and
another [(2009) 8 SCC 785]. However, by order dated
17.9.2013, the Special Leave Petition was dismissed and
the reference has been kept open to be decided in an
appropriate case. Again in National Insurance Company
vs. Roshan Lal and another [(2017) 4 SCC 803] the
question has been placed before a larger Bench.
17. On an overall re-appreciation of the facts,
Sections 147 and 149 of the Act and the aforecited
precedents, I am of the definite opinion that the law laid by
the three Judge Bench in Asha Rani, and Tilak Singh,
that a 'Statutory Policy' only covers death or bodily injury
of a third party falling within the sweep of Section 147 of
the Act, is squarely applicable to the facts of the present
case. Therefore, as additional premium was admittedly not
paid to cover the deceased, who was a pillion rider on the
MACA.No.771 OF 2020
motor cycle, which was covered by only 'Act Policy', I have
no hesitation to hold that the deceased was not covered by
Exhibit B-1 policy. Hence, the impugned award directing
the appellant to pay compensation to the respondents 1 to
4 and then recover the amount from the fifth respondent/
first respondent in the claim petition is erroneous and
unsustainable in law. Hence, the impugned award
directing the appellant to pay compensation to the
respondents 1 to 4 is set aside.
In the result, the appeal is allowed and the impugned
award directing the appellant to pay compensation to the
respondents 1 to 4 is set aside. The parties shall suffer
their respective costs.
Sd/-
C.S.DIAS
SKS/16.3.2021 JUDGE
