Madhya Pradesh High Court
National Insurance Company Ltd. vs Smt.Archana Sahu on 14 February, 2025
Author: Gurpal Singh Ahluwalia
Bench: G. S. Ahluwalia
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IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE G. S. AHLUWALIA
ON THE 14th OF FEBRUARY, 2025
MISC. APPEAL No. 1378 of 2012
NATIONAL INSURANCE COMPANY LTD.
Versus
SMT.ARCHANA SAHU AND OTHERS
Appearance:
Shri Shrinivas Gajendra Gadkar - Advocate for the appellant.
Shri Ram Kishor Sharma- Advocate for the respondent No.1.
ORDER
By this common order, M.A.No.1338/2012 filed by claimants for
enhancement of compensation amount and M.A.No.1378/2012 filed by insurance
company will be decided.
2. Both the appeals have been filed against the award dated 30/10/2012
passed by MACT, Datia in Claim Case No.173/2011 by which compensation
amount of Rs.1,94,500/- has been awarded to claimants and the insurance
company has also been held jointly and severally responsible for payment of
compensation amount.
M.A.No.1378/2012:-
3. By referring to insurance policy Ex.D-7, it is submitted by Shri
Gajendragadkar that no premium for driver of vehicle was paid and according to
claimants themselves accident was caused by some unknown Jeep, therefore, the
deceased who was borrower of motor-cycle from the owner cannot be treated as
third party. Having borrowed the motor-cycle, he had step into the shoes of
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owner.
4. To buttress his contentions, counsel for insurance company has relied
upon, the judgment passed by the Supreme Court in the case of Ramkhiladi and
Another Vs. United India Insurance Co. Ltd. and Another reported in 2020 ACJ
627 and in the case of Ningamma & another Vs. United India Insurance Co. Ltd.
reported in 2009 ACJ 2020 .
5. It is fairly conceded by counsel for claimants that no premium for
driver/owner of motor-cycle was paid, and only the premium for third party was
paid.
6. Heard the learned counsel for the parties.
7. Since, the driver of motor-cycle had borrowed the motor-cycle from its
owner, therefore, he had stepped into the shoes of owner of motor-cycle and
accordingly, he cannot be treated as third party. Since, no premium for driver
/owner of motor-cycle was paid, therefore, insurance company cannot be held
liable to pay any compensation amount.
8. Accordingly, the award dated 30/10/2012 passed by MACT, Datia in
Claim Case No.173/2011 by which insurance company was held jointly and
severally liable is hereby set aside and insurance company is hereby exonerated.
M.A.No.1338/2012:-
9. So far as M.A.No.1338/2012, which has been filed by claimants for
enhancement of compensation amount, is concerned, the Supreme Court in the
case of Ningamma (supra) has held as under:-
"13. 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
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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? Before dwelling further, it would be useful to
discuss the relevant paras of Sections 163-A and 166 of the MVA
applicable in the present case.
"163-A. Special provisions as to payment of compensation on
structured formula basis.--(1) Notwithstanding anything contained in
this Act or in any other law for the time being in force or instrument
having the force of law, the owner of the motor vehicle or the
authorised insurer shall be liable to pay in the case of death or
permanent disablement due to accident arising out of the use of motor
vehicle, compensation, as indicated in the Second Schedule, to the
legal heirs or the victim, as the case may be.
***
(2) In any claim for compensation under sub-section (1), the claimant
shall not be required to plead or establish that the death or permanent
disablement in respect of which the claim has been made was due to
any wrongful act or neglect or default of the owner of the vehicle or
vehicles concerned or of any other person.
(3) The Central Government may, keeping in view the cost of living
by notification in the Official Gazette, from time to time amend the
Second Schedule.
***
1 6 6 . Application for compensation .--(1) An application for
compensation arising out of an accident of the nature specified in sub-
section (1) of Section 165 may be made--
(a) by the person who has sustained the injury; or
(b) by the owner of the property; or
(c) where death has resulted from the accident, by all or any of the
legal representatives of the deceased; or
(d) by any agent duly authorised by the person injured or all or any of
the legal representatives of the deceased, as the case may be:
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Provided that where all the legal representatives of the deceased have
not joined in any such application for compensation, the application
shall be made on behalf of or for the benefit of all the legal
representatives of the deceased and the legal representatives who have
not so joined, shall be impleaded as respondents to the application...."
18. In the case of Oriental Insurance Co. Ltd. v. Rajni Devi [(2008) 5
SCC 736 : (2008) 3 SCC (Cri) 67] 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 said decision 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 aforesaid decision 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 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.
19. 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 de-ceased in the present case
would step into the shoes of the owner of the vehicle. In a case wherein
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the victim died or where he was permanently disabled due to an acci-
dent arising out of the aforesaid motor vehicle in that event the liability
to make payment of compensation is on the insur-ance company or the
owner, as the case may be as provided under section 163-A. But if it is
proved that driver is the owner of the motor vehicle, in that case the
owner could not himself be a recipient of compen-sation 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."
10. The Supreme Court in the case of Ramkhiladi (supra) has held as
under:-
"5. Heard the learned counsel appearing on behalf of the respective
parties at length. We have also perused and considered the judgment
and award passed by the learned Tribunal as well as the impugned
judgment and order passed by the High Court and the evidence on
record. The short question which is posed for consideration of this
Court is whether, in the facts and circumstances of the case and in a
case where the driver, owner and the insurance company of another
vehicle involved in an accident and whose driver was negligent are not
joined as parties to the claim petition, meaning thereby that no claim
petition is filed against them and the claim petition is filed only against
the owner and the insurance company of another vehicle which was
driven by the deceased himself and the deceased being in the shoes of
the owner of the vehicle driven by himself, whether the insurance
company of the vehicle driven by the deceased himself would be liable
to pay the compensation under Section 163-A of the Act? Whether the
deceased not being a third party to Vehicle No. RJ 02 SA 7811 being
in the shoes of the owner can maintain the claim under Section 163-A
of the Act from the owner of the said vehicle?
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5.4. An identical question came to be considered by this Court
in Ningamma [Ningamma v. United India Insurance Co. Ltd. , (2009)
13 SCC 710 : (2009) 5 SCC (Civ) 241 : (2010) 1 SCC (Cri) 1213] . In
that case, the deceased was driving a motorcycle which was borrowed
from its real owner and met with an accident by dashing against a
bullock cart i.e. without involving any other vehicle. The claim
petition was filed under Section 163-A of the Act by the legal
representatives of the deceased against the real owner of the
motorcycle which was being driven by the deceased. To that, this
Court has observed and held that since the deceased has stepped into
the shoes of the owner of the vehicle, Section 163-A of the Act cannot
apply wherein the owner of the vehicle himself is involved.
Consequently, it was held that the legal representatives of the deceased
could not have claimed the compensation under Section 163-A of the
Act. Therefore, as such, in the present case, the claimants could have
even claimed the compensation and/or filed the claim petition under
Section 163-A of the Act against the driver, owner and insurance
company of the offending vehicle i.e. motorcycle bearing Registration
No. RJ 29 2M 9223, being a third party with respect to the offending
vehicle. However, no claim under Section 163-A was filed against the
driver, owner and/or insurance company of the motorcycle bearing
Registration No. RJ 29 2M 9223. It is an admitted position that the
claim under Section 163-A of the Act was only against the owner and
the insurance company of the motorcycle bearing Registration No. RJ
02 SA 7811 which was borrowed by the deceased from the opponent-
owner Bhagwan Sahay. Therefore, applying the law laid down by this
Court in Ningamma [Ningamma v. United India Insurance Co. Ltd. ,
(2009) 13 SCC 710 : (2009) 5 SCC (Civ) 241 : (2010) 1 SCC (Cri)
1213] , and as the deceased has stepped into the shoes of the owner of
the vehicle bearing Registration No. RJ 02 SA 7811, as rightly held by
the High Court, the claim petition under Section 163-A of the Act
against the owner and insurance company of the vehicle bearing
Registration No. RJ 02 SA 7811 shall not be maintainable.
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5.9. Now, so far as the submission made on behalf of the claimants
that in a claim under Section 163-A of the Act mere use of 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 163-A of the Act would be
maintainable is concerned, in view of the decision of this Court
i n Rajni Devi [Oriental Insurance Co. Ltd. v . Rajni Devi , (2008) 5
SCC 736 : (2008) 3 SCC (Cri) 67] , the aforesaid cannot be accepted.
I n Rajni Devi [Oriental Insurance Co. Ltd. v . Rajni Devi , (2008) 5
SCC 736 : (2008) 3 SCC (Cri) 67] , it has been specifically observed
and held that the provisions of Section 163-A 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 Oriental Insurance Co. Ltd. v . Jhuma
Saha [Oriental Insurance Co. Ltd. v. Jhuma Saha , (2007) 9 SCC 263 :
(2007) 3 SCC (Cri) 443] ; Dhanraj [Dhanraj v. New India Assurance
Co. Ltd., (2004) 8 SCC 553 : 2005 SCC (Cri) 363] ; National
Insurance Co. Ltd. v . Laxmi Narain Dhut [National Insurance Co.
Ltd. v. Laxmi Narain Dhut , (2007) 3 SCC 700 : (2007) 2 SCC (Cri)
142] and Premkumari v. Prahlad Dev [Premkumari v . Prahlad Dev ,
(2008) 3 SCC 193 : (2008) 1 SCC (Civ) 822 : (2008) 1 SCC (Cri)
694] , it is ultimately concluded by this Court that the liability under
Section 163-A 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
163-A of the Act. It is further observed that, for the said purpose, only
the terms of the contract of insurance could be taken recourse to. In the
recent decision of this Court in Ashalata Bhowmik [National
Insurance Co. Ltd. v. Ashalata Bhowmik , (2018) 9 SCC 801 : (2018)
4 SCC (Civ) 595 : (2019) 1 SCC (Cri) 399] , it is specifically held by
this Court that the parties shall be governed by the terms and
conditions of the contract of insurance. Therefore, as per the contract
of insurance, the insurance company shall be liable to pay the
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compensation to a third party and not to the owner, except to the
extent of Rs 1 lakh as observed hereinabove."
11. Under these circumstances, it is held that since the deceased had
borrowed the motor-cycle from the owner and having stepped into the shoes of
owner, his legal representatives cannot claim compensation against true owner of
motor-cycle. In the present case, since accident was caused by unknown Jeep,
even otherwise, the driver of motor-cycle cannot be treated as a third party qua
offending vehicle.
12. Considering the totality of the facts and circumstance of the case, this
Court is of considered opinion that the claims tribunal committed material
illegality by awarding compensation against the true owner and insurance
company of motor-cycle. Accordingly, claim petition filed by claimants is hereby
dismissed.
13. Ex-consequenti, the award dated 30/10/2012 passed by MACT, Datia
in Claim Case No.173/2011 is hereby set aside.
14. Needless to mention that whatever amount has been deposited by the
insurance company shall be liable to be refunded.
(G. S. AHLUWALIA)
JUDGE
PjS/-
