Punjab-Haryana High Court
Icici Lombard General Insurance ... vs Ram Niwas on 12 September, 2022
FAO No. 2401 of 2013 (O&M) -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
FAO No. 2401 of 2013 (O&M)
Date of Decision:12.9.2022
ICICI Lombard General Insurance Company Limited
---Appellant
versus
Ram Niwas
---Respondent
CORAM: HON'BLE MR. JUSTICE JAGMOHAN BANSAL
Present: Mr. Rajbir Singh, Advocate
for the appellant
Mr. S.K.Yadav, Advocate
for the respondent
***
JAGMOHAN BANSAL, J.
1. The appellant-insurance company through the instant
appeal is seeking setting aside of award dated 5.3.2013 passed by
Motor Accident Claims Tribunal, Narnaul (for short "Tribunal")
whereby learned Tribunal has awarded a sum of Rs. 1,07,000/- to
Ram Niwas alongwith interest @ 7.5% per annum.
2. The brief facts emerging from record are that Ram Niwas-
respondent-claimant on 25.9.2011 was going from his village
Chhapra to Nangal Chaudhary on his motorcycle bearing registration
No. HR-35F-1828 and his son Hanuman Singh son of Banwari Lal
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was pillion rider on the aforesaid motorcycle. A 'neel gai' (wild cow)
suddenly came on the road and struck against the aforesaid
motorcycle. Resultantly, the respondent fell on the road and
sustained injuries on his both legs.
3. The respondent preferred claim petition under Section
163-A of the Motor Vehicles Act, 1988 (for short " 1988 Act") seeking
compensation of Rs. 20 lakhs on account of injuries sustained by
him. Learned Tribunal vide award dated 5.3.2013, after considering
the fact that respondent has suffered permanent disability to the
extent of 8% on account of the aforesaid accident, awarded a sum of
Rs. 1,07,000/- alongwith interest @ 7.5% per annum.
4. Learned counsel for the appellant contended that it was
respondent who was driving the aforesaid motorcycle and did not
meet with accident with any other vehicle. He is owner of the vehicle.
The insurance company is liable to make payment if a vehicle meets
with an accident with any other vehicle. Section 163-A read with
Section 147 of 1988 Act fastens liability on insurance company in
case of accident with any other vehicle or in case of loss to third
party. The respondent was not third party, thus, he was not covered
by Section 163-A of 1988 Act. The rigor of Section 163-A of 1988 Act
does not come into play where owner is driving the vehicle and no
other vehicle is involved because in the absence of any other
vehicle, it would be owner of the vehicle who is responsible for the
accident. He further submitted that as per insurance policy, the
maximum liability of insurer is Rs. 1,00,000/- and as per GR 36 of
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Indian Motor Tariff which relates to personal accident cover for owner
and driver creates maximum liability of Rs. 1,00,000/- in case of two
wheeler. Liability of Rs. 1,00,000/- is maximum liability and it is
payable in case of death or 100% permanent disability whereas in
the present case, there is 8% permanent disability so, a maximum
sum of Rs. 50,000/- could be awarded.
5. Per contra, learned counsel for the respondent contended
that as per Section 163-A of the Act, there is no limit of liability and
appellant is primarily aggrieved from award of Rs. 1,07,000/-
whereas appellant has no objection if a sum of Rs. 1,00,000/- is
awarded. He very fairly stated that he has no objection if awarded
amount is reduced from Rs. 1,07,000/- to Rs. 1,00,000/-. In support
of his contention, he pointed out judgment of this Court passed on
16.8.2022 by a Co-Ordinate Bench of this Court in FAO No. 4837 of
2013 titled as "National Insurance Company Limited vs. Roopa
and others".
6. I have perused the record and heard arguments of both
sides.
7. The dispute in question has been considered time and
again by different High Courts as well Hon'ble Supreme Court. In the
present case, Section II (Liability Premium Computation) of Policy is
relevant which is reproduced alongwith note appended on the bottom
of the table:-
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B. Liability Premium Computation (Section II) in Rs.
Basic Premium including Premium for TPPD :
Vehicle : 300.00
CNG/LPG/Bi-Fuel Kit : 0.00
Add
a) Compulsory PA Cover
(Owner Driver) : 50.00
b) Optional PA Cover
(Un Named Driver) : 0.00
c) Optional PA Cover
(Pillion Rider) : 0.00
Legal Liability
d) Legal Liability Cover(Paid
drivers, Cleaners) : 0.00
e) Legal Liability Cover
(other then (sic) : 0.00
paid Drivers,Cleaners
Total Liability Premium(B) : 350.00
Total Premium (A+B) : 792.00
For any other Extra : 0.00
Add Service Tax : 82.00
Gross Premium : 874.00
LIMIT OF LIABILITY: Limit of the amount of
Company's liability under the Section-II-I(i) in respect of
any one accident as per M.V.Act 1988. Limit of the
amount of the Company's liability under Section II-I(ii)
in respect of any one claim of series of claims arising out
of one event: Upto Rs. 100000/-.
8. For the adjudication of issue raised by appellant, it would
be apt to look at Sections 147 and 163A of the 1988 Act which are
reproduced hereinbelow:-
"147 Requirements 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--
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(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 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
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 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.
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Explanation. --For the removal of doubts, it is hereby
declared 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 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.
(3) A policy shall be of no effect for the purposes
of this Chapter unless and until there is issued by the
insurer in favour of the person by whom the policy is
effected a certificate of insurance in the prescribed form
and containing the prescribed particulars of any
condition subject to which the policy is issued and of any
other prescribed matters; and different forms, particulars
and matters may be prescribed in different cases.
(4)Where a cover note issued by the insurer under
the provisions of this Chapter or the rules made
thereunder is not followed by a policy of insurance
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within the prescribed time, the insurer shall, within seven
days of the expiry of the period of the validity of the
cover note, notify the fact to the registering authority in
whose records the vehicle to which the cover note relates
has been registered or to such other authority as the State
Government may prescribe.
(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.
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 of 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.
Explanation. - For the purposes of this sub-
section, "permanent disability" shall have the same
meaning and extent as in the Workmen's Compensation
Act, 1923 (8 of 1923).
(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
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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."
From the perusal of above quoted Sections, it is quite
evident that liability created under Section 163-A is more or less
paramateria with liability embodied in Section 140 of 1988 Act. An
aggrieved party as per Sections 141 of 1988 Act can file petition
either under Section 140 or 163A of 1988 Act. Both the provisions
are mutually exclusive. Section 163A of 1988 Act was introduced to
enhance the object embodied in Section 140 as well as Section 166
of the 1988 Act. It was realized that claim petitions under Section
166 of 1988 Act are adjudicated after a long time whereas object of
compensation is to help the aggrieved family members at the
earliest. There may be a case where head of the family dies and all
the dependents come on road. There is always the immediate need
of financial assistance. Section 166 of 1988 Act does not fulfill the
aforesaid object. Thus, Section 163A of 1988 Act was inserted with
effect from 14.11.1984.
From the reading of Section 163 A of 1988 Act, it is quite
evident that owner of motor vehicle or insurer shall be liable to pay in
case of death or permanent disability. The liability of owner of motor
vehicle is co-extensive with liability of insurer. In case, owner of motor
vehicle is driving the vehicle and it does not meet with an accident
with another vehicle means no third party is involved, the insurer
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cannot be held liable to make payment under Section 163A of the
1988 Act.
9. The Madras High Court in The Divisional Manager,
TATA AIG General Insurance Company Limited vs. A.C.
Jagadeesann and others MANU/TN/1760/2022 in paragraphs 36
and 39 has concluded that insurance company is not liable to make
payment if no other vehicle is involved and accident takes place
when owner of vehicle is driving the vehicle, the same are
reproduced below:-
"36. The Scheme of the Act contemplates 4 players-the
victim, the driver of the offending vehicle, owner of the
offending vehicle and lastly, its insurer. In any accident
which results in any damage to person or property the
person who is primarily at fault is the driver of the
vehicle that caused the accident. Once, the fault if fixed
on the driver, the owner of the vehicle becomes
vicariously liable. At times the owner and the driver may
be the same person. Thereafter, if the vehicle possesses a
valid insurance then the insurer is bound to indemnify
the owner of the vehicle. Therefore, considering the
object of the Act and the judicial pronouncements, it is
clear that a person claiming compensation under the "No
Fault Liability" has to first establish a third party
involvement in the mishap. The judgment in United
India Insurance Company Limited vs. Sunil Kumar and
another (AIR 2017 SC 5710), only emphasis that the
Insurer cannot set up the defence of negligence, it has not
done away with the primary proof that the accident
involved a third party intervention/involvement.
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39. The tenor and purport of the above judgment
is the principle of "No Fault Liability" obviously implied
that the injury or death or the claimant is the result of the
involvement of a third party with the claimant being an
innocent by stander and the accident has occurred out of
no fault of his."
10. A two Judge Bench of Hon'ble Supreme Court in
Ramkhiladi and another vs. United India Insurance Company
and another (2020) 2 SCC 550 dealt at length with question of
liability of insurance company where no other vehicle is involved and
owner of insured vehicle is found driving the vehicle. The Supreme
Court in following paragraphs has clearly held that the insurance
company is not liable to make payment under Section 163-A of 1988
Act if vehicle is being driven by owner of the vehicle and no other
vehicle is involved in the accident:-
"9. Heard 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
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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 163A of the Act?; Whether
the deceased not being a third party to the vehicle No. RJ
02 SA 7811 being in the shoes of the owner can maintain
the claim under Section 163A of the Act from the owner
of the said vehicle?
9.5 It is true that, in a claim under Section 163A of the
Act, there is no need for the claimants to plead or
establish the negligence and/or that the death in respect
of which the claim petition is sought to be established
was due to wrongful act, neglect or default of the owner
of the vehicle concerned. It is also true that the claim
petition under Section 163A of the Act is based on the
principle of no fault liability. However, at the same time,
the deceased has to be a third party and cannot maintain a
claim under Section 163A of the Act against the
owner/insurer of the vehicle which is borrowed by him as
he will be in the shoes of the owner and he cannot
maintain a claim under Section 163A of the Act against
the owner and insurer of the vehicle bearing registration
No. RJ 02 SA 7811. In the present case, the parties are
governed by the contract of insurance and under the
contract of insurance the liability of the insurance
company would be qua third party only. In the present
case, as observed hereinabove, the deceased cannot be
said to be a third party with respect to the insured vehicle
bearing registration No. RJ 02 SA 7811. There cannot be
any dispute that the liability of the insurance company
would be as per the terms and conditions of the contract
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of insurance. As held by this Court in the case of Dhanraj
(supra), an insurance policy covers the liability incurred
by the insured in respect of death of or bodily injury to
any person (including an owner of the goods or his
authorized 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 the said decision,
it is further held by this Court that Section 147 does not
require an insurance company to assume risk for death or
bodily injury to the owner of the vehicle.
9.6 In view of the above and for the reasons stated
above, in the present case, as the claim under Section
163A of the Act was made only against the owner and
insurance company of the vehicle which was being
driven by the deceased himself as borrower of the vehicle
from the owner of the vehicle and he would be in the
shoes of the owner, the High Court has rightly observed
and held that such a claim was not maintainable and the
claimants ought to have joined and/or ought to have
made the claim under Section 163A of the Act against the
driver, owner and/or the insurance company of the
offending vehicle i.e. RJ 29 2M 9223 being a third party
to the said vehicle.
9.9 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 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
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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 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 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 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."
11. In view of law laid down by Hon'ble Supreme Court in
catena of judgments, this Court finds itself unable to hold appellant-
insurer liable to make compensation under Section 163-A of the 1988
Act when admittedly the vehicle in question was being driven by
owner of the vehicle and it did not meet with accident with any other
vehicle. It is further undisputed that respondent-claimant filed claim
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against insurer of its own vehicle and claim was not filed against any
other vehicle.
12. It is apt to notice here that as per Section 147 of 1988 Act
read with judgments delivered by different Courts, there may be
contractual liability between the insured and insurer. The liability may
be statutory or contractual and if contractual liability is created, the
insurer is liable to make payment to the extent of liability determined
by contract. As reproduced above, the respondent had made
payment of Rs. 50/- towards insurance of owner of vehicle. The
policy further provides that liability would not exceed Rs. 1,00,000/-.
As per GR 36 of Indian Motor Tariff, there is maximum liability of Rs.
1,00,000/- in case a two wheeler is involved and driver dies in the
accident or he becomes 100% disable. In case of loss of one limb or
sight of one eye, insurer is liable to make 50% of the capital sum
insured. In the present case, admittedly, there is permanent disability
to the extent of 8%. Keeping in view totality of facts and
circumstances and the statement of counsel for the appellant that
they are willing and ready to pay compensation of Rs. 50,000/- in
view of their contractual liability, I find it appropriate to direct insurer-
appellant to make payment of Rs. 50,000/- alongwith interest as
awarded by learned Tribunal.
13. In view of above discussion and findings, the impugned
order deserves to be modified and accordingly the amount of
compensation awarded is reduced to Rs. 50,000/- from Rs.
1,07,000/-. The insurer shall make payment alongwith interest at the
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rate awarded by learned Tribunal within a period of 8 weeks, if
amount of compensation has not been released.
(JAGMOHAN BANSAL)
JUDGE
12.9.2022
PARAMJIT
Whether speaking/reasoned : Yes
Whether reportable : Yes
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