The New India Assurance Co. Ltd vs Panchu And Ors
2021 Latest Caselaw 8217 Raj

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S. B. Civil Misc. Appeal No. 1882/2018

The New India Assurance Company Limited, T.P. Claims Hub, Divisional Office, Abhay Chambers, Jalori Gate, Jodhpur through its authorized representative

----Appellant Versus

1. Panchu s/o Shri Dhulji Rana Adivasi, R/o Bortalav, Tehsil and District Banswara (Claimant)

2. Surendra Patel S/o Shankarlal Patel - Kalal, R/o Kutumbi, Tehsil and District Banswara. (Driver)

3. Firoz Khan S/o Sarfaraz Khan Muslim, R/o Danpur, Tehsil and District Banswara. (Owner)

----Respondents

For Appellant(s) : Mr. Jagdish Vyas For Respondent(s) : Mr. Parikshit Nayak for the respondent

HON'BLE MR. JUSTICE VINIT KUMAR MATHUR

Order

25/03/2021

Nobody has put in appearance on behalf of the respondent

Nos. 2 and 3 despite service.

With the consent of the learned counsel for the parties, the

matter is being heard finally and decided today itself.

The present appeal has been preferred by the appellant -

insurance company against the Judgment and Award dated

16.02.2018 passed by the Judge, Motor Accident Claims Tribunal,

Banswara in M.A.C. Case No. 165/2011 vide which a sum of

Rs. 1,59,860/- along with interest @ 9% per annum was awarded

as compensation in favour of the respondent-claimant - Panchu on

account of injuries suffered by him in the accident which occurred

(2 of 4) [CMA-1882/2018]

on 12.07.2005, with a direction to the appellant-insurance

company to firstly pay the compensation and thereafter, recover

the same from the owner of the offending vehicle.

The Tribunal after framing the issues, evaluating the

evidence available on record and hearing the learned counsel for

the parties, partly allowed the claim petition awarding a total sum

of 1,59,860/- as compensation under various heads in favour of

the respondent-claimant.

Heard learned counsel for the parties.

Learned counsel for the appellant-insurance company

submits that though, the Tribunal recorded the finding that the

offending vehicle was being used for the commercial purpose at

the time of accident, thus, there was no liability of insurance

company to pay the compensation, however, it directed the

insurance company to firstly pay the amount of compensation to

the respondent-claimant and thereafter, recover the same from

the owner. Learned counsel further submits that there was no

liability of paying the compensation on the insurance company in

the present case as the vehicle was covered by 'act only' policy

(liability only policy). The insurance policy was placed on record

as Ex.P/9. He further submits that in view of the judgments of

the Hon'ble Supreme Court in the cases of National Insurance

Company Limited Vs. Balkrishnan & anr. reported in (2013)

1 SCC 731 as well as Oriental Insurance Co. Ltd. Vs. Meena

Variyal reported in (2007) 7 SCC 425 and the judgments

rendered by the Coordinate Bench of this Court in the cases of

National Insurance Company Ltd. Vs. Smt. Sahidan Bano

reported in 2015(2) R.A.R. 892 (Raj.) as well as The Oriental

Insurance Company Limited Vs. Smt. Sharda Devi & ors.

                                         (3 of 4)                [CMA-1882/2018]



(S.B.   Civil   Misc.   Appeal         No.      696/2003)       decided    on

04.08.2016, the insurance company cannot be fastened with the

liability to pay the compensation in case of vehicle having been

insured under the 'Act only' policy. He, therefore, prays that the

appellant-insurance company may be exonerated from the liability

of paying the compensation.

Per contra, learned counsel for the respondent-claimant

submits that the Tribunal rightly decided the claim petition after

evaluation of the evidence on record and fastened the liability on

the insurance company to firstly pay the amount of compensation

and thereafter, recover the same from the owner. Learned counsel

further submits that the insurance company has received the

premium to cover the risk of only 10 passengers towards the

personal accident liability upto the extent of Rs. 40,000/- and

therefore, the insurance company is liable to pay at least the

amount of Rs. 40,000/- towards the compensation awarded in the

present case.

I have considered the submissions made at the Bar and gone

through the judgment and award impugned dated 16.02.2018 as

well as relevant record of the case.

The Tribunal while deciding the Issue No. 3 did not take into

consideration the fact that the insurance policy in the present case

was 'act only' policy (liability only policy) and therefore, the

premium for the same was paid by the owner covering the risk in

terms of the policy i.e. 'act only' policy. Therefore, as per the 'act

only' policy, the risk of passengers travelling in the vehicle

whether gratuitous or otherwise is not covered and hence, the

liability to pay the compensation cannot be fastened on the

insurance company in view of the judgments of the Hon'ble

(4 of 4) [CMA-1882/2018]

Supreme Court in the cases of Balkrishnan & anr. (supra) and

Meena Variyal (supra), wherein it has been made clear that the

persons travelling in the vehicle whether private or commercial

under the 'act only' policy will not be construed as third party and

therefore, if any damage is caused to them, the same will not be

compensated by the insurance company.

It is noted that since the premium towards the personal

accident cover was received by the insurance company to the

extent of Rs. 40,000/-, therefore, the insurance company shall

pay the amount of Rs. 40,000/- to the respondent-claimant in the

present case.

In view of the discussions made above, the appeal of the

appellant - Insurance Company is partly allowed and the direction

of the Tribunal to firstly pay the amount of compensation over and

above Rs. 40,000/- and thereafter, recover the same from the

owner of the offending vehicle is modified and it is held that the

appellant - insurance company shall pay the amount of Rs.

40,000/- only to the respondent-claimant and rest of the amount

of compensation will be recovered by the respondent-claimant

from the owner of the vehicle in accordance with law.

Needless to say, the amount already deposited by the

appellant - insurance company shall be adjusted towards the

settlement of the claim in the present case in view of the order

passed by this Court.

(VINIT KUMAR MATHUR),J

67-Inder/-

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