Anand Byrareddy, J.
1. These appeals are heard together, as they are preferred against the same award. The former is by the insurer and the latter by the claimants.
2. The facts of the case are - the claimants are the mother and brother of the deceased victim of a motor accident. The deceased was riding a motor cycle registered in the name of his brother, when he was said to have been fatally knocked down by a lorry, that did not stop.
In the claim for compensation brought against the insurer of the motor cycle, the insurer had contested the claim and disputed the liability, on the grounds that the risk of a rider of a motor cycle is not covered and that the owner and insurer of the offending lorry were not made parties. Inspite of this defence, the Claims Tribunal having found the insurer liable to pay the compensation, the insurer is in appeal.
3. On the other hand, the claimants in their appeal are seeking enhancement of compensation.
4. The appeal by the Insurer is considered first, as its very liability is in question.
5. The counsel for the insurer would contend that notwithstanding that the claim petition was one filed under Section 163-A of the Motor Vehicles Act, 1988, the insurer could not be held liable to pay compensation assessed in respect of the death of the rider of the motor cycle, whose risk is not covered under the policy.
6. It is contended that Section 147 of the Motor Vehicles Act, 1988, (Hereinafter called the Act) does not require coverage to the life of the rider of the motor cycle nor did the policy issued provide for the same. Any claim, whether made under Section 140, 163-A or under 166 of the Act, is circumscribed by the prescription under Section 147 and the liability of the Insurer does not enlarge beyond the requirements of the same.
7. It is contended that the younger brother of the insured who was using the insured vehicle for his own purpose does not become a third party. The offending vehicle was an unknown 'runaway' lorry. The insurer of the motor cycle cannot, therefore, be held liable to pay compensation.
8. The counsel places reliance on the following authorities:
Oriental Insurance Co. Ltd. v. Meena Variyal and Ors. 2007 (2) TAC 417: In the said case a company executive was provided with a car registered in the name of the company. The vehicle had met with an accident and the executive who was in the vehicle had died as a result of the accident. The widow and daughter of the victim made a claim for compensation under the Act, claiming the deceased was an occupant of the vehicle when it was being used for the purposes of the business of the insured and the accident had occurred on account of the rash and negligent act of the driver, in the car having dashed against a tree. In the claim petition, the alleged driver was not a party. The insured who was made a party did not appear, after service of summons. The insurer had contested the proceedings, alleging collusion. The insurer pointedly raised the objection that the FIR disclosed that the deceased himself was driving the vehicle at the time of the accident.
The Tribunal held that the owner of the vehicle was liable to pay the compensation and absolved the Insurer, as it was found that the vehicle was being driven by the deceased himself, who was an employee of the insured. The policy did not cover the risk to such an employee.
In an appeal before the High Court, it was held that the Insurer was liable, in the light of the judgment of the Supreme court in National Insurance Co. Ltd. v. Swaran Singh : AIR2004SC1531 , while granting liberty to recover the amount from the insured.
In the further appeal by the Insurer, the apex court has held-that the High Court was in error in applying the ratio in Swaran Singh's case to hold the Insurer liable. The deceased being an employee, (not covered by the Workmen's Compensation Act, 1939,) of the insured, was not to be compulsorily covered under a policy of insurance in terms of Section 147 of the Act. It is only by entering into a special contract, by the insured with the insurer, could such a person be brought under coverage.
Further, it was also held, even assuming that the vehicle was driven by another and not the deceased at the time of the accident- the insurer cannot be held liable without the negligence of the driver being established, as laid down, in Minu B. Mehta v. Balkrishna Ramchandra Nayan : [1977]2SCR886 , by a three judge bench of the apex court.
Appaji (since deceased) and Anr. v. M. Krishna and Anr. : In this case the rider of a scooter had died as a result of the vehicle having met with an accident. The parents of the deceased claimed compensation from the owner of the scooter, who was the employer of the deceased. The claim petition was filed under Section 163-A of the Act. The insurer contested the claim, holding that the vehicle was covered under an 'Act policy', which did not cover the risk of a driver (or a rider). The Claims Tribunal held, that the deceased had died on account of his own negligence and therefore the claimants were held entitled to only Rs. 50000 in terms of Section 140 of the Act, under the 'no-fault liability' clause.
In an appeal before a division bench of this Court, it was urged on behalf of the claimants, that from the language of Section 163-A, it was clear that the provisions of the Act or any other law, disentitling the claimants from payment of compensation, where the death or injury was caused on account of the rash and negligent act of the deceased or the injured himself would stand neutralized and rendered ineffective. It was contended, that the question would be whether the accident resulting in the death of the deceased had arisen out of the use of the motor vehicle regardless whether the same was on account of the rash and negligent act of the deceased himself or of some other person or agency. It was argued that Section 163-A was introduced as a social security measure, in that, any loss of life or limb would entail payment of compensation on a no-fault basis, even when such loss had arisen on account of the rash and negligent act of the person who dies or suffers injury.
This Court held as follows
19. The right to receive compensation under Section 163-A presupposes that the person who makes a claim is a victim or the legal heirs of a victim. The provision on the plain language employed in the same does not entitle a person who is neither a victim nor his/her legal heir to claim any compensation. In other words, one who is the victim of his own actions of rash or negligent driving cannot invoke Section 163-A for making a claim. The concern of the legislature and the jurists is understandably for the victim in contradistinction to the victimizeror one who falls a victim to his own action. While road accidents generally affect innocent third parties or those making use of public transport, cases where the owner or driver of the vehicle alone suffers on account of his rash and negligent driving are not uncommon. Drunken driving, speeding in what are high performance new generation of automobiles including two-wheelers are accounting for a large number of accidents every day. Quite often these accidents kill or wound even the person who is driving the vehicle. Parliament did not in our opinion intend to provide for compensation to the person responsible for the accident on structured formula basis in such cases. Neither the provisions of Section 163-A nor the background in which the same were introduced disclose any such intention. The argument that Section 163-A is a panacea for all ills concerning the accidents regardless of whether the person who is killed or injured is or is not a victim must therefore be rejected.
20. The issue can be examined from yet another angle. Section 147 of the Motor Vehicles Act prescribes the requirement of a policy of insurance in order that the same may be said to comply with the provisions of Chapter XI. It, inter alia, envisages a policy of insurance which insures the person or class of persons specified in the policy against any liability which may be incurred by him in respect of the death or bodily injury or damage to any property of a third party arising out of the use of the vehicle in a public place. What is important is that the policy must insure the owner against 'any liability which arises against him' on account of any death or injury arising out of a motor accident. In the case of an accident where the person who is killed or injured is himself responsible for the accident without the involvement of any other vehicle or agency, no liability qua the insured would arise except where the person who is killed or injured is an employee of the insured and the accident arises out of his employment. In any such case, rashness or negligence of the employee may be inconsequential for purposes of holding the employer liable to pay the compensation under the Workmen's Compensation Act. The decision of this Court in Y.R. Shanbhag v. Mohammed Gouse : 1990(2)KarLJ398 (Karnataka), has taken the view that where the driver had sustained injuries due to his own driving he cannot maintain a petition under Motor Vehicles Act, his remedy being under Workmen's Compensation Act. Reference may also be made to another Division Bench decision of this Court in B. Prabhakar v. Bachima 1984 ACJ 582 (Karnataka), where the court observed:From Section 110-A, it is clear that before an application can be entertained, the accident must have occurred due to the actionable negligence of the owner or the driver of the vehicle.... When the accident has occurred due to actionable negligence of the deceased who was himself the driver, no claim by his legal representatives can be entertained under the Act. That being so Section 110-AA will not come into play at all.
And concluded that the non obstante clause contained in Section 163-A of the Act, simply excludes determination of compensation on the principle of fault liability. The said provision does not permit a person to place a premium upon his own fault and make the insurance company pay for the same.
9. The counsel would draw attention to the following from the book by Lord Denning M.R. 'What next in the law':
In the present state of motor traffic, I am persuaded that any civilised system of law should require, as matter of principle, that the person who uses this dangerous instrument on the roads - dealing death and destruction all around - should be liable to make compensation to anyone who is killed or injured in consequence of the use of it. There should be no need for him to prove that he was negligent. There should be liability without proof of fault. To require an injured person to prove fault results in the gravest injustice to many innocent persons who have not the wherewithal to prove it. It is fault enough that the driver should use this dangerous instrument on the roads - thereby putting others at risk.
xxx xxx xxx xxx xxxxxx xxx xxx xxx xxxThere should be a compensation fund established out of which all injured parties could be compensated. To enable this to be done, it would be necessary either for the insurance company to take on the responsibility or alternatively that the state itself should institute its own compensation fund. The Royal Commission came down in favour of the state providing its own compensation fund. After making all the calculations the Royal Commission thought it could be done by imposing a surcharge of 1p or 2p on every gallon of petrol.
This fund would, however, not be available for a man who was driving alone and was killed or injured himself when no other vehicle or pedestrian was concerned. In any such case any fault would be his alone. The scheme would be a no-fault liability scheme and not a no-fault insurance scheme. The driver would be in the same position as if he injured himself at home with his lawn-mower or garden tractor. His only recourse would be to seek such social security benefits as might be available.
The counsel would hence pray that the appeal of the insurer be allowed and consequently dismiss the appeal of the claimants as not maintainable.
10. Per contra the counsel for the claimants would contend that in the very judgment relied upon by the appellant, namely, Meena Variyal supra, it is stated at paragraph 24 thereof '...the victim of an accident or his dependants have an option either to proceed under Section 166 of the Act or under Section 163-A of the Act. Once they approach the Tribunal under Section 166 of the Act, they have necessarily to take upon themselves the burden of establishing the negligence of the driver or owner of the vehicle concerned. But if they proceed under Section 163-A of the Act, the compensation will be awarded in terms of the Schedule without calling upon the victim or his dependants to establish any negligence or default on the part of the owner of the vehicle or the driver of the vehicle.'
In the light of this categorical observation it cannot be said that the claim was not maintainable. The negligence or otherwise of the owner, or another using the vehicle in his stead, would not arise for consideration at all in a petition under Section 163-A of the Act. Payment of compensation under the said section is under a no fault liability as it were.
And while supporting the award to that extent, would contend, that the Tribunal on the other hand, ought to have granted a larger compensation and would seek to point out infirmities in the computation of compensation in terms of the structured formula prescribed.
11. The counsel places reliance on the following authorities:
Vimala S. and Ors. v. Chikkahanumanthaiah : ILR1999KAR157 : The case related to a scooter rider who died as a result of an accident. Negligence on his part was established. The legal representatives claimed compensation under Section 140 of the Act. The insurer contended that as the scooter rider himself was at fault hence there was no liability to pay compensation under the insurance policy covering the scooter. This, it was contended, would be so even in respect of a claim under Section 140 of the Act.
This Court held that since the claim petition satisfied the requirements of Section 140, the insurer would be liable.
Deepal Girishbhai Soni v. United India Insurance Co. Ltd 2004 ACJ 934: This decision deals with the scope of Section 163-A.
National Insurance Co. Ltd v. Nagaraj Vithal Seth MFA 3888/2003 dated 16-11-2005: In this case this Court has held that even if the accident was as a result of the victim's own negligence, a claim petition under Section 163-A was maintainable.
12. In the light of these rival contentions the questions that arise for consideration in the present appeals are:
a. Whether an insurer is liable to satisfy the claim for compensation on the death of the rider of the vehicle insured, when a claim is made under Section 163-A of the Act.
b. Whether the insurer can claim that a policy of insurance issued in terms of Section 147 of the Act, would not require it to cover the risk to the life of the rider of a two-wheeler.
c. Whether a claim for compensation be made by the insured himself or his legal representatives on injury or death, as the case may be, by the use of his own vehicle which is involved in an accident, against the insurer.
13. In answering these questions the limits of liability of the insurer in respect of a policy of insurance issued in terms of Chapter XI of the Act, need to be kept in view. Section 147 sets out the requirements and limits of liability under a policy to be issued in compliance with Chapter XI of the Act. The said section provides that the policy must insure a owner against any liability to a third party caused by or arising out of the use of the vehicle in a public place and against death 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. The policy shall not be required to cover an employee of the insured in respect of bodily injury or death arising out of and in the course of his employment. An exception is that the policy must cover a liability arising under the Workmen's Compensation Act, 1923, in respect of the death or bodily injury to an employee who is engaged in driving the vehicle or who serves as a conductor in a public service vehicle or an employee who travels in the vehicle of the employer carrying goods, if it is a goods carriage. It is clear that the object is to ensure compulsory coverage of the liability relating to the person or properties of third parties and in respect of employees of the insured employer. Hence whether the claim is under Section 140, 163-A or under 166 of the Act, the limit of liability of the insurer in respect of a policy issued as required under the Act, would not cover the risk to the owner, or any other who is permitted the use of the vehicle, other than an employee.
14. It is not possible to envisage that Section 163-A is a departure from the concept of tortious liability. The non obstante clause incorporated in the section does not alter the legal basis on which a liability arises under Section 147 of the Act nor does it provide a different basis for the same. It would not permit even the Tort farosto claim compensation on the principle of no fault liability. As held by the Apex Court in Oriental Insurance co. Ltd v. Hansrajbhai V. Kodala 2001 ACJ 827, the non obstante clause simply excludes determination of compensation on the principle of fault liability. The provision does not permit a person to place a premium upon his own fault and make the insurance company pay for the same.
15. The first question is answered in the negative. In the instant case the Insurer cannot be made liable even if the claim petition is under Section 163-A of the Act.
16. The second question is answered in the affirmative. In the absence of any special contract, the Insurer can question any liability sought to be fastened beyond the requirement of the terms of Section 147 of the Act. The terms of any special contract are enforceable elsewhere and not before the Motor Accident Claims Tribunal.
17. The risk to the person of the insured is not covered under a policy issued in terms of the Act, nor anybody claiming under him, except his employees. The insured cannot claim compensation as in the instant case. The third question is answered in the negative.
18. The case law cited by the claimant would not be of help in the light of the several decisions of the apex court to the contrary.
19. The appeal in MFA 2488/2006 is allowed. The award of the Tribunal in so far as it fastens the liability on the insurer is set aside. Consequently the appeal in MFA 12080/2005 is dismissed.