National Insurance Co. Ltd Vs. sri.srinivasa - Court Judgment

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE1T DAY OF JULY, 2017 BEFORE: THE HON’BLE MR. JUSTICE B.MANOHAR MFA.NO.4246/2009(MV) ® ... APPELLANT BETWEEN: NATIONAL INSURANCE CO. LTD., D O NO.5, BANGALORE, REGIONAL OFFICE, NO.144, SUBHARAM COMPLEX, M G ROAD, BANGALORE-560 001, REP. BY ITS ADMINISTRATIVE OFFICER T MAHENDRAN. (BY SRI.K.S.LAKSHMINARASAPPA, ADV. FOR SRI.B.C.SEETHARAMA RAO, ADV.) AND:

1. SRI.SRINIVASA, AGED ABOUT30YEARS, S/O.C.NARAPPA, C/O.PADMANABHARAJA, NO.27/28, 14TH CROSS, KANANALA NAGARA, R T NAGARA POST, V NAGENAHALLI, BANGALORE – 32. 2 2. A.SIDDALINGAPPA, S/O. Y.ADVAPPA, PROP M/S.ADVANI SONS & CO., NO.78, 1ST FLOOR, ARUN MANSION, J C ROAD, BANGALORE – 02.

3. RAMBIR SINGH, MAJOR, S/O.GOPA SINGH, ASST OFFICE, FCT SABARI COMPLEX, NO.24, RESIDENCY ROAD, BANGALORE – 25. (BY SRI.SURESH M LATUR, ADV. FOR R1, SRI.R.NARAYANA, ADV. FOR R.2, R.3 NOTICE HELD SUFFICIENT) ... RESPONDENTS THIS MFA IS FILED U/S1731) OF MV ACT AGAINST THE JUDGMENT

AND AWARD DATED:

22. 12.2008 PASSED IN MVC NO.5189/2005 ON THE FILE OF14H ADDITIONAL JUDGE, COURT OF SMALL CAUSES, MEMBER, MACT, BANGALORE SCCH – 10, AWARDING A COMPENSATION OF RS.1,76,200/- WITH INTEREST @ 8% P.A. FROM THE DATE OF PETITION TILL DEPOSIT. THIS APPEAL COMING ON FOR HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING: -

JUDGMENT

The National Insurance Company Limited has filed this appeal challenging the legality and correctness of the judgment and award dated 22-12-2008 passed in MVC3No.5189/2005 by the Motor Accident Claims Tribunal, Bangalore (hereinafter referred to as "the Tribunal" for short) fastening liability on them to compensate the claimant.

2. The facts leading to the filing of this appeal are: The first Respondent herein filed a claim petition contending that, on 15-10-2004 while he was proceeding in a car bearing Registration No.CKR8485on NH-4 near L.Mallappa Shetty Lake, Hosakote at about 1.00 a.m., within the jurisdiction of Hosakote Police Station, due to the rash and negligent driving of the said Car, it dashed against an unknown lorry. Due to that the claimant sustained injuries. Immediately after accident, he was shifted to the Government Hospital, Hosakote, thereafter he took treatment in B.R.Ambedkar Medical College Hospital. Prior to the accident, he was doing the work of ironing the clothes and earning Rs.6,000/- p.m. In view of the injuries he had sustained he cannot do the work which he was doing prior to 4 the accident. Hence sought for compensation of Rs.6,00,000/-.

3. In response to the notice issued by the Tribunal, the second respondent-insurance company filed written statement denying the entire averments made in the claim petition and also contended that as on the date of accident, the driver of the offending car was not holding the valid and effective driving license. Further the insurance policy is an Act policy which covers the risk of 3rd party and the gratuitous passenger traveling in the car is not covered by the policy. Hence the insurance company is not liable to compensate the claimant and sought for dismissal of the claim petition.

4. The first respondent in the written statement had denied the occurrence of the accident, injuries sustained. As on the date of accident, the insurance policy was in force. Hence the insurance company is liable to compensate the claimant. 5 5. On the basis of pleadings of the parties, the Tribunal framed necessary issues.

6. In order to prove his case, the claimant got examined himself as P.W.1 and the doctor who treated the claimant was examined as P.W.2 and got marked the documents as Ex.P1 to Ex.P9. On behalf of the respondents, the Deputy General Manager of the insurance company was examined as R.W.1 and got marked the documents as Ex.R1 to Ex.R7.

7. The Tribunal, after appreciating the oral and documentary evidence let in by the parties held that due to the actionable negligence on the part of driver of the offending car, the accident occurred and the claimant has sustained injuries. Hence he is entitled to compensation. In the accident the claimant has sustained (i) fracture of spinous process of right scapula (ii) fracture of lateral margin of right scapula and (iii) fracture of 3rd rib of right chest. Taking into consideration the injuries sustained and suffering undergone, the Tribunal has awarded compensation in a sum of 6 Rs.1,76,200/- with interest at the rate of 6% p.a. The liability was fastened on the insurance company to compensate the claimant.

8. The insurance company being aggrieved by the said judgment and award fastening liability on them to compensate the claimant has filed this appeal mainly contending that the policy issued to the offending car is an Act policy and it covers the risk of 3rd party only. The person traveling in the car as a gratuitous passenger is not covered by the insurance policy. Hence, the insurance company is not liable to compensate the claimant and the judgment and award passed by the Tribunal cannot be sustained. In support of his contention, learned counsel for the appellant relied upon the judgment reported in ILR2012KAR1841in the case of THE BRANCH MANAGER, NEW INDIA INSURANCE COMPANY LIMITED v/s MAHADEV PANDURANG PATIL AND ANOTHER; 2009 ACJ104in the case of ORIENTAL INSURANCE COMPANY v/s M.LAKSHMI7and AIR2008SC2729in the case of ORIENTAL INSURANCE COMPANY LIMITED v/s SUDHAKARAN K.V. AND OTHERS; (2006) 4 SCC404in the case of UNITED INDIA INSURANCE COMPANY LIMITED, SHIMLA v/s THILAK SINGH AND OTHERS.

9. Sri.Suresh M.LathuR, learned counsel appearing for the first respondent argued in support of the judgment and award passed by the Tribunal and contended that the person traveling in the car is also statutorily covered under Section 147 of the Motor Vehicles Act. In view of the amendment of the Motor Vehicles Act, it is incumbent upon the insured to take policy covering the risk of the inmates of the car as well as third party. Even if the insurance policy is an Act Policy, the insurance company has to pay compensation and recover the same from the owner of the offending vehicle. In support of his contention, he relied upon a judgment reported in 2017 ACJ1031in the case of MANUARA KHATUN AND OTHERS v/s RAJESH KUMAR SINGH AND OTHERS and 8 another judgment reported in 2009(1) TAC92(KAR) in the case of MANAGER, NATIONAL INSURANCE COMPANY LIMITED v/s SHEELA AND OTHERS.

10. I have carefully considered the arguments addressed by the learned counsel appearing for the parties. Perused the judgment and award, oral and documentary evidence adduced by the parties.

11. The occurrence of the accident due to the actionable negligence on the part of driver of the offending car on 15-10-2004 is not in dispute. The dispute in this appeal is liability to compensate the claimant. The contention of the insurance company is that the insurance policy is an Act policy, risk of the gratuitous passenger carried in the said car is not covered. On perusal of Ex.R1/insurance policy, it is clear that the certificate of insurance of a private car liability only”. The minimum premium of Rs.783/- has been paid. It covers the risk of the third party. The person traveling in a private car is not covered by the insurance policy issued by 9 the appellant. The specific contention has been taken by the appellant-insurance company in the written statement as well as in the evidence that policy issued by the insurance company is the Act Policy and it does not cover the risk of the inmates of the Car. The Tribunal without examining Ex.R1- insurance policy relying upon judgment of this Court reported in ILR2006KAR889in the case of ORIENTAL INSURANCE COMPANY LIMITED v/s PURUSHOTHAM T.M. AND OTHERS held that the passenger in a private car is also covered by the Act Policy under Section 147 of the Motor Vehicles Act and directed the insurance company to compensate the claimant. The Act Policy covers the risk of only 3rd party and inmate of the car is covered only when the insured pays additional premium towards occupants. Nowhere in the claim petition or in the evidence, either the claimant or owner of the vehicle has stated that the additional premium has been paid to cover the risk of the inmate of the car. The Hon'ble Supreme Court in the case of SUDHAKARAN K.V. referred to above, clearly held that where contract of insurance covering risk of 10 third party but not that of owner or pillion rider of two wheeler, liability of the insurance company in case of this nature was not extended to the pillion rider of the motor vehicle unless requisite amount of premium is paid covering the risk of the pillion rider also. Paragraph 19 of the said judgment reads as under: The law which emerges from the said judgment is:(i) the liability of the insurance company in a case of this nature is not extended to a pillion rider of the motor vehicle unless the requisite amount of premium is paid for covering his/her risk, (ii) the legal obligation arising under Section 147 of the Act cannot be extended to an injury or death of the owner of vehicle or the pillion rider, (iii) the pillion rider in a two wheeler was not to be treated as third party when the accident has taken place owing to rash and negligent riding of the scooter and not on the part of the driver of another vehicle.” 12. The Division Bench of this Court in MAHADEVA PANDURANGA PATIL case referred to above, at paragraphs 16 and 17 held as under:

11. is paid, their risk 16. If the risk of an occupant of a car, inmate of a vehicle or passenger in a private car, is to be covered, additional premium has to be paid. If no additional premium is not covered. The statutory liability under Sections 146 and 147 of the Act has to be read with the terms of the insurance policy issued under Section 146 of the Act. But that does not prevent an insurer from entering into a contract of insurance covering a risk wider than the minimum requirement of the statute, whereby the risk to gratuitous passengers could also be covered. A third party policy does not cover liability to gratuitous passengers who are not carried for hire or reward. 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. The liability is restricted to the liability arising out of the statutory requirements under Section 14 only. view of the In 17. authoritative pronouncement of the Apex Court holding that an occupant/inmate/passenger in a private car, is not a third party, the finding recorded by the Tribunal that the insurance policy issued covers the risk of such persons and therefore the insurance company is liable to pay compensation amount is illegal and contrary to the law declared by the Apex Court. In fact, is received by the insurance company to cover the risk of such persons. It is clear from the terminology used in the policy which fact is not in dispute. In one of the cases, additional premium is collected to loading the risk of third party only, as is clear from the policy that loading was not meant to cover risk of inmates of a private car and therefore, merely in the policy, no additional premium 12 because an additional premium is collected under the said policy, it cannot be inferred that the risk of inmates of a car are covered. The words are specific that the loading is done in order to cover only third party risk, it is not a case of additional premium being collected to cover the risk of inmates along with third parties. Therefore, in the facts of this case, we are satisfied, as the insured has not paid additional premium and the insurance company has not collected any additional premium, the risk of the occupants of private car was not covered. Therefore, insurance company cannot be sustained and accordingly, it is hereby set-aside. foisted on liability the 13. The Hon'ble Supreme Court in the judgment of THILAK SINGH case referred to above while examining the liability of the insurer to pay the compensation under Section 147 of the Motor Vehicles and extent of its liability at paragraphs 20 and 21 has held as under:

20. The view expressed in Satpal Singh case however, has been specifically overruled in the subsequent judgment of a Bench of three judges in New India Assurance Co. Ltd., v Asha Rani [2003]. 2 SCC223 In that case the discussion arose in connection with carrying passengers in a goods vehicle. This Court after referring to the terms of section 147 of the 1988 Act, as contrasted with section 95 of the 1939 Act, held that the judgment in Satpal Singh case had been incorrectly decided and that the insurer will not be liable to pay 13 compensation. In the concurring judgment of Sinha, J.

after contrasting the language used in the 1939 Act with that of the 1988 Act, it has been observed (vide SCC p 235, paras 25 and 27): compulsory

"25. Section 147 of 1988 Act, inter alia, prescribes coverage against the death of or bodily injury to ‘ public service any passenger of vehicle’. Proviso appended thereto that compulsory categorically states coverage in respect of drivers and conductors of public service vehicle and employees carried in a goods vehicle would be limited to the liability under the Workmen's Compensation Act. It does not speak of any passenger in a `goods carriage'.

27. Furthermore, sub-clauses (i) of Clause (b) of sub-section (1) of Section 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-clause (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 caused by or arising out of the use of the vehicle in a public place."

14 21. In our view, although the observation 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 toward the injuries suffered by the deceased Rajinder Singh who was a pillion 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.

14. Further, the Division Bench of Madras High Court in the judgment reported in 2016 ACJ5in the case of NEW INDIA ASSURANCE CO. LTD. v/s S.KRISHNASAMY AND OTHERS while examining the liability under Section 147(1) of the Motor Vehicles held as under: the insurance “ Claimants contended that deceased was a third party and there was no need to pay additional premium to cover his risk – Tribunal found that deceased was a passenger in private car and owner of car has violated policy condition and directed pay compensation and recover the amount from owner – Whether the deceased was a third party, his risk was covered under the policy and insurance company is liable – Held: no; no direction to pay and recover could be issued to the insurance company; owner of vehicle alone is liable; case-law discussed.” company to 15 15. The judgments relied upon by Sri.Suresh M Lathur, learned counsel appearing for the appellant are not applicable to the case on hand. In the said case, the victim is a gratuitous passenger traveling in a goods vehicle. The Hon'ble Supreme Court relying upon the judgment reported in NATIONAL INSURANCE COMPANY LIMITED v/s SAJU P PAUL whereby the Hon'ble Supreme Court directed the insurance company to pay compensation amount and recover the same from the owner of the vehicle. On peculiar facts and circumstances of the case, the said order was passed invoking article 142 of the Constitution of India. The said judgment is not applicable to the facts of the present case.

16. The judgments referred to above clearly disclose that in case of the inmate traveling in a private car where the vehicle is covered by the Act Policy, the insurance company is not liable to compensate the claimant unless additional premium is paid. In the instant case, no document has been produced to show that the owner of the vehicle has paid additional 16 premium to cover the risk of inmates of the car. Hence, the judgment and award passed by the Tribunal is not sustainable. The owner of the vehicle has to compensate the claimant. Accordingly, I pass the following: ORDER

The appeal is allowed. The judgment and award dated 22-12-2008 made in MVC No.5189/2005 by the Motor Accident Claims Tribunal, Bangalore is modified. The insurance company is exonerated from their liability and the liability is fastened on the owner of the offending vehicle to compensate the claimant. The amount in deposit is directed to be refunded to the appellant-insurance company. mpk/-* Sd/- JUDGE