Oriental Insurance Company Limited Bangalore Vs Minaxi and Others - Citation 384320 - Court Judgment

Judgment:
Acts/Rules/Orders:

Motor Vehicles Act, 1988 - Sections 2(1), 140 and 147(1);Workmen's Compensation Act, 1923;Motor Vehicles Act, 1939 - Section 95(1)

Cases Referred:

New India Assurance Company Limited, Bangalore v. Nagarathna, 1996(6) Kar. L.J. 77, ILR 1996 Kar. 3041;Kashmir D. Gudinho (deceased) by L.R. and Another v. Suresh Kulkarni and Others, 1997(5) Kar. L.J. 364, ILR 1997 Kar. 1491;National Insurance Company Limited, Bangalore v. Smt. Rasheeda and Another, 1997(7) Kar. L.J. 629, ILR 1997 Kar. 2697;Pushpabai Parshottam Udeshi v. M/s. Ranjit Ginning and Pressingh Company Private Limited, AIR 1977 SC 1735, 1977 ACJ 343;National Insurance Company v. Dundamma, 1991(3) Kar. L.J. 505, ILR 1991 Kar. 2045;A.A. Haja Muniuddian v. India Railways, AIR 1993 SC 361, (1992) 4 SCC 736;Skandia Insurance Company Limited v. Kokilaben Chandravadan, AIR 1987 SC 1187, (1987) 2 SCC 654;United India Insurance Company v. Kashimsab, 1993(2) Kar. L.J. 559, ILR 1993 Kar. 1991;Shanthabai and Others v. Shekappa, 1995(2) Kar. L.J. 268, ILR 1995 Kar. 1637

JUDGEMENT

1. All these appeals are commonly heard since the common point is involved in all these appeals.

2. All these appeals are filed by the Insurance Company represented by its Manager.

3. I heard the learned Counsel, Sri S.P. Shankar appearing for the appellants in first two appeals and Sri O. Mahesh, the learned Counsel appearing for the appellant in the third appeal, the learned Counsel, Sri G.S. Kannur, appearing for the contesting respondents 1 and 2 in the first two appeals and Sri Ravi G. Sabhahit, the learned Counsel appearing for the respondent 1 in the third appeal. The respondents 2 and 3 in the third appeal having been served with notices had remained absent before Court.

4. The facts relevant for our purpose in the appeals are as hereunder:

5. That, the first two appeals are directed against the common order dated 22-9-1993 in MVC Nos. 21 of 1992 and 22 of 1992 passed by the Motor Accident Claims Tribunal No. 1, Bijapur, in passing whereof, the said Tribunal had passed an award of Rs. 20,000.00 and Rs. 12,500.00 each to the respondent 1. The respondent 1 had filed the above two claim petitions one for self for the personal injury suffered in the accident, whereas the second claim petition was made by her due to the death of her one and half year old child, a pillion rider when her husband, Shankargouda Patil driven the Yezdi motorcycle bearing Registration No. CNL 2338 in a rash and negligent manner and the accident in question had taken place in his hands on 27-9-1991. It is stated that the vehicle belonged to the respondent 3 in the first two appeals and the appellant-Insurance Company had issued Act Policy by accepting premium of Rs. 40/- covering third party risk.

6. That, the third appeal i.e., MFA No. 668 of 1994 is directed against the order dated 30-12-1993 in MVC No. 39 of 1991 passed by the District Judge and MACT, UK District, Karwar, wherein the respondent 1 in that appeal was awarded with compensation of Rs. 25,000.00 together with interest at 6% p.a. for the injury she suffered in a road accident that took place on 16-2-1990 at about 5.00 p.m. near Godehalli Cross on Banavasi Road involving motorcycle bearing Registration No. MEI 9666 and a moped bearing Registration No. CNE 8027 while the respondent 3-her husband had driven the vehicle in question belonging to the respondent 2. It is also stated that in the instant case too it was the Act Policy that was issued by the appellant-Insurance Company by covering the third party risk.

7. The common point that arises for consideration in all these appeals is whether in issuance of an Act Policies in respect of the two wheelers involved in the two separate accidents cover risk of pillion rider or not.

8. Both the learned Counsel appearing for the appellants-Insurance Company, Sri S.P. Shankar as well as Sri O. Mahesh, vehemently argued that in covering the third party risk under the two separate insurance policies in respect of the above two vehicles involved in two different accidents did not cover the risk of pillion riders and according to them, there would have been a contract between the appellant-Insurance Company on the one side and the owners on the other for covering additional risk of the pillion riders. It was argued before me that the third party risk does not include the risk of the pillion riders.

9. Sri S.P. Shankar had also cited before me the following decisions in support of his argument, they are:

1. New India Assurance Company Limited, Bangalore v Nagarathna.

2. Kashmir D. Gudinho (deceased) by L.R. and Another v Suresh Kulkarni and Others.

3. National Insurance Company Limited, Bangalore v Smt. Rasheeda and Another.

4. Pushpabai Parshottam Udeshi v M/s. Ranjit Ginning and Pressing Company Private Limited.

5. National Insurance Company v Dundamma.

10. The learned Counsel for the contesting respondents, Sri G.S. Kannur, appearing in the first two appeals, had supported the impugned order, wherein the parties were awarded with compensation by the concerned Tribunals. It is his submission that the third party risk was very well covered by issuance of the Act Policy and the certificate covers the risk of the pillion riders too and therefore, according to him, there is no substance in the argument advanced by the other side, Sri S.P. Shankar. He had also submitted that the provisions in the Motor Vehicles Act to compensate the sufferers is a beneficial peace of legislation. He had further submitted in this regard that the interpretation of the statutory provisions in the beneficial peace of legislation should be interpreted to advance the cause of justice. In support of that argument of his, Sri Kannur had also cited before me the reported decision in A.A. Haja Muniuddian v Indian Railways . The said reported case was in a matter in claiming compensation for loss of goods in forma pauperis. He had also cited the following decisions in support of his argument, they are:

1. Skandia Insurance Company Limited v Kokilaben Chandravadan.

2. United India Insurance Company v Kashimsab.

3. Kashmir D. Gudinho's case, supra.

11. Out of the above decisions, I feel that the decision cited at Sl. No. 3 appears to be relevant. I advert to the same little later here below.

12. When the matter was heard by me, I have also noticed that Sri C.K. Kambeyananda, one of the Senior Advocates on the panel of the Insurance Company present before Court, and therefore, I sought his assistance to decide the issue before me. It is his submission that on 2-6-1986, a circular came to be issued to cover the risk of pillion riders and with the issuance of that circular the amendment in the clause of the Insurance Policy very well covered the third party risk including the death or bodily injury to any person including person conveyed in or on the motorcycle provided such person is not carried for hire or reward. He specifically placed reliance on the reported decision of the learned Single Judge of this Court in New India Assurance Company Limited's case, supra. The other decisions Sri Kambeyananda cited before me are:

1. Smt. Rasheeda's case, supra.

2. Shanthabai and Others v Shekappa

3. Dundamma's case, supra.

4. Pushpabai Parshottam Udeshi's case, supra.

5. New India Assurance Company Limited's case, supra.

6. Unreported judgment of the learned Single Judge of this Court in MFA No. 2263 of 1994, DD: 20-1-1998.

13. It is relevant to point out here that the Tariff Advisory Committee had issued the circular dated 2-6-1986 to cover the third party risk. In this context, I feel it appropriate to quote the said circular that came to be issued by the Tariff Advisory Committee, a copy thereof had been supplied to the Court by the learned Counsel for the appellant in the first appeal, the same reads as hereunder:

'(PRIVATE AND CONFIDENTIAL: ISSUED FOR THE USE OF INSURERS CARRYING ON GENERAL INSURANCE BUSINESSIN INDIA)

TARIFF ADVISORY COMMITTEE, BOMBAY

Ador House, 1st floor,6, K. Dubash Marge,Bombay-400 023.MOT/GEN/10 2nd June, 1986.To

All Regional Offices of:

1. National Insurance Company Limited, Calcutta.

2. The New India Assurance Company Limited, Bombay.

3. The Oriental Insurance Company Limited, Delhi.

4. United India Insurance Company Limited, Madras.

Govt. Insc. Funds: 1. Maharashtra State, Bombay.2. Gujarat State, Ahmedabad.3. Kerala State, Trivandrum.4. Karnataka State, Bangalore.Re: Compensation to Pillion Riders

Insurer's attention is invited to Section 2(1)(a) of Standard Form for Motorcycle Comprehensive Policy, Sheet 59 of the IMT.

It has now been decided that the Standard Motorcycle Comprehensive Policy should cover liability to Pillion Passengers treating them as occupants in the Motorcycle and provide indemnity to such persons who are not carried for hire or reward.

Accordingly, Extra Benefit No. 2 granting legal liability to cover side car passengers will stand deleted and Standard Cover under Section 2(1)(a) of the Policy are worded as under.-

'Death or bodily injury to any person including person conveyed in or on the Motorcycle provided such person is not carried for hire or reward'.Insurers are requested to issue necessary instructions to their Divisional/Branch offices accordingly.

Sd/-

(Y.D. Patil)

Secretary

C.C. to: Head Office of New India/National/Oriental/United India, Bombay/Calcutta/Delhi/Madras Regional Committees. General Insurance Corporation of India, Technical Department, Bombay.

Government Audit Departments, Bombay/Calcutta/Delhi/Madras'.

14. Both the two accidents involved in these three appeals had taken place after coming into force of the Motor Vehicles Act, 1988, when the accident in the first two appeals had taken place on 27-9-1991, the accident in the third appeal had taken on 16-12-1990. Therefore, I feel it appropriate to advert to Section 147 of the Motor Vehicles Act, 1988 (henceforth referred to in brief as 'Act'). The said section deals with the requirements of the policies and limits of liability. To quote the same, the same reads as he rounder:

'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-

(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 a conductor of the vehicle or in examining tickets on the vehicle, or

(ii) to cover any contractual liability.

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 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'.

15. By reading the provision in Section 147(1)(b)(i), it appears to me that the policy one issuable by the Insurance Company must cover as against any liability which may be incurred by the owner of the vehicle in respect of the death or bodily injury to any person and must include the death or bodily injury or injuries likely to be suffered by the third parties too. It further appears to me that the term 'any person' used in the above section also covers the pillion rider, for in the explanation below the proviso thereto, it is clarified that the death 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 the vehicle in a public place at the point of time of accident that occurred in a public place. Therefore, it is obvious that Section 147 of the Act contemplates coverage of risk of tbe third parties too, who suffered either bodily injury or death as the case may be. This interpretation of mine has got support in the decision of the learned Single Judge in the case of Smt. Rasheeda, supra. In the said decision, at para 9 thereof, the learned Single Judge had observed as hereunder:

'9. A perusal of these observations per se reveals that in order to reject the plea raised therein that the expression third party is wide enough to cover all persons except, person and the insurer, the basis provided has been by the proviso clause (ii) to Section 95(1) of the Act of 1939. No doubt under Motor Vehicles Act of 1939 proviso clearly says that policy is not required to cover the liability in respect of death or bodily injury to persons being carried in or upon entering or mounting or alighting from the vehicle at the time of occurrence of the event out of which the claim arises, subject to the exception which is indicated and provided by the expression 'except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of contract of employment'. The Section 95 of Act of 1939 very clearly provides by virtue of proviso clause (ii) inserted therein, with exception to the passengers for hire or reward taken in the vehicles in which passengers are taken for hire or reward or who are taken by reason of contract, Insurance Policy will not be required to cover the risk of any persons travelling in the vehicle who are not carried for hire or reward. This clause (ii) to the proviso to Section 95 of Old Act has been omitted from the new Act. The legislature has completely omitted to enact this clause in proviso to Section 147(1), when it enacted Motor Vehicles Act, 1988. It is to be assumed and presumed that Legislature when enacting the new Act and when enacting Section 147 knowingly changed the tenor of language and omitted proviso two to Section 95 of Act of 1939 and did not incorporate that in Section 147 of Act of 1988. It intended to provide something different and modified from the Scheme of Section 95 of Old Act under Section 147, to that extent. It is well-settled principles of law that if under subsequent Act, the legislature changes the tenor of language, omits certain provisions from being incorporated which existed at the time of enactment of New Act replacing Old Act and the subject-matter, the intention emerging therefrom i.e., the change has got to be given effect to. The effect of change of language is revelation of legislative intent that expression 'Any person' and the third party used in the Act will also include any person even travelling in the vehicle without paying any hire etc. If the Legislature would not have different intents in enacting Section 147 of Act of 1988 than revealed by Section 95 of Old Act into, it would have incorporated in extenso Section 95 of the Act of 1939 in the Act of 1988 as it did exist in Act of 1939. The Parliament would not have omitted clause (ii) to proviso to Section 95(1) when it enacted Section 147. Therefore, in my opinion the expression 'Third Party' or 'Any Person' used in Section 147 of Act of 1988 includes in itself even a person travelling in a private car. When I so opine, I find support from the Single Judge decision of High Court of Jammu and Kashmir in the case of National Insurance Company v Faqir Chandra, as well as the decision of this Court in the case of United Insurance Company v P.B. Laxman and the decision of this Court in the case of Shanti Bai v Shekappa. Thus considered in my opinion the appeal has got no merits and I do find that the Tribunal has not committed any error of law or jurisdiction in holding that Insurance Company is liable to pay that amount as the liability of the Insurance Company runs with the liability of the owner of the vehicle and so liability fastened under Section 140 will also be covered by the policy. The appeal as such is to be hereby dismissed. It has been brought to my notice that the main claim is pending for decision. It is expected that Tribunal will expeditiously decide the matter as the occurrence had taken place some time in 1992. The appeal is thus dismissed and finally disposed of the Tribunal is directed to decide the petition within a period of six months from the date of receipt of this order'.

16. It is an admitted fact that after the Apex Court decided Seethabai's case, the Tariff Advisory Committee, Bombay, had issued a Circular to cover the risk of third parties, who are gratuitous travellers and it is also an admitted fact that the Tariff Advisory Committee in that circular issued on 2-6-1986 stated that the comprehensive policy should cover liability to pillion passengers treating them as occupants in the motorcycle. The learned Counsel for the appellant had also produced before me a copy of the circular dated 2-6-1986 that came to be issued by the Tariff Advisory Committee, Bombay. As a matter of fact, in the first two appeals, the appellant-Insurance Company had also issued Ex. R1-Policy in respect of the Yezdi motorcycle bearing Registration No. CNL 2338 and in one of the terms and conditions under the heading 'Liability to third parties'. It is set down therein as hereunder:

'Subject to the Limit of Liability as laid down in the Motor Vehicles Act the Company will indemnify the Insured in the event of accident caused by or arising out of the use of Motor Vehicle anywhere in India against all sums including claimant's cost and expenses which the Insured shall become legally liable to pay in respect of death of or bodily injury to any person and/or damage to any property of Third Party'.

17. Similarly in the third appeal before the Tribunal, the appellant-Insurance Company had also produced Ex. R1-Insurance Policy in respect of the vehicle in question before the Tribunal below and in page No. 1 of the said Insurance Policy, I find the similar term in the said policy.

18. In all the cases, therefore it is clear that the Insurance Companies in question had issued Act policies but to cover the risk of the third parties too. That being so, I have got no hesitation to hold that the appellants-Insurance Companies could be saddled with the liabilities of compensating the respondents-owners in both the sets of appeals.

19. If the above term as at para 16, supra, under the liability to third parties read along with the provision in Section 147 of the Act, in my considered view, it is clear that the appellant-Insurance Company had covered the third party risk and that risk also included the risk caused by death or injury of pillion riders. Therefore, I have got no reservation to uphold the impugned judgments and awards passed by the Tribunal in two sets of appeals. As a matter of fact, in yet another decision reported in Kashmir D. Gudinho's case, supra, the learned Single Judge of this Court had also held similar view and in the said decision, the learned Single Judge held as hereunder:

'In the present case, insurance policy was effective from 6-1-1987 for one year i.e., 5-1-1988, occurrence or incident causing injuries and death of Gudinho, did take place on 27-2-1987 i.e., all dates noted above were subsequent to 2-6-1986 i.e., date of circular therefore, in the present case in view of amendment being applicable, it must be held that the policy covers the risk of pillion rider in the present case. That amendment in the clause of the policy covers the third party risk including death or bodily injury causes to any person including the person conveyed in or on the motorcycle and it is provided that such person should not have been carried on for hire or reward, it may not cover that risk, but if a person is not carried on for hire or reward, then company has undertaken the liability to compensate or indemnify the insured for whatever sum it is required to pay as compensation to the claimant including the costs and the interest'.

20. Therefore, I am inclined to dismiss the two sets of appeals by confirming the impugned judgments and awards of the Tribunals below in following the view taken by the learned Single Judge of this Court in two different appeals referred to in paras 15 and 19, supra.

21. In that view of the matter, I do not find any merit in these three appeals and accordingly all the appeals stand dismissed. No cost.

22. To conclude, I record the words of appreciation for the able assistance rendered by the learned Counsel, Sri Chinnappa Kambeyananda to decide the above cases; of course such an assistance was sought for by the Court itself. He, as I observed, did with sense of duty as an officer of the Court and more than an Advocate on panel of Insurance Companies as that of the petitioners herein; for that none on earth dare say that he was not true to his salt. He assisted the Court with all sincerity of purpose, I further add in the context.

Subject	Motor Vehicles
Court	Karnataka High Court
Decided On	Jul-06-1999
Case Number	Miscellaneous First Appeal No. 344 of 1994 connected with Miscellaneous First Appeal Nos. 586 and 66
Judge	Chidananda Ullal, J.
Reported in	2000ACJ385; AIR2000Kant73; ILR1999KAR3219; 1999(5)KarLJ573
Acts	Motor Vehicles Act, 1988 - Sections 2(1), 140 and 147(1); Workmen's Compensation Act, 1923; Motor Vehicles Act, 1939 - Sections 95(1)
Appellant	Oriental Insurance Company Limited, Bangalore
Respondent	Minaxi and Others
Appellant Advocate	Sri S.P. Shankar and ;Sri O. Mahesh, Advs.
Respondent Advocate	Sri Ravi G. Sabhahit and ;Sri G.S. Kannur Advs.

Oriental Insurance Company Limited, Bangalore Vs. Minaxi and Others - Court Judgment