R. Sathyanarayana and ors. Vs. Muralidhara and anr. - Court Judgment

B.S. Sreenivasa Rao, J.

1. These appeals have been filed by the appellants/occupants of the car who were injured/claimants against the judgment and award dated 22.10.1993 passed by the Motor Accident Claims Tribunal-l, Hassan in MVC.Nos.262, 263, 264 and 265/1986 dismissing the claim petitions for compensation against the owner of the car and the Insurance Company.

2. Heard the learned Counsel for the appellants and the learned Counsel for the 1st respondent/owner and the learned Counsel for the 2nd respondent/Insurance Company.

3. Briefly stated the facts of the case are that in MVC.Nos. 262 to 265/86 from the present appeals have been filed in the policy Ext.R2, it is mentioned that the policy covers the use for social, domestic or pleasure purposes and for the business of the insured. The learned Counsel for the claimants have contended that the occupants who were travelling in the car were returning after attending a dance programme at the time of the accident. It must be held that the car was given for the use of social, domestic and pleasure purposes by the 1st respondent/owner of the car. The Tribunal has held that since the car was not used by the 1st respondent/owner at the time of the accident for its social, domestic or pleasure purposes and as it was given to his acquaintance Sri G.S. Venkatesh, Advocate for his use. So, the said purpose for which the car was given for the use by the deceased Venkatesh cannot be considered as the use of the car by the insured/owner for his own social, domestic or pleasure purposes. Policy Ex.R2 issued in respect of the car does not cover the risk of any of the injured claimants who were the occupants of the car or the risk of the deceased Venkatesh who was driving the car and it has been held by the Tribunal that the present appellants cannot be considered as the third party within the meaning of the third party risk covered by the policy. Whenever the persons involved in the accident are not connected with the insured such as pedestrians, passengers in a vehicle (not a passenger in a goods vehicle) any person who is not in the vehicle which involved in the accident are to be considered as third parties. In the present case, as the injured passengers and deceased Venkatesh were all the occupants of the same car involved in the accident, they cannot be considered as third parties and their risk is not covered by the policy Ex.R2 issued in respect of the said car. Hence, the Tribunal has held Issue No. 5 raised in the MVC cases filed by the claimants that respondents-1 and 2 viz., owner of the car and the Insurance Company are not liable to pay any compensation to any of the claimants in all the cases and answered Issue No. 5 in the negative and dismissed the claim petitions for compensation.

4. The main grounds urged in the appeal are that the Tribunal erred in appreciating that the car bearing Registration No. MYX. 177 was being driven by the deceased G.S. Venkatesh for and on behalf of the 1st respondent/owner of the car and with his consent and as such respondents-1 and 2 are liable to pay compensation for the injuries sustained by the appellants can be considered on account of the tort committed by the deceased who was driving the vehicle in a rash and negligent manner and caused the accident. It is contended by the Learned Counsel for the appellants that the policy issued by the 2nd respondent/Insurance Company covered the use of the car for social, domestic and pleasure purposes and also for the business of the insured, as the claimants in the car after attending the dance performance at Udupi Sri Krishna Temple, it has to be considered as a social purpose and as such the insurance company was liable to pay compensation. It has also been urged by the Learned Counsel for the appellants that the car was not being used at the time of the accident by the 1st respondent/owner for his social, domestic and/or pleasure purposes as it was being used by his acquaintance G.S. Venkatesh. The said purpose for which the car was given cannot be considered as the use of the car for his own social, domestic or pleasure purpose as observed by the Tribunal. It has also been contended that the interpretation of social, domestic or pleasure purpose by the Tribunal in a restricted and narrow sense is not in accordance with taw. It has been urged that the word 'third party' includes not only pedestrians, but also passengers in the car involved in the accident as they are the third parties so far as the Insurance Company is concerned as there is no privity of contract between the claimant's/appellants and the insurer.

5. The learned Counsel for the appellants, in support of the contention that even the occupants in a private car ought to be held as third parties so far the claim for compensation is concerned, has relied on the decision in THE NEW INDIA ASSURANCE CO., LTD v. H. SIDDALINGA NAIKA AND ORS., : AIR1984Kant228 ' wherein it has been held that person travelling in the vehicle belonging to a company was doing so on an invitation from the Chairman of the company and could not be non-suited in a claim for compensation for injuries sustained by him on the ground that he was a gratuitous passenger. Where a clause in the policy indemnified the insured in case of accident by or arising out of motor car, including claims costs and expenses which the insurer had become legally liable to pay on death or bodily injury to any person, it must be held to cover passenger liability as well. The exceptions made in it were personal injury or death liability to employees. Further, excepting the contracting parties, injured, insurer, all others were third parties for purpose of liability.

In NATIONAL INSURANCE COMPANY LIMITED, BANGALORE v. SMT LEELAVATHI AND ORS., 1996(5) KAR. L.J. 442 it has been held that Insurer's liability in respect of third party risk - whether insurer can raise the defence that vehicle had no valid permit, to avoid liability? - NO -Passenger carried in bus is third party to insurer.

In UNITED INDIA INSURANCE COMPANY LIMITED v. P.V. LAKSHMANAN AND ANR., 1996(3) KAR L.J. 475 wherein it has been held that the requirements and limits of liability of Instructions dated 13.3.1978 of Tariff Advisory Committee to insurance companies to be read into all policies to cover risk to passengers not carried for hire or reward. Compensation awarded for bodily injury suffered by gratuitous passenger carried in private car cannot be challenged. - By virtue of the Tariff Advisory Instructions it logically follows that the Act policy also governs the risk to the gratuitous passenger travelling in a private motor car at the time of accident. Moreover, there is an additional clause put on the face of the front page of policy schedule with a seal, which reads:

'The policy covers use for any purpose other than:

(a) hire or reward.

(b) organised racing or speed testing.'

This clause sufficiently widens the liability of the appellant-insurance company so as to cover the risk of gratuitous passenger in a private car inasmuch as it permits the use of the car for any purpose other than for hire or reward, and organised racing and speed testing. Such a construction falls in complete harmony with the said instructions dated March 13, 1978 issued to the insurance company by the Tariff Advisory Committee.

In KISHORI v. CHAIRMAN, TRIBAL SERVICE CO-OP, SOCIETY LIMITED AND ORS., 1988 ACJ 636, it has been held that policy provides no liability of the insurance company to 'third party' in respect of damage to goods under transport Tribunal determined the Act liability of the insurance company at Rs. 2000/- in respect of damage to the goods Whether insurance company liable Held; no; insurance company under no statutory obligation to cover any contractual liability; provision of sub-Section (2) of Section 95 which provides for limits of insurer's liability is subject to proviso to Sub-section (1) of Section 95.

In ASSAM CORPORATION v. BINU RANIAO AO AND ORS., 1974 ACJ 381 it has been held that gratuitous passenger - Policy covers wider risk than these prescribed under the Act - whether the Insurance Company is liable to pay compensation for the injuries sustained by a passenger carried in the vehicle gratuitously - Held -Yes; because the provisions of Section 110 to 100F of the M.V. Act are not controlled by the provisions of Section 96 and Sections provide a self contained code for adjudicating upon such claims and impose a statutory duty on the insurer to indemnify the insured.

In NATIONAL INSURANCE CO., LTD., v. FAQIR CHAND AND ORS., AIR 1995 JK 91 it has been held that Insurer liability - third party includes passenger travelling in bus.

In SKANDIA INSURANCE CO., LTD., v. KOKILABEN CHANDRAVADAN AND ORS, AIR 1987 SC 1184, it has been held that the provisions of the Motor Vehicles Act must be interpreted in the spirit in which the same have been enacted accompanied by an anxiety to ensure that the protection is not nullified by the backward looking interpretation which serves to defeat the provision rather than to fulfill its life-aim. To do otherwise would amount to nullifying the benevolent provision by reading it with a no benevolent eye and with a mind not tuned to the purpose and philosophy of the legislation without being informed of the true goals sought to be achieved.

6. The main contention of the learned Counsel for the appellants is that the occupants were travelling in the car and they are entitled to claim compensation for the injuries sustained by them as they are third parties as per the policy. All the persons insured and the insurance company, the other persons who sustained bodily injury have to be interpreted as third party and the insurance company should be made liable.

7. As against this contention, the learned Counsel for the respondents/Insurance Company has contended that so far the Act policy is concerned, it covers the liability under the policy as per the conditions and terms of the policy and the contention that the occupants of a private car cannot claim compensation for the reason that the deceased who was driving the private car was not the employee of the owner of the car/1st respondent and he was not driving the car during the course of the employment and the conditions of the policy did not cover the risk of the occupants of the car. The Learned Counsel for the Insurance Company has relied on the following Rulings. Admittedly, the insurance policy in the present case is an Act policy and it has been mentioned that it covers third party risk.

In PUSHPABAI PURSHOTTAM UDESHI AND ORS. v. RANJIT GINNING AND PRESSING CO., & (P) LTD., AND ANR, : [1977]3SCR372 . it has been held that Sections 95(a) and 95(b)(i) of the Motor Vehicles Act adopted the provisions of the English Road Traffic Act, 1960, and excluded the liability of the Insurance Company regarding the risk to the passengers. Section 95 provides that a policy of insurance must be a policy which insures the persons against any liability which may be incurred by him in respect of death 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. The plea that the words 'third party' are wide enough to cover all persons except the person and the insurer is negative as the insurance cover is not available to the passenger made clear by the proviso to sub-section which provides that a policy shall not be required:

(ii) except where the. vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to person being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises.

Therefore it is not required that a policy of insurance should cover risk to the passengers who are not carried for hire or reward. As under Section 95 the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured the plea of the counsel for the insurance company will have to be accepted and the insurance company held not liable under the requirements of the Motor Vehicles Act.

In CHACKO v. ROSAMMA, 1991(2) Kerala High Court 588 it has been held that liability of insurance company - The policy is only an Act policy and does not cover risk to passengers in a private car - it covers only third party risks - The Tariff Advisory Committee instructions do not apply to such a case.

In AMRIT LAL SOOD AND ANR. v. SMT. KAUSHALYA DEVI, : [1998]2SCR284 wherein it has been held that the liability of the insurer depends on the terms of the contract between the insured and the insurer as evidence from the policy. Section 94 of the Motor Vehicles Act, 1939 compels the owner of a motor vehicle to insure the vehicle in compliance with the requirements of Chapter VIII of the Act. Section 95 of the Act provides that a policy of insurance must be one which insures the person against any liability which may be incurred by him in respect of death or bodily injury to any person or damage to any property of third party caused by or arising out of the use of the vehicle in a public place. The section does not however require a policy to cover the risk to passengers who are not carried for hire or reward. The statutory insurance does not cover injury suffered by occupants of the vehicle who are not carried for hire or reward and the insurer cannot be held liable under the Act.

In UNITED INDIA ASSURANCE CO., LTD., v. SMT. KASTURI AND ORS, M.F.A.No. 4461 of 1997 D.D. 15.6.1998. this Court has held that in view of the ruling in at para-4 of the judgment, the Supreme Court has stated as follows:

'4... The statutory insurance does not cover injury suffered by occupants to vehicle who are not carried for hire or reward and the insurer cannot be held liable under the Act'

it is an Act policy. Therefore, it is clear that the liability of the Insurance policy is only with regard to the terms and conditions of the policy and nothing more.

8. In the present case also the policy is an Act policy and in view of the latest judgment of the Supreme Court the present appellants are not entitled to claim compensation for the injuries suffered by them as the policy does not cover the risk as it is an Act policy in view of the reasons given in the judgment of the Supreme Court. Though it has been contended that the occupants in the private car are third parties and the Insurance Company is liable if it were comprehensive policy.

9. For the reason mentioned above, in view of the recent ruling of the Supreme Court and also of this Court, the present appeals have to be dismissed as the policy of the car in which they were travelling is an 'Act policy' which does not cover the risk of appellants,

10. Accordingly, all the appeals fail and the same are dismissed.