State of Madhya Pradesh and ors. Vs. D.N. Patel - Court Judgment

Excerpt:
- motor vehicles act, 1988 [c.a. no. 59/1988]section 147; [a.k. patnaik, cj, s.s. jha & a.m. sapre, jj] liability of insurer - third party insurance held, the insured who is a party to the insurance is not a third party for the purpose of chapter xi of the act, particularly section 147 thereof. thus, any person other than the insurer and the insured who are parties to the insurance policy is a third party. the insurer, however, would not be liable for any bodily injury or death of a third party in an accident unless the liability is fastened on the insurer under the provisions of section 147 of the act or under the terms and conditions of the policy of insurance. hence, the mere fact that a passenger is a third party would not fasten liability on the insurer unless such liability arises under section 147 of the act or under the terms and conditions of the insurance policy. an employee is a third party inasmuch as he is not a party to the insurance policy. but merely because an employee is a third party, the insurance company would not be liable to compensate in case such employee suffers bodily injury or dies in an accident in which the motor vehicle is involved unless section 147 of the act fixes such liability on the insured or unless the terms and conditions of the contract of insurance fixes liability on the insurer. section 147 (1)(b) of the act provides that in order to comply with the requirements of chapter xi of the act, a policy of insurance must be a policy which insures the person or classes of persons specified in the policy to the extent specified in sub-section (2) against the liabilities mentioned in clauses (i) and (ii) thereunder. even if an employee is a passenger or a person travelling in a motor vehicle which is insured as per the requirements of sub-section (1) of section 147 of the act, the insurer will not be liable to cover any liability in respect of death or bodily injury of such employee unless such employee falls in one of the categories mentioned in sub-clauses (a), (b) and (c)of clause (i) of the proviso to sub-section (1)of section 147 of the act and further in cases where such employees fall under categories mentioned in sub-clauses (a), (b) and (c) of clause (i) of the proviso to sub-section (1`) of section 147 of the act, the insurer is liable only for the liability under the workmens compensation act, 1923. [national insurance co. ltd. v sarvanlal, 2004 (4) mpht 404 (d.b) overruled]. sections 147 & 96 & m.p. m.v. rules, 1994, rule 97; [a.k. patnaik, cj, s.s. jha & a.m. sapre, jj] control of transport vehicles m.p. rules relate to provisions of control of transport vehicles and it cannot be adopted for interpreting sections 147 and 145 of the m.v. act to hold the insurer liable for death or bodily injury suffered by passenger. [national insurance co. ltd. v sarvanlal, 2004 (4) mpht 404 (d.b) overruled]. - the state did not prefer to pay the amount and to keep itself satisfied with the decree of the trial court and instead, approached this court and more expenditure has been incurred than what would have been paid to the plaintiff.d.p.s. chouhan, j.1. the controversy involved in the appeal is in a limited sphere and the facts have only peripheral relevance.2. a suit was filed on the ground that a contract was executed on the basis of an auction regarding the forest produce. the auction took place regarding the forest produce and thereafter money amounting to rs. 44,193.55 p. was deposited by the respondent but before the contract was executed, the amount so deposited was returned by the state government on 18-6-1986, i.e. subsequent to the filing of the suit for recovery of the money. in the suit, prayer was for recovery of the money together with the interest at the rate of 18% per annum.3. the trial court decreed the suit as it was only relating to the interest and the rate of interest awarded was 18% per annum. against this order, the state of madhya pradesh has come in appeal.4. the claim-amount was rs. 9590.50 p. the state did not prefer to pay the amount and to keep itself satisfied with the decree of the trial court and instead, approached this court and more expenditure has been incurred than what would have been paid to the plaintiff. actually in such state of affairs, the approach should be how the money of the public exchequer can be saved but the position here has been reversed in this case.5. learned counsel for the appellant-state relied on section 34, civil procedure code which gives the discretion to the court in the matter of interest, fixing the outer limits. learned counsel for the state submitted that section 34 gives the discretion in the matter of interest but fixes the outer limits. learned counsel also relied on section 3(l)(b) of the interest act, 1978 which reads as under :-'3. power of court to allow interest. - (1) in any proceedings for the recovery of any debt or damages or in any proceedings in which a claim for interest in respect of any debt or damages already paid is made, the court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for the whole or part of the following period, that is to say, -(a) xx xx xx(b) if the proceedings do not relate to any such debt, then, from the date mentioned in this regard in a written notice given by the person entitled or the person making the claim to the person liable that interest, will be claimed to the date of institution of the proceedings;'6. this provision is not attracted in the present case, as it says that if the proceedings do not relate to any such debt, then, from the date mentioned in this regard in a written notice given by the person entitled or the person making the claim to the person liable that interest, will be claimed to the date of the institution of the proceedings. it is not a case of any debt. it is a commercial transaction. the auction sale was advertised and it was o a condition of the bid that the amount was deposited.7. learned counsel for the parties stated that in the year 1986 the f. d. interest rate was 10% and the s. b. interest rate was 5%. on this position, the parties are not at variance. i think, the interest awarded by the court below was excessive. the interest of justice would be served if the rate of interest is reduced from 18% to 10%.8. the appeal is accordingly allowed. the respondent is entitled to interest at the rate of 10% per annum and this amount shall be paid after preparation of the decree, by the state government within a period of two months from the preparation of the decree, failing which the same rate of interest shall be payable till the final amount is paid by the govt. in the circumstances, no orders as to costs.