SooperKanoon Citation | sooperkanoon.com/731845 |
Subject | Motor Vehicles |
Court | Kerala High Court |
Decided On | Jun-16-2000 |
Case Number | M.F.A. No. 922 of 1994 |
Judge | K. Narayana Kurup and; D. Sreedevi, JJ. |
Reported in | 2001ACJ596 |
Appellant | United India Insurance Co. Ltd. |
Respondent | Kunhimu and ors. |
Appellant Advocate | P.V. Jyothi Prasad, Adv. |
Respondent Advocate | T.P.M. Ibrahim Khan and; T.G. Rajendran, Advs. |
Disposition | Appeal dismissed |
Cases Referred | National Insurance Co. Ltd. v. Bilasini Naik |
D. Sreedevi, J.
1. This appeal is directed against the award in O.P. (MV) No. 1874 of 1990 on the file of the Motor Accidents Claims Tribunal, Manjeri.
2. The claimants are the legal representatives of the deceased Latiff who died in a motor accident on 25.5.1990. The deceased was travelling in a lorry bearing registration No. KLM 1241, along with others as the owner of the goods and as loading and unloading labourer. When the lorry reached at the scene of occurrence, the respondent No. 1 driver lost the control of the vehicle due to rash and negligent driving while negotiating a curve and as a result Latiff was thrown out of the lorry and sustained serious injuries and later succumbed to the injuries. The legal heirs of the deceased Latiff filed the above original petition for compensation for the death of Latiff.
3. The Tribunal, after taking the evidence, held that there was no negligence on the part of the respondent No. 1 driver and accordingly the original petition was dismissed. But the Tribunal has granted an interim award for Rs. 25,000 under Section 140 of the Motor Vehicles Act, 1988 (hereinafter referred to as 'the Act') and the respondent No. 3 was made liable to pay the amount to the claimants. Aggrieved by the said finding, the respondent No. 3 filed this appeal.
4. Heard Mr. P.V. Jyothi Prasad for the appellant and Mr. T.G. Rajendran, learned counsel for the respondents.
5. Learned counsel for the appellant Mr. Jyothi Prasad submitted that after taking the entire evidence, the Tribunal found that the driver of the vehicle was not negligent, that there were four persons in the lorry at the time of the accident and that the said lorry was not having the fitness certificate and as such the owner of the lorry has violated the conditions stipulated in the insurance policy. According to him, the insurance company is not liable to pay the compensation as Section 140 of the Act only provides that the owner of the vehicle is liable to pay Rs. 25,000 on no fault liability.
6. The question that falls for consideration is interpretation of Section 140 of the Act, vis-a-vis, the liability of the insurer to cover third party risks and whether the insurer can plead statutory defence or breach of terms of policy in claim under Section 140 of the Act. Section 140 under Chapter X of the Act reads as follows:
140. Liability to pay compensation in certain cases on the principle of no fault.--Where death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of this section.
Under Section 140 of the Act the liability is fastened only on the owner or owners of the vehicle. Chapter X of the Act was introduced to provide social justice by giving compensation without proper proof of negligence of the owner or any other person. It is a beneficial piece of legislation aimed at giving quick relief to the victims of the motor accidents.
7. Section 145(c) under Chapter XI defines liability. It reads as follows:
'Liability', wherever used in relation to the death of or bodily injury to any person, includes liability in respect thereof under Section 140.
Section 149 imposes a duty on the insurers to satisfy judgments and awards against persons insured in respect of third party risks. By virtue of Section 149 the insurer is entitled to defend the action and avoid liability only if there has been a breach of one of the specified conditions of the policy. A policy has been issued under Section 147 of the Act. It relates to the requirements of policies and limits of liability. Since Section 145(c) of the Act defines liability, which includes no fault liability, the insurer is liable to pay no fault liability also. Under Section 149, the insurer is entitled to defend the action and avoid the liability only if there has been a breach of one of the specified conditions of the policy which condition is one of those mentioned in Sub-clauses (i), (ii) or (iii) of Clause (a) and Clause (b) of Section 149 of the Act. They are as follows:
(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:
(i) a condition excluding the use of the vehicle--
(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
(d) without side-car being attached where the vehicle is motor cycle; or
(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or
(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or
(b) that the policy is void on the ground that it was obtained by the nondisclosure of a material fact or by a representation of fact which was false in some material particular.
Except these defences, the other defences are not open to the insurer to plead in the proceedings. The burden to prove that there has been a breach of one of the specified conditions of the policies is on the insurer. There is absolutely nothing on the record to discharge the said burden.
8. The Bombay High Court in the decision in Pandurang Narayandas Sarada v. Subhash Gopal Changale 1989 ACJ 879 (Bombay), held that as the vehicle was driven by a minor boy at the time of the accident, the company was not liable to pay the amount to indemnify the owner so far as no fault liability is concerned. But, the court held that as far as liability under Section 92-A (present Section 140) was concerned, following the decision of the Apex Court in Gujarat State Road Trans. Corporation v. Ramanbhai Prabhatbhai 1987 ACJ 561 (SC), the insurance company will be liable to indemnify the owner under 'no fault liability'. Section 140 suggests that the owner of the vehicle is liable even if the accident is not due to the rash or negligent act of the driver and even in cases where the injured or the deceased was solely responsible for the accident. Thus it is a case of absolute liability on the part of the owner of the vehicle to pay damages in case of death or permanent disablement caused due to the accident, if that accident had arisen due to the use of his vehicle. The liability which is termed as 'no fault liability' is distinct and different from liability under law of Torts which is termed as fault liability. The right to claim compensation under Section 140 is in addition to the right on the principle of fault to claim compensarion in respect of death or permanent disablement. The liability under Section 140 is an absolute liability, even though that liability cannot be fastened on the owner under general law of Torts. The nature of liability under Section 140 is different from the liability under Section 110A (sic) 166.
9. The Andhra Pradesh High Court in the decision in Divisional Manager, New India Assurance Co. Ltd. v. Tumu Gurava Reddy 1999 ACJ 1077 (AP), held that the liability of the insurer becomes coextensive with that of the owner of the vehicle. It reads as follows:
When once the policy is issued, the statute creates legal fiction making the insurance company liable under 'no fault liability'. The insurer had undertaken to indemnify the owner under fault liability subject to certain limitations under Chapter XI of the Act. When such liability includes the liability under Section 140 of the Act, the insurer cannot plead that it cannot indemnify the owner under 'no fault liability'. If the owner is made liable under 'no fault liability' so also the insurer is liable if the vehicle is insured. The provision has to be interpreted not to frustrate the intention of the legislature, but to subserve the object. Therefore, in my considered opinion, when once the insurance is obtained under Chapter XI, the liability of the insurance company cannot be limited to Chapter XI, but it is also liable under 'no fault liability'.
The Orissa High Court in the decision in National Insurance Co. Ltd. v. Bilasini Naik 1999 ACJ 547 (Orissa), also took the view that the insurance company is liable to indemnify the insured for his liability to pay compensation towards 'no fault liability'.
10. On a close scrutiny of the relevant provisions on the point and also the decisions mentioned above, we hold that the liability of the insurance company cannot be limited to Chapter XI of the Act, but also liable under no fault liability. As the insurance company is liable to pay the amount covered by interim award, we do not find any merit in this appeal.
In the result, this appeal is dismissed.