New India Assurance Co. Ltd. Vs. Kashmiri Devi and ors. - Court Judgment

Surjit Singh, J.

1. A common question of law having been raised in all these appeals and the persons for whose death the compensation was claimed in the petitions, out of which these appeals have arisen, having died in the same accident, all these appeals are being disposed of by a common judgment, i.e., the one in hand.

2. The facts common to all the appeals are that the marriage of a son of a man, named, Gajan Ram, resident of Leghri, Tehsil Ghumarwin, District Bilaspur, had taken place on 12.11.1992. He engaged truck No. HP-23 0511 owned by respondent Shamsher Singh for carrying barat. The truck, while returning to the place of said Gajan Ram, after the marriage, met with an accident. The baratis (members of the marriage party) were on board the truck at that time. Seven persons died in that accident and thirty-seven were injured. The dead included the driver of the truck Baldev Dass. Petitions for claiming compensation for the death of six passengers were filed with M.A.C.T., Bilaspur. In five out of the aforesaid six petitions claimants pleaded specifically that deceased were on board the truck as members of marriage party. However, in one petition, out of which F.A.O. No. 57 of 1997 has arisen, it was alleged that the deceased, named Shariff, was a carpenter by occupation and he boarded the truck along with his tools and paid certain amount of money towards carriage charges for those tools.

3. The owner of the vehicle, i.e., respondent Shamsher Singh, initially stated in his replies that the deceased had forcibly boarded the truck in spite of resistance and objection by the driver and, therefore, he (the owner) was not liable to pay any compensation. Later on the replies were amended and it was stated that though Shariff was on board the truck in the capacity of the owner of the goods, which he was carrying, other deceased persons, except one Rattan Lai in respect of whom the claim petition out of which F.A.O. No. 55 of 1997 has arisen, was filed, had been engaged by the father of the bridegroom, namely, Gajan Ram, as labourers for loading and unloading the dowry articles and that when the accident took place only the deceased were on board the truck in the capacity of labourers. As regards Rattan Lai, it was stated in the initial as also in the amended reply that he had been engaged as conductor about ten days back on payment of Rs. 300 a month as salary plus meals and his total emoluments inclusive of the value of meals were to the tune of Rs. 600 a month. It was alleged that the risk of the labourers was covered by the policy, which the owner had purchased from the present appellant, i.e., New India Assurance Co. Ltd. for his indemnification for payment of compensation in respect of the death of or bodily injury to any person, in the use of the truck. The insurance company raised a number of preliminary objections. It is not necessary for the disposal of these appeals to notice all those objections. The objection relevant for the purpose of these appeals was that the deceased were unauthorized passengers on board the truck and hence the policy did not cover their risk.

4. The Tribunal framed various issues and tried all the petitions separately. Separate awards were given by Tribunal in all the petitions. The aforesaid objection of the insurer did not find favour with Tribunal in any of the petitions and consequently the Tribunal decided the issue based on such objection against the insurer and directed the insurer to pay the compensation to the claimants, in all the six cases.

5. It was held by the Tribunal that the plea of the insurer that the deceased were gratuitous passengers, did not stand established, inasmuch as in one of the cases the deceased, namely, Shariff, was on board the truck in the capacity of the owner of the goods which he was carrying and the others were on board the truck not only as members of the marriage party but also for doing labourers' job for which they were to be paid by Gajan Ram, the father of the bridegroom who hired the truck. It was held that it was for the insurer to prove its plea of breach of condition of policy and it (the insurer) having failed to lead any evidence, the finding on the issue based on the aforesaid objection had to be against it.

6. These appeals have been filed by the insurance company with which the truck was insured for third party risk. The grievance of the appellant insurer is that from the facts and the circumstances of the case, as borne out from the pleadings and the evidence on record, all the deceased were gratuitous/unauthorized passengers and their risk was not covered by the policy. learned Counsel representing the insurer argued that as a matter of fact there was no agreement between the insurer and the insured covering the risk of the victims of the accident and that, therefore, this is a case not of breach of any terms or conditions of the insurance contract, but a case of no contract of insurance and hence the insurer is not liable. I was taken through the evidence (recorded separately in all the six cases) by the learned Counsel for the appellant. My attention was also drawn to the relevant parts of the pleadings, in all the cases. It was argued that insurer was not liable to satisfy the claim in any of the six cases because the risk of none of the six persons, who died in the accident, was covered by the policy nor was it statutorily obligatory for the insurer to cover the risk of such persons.

7. The learned Counsel representing the insured on the other hand argued that no evidence had been led by the insurer in support of its plea of breach of condition of policy. He further argued that one of the deceased persons, namely, Shariff was carrying his goods, another, namely, Rattan Lai, was a conductor employed by the owner of the truck and the remaining had been engaged as labourers by father of the bridegroom to load/unload dowry articles in the truck. He urged that there was no unauthorized passenger on the truck.

8. The learned Counsel representing the claimants in addition to making submissions similar to those made by the counsel representing the insured, urged that even if it was held that the insurer was not liable under the policy to indemnify the insured for his liability to pay the compensation for the deaths of the persons in the accident, in question, still in view of the law laid down by the Apex Court in National Insurance Co. Ltd. v. Baljit Kaur : AIR2004SC1340 , the insurer was bound to make the payment of compensation to the claimants and thereafter it could recover the same from the insured.

9. Before dwelling upon the question of law involved in these appeals, it is desirable to record the finding as to in what capacity the deceased in each individual case were on board the truck, when the accident took place.

10. In F.A.O. (MVA) No. 55 of 1997 the contention of the insured is that the deceased was employed as a conductor on the truck. The insurer has alleged that he was one of the members of the marriage party, who were being brought back to the bridegroom's place after the solemnization of marriage. Claimants in this case are the widow, the mother and a minor son of the deceased. In the petition it was categorically stated, vide paras 5, 10 and 22 that the deceased was a tailor by occupation and was on board the truck as a barati (a member of the marriage party). The claimants particularly the wife and the mother of the deceased are supposed to be knowing better than all others, as to what were the means by which the deceased earned his livelihood. No doubt the insured claims to have employed the deceased as a conductor and, therefore, he can also be said to be the right person to say as to what occupation the deceased had been following at the time of his death but his claim becomes suspicious when the mother and the widow of the deceased say that he was following a different avocation. The reason is that the insured by taking such a plea can shift the liability for the payment of compensation on to the insurer. The facts constituting this plea as stated in the reply of the insured are that the deceased was employed as conductor on the truck 10 days before the said occurrence on payment of salary amounting to Rs. 300 and in addition to that he was provided with meals and that total amount of his salary and the value of the meals worked out to Rs. 600 a month.

11. Now the evidence which the insured led in support of these pleaded facts is, per insured's own testimony as RW 1, that the deceased had been engaged as conductor on the truck about two months prior to the occurrence of the accident on payment of Rs. 200 per month as salary plus Rs. 60 for the meals. This statement is in total contradiction with the pleaded facts summed up hereinabove. Therefore, no reliance can be placed on the testimony of the insured.

12. One of the claimants, namely, Kashmiri Devi who has appeared as PW 3, very categorically stated that the deceased was a tailor and used to earn Rs. 3,000 a month from that avocation. In cross-examination she denied for want of knowledge that the deceased had been employed as conductor on the truck in question about three months before his death and used to be paid Rs. 1,000 per month as emoluments. Firstly, she does not admit the suggestion, of course, for want of knowledge, that the deceased was employed as a conductor on the truck and secondly, the suggestion itself shows that the same is not correct, because as already noticed, the pleaded version of the insured is that the deceased was employed only ten days before his death and he was paid Rs. 300 on account of salary and was also provided free meals. Also the suggestion put to Kashmiri Devi, PW 3, is not in line with the testimony of the insured (who appeared as RW 1) wherein he stated that the deceased had been employed two months before his death and was being paid Rs. 200 as salary and Rs. 60 on account of meals, meaning thereby that his total emoluments were to the tune of Rs. 260.

13. The above discussed evidence apart, the insurer proved on record the motor claim form submitted by the insured to it to seek indemnification for the damage caused to the truck. That form is Exh. Rl. Along with the said form he submitted a copy of the first information report that was lodged with the police in respect of the accident. The fact of enclosing of the first information report with the form is mentioned under heading 'third party injury/ property damaged'. As per contents of the first information report, Exh. PB, the truck was carrying a large number of persons when it rolled down the road. The contents of the first information report give a lie to the insured's plea that only a few labourers, the driver and the conductor were on board the truck when the accident took place and corroborates the version given in the petition that the deceased was on board the truck along with other persons as a member of the marriage party. Furthermore, in the aforesaid claim form, Exh. Rl, while giving the details under column 8 regarding injury to the driver/occupants, the insured gave the name of driver only, who died in the accident. He did not name Rattan Lai, under this column or anywhere else in this form as conductor. This omission also falsifies the insured's plea that the deceased was on board the truck as conductor. The learned Tribunal has also not returned the finding that the deceased was employed as conductor on the truck. Instead the Claims Tribunal has found that he was a tailor by occupation and had been earning Rs. 3,000 a month by following the avocation of tailoring and it cannot be believed that he took employment with the insured to work as conductor on his truck, on payment of paltry sum of Rs. 200 or Rs. 300 a month. And this finding of the Tribunal has not been challenged by the insured by filing cross-appeal or even cross-objections. So it is held that the deceased was aboard the truck, not as a conductor as claimed by the insured, but as a member of the marriage party or say simply as a passenger.

14. As regards the case pertaining to compensation for the death of Shariff, the claimants pleaded that he was carrying his tools weighing about 50 kilogram in the truck and thus his status on board the truck was that of the owner of the goods, being carried in the truck. The insured also took a similar plea. The Tribunal has returned the finding that he was carrying the goods and was accompanying those goods and, therefore, he cannot be said to be a gratuitous or unauthorized passenger. The finding was not assailed during the course of the hearing of the appeals.

15. As regards the remaining four appeals the finding of the Tribunal is that the truck had been hired by the father of the bridegroom for the transportation of the marriage party as also the dowry articles and, therefore, the deceased could not be said to be gratuitous passengers. The Tribunal has also observed that the services of these four deceased had been engaged by the father of the bridegroom for loading and unloading the dowry articles.

16. The finding of learned Tribunal that the deceased were engaged as labourers by the hirer of the truck is not borne out from the record. The claimants in all the cases categorically stated that the deceased were travelling by the truck as members of the marriage party. It is not believable that the friends or the relatives of the bridegroom, forming a marriage party would be engaged by the bridegroom or his father as labourers to load and unload the dowry articles given in the marriage. The story on the face of it appears to have been cooked up by the insured in connivance with the father of the bridegroom to fasten the liability for payment of compensation upon the insurer. Two of the four deceased persons involved in these appeals were regular government employees. One, namely, Amar Nath, was employed as a driver with the Himachal Road Transport Corporation and had been getting salary of Rs. 5,000 a month. Another, namely, Baldev Singh, son of Jeet Ram, was in the Indian Army and had been getting salary of Rs. 4,000 a month. One of the remaining two, namely, Bansi Ram aged 55 years was a retired Naib Subedar from the Army and had been re-employed as a helper in IandPH Division, Bilaspur. It is totally unbelievable that these persons, while being the members of the marriage party, were offered some wages to act as labourers for loading or unloading dowry articles by the father of the bridegroom and they had accepted the same.

17. Having returned the finding, on reappraisal of the evidence on record, that out of the six deceased persons involved in these appeals, one was travelling with his goods and five others were the members of the marriage party, I proceed to examine and determine the question of law involved in the cases.

18. learned Counsel representing the insurance company argued that the risk of none of the six persons, who were on board and who died in the accident was covered by the policy, Exh. R2, as all of them were passengers and the risk of passengers travelling by the goods vehicle is not required to be covered by the policy, under Section 147 of the Motor Vehicles Act, 1988, as it stood prior to the amendment of the said provision, by amending Act of 1994. The argument is supported by a judgment of three Judges' Bench of the Hon'ble Supreme Court in New India Assurance Co. Ltd. v. Asha Rani : AIR2003SC607 . In the said judgment it has been authoritatively declared that Section 147 of Motor Vehicles Act of 1988, as it stood prior to its amendment in 1994, did not require insurance of passenger, including the owners of the goods, travelling by a goods vehicle and, therefore, if any passenger travelling by a goods carrier died or received injury prior to amendment of 1994, the insurer cannot be made liable to pay compensation for the death of or injury to such passenger.

19. In the present case the accident had taken place after coming into force of the Act of 1988 and before the amendment of Section 147 by the Amending Act, 1994. However, the ratio of the aforesaid judgment of the Supreme Court is applicable to the facts of these cases on all fours. Consequently, it is held that the insurance company is not liable to pay compensation in any of the six cases.

20. learned Counsel representing the insured submitted that the insurance policy copy, Exh. R2, had not been properly proved and so it could not be looked into. The argument has been stated only to be rejected. The policy was tendered during the course of the trial before the Tribunal in the presence of counsel for the insured. He did not object to its being tendered in evidence. In any case it is not the case of the insured that any extra premium, viz., premium in addition to the premium for meeting the statutory requirement of insurance, had been paid by him to cover the risk of owner of the goods, carried in the truck or other deceased persons. Therefore, the necessary presumption is that policy was purchased by the insured only to cover that risk, which was statutorily required to be covered and that risk was only in respect of the third party and the employees engaged in connection with the operation of the vehicle.

21. As a sequel to the above discussion, it is held that the insurance company is not liable to indemnify the insured for his (insured's) liability for payment of compensation to claimants, i.e., the dependants of the deceased persons in these cases and, therefore, all the six appeals are accepted and the findings of the learned Tribunal holding the appellant liable and directing it to pay the compensation, is set aside.

22. However, in spite of the acceptance of the appeals, the insurer shall have to satisfy the award and thereafter it may recover the compensation money together with interest, etc., from the insured, in view of the mandate of Hon'ble Supreme Court in National Insurance Co. Ltd. v. Baljit Kaur : AIR2004SC1340 , the relevant portion of which is reproduced below:

(21) The upshot of the aforementioned discussions is that instead and in place of the insurer the owner of vehicle shall be liable to satisfy the decree. The question, however, would be as to whether keeping in view the fact that the law was not clear so long such a direction would be fair and equitable. We do not think so. We, therefore, clarify the legal position which shall have prospective effect. The Tribunal as also the High Court had proceeded in terms of the decision of this Court in Satpal Singh : AIR2000SC235 . The said decision has been overruled only in Asha Rani : AIR2003SC607 . We, therefore, are of the opinion that the interest of justice will be subserved if the appellant herein is directed to satisfy the awarded amount in favour of the claimant, if not already satisfied and recover the same from the owner of the vehicle. For the purpose of such recovery, it would not be necessary for the insurer to file a separate suit but it may initiate a proceeding before the executing court as if the dispute between the insurer and owner was the subject-matter of determination before Tribunal and issue is decided against the owner and in favour of the insurer. We have issued the aforementioned directions having regard to the scope and purport of Section 168 of the Motor Vehicles Act, 1988, in terms whereof, it is not only entitled to determine the amount of claim as put forth by the claimant for recovery thereof from the insurer, owner or driver of the vehicle jointly or severally but also the dispute between the insurer on the one hand and the owner or driver of the vehicle involved in the accident inasmuch as can be resolved by the Tribunal in such a proceeding.

23. Consequently, it is ordered that the insurer shall satisfy the award and thereafter it may recover the compensation money in all the six cases from the insured. The appeals are disposed of accordingly.