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United India Insurance Company Ltd. v/s Kalidoss & Another


Company & Directors' Information:- UNITED INDIA INSURANCE COMPANY LIMITED [Active] CIN = U93090TN1938GOI000108

    C.M.A. No. 1234 of 2019 & C.M.P. No. 3416 of 2019

    Decided On, 07 September 2020

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE S.M. SUBRAMANIAM

    For the Appellant: G. Udaya Sankar, Advocate. For the Respondents: Ramya V. Rao, Advocate.



Judgment Text

(The Civil Miscellaneous Appeal is preferred under Section 173 of the Motor Vehicles Act, 1988, against the judgment and decree dated 02.07.2015 passed in M.C.O.P. No.804 of 2012 on the file of the learned V Judge, V Small Causes Court-cum-Motor Accidents Claims Tribunal, Chennai.)1. The Civil Miscellaneous Appeal on hand is preferred against the judgment and decree dated 02.07.2015 passed in M.C.O.P. No.804 of 2012 by the learned V Judge, V Small Causes Court-cum-Motor Accidents Claims Tribunal, Chennai.2. The accident occurred on 14.08.2007 at about 11.30 hours when the first respondent/claimant was riding the motorcycle bearing Registration No.TN-04-AA-1461 at Mount Poonamallee Road near L&T Company, Nandhambakkam, Chennai and at that point of time, an unknown lorry driven by the driver of the lorry in a rash and negligent manner dashed against the first respondent/claimant, resulted in an accident and the first respondent/claimant sustained grievous injuries. Thus, the claim petition was filed seeking compensation of Rs.7 lakhs for the injuries sustained by the first respondent/claimant.3. The Tribunal adjudicated the issues based on the documents as well as the evidences. Considering Ex.P-3 document FIR, the Tribunal arrived a conclusion that the accident occurred on account of rash and negligent driving of the driver of the unknown lorry. The overall background of the deposition of PW-1 was also considered by the Tribunal. As far as the quantum of compensation is concerned, the Tribunal considered the disability based on the Disability Certificate Ex.P-12 and granted a total compensation of Rs.3,28,000/-.4. The learned counsel appearing on behalf of the appellant-Insurance Company contended that the award of the Tribunal is perverse on the ground that the first respondent/claimant himself is a tort-feasor and not a third party to the accident. Therefore, the claim petition itself is not maintainable and the Tribunal has erroneously entertained the claim petition and awarded compensation.5. It is contended that the first respondent/claimant was hit by an unknown lorry and on that basis, he filed the claim petition under Section 163-A of the Motor Vehicles Act, 1988. The claimant, being the tort-feasor, and was at fault in getting injured himself, he is not entitled for compensation by filing claim petition under Section 163-A of the Motor Vehicles Act, 1988. This apart, the First Information Report itself was registered belatedly after a lapse of 70 days from the date of accident. Therefore, there is a doubt even with reference to the accident and the Tribunal has not considered these vital aspects and awarded compensation in a routine manner.6. The learned counsel appearing on behalf of the first respondent/claimant opposed the contentions of the learned counsel appearing on behalf of the appellant/Insurance Company, by stating that the accident was established and there is a policy coverage and therefore, the first respondent/claimant is entitled for compensation and the Tribunal has not committed any error. The first respondent/claimant was hit by an unknown lorry and sustained grievous injuries and he submitted all the relevant medical documents to establish the injuries sustained and considering all these aspects, the Tribunal awarded compensation and the Civil Miscellaneous Appeal is liable to be dismissed.7. In this regard, the learned counsel appearing on behalf of the appellant-Insurance Company cited the judgment of the Hon'ble Supreme Court of India in the case of Ningamma and Others vs. United India Insurance Co. Ltd [2009 ACJ 2020], wherein in paragraphs 13, 18, 19 and 20, it has been held as under:-“13. In the light of the aforesaid submissions, the question that falls for our consideration is whether the legal representatives of a person, who was driving a motor vehicle, after borrowing it from the real owner meets with an accident without involving any other vehicle, would be entitled to compensation under Section 163A of MVA or under any other provision(s) of law and also whether the insurer who issued the insurance policy would be bound to indemnify the deceased or his legal representative? Before dwelling further, it would be useful to discuss the relevant paras of Section 163A and 166 of the MVA applicable in the present case. 163A. Special provisions as to payment of compensation on structured formula basis.-- (1) Notwithstanding anything contained in this Act or in any other law for the time being in force or instrument having the force of law, the owner of the motor vehicle of the authorised insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be.xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx(2) In any claim for compensation under Sub-section (1), the claimant shall not be required to plead or establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act or neglect or default of the owner of the vehicle or vehicles concerned or of any other person. (3) The Central Government may, keeping in view the cost of living by notification in the Official Gazette, from time to time amend the Second Schedule. 166. Application for compensation- (1) An application for compensation arising out of an accident of the nature specified in Sub-section (1) of Section 165 may be made- (a) by the person who has sustained the injury; or (b) by the owner of the property; or (c) where death has resulted from the accident, by all or any of the legal representatives of the deceased; or (d) by any agent duly authorised by the person injured or all or any of the legal representatives of the deceased, as the case may be: Provided that where all the legal representatives of the deceased have not joined in any such application for compensation, the application shall be made on behalf of or for the benefit of all the legal representatives of the deceased and the legal representatives who have not so joined, shall be impleaded as respondents to the application.XxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxXxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx18. In the case ofOriental Insurance Co. Ltd.vs.Rajni Devi[(2008) 5 SCC 736 : (2008) 3 SCC (Cri) 67] wherein one of us, namely, Hon'ble S.B. Sinha, J. was a party, it has been categorically held that in a case where third party is involved, the liability of the insurance company would be unlimited. It was also held in the said decision that where, however, compensation is claimed for the death of the owner or another passenger of the vehicle, the contract of insurance being governed by the contract qua contract, the claim of the claimant against the insurance company would depend upon the terms thereof. It was held inOriental Insurance Co. Ltd. case[(2008) 5 SCC 736 : (2008) 3 SCC (Cri) 67] that Section 163-A of the MVA cannot be said to have any application in respect of an accident wherein the owner of the motor vehicle himself is involved. The decision further held that the question is no longer res integra. The liability under Section 163-A of the MVA is on the owner of the vehicle. So a person cannot be both, a claimant as also a recipient, with respect to claim. Therefore, the heirs of the deceased could not have maintained a claim in terms of Section 163-A of the MVA. In our considered opinion, the ratio of the decision inOriental Insurance Co. Ltd. case[(2008) 5 SCC 736 : (2008) 3 SCC (Cri) 67] is clearly applicable to the facts of the present case. In the present case, the deceased was not the owner of the motorbike in question. He borrowed the said motorbike from its real owner. The deceased cannot be held to be an employee of the owner of the motorbike although he was authorised to drive the said vehicle by its owner and, therefore, he would step into the shoes of the owner of the motorbike.19. We have already extracted Section 163-A of the MVA hereinbefore. A bare perusal of the said provision would make it explicitly clear that persons like the deceased in the present case would step into the shoes of the owner of the vehicle. In a case wherein the victim died or where he was permanently disabled due to an accident arising out of the aforesaid motor vehicle in that event the liability to make payment of the compensation is on the insurance company or the owner, as the case may be as provided under Section 163-A. But if it is proved that the driver is the owner of the motor vehicle, in that case the owner could not himself be a recipient of compensation as the liability to pay the same is on him. This proposition is absolutely clear on a reading of Section 163-A of the MVA. Accordingly, the legal representatives of the deceased who have stepped into the shoes of the owner of the motor vehicle could not have claimed compensation under Section 163-A of the MVA.20. When we apply the said principle into the facts of the present case we are of the view that the claimants were not entitled to claim compensation under Section 163A of the MVA and to that extent the High Court was justified in coming to the conclusion that the said provision is not applicable to the facts and circumstances of the present case. However, the question remains as to whether an application for demand of compensation could have been made by the legal representatives of the deceased as provided in Section 166 of the MVA. The said provision specifically provides that an application for compensation arising out of an accident of the nature specified in Subsection (1) of Section 165 may be made by the person who has sustained the injury; or by the owner of the property; or where death has resulted from the accident, by all or any of the legal representatives of the deceased; or by any agent duly authorised by the person injured or all or any of the legal representatives of the deceased, as the case may be. When an application of the aforesaid nature claiming compensation under the provisions of Section 166 is received, the Tribunal is required to hold an enquiry into the claim and then proceed to make an award which, however, would be subject to the provisions of Section 162, by determining the amount of compensation, which is found to be just. Person or persons who made claim for compensation would thereafter be paid such amount. When such a claim is made by the legal representatives of the deceased, it has to be proved that the deceased was not himself responsible for the accident by his rash and negligent driving. It would also be necessary to prove that the deceased would be covered under the policy so as to make the insurance company liable to make the payment to the heirs. In this context reference could be made to relevant paras of Section 147 of the MVA which reads as follows: 147. Requirements of policies and limits of liability- (1) In order to comply with the requirement of this Chapter, a policy of insurance must be a policy which- (a) is issued by a person who is an authorised insurer; or (b) insurer 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 his 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 conductor of the vehicle or in examining tickets on the vehicle, or (c) if its is a goods carriage, being carried in the vehicle, or (ii) to cover any contractual liability. xxx xxx (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. xxx xxx (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.”8. This Court also rendered a judgment in the case of National Insurance Co. Ltd vs. Rani and Others [2020 (2) CTC 703], wherein the said principle has been followed.9. The Apex Court held that Section 163-A of the Motor Vehicles Act, cannot be said to have any application in respect of an accident, wherein the owner of the motor vehicle himself is involved. The liability under Section 163-A of the Motor Vehicles Act, 1988 is on the owner of the vehicle. So a person cannot be both, a claimant and also a recipient, with respect to claim. Thus, the heirs of the deceased could not have maintained a claim in terms of Section 163-A of the Motor Vehicles Act.10. The recent Judgment of Hon'ble Supreme Court in the case of Ramkhiladi and Another Vs. United India Insurance Co. Ltd and Another [2020 (1) TN MAC 1 (SC)], elaborately discussed the scope of claim petition under Section 163 (A) of the Motor Vehicles Act. Undoubtedly, the Special Provision cannot be read in isolation and the Apex Court considered Sections 147, 166 and 163-A of the Motor Vehicles Act. Thus the Special Provision is to be read conjointly and in consonance with the object, purpose as well as the intention of the Legislature.11. In the event of interpreting any Special Provision in isolation to the other provisions of the Statute, then the very object would be defeated and therefore, the Courts cannot make an interpretation of a Special Provision, which is otherwise intended to grant certain benefits in respect of grant of compensation in the event of not establishing negligence. Thus, this Court is of the considered opinion that, even the Personal Accident Coverage cannot be considered in certain cases, where the victim is not the registered owner of the vehicle. Three conditions are required even under Personal Accident Policy (which is not a statutory coverage in terms of Section 147 of the Act.). The said three conditions are mandatory, so as to avail compensation under the Personal Accident Policy (not a statutory coverage in terms of Section 147 of the Act). The conditions are:-(a) the owner-driver is the registered owner of the vehicle insured;(b) the owner-driver is the insured named in the policy;(c) the owner-driver holds an effective driving license, in accordance with the provisions of Law.12. With reference to Section 163-A of the Motor Vehicles Act, 1988, the Hon'ble Supreme Court has taken a view that if a borrower of the vehicle met with an accident while riding the vehicle, he cannot claim compensation under Section 163-A of the Act. The reason being in the event of granting compensation without adjudication of negligence, then the same would result in defeating the very object of the Act, under Sections 147 and 166 of the Motor Vehicles Act. When Section 147 categorically enumerates requirements of policies, limits and liabilities, the same cannot be whittled down, while dealing with the claim petitions under Section 163-A of the Act. All these provisions are to be read conjointly for the purpose of granting the benefit of Special Provision enacted under Section 163-A of the Act, for payment of compensation on structured formula basis. When the Special Provision is specifically provided for a structured formula basis, it cannot be read in isolation with reference to the nature of the contracted policy and the requirement of policy and limited liabilities clauses, which all are well enumerated under the provisions of the Act. Thus, this Court is of the considered opinion that a person, who borrowed a vehicle from the registered owner and while driving the same met with an accident sustained injuries or dead, then he is not entitled to claim any compensation under Section 163-A of the Act and even for claiming Personal Accident Policy (not a statutory coverage in terms of Section 147 of the Act), he is bound to establish the three mandatory conditions and in the absence of compliance with the said three conditions, he is not entitled for compensation.13. This Court is of the considered opinion that the Insurance Company as well as the Policy Holders are bound by the terms and conditions of the contract agreed between the parties. In the event of superseding the terms of contract, then the very legality of the Law of Contract is sacrificed under the provisions of the Indian Contract Act, which is unacceptable and therefore, in respect of the contract, Courts are bound to consider the terms and conditions and the binding clauses between the parties.14. The Hon'ble Supreme Court in the judgment, cited supra, in unequivocal terms held that in a claim under Section 163-A of the Act, there is no need for the claimants to plead or establish the negligence and/or that the death in respect of which the claim petition is sought to be established was due to wrongful act, neglect or default of the owner of the vehicle concerned. It is also true that the claim petition under Section 163-A of the Act is based on the Principle of 'No Fault Liability'. However, at the same time, the deceased has to be a third party and cannot maintain a claim under Section 163-A of the Act, against the owner/Insurer of the vehicle, which is borrowed by him as he will be in the shoes of the owner and he cannot maintain a claim under Section 163-A of the Act, against the owner and Insurer of the vehicle. In the case before the Hon'ble Supreme Court, the finding was that the parties are governed by the contract of Insurance and under the contract of Insurance, the liability of the Insurance Company would be qua third party only. Thus the deceased cannot be said to be a third party with respect to the insured vehicle. There cannot be any dispute that the liability of the Insurance Company would be as per the terms and conditions of the Contract of Insurance. The insurance policy covers the liability incurred by the insured in respect of death or bodily injury to any person (including an owner of the goods or his authorized representative) carried in the vehicle or damag

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e to any property of a third party caused by or arising out of the use of the vehicle. Thus Section 147 does not require an Insurance Company to assume risk for death or bodily injury to the owner of the vehicle.15. Perusal of the judgment, it is crystal clear that the scope of Section 163-A of the Act cannot be expanded, so as to cover borrower of the vehicle, who stepped into the shoes of the registered owner and file claim petition under Section 163-A of the Act. In the event of entertaining such claim petition, undoubtedly, the other provisions namely, Section 147 and other related provisions would get defeated and the object sought to be reached through Special Provision under Section 163-A of the Act, would also be defeated. Thus the fact remains that in all such cases, where a vehicle was borrowed from the registered owner by any person and such vehicle met with an accident and the rider of the vehicle sustained injury or it resulted in death, then no claim petition is entertained under Section 163-A of the Act and even in cases of claim of Personal Accident Policy (not a statutory coverage in terms of Section 147 of the Act), then also the mandatory conditions under the Personal Accident Policy are to be established by the claimant. This being the principles to be followed, this Court is of the considered opinion that in the present case, the claim petition is unsustainable and not entertainable and liable to be rejected.16. In view of the discussions made above, the judgment and decree dated 02.07.2015 passed in M.C.O.P. No.804 of 2012 by the learned V Judge, V Small Causes Court-cum-Motor Accidents Claims Tribunal, Chennai stands set aside and consequently, CMA No.1234 of 2019 is allowed. However, there shall be no order as to costs. Consequently, connected miscellaneous petition is closed.17. The amount, if any, deposited by the appellant-Insurance Company into the credit of MCOP No.804 of 2012 on the file of the learned V Judge, V Small Causes Court-cum-Motor Accidents Claims Tribunal, Chennai shall be withdrawn by the appellant-Insurance Company by filing an appropriate application and payments are to be made through RTGS.
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