Kishan Dutt
Liability of Insurer when claimant is not third party
Kishan Dutt Kalaskar 10 Nov 2017

Liability of Insurer when claimant is not third party

KDK_1_GUJ_122773

 

Motor Vehicles – Motor Vehicles Act, 1988 S 173 – Motor Vehicles Accident – Liability of Insurer when claimant is not third party -  Held, claimant stands as driver, owner, tortfeasor, insured and the claimant also claimed  compensation against his own insurer which is not maintainable - Claimant himself is registered owner of  vehicle - Statute has made it compulsory for securing risk of third party - Claim petition preferred by respondent - Original claimant is not maintainable under provisions of 1988 Act - Tribunal  committed manifest error in entertaining claim petition and making award - For breach of  contract, respondent cannot maintain  claim petition before  Tribunal – Judgment and Award of Tribunal set aside – Appeal allowed ( P 5, 8, 9 and 10)

 

1_GUJ_122773

The Judgment of the Court was delivered by

R.P. Dholaria, J.:— This appeal is preferred by the appellant against the judgment and award dated 24.9.2014 passed by learned Motor Accident Claims Tribunal (Aux.), Sabarkantha District at Modasa below Exh.47 in Motor Accident Claim Petition No. 1705 of 2013 whereby learned Tribunal was pleased to award compensation of Rs. 3,35,600/- with interest and cost proportionately in favour of the respondent herein - original claimant.

2. The appellant - insurance company has preferred the present appeal, inter alia, contending that the award passed by learned Tribunal is contrary to the provisions of law, the claimant is indisputably not the third party and he cannot maintain the claim petition before the learned Tribunal under the provisions contained under Chapter XI of the Motor Vehicles Act 1988 (“the Act” for short). It is further contended that learned Tribunal fallen in error in holding that as the insurance company has recovered Rs. 50/- towards coverage of personal accident and, therefore, the insurance company is bound to compensate the insured/owner as such.

3. The facts necessary for disposal of this appeal are narrated as under.

3.1 That the respondent - original claimant who is the owner of motor cycle No. GJ 9 AG 7615 himself was proceeding upon his motor cycle on 6.12.2010 at about 6.00 hours in the morning from Modasa to Himatnagar and while the motor cycle was proceeding within vicinity of Lalpura Kampa Na Patiya, at that time, one truck was coming from opposite direction in full light, due to dazzling effect, he fell down and sustained injuries and ultimately, he received permanent disability which led to filing of the claim petition against the appellant - insurance company making the claim that the insurance company has recovered additional amount of premium of Rs. 50/- and, therefore, the insurance company should compensate for the injuries sustained by him.

3.2 Learned Tribunal, after conclusion of trial and hearing, awarded compensation of Rs. 3,35,600/- and along with interest at the rate of 8% and cost proportionately.

4. This Court has heard Mr. Rathin Raval, learned advocate for the appellant - insurance company and Mr. Abhishek Joshi, learned advocate for the respondent - original claimant.

5. Mr. Raval, learned advocate for the appellant - insurance company has submitted that since the claimant himself is registered owner of the vehicle being Morot Cycle No. GJ 9 AG 7615 which is involved in the accident in question and while the accident occurred, he himself was driving. In his submission, the claimant stands as driver, owner, tortfeasor, insured and the claimant also who claimed the compensation against his own insurer for the injuries and damages sustained by him by way of invoking the provisions of Chapter XI of the Act before learned Tribunal.

5.1 Mr. Raval, learned advocate for the appellant submitted that in view of several decisions, the issue involved in the present appeal has been discussed and decided and hence, this issue remains no longer res integra. In support of his submissions, Mr. Raval has placed reliance on the following decisions.

5.2 In 1986 GLH 573 (United India Ins. Company Ltd. v. Jagatsinh Valsinh, this Court has held as under.

“The claimant is held to be tort feasor. It is beyond comprehension as to how a tort-feaser can be awarded compensation for the tortious act committed by him. If the claimant sustained injuries and suffered disablement as a result of such injuries he has to blame himself for it was his own negligence which caused these injuries. If the claimant was negligent he cannot come forward and say “pay me compensation for my own negligence”. The Tribunal has not examined whether the position of a tort-feaser who is employee', would be different from other tort-feasers. (Para 7)”

“The owner has not been found to be liable to pay compensation to the claimant. Thus what is startling is that without holding the owner liable, the insurance company is made liable to pay compensation to the claimant. In fact, award has been passed against the appellant insurance company alone and the claimant's application as against respondent No. 2 owner has been dismissed. The insurance policy taken out by the owner of the vehicle is a contract of indemnity and liability of the Insurance Company, if any is to indemnify the owner of the vehicle to the extent he is made liable to pay damages or compensation. Therefore, unless the owner is made liable, the insurance company cannot be held liable. Unfortunately, we find that the Tribunal has lost sight of this elementary principle and passed award against the appellant insurance company without making respondent No. 2 liable to pay compensation, to the claimant. (Para 9).”

5.3 In 2007 V (0) GLHEL-SC 38690 (Oriental Insurance Company Limited v. Jhuma Saha, the Honourable Supreme Court has held as under.

“Motor Vehicles Act, 1988 - S.147, 166-motor accident - owner himself involved in accident, resulting in his death - he himself was negligent - accident did not involve any othr motor vehicle liability of Insurance Company - claim petition under S.166 - maintainability of - held, liability of insurer-company is to the extent of indemnification of insured against injured persons, a third person or in respect of damages of property - if insured cannot be fastened with any liability, question not arise-additional premium under the insurance policy was not paid in respect of entire risk of death or bodily injury of owner of vehicle - present case did not fall under S.147(b) as it covers a risk of a third party only - impugned judgment, being unsustainable, set aside - appeal allowed.”

“3. The deceased was the owner of an insured vehicle bearing Registration No. TR 03-2304, a maruti van. While he was driving the said vehicle, allegedly, in olrder to save a goat which was running across the road, the steering of the vehicle failed and it dashed with a tree on the road side. He suffered injuries. He later on succumbed thereto.”

“10. The deceased was the owner of the vehicle. For the reasons stated in the claim petition or otherwise, he himself was to be blamed for the accident. The accident did not involve motor vehicle other than the one which he was driving, the question which arises for consideration is that the deceased himself being negligent, the claim petition u/s 166 of the Motor Vehicles Act, 1988 would be maintainable.

11. Liability of the insurer-Company is to the extent of indemnification of the insured against the respondent or a injured person, a third person or in respect of damages of property. Thus, if the insured cannot be fastened with any liability under the provisions of Motor Vehicle Act, the question of the insurer being liable to indemnify insured, therefore, does not arise.”

5.4 In 2004 (0) GLHEL-SC 7855 (Dhanraj v. New India Assurance Company Limited, the Honourable Supreme Court has held as under.

“8. Thus, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorised representative) carried in the vehicle or damage to any property of a third party caused by or raising out of the use of the vehicle. Section 147 does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle.

9. In the case of Oriental Insurance Co. Ltd. v. Sunita Rathi, 1988 0 ACJ (SC) 121, it has been held that the liability of an insurance company is only for the purpose of indemnifying the insured against liabilities incurred towards third person or in respect of damages to property. Thus, where the insured, i.e., an owner of the vehicle has no liability to a third party the insurance company has no liability also.”

5.5 In 2009 (0) GLHEL-SC 43604 (Ningamma v. United India Insurance Company Limited), the Honourable Apex Court has held as under.

“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 163-A 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 sub-section (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……”

5.6 In III (2007) CPJ 12 (SC) (National Insurance Co. Ltd. v. Laxmi Narain Dhut), the Honourable Apex Court has held as under.

“21. Where the claim relates to own damage claims, it cannot be adjudicated by the insurance company. But it has to be decided by an other Forum i.e. Forum created under the Consumer Protection Act, 1985 (in short the ‘CP Act’). Before the Tribunal, there were essentially three parties i.e. the insurer, insured and the claimants. On the contrary, before the Consumer Forums there were two parties i.e. owner of the vehicle and the insurer. The claimant does not come in to the picture. Therefore, these are cases where there is no third party involved.

22. According to learned Counsel for the appellants, in such cases the logic i.e. let the insurer pay and recover from the insured company does not apply.

23. As noted above, there is no contractual relation between the third party and the insurer. Because of the statutory intervention in terms of Section 149, the same becomes operative in essence and Section 149 provides complete insulation.

24. In the background of the statutory provisions, one thing is crystal clear i.e. the statute is beneficial one qua the third party. But that benefit cannot be extended to the owner of the offending vehicle. The logic of fake licence has to be considered differently in respect of third party and in respect of own damage claims.”

5.7 Relying upon the aforesaid decisions, Mr. Raval, learned advocate for the appellant has submitted that since in the present case, two parties are involved and there is no third party, learned Tribunal has no jurisdiction to decide the claim itself. He further submitted that insured/owner of the offending vehicle cannot maintain the claim invoking the provisions of section 166 of the Act before learned Tribunal against his own insurance company for claiming compensation for the injuries sustained by him. He submitted that even on perusal of the provisions of law contained in Chapter XI of the Act itself, it is amply clear that learned Tribunal has wrongly exercised the jurisdiction though learned Tribunal is not having any authority to decide the claim petition when the third party I is not involved in such claim petition and wrongfully awarded the compensation which is required to be set aside as such.

6. On the other-hand, Mr. Abhishek Joshi, learned advocate for the respondent - original claimant has supported the judgment and award passed by learned Tribunal. He submitted that since the insurance company has already recovered additional premium of Rs. 50/- for coverage of risk of the owner/driver himself, the award passed by learned Tribunal is in consonance with the contractual liability undertaken by the insurance company. In support of his submission, Mr. Joshi has relied upon the following decisions.

6.1 In (2008) 5 SCC 736 (Oriental Insurance Company Limited v. Rajni Devi), the Honourable Apex Court has held as under.

“12. According to the terms of contract of insurance, the liability of the Insurance Company was confined to Rs. 1,00,000 (Rupees one lakh only). It was liable to the said extent and not any sum exceeding the said amount.”

6.2 In 2009 (0) GLHEL - SC - 44069 (Bhagyalakshmi v. United Insurance Co. Ltd.), the Honourable Apex Court has held as under.

“Before this Court, however, the nature of policies which came up for consideration were Act polices. This Court did not deal with a package policy. If the Tariff Advisory Committee seeks to enforce its decision in regard to coverage of third party risk which would include all persons including occupants of the vehicle and the insurer having entered into a contact of insurance in relation thereto, we are of the opinion that the matter may require a deeper scrutiny.”

6.3 In 2012 (0) GLHEL - SC 52350 (Oriental Insurance Company Ltd. v. Surendra Nath Loomba), the Honourable Apex Court has held as under.

“14. We have quoted in extenso to reiterate the legal position. In the case at hand, the policy has not been brought on record. The learned counsel for the appellant - insurer would submit that it is an “Act Policy”. The learned counsel for the respondent would seriously dispute and submit that extra premium might have been paid or it maybe a “Comprehensive/Package Policy”. When Certificate of Insurance is filed but the policy is not brought on record it only conveys that the vehicle is insured. The nature of policy cannot be discerned from the same. Thus, we are disposed to think that it would be appropriate to remit the matter to the tribunal to enable the insurer to produce the policy and grant liberty to the parties to file additional documents and also lead further evidence as advised, and we order accordingly.”

7. The precise contention of Mr. Joshi, learned advocate for the respondent - original claimant is such that if learned [Tribunal having no jurisdiction, in that case also, once the insurance company has recovered additional premium of Rs. 50/- for personal accident coverage of the owner himself in terms of the contract of the insurance, liability of the insurance company is already confirmed to Rs. 1,00,000/- for the coverage of personal accident insurance and in that case, learned Tribunal can surely make the award to the extent of Rs. 1,00,000/-.

8. Taking into consideration the rival submissions made by learned advocates for both the sides, ratio laid down in the above referred decisions by the Honourable Apex Court in light of the peculiar facts and circumstances of the case, indisputably, the claimant himself stands as registered owner and he himself was driving the offending vehicle as well as he himself has preferred the claim petition against his own insurance company claiming compensation for injuries sustained by him and resultant damages suffered by him. Indisputably, the claimant is not the third party. He is insured and the respondent insurance company is the insurer. Chapter XI of the Act makes the provision for insurance of the motor vehicle against the third party risk and the statute has made it compulsory for securing the risk of the third party and in the case on hand, if the injury or damage is suffered by the third party, then the third party can claim and maintain the claim petition before the Motor Accident Claims Tribunal constituted under the said Chapter.

9. In view of the ratio laid down by the Honourable Apex Court in the above referred decisions, the claim petition preferred by the present respondent - original claimant is not maintainable under the provisions of the Act and learned Tribunal has committed manifest error in entertaining the claim petition and making the award, as such.

10. So far as the argument of Mr. Joshi as regards to passing the award to the extent of contractual insured amount of Rs. 1,00,000/- is concerned, the said liability arises between the parties by virtue of the contract and in case of breach of contract, party to the contract can avail legal remedy either before the competent civil court or before the consumer forum as may be advised, but surely for breach of such contract, he cannot maintain the claim petition before the learned Tribunal constituted under the Act.

11. For the reasons recorded above, the appeal succeeds. The impugned judgment and award dated 24.9.2014 passed by learned Tribunal is quashed and J set aside. If any amount is deposited by the appellant insurance company either before the registry of this Court or before the learned Tribunal, the same shall be refunded to the insurance company forthwith. Record and Proceedings, if any, be sent back to the lower court forthwith. No order as to costs.

12. In view of the above order, the Civil Application does not survive and the same stands disposed of accordingly.

———

Gujarat High Court

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