Partly allowed

The Oriental Fire and General Insurance Co. v. Smt. Sharada T. Koli and Ors.

Bombay HC14 Dec 2005FA/820/1990

Case brief

AI extract

What is this about?

In an appeal against a Motor Accidents Claims Tribunal order, the court held that an insurer is not liable for death of a gratuitous passenger in a goods vehicle due to policy exclusion. Compensation of Rs. 75,000 was awarded to be recovered jointly and severally from the vehicle owner and driver, not the insurer. The insurer may recover the amount from them via executing court.

What did the court decide?

Compensation of Rs. 75,000 to be recovered by claimants from vehicle owner and driver jointly and severally; appeal allowed in these terms.

The Oriental Fire and General Insurance Co. Vs Smt. Sharada T. Koli… — Insurance | Bombay HC (2005)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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APPELLATE CIVIL JURISDICTION

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FIRST APPEAL NO. 820 OF 1990

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`The`	`Oriental Fire and General )`
`Ins`	`urance Company.` `....` `)..`	`Appellant.`
	`Versus`
`1)`	`Smt. Sharada Tukaram Koli` `)`
`2)`	`Jawahar Tukaram Koli` `)`
`3)`	`Sau. Akkatai Ramchandra Koli )`
`4)`	`Malhari Sakharam Jadhav` `)`
`5)`	`Hasan Chandsaheb Bagwan` `)`
`6)`	`Rajuddin Babusaheb Shaikh` `)`
`(No`	`s.1 to 3 Original Petitioners)`
`and`	`Nos.4 to 6 Original` `)`
`Res`	`pondents Nos.1 to 3)` `)..`	`Respondents.`
`Mr.`	`S. S. Vidyarthi for the Appellant.`
`Mr.`	`T.S.Ingale` `with` `Mr.` `A.`	`Adusale` `for`
`Res`	`pondent Nos.1 to 3.`
`Mr.` `for`	`B.` `A.` `Valimhe` `with` `Mr.` `Respondent No.5.`	`R.` `V.` `More`
`Mr.`	`B. R. Patil for Respondent No.6.`

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CORAM : ANOOP V. MOHTA, J.
DATED : 14TH DECEMBER, 2005.

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J U D G E M E N T:

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This is the first appeal of The Oriental Fire and
General Insurance Company, original respondent No.4,
hereby challenge has been made to the Judgment and
Order dated 6th September, 1990 passed by the Motor
Accident Claims Tribunal, Sangli (Claims Tribunal)
whereby an application under Section 110 of the Motor
Vehicles Act, 1939 (Motors Act) of respondent Nos.1 to
3 / applicant Nos.1 to 3 has been allowed only against
the appellant.

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2. The respondent No.4 herein, as a goods carrier was
driving truck (MHL - 1194) owned by respondent No.5.
Respondent No.6 is subsequent purchaser of the truck.
The said truck was insured with the appellant as a
goods carrier. The deceased Tukaram, aged 24 years,
on 23rd July, 1979 at about 9.00 a.m. left his
village Mayani for carrying bricks (Vita) by the truck
in question. The said truck met with an accident, as
one Ambassador Car was coming in a high speed from the

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opposite direction. Both the vehicle were in high
speed. The driver, respondent No.4, had suddenly
applied brakes and the truck turned in the deep. The
deceased who was sitting on the truck was thrown out
of the truck and died on the spot on 23rd July, 1979.

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3. Respondent Nos.1 to 3, therefore, filed the claim
petition in question for Rs.1,20,500/-. The appellant
resisted the claim and allegations. Respondent No.6
was added subsequently being purchaser of the vehicle
after the accident. Respondent No.5, Hasan, as
observed, admitted his responsibility for the
accident. The appellant resisted the claim petition
by stating that the said goods vehicle truck, was
unauthorisedly carrying the passengers on hire or for
reward. The policy excludes the carrying of a
passenger for reward or hire. As there was a breach
of the policy condition, appellant is not liable to
pay any compensation. In the alternative they
contended that their liability in view of the policy
at the most, be restricted to the tune of Rs.50,000/-
only.

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4. After considering the materials placed on the
record, the Claim Tribunal held that the accident took

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place due to rash and negligent driving of the truck.
The appellant / Opponent No.4 submitted that at the
time of the accident truck was used for carrying
passengers contrary to the terms and conditions for
the insurance policy. The plea of limitation was
rejected. The Claims Tribunal therefore awarded
Rs.75,000/- to the respondent Nos.1 to 3 / Claimant
Nos.1 to 3 only against appellant / Opponent No.4,
even though in the reasoning it was specifically
observed that the claimants were entitled to recover
compensation of Rs.75,000/- from Opponent No.1,2 and 4
jointly and severally. Therefore, this challenge is
only by the appellant and not by the other
Opponents/respondent Nos.4,5 and 6.

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5. Heard learned Counsel appearing for the parties.
The liability of the insurance company / insurer, does
not cover death or injuries sustained by a person or a
gratuitous passenger carried in such a good vehicle
(truck) under Section 95(1)(b) of the Motor Vehicles
Act, 1939 (now Section 147(1)(b) of 1988 Act). The
Apex Court has settled the issues in (1) Mallawwa &
Ors. v/s Oriental Insurance Co. Ltd. & Ors., (1999
ACJ 1), National Insurance Co. Ltd. v/s V.
Chinnamma (2004 (3) T.A.C. 577 (S.C.), (3) New India

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Assurance Co. Ltd. v/s Asha Rani & Others, (2003 ACJ

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1).

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6. In view of this settled provisions of law and
taking into consideration the admitted position on the
record in the present case, there remain no doubt that
the deceased was a gratuitous passenger travelling on
a goods vehicle. The truck was admittedly, not
insured to cover the gratuitous passenger like the
deceased. On the contrary there was a specific
prohibition as observed by the Tribunal. In this
background the learned Claims Tribunal committed error
by directing the appellant / Opponent No.4 to make
payment to the claimants. The learned Claims Tribunal
has in fact observed the joint and several liability
of the original Opponent Nos.1,2 and 4 i.e. Driver,
owner and insurance company. The direction to recover
compensation of Rs.75,000/- only from the appellant is
not correct. The learned Claims Tribunal has observed
that the insurance policy, Exhibit 96, no way exclude
the risk about gratuitous passenger and therefore as
per the insurance policy, the appellant / insurance

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company has been directed to pay the compensation to
the claimants. In the present case, admittedly, the
deceased Tukaram was not a traveller for hire or

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reward. He was a gratuitous passenger. Considering
the principles, now as settled by the Apex Court, as
referred above, there remained no doubt that the
gratuitous passengers like the deceased, if not
covered under the policy, the appellant / insurance
company cannot be directed to make such payment in
view of the breach of the terms and conditions of the
policy based on then existing provisions of the Motor
Vehicles Act and part from this the above decisions of
the Apex Court.

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7. Learned advocate appearing for the driver /
Opponent No.1, based on the decision of the Supreme
Court in National Insurance Co. Ltd. v/s Baljit Kaur
and Ors. ((2004) 2 SCC 1), contended that as the
appellant has already deposited the money in the
Claims Tribunal and the same was withdrawn by the
respondents / claimants, in such circumstances let
this order of the Claims Tribunal be maintained and
the appellant be allowed to recover the amount from
the owner and/or the driver of the vehicle involved in
the accident. Such mode has been recognised by the
Apex Court in Baljit Kaur (supra). Therefore, in the
interest of justice, so far as the claimants are
concerned, they need not be now restricted to recover

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the amount and/or balance amount from the original
owner or the driver.

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8. The learned Advocate appearing for the owner,
however, tried to distinguish the Apex Court decisions
referred above and submitted that the Apex Court
decision especially Mallawwa & Ors. (supra) still has
considered that on a single occasion or on some stray
occasion, if the vehicle carrying passengers for hire
or reward that itself should not be treated as a
breach of terms and conditions of the policy of
insurance, if any. A passenger travelled on such
single or some stray occasions should not be treated
as gratuitous passenger. He further contended that
being the beneficiary legislation, the court should
take liberal interpretation and therefore in the
present facts and circumstances of the case, this
Court need not interfere with the finding and
directions given by the Claims Tribunal.

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9. As noted, there is no material brought on the
record by the owner of the vehicle to justify his case
that it was only a single or a stray occasion for the
owner or driver to use the vehicle for unauthorisedly
carrying such passenger for hire or reward. For want

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of material evidence, at this stage it is difficult to
consider this submission. There was no such plea
raised by the owner. As observed by the Tribunal in
fact he had admitted the liability. Therefore, in the
absence of specific plea and material in support of
the case, this contention of the owner of the vehicle
is rejected.

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10. The decisions of the Apex Court as referred above
itself shows the true and correct interpretation based
on the principles applicable to the beneficial
legislature but subject to the scheme of the Motor
Vehicle Act. Therefore, there is no case made out by
the owner and/or driver of the vehicle to justify the
impugned judgment and/or directions passed by the
Tribunal of recovery of compensation only against
appellant / respondent No.4. It is contrary to law
and the record. The observations of the Apex Court in

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National Insurance Co. Ltd. vs. Bommithi

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Subbhayamma and others, (2005 ACJ 721) substantially
covers the present case also. The same reads as
under:

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"It is, therefore, manifest that in spite of
the amendment of 1994 the effect of the

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provision contained in section 147 with
respect to persons other than the owner of
the goods or his authorised representative
remains the same. Although the owner of the
goods or his authorised representative would
now be covered by the policy of insurance in
respect of a goods vehicle, it was not the
intention of the legislature to provide for
the liability of the insurer with respect to
passengers, especially gratuitous
passengers, who were neither contemplated at
the time the contract of insurance was
entered into, nor any premium was paid to
the extent of the benefit of insurance to
such category of people.

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The same view was reiterated in National
Insurance Co. Ltd. v. Challa Bharathamma,
(2004 ACJ 2094 (SC)); Pramod Kumar Agarwal
v. Mushtari Begum, (2004 ACJ 1903 (SC)) and
also in National Insurance Co. Ltd. v. V.
Chinnamma (2004 ACJ 1909 (SC)).

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In view of the aforementioned authoritative
pronouncements of this Court, the impugned

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judgment of the High Court cannot be
sustained which is set aside accordingly.
This appeal is allowed. We, however, make
it clear that the claimants - respondents
will be entitled to recover the amount of
compensation granted in their favour by the
Motor Accidents Claims Tribunal from the
owner of the vehicle."

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11. Based on the above principles of law, there is no
reason to restrict the liability limited even to the
tune of Rs.50,000/-. There is a clear breach of
insurance policy and therefore the appellant is not
bound to make any payment to the respondents /
original claimants. The owner and driver, however,
are jointly and severally liable to pay the
compensation as arrived at by the Tribunal with
interest, as awarded. There is no challenge made by
any parties so far as the amount of compensation as
awarded by the Tribunal is concerned. The
compensation as awarded by the Tribunal therefore
remain in tact. However, this should be recovered
only from respondent Nos.4 and 5 i.e. driver and
owner respectively.

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12. As admitted by the parties that the appellant has
already deposited the money with the Claim Tribunal as
per the impugned order dated 6th September, 1990 and
the claimants have already withdrawn the said amount.
In this background, in the interest of justice, I am
not inclined to direct the claimants / respondents to
refund the amount to the appellant. It will be
difficult for the claimants now at this stage after 15
years to recover the same from the owner or driver.
Considering the submissions raised based on the Baljit
Kaur & Ors. I am of the view that the appellant is
entitled to recover the amount from the owner and the
driver of the vehicle jointly and/or severally,
through the executing court without filing a separate
suit for recovery of this amount. This course, in the
fact and circumstances of the case will serve the
interest of justice.

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13. Taking all this into account, the impugned
judgment and order is modified to the extent that the
original claimants / respondent Nos.1 to 3 are
entitled to recover compensation of Rs.75,000/- along
with the proportionate costs and future interest at
the rate of 12% p.a. from the date of the application
till realisation of the amount from the respondent

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Nos.4 and 5 i.e. driver and the owner of the vehicle
in question only and not from the appellant. The rest
of the order of the learned Tribunal is maintained
with the above observations.

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14. The appeal is partly allowed, in terms aforesaid.
There shall be no order as to costs.

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Sd/-

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(ANOOP V. MOHTA,J.)

The Oriental Fire and General Insurance Co. v. Smt. Sharada T. Koli and Ors.

Case brief

What is this about?

What did the court decide?

The Oriental Fire and General Insurance Co. v. Smt. Sharada T. Koli and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

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