Partly allowed

Oriental Insurance Co. Ltd. v. Smt Rekha Jayaram

Karnataka HC23 Oct 2021MFA/996/2012

Case brief

AI extract

What is this about?

The Karnataka High Court allowed the appeal filed by an insurance company against a Tribunal award of Rs.4,60,500. The Court held that a deceased rider who borrowed the vehicle stepped into the shoes of the owner, thus making a Section 163-A claim against the insurer non-maintainable. Instead, liability was determined under the insurance contract for owner-driver death.

What did the court decide?

The judgment and award of the Tribunal are modified; the petitioners are entitled to compensation of Rs.1,00,000 with interest at 8% p.a.

Oriental Insurance Co. Ltd. Vs Smt Rekha Jayaram — Cheque Dishonour | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23^RD DAY OF OCTOBER 2021

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BEFORE

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THE HON'BLE MR. JUSTICE ASHOK S. KINAGI

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M. F. A. NO. 996 OF 2012 (MV)

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BETWEEN:

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ORIENTAL INSURANCE CO. LTD. DO 6, SRINIVASA MANSION,# 364/1, 10 ‘B’ MAIN, III BLOCK, JAYANAGAR, BANGALORE - 560011, NOW REP BY ITS REGIONAL MANAGER, ORIENTAL INSURANCE CO. LTD., REGIONAL OFFICE, # 44/45, LEO SHOPPING COMPLEX, RESIDENCY ROAD, BANGALORE - 560025

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...APPELLANT

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(BY SRI. A N KRISHNA SWAMY, ADV.)

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AND

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SMT. REKHA JAYARAM W/O JAYARAM SUVARNA M AGED ABOUT 46 YEARS

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M. J. SANDEEP S/O JAYARAM SUVARNA M AGED ABOUT 29 YEARS

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M J SANJAY S/O JAYARAM SUVARNA M AGED ABOUT 25 YEARS

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ALL ARE R/A # 24, GURUKRIPA, NEAR SUNRISE SCHOOL, HEBBAL KEMPAPURA, BANGALORE - 560 024

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JAYARAM SUVARNA M S/O LATE BABU M AGED ABOUT 59 YEARS # 24, GURUKRIPA, NEAR SUNRISE SCHOOL, HEBBAL KEMPAPURA, BANGALORE - 560 024

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…RESPONDENTS

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(BY SRI. I. GOPAL KRISHNA, ADV. FOR R1 TO R3 R4 – SERVED BUT UNREPRESENTED)

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THIS MFA IS FILED U/S 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD DATED 10.11.2011 PASSED IN MVC NO.7949/2008 ON THE FILE OF THE IV ADDITIONAL JUDGE, MEMBER, MACT, COURT OF SMALL CAUSES, BANGALORE, AWARDING A COMPENSATION OF Rs.4,60,500/- WITH INTEREST @ 6% P.A. FROM THE DATE OF PETITION TILL PAYMENT.

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THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 17.08.2021, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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This appeal is filed by the Insurance Company under Section 173(1) of the M.V.Act challenging the judgment and award dated 10.11.2011 passed in MVC No.7949/2008.

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Parties are referred to as they are arrayed before the Tribunal.

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Brief facts of the case leading rise to the filing of this appeal are that on 14.1.2004 at about 21.00 to 24.00 hours in the night, when one Sachin was riding his Hero Honda motorcycle bearing Registration KA-04 EF 9048, on the way to his house at Kempapura from Yeshwanthpura, near G R Kalyana Mantapa, Hebbal Ring Road, Bhadrappa layout, Bengaluru, he met with an accident by an unknown vehicle and suffered grievous injuries on his head with bleeding in the nose. Immediately he was taken to the Baptist Hospital and later shifted to Mallige Medical Centre for better treatment. He succumbed to the injuries at 3.45 a.m. on 15.1.2004.

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2.1. The petitioners being the legal representatives of the deceased-Sachin filed claim petition claiming compensation of Rs.9,19,939/- for the death of the deceased-Sachin in the road traffic accident.

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2.2. Respondent No.1-Insurance Company filed the

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written statement admitting issuance of policy in respect of the said motorcycle but denied its liability on the reason that

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the deceased rider had no valid driving licence and the owner of the vehicle knowingly entrusted the vehicle to such a person. Thus there is a violation of the policy conditions and it is contended that owner of the motor cycle is none other than the father of the deceased-Sachin. It is contended that as per the police reports some unknown vehicle hit and run away. Hence, prayed to dismiss the claim petition.

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2.3. Initially, Respondent No.2 was petitioner No.1. He

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was examined himself as PW1. Later on he filed an application and got transposed as respondent No.2 and has

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admitted that he is the owner of the motor cycle and the motor cycle was insured with respondent No.1 and also admitted the rest of the petition averments as true and prayed to award compensation.

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2.4. The Tribunal on the basis of the pleadings framed the issues.

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2.5. The petitioners, being the mother and brothers of deceased Sachin, in order to prove the claim petition, respondent No.2 was examined as PW1, petitioner No.1 was examined as PW2 and examined two witnesses as PWs 3 and 4 and got marked the documents as exhibits P1 to P12.

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2.6. Respondent No.1-Insurance Company examined

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its officer as RW1 and got marked the insurance policy as exhibit R1. Respondent No.2 was examined as RW2.

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2.7. The Tribunal after recording the evidence and considering the material on record held that the petitioners have proved that the deceased died in a road traffic accident

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on 14.1.2004 on account of the use of motor cycle bearing registration No.KA 04 EF 9048 by its rider and further held that respondent No.1-Insurance Company has failed to prove that the rider of offending vehicle did not possess valid driving licence and further held that respondent No.1Insurance Company has failed to prove that the company is not liable to pay compensation and further held that the petitioners are entitled for compensation and awarded a compensation of Rs.4,60,500/- with interest at the rate of 6% p.a. from the date of petition till the date of realisation.

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The respondent No.1-Insurance Company aggrieved by

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the judgment and award passed by the Tribunal has filed this appeal.

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Heard the learned counsel for the appellantInsurance Company and learned counsel for respondents/petitioners.

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Learned counsel for the appellant Insurance Company submits that the deceased was not a third party. He further

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submits that the deceased was riding the vehicle as on the date of accident and that the deceased was the son of the owner of the offending vehicle. He further submits that as the deceased has borrowed the vehicle from respondent No.2, he cannot be said to be a third party with respect to the insured vehicle. He further submits that the deceased will step into the shoes of respondent No.2. Hence the Insurance Company is not liable to pay the compensation and he further submits that the tribunal has committed an error in fastening the liability. Hence, on these grounds prays to allow the appeal

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Per contra, learned counsel for the respondents/petitioners submits that the offending vehicle was insured with the Insurance Company and the claim petition is filed under Section 163-A of the M.V.Act. Claim is based on ‘no fault liability’ and in order to buttress his argument, he has placed reliance on the judgment of the Hon’ble Apex Court in the case of RAMKHILADI AND

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ANOTHER V. UNITED INDIA INSURANCE COMPANY

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AND ANOTHER reported in (2020) 2 Supreme Court Cases

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Hence, he prays to dismiss the appeal.

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Perused the records and considered the submissions of the learned counsel for the parties.

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The point that arises for consideration is with regard to liability.

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It is not in dispute that on 14.1.2014 the deceased-

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Sachin met with an accident by an unknown vehicle and suffered grievous injuries and he was shifted to Baptist Hospital, followed by Mallige Medical Centre for better treatment. He succumbed to the injuries on 15.1.2004. In order to prove the accident, the petitioners have produced a copy of the FIR marked as Ex.P1. From the perusal of the records produced by the petitioners, it is evident that the deceased met with an accident and succumbed to the injuries.

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The legal representatives of the deceased-Sachin initially filed a claim petition under section 163-A of the MV Act against the Insurance Company. Subsequently the owner of the vehicle i.e. the original petitioner No.1 filed an application for transposing him as respondent No.2. The Tribunal allowed the said application and permitted the owner for transposing as respondent No.2. That under Section 163-A of the M.V. Act, claim lies against the real owner and the Insurance Company. As per Section 2(30) of the M.V Act, owner is defined as to mean “a person in whose name motor vehicle stands registered, and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject matter of a hire-purchase, agreement or an agreement of lease or an agreement of lease or an agreement of hypothecation, the person in possession of vehicle under the agreement. The definition of ‘owner’ contemplates that the registered owner of the vehicle as per the registering authority liable in respect of the offending vehicle despite sale or purchase of

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vehicle the person and person in whose name the motor vehicle stands registered and in possession of the vehicle is the owner of the vehicle for the purpose of the Act. As per the definition, a person in whose possession the vehicle is, is also included within the definition of ‘owner’ of the vehicle. In the present case, the deceased was the son of respondent No.2, who is the owner of the vehicle. The deceased borrowed the vehicle from respondent No.2 and was driven by him. As on the date of accident, the vehicle was in possession of the deceased and hence, the deceased enters into the shoes of the owner.

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The claim petition under Section 163-A of the M.V.Act is based on the principles 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 M.V. Act against the owner/insurer of the vehicle which is borrowed by him as he will be in the shoes of the owner and cannot maintain a claim under Section 163-A of the Act

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against owner/insurer of the offending vehicle. In the present case, the claim petition is filed under Section 163-A of the M.V.Act. As observed above, the claim petition filed by the petitioners under Section 163-A of the M.V. Act is not maintainable as the deceased stepped into the shoes of the owner of the vehicle.

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In the present case, the parties are bound by the contract of Insurance and under the contract of Insurance, the liability of the Insurance Company would be qua third party only. The deceased cannot be said to be a third party. As per the contract of insurance, in case of personal accident, the owner-driver is entitled to a compensation of Rs.1,00,000/-. Therefore, the deceased, as observed herein above who would step into the shoes of the owner, shall be entitled to compensation of Rs.1,00,000/-. The said finding is being reiterated by the Hon’ble Apex Court in the case of RAMKHILADI supra. The petitioners are entitled to a compensation of Rs.1,00,000/-. The Tribunal has

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committed an error in awarding a compensation of Rs.4,60,500/-. The offending vehicle was insured with respondent No.1 and as per the contract of Insurance, the respondent No.1 is liable to pay compensation of Rs.1,00,000/- only.

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In view of the above discussion, this Court is inclined to interfere with the impugned judgment and award passed by the Tribunal Accordingly, I proceed to pass the following :

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ORDER

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i) The appeal is allowed in part;

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ii) The judgment and award passed by the Tribunal in MVC No.7949/2008 dated 10.11.2011 is modified. The petitioners are entitled for compensation of Rs.1,00,000/- with interest at the rate of 8% p.a. from the date of petition till the date of realisation of amount.

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iii) Respondent No.1-Insurance Company is directed to deposit the amount within a

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period of six weeks from the date of receipt of a copy of this judgment.

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SD/JUDGE

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Oriental Insurance Co. Ltd. v. Smt Rekha Jayaram

Case brief

What is this about?

What did the court decide?

Oriental Insurance Co. Ltd. v. Smt Rekha Jayaram

Case brief

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