Manager, National Insurance Co. Ltd vs. Saju P. Paul and Another, CIVIL APPEAL NO. 5 OF
2013 (Arising out of SLP(C) No. 20127 of 2011), Decided on Jan 3, 2013
The
question of law that arised in this appeal was as to whether having regard to
the provisions of the Motor Vehicles Act, 1988, the insurance company was
liable to pay compensation for the bodily injury caused to the claimant who was
travelling in a goods vehicle as a spare driver though he was employed as a
driver in another vehicle owned by the owner of the vehicle under the policy of
insurance.
The
insurer set up the plea that the vehicle was a goods vehicle and the risk of
the passengers travelling in the goods vehicle was not covered under the policy
of insurance.
The
Court held:
“In the present case,
Section 147 as originally existed in 1988 Act is applicable and, accordingly,
the judgment of this Court in Asha Rani is fully attracted. The High Court was
clearly in error in reviewing its judgment and order delivered on 09.11.2010 in
review petition filed by the claimant by applying Section 147(1)(b)(i). The
High Court committed grave error in holding that Section 147(1)(b)(i) takes
within its fold any liability which may be incurred by the insurer in respect
of the death or bodily injury to any person. The High Court also erred in
holding that the claimant was travelling in the vehicle in the course of his
employment since he was a spare driver in the vehicle although he was not
driving the vehicle at the relevant time but he was directed to go to the
worksite by his employer. The High Court erroneously assumed that the claimant
died in the course of employment and overlooked the fact that the claimant was
not in any manner engaged on the vehicle that met with an accident but he was
employed as a driver in another vehicle owned by M/s. P.L. Construction
Company. The insured (owner of the vehicle) got insurance cover in respect of
the subject goods vehicle for driver and cleaner only and not for any other
employee. There is no insurance cover for the spare driver in the policy. As a
matter of law, the claimant did not cease to be a gratuitous passenger though
he claimed that he was a spare driver. The insured had paid premium for one
driver and one cleaner and, therefore, second driver or for that purpose ‘spare
driver’ was not covered under the policy. [Para 16]
“The High Court
misconstrued the proviso following sub-section (1) of Section 147 of the 1988
Act. What is contemplated by proviso to Section 147 (1) is that the policy
shall not be required to cover liability in respect of death or bodily injury
sustained by an employee arising out of and in the course of his employment
other than a liability arising under the Workmen’s Compensation Act, 1923. The
claimant was admittedly not driving the vehicle nor he was engaged in driving
the said vehicle. Merely because he was travelling in a cabin would not make
his case different from any other gratuitous passenger.” [Para 17]
“The impugned judgment
is founded on misconstruction of Section 147. The High Court was wrong in
holding that the insurance company shall be liable to indemnify the owner of
the vehicle and pay the compensation to the claimant as directed in the award
by the Tribunal.” [Para 18]
The
Court relied on a three judgment Bench decision in Asha Rani (2003) 2 SCC 223
which noticed Section 147 of the 1988 Act prior to its amendment in 1994 and
after its amendment in 1994 and held in paragraph 9 as follows :
“In Satpal case [(2000) 1 SCC 237] the Court assumed that the
provisions of Section 95(1) of the Motor Vehicles Act, 1939 are identical with
Section 147(1) of the Motor Vehicles Act, 1988, as it stood prior to its
amendment. But a careful scrutiny of the provisions would make it clear that
prior to the amendment of 1994 it was not necessary for the insurer to insure
against the owner of the goods or his authorized representative being carried
in a goods vehicle. On an erroneous impression this Court came to the conclusion
that the insurer would be liable to pay compensation in respect of the death or
bodily injury caused to either the owner of the goods or his authorised
representative when being carried in a goods vehicle the accident occurred. If
the Motor Vehicles Amendment Act of 1994 is examined, particularly Section 46,
by which the expression “injury to any person” in the original Act stood
substituted by the expression “injury to any person including owner of the
goods or his authorised representative carried in the vehicle”, the conclusion
is irresistible that prior to the aforesaid Amendment Act of 1994, even if the
widest interpretation is given to the expression “to any person” it will not
cover either the owner of the goods or his authorized representative being
carried in the vehicle. The objects and reasons of clause 46 also state that it
seeks to amend Section 147 to include owner of the goods or his authorized
representative carried in the vehicle for the purposes of liability under the
insurance policy. It is no doubt true that sometimes the legislature amends the
law by way of amplification and clarification of an inherent position which is
there in the statute, but a plain meaning being given to the words used in the
statute, as it stood prior to its amendment of 1994, and as it stands
subsequent to its amendment in 1994 and bearing in mind the objects and reasons
engrafted in the amended provisions referred to earlier, it is difficult for us
to construe that the expression “including owner of the goods or his authorised
representative carried in the vehicle” which was added to the pre-existing
expression “injury to any person” is either clarificatory or amplification of
the pre-existing statute. On the other hand it clearly demonstrates that the legislature
wanted to bring within the sweep of Section 147 and making it compulsory for
the insurer to insure even in case of a goods vehicle, the owner of the goods
or his authorised representative being carried in a goods vehicle when that
vehicle met with an accident and the owner of the goods or his representative
either dies or suffers bodily injury. The judgment of this Court in Satpal case
therefore must be held to have not been correctly decided and the impugned
judgment of the Tribunal as well as that of the High Court accordingly are set
aside and these appeals are allowed. It is held that the insurer will not be
liable for paying compensation to the owner of the goods or his authorised
representative on being carried in a goods vehicle when that vehicle meets with
an accident and the owner of the goods or his representative dies or suffers
any bodily injury.”
S.B. Sinha, J. in his supplementary judgment in Asha Rani
while concurring with the above, observed as follows:
“26. In view of the changes in the relevant provisions in the
1988 Act vis-à-vis the 1939 Act, we are of the opinion that the meaning of the
words “any person” must also be attributed having regard to the context in
which they have been used i.e. “a third party”. Keeping in view the provisions
of the 1988 Act, we are of the opinion that as the provisions thereof do not
enjoin any statutory liability on the owner of a vehicle to get his vehicle
insured for any passenger travelling in a goods vehicle, the insurers would not
be liable therefor.
27. Furthermore, sub-clause (i) of clause (b) of sub-section
(1) of Section 147 speaks of liability which may be incurred by the owner of a
vehicle in respect of death of or bodily injury to any person or damage to any
property of a third party caused by or arising out of the use of the vehicle in
a public place, whereas sub-clause (ii) thereof deals with liability which may
be incurred by the owner of a vehicle 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.
28. An owner of a passenger-carrying vehicle must pay premium
for covering the risks of the passengers. If a liability other than the limited
liability provided for under the Act is to be enhanced under an insurance
policy, additional premium is required to be paid. But if the ratio of this
Court's decision in New India Assurance Co. v. Satpal Singh [(2000) 1 SCC 237]
is taken to its logical conclusion, although for such passengers, the owner of
a goods carriage need not take out an insurance policy, they would be deemed to
have been covered under the policy wherefor even no premium is required to be
paid.
Asha
Rani case relied upon in Oriental Insurance Co. Ltd. v. Devireddy Konda Reddy
and Others (2003) 2 SCC 339 wherein it was held as under:
“….The difference in the language of “goods
vehicle” as appearing in the old Act and “goods carriage” in the Act is of
significance. A bare reading of the provisions makes it clear that the
legislative intent was to prohibit goods vehicle from carrying any passenger.
This is clear from the expression “in addition to passengers” as contained in
the definition of “goods vehicle” in the old Act. The position becomes further
clear because the expression used is “goods carriage” is solely for the
carriage of “goods”. Carrying of passengers in a goods carriage is not
contemplated in the Act. There is no provision similar to clause (ii) of the
proviso appended to Section 95 of the old Act prescribing requirement of
insurance policy. Even Section 147 of the Act mandates compulsory coverage
against death of or bodily injury to any passenger of “public service vehicle”.
The proviso makes it further clear that compulsory coverage in respect of
drivers and conductors of public service vehicle and employees carried in goods
vehicle would be limited to liability under the Workmen's Compensation Act,
1923 (in short “the WC Act”). There is no reference to any passenger in “goods
carriage”.
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