the policy clearly indicates that it was an Act policy and no extra premium was paid covering the risk of the owner or driver of the vehicle. The insurer is not liable where the policy does not cover the risk of either the owner or the inmates of the vehicle. There is no contractual liability as envisaged in Sub-Clause (ii) of Proviso to Sub-Section (1) of Section 147 of the Act.=1. A statutory insurance policy in terms of Section 147 of the Act covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods of his authorized 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. 2. Section 147 of the Act does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle. 3. An insurer can enter into a contract of insurance with the insured covering a risk wider than the minimum requirement of the statute whereby the risk to the owner of the vehicle / insured or gratuitous passengers or such other risks not covered by the statute can also be covered, for which premium is paid. 4. The owner of the vehicle / insured driving or travelling in the vehicle in case of injuries or his legal representatives in case of his death in the accident can make a claim only if the policy by its terms covers such risk. 5. The kith and kin of the insured for injuries and their legal representatives in the event of their death in the accident can sustain claims for compensation as third party claims, provided the relevant policy of insurance covers such a risk. 6. The terms of the insurance policy determine the liability of the insurer in each case. 7. Mere nomenclature of the policy as a comprehensive policy or otherwise is not the guide, but the specific terms and conditions of the policy govern the existence and extent of the liability of the insurer.


THE HON'BLE SRI JUSTICE C. PRAVEEN KUMAR        

C.M.A. No.844 OF 2004

02.11.2012

New India Assurance Co. Ltd, Rep. by its Branch Manager Branch near New Bus
Stand Adilabad

Dongre Sanjeev

< GIST:

* HEAD NOTE:

Counsel for Appellant: Sri T. Ramulu

Counsel for Respondent:  Sri Chandra Sekhar

? Cases referred
1 (2004) 8 SCC 553
2 (1998) 1 SCC 365
3 2007 ACJ 818
4 2002 ACJ 1950 (SC)
5 2008 (1) ALD 215
6 2007 ACJ 821
7 2008 (1) ALD 156
8 2007 (6) ALD 306 (DB)

JUDGMENT:
1       This appeal is directed against the order dated 31.03.2003 passed in OP
No.229 of 1999 on the file of The Motor Accidents Claims Tribunal - cum -
Additional District Judge, Adilabad wherein the claim of the respondent herein
was allowed awarding a sum of Rs.54,000/- with interest at 9% p.a. from the date
of filing of the petition till the date of realization.
2       The respondent filed the claim petition before the Tribunal claiming
compensation of Rs.1.00 lakh on account of injuries sustained by him in an
accident that took place on 29.11.1998.  According to him, on that day at about
5.00 PM while he himself was driving his tractor and trailer bearing No.AP 1 T-
3335 and AP 1 T-3336 and coming from Bazarhathnur to Adilabad for loading and
unloading of steel pipes along with some labourers, the tractor turned turtle
due to the load. The claimant who is the owner -cum- driver of the said tractor
and trailer sustained injuries on right ankle, fracture to left radius and
multiple injuries on other parts of the body. Initially he was taken to
Government hospital, Adilabad where he was treated as an inpatient from
29.11.1998 to 04.12.1998 and thereafter he took treatment privately and spent
Rs.10,000/- towards medical expenses. In respect of the said incident, a case in
Cr.No.82 of 1998 was registered under Sections 337 and 338 of IPC against the
driver-cum-owner of the said tractor and trailer i.e. respondent herein.
3       The appellant herein i.e. the insurance company filed counter denying the
averments made in the claim petition.  According to them they have no liability
to compensate the claimant as he himself is the owner and also driver of the
offending vehicle at the time of accident, and the policy does not cover the
risk of owner or the driver of the vehicle, which involved in the accident.
4       In order to substantiate his claim, the claimant got himself examined as
P.W.1 and also got marked Exs.A.1 to A.7.  No oral or documentary evidence has
been adduced on behalf of the appellant herein.
5       On a consideration of the evidence placed before it, the Tribunal awarded
a sum of Rs.54,000/- as compensation after holding that the accident took place
due to the rash and negligent driving of the driver of the tractor and that
there was a valid insurance coverage for the said vehicle at the time of
accident.  As no contra evidence has been let in, the Tribunal held that the
insurance company is liable to pay the compensation to the claimant.  Aggrieved
by the said award, the insurance company preferred the present appeal.
6       Heard Sri T.Ramulu, the learned counsel for the appellant and Sri Chandra
Sekhar, learned counsel for the respondent-claimant.  Perused the record.
7       The learned counsel for the appellant - insurance company contents that as
the claimant himself was the owner of the vehicle and as he himself was driving
the vehicle at the time of accident, the insurance company is not liable to pay
any compensation to the claimant.
8       On the other hand, the learned counsel for the respondent-claimant would
contend that the Tribunal has considered the aspect in detail and the findings
arrived at by the Tribunal warrant no interference from this Court.
9       In view of the rival contentions of the parties, the question that arises
for consideration is whether the claimant is entitled to any compensation from
the insurance company?
10      The provisions of the Motor Vehicles Act, 1988 clearly indicate that it is
the liability of the owner of the vehicle to compensate the victim in an
accident due to negligent driving of his servant.  The owner is made liable for
the act of his servant on the basis of vicarious liability.  Before the master
could be made liable, it is necessary to prove that the servant was acting under
due course of his employment and that he was negligent.  The insurance policy is
only to cover the liability of a person which he might have incurred in respect
of death or bodily injury. The accident to which the owner or his person
insuring is liable to the extent of his liability in respect of death or bodily
injury and that liability is covered by the insurance. In substance, it means,
that if the owner has not incurred any liability in respect of death or bodily
injury of any person, there is no liability and it is not intended to be covered
by the insurance policy.  Therefore, one of the main ingredients to claim
compensation under the provisions of the Motor Vehicles Act is that the claimant
has to establish that there was negligence on the part of the driver and that
the driver was acting under the instructions of his master.  Then only the
insurance company will be liable to indemnify the owner of the vehicle.
11      The issue involved in the present case is what would be the effect when
the accident takes place while the owner himself sustained injuries while
driving the vehicle.  Is the insurance company liable to pay compensation to
owner / driver of the vehicle?
12      It is the contention of the learned counsel for the appellant that the
policy is an act policy which does not cover even the inmates of the vehicle,
leave alone, the driver or the owner of the vehicle.  The policy covers the risk
of death or bodily injury of a third party only.  A look at the policy clearly
indicates that it was an act policy and no extra premium was paid covering the
risk of the owner or driver of the vehicle.  Section 2 (3) of the Motor Vehicles
Act defines the expression 'owner' as under:
        "Owner" means a person in whose name a 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 of a hire- purchase, agreement, or an
agreement of lease or an agreement of hypothecation, the person in possession of
the vehicle under that agreement.

13      As the vehicle stood registered in the name of the claimant who was
injured in the said accident, and was also driving the vehicle at the relevant
point of time, the claimant alone answers the description of the owner as
defined above.
14      In Dhanraj Vs. New India Assurance Co. Ltd & Another1, the apex Court was
dealing with a situation where the appellant therein along with certain other
persons was travelling in his own jeep met with an accident and received
injuries.  Claim petitions were filed seeking compensation from the insurance
company. The Tribunal held that the driver of the jeep was responsible for the
accident and in all the claim petitions filed by passengers the Tribunal
directed the owner as well as the insurance company to pay the compensation.
While dealing with the claim petition filed by the owner, the Tribunal directed
the driver and insurance company to pay compensation to the appellant.  Appeal
filed by the insurance company was allowed by the High Court. Aggrieved by the
same, the claimant / owner therein carried the matter to the Supreme Court.
Analyzing the provisions of Section 147 of the Act, the Court held at para No.8
as under:
        "Thus, an 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 damage to any
property of a third party caused by or arising 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."

15      Further, relying upon the judgment in Oriental Insurance Co. Ltd Vs.
Sunita Rathi2, the apex Court held that the policy does not cover the risk of
injury to the owner himself and as such the insurance company is not liable to
indemnify the owner. The Court also held that the owner of the vehicle can only
claim compensation provided a personal accident insurance has been taken out and
in the absence of such policy, the Court held that the insurance company is not
liable to indemnify the owner.
16      The apex Court in Oriental Insurance Co. Ltd. Vs. Jhuma Saha and others3
reiterated the said principle. In the said case, the deceased was the owner of
the insured vehicle and an accident took place while he was driving the said
vehicle.  The Tribunal, on an application under Section 166 of the Motor
Vehicles Act, awarded compensation holding that since the vehicle being insured
and an additional premium being paid for death of the driver or conductor, the
liability was covered by the insurance policy.  On appeal preferred by the
insurance company, the High Court held that in view of the decision of the
Supreme Court in Nicolletta Rohtagi4 the appeal was held to be not maintainable.
Aggrieved by the same, the insurance company preferred an appeal before the
Supreme Court. The question that fell for consideration before the Supreme Court
was whether the jurisdiction of the Tribunal was restricted only to third party
claim.  Relying upon various judgments of the Supreme Court, including Dhanraj
case (1 supra) the apex Court held that in view of the fact that additional
premium was not paid in respect of risk of death or bodily injury to owner of
the vehicle, Section 147(1) (b) of the Act, which in no uncertain terms covers a
risk of a third party only, allowed the appeal filed by the insurance company.
17      Similar view was taken by this Court in United India Insurance Co. Ltd,
Nizamabad Vs. N. Rukkamma and others5, New India Assurance Co. Ltd Vs. Meera Bai  
and Others6 and United India Insurance Co. Ltd, Nizamabad Vs. K. Sukada Bai and
Others7.
18      From the above, it is abundantly clear that Section 147 of the Motor
Vehicles Act does not contemplate coverage of any risk of bodily injury or death
to the owner of the vehicle unless such risk is covered by the policy.  In the
case on hand, the insurance policy of the offending vehicle is stated to be an
act policy and the said vehicle is to be used only for the purpose mentioned
therein.  It specifically cover only third parties.  The expression 'third
party' should be treated as a person not travelling in the vehicle including the
owner, unless separate premium covering the risk of such other persons
travelling in the vehicle including the owner is paid. It is only the condition
of the policy that should govern the parties in so far as claiming compensation
from the insurance company.
19      Ex.A.1 charge sheet clearly discloses that the owner was driving the
tractor on the date of accident. However, in the claim petition a twist is
sought to be given to the facts by narrating the events as if the claimant was
only travelling in the said vehicle and not driving the vehicle.  But in the
second para of the claim petition it is clearly mentioned that he was driver-
cum-owner of the offending vehicle on the date of accident and he sustained
injuries in the said accident.  While giving evidence, the claimant who examined
himself as P.W.1 deposed to the same effect.  The said version was found to be
inconsistent with the earlier version mentioned in the FIR and also in the
charge sheet filed by the police.  It appears that the claimant gave a twist
from his earlier version only with a view to fasten the liability on the
insurance company.   However, the learned counsel for the respondent did not
dispute the fact of the claimant being the owner and driver of the offending
vehicle at the time of accident.
20      The learned counsel for the respondent took me through the judgment of
this Hon'ble Court in Jayavarapu Rajamma and Others Vs. Jayavarapu Laxminarayana
and Others8.  It was a case where the entire family of the owner of the vehicle
including his parents, wife and children were travelling in the said vehicle
when accident took place and the father of the owner died in the said accident.
The other brothers of the owner filed claim petitions against the insurance
company and also against the owner of the vehicle i.e. their brother.  Objection
with regard to the liability of the insurance company was raised with regard to
payment of compensation to the death of a family member travelling in the said
vehicle. This Hon'ble High Court on a reference answered the same in the
following terms:
1. A statutory insurance policy in terms of Section 147 of the Act covers the
liability incurred by the insured in respect of death of or bodily injury to any
person (including an owner of the goods of his authorized 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.
2. Section 147 of the Act does not require an insurance company to assume risk
for death or bodily injury to the owner of the vehicle.
3. An insurer can enter into a contract of insurance with the insured covering a
risk wider than the minimum requirement of the statute whereby the risk to the
owner of the vehicle / insured or gratuitous passengers or such other risks not
covered by the statute can also be covered, for which premium is paid.
4. The owner of the vehicle / insured driving or travelling in the vehicle in
case of injuries or his legal representatives in case of his death in the
accident can make a claim only if the policy by its terms covers such risk.
5. The kith and kin of the insured for injuries and their legal representatives
in the event of their death in the accident can sustain claims for compensation
as third party claims, provided the relevant policy of insurance covers such a
risk.
6. The terms of the insurance policy determine the liability of the insurer in
each case. 
7. Mere nomenclature of the policy as a comprehensive policy or otherwise is not
the guide, but the specific terms and conditions of the policy govern the
existence and extent of the liability of the insurer.

21      Even Clauses 2, 4 and 6 of the said order clearly indicate that the owner
of the vehicle / insured driving or travelling in the vehicle in case of
injuries or his legal representatives in case of his death in the accident can
make a claim only if the policy by its terms covers such risk.
22      That being the position of law and the fact of insured being the owner and
also the driver of the vehicle at the time of accident being undisputed, I feel
that the insurance company is not liable to indemnify the owner of the vehicle.
23      Further, a perusal of the policy clearly indicates that it was an Act
policy and no extra premium was paid covering the risk of the owner or driver of
the vehicle. The insurer is not liable where the policy does not cover the risk
of either the owner or the inmates of the vehicle.  There is no contractual
liability as envisaged in Sub-Clause (ii) of Proviso to Sub-Section (1) of
Section 147 of the Act.
24      In the circumstances and for the reasons stated above, the award passed in
OP No.229 of 1999 on the file of The Motor Accidents Claims Tribunal - cum -
Additional District Judge, Adilabad is hereby set aside.
25      In the result, the appeal is allowed. But in the circumstances there shall
be no order as to costs.
-----------------------------------
C.PRAVEEN KUMAR, J.  
Date: 02-11- 2012.

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