1998 Supreme(SC) 1175

1998(9) Supreme 70
Supreme Court of India
(From Karnataka High Court)
M.K. Mukherjee, G.T. Nanavati & B.N. Kirpal, JJ.
Smt. Mallawwa etc. -Appellants
versus
The Oriental Insurance Co. Ltd & Ors. -Respondents
Civil Appeal No. 3659 of 1993
With
C.A.Nos. 880/86, 1478/87, 6001/90, 6002/90, 2098/96, 5872/74
And
C.A Nos. 5965, 5966, 5967 & 5968/98
(@ SLP (C) Nos. 10745, 10747, 10748/95 & 9727/89 respectively)
Decided on 27-11-1998
Counsel for the Parties :
For the Appearing Parties : S.C. Dhanda, H.K. Puri, Ujjal Banerejee, Rajesh Srivastava, B.R. Sabharwal, Sunil Kapoor, M.K. Dua, S.K. Paul, Salil Paul, Atul Chitale, Ravikesh Sinha, Abijit P. Mehd, B.V. Desai, N.G.J.R. Luwang, Ms. Shashi Sohari, P.I. Mehta, (S.K. Jain) Adv. (RR-8), (B.D. Sharma) Adv. (RR-161, 165), P.K. Seth, S.K. Gupta, K.K. Gupta, S.C. Birla, Ms. Sushma Suri, Sudhir Kr. Gupta, Ms. Suchitra Atul Chitale, K.R. Nagaraja, Ms. Indra Sawhney and Ms. Meenakshi Arora, Advocate.

Important Point
For the purpose of construing a provision like proviso (ii) to Section 95(1)(b), the correct test to determine whether a passenger was carried for hire or reward, would be whether there has been a systematic carrying of passengers. Only if the vehicle is so used then that vehicle can be said to be a vehicle in which passengers are carried for hire or reward.

Headnote:Motor Vehicles Act, 1939-Section 95-Limits of liability of insurer-Owner of goods being carried on in good vehicle travelling in vehicle -Death of owner of goods in accident to vehicle-Gratitious passenger travelling in goods vehicle-Passenger travelling in goods vehicle- Liability of insurer in such cases in case of accident-Test to deter­mine whether a passenger was carried for his or reward.

       Held : What is important to be noted in Section 195, as it stood before it was amended by Act 56 of 1969, is that the legislature, after providing generally in Clause (b) of Sub-section (1) in wide terms so as to include ‘any person’ and every motor ‘vehicle’ within its sweep, carved out certain exception by adding a proviso to that clause. By proviso (ii), if restricted the generality of the main provision by confining the requirement to cases where “the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment”. In absence of the proviso the main provision would have included all classes of vehicle including goods vehicles and all passengers whether carried for hire or reward or by reason of or in pursuance of a contract of employment or other­wise. That is the reason why there is a reference to different classes of vehicles in proviso (i). It refers to “vehicle”, “public service vehicle” and “goods vehicle” The words “any person” in the main provi­sion would have included the employee of the person insured, and therefore an exception was made by enacting proviso (i) so as to restrict liability of the insurer in respect of his employees. Both those exceptions were made as the legislature did not want to widen the liability of the insurer and the insured by making it more than what it was under the English Act, upon which Section 95 was based. (Para 7)

       Again turning back to proviso (ii), we find that it in clear terms restricted the scope of the main provision by confining its applica­tion to that vehicle which is “a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment’. In the first instance, the vehicle had to be a vehicle of that class in which passengers were carried. If that was not the intention of the Legislature, it would not have used the phraseology “the vehicle is a vehicle in which passengers are carried” and would have simply provided that “except where passengers are carried for hire or reward....” So also the compulsory coverage was not intended for all passengers and, therefore, it was provided that “passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment. Thus, the confinement of the operation of the main provision was in respect of vehicles and also passengers. And that was consistent with the English Law on which Section 95 was based. After the Section 95 was amended by Act 56 of 1969, the proviso remained as it was. The object of the Legislature in making that amendment was to cover the risk in respect of passengers of public service vehicles. The Legislature, therefore, made a special provision in sub-clause (ii) of clause (b), leaving the rest of sub-section (1) including the proviso as it was. If this background is kept in mind, it becomes apparent that the Legislature did not want to make any change in the position of law except to provide specifically for covering risk to passengers of public service vehicles. Though apparently, it looked as if the Legislature by introducing two sub-clauses in clause (b) had tried to make a distinction between passengers and non-passengers, that was not really so. Though the proviso appeared after sub-clause (ii) of clause (b), it really re­mained a proviso to the earlier clause (b) which after the amendment became clause (b)(i). Neither the object of introducing sub-clause (ii) in clause (b) nor the language of the proviso indicate that the proviso was to act as a proviso to sub-clause (ii) also. Even earlier, the passengers of a public service vehicle were required to be covered compulsorily as they answered the description of passengers carried for hire or reward. The only effect of making a special provision for passengers of a public service vehicle was taht proviso (ii) thereaf­ter remained applicable vehicles other than public service vehicles. (Paras 8 & 9)

       For the purposes of Section 95, ordinarily a vehicle could have been regarded as a vehicle in which passengers have carried if the vehicle was of that class. Keeping in mind the classification of vehicles, by the Act, the requirement of registration with particular including the class to which it belonged, requirement of obtaining a permit for using the vehicle for different purposes and compulsory coverage of insurance risk, it would not proper to consider a goods vehicle as a passenger vehicle on the basis of a single use or use on some stray occasions at that vehicle for carrying passengers for hire or reward. For the purpose of construing a provision like proviso (ii) to Section 95(1)(b), the correct test to determine whether a passenger was carried for hire or reward, would be whether there has been a systematic carrying of passengers. Only if the vehicle is so used then that vehicle can be said to be a vehicle in which passengers are carried for hire or reward. (Para 10)