Oriental Insurance Company LTD. vs Sony Cheriyan

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1999 Supreme(SC) 889

1999(7) Supreme 195
SUPREME COURT OF INDIA
(From National Consumer Dispute Redressal Commission)
S. Saghir Ahmad & R.P. Sethi, JJ.
Oriental Insurance Co. Ltd. -Appellant
versus
Sony Cheriyan -Respondent
Civil Appeal No. 4913 of 1997
Decided on 19-8-1999
Counsel for the Parties :
For the Appellant : T.L.V. Iyer, Sr. Advocate and M.J. Paul, Advocates.
For the Respondent : Subramonium Prasad, Advocate.

Headnote:(i) Insurance - Motor vehicle insurance - Truck insured-Policy stipulated limitation as to use of truck as "only for carriage of goods within meaning of the Motor Vehicles Act, 1988"-Truck carrying Ether Solvent caught fire-Permit granted to vehicle under Motor Vehicles Act only to carry all kinds of unhazardous goods-Ethyl Ether is hazarduous goods-Claim of insured cannot be allowed as claim was not covered by terms of insurance policy.
       Held : The insurance policy between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. The insured cannot claim anything more than what is covered by the insurance policy. That being so, the insured has also to act strictly in accordance with the statutory limitations or terms of the policy expressly set out therein. (Para 9)
       In the instant case, while specifying the "Limitations as to use", it was clearly mentioned that the policy was meant to cover only carriage of goods as defined within the meaning of Motor Vehicles Act, 1988. The permit granted to the respondent under the Act specifies the nature of goods which he could carry on the vehicle. It was provided in the `permit itself that the respondent could carry "all kinds of unhazardous goods including fish except those prohibited." It is obvious that the `permit was not granted for carrying hazardous goods. It has already been specified above that Ether which was being transported by the respondent in his vehicle is hazardous substance indicated in Table III under Rule 137 of the Motor Vehicle Rules. There was, therefore, a specific prohibition operating against the respondent from carrying a hazardous, and that too, flammable substance in his vehicle which, under the `permit granted to him, could be utilised only for carrying unhazardous goods under the Motor Vehicles Act. (Para 10)
       The argument that what was being carried by the respondent was Ether Solvent which is not specified in Table III appended to Rule 137 and what is specified therein is Ethyl Ether which is a different substance altogether and, therefore, carrying of Ether Solvent was not prohibited and it could not be treated to be a hazardous substance as it was not specified as such in Table III cannot be accepted. From Chemical Dictionaries, it is apparent that Ether Solvent is only a descriptive name for Ether which is widely used as a solvent not only in the industry, but also in chemical manufacture and in research laboratories. Ether and Ethyl Ether are the same substance and the term "Ether" is used synonymously with the "Ethyl Ether". (Paras 11 & 14)
       Held consequently, the claim of the insured was rightly rejected on the ground that the claim was not covered by the terms of the insurance policy. (Paras 2 & 15)
       (ii) Motor Vehicles Rules, 1989 -Rule 91(c) and Table III in Rule 137 - Hazardous goods - Ethyl Ether-Ether Solvent is only descriptive name for Ether-Ether and Ethyl Ether are same substance. (Paras 11, 12, 13 & 14)

JUDGMENT

S. Saghir Ahmad, J.-Respondent s truck was insured with the appellant. On 19.4.1994, while the truck was on its way from Bombay to Allapuzha carrying 15 barrels of Ether Solvent, it caught fire at Bisalkoppa near Hubli, which gave rise to a Claim Petition being filed by the respondent before the District Consumer Disputes Redressal Forum, Allapuzha, in the sum of Rs. 2,15,000/-, along with interest @ 18 per cent per annum from 19.4.1994, but the Complaint was dismissed on 30.9.1995. An appeal, which was thereafter filed by the respondent before the Kerala State Consumer Disputes Redressal Commission, was allowed on 24.4.1996 directing the appellant to pay a sum of Rs. 1,93,500/- together with interest @ 12 per cent from 19.4.1994 to the respondent. A Revision filed by the appellant before the National Consumer Disputes Redressal Commission was dismissed on 10.2.1997 and now the matter is in appeal before this Court.

2. The claim of the respondent was resisted by the appellant before the District Consumer Disputes Redressal Forum on the ground, inter alia, that the claim was not covered by the terms of the insurance policy as the respondent, in his vehicle, was carrying Ethyl Ether, a hazardous and highly inflammable substance, which could not be legally carried by the respondent in his truck in terms of the permit granted to him under the Motor Vehicles Act, 1988. It was precisely on this ground that the District Forum had rejected the claim which, as mentioned above, was allowed by the State Commission. The National Commission before which it was argued that the Ether Solvent and Ethyl Ether were the same substance, dismissed the Revision on the ground that what was prohibited under the Central Motor Vehicle Rules was Ethyl Ether and that there was no material on record to indicate that Ethyl Ether was the same substance as Ether Solvent.

3. The insurance policy issued to the respondent in respect of his Mahindra Alwin Nisan Truck No. KL-04 A 4683, which was registered as a public carrier, clearly stipulated under the heading "Limitation as to use" as under :

"Only for carriage of goods within the meaning of the Motor Vehicles Act, 1988."

4. Section 2(13) of the Motor Vehicles Act, 1988 (the Act for short) defines "goods" as under :

" Goods includes live-stock, and anything, (other than equipment ordinarily used with the vehicle) carried by a vehicle except living persons, but does not include luggage or personal effects carried in a motor car or in a trailer attached to a motor car or the personal luggage of passengers travelling in the vehicle."

Section 2(14) defines "goods carriage" as under :

" Goods carriage means any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods."

"Permit" is defined in Section 2(31) as under :

"`Permit means a permit issued by a State or Regional Transport Authority or an authority prescribed in this behalf under this Act authorising the use of a motor vehicle as a transport vehicle."

This definition stipulates that a motor vehicle cannot be used as a transport vehicle unless a permit is issued either by the State Transport Authority or the Regional Transport Authority or any other Authority prescribed in that behalf under the Act.

5. Chapter 5 of the Act deals with control of transport vehicles. Section 66(1), together with the third proviso which is relevant for this case, lays down as under :

"66. Necessity for permit.-(1) No owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place whether or not such vehicle is actually carrying any passengers or goods save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or any prescribed authority authorising him the use of the vehicle in that place in the manner in which the vehicle is being used :

Provided that..............

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