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Andhra Pradesh High Court
Judges : B.PRAKASH RAO, G.BHAVANI PRASAD
JAYAVARAPU RAJAMMA, W/O TIRUPATI SWAMY - Appellant
Versus
JAYAVARAPU LAXMINARAYANA, S/O.SUBRAHMANYAM - Respondent
Decided On : 06/21/2007
C. M. A. 3209 Of 2001
Motor Vehicles Act, 1939 – Sections 95 and 96 – Accident – Death – Compensation – Liability of Insurance company – When liable – Whether, in facts and circumstances, insurance company can be made liable for compensation in respect of the claims made by owner or legal representatives of deceased as third party claims – Accident occurred when owner/insured was travelling in car along with his family members and his father died in accident – Mother and two other sons of deceased made claim for compensation against owner who himself was driving car, owner of lorry and respective insurance companies – Tribunal while holding that accident occurred due to negligent driving of car, held that the father or other family members of insured will not fit within ambit of third party as insured and deceased are living under one roof being father and son – Tribunal accordingly dismissed petition without costs holding insurance company to be not liable to pay compensation – Held, Supreme Court noted insurer vehemently disputing liability when claim is made by insured himself or his legal heirs without any third party being involved and further noted that insurance company has no dispute that claims, if any, made by kith and kin of insured for injuries sustained by them in accident including claims made by legal representatives of deceased in such accident would also be treated as third party claims – While statute does not require insurance policy to cover the risk of death of or bodily injury to the owner of vehicle, insurer can cover a wider risk under contract of insurance and terms of policy determine liability of insurer in each case – Owner of a vehicle in case of injury and his heirs/dependants in case of his death can make a claim only if policy covers any risk of injury or death to owner personally, for which premium is paid – Mere nomenclature of a policy as a comprehensive policy is not guide and where policy is not merely a statutory policy, terms of policy have to be considered to determine liability of insurer – A policy by its terms can cover risk to owner or gratuitous passengers also – Claims by kith and kin of insured for injuries or their legal representatives in case of their death in accident have to be treated as third party claims and are sustainable if policy in question covers such third party claims – Civil Miscellaneous Appeal disposal.
Key Points: - The policy can cover risks beyond the statutory minimum if the terms of the contract are broader, affecting insurer liability (!) (!) . - Section 147 does not require insurers to cover death or injury to the owner/insured, but may do so if the policy explicitly covers such risk; mere "own damage" for vehicle does not imply coverage for owner’s injuries (!) (!) (!) . - Claims by kith and kin of the insured or legal representatives of the deceased can be treated as third party claims if the policy covers such risks; the determination depends on policy terms rather than mere nomenclature (!) (!) (!) . - An insurer’s liability to indemnify the insured/third parties is determined by the specific terms and conditions of the insurance policy, not solely by statutory policy labeling (!) . - The reference clarifies that the Civil Miscellaneous Appeal should consider whether the policy covers risks to the owner/insured or gratuitous passengers and whether third party claims by family/representatives are included (!) .
( 1 ) THE question as to whether, in the facts and circumstances, the insurance company can be made liable for compensation in respect of the claims made by the owner or the legal representatives of the deceased as third party claims, is the subject matter of the reference by one of us (Hon'ble Sri Justice B. Prakash rao ).
( 2 ) THE motor accident in question occurred when the owner/insured was travelling in the car along with his family members and his father died in the accident. The mother and two other sons of the deceased made the claim for compensation against the owner who himself was driving the car, the owner of the lorry and the respective insurance companies. The Tribunal while holding that the accident occurred due to the negligent driving of the car, held that the father or the other family members of the insured will not fit within the ambit of third party as the insured and the deceased are living under one roof being father and son. The Tribunal accordingly dismissed the petition without costs holding the insurance company to be not liable to pay the compensation.
( 3 ) THE claimants preferred the appeal contending that the kith and kin of the insured are third parties entitled to make the claim. When the appeal came up for hearing, the decisions in National Insurance Company limited v. Seema Malhotra and Dhanraj v. New India Assurance Company Limited were respectively relied on. As there was variance regarding the liability of the insurance company in respect of the claims by the owners or the legal heirs of the deceased, which question is likely to come up again and again, it was felt desirable that the same should be decided for the guidance of the tribunals.
( 4 ) SRI K. Ananda Rao and Smt. A. Malathi, learned counsel for the parties placed the relevant decisional law to help determine the question. In Dhanraj's case (2 supra), the injured owner/insured travelling in his own jeep at the time of the accident made the claim under the comprehensive policy. Referring to Section 147 of Motor Vehicles Act, 1988 (for short "the Act"), the apex Court observed that an insurance policy covers the liability incurred by the insured in respect of death of 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 and that Section 147 does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle. Referring to oriental Insurance Company Limited v. Sunita Rathi and others, it was observed that where the insured/owner of the vehicle has no liability to a third party, the insurance company has no liability also. In the case before the Apex Court, it was not shown that the policy covered any risk for injury to the owner himself. The premium paid under the heading 'own damage' was explained to be towards damage to the vehicle and not for injury to the person of the owner and it was laid down that an owner of a vehicle can only claim, provided a personal accident insurance has been taken out.
( 5 ) IN New India Assurance Company Limited v. Meera Bai and others following dhanraj's case (2 supra), the Apex Court held that the owner who was himself driving the vehicle, was not covered under the policy and that the driver of the vehicle covered by the policy is only a paid driver as per the insurance schedule and not the owner. In Oriental Insurance Company Limited v. Jhuma Saha, the owner driving the vehicle died in the accident not involving any other vehicle. Observing that the liability of the insurer company is to the extent of indemnification of the insured against the respondent or an injured person, a third person or in respect of damages of property and that if the insured cannot be fastened with any liability under the provisions of the Act, the question of the insurer being liable to indemnify t
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