Oriental Insurance Company Ltd Now Represented By Its Divisional Office represented By Its Regional Manager vs Mookambika

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2011 Supreme(Kar) 453

High Court of Karnataka
THE HONOURABLE MR. JUSTICE SUBHASH B. ADI
M/S Oriental Insurance Company Ltd Now Represented By Its Divisional Office represented By Its Regional Manager
Versus
Mookambika & Another
M.F.A.NO. 8052 of 2007 (MV) A/W M.F.A.NO. 8053 of 2007 (MV) IN M.F.A.NO. 8052 of 2007
Decided on : 19-07-2011
.

Advocates appeared:
For the Petitioner:A.M. Venkatesh, Advocate.
For the Respondents:R1 - Smt. Suguna R. Reddy, Advocate, R2 Served.

Headnote:MOTOR VEHICLES ACT, 1988 - Section 147: [Subhash B. Adi, J] Risk of a person traveling as a passenger in a goods vehicle - Held, The risk of a person traveling as a passenger in a goods vehicle using the same for transportation of passenger cannot be treated as a person traveling in connection with the journey in one form or other under the provisions of IMT 14. Hence the insurer cannot be made liable to pay the compensation. IMT 14 refers to cover the risk of the persons who are otherwise not statutorily covered under Section 147 of Motor Vehicle Act, namely a person not being an employee of the insured not carried for hire or reward. It is true that incidentally, in connection with transportation of the goods or connected with the journey if a person is required to be carried in a goods vehicle over and above person specified under Section 147 of the Act and such persons having not been carried for hire or reward, the contract covers the risk of such person. On Facts, Held, The facts of the case revealed that, the vehicle was hired by the claimants and others to travel various place from Channapattana to Kolar. It was proceeding to Kolar and on its way it met with an accident. If the vehicle is hired, admittedly, for the purpose other than transportation of the goods and the persons traveling as a passengers in the goods vehicle and not being charterer or representative of charterer, driver or employees and not connected with the journey in one form or other their risk is neither statutorily or under the contract could be covered. Transportation of passenger from one destination to another in goods vehicle cannot be termed as journey connected with journey in one form or other to cover the risk of such persons. There is no dispute that the vehicle involved in the accident is a goods vehicle and persons traveling in goods vehicle neither under statute nor under the contract could be covered, IMT 14 is not applicable to such persons. The Tribunal has neither considered the scope of Section 147 of the Act nor has considered the scope of IMT 14. Hence, the liability of the insurer to pay the compensation is liable to be set-aside.
MOTOR VEHICLES ACT, 1988 - Sections 173 (1) & 149: [Subhash B. Adi, J] Liability of Insurer - Finding by the Tribunal that though there is violation of the Policy condition, that the insurer should pay the compensation and recover the same from the owner - Held, Under the IMT 14 the risk of the persons other than the driver to the extent of numbers specified in Rule 100 of Karnataka Motor Vehicle Rules, has been statutorily covered under Section 147 Clause (ii)(b)(2), it also provides the power to cover the risk of other persons contractually. It is in these circumstances, it is necessary to find out as to whether there can be any contract to allow the goods vehicle to be used for any other purpose other than the transportation of the goods, by covering the risk of such persons by entering into a contract. It leaves no doubt that the goods vehicle cannot be used for transportation of the passengers and intention of the legislation to classify the vehicle as goods vehicle, is one for transportation of the goods. If the intention of the legislation is to prevent use of particular class of vehicle for the purpose other than purpose for which it was permitted in law it would be violation of the Motor Vehicles Act. However Section 147 Clause b(ii) refers to rights of the insurer to enter into the contract.

Judgment :-

1. Both the appeals are by the insurer questioning the liability in judgment and award in MVC No.661/2002 and MVC No. 641/2002 on the file of the Civil Judge (Sr. Dn.) and MACT, Kolar dated 12.01.2007

2. Tribunal has awarded compensation of Rs.1,47,400/- and Rs.21,600/- with interest respectfully and has held that the insurer to pay the compensation and recover the same from the owner. It is against the said direction, insurer is in appeals.

3. The case of the claimants is that on 3.5.2000 they were traveling in a tempo bearing registration No.KA-07-A-2545 from Channarayapattana to Kolar. When the tempo reached Rajapura and Mattigatta, on account of rash and negligent driving by the driver of the tempo, it dashed against the tree, as a result of which, claimants suffered grievous injuries. The claim petition was contested by the insurer interalia denying the accident and denying the liability to indemnify. Interalia contending that the claimants were passengers in a goods vehicle, insurer is not liable to indemnify the liability of the owner. The Tribunal though held that there is a violation of the policy condition however, observed that the insurer should pay the compensation and recover the same from the owner.

4. Sri. A.M. Venkatesh, learned Counsel for the insurer submitted that the claimants used the vehicle on hire. They have taken the goods vehicle to travel from Channapattana to Kolar to travel several places. FIR shows that there were several persons traveling in the said goods tempo, as such, risk of such passengers is not covered either under provision of Section 147 of Motor Vehicle Act or under the policy. Though there is a reference of IMT 14, IMT 14 does not cover the risk of gratuitous passenger in a goods vehicle but only for such persons traveling with the journey for the benefit of the owner. To support his case he relied on the judgment of this Court in MFA NO.4064/2004 dated 5.11.2007, MFA No.25/2007 dated 21.4.2011, MFA NO.4166/2004 dated 17.1.2007, and the decision reported in 2005 II page 721 ACJ in the matter of National Insurance Company Ltd. vs. Bommithi Subbhayamma and others. He also relied on the judgment reported in 2007 ACJ Page 1043 II in the matter of New India Assurance Company Ltd., vs. Vedwati and others and submitted that vehicle in question is a goods vehicle meant for transporting the goods only, as such, persons as specified under Section 147 of the Motor Vehicle Act are only the persons authorized to travel in the goods vehicle, not others. Even, if there is a contract, contract must be in consonance with the provisions of Motor Vehicle Act as such, the risk of the persons other than mentioned under Section 147 of the Motor Vehicle Act is covered.

5. On the other hand, Smt. Suguna R. Reddy, learned Counsel for the respondent No.1 submitted that under Section 147 of the Act though, the risk of non-fair-paid passenger is not covered but the insurer can entered into a contract to cover the risk of person other than the persons mentioned in Section 147 of the Act. In this case, there is no dispute that the insurer has collected extra premium to cover the risk of non-fair-paid passenger/non-employed one and in view of the same, the insurer is liable to indemnify the liability of the owner. To support her contention, she relied on the judgment reported in AIR 2004 SC 4360 in the matter of Pramod Kumar Agrawal and others v. Smt. Mushtari Begum and others and a submitted that insurer is liable to pay the compensation and may recovery the same from the owner, if there is a violation of condition of policy. She relied on another decision of this Court reported in 2006 III KCCR page 1753 in the matter of United India Insurance Company Limited v. Keludappa and Another and submitted that the risk of inmate of the private vehicle does not makes any difference as to whether they are paid passenger and gratuitous passenger. She also relied on other judgment reported in 2007 (6) AIR KAR

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