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2020 Supreme(Kar) 1195
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
H.P. Sandesh, J.
New India Assurance Co Ltd. - Appellant
Versus
Girija - Respondent
Miscellaneous First Appeal No. 2628 of 2010, 2629 of 2010
Decided On : 15-09-2020
P.B. Raju, Advocate, L.S. Chikkanagoudar, Advocate
The main legal point established in the judgment is that unless specific or additional premium is paid to cover the risk of the occupants, the insurer is not liable under an 'Act only Policy' as per Section 147 of the Motor Vehicles Act, 1988.
Headnote:
Insurance Company - Liability under Act Policy - Section 147 of Motor Vehicles Act, 1988 - ILR 2011 KAR 850, (2008) 7 SCC 428, (2012) 3 GLH 748 - The court discussed the liability of the insurance company under an 'Act only Policy' and the necessity of additional premium to cover the risk of occupants of a vehicle. The court held that unless specific or additional premium is paid to cover the risk of the occupants, the insurer is not liable. The legal obligation arising under Section 147 of the Act cannot be extended to an injury or death of the owner of the vehicle, passengers in such private vehicle or a pillion-rider in the case of a two-wheeler.
Fact of the Case:
The claimants were traveling in a jeep when it capsized due to rash and negligent driving, causing severe injuries. They filed claim petitions for compensation from the respondents. The Tribunal granted compensation, holding the Insurance Company liable.
Finding of the Court:
The court found that the Insurance Company was not liable under the 'Act only Policy' as no specific or additional premium was paid to cover the risk of the occupants of the vehicle. The Tribunal's decision to fasten the liability on the Insurance Company was illegal and contrary to the law declared by the Apex Court.
Issues: 1. Whether the Insurance Company was liable under the 'Act only Policy' without additional premium for covering the risk of occupants. 2. What order to pass in the appeal filed by the Insurance Company.
Ratio Decidendi: The court held that unless specific or additional premium is paid to cover the risk of the occupants, the insurer is not liable. The legal obligation arising under Section 147 of the Act cannot be extended to the injury or death of the owner of the vehicle, passengers in such private vehicle, or a pillion-rider in the case of a two-wheeler.
Final Decision: The appeals filed by the Insurance Company were allowed, and the impugned judgment and award fastening the liability on the Insurance Company were set aside. The insured was held liable to pay the compensation. The Insurance Company was directed to pay the compensation amount to the claimants as an exceptional case.
JUDGMENT
H.P. Sandesh, J. - These two appeals are filed challenging the judgment and award passed in MVC Nos.274/2002 and 275/2002 dated 21.12.2009 on the file of Civil Judge (Senior Division) and MACT at Madikeri ('the Tribunal' for short) fastening of liability on the Insurance Company.
2. The parties are referred to as per their original rankings before the Tribunal to avoid confusion and for the convenience of the Court.
3. Heard learned counsel for the appellant/ Insurance Company and learned counsel for respondents.
4. The factual matrix of both the claim petitions are that on 18.02.2002 at about 12.30 p.m. when the claimants were traveling in a jeep No.CTA 911 (hereinafter called as "offending owner") from Thakeri Village to Somwarpet town nearby the coffee estate of one C.M.Chengappa the respondent No.1 being the driver and owner of the said jeep drove the same in a rash and negligent manner, due to that the jeep capsized and they sustained severe injuries. They were immediately shifted to the Government Hospital, Somwarpet and took treatment. They were coolies and earning not less than Rs.1,500/- per month and due to the said accident, they are unable to work as earlier. Hence, filed claim petitions claiming compensation from the respondents.
5. Respondent Nos.1 and 2 appeared through their counsel and filed their written statement. Respondent No.1 would contend that the jeep was insured with respondent No.2 whereby the policy was in force and the compensation claimed by the claimants is payable by respondent No.2.
6. Respondent No.2 resisted the claim petition by denying the averments. However, admitted that the vehicle has been insured with them and the same is subject to the terms and conditions specified in the policy. But, it is their specific contention that the driver was having no valid and effective driving license to drive the said vehicle and the compensation claimed in both the cases are exorbitant.
7. The claimants, in order to substantiate their claim, examined themselves as P.Ws.1 and 2 and got marked documents Exs.P1 to 22. The Insurance Company also examined one witness as R.W.1 and got marked documents Exs.R1 and R2. The Tribunal, after considering both oral and documentary evidence, allowed both the claim petitions granting compensation of Rs.10,000/- and Rs.5,000/- respectively with interest at the rate of 6% per annum from the date of petition till its realization.
8. Being aggrieved by the judgment and award of the Tribunal fastening the liability on the Insurance Company, the present appeals are filed contending that the Tribunal has failed to appreciate the fact that the policy which is marked as Ex.R1 is only an 'Act only Policy'. Hence, the Insurance Company is not liable to indemnify the owner in respect of the injury suffered by the occupants and admittedly, the claimants are occupants. Though the said defence has been taken and the policy being marked as Ex.R1, the Tribunal failed to consider the said issue and committed an error in fastening the liability on the Insurance Company.
9. Learned counsel for the Insurance Company, in his arguments, would vehemently contend that the Tribunal failed to consider the policy-Ex.R1, which is an 'Act only Policy'. The law is settled that unless the specific premium is paid, under the Act Policy, the Insurance Company is not liable to pay the compensation to the occupants of the Car/Jeep.
10. Learned counsel for the appellant/Insurance Company in support of his contentions relied upon the following judgments:-
(i) The Branch Manager, The New India Assurance Co., Ltd., Vs. Mahadev Pandurang Patil and Another,2011 ILR(KAR) 850;
(ii) Oriental Insurance Company Limited Vs. Sudhakaran K.V. and Others, (2008) 7 SCC 428 ;
(iii) National Insurance Company Ltd., Vs. Balakrishnan and Another, (2012) 3 GLH 748 ;
11. Learned Counsel, referring to these judgments, would submit that the principles laid down therein clearly depicts that if the specific or additional
