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IN THE HIGH COURT OF BOMBAY
(Full Bench)
P.B. Sawant, B.G. Kolse Patil G.H. Guttal, JJ.
Oriental Fire General Insurance Co. Solapur ….. Appellants.
Versus
Hirabai Vithal Nikam others..... Respondents.
First Appeal No. 526 of 1980, decided on 20-1-1988.
Advocates appeared :
V. H. Gumaste with Mhamane, for appellants.
S. S. Pandit, for respondents Nos. 1, 3 7.
Atmaram Nadkarni with Bhimrao Naik, for respondent No. 9.
The injured passenger whose claim fell for consideration was not a stranger who travelled for "hire or reward". Paragraphs 12 and 17 of the Judgment bring out the ratio, which may be summarized as under:
(a) where a person hires a goods vehicle, it is legitimate and necessary for him to accompany the goods and travel in the vehicle for the purpose of supervising the transport or his goods ;
(b) the consideration paid by such hire for transport of his goods, being composite consideration, his presence in the vehicle is a part of the contract for which he has paid the consideration ;
(c) such hirer is deemed to be a passenger within the meaning of Section 95 (1) (ii) of the Motor Vehicles Act and therefore the insurer is liable for the tortious act of the owner of the vehicles.
By the very necessity of the contract of hire of the vehicle, the hire, who is the owner of the goods to be transported, has to travel, in the vehicle to supervise the transport. The consideration paid by the hirer of the vehicle being composite included consideration for the incidental transport of the hirer Nasibdars case, AIR 1984 Born 1, paragraph 12), who accompanied the good.
The vehicle in which the deceased V travelled was a goods vehicle. The contract of insurance entered into with the appellant did not cover the carriage of passengers for hire or reward in this vehicle. V travelled for hire by consent of the driver and the brother of the owner. The vehicle was not covered by a permit to ply for hire or reward. The vehicle was, therefore, used for a purpose not allowed by the permit under which it was used. Consequently, therefore, by virtue of Section 95 (2) (i) (b) (c) of the Motor Vehicles Act the insurer is not liable for the tortious act of the owner of the vehicle.
Where a passenger is carried in a goods vehicle for hire or reward and the terms of the contract of insurance do not cover such carriage, the insurer is not liable for the death or bodily injury to such passenger.
"Where, a passenger is carried in a goods vehicle for hire or reward and the terms of the contract of insurance do not provide for such carriage, is the insurer liable for the death or bodily injury to such passenger?"
2. This appeal and therefore, the question formulated by us arises out of these facts:
The respondent No. 8 Balasaheb Chavan was, at about 9 a.m. on 3rd July 1978, driving Truck No. BYX 5435 on Pandharpur - Miraj road. The deceased Vithal Nikam was waiting for a State Transport bus at village Kuchi. Audumbar Mahadev Raichure, the brother of the owner of the Truck, was also sitting with the driver in the truck. Vithal Nikam- the deceased-boarded the Truck at the request of driver Balasaheb Abasaheb Chavan and of the brother of the owner. It was agreed that Vithal Nikam should pay hire charges for caring him the vehicle. The amount was agreed to be equal to the fare for the journey by the State Transport bus. Nikam travelled in the bus. But due to the negligence of the driver, the bus left the road and dashed against a tree causing the death of Nikam. The Motor Accidents Claims Tribunal, Sangli , in Motor Accident Claim No. 3 of 1979 awarded compensation of Rs.75,000/-. The driver and the owner filed F.A No. 960 of 1980. This appeal is by the insurer.
3. Certain findings of fact recorded by the Division Bench consisting of Dharmadhikari and Vaze JJ., need to be borne in mind. It was the owner's brother who asked the deceased to board the truck and the deceased was a passenger for hire. The driver caused the death by rash and negligent driving. They rejected the case of the driver that the deceased, contributed to the negligence and that the owner had asked him not to take passengers. On these findings, the First Appeal No. 960/1980 by the driver and the owner was dismissed on 21-11-1984 by the referring Judgement. The appeal by the Insurance Company has been referred to us.
4. We will first set out the ratio of the judgement of The United India Insurance Company Ltd. (supra). In that case the Truck which was insured as a goods vehicle carried 35 passengers for hire of rupee 1/- each. Six passengers died as a result of the rash and negligent driving. The Insurance policy did not cover the risk to the passengers carried for hire or reward.
Sawant and Tated, JJ, after considering the terms of the contract of Insurance and in view of the decision of the Supreme Court in 3(Pushpabai's Purushottam Udeshi, A.I.R. 1977 S.C. 1735 held that the passengers for hire or reward did not fall in the category of third party and that a specific condition in the policy excluded the use of the Truck for carriage of passengers for hire or reward. Consequently, it was held-
"under section 96(2)(b)(i)(c) of the Motor Vehicles Act, 1939, the appellant - Insurance Company , therefore had a valid defence to the claim. Futher the said section says that if the condition specified in the policy is that the insured vehicle will not be used for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle no sum shall be payable by the insurer in respect of the liability arising out of the accident This is also the view expressed by Full Bench of Gujarat High Court in (New India Assurance Co
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