The liability of the insurer under a motor vehicle insurance policy extends to the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place, including the death of or bodily injury to an employee or representative of the owner of the goods travelling in the goods vehicle along with the goods.

Headnote:
MOTOR VEHICLES ACT - INSURANCE - LIABILITY OF INSURER - DEATH OF EMPLOYEE OR REPRESENTATIVE OF OWNER OF GOODS TRAVELLING IN GOODS VEHICLE - LIABILITY OF INSURER - CONTRACTUAL LIABILITY OF INSURER - INTERPRETATION OF RELEVANT PROVISIONS.
Fact of the Case:

The appellant, an insurance company, challenged the award passed by the Motor Accident Claims Tribunal, which held the appellant liable for the death of an employee travelling in a goods vehicle along with the goods. The appellant contended that the liability could not be fastened on the insurer for the death of an employee or representative of the owner of the goods and that the liability was limited to Rs. 10,000/- per passenger as per the terms of the insurance policy.
Finding of the Court:

The court held that the liability of the insurer could be fastened for the death of an employee or representative of the owner of the goods travelling in the goods vehicle along with the goods. The court interpreted the relevant provisions of the Motor Vehicles Act and the insurance policy and held that the insurer was liable to the extent specified in the policy, which was Rs. 1,50,000/- at the time of the accident.
Issues: 1. Whether the liability could be fastened on the insurer for the death of an employee or representative of the owner of the goods travelling in the goods vehicle along with the goods? 2. Whether the liability of the insurer was limited to Rs. 10,000/- per passenger as per the terms of the insurance policy?
Ratio Decidendi: 1. The court held that the liability of the insurer could be fastened for the death of an employee or representative of the owner of the goods travelling in the goods vehicle along with the goods based on the following grounds: - The definition of "goods vehicle" in the Motor Vehicles Act contemplates the carriage of passengers. - Rule 118 of the Bombay Motor Vehicles Rules permits the carriage of persons in goods vehicles subject to certain conditions. - Section 95(1)(b) of the Motor Vehicles Act requires the insurance policy to cover the liability of the insured in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place. - The proviso to section 95(1)(b) exempts the insurer from liability in respect of the death or bodily injury of an employee of the insured engaged in driving the vehicle or, in the case of a public service vehicle, engaged as a conductor or in examining tickets on the vehicle, or, in the case of a goods vehicle, being carried in the vehicle. - However, the court held that this exemption did not apply to the present case, as the deceased was not an employee of the insured engaged in driving the vehicle or being carried in the vehicle. 2. The court held that the liability of the insurer was not limited to Rs. 10,000/- per passenger as per the terms of the insurance policy based on the following grounds: - The terms and conditions of the insurance policy that purport to restrict the insurance of the persons insured thereby by reference to any conditions other than those in Clause (b) of sub-section (2) of section 95(1) of the Motor Vehicles Act are of no effect. - The insurer had undertaken its liability to the extent it is necessary to meet the requirements of the Motor Vehicles Act, and the liability of the insurer under the provisions of the Act at the time of issuance of the policy was Rs. 1,50,000/-.
Final Decision: The court dismissed the appeal filed by the insurer.

Order.:—Taking exception to the award passed by the Motor Accident Claims Tribunal, Yavatmal on 9th December, 1993 in Motor Accident Claim No. 4 of 90, (Gangavarapur Padmawati and others v. J. Ramchandra Reddy and others)1, whereby the learned Tribunal passed an award for a sum of Rs. 1,35,600/- together with interest @ 12% per annum from the date of claim petition i.e. 10-1-1990 till realisation making the non-applicants 1 to 3 jointly and severally liable, the appellant the Oriental Insurance Company Limited (hereinafter referred to as 'the Insurer') has filed this appeal under section 173 of the Motor Vehicles Act, 1988.

2. Two-fold contentions have been raised by Mr. D.N. Kukdey, the learned Counsel for the Insurer in this appeal-(i) that, the liability on the Insurer could not have been fastened in respect of the death of employee or representative of the owner of the goods who was travelling in the goods vehicle along with the goods, and (ii) that, in any case, the liability in present case contractually accepted by the Insurer was to the extent of Rs. 10,000/-per passenger and, therefore, the liability of the Insurer was only limited to that extent. In support of his submissions, Mr. Kukdey, the learned Counsel for the Insurer placed reliance on the Full Bench decision of the Karnataka High Court in (National Insurance Co. Ltd. v. Dundamma and others)2, 1992 A.C.J. 1.

3. Before we examine the two contentions of the learned Counsel, briefly the undisputed facts of the case may be noticed which are also summarised by the Insurer in synopsis of the appeal. On 5-10-1989 one G. Ramanna Reddy, aged 26 years, resident of Narasrao Peth, District Guntur (A.P.) was travelling in goods vehicle bearing No. A.H.T. 7576 along with the goods of his employer Palvedi Narsinha Rao. The goods being carried in the truck was onions. The said truck was being driven by the non-applicant No. 2 G. Laxmaiyya Venketteiya (hereinafter referred to as 'the Driver') rashly and negligently with the fast speed and when the truck reached near Mama Bhasa Bridge the truck dashed against the right parapet wall of the bridge as a result of which the parapet wall was broken and the truck turned turtle and fell in the river resting its cabin on the ground. Shri Ramanna Reddy received multiple injuries and died. Non-applicant No. 1 J. Ramchandra Reddy (hereinafter referred as to 'the Owner') was owner of the said truck and the said vehicle was insured with the 'Insurer' by Policy of Insurance effective form 29th April, 1989 to 28th April, 1990. The respondents 1 to 4 herein who were claimants before the Tribunal (hereinafter referred to as 'the claimants') filed the claim petition before the Motor Accident Claims Tribunal, Yavatmal seeking a claim of Rs. 1,75,000/- against the owner, Driver and the Insurance in favour of the claimants along with interest at the rate of 18% per annum. The claimants averred in the claim petition that deceased Ramanna Reddy was employed on the salary of Rs. 1,000/- per month and his monthly contribution to the family was Rs. 700/-. The deceased was a young man of 26 years. The wife claimed Rs. 25,000/- for the loss of consortium and for loss of association and a sum of Rs. 5,000/- by way of expenses to take the dead body of the deceased to his native place in taxi.

4. The owner despite service remained ex parte before the Tribunal. The Driver admitted that he was driving the truck bearing No. AHT 7576 at the relevant time, but he denied that he was driving the vehicle rashly and negligently but submitted that the accident took place due to mechanical defect. Insurer also denied the material facts and also set up the defence that on the date of the accident i.e. 5-10-1989, the deceased was travelling in the goods vehicle for collecting onions in Yavatmal district and he was travelling in the said truck for collection of onions of his master viz. Palvedi Narsinha Rao. The above truck was insured with the Insurer and as per the t

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1994 Supreme(Bom) 443

Cases Referred (2)