The liability of the insurer is co-extensive with the liability of the owner of the insured vehicle involved in a road accident, and the insurance policy covers the liability of the owner, even for gratuitous passengers.

Headnote:
Motor Vehicles Act - Liability of Insurer - Sec. 140, Sec. 149, Sec. 147 - The judgment discusses the liability of the insurer under Sec. 140 of the Motor Vehicles Act, 1988 in a fatal accident case. It interprets the co-extensive liability of the insurer with the owner of the insured vehicle and the grounds for the insurer to avoid liability under Sec. 149. The judgment also highlights the requirements of a policy of insurance under Sec. 147 and the coverage of liability for passengers in a public service vehicle. The court emphasizes that the liability of the owner is covered by the insurance policy, even for gratuitous passengers, and dismisses the appeals challenging the liability of the insurer.
Fact of the Case:

The appeals arose from orders passed under Sec. 140 of the Motor Vehicles Act, 1988, directing the Insurance Company to pay interim compensation for a fatal accident involving a goods carrying-transport vehicle. The appellants challenged the orders on the ground that they were not liable to pay compensation as the deceased were unauthorized passengers and the Insurance Company was not liable to indemnify the owner for their deaths.
Finding of the Court:

The court found that the liability of the insurer is co-extensive with the liability of the owner of the insured vehicle involved in a road accident. It emphasized that the insurance policy covers the liability of the owner, even for gratuitous passengers, and dismissed the appeals challenging the liability of the insurer.
Issues: The issues involved the interpretation of the liability of the insurer under Sec. 140, Sec. 149, and Sec. 147 of the Motor Vehicles Act, 1988, in a fatal accident case, and the challenge to the orders directing the Insurance Company to pay compensation.
Ratio Decidendi: The court held that the liability of the owner is covered by the insurance policy, even for gratuitous passengers, and emphasized the co-extensive liability of the insurer with the owner of the insured vehicle. It also found that the Claims Tribunal followed the prescribed procedure and considered all relevant documents before making the impugned orders/awards.
Final Decision: The appeals challenging the liability of the insurer were dismissed in limine.

Judgment

G.S.Chaube, J.

1. On a petition having been filed by and on behalf of the appellants, Oriental Insurance Co. Ltd. and its Divisional Manager, M.A. Nos. 67/98(R), 68/98(R), 69/98(R), 70/98(R), 71/9S(R), 72/98(R) have been heard analogous and are being disposed of by this common order. All of them have arisen from identical orders passed by the 5th Addl. Judicial Commissioner of Ranchi on applications under Sec. 140 of the Motor Vehicles Act, 1988 (hereinafter to be referred to as the Act) in consequence of a fatal accident resulting in death of the Kin of the applicants therein. By the impugned orders, the learned Additional Judicial Commissioner has directed the appellants, particularly appellant No. 1-Insurance Company, to pay to each set of applicants in those, applications a sum of Rs. 50,000.00 as interim compensation within one month from the date of the order, otherwise interest @ 12% per annum is to be levied.

2. The admitted facts giving rise to these appeals under Sec. 173 of the Act that Md. Soaib who has been arrayed as Respondent No. 6 in M.A. Nos. 68/98R to 70/98R, R. No. 7 in M.A. No. 71/98R and respondent No. 9 in M.A. Nos. 67/98R and 72/98R, is the owner of a truck, that is, goods carrying-transport vehicle bearing registration No. BPN 2489. That vehicle was registered with appellant No. 1 under Policy No. MV/14/17 (Certificate No. 332203/21/185) valid between 10.4.96 and 9.4.97. On 1.10.96, the said truck was carrying thereon certain amount of goods with owners thereof numbering about 30-35 for reaching them to Bargaon (Chainpur). It is stated that the driver of the truck was driving the vehicle in a very high speed and negligently. The result was that it turned turtle by the side of the road at a place near Nayee Sarai. Several persons got injured. Nine persons named Rajesh Munda, Maheswar Rai, Saraswati Devi, Kaushalya Devi, Shankar Sao, Mahesh Pd. Agarwal, Laxmi Rai, Om Sao, Rafique Mian and Lalita Kumari died at the spot. The surviving injured were rushed to Nayee Sarai Hospital where one of them named Kishori Prasad Agarwallodged. First Information Report with an Assistant Sub-Inspector of Ramgarh police within whose jurisdiction the accident had taken place. The police took up investigation and submitted charge-sheet against the driver of the said truck named Md. Riyaz @ Raju for commission of offences under Secs. 279, 337, 338 and 304-A of the Indian Penal Code. The heirs and dependants of 6 of the deceased who had died at the spot, namely, Shankar Sao, Laxmi Rai, Saraswati Devi, Mahesh Prasad, Kaushalya Devi and Lalita Kumari laid their claim for compensation on the principles of non-fault liability ay envisaged under Section 140 of the Act. Their claim applications were registered as Compensation Case Nos. 196/96, 197/96, 199/96, 200/96, 201/96 and 203/96. By identical orders dated 10.3.98, the learned Addl. Judicial Commissioner of Ranchi has directed the Insurance Company to pay a sum of Rs. 50,000.00 to each set of the applicants in all the six compensation cases. That order has been impugned in these appeals.

3. MA No. 67/98R has arisen from Compensation case No. 201/96, while M.A. Nos. 68/98R, 69/98R, 70/98R, 71/98R and 72/98R are directed against orders impugned in Compensation Case Nos. 196/96, 200/96, 199/96, 197/96 and 203/96 respectively.

4. The appellants have challenged the orders made under Sec. 140 of the Act on the ground that they were not liable to pay the compensation as insurer of the owner of the vehicle involved in the accident because even though it was a goods carrying transport vehicle and was insured, as such, it was being used as a transport vehicle for carrying passengers. Therefore, in terms of the contract of insurance incorporated in the policy, they were not liable to indemnify the owner of his liability. According to the appellants, the deceased for whose death compensation under Sec. 140 of the Act was claimed and has been allowed by the Claims Tribunal, were u

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Judicial Analysis

2000 Supreme(Pat) 251

PATNA HIGH COURTG.S.Chaube, J.Oriental Insurance Company LimitedVersusBadri GoraiMiscellaneous Application No. 67 of 1998 ; 68 of 1998 ; 69 of 1998 ; 70 of 1998 ; 71 of 1998 ; 72 of 1998 ;Decided On : FEBRUARY 14, 2000

The liability of the insurer is co-extensive with the liability of the owner of the insured vehicle involved in a road accident, and the insurance policy covers the liability of the owner, even for gratuitous passengers.

Judicial Analysis

PATNA HIGH COURT
G.S.Chaube, J.
Oriental Insurance Company Limited
Versus
Badri Gorai
Miscellaneous Application No. 67 of 1998 ; 68 of 1998 ; 69 of 1998 ; 70 of 1998 ; 71 of 1998 ; 72 of 1998 ;
Decided On : FEBRUARY 14, 2000