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IN THE HIGH COURT OF CHHATTISGARH
N.K. AGARWAL, J.
New India Insurance Co Ltd. - Appellant
Versus
Prahlad Sahu - Respondent
M.A.C. No 1140 of 2010
Decided On : 03-01-2012
Motor Accident Claim - Motor Vehicles Act, 1988 - Section 163-A - [MV Act, Section 163-A] - The court discussed the liability of the insurance company in cases involving third parties and the interpretation of the provisions of Section 163-A. It highlighted the distinction between the liability for compensation in cases where the owner of the vehicle is involved and cases where a third party is involved. The court also emphasized the significance of the insurance policy terms in determining the extent of coverage and liability of the insurance company.
Fact of the Case:
The claimant sustained multiple injuries in a motor accident and filed a claim under Section 163-A of the MV Act. The Tribunal awarded compensation, holding the insurance company liable. The appellant appealed against the award.
Finding of the Court:
The court allowed the appeal, stating that the claimant was not a third party and the liability of the insurance company was not sustainable in law. The cross-objection by the claimant was dismissed, and the award against the appellant was set aside.
Issues: Liability of the insurance company under Section 163-A of the MV Act, interpretation of insurance policy terms, and the claimant's status as a third party.
Ratio Decidendi: The court held that the claimant, not being a third party, was not entitled to claim compensation under Section 163-A. It emphasized the significance of the insurance policy terms in determining the liability of the insurance company.
Final Decision: The appeal by the appellant/insurance company was allowed, and the cross-objection by the claimant was dismissed. The award against the appellant was set aside.
N.K. AGARWAL, J.
1. This is insurer's appeal against the award dated 30th July, 2010 passed by the Additional Motor Accident Claims Tribunal (FTC), Khairagarh (for short 'the Tribunal') in motor accident claim case No. 44/07.
2. As against compensation of Rs. 24,82,400/- claimed by the claimant/respondent No.1 by filing application before the Tribunal under Section 163-A of the Motor Vehicles Act, 1988 (for short 'MV Act') for the injuries sustained by him in the motor accident on 29.03.2007, the Tribunal awarded a total sum of Rs. 50,000/- against the appellant as well as respondent No.2 along with interest @ 6 percent per annum from the date of application till its actual payment.
3. The Tribunal, on a close scrutiny of the evidence led, held: respondent No.1 Prahlad Sahu sustained multiple injuries while driving motor cycle bearing registration No. C.G. 08 E 8540 on 29.03.2007 resulting into permanent disability to the extent of 70%; appellant/the New India Insurance Company Limited liable for payment of compensation as it could not prove violation of policy conditions; liability of the insurance company is to the extent of 50,000/- only; and awarded Rs. 50,000/- as compensation along with interest @ 6 percent per annum from the date of application till its actual payment.
4. Shri H.B. Agrawal, learned Senior Advocate with Shri Pankaj Agrawal, appearing for the appellant would submit,: the Tribunal has erred in holding, respondent No.1 is a third party and also in holding by taking extra premium of Rs. 35/-, the risk of driver of the motor cycle has been covered by the insurance company and thus has erred in fastening liability of payment of compensation upon the appellant/insurance company.
5. On the other hand, Shri R.N. Jha, learned counsel appearing for the respondent No. 2 supported the award impugned.
6. Shri Abhishek Sharma, learned counsel appearing for respondent No.1 submitted that the amount of compensation awarded by the Tribunal is shockingly on lower side, and therefore, the cross-objection preferred by respondent No.1 may be allowed and the amount of compensation may suitably be enhanced.
7. I have heard the counsel appearing for the parties and perused the order impugned including records of the Tribunal.
8. As per the claim petition, Prahlad Sahu was driving the motor cycle-Bajaj; the same was slipped and turned turtle, due to such accident, he sustained multiple injuries resulting into permanent disability to the extent of 70 per cent. As per claimant's version, he is a carpenter and used to earn Rs. 2400-2500/- per month. The claimant examined his father-Bharat Ram Sahu as A.W.2. As per his statement also, the claimant Prahlad is working as Carpenter. It was not the case of the claimant that he was working under the employment of respondent No.2, therefore, he cannot be said to be employee of respondent No.2. He borrowed the motorcycle from its real owner. He would step into shoes of the owner of the motorcycle.
9. The Supreme Court in the case of Ningamma and another v. United India Insurance Company Limited, (2009) 13 SCC 710 has observed in para 18 & 19 as under:
"18. In the case of Oriental Insurance Company Ltd. v. Rajni Devi & Others (2008) 5 SCC-736, wherein one of us, namely Hon'ble Justice S.B. Sinha is a party, it has been categorically held that in a case where third party is involved, the liability of the insurance company would be unlimited. It was also held in the said decision that where, however, compensation is claimed for the death of the owner or another passenger of the vehicle, the contract of insurance being governed by the contract qua contract, the claim of the claimant against the insurance company would depend upon the terms thereof. It was held in the said decision that Section 163-A of the MVA cannot be said to have any application in respect of an accident wherein the owner of the motor vehicle himself is involved. The decision further held that the question is no longer res i
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