The contractual nature of the insurance policy and the specific provisions under GR-36A regarding the availability of personal accident cover to the owner of the insured vehicle holding an effective driving licence.

G.P. Mittal, J.

The Appellant Oriental Insurance Co. Ltd. impugns the award dated 20.08.2009 passed by the Motor Accident Claims Tribunal whereby a compensation of Rs. 1,00,000/- as personal accident insurance cover was awarded in favour of the Respondents No.1 to 3 who are the legal heirs of deceased Vikas Singhal. He died in an accident, which took place on 19.11.2006. The finding that the accident was caused on account of deceased's own negligence is not disputed as the Respondents No.1 to 3 have not filed any appeal or cross-objection against the judgment. The Tribunal relying on the judgment of the Supreme Court in Oriental Insurance Co. Ltd. Vs. Rajni Devi and Others, (2008) 5 SCC 736 and Ningamma and Another Vs. United India Insurance Co. Ltd., (2009) 13 SCC 710, held that the deceased stepped into the shoes of the owner i.e. Respondent No.4 Vineet Singhal and was, therefore, entitled to a compensation of Rs. 1,00,000/- as personal accident insurance cover.

2. In my view the Tribunal misinterpreted the judgment in Ningamma (supra), it was nowhere laid down in Ningamma that a personal accident cover made in respect of the owner - driver would extend to anybody driving the two wheeler covered by the policy of insurance. Ningamma and Rajni Devi (supra) were in the context that compensation u/s 163 (A) cannot be claimed by an owner or anybody driving the vehicle with the permission of the owner (not being his employee) against his own insurer as in respect of 3rd party risk, the liability of insurance company is to indemnify the owner. The relevant portion of the report in Nigamma (supra) is extracted hereunder: -

18. However, in the facts of the present case, it was forcefully argued by the counsel appearing for the respondent that the claimants are not the "third party", and therefore, they are not entitled to claim any benefit u/s 163-A of the MVA. In support of the said contention, the counsel relied on the decision of this Court in Oriental Insurance Co. Ltd. Vs. Rajni Devi and Others, and New India Assurance Company Ltd. Vs. Sadanand Mukhi and Others, (2009) 2 SCC 417.

19. In Oriental Insurance Co. Ltd. v. Rajni Devi (supra) wherein one of us, namely, Hon'ble S.B. Sinha, J. was 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.

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21. In our considered opinion, the ratio of the decision in Oriental Insurance Co. Ltd. v. Rajni Devi (supra) is clearly applicable to the facts of the present case. In the present case, the deceased was not the owner of the motorbike in question. He borrowed the said motorbike from its real owner. The deceased cannot be held to be an employee of the owner of the motorbike although he was authorized to drive the said vehicle by its owner and, therefore, he would step into the shoes of the owner of the motorbike. We have already extracted Section 163-A of the MVA hereinbefore. A bare perusal of the said provision would make it explicitly clear that persons like the deceased in the present case would step into the shoes of the owner of the vehicle.

22. In a case wherein the victim died or where he was permanently disabled due to an accident arising out of the aforesaid motor vehicle in that event the liability to make payment of the compensation is on the insurance company or the owner, as the case may be as provided u/s 163-A. But if it is proved that the driver is the owner of the motor vehicle, in that liability to pay the same is on him. This proposition is absolutely cl