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IN THE HIGH COURT OF DELHI AT NEW DELHI
Gaurang Kanth, J.
Sanjay Sharma – Appellant
Versus
M/s New India Ass Co. Ltd. & Ors – Respondent
MAC.APP. 619 of 2013 & MAC.APP. 624 of 2013
Decided On : 16-05-2023
Insurance Liability - Motor Vehicle Accident - Motor Vehicles Act, 1988 - Section 147 - Summary of Acts and Sections: The court discussed the liability of an insurance company in case of a package insurance policy under the Motor Vehicles Act, 1988. It highlighted the provisions of Section 147 and the interpretation of the extent of liability of the insurance company in case of a comprehensive policy. The court referred to various judgments and circulars issued by the Insurance Regulatory & Development Authority (IRDA) to establish that insurance companies are liable to compensate the insured for the payment of compensation to the occupant of the insured vehicle under a package policy, irrespective of the terms and conditions of the policy.
Fact of the Case:
The case involved a fatal accident where the insured vehicle was alleged to be driven negligently and recklessly, resulting in the death of the occupants. The appellant, owner of the vehicle, challenged the limitation of liability of the insurance company to Rs. 2,00,000/- per person and sought the entire compensation amount to be paid by the insurance company.
Finding of the Court:
The court found that the insurance policy obtained by the appellant was a package policy, covering the unlimited liability of the occupants of the vehicle. It held that the insurance company is liable to pay the entire compensation amount to the claimants, irrespective of the terms and conditions of the policy. The court set aside the lower court's order and directed the insurance company to pay the entire compensation amount to the claimants.
Issues: The pivotal issue was whether the quantum of the liability of an insurance company can be limited to a maximum amount in case of a package insurance policy.
Ratio Decidendi: The court established that insurance companies are liable to compensate the insured for the payment of compensation to the occupant of the insured vehicle under a package policy, irrespective of the terms and conditions of the policy. It relied on statutory provisions, judgments, and circulars issued by the IRDA to support its decision.
Final Decision: The court modified the lower court's order and directed the insurance company to pay the entire compensation amount to the claimants, setting aside the limitation of liability to Rs. 2,00,000/- per person.
JUDGMENT
Gaurang Kanth, J.
1. The present appeals have been filed against the order dated 02.04.2008 ("Impugned order-I") passed by the M.A.C.T., Karkardooma Courts, Delhi and order dated 19.02.2013 ("Impugned order-II") passed by the ADJ, Karkardooma Courts, Delhi. The Impugned order-I and Impugned order-II would be collectively referred as `impugned orders', wherever required.
The appellant, who is the owner of the insured vehicle is impugning the legality of impugned orders and has prayed for setting aside of the impugned orders passed by the learned Claims Tribunal and the lower court respectively.
FACTS RELEVANT FOR ADJUDICATION OF THE APPEALS
2. Succinctly stated, on an unfortunate day of 21.01.2005, the deceased/Mr. Rajiv Kumar Chauhan and Master Vishal along with their family while travelling to Delhi in Jeep bearing no. DL5C-B-7800 ("the vehicle") met with a fatal accident. The said vehicle was insured vide policy number 310701/31/04/01/00001285 by the insurer/Respondent no.1, The New India Assurance Co. Ltd. The vehicle was alleged to be driven negligently and recklessly by the Respondent no.2 (driver of the vehicle) when it lost the control and hit the trolley which was parked on the kaccha portion of the road. Deceased/Mr. Rajiv Kumar Chauhan and Master Vishal tragically lost their lives in the said accident. A claim vide MACT no. 129/05 was filed by the claimant towards the death of Mr. Rajiv Kumar Chauhan, while MACT no. 130/05 was filed for claiming compensation towards death of Master Vishal due to road accident involving the insured vehicle.
3. The appellant (owner) and the driver of the vehicle, in their common written statement, averred that the accident occurred due to a vehicle coming from the opposite side of the road with a high beam light that blinded the driver's vision. The driver, for safety reasons, moved the vehicle towards his left and was unable to see the stationary trolley on the left side of the road, resulting in a collision. Therefore, the allegation of negligence on the part of the driver is false and baseless. Respondent no.1, in its written statement, admitted that the policy was issued in the name of the appellant, covering the date of the accident. However, it is submitted that since there is no privity of contract between the claimants, owner, and the insurance company, the insurance company is not liable to pay any compensation to the claimants.
4. The claimant examined the 3 witnesses namely Smt. Geeta as PW-1 who tendered her affidavit at Ex. P-1, Sh. Nigam Pal Singh as PW-2 who tendered his affidavit at Ex. P-2, Sh. S K Mishra as PW-3 who produced documents marked at Ex. PW 3/A; on the other hand, Respondent no.1 produced Sh. Rakesh Kumar Mehrotra as R3W1 who produced insurance policy marked at Ex. R3W1/A.
5. The learned Claims Tribunal vide the Impugned order-I passed the common award in MACT no. 129/05 and MACT no. 130/05. Relevant portion of the order has been reproduced herein below:
"5- In view of the above, I pass the following common award
COMMON AWARD
The petitions are partly allowed.
The respondents 1 & 2 are jointly and severally liable to pay the following compensation to the petitioners as noted in the cause title. They are hereby directed to pay the compensation amounts detailed below; along with the interest ) 7.5 % p.a., from the date of petition till realisation within one month from today.
MACT No. AWARD (Am.)
129/05 10,10,000/- (RUPEES TEN LAC TEN THOUSAND ONLY)
130/05 3,00,000/- (RUPEES THREE LAC ONLY)
Out of the award amounts in both the cases, the R-3 Ins. Co. shall indemnify to the extent of Rs. 2,00,000/- in both the awards along with the corresponding interests which be deposited within one month from today.
The balance amount be deposited by the respondent number 2 who is the owner of the vehicle under the doctrine of vicarious liability. The order on apportionment shall follow while releasing the shares. Original judgment be kept in MACT No. 129/05 and a copy in
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