IMPORTANT POINTS(i) Motor Vehicle Act Section -146 - Act Policy - A policy which covers the liability, only statutorily coverable under the Act is called an Act policy - When an insurance company issues an Act Policy, it undertakes to indemnify the insured for all losses which are payable made under the terms of the Motor Vehicle Act.(Para-8)(ii) Motor Vehicle Act - Section 147 - Insurance Policy - Incorporation of Conditions - It is settled law that the insurance company even by incorporating a condition under the policy cannot exclude a risk which it is bound to cover under the Act - Therefore, unless the policy specifically covers damage to goods, the Insurance Company would not be liable under the Act.
(Para-23)(iii) . Motor Vehicle Act Section-147 (as amended vide Act 54 of 1994 w.e.f. 14.11.1994) - Any person - Injury to the owner of the goods or his authorized representative carried in a goods vehicle was covered under the expression any person. (Para-24)(iv) Motor Vehicle Act Section-147 - Any person Apex Court clearly held that apparently the words "any person" are wide and is qualified by the setting in which they occur and that 'any person' is to be understood as a third party (case of Oriental Insurance Co. Ltd. Vs. Meena Varial & Ors.) - Refers (Para-26)(v) Motor Vehicle Act Section-147 - Third party Liability of insurer - Statutory claim - The liability of the insurer to reimburse the owner in respect of a claim made by the third party, claim, being a statutory claim where as other claims are not. (Case of Oriental Insurance Ltd. vs. Sudhakaran K.V. & Ors.) Relied upon.
(Para-30)(vi) Motor Vehicle Act Section-147 & 165 - Third Party - Gratuitous passenger - If a passenger in vehicle is not a third party - It is obvious that the goods being carried in a vehicle cannot be said to be the goods of a, third party - (Case of Bhagyalakshmi& Ors vs. United Insurance Company Ltd. & Anr) - Relied upon.
(Paras - 32 &33)

Deepak Gupta, J.-The following questions have been referred for decision to the Full Bench:-

(1). What meaning should be assigned to the phrase “any property of a third party” occurring in Section 147 and 165 of the Motor Vehicles Act, 1988?

(2). Whether the goods of a consignor/consignee being carried in a goods vehicle can be termed to be property of a third party?

2. The claimants in both these appeals filed Claim Petitions before the Motor Accident Claims Tribunal, Shimla under Section 166 of the Motor Vehicles Act, 1988 (hereinafter referred to as the ‘Act’) in which compensation was claimed for loss of goods being carried in a truck. In both the cases, the owner of the goods was travelling alongwith the goods in the truck.

3. In FAO No.97 of 1999, the learned Tribunal awarded compensation for the personal injuries suffered by the owner but rejected the claim with regard to the goods being carried in the vehicle.

4. In FAO No.209 of 1999 the claim was only with regard to the goods being carried in the vehicle and the learned Tribunal held that such a claim was not maintainable before the Claims Tribunal and ordered that the claim petition be returned to the petitioner for presentation in the proper Court. The learned Tribunal held that the property being carried in a goods vehicle cannot be said to be the property of a third party and, therefore, the Motor Accident Claims Tribunal constituted under the Act would have no jurisdiction to entertain the claim.

5. Before dealing with the matter it would be apposite to refer to the relevant provisions of the Motor Vehicles Act, (hereinafter referred to as the Act). The Motor Accidents Claims Tribunals are constituted under Chapter XII of the Act. The relevant portion of Section 165 reads as follows:

“165. Claims Tribunals.-(1) A State Government may, by notification in the Official Gazette, constitute one or more Motor Accidents Claims Tribunals (hereinafter in this Chapter referred to as Claims Tribunal) for such area as may be specified in the notification for the purpose of adjudicating upon claims for compensation in respect of accidents involving the death of, or bodily injury to, persons arising out of the use of motor vehicles, or damages to any property of a third party so arising, or both.”

(emphasis supplied)

6. Insurance of motor vehicles against third party risk is compulsory under the provisions of Chapter XI of the Act. Relevant portion of Section 147 (1) and (2) of the Act reads as follows:-

“147.Requirements of policies and limits of liability.-

(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which-

(a) is issued by a person who is an authorized insurer; and

(b) insures the person or class of persons specified in the policy to the extent specified in sub-section

(2)-(i) against any liability which may be incurred by him in respect of the death of or bodily [injury to any person, including owner of the goods or his authorized representative carried in the vehicle] or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;

(ii) against the death of or bodilyinjury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:

Provided that a policy shall not be required-

(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen’s Compensation Act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, any such employee

(a) engaged in driving the vehicle, or

(b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods carriage, being carried in the vehicle, o