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2022 Supreme(Jhk) 1441
IN THE HIGH COURT OF JHARKHAND AT RANCHI
GAUTAM KUMAR CHOUDHARY, J.
The Branch Manager, Oriental Insurance Company Limited, represented through its Deputy Manager & In-Charge – Appellant
Versus
Mangri Devi, wife of Late Raju Mahto and Ors. – Respondents
M.A. No. 21 of 2012
Decided On : 04-03-2022
For the Appellant : Mr. Manish Kumar.
For the Respondents: Md. Zaid Ahmed.
The Motor Vehicles Act, Section 147 mandates insurance to cover not only third party but also the owner or his representative traveling along with the goods.
Headnote:
Insurance - Breach of Insurance Policy Terms - Motor Vehicles Act, Section 147
Fact of the Case:
The appeal was filed by the Insurance Company against the judgment and award of compensation passed in a motor accident case. The appellant argued that the deceased breached the terms of the insurance policy by using the tractor for commercial purposes, which was covered only for agricultural use.
Finding of the Court:
The court found that the deceased was not a gratuitous passenger but the owner of the goods being carried on the trailer and was traveling with it. The court held that there was no breach of the insurance policy terms and the Insurance Company was not entitled to recovery. The compensation for lawyer's fees was set aside, and the claimants were awarded Rs. 5,66,600/- with interest.
Issues: Breach of insurance policy terms, entitlement to compensation, liability of the Insurance Company
Ratio Decidendi: The court relied on the Motor Vehicles Act, Section 147, which mandates insurance to cover not only third party but also the owner or his representative traveling along with the goods. Any term of exclusion of liability under a policy of insurance in contravention to the express provision of the law cannot be acted upon.
Final Decision: The appeal was dismissed, and the Insurance Company was directed to make payment of the compensation amount to the claimants within a month.
JUDGMENT :
1. This appeal has been preferred by the Insurance Company against the judgment and award of compensation passed in M.A.C.C. Case No. 24 of 2005 passed by Principal District Judge-cum-M.A.C.T., Simdega whereby and whereunder Rs.4,10,000/- as compensation in favour of claimants and Rs.11,000/- towards fee of claimants’ lawyer with interest at the rate of 7% from the date of judgment has been awarded.
2. The appeal has been filed mainly on the ground that the tractor was insured by the appellant-Insurance Company under Kisan Package Policy which covers only third party damage, personal accident insurance of owner and driver and building of insured against fire and burglary. Under the term of policy, the vehicle was intended to be used only for agricultural purpose and not for commercial purpose like transporting goods and passengers. As per claimant’s case and the findings recorded, the deceased was travelling on trailer along with goods when the accident took place. In this way, there was a definite breach of terms and conditions of Insurance Policy and being a gratuitous passenger, he will not come within the meaning of third party.
3. Learned counsel appearing on behalf of Insurance Company has relied on a judgment in the case of Oriental Insurance Co. Ltd. v. Brij Mohan, (2007) 7 SCC 56 :
“11. Although the effect of 1994 amendment in the Motor Vehicles Act did not call for consideration in Asha Rani [New India Assurance Co. Ltd. v. Asha Rani, (2003) 2 SCC 223 : 2003 SCC (Cri) 493], a Three- Judge Bench of this Court had the occasion to consider the said question in National Insurance Co. Ltd. v. Baljit Kaur [(2004) 2 SCC 1 : 2004 SCC (Cri) 370] in the following terms : (SCC pp. 7-8, paras 17-19)
“17. By reason of the 1994 amendment what was added is ‘including owner of the goods or his authorised representative carried in the vehicle’. The liability of the owner of the vehicle to insure it compulsorily, thus, by reason of the aforementioned amendment included only the owner of the goods or his authorised representative carried in the vehicle besides the third parties. The intention of Parliament, therefore, could not have been that the words ‘any person’ occurring in Section 147 would cover all persons who were travelling in a goods carriage in any capacity whatsoever. If such was the intention, there was no necessity of Parliament to carry out an amendment inasmuch as the expression ‘any person’ contained in sub-clause (i) of clause (b) of sub-section (1) of Section 147 would have included the owner of the goods or his authorised representative besides the passengers who are gratuitous or otherwise.
18. The observations made in this connection by the Court in Asha Rani case [New India Assurance Co. Ltd. v. Asha Rani, (2003) 2 SCC 223: 2003 SCC (Cri) 493] to which one of us, Sinha, J., was a party, however, bear repetition: (SCC p. 235, para 26)
‘26. In view of the changes in the relevant provisions in the 1988 Act visà- vis the 1939 Act, we are of the opinion that the meaning of the words ‘any person’ must also be attributed having regard to the context in which they have been used i.e. ‘a third party’. Keeping in view the provisions of the 1988 Act, we are of the opinion that as the provisions thereof do not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured for any passenger travelling in a goods vehicle, the insurers would not be liable therefor.'
19. In Asha Rani [New India Assurance Co. Ltd. v. Asha Rani, (2003) 2 SCC 223 : 2003 SCC (Cri) 493] it has been noticed that sub-clause (i) of clause (b) of sub-section (1) of Section 147 of the 1988 Act speaks of liability which may be incurred by the owner of a vehicle in respect of death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place. Furthermore, an owner of a passenger-carrying vehicle must pay premium for covering the risks of the passenge
