Back
1997 Supreme(Mad) 1065
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE GOVARDHAN
New India Assurance Company Limited, through its Branch Manager, Tirunelveli
Versus
Mari & Others
A.A. No. 745 of 1985
Decided On :Decided on : 27-09-1997
For the Appellant:Kurian Associates, Advocates.
For the Respondents:G. Krishnan, G. Ravinchandran, K. Srinivasan, Bagirathi Narayan, A.V. Kala, J. Marteen, M. Josefh, Thatheous Jerome, Gunaraj, Advocates.
An insurer is not liable to pay compensation to a passenger in a vehicle that is being used for hire or reward in violation of the terms of the policy.
Headnote:
MOTOR VEHICLES ACT, 1939 - SECTION 96 - INSURANCE - LIABILITY OF INSURER - POLICY IMPOSING PROHIBITION AGAINST CARRYING PASSENGERS FOR HIRE OR REWARD - INSURER NOT LIABLE TO PAY COMPENSATION TO PASSENGER.
Fact of the Case:
The deceased, Gopal, was travelling in a jeep belonging to the second respondent when it collided with a bus, resulting in his death. The petitioners, Gopal's dependants, filed a claim for compensation under the Motor Vehicles Act, 1939. The Tribunal awarded compensation to the petitioners, holding that the accident was due to the rash and negligent driving of the jeep driver. The third respondent, the insurer of the jeep, appealed the decision, arguing that they were not liable to pay compensation because the policy issued to the second respondent was an Act Policy with a limitation on the use of the vehicle, specifically excluding use for hire or reward.
Finding of the Court:
The court found that the jeep was being used for hire or reward at the time of the accident, as evidenced by the fact that the deceased had paid the driver to travel in the jeep. The court also found that the insurer had specifically excluded liability for use of the vehicle for hire or reward in the policy issued to the second respondent.
Issues: Whether the insurer was liable to pay compensation to the petitioners, given that the policy issued to the second respondent excluded liability for use of the vehicle for hire or reward.
Ratio Decidendi: The court held that the insurer was not liable to pay compensation to the petitioners because the policy issued to the second respondent specifically excluded liability for use of the vehicle for hire or reward. The court relied on the decisions in United India Fire & General Insurance Co. ltd. v. M.S. Durairaj and National Insurance Co. Ltd. v. Jaluben, which held that an insurer is not liable to pay compensation to a passenger in a vehicle that is being used for hire or reward in violation of the terms of the policy.
Final Decision: The court allowed the appeal and set aside the order of the Tribunal making the insurer jointly and severally liable with the owner and driver of the jeep for the compensation awarded to the petitioners. The court modified the award to make the compensation payable by the owner and driver of the jeep alone.
1. This Appeal coming on for hearing on Monday, the 23rd and Thursday, the twenty-sixth days of September 1996, an having stood over for consideration till this day, the court delivered the following judgement:—
This Appeal is against the order passed by the Motor Accidents Claims Tribunal, Tuticorin, in M.C.O.P. No. 19/1981.
2. The petitioners case is as follows:—
The petitioners are the dependants and legal representatives of the deceased Gopal. On 25.11.1980, Gopal was going to Uvari. He travelled in the bus from Pillaiyan Manai to Thisaiyanvilai.
From Thisaiyanvilai, he travelled in the heep bearing registration No. MSQ 4247 belonging to the respondent and driven by the first respondent. The third respondent is the insurer of the said Vehicle. At about 12 noon, in the road from Thisaiyanvilai to Uvari, the bus bearing registration No. TMN 518 belonging to the 4th respondent driven in a rash and negligent manner, dashed against the jeep resulting in the death of Gopal. The petitioners have made a claim for Rs. 55,000/- as compensation.
3. The respondents 1 and 2 have contended that the accident was due to the rash and negligent driving of the bus. The third respondent has stated that they were not informed of the accident and the petitioners have to prove that it was due to the rash and negligent driving of the first respondent. Apart from stating that they are not liable to pay any compensation, the third respondent has also stated that their liability is only Rs. 50.000/-.
4. The 4th respondent has contended in the counter that the accident was due to the rash and negligent driving of the first respondent and they are not liable.
5. On the above pleadings, the Motor Accidents Claims Tribunal, held an enquiry and gave a finding that the accident was due to the rash and negligent driving of the jeep belonging to the second respondent and awarded a compensation of Rs. 65.000/- payable by the respondents 1 to 3 jointly and severally.
6. Against the said judgment, the third respondent has come forward with this appeal.
7. The learned counsel appearing for the appellant has argued that they are not disputing the finding of the Tribunal that the accident was due to the rash and negligent driving of the jeep and they are also not disputing the compensation awarded, but they only contend that the third respondent insurer is not liable to make payment of any compensation to the petitioners and it has be paid only by the owner of the jeep. The learned counsel appearing for the second respondent before the Tribunal, would contend that the appellant only wants to get away from the liability of not paying the compensation awarded to the petitioners in spite of the jeep being instructed with them and the appeal has to be dismissed as no merits since the vehicle has been insured with the appellant under Ex. B-1. The learned counsel appearing for the appellant would argue that it is no doubt true that the jeep involved in the accident has been insured with the appellant; but the policy issued is and Act Policy and the premium collected is only-basic Act premium of Rs. 36/- and the policy is very specific in stating the limitation as to use of the Vehicle and the Tribunal has failed to take note o f the same. In Ex. B-1, it is specifically stated that the policy covers use for any purpose other than hire or reward and organised racing or speed testing. According to the learned counsel appearing for the appellant, the deceased has paid to the first respondent for permitting to travel in the jeep, R.W. 2, has no doubt stated that it is not his habit to collect money and transport people in the jeep. He has stated during cross examination that there are six members in his family and he is running a petty shop earning Rs. 500/- to Rs. 600/- per month. It is further stated by him that he purchased a jeep for Rs. 9,000/- and at the same time, he would say that he is not in the habit of collecting money and allowing the people to travel in
