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2014 Supreme(P&H) 729
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
JITENDRA CHAUHAN, J.
National Insurance Co. Ltd. – Appellant
Versus
Rita Goyal and others – Respondent
FAO-6041-2011 (O&M)
Decided on: 30.1.2014
Advocate Appeared:
Mr. R.C. Kapoor, Advocate for the appellant
Mr. B.R. Mahajan, Advocate for respondent Nos. 1 to 3
The main legal point established in the judgment is that the liability of the insurance company and the owner in a case where the deceased borrowed a vehicle and met with an accident is determined by the provisions of the Motor Vehicles Act, particularly Section 163A, Section 166, and Section 140.
Headnote:
Motor Vehicles Act - Liability of Insurance Company - Section 163A, Section 166 - The court discussed the liability of the insurance company and the owner in a case where the deceased borrowed a vehicle and met with an accident. The court referred to relevant provisions of the Motor Vehicles Act and interpreted the applicability of Section 163A and Section 166. The court held that the deceased, who borrowed the vehicle, cannot be considered a third party for the purpose of awarding compensation under the Act. The court also highlighted the limitations of the insurance policy and the personal accident cover, concluding that the claimants are not entitled to compensation under the Act. The appeal was allowed, and the impugned award was set aside, but the claimants were entitled to a compensation of Rs.50,000 under the no-fault liability provided under Section 140 of the Act.
Fact of the Case:
The appeal was filed by the Insurance Company challenging the award passed by the Motor Accident Claims Tribunal, where a sum of Rs.14,70,000/- was awarded to the claimants. The appellant contended that the deceased, who borrowed the vehicle, cannot be termed as a third party for the purpose of awarding compensation under the Act.
Finding of the Court:
The court found that the deceased, who borrowed the vehicle, cannot be considered a third party for the purpose of awarding compensation under the Act. The insurance policy's liability is restricted to the personal insurance cover to the owner, and the personal accident cover is a contract between the insured and the insurer, designed to give the benefit to the insured and not to the borrower.
Issues: The issues revolved around the liability of the insurance company and the owner in a case where the deceased borrowed a vehicle and met with an accident, and the applicability of relevant provisions of the Motor Vehicles Act.
Ratio Decidendi: The court interpreted the provisions of Section 163A, Section 166, and Section 140 of the Motor Vehicles Act to determine the liability of the insurance company and the owner in the given case. The court concluded that the deceased, who borrowed the vehicle, cannot be considered a third party for the purpose of awarding compensation under the Act.
Final Decision: The appeal was allowed, and the impugned award was set aside. However, the claimants were entitled to get an amount of Rs.50,000/- as compensation under the no-fault liability provided under Section 140 of the Act.
Jitendra Chauhan, J.
The present appeal has been filed by the Insurance Company, challenging the impugned Award dated 5.8.2011, passed by the learned Motor Accident Claims Tribunal, Fast Track Court, Amritsar, (in short 'the Tribunal') vide which, a sum of Rs.14,70,000/- has been awarded to the claimants and the appellant being the insurer alongwith the driver and the owner of the offending vehicle has been held liable.
2. Learned counsel for the appellant Insurance Company contended that the award is against the provisions of the Motor Vehicles Act (for short 'the Act'). As per the provision of the Act, in MACT cases there are three necessary parties i.e. claimant, insured and the insurer. In the instant case, the deceased has stepped into the shoes of the owner. Thus, the deceased cannot be termed as a third party for the purpose of awarding the compensation under the Act.
3. Learned counsel further contended that the findings returned by the learned Tribunal are on incorrect appreciation of the law enunciated by the Hon'ble Supreme Court in Ningamma & another vs. United India Insurance Co. Ltd. 2009(3) RCR (Civil), 435. Thus, the learned counsel argued that as the claim petition was filed under Section 163A of the Act, it is primarily the liability of the owner to indemnify the claim.
4. On the other hand, the learned counsel appearing for respondent Nos. 1 to 3 refers to the statement of RW3, Harwinder Singh Narang, Senior Assistant, National Insurance Company and states that LRs of the deceased are entitled to get claim from the appellant.
5. I have heard the learned counsel for the parties and perused the record carefully.
6. It is not disputed that at the time of accident, Arun Goyal was the driver of the offending vehicle and he was not a paid driver. He borrowed the car from the registered owner. The claim petition was preferred by the LRs of the deceased against the owner and the insurer of the offending car. As the deceased borrowed the car from the owner, he stepped into the shoe of the owner and therefore, he cannot be the recipient of the compensation. The Insurance Policy is a contract of insurance only provides for indemnity to the insurer company as the liability of the owner towards third party and not the user /rider, who steps into the shoes of the insured himself. From the perusal of Ex.P9, it is clear that the premium was paid towards personal accident. Therefore, the Insurance company cannot be burdened with the liability of compensation to the LRs of the deceased, who borrowed the vehicle from the registered owner.
7. It is amply proved on record that the deceased was at fault and Section 163A of the Act is not meant to extend the benefit to the tort feaser. The party, who suffered loss in the MACT claims must be the third party, whereas in the present case, the LRs filed the claim petition against the registered owner and the insurer of the motorcycle.
8. The Hon'ble Supreme Court in Ningamma and another vs. United India Insurance Co. Ltd. 2009 ACJ, 2020, held in paras No.13, 18, 19, 20, as under:
13. In the light of the aforesaid submissions, the question that falls for our consideration is whether the legal representatives of a person, who was driving a motor vehicle, after borrowing it from the real owner meets with an accident without involving any other vehicle, would be entitled to compensation under Section 163A of MVA or under any other provision(s) of law and also whether the insurer who issued the insurance policy would be bound to indemnify the deceased or his legal representative? Before dwelling further, it would be useful to discuss the relevant paras of Section 163A and 166 of the MVA applicable in the present case.
“163A. Special provisions as to payment of compensation on structured formula basis.—
(1) Notwithstanding anything contained in this Act or in any other law for the time being in force or instrument having the force of law, the owner of the motor vehicle of the authorised insure
