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2014 Supreme(P&H) 743
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
JITENDRA CHAUHAN, J.
United India Insurance Co. Ltd. – Appellant
Versus
Sidharat Raju and others – Respondents
FAO-1665-2010 (O&M)
Decided on: 10.2.2014
Advocate Appeared:
Mr. V.M. Gupta, Advocate for the appellant Mr. Arun Takhi, Advocate for respondent Nos. 1 and 2 Mr. Ravi Kamal Gutpa, Advocate/Amicus Curiae
The main legal point established in the judgment is the distinction between the liability of the owner and the user of a vehicle under the Motor Vehicles Act, particularly in the context of compensation claims and the applicability of specific provisions such as Sections 163A, 166, and 140.
Headnote:
Motor Vehicles Act - Liability of Insurance Company - Sections 163A, 166 - Summary of Acts and Sections: The court discussed the liability of the insurance company under Sections 163A and 166 of the Motor Vehicles Act. It highlighted the distinction between the owner and the user of the vehicle and the applicability of compensation provisions to the legal representatives of the deceased. The court's decision was influenced by the interpretation of these sections and their application to the specific circumstances of the case.
Fact of the Case:
The appeal challenged an award passed by the Motor Accident Claims Tribunal, involving the liability of the insurance company, driver, and owner of the offending vehicle. The deceased, who was driving the vehicle at the time of the accident, had borrowed the car from the owner. The claim petition was filed under Section 163A of the Motor Vehicles Act by the deceased's legal representatives.
Finding of the Court:
The court found that the deceased, as the user of the vehicle, could not be considered a third party for the purpose of awarding compensation under the Act. It held that the insurance policy only provided indemnity to the insurer for the liability of the owner towards third parties, not the user who borrowed the vehicle. The court also allowed compensation under the 'No fault liability' provided under Section 140 of the Act.
Issues: The issues involved the interpretation of Sections 163A, 166, and 140 of the Motor Vehicles Act, and the determination of the liability of the insurance company, owner, and user of the vehicle in a compensation claim.
Ratio Decidendi: The court's decision was based on the distinction between the owner and the user of the vehicle, as well as the specific provisions of Sections 163A, 166, and 140 of the Motor Vehicles Act. It emphasized that the insurance policy's benefits were restricted to the owner and that the legal representatives of the deceased, as the user, could not claim the benefit of the death of the borrower.
Final Decision: The appeal was allowed, and the impugned award was modified. The claimants were entitled to receive an amount of Rs.50,000 as compensation under 'No fault liability' provided under Section 140 of the Act. The statutory amount deposited by the appellant was to be disbursed, and the remaining amount refunded to the appellant-Insurance Company.
Jitendra Chauhan, J.
The present appeal has been filed by the Insurance Company, challenging the impugned Award dated 9.12.2009, passed by the learned Motor Accident Claims Tribunal, Hoshiarpur, (in short 'the Tribunal') vide which, a sum of Rs.4,49,960/- 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 and 2 submits that the matter be remanded back to the Tribunal for fresh adjudication, as the claimants prefers to file petition under Section 166 of the Act.
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, Raj Kumar Raju, since deceased, was the driver of the offending vehicle and he was not a paid driver. The vehicle was owned by the wife of the deceased. He borrowed the car from the registered owner. The claim petition was preferred under Section 163A of the Act, 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. 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. 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 tortfeaser. 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 car.
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 insurer shall be liable to pay in the case of death or permanent
