1969 Supreme(MP) 113

High Court Of Madhya Pradesh
Bishambhar Dayal, C. J. , Shiv Dayal and Suraj Bhan, JJ.
MANGILAL - Appellant
Versus
PARASRAM - Respondents
Misc. First Appeal 53 Of 1965
Decided On : 11/03/1969

Headnote:(1) Motor Vehicles Act. 1939 - Ss.96, 110 to 110-B-scope and scheme of the provisions-liability of the insurer is governed by general substantive law-insurer is liable only if the insured is liable-defences open to the inwrer.

       It is seen from the provisions of sections 96, 110 to 110-B of the Act that (i) A claimant is entitled to recover from the insurer the amount of compensation which he is in law entitled to obtain from the insured, subject to the statutory limits of liability of the insurer. (ii) Insurance against third party risks is compulsory which secures payment to the claimant against the insolvency or liquidation of the insured. (iii) The insurer cannot escape liability under the policy on the ground that because of breach of any term of the contract on the part of the insured, the claim of third party was not covered, or, otherwise, the insurer is entitled to avoid the policy. But these provisions do not go beyond this. They leave untouched the question what would make the insurer liable to pay the insurance money to the claimant. To put it differently, they lay down WHEN the insurer is liable and to what EXTENT he is liable but not what makes him liable. [Para 20

       As provided in section 110-B the Accidents Claims Tribunal shall in its award determine the total amount of compensation and then specify the sum which shall be paid by the insurer. And, by virtue of section 110-E, the latter sum is recoverable from the insurer as arrears of land revenue. However, the ingredients of the liability of the insurer are no where provided in this special statute. Necessarily, therefore, that aspect of the matter will be governed by the general substantive law, which remains untouched by this special law.

       It is on the contract of indemnity that the insurer is liable to pay compensation only if the insured is liable to pay damages to the claimant. If the insured is not liable then the insurer is also not liable. In other words, the liability of the insurer depends upon the liability of the insured. Now, the liability, direct or vicarious, of the owner of a motor vehicle involved in an accident resulting in injury to, or death of, a third party, to pay damages arises from the law of torts. Under that law, negligence of the owner or driver is the line qua non for such liability. AIR 1952 Punj 540, 1968 ACJ 401, 1969 ACJ 204 & 1969 ACJ 327 relied on. 1968 JLJ 189 referred to. [Para 23

       The insurer may resist the claim against him in two ways:

       (i) That the insurer is not liable although the insured may be liable; and (ii) that the insurer is not liable because the insured is not liable. Under the first head, the insurer is entitled to escape liability by saying that the policy is void because it was obtained by the insured on a false representation or non-disclosure of a material fact; or that the policy was cancelled before the accident; or that there bas been a breach of a specified condition of the policy, being one of the conditions enumerated in the section. The insurer is debarred from raising any other ground of defence to avoid his liability, if the insured is found to have incurred the liability. Under the second head, the insurer can plead that there was no negligence on the part of the insured, to show that the insured incurred no liability so that the insurer's liability under the contract of indemnity does not arise. The insurer is entitled to raise all such pleas in defence as the insured can take to show that he (the insured) has not incurred the liability. This the insurer can do, as of right, in the case of the insured, provided that right is reserved in the policy. Section 96 (2) has nothing to do with the second head of defences. All that section 96 (2) does is that it debars the insurer from taking up any defence, other than those enumerated in it, to show that the insurer is not liable although the insured has incurred liability. AIR 1959 SC 1331 relied on. [Paras 27 & 32

       (2) Motor Vehicles Act, 1939 - S.110-B-award by the Claims Tribunal-absence of provision for its execution against the insurer-the power of its execution is implied in the power to give the award.

       (3) Interpretation of statutes-jurisdiction conferred to make a grant-power to enforce the grant is implied-jurisdiction.

       In the absence of an express provision in the Motor Vehicles Act, 1939, for the execution of the award against the insured, the rule that shall apply is that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective. 1969 ACJ 34 referred to. (Para 31

       (4) Tort-negligence - factors determining negligence - burden of proof- principle of 'res ipsa loquitor' - applicability of.

       (1) The standard to determine whether a person has been guilty of negligence is the standard of care which, in the given circumstances, a reasonable man could have foreseen. (2) The test is forseeability, not probability. (3) The more serious the consequences if care is not taken, the greater is the degree of care which must be exercised. (4) While the initial burden of proof of negligence is on the claimant, barring exceptional cases, the principle 'res ipsa loquitur' comes into play. It is a rule of evidence and does no more than cast a provisional burden on the defendant. (5) Having regard to the local conditions prevailing in this country, when res ipsa loquitur is attracted, it should be given as wide an amplitude and as long a rope as possible in its application to the case of a motor accident. (6) The defendant cannot escape liability merely by preferring hypothetical explanations however plausible, of the accident. [Para 39