The provisions of Chapter X of the Motor Vehicles Act, 1988, have an overriding effect, and the insurance company cannot escape liability under Section 140 of the Act, even if the insured vehicle was being used for a purpose not covered by the insurance policy.

T.S. Doabia, J.

1. This is a petition under Article 227 of the Constitution of India. This arises out of the following facts. The petitioner is an insurer. A tractor, bearing No. UP-75-2218, was involved in an accident on 16.10.1991. One Sonu, minor, aged four years, died in this accident. In para 3 of the claim petition, it is stated that the deceased Sonu and Maya Devi were waiting on the roadside for a lift. They made a request to the driver of the tractor to accept fare from them and permit them to travel on the tractor-trolley. It is further stated in para 3 of the claim petition that a sum of Rs. 6/- was given by way of fare. It is on these premises, the petitioner company contends that ultimately no liability can be fastened on it. The petitioner company has also placed reliance on the insurance policy. As per the insurance policy, the tractor was meant to be used for agricultural purposes only.

2. The Motor Accidents Claims Tribunal has awarded interim compensation to the extent of Rs. 25,000/-. This is being challenged in this petition on the ground that ultimately the insurance company cannot be held liable and, as noticed above, reliance is being placed on the averments made by the claimant in para 3 of the claim petition.

3. This is one aspect of the matter. The other aspect which has been pointed out by the learned counsel, appearing for the owner of the tractor, is that his stand is entirely different. The fact as to whether Sonu and her mother were travelling as passengers or not is not admitted by his client. As such, this is a contentious issue and would ultimately be decided after the trial is over. According to him, the insurance company cannot escape liability created under Section 140 of the Motor Vehicles Act, 1988 (for short, 'the Act'). He has also pointed out that on account of the provisions contained in Section 144 of the Act, the provisions of Chapter X ought to have an overriding effect.

4. The learned counsel for the petitioner has placed reliance on a Single Bench decision of this court, reported as New India Assurance Co. Ltd. v. Ajay 1994 ACJ 987 (MP). The learned single Judge has placed reliance on a Full Bench decision of the Karnataka High Court, reported as United India Insurance Co. Ltd. v. Immam Aminasab Nadaf 1990 ACJ 757 (Karnataka). This decision does help the case pleaded by the petitioner. It may, however, be seen that this very Full Bench was noticed by a Division Bench of this court in the case of National Insurance Co. Ltd. v. Thaglu Singh 1995 ACJ 248 (MP). The Division Bench, in express terms, disagreed with the view expressed by the Full Bench of Karnataka High Court. This matter is dealt with in para 15 of the judgment and this para reads as under:

(15) The Full Bench decision of the Karnataka High Court in arriving at the contrary conclusion took into account the provisions of Sections 95(5) and 96(2) of the Act and the fact that there is no provision rendering Section 96(2) of the Act inapplicable in the matter of liability to pay compensation under Section 92-A of the Act. With great respect, we are unable to agree with this approach. The court did not take into consideration the high legislative purpose sought to be served by these provisions. The court also did not try to draw appropriate inferences from the requirement of deduction of the no fault liability compensation in the final award. The court was quite conscious of the fact that the Tribunal should not allow the claim to be frustrated by examination of complicated questions and evolved a formula that the Tribunal should prima facie examine if the risk was covered by the policy. We find no support in the statutory language for this conclusion. We also fail to comprehend why the Full Bench restricted the examination to prima facie examination. Either the defence can be raised or it cannot be raised. If it can be raised, it must be considered properly and not merely prima facie. In our considered opinion, the view