Back
2021 Supreme(Online)(Guj) 7749
GUJARAT HIGH COURT
A.G. Uraizee, J
ORIENTAL INSURANCE CO LTD – Appellant
Versus
MINOR VIRAJ VIPUL BRAHMBHATT – Respondent
FIRST APPEAL NO. 1652 of 2021
For the Appellants/Petitioners: MR RATHIN P RAVAL
For the Respondents: NISHIT A BHALODI
Insurance liability is contingent on adherence to policy terms; violations negate coverage, compelling insurers to satisfy claims initially and potentially recover from vehicle owners.
Headnote:(A) Motor Vehicles Act, 1988 - Section 173 and 166 - Appeal against judgment and award passed by Motor Accident Claims Tribunal - Claim petition for compensation arose from an accident where the vehicle was driven recklessly - Tribunal awarded compensation but held the insurance company liable despite violation of policy terms - Appeal to exonerate the insurance company, reserving recovery rights post-payment by the company to the claimant (Paras 10, 11, 12, 13 and 14).
(B) Insurance - Terms of policy breach - Private policy covering transport for reward - Passenger in private vehicle considered gratuitous, leading to non-liability of insurer - Obligation to satisfy award but right to recover expenses from the owner of the vehicle upheld. (Paras 11, 13).
Facts of the case:
The accident occurred when the claimant was travelling in a vehicle that collided with a tree; the driver lost control due to speed, leading to injuries.
Findings of Court:
The Tribunal's ruling was partially flawed for not adequately considering the violation of the insurance terms; nonetheless, the principle of compensation order remains valid.
Issues: Whether the Tribunal erred in calculating liability given the vehicle was used for commercial purposes against policy rules.
Ratio Decidendi: The Court elucidated that a passenger in a private vehicle assumes a gratuitous status, justifying the exoneration of the insurance company from liability.
Result: Appeal partially allowed.
| Table of Content |
|---|
| 1. appeal concerning liability for compensation under insurance policy. (Para 1) |
| 2. accident details and parties involved. (Para 2 , 3 , 4) |
| 3. tribunal's decisions and court's hearing required. (Para 5 , 6 , 7) |
| 4. key issues surrounding insurance coverage and policy breach. (Para 10 , 11 , 12) |
| 5. court's conclusion on exoneration and compensation obligation. (Para 13 , 14) |
ORDER
1. The present appeal under section 173 of the Motor Vehicles Act (“the MV Act” for short) is directed against the judgment and award dated 22.7.2020 passed by the learned Motor Accident Claims Tribunal (Aux.), Bharuch in Motor Accident Claim Petition No.675 of 2009.
2. Bereft of unnecessary details, short facts giving rise to the present appeal are that respondent No.1 along with his family members were going towards Somnath in Tata Sumo Car bearing No.GJ 16 AA 5670. The car was driven by respondent No.2 herein and it was of the ownership of respondent No.3 and insured with the appellant insurance company. The respondent No.2 was driving the car at very high and excessive speed so as to endanger human life. At about 6.00 pm, when the car was passing on Vanthli Junagadh Highway, respondent No.2 lost control over offending car resulting in dashed with the tree. The respondent No.1 and his family members suffered bodily injuries. The respondent No.1, therefore, filed Motor Accident Claims Petition No.675 of 2009 under section 166 of the MV Act against respondent Nos.2, 3 and the appellant to recover in the Motor Accident Claims Tribunal at Bharuch.
3. The respondents appeared through their learned advocates and contested the claim petition. The respondent Nos.1 and 2 contested the claim petition by filing written statement at Exh.72 wherein they have denied all the averments, statements and contentions raised in the claim petition. They also claimed that at the relevant time, respondent No.1 was going to Somnath along with the claimant who was relative of respondent No.3 – owner of the vehicle. It is also submitted in the reply that offending car dashed with the tree as one another Maruti car had applied sudden brakes and therefore, it was submitted that the claim petition may be dismissed.
4. The appellant contested the claim petition by filing the written statement at Exh.73 wherein the averments made in the claim petition are denied. It is also contended that offending vehicle was used for higher and reward though the vehicle was private vehicle. It was, thus, contended that there was violation of conditions of policy as contemplated under section 149(2) of the MV Act. Hence, the appellant insurance company may be exonerated.
5. The Tribunal has, by the impugned award, partly allowed the claim petition and has fastened liability of payment of compensation on the appellant insurance company and respondent Nos.2 and 3 jointly and severally. The insurance company has, therefore, approached this Court with this appeal.
6. By order dated 1.7.2021, the Notice for final disposal was issued since it was submitted that the appeal could be finally disposed of upon submission of higher and reward.
7. I have heard Mr.Rathin Raval, learned advocate for the appellant insurance company and Mr.Nishith Bhalodi, learned advocate for the claimant. The respondent Nos.2 and 3 though served have not appeared either in person or by duly instructed learned advocate.
8. Mr.Raval submitted that offending vehicle was under the cover of insurance by virtue of private policy. It is his submission that however offending vehicle was used for commercial purpose which amounts to infraction of terms of the policy. He submits that learned Tribunal has failed to appreciate the fact that the original claimant cannot be relative of respondent No.3 – owner of offending vehicle because the claimant is NRI being resident of USA.
Rely
