* THE HON’BLE SRI JUSTICE U. DURGA PRASAD RAO
+ M.A.C.M.A No.640 of 2009
%09.10.2014
Between:
The New India Assurance Company Limited Rep. by its Divisional Manager, Hyderabad. .... Appellant AND Nellakoti Kanthamma and others ….
Respondents ! Counsel for Appellant : Sri P. Harinath Gupta ^ Counsel for Respondent Nos.1 & 2: Smt. P. Lakshmi < Gist:
> Head Note:
? Cases referred:
1) 2001 (1) ALT 485
2) 2013 ACJ 2720 (Gauhati)
3) 2008 ACJ 1441 (SC)
4) 2012 ACJ 1 = AIR 2012 SC 797
5) 2007 (4) TAC 842 (HP) THE HONOURABLE SRI JUSTICE U.DURGA PRASAD RAO
M.A.C.M.A. No.640 of 2009
JUDGMENT:
Aggrieved by the Award dated 23.03.2005 in OP No.400 of 2002 passed by the Chairman, M.A.C.T-cum-I Additional District Judge, Nalgonda (for short “the Tribunal”), the 2nd respondent in the OP/ New India Assurance Company Limited preferred the instant appeal.
2) The factual matrix of the case is thus:
a) The first claimant is the wife and the second claimant is the daughter of the deceased—Venkat Reddy. Their case is that on 09.03.2002 at about 11:00 PM, when the deceased was going on his Hero Honda motorcycle bearing No.AP 28AA 6268 to arrange labourers along with one mason by name —M.Narayana and when they reached near tank bund on Bhongir to Yadagirigutta, the breaks of his motorcycle failed and deceased could not control his vehicle and fell into a ditch. Due to which the deceased sustained injuries and died after admitting him in the hospital. On these pleas, the claimants filed OP No.400 of 2002 against respondents 1 and 2, who are the owner and insurer of the motorcycle and claimed Rs.1,00,000/- as compensation under different heads mentioned in the OP.
b) Respondent No.1 remained ex parte.
c) Respondent No.2/Insurance Company opposed the claim denying all the material claim averments and urged to put the claimants in strict proof of the same. R2 further denied the age, avocation and income of the deceased. R2 contended that accident was occurred due to the fault of the rider of motorcycle and prayed to dismiss the OP.
d) During trial, PW1 was examined and Exs.A1 to A4 were marked on behalf of the claimants. Ex.B.1 copy of the policy was marked on behalf of the respondents.
e) Award would show that the Tribunal having regard to the oral and documentary evidence, has granted Rs.1 lakh as compensation with interest @ 8% per annum.
Hence, the appeal by the New India Assurance Company Limited.
3) The parties in the appeal are referred as they stood before the Tribunal.
4) Heard arguments of Sri P.Harinath Gupta, learned counsel for appellant/Insurance Company. No representation for respondents 1 and 2. Respondent No.3/owner of the motorcycle though served notice failed to appear. However, since he remained ex parte before the Tribunal and suffered decree, his absence in this appeal will not have any effect in view of the decision reported in Meka Chakra Rao vs.
[1]
Yelubandi Babu Rao @ Reddemma and others .
5 a) Challenging the award learned counsel for appellant/Insurance Company would argue that the accident was occurred due to fault of the deceased himself, as he drove the motor cycle in a rash and negligent manner and unable to control it, went and fell in a ditch and as such, though claim is under Section 163A of Motor Vehicles Act (for short “MV Act”) i.e. under “no fault liability” principle, still the Insurance Company is not liable for the claim as the accident was occurred due to his own fault. Learned counsel thus at first instance disowned the liability of the Insurance Company.
b) Secondly, he argued that rate of interest awarded by the Tribunal is highly excessive. He thus prayed to allow the appeal and exonerate the Insurance Company from its liability, if not, reduce the rate of interest suitably.
6) In the light of above arguments, the point for determination in this appeal is:
“Whether the decision of the Tribunal fastening liability on the Insurance Company is correct?”
7) POINT: As can be seen from para-5 of the award the Tribunal having considered the fact that claim is under Section 163-A of MV Act and as per Section 163-A rash and negligent driving by the concerned driver is not material and it is sufficient to prove that accident had taken place when the vehicle was being used on the road, has ultimately held that the deceased in the instant case died in due course of using the motorcycle and as the policy was in force, the Insurance Company was liable for the claim. It is now to be seen whether above finding is correct or not.
8) It is a claim under Section 163-A of MV Act. Section 163- A of MV Act reads thus:
“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 or the authorized insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be.
Explanation.—For the purposes of this sub-section, "permanent disability" shall have the same meaning and extent as in the Workmen's Compensation Act, 1923 (8 of 1923).
(2) In any claim for compensation under Sub-section (1), the claimant shall not be required to plead or establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act or neglect or default of the owner of the vehicle or vehicles concerned or of any other person.
(3) The Central Government may, keeping in view the cost of living by notification in the Official Gazette, from time to time amend the Second Schedule.
a) A perusal of Section 163-A would show that it begins with a non-abstante clause and specifies that in case of death or permanent disablement due to the accident arising out of the use of motor vehicle, the owner of the motor vehicle or authorized insurer shall be liable to pay compensation as indicated in the Second Schedule of the Act and in such a case, the claimant shall not be required to plead or establish that the death or permanent disablement was caused due to any wrongful act or neglect or default of the owner of the vehicle or vehicles concerned or any other person. So, it can be said that the liability envisaged under Section 163-A of MV Act is not the liability which was recognized under the law of Tort, rather it was different, distinct and absolute statutory liability and as such search for negligence is not necessary in such instances. Under Section 163-A, the emphasis was shifted from “fault” to “suffering”. It is the suffering endured in an accident involving a motor vehicle that gives rise to the liability under Section 163-A.
b) A careful study of the section, however, would further reveal that the claim under Section 163-A relates to third party risks. Therefore, a third party can seek benefit under the provisions of Section 163-A but not the owner of the vehicle under whose driving and on whose fault an accident did occur.
c) That, the relief under Section 163-A of MV Act can be claimed by a third party is discussed in the following decisions:
(i) I n Padam Bahadur Rana vs. National Insurance Company[2] a scooterist-owner while averting a cow being hit by the scooter, fell down and suffered injuries. He filed claim petition under Section 163-A of MV Act before the tribunal against his insurer i.e. National Insurance Company showing himself as owner and driver of the scooter. The claim was opposed mainly on the contention that the claimant himself was the owner of the accident vehicle and not a third party and accident was occurred due to his own fault and hence not entitled to claim comepnsation under Section 163-A. The tribunal upheld the contention of Insurance Company and dismissed the claim. Learned single Judge of High Court of Gauhati while considering the argument that though the policy had personal accident cover for owner-driver, the owner-driver cannot lay claim under Section 163-A of MV Act but should approach another judicial forum, has observed thus:
“12. To answer this question, the heading of Chapter XI of the Act in which Section 163-A is contained has to be adverted to. The heading of Chapter XI of the Act runs as follows;-
INSURANCE OF MOTOR VEHICLES AGAINST THIRD PARTY RISKS
13. This heading in itself makes it abundantly clear that all the sections contained in this chapter including Section 163- A relates to third party risks.
14. Sub-section (2) of Section 163-A further drives home the point as regards the fact that this section deals with third party risks. Thus, it states that claimant claiming compensation under the structured formula basis as laid down in Sub-section (1) of this Section need not prove negligence or wrongfulness or default on the part of the owner of the vehicle. Thus clearly, the wordings of Subsection (2) prove that the claimant and the owner are two separate persons.
15. Clearly therefore, it is apparent from the provisions of the Act itself that Section 163-A also relates to third party insurance, meaning thereby that only a third party can claim compensation under Section 163-A of the Act.”
Ultimately learned judge held that the claim under Section 163-A of MV Act by the owner seeking compensation against his own Insurance Company for his own accident while he was driving his own scooter is not maintainable. He however held that there is no bar for the appellant to approach other authorities or judicial forums which do have jurisdiction to adjudicate upon the matter.
So, in the above decision it was held that claim under Section 163-A relates to third party claim.
(ii) I n Oriental Insurance Company Limited vs. Rajni
[3]
Devi and others the facts are that one Janak Raj who was the owner of motorcycle along with Sukhdev Raj went and met with accident and died. It was not clearly known who actually drove the motorcycle. The L.Rs. of Janak Raj filed claim under Section 163-A of MV Act against the Insurance Company. It opposed the claim contending that the policy does not cover the risk of owner who was not a third party within the meaning of Section 163-A of MV Act. The tribunal, it appears, awarded compensation. The matter went upto Supreme Court.
The Apex Court observed thus:
“6. It is now a well settled principle of law that in a case where third party is involved, the liability of the insurance company would be unlimited. Where, however, compensation is claimed for the death of the owner or another passenger of the vehicle, the contract of insurance being governed by the contract qua contract, the claim of the insurance company would depend upon the terms thereof.”
The Apex Court ultimately held thus:
“10. In this case, it has not been shown that the policy covered any risk for injury to the owner himself. We are unable to accept the contention that the premium of Rs 4989 paid under the heading 'Own damage' is for covering liability towards personal injury. Under the heading 'Own damage', the words 'premium on vehicle and non-electrical accessories' appear. It is thus clear that this premium is towards damage to the vehicle and not for injury to the person of the owner. An owner of a vehicle can only claim provided a personal accident insurance has been taken out. In this case there is no such insurance.”
So, in the above decision while reiterating that the claim under Section 163-A is basically a third party claim, the Supreme Court observed that the owner cannot claim under Section 163-A of MV Act and in such an instance the terms of the contract have to be resorted and compensation would be payable to that extent alone.
d) In the light of above rulings, it is now to be seen whether the claim is maintainable under Section 163-A or not. Sofaras ownership of the crime motorcycle bearing No.AP 28AA 6268 is concerned it belongs to first respondent but not the deceased. So, the deceased though riding the vehicle, was only a third party with reference to the vehicle. Sofaras negligence is concerned, since the claim is one under Section 163-A, the tribunal has not given any positive finding as to whether accident was occurred due to the fault of deceased himself. It may be noted that as per the decision reported in National
[4]
Insurance Company Limited vs. Sinitha and others , though owner and Insurance Company are entitled to prove the fault of the claimant/deceased in a claim under Section 163-A of MV Act, they have not established the same by adducing any positive evidence except the Insurance Company taking a plea in its counter. Therefore, there is no positive evidence to the effect that deceased himself was responsible for the accident. On the other hand, the evidence of PW1 is to the effect that the accident was occurred due to failure of break system. So, briefly, facts and evidence would show that the deceased while driving the vehicle of the first respondent met with accident and died as a third party. Ex.B1—policy copy covers the risk of third parties. Therefore, his risk shall be deemed covered under the terms of the policy.
e) In similar circumstances, in the case of Sudhir Mahajan
[5]
vs. United India Insurance Company Limited and another when the husband (petitioner) drove the car belonging to his wife (1st respondent) and met with accident, the High Court of Himachal Pradesh following the decision of the Apex Court in Deepal Girishbhai Soni and others vs. United India Insurance Company Limited (2004 ACJ 934 (SC)), has held that claim under Section 163-A of MV Act was maintainable. Of course, his claim was dismissed on another ground that the annual income of the petitioner has exceeded Rs.40,000/- per annum which was one of the conditions under Second Schedule of MV Act. As such, in the instant case it can be said that claim petition filed by the petitioners under Section 163-A of MV Act is maintainable.
9) So, I find no merits in the first argument of the appellant. Sofaras rate of interest is concerned, the same is reduced to 7.5% per annum throughout.
10) In the result, while dismissing the M.A.C.M.A and confirming the award passed by the Tribunal in OP No.400 of 2002, the rate of interest awarded by the Tribunal is reduced to 7.5% per annum. No costs in the appeal.
As a sequel, miscellaneous applications pending, if any, shall stand closed.
U.DURGA PRASAD RAO, J Date: 09.10.2014
Note: L.R. Copy to be marked: Yes / No
Murthy
[1] 2001 (1) ALT 485
[2] 2013 ACJ 2720 (Gauhati)
[3] 2008 ACJ 1441 (SC)
[4] 2012 ACJ 1 = AIR 2012 SC 797
[5] 2007 (4) TAC 842 (HP)