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TMI Blog2013 (1) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... ployed as a driver in another vehicle owned by the owner of the vehicle under the policy of insurance. 4. The above question arises in this way. Saju P. Paul, claimant (Respondent No. 1), was a heavy vehicle driver. He was employed with Respondent No. 2 as a driver in some other vehicle. On 16.10.1993, he was travelling in a goods vehicle bearing No. KL-2A/3411 in the cabin. The goods vehicle was being driven by one Jayakumar. In that vehicle, many other persons were also travelling. At Nilackal, due to rash and negligent driving of the driver Jayakumar, the goods vehicle capsized. As a result of which the claimant suffered fracture and injuries. The claimant remained under treatment for quite some time and the injuries that he sustained in the accident rendered him permanently disabled. In the claim petition filed by him before the Motor Accident Claims Tribunal, Pathanamthitta (for short, 'the Tribunal'), he claimed compensation of Rs. 3,00,000/-. The owner and insurer were impleaded as respondent no. 2 and respondent no. 3 respectively in the claim petition. 5. The insurer filed its written statement and opposed the claimant's claim insofar as it was concerned. The insurer set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the vehicle at the time of accident and therefore, the petitioner was only a gratuitous passenger cannot be countenanced at all. Even otherwise, the first proviso to Section147(1) will cast a liability on the insurer to indemnify the owner in respect of the injury sustained by the employee of the insured arising out of and in the course of his employment." 9. It is appropriate to quote Section 147 of the 1988 Act as was obtaining on the date of accident, i.e., 16.10.1993, which reads as follows : "147. Requirements of policies and limits of liability.-(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which- (a) is issued by a person who is an authorized insurer; and (b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)- (i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place; (ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe. (5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons." 10. By the Motor Vehicles (Amendment) Act, 1994 (for short, '1994 Amendment Act'), Section 147 came to be amended. The expression "including owner of the goods or his authorised representative carried in the vehicle" was added in Section 147. The amended Section 147 has been considered by this Court in various decisions, some of which we intend to refer a little later. 11. In New India Assurance Company v. Satpal Singh and others (2000) 1 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of clause 46 also state that it seeks to amend Section 147 to include owner of the goods or his authorised representative carried in the vehicle for the purposes of liability under the insurance policy. It is no doubt true that sometimes the legislature amends the law by way of amplification and clarification of an inherent position which is there in the statute, but a plain meaning being given to the words used in the statute, as it stood prior to its amendment of 1994, and as it stands subsequent to its amendment in 1994 and bearing in mind the objects and reasons engrafted in the amended provisions referred to earlier, it is difficult for us to construe that the expression "including owner of the goods or his authorised representative carried in the vehicle" which was added to the pre-existing expression "injury to any person" is either clarificatory or amplification of the pre-existing statute. On the other hand it clearly demonstrates that the legislature wanted to bring within the sweep of Section 147 and making it compulsory for the insurer to insure even in case of a goods vehicle, the owner of the goods or his authorised representative being carried in a goods vehicle when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rance policy, they would be deemed to have been covered under the policy where for even no premium is required to be paid. 14. Asha Rani1 has been relied upon in Oriental Insurance Co. Ltd. v. Devireddy Konda Reddy and Others (2003) 2 SCC 339 wherein it was held as under (Pgs. 342-343): "....The difference in the language of "goods vehicle" as appearing in the old Act and "goods carriage" in the Act is of significance. A bare reading of the provisions makes it clear that the legislative intent was to prohibit goods vehicle from carrying any passenger. This is clear from the expression "in addition to passengers" as contained in the definition of "goods vehicle" in the old Act. The position becomes further clear because the expression used is "goods carriage" is solely for the carriage of "goods". Carrying of passengers in a goods carriage is not contemplated in the Act. There is no provision similar to clause (ii) of the proviso appended to Section 95 of the old Act prescribing requirement of insurance policy. Even Section 147 of the Act mandates compulsory coverage against death of or bodily injury to any passenger of "public service vehicle". The proviso makes it further clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein Their Lordships held that under the Motor Vehicles Act, 1988 all insurance policies covering third-party risks are not required to exclude gratuitous passengers in the vehicle though vehicle is of any type or class. In view of the proposition of law laid down by the Supreme Court in the decision stated supra, these appeals are dismissed. No costs." 16. Following the aforementioned principles, the impugned judgment cannot be sustained which is set aside. The appeals are allowed accordingly." 15.1. With reference to the accident that took place on 24.12.1993 (prior to 1994 amendment) in SLP(C) Nos. 7241-43/2003, this Court in Cholleti Bharatamma2 in paragraphs 17,18,19,20 and 21 (Pgs. 430-431) held as under : "17. In the aforementioned case, accident took place on 24- 12-1993. The respondents herein filed a claim petition claiming compensation for the death of one Kota Venkatarao who had allegedly paid a sum of Rs. 20 for travelling in the lorry. The Tribunal held: "In the absence of rebuttal evidence from the deceased and some others who travelled in the said vehicle in the capacity of owner of the luggage which was carried by them at the time of accident, it cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nner engaged on the vehicle that met with an accident but he was employed as a driver in another vehicle owned by M/s. P.L. Construction Company. The insured (owner of the vehicle) got insurance cover in respect of the subject goods vehicle for driver and cleaner only and not for any other employee. There is no insurance cover for the spare driver in the policy. As a matter of law, the claimant did not cease to be a gratuitous passenger though he claimed that he was a spare driver. The insured had paid premium for one driver and one cleaner and, therefore, second driver or for that purpose 'spare driver' was not covered under the policy. 17. The High Court misconstrued the proviso following sub-section (1) of Section 147 of the 1988 Act. What is contemplated by proviso to Section 147 (1) is that the policy shall not be required to cover liability in respect of death or bodily injury sustained by an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923. The claimant was admittedly not driving the vehicle nor he was engaged in driving the said vehicle. Merely because he was travelling in a cabin would no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the owner or driver of the vehicle involved in the accident inasmuch as can be resolved by the Tribunal in such a proceeding." 21. The above position has been followed by this Court in National Insurance Co. Ltd. v. Challa Bharathamma & Ors. (2004) 8 SCC 517, wherein this Court in paragraph 13 (Pg. 523) observed as under: "13. The residual question is what would be the appropriate direction. Considering the beneficial object of the Act, it would be proper for the insurer to satisfy the award, though in law it has no liability. In some cases the insurer has been given the option and liberty to recover the amount from the insured. For the purpose of recovering the amount paid from the owner, the insurer shall not be required to file a suit. It may initiate a proceeding before the executing court concerned as if the dispute between the insurer and the owner was the subject-matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer. Before release of the amount to the claimants, owner of the offending vehicle shall furnish security for the entire amount which the insurer will pay to the claimants. The offending vehicle shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d party risks. In Baljit Kaur's case (supra) which is a judgment rendered by three Hon'ble Judges, such a direction was made in the special circumstances noticed by the Court in paragraph 21 of the report. There are observations in Oriental Insurance Co. Ltd. Vs. Ranjit Saikia and Ors. (2002) 9 SCC 390 which may support the contention of the petitioners before us." 24. In National Insurance Company Ltd. v. Parvathneni & Another [SLP(C)....CC No. 10993 of 2009], the following two questions have been referred to the larger Bench for consideration: (1) If an Insurance Company can prove that it does not have any liability to pay any amount in law to the claimants under the Motor Vehicles Act or any other enactment, can the Court yet compel it to pay the amount in question giving it liberty to later on recover the same from the owner of the vehicle. (2) Can such a direction be given under Article 142 of the Constitution, and what is the scope of Article 142? Does Article 142 permit the Court to create a liability where there is none?" 25. The pendency of consideration of the above questions by a larger Bench does not mean that the course that was followed in Baljit Kaur5 and Challa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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