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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 ..... icle against third party risks, direction can be sought against insurer to discharge liability under award first and then recover same from owner – Insurance company has already deposited entire awarded amount and said amount was invested in fixed deposit account – Appeal disposed – Decision of National Insurance Co. v. Roshan Lal and Another and New India Assurance Co. Ltd. v. Asha Rani [2002 (12) TMI 598 - SUPREME COURT] followed – Decided in favour of Appellant. - CIVIL APPEAL NO. 5 OF 2013 (Arising out of SLP(C) No. 20127 of 2011) - - - Dated:- 3-1-2013 - LODHA, RAJENDRA MAL AND DAVE, ANIL R., JJ. JUDGMENT R.M. LODHA, J. Leave granted. 2. The appellant, insurance company, is in appeal by special leave against the judgment and order dated 23.03.2011 whereby the Division Bench of the Kerala High Court allowed the review petition and reviewed its order dated 09.11.2010 and held that the insurance company was liable to pay compensation in sum of ₹ 2,88,000/- with 9% interest thereon to the claimant awarded by the Motor Accident Claims Tribunal in its award dated 23.07.2002. 3. The question of law that arises in this appeal is as to whether having rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la High Court. The Division Bench of that Court by relying upon decisions of this Court in New India Assurance Co. Ltd. v. Asha Rani and others (2003) 2 SCC 223 and National Insurance Co. Ltd. v. Cholleti Bharatamma and Others (2008) 1 SCC 423 allowed the appeal of the insurer vide judgment and order dated 09.11.2010. The Division Bench held that insurer was not liable as gratuitous passengers travelling in a goods vehicle were not covered under the policy and the claimant shall be entitled to recover the awarded amount from the owner or driver of the vehicle. 8. The claimant sought review of the order dated 09.11.2010 and, as noted above, by the impugned order that review application has been allowed. While allowing the review application, the Division Bench held as under: It has already been noticed that the petitioner was admittedly a spare driver of the vehicle. It may be true that he was not driving the vehicle at the relevant point of time; but he was directed to go to the worksite by his employer as a spare driver in the vehicle. Therefore, by no stretch of imagination, it can be said that the petitioner was not travelling in the vehicle in the course of his employmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place. (2) Subject to the proviso to sub-section (1), a policy of insurance referred to in sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely- (a) save as provided in clause (b), the amount of liability incurred; (b) in respect of damage to any property of a third party, a limit of rupees six thousand: Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier. (3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Section 147 of the 1988 Act prior to its amendment in 1994 and after its amendment in 1994 and held in paragraph 9 of the Report (Pgs. 231-232) as follows : In Satpal case [(2000) 1 SCC 237] the Court assumed that the provisions of Section 95(1) of the Motor Vehicles Act, 1939 are identical with Section 147(1) of the Motor Vehicles Act, 1988, as it stood prior to its amendment. But a careful scrutiny of the provisions would make it clear that prior to the amendment of 1994 it was not necessary for the insurer to insure against the owner of the goods or his authorised representative being carried in a goods vehicle. On an erroneous impression this Court came to the conclusion that the insurer would be liable to pay compensation in respect of the death or bodily injury caused to either the owner of the goods or his authorised representative when being carried in a goods vehicle the accident occurred. If the Motor Vehicles Amendment Act of 1994 is examined, particularly Section 46, by which the expression injury to any person in the original Act stood substituted by the expression injury to any person including owner of the goods or his authorised representative carried in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nion that the meaning of the words any person must also be attributed having regard to the context in which they have been used i.e. a third party . Keeping in view the provisions of the 1988 Act, we are of the opinion that as the provisions thereof do not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured for any passenger travelling in a goods vehicle, the insurers would not be liable therefor. 27. Furthermore, sub-clause (i) of clause (b) of sub-section (1) of Section 147 speaks of liability which may be incurred by the owner of a vehicle in respect of 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, whereas sub-clause (ii) thereof deals with liability which may be incurred by the owner of a vehicle against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place. 28. An owner of a passenger-carrying vehicle must pay premium for covering the risks of the passengers. If a liability other than the limited liability provided for under the Act is to be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] was not correctly decided. That being the position, the Tribunal and the High Court were not justified in holding that the insurer had the liability to satisfy the award. 15. In Cholleti Bharatamma2, this Court was concerned with the question about the liability of the insurance company to indemnify the owner of the vehicle in respect of death of passengers travelling in goods vehicle. The Court considered the applicability of Section 147 as it originally stood under 1988 Act and after its amendment in 1994. In relation to the accident that occurred on 16.12.1993 i.e., prior to the 1994 amendment in SLP(C) 7237-39/2003, this Court set aside the judgment of the High Court and allowed the appeal of the insurance company by observing as follows (Pg. 430): 14. The date of accident being 16-12-1993, the amendment carried out in the year 1994 in Section 147 of the Motor Vehicles Act would not be applicable. 15. The Motor Accidents Claims Tribunal, Nalgonda, by a judgment and award dated 13-11-1997 awarded various sums overruling the defence of the appellant herein that they were unauthorised passengers. The High Court, however, by reason of the impugned judgment, relying on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the cabin of the vehicle. 20. In this case, the High Court had proceeded on the basis that they were gratuitous passengers. The admitted plea of the respondents themselves was that the deceased had boarded the lorry and paid an amount of ₹ 20 as transport charges. It has not been proved that the deceased was travelling in the lorry along with the driver or the cleaner as the owner of the goods. Travelling with the goods itself does not entitle anyone to protection under Section 147 of the Motor Vehicles Act. 21. For the reasons aforementioned, this appeal is allowed. 16. In the present case, Section 147 as originally existed in 1988 Act is applicable and, accordingly, the judgment of this Court in Asha Rani1 is fully attracted. The High Court was clearly in error in reviewing its judgment and order delivered on 09.11.2010 in review petition filed by the claimant by applying Section 147(1)(b)(i). The High Court committed grave error in holding that Section 147(1)(b)(i) takes within its fold any liability which may be incurred by the insurer in respect of the death or bodily injury to any person. The High Court also erred in holding that the claimant was travelling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under : 21. The upshot of the aforementioned discussions is that instead and in place of the insurer the owner of the vehicle shall be liable to satisfy the decree. The question, however, would be as to whether keeping in view the fact that the law was not clear so long such a direction would be fair and equitable. We do not think so. We, therefore, clarify the legal position which shall have prospective effect. The Tribunal as also the High Court had proceeded in terms of the decision of this Court in Satpal Singh. The said decision has been overruled only in Asha Rani. We, therefore, are of the opinion that the interest of justice will be subserved if the appellant herein is directed to satisfy the awarded amount in favour of the claimant, if not already satisfied, and recover the same from the owner of the vehicle. For the purpose of such recovery, it would not be necessary for the insurer to file a separate suit but it may initiate a proceeding before the executing court 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. We have issued the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Report (pg. 250), the Court observed as follows: 15. For the reasons aforementioned, civil appeal arising out of SLP (C) No. 10694 is allowed and civil appeal arising out of SLP (C) No. 9910 of 2006 is dismissed. If the amount deposited by the Insurance Company has since been withdrawn by the first respondent, it would be open to the Insurance Company to recover the same in the manner specified by the High Court. But if the same has not been withdrawn the deposited amount may be refunded to the Insurance Company and the proceedings for realisation of the amount may be initiated against the owner of the vehicle. In the facts and circumstances of the case, however, there shall be no order as to costs. 23. We are informed that by an order dated 19.01.2007 in National Insurance Co. v. Roshan Lal and Another [SLP (C) No. 5699/2006] in light of the argument raised before a two-Judge Bench that the direction ought not to be issued to the insurance company to discharge the liability under the award first and then recover the same from the owner, the matter has been referred to the larger Bench by the following order: Having regard to the submissions urged before us, we are of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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