MAC.APP./533/2009 of ORIENTAL INSURANCE COMPANY LTD Vs KAVITA SINGAL & ORS

* IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: 9[th] January, 2012

Pronounced on: 13[th] January, 2012

+ MAC APP. 533/2009

ORIENTAL INSURANCE CO. LTD. ..... Appellant Through: Ms. Manjusha Wadhwa, Adv.

versus

KAVITA SINGAL & ORS ..... Respondents

Through: Mr. R.M. Bagai, Adv. for R-1 to R-3.

CORAM:

HON'BLE MR. JUSTICE G.P.MITTAL

G. P. MITTAL, J.

J U M N T

1.The Appellant Oriental Insurance Co. Ltd. impugns the award dated 20.08.2009 passed by the Motor Accident Claims Tribunal whereby compensation of ` 1,00,000/- as personal accident insurance cover was awarded in favour of the Respondents No.1 to 3 who are the legal heirs of deceased Vikas Singhal. He died in an accident, which took place on 19.11.2006. The finding that the accident was caused on account of deceased’s own negligence is not disputed as the Respondents No.1 to 3 have not filed any appeal or cross-objection against the judgment. The Tribunal relying on the judgment of the Supreme Court in Oriental Insurance Co. Ltd. v. Rajni Devi & Ors., (2008) 5 SCC 736 and Ningamma & Anr. dated 20.08.2009 passed by the Motor Accident Claims Tribunal whereby compensation of ` 1,00,000/- as personal accident insurance cover was awarded in favour of the Respondents No.1 to 3 who are the legal heirs of deceased Vikas Singhal. He died in an accident, which took place on 19.11.2006. The finding that the accident was caused on account of deceased’s own negligence is not disputed as the Respondents No.1 to 3 have not filed any appeal or cross-objection against the judgment. The Tribunal relying on the judgment of the Supreme Court in Oriental Insurance Co. Ltd. v. Rajni Devi & Ors., (2008) 5 SCC 736 and Ningamma & Anr.

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Vs. United India Insurance Co. Ltd., (2009) 13 SCC 710, held that the deceased stepped into the shoes of the owner i.e. Respondent No.4 Vineet Singhal and was, therefore, entitled to compensation of ` 1,00,000/- as personal accident insurance cover.

In my view the Tribunal misinterpreted the judgment in Ningamma (supra), it was nowhere laid down in Ningamma that –a personal accident cover made in respect of the owner driver would extend to anybody driving the two wheeler covered by the policy of insurance. Ningamma and Rajni Devi (supra) were in the context that compensation under Section 163 (A) cannot be claimed by an owner or anybody driving the vehicle with the permission of the owner (not being his employee) against his own insurer as in respect of 3[rd] party risk, the liability of insurance company is to indemnify the owner. The relevant portion of the report in Nigamma (supra) is extracted hereunder:

“18. However, in the facts of the present case, it was forcefully argued by the counsel appearing for the respondent that the claimants are not the “third party”, and therefore, they are not entitled to claim any benefit under Section 163-A of the MVA. In support of the said contention, the counsel relied on the decision of this Court in Oriental Insurance Co. Ltd. v. Rajni Devi (2008) 5 SCC 736 and New India Assurance Co. Ltd. v. Sadanand Mukhi, (2009) 2 SCC 417.

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19. In Oriental Insurance Co. Ltd. v. Rajni Devi (supra) wherein one of us, namely, Hon’ble S.B. Sinha, J. was party, it has been categorically held that in case where third party is involved, the liability of the insurance company would be unlimited. It was also held in the said decision that 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 claimant against the insurance company would depend upon the terms thereof.

xxxxx xxxxx xxxxx

21. In our considered opinion, the ratio of the decision in Oriental Insurance Co. Ltd. v. Rajni Devi (supra) is clearly applicable to the facts of the present case. In the present case, the deceased was not the owner of the motorbike in question. He borrowed the said motorbike from its real owner. The deceased cannot be held to be an employee of the owner of the motorbike although he was authorized to drive the said vehicle by its owner and, therefore, he would step into the shoes of the owner of the motorbike. We have already extracted Section 163-A of the MVA hereinbefore. bare perusal of the said provision would make it explicitly clear that persons like the deceased in the present case would step into the shoes of the owner of the vehicle.

22. In case wherein the victim died or where he was permanently disabled due to an accident arising out of the aforesaid motor vehicle in that event the liability to make payment of the compensation is on the insurance company or the owner, as the case may be as provided under Section 163-A. But if it is proved that the driver is

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the owner of the motor vehicle, in that liability to pay the same is on him. This proposition is absolutely clear on reading of Section 163-A of the MVA. Accordingly, the legal representatives of the deceased who have stepped into the shoes of the owner of the motor vehicle could not have claimed compensation under Section 163-A of the MVA.

23. When we apply the said principle into the facts of the present case we are of the view that the claimants were not entitled to claim compensation under Section 163-A of the MVA and to that extent the High Court was justified in coming to the conclusion that the said provision is not applicable to the facts and circumstances of the present case.”

perusal of the insurance policy placed on record shows that an additional premium of ` 50/- was paid for owner-driver under GR-36A. An order dated 11.12.2009 was passed by this Court (in this case); relevant portion of the order is extracted hereunder: -

“GR.36. Personal Accident (PA) Cover under Motor Policy

(not applicable to vehicles covered under Sections E, and of Tariff for Commercial Vehicles)

A. Compulsory Personal Accident Cover for Owner-Driver

Compulsory Personal Accident Cover shall be applicable under both Liability Only and Package policies. The owner of insured vehicle holding an

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effective driving licence is termed as Owner-Driver for the purposes of this section.

Cover is provided to the Owner-Driver whilst driving the vehicle including mounting into/ dismounting from or travelling in the insured vehicle as co-driver.

NB.: This provision deals with Personal Accident cover and only the registered owner in person is entitled to the compulsory cover where he/ she holds an effective driving licence. Hence compulsory PA cover cannot be granted where vehicle is owned by company, partnership firm or similar body corporate or where the owner-driver does not hold an effective driving licence. In all such cases, where compulsory PA cover cannot be granted, the additional premium for the compulsory P.A. cover for the owner-driver should not be charged and the compulsory P.A. cover provision in the policy should also be deleted. Where the owner-driver owns more than one vehicle, compulsory PA cover can be granted for only one vehicle as opted by him/ her.

The scope of the cover, Capital Sum Insured (CSI) and the annual premium payable under this section are as under: -

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B. Optional Personal Accident Cover for persons other than Owner-Driver

The cover under this section is limited to maximum Capital Sum Insured (CSI) of ` 2 lacs per person.

Cover is available only in respect of the following persons: -

1. Private Cars including three wheelers rated as Private cars and motorized two wheelers with or without side car (not for hire or reward): For insured or any named person other than the paid driver and cleaner.

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–Endorsement IMT 15 is to be used

2. Private Cars, three wheelers rated as Private cars and Motorsied Two Wheelers (not used for hire or reward) with or without side car: For unnamed passengers limited to the registered carrying capacity of the vehicle other than the insured, his paid driver and cleaner.

–Endorsement IMT 16 is to be used.

3. In respect of all classes of vehicles: For paid drivers, cleaners and conductors.

4. Motorised Two Wheelers with or without side car (used for hire or reward): For unnamed hirer/ driver.

–Endorsement IMT 1 is to be used.

The scope of the cover, Capital Sum Insured and the annual premium payable under this section would be as under: -

DESCRIPTION OF % OF PREMIUM FOR EVERY BENEFITS CAPITAL UNIT OF CSI OF `SUM 10,000/- OR PART INSURED THEREOF (IN `) Pvt. Car Mot. Com. Two Veh. Wheeler i) Death only100% 5 7 6 ii) Loss of Two Limbs 100% 5 7 6 or sight of two eyes or one limb and sight of one eye. ii) Loss of one Limb 50% 5 7 6 or Sight of one eye. iii) Permanent Total 100% 5 7 6 Disablement from injuries other than named above.

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4.It is clearly mentioned in India Motor Tariff under GR-36 that this personal accident cover is available to the owner of the insured vehicle holding an effective driving licence. Anybody driving the vehicle with or without permission of the owner cannot be taken as owner-driver. The policy of insurance company is contractual. The compensation of ` 1,00,000/- was not payable to Respondents No.1 to 3. this personal accident cover is available to the owner of the insured vehicle holding an effective driving licence. Anybody driving the vehicle with or without permission of the owner cannot be taken as owner-driver. The policy of insurance company is contractual. The compensation of ` 1,00,000/- was not payable to Respondents No.1 to 3.

5.The impugned order cannot be sustained and the Insurance Company cannot be made liable to pay the compensation. Company cannot be made liable to pay the compensation.

6.The Appeal is allowed and the impugned order is set-aside. The amount of ` 1,00,000/- along with interest, if any, and the statutory amount shall be refunded to the Appellant Oriental Insurance Co. Ltd. amount of ` 1,00,000/- along with interest, if any, and the statutory amount shall be refunded to the Appellant Oriental Insurance Co. Ltd.

JANUARY 13, 2012 hs

(G.P. MITTAL) JUDGE JUDGE

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