2013 (1) TMI 747 - SC - Indian Laws

Insurance company not liable for injuries to passenger, directed to pay; aligns with precedents.

The Supreme Court held that the insurance company was not liable under the policy for the claimant's injuries as he was considered a gratuitous passenger. ... Liability of insurer towards gratuitous passengers – Payment of compensation – Held that :- as per decision of High court in similar case, Insurer was not liable for paying compensation to owner of goods or his authorised representative on being carried in goods vehicle when that vehicle meets with accident and owner of goods or his representative dies or suffers any bodily injury –Therefore High Court was clearly in error in holding that Section 147(1)(b)(i) takes within its fold any liability which may be incurred by insurer in respect of death or bodily injury to any person – High Court also erred in holding that claimant was travelling in vehicle in course of his employment since claimant was spare driver in vehicle and was not driving at relevant time – There was no insurance cover for spare driver in policy – Merely because claimant was travelling in cabin would not make his case different from any other gratuitous passenger – However, where owner has insured his vehicle 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. Issues Involved:1. Liability of the insurance company under the Motor Vehicles Act, 1988 for a bodily injury to a claimant traveling in a goods vehicle as a spare driver.2. Applicability of Section 147 of the Motor Vehicles Act, 1988 before and after the 1994 amendment.3. The High Court's review of its initial judgment and the interpretation of Section 147(1)(b)(i).4. Direction for the insurance company to satisfy the awarded amount and recover it from the vehicle owner.Detailed Analysis:1. Liability of the Insurance Company:The core issue is whether the insurance company is liable to pay compensation for the bodily injury caused to the claimant, who was traveling in a goods vehicle as a spare driver. The claimant was employed as a driver in another vehicle owned by the same owner. The insurance policy covered the driver and cleaner of the vehicle but did not explicitly cover a spare driver.2. Applicability of Section 147:Section 147 of the Motor Vehicles Act, 1988, as it stood on the date of the accident (16.10.1993), was crucial. The section mandates insurance coverage against liability for death or bodily injury to any person or damage to third-party property. However, it does not explicitly cover gratuitous passengers in goods vehicles. The 1994 amendment added the expression 'including owner of the goods or his authorised representative carried in the vehicle,' clarifying that the insurer's liability extends to such persons.The Supreme Court in New India Assurance Co. Ltd. v. Asha Rani and others, and subsequent cases, held that prior to the 1994 amendment, the insurer was not liable for gratuitous passengers in goods vehicles. This interpretation was reaffirmed in various judgments, including Oriental Insurance Co. Ltd. v. Devireddy Konda Reddy and Others, and Cholleti Bharatamma.3. High Court's Review:The High Court initially held that the insurer was not liable, relying on decisions like Asha Rani. However, upon review, it reversed its decision, holding that the claimant was traveling in the course of his employment as a spare driver, thereby falling under Section 147(1)(b)(i). The Supreme Court found this interpretation erroneous, emphasizing that the claimant was not driving the vehicle at the time of the accident and was not covered under the policy as a spare driver.4. Direction for the Insurance Company:In National Insurance Co. Ltd. v. Baljit Kaur and others, the Supreme Court allowed the insurer to satisfy the awarded amount and recover it from the vehicle owner, considering the claimant's prolonged suffering and the peculiar facts of the case. This approach was followed in subsequent cases, including National Insurance Co. Ltd. v. Challa Bharathamma & Ors. and National Insurance Company Limited v. Kaushalaya Devi and Others.Conclusion:The Supreme Court concluded that the insurance company was not liable under the policy for the claimant's injuries as he was a gratuitous passenger. However, considering the claimant's prolonged disability and delay in receiving compensation, the Court directed the insurance company to pay the awarded amount and recover it from the vehicle owner. This decision aligns with the Court's precedents in similar cases, ensuring the claimant receives timely compensation while allowing the insurer to seek recovery from the owner.