[CASE NUMBER] IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL NO. 1410 of 2009 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE [ENTITY] 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the [ACT] or any order made thereunder ? [ENTITY] Appellant(s) Versus [ENTITY] & 1 Defendant(s) Appearance: MR [ENTITY], ADVOCATE for the Appellant(s) No. 1 MR [ENTITY], ADVOCATE for the Defendant(s) No. 2 RULE SERVED for the Defendant(s) No. 1 CORAM: HONOURABLE MR.JUSTICE [ENTITY] Date : 07/04/2017 CAV JUDGMENT
1. Heard learned advocate Mr. [ENTITY] for the appellant and learned advocate Mr. [ENTITY] for the HC-NIC Page 1 of 16 Created On Tue Aug 15 19:13:54 IST 2017 respondent. Perused the record and proceedings, which includes oral, as well as, documentary evidence produced before the tribunal.
2. The appellant herein is original claimant and victim of road accident, whereas respondent No.1 is driver-cum-owner of the vehicle in question and respondent No.2 is insurer of the vehicle in question.
3. This appeal is mainly restricted on the point of liability of insurance company only and, thereby, when there is no dispute with regard to incident and privity of contract between respondent Nos.1 and 2 in the form of insurance policy, so also there is no issue raised by either of the parties regarding quantum of compensation which is determined by the tribunal by the impugned judgment, except for referring the details, which is necessary to decide the liability of insurance company, other details are not material and, therefore, not reproduced or discussed herein, more particularly when all such information is well described, both, in pleadings and impugned award.
4. It is undisputed fact that appellant was injured in vehicular accident for which, tribunal has awarded a compensation of Rs.1,17,950/- with 7.5% interest. However, by impugned judgment and award dated 02.02.2008, the MACT (Auxilliary) of Gondal Camp at Dhoraji has in [CASE NUMBER] while awarding HC-NIC Page 2 of 16 Created On Tue Aug 15 19:13:54 IST 2017 aforesaid amount in favour of the appellant, exonerated the insurance company from its liability of making such payment on the ground that insurance company is not liable to pay compensation when appellant - victim was travelling in a goods vehicle.
5. It is undisputed fact that vehicle being delivery van - Chhakda bearing registration No. GRP 4315 is a goods vehicle i.e. not a passenger vehicle. It is also undisputed fact that respondent No.2 insurance company has issued an insurance policy describing the vehicle as delivery van and it has an endorsement in it prescribing limits of liability by following additional line, typed over and above the prescribed form of policy. Therefore, those lines are material to be recollected here, which reads thus;
"The Policy Cover the use only under a permit within the meaning of [ACT] or such a carriage falling under [SECTION] of [ACT]."
5.1 Therefore, one thing is certain that such insurance policy which is effective from 19.01.2001 till 18.01.2002 is subject to the provisions of the [ACT] as applicable on the date of issuance of such policy. Therefore, if we peruse the [ACT], [SECTION] of the act provides for requirement of the policy and limits of liability which reads as under;
"147. Requirement 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 authorised insurer; and HC-NIC Page 3 of 16 Created On Tue Aug 15 19:13:54 IST 2017
(b) insurers 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, including owner of the goods or his authorised representative carried in the vehicle 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 of the vehicle in a public place;
Provided that a policy shall not be required -
(i) to cover liability in respect of the death, arising out of and in the course of this employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the [ACT], in respect of the death of, or bodily injury to, any such employee - (a) engaged in driving the vehicle, or (b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods carriage, being carried in the vehicle, or (ii) to cover any contractual liability.
Explanation. - For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of 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 pers on 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. HC-NIC Page 4 of 16 Created On Tue Aug 15 19:13:54 IST 2017 (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) xxx xxx xxx (4) xxx xxx xxx (5) xxx xxx xxx"
The text of Sub Section (3) to (5) are not much material for this appeal and hence it is not reproduced.
5.2 Therefore, considering the date of incident being 15.04.2001 and period of policy between the year 2001 and 2002, the amended provisions of [SECTION] is material, whereby the phrase "injury to any person" has been replaced by the phrase "injury to any person, including owner of the goods or his authorised representative carried in the vehicle with effect from 14.11.1994.
6. Therefore, now in all policies after 14.11.1994, the liability of HC-NIC Page 5 of 16 Created On Tue Aug 15 19:13:54 IST 2017 insurance company is not limited to 3rd person only but it would include owner of the goods or his authorised representative carried in the vehicle though, it is not necessary for the insurance company to include the liability under the [ACT] for the employees engaged either by the owner of the vehicle or owner of the goods. Thereby, for such liability, insurance company may charge extra premium but for the insurance to the owners of the goods or his authorised representative carried in vehicle, insurance company shall stand liable even under Act policy because the requirement of the policy confirms that the policy for insurance must be a policy which insures the person including the owner of the goods or his authorised representative carried in the vehicle.
7. There is reason or substance for such amendment and clarity in the statute itself because though the phrase "injury to any person" generally includes every person except driver being tort-
feasor and owner of the vehicle being party to the contract of insurance company, there are different views at different point of time to exclude several such person.
8. It would be appropriate to recollect the situation before the enactment of [ACT] wherein insurance companies were able to convince the Court for even occupation of the private vehicles were not insured though, it was not the situation and, therefore, even after a decision of the Honourable HC-NIC Page 6 of 16 Created On Tue Aug 15 19:13:54 IST 2017 Supreme Court in favour of the insurance company the Tariff Advisory Committee has to direct the insurance companies to amend the policy. To clarify this position it would be appropriate to recollect following observations of the decision in case of [PRECEDENT]
10. The question that arises for consideration now is regarding the extent of liability of the Insurance Company. The Insurance Company has filed a joint written statement and has adopted the defence raised by the car owner and has not pleaded any special defence. It is, however, contended by learned counsel for the Insurance company should be permitted to raise the defence that [ENTITY] was a gratuitous passenger and in view of the decision of the Supreme court in [PRECEDENT] the Insurance Company was not liable in regard to this claim. The learned Counsel for the claimants as also learned Counsel for the car owner have opposed the request made by the counsel for the Insurance Company in this behalf. The point not involve any mixed question of law and facts. On admitted facts it is established that [ENTITY] was travelling in the Car in his capacity as a friend of [ENTITY]. It is therefore clear that he was a gratuitous passenger. Since the law on the point has been settled, it would not be proper on our part to refuse the permission sought by the Insurance Company to raise this point. Of course this plea was not raised in the trial Court and it does not arise out of the pleadings. But then there is no point in insisting on a formal amendment of the plaint in view of the fact that admittedly [ENTITY] was a gratuitous passenger and the legal position is also not in dispute. Under the circumstances we are of the opinion that the Insurance Company cannot be prevented from advancing this point at the stage of appeal. It, however, does not mean that the Insurance Company is wholly absolved of the liability. Learned Counsel for the claimants and learned counsel for the car ownder have relied on [PRECEDENT], in support of their contention that the case would be covered by [SECTION] of the [ACT] and the liability of the Insurance Company to the extent of Rs.15,000/ as stipulated in the Policy of Insurance would remain. The Insurance Policy is a comprehensive policy as HC-NIC Page 7 of 16 Created On Tue Aug 15 19:13:54 IST 2017 per Ex.145 Clause I M. R. 5 provides="In consideration of the payment of an additional premium it is hereby understood and agreed that the Company undertakes to pay compensation on the scale provided below for bodily injury as herein after defined sustained by any passenger other than the insured and/or his paid driver attendant or cleaner and/or his paid driver attendant or cleaner and/or a person in the employee of the insured coming within the scope of the [ACT] and subsequent amendments of the said Act and engaged in and upon the service of the insured at the time such injury is sustained whilst mounting into dismounting from the travelling in but not driving the Motor Car and and caused by ciolent accidental external and visible means which independently of any other cause shall within three calender months of the occurrence of such injury result in (1) Death Scale of compensation (2) Rs.15,000.00
11. The aforesaid clause is precisely in the same terms as the policy in the case of the Oriental Fire & General Insurance Co. Ltd. (Supra) and in view of the ratio of the said decision the liability of the Insurance Company to this extent cannot be disputed. Under the circumstances we hold the insurance Company liable to the extent of Rs.15,000/-. But, the matter does not rest there. The learned Counsel for the claimants has placed on record a communication issued by the Tariff Advisory committee, Bombay Regional Committee to the Insurers carrying on General Insurance Business in the Bombay Region Only. It is in the following terms;
Tariff Advisory Committee Bombay Regional Committee Circular M.V.No.1 of 1978 Bombay 17th March
INSURANCE COMPANY'S LIABILITY IN RESPECT OF GRATUITOUS PASSNEDGERS CONVEYED IN A PRIVATE CAR-STANDARD FROM FOR PRIVATE CAR COMPREHENSIVE POLICY -SECTION II - LIABILITY TO THIRD PARTIES.
I am directed to inform Insurance that advices have been received from the Tariff Advisory Committee to the effect that since the industry had all these years been holding the view liability the same practice should continue. In order to make this intention clear, Insurers are requested to amend [SECTION] of the [ACT] by incorporating the following words after the words "death of or bodily injury to any person" appearing therein including occupants carried in the motor car provided HC-NIC Page 8 of 16 Created On Tue Aug 15 19:13:54 IST 2017 that such occupants are not carried for hire or reward." I am accordingly to request Insurances to make the necessary amendment on sheet 38 of the [ACT] pending reprinting of the relevant sheet.
All existing policies may be deemed to incorporate the above amendment automatically as the above decision is being brought is to force with effect from 25th March 1977.
Regional Secretary It is agreed by Counsel that in view of this policy decision, the Insurance company should make full payment in the present case also, in disregard of the fact that the deceased was a gratuitous passenger. Taking into consideration the spirit underlying the aforesaid instructions issued by the Tariff Advisory Committee, all the insurers would be expected to adhere to the policy decision in its true spirit. The policy decision has to be evolved by reason of the fact that for years the insurance were considered to be liable event in cases of gratuitous passengers. The situation came to be altered by cirture of the decision in [PRECEDENT]'s case (supra) rendered on 25th March 1977. the insurance business having been nationalized it is but reasonable to expect the insurers not to take advantate of the altered situation and to continue to discharge their obligation as hitherio. No doubt the aforesaid instructions cannot be enforced in a MACT proceedings in the sense that we cannot direct that the Insurance Company shall reimburse the insured fully or that the full decree against the insured may be executed against the Insurance company as if it was a decree passed against it. We are given to understand that the insurance Companies are discharging their obligations as hitherto notwithstanding [ENTITY]'s case. If such is the policy that is being followed in other cases no discrimination can be made on principle in the present case. There cannot be a selective application of the policy embodied in the aforesaid resolution. If such a selective application were to be countenanced, it would violate the mandage of [SECTION] of the [ACT]. We have, therefore, no doubt that the insurance company will follow the same policy uniformaly and will not clutch at this defence in the present case if the policy decision contained in the aforesaid communication is being adhered to in other cases. In case of necessity learned counsel for the claimants will be at liberty to apply to the learned counsel for the claimants will be at liberty to apply the insurance company and make a request for implementing the aforesaid policy decision in the present case. It will be open to him to forward a copy of this judgment in support of this request."
HC-NIC Page 9 of 16 Created On Tue Aug 15 19:13:54 IST 2017
9. If we peruse the [SECTION] of the [ACT] which are framed under the Act it becomes clear that there is no absolute ban or restriction to carry any person in a goods vehicle. The relevant portion of [SECTION] reads as under:
"122. Carriage of persons in goods carriages.-
(1) Subject to the provisions of this rule, no person shall be carried in a goods carriage:
Provided that the owner or the hirer or a bonafide employee of the owner or the hirer of the vehicle carried free of charge, or a police officer in uniform, traveling on duty, may be carried in a goods carriage:
Provided further that the total number of persons so carried shall not be more than -
(i) one, in case of a light motor vehicle having gross vehicle weight less than 900 kilograms;
(ii) three, in case of any other light motor vehicle;
(iii) five, in case of any medium goods vehicle;
(iv) seven, in case of any heavy goods vehicle.
Provided further that the provision of second proviso to this sub-rule shall not apply in case where integral seating arrangements providing a reasonably comfortable seating space for each person has been made in the goods carriage for more than the number specified in the second proviso. (2) Notwithstanding anything contained in [SECTION] but subject to the provisions of [SECTION], a Regional Transport Authority - 80 - may, by an order in writing, permit that a large number of persons may be carried in the goods carriage on condition that no goods at all are carried in addition to such persons and such persons are carried free of charge in connection with the work for which the vehicle iis used and that such other conditions as may be specified by the HC-NIC Page 10 of 16 Created On Tue Aug 15 19:13:54 IST 2017 Regional Transport Authority are observed and where the vehicle is required to be covered by permit the conditions of the permission aforesaid are also made conditions of the permit.
(3) Xxx xxx xxx (4) xxx xxx xxx (5) xxx xxx xxx (6) xxx xxx xxx"
9.1 The [SECTION] are not relevant and hence not reproduced. The bare perusal of above two provisions make it clear that travelling in goods vehicle is not an absolute ban in the Act or in the Rules and in fact, after the amendment even statutory insurance policy shall include risk for injury to any person including owner of the goods or its representative carried in the vehicle.
10. Therefore, all the judgments cited by the respondent - insurance company are of no relevance when they are practically dealing with the requirement of policy before the [ACT] in [SECTION] of the Act and, therefore, their reference is not material.
11. Therefore, now what is required to be scrutinized is only to the effect that whether a claimant was travelling in the vehicle as a gratuitous passenger or paid passenger or he was travelling either as an owner of the goods to be carried in the vehicle. HC-NIC Page 11 of 16 Created On Tue Aug 15 19:13:54 IST 2017
12. The scrutiny of record and evidence makes it clear that there is more than one piece of evidences to prove that appellant was travelling in the vehicle in question either as owner of the goods or at least as authorised representative of the owner of the goods to be carried in such vehicle. To name all such evidence we have to start with the deposition of the appellant himself at exhibit 23 wherein he has stated that he has to carry his own bricks from Motagundana village to Dhoraji and since he has to load and unload the bricks at both the ends, he was travelling in the rickshaw as owner of the goods. Though he was cross examined on such issue there is no evidence for rebuttal to prove that he was not travelling as owner of the goods. Therefore, only few suggestions in the cross examination that there was no evidence to prove him as owner of the goods would not change the situation more particularly, when other documentary evidence which is otherwise admitted by the insurance company there is disclosure by independent witness that appellant was travelling in the vehicle as an owner of the goods.
12.1 There are several other statements at exhibit 37 and 38, wherein other witnesses namely [ENTITY] and [ENTITY] have also categorically disclosed that appellant was travelling in the rickshaw for carrying bricks from village Gundala. At exhibit 40 [ENTITY], father of the appellant and exhibit 42 [ENTITY], HC-NIC Page 12 of 16 Created On Tue Aug 15 19:13:54 IST 2017 driver cum owner of the vehicle in question has also disclosed at the relevant time that appellant was travelling in the vehicle for carrying bricks as owner of the goods. The cogent reading of entire evidence categorically confirms that appellant was travelling in vehicle as owner of his own bricks even if it is believed that bricks are to be brought for his father [ENTITY]. Therefore, one thing is certain that appellant was travelling as owner of the goods and, therefore, considering the provisions referred herein above, it is to be believed the basic policy covers risk of such passenger and, thereby, insurance company is to be held liable for paying amount of compensation awarded by the tribunal pursuant to insurance policy in favour of the owner of the insured vehicle.
13. In support of such view, reference of following judgments are relevant:
(1) [PRECEDENT].
(2) [PRECEDENT] 13.1 The sum and substance of above two judgments is quite clear that after amendment in [SECTION], now insurance company has to pay the amount of compensation to owner of the goods or representative of owner of the goods. There is material difference between person travelling as an owner of the goods or his authorised representative and gratuitous passenger and, therefore, a broad aspect of excluding liability cannot be clubbed in a case HC-NIC Page 13 of 16 Created On Tue Aug 15 19:13:54 IST 2017 like present one wherein appellant was not travelling as gratuitous passenger but was travelling as owner of the goods or his representative.
14. Though a legal position is clear as aforesaid, there are two more issues raised by the appellant which needs consideration irrespective of outcome on any such issue.
14.1 While relying upon the decision dated 24.09.2014; by the division bench of this Court in [CASE NUMBER], in the case between the [PRECEDENT] it is contended by the appellant that without consideration of capacity of the appellant either as a passenger or 3rd party, what needs to be scrutinized properly in light of what is held in such case as held by the division bench, in the nature of injury and if the injuries are resulting because of the impact of the vehicle, then status of the victim needs to be considered at the time of actual impact by the vehicle with the victim, in which case he would be third party to the vehicle though he was travelling in the vehicle. For such concept the division bench has considered that travelling in a goods vehicle is one act, but when because of impact of accident if such person has been thrown out of the vehicle and if he has received injuries because of the vehicle thereafter and not only because of falling down at the time of impact then he was to be treated as 3rd party. Though such concept seems to be attractive HC-NIC Page 14 of 16 Created On Tue Aug 15 19:13:54 IST 2017 in favour of the victim at present in absence of specific pleadings and evidence during the trial, it would be beyond scope to go beyond pleadings and evidence on record and to presume as suggested in the judgment.
14.2 The appellant has also taken a serious ground of non appreciation of exhibit 45 and 46 by the tribunal. If we peruse both these documents it becomes clear that at exhibit 45, there is a brief note of case details including suggested quantum of compensation that may be awarded to the claimant. Though such sheet was signed by the advocate of the appellant and representative of the advocate of the insurance company when it was not signed by the Presiding Officer of the tribunal at the relevant time, the next Presiding Officer of the tribunal who has decided the claim petition by impugned award has ignored such calculation. It is found that there is no date endorsed at exhibit 45 but at exhibit 46 on 23.03.2006 written submissions by the insurance company is placed before the tribunal wherein legal objection is taken regarding status of the appellant and liability of the insurance company. Exhibit 46 is signed by the advocate of the insurance company and endorsed by the Presiding Officer as "Recorded" whereas exhibit 45 is neither signed by the advocate of the insurance company nor by the Presiding Officer. However, there is endorsement "not pressed" on exhibit 46 again by the proxy advocate of the advocate of the insurance company. This goes to HC-NIC Page 15 of 16 Created On Tue Aug 15 19:13:54 IST 2017 show that there was some settlement or consensus between the parties but tribunal has not considered such settlement in favour of the appellant. The tribunal has recorded its findings in para 11 for both these exhibits whereby tribunal has ignored exhibit 45 for want of endorsement by the then Presiding Officer. However, at present when appeal needs to be allowed on law point, as discussed herein above, I do not think it proper to enter into those issues at this stage.
15. In view of above facts and circumstances, appeal needs to be allowed. Thereby appeal is allowed which results into modification of impugned order whereby the decision of the tribunal regarding exonerating the liability of the insurance company is set aside and award is modified to the effect that the insurance company shall make the payment as awarded by the tribunal. The insurance company is directed to make payment as per award within three months from the date of receipt of writ of this judgment. If insurance company fails to make payment within three months then the amount of compensation shall carry 9% interest on the amount of compensation from the date of this judgment till its realization. Appeal is partly allowed to aforesaid extent. R & P be sent back forthwith.
([ENTITY], J.) drashti HC-NIC Page 16 of 16 Created On Tue Aug 15 19:13:54 IST 2017