FAO No. 3584 of 2003 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No. 3584 of 2003 Date of decision 28.4.2010. National Insurance Company Ltd. ...... Appellant. versus Madan Bala and others ...... Respondents. Present : Mr. L.M.Suri, Senior Advocate with Mr. Neeraj Khanna, Advocate for the appellant. Mr. Vipin Mahajan, Advocate K.C.PURI. J. Appellant-National Insurance Company Ltd. has directed this appeal against the award dated 14.5.1993 passed by learned Motor Accident Claims Tribunal, Gurdaspur praying that it be absolved from the liability. The brief facts of the case are as under:- On 11.8.2000 deceased Satnam Singh was going on scooter bearing registration No.PB-18-E-1304 owned by respondent no.2 from Tibri bridge to his village Chander Bhan and when he reached near Chhoti Sem Nehar, he applied the brakes of his scooter to slow down FAO No. 3584 of 2003 2 the speed because the road was slippery but the scooter due to some mechanic defect in the brakes slipped and turned turtle. He fell down on the pucca road and sustained multiple injuries on his face and head. He was brought to Civil Hospital, Gurdaspur from where he was referred to S.G.T.B. Hospital, Amritsar where he died. It was alleged that accident had taken place on account of negligence of the owner of the vehicle, who failed to keep the vehicle fit for use. Deceased went to his village for the personal work of respondent No.2, who authorized him to drive the scooter. The matter was reported to police vide DDR No.22 dated 12.8.2000. It is further pleaded that deceased was 25 years old and was employed in the Irrigation Department having monthly income of Rs.5000/- per month. Claimants being widow and minor sons were completely dependent upon his income. They were now deprived of the sole source of livelihood on account of abrupt termination of life of deceased and as such claimants claimed compensation to the tune of Rs.7,40,000/-. Respondent No.1 National Insurance Co. appeared and controverted the claim of the claimants on the ground that company is not liable to pay any compensation because no contractual liability has arisen in the present case for payment of compensation to the dependents of the deceased because deceased had allegedly borrowed the scooter from the insured and fell down from the scooter and cannot be termed as 3rd party loss arising from the accident while driving the scooter. Moreover, the deceased was not holding valid and effective FAO No. 3584 of 2003 3 driving licence at the time of accident. The alleged monthly income of the deceased is exaggerated and unjustified. Respondent No.2 appeared and controverted the averments about his negligence in maintenance of the scooter. It is, however, admitted that he handed over his scooter for some personal work to deceased Satnam Singh, who met with an accident, while going on scooter No.PB-18-E-1304. Following issues were framed :- 1. Whether the claimants are entitled to compensation for the death of Satnam Singh while he was driving scooter No.PB-18-E-1304 on 11.8.2000 at 2/3 p.m. In the area of PS Purana Shalla ? OPA. 2. Whether there exists a contractual liability against the insurance company in terms of the insurance policy? 3. If issue No.1 is proved whether the claimants are entitled to compensation? If so how much and from whom ? OPA. 4. Relief. The parties have led their respective evidence on the aforesaid issues. The Tribunal, after appraisal of the evidence and after hearing learned counsel for the parties, awarded Rs.4,00,000/- as compensation to the claimants. Out of the said amount Rs.1,60,000/- to Smt.Madan Bala widow and the remaining shall be shared by minor claimants No.2 to 5 in equal shares i.e. Rs.80,000/- each. The shares of the minor claimants were ordered to be deposited in a nationalized bank in the shape of FDRs payable to them on their attaining majority. The amount was held to be payable by National Insurance Company Ltd. -respondent No.1 along with interest at the rate of 9% per annum FAO No. 3584 of 2003 4 from the date of filing the petition till its realization. Feeling dis-satisfied with the aforesaid award, appellant- National Insurance Company Ltd has filed the instant appeal. I have heard the learned counsel for the parties and have gone thorough the records of the case. Learned counsel for the appellant has submitted that the present claim petition has been filed under Section 163-A of the Motor Vehicles Act (hereinafter referred as – the Act) and the same is not maintainable inasmuch as the income of the deceased has been pleaded to be Rs.5000/- per month i.e. More than Rs.40,000/- per year. It is contended that the claimant can file petition under Section 163-A of the Act only if the income of the deceased was less than Rs.40,000/-. So, it is prayed that present claim petition is not maintainable. I have carefully considered the said submission but do not find any force in the said submission. The Tribunal has taken the income of the deceased as Rs.40,000/- per year and thereafter the amount of compensation has been calculated. In authority laid down by a Division Bench of this Court in Oriental Insurance Co. Ltd. vs. Smt. Saroj and others 2007(1) RCR (Civil) 152 has held that where the income of the deceased is assessed as Rs.40,000/- or less in that case the claim petition under Section 163-A of the Act is maintainable. Learned counsel for the Insurance Company has submitted that deceased Satnam Singh was driving the scooter No.PB-18-E-1304 FAO No. 3584 of 2003 5 by borrowing it from Vinod Kumar-respondent. So, for all intends and purposes the deceased would be deemed to be the owner of the scooter in question. It is contended that in case Ningamma and another versus United India Insurance Company Ltd. Reported as 2009 ACJ 2020, the Hon'ble Apex Court has held that where a person borrowing motor cycle from its owner and met with an accident resulting in his death, deceased cannot be held to be employee of the owner although he is authorized to drive the vehicle by its owner. He would step into the shoes of the owner. It has been further laid down in the said authority that petition under Section 163-A of the Act by the owner cannot be maintained against the Insurance Company except where there is an additional premium paid by the owner. It is submitted that in the present case no additional premium has been paid by the owner and it was an act policy. So, the Insurance Company is not liable to pay the amount of compensation in view of authority Ningamma and another's case (supra). The learned counsel for the appellant has further contended that in authority Oriental Insurance Co. Ltd. vs. Jhuma Saha and others 2007 ACJ 818 held that where there is a death of owner-insured when he had met with an accident and no additional premium regarding death of driver and owner is paid in that case Insurance Company is not liable to ay the amount. It is further contended that in authority Dhanraj vs. New India Assurance Co. Ltd and another 2005 ACJ page 1, Hon'ble Apex Court has held that even in a FAO No. 3584 of 2003 6 comprehensive policy unless the premium regarding owner is paid, Insurance Company is not liable to pay the amount in respect of injury to the owner in a motor vehicular accident. In reply to the above noted submissions, learned counsel for the claimants has submitted that owner of the vehicle was Vinod Kumar-respondent No.2. Deceased-Satnam Singh was a 3rd party in the accident and as such even in statutory policy the Insurance Company is liable to pay the amount of compensation. I have carefully considered the said submission and have gone through the records of the case. The first and foremost point for consideration is whether any additional premium in respect of driver of the vehicle or owner of the vehicle has been paid in the present case. From the perusal of the policy Ex.R-C covering note Ex.A-4, it is revealed that an amount of Rs.77/- has been paid as basic premium besides Rs.4/- as service tax. No additional premium in addition to legal right to the passenger for employee or for personal accident has been stated to be paid as per Ex. R-C. So, this is an act policy. Therefore, I have no hesitation in holding that it is an act policy and no additional premium to cover the risk of driver or owner has been paid. The next question arises whether Satnam Singh can be said to be a 3rd party qua the accident in question. The answer to that question is clear from latest authority Ningamma and another's case (supra). In that authority, it has been held that borrower stepped into FAO No. 3584 of 2003 7 the shoes of owner. Owner cannot be himself be a recipient of compensation as liability to pay the same is on him except in the case where additional premium is paid. That was a case under Section 163- A of the Act and it was held by the Hon'ble Apex Court that legal representatives of owner cannot maintain petition under Section 163-A of the Act unless additional premium covering the risk of the owner or driver is there. In authority Oriental Insurance Co. Ltd. vs. Jhuma Saha and others' case (supra), the Hon'ble Apex Court held that where there is a death of owner while driving the vehicle in that case, the Insurance Company is not liable unless the additional premium is paid. In authority Dhanraj's case (supra), the Hon'ble Apex Court has taken the same view even in a case where there was comprehensive policy. It is laid down in the later authority that premium in respect of damage to the vehicle does not cover the risk of the owner. So, in view of the above discussion, the appeal preferred by the Insurance Company stands accepted and it is held that Insurance Company is not liable to pay the amount of compensation. However, in view of authority National Insurance Co. Ltd . vs. Swaran Singh 2004 Accidents Claims Journal reported at page 1 , the Insurance Company shall pay the amount of compensation to the claimants as awarded by the Tribunal but shall be entitled to recover from the same from the owner of the offending vehicle. FAO No. 3584 of 2003 8 A copy of this judgment be sent to the trial Court for strict compliance. ( K.C.PURI ) JUDGE April 28th, 2010 sv