SCA/26517/2006 1/24 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 26517 of 2006 With SPECIAL CIVIL APPLICATION No. 26460 of 2006 With SPECIAL CIVIL APPLICATION No. 26462 of 2006 To SPECIAL CIVIL APPLICATION No. 26469 of 2006 With SPECIAL CIVIL APPLICATION No. 26483 of 2006 To SPECIAL CIVIL APPLICATION No. 26493 of 2006 With SPECIAL CIVIL APPLICATION No. 26495 of 2006 To SPECIAL CIVIL APPLICATION No. 26498 of 2006 With SPECIAL CIVIL APPLICATION No. 26509 of 2006 To SPECIAL CIVIL APPLICATION No. 26516 of 2006 With SPECIAL CIVIL APPLICATION No. 26459 of 2006 For Approval and Signature: HONOURABLE MR.JUSTICE AKSHAY H.MEHTA ========================================================= 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 constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= ORIENTAL INSURANCE COMPANY LTDTHRO'AUTHORISED SIGNATORY. - Petitioner(s) SCA/26517/2006 2/24 JUDGMENT Versus DAKSHBEN INDUGIRI GOSAI. & 3 - Respondent(s) ========================================================= Appearance : MR MAULIK J SHELAT for Petitioner(s) : 1, None for Respondent(s) : 1 - 2. MR ARVIND THAKUR with MS. SHAH for Respondent(s) : 1.2.1, 1.2.2, 1.2.3, 1.2.4, 1.2.5, 4, UNSERVED-REFUSED (R) for Respondent(s) : 2.2.1 DS AFF.NOT FILED (R) for Respondent(s) : 3, MR BIPIN I MEHTA for Respondent(s) : 4, ========================================================= CORAM : HONOURABLE MR.JUSTICE AKSHAY H.MEHTA Date : 29/06/2007 COMMON CAV JUDGMENT : This group of petitions, filed essentially under Article 227 of the Constitution of India, is directed against order passed below Exh. 73 in M.A.C. Petition No. 403 of 2005 and other allied matters by the Motor Accident Claims Tribunal {Aux.] Amreli dated 31/8/2006, hence they are heard together and now they are being disposed of by this common CAV Judgment. 2. The proceedings of M.A.C. Petition No. 403 of 2005 and its allied matters have arisen on account of vehicular accident which occurred on 21/2/1994. On that day several persons were travelling in a goods vehicle bearing Registration No. GJ-1-U-7527. It was proceeding towards Savarkundla. On way, there was unmanned railway crossing. When the vehicle approached the railway crossing, the passengers noticed a train coming from the side of village Dhola and going towards Savarkundla. The passengers shouted to halt the vehicle, but respondent no. 3 did not respond to them and continued to drive SCA/26517/2006 3/24 JUDGMENT the vehicle. As a result of the same, while it was crossing the railway track, the train collided with it causing the accident. About five persons lost their lives and others got injured. The victims and/or the relatives of the victims preferred Motor Accident Claim Petitions for claiming compensation before the Motor Accident Claims Tribunal, initially at Bhavnagar but subsequently the proceedings have now been transferred to M.A.C. Tribunal at Amreli. They are numbered as M.A.C. Petitions No. 403 of 2005 to 437 of 2005. 2.1. Pending the proceedings, the petitioner, which is the Insurance Company of the offending vehicle, submitted an application at Exh. 73 praying for deleting it from the proceedings because according to the petitioner, the victims were travelling in a goods vehicle as passengers and, therefore, their risk was not covered under the policy. In other words, it was contended by the petitioner that Insurance Company was not liable to satisfy the award because the accident occurred on 21/2/1994; that is prior to amendment effected in section 147 of the Motor Vehicles Act [hereinafter referred to as 'the Act']. It was further contended that the petitioner was joined as party to the proceedings in view of the decision of the Apex Court rendered in the case of New India Assurance Co. Ltd., v/s. Satpal Singh reported in 1999 AIR SCW 4337, however, the said decision has been overruled by Larger Bench of the Supreme Court by decision rendered in the case of New India Assurance Co. Ltd., v/s. Asha Rani reported in AIR 2003 S.C. 607. It was further contended by the petitioner that the Apex Court in Asha Rani's case held that the insurance SCA/26517/2006 4/24 JUDGMENT company was not liable to satisfy the award in case of passengers travelling in goods vehicle. The said application was resisted by the claimants as well as the insured. It may be noted here that initially the Railway i.e., Union of India was not joined as party opponent, but subsequently on the application of the petitioner it was impleaded as party opponent. The Tribunal held that at this stage it was difficult to accept request of the petitioner and delete it from the proceedings. According to the Tribunal, the parties were still to lead evidence in the case and in that view of the matter, it was premature to accept the contention of the petitioner and to delete it from the proceedings. It has, therefore, rejected the said application. Hence, these petitions. 3. I have heard Mr. Maulik J Shelat, learned advocate for the petitioner and Mr. Bipin Mehta & Mr. Arvind Thakur, learned advocates for the respondents. Mr. Shelat has contended that when the proceedings were filed before the Tribunal, law laid down by the Apex Court in Satpal's case [supra] was good law and, therefore, the petitioner was joined as opponent. However, the said decision has been overruled in Asha Rani's case and it has been held that insurance company is not liable to satisfy the award if the claimants are travelling as passengers in goods vehicle. He has submitted that the law on this issue has now been crystalised by the Larger Bench. He has further submitted that it is clear from the pleadings that the claimants were travelling as passengers in a goods vehicle, hence the liability of the insurance company was not there and there was no need to join it as opponent. According to Mr. SCA/26517/2006 5/24 JUDGMENT Shelat, this will not only cause unnecessary harassment to the petitioner, but it will result into wanton waste of public money and public time. According to him, when the law on the point is very clear and when the petitioner in all circumstances is likely to be exonerated, there was no point in continuing it in the proceedings. He has placed reliance on several decisions of the Apex Court as well as this Court to substantiate his submissions. 3.1. As against that, Mr. Bipin Mehta and Mr. Thakur have argued that the application before the Tribunal at Exh. 73 itself was not maintainable since it was at a premature stage. According to them, when the entire trial is still pending and the petitioner company has to establish and prove defences available to it under section 149 of the Act, the Tribunal has rightly rejected the applications of the petitioner. They have further submitted that it would not be proper for this Court to delete the insurance company from the proceedings at the preliminary stage. They have submitted that applications made under section 140 are still pending where neither the negligence nor the liability is required to be seen. According to them, if the insurance company is deleted from the proceedings, it will render the respondents almost remedy-less. They have also placed reliance on the decisions of this Court. 4. Having carefully considered the rival submissions and upon perusal of the impugned order as well as record of the petitions, it appears that on the date of accident certain persons, approximately 60 in number, were travelling by offending vehicle. They had started from village Dhamel to go to SCA/26517/2006 6/24 JUDGMENT Badhada to attend marriage. It was alleged that the driver of offending vehicle, namely respondent no. 3 was driving it rashly and negligently and at high speed. The passengers asked him to slow down the vehicle but he did not listen to them. On the contrary, he had switched on the cassette player at high volume. When they approached unmanned railway crossing, seeing the sign board, the inmates of the vehicle noticed a train approaching the crossing and they shouted to stop the vehicle, but respondent no. 3 did not stop it. As a result of the same, while the vehicle was about to cross the railway tracks, the engine of the train collided with it and five persons lost their lives, whereas others got injured. Now in view of the submissions of the petitioner that it is not liable to satisfy the award and it should be deleted, the important questions which are to be decided amongst others are that if the driver is found negligent, then whose liability it is to satisfy the award and whether the insurance company can be deleted at this stage. 5. The petitioner has been joined on the ground that it has issued the insurance policy in respect of public carrier bearing registration no. GJ-1-U- 7527, which is the offending vehicle and since the insured i.e., the owner was vicariously liable for the act of his employee i.e., the driver, the insurance company was statutorily as well as contractually bound to indemnify the owner for the liability arising qua third party. So far as the insurance policy of the offending vehicle is concerned, it is an admitted fact that the policy is issued by the petitioner. The petitioner has, however, filed application to delete it as SCA/26517/2006 7/24 JUDGMENT according to the petitioner, at the time when the claims were lodged and the pleadings were filed, law laid down in Satpal Sing's case was holding the field and the position of law was that the insurance company was required to indemnify the owner for the liability arising in respect of passengers in goods vehicle also. But later on the decision rendered in Satpal's case has been over- ruled by the Apex Court by decision rendered in the case of New India Assurance Co. Ltd., v/s. Asha Rani & ors., reported in 2003 (2) S.C.C. 223. 5.1. I have carefully perused the said decision. The question that was considered by the Apex Court was whether the insurer was liable to pay compensation to the dependents of the deceased passengers while the deceased passengers were travelling in a goods vehicle and that vehicle met with an accident on account of which the passengers died or suffered grave injury. The Apex Court has observed as under :- “26. In view of the changes in the relevant provisions in 1988 Act vis- a-vis 1939 Act, we are of the opinion 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 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 SCA/26517/2006 8/24 JUDGMENT 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 passenger carrying vehicle must pay premium for covering risks of the passengers. If a liability other than limited liability provided for under the Act is to be enhanced under an insurance policy, additional premium is required to be paid. But if the ratio of this Court's decision in New India Assurance Company v/s. Satpal Singh and others [2000] 1 S.C.C. 237 is taken to its logical conclusion, although for such passengers the owner of a goods carriage need not to take out an insurance policy, they would be deemed to have been covered under the policy wherefor even no premium is required to be paid. 29. We may consider the matter for another angle. Section 149 (2) of the 1988 Act enables the insurers to raise defences against the claim of the claimants. In terms of clause 2 (a)(i)(c) of section 149 of the Act, one of the defences which is available to the insurer is that the vehicle in question has been used for a purpose not allowed by the permit under which the vehicle was used. Such a statutory defence available to the insurer would be obliterated in view of the decision of this Court in Satpal Singh's case [supra].” While relying upon this decision, it is pleaded by the petitioner that the offending vehicle is a goods vehicle and the victims were travelling as passengers in the said vehicle and hence insurance company would not be liable. 6. Mr. Maulik Shelat has also relied upon decision rendered by the SCA/26517/2006 9/24 JUDGMENT Apex Court in the case of M/s. National Insurance Co. Ltd., v/s. Baljit Kaur and others reported in (2004) 2 S.C.C. p.1, in which it is held as under:- “20. It is, therefore, manifest that in spite of the amendment of 1994, the effect of the provision contained in Section 147 with respect to persons other than the owner of the goods or his authorized representative remains the same. Although the owner of the goods or his authorized representative would now be covered by the policy of insurance in respect of a goods vehicle, it was not the intention of the legislature to provide for the liability of the insurer with respect to passengers, especially gratuitous passengers, who were neither contemplated at the time of contract of insurance was entered into, nor was any premium paid to the extent of the benefit of insurance to such category of people. 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 SCA/26517/2006 10/24 JUDGMENT the Tribunal and the issue is decided against the owner and in favour of the insurer. We have issued the aforementioned directions having regard to the scope and purport of Section 168 of the Motor Vehicles Act, 1988, in terms whereof, it is not only entitled to determine the amount of claim as put forth by the claimant for recovery thereof from the insurer, owner or driver of the vehicle jointly or severally but also the dispute between the insurer on the one hand and the owner or driver of the vehicle involved in the accident insmuch as can be resolved by the Tribunal in such a proceeding.” 7. Mr. Shelat has cited other decisions which are on the same line. These decisions are of the Apex Court and are rendered in the cases of National Insurance Co. v/s. Bommithi and ors. Reported in (2005) 12 S.C.C. 243, National Insurance Co., v/s. Challa Bharathamma reported in 2004 ACJ 2094 and in the case of New India Assurance Co. Ltd., v/s. Ved Vatti and ors., reported in 2000 (3) Scale at page 397. According to Mr. Shelat, the Apex Court has now examined all the aspects of the question whether risk of passengers travelling in a goods vehicle is required to be covered by the insurance company and has crystalised the law on this issue; hence insurance company, in the present case, is not necessary party as no liability can be fastened upon it because admittedly the victims of the accident were travelling as passengers in a goods vehicle. 7.1. In support of his submission, he has placed reliance on the provisions contained in Order 1 of Civil Procedure Code and in particular Rule 3 thereof. It reads as under :- SCA/26517/2006 11/24 JUDGMENT “3. Who may be joined as defendants.- All persons may be joined in one suit as defendants where - (a) any right to relief in respect of, or arising out of, the same act or transaction or series of acts or transactions is alleged to exist against such persons, whether jointly, severally or in the alternative; and (b) if separate suits were brought against such persons, any common question of law or facts would arise.” It is his contention that in view of the law laid down by the Apex Court in the decision rendered in the case of Asha Rani [supra] no right to relief in respect of any act or transaction exists against the insurance company and hence it cannot be said to be necessary party and, therefore, the petitioner is required to be deleted from the proceedings. 8. The submission of Mr. Shelat though appears to be attractive, it requires detailed consideration before its acceptance or rejection. It is to be noted here that it is not the case of the petitioner that there was no contract of insurance existing between the insured and the petitioner on the date of accident. It is also not the case of the petitioner that it was not liable to indemnify the insured in respect of his liability that would arise in respect of death or bodily injury caused to any person in a vehicular accident. The sole submission is that since as per Asha Rani's case the petitioner is not required to cover the risk of passengers in goods vehicle, it is not liable to indemnify the insured since they are not falling under the category of 'any person'. Here it is SCA/26517/2006 12/24 JUDGMENT necessary to state that for culling out the favourable facts, the petitioner has placed reliance on the FIR lodged in respect of the accident as also the claim petition. In the FIR it is stated that the victims were travelling in vehicle being public carrier bearing Registration No. GJ-1-U-7527 on 21/2/1994 as a part of marriage procession of son of Bavaji Umedpari Ravpari'. Whereas in the claim petition, particularly in M.A.C. Petition No. 403 of 2005 it is stated that the victims were travelling to fulfill religious commitment and for singing devotional songs at a particular place. Copy of the application is annexed to the petition at Annexure-C. It also emerges that deceased of that case had paid fare for travelling in the vehicle. Be that as it may, when it prima-facie appears that the victims were travelling in the goods vehicle as passengers, whether the plea of the petitioner can be accepted at this stage to delete it. 9. The plea raised by the petitioner is its defence and in usual circumstances such defence can be considered only upon the evidence that may be adduced before the Tribunal during the inquiry or trial. It is true that the Apex Court has absolved the insurance company from its liability to satisfy the award in the decisions rendered in the cases referred to above, but those decisions have been rendered only after completion of the full-fledged inquiry or trial. There is, therefore, every possibility that the claimant and the insured may have a chance, despite the prima-facie facts on record, to try and to lead evidence and prove that petitioner is liable to satisfy the award. 9.1. In the case of New India Insurance Co. v/s. Asha Rani [supra] the SCA/26517/2006 13/24 JUDGMENT question that is raised by the Apex Court for its consideration is that whether the insurer was liable to pay compensation to the dependents of the deceased passenger while the deceased passenger was travelling in a goods vehicle and that vehicle met with an accident, on account of which the passenger died or suffered bodily injury. The Apex Court has thereafter considered the relevant provisions as existing in the Act of 1939 and now in the Act of 1988 and arrived at a conclusion that the careful scrutiny of the provisions [section 147 of 1988] makes it clear that prior to the amendment of 1994 it was not necessary for the insurer to insure against owner of the goods or his authorized representatives being carried in a goods vehicle. The Apex Court has also considered the case from another angle i.e., by keeping in view the defences available to the insurance company as specified in section 149 (2) of the Act of 1988 and particularly clause [c] of sub-sec. (i) wherein the defence is provided to the insurer that the vehicle in question was used for a purpose not allowed by the permit under which the vehicle was used. The Apex Court therefore observed that if the insurance company is required to cover the risk of passengers in goods vehicle, the statutory defence available to the insurer would be obliterated. Similar view has been taken by the Apex Court in the cases of National Insurance Co. v/s. Swaran Singh reported in (2004) 3 SCC p.297, National Insurance Co. v/s. Bommithi [supra] and New India Insurance Co. v/s. Ved Vatti [supra]. In these cases it has been held that gratuitous passengers travelling in goods vehicle were not covered under the policy of SCA/26517/2006 14/24 JUDGMENT insurance. The Apex Court in aforesaid decisions has kept in view the difference between the definitions of goods vehicle occurring in the Act of 1939 and the goods carriage in the Act of 1988 and has held that the travelling of passengers in a goods vehicle was not at all in contemplation while enacting the Act of 1988. 9.2. A careful study of the aforesaid decisions clearly show that these decisions are based on the proven facts. It is also clear that certain eventualities which may possibly occur in the present case during the course of trial, have not been referred to in those cases. In other words, certain aspects such as whether the insured or owner of the offending vehicle had obtained temporary permit for carriage of passengers in goods carriage, etc., were not for consideration before the Apex Court. The owner of the goods vehicle or goods carriage is entitled to obtain a permit for carriage of passengers and he may be authorized to use the vehicle temporarily for the conveyance of the passengers, if he so chooses, as per sub-section (1) of section 87 of the Act which reads as under :- “87. Temporary permits.- (1) A Regional Transport Authority and the State Transport Authority may without following the procedure laid down in section 80, grant permits to be effective for a limited period which shall, not in any case exceed four months, to authorise the use of a transport vehicle temporarily- (a) for the conveyance of passengers on special occasions such as to and from fairs and religious gatherings, or (b) for the purposes of a seasonal business, or SCA/26517/2006 15/24 JUDGMENT (c