FAO No.747 of 2003 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.747 of 2003 Date of Decision. 15.09.2010 National Insurance Company Ltd., Yamuna Nagar through Sh. Lajpat Arora, Asstt. Administrative Officer, Regional Office-II, National Insurance Company SCO No.337-340, Sector 35-B, Chandigarh ......Appellant Versus Saroj Bala wd/o Sh. Devi Dayal son of Madan Lal and others ......Respondents Present: Mr. Suman Jain, Advocate for the appellant. Mr. Sanjay Jain, Advocate for respondent Nos.1 to 9. Mr. Inderjit Sharma, Advocate for Mr. Pradeep Bedi, Advocate for respondent No.10. None for respondent No.11. Mr. S.S. Dinarpur, Advocate for respondent No.12. CORAM:HON'BLE MR. JUSTICE K. KANNAN 1. Whether Reporters of local papers may be allowed to see the judgment ? 2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? -.- K. KANNAN J.(ORAL) 1. The appeal is by the insurance company challenging the liability on the ground that the claim was made by the representatives of the co-owner of the vehicle. The policy of insurance was under a Farmer's Package Policy with special provisions relating to liability. The terms of the policy provided to the vehicle are set out in Section XIV of the Farmer's Package Policy. FAO No.747 of 2003 -2- Sub-section 1 of Section XIV refers to loss to damage and Section 2 refers to liability to third parties. The third party liability, which is contemplated is as follows: (i) death or bodily injury to any person caused by or arising out of the use (including the loading and/or unloading) of the agricultural tractor. (ii) damage to property caused by the use (including the loading and/or unloading) of the tractor. (a) the company shall not be liable in respect of death, injury damage caused or arising beyond the limits of any carriageway or thoroughfare in connection with the bringing of the load to the tractor for loading thereon or the taking away of the load from the tractor after unloading therefrom.” 2. Subject to limits of liability as laid down in the Schedule hereto, the company will indemnify the insured against all sums including claimant's cost and expenses, which the insured shall become legally liable to pay in respect of. The personal accident cover, which is available to the owner under the same is to the extent of Rs.10,000/-. The contention on behalf of the insurance company, therefore, was that the insurance company cannot be made liable for the act of a driver when he had run over the deceased, when he was sitting just near the tyre waiting for his turn to be called into the sugar factory for unloading the goods. The contract of insurance is a specie of law of contract and subject only FAO No.747 of 2003 -3- to what the Motor Vehicles Act provides for compulsory insurance for third parties, the liability of the insurer cannot be fastened outside the realm of the contractual obligations. The claim against the insurer was not maintainable at all apart from what was possible to secure under the personal accident claim. 3. Recently in a judgment, the Hon'ble Supreme Court in Eshwarappa @ Maheshwarappa and Anr. Vs. C. S. Gurushanthappa and Anr. in Civil Appeal No.7049 of 2002 delivered on 18.08.2010, has held in para 17 as follows: “The provisions of section 140 are indeed intended to provide immediate succour to the injured or the heirs and legal representatives of the deceased. Hence, normally a claim under section 140 is made at the threshold of the proceeding and the payment of compensation under section 140 is directed to be made by an interim award of the Tribunal which may be adjusted if in the final award the claimants are held entitled to any larger amounts. But that does not mean, that in case a claim under section 140 was not made at the beginning of the proceedings due to the ignorance of the claimant or no direction to make payment of the compensation under section 140 was issued due to the over-sight of the Tribunal, the door would be permanently closed. Such a view would be contrary to the legal provisions and would be opposed to the public policy.” 4. The liability could be only to provide for Rs.50,000/- FAO No.747 of 2003 -4- irrespective of whether a particular type of policy is entitled to enforce the claim against the insurer or not. The liability under Section 140 of the Motor Vehicles Act is rooted on a larger public welfare principle that if there is a contract of insurance in any form, the insurer shall still be liable although not under the terms of policy but by virtue of statutory mandate under Section 140 of the Motor Vehicles Act. 5. The award of the Tribunal is set aside and there shall be an award only for Rs.50,000/- against the appellant in the manner provided by the Hon'ble Supreme Court in the judgment referred to above. The appeal is allowed. (K. KANNAN) JUDGE September 15, 2010 Pankaj*