1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR : J U D G M E N T : (1) D.B. Civil Special Appeal No.25/1994. (New India Assurance Co. Ltd. Vs. Dhanna & Others) Arising out of S.B. Civil Misc. Appeal No.11/88 preferred against impugned Award dated 01.08.87 passed in Civil Misc. Case No.33/82. (2) D.B. Civil Special Appeal No.12/1999. (New India Assurance Co. Ltd. Vs. Bai Kala & Others) Arising out of S.B. Civil Misc. Appeal No.8/88 preferred against impugned Award dated 01.08.87 passed in Civil Misc. Case No.34/82. (3) D.B. Civil Special Appeal No.13/1999. (New India Assurance Co. Ltd. Vs. Cheeta Bai & Others) Arising out of S.B. Civil Misc. Appeal No.10/88 preferred against impugned Award dated 01.08.87 passed in Civil Misc. Case No.53/82. (4) D.B. Civil Special Appeal No.21/1994. (New India Assurance Co. Ltd. Vs. Girdhari & Others) Arising out of S.B. Civil Misc. Appeal No.13/88 preferred against impugned Award dated 01.08.87 passed in Civil Misc. Case No.36/82. (5) D.B. Civil Special Appeal No.26/1994. (New India Assurance Co. Ltd. Vs. Nanu Ram & Others) Arising out of S.B. Civil Misc. Appeal No.12/88 preferred against impugned Award dated 01.08.87 passed in Civil Misc. Case No.35/82. 2 DATE OF JUDGMENT : February 25, 2010 P R E S E N T HON'BLE MR. JUSTICE A.M. KAPADIA HON'BLE MR. JUSTICE GOPAL KRISHAN VYAS _________________________________________ Mr. R. Chouhan/Mr. Dhanpat Choudhary for the appellant. Mr. Manish Shishodia/Mr. Suresh Shrimali for the respondent(s). Reportable BY THE COURT : (Per Hon'ble Mr. Vyas, J.) In this bunch of intra-court appeals, filed under Section 18 of of Rajasthan High Court Ordinance, 1949, appellant New India Assurance Co. Ltd. is challenging the common judgment dated 05.11.1993 passed by the learned Single Judge, whereby, learned Single Judge dismissed S.B. Civil Misc. Appeals No.10, 11, 12 and 13 of 1988; and, partly allowed S.B Civil Misc. Appeal No.8/1988 with cost and held the insurance company liable to the extent of Rs.50,000/-. Brief facts stated in the claim petitions filed by respective claimant-respondents are that on 3 31.05.1979 truck No.GTY 4126, owned by Suresh Nathuram Agrawal (respondent No.3) and insured by appellant was bringing cement from Kandla to Banswara and said vehicle was driven by driver Laxman. Injured Radha Kishan, Nanu Ram, Girdhari and Kamla and deceased Laxman, Gangaram and Bherunath boarded it at the bus stand of the village Mangana along with their baskets of fish after paying their fare and also the freight of the baskets. Deceased Virendra Kumar was khalasi in the truck. While the said truck was passing through Chanduji-ka-Ghata (P.S. Loharia), it fell down in a ditch. As a result thereof, aforesaid persons received injuries and Laxman, Ganga Ram, Bheru Nath and Virendra Kumar died as a result of the injuries. The accident took place due to rash and negligent driving of the truck by its driver. Claim petitions were filed by the injured as well as legal representatives of the aforementioned deceased persons. After holding trial, the Tribunal awarded compensation, as mentioned below, against the owner, driver and insurance company. 4 “-------------------------------------------------------------- S.No. Number and year of Name of Amount Misc. Appeal MACT Deceased Injured in Rs. Case ----------------------------------------------------------------------- 1. 8/88 34/82 Bherunath - 57,800 2. 10/88 53/82 Gangaram - 35,100 3. 11/88 33/82 Laxman - 39,000 4. 12/88 35/82 - Nanu Ram 16,400 5. 13/88 36/82 - Girdhari 12,000 --------------------------------------------------------------- Against aforesaid award dated 01.08.1987 passed by the Motor Accident Claims Tribunal, Banswara (District Judge, Banswara), aforementioned five miscellaneous appeals were filed before this Court by the appellant New India Assurance Co. Ltd. Learned Single Judge, vide common judgment dated 25.11.1993, dismissed appeals No.10, 11, 12 and 13 of 1988 with cost and, miscellaneous appeal No.8/1988 was partly allowed with cost and appellant insurance company was held liable to the extent of Rs.50,000/-. While assailing the judgment of the learned Single Judge as well as award passed by the Motor Accident Claims Tribunal, Banswara, it is argued by 5 learned counsel for the appellant that as a general proposition it is true that classification of vehicle or nature of vehicle is to be seen as at the time of issuance of insurance cover as to whether it is a goods vehicle or a public service vehicle or any other type of vehicle like earth-remover, or bull- dozer, or mobile crane, etc. which are neither public service vehicles nor goods vehicles, but, after issuance of cover on the basis of nature of the vehicle, the extent of liability of the insurer has to be determined by combined considering the nature of the vehicle and nature of the victim as to whether the victim is a passenger or other than passenger and if passenger, of what category ? As per learned counsel for the appellant, admittedly, in the present case, the vehicle was a goods vehicle being truck and as per claimants the victims except deceased khalasi Virendra Kumar were passengers for hire or reward. In such circumstances, according to provisions of the Motor Vehicles Act and Rules framed thereunder, carrying of passengers for hire or reward in goods vehicle is 6 precisely prohibited. Further, it is argued that even according to terms of the policy the insured or the driver was not authorized to carry passengers for hire or reward in goods vehicle, therefore, if passengers are so carried in goods vehicle which is in question, then, liability upon the appellant cannot be made for any compensation. As per learned counsel for the appellant, obviously because even in respect of goods vehicle or passengers vehicle, the gratuitous passenger is not required to be covered by the insurance policy. As per Section 95 (2) (b), for liability in respect of passengers being carried for hire or reward or by reason of or in pursuance of contract of employment and provided for a limit of Rs.5,000/- for each individual passenger. It is significant to note that clause (b) does not use the expression 'public service vehicle' but covers vehicles in which 'passengers are carried for hire or reward or by reason of or in pursuance of contract of employment'. In such circumstances, when the victim was being carried as passenger for hire or 7 reward in the vehicle, irrespective of the fact as to whether the vehicle is a goods vehicle or a public service vehicle or is a vehicle of any other category, that would not change the nature of passenger on the vehicle being a passenger being carried for hire or reward or by reason of or in pursuance of contract of employment. Therefore, the limit of liability of the insurer could not be extended beyond the one prescribed for this nature of passenger. Learned counsel for the appellant contends that in this case the liability of the appellant could not be fixed to the extent of liability applicable qua the victim being third party by a goods vehicle. As per learned counsel for the appellant, the learned Single Judge has lost sight of the fact that passengers carried in a goods vehicle cannot be placed on a pedestal higher than the passenger carried in public service vehicle as passenger for hire or reward. Learned counsel for the appellant invited our attention towards judgment of the Hon'ble Supreme Court, reported in AIR 1999 S.C. 589, Smt. 8 Mallawwa etc. Vs. Oriental Insurance Co. Ltd. & Others, in which, the apex Court has held that as per Section 95 the liability of the insurer with regard to compensation to the legal heirs on the death of passenger in a goods carriage is restricted to the employee of the person insured and insurance company has no liability to pay compensation in respect of damages caused to any goods carried in the vehicle by an accident. Therefore, in view of the said judgment, in these appeal, admittedly the vehicle in which the injured and deceased were travelling was a goods vehicle, therefore, the insurance company is not liable to indemnify the victims for damages caused to them because admittedly they were travelling as passengers for hire and reward. Therefore, it is prayed that insurance company may be discharged from the liability imposed by the Motor Accident Claims Tribunal and upheld by the learned Single Judge of this Court and judgment impugned in these appeals dated 25.09.1993 may be quashed and set aside qua the insurance company. 9 Despite service, none has appeared on behalf of the owner of the vehicle, respondent No.4 and counsel appearing on behalf of the claimant- respondents argued that compensation has already been deposited by the insurance company and it has been paid to the claimants, therefore, even if the verdict of the Hon'ble Supreme Court is there, the compensation cannot be recovered from the claimants. Further, it is argued that in view of the judgment of the Supreme Court the insurance company is not liable upon the facts of the case for indemnify the victims for compensation, then also, claimants are entitled for compensation from the owner. We have considered the rival submissions made by respective parties. Admittedly, the injured and legal heirs of the deceased persons who preferred the claim petitions before the Motor Accident Claims Tribunal, Banswara were travelling in a goods vehicle for hire and reward and they paid fare and freight for their luggage, therefore, in view of the judgment of the 10 Supreme Court in the case of AIR 1999 S.C. 589, Smt. Mallawwa etc. Vs. Oriental Insurance Co. Ltd. & Others, the appellant insurance company cannot be held liable for any compensation. In para 10, 12 and 13 of the said judgment, their Lordships of the Supreme Court laid down the proposition as follows : “10. For the purposes of Section 95, ordinarily a vehicle could have been regarded as a vehicle in which passengers have carried if the vehicle was of that class. Keeping in mind the classification of vehicles, by the Act, the requirement of registration with particulars including the class to which it belonged, requirement of obtaining permit for using the vehicle for different purposes and compulsory coverage of insurance risk, it would not be proper to consider a goods vehicle as a passenger vehicle on the basis of a single use or use on some stray occasions of that vehicle for carrying passengers for hire or reward. For the purpose of construing a provision like proviso (ii) to Section 95 (1)(b), the correct test to determine whether a passenger was carried for hire or reward, would be whether there has been systematic carrying of passengers. Only if the vehicle is so used then that vehicle can be said to be a vehicle in which passengers are carried for hire or reward. The High Courts have expressed divergent views on the question whether a passenger can be said to have been carried for hire or reward when he travels in goods vehicle either on payment of fare or along with 11 his goods. It is not necessary to refer to those decisions which were cited at the Bar as we find that all the relevant aspecvts were not taken into consideration while expressing one view or the other. We may only refer to the decision of the Orissa High Court in New India Assurance Co. Ltd. v. Kanchan Bewa, 1994 Acc CJ 138, where Hansaria, J. speaking for the Full Bench observed as under :- “18. The aforesaid is not enough to take any view as to whether goods vehicle can or cannot come within the fold of proviso (ii) with which we are concerned. Our primary reason for differing, with respect, with Rajasthan Full Bench is that, allowing goods vehicle to be taken within the fold of proviso (ii) would introduce uncertainties in law as that would depend upon various factors to which we shall advert; the result would be that the law would cease to be certain which it has to be at least in a case of the present nature. We have said so because reference to the definition of goods vehicle shows that the first part of it does not deal with carrying of passengers. It is the second part which speaks about the same and that too when the vehicle is used for such a purpose. The word 'use' has been defined in Chambers English Dictionary in its intransitive sense to mean 'to be accustomed; (to; used chiefly in the past tense)'; 'to be in the habit of so doing'; 'to resort'. Reference to the meaning of this word, as given in Black's Law Dictionary, 5th edition, would show that even one user may amount to 'use' or it may be that for a thing being said to be 'used', it has to be 'employed habitually'. 19. Being concerned with a beneficial legislation like the one at hand, we would have normally preferred liberal interpretation, but the question is 12 whether, without any extra premium having been paid, the owner of a goods vehicle can claim indemnification from the insurer just because once in a year the goods vehicle had carried a passenger for hire or reward along with the goods. This would perhaps robe the third proviso dealing with coverage of contractual liability lame . . . xxxxxx 22. Thus, to find out whether an insurer would be liable to indemnify an owner of a goods vehicle in a case of the present nature, the mere fact that the passenger was carried for hire or reward would not be enough; it shall have to be found out as to whether he was the owner of the goods, or an employee of such an owner, and then whether there were more than six persons in all in the goods vehicle and whether the goods vehicle was being habitually used to carry passengers. The position would thus become very uncertain and would vary from case to case. Production of such result would not be conducive to the advancement of the object sought to be achieved by requiring a compulsory insurance policy. 23. There is another aspect of the matter which had led us to differ from the Full Bench decision of Rajasthan High Court The same is what finds place in sub- section (2) of Section 95. That sub- section specifies the limits of liability and clause (a) deals with goods vehicle; and in so far as the person travelling in goods vehicle is concerned, it has confined the liability to the employees only. This is an indicator, and almost a sure indicator, of the fact that legislature did not have in mind carrying of either the hirer of the vehicle or his employee in the goods vehicle, otherwise, clause (a) would have provided a limit of liability regarding such persons also.” 13 12. We will now consider whether the decision of this Court in Pushpabai's case (AIR 1977 SC 1735) (supra) requires reconsideration. That was a case of a passenger travelling in a motor car. He was not travelling for hire or reward. The vehicle was neither a public service vehicle nor a goods vehicle, but it was a different class of vehicle. It was in that context that this Court made the following observations in paragraphs 21 and 22 : “. . . The plea that the words “third party” are wide enough to cover all persons except the person and the insurer is negatived as the insurance cover is not available to the passengers is made clear by the proviso to sub- section which provides that a policy shall not be required : “(ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by a reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises. (22) Therefore it is not required that a policy of insurance should cover risk to the passengers who are not carried for hire or reward. As under Section 95 the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured the plea of the counsel for the insurance company will have to be accepted and the insurance company held not liable under the requirements of the Motor Vehicles Act.” What was held in that case is, with respect, consistent with our 14 interpretation of Section 95 as it stood before and after its Amendment by Act 56 of 1969.” 13. The 1939 Act is now replaced by the 1988 Act. Section 147 which corresponds to old Section 95 has been substantially altered by the Legislature Therefore, the above interpretation of Section 95 of the 1939 Act will govern the cases which have arisen under the 1939 Act. According to our interpretation of Section 95(1)(b)(i) and the proviso, the appeals filed by the Insurance Company are allowed . In SLP (C) Nos.10745, 10747 and and 10748 of 1995 filed by the Insurance Company, 'leave' is granted and those appeals are also allowed. The appeals filed by the claimants/owners of the vehicles are dismissed. SLP (C) No.9727 of 1989 filed by the owner of the vehicle is also dismissed.” In view of the above judgment, we are of the opinion that appellant insurance company cannot be held liable for any compensation because the claimants were passengers in the goods vehicle which is in question. Therefore, the appeals filed by the appellant insurance company deserve to be allowed. In these appeals, however, compensation has already been paid by the insurance company, therefore, in view of the fact that learned Tribunal has held owner, driver and insurance company 15 liable for payment of compensation jointly and severally, the insurance company is held entitled to recover the amounts of compensation from the owner of the vehicle in question in view of the judgment of the Hon'ble Supreme Court in the case of National Insurance Co. Ltd. Vs. Baljit Kaur & Others, reported in 2004 ACJ 428, in which, apex Court has held that insurance company, if directed to satisfy the award in favour of the claimant, may recover the amount from the owner in execution proceedings and insurance company need not file a separate suit. In para 19, 20 and 21 of the said judgment, their Lordships of the Supreme Court held as follows : “19. In Asha Rani, 2003 ACJ 1 (SC), it has been noticed that sub-clause (i) of clause (b) of sub-section (1) of section 147 of the 1988 Act 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 any property of a third party caused by or arising out of the use of vehicle in a public place. Furthermore, an owner of a passenger-carrying vehicle must may premium for covering the risk of the passengers travelling in the vehicle. The premium in view of the 1994 amendment would only cover a third party as also the owner of the goods or his authorised representative and not any passenger 16 carried in a goods vehicle whether for hire or reward of otherwise. 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 authorised representative remains the same. Although the owner of the goods or his authorised 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 as the time the contract of insurance was entered into, nor any premium was 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, 2000 ACJ 1 (SC). The said decision has been overruled only in Asha Rani, 2003 ACJ 1 (SC). 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 17 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 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 pur 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 inasmuch as can be resolved by the Tribunal in such a proceeding. (Emphasis supplied) In view of the fore-going discussions, all these appeals are allowed and common award passed by the Motor Accident Claims Tribunal, Banswara dated 01.08.1987, so also, impugned judgment of the learned Single Judge upholding the said award, to the extent of liability of appellant insurance company, is quashed and common award dated 01.08.1987 as well as judgment dated 05.11.1993 passed by the learned Single Judge is modified and it is held that appellant insurance company is not liable to indemnify the claimants' claim. Since 18 compensation has already been paid by the insurance company, therefore, in view of the fact that learned Tribunal has held owner, driver and insurance company liable for payment of compensation jointly and severally, the insurance company is held entitled to recover the amounts of compensation from the owner of the vehicle in question; and, for the said purpose, appellant insurance company need not file separate suit but it may initiate proceedings before the executing court directly. (Gopal Krishan Vyas) J. (A.M. Kapadia) J. Ojha, a.