SBCMA NO.581/1996 – NATIONAL INSURANCE COMPANY LTD. V/S PRABHU AND FOUR CONNECTED APPEALS : JUDGMENT DTD..23.7.2009 1/14 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR. 1. S.B. CIVIL MISC. APPEAL NO.581/1996 National Insurance Company Limited versus Prabhu. 2. S.B. CIVIL MISC. APPEAL NO.570/1996 National Insurance Co. Ltd. versus Smt. Nathi and ors. 3. S.B. CIVIL MISC. APPEAL NO.579/1996 National Insurance Co. Ltd. versus Smt. Nani and anr. 4. S.B. CIVIL MISC. APPEAL NO.582/1996 National Insurance Co. Ltd. versus Manu and anr. PRESENT HON'BLE Dr.JUSTICE VINEET KOTHARI Mr. Anil Bachhawat } for the Insurance Company. Mr.V.N. Kalla } Mr. Mridul Jain } for the claimants. DATE OF JUDGMENT : 23rd July, 2009. JUDGMENT SBCMA NO.581/1996 – NATIONAL INSURANCE COMPANY LTD. V/S PRABHU AND FOUR CONNECTED APPEALS : JUDGMENT DTD..23.7.2009 2/14 1. The learned counsel for the Insurance company submitted that the controversy involved in the present appeals is squarely covered by the judgment of Hon'ble Supreme Court in the case of National Insurance Company V/s Rattani and ors. reported in MACD 2009 (SC) 100 in which it has been held by the Hon'ble Supreme Court relying on the earlier decision of the Hon'ble Supreme Court in the case of National Insurance Company V/s Asha Rani reported in 2003 ACJ 1 that the insurance company would not be liable to pay compensation in the case of death or bodily injury of the gratuitous passengers travelling in goods carriage vehicle. This Court following the aforesaid decisions of the Hon'ble Apex Court recently has decided CMA No. 564/1995 – The New India Assurance Company Limited V/s Smt. Kamla Devi and ors. on 9.7.2009. The relevant extract of the aforesaid judgment in the case of New India Assurance Company V/s Smt. Kamla Devi and ors. (supra) is as under: “3. Mr. R.K. Mehta, learned counsel appearing for the Insurance Company submitted that the deceased along with two other persons named above were travelling as gratuitous passengers in the said goods vehicle at the time of accident on 11.12.1992 and therefore, the Insurance Company was not liable to pay such compensation. He submitted that even before the SBCMA NO.581/1996 – NATIONAL INSURANCE COMPANY LTD. V/S PRABHU AND FOUR CONNECTED APPEALS : JUDGMENT DTD..23.7.2009 3/14 amendment of Section 147 w.e.f. 14.11.1994 when the words “injury to any person, including the owner of the goods or his authorised representative carried in the vehicle” were inserted with effect from the said date and prior to that the words in the Motor Vehicles Act, 1988 were “ injury to any person” as per the decision of the Hon'ble Supreme Court in the case of National Insurance Company V/s Asha Rani reported in 2003 ACJ 1, the Insurance Company would not be liable to pay compensation even in respect of owner of the goods or his authorised representative being carried in a goods vehicle when that vehicle met with an accident prior to amendment of 1994. He submitted that by the said judgment, 3 Judges Bench of the Hon'ble Supreme Court has reversed the earlier decision of the Hon'ble Supreme Court in the case of New India Assurance Company V/s Satpal reported in 2000 ACJ (SC) 1 and therefore, in the present case also the Insurance Company cannot be held liable. He also relied upon the recent decision of the Hon'ble Supreme Court which has been rendered following the aforesaid decision in the case of Asha Rani (supra) in the case of National Insurance Company V/s Ratani and ors. reported in MACD 2009 (SC) 100 in which the Hon'ble Supreme SBCMA NO.581/1996 – NATIONAL INSURANCE COMPANY LTD. V/S PRABHU AND FOUR CONNECTED APPEALS : JUDGMENT DTD..23.7.2009 4/14 Court reiterating its decision in the case of Asha Rani (supra) held as under: 14....... We thus, are of the opinion that the Tribunal as also the High Court committed a serious error in opining that the insurance company was liable. Reliance placed by the learned counsel on a decision of this Court in National Insurance Co. Ltd. V/s Baljit Kaur and ors. (2004) 2 SCC 1 is misplaced. The question which arose for consideration therein was as to whether the words “any person” shall include a gratuitous passenger despite the amendment made in Sec. 147 of the Act by reason of the Motor Vehicles (Amendment) Act, 1994. Following New India Assurance Co. Ltd. vs. Asha Rani, (2003) 2 SCC 223, it was categorically held:- “20. It is, therefore, manifest that in spite of the amendment of 1994, the effect of the provision SBCMA NO.581/1996 – NATIONAL INSURANCE COMPANY LTD. V/S PRABHU AND FOUR CONNECTED APPEALS : JUDGMENT DTD..23.7.2009 5/14 contained in Sec.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 the contract of insurance was entered into, nor was any premium paid to the extent of the benefit of insurance to such category of people.” In National Insurance Co. Ltd. vs. Cholleti Bharatamma and ors. (2008) 1 SCC 423, this Court categorically held :- “27. The learned counsel appearing for the respondent submitted that from the aforementioned finding, it is evident that the respondent was travelling as the owner of the goods. We do not think that the said submission is correct. P.W.2, in his evidence, stated: SBCMA NO.581/1996 – NATIONAL INSURANCE COMPANY LTD. V/S PRABHU AND FOUR CONNECTED APPEALS : JUDGMENT DTD..23.7.2009 6/14 “ I am doing tamarind business. I witnessed the accident which took place about 3 years back at about 6.00 a.m. at Borrampalem junction beyond Tallaru. At the time of the accident I was in the crime lorry by the side of the driver. Myself and 6 others were carrying tamarind in that lorry belonging to us. We boarded the lorry along with our load of tamarind at Dharamavaram to go to Rajanagaram. We were selling the tamarind at Rajanagaram in retail by taking the tamarind there in our lorry from our village of Dharamavaram.” 28. The Tribunal, therefore, correctly recorded that according to PW2, he was travelling with his goods as owner thereof and not the deceased. We, therefore, in the facts and circumstances of the case, have no hesitation to hold that the victims of the accidents were travelling in the truck as gratuitous passengers and in that view of the matter, the appellant herein was not liable to pay the amount of compensation to the claimants. 15. For the reasons aforementioned, the impugned judgment cannot be sustained which is SBCMA NO.581/1996 – NATIONAL INSURANCE COMPANY LTD. V/S PRABHU AND FOUR CONNECTED APPEALS : JUDGMENT DTD..23.7.2009 7/14 set aside in so far as the liability of the appellant herein is concerned. The appeal is allowed. 4... 5.. 6... 7. Having heard the learned counsels and giving thoughtful consideration to the facts of this case, this Court is of the opinion that as far as legal position is concerned, the same is clear and beyond the realm of doubt after the Hon'ble Supreme Court's decision in the case of Asha Rani (supra). The Apex Court in the accident arising and covered by the 1988 Act even prior to amendment in Section 147 of the Act w.e.f.14.11.1994 has categorically laid down in the case of Asha Rani (supra) that the Insurance Company would not be liable for payment of compensation even in respect of owner of the goods or his authorized representative much less for gratuitous passengers being carried in the goods vehicle. The amendment of Section 147 of the Act was also made with a view to make this SBCMA NO.581/1996 – NATIONAL INSURANCE COMPANY LTD. V/S PRABHU AND FOUR CONNECTED APPEALS : JUDGMENT DTD..23.7.2009 8/14 position clear that after 14.11.1994 if the goods vehicles have been hired for carrying the goods, then the Insurance Company can cover the liability of owner or authorized representative of the goods being carried in the said goods vehicles. In any case, no liability can be fastened upon the Insurance Company for compensating death or bodily injury of gratuitous passengers and this legal position obtains right from the beginning even under the Old Act of 1939 as well as under the new enactment of 1988. It would be useful to extract the relevant portion of the judgment of the Hon'ble Supreme in the case of Asha Rani (supra) as under: “Per G.B. Pattanaik, C.J.I (For himself, H.K. Sema and S.B. Sinha JJ) : Prior to the amendment of 1994 it was not necessary for the insurer to insure against the owner of the goods or his authorized representative being carried in a goods vehicle. It is no doubt true that sometimes the legislature amends the law by way of amplification and clarification of an inherent position which is there in the statute, but a plain meaning being given to SBCMA NO.581/1996 – NATIONAL INSURANCE COMPANY LTD. V/S PRABHU AND FOUR CONNECTED APPEALS : JUDGMENT DTD..23.7.2009 9/14 the words used in the statute, as it stood prior to its amendment of 1994, and as it stands subsequent to its amendment in 1994 and bearing in mind the objects and reasons engrafted in the amended provisions referred to earlier, it is difficult for us to construe that the expression 'including owner of the goods or his authorized representative carried in the vehicle' which was added to the pre- existing expression 'injury to any person' is either clarificatory or amplification of the pre-existing statute. On the other hand, it clearly demonstrates that the legislature wanted to bring within the sweep of section 147 and making it compulsory for the insurer to insure even in case of a goods vehicle, the owner of the goods or his authorised representative being carried in a goods vehicle when that vehicle met with an accident and the owner of the goods or his representative either dies or suffers bodily injury. Per S.B. Sinha, J. (concurring) : Section 2(35) of the Motor Vehicles Act, 1988, does not include passengers in goods carriage whereas section 2 (25) of 1939 Act did, as even passengers could be SBCMA NO.581/1996 – NATIONAL INSURANCE COMPANY LTD. V/S PRABHU AND FOUR CONNECTED APPEALS : JUDGMENT DTD..23.7.2009 10/14 carried in a goods vehicle. The difference in the definitions of the 'goods vehicle' in 1939 Act and 'goods carriage' in 1988 Act is significant. By reason of that change in the definitions of the terminology, the legislature intended that a goods vehicle could not carry any passenger, as the words 'in addition to passengers' occurring in the definition of goods vehicle in 1939 Act were omitted. Furthermore, it categorically states that 'goods carriage' would mean a motor vehicle constructed or adapted for use 'solely for the carriage of goods'. Carrying of passengers in a 'goods carriage', thus, is not contemplated under 1988 Act. Section 147 of 1988 Act, inter alia, prescribes copulsory coverage against the death of or bodily injury to any passenger of 'public service vehicle'. Proviso appended thereto categorically states that compulsory coverage in respect of drivers and conductors of public service vehicle and employees carried in a goods vehicle would be limited to the liability under the Workmen's compensation Act. It does not speak of any passenger in a 'goods carriage'. Section 149(2) of the 1988 Act enables the insurers to raise defences SBCMA NO.581/1996 – NATIONAL INSURANCE COMPANY LTD. V/S PRABHU AND FOUR CONNECTED APPEALS : JUDGMENT DTD..23.7.2009 11/14 against the claim of the claimants. In terms of clause (a) (i) © of sub-section (2) 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, 2000 ACJ 1 (SC).” 8. This court is further of the opinion that the statement of witness Shankar Lal before the Tribunal that they paid Rs.10-15 while boarding the said vehicle at village Gandhav upto Barmer and therefore, they should be treated to have hired the said vehicle for carrying the goods, also does not convince this Court. The said averment in the statement recorded by the Tribunal appears to be clearly an afterthought and to bring the claim within the parameters of amended legal position of law w.e.f. 14.11.1994 even though this claim petition was filed in the year 1993. Since the claimants knew that gratuitous passengers in the SBCMA NO.581/1996 – NATIONAL INSURANCE COMPANY LTD. V/S PRABHU AND FOUR CONNECTED APPEALS : JUDGMENT DTD..23.7.2009 12/14 goods vehicle would not be entitled to recover anything from the Insurance Company, the averment to the effect of hiring of the said goods vehicle for the purpose of carrying goods was made and was conveniently agreed and admitted by the owner of the vehicle in the written statement. Had there been some goods in the vehicle, a mention thereof would have been found by the police during the investigation of the FIR, which was lodged immediately upon the said accident taking place, by Shankar Lal. However, a perusal of the FIR does not disclose any such fact of any goods being carried in the said vehicle. The payment of nominal sum of Rs.10-15 stated by the said witness for carrying three passengers for a distance of about 35 kms is also not very convincing. Passengers as such are not allowed to be carried in goods vehicles and therefore, unless they were accompanying their goods in the said goods vehicle as owner or authorized representative of the owner accompanying the said goods, the liability to pay compensation cannot be fastened upon the Insurance Company. Therefore, the award of the learned Tribunal qua the present SBCMA NO.581/1996 – NATIONAL INSURANCE COMPANY LTD. V/S PRABHU AND FOUR CONNECTED APPEALS : JUDGMENT DTD..23.7.2009 13/14 Insurance Company also deserves to be set aside. 9. The appeal is accordingly allowed qua the appellant Insurance Company. The award against the owner of the vehicle is however, maintained and the balance amount of compensation can be recovered by the claimants from the owner of the vehicle. The amount already paid by the Insurance Company to the claimants under Section 140 of the Act and under the interim order of this Court to the extent of Rs.50,000/- would be recoverable by the Insurance Company either from the owner of the vehicle or the claimants and the Insurance Company would be entitled to proceed for recovery in accordance with law. No costs.” 2. The learned counsel for the respondents – owners as well as the claimants further submitted that since said truck was taken on hire for taking “Barat” of one Basu Lal, therefore, the passengers in the said truck cannot be said to be gratuitous passengers and thus the insurance company would be liable. However, they were unable to satisfy as to whether such goods carriage vehicle, namely, the truck could at all be hired for this purpose and whether the insurance company had charged any premium for covering such risk. SBCMA NO.581/1996 – NATIONAL INSURANCE COMPANY LTD. V/S PRABHU AND FOUR CONNECTED APPEALS : JUDGMENT DTD..23.7.2009 14/14 Admittedly the truck in question was a goods carriage as defined under the Act and therefore, no passenger could as such travel in the same nor the Insurance Company having covered any such risk under the insurance contract in question, the liability of paying such compensation cannot be fastened upon the insurance company. Therefore, this court finds no force in the submissions made by the learned counsels for the owners and claimants. 3. Accordingly these appeals deserve to be allowed in the same terms as decided by this Court following the Supreme Court decision in the case of National Insurance company V/s Rattani and ors. (supra). No order as to costs. (Dr.VINEET KOTHARI)J. Item No.9-12. Ss/-