IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No. 1578 of 2008 Date of decision: May 26, 2008 Bajaj Allianz General Insurance Company Ltd. ..... Appellant Versus Rajinder Rajan and Others ..... Respondents Present : Mr. P.M. Goyal, Advocate for the appellant. *** S.S. SARON, J. This appeal has been filed by the appellant-Bajaj Allianz General Insurance Company Ltd. against the judgment and award dated 02.04.2008 passed by the learned Motor Accident Claims Tribunal, Rupnagar (“Tribunal” - for short) whereby the claim petition filed by the claimants has been accepted and an award of Rs.2,66,000/- has been passed in favour of the claimants who are the legal heirs of the deceased -Ajay Singh who died in the motor cycle accident of which he was riding pillion and was being driven by Amandeep Singh who also died in the same accident. The claimants filed a petition under Section 163-A of the Motor Vehicles Act, 1988 (‘1988 Act’ – for short) seeking compensation on account of the death of Ajay Singh. On 8.1.2007, Amandeep Singh (deceased) and his cousin brother Ajay Singh had gone on their motorcycle No. PB-41-C- 0593 to get the gas cylinder refilled at Village Mahlan. Amandeep Singh (deceased) was driving the motorcycle at a slow speed and his cousin brother- FAO No. 1578 of 2008 -2- Ajay Singh (deceased) was riding pillion. While returning when they reached near the curve of village Mazafat, then a stray cow came in front of the motorcycle and in order to save the cow, the motorcycle struck against a 'Jamun' tree and both the riders fell down. Ajay Singh died at the spot and Amandeep Singh received multiple grievous injuries and he succumbed to his injuries and died on the way to the hospital. The accident had taken place due to the use of aforesaid motorcycle. Hence, it was claimed that the respondents in the claim petition were jointly and severally liable to pay compensation to the claimants. In the written statement filed by Sh. Harmesh Singh (respondent No.3), the owner of the motor cycle, the manner in which the accident had occurred was admitted. It was, however, pleaded that the vehicle involved in the accident was insured with the appellant Insurance Company. Therefore, the liability to pay compensation to the complainants may be fastened on it. In the written statement filed by the appellant-Insurance Company, a preliminary objection was raised to the effect that the claim petition was not maintainable and that the Tribunal has no jurisdiction to try and adjudicate the present petition for the reasons that the claim petition was not a petition in respect of death of any third party. Besides, the deceased - Amandeep Singh who was driving the motor cycle was not holding a valid and effective driving licence at the time accident. The present claim petition filed by the legal heirs of deceased Ajay Singh was decided along with the claim petition filed by the legal heirs of deceased-Amandeep Singh and aggrieved against the award passed by the learned Tribunal, the appellant-Insurance Company has filed the present appeal. FAO No. 1578 of 2008 -3- Learned counsel for the appellant-Insurance Company has contended that Ajay Singh (deceased) in the present case was a gratuitous passenger on the motor cycle on which he was riding pillion and, therefore, the Insurance Company was not liable to pay any compensation. It is submitted that in terms of the Insurance Policy, no extra premium was paid nor was it charged to cover the risk of a gratuitous passenger and a pillion rider. In other words, it is submitted that the insurance policy in respect of the motor cycle that was involved in the accident, no extra premium was paid by the insured nor charged by the insurer to cover the risk pertaining to a pillion rider. Reliance is placed on Section 147 of the Act to contend that it does not require the insurer to cover the risk in respect of an occupant/gratuitous passenger in the car. In support of his contention, learned counsel appearing for the appellant-Insurance Policy cites the following judgments :- (1)United India Insurance Co. Ltd, Shimla v. Tilak Singh & Ors, 2006 AIR SCW 1822. (2)New India Assurance Co. Ltd. v. C.M. Jaya and others, 2002 ACJ 271. (3)Ramashray Singh v. New India Assurance Co. Ltd. and others, 2003 ACJ 1550. (4)United India Insurance Co. Ltd. v. Bhagyalakshmi and Others, 2007 ACJ 1676. (5)New India Assurance Co. Ltd. v. Ranglal Punju Nikam and Others, 2007 ACJ 1483. I have given my thoughtful consideration to the contentions of the learned counsel for the appellant-Insurance Company and perused the record. It may be noticed that the claim petition that was filed by the legal heirs of the deceased Ajay Singh is under Section 163-A of the 1988 Act, which reads as under :- FAO No. 1578 of 2008 -4- 163-A. Special provisions as to payment of compensation on structured formula basis. - (1) Notwithstanding anything contained in this Act or in any other law for the time being in force or instrument having the force of law, the owner of the motor vehicle or the authorised insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be. Explanation – For the purposes of this sub-Section, “permanent disability” shall have the same meaning and extent as in the Workmen's Compensation Act, 1923. (2) In any claim for compensation under sub-Section (1), the claimant shall not be required to plead or establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act or neglect or default of the owner of the vehicle or vehicles concerned or of any other person. (3) The Central Government may, keeping in view the cost of living by notification in the Official Gazette, from time to time amend the Second Schedule.” (Emphasis added). A reading of Section 163-A (1) of the 1988 Act shows that it starts with a non-obstante clause which provides that notwithstanding anything contained in this Act or in any other law for the time being in force or instrument having the force of law, the owner of the motor vehicle or the FAO No. 1578 of 2008 -5- authorised insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be. Therefore, it is provided that the owner of the motor vehicle or the authorised insurer which would mean the authorised insurer of the vehicle and this is subject to notwithstanding anything contained in this Act or in any other law for the time being in force is liable to pay in case of death or permanent disablement due to accident arising out of use of a motor vehicle. The effect of the non-obstante clause has been considered in several decisions of the Supreme Court. The primary effect of it is that with the view to give the enacting part of the Section in case of conflict an overriding effect over the provisions or Act mentioned in the non-obstante clause. In Union of India v. G.M. Kokil, AIR 1984, SC 1022 it was held that it is well known that a non- obstante clause is a legislative device which is usually employed to give overriding effect to certain provisions over some contrary provisions that may be found either in the same enactment or some other enactment, that is to say, to avoid the operation and effect of all contrary provisions. Thus the non-obstante clause in Section 70 of the Bombay Act, namely, “notwithstanding anything in that Act”, it was observed, must mean notwithstanding anything to the contrary contained in that Act and as such it must refer to the exempting provisions which would be contrary to the general applicability of the Act. In other words, as all the relevant provisions of the Act are made applicable to a factory notwithstanding anything to the contrary contained in it, it must have the effect of excluding the operation of the exemption provisions. The non-obstante clause therefore gives overriding effect to the other general provisions of the Act. The case of United India Insurance Co. Ltd. v. Tilak Singh and Ors FAO No. 1578 of 2008 -6- (supra), cited by the learned counsel for the appellant, was a case in the context of Sections 95 (1) (a) and 103-A of the Motor Vehicles Act, 1939 (“1939 Act” – for short) which are now Sections 147 (1) and 157 of the 1988 Act. In the said case, it was observed that the Insurance Company had no liability towards the injuries suffered by the deceased who was a pillion rider. The question which arose for consideration by the Supreme Court in the said case was whether a statutory policy under the 1988 Act intended to cover the risk to life or damage to properties of third parties would cover the risk of death or injury to a gratuitous passenger carried in a private vehicle. It was held that the observations made in Asha Rani’s case (2003) 2 SCC 223 were in connection with carrying passengers in goods vehicle, the same would apply with equal force to gratuitous passengers in any other vehicles. As such the appellant Insurance Company in the said case, it was held, owed no liability towards the injuries suffered by the deceased who was a pillion rider, as the insurance policy was a statutory policy and hence it did not cover the risk of death or bodily injury to a gratuitous passenger. In the context of the 1939 Act and 1988 Act, it was observed in terms thereof the legal position was that unless there was a specific coverage of the risk pertaining to a gratuitous passenger in the policy, the insurer was not liable. A reference was made to Section 95(1) proviso (ii) and it was observed that the same had been eliminated while drafting Section 147 of the Act. The established legal position under the 1939 Act was that unless there was a specific coverage of the risk pertaining to a gratuitous passenger in the policy, the insurer was not liable. In terms of Section 147 (1)(b) of the 1988 Act, compulsory policy of insurance is required under the statute which must now provide against any liability which may be incurred by the owner of the vehicle; “in respect of the death or bodily injury to FAO No. 1578 of 2008 -7- any person, including owner of the goods or his authorized representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place”. In any case, in the said case, the provisions of Section 163-A (1) of the 1988 Act in terms of which the claim petition has been filed in the present case were not involved. The case of New India Assurance Co. Ltd. v. C.M. Jaya and others (supra), was also a case under Section 95 (2) of the 1939 Act. In the said case, death had occurred of the pillion rider of the two-wheeler scooter when it met with an accident with a truck. The truck was comprehensively insured but no additional or higher premium was paid to cover unlimited or higher liability than the statutory liability of a third party. It was held that the liability of the Insurance Company of the truck was limited to Rs.50,000/ as per statute at the time of accident and that under a comprehensive policy liability of insurance company is not unlimited qua third party. The ratio of the said judgment would not apply to the facts of the present case as the claim has been made in terms of Section 163-A of the 1988 Act which as already noticed starts with a non-obstante clause, besides it is not a case of limited liability of Rs.50,000/- as in the said case. In Ramashray Singh v. New India Assurance Co. Ltd and ors (Supra), the claim was made for the death of 'khalasi' in a motor vehicle accident. The insurance policy covered risk of 13 passengers and one driver. It was contended that the phrases 'any person' and 'any passenger' in sub-Clauses (i) and (ii) of Section 147 (1) (b) are of wide amplitude and cover the 'khalasi' as a passenger. In the alternative, it was contended that the deceased in the said case was a conductor. It was considered whether the risk of 'khalasi' was covered and whether the Insurance Company was liable. It was held that the policy covered the risk of a driver, conductor or examiner of tickets and it did not FAO No. 1578 of 2008 -8- cover the risk of any other employee; besides 'khalasi' and conductor were not the same. In the said case, the claim of the deceased employee therein was adjudicated upon by the Workmen’s Compensation Court which it was observed could have assumed jurisdiction and passed an order directing compensation only on the basis that the deceased was an employee. The said order could not be enforced on the basis that the deceased was a passenger. Therefore, it was also not a case of Section 163-A (1). In United India Insurance Co. Ltd. v. Bhagyalakshmi and Ors (supra), it was observed that car was insured under 'B' policy and the said policy can cover the risk of occupants of the car on the payment of additional premium. It was observed that the occupant of a private car was not required to be covered under the statute and such risk would only be covered by way of a contract by paying additional premium. The same was in the context of Section 147 (1) of the 1988 Act. In New India Assurance Company Limited v. Ranglal Punju Nikam and others (supra), a Division Bench of Bombay High Court considered the case of gratuitous passenger in a private vehicle sustaining injuries when the vehicle slipped, turned turtle and fell in a ditch. It was contended on behalf of the insurance company that the policy did not cover risk of a gratuitous passenger in a private vehicle and the liability of the insurance company was limited to the extent as imposable by additional premium paid. The policy covered risk of passengers to the tune of Rs.50,000/- and for a maximum of four passengers. It was observed that the total liability of the insurance company towards passengers, due to payment of extra premium of Rs.100/- was Rs.50,000/- and as per IMT 5, the personal accident benefits were 100 per cent of it in the case of death or loss of sight of both eyes, physical separation of two entire hands or two entire legs or loss of one hand plus one leg or one eye plus one hand or one FAO No. 1578 of 2008 -9- leg. In case of total and irrecoverable loss of use of hand or foot without physical separation, liability extends to 50 per cent. Although in the case of claimant that he suffered fracture of leg, it was not a case of total separation but a case of total irrecoverable loss of use of leg, the liability of insurance company, therefore, it was held shall be 50 per cent Rs.50,000/- i.e., Rs.25,000/-. As such the ratio of the said judgment is inapplicable to the facts of the present case. Therefore, it may appropriately be noticed that the cases cited by the learned counsel for the appellant are not cases which relate to or are covered by the provisions of Section 163-A of the Act. The said provision as has already been noticed starts with a non-obstante clause and therefore has an overriding effect over the other provisions in the Act. In Deepal Girishbhai Soni and Others v. United India Insurance Co. Ltd., Baroda, (2004) 5 SCC 385 it was observed by the Supreme Court while analyzing the provisions of Section 163-A that the said provision as incorporated by the amendment are beneficial in nature and the Act indisputably is in the nature of a social welfare legislation. It was observed that Section 163-A was introduced in the 1988 Act by way of a social security scheme and that it is a code by itself. A reference was made to the Objects and Reasons of the Motor Vehicles (Amendment) Act, 1994 that after enactment of the 1988 Act several representations and suggestions were made from the State Governments, transport operators and members of the public in relation to certain provisions thereof. Taking note of the observations made by the various Courts and the difficulties experienced in implementing the various provisions of the Motor Vehicles Act, the Government of India appointed a Review Committee which made various recommendations. It was observed that Section 163-A of the 1988 Act was FAO No. 1578 of 2008 -10- enacted for grant of immediate relief to a section of the people whose annual income is not more than Rs.40,000/- having regard to the facts that in terms of Section 163-A of the 1988 Act read with the Second Schedule appended thereto, compensation is to be paid on a structured formula not only having regard to the age of the victim and his income but also the other factors relevant therefor. In Rita Devi and others v. New India Assurance Co. Ltd. and another, (2000) 5 SCC 113 one Dasarath Singh was driver of an auto- rickshaw owned by Lalit Singh. The auto-rickshaw was registered as a public carrier used for hire by passengers. It was insured with the Insurance Company. On 22.3.1995, some unknown persons hired the auto-rickshaw which was stolen and the dead body of Dasarath Singh the driver was recovered. The auto- rickshaw was never recovered and the claim of the owner for the loss of the auto-rickshaw was accepted by the Insurance Company and the amount of loss paid. The claimants through their power of attorney being legal representatives of the deceased filed a petition under Section 163-A of the Act claiming damages for the death of Dasarath Singh caused during the course of his employment under the said auto-rickshaw as a death caused in an accident arising out of the use of the motor vehicle. The Claims Tribunal allowed the petition against the owner of the auto-rickshaw and also fastened legal and statutory liability on the Insurance Company. The appeal of the Insurance Company was allowed by the High Court on the ground that it was a case of murder and not that of an accident. Before the Supreme Court, the legal representatives of the deceased contended that the death of Dasarath Singh falls within words. “death due to accident arising out of the use of motor vehicle” as provided under Section 163-A(1) of the Act. It was held by the Supreme Court FAO No. 1578 of 2008 -11- that the death of Dasarath Singh was caused accidentally in the process of committing theft of the auto-rickshaw. Therefore, the trial Court rightly came to the conclusion that the claimants were entitled to compensation as claimed by them and the High Court was wrong in coming to the conclusion that the death of Dasarath Singh was not caused by an accident involving the use of motor vehicle. Reliance was placed on the case of Shivaji Dayanu Patil v. Vatschala Uttam More, (1991) 3 SCC 530, wherein while pronouncing on the interpretation of Section 92-A of the Motor Vehicles Act, 1939 it was held as follows :- “Section 92-A was in the nature of a beneficial legislation enacted with a view to confer the benefit of expeditious payment of a limited amount by way of compensation to the victims of an accident arising out of the use of a motor vehicle on the basis of no-fault liability. In the matter of interpretation of a beneficial legislation the approach of the courts is to adopt a construction which advances the beneficent purpose underlying the enactment in preference to a construction which tends to defeat that purpose”. It may, therefore, be noticed that Section 163-A of the 1988 Act being in the nature of a social welfare legislation and by way of a social security scheme, the benefit of the same is to be extended to the victims of the legal heirs where a death or a permanent disablement occurs due to accident arising out of the use of motor vehicle by way of payment of compensation. Besides, starting with a non-obstante clause, it has overriding effect over the other provisions of the Act or anything contained in any other law. A Division Bench of this Court in New India Assurance Company Ltd. v. Shyamo Chauhan & Ors., 2005 (1) CCC 618 (P&H) in a case under Section 163-A FAO No. 1578 of 2008 -12- held that deceased driver was owner of motor vehicle. Therefore, owner and Insurance Company were liable to pay compensation under “no fault liability” where accident takes place “arising out of the use of motor vehicle”. Therefore, in view of the fact , it is a case under Section 163-A (1) of the 1988 Act, it cannot be said that the Insurance Company is absolved of its liability. The accident had indeed occurred on account of the use of the motor vehicle on which the deceased Ajay Singh was riding pillion. Besides, it may be noticed that the accident in no way is on account of any rash and negligent driving on the part of Amandeep Singh who was driving the motor cycle. In fact a stray cow had come in front of the motorcycle and in order to save it, the motorcycle struck against a 'Jamun' tree and both the riders fell down. Learned counsel for the appellant-Insurance Company during the course of hearing has not been able to show the Insurance Policy where the liability of the appellant-Insurance Company is completely absolved. Consequently, there is no merit in this appeal and the same is accordingly dismissed. (S.S. SARON) JUDGE May 26, 2008 amit