F.A.O.Nos. 1384 to 1391 of 2006, Civil Revision Nos. 2041 & 2042 of 2006 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH F.A.O.NO. 1384 OF 2006 Date of decision:30th September, 2010 M/s United India Insurance Co. Ltd., Regional Office, S.C.O.No. 123- 124, Sector 17-B, Chandigarh through Sh. R.S.Bansal, duly constituted attorney. .......Appellant Versus Gopal and others ........Respondents F.A.O.NO. 1385 OF 2006 M/s United India Insurance Co. Ltd., Regional Office, S.C.O.No. 123- 124, Sector 17-B, Chandigarh through Sh. R.S.Bansal, duly constituted attorney. .......Appellant Versus Jagdish and others ........Respondents F.A.O.NO. 1386 OF 2006 M/s United India Insurance Co. Ltd., Regional Office, S.C.O.No. 123- 124, Sector 17-B, Chandigarh through Sh. R.S.Bansal, duly constituted attorney. .......Appellant Versus Smt. Guddi and others ........Respondents F.A.O.NO. 1387 OF 2006 M/s United India Insurance Co. Ltd., Regional Office, S.C.O.No. 123- 124, Sector 17-B, Chandigarh through Sh. R.S.Bansal, duly constituted attorney. .......Appellant Versus Krishan Kumar and others ........Respondents F.A.O.Nos. 1384 to 1391 of 2006, Civil Revision Nos. 2041 & 2042 of 2006 -2- F.A.O.NO. 1388 OF 2006 M/s United India Insurance Co. Ltd., Regional Office, S.C.O.No. 123- 124, Sector 17-B, Chandigarh through Sh. R.S.Bansal, duly constituted attorney. .......Appellant Versus Mahesh Chand and others ........Respondents F.A.O.NO. 1389 OF 2006 M/s United India Insurance Co. Ltd., Regional Office, S.C.O.No. 123- 124, Sector 17-B, Chandigarh through Sh. R.S.Bansal, duly constituted attorney. .......Appellant Versus Smt. Murti Devi and others ........Respondents F.A.O.NO. 1390 OF 2006 M/s United India Insurance Co. Ltd., Regional Office, S.C.O.No. 123- 124, Sector 17-B, Chandigarh through Sh. R.S.Bansal, duly constituted attorney. .......Appellant Versus Neelam and others ........Respondents F.A.O.NO. 1391 OF 2006 M/s United India Insurance Co. Ltd., Regional Office, S.C.O.No. 123- 124, Sector 17-B, Chandigarh through Sh. R.S.Bansal, duly constituted attorney. .......Appellant Versus Deepak and others ........Respondents Civil Revision No. 2041 OF 2006 M/s United India Insurance Co. Ltd., Regional Office, S.C.O.No. 123- 124, Sector 17-B, Chandigarh through Sh. R.S.Bansal, duly constituted attorney. .......Appellant Versus F.A.O.Nos. 1384 to 1391 of 2006, Civil Revision Nos. 2041 & 2042 of 2006 -3- Smt. Shanti and others ........Respondents Civil Revision.NO. 2042 OF 2006 M/s United India Insurance Co. Ltd., Regional Office, S.C.O.No. 123- 124, Sector 17-B, Chandigarh through Sh. R.S.Bansal, duly constituted attorney. .......Appellant Versus Smt. Sunita and others ........Respondents BEFORE: HON'BLE MR. JUSTICE K.KANNAN Present: Mr. Raj Kumar Bashamboo, Advocate, for the appellant. None for the respondents. 1. Whether Reporters of local papers may be allowed to see the judgment? Yes/No 2. To be referred to the Reporters or not?Yes/No 3. Whether the judgment should be reported in the Digest? Yes/No K.Kannan, J.(Oral) 1. There are eight appeals and two civil revisions. All of them arise out of the same accident. The claimants are representatives of the deceased or injured persons, making a claim for compensation for death and injury in the accident of the insured's vehicle. All the claimants were going to Mohan Dass Baba Mandir in a goods carriage. The contention was that they were all booked to travel to the mandir. Evidently, they were travelling in a vehicle which was not supposed to carry passengers and there was no possibility of an insurance cover for risk to bodily injury or death for such passengers. The Tribunal held in F.A.O.Nos. 1384 to 1391 of 2006, Civil Revision Nos. 2041 & 2042 of 2006 -4- paragraph 18 that the owner of the vehicle had committed a breach of the terms of the policy that he was using the vehicle for transporting persons and not merely goods. However, while applying the relief, the Tribunal applied the decision of the Hon'ble Supreme Court in New India Assurance Co., Shimla v. Kamla,(2001) 4 SCC 342 and held that the insurance company shall pay the amount initially and recover the same from respondent nos. 1 and 2 through legal representatives. The Tribunal was completely in error in applying the pay and income pinciples enunciated by the Kamla's judgment(supra) referred to above. On the other hand, this matter is squarely covered by the decision of the Hon'ble Supreme Court in New India Assurance Co. Ltd. vs. Asha Rani and others (2003) 2 SCC 223. The liability to pay in the first place must be founded on the terms of the policy and guaranteed by the provision under the Act. The liability could arise in compulsory insurance situations covered under Section 147 of the Act. In the first place, before the Tribunal applies the pay and recover principle, it must first satisfy itself that there was a liability for taking a compulsory cover under Section 147 of the Act or there was a particular clause in the policy of the terms that covered the risk for bodily risk or injuries or both of the person who had used the motor vehicle. Then, if there had been a violation of terms of policy that enabled an insurer to plead under any of the grounds covered under Section 149(2) of the Act, then notwithstanding such violation by the F.A.O.Nos. 1384 to 1391 of 2006, Civil Revision Nos. 2041 & 2042 of 2006 -5- fact that the claimant had the benefit of compulsory insurance or a term of policy for enabling the claim. It would become possible to enforce the claim against the insurer and leave the right to the insurer to recover against the insured for violation of the terms of the policy. 2. On the contrary, if there had been no requirement under law for covering particular type of risk then it only means that there was no duty to pay at all. The question of making the insurer pay and recover does not arise in a case that deals with gratuitous passenger in a goods carriage or fare paying passengers in a goods carriage. There is no requirement under any provision of law for taking an insurance cover to such persons. The only class of persons who could be covered while travelling in a goods carriage are the persons referred under Section 147 of the Act itself, namely, the driver or a conductor or a workman who is required to be protected under the provisions of Workmen's Compensation Act or the owner of the goods travelling along with the goods. If the persons who were deceased or injured did not fall within any of the above categories, then they were not the persons who could leave a trail of cause of action for the representatives or the injured themselves to have claim against the insurer. It is to these situations that the decision in Asha Rani's case (supra) would apply. There was no liability for an insurer to cover the risk and therefore, there was no liability in the first place to make any payment to the claimants. If the accident had been the result of F.A.O.Nos. 1384 to 1391 of 2006, Civil Revision Nos. 2041 & 2042 of 2006 -6- negligence of the driver of the vehicle then the owner himself shall be vicariously liable for the compensation to the claimants. 3. The awards of the Tribunal granting compensation against the insurer under the circumstances are set aside and the appeals are allowed. The claimants shall have a right of enforcement of the awards determined by the Tribunal against the owner/insured. All the appeals and civil revisions are allowed in terms referred to above. [K.KANNAN] JUDGE 30th September, 2010 Shivani Kaushik