1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD FIRST APPEAL NO. 521 OF 1994 New India Assurance Company Ltd., having its registered Office at New India Assurance Building, 87, M. G. Marg, Fort, Bombay -1, and having its Branch Office at Khandesh Mill Shopping Complex, Bldg. No. 6, Jalgaon by its Branch Manager and Divisional Office At Aurangabad. .. .. Appellant Versus 1. Jivlal S/o Ramlal Rajput, Age : 27 Years, 2. Thansingh Ramlal Rajput, Age : 24 Years, 3. Gopal Ramlal Rajput, Age : 21 Years, 4. Prakash Ramlal Rajput, Age : 19 Years, 5. Unhersingh Ramlal Rajput, Age : 18 Years, Resp. No. 1 to 5 by Occu. Agril., 2 R/o Kalkheda Post Vaghari, Tq. Jamner, Dist. Jalgaon. 6. Sunderbai Shenfadu Pardeshi, Age : 95 Years, Occu. : Nil, R/o Kalkheda Post Vaghari, Tq. Jamner, Dist. Jalgaon. 7. Amirbeg Abbasbeg Musalman, Age : Major, Occu. : Truck Driver, R/o Jamner, Dist. Jalgaon. 8. Smt. Chotibi W/o Sk. Nabbu Musalman, Age : 35 Years, Occu. : Business, R/o Utran, Tq. Erandol, District Jalgaon. .. .. Respondents Shri S. L. Kulkarni, Advocate for the Appellant. Mrs. Asha Rasal, Advocate for Respondent Nos. 1 to 5 - absent. Appeal abated as against the Respondent No. 6. The respondent No. 7 served and the Respondent No. 8 served through paper publication. WITH FIRST APPEAL NO. 522 OF 1994 New India Assurance Company Ltd., having its registered Office at New India Assurance Building, 87, M. G. Marg, Fort, Bombay -1, and having its Branch Office at Khandesh Mill Shopping Complex, Bldg. No. 6, Jalgaon by its 3 Branch Manager and Divisional Office At Aurangabad. .. .. Appellant Versus 1. Shriram Narayan Patil, Age : 38 Years, Occu. : Agril., R/o Naganchowki Post Samrod, Tq. Jamner, Dist. Jalgaon. 2. Amirbeg Abbasbeg Musalman, Age : Major, Occu. : Truck Driver, R/o Jamner, Dist. Jalgaon. 3. Smt. Chotibi W/o Sk. Nabbu Musalman, Age : 35 Years, Occu. : Business, R/o Utran, Tq. Erandol, District Jalgaon. .. .. Respondents Shri S. L. Kulkarni, Advocate for the Appellant. Shri V. B. Garud, Advocate for the Respondent No. 1. The respondent No. 2 served and the Respondent No. 3 served through paper publication. WITH FIRST APPEAL NO. 523 OF 1994 New India Assurance Company Ltd., having its registered Office at New India Assurance Building, 87, M. G. Marg, Fort, Bombay -1, and having its Branch Office at Khandesh Mill Shopping Complex, 4 Bldg. No. 6, Jalgaon by its Branch Manager and Divisional Office At Aurangabad. .. .. Appellant Versus 1. Kishanrao Govindrao Parise, Age : 39 Years, Occu. : Music Bhajan Teacher, R/o Sangvi Post Kheri, Tq. Achalpur, Dist. Amravati At present R/o Nandura, Tq. Malkapur, Dist. Buldhana. 2. Amirbeg Abbasbeg Musalman, Age : Major, Occu. : Truck Driver, R/o Jamner, Dist. Jalgaon. 3. Smt. Chotibi W/o Sk. Nabbu , Age : 35 Years, Occu. : Business, R/o Utran, Tq. Erandol, District Jalgaon. .. .. Respondents Shri S. L. Kulkarni, Advocate for the Appellant. Shri A. R. Rathod, Advocate for the Respondent No. 1. The respondent No. 2 served and the Respondent No. 3 served through paper publication. WITH FIRST APPEAL NO. 524 OF 1994 New India Assurance Company Ltd., having its registered Office at New India Assurance Building, 5 87, M. G. Marg, Fort, Bombay -1, and having its Branch Office at Khandesh Mill Shopping Complex, Bldg. No. 6, Jalgaon by its Branch Manager and Divisional Office At Aurangabad. .. .. Appellant Versus 1. Gulabrao Tukaram Patil, Age : 39 Years, Occu. : Kirtan Bhajan and Music Teacher, R/o Chikhli, Tq. Edlabad, District Jalgaon. 2. Amirbeg Abbasbeg Musalman, Age : Major, Occu. : Truck Driver, R/o Jamner, Dist. Jalgaon. 3. Smt. Chotibi W/o Sk. Nabbu , Age : 35 Years, Truck Owner, R/o Utran, Tq. Erandol, District Jalgaon. .. .. Respondents Shri S. L. Kulkarni, Advocate for the Appellant. Shri A. R. Rathod, Advocate for the Respondent No. 1. The respondent No. 2 served and the Respondent No. 3 served through paper publication. WITH FIRST APPEAL NO. 525 OF 1994 New India Assurance Company Ltd., 6 having its registered Office at New India Assurance Building, 87, M. G. Marg, Fort, Bombay -1, and having its Branch Office at Khandesh Mill Shopping Complex, Bldg. No. 6, Jalgaon by its Branch Manager and Divisional Office At Aurangabad. .. .. Appellant Versus 1. Hajari Deepa Naik, Age : 50 Years, 2. Kashinath Hajari Naik, Age : 30 Years, 3. Sukdeo Hajari Naik, Age : 28 Years, 4. Indal Hajari Naik, Age : 25 Years, 5. Prakash Hajari Naik, Age : 20 Years, 6. Vikas Hajari Naik, Age : 16 Years, Minor, through his natural father, respondent No. 1. 7. Sheshmal Hajari Naik, Age : 12 Years, Minor, 7 through his natural father, respondent No. 1. All R/o Khadki, Tq. Jamner, Dist. Jalgaon. 8. Amirbeg Abbasbeg Musalman, Age : Major, Occu. : Truck Driver, R/o Jamner. 9. Smt. Chotibi Sk. Nathu Musalman, Age : Major, R/o Utran, Tq. Erandol, District Jalgaon. .. .. Respondents Shri S. L. Kulkarni, Advocate for the Appellant. Shri V. B. Garud, Advocate for Respondent No. 1. The respondent No. 8 served and the Respondent No. 9 served through paper publication. WITH FIRST APPEAL NO. 526 OF 1994 WITH CROSS OBJECTION ST. NO. 25728 OF 1994 New India Assurance Company Ltd., having its registered Office at New India Assurance Building, 87, M. G. Marg, Fort, Bombay -1, and having its Branch Office at Khandesh Mill Shopping Complex, Bldg. No. 6, Jalgaon by its Branch Manager and Divisional Office 8 At Aurangabad. .. .. Appellant Versus 1. Hiralal Babulal Bhagrecha, Age : 40 Years, Occu. : Agril., 2. Smt. Pramila Hiralal Bhagrecha, Age : 35 Years, Occu. : Household, Both R/o at Shelwad, Tq. Edlabad, District Jalgaon. 3. Amirbeg Abbasbeg Musalman, Age : Major, Occu. : Truck Driver, R/o Jamner. 4. Smt. Chotibi Sk. Natbbu Musalman, Age : Major, R/o Utran, Tq. Erandol, District Jalgaon. .. .. Respondents Shri S. L. Kulkarni, Advocate for the Appellant. Shri P. R. Katneshwarkar, Advocate for Respondent Nos. 1 & 2. The respondent No. 3 served and the Respondent No. 4 served through paper publication. WITH FIRST APPEAL NO. 59 OF 1995 New India Assurance Company Ltd., having its registered Office at New India Assurance Building, 9 87, M. G. Marg, Fort, Bombay -1, and having its Branch Office at Khandesh Mill Shopping Complex, Bldg. No. 6, Jalgaon by its Branch Manager and Divisional Office At Aurangabad. .. .. Appellant Versus 1. Ku. Majik Majitkha Patel, Age : 8 Occu. : Education 2. Anisabi Majitkha Patel, Age : 4 Occu. : Nil, Both minors through their minor guardian Jilanikha Karimkha Pathan Age : 48 Years, Occu. : Labourer, R/o Chandur Biswa, Tq. Nandura, Dist. Buldhana. 3. Amirbeg Abbasbeg Musalman, Occu. : Truck Driver, R/o Jamner. 4. Smt. Chotibi Shaikh Maibu, R/o Utran, Tq. Erandol, District Jalgaon. .. .. Respondents Shri S. L. Kulkarni, Advocate for the Appellant. Shri Ajit M. Gholap, Advocate for Respondent Nos. 1 & 2. The respondent No. 3 served. 10 CORAM : K. K. TATED, J. RESERVED FOR JUDGMENT DATE : 30.11.2010 JUDGMENT PRONOUNCED DATE : 20.12.2010 JUDGMENT : . Heard learned counsel for the parties. All these appeals can be disposed of by common judgment as the issue involved is identical i. e. whether the Insurance Company is liable to pay the compensation if passenger injured/dead travelling in a goods vehicle. The appellant/Insurance Company challenges the judgment and award dated 05th March, 1994, passed by Motor Accident Claims Tribunal, Jalgaon directing them to pay the compensation to the respondents/original claimants on account of the accident which took place on 12th June, 1988. 2. A few facts of the matter are as under : In First Appeal No. 521/1994 respondent/original claimant filed M.A.C.P. No. 274/1988 U/Sec. 110 of the Motor Vehicles Act 1939 claiming compensation of Rs. 1,50,000/- as their son Ramlal died due to the injuries sustained in the accident. Said Ramlal 11 on 12th June, 1988 was travelling in truck No. MHS - 8799 from Kaklheda to Bodwad. When the said truck came near mile stone No. 18, the driver could not control the truck due to its high speed. The truck therefore, left the road and dashed against the tamrind tree which was by the side of the road. In the said accident Ramlal sustained injuries. He died due to those injuries. 3. In First Appeal No. 522/1994, the respondent/original claimant filed Motor Accident Claim Petition No. 257/1988 claiming compensation of Rs. 50,000/-. He was traveling on 12th June 1988 by truck No. MHS - 8799 along with his goods namely jawar. He was going from Wade-Killa to Bodwad. At that time accident took place and he sustained injuries. 4. In First Appeal No. 523/1994, respondent/original claimant filed M.A.C.P. No. 243/1988 claiming a sum of Rs. 75,000/-. On 12th June, 1988 he was proceeding to Bodwad from Wade-Killa by truck No. MHS - 8799 along with his goods. At that time the accident took place and he sustained injuries like fracture of his left femure, etc. 12 5. In First Appeal No. 524/1994, the respondent/original claimant filed M.A.C.P. No. 244/1988 claiming compensation of Rs. 85,000/- towards the injuries sustained by him on 12th June, 1988, when he was travelling by truck No. MHS - 8799 along with his musical instruments like Harmonium, Tabala, Mrudung, etc. from Wade Killa to Bodwad. 6. In First Appeal No. 525/1994, the respondents/original claimants filed M.A.C.P. No. 259/1988 claiming compensation of Rs. 50,000/-. On 12.06.1988 Dhamabai was proceeding to Bodwad in truck No. MHS - 8799. The said truck met with an accident and deceased Dhamabai sustained injuries. Thereafter, she succumbed to those injuries. 7. In First Appeal No. 526/1994, the legal heirs of Deelip filed M.A.C.P. No. 271/1988 claiming compensation of Rs. 1,00,000/-. On 12.06.1988 deceased Deelip was proceeding to Bodwad along with other persons in truck No. MHS - 8799. At that time the accident took place in which Deelip sustained injuries and he died on the spot. The respondents original claimants also filed cross objections claiming enhanced compensation. 13 8. In First Appeal No. 59/1995, the original claimant filed M.A.C.P. No. 270/1988 claiming compensation of Rs. 1,00,000/-. In this case Majidkhan was traveling in truck No. MHS - 8799. On 12.06.1988 accident took place and he died on the spot. 9. The learned counsel appearing on behalf of appellant/Insurance company fairly submits that though they have raised several grounds in appeal memo, they are not pressing the same except about the liability of the Insurance Company. He submits that deceased persons/injured persons were travelling in goods vehicle and, therefore, Insurance Company is not responsible to make the payment towards compensation. He submits that Tribunal erred in applying the provisions of law to the facts of the case and in passing award against the Appellant and also holding jointly responsible to pay the compensation awarded. He submits that in the present cases accident took place on 12.06.1988 and, therefore, the provisions of old Act i. e. Motor Vehicles Act 1939 are applicable. Learned counsel appearing on behalf of appellant mainly relies on terms and conditions of Insurance policy. The Insurance policy is at Exhibit 49 in respect of truck No. MHS - 8799. In Insurance policy following terms are incorporated in respect of 14 limitation as to use : The policy does not cover :- 1. Use for organised racing pace-making relibility trial speed testing. 2. Use whilst drawing a trailer except the towing (other than for reward) of any one disabled mechanically propelled vehicle. 3. Use for carrying passengers in the vehicle except employees (other than the driver) not exceeding six in number coming under the purview of the W. C. Act 1923. 10. He submits that in view of the terms and conditions of policy, in the present case the Insurance company is not responsible to make the payment of compensation to the respondents/original claimants. He further submits that in view of the Apex Court Judgment in the matter of Mallawwa (Smt) and others v. Oriental Insurance Co. Ltd. (1999) 1 Supreme Court Cases 403, AIR 1988 Bombay 199 Oriental Fire and General Insurance Co., Solapur Vs. Hirabai Vithal Nikam and others, AIR 2003 Supreme Court 3093 National Insurance Co. Ltd. Vs. Ajit Kumar and others, 15 the Insurance company is not liable to pay compensation if a goods vehicle is carrying passengers contrary to the terms and conditions of Insurance policy. He submits that though these facts were brought on record, the Tribunal held Insurance Company also responsible for the payment to the original claimants along with driver and owner of vehicle involved in the accident. 11. On the other hand the learned counsel appearing on behalf of respondents vehemently opposed present appeals. They submit that, if deceased/injured persons travelling with their goods in the hired vehicle as a owner of goods which were being transported in it, then Insurance Company is also responsible to make the payment of compensation. In support of their submissions they relied on the judgment in the matter of Balasaheb Shamrao Salunkhe Deceased vs. Laxmibai Yashwant Jadhav reported in 2009 (6) Mh. L. J. page 141, National Insurance Co. Ltd. v. Dundamma and others reported in 1992 ACJ 1. Learned counsel appearing on behalf of respondents/original claimants submit that in view of Bombay Motor Vehicles Rules 118, it is permitted to travel in a goods vehicle as a owner of goods and or carrier of the goods. 16 Therefore, the Insurance company is also liable along with owner and driver of the said vehicle. 12. Considering the submissions of both the sides issue involved in present group of matters is whether the Insurance Company is liable to pay the compensation though the deceased/injured were travelling in a goods vehicle. 13. It is not necessary to go into the facts of the matter in detail, because only the question of law to be decided is, whether Insurance company is responsible if persons travelling in goods vehicle, whether owners of the goods or passengers on payment of fare or gratuitous passengers who died/injured in accident met with by such goods vehicle. For this purpose it is necessary to quote Section 95 (1) of the Motor Vehicles Act 1939. 95. Requirements of policies and limits of liability.-(1) In order to comply with the requirements of this Chapter, a policy of insurance may be a policy which, -- (a) is issued by a person who is an authorised insurer [or by a co-operative society allowed under section 108 to transact the business of an insurer], and [(b) insures the person or classes of persons 17 specified in the policy to the extent specified in sub-section (2)--- (i) against any liability which may be incurred by him in respect of the 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 the vehicle in a public place; (ii) against the death of or bodily injury to any passanger of a public service vehicle caused by or arising out of the use of the vehicle in a public place;] Provided that a policy shall not [* * *] be required-- (i) to cover liability in respect of the death, arising out of an in the course of his employment, of the employees of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of an in the course of his employment [other than a liability arising under the Workmen's Compensation Act, 1923,] in respect of the death of, or bodily injury to, any such employee--- (a) engaged in driving the vehicle, or (b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods vehicle, being carried in the vehicle]; or (ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of contract of employment, to cover liability in respect of the 18 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, or (iii) to cover any contractual liability. [Explanation,-- For the removal of doubts, it is hereby declared that the death of or bodily injury to any person, or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.] 14. Section 95 of the Motor Vehicles Act 1939 lays down that in order to comply with the requirement of Chapter VIII of policy of insurance must be a policy which should be issued by a person who is the authorised insurer. The policy should ensure the person or classes of persons prescribed in the policy to the extent of specified in Sub Section (2) which prescribed the limit of liability in terms of money. 15. Section 95(1)(b) lays down that a policy of insurance is necessary to insure the person or classes of persons as set out in sub clauses (i) and (ii). Under Sub Clause (i) a insurance policy 19 in respect of the use of a vehicle in public place is required to insure, the liability which may be incurred by an insurer in respect of the death or bodily injury caused to any person or any damage caused to the property of any third party arising out of the use of a vehicle. Under Sub Clause (ii) of Clause (b), the policy is required to insure against the death or bodily injuries to any passanger of a public service vehicle. A "public service vehicle" as defined by Sec. 2(25) means a vehicle used for the carriage of passenger for hire or reward. There are three provisos to the Section 95(1)(b). These provisos carve out exceptions to the general rule as laid down in the two Sub clause (b) (i) and (ii) of the main section making provisions for compulsory insurance. Proviso (i) lays down that no policy shall be required to cover risk in respect of death or bodily injury of an employee of the insured person engaged in driving the vehicle or conductor or a ticket examiner in the case of a public service vehicle and also in the case of employee being carried in a goods vehicle, although the owner may be liable under Workmen's Compensation Act 1923. Proviso ii carves out an exception from the exceptions, as such its provision is positive, it lays down that policy is necessary whether the vehicle is a vehicle in which passengers are carried for hiere or reward or by reason of or in pursuance of contract of 20 employment to cover the liability in respect of the death of or bodily injury to persons being carried in the vehicle. Proviso (iii) lays down that no policy is necessary to cover a contractual liability. 15. Section 96 imposes liability on the insurer to satisfy judgments against a person insured in respect of third party risk. The liability to indemnify the insured person would be to the extent as specified in Section 95 (2) of the Act. The Insurance company is, however, entitled to avoid its liability on the proof of the conditions prescribed U/Sec. 96(2) of the Act. One of the conditions as laid down in Sec. 96(2)(b)(ii) is that if the vehicle is used in breach of specified conditions of the policy which may exclude the use of vehicle for hire or reward, where the vehicle not covered by a permit to ply for hire or reward. Thus, if the insurance policy is in respect of a public carrier or a goods carrier, the policy may contain a condition prohibiting use of the vehicle for hire or reward if the vehicle is not covered by a permit to ply for hire or reward. The contention of the Insurance company has been that in the instant case the vehicle was the goods vehicle which had no permit to carry passengers for hire or reward, as such, the insurance company is not liable. In the 21 present cases, the terms and conditions of the insurance policy are crystal clear that in a goods vehicle passengers are not permitted even along with goods. Admittedly in the present cases deceased/injured persons were travelling in a goods vehicle. 16. The Apex Court in the matter of Mallawwa and others supra categorically held that person travelling in goods vehicles, whether owners of the goods or passengers on payment of fare or gratuitous passengers, who died in accident met with by such goods vehicle, held, not covered by proviso (ii) of Sec. 95(1)(b) of the Act and, therefore, insurer of the goods vehicle is not liable to pay the compensation for their death. Head note "A" of this judgment reads thus : "A. Motor Vehicles - Motor Vehicles Act, 1939 - S. 95(1)(b)(i) and proviso (ii) (as amended in 1969) - Liability of insurer of goods vehicle - Whether passenger was carried for hire or reward within the meaning of proviso (ii) - Test to determine - Only a vehicle which is used for a systematic carrying of passengers, held, can be said to be a vehicle in which passengers are carried for hire or reward - Hence, persons travelling in goods vehicles, whether owners of the gods or passengers on payment of fare or gratuitous passengers, who died in accident met with by such goods vehicle, held, not covered by 22 proviso (ii) - Therefore, the insurer of the goods vehicle is not liable to pay compensation for their death - Pushpabai Purshottam Udeshi case, (1977) 2 SCC 745, considered and affirmed - However, the interpretation of S. 95 limited to cases arising under the 1939 Act as corresponding S. 147 of 1988 Act has been substantially altered - Motor Vehicles Act, 1988, S. 147." 17. In a similar case where the Full Bench of this High Court in the matter of Oriental Fire and General Insurance Company (supra) held that persons travelling in goods vehicle for hire with the consent of driver and the owner and if the vehicle is not covered with a permit to ply passengers for hire or reward, then Insurance Company is not responsible. Para 11 of the judgment reads thus : "11. We, now summarise our conclusions :- The vehicle in which the deceased Vithal Nikam travelled was a goods vehicle. The contract of insurance entered into with the appellant did not cover the carriage of passengers for hire or reward in this vehicle. Vithal Nikam travelled for hire by consent of the driver and the brother of the owner. The vehicle was not covered by a permit to ply for hire or reward. The vehicle was, therefore, used for a purpose not allowed by the permit under which it was used. Consequently, therefore, by virtue of S. 96(2)(b)(i)(c) of the Motor Vehicles Act the insurer is 23 not liable for the tortious act of the owner of the vehicle. We are in agreement with the view propounded by Sawant and Tated JJ in United India Insurance Co. Ltd. v. Abdul Munaf Majur Hussain Momin, First Appeal NO. 1012 of 1980 decided by Sawant and Tated JJ on 17th August 1984. We do not discern any conflict between the United India Insurance Co. Ltd. (supra) and Nasibdar's case AIR 1984 Bom. 1. They operate in different areas and in different sets of facts."