IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH : HYDERABAD TUESDAY, THE TWENTY NINTH (29TH) DAY OF NOVEMBER TWO THOUSAND AND ELEVEN Present: HON’BLE SRI JUSTICE G.V.SEETHAPATHY MA CMA No.123 of 2008 Between: Royal sundaram Alliance Insurance Co. Ltd., Chennai … Appellant And: Rallacheni Pandu Rangadu & others … Respondents HON’BLE SRI JUSTICE G.V.SEETHAPATHY MA CMA No.123 of 2008 JUDGMENT: This appeal is directed against the order dated 05.10.2007 in OP No.61 of 2006 on the ﬁle of the MACT cum 6th Additional District Judge (FTC), Gooty, wherein the said application ﬁled by the respondents 1 and 2 herein, under section 166 of the Motor Vehicles Act, for compensation, was allowed in part, awarding Rs.1,95,000/- with interest at 7.5% per annum. 2. Heard the learned counsel for the appellant and the learned counsel for the respondents 1 and 2. Perused the record. 3. The respondents 1 and 2 herein ﬁeld claim application seeking compensation of Rs.3 lakhs for the death of the deceased Rangaswamy, who died in a motor vehicle accident that occurred on 24.11.2005. The claimants are the parents of the deceased. According to them, on that day, the deceased went for coolie work in the tractor-trailer bearing No.AP 02 U 8312 and 8313 belonging to 3rd respondent herein and that near Chandana village, on account of the rash and negligent driving of the tractor by its driver, who applied sudden brakes, the deceased who was sitting in the trailer, fell on to the road and the back wheel of the trailer ran over the deceased and he died on the spot. A case in Cr.No.60 of 2005 was registered by Yadiki police against the driver of the tractor-trailer. It is stated that the deceased was aged 18 years and was working as a coolie. 4. The 3rd respondent herein-owner of the tractor- trailer remained ex-parte. The appellant-insurer ﬁled counter, opposing the claim and denying their liability inter alia on the ground that the deceased was unauthorized and gratuitous passenger, whose risk is not covered by the policy. 5. During enquiry, PWs.1 and 2 were examined and Exs.A.1 to A.5 were marked on behalf of the claimants. RWs.1 and 2 were examined and Exs.B.1 to B.5 were marked on behalf of the appellant-insurer. On a consideration of the evidence available on record, the Tribunal held that the accident occurred due to the rash and negligent driving of the tractor- trailer by its driver. The Tribunal also held that the claimants are also entitled for total compensation of Rs.1,95,000/-. 6. The main contention of the learned counsel for the appellant is that no liability can be fastened on the insurer as the policy Ex.B.1 does not cover the risk of the unauthorized traveller on the tractor-trailer. Learned counsel for the respondents 1 and 2-claimants however would contend that the deceased was a coolie engaged for loading and unloading purpose and so, he is a third party. On the basis of the oral evidence of PW.2 and also inquest report Ex.A.2, the Tribunal recorded a ﬁnding to the eﬀect that the deceased was travelling in the tractor-trailer as a coolie. The Tribunal further held that no premium was collected to cover the risk of the coolie under the policy Ex.B.1. The Tribunal however held that as the deceased was going in the tractor for the purpose of loading and unloading, he must be deemed to be a third party and so, even if no separate premium is collected to cover the risk of a coolie, the appellant-insurer cannot escape from the liability. 7. While holding so, the Tribunal referred to Section II dealing with the liability to third parties, which forms part of the terms and conditions of the policy Ex.B.1. The said provision contained in Section II states that subject to the limits of liability as laid down in the schedule, the company will indemnify the insured in the event of the accident caused by or arising out of the use of the vehicle in respect of the death or bodily injury to any person caused by or arising out of the use (including the loading or unloading) of the vehicle and damage to the property caused by the use (including the loading or unloading) of the vehicle. Thus, the liability to indemnify the insured for the death or bodily injury to any person or damage to the property caused by the use or arising out of the use of the vehicle including use for the purpose of loading and unloading is contemplated. But however, the same is subject to the limits of the liability as laid down in the schedule. The Tribunal failed to appreciate the said aspect that the liability to third parties either in case of death or bodily injury or damage to property caused or arising out of the use of the vehicle is subject to the limits as laid down in the schedule. The certiﬁcate cum policy schedule which forms part of Ex.B.1 speciﬁes such limitation as to the liability. The legal liability arising under the policy Ex.B.1 to indemnify the insured is contractual in nature. Ex.B.1 policy which governs the contractual obligation between the insured and insurer would show that apart from the basic premium including premium for third party property damage and the premium for the trailer, the insured has paid premium only to cover personal accident risk for the owner, driver and two paid drivers. Ex.B.1 policy speciﬁcally states that no premium was paid for the coolies. Thus the risk in respect of the owner and driver alone is covered by payment of speciﬁc premium and the risk in respect of coolie is not covered at all as no premium was paid in that regard. Even according to the claimants, the deceased was only a coolie, hence no joint liability can be fastened on the appellant-insurer. The ﬁnding of the Tribunal that the deceased shall be deemed to be a third party is based on misconception. 8. In ‘Ramashsray Singh v. New India Assurance Co. Ltd.,[1]’ the apex court, while dealing with the policy where under the risk of the driver, conductor and examiner of tickets alone was covered but not that of any other employee, held that the risk of the deceased therein who was a khalasi was not covered and he does not answer the description of the conductor or a passenger. 9. In ‘Vachala v. V.R.Kumar [2]’, this court held that in an auto-trolley when seating capacity is for one person namely driver, the question of anybody else being allowed to travel therein cannot arise and therefore, the insurance company cannot be made liable for the risk of a passenger, who unauthorisedly travelled in the auto-trolley. In the present case also, admittedly, the tractor-trailer is having seating capacity only for one i.e., driver, whose risk alone is covered by policy Ex.B.1. 10. In ‘National Insurance Company Ltd., v. Rattani[3]’, the apex court held that the insurance company cannot be fastened with liability for the death or injury caused to the unauthorized and gratuitous passenger travelling in the goods vehicle. 11. In ‘New India Assurance Co. Ltd. V. Neeradi Kaspa Sattavva[4]’, this court, while following the decision of the apex Court in ‘United India Insurance Co. Ltd. V. Serjerao[5]', held that the insurance company cannot be fastened with liability in respect of the risk for the labourers travelling in the trolley attached to the tractor as such travel itself is not permissible under Rule 28 of the Central Motor Vehicle Rules, which states that the driver when driving the tractor shall not carry or allow any person to be carried on tractor. 12. In view of the principles laid down in the above decisions, as the deceased was found to be a coolie, whose risk is not covered by the policy Ex.B.1, fastening of joint liability on the insurer is not sustainable. 13. Learned counsel for the claimants would rely upon the decision of the apex Court in ‘National Insurance Co. Ltd. V. Abhaysing Pratapsing Waghela[6]’, where in it was held as follows: “…..No doubt, a contract of insurance is to be governed by the terms thereof, but a distinction must be borne in mind between a contract of insurance which has been entered into for the purpose of giving eﬀect to the object and purport of the statute and one which provides for reimbursement of the liability of the owner of the vehicle strictly in terms thereof. In that limited sense, a contract of insurance entered into for the purpose of covering a third party risk would not be purely contractual. We may place on record that an ordinary contract of insurance does not have a statutory ﬂavour. The Act merely imposes an obligation on the part of the insurance company to reimburse the claimant both in terms of the Act as also the Contract. So far as the liability of the insurance company which comes within the purview of Sections 146 and 147 is concerned, the same subserves a constitutional goal, namely, social justice. A contract of insurance covering the third party risk must, therefore, be viewed diﬀerently vis- à-vis a contract of insurance qua contract.” 14. The principles laid down in the above decision is not applicable to the present case for the simple reason that the deceased herein cannot be treated as a third party and his risk is not covered by the policy even if he was engaged as a coolie. 15. In ‘United India Insurance Co. Ltd. V. Suresh K.K.[7]’ which is also relied upon by the learned counsel for the respondents 1 and 2, it was held that ‘the term ‘any person’ envisaged under the amended S.147 shall not include any gratuitous passenger in a three-wheeler goods carriage, the driver could not have allowed anybody else to share his seat, no other person whether as a passenger or as a owner of the vehicle is supposed to share the seat of the driver and the coolie worker is also not covered under section 147.’ 18. In the circumstances, it is held that the appellant-insurer cannot be fastened the liability for payment of compensation, as the deceased was not a third party, though he is a coolie, his risk is not covered by policy Ex.B.1. The impugned award is set aside to the extent of its fastening the joint and several liability on the appellant. 19. It is stated that as per the interim order dated 25.01.2008, the appellant-insurer deposited 1/3rd of the award amount with interest and costs and that by order dated 03.02.2009, the claimants were permitted to withdraw Rs.30,000/- without furnishing security. Having regard to the fact that the claimants are stated to be poor and eking out their livelihood by doing coolie work, it is held that the amount already withdrawn by them may not be recovered by the appellant-insurer. The balance amount lying in deposit shall be refunded to the appellant-insurer. It is open to the claimants to recover the balance amount due under the award from owner of the vehicle. The appellant-insurer is also at liberty to recover the amount withdrawn by the claimants, from the owner of the vehicle. 20. In the result, the appeal is allowed to the extent stated above. G.V.SEETHAPATHY,J Date: 29.11.2011 bss [1] 2003 ACJ 1550 [2] 2006 ACJ 2098 [3] 2009 ACJ 925 [4] 2009(3) ALD 289 [5] 2008 ACJ 254 [6] (2008)9 SCC 133 [7] (2008) 12 SCC 657