Case: Mata Ram Vs. National Insurance Co. Ltd. and Ors

Pinaki Chandra Ghose and Rohinton Fali Nariman, JJ. 1. Leave granted. This appeal is directed against the judgment dated 28.08.2015 passed by the High Court of Himachal Pradesh at Shimla whereby the High Court disposed of the FAO and modified the order passed by the Tribunal holding the insurer liable and giving the recovery rights to the insurance company against the Appellant herein. 2. The facts, in brief, are as follows:- (i) The Appellant herein got his tractor and trolley insured with National Insurance Co, Ltd., Respondent No. 1 herein, and that extra premium was also paid for the insurance of the driver of the vehicle and 3 employees. (ii) The vehicle met with an accident. The claimants-proforma Respondents filed claim application in lieu of death of one Mohammad Khatruddin alias Khaba before the Motor Accidents Claims Tribunal (in short the Tribunal). (iii) The Claims Tribunal decided the claim petition on its merit in favour of the claimants and fastened the liability on the insurance company, Respondent No. 1, with a direction to the insurance company to indemnify the insured as the insurance company has charged the premium for 3 persons excluding the driver of the tractor from the owner of the tractor at the time of issuance of the insurance policy. (iv) The insurance company, being aggrieved by the order of Claims Tribunal saddling it with the liability, filed FAO No. 106 of 2009 before the High Court of Himachal Pradesh. (v) The High Court, by impugned judgment disposed of FAO and modified the order passed by the Tribunal holding the insurer liable and giving the recovery rights to the insurance company against the Appellant herein. (vi) Being aggrieved, the Appellant preferred this appeal, by way of special leave. 3. Heard the learned Counsel appearing for the parties. 4. The only question which arises for our consideration is whether the insurance company can be absolved from its liability on the death of a person from indemnifying the insured when insurance company has specifically charged premium from the insured for 3 persons excluding the driver. 5. Learned Counsel appearing for the Appellant contended that the High Court has committed grave error by reversing the well-reasoned award of the Tribunal merely on the basis of finding on presumption in contrary to the evidence available on record and taken us through the evidence on record including the insurance policy. 6. Learned Counsel for the Appellant, in support of his case, drew our attention to a judgment passed by this Court in B.V. Nagaraju v. Oriental Insurance Co. Ltd. (1996-3) 114 P.L.R. 87 (SC), wherein this Court held that the terms of the policy of insurance are not to be construed so strictly and are to be read down to advance the main purpose of the contract and that the exclusion clause of the insurance policy must be read down so as to serve the main purpose of the policy. 7. We have gone through the material available on record including the terms and conditions mentioned in the insurance policy and the judgment of this court cited before us. 8. After carefully perusing the records of the case and having regard to the fact that the insurance policy clearly shows that the insurance company has charged a premium from the insured for 3 persons excluding the driver, we are of the opinion that the insurance company cannot be absolved from its liability on the death of a person. 9. Therefore, in our considered view, the High Court has failed to take note of the said facts in question and modified the order passed by the Tribunal. Furthermore, the judgment of this Court which was cited before us is applicable to the matter in question.

Decision reasoning: 1[ds]7. We have gone through the material available on record including the terms and conditions mentioned in the insurance policy and the judgment of this court cited before us.8. After carefully perusing the records of the case and having regard to the fact that the insurance policy clearly shows that the insurance company has charged a premium from the insured for 3 persons excluding the driver, we are of the opinion that the insurance company cannot be absolved from its liability on the death of a person.9. Therefore, in our considered view, the High Court has failed to take note of the said facts in question and modified the order passed by the Tribunal. Furthermore, the judgment of this Court which was cited before us is applicable to the matter in question.