Case: New Indian Insurance Company Vs. Darshana Devi

difficult to apply the ratio of this decision to a case not involving a third party. The whole protection provided by Chapter XI of the Act is against third party risk. Therefore, in a case where a person is not a third party within the meaning of the Act, the insurance company cannot be made automatically liable merely by resorting to the Swaran Singh (supra) ratio. This appears to be the position. This position was expounded recently by this Court in National Insurance Co. Ltd. v. Laxmi Narain Dhut [2007 (4) SCALE 36 ]. This Court after referring to Swaran Singh (supra) and discussing the law summed up the position thus:In view of the above analysis the following situations emerge:1. The decision in Swaran Singhs case (supra) has no application to cases other than third party risks.2. Where originally the licence was a fake one, renewal cannot cure the inherent fatality.3. In case of third party risks the insurer has to indemnify the amount and if so advised, to recover the same from the insured.4. The concept of purposive interpretation has no application to cases relatable to Section 149 of the Act.The High Courts/Commissions shall now consider the mater afresh in the light of the position in law as delineated above.We are in respectful agreement with the above view." Asha Rani (supra) was followed. Yet again, in Oriental Insurance Co. Ltd. v. Brij Mohan & Ors. [2007 (7) SCALE 753 ], wherein one of us (S.B. Sinha, J.) was a member, this Court noticed Asha Rani and other decisions. Following the same, it was stated: "10. Furthermore, respondent was not the owner of the tractor. He was also not the driver thereof. He was merely a passenger travelling on the trolley attached to the tractor. His claim petition, therefore, could not have been allowed in view of the decision of this Court in New India Assurance Co. Ltd. v. Asha Rani and Ors. [(2003) 2 SCC 223] wherein the earlier decision of this Court in New India Assurance Co. v. Satpal Singh [(2000) 1 SCC 237] was overruled. In Asha Rani (supra) it was, inter alia, held:25. Section 147 of the 1988 Act, inter alia, prescribes compulsory coverage against the death of or bodily injury to any passenger of "public service vehicle". Proviso appended thereto categorically states that compulsory coverage in respect of drivers and conductors of public service vehicle and employees carried in a goods vehicle would be limited to the liability under the Workmen Compensation Act. It does not speak of any passenger in a "goods carriage".26. In view of the changes in the relevant provisions in the 1988 Act vis-à-vis the 1939 Act, we are of the opinion that the meaning of the words "any person" must also be attributed having regard to the context in which they have been used i.e. "a third party". Keeping in view the provisions of the 1988 Act, we are of the opinion that as the provisions thereof do not enjoin any statutory liability on the owner of a vehicle to get his vehicle insured for any passenger travelling in a goods vehicle, the insurers would not be liable therefor.27. Furthermore, Sub-clause (i) of Clause (b) of Sub-section (1) of Section 147 speaks of liability which may be incurred by the owner of a vehicle in respect of 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, whereas Sub-clause (ii) thereof deals with liability which may be incurred by the owner of a vehicle against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place.[See also National Insurance Co. Ltd. v. Bommithi Subbhayamma and Ors. [(2005) 12 SCC 243] ; United India Insurance Co. Ltd., Shimla v. Tilak Singh and Ors. [(2006) 4 SCC 404] ; Prem Kumar & Ors. v. Prahlad Dev & Ors. [2008 (1) SCALE 531 ] and Oriental Insurance Co. Ltd. v. Prithvi Raj [2008 (1) SCALE 727 ]" Having said so, we must take notice of the fact that the deceased Baldev Singh was labourer. The Tribunal has found that besides being a labourer, he also used to deal in Safeda wood. He was the owner of the Safeda wood which was being transported to the market for its sale. The first respondent, Darshana Devi, in her deposition, stated that the deceased used to purchase wood from the State of Himachal Pradesh on contract basis. Only Gurdial Singh and Ravinder Singh were accompanying him as labourer. His income was assessed only at Rs.2,400 per month. 13. In this view of the matter, we are of the opinion that it is not a fit case where this Court should exercise its discretionary jurisdiction under Article 136 of the Constitution of India. Even in Brij Mohan (supra), this Court held: "13. However, respondent No. 1 is a poor labourer. He had suffered grievous injuries. He had become disabled to a great extent. The amount of compensation awarded in his favour appears to be on a lower side. In the aforementioned situation, although we reject the other contentions of Ms. Indu Malhotra, we are inclined to exercise our extraordinary jurisdiction under Article 142 of the Constitution of India so as to direct that the award may be satisfied by the appellant but it would be entitled to realize the same from the owner of the tractor and the trolley wherefor it would not be necessary for it to initiate any separate proceedings for recovery of the amount as provided for under the Motor Vehicles Act.14. It is well settled that in a situation of this nature this Court in exercise of its jurisdiction under Article 142 of the Constitution of India read with Article 136 thereof can issue suit directions for doing complete justice to the parties."

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]8. The liability of an insurance company to recompense the owner and driver of a vehicle, who are primarily responsible for payment of compensation to a victim or dependent of a deceased arising out of use of a motor vehicle, is statutory in nature. Whereas an owner of a motor vehicle is under a statutory obligation to get it compulsorily insured, the defence of an insurance company is limited.Extent of liability of an insurance company in terms of the said provision came up for consideration before this Court in a large number of decisions.In this view of the matter, we are of the opinion that it is not a fit case where this Court should exercise its discretionary jurisdiction under Article 136 of the Constitution of India. Even in Brij Mohan (supra), this CourtHowever, respondent No. 1 is a poor labourer. He had suffered grievous injuries. He had become disabled to a great extent. The amount of compensation awarded in his favour appears to be on a lower side. In the aforementioned situation, although we reject the other contentions of Ms. Indu Malhotra, we are inclined to exercise our extraordinary jurisdiction under Article 142 of the Constitution of India so as to direct that the award may be satisfied by the appellant but it would be entitled to realize the same from the owner of the tractor and the trolley wherefor it would not be necessary for it to initiate any separate proceedings for recovery of the amount as provided for under the Motor Vehicles Act.14. It is well settled that in a situation of this nature this Court in exercise of its jurisdiction under Article 142 of the Constitution of India read with Article 136 thereof can issue suit directions for doing complete justice to the parties."