Case: National Insurance Co. Ltd Vs. Deepa Devi

Respondent No. 3 was the owner of a Maruti Gypsy bearing Registration No. HIS 6095. Appellant - Company issued a policy of insurance in favour of Respondent No. 4 for the said Maruti Gypsy for the period 10.06.1993 to 9.06.1994. In regard to limitation of its use, the insurance policyprivate car IXI and Motor Cycle/ScooterIYI.Use only for social, domestic and pleasures and insureds owncar in question was requisitioned during the Assembly Elections in the year 1993 by the Sub-Divisional Magistrate Rampur through the Deputy Commissioner, Shimla. The said vehicle was in possession as also under the control of the said officer. On or about 17.11.1993 while the Sub-Divisional Magistrate Rampur was travelling in the said vehicle, an accident occurred as a result whereof a boy named Satish Kumar sustained injuries. He later onNo.1 Deepa Devi and Joginder being the heirs and legal representatives of the deceased filed an application for compensation in terms of Section 166 of the 1988 Act. The State of Himachal Pradesh as also the Sub-Divisional Magistrate Rampur were impleaded therein. The Motor Accident Claims Tribunal in its judgment dated 28.09.1996 upheld the contention of the Insurance Company that under the terms of the insurance policy, it was not liable to reimburse the owner of the vehicle as regards his liability to pay compensation on account of said accident. A Division Bench of the High Court, however, by reason of the impugned judgment, has set aside the said award of the Tribunal,view of the above discussion, the appeal is allowed and the award of the Tribunal is modified and it is held that the owner of the vehicle, the State Government and the Insurance Company are all jointly and severally liable to pay the compensation. Since the vehicle was insured with the Insurance Company it shall deposit the amount payable to the claimants."

Court's reasoning:
Respondent Nos. 3 and 4 continued to be the registered owner of the vehicle despite the fact that the same was requisitioned by the District Magistrate in exercise of its power conferred upon it under the Representation of People Act.The owner of the vehicle cannot refuse to abide by the order of requisition of the vehicle by the Deputy Commissioner. While the vehicle remains under requisition, the owner does not exercise any control there over. The driver may still be the employee of the owner of the vehicle but he has to drive it as per the direction of the officer of the State, who is put in-charge thereofThe purpose of requisition is to use the vehicle. For the period the vehicle remains under the control of the State and/ or its officers, the owner is only entitled to payment of compensation therefor in terms of the Act but he cannot not exercise any control thereupon. In a situation of this nature, this Court must proceed on the presumption that the Parliament while enacting the 1988 Act did not envisage such a situation. If in a given situation, the statutory definitions contained in the 1988 Act cannot be given effect to in letter and spirit, the same should be understood from the common sense point of view, the Stateshall be liable to pay the amount of compensation to the claimants and not the registered owner of the vehicle and consequently the appellantare of the opinion that the Stateshall be liable to pay the amount of compensation to the claimants and not the registered owner of the vehicle and consequently the appellant