Bipin Paul S/o Kannan Paul v. SathyaDevan K.I. and United India Insurance Co. Ltd.

**C.R.** # **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **MONDAY ,THE 19TH DAY OF NOVEMBER 2018 / 28TH KARTHIKA, 1940** ## **MACA.No. 1518 of 2009** **AGAINST THE AWARD IN OPMV 583/2004 of MACT, IRINJALAKUDA DATED 28-01-2009** ## **APPELLANT/S:** **BIPIN PAUL S/O. KANNAN PAUL, CHALAPADAM ROAD, MANAVALASSERY VILLAGE, IRINJALAKUDA P.O., MUKUNDAPURAM TALUK, THRISSUR DISTRICT.** **BY ADVS. SRI.P.V.BABY SRI.A.N.SANTHOSH** ## **RESPONDENT/S:** **1 SATHYADEVAN K.I.** **S/O KUTHANAMPARAMBIL MAMAN, MADAYIKONAM P.O., IRINJALAKUDA.** **2 UNITED INDIA INSURANCE CO. LTD., PARK HOUSE, ROUND NORTH, THRISSUR.** **BY ADV. SMT.T.C.SOWMIAVATHY, SC** ## **OTHER PRESENT:** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 19.11.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** _MACA 1518/2009_ 2 ## **JUDGMENT** The issue once more is attempted to be raised in the appeal, with respect to liability of the Insurance Company to compensate the injury or death of the rider, other than the owner, of a motor bike, when there is no other vehicle involved in the accident and the claim is made under Section 163A of the Motor Vehicles Act. The issue according to the learned Standing Counsel appearing for the Insurance Company is settled by a judgment of another leaned Single Judge of this Court reported in _**Jiljet v. Stamphen George, 2018 (5) KHC 206**_ . The learned Counsel for the appellant seeks to persuade this Court to take a different view from that taken by the learned Single Judge, especially relying on the decision in _**National Insurance Co.Ltd. v. Sinitha, (2012) 2 SCC 356**_ . It is submitted that _**Sinitha**_ though overruled on the question of whether the Insurance Company could take a defence of negligence of the victim, when the claim is under Section 163A, stands uninterfered with insofar as the second limb dealing with the issue whether the rider of a motor bike can be held to be _MACA 1518/2009_ 3 stepping into the shoes of the owner. The specific contention is raised only in the context of a comprehensive policy, the position with respect to an “Act only” policy being settled in favour of the insurer who has been declared to have no liability to indemnify the insured, in the specific circumstance in which the issue is raised. 2. The learned Single Judge in _**Jiljet**_ (supra) relied on the decision in _**Ningamma & another v. United India Insurance Co.Ltd., (2009) 13 SCC 710.**_ It is argued that in _**Ningamma**_ the issue arose in the context of an 'Act only' policy as distinguished from a comprehensive policy. It is contended that when there is a comprehensive policy it takes in the rider of a motor bike, who is not the registered owner since he is a third party insofar the registered owner is concerned. The registered owner is hence liable to compensate the injury caused to the rider and in such circumstances the Insurance Company should indemnify the registered owner. Even if the accident is caused by reason of the negligence of the rider, Section _MACA 1518/2009_ 4 163A eschews any consideration of and adjudication on, negligence, hence the liability remains with the registered owner which has to be necessarily indemnified by the insurer is the argument. 3. The learned Single Judge specifically referred to the schedule of premium as available in the comprehensive policy. It was found that the premium collected over and above that collected for third party injuries was with respect to own damage to the vehicle, besides the premium for unlimited third party property damage. There was no premium collected towards the personal accident liability. Section II of the policy was also extracted, which is as below:- ## _“_ _**SECTION II - LIABILITY TO THIRD PARTIES**_ _(1) Subject to the Limits of Liability the Company will indemnify the insured in the event of accident caused by or arising out of the use of Motor Cycle against all sums including claimant's cost and expenses which the insured shall become legally liable to pay in respect of-_ _(i) death or bodily injury to any person including person conveyed in or on the Motor Cycle provided such person is not carried for hire or reward._ _(ii) damage to property other than property belonging to the insured or hold in_ _MACA 1518/2009_ 5 _trust by or in the custody or control of the insured or any member of the insured's household or being conveyed by the Motor Cycle:_ _Provided that company shall not be liable in respect of death, injury or damage caused or arising beyond the limits of any carriage way or thoroughfare in connection with the bringing of the load to the Motor Cycle for loading thereon or taking away of the load from the Motor Cycle after unloading therefrom.”_ 4. It was held that the liability even under a comprehensive policy is only as against third parties, including those conveyed in or on the bike, who is not so carried for hire or reward. Only this liability has to be indemnified by the Insurance Company. When a rider, with the consent of the owner, drives a vehicle he steps into the shoes of the owner. Then, if by reason of his own negligence, an accident is caused, there is no question of any liability being mulcted on the driver much less any question of indemnification of such liability. 5. I have also heard learned Senior Counsel Sri.Mathews Jacob, who was requested to assist the Court and Smt.T.C.Sowmiavathy, the learned Standing Counsel for the respondent-Insurance Company. _MACA 1518/2009_ 6 6. The learned Counsel appearing for the appellant, Sri.A.N.Santhosh, would seek to persuade this Court to take a different view and refer the matter to a Larger Bench. Relying on _**Sinitha**_ it is specifically pointed out that the facts therein indicate the vehicle involved being covered by an 'Act only' policy. Therein, the Insurance Company had taken the defence of negligence of the rider who was also the victim, but was not the registered owner of the vehicle. There was also no other vehicle involved in the accident. The Hon'ble Supreme Court on a comparison of Section 140 and Section 163A, found the absence of a like provision as in sub-section (4) of Section 140; in Section 163A to find that negligence could be a defence even in a claim under Section 163A. However on facts it was found that there was absolutely no evidence let in by the Insurance Company in the said case with respect to the negligence of the driver of the vehicle, who died in the accident. In any event, on this legal aspect, the decision in _**Sinitha**_ stands overruled by the decision of the Hon'ble Supreme Court in _**United India Insurance Co.Ltd. v. Sunil**_ _MACA 1518/2009_ 7 _**Kumar, 2017 (4) KLT 1093 (SC): AIR 2017 SC 5710** ._ Therein the three Judge Bench categorically held that in proceedings under Section 163A of the Act it is not open for the insurer to raise any defence of negligence on the part of the victim. 7. Reliance placed by the learned Counsel for the appellant is on the declaration in _**Sunil Kumar**_ with respect to negligence being totally eschewed from consideration in a claim under Section 163A and the further findings of the leaned Judges in _**Sinitha,**_ as available from para 18 onwards. In _**Sinitha,**_ though the defence of negligence was found to be without merit on facts, a further contention was advanced by the Insurance Company insofar as the deceased being the driver of the motor cycle, not being treated as a third party. There was no finding rendered on that count as to whether the rider of the motor bike stepped into the shoes of the owner or not. It was found that there was nothing brought out with respect to the relationship between the owner and the victim and hence the contention cannot be sustained. This Court cannot ferret out a declaration, from such findings on facts, to find the _MACA 1518/2009_ 8 Hon'ble Supreme Court having laid down that in the case of a rider of the motor bike, who is not the registered owner, he would be treated as a third party. When such a declaration has not been made by the Hon'ble Supreme Court, this Court finds itself bound by the judgment of the learned Single Judge in _**Jiljet** (supra)_ . We also have to notice Section II of the comprehensive policy, which we extracted herein above to emphasize that the inclusion in third parties is only of a person conveyed in or on the bike, not for hire or reward, and not a person driving the vehicle other than the registered owner. 8. In _**Ningamma**_ too, the issue arose under Section 163A, wherein the rider of a motor bike, who was not the registered owner, died in an accident. I do not see any reference to the policy in the accident being an 'Act only' policy or a comprehensive policy. The Hon'ble Supreme Court found that in a claim under Section 163A there cannot be any indemnification of the owner's liability as against the rider, since the vicarious liability of the owner would be essentially the liability of the rider of the vehicle, _MACA 1518/2009_ 9 who died in the accident by reason of negligence or otherwise. In fact, the specific question raised therein is the question raised in the present appeal also. Apposite would be extract of para 12 of _**Ningamma**_ , to understand the issue raised therein: _**“12.** In the light of the aforesaid submissions, the question that falls for our consideration is whether the legal representatives of a person, who was driving a motor vehicle, after borrowing it from the real owner meets with an accident without involving any other vehicle, would be entitled to compensation under Section 163-A of MVA or under any other provision(s) of law and also whether the insurer who issued the insurance policy would be bound to indemnify the deceased or his legal representative?”_ 9. It was held relying on _**Oriental Insurance Company**_ ## _**v. Rajni Devi, (2008) 5 SCC 736**_ , as follows:- _**“** 21. In our considered opinion, the ratio of the decision in Oriental Insurance Co. Ltd. case, (2008) 5 SCC 736, is clearly applicable to the facts of the present case. In the present case, the deceased was not the owner of the motorbike in question. He borrowed the said motorbike from its real owner. The deceased cannot be held to be an employee of the owner of the motorbike although he was authorised to drive the said vehicle by its owner and, therefore, he would step into the shoes of the owner of the motorbike. We have already extracted Section 163-A of the MVA herein before. A bare perusal of the said provision would make it_ _MACA 1518/2009_ 10 _explicitly clear that persons like the deceased in the present case would step into the shoes of the owner of the vehicle.”_ 10. The driver of a vehicle, who is driving the same on consent of the registered owner, has already been held to have stepped into the shoes of the owner and hence the tort-feasor cannot be the claimant. It has to be noticed that the liability primarily is of the person, who commits the negligence. With respect to a motor vehicle, when the driver is negligent and an injury is caused to a third party, then necessarily the registered owner has to shoulder the responsibility of paying compensation, on principles of vicarious liability. It is this vicarious liability of the owner of the vehicle that has been indemnified by the issuance of a valid insurance policy. The liability being that of the driver primarily and at the first instance, when his negligence causes an accident and by reason of the accident the driver himself meets death, there cannot be any vicarious liability cast on the owner much less any liability to indemnify the same on the Insurance Company. _MACA 1518/2009_ 11 11. In this context, this Court has also to notice sub-section (4) of Section 140, which is extracted below: _“(4) A claim for compensation under sub-section (1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim has been made nor shall the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement.”_ Section 140 speaks of an interim compensation of Rs.50,000/- with respect to death caused in a motor vehicle accident and Rs.25,000/- with respect to permanent disability. Sub-section (4) makes it mandatory that such compensation shall be paid without any deduction made for reason of any negligence attributed to such victim. 12. To understand who is covered under the policy of insurance, Section 163A has to be read with Section 147 of the Motor Vehicle Act, which clearly indicates that there could be liability cast on the owner and the Insurance Company only with respect to claims of third parties. 13. Section 163A also does not contain a provision like sub-section (4), which if available, even the death of _MACA 1518/2009_ 12 a person riding the vehicle would have been covered; the owner being held liable on that count alone. The tortfeasor or his legal heirs cannot claim compensation for the bodily injury or death of the tort-feasor on principles of vicarious liability. Then the tort-feasor would reap advantage of his own negligence. Section 163 A is a special provision brought in, a clear departure from an adjudication required in an action for damages, as to the negligence of the person driving a vehicle, when a third party is injured, maimed or killed. Only considering the increasing number of accidents, the provision was brought in as a social security measure especially to benefit the marginalised section of society, since it applies only to persons whose annual income does not exceed Rs. 40,000/-. 14. The provision was introduced pursuant to the directions issued in _**Minu B. Mehtha V. Balakrishna Ramachandra Nayan, (1977) 2 SCC 441,**_ where the learned Judges differed authoritatively from the view expressed by two High Courts, that the liability of the insured and consequently of the insurer to compensate a third party, _MACA 1518/2009_ 13 killed or injured in a motor vehicle accident, is irrespective of the fact whether the death or injury was caused on account of the rash and negligent driving of the vehicle. It was categorically held so: _“27. This plea ignores the basic requirements of the owner’s liability and the claimant’s right to receive compensation. The owner’s liability arises out of his failure to discharge a duty cast on him by law. The right to receive compensation can only be against a person who is bound to compensate due to the failure to perform a legal obligation. If a person is not liable legally he is under no duty to compensate anyone else. The Claims Tribunal is a tribunal constituted by the State Government for expeditious disposal of the motor claims. The general law applicable is only common law and the law of torts. If under the law a person becomes legally liable then the person suffering the injuries is entitled to be compensated and the Tribunal is authorised to determine the amount of compensation which appears to be just. The plea that the Claims Tribunal is entitled to award compensation which appears to be just when it is satisfied on proof of injury to a third party arising out of the use of a vehicle on a public place without proof of negligence if accepted would lead to strange results._ _28. Section 110(1) of the Act empowers the State Government to constitute one or more Motor Accidents Claims Tribunals for such area as may be specified for the purpose of adjudicating upon claims for compensation in respect of accidents involving the death or bodily injury to persons. The power is optional and the State Government may not constitute a Claims Tribunal for certain areas. When a claim includes a claim for compensation the claimant has an option to make his claim before the civil court. Regarding claims for compensation therefore in certain cases civil courts also have a jurisdiction. If the_ _MACA 1518/2009_ 14 _contention put forward is accepted so far as the civil court is concerned it would have to determine the liability of the owner on the basis of common law or torts while the Claims Tribunal can award compensation without reference to common law or torts and without coming to the conclusion that the owner is liable. The concept of owner’s liability without any negligence is opposed to the basic principles of law. The mere fact that a party received an injury arising out of the use of a vehicle in a public place cannot justify fastening liability on the owner. It may be that a person bent upon committing suicide may jump before a car in motion and thus get himself killed. We cannot perceive by what reasoning the owner of the car could be made liable. The proof of negligence remains the linch pin to recover compensation. The various enactments have attempted to mitigate a possible injury to the claimant by providing for payment of the claims by insurance._ _xxx xxx xxx_ _30. A person is not liable unless he contravenes any of the duties imposed on him by common law or by the statute. In the case of a motor accident the owner is only liable for negligence and on proof of vicarious liability for the acts of his servant. The necessity to provide effective means for compensating the victims in motor accidents should not blind us in determining the state of law as it exists today."_ **==> picture [37 x 33] intentionally omitted <==** 15. Finding that the High Court in its zeal to protect and preserve public good had misled itself and ventured into a course which was nothing short of legislation; the Hon'ble supreme Court observed so on no-fault liability: _"34. Equally unacceptable is the view of the Bench of the Andhra Pradesh High Court in Haji Zakaria v. Naoshir Cama wherein the Court concluded without any hesitation that the liability to compensate arises when death or bodily injury to any_ _MACA 1518/2009_ 15 _person or damage to any property of a third party is caused by or arising out of the use of the vehicle in a public place and to infer the qualifications or limitations that such death or bodily injury should have been caused before such liability arises only on account of rash and negligent driving would amount to introducing something which is not there and would be violating and transgressing the clear provisions of the statute and intention of the legislature._ _35_ _**.** The Patna High Court in New India Assurance Co. Ltd. v. Sumitra Devi held that the liability of the insurance company is absolute but is only limited to the extent provided by the insurance policy. As against this view all the other High Courts have held that the liability to compensate arises only on a finding of negligence. It may not be out of place to mention that though automobile accidents are subject to the law of negligence, modern proposals consistently favour the social insurance model under which benefits are payable directly by a fund without any reference at all to the injurer while retaining the option for the victim to claim either limited benefits on a non-fault basis or full damages for negligence._ _36_ _**.** Consistent with this line of thinking is the judgment of the Kerala High Court in Kesavan Nair v. State Insurance Officer where Justice Krishna Iyer expressed himself thus: “Out of a sense of humanity and having due regard to the handicap of the innocent victim in establishing the negligence of the operator of the vehicle a blanket liability must be cast on the insurers.” Modern legislation has also provided insurance cover for all air and rail passengers and recently by amendment of Section 95 of the Act against death or bodily injury to passengers of a public service vehicle caused by or arising out of the use of a vehicle in a public place._ _37_ _**.** In a recent judgment of Madras High Court a Division Bench in AAO Nos. 607 of 1973 and 296 of 1974 Ruby Insurance Co. Ltd. v. Govindaraj delivered_ _MACA 1518/2009_ 16 _on December 13, 1976, has suggested the necessity of having social insurance to provide cover for the claimants irrespective of proof of negligence to a limited extent say Rs 250 to Rs 300 a month. It has also suggested that instead of a lump sum payment which does not often reach the claimants a regular monthly payment to the dependents by the nationalised insurance company or bank would be desirable. Unless these ideas are accepted by the legislature and embodied in appropriate enactments courts are bound to administer and give effect to the law as it exists today. We conclude by stating that the view of the learned Judges of the High Court has no support in law and hold that proof of negligence is necessary before the owner or the insurance company could be held to be liable for the payment of compensation in a motor accident claim case.”_ 16. It is these observations that led to introduction of Section 163A for the limited purpose of avoiding the onerous task of proving negligence and being relieved of such burden, if the claim is limited to the structured formula as per the Schedule. It was never intended that a person could claim compensation for the injury caused out of his own negligence. When the insurance cover is by way of an 'Act only' policy, then the injury caused to third parties alone is compensated. The insured cannot claim any compensation for injury caused by the vehicle to himself or the driver nor his gratuitous passenger can claim _MACA 1518/2009_ 17 indemnification of the owners liability by the insurer. In the case of a comprehensive policy as has been held in _**National Insurance Company Ltd. Vs. Balakrishnan (2013) 1**_ _**SCC 731;**_ based on the clarifications by the Tariff Advisory Committee (TAC) and the Insurance Regulatory and Development Authority (IRDA), a comprehensive policy would cover the third party risk of an occupant in a vehicle. This is the coverage as granted in Section II – Liability to third parties: I(i) which includes a death or bodily injury of a person carried gratuitously in a bike, meaning the pillion rider. The driver or the owner however is not covered even if the policy is comprehensive since the vicarious liability is as against third parties and it arises only when the driver is negligent. When the driver is negligent and injury is caused to himself there is no liability cast on the owner to compensate the same. Section 163 A does not deal with such cases at all and no claimant can have benefit of his own or his predecessors negligence. Section 163A, a non-obstante provision having overriding effect, as a social security measure, ensures payment of _MACA 1518/2009_ 18 compensation in the event of fatal injury or permanent disablement, in a road traffic accident, eschewing totally consideration of the aspect of negligence from the adjudication process; but does not seek to extend the coverage to persons other than whose risk is specifically covered. In the case of 'Act only' policies the third parties alone are covered and in comprehensive policies the third parties inclusive only of the other occupants in the vehicle insured, other than the driver and owner are covered. For all the above reasons, this Court respectfully follows the decision in _**Jiljet**_ and the appeal would stand dismissed. The parties to suffer the costs. **Sd/-** ## **K.VINOD CHANDRAN** **JUDGE** _dkr_