NATIONAL INSURANCE CO. LTD.versusV. CHINNAMMA AND ORS.

                NATIONAL INSURANCE CO. LTD.
                             v.
                  V. CHINNAMMA AND ORS.

                          AUGUST 25, 2004

   [N. SANTOSH HEGDE, S.B. SINHA AND A.K. MATHUR, JJ.]

     Motor Vehicles Act, 1988:

     Section 147(1) (as amended by Act 54of1994)-Compensation-To
a person in goods vehicle-As owner of the goods-Liability of Insurance
companrHeld: Insurance company not liable to pay compensation to the
owner of the goods when, being carried in a goods vehicle, the accident
occurred.

     Words & Phrases:

     "Goods carriage "-Meaning of-In the context of Section 2(14) of
the Motor Vehicles Act, 1988.

     The deceased used to carry on business in vegetables and loaded
some bags of the same in a trailer of a tractor and was travelling
therein. The tractor was being driven at a very high speed as a result
of which the deceased fell down and died.

     The Additional Motor Accidents Claims Tribunal allowed the
claim petition filed by the respondents-legal heirs of the deceased on
the ground that carrying of goods, i.e., vegetables, by the deceased as
owner thereof would entitle the respondents to receive compensation
from the appellant-corroration. The High Court dismissed the appeal
preferred by the appellant. Hence the appeal.

      On behalf of the appellant, it was contended that the appellant
would not be liable for paying compensation to a passenger in a goods
vehicle in which he was travelling as owner of the goods when that          h
·1ehicle met with an accident.

     On behalf of the respondents, it was contended that a tractor is
not a 'goods carriage' vehicle and as carrying of vegetables in a tractor
                                  898




                                                                            ,,_
                                                                            \
                NATIONAL INSURANCE CO. LTD. v. V. CHINNAMMA                  899

        would be for agricultural purposes, the appellant could not be absolved A
        from its liability to pay the amount of compensation.

             Allowing the appeal, the Court

             HELD: I. An insurance for an owner of the goods or his B
        authorized representative travelling in a vehicle became compulsory
        only with effoct from I 4-I I- I 994 i.e., from the date of coming into force
        of Amending Act 54 of 1994. [905-C-D]

              2. A tractor is not even a goods carriage. A tractor fitted with a C
        trailer may or may not answer the definition of goods carriage contained
        in section 2(14) of the Motor Vehicles Act, 1988. The tractor was meant
        to be used for agricultural purposes. The trailer.attached to the tractor,
        thus, necessarily is required to be used for agricultural purposes, unless
t       registered otherwise. It may be that carriage of vegetables being
        agricultural produce would lead to an inference that the tractor was D
        being used for agricultural purposes but the same by itself would not
        be construed to mean that the tractor and trailer can be used for
        carriage of goods by another person for bis business activities. The
        deceased was a businessman. He used to deal in vegetables. After he
        purchased the vegetables, he was to transport the same to a market E
        for the purpose of sale thereof and not for any agricultural purposes.
        The tractor and trailer, therefore, were not being used for agricultural
        purposes. However, even if it be assumed that the trailer would answer
        the description of"goods carriage" as contained in section 2(14) of the
        Act, the case would be covered by the decision of this Court Asha Rani F
        case and other decisions following the same, as the accident had taken
        place on 24.11.1991, i.e., much prior to the coming into force of the
        1994 amendment. (905-D, F-H; 906-A-B]

             New India Assurance Co. Ltd. v. Asha Rani, [2003) 2 SCC 223;
        Oriental Insurance Co. Ltd. v. Devireddy Konda Reddy, [2003) 2 sec G

'
    .
    ,
        339; National Insurance Co. Ltd. v. Anil Kumar, JT (2003) 7 520 and
        National Insurance Co. Ltd. v. Baljit Kaur, (2004) 2 SCC I, relied on.

             New India Assurance Co. Ltd. v. Satpal Singh, [2000) 1 SCC 237,
        referred to.                                                         H

-\
A
    900                  SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.

         CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5428 of
                                                                                   )
    2004 .

        .from the Judgment and Order dated 28.3.2002 of the Andhra Pradesh
    High Court in Appeal Against Order No. 216 of 1997.
B
          P.K. Seth, Sudhir Kumar Gupta and Anurag Pandey for the Appellant.

          Mrs. K. Sharda Devi for the Respondents.


c         The Judgment of the Court was delivered by

          S.B. SINHA, J. : Leave granted.

         The Appellant-Insurance Company aggrieved by and dissatisfied with
    a judgment and order dated 28th March, 2002 passed by the High Court          •
D   of Judicature Andhra Pradesh at Hyderabad in AAO No. 216 of 1996 is
    in appeal before us.

          The respondents herein are heirs and legal representative of one V.
    Gopal. The said V. Gopal (the deceased) used to carry on business in
E   vegetables. He purchased 5 bags of vegetabies on 24.11.1991 in a village
    known as Ayyapareddipalem and loaded the same in a trailer of a tractor
    bearing No. MH33-8109. He was travelling therein. He wanted to buy
    some more vegetables at a village known as Peddapadu. While the tractor
    approached the said village, a bus was seen coming from opposite
F   direction. Because of rash and negligent driving on the part of the driver
    of the said tractor, and which was driven at a very high speed, it went to
    the extreme left side of road margin and because of heavy jerks, the
    deceased fell down and received serious injuries. He was immediately
    shifted to Peddapadu where he breathed his last.
G
          A claim petition was filed by the respondents herein before the Addi.
    Motor Accidents Claims Tribunal, Nellore claiming a sum of Rs. 1,00,000       ·i:-
      The Appellant herein denied and disputed its liability to pay any amount
    to the Respondents by way of compensation inter alia on the ground that
H   the deceased \'.'as iravelling in the said tractor as a 'paid passenger'.
..        NATIONAL INSURANCE CO. LTD. v. V. CHINNAMMA [SINHA, J.]            901

           The learned Addi. Motor Accidents Claims. Tribunal inter alia held A
     that carrying the goods, i.e., vegetables, by the deceased as owner thereof
     would entitle the Applicants to receive compensation from the Appellant.

          The learned Tribunal observing that a person who is not party to
     contract of insurance would be the 'third party' and in that view of the B
     matter the respondents wold be entitled to the amount of compensation
     even if the vehicle was only having third party insurance (Act policy). It
     was further held that the Tribunal was empowered to grant compensation
     over and above the amount claimed. A sum of Rs. 1,53,000 was awarded
     by way of compensation in favour of the Respondents. The High Court by C
     reason of the impugned judgment has dismissed the appeal preferred by
     the Appellant herein from the said judgment and award holding that as the
     deceased was travelling in the trailer alongwith his goods being vegetables,
     it was liable to pay compensation.

          Mr. P.K. Seth, learned counsel appearing on behalf of the appellant D
     would submit that as this Court in New India Assurance Co. Ltd. v. Asha
     Rani and Others, [2003] 2 SCC 223 overruled its earlier decision in New
     India Assurance Co. v. Satpal Singh, [2000] 1 SCC 237 holding that the
     insurance company would not be liable for paying compensation to a
     passenger in goods vehicle, whether he was travelling as an owner of the E
     goods when that vehicle meets with an accident, the impugned judgment
     is not sustainable.

           Mrs. K. Sharda Devi, learned counsel appearing on behalf of the
     respondents, on the other hand, would submit that a tractor is not a 'goods    F
     carriage' vehicle and as carrying of vegetables in a tractor would be for
     agricultural purpose, the appellant cannot be absolved from its liability to
     pay the amount of compensation.

           Section 147(1) of the Motor Vehicles Act, 1988 is in pari materia
     with the provisions of Section 95(1) of the Motor Vehicles Act, 1939. In G
     the year, 1994, Section 147 was amended by reason of Act 54of1994 with
     effect from 14.11.1994 in terms whereof the words "including owner of
     the goods or his authorized representative carried in the vehicle" were
     added after the words "against any liability which may be incurred by him
     in respect of the death of or bodily injury to any person."               HI
    902                  SUPREME COURT REPORTS (2004] SUPP. 3 S.C.R.                "
A        In Asha Rani (supra), this Court overruling its earlier decision in
    Satpal Singh (supra) observed :

             "9. In Satpal Singh 's case (supra) the Court assumed that the
             provisions of section 95(1) of Motor Vehicles Act, 1939 are
B            identical with section 147(1) of the Motor Vehicles Act, 1988, as
             it stood prior to its amendment. But a careful scrutiny of the
             provisions would make it clear that prior to the amendment of
             1994 it was not necessary for the insurer to insure against the
             owner of the goods or his authorised representative being carried
             in a goods vehicle. On an erroneous impression this Court
c            came to the conclusion that the insurer would be liable to
             pay compensation in respect of the death or bodily injury
             caused to either the owner of the goods or his authorised
            ·representative when being carried in a goods vehicle the accident
             occurred."
D
         One of us in a supplemental judgment in Asha Rani (supra)
    opined :

             "25. Sectionl47 of 1988 Act, inter alia, prescribes compulsory
E            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's
             Compensation Act. It does not speak of any passenger in a 'goods
F            carriage'.

             26. In view of the changes in the relevant provisions in the 1988
             Act vis-a-vis the 1939 Act, we are of the opinion that the meaning
             of the words "any person" must also be attributed having regard
G            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
H            be liable therefor.
          NATIONAL INSURANCE CO.LTD. v. V. CHINNAMMA [SINHA, J.)           903

             27. Furthermore, sub-clause (i) of clause (b) of sub-section (I) of A
             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-
             claus~ (ii) thereof deals with liability which may be incurred by B

•            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.

             28. An owner of a passenger carrying vehicle must pay premium
             for covering the risks of the passengers. If a liability other than C
             the limited liability provided for under the Act is to be enhanced
             under an insurance policy, additional premium is required to be
             paid. But if the ratio of this Court's decision in New India
 n           Assurance Co. v. Satpal Singh, (2000] I SCC 237 is taken to its
Ii
             logical conclusion, although for such passengers, the owner of a D
'I
             goods carriage need not take out an insurance policy, they would
             be deemed to have been covered under the policy wherefor even
             no premium is required to be paid.

             29. We may consider the matter from another angle. Section E
             149(2) of the 1988 Act enables the insurers to raise defences
             against the claim of the claimants. In terms of clause (c) of sub-
             section (2) of Section 149 of the Act one of the defences which
             is available to the insurer is that the vehicle in question has been
             used for a purpose not allowed by the permit under which the F
             vehicle was used. Such a statutory defence available to the insurer
             would be obliterated in view of the decision of this Court in Satpal
             Singh 's case (supra)."

          Asha Rani (supra) was followed by this Court in Oriental Insurance
     Co. Ltd. v. Devireddy Konda Reddy and Others, (2003] 2 sec 339 holding: G

-            "10. The inevitable conclusion, therefore, is that provisions of the
             Act do not enjoin any statutory liability on the owner of a vehicle
             to get his vehicle insured for any passenger travelling in a goods
             carriage and the insurer would have no liability therefore,."        H
    904                  SUPREME COURT REPORTS (2004] SUPP. 3 S.C.R.

A        Yet again in National Insurance Co. Ltd. v. Ajit Kumar and Ors., JT
    (2003) 7 SC 520 this Court held :

            "I I. The difference in the language of "goods vehicle" as
            appearing in the old Act and "goods carriage" in the Act is of
            significance. A bare reading of the provisions makes it clear that
B
            the legislative intent was to prohibit goods vehicle from carrying
            any passenger. This is clear from the expression "in addition to
                                                                                   •
            passenger" as contained in definition of"goods vehicle" in the old
            Act. The position become further clear because the expression
            used is "goods carriage" is solely for the "carriage of goods''.
c           Carrying of passengers in a goods carriage is not contemplated
            in the Act. There is no provision similar to clause (ii) of the
            proviso appended to section 95 of the old Act prescribing
            requirement of insurance policy. Even section 147 of the Act
            mandates compulsory coverage against death of or bodily injury
D           to any passenger of"public service vehicle". The proviso makes         \
            it further clear that compulsory coverage in respect of drivers and    i
            conductors of public service vehicle and employees carried in
            goods vehicle would be limited to liability under the Workmen's
            Compensation Act, 1923 (in short ·we Act'). There is no
E            reference to any passenger in "goods carriage".

         The effect of 1994 amendment came up for consideration before a
    3-Judge Bench of this Court in National Insurance Co. Ltd. v. Baljit Kaur
    and Others, (2004] 2 SCC I wherein again it was held :

F            "19. Jn Asha Rani (supra), it has been noticed that sub-clause (i)
             of clause (b) of sub-section (I) of Section 14 7 of the 1988 Act
             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
G            of the use of the vehicle in a public place. Furthermore, an owner    ,-
             of a passenger-carrying vehicle must pay premium for coveri~g
             the risks of the passengers travelling in the vehicle. The premium    •
             in view of the 1994 Amendment would only cover a third party
             as also the owner of the goods or his authorised representative and
H            not any passenger carried in a goods vehicle whether for hire or
      NATIONAL INSURANCE CO.LTD. v. V. CHINNAMMA [SINHA, J.]           905

         reward or otherwise.                                                A

         20. It is therefore, manifest that in spite of the amendment of 1994,
         the effect of the provision contained in Section 147 with respect
         to persons other than the owner of the goods or his authorized
         representative remains the same. Although the owner of the goods B
         or his authorized representative would now be covered by the
         policy of insurance in respect of a goods vehicle, it was not the
         intention ofthe legislature to provide for the liability ofthe insurer
         with respect to passengers, especially gratuitous passengers, who
         were neither contemplated at the time the contract of insurance C
         was entered into nor was any premium paid to the extent of the
         benefit of insurance to such category of people."
                                                            (Emphasis supplied)

        An insurance for an owner of the goods or his authorised representative
·travelling in a vehicle became compulsory only with effect from 14.11.1994, D
 i.e., from the date of coming into force of Amending Act 54 of 1994.

      Furthermore, a tractor is not even a goods carriage. The "goods
carriage" has been defined in Section 2( 14) to mean "any motor vehicle
constructed or adopted for use solely for the carriage of goods, or any motor E
vehicle not so constructed or adopted when used for the carriage of goods"
whereas "tractor" has been defined in Section 2(44) to mean "a motor
vehicle which is not itself constructed to carry any load (other than
equipment used for the purpose of propulsion); but excludes a "road-
roller". The "trailer" has been defined in Section 2(46) to mean "any F
vehicle, other than a semi-trailer an a side-car, drawn or intended to be
drawn by a motor vehicle".

      A tractor fitted with a trailer may or may not answer the definition
of goods carriage contained in Section 2( 14) of the Motor Vehicles Act.
The tractor was meant to be used for agricultural purposes. The trailer G
attached to the tractor, thus, necessarily is required to be used for
agricultural purposes, unless registered otherwise. It may be, as has been
contended by Mrs. K. Sharda Devi, that carriage of vegetables being
agricultural produce would lead to an inference that the tractor was being
used for agricultural purposes but the same by itself would not be construed H
    906                  SUPREME COURT REPORTS (2004] SUPP. 3 S.C.R.

A to mean that the tractor and trailer can be used for carriage of goods by
  another person for his business activities. The deceased was a businessman.
  He used to deal in vegetables. After he purchased the vegetables, he was
  to transport the same to market for the purpose of sale thereof and not for
  any agricultural purpose. The tractor and trailer, therefore, were not being
B used for agricultural purposes. However, even if it be assumed that the
  trailer would answer the description of the "goods carriage" as contained
  in Section 2(14) of the Motor Vehicles Act, the case would be covered by
  the decisions of this Court in Asha Rani (supra) and other decisions
  following the same, as the accident had taken place on 24. J 1.199 I, i.e.,
  much prior to coming into force of 1994 amendment.
c
          For the reasons aforementioned, impugned judgments cannot be
    sustained which are set aside accordingly. This appeal is allowed. In the
    facts and circumstances of this case, there shall be no order as to costs.

    v.s.s.                                                   Appeal allowed.