Supreme Court of India
NEW INDIA ASSURANCE CO. LTD.versusBISMILLAH BAI & OTHERS
- Citation
- 2009 INSC 374
- Decided
- 20 March 2009
- Disposal
- Appeal(s) allowed
Holding
A statutory motor insurance policy does not cover a gratuitous passenger, so the insurer is not liable to pay compensation.
Summary
A passenger named Israel died when a Jeep insured by New India Assurance collided with an uninsured truck. The claimants filed a claim under Sections 166 and 140 of the Motor Vehicles Act. The Motor Accident Claims Tribunal found the truck driver negligent and exonerated the Jeep’s insurer because the Jeep driver was not at fault. The Madhya Pradesh High Court reversed that part of the Tribunal’s award and held the insurer liable, without providing reasons. The Supreme Court held that a statutory motor insurance policy does not cover a gratuitous passenger and that the High Court could not overturn the Tribunal’s factual finding without justification. Consequently, the Court set aside the High Court judgment, reinstated the Tribunal’s exoneration of the insurer, and allowed the appeal.
Issues considered
- Whether a statutory motor insurance policy covers a gratuitous passenger and makes the insurer liable for compensation when the insured vehicle’s driver is not at fault.
- Whether the High Court could reverse the Tribunal’s factual finding of negligence without assigning reasons and thereby fasten liability on the insurer.
- Whether the lack of insurance on the other vehicle creates liability for the insurer of the insured vehicle.
Legislation cited
- Motor Vehicles Act, 1988s. 140, s. 147, s. 166
Subjects
Motor Vehicles ActInsurance liabilityGratuitous passengerStatutory motor insuranceCompensationNegligenceThird party risk
Judgment
[~!009] 5 S.C.R. 14
\
A NEW INDIA ASSURANCE CO. LTD.
v.
BISMILLAH BAI & OTHERS
(Civil Appeal No.1799 of 2009)
MARCH 20, 2009
B
[S.B. SINHA AND P.SATHASIVAM, JJ.]
MOTOR VEHICLES ACT, 1988:
c s. 166 rlw s.140- Liability of insurer- Collision of Jeep
and Truck - Person sitting in Jeep died - Truck not insured
- Petition for claim - Tribunal holding Truck driver guilty of
rash and negligent driving - Compensation awarded - Insurer
of Jeep exonerated - High Court setting aside the part of
award exonerating the Jeep and making insurer also liable ....-
D
for payment - HELD: High Court having not reversed the >
finding of Tribunal that .Jeep was not guilty, it could not have
fastened liability on insurer of Jeep - Besides, Insurance
Company cannot be held liable in view of the decision of the
Court* - Accordingly, judgment of High Court set aside.
E
*Oriental lnsuranc19 Company Limited v. Sudhakaran
K. V. & Ors. (2008) 7 SC:C 428, relied on.
':aise Law Reference:
F (2008) 1 sec 428 relied on para 12 -1
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1799 of 2009.
From the Judgment & Order dated 7.02.2006 of the High
G Court of Madhya Pradesh at Indore in M.A. No. 1377/2003.
Dr. Manish Singhvi for P.V. Yogeswaran for the Appellant.
H 14
NEW INDIA ASSURANCE CO. LTD. v. BISMILlAH BAI & 15
ORS.
The following Order of the Court was delivered: A
ORDER
Leave granted.
The Insurance Company is before us, aggrieved by and B
dissatisfied with the judgment and order dated 07th February,
2006 passed by a Division Bench of the High Court of Madhya
Pradesh, Indore Bench, Indore in M.A. No.1377 of 2003,
whereby and whereunder the High Court has modified the
judgment of the Motor Accident claims Tribunal, Indore (for short c
'the Tribunal') exonerating the Insurance Company- appellant
herein from paying any amount of compensation passed in
Claim Case No. 285 of 1997 awarding a total sum of
Rs.3, 12,000/- with interest to the claimants for the death of one
Israel, in a motor vehicle's accident holding that the Insurance D
J Company is liable to pay the compensation to the claimants.
Facts of the case giving rise to this appeal are:
The deceased-Israel was travelling in a Jeep bearing
No.MPA-09-1658 on 26.08.1995. The said Jeep collided with E
a truck bearing No.MPF 07158 anctlsrael died of the injuries
suffered by his at the site of accident. HisJamily members filed
an application under Section 166, 140 of the Motor Vehicles
Act (for short 'the Act') before the Tribunal for compensation.
I F
The appellant raised a contention in the said proceeding
that since the driver of the jeep was not responsible for causing
the said accident, it was not liable to pay any compensation to
the claimants.
The Tribunal by reason of the afore"!entioned award, inter G
a/ia, held in paras 22 & 23 as under:
...
"22. Therefore due to want of averments of Petitioners in
the application and from the certified copy of charge sheets
Ex.P-1 to Ex.P-5 produced by the Petitioners, the
H
16 SUPREME COURT REPORTS (2009] 5 S.C.R.
A Petitioners remained successful in proving that accident
occurred due to rash and negligent driving of truck by r
opposite party No.4.
23. Therefore on the basis of evidence produced, the
Petitioners remaim~d successful in proving their case
B
against opposite pa11y No.3 and 4 in lieu of opposite party
No.1 and 2, and as per the record the jeep owner Raees
Khan and Insurance company cannot be held accountable
to pay the compensation amount as the driver of jeep
lsraeel was not driving his jeep rashly and negligently and
c he had no fault."
It was also held by the Tribunal that as the Insurance
Company is not held accountable for payment of compensation
amount, it is entitled to receive the amount of Rs.25,000/-,
D deposited with the Tribunal by an interim order, from the
claimants with interest at the rate of 9% per annum. However, ·
an award for a sum of Rs.3, 12,000/- was passed against the
driver and owner of the truck in question.
E Claimants, however, preferred an appeal against the said
award.
'
The High Court by mason of the impugned judgment set
aside that part of the order of the Tribunal whereby the appellant
herein was exonerated from payment of any liability for
F reimbursement of the claim so far as the driver and owner of
the jeep were concerned, stating:
"7. So far as finding in relation exonerating of Insurance
Company is concerned, we are inclined to reverse the
same in favour of claimants. Firstly, no evidence in rebuttal
G
was led by the Company and then for all practical purposes
remained exparte in the sense that except to file written
statement, they did nothing. On the other hand, the
claimants led evidenc:e and discharged their initial burden.
Israel was neither owner of the offending Jeep, not insurer.
H
NEW INDIA ASSURANCE CO. LTD. v. BISMILLAH BAI & 17
j ORS.
He was, therefore, third party, as one of the person sitting A
in Jeep. Ajij was the driver. There is nothing on record to
hold that Jeep was responsible for causing accident and
hence, claimants are not entitled to get any compensation.
The driver of Truck was not examined. We cannot conclude
on the strength of evidence that Jeep was responsible for B
the accident.
8. In this view of the matter, we set aside the finding of the
Tribunal on this issue and modify the impugned award by
passing the same also against the insurance company i.e.
respondent No.3/non applicant No.3."
c
A bare perusal of the order clearly shows that no reason
whatsoever has been assigned in support thereof. The finding
of the learned Tribunal and the material noticed by it for the said
J purpose has not been considered by the High Court. D
The question as to whether the driver of the jeep or the
truck and/or both of them were responsible for negligence in
driving their respective vehicles, which led to· the said
accident is essentially a question of fact. While reversing the E
said finding of fact, so as to fasten the liability on the insurance
company, the High Court was required to assign sufficient and
cogent reasons. No such finding to the effect that both driver
as also the jeep contributed to the negligence having been
recorded by the High Court, the question of fastening the joint
F
liability by the insurance company did not arise. Only because
the truck was not insured, the same by itself did not mean that
the appellant-insurance company can be held liable to reimburse
the claim to the claimants wherefor liability had been incurred
by the owner and driver of the truck and, thereofore, no liability
has been incurred by the driver and owner of the jeep is G
concerned. The Tribunal has categorically recorded a finding
that the driver of the jeep was not driving his jeep rashly and
negligently and he was not at fault and. that the accident
occurred due to rash and negligent driving of truck by its driver.
H
18 SUPREME COURT REPORTS [2009] 5 S.C.R.
A Since, the High Court has not reversed this finding of the
Tribunal, fastening of the liability on the insurance company
which is the insurer of the jeep did not arise.
Even otherwise, the insurance company cannot be held
B liable to pay compensation to the claimants in view of the
decision of this Court in Oriental Insurance Company Limited
v. Sudhakaran K. V. & Or.s. [(2008) 7 SCC 428] wherein this
Court opined:
"11. This Court in a catena of decisions has categorically
c held that a gratuitous passenger in a goods carriage
would not be covered by a contract of insurance entered
into by and between the insurer and the owner of the
vehicle in terms of se~ction 147 of the Act. [See New India
Assurance Co. Ltd. v. Asha Rani (2003) 2 SCC 223]
D ;_
12. A Division Bench of this Court in United India
Insurance Co. Ltd., Shim/a v. Tilak Singh and Ors.
extended the said principle to all other categories of
vehicles also, stating as under:
E In our view, although the observations made in Asha Rani
case were in connection with carrying passengers in a
goods vehicle, the same would apply with equal force to
gratuitous passengers in any other vehicle also. Thus, we
must uphold the contention of the appellant Insurance
F Company that it owed no liability towards the injuries
suffered by the deceased Rajinder Singh who was a pillion
rider, as the insurance policy was a statutory policy, and
hence it did not cover the risk of death of or bodily injury
to a gratuitous passenger."
G
It was held:
.,._
"14. The provisions of the Act and, in particular, Section
147 of the Act were enacted for the-purpose of enforcing
the principles of social justice. It, however, must be kept
H
NEW INDIA ASSURANCE CO. LTD. v. BISMILLAH BAI & 19
ORS.
confined to a third party risk. A contract of insurance which /\
is not statutory in nature should be construed like any other
contract.
15. We have noticed the terms of the contract of insurance.
It was entered into for the purpose of covering the third
B
party risk and not the risk of the owner or a pillion rider.
An exception in the contract of insurance has been made,
i.e., by covering the risk of the driver of the vehicle. The
deceased was, indisputably .. not the driver of the vehicle.
16.The contract of insurance did not cover the owner of the C
vehicle, certainly not the pillion rider. The deceased was
travelling as a passenger, stricto sensu may not be as a
gratuitous passenger as in a given case she may not be
a member of the family, a friend or other relative. In the
sense of the term which is used in common parlance, she D
might not be even a passenger.
In view of the terms of the contract of insurance, however,
she would not be covered thereby."
For the aforementioned reasons, the impugned judgment E
cannot be sustained and it is set aside accordingly. The appeal
is allowed. No costs.
R.P. Appeal allowed.
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