Read Order: RAMCHAND S/O SOBHRAJAMAL KISHNANI Vs. GHANSHYAM Vs. S/O JUMDOMAL RANGLANI AND ORS 

Mansimran Kaur 

Mumbai,  April 12, 2022: Directing that the appellant-claimant be granted the compensation in accordance with the terms of the Insurance policy under Section 166 r/w Section 165 of the Motor Vehicles Act, the Nagpur Bench of the Bombay High Court has observed that Section 163-A is a special provision meant for special class of claimants based on no fault liability wherein the owner or the authorized insurer has to be the indemnifier.

The Bench of Justice V.G.Bisht was considering an appeal instituted by the appellant/original petitioner assailing the judgment and award passed by the Member of the Motor Vehicle  Accident Claim Tribunal-2, Nagpur. 

Brief facts of the case were such  that the appellant in the present case  met with a  motor accident on March 18, 2006  at Mouza Gumthala area on National Highway in District Nagpur. On the fateful day, the petitioner was driving the vehicle namely, Toyota Qualis and was returning to Nagpur. The appellant’s two friends, namely, Hemant Poptani and Mr. Suresh Gyanchandani were also traveling in the car with him. The appellant’s car got disbalanced due to the truck coming from the opposite direction that was trying to take over and the car of the appellant dashed into a babul tree. 

After the accident, the appellant was not in a position to give the statement to the Police authorities, therefore on the basis of their own investigation documents were prepared. They failed to record the statements of the appellant as well as of the other co- passengers in the car.  Because of the various injuries suffered by the petitioner his right side body was paralyzed. The sciatic nerve of the right leg of the appellant was completely damaged which has resulted in complete non-functioning of his right leg. He was unable to sit, stand and walk properly and do other daily activities. In all, he suffered medical expenses of Rs.48,45,000 and other losses. The details of which were stated  in the claim petition. However, the insurance company refused to entertain the claim by filing a written statement wherein it was stated  gratuitous driver and/or owner’s representative and/or person/s who was driving the vehicle borrowed pursuant to the relationship between the owner, is not a third party and cannot be treated as third party against the insurer. Therefore,  the insurer of the said vehicle and his risk was not covered under the policy.

The Member of the Tribunal in its judgment observed that appellant did not prove that the accident took place due to the rash and negligent driving of the truck driver, therefore the risk of the appellant couldot be covered under the insurance Policy. The insurance company was directed to pay an amount of Rs 25,000/- only for no fault liability. Consequently, the present appeal was instituted. 

The Counsel for the appellant contended that at first the petition was moved under Section 163-A of the Motor Vehicle Act ,1988 wherein the petitioner was not required to plead negligence as the same is a special provision . It was further added that at the later stage there was conversion of the petition under Section 166 of the Act which required the petitioner to apprise the Court of the circumstances which led to the accident.  

The present Court was of the view that the  Member of the Tribunal  failed to take into consideration “Clause 3” of the policy which clearly covered the claim of the appellant under the head “third party” and this being so claim of the appellant was perfectly maintainable although it was alleged that the appellant was the gratuitous passenger but the insurance company could not prove the same by adducing cogent and convincing evidence. 

The Court  primarily dealt with two relevant contentions in this case concerning the maintainability of the present writ petition under Section 166 of the Act and liability to pay compensation to the claimant. According to the  insurance company the present petition was not maintainable as it was the insurer of the fateful vehicle involved in the accident and the petitioner himself being a gratuitous driver, who borrowed vehicle from his friend (first respondent), who now stepped into the shoes of the owner, couldnot be both claimant and receiver at the same time. 

The Court noted that it is no more res integra that the principle “claimant stepping into the shoes of owner” is applicable only in respect of Section 163-A of the Act, wherein this special provision is meant for special class of claimants based on no fault liability basis which provides it is the owner or the authorised insurer who has to be the indemnifier as per the scheme of Section 163-A of the Act, which is not the case in respect of Section 166 of the Act. 

The Court was of the view that the “Driver stepping into the shoes of the owner” is only applicable in claims filed under Section 163-A of the Act and in the present case the said ground was already considered when there conversion of petition under Section 166 of the Act. 

However, the question that came  to the surface was that who would be held responsible to pay the claimant, the answer to the same was to be determined in accordance with the terms of the policy. The Court stated that the only requirement to claim under Section 166 read with 165 of the Act is that there should be an involvement of a Motor Vehicle in respect to the accident involving fatal injury that entitles the claimant to institute the claim petition. 

The Bench said,” It is no more res integra that the principal of “claimant stepping into the shoes of owner” is applicable only in respect of Section 163-A of the Act, wherein this special provision is meant for special class of claimants based on no fault liability basis which provides it is the owner or the authorized insurer who has to be the indemnifier as per the scheme of Section 163-A of the Act, which is not the case in respect of Section 166 of the Act.”

The Bench referred to the judgment of the Apex Court case in Ningamma and Anr. .v/s. United India Insurance Company wherein it was categorically held that in case of claim under Section 163-A the liability is upon the owner of the vehicle to pay compensation and a person cannot be both recipient as well as the claimant. In such a case an application should be moved under Section 166 of the Act. 

Another issue that was determined by the Court was pertaining to the compensation that should be granted to the appellant in accordance with the terms of the insurance policy. The Counsel for the petitioner stated that he was covered under Section 2 Clause 3 of the insurance policy and fell in the category of ‘third party” . It was submitted that since the petitioner/ appellant was not the registered owner of the vehicle, he therefore should be treated as “third party” . 

The Court also noted that the Member of the Tribunal did not consider the clauses of the insurance policy at all. The Counsel for the petitioner also cited the case of New Asiatic Insurance Company Limited .v/s. Pessumal Dhanamal Aswani and ors. , wherein the Apex Court has held that once the company has undertaken liability to third parties incurred by the persons specified in the policy, the third party right to recover any amount under or by virtue of provision of the act is not affected by any condition in the policy.

However, the Member of the Tribunal paid no attention to the clauses of the policy. Thus, the Court was of the view that the insurance policy being the comprehensive one and the insurer  was not able to prove the breach of the policy makes the appellant entitled for compensation. It was also held that if the observation of the Member of the Tribunal was followed then in accordance with the same, no driver will be ever able to claim compensation and the same shall vitiate the objective of the Act. 

In view of above stated findings the order of the Court directed the respondents to pay jointly and severally compensation of Rs.42,45,000 alongwith simple interest of 8% p.a. from the date of filing of claim petition.

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