Pauri

Motor Vehicles Act, 1988 – ss. 147 and 149 – Motor accident – Compensation – Liability of insurer – Insurance policy taken by the owner of the vehicle covering six passengers including the driver – Vehicle while driven by father of the owner, met with an accident – Passengers in excess of the number covered by the insurance policy, travelling in the vehicle at the time of accident – Death/injury to the passengers – Claim petitions – Liability of the insurer – Held: Is confined to the number of persons covered by the insurance policy only and liability to pay the other passengers is that of the owner of the vehicle – Persons travelling in the vehicle in excess of the permitted number of six passengers, though entitled to be compensated by the owner of the vehicle, would still be entitled to receive the compensation amount from the insurer, who could recover it from the insured owner of the vehicle – There can be no pick and choose method to identify the five passengers, excluding the driver, in respect of whom compensation would be payable by the Insurance Company – In the interest of justice, Insurance Company directed to deposit the total amount of compensation awarded to the claimants which would be disbursed to the claimants – Insurance Company would be entitled to recover the amounts paid by it, in excess of its liability, from the owner of the vehicle, by putting the decree into execution. Respondent No. 5-owner of the vehicle obtained an insurance policy insuring his jeep with a sitting capacity of six persons including the driver, for a certain period. During the said period, the father of respondent No. 5, drove the insured vehicle carrying fifteen passengers. The vehicle fell into the ditch resulting in the death of the respondent’s father and the death of the majority of the passengers while causing serious injuries to the remaining passengers. The legal representatives of the deceased filed a claim petition. The Tribunal awarded compensation in favour of the claimants holding that carrying a larger number of passengers than was permitted in terms of the Insurance policy, did not amount to breach of the terms and conditions of the Policy and the Insurance Company would still be liable since the vehicle was legally insured. The High Court upheld the order passed by the Tribunal, but enhanced the amount of compensation. Therefore, the appellants filed the instant appeals. =Disposing of the appeals, the Court HELD: 1.1 In order to fix the liability of the insurer, the provisions of Section 147 have to be read with Section 149 of the Motor Vehicles Act, 1988 which deals with the duty of the insurer to satisfy judgments and awards against persons insured in respect of third party risks. The third party risk in the instant case involves purported breach of the conditions contained in the insurance agreement executed by and between the insurer and the insured. [Paras 20 and 22] [1041-E-F; 1040-F] 1.2. The liability of the insurer is confined to the number of persons covered by the insurance policy and not beyond the same. In the instant case, since the insurance policy of the owner of the vehicle covered six occupants of the vehicle in question, including the driver, the liability of the insurer would be confined to six persons only, notwithstanding the larger number of persons carried in the vehicle. Such excess number of persons would have to be treated as third parties, but since no premium had been paid in the policy for them, the insurer would not be liable to make payment of the compensation amount as far as they are concerned. However, the liability of the Insurance Company to make payment even in respect of persons not covered by the insurance policy continues under the provisions of sub-section (1) of Section 149 of the Act, as it would be entitled to recover the same if it could prove that one of the conditions of the policy had been breached by the owner of the vehicle. In the instant case, any of the persons travelling in the vehicle in excess of the permitted number of six passengers, though entitled to be compensated by the owner of the vehicle, would still be entitled to receive the compensation amount from the insurer, who could then recover it from the insured owner of the vehicle. [Para 24] [1042-D-G] 1.3. In the instant case, the insurance policy taken out by the owner of the vehicle was in respect of six passengers, including the driver, travelling in the vehicle. The liability of the Insurance Company to pay compensation was limited to six persons travelling inside the vehicle only the liability for payment of the other passengers in excess of six passengers would be that of the owner of the vehicle who would be required to compensate the injured or the family of the deceased to the extent of compensation awarded by the Tribunal. [Paras 25 and 26] [1042-H; 1043-A-B] 1.4. The number of persons to be compensated being in excess of the number of persons who could validly be carried in the vehicle, the question which arises is one of apportionment of the amounts to be paid. Since there can be no pick and choose method to identify the five passengers, excluding the driver, in respect of whom compensation would be payable by the Insurance Company, to meet the ends of justice the procedure adopted in *Baljit Kaur’s case is applied. The Insurance Company is directed to deposit with the Tribunal, the total amount of compensation awarded to all the claimants within the stipulated period and the amounts so deposited be disbursed to the claimants in respect to their claims. The Insurance Company would be entitled to recover the amounts paid by it, in excess of its liability, from the owner of the vehicle, by putting the decree into execution. For the said purpose, the total amount of the six Awards which are the highest would be construed as the liability of the Insurance Company. After deducting the said amount from the total amount of all the Awards deposited in terms of this order, the Insurance Company would be entitled to recover the balance amount from the owner of the vehicle as if it is an amount decreed by the Tribunal in favour of the Insurance Company. The Insurance Company would not be required to file a separate suit in this regard in order to recover the amounts paid in excess of its liability from the owner of the vehicle. [Paras 26 and 27] [1043-D-H; 1044-A-C] *National Insurance Co. Ltd. vs. Baljit Kaur (2004) 2 SCC 1 – relied on. National Insurance Co. Ltd. vs. Anjana Shyam and Ors. (2007) 7 SCC 445; National Insurance Co. Ltd. vs. Challa Bharathamma and Ors. 2004 AIR SCW 5301; New India Assurance Co. Ltd. vs. Satpal Singh and Ors. (2000) 1 SCC 237; New India Assurance Co. Ltd. vs. Asha Rani and Ors. (2003) 2 SCC 223; National Insurance Company Ltd. vs. Nicolletta Rohtagi (2002) 7 SCC 456; Mallawwa and Ors. vs. Oriental Insurance Co. Ltd. and Ors. (1999) 1 SCC 403; National Insurance Co. Ltd. vs. Swaran Singh (2004) 3 SCC 297 – referred to. Case Law Reference: (2007) 7 SCC 445 Referred to Para 11 2004 AIR SCW 5301 Referred to Para 12 (2003) 2 SCC 223 Referred to Para 12, 16, 17 (2002) 7 SCC 456 Referred to Para 12 (2000) 1 SCC 237 Referred to Para 12, 14, 16, 17 (1999) 1 SCC 403 Referred to Para 16, 17 (2004) 3 SCC 297 Referred to Para 18 (2004) 2 SCC 1 Relied on Para 26 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1928 of 2011. From the Judgment & Order dated 25.09.2007 of the High Court of Uttarkhand at Nainital, in A.O. No. 311 of 2006. With C.A. Nos. 1929, 1930, 1931, 1932, 1933, 1934 & 1935 of 2011. A.K. De, Keshab Upadhyay, Debasis Misra for the Appellant.

1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.1928 OF 2011 (Arising out of SLP(C)No.24188 of 2008) United India Insurance Co. Ltd. … Appellants Vs. ?K.M. Poonam & Ors. … Respondents WITH CIVIL APPEAL NOS. 1929, 1930, 1931 OF 2011 (@ SLP(C)NOS.24212, 24210, 24211) CIVIL APPEAL NOS. 1932, 1933, 1934 … Continue reading →