National Insurance Co.Ltd vs Ajit Kumar And Ors

The only question raised in these appeals is whether the insurer

is liable to pay the compensation under the Motor Vehicles Act, 1988

(in short the 'Act') for the death or bodily injury to a person

traveling in goods vehicle as passenger. Liability of the insurer was

fixed by relying on this Court's decision in New India Assurance Co.

Ltd. v. Satpal Singh (2000 (1) SCC 237).

Factual aspects need not be gone into in detail, as there is

practically no dispute on the factual aspects.

Learned counsel for the insurer-appellant submitted that Section

149 (2) of the Act is etymologically different from proviso (ii) to

Section 96 (2)(b) of the Motor Vehicles Act 1939 (hereinafter referred

to as the 'old Act') and, therefore, the ratio in Satpal Singh's case

(supra) has no application. In response, learned counsel appearing for

the claimants submitted that in the said case such a stand has been

negatived and it has been held that insurer is liable to pay

compensation to gratuitous passengers.

This Court had occasion to deal with cases of passengers

traveling in goods vehicles which met with accident resulting in death

of such person or bodily injury. Such cases belong to three categories

i.e. (1) those covered by the old Act;(2) those covered by the Act; and

(3) those covered by amendment of the Act in 1994 by the Motor Vehicles

(Amendment) Act, 1994 (hereinafter referred to as the 'Amendment Act').

The present appeals belong to the second category.

In Satpal Singh's case (supra) this Court proceeded on the

footing that provision of Section 95(1) of the old Act is in pari

materia with Section 147(1) of the Act, as it stood prior to the

amendment in 1994.

On a closer reading of the expressions "goods vehicle", "public

service vehicle", "stage carrier" and "transport vehicle" occurring in

Sections 2(8), 2(25), 2(29) and 2(33) of the old Act with the

corresponding provisions i.e. Section 2(14), 2(35), 2(40) and 2(47) of

the Act, it is clear that there are conceptual differences. The

provisions read as follows:

Old Act:

"2(8) "goods vehicle" means any motor vehicle

constructed or adapted for use for the carriage of

goods, or any motor vehicle not so constructed or

adapted when used for the carriage of goods solely or

in addition to passengers;"

"2(25) "public service vehicle" means any motor

vehicle used or adapted to be used for the carriage

of passengers for hire or reward, and includes a

motorcab, contract carriage, and stage carriage;"

"2(29) "stage carriage" means a motor vehicle

carrying or adapted to carry more than six persons

excluding the driver which carries passengers for

hire or reward at separate fares paid by or for

individual passengers, either for the whole journey

or for stages of the journey;"

"2(33) "transport vehicle" means a public service

vehicle or a goods vehicle;"

New Act:

"2(14) "goods carriage" any motor vehicle constructed

or adapted for use solely for the carriage of goods,

or any motor vehicle not so constructed or adapted

when used for the carriage of goods;"

"2(35) "public service vehicle" means any motor

vehicle used or adapted to be used for the carriage

of passengers for hire or reward, and includes a

maxicab, a motorcab, contract, and stage carriage;"

"2(40) "stage carriage" means a motor vehicle

constructed or adapted to carry more than six

passengers excluding the driver for hire or reward at

separate fares paid by or for individual passengers,

either for the whole journey or for stages of the

journey;"

"2(47) "transport vehicle" means a public service

vehicle, a goods carriage, an educational institution

bus or a private service vehicle;"

(Underlined for emphasis)

"Liability" as defined in Section 145(c) of the Act reads as

follows:

"'Liability' wherever used in relation to the death

of or bodily injury to any person, includes liability

in respect thereof under Section 140;"

Third party risks in the background of vehicles which are

subject-matter of insurance are dealt with in Chapter VIII of the old

Act and Chapter XI of the Act. Proviso to Section 147 needs to be

juxtaposed with Section 95 of the old Act. Proviso to Section 147 of

the Act reads as follows:

"Provided that a policy shall not be required-

(i) to cover liability in respect of the death,

arising out of and in the course of his employment,

of the employee of a person insured by the policy or

in respect of bodily injury sustained by such an

employee arising out of and in the course of his

employment other than a liability arising under the

Workmen's Compensation Act, 1923 (8 of 1923) in

respect of the death of, or bodily injury to, any

such employee –

(a) engaged in driving the vehicle, or

(b) if it is a public service vehicle engaged

as conductor of the vehicle or in

examining tickets on the vehicles, or

(c) if it is a goods carriage, being carried

in the vehicle, or

(ii) to cover any contractual liability."

It is of significance that proviso appended to Section 95 of the old

Act contained clause (ii) which does not find place in the new Act.

The same reads as follows:-

"except where the vehicle is a vehicle in which

passengers are carried for hire or reward or by

reason of or in pursuance of a contract of

employment, to cover liability in respect of the

death of or bodily injury to persons being carried in

or upon or entering or mounting or alighting from the

vehicle at the time of the occurrence of the event

out of which a claim arises."

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 the legislative intent

was to prohibit goods vehicle from carrying any passenger. This is

clear from the expression "in addition to passengers" as contained in

definition of "goods vehicle" in the old Act. The position becomes

further clear because the expression used is "goods carriage" is solely

for the carriage of goods". 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 to

any passenger of "public service vehicle". The proviso makes it further

clear that compulsory coverage in respect of drivers and 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 'WC Act'). There is no reference to any passenger in "goods

carriage'.

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 traveling in a goods carriage

and the insurer would have no liability therefor.

Our view gets support from a decision of a three-Judge Bench in

New India Assurance Co. Ltd. v. Asha Rani and Ors. (2003 (2) SCC 223)

and Oriental Insurance Co. Ltd. v. Devireddy Konda Reddy and Ors. (2003

(2) SCC 339)

Learned counsel for the respondents submitted that respondent

No.1 should be permitted to avail such remedies as are available in law

for recovering any amount to be paid as compensation from a person

liable to pay compensation at the first instance. No permission is

necessary for such purpose. If respondent No.1 has any remedy in law it

is open to pursue it in accordance with law. The appeals are allowed by

setting aside the judgment of the Tribunal and the High Court. There

shall be no order as to costs.