MCOP ACT – The insurance company is not liable to pay compensation if the vehicle is driven b

Ramkhiladi & Anr. V. The United India Insurance Company & Anr. CIVIL APPEAL NO. 9393 OF 2019 on January 07th, 2020.

The present appeal was preferred by the original petitioner in the Supreme Court under the bench comprising of Justice ASHOK BHUSHAN and Justice M.R.SHAH

The Court held that; The liability under Section 163A of the Act is on the owner of the vehicle as a person cannot be both, a claimant as also a recipient and, therefore, the heirs of the owner could not have maintained the claim in terms of Section 163A of the Act. It is further observed that, for the said purpose, only the terms of the contract of insurance could be taken recourse to.

In a vehicular accident that occurred on 02.10.2006, one Chotelal alias Shivram died. The deceased was traveling on a motorcycle bearing registration No. RJ 02 SA 7811. The appellants herein filed a claim petition before the Motor Accident Claims Tribunal, Laxmangarh (Alwar), Rajasthan under Section 163A of the Motor Vehicles Act. It is required to be noted that the claim petition was preferred only against the owner of the motorcycle bearing registration No. RJ 02 SA 7811 and its insurance company. Stated in the FIR, the driver of the motorcycle bearing registration No. RJ 29 2M 9223 was rash and negligent and the claimants have not filed the claim petition against the owner of the said vehicle, the claim petition is required to be dismissed against the insurance company of the motorcycle bearing registration No. RJ 02 SA 7811.

The learned Tribunal held that the death of the deceased Chotelal alias Shivram had occurred from the motorcycle involved in the accident and the said motorcycle was insured with the respondent­insurance company, the insurance company is liable to pay the compensation under Section 163A of the Act. Feeling aggrieved and dissatisfied with the Judgment and Award passed by the learned Tribunal. The impugned Judgment and Order, the High Court has allowed the said appeal and has quashed and set aside the Judgment and Award passed by the learned Tribunal. Consequently has dismissed the claim petition on the ground that even as per the informant Vikram Singh, who lodged the FIR, the accident had occurred on account of rash and negligent driving by the driver of motorcycle bearing registration No. RJ 29 2M 9223.

The question of law and question of fact are whether the deceased being in the shoes of the owner of the vehicle driven by himself, whether the insurance company of the vehicle driven by the deceased himself would be liable to pay the compensation under Section 163A of the Act? Whether the deceased not being a third party to the vehicle No. RJ 02 SA 7811 being in the shoes of the owner can maintain the claim under Section 163A of the Act from the owner of the said vehicle?

In the present appeal learned advocate, Shri Abhishek Gupta was representing the appellants. They made a contention that the Tribunal made the insurance company liable only under Sec 163A as per that Section there is no need for the petitioner to establish how the deceased died, there is no need to prove the negligence of the owner of the vehicle and the only need of establishment is that the accident occurred due to the use of the said motor vehicle therefore so no error can be found in the order of the Tribunal which allowed the claim of liability against the owner/insurer of the vehicle No. RJ 29 2M 9223 under the said provision.  Further the deceased was not the owner of the vehicle he was working as an employee under the owner of vehicle No. RJ 02 SA 7811 and the claim of no fault-liability was made by the legal heirs of the deceased this cannot make the insurer non-liable.

“It is prayed to allow the present appeal and quash and set aside the impugned Judgment and Order passed by the High Court and to restore the Judgment and Award passed by the learned Tribunal holding the owner of the vehicle bearing registration No. RJ 02 SA 7811 and the insurer of the said vehicle to pay the compensation.”

Shri Amit Kumar Singh, learned advocate appearing on behalf of the respondent-insurance company made a contention that the application filed was against the owner of the insured vehicle i.e. RJ 02 SA 7811 but the Tribunal has errored by making the insurance company of the vehicle No. RJ 29 2M 9223 liable. There was no evidence to prove that the deceased was working under the owner of the said vehicle.

As the insurance company provides compensation to the owner cum driver only in the case of a personal accident in this case, the deceased is in the shoes of the owner. “It is prayed to dismiss the present appeal and/or partly allow the appeal to the extent of Rs.1 Lakh as per the terms and conditions of the contract of insurance.”

The SC held that, the question of whether the owner of the vehicle No. RJ O2 SA 7811 hade employed the deceased with his full knowledge was not answered by the Tribunal. The claim petition under Section 163A of the Act against the owner and insurance company of the vehicle bearing registration No. RJ 02 SA 7811 shall not be maintainable was passed by the High Court. Section 163A of the Act cannot apply wherein the owner of the vehicle himself is involved so the SC felt that the High court has allowed it without any error.

In the insurance agreement the deceased, as observed hereinabove, who would be in the shoes of the owner shall be entitled to a sum of Rs.1 lakh, but the claim was made for Rs 5 Lakhs. The claim was not accepted by the Supreme Court.

The liability under Section 163A of the Act is on the owner of the vehicle as a person cannot be both, a claimant as also a recipient and, therefore, the heirs of the owner could not have maintained the claim in terms of Section 163A of the Act. It is further observed that, for the said purpose, only the terms of the contract of insurance could be taken recourse to.

The Supreme Court has allowed the appeal partly.

View/ Download the Judgment: Ramkhiladi & Anr. V. The United India Insurance Company & Anr.

–  Manusri Ramakrishna

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