REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1799  OF 2009          (Arising out of SLP(C) No.14791 of 2006)

New India Assurance Co. Ltd. ..Appellant

versus

Bismillah Bai & Others ..Respondent

O R D E R

Leave granted.

The Insurance Company is before us, aggrieved by and 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 '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 Company

is liable to pay the compensation to the claimants.

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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 a truck bearing No.MPF 07158 and Israel died

of the injuries suffered by his at the site of accident.   His family members filed an

application  under Section  166,  140 of the  Motor Vehicles Act  (for short  'the  Act')

before the Tribunal for compensation.  

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  aforementioned  award,  inter alia,  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  Petitioners remained successful in proving that accident occurred due to rash and negligent driving of truck by opposite party No.4.

23.Therefore on the basis of evidence produced, the Petitioners remained successful in proving their case against opposite party 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 Israeel was not  

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driving his jeep rashly and negligently and 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/-, 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.

Claimants, however, preferred an appeal against the said award.   

The High Court by reason 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 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 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 evidence and discharged their initial burden.  Israel was neither owner of  the  offending  Jeep,  not  insurer.  He  was,  therefore,  third party, as one of the person sitting in Jeep. Ajij was the driver. There is nothing on record to  

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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 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.”

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 purpose has not been considered by the High Court.

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 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 liability by the insurance company did

not arise. Only because the truck was not insured,  

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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 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.  

Since,  the  High  Court  has  not  reversed  this  finding  of  the  Tribunal,

fastening of the liability on the insurance compnay which is the insurer of the jeep did

not arise.   

Even  otherwise,  the  insurance  company  cannot  be  held  liable  to  pay

compensation  to  the  claimants  in  view  of  the  decision  of  this  Court  in  Oriental

Insurance Company Limited v. Sudhakaran K.V. & Ors. [(2008) 7 SCC 428] wherein

this Court opined:

“11.  This  Court  in  a  catena  of  decisions  has  categorically  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 Section 147 of the Act. [See New India Assurance Co. Ltd. v. Asha Rani (2003) 2 SCC 223]

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12.  A  Division  Bench  of  this  Court  in  United  India  Insurance  Co.  Ltd., Shimla v.  Tilak  Singh  and  Ors. extended  the  said  principle  to  all  other categories of vehicles also, stating as under:

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 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.”

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 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 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 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  might  not  be  even  a passenger.

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In view of the terms of the contract of insurance, however, she would not be covered thereby.”

For the aforementioned reasons, the impugned judgment cannot be

sustained and it is set aside accordingly.  The appeal is allowed.  No costs.  

..........................J. [S.B. SINHA]

New Delhi; ..........................J. March 20, 2009. [P.SATHASIVAM]