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CASE NO.: Appeal (civil)  4946-4947 of 2007

PETITIONER: Smt. Thokchom Ongbi Sangeeta @ Sangi Devi & Anr

RESPONDENT: Oriental Insurance Co. Ltd. & Ors

DATE OF JUDGMENT: 23/10/2007

BENCH: Dr. ARIJIT PASAYAT & P. SATHASIVAM

JUDGMENT: J U D G M E N T

CIVIL APPEAL NOS. 4946-4947 OF 2007 (Arising out of SLP (C) Nos.3871-3872 of 2005)

Dr. ARIJIT PASAYAT, J.

1.      Leave granted.

2.      Challenge in these appeals is to the order passed by a  Division Bench of the Guwahati High Court, Imphal Bench,  allowing the appeal filed by respondent No.1 (hereinafter  referred to as ’the insurer’).

3.      Briefly stated, the facts are that on 19.12.1994 at about  7.30 a.m., near Lungthulien village about 7 km. southwest  from Parbung Police Station on Tipaimukh Road, a Tata Truck  bearing registration No.MN-01/3578 while proceeding towards  Mizorm met with an accident. Two claim cases were filed  before the Motor Accident Claims Tribunal, Manipur (in short  ’Tribunal’), under Motor Vehicles Act, 1988 (in short the ’Act’).  The Tribunal by common judgment and award dated  31.12.2002, awarded compensation of Rs.2,99,464/- in MAC  Case No.61/95 and also an award of Rs.1,62,000/- in MAC  Case No.27/95.      4.      The Insurance Company assailed the said common  judgment and award only on the ground that the vehicle  involved in the accident is a Tata Truck which is a goods  vehicle and, therefore, the Insurance Company is not liable to  pay compensation.         

5.      The question of liability of the insurer with regard to the  goods carrier has been dealt with by this Court in Oriental  Insurance Company Ltd. v. Devireddy Konda Reddy and Ors.  (AIR 2003 SC 1009).  In the said case the provisions of Section  95(1) of Motor Vehicles Act, 1939 (hereinafter referred to as  the ’Old Act’) as well as Section 147 (1) of the Act were dealt  with.    

6.      The High Court by the impugned judgment, accepted the  plea and held that the insurer was not liable to pay the  compensation.    

7.      In support of the appeal, learned counsel for the  appellants submitted that the High Court ought to have

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directed the insurer to pay and recover the amount from the  insured. Learned counsel for the insurer submitted that no  such direction could have been given on the basis of the  position in law stated by this Court.

8.      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 \026 (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 in clause  (ii) does not find place in the new Act. The  same reads as follow:      "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."    

9.      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. There is no reference to any passenger in "goods  carriage".             

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10.     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.  

11.     The above position was highlighted in Devireddy Konda  Reddy and Ors.’s case (supra) and National Insurance  Company Ltd. V. Ajit Kumar and Ors. (AIR 2003 SC 3093).    

12.     The High Court was, therefore, justified in holding that  the insurer was not liable.

13.     But the further question that ought to have been dealt  with by the High Court was the person who had the liability to  pay the amount awarded as compensation. Such a finding has  not been recorded by the High Court.  While issuing notice on  4.3.2005, it was indicated that the matter requires to be  remitted to the High Court to fix the responsibility of the  person who is to satisfy the Award made by the Tribunal even  though, in law, the High Court was justified in holding that  the Insurance Company had no liability. Accordingly, we remit  the matter to the High Court for the limited purpose of fixing  the responsibility of the person who is to satisfy the Award  made by the Tribunal.

14.     The appeals are disposed of accordingly.