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National Insurance Co. Ltd. v. Shabirkhan
Case Summary: National Insurance Co. Ltd. — Appeals against Interim Awards dated 29-6-1989
Factual and Procedural Background
On the night of 14-5-1985 a marriage party of about 60–70 persons travelling in Truck No. C.P.U 5169 from Neemuch to Shamgarh met with an accident at Sangram Ghat when the truck toppled due to alleged rash and negligent driving by the driver-owner. Several passengers sustained serious injuries and many died. Claim petitions were filed by the respective legal representatives (LRs) of the deceased and by the injured claimant Jahid Hussain.
The Motor Accident Claims Tribunal, Garoth made interim awards on 29-6-1989 under section 92-A of the Motor Vehicles Act, 1939 (the Act), awarding Rs. 15,000/- as interim compensation for each deceased listed (Salmabai w/o Sabirkhan; Sabanabai d/o Nisarkhan; Chhotibai w/o Ishaq; Shahirabi d/o Abdul Razzaq; Faridabanoo w/o Sabuddin; Sahabuddin s/o Kalekhan; Rehimanbai w/o Alam Khan; Seikh Salim s/o Seikh Amin; Rabim Baksh s/o Kasamji) and Rs. 7,500/- for the injuries to Jahid Hussain.
The Tribunal made the interim awards against the owner-driver Shafi Mohd. as well as against the insurer (National Insurance Company), treating them as jointly and severally liable. The insurer filed these appeals (including connected appeals M.A. Nos. 262–270 of 1989) challenging the interim awards.
Legal Issues Presented
- Whether the interim awards under section 92-A of the Motor Vehicles Act, 1939 can be made against the insurer of a goods vehicle where the insurer contends that passenger risk in a goods vehicle is not required to be covered under section 95 and the policy did not cover passengers.
- Whether, at the stage of an interim award under section 92-A, the Tribunal is required to decide contested factual and legal issues (such as coverage under the insurance policy) or whether such issues can be deferred to the final trial.
Arguments of the Parties
Appellant (National Insurance Company) — Main Contentions
- The vehicle involved was a truck (a goods vehicle) and, therefore, passenger risk was neither required to be covered under section 95 of the Act nor was it covered by the insurance policy in question.
- Accordingly, no liability for passenger death or injury attaches to the appellant-insurer under the policy, and the interim award against the insurer was erroneous.
Tribunal / Claimants' Position (as reflected in the Tribunal's award)
- The Tribunal applied section 92-A (no-fault liability) and awarded interim compensation to each claimant (Rs. 15,000/- for deaths and Rs. 7,500/- for the injured claimant), holding the owner-driver and the insurer jointly and severally liable to pay the interim compensation.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Dwarika v. Bise, 1990 ACJ 283 | If it is admitted or prima facie proved from the material on record that the vehicle was insured, the Tribunal has jurisdiction to hold the insurer jointly and severally liable for no-fault liability under section 92-A and to require payment of interim compensation without deciding all objections to insurer's liability at that stage. | The court relied on this decision to support the proposition that a prima facie showing of insurance suffices for an interim award against the insurer; the Tribunal need not decide insurer's substantive objections at the interim stage. |
| National Insurance Co. v. Smt. Savitri, 1991 MPLJ 46 : 1990 JLJ 664 | For making an interim award under section 92-A, only the owner and insurer of the offending vehicle are to be ascertained; time-consuming enquiries into legal objections should not be undertaken at the interim stage. | The court cited this authority as reinforcing that interim awards should not be delayed by in-depth enquiries into contentious legal points regarding insurer's liability. |
| United Insurance Co. Ltd. v. Smt. Rajadevi, M.A. No. 242/90 (decided 8-4-1991) | The only material fact for an interim award is whether the vehicle was insured with the insurer; legal objections of the insurer that require evidence and detailed consideration should be left for the final award. If insurer later found not liable, equities can be worked out at final stage (including reimbursement directions). | The court quoted and relied on this decision to explain that interim relief is urgent partial relief and that substantive legal defenses by the insurer are for trial and final determination. |
| United India Insurance Co. v. Immam Aminasab Nadaf, 1990 ACJ 757 (Karnataka Full Bench) | Presented a contrary view (the text refers to a contrary Full Bench view in Karnataka) concerning insurer's liability at the interim award stage. | The court noted this contrary view; the Rajadevi decision took that contrary Full Bench view into account but proceeded to adopt and apply the approach favouring interim awards against insurers where insurance of the vehicle is prima facie shown. |
Court's Reasoning and Analysis
The court examined the statutory scheme and the purpose of the provisions invoked. It observed that:
- Section 92-A(1) creates a no-fault liability of the vehicle owner to pay compensation for death or permanent disablement arising out of the use of a motor vehicle.
- Section 92-B(2) mandates that claims under section 92-A be disposed of as expeditiously as possible, indicating the legislative intent to provide quick interim relief.
- The underlying purpose of sections 92-A and 92-B(2) is to provide social security and urgent interim relief to injured persons or families of deceased victims; this salutary purpose would be frustrated if tribunals were required at the interim stage to adjudicate contested factual and legal issues that properly belong to the final trial.
- The amended definition of “liability” in section 93 includes liability under section 92-A, and section 95 requires policies to insure the vehicle owner against liabilities (which, the court held, includes liabilities arising under section 92-A).
- Section 95(2)(a) specifically sets coverage limits for goods vehicles (up to Rs. 1,50,000/- for any one accident, including Workmen's Compensation liabilities for certain employees), indicating the statutory contours of required coverage for goods vehicles.
Applying these statutory provisions and the authorities cited (notably Dwarika v. Bise, National Insurance Co. v. Smt. Savitri and United Insurance Co. Ltd. v. Smt. Rajadevi), the court explained that at the interim stage the crucial question is whether the vehicle stood insured with the insurer. If that is admitted or prima facie proved, the Tribunal has jurisdiction to make an interim award against the insurer without undertaking the full trial of disputed legal objections as to the insurer's ultimate liability. The court observed that the appellant’s contention that passenger risk in a goods vehicle was not required to be insured could not be accepted prima facie at the interim stage because it required closer examination of facts and law appropriate only at the final trial.
Having considered the impugned interim awards and the material placed before the Tribunal, the court concluded that the interim awards were neither illegal nor unreasonable and therefore did not merit interference.
Holding and Implications
HOLDING: The appeals (including the connected appeals M.A. Nos. 262/89 to 270/89 and 266/89) filed by National Insurance Co. Ltd. are dismissed as without merit, with no order as to costs. (The opinion concludes: "Appeals dismissed.")
Implications:
- The impugned interim awards made by the Motor Accident Claims Tribunal on 29-6-1989 under section 92-A, awarding interim compensation (Rs. 15,000/- per death and Rs. 7,500/- for the injured claimant), remain in force.
- As upheld by this court, at the interim award stage the Tribunal need only be satisfied that the vehicle was insured prima facie; detailed adjudication of insurer's legal defenses (for example, whether passenger risk in a goods vehicle was covered) is reserved for the final trial and final award, where equities between insured and insurer can be worked out.
- This decision upholds the practice of granting urgent interim relief under section 92-A without resolving all contested legal and factual issues at the interim stage. The opinion does not state that it creates a new binding precedent beyond the application to these appeals.
This summary is limited to, and based exclusively on, the information contained in the provided opinion.
1. This order shall also govern the disposal of M.A No. 262/89 (National Insurance Co. Ltd. v. Nisar Khan), M.A No. 263/89 (National Insurance Co. Ltd. v. Mohd. Ishaq), M.A No. 264/89 (National Insurance Co. Ltd. v. Razzak Khan), M.A No. 265/89 (National Insurance Co. Ltd. v. Kalekhan), M.A No. 267/89 (National Insurance Co. Ltd. v. Kele Khan), M.A No. 268/89 (National Insurance Co. Ltd. v. Ayyub Beg), M.A No. 269/89 (National Insurance Co. Ltd. v. Sheikh Amin), M.A No. 270/89 (National Insurance Co. Ltd. v. Bismillaha) and M.A No. 266/89 (National Insurance Co. Ltd. v. Jahid Hussain).
2. This appeal as also the connected appeals Nos. 262 to 270 of 1989 are filed by the Insurance Company against the interim Award dated 29-6-1989 made by the Motor Accident Claims Tribunal, Garoth in Claim Cases Nos. 16/86, 19/86, 17/86, 24/86, 22/86, 25/86, 18/86, 23/86, 21/86 and 15/86 respectively whereby an interim compensation of Rs. 15,000/- under section 92-A of the M.V Act, 1939 (hereinafter referred to as the ‘Act’) has been awarded in respect of the death of each of the deceased persons viz., Salmabai w/o Sabirkhan, Sabanabai d/o Nisarkhan, Chhotibai w/o Ishaq, Shahirabi d/o Abdul Razzaq, Faridabanoo w/o Sabuddin, Sahabuddin s/o Kalekhan, Rehimanbai w/o Alam Khan Seikh Salim s/o Seikh Amin, Rabim Baksh s/o Kasamji and an interim compensation of Rs. 7,500/- under section 92-A of the Act has been awarded in respect of the injuries sustained by the injured claimant Jahid Hussain.
3. The facts giving rise to this appeal, as per the claim petition, are as follows:—
In the night of 14-5-1985 the marriage party of Sabbir consisting of 60 to 70 persons including ladies and minor children were returning after marriage from Neemuch to Shamgarh in Truck No. C.P.U 5169 and while the truck was passing through Sangram Ghat it toppled down due to rash and negligent driving of the driver-owner of the truck. As a result of this accident the passengers in the truck sustained serious injuries and many of them succumbed to the injuries. On claim petitions having been filed by the respective LRs. of the above-named deceased persons and the claimant-injured Jahid Hussain and a petition under section 92-A of the Act having been moved in each case, for interim compensation on the principle of ‘no fault liability’, the learned Tribunal awarded interim compensation of Rs. 15,000/- in respect of the death of each of the above-named deceased persons and Rs. 7,500/- in respect of the injuries sustained by the claimant injured.
4. The Award of compensation under section 92-A of the Act has been made against the owner driver Shafi Mohd. as well as the appellant-insurer with whom the offending truck stood insured during the material time on the view taken by the Tribunal that both the insured and the insurer are jointly and severally liable to pay the interim compensation.
5. Being aggrieved by the Award made against the appellant Insurance Company it has filed these appeals.
6. The main contention of the appellant Insurance Co. is that the learned Tribunal has committed an error in not considering the fact that risk of passenger travelling in a truck i.e a goods vehicle is not required to be covered under section 95 of the Act nor the Policy of Insuence covered it. As such, no liability attaches to the appellant Insurance Company.
7. Section 92-A(1) of the Act provides for liability of the owner of the vehicle involved in the accident, to pay compensation in respect of the death or permanent disablement of any person caused in the accident arising out of the use of the motor vehicle on the principle of no fault liability. A claim for compensation on the principle of no fault liability under section 92-A is required to ‘be disposed of as expeditiously as possible’, as per sub-section (2) of section 92-B of the Act.
8. The underlying purpose envisaged in the provisions of section 92-A(1) and 92-B(2) of the Act apparently is to provide social security against motor accident and to make available an interim relief urgently to the injured person or in case of death by accident to the members of the family of the deceased. This salutary humanistic purpose shall be defeated if the Tribunal were to be invited at the stage of interim award to decide contested questions of fact and law which the Tribunal can appropriately decide only after complete trial of the claim petition. The controversy as to liability of the insured and insurance inter se should not be allowed to hamper making of an interim Award since it can appropriately be deferred to be decided on completion of the trial by the Tribunal which is empowered to make suitable directions under section 96(4) of the Act to meet the ends of justice.
9. The amended definition of ‘liability’ in section 93 of the Act, provides that the word “liability” wherever used in relation to the death or bodily injury to any person includes the liability in respect thereof under section 92-A. The liability required to be statutorily covered in a policy of insurance as per section 95 of the Act, therefore, includes the liability arising under section 92-A of the Act.
10. Section 95(1)(b) of the Act envisages a policy of insurance to insure the vehicle owner against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of use of the vehicle in a public place. In the case of a vehicle being a goods vehicle section 95(2)(a) of the Act provides that the policy of insurance shall cover any liability incurred in respect of any one accident upto a limit 1,50,000/- in all including liabilities if any, arising under the Workmen's Compensation Act in respect of employees (other than the driver) not exceeding six in number, being carried in the vehicle.
11. The learned counsel for the appellant Insurance Company has contended that the vehicle involved in the accident being a truck, it was neither insured nor was required to be insured for carrying passengers and as such, the Insurance Co. cannot be held liable in respect of the death and injuries caused to the passengers travelling in the truck. This contention on merits cannot be prima facie accepted at this stage, since it would require closer examination of facts and law for deciding the contention and that can appropriately be done at the final stage of the trial.
12. In a decision of this Court in Dwarika v. Bise, 1990 ACJ 283, it has been held that if it is admitted or prima facie proved from the material available on record that the vehicle involved in the accident was insured, the Tribunal has jurisdiction to hold the Insurance Co., jointly and severally liable with the owner of the vehicle for no fault liability under section 92-A, requiring the Insurance Co. to pay the amount of interim compensation to the claimants forthwith and at that stage the Tribunal is not bound to enquire into or record a finding as to sustainability or otherwise of the objections raised by the Insurance Co. that it was not liable at all. Another decision of this Court to the similar effect is in the case of National Insurance Co. v. Smt. Savitri, 1991 MPLJ 46 : 1990 JLJ 664, which emphasises that for making interim award under section 92-A of the Act only owner and insurer of the offending vehicle are to be ascertained and time consuming enquiry cannot be held at the stage of payment of interim compensation. In another decision of this Court in the United Insurance Co. Ltd. v. Smt. Rajadevi, M.A No. 242/90 decided on 8-4-1991, which takes into account a contrary view of Full Bench decision of the Karnataka High Court in United India Insurance Co. v. Immam Aminasab Nadaf*, 1990 ACJ 757, the view taken has been expressed thus:
“In view of the discussion aforesaid, it seems that the interim Award of compensation on the principle of no fault liability, being in the nature of urgent partial relief to the claimant, the only material fact to be ascertained at the stage of making interim Award against the Insurance Company by the Tribunal is whether or not the vehicle involved in the accident stood insured with the said Insurance Company. Once it is not disputed that the vehicle was so insured with the non-applicant Insurance Company, the Tribunal has the jurisdiction to make an interim Award jointly against the insured and the insurer. Any legal objection or legal contention of the insurer based on facts to be enquired during the trial of the claim petition cannot be allowed to hamper making of an interim Award by the Tribunal against the insurer. The legal questions raised in the objection of the Insurance Company which require proper material to be brought in evidence or sorting out the true legal position after indepth consideration of the legal controversy raised by the parties should properly be left to be decided at the conclusion of the case resulting in the final Award and at that final stage equities can be worked out between the insured and the insurer and in case the insurer is not found liable it can be directed to be reimbursed by the insured, even in respect of the liability imposed on the insurer under the interim order.”
13. Having heard learned counsel for the parties and having considered the impugned orders and the material placed before the Tribunal, I am of the opinion that the impugned interim Awards cannot be said to be illegal or unreasonable so as to call for interference in this appeal and the other connected appeals.
14. In the result, therefore, this appeal as also the connected appeals viz. M.As Nos. 262/89, 263/89, 264/89, 265/89, 267/89, 268/89, 269/89, 270/89 and M.A No. 266/89 are dismissed, being without merit, with no order as to cost.
Appeals dismissed.
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