New India Assurance Company Ltd. v. Kanchan Bewa And Others

Hansaria, C.J:— These appeals by the insurer have raised the question of its liability to satisfy the awards which have been passed in proceedings under Section 110-A of the Motor Vehicles Act, 1939 (hereinafter, “the Act”) claiming compensation for the death of three persons who were travelling in a goods vehicle, which had been hired by the deceased and who were travelling in the vehicle which got involved in an accident. When these appeals came before one of us (G.B Patnaik, J.), reliance was placed on a bench decision of this Court in Oriental Fire and General Insurance Company Ltd. v. Narayani Bai, 1984 Acc CJ 106 : (AIR 1984 Orissa 43) in which this question had been answered in affirmative. This had been done following the decisions of Karnataka High Court in Channappa v. Laxman Bhimappa, AIR 1979 Karnataka 93; T.M Renukappa v. Fahmida, 1980 Acc CJ 86 : (AIR 1980 Karnataka 25) and United India Insurance Co. Ltd. v. Gangamma, 1982 Acc CJ 357 : (AIR 1982 Karnataka 261). The learned Judge, however, noted that these decisions have been overruled by a Full Bench of that High Court in National Insurance Co. v. Dundamma*, 1992 Acc CJ 1 : (AIR 1992 Karnataka 3). It was also noted that there were two lines of decisions taken by different High Courts on this question, and so, it was felt appropriate to refer the matter to a larger Bench, though ordinarily a Bench decision would have been binding on the learned single Judge. It is this reference which finds these appeals before us.

2. During the course of hearing and subsequently by filing memo of citations, our attention has been invited to a number of decisions of different High Courts of the country taking different views in the matter. There are decisions according to which in such a case the insurer would be liable and there is a contrary view also. We have perused the decisions and would refer them at the appropriate places. Suffice it to say at this stage that the two conflicting views owe their origin mainly to the question as to whether the second proviso to Section 95(i)(b) of the Act takes within its fold only “public service vehicle” or would extend to “goods vehicle”.

3. Before we note the aforesaid provision, a little excursion in history may be useful. Section 95 finds place in Chapter VIII of the Act on the subject of “Insurance of Motor Vehicles Against Third-Party Risks”. So, it was the “third-party” which was basically in mind when the Legislature mandated that no person shall use a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person, a policy of insurance, as stated in Section 94. Section 95 deals with the requirements of policies, and limits of liability. That part of the section which dealt with the requirements of policies as inserted read as below:—

“95. Requirements of policies and limits of liability.— (1) In order to comply with the requirements of this chapter, a policy of insurance must be a policy which—

(a) is issued by a person who is an authorised insurer or by a co-operative society allowed under Section 108 to transact the business of an insurer, and

(b) insures the person or classes of person specified in the policy to the extent specified in sub-section (2) against any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place:

Provided that a policy shall not except as may be otherwise provided under sub-section (3) 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 a conductor of the vehicle or in examining tickets on the vehicles, or

(c) if it is a goods vehicle, being carried in the vehicle, or

(ii) 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, or

(iii) to covery any contractual liability.

xxxxxxxx”

4. By Section 74 of Act 100 of 1956, the words, brackets and figure “except as may be otherwise provided under sub-section (3)” were omitted from the proviso. Further, Section 54(a) of Act 56 of 1969 substituted the following clause for clause (b):—

“(a) in sub-section (1),—

(i) for clause (b), the following clause shall be substituted, namely:—

“(b) insurer the person or classes of persons specified in the policy to the extent specified in sub-section (2)—

(i) 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 the use of the vehicle in a public place;

(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place;

(iii) the following Explanation shall be added at the end, namely:—

‘Explanation.— For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.”

The purpose for this substitution was to cover passenger risks in public service vehicles as would appear from what has been stated under point No. (6) of the Statements of Objects and Reasons relating to this Act. The proviso, however, was not altered in any way

5. The amended clause (b) thus read as below:—

“(b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)—

(i) 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 the use of the vehicle in a public place;

(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:

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 a conductor of the vehicle or in examining tickets on the vehicle, or

(c) if it is a goods vehicle, being carried in the vehicle, or

(ii) 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, or

(iii) to cover any contractual liability.

Explanation.— For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.”

(Emphasis supplied)

6. In view of the amendment made in the Act in 1969, the object of Chapter VIII cannot be confined to what has been stated in New Asiatic Insurance Co. v. Pessumal, AIR 1964 SC 1736, which has been mentioned in some of the decisions to be referred later. What would be more to the point would be what has been stated in this connection in Pushpabai v. Ranjit Ginning and Pressing Co., AIR 1977 SC 1735, which attracted sub-clause (i) of clause (b) of Section 95(1), as it stood amended in 1969, as to which it was stated that a policy of insurance is not required to cover risk to the passengers who were not carried for hire or reward. This observation made in Pushpabai's case has been relied on in some of the decisions in support of the view taken therein.

7. The first aspect of the matter with which we may, therefore, deal is whether an owner of the goods who would be travelling in a goods vehicle taken on hire by him for carrying his goods would be a passenger “for hire or reward”. There seems to be near unanimity on this question inasmuch as when an owner of the goods hires a vehicle to carry his goods, there is an implied contract to carry him in the vehicle either for the safety of the goods or to help him to load and unload the goods. It has also been accepted that while charging for the vehicle hired for carrying goods, the owner of the vehicle takes into account the fact that the owner of the goods may also be travelling and it has, therefore, been held that the owner in such a case travels in the vehicle, may be for hire, may be for reward. (Though there is some difference in the views expressed in this regard, as according to some High Courts it is for hire, while as per others for reward. That is not material inasmuch as in either case the proviso would got attracted.)

8. The hub of the difference is on the meaning to be assigned to the expression “where the vehicle is a vehicle in which passengers are carried for hire or reward”. The High Courts which have answered the question in affirmative have taken the view that this expression would include a goods vehicle, whereas those who have taken the contrary view are of the opinion that this expression is referable only to a “public service vehicle”, of which reference has been made in sub-clause (ii) of clause (b).

9. As to which view we should adopt in the matter would depend upon the definition of these two expressions as given in the Act and the provisions finding place in Rule 95 of the Orissa Motor Vehicles Rules, 1940 relating to carriage of persons in goods vehicles.

10. The expression “goods vehicle” has been defined in Section 2(8) of the Act as below:—

“‘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.”

(Emphasis ours)

Section 2(25) has defined “public service vehicle” thus:—

“‘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 motor cab, contract carriage, and stage carriage;”

11. Proviso (ii) having stated that the vehicle must be of the type “in which passengers are carried for hire or reward”, the Courts which have ruled out the liability of the insurer in a case of the present nature have held that the proviso takes care of passengers in public service vehicles only because of the definition of that expression noted above. This is the reason given by the Full Bench of Karnataka High Court in Dundamma's case (AIR 1992 Karnataka 3) in overruling the three Karnataka decisions basing on which Narayani Bai's (AIR 1984 Orissa 43) was decided by a Bench of this Court. But then, keeping in view what has been stated in proviso (i), it was stated that the insurer would be liable to pay compensation relating to the employees of the owner of the goods vehicle. Even while so holding, the Full Bench, applying the principle of stare decisis, upheld the award against the insurer even for the owner of the goods travelling in the goods vehicle because the law in Channappa's case (AIR 1979 Karnataka 93), which was decided in 1979, had prevailed for the last twelve years.

12. Shri Roy, appearing for the appellants, besides drawing our attention to the aforesaid Full Bench case has referred to two other decisions of this Court, one of which is by a learned single Judge in National Insurance Co. Ltd. v. Kuntala Swain, 1992 (1) TAC 637 and the other by a Bench in Jabananda v. Artatrana, AIR 1992 Orissa 110. In the first case the question for determination was whether the insurer was liable to satisfy the award of compensation awarded relating to the passengers who were boarded in a mini truck on payment of fare. In the accident there was death of four persons and injuries to others. The liability of the insurer was denied because the passengers were in a goods vehicle. We shall advert to this decision later while dealing with those cases in which liability under proviso (ii) has been fastened on the insurer relating to passengers travelling for hire or reward in a goods vehicle. The second of the above-mentioned decisions held that the expression “third party” does not include anybody and everybody involved in accident and does not cover risk to passengers not carried for hire or reward.

13. Shri Mohanty, appearing for the claimants, however, places reliance on Nasibdar v. Adhia and Company, 1983 Acc CJ 264 : (AIR 1984 Bombay 1); Abdul v. Sharifunnisa, 1984 Acc CJ 44 : (AIR 1983 Allahabad 400); Santra Bai v. Prahlad, 1985 Acc CJ 762 : (AIR 1986 Rajasthan 101) (Full Bench); and New India Assurance Co. Ltd. v. K.T Jose, 1990 Acc CJ 184 : (AIR 1990 Kerala 314) in supporting the awards.

14. The Bombay decision was founded solely on the fact that the hirer was carried for reward and was, therefore, accepted to be a passenger carried for reward. This, however, does not clinch the matter as already stated. In the Kerala case also, the only reason given was that where the owner of the goods travelled in the goods vehicle either for the purpose of loading or unloading or taking care of the goods, the contract between him and the owner of the vehicle must necessarily imply permission for him or his agent to travel in the vehicle; and this implied condition might have also been taken into consideration in fixing the hire because of which the owner of the goods travelling in a goods vehicle would be a passenger for hire.

15. In the Allahabad case (AIR 1983 All 400), it was accepted that the proviso covers goods vehicle also because the U.P Motor Vehicles Rules, 1940 authorised goods vehicle to carry hirer or an employee of the hirer of the goods vehicle. Such a provision finds place in Rule 95 of the Orissa Rules to the details of which we shall advert later. It may be pointed out that in the Allahabad case it was noted that the terms of the policy had even otherwise covered the risk in question.

16. The Full Bench case of Rajasthan High Court (AIR 1986 Raj 101) contains a detailed discussion on the real issue at hand, namely, whether the proviso is confined to public service vehicle only or takes within its fold goods vehicle also. Kasliwal, J. (as he then was) first stated in paragraph 9 that the owner of the goods or his employee, if he travels in the goods vehicle, has to be taken to be a person carried for reward, if not for hire, as the owner pays consideration for carrying his goods and he may not trust the driver of the goods vehicle for which reason he may like to travel himself along with the goods. The learned Judge then noted the definition of “goods vehicle” and stated in proviso (ii) the legislature has not used the term “public service vehicle” but the words “where the vehicle is a vehicle in which passengers are carried”. By referring to the definition of goods vehicle, it was stated that such a vehicle can also carry passengers and it was, therefore, opined that the intention of the legislature appeared to be to keep proviso (ii) “wide open for any kind of such vehicle in which passengers may be carried for hire or reward”.

17. Let us now take the bull by the horns and let us see whether the expression used in the second proviso can take within its fold goods vehicle. Before we express our opinion on this aspect, let it be noted that when the aforesaid proviso had found place in the Act, clause (b) was differently worded. It is the aforesaid Act 56 of 1969 which brings sub-clause (ii) requiring a policy to cover death of or bodily injury to any passenger of a public service vehicle. It is because of this that an argument was advanced before the Full Bench of Karnataka High Court in Dundamma (AIR 1992 Kant 3) (supra) that proviso (ii) should have really been omitted by submitting that it had become otiose; but that was not accepted because that proviso took care not only of the passengers carried for hire or reward or by reason of or in pursuance of a contract of employment, but also “persons……entering or mounting or alighting from the vehicle”. It may, however, be pointed out that in Section 147 of the Motor Vehicles Act, 1988 (which Section is parallel to Section 95 of the 1939 Act), there is no provision parallel to proviso (ii).

18. The aforesaid is not enough to take any view as to whether goods vehicle can or cannot come within the fold of proviso (ii) with which we are concerned. Our primary reason for differing, with respect, with Rajasthan Full Bench is that allowing goods vehicle to be taken within the fold of proviso (ii) would introduce uncertainties in law as that would depend upon various factors to which we shall advert; the result would be that the law would cease to be certain which it has to be at least in a case of the present nature. We have said so because reference to the definition of goods vehicle shows that the first part of it does not deal with carrying of passengers. It is the second part which speaks about the same and that too when the vehicle is used for such a purpose. The word ‘use’ has been defined in Chambers English Dictionary in its intransitive sense to mean “to be accustomed; (to; used chiefly in the past tense)” to be in the habit of so doing; “to resort”. Reference to the meaning of this word, as given in Black's Law Dictionary (5th edition), would show that even one user may amount to ‘use’ or it may be that for a thing being said to be ‘used’, it has to be “employed habitually”.

19. Being concerned with a beneficial legislation like the one at hand, we would have normally preferred liberal interpretation, but the question is whether, without any extra premium having been paid, the owner of a goods vehicle can claim indemnification from the insurer just because once in a year the goods vehicle had carried a passenger for hire or reward along with the goods. This would perhaps robe the third proviso dealing with coverage of contractual liability lame. May it be said that in Allahabad case it had been noted that the terms of the policy had even otherwise covered the risk at hand.

20. The above, however, is not our main reason for not agreeing with the Rajasthan view. That lies in the uncertainties which would be created because of what finds palce in rules 95 and 95-A of the Orissa Motor Vehicles Rules, 1940 which we may read in entirety:—

“95. Carriage of persons in goods vehicles (a) Save in the case of a stage carriage in which goods are being carried in addition to passengers no person shall be carried in goods vehicle other than a bona fide employee of the owner or the hirer of the vehicle, and except in accordance with this rule.

(b) No person shall be carried in the cab of a goods vehicle beyond the number for which there is sitting accommodation at the rate of 45 centimeters measured along the seat, excluding the space reserved for the driver, for each person, and not more than six persons in all in addition to the driver shall be carried in any goods vehicle.

(c) No person shall be carried upon the goods or otherwise in such a manner that such person is in danger of falling from the vehicle, and in no case shall any person be carried in a goods vehicle in such a manner that any part of his person, when he is in a sitting position, is at a height exceeding 3 metres from the surface upon which the vehicle rests.

(d) Notwithstanding the provisions of sub-rule (b) the Regional Transport Authority may, as a condition of the permit granted for any goods vehicle, specify the conditions subject to which a larger number of persons may be carried in the vehicle; provided that such number shall not exceed the area in square decimetres of the floor of the vehicle divided by sixty-five.

(e) Nothing contained in this rule shall be deemed to authorise the carriage of any person for hire or reward or any vehicles.”

“95-A. Notwithstanding anything contained in R. 95 the State Government may in special case allow a goods vehicle to carry such number of persons not exceeding the number reckoned by dividing the floor area of the vehicle in square decimetres by forty-six.”

21. So, though rule 95 permits carrying of the hirer of the vehicle, it does not cover his employee. We may point out here that Rule 92 of the U.P Motor Vehicles Rules which was noted in the aforesaid Allahabad decision had allowed carrying of the person hiring the vehicle, so also bona fide employee of the hirer. This is not all. Rule 95 has put a limit on the number of persons to be carried, the same being six in all in addition to the driver, as would appear from sub-rule (b). Of course, rule 95-A permits the State Government in a special case to allow a goods vehicle to carry more number of persons. In the learned single Judge's case of Kuntala Swain (1992 (1) TAC 637), to which we have referred earlier, it was the lack of this authorisation which had led the learned single Judge to hold that insurer was not liable because in that case 30-40 passengers had boarded the mini truck though on payment of fare.

22. Thus, to find out whether an insurer would be liable to indemnify an owner of a goods vehicle in a case of the present nature, the mere fact that the passenger was carried for hire or reward would not be enough; it shall have to be found out as to whether he was the owner of goods, or an employee of such an owner, and then whether there were more than six persons in all in the goods vehicle and whether the goods vehicle was being habitually used to carry passenger. The position would thus become vary uncertain and would vary from case to case. Production of such result would not be conducive to the advancement of the object sought to be achieved by requiring a compulsory insurance policy.

23. There is another aspect of the matter which had led us to differ from the Full Bench decision of Rajasthan High Court. The same is what finds place in sub-section (2) of Section 95. That sub-section specifies the limits of liability and clause (a) deals with goods vehicle; and in so far as the person travelling in goods vehicle is concerned, it has confined the liability to the employees only. This is an indicator, and almost a sure indicator of the fact that legislature did not have in mind carrying of either the hirer of the vehicle or his employee in the goods vehicle; otherwise, clause (a) would have provided a limit of liability regarding such persons also.

24. So, we disagree with Rajasthan view and hold that proviso (ii) does not deal with goods vehicle at all. In passing, Shri Roy brings to our notice the judgment of a learned single Judge of this Court in National Insurance Company Ltd. v. Laxmi Devi, 1985 Acc CJ 48 : (AIR 1984 Orissa 197) in which liability of the insurance company in respect of death of a person carried in truck along with the goods under a contract of employment with the owner of the goods was upheld by placing reliance primarily on Vanguard Insurance Company Ltd. v. Chinnammal, 1969 Acc CJ 226 : (AIR 1970 Madras 236), which was followed in Hukumchand Insurance Company v. Badruddin, 1980 Acc CJ 164 (Madhya Pradesh) the decision of the Madras High Court itself receiving support from Oriental Fire and General Insurance Companv v. Gurdev Kaur, 1967 Acc CJ 158 : (AIR 1967 Punjab 486) (FB). Shri Roy, however, brings to our notice that the aforesaid Madras decision was held to be a bad law in C. Narayanan v. Madras State Palm Gur Sammelan, 1974 Acc CJ 479 : (AIR 1974 Madras 281), as would appear from what has been observed in Kandaswamy v. Chinnaswamy, 1985 Acc CJ 232 : (AIR 1985 Madras 290), in which it was stated in paragraph 7 that Chinnammal's case was “no longer good law” because of what was stated in Narayanan's case.

25. Despite the above, it may be useful to state that the controversy in this regard, as would appear from the decision of the Punjab and Haryana High Court in Gurdev Kaur, (AIR 1967 Punjab 486), which is by a Full Bench, is on the question as to whether “a contract of employment”, of which mention has been made in proviso (ii) has to go with the word “passengers”, or with the word “vehicle”. The Full Bench held that the same has relationship with “passenger, because, otherwise, the proviso would not make out a correct grammatical sense or any other sense. It was then pointed out that no judicial opinion had been referred to show that the expression “a contract of employment” can have reference to a contract of carriage of goods whether in relation to carriage itself or only of such carriage. In paragraph 9 it is then observed:—

“The normal and ordinary meaning and the scope of expression of ‘a contract of employment’ points to a person being employed to do something or to carry out something for another person. It has the element of rendition of some service in one shape or another for the employer. So, it cannot refer to the hiring of a goods carrier as a contract of employment or to the owner of such a carrier as the person with whom a contract of employment has been made.”

What is required to be stated further is only that what applies to the owner of the goods mentioned above would apply to the employee of the owner of the goods. So, what was stated in Laxmi Devi cannot be held to be good law.

26. For the sake of completeness, we may deal with the submission of Shri Mohanty that because of stare decisis, we may not disturb the ratio of Narayani Bai which has held the field for about nine years by now. This submission has been advanced because of what has been stated in the Full Bench case of Karnataka High Court referred above. To deal with the submission, we have to know what really stare decisis. The full form of this principle is “stare decisis et non quieta movere” which means “to stand by decisions and not to disturb what is settled”, which was put by Lord Coke in his classic English version as: “Those things which have been so often adjudged ought to rest in peace”. According to Justice Frankfurter, the doctrine of stare decisis is not “an imprisonment of reason”, as observed in U.S v. International Boxing Club, (1954) 348 US 236 (249). (See paragraph 43 of Waman Rao v. Union of India, AIR 1981 SC 271).

27. In Distributors (Baroda) Pvt. Ltd. v. Union of India, AIR 1985 SC 1585, it was stated in paragraph 19 that there may be circumstances where public interest demands that the previous decision be reviewed and reconsidered and the doctrine of stare decisis should not deter the Court from overruling an earlier decision, if it is satisfied that such decision is manifestly wrong or proceeds upon a mistaken assumption in regard to the existence or continuance of a statutory provision or is contrary to another decision of the Court. What was stated by Jackson, J. in his dissenting opinion in Massachusetts v. United States, (1947) 333 US 611, was then quoted which is: “I see no reason why I should be consciously wrong today because I was unconsciously wrong yesterday”. Then comes what Lord Denning said in Ostime v. Australian Mutual Provident Society, 1960 AC 459. This is what the noble Judge said: “The doctrine of precedent does not compel your Lordships to follow the wrong path until you fall over the edge of the cliff.

28. The aforesaid shows that the doctrine of stare decisis is not available as a shield against all attacks. Its umbrella should be provided in a case of the nature which confronted itself to Khanna, J. in Kesavananda v. State of Kerala, AIR 1973 SC 1461, when validity of Article 31A of the Constitution which had been upheld in Shankari Prasad v. Union of India, AIR 1951 SC 458, was sought to be re-challenged, as to which the learned Judge said in paragraph 1530 that the effects which have followed after Shankari Prasad's case are “so overwhelming that we should not disturb the decision” inasmuch as “millions of acres of land have changed hands and millions of titles in agricultural lands which have been created and the State laws dealing with agricultural land which have been passed in the course of the years after the decision in Shankari Prasad's case have brought about an agrarian revolution”. It was then observed that it would be wrong to hold that Shankari Prasad's decision was not correct and disturb all that has been done during these years and “create chaos in the lives of millions of our countrymen who have benefited by these laws relating to agricultural reforms”. So, that was regarded as the fittest case in which principle of stare decisis should be applied.

29. Because of what has been stated above about the doctrine of stare decisis, we do not think if we would be justified at all in upholding the decision in Narayani Bai (AIR 1984 Orissa 43) on the basis of this doctrine.

30. We, therefore, answer the referred question by stating that proviso (ii) to Section 95(1)(b) did not apply to the passengers carried for hire or reward in a goods vehicle and it is restricted to such passengers carried in a public service vehicle.

G.B Patnaik, J.:— 31. I entirely agree with the conclusion arrived at by my Lord the Chief Justice. But I would like to add a few words particularly because of the fact that I was a party to Narayani Bai's case 1984 Acc CJ 106 : (AIR 1984 Orissa 43) and I also had referred this matter to a larger Bench. Apart from the fact that the Division Bench decisions of the Karnataka High Court which were relied upon by this Court in Narayani Bai's case have been overruled by the later Full Bench decision of the said Court, as has already been noticed by my Lord the Chief Justice, in National Insurance Co. case 1992 Acc CJ 1 : (AIR 1992 Karnataka 3), several other High Courts have also taken the same view. A Full Bench of the Punjab High Court in the case of The Oriental Fire and General Insurance Co. Ltd. New Delhi v. Smt. Gurdey Kaur, AIR 1967 Punjab 486 (FB) considered the question of the Insurer's liability and after interpreting sub-section (1) of Section 96 of the Motor Vehicles Act as well as the proviso (ii) to Section 95(1)(b) of the said Act, came to hold that the owner of the goods who was also sitting in the goods vehicle along with his goods when the vehicle met with an accident did not come under the proviso (ii) to Section 95(1)(b) of the Act and, therefore, the Insurer will not be liable to pay compensation in such a case. The Madhya Pradesh High Court also considered a similar question in the case of South India Insurance Co. Ltd., Indore v. Heerabai, 1967 Acc CJ 65 and on construction of Section 95(1)(b), as stood then, a Division Bench came to the conclusion that unless and until the person travelling in the goods vehicle is a passenger carried by reason of or in pursuance of a contract of employment, the Insurer will not be liable and a person travelling on the vehicle along with the goods does not come within either of the categories. A learned single Judge of the Madras High Court in the case of South Indian Insurance Co. Ltd. v. P. Subramaniam, AIR 1972 Madras 49, came to the conclusion that where the owner of the goods was travelling on the goods vehicle not in pursuance of a contract of employment, but was gratuitously travelling along with his goods and sustained bodily injuries, the Insurer could not be held liable to pay any compensation to the said injured. A Division Bench of the Calcutta High Court in the case of Indian Mutual General Insurance Society Ltd. v. Mazdoor Ashan, AIR 1977 Calcutta, 34 also considered the proviso (ii) to Section 95(1)(b) and came to the conclusion that a hirer of a goods vehicle for carrying goods cannot be said to be a person who enters into a contract of employment with the owner of the vehicle and, therefore, the insurance company is not liable for any compensation in case of bodily injury to the said hirer of the vehicle.

32. Coming to the rules of interpretation of statutes, it is a cardinal principle that the words used by the legislature should have their ordinary, natural and grammatical meaning and it is only when such words are capable of two constructions, then the question of giving effect to the policy or object of the Act can legitimately arise. The Privy Council in the case of Crawford v. Spooner, (1846) 4 Moo Ind App 179, had indicated:—

“…… The construction of the Act must be taken from the bare words of the Act. We cannot find out what possibly may have been the intention of the legislature, we cannot aid the legislature's defective phrasing of the statute; we cannot add, and mend, and, by construction, make up deficiencies which are left there….”

Tindal, C.J, while delivering the opinion of the Judges in Sussex Peerage case, (1844) 11 C1 & Fin 85, had observed that the only rule of construction of Acts of Parliament is that they should be construed according to the intent of the Parliament which passed the Act. If the words of the statute are in themselves precise and unambiguous, then no more can be necessary than to expound these words in their natural and ordinary sense. The words themselves alone do in such cases best declare the intention of the law-giver. But if any doubt arises from the terms employed by the legislature, it has always been held a safe means of collecting the intention to call in aid the ground and cause of making the statute, and to have recourse to the preamble. (See, the Interpretation of Statutes, 2nd Edn. page 43, by Vepa P. Sarathi). Maxwell on the Interpretation of Statutes at page 68 had administered a word of caution by saying that the construction of a statute must not be stressed to include cases plainly omitted from the natural meaning of the words. Crawford on Statutory Construction at page 492 says that a literal construction does not justify an extension of the statute's scope beyond the contemplation of the legislature and the fundamental and elementary rule of construction is that the words and phrases used by the legislature shall be given their ordinary meaning and shall be construed according to the rules of grammar.

33. With this rule of construction of a statute if the proviso (ii) to Section 95(1)(b) is examined, the conclusion is irresistible that unless a vehicle is a vehicle meant for carrying passengers for hire or reward or the said vehicle by reason of or in pursuance of contract of employment is required to cover the liability in respect of death of or bodily injury to persons being carried in or upon, the Insurer will not be liable to pay compensation. Admittedly, the owner of goods who has hired a goods vehicle does not become a person travelling on the vehicle in pursuance of a contract of employment and even if he is carrying his goods after hiring the vehicle, the vehicle does not become a vehicle meant for carrying passengers for hire or reward and consequently, would not come within the proviso (ii) to Section 95(1)(b). So had committed the error in Narayani Bai's case (AIR 1984 Orissa 43) by giving an extended meaning on the ground that the statute is a beneficial one and by ignoring the ordinary rules of construction had given an extended meaning. In my considered opinion, to come under the first part of Section 95(1)(b), proviso (ii), the vehicle in question must be a vehicle which is meant for carrying passengers for hire or reward and consequently, a goods vehicle will not come within the said provision.

R.K Patra, J.:— 34. I have had the benefit of going through the judgment prepared by my Lord the Chief Justice and the concurring views candidly expressed in the judgment of my learned brother Patnaik, J. I endorse with the conclusion reached therein and the reasons for it.

Order accordingly.