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Dhanraj v. New India Assurance Co. Ltd. And Another
Factual and Procedural Background
The appellant, owner of a jeep, was injured along with several passengers when the vehicle met with an accident on 26-8-2000 at about 6:30 a.m. Numerous claim petitions followed. In the petitions filed by the passengers, the Motor Accidents Claims Tribunal (MACT) held the driver, the appellant (as owner), and the insurer jointly liable. In the separate claim petition filed by the appellant for his own injuries, MACT directed only the driver and the insurer to compensate him. The insurer appealed, and the High Court of Madhya Pradesh, by judgment dated 21-7-2003, allowed the appeal, holding that the insurer was not liable to compensate the owner for his personal injuries. The present Supreme Court appeals challenge that High Court decision.
Legal Issues Presented
- Whether a “comprehensive” motor insurance policy obliges the insurer to compensate the owner of the vehicle for his own bodily injuries sustained in an accident.
Arguments of the Parties
Appellant's Arguments
- The payment of a premium of Rs 4,989 under the heading “Own damage” in a comprehensive policy indicates that the policy extends to personal injury suffered by the owner; therefore, the insurer should be liable.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Oriental Insurance Co. Ltd. v. Sunita Rathi, (1998) 1 SCC 365; 1998 ACJ 121 | The insurer’s liability under a motor policy is only to indemnify the insured against liabilities incurred towards third parties or property damage. | The Court relied on this ruling to reinforce that, absent third-party liability, the insurer bears no liability towards the owner’s personal injuries. |
Court's Reasoning and Analysis
1. Section 147 of the Motor Vehicles Act, 1988 mandates insurance against liability for death or bodily injury to “any person” other than the owner of the vehicle; the provision aims at protecting third parties.
2. A “comprehensive” policy may cover several risks, but Section 147 does not oblige the insurer to cover the owner’s personal injury unless a separate “personal accident” cover is expressly taken.
3. Examination of the policy showed a premium under “Own damage” described as “premium on vehicle and non-electrical accessories,” evidencing coverage for damage to the vehicle, not for bodily injury to the owner.
4. The appellant failed to demonstrate that any additional premium had been paid for personal accident cover; consequently, no contractual term imposed such liability on the insurer.
5. Citing Oriental Insurance Co. Ltd. v. Sunita Rathi, the Court reiterated that the insurer’s duty is to indemnify only against liabilities the insured owes to third parties; since the owner has no liability to himself, the insurer’s liability does not arise.
6. Accordingly, the High Court correctly absolved the insurer of liability, and no infirmity existed in its judgment.
Holding and Implications
Appeals dismissed.
The Supreme Court affirmed that, in the absence of a specific personal accident cover, a comprehensive motor insurance policy does not entitle the owner to compensation for his own bodily injuries. The decision leaves intact the High Court’s ruling in favour of the insurer and underscores that owners must obtain separate personal accident insurance to secure such coverage. No new legal precedent was created, but the ruling reinforces existing jurisprudence on the limited scope of insurer liability under Section 147.
S.N Variava, J.— Special leave granted.
2. Heard parties.
3. These appeals arise out of a judgment of the High Court of Madhya Pradesh dated 21-7-2003.
4. Briefly stated the facts are as follows:
On 26-8-2000, the appellant along with certain other persons was travelling in his own jeep. Around 6.30 a.m the jeep met with an accident. In the accident, the appellant as well as the other passengers received injuries. A number of claim petitions came to be filed. The appellant also filed a claim petition.
5. The Motor Accidents Claims Tribunal (MACT) held the driver of the jeep responsible for the accident. In all the claim petitions filed by the other passengers MACT directed that the appellant (as the owner) as well as the driver and the Insurance Company were liable to pay compensation. In these appeals, we are not concerned with those petitions and the orders thereon.
6. In the claim petition filed by the appellant, the Motor Accidents Claims Tribunal directed the driver and the Insurance Company to pay compensation to the appellant. The Insurance Company filed an appeal. That appeal has been allowed by the impugned judgment. It has been held that as the appellant was the owner of the vehicle the Insurance Company is not liable to pay him any compensation.
7. We have seen the policy. It is a comprehensive policy. The question that arises is whether a comprehensive policy would cover the risk of injury to the owner of the vehicle also. Section 147 of the Motor Vehicles Act, 1988 reads as follows:
“147. 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; and
(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, including owner of the goods or his authorised representative carried in the vehicle 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 carriage, being carried in the vehicle, or
(ii) 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.
(2) Subject to the proviso to sub-section (1), a policy of insurance referred to in sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely—
(a) save as provided in clause (b), the amount of liability incurred;
(b) in respect of damage to any property of a third party, a limit of rupees six thousand:
Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy, whichever is earlier.”
8. Thus, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorised representative) carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle. Section 147 does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle.
9. In the case of Oriental Insurance Co. Ltd. v. Sunita Rathi (1998) 1 SCC 365, 1998 ACJ 121 it has been held that the liability of an insurance company is only for the purpose of indemnifying the insured against liabilities incurred towards a third person or in respect of damages to property. Thus, where the insured i.e an owner of the vehicle has no liability to a third party the insurance company has no liability also.
10. In this case, it has not been shown that the policy covered any risk for injury to the owner himself. We are unable to accept the contention that the premium of Rs 4989 paid under the heading “Own damage” is for covering liability towards personal injury. Under the heading “Own damage”, the words “premium on vehicle and non-electrical accessories” appear. It is thus clear that this premium is towards damage to the vehicle and not for injury to the person of the owner. An owner of a vehicle can only claim provided a personal accident insurance has been taken out. In this case there is no such insurance.
11. We, therefore, see no infirmity in the judgment of the High Court. We see no reason to interfere. The appeals stand dismissed. There will be no order as to costs.
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