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Oriental Insurance Co. Ltd. v. Jhuma Saha (Smt) And Others
Factual and Procedural Background
The deceased was the owner and driver of a Maruti van bearing Registration No. TR 03 2304. While attempting to avoid a goat on the road, the steering allegedly failed and the vehicle collided with a roadside tree, causing fatal injuries to the owner-driver.
His legal heirs instituted a claim under Section 166 of the Motor Vehicles Act, 1988 before the Motor Accident Claims Tribunal (MACT). The insurer resisted the claim, asserting that the policy was only for third-party risks. The MACT nonetheless awarded compensation, observing that an additional premium had been paid for the death of the driver or conductor.
The insurer’s appeal to the Gauhati High Court (CRP No. 69 of 2003) was dismissed on 28-10-2003, primarily on the ground—relying on National Insurance Co. Ltd. v. Nicolletta Rohtagi—that the appeal was not maintainable. The insurer then appealed to the Supreme Court.
Legal Issues Presented
- Whether, under Section 147 of the Motor Vehicles Act, 1988, an insurance policy that covers only third-party risks obliges the insurer to compensate for the death of the owner-driver of the insured vehicle.
- Consequentially, whether the claim petition filed under Section 166 against the insurer was maintainable when the deceased was himself the negligent owner-driver.
Arguments of the Parties
Insurer (Appellant)
- The MACT lacked jurisdiction because Section 147 confines compulsory insurance to third-party risks; the deceased owner is not a third party.
- No additional premium had been paid to extend personal accident cover to the owner; therefore, the policy did not cover his death.
Claimants (Respondents)
- Before the MACT they relied on an alleged additional premium for “driver/conductor” to argue that the risk was covered.
- Before the High Court they contended, on the authority of Nicolletta Rohtagi, that the insurer’s appeal itself was not maintainable.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| National Insurance Co. Ltd. v. Nicolletta Rohtagi, (2002) 7 SCC 456 | An insurer’s right to appeal in motor accident cases is limited. | The High Court had relied on this case to dismiss the insurer’s appeal as non-maintainable; the Supreme Court noted but did not adopt that ground, deciding the matter on the substantive liability issue. |
| Dhanraj v. New India Assurance Co. Ltd., (2004) 8 SCC 553 | Section 147 does not require an insurer to cover death or bodily injury to the owner of the vehicle unless a specific personal accident cover is taken. | The Court quoted and followed this decision to hold that the insurer had no liability towards the owner-driver in the absence of a separate premium. |
Court's Reasoning and Analysis
Justice S.B. Sinha examined Section 147(1)(b) of the Motor Vehicles Act, emphasizing that compulsory insurance under the provision is restricted to third-party liability. Because the deceased was the owner of the vehicle and the only person involved in the accident, no third-party liability arose.
The Court reiterated that an insurer’s duty is merely to indemnify the insured against liability to third persons. Where the insured himself is at fault and suffers injury or death, the insurer is not liable unless a specific personal accident policy has been purchased. Relying on Dhanraj, the Court found that the additional premium evidenced in the record did not extend to personal injury of the owner.
Consequently, as the insured (i.e., the deceased owner) could not have fastened liability on himself under the Act, the insurer had no corresponding duty of indemnification. The MACT and High Court therefore erred in holding the insurer liable.
Holding and Implications
Appeal Allowed – Impugned judgments of the MACT and Gauhati High Court set aside.
Immediate Effect: The claim for compensation against the insurer fails; no liability attaches to the insurer for the death of the owner-driver.
Broader Implications: The decision reinforces that Section 147 mandates coverage only for third-party risks and that owners must procure separate personal accident coverage to secure compensation for self-inflicted injuries or death. No new legal principle was created, but existing jurisprudence under Dhanraj was affirmed.
S.B Sinha, J.— Leave granted.
2. This appeal is directed against the judgment and order dated 28-10-2003 passed by the Gauhati High Court in CRP No. 69 of 2003 whereby and whereunder the appeal preferred by the appellant herein was dismissed.
3. The deceased was the owner of an insured vehicle bearing Registration No. TR 03 2304, a Maruti van. While he was driving the said vehicle, allegedly, in order to save a goat which was running across the road, the steering of the vehicle failed and it dashed with a tree on the roadside. He suffered injuries. He later on succumbed thereto.
4. On the aforementioned premise a claim petition under Section 166 of the Motor Vehicles Act, 1988 was filed.
5. The insurer resisted the claim petition when served with a notice, inter alia, contending as under:
“That as per the Motor Vehicles Act and Rules the owner is not entitled to get any compensation if he drives the vehicle and falls in an accident — as the insurance policy is a third party in nature. The contract between the insured and the insurer is that if any accident occurred out of the use of motor vehicle then only third party is entitled to get compensation. The insurer and the insured is the first and second party and other than them all are third party. But in this case as per the version of the petition the deceased was the owner of the vehicle and was driving the vehicle and he met with an accident. Though the deceased had valid driving licence still he is not the third party as per the Rules and Act. Hence the petitioners are not entitled to get any compensation.…”
6. The said contention of the appellant, however, did not find favour with the Motor Vehicle Accidents Claims Tribunal which, inter alia, held that the vehicle being insured and an additional premium for the death of the driver or conductor having been paid, the liability was covered by the insurance policy.
7. In the appeal preferred by the appellant before the High Court, however, the contention of the respondents herein that in view of the decision of this Court in National Insurance Co. Ltd. v. Nicolletta Rohtagi (2002) 7 SCC 456 the appeal was not maintainable, was accepted.
8. Before us a short question has been raised by the learned counsel appearing on behalf of the appellant stating that in view of Section 147 of the Motor Vehicles Act, 1988, the jurisdiction of the Tribunal was confined to a third-party claim and, thus, the impugned judgment cannot be sustained.
9. Section 147(1)(b) of the Motor Vehicles Act, with which we are concerned, reads as under:
“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—
(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.”
10. The deceased was the owner of the vehicle. For the reasons stated in the claim petition or otherwise, he himself was to be blamed for the accident. The accident did not involve motor vehicle other than the one which he was driving. The question which arises for consideration is that the deceased himself being negligent, the claim petition under Section 166 of the Motor Vehicles Act, 1988 would be maintainable.
11. Liability of the insurer Company is to the extent of indemnification of the insured against the respondent or an injured person, a third person or in respect of damages of property. Thus, if the insured cannot be fastened with any liability under the provisions of the Motor Vehicles Act, the question of the insurer being liable to indemnify the insured, therefore, does not arise.
12. In Dhanraj v. New India Assurance Co. Ltd. (2004) 8 SCC 553 it is stated as follows:
“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.
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.”
13. The additional premium was not paid in respect of the entire risk of death or bodily injury of the owner of the vehicle. If that be so, Section 147(b) of the Motor Vehicles Act which in no uncertain terms covers a risk of a third party only would be attracted in the present case.
14. In that view of the matter, the impugned judgment cannot be sustained. The appeal is allowed.
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