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Abdul Razzak Vs. Smt. Sharifunnisa and ors. - Court Judgment

LegalCrystal Citation
SubjectMotor Vehicles
CourtAllahabad High Court
Decided On
Case NumberFirst Appeal From Order No. 473 of 1976
Judge
Reported in[1985]58CompCas426(All)
ActsMotor Vehicles Act, 1939 - Sections 95 and 95(1)
AppellantAbdul Razzak
RespondentSmt. Sharifunnisa and ors.
DispositionAppeal partly allowed
Cases ReferredIn Pushpabai Parshottam Udeshi v. Ranjit Ginning and Pressing Co. P. Ltd.
Excerpt:
- - explaining the reason for the accident, he asserted that a convoy of vehicles was coming from the opposite direction and one of them failed to give pass as a result of which the front part of the vehicle coming from the opposite direction collided with the front part of his vehicle breaking the steering wheel as a result of which the vehicle went out of control and it capsized. 5. in the grounds of appeal, a number of pleas have been raised against the findings of the tribunal on the question of rash and negligent driving of the vehicle and also against the assessment of damages, but daring the course of arguments, these pleas were not pressed and instead the appellant's counsel confined his submission to the sole ground that under the insurance policy as well as under the terms of.....k.n. singh, j.1. this appeal under section 110d of the motor vehicles act, 1939, is directed against the award of the motor accidents claims tribunal, fatehpur, awarding a sum of rs. 26,400 as compensation to the respondent-claimants.2. mohammad ibrahim and mohammad nasir hired a public carrier bearing registration no. usf 4322 which was owned by abdul razzak, appellant, and insured with new india insurance company, respondent no. 7,for carrying onions from a village in district fatehpur to kanpur. afterloading the onions into the vehicle, mohd. ibrahim and mohd. nasir whowere, co-owners of the goods, boarded the public carrier along with saeedand majid in the driver's cabin along with the owner who was driving thevehicle. at about 3.30 a.m. on may 3, 1975, the truck capsized at a.....
Judgment:

K.N. Singh, J.

1. This appeal under Section 110D of the Motor Vehicles Act, 1939, is directed against the award of the Motor Accidents Claims Tribunal, Fatehpur, awarding a sum of Rs. 26,400 as compensation to the respondent-claimants.

2. Mohammad Ibrahim and Mohammad Nasir hired a public carrier bearing registration No. USF 4322 which was owned by Abdul Razzak, appellant, and insured with New India Insurance Company, respondent No. 7,for carrying onions from a village in District Fatehpur to Kanpur. Afterloading the onions into the vehicle, Mohd. Ibrahim and Mohd. Nasir whowere, co-owners of the goods, boarded the public carrier along with Saeedand Majid in the driver's cabin along with the owner who was driving thevehicle. At about 3.30 a.m. on May 3, 1975, the truck capsized at a placefour furlongs to the west of village Malwan on the Grand Trunk Road. Theleft side of the vehicle fell on the road and the right side went upwards.The left side window of the vehicle got opened and Majid and Nasir werethrown out, and Nasir was crushed under the vehicle and he died instantaneously.

3. Smt. Sharif-in-Nisa widow of Mohd. Nasir, and three minor daughters and two minor sons of the deceased, filed a claim petition under Section 110A of the Act claiming a sum of Rs. 70,000 as damages from the owner and the insurer of the vehicle. Abdul Razzak, appellant, filed written statement denying his liability. He pleaded that he was not guilty of any rash and negligent driving. Explaining the reason for the accident, he asserted that a convoy of vehicles was coming from the opposite direction and one of them failed to give pass as a result of which the front part of the vehicle coming from the opposite direction collided with the front part of his vehicle breaking the steering wheel as a result of which the vehicle went out of control and it capsized. The window got opened and the deceased was thrown on the road. He was crushed to death by another vehicle. The insurance company also pleaded that the death of the deceased, Mohd. Nasir, was caused by another vehicle. The insurance company further pleaded that since the deceased was travelling in the goods vehicle, he was not covered by the insurance policy and the company was not liable to indemnify the owner for the damages, if any, awarded to the claimants.

4. The Tribunal on appraisal of evidence held that the vehicle was being driven by the appellant in a rash and negligent manner as a result of which the vehicle capsized. The deceased was thrown out of the window and he was crushed by the appellant's vehicle and, as such, the appellant was liable to pay damages to the claimants. The Tribunal held, that the, claimants were entitled to a sum of Rs. 26,400, as damages which was recoverable by them from the owner. The claimants had asserted that the deceased was a palledar who was being carried in the vehicle by Mohd. Ibrahim for loading and unloading of the onions. The Tribunal held that since the deceased was travelling in the vehicle as owner of the goods along with Mohd. Ibrahim, his risk was not covered by the policy, and, as such, the insurance company was not liable to indemnify the owner of the vehicle. It further held that the amount of compensation was payable by the owner alone. Aggrieved, the owner of the vehicle has filed the present appeal.

5. In the grounds of appeal, a number of pleas have been raised against the findings of the Tribunal on the question of rash and negligent driving of the vehicle and also against the assessment of damages, but daring the course of arguments, these pleas were not pressed and instead the appellant's counsel confined his submission to the sole ground that under the insurance policy as well as under the terms of Section 95 of the M.V. Act, 1939, the insurance company was liable to indemnify the appellant for the damages awarded against him. Learned counsel for the insurance company on the contrary urged that in view of the proviso to Section 95(1)(b), the fatal injury caused to the deceased who was the hirer of the vehicle was not covered by the terms of the insurance policy and, as such, the insurance company was not liable to indemnify the owner. Counsel for both the parties cited a number of authorities in support of their contention. We would consider those authorities a little later.

6. Chapter VIII of the Motor Vehicles Act, 1039, hereinafter referred toas ' the Act', contains provisions for the insurance of motor vehiclesagainst third party risk- Section 94 of the Act prohibits use of a motorvehicle in a public place unless the vehicle is insured by a policy of insurance complying with the requirements of the said Chapter. Section 95 dealswith the requirements of policies and limits of liability. The provisions of Section 95, in so far as they are relevant for the purpose of the present case, are as under :

'95. Requirements oj 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 cooperative society allowed under Section 108 to transact the business of aninsurer, 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 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 of 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. ...'

7. Section 95(1) lays down that in order to comply with the retirements of Chapter VIII, a policy of insurance must be a policy which should be issued by a person who is the authorised insurer. The policy should insure the person or classes of persons specified in the policy to the extent specified in Sub-section (2) which prescribes the limit of liability in terms pf money. Section 95 (1)(b) lays down that a policy oi insurance is necessary to insure the person or classes of persons as set out in Sub-clause (i) and (ii). Under Sub-clause (i), an insurance policy in respect of the use of a vehicle in public place is required to insure the liability which may be incurred by an insurer in respect of death or bodily injury caused to any person or any damage caused to the property of any third party arising out of the use of a vehicle... Under Sub-clause (ii) of Clause (b), policy is required to insure the death of, or bodily injury to, any passenger of a public service vehicle. A 'public service vehicle ' as defined by Section 2(25) means a vehicle used for the carriage of passengers for hire or reward. There are three provisos to Section 95 (1)(b). These provisos carve out exceptions to the general rule as laid down in the ' two Sub-clauses (b)(i) and (ii) of the main Section making provision for compulsory insurance. Proviso (i) lays down that no policy shall be required to cover risk in respect of death or bodily injury of an employee of the insured person engaged in driving the vehicle or conductor or a ticket examiner in the case of a public service vehicle and also in the case of the employee being carried in a goods vehicle although the owner may be liable under the Workmen's Compensation Act, 1923. Proviso (ii) carves out an exception from the exceptions ; as such its provision is positive ; it lays down that policy is necessary 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 the liability in respect of the death of, or bodily injury to, persons being carried in the vehicle. Proviso (iii) lays down that no policy is necessary to cover a contractual liability.

8. Section 96 imposes liability on the insurer to satisfy judgments against persons insured in respect of third party risks. Its liability to indemnify the insured persons would be to the extent as specified in Section 95(2) of the Act. The insurance company is, however, entitled to avoid its liability on the proof of the conditions prescribed under Section 96(2) of the Act. One of the conditions as laid down in Section 96(2)(b)(i) is that if the vehicle is used in breach of specified conditions of the policy which may exclude the use of a vehicle for hire or reward where the vehicle is, on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward. Thus, if the insurance policy is in respect of a public carrier or a goods carrier, the policy may contain a condition prohibiting the use of the vehicle for hire or reward if the vehicle is not covered by a permit to ply for hire or reward. The contention of the insurance company has been that in the instant case the vehicle was a private carrier which had no permit to carry passengers for hire or reward and, as such, the insurance company is not liable.

9. In order to determine the questions raised before us, it is necessary to analyse the provisions of the Act requiring a compulsory insurance policy covering risk of third parties travelling in a vehicle and the provisions relating to the grant of permits to vehicles for carrying passengers or goods. Section 95(1)(b) and its two Sub-clauses (i) and (ii) compulsorily require a policy insuring the persons or classes of persons specified therein.

10. Provisos (i) and (ii) lay down that no policy shall be required to cover liability of employees of the insured in the case of a public service Vehicle and goods vehicle, or to cover any contractual liability. Proviso (ii) being an exception to the exception lays down a positive rule that the policy shall be required to cover liability in respect of death of, or bodily injury to, persons being carried in the vehicle where the vehicle is a vehicle in which passengers are carried for hire or reward, or where the passengers are carried by reason of or in pursuance of a contract of employment. The statutory liability of the insurer arises only if the injured or the deceased person's risk is covered by either Sub-clauses (i) and (ii) of Section 95(1)(b) or by the second proviso thereof. An owner of goods who is: the hirer of a goods vehicle or his employee travelling in that vehicle is primarily not covered by either of the two Sub-clauses (i) and (ii) of Section 95(1)(b). The liability of the insurer to cover the risk of such a person would only arise under the proviso (ii), which contemplates an insurance policy to cover liability in respect of death of, or bodily injury to, persons travelling, entering, mounting or alighting from the vehicle, subject to two conditions, that the vehicle carried passengers for hire or reward, and that the vehicle carried persons by reason of or in pursuance of a contract of employment. The proviso does not specify any particular class of vehicle, but instead it indicates functional aspect of the vehicle which may be a goods vehicle, private carrier, motor car, etc.

11. The Act contemplates two classes of vehicles : (1) for carrying passengers, and (2) for carrying goods. A 'public service vehicle ' defined by Section 2(25) means any motor vehicle used or adapted to be used for carriage of passengers for hire and reward which includes motor cab, contract carriage and stage carriage. These vehicles ply under a permit issued by the transport authorities permitting carrying of passengers. A ' goods vehicle ' as defined by Section 2(8) 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 td passengers; A 'public carrier' as defined by Section 2(23) means an owner of a transport vehicle who transports or undertakes to transport goods or any class of goods for another person at any time and in any public place for hire or reward whether in pursuance of the terms of a contract or agreement or 'otherwise. Public carrier is thus a goods vehicle primarily used for transport of goods for hire or reward but it may be permitted to carry passengers also. Section 42 of the Act provides that a transport vehicle including a goods vehicle shall not be plied on road except in accordance with the conditions of a permit granted by the transport authorities. Section 56 confers power cm the Regional Transport Authority to attach conditions to a permit granted in respect of a goods vehicle. Section 68 confers power on the State Government to make rules for the purpose of carrying into effect the provisions of Chapter IV of the Act which relates to the control of transport vehicles. The State of U.P, has framed the U.P. Motor Vehicles Rules, 1940. Rule 92 of the said Rules provides for carriage of persons in a goods vehicle. It lays down that no person shall be carried in a goods vehicle other than the person hiring or bona fide employee of the hirer of the vehicle. Clause (b) of the rule lays down that not more than six persons in all in addition to the driver shall be carried in any goods vehicle. Clause (d) of the rule may attach a condition to the permit granted for any goods vehicle authorising it to carry a larger number of persons. Rule 92 makes it amply clear that 9 goods vehicle is authorised to carry the hirer or an employee of the hirer of the vehicle. Whenever a person hires a goods vehicle for transporting his goods from one place to the other, he himself or his employee is entitled to be carried in the vehicle under the provisions of the Act and the rules framed thereunder.

12. When the provisions of the Act and the rules framed thereunder permit carrying of a hirer or his employee on a goods vehicle, does not the law require an insurance policy to cover their risks In answering this question, we have to bear in mind the purpose and object of Chapter VIII of the Act which provides for compulsory insurance policy to enable the third party to get damages for injuries suffered by them from the insurance company. In New Asiatic Insurance Co. Ltd. v. Pessumal Dhanamal Aswani [1964] 34 CompCas 693 (SC), this aspect was emphasised by the Supreme Court in the following words (p. 699) :

' Chapter VIII of the Act, it appears from the heading, makes provision for insurance of the vehicle against third party risks, that is to say, its provisions ensure that third parties who suffer on account of the user of the motor vehicle would be able to get damages for injuries suffered and that their ability to get the damages will not be dependent on the financial condition of the driver of the vehicle whose user led to the causing of the injuries. The provisions have to be construed in such a manner as to ensure this object of the enactment '.

13. The owner or the driver of a vehicle may not have financial capacity to pay damages to those who suffer on account of injuries by the use of vehicle in a public place. In order to meet this contingency, the Legislature has by enacting Chapter VIII of the Act provided that there should be an insurance policy in respect of the use of the vehicle in public place to cover the risk of bodily injury or death of third party who suffers on account of the use of the motor vehicle. The risk of persons who are carried in a transport vehicle is compulsorily covered by an insurance policy. Proviso (ii) to Section 95(1)(b) of the Act also lays down that a policy shall be necessary where passengers are carried in a vehicle for hire or reward or by reason of or in pursuance of a contract of employment. The proviso is in two parts. The first part relates to carrying of passengers for hire or reward in the vehicle, while the second part contemplates carriage of passengers by reason of or in pursuance of a contract of employment, We would first consider the scope of the first part of the proviso. The first part of the proviso provides for the insurance policy to cover liability in respect of death of, or bodily injury to, persons being carried in a transport vehicle for hire or reward. Such a vehicle need not be a public service vehicle because risk of a passenger being carried in a public service vehicle is already covered by Clause (ii) of Section 95(1)(b).

14. In Pushpabai Parshottam Udeshi v. Ranjit Ginning and Pressing Co P. Ltd. [1977] ACJ 343; AIR W77 SC 1735, the Supreme Court considered Section 95(1)(a) and (b) and proviso (ii) to determine the question as to whether the risk of a person being carried in a vehicle gratuitously was covered by a compulsory policy of insurance. Kailasam J., speaking for the court, observed (p. 1746 of AIR 1977 SC) :

' Therefore, it is not required that a policy of insurance should cover risk to the passengers who are not carried for hire or reward. As, under Section 95, the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured.......'

15. In view of the Supreme Court decision, the risk of a passenger being carried in a vehicle is covered by a compulsory policy of insurance provided such passenger was being carried for hire or reward. Section 95, which deals with a compulsory policy of insurance, requires all classes of vehicles, passenger goods or motor cabs to get the risk of passengers covered. A gratuitous passenger being carried in a vehicle is not covered by the compulsory policy of insurance although his risk may be covered under the agreement between the insurance company and the owner of the vehicle.

16. The question then arises whether the owner of the goods who hires the vehicle while travelling in it, is being carried for hire or reward. When a person hires a goods vehicle for the transport of his goods he or his employee is entitled to be carried in the vehicle under the rules and the charges for his transport would be included in the charges which he may have agreed to pay for the transport of his goods. In such a case, the hirer or his employee is not carried in the vehicle gratuitously nor is he given a free lift. Instead he is carried in the vehicle on payment of charges for transport of goods which include charges for carrying of the owner as well as his employee. In Channappa Channaveerappa Katti v. Laxman Bhimappa Bajentri, AIR 1979 Kar 93 ; [1982] 52 Comp Cas 609 (Ear), a Division Bench held that the hire payable for carrying goods must include the hire for carrying the owner of the goods or his agent or servant who may travel in the vehicle along with the goods for their safety. It is impossible to think that there would be no binding obligation on the part of the owner of the vehicle to carry in the vehicle the owner of the goods who hires the vehicle for carrying the goods. The Bench further held that the Legislature by enacting the exception contained in the first part of the proviso has thought of compulsory coverage by insurance, the risk of owners of goods who are entitled to travel in a goods vehicle along with their goods in the event of any risk arising in the course of user of the vehicle. The Bench referred to Rule 161 of the Rules framed by the Karnataka State authorising carrying of hirer of the vehicle along with his goods in the vehicle in holding that a goods vehicle which was permitted to carry along with the goods passengers for hire and reward fell within the exception contained in the first part of the second proviso so as to require the coverage of the risk of the person travelling as passenger by compulsory insurance.

17. The view that we are taking is supported by a number of decisions of various High Courts. In Ambaben v. Usmanbhai Amirmiya Sheikh [1979] ACJ 292 ; AIR 1979 Guj 9, a Full Bench interpreted Section 95(l)(b). The Full Bench held that so far as the policy contemplated by Section 95(1)(b) is concerned, it does not cover the risk of persons other than those who were carried for hire or reward at the time of occurrence of event which gives rise to the claim against the insurer and passengers other than those who were bona fide employees of the owner or hirer of the vehicle, not exceeding six in number carried by reason of contract of employment. The Bench held that where free lifts are given by drivers of goods vehicle and in the event of death or injury comes to such passengers, the insurer would not be liable as such passengers are not carried for hire or reward. While considering the question which went up for consideration before the Full Bench, the second proviso to Section 95(1)(b) was also considered. The Full Bench observed that where persons are normally carried by a goods vehicle as passengers when they are lawfully permitted under the rules framed under the M. V. Act, it would be difficult to hold that such goods vehicle would not be required to be compulsorily insured so far as such passengers are concerned. In State Insurance Department, State Insurance Officer v. Sosamma Mani [1978] ACJ 504 ; AIR 1979 Ker 15, a Divison Bench held that a person travelling in a goods vehicle for and on behalf of the owner of goods is covered by the policy of insurance of the vehicle against the third party risks. In T.M. Renukappa v. Smt. Fahmida [1980] ACJ 86 ; AIR 1980 Kar 25; [1982] 52 Comp Cas 634 (Kar), a Division Bench held that the owner of goods travelling in a goods vehicle along with his goods is also covered by third party risks and in case of death of the owner, the insurer is liable to indemnify the owner. The Bench observed that since a goods vehicle was permitted under the rules to carry along with the goods passengers for hire or reward, the risk to such passengers was covered by the first part of the second proviso to Section 95(1)(b) and the Act requires compulsory insurance.

18. Recently, a Full Bench of the Gujarat High Court considered the question in New India Assurance Co. Ltd. v. Smt. Nathiben Chatrabhuj [1982] 1 GLR 411 ;[1982] ACJ 153 ; AIR 1982 Guj 116 ; [1984] 55 Comp Cas 568 (Guj) [FB]. The question before the Full Bench was where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, whether a passenger on payment will get the benefit of the statutory insurance ?' The Full Bench analysed the provisions of the Act and the Rules in a detailed manner and thereupon it held that the liability in respect of the death of, or bodily injury to, a passenger carried for hire or reward on the insured vehicle when the accident giving rise to the claim occurred, including the liability in respect of the owner or hirer of the insured vehicle or his bona fide employees within the permissible limits, will be covered by the statutory insurance either by virtue of Section 95(1)(b)(i) read with the second clause of the proviso or by reason of Section 95(1)(b)(ii) of the Act. In such a case, the insurer will have to pay to the person entitled to the benefit of the award the sum assured which shall not be less than the sum specified in Section 95(2). The Full Bench opined that the risk was covered by the second proviso read with Section 95(1)(b)(i) which covers the risk of the third party. In United India Insurance Co. Ltd, v. Gangamma [1982] ACJ 357 ; AIR 1982 Kar 261, a Division Bench of the Karnataka High Court following an earlier Division Bench in Channappa Channaveerappa Katti v. Laxman Bhimappa Bajentri, AIR 1979 Kar 93; [1982] 52 Comp Cas 609 (Kar), held that for the death of owner of goods travelling in the goods vehicle in an accident, the insurance company was liable to pay compensation and to indemnify the owner. The view, which we have taken, is in consonance with the object and purpose of Chapter VIII of the Act which covers risk of innocent persons travelling in goods vehicle. This view, in our opinion, is in public interest which would go a long way to protect the interest of the innocent party.

19. Coming to the second part of the proviso (ii), it is necessary to ascertain the meaning and scope of the expression ' by reason of or in pursuance of a contract of employment' occurring in proviso (ii). According to the learned counsel for the insurance company, the expression means that the passenger being carried in the vehicle should be there in pursuance of a contract of employment either with the owner of the goods or with the insured person. The expression 'contract of employment' means a contract of service. If that be so, an employee of the insured who is the owner of the vehicle if being carried in the vehicle would be covered by a policy as contemplated by proviso (ii). This would be contrary to the proviso (i) which expressly lays down that no policy shall be required to cover employees of the insured person. This interpretation, therefore, cannot be accepted. Since an employee of the insured person is ruled out, it appears that the second part of the proviso refers to a person who may be in the employment of the owner of the goods or any other person who may have entered into contract with the owner of the vehicle. Thus, if a person hires a vehicle for the transport of his goods and his employee accompanies the goods in the vehicle, he would be covered by the expression ' by reason of or in pursuance of a contract of employment' and his risk will be covered by a compulsory policy. We find support for this view from a decision of the House of Lords in Izzard v. Universal Insurance Co. Ltd. [1937] 3 All ER 79. Section 36 of the Road Traffic Act, 1930 (of England), is similar to Section 95 of our Act. Section 3.6 of that Act required an insurance policy in respect of liability for death of, or bodily injury to, any person arising out of the use of the vehicle on road. Proviso (ii) to the Section was almost in similar terms as contained in proviso (ii) to Section 95(1)(b) of our Act. The House of Lords interpreted the expression ' by reason of or in pursuance of a contract of employment' occurring in the proviso (ii) to Section 36 and it held that the risk of an employee of a person who had entered into agreement with the owner of the vehicle for the transport of his workmen to the site of the work was covered by the said expression and the insurance company was liable to indemnify the owner. Following the decision of the House of Lords, the Punjab High Court in its Full Bench decision in Oriental Fire and General Insurance Co. Ltd. v. Smt. Gurdev Kaur [1967] 37 Comp Cas 577 ; AIR 1967 Punj 486, held that the second proviso to Section 95(1)(b) does not cover the risk of the owner of the goods or hirer of the goods travelling in the vehicle along with his goods. Similar view has been taken in South Indian Insurance Co. Ltd. v. Heerabhai and Co. [1967] ACJ 65 (MP), Commonwealth Assurance Co Ltd. v. V, P. Rahim Khan Sahib [1971] 41 Comp Cas 727 (Mad); [1971] ACJ 295, C. Narayanan v. Madras State Palm Gur Sammelan [1974] ACJ 479 (Mad) ; AIR 1974 Mad 281, Hindustan Ideal Insurance Corporation Ltd. v. Manne Chimperamma [1974] ACJ 13 (AP); AIR 1974 AP 120 and Indian Mutual General Insurance (Society) Ltd. v. Manzoor Ahsan [1977] ACJ 85 (Cal); AIR 1977 Cal 34.

20. These decisions do not affect the view that we have taken that the risk of hirer of the vehicle travelling in the vehicle along with his goods is covered by the first part of the proviso. In the circumstances, even if the risk of owner travelling along with his goods is not covered by the second part of the proviso, the insurance company is liable to indemnify the owner of the vehicle.

21. Section 95(1)(a) and (b) provides for compulsory insurance for covering the risk specified therein. The insurance company is compulsorily liable to indemnify the owner of the liabilities arising thereunder, but it is open to the insurer to enter into an agreement with the owner of the vehicle to cover the risk of persons who may not be covered by the compulsory insurance. In Pushpabai Parshottam Udeshi v. Ranjit Ginning and Pressing Co. P. Ltd., AIR 1977 SC 1735; [1977] ACJ 343, the Supreme Court observed that the insurer can always take policies covering risks which are not covered by Section 95 and in that event the insurer would be liable to indemnify the owner of the vehicle. Even if the insurance company is not liable for the death of owner of the goods travelling in the vehicle under the provisions of Section 95(1)(b), it may undertake such liability under the terms and conditions of the policy. It is, therefore, necessary to consider the terms and conditions of the policy issued by the insurance company in the instant case. The insurance company has filed the copy of the insurance policy issued in favour of the appellant in respect of the vehicle which met with an accident, which has been marked as Ex. A-1. Under the policy, the insurance company undertook to indemnify the insured in respect of the risks of third party. Section II of the policy enumerates the liability of third parties. Clause (1)(c) of Section II is as under :

(i) Subject to the limits of liability, the company will indemnify the insured against all sums including claimants' costs and expenses which the insured shall become legally liable to pay in respect of :--

(ii) death of, or bodily injury to, any person caused by or arising out of the use (including the loading and/or unloading) of the motor vehicle.

(iii) damage to property caused by the use (including the loading and/or unloading of the motor vehicle. Provided always that--...... (c) Except so far as is necessary to meet the requirements of Section 95 of the Motor Vehicles Act, 1939, in relation to liability under the Workmen's Compensation Act, 1923, the company shall not be liable in respect of death of, or bodily injury to, any person (other than a passenger carried by reason of or in pursuance of a contract of employment) being carried in or upon or entering or mounting or alighting from the motor vehicle at the time of the occurrence of the event out of which any claim arises.'

22. The above provision is in the nature of proviso (ii) to Section 95(1)(b). There is, however, a significant difference in the two provisions. Under the proviso (ii) to Section 95(1)(b), the expression used is ' by reason of or in pursuance of a contract of employment' which, according to some of the High Courts, means that the person travelling in the vehicle must be doing in pursuance of an employment with the insurer or with some other person. Clause (1)(b) of Section II of the policy, however, uses a different phraseology. It states that the company shall not be liable in respect of death of, or bodily injury to, any person other than a passenger being carried ' by reason of or in pursuance of a contract or employment', in the vehicle at the time of the occurrence. The use of the word ' or ' between the words ' contract' and ' employment ' is significant. The policy does not insist on a contract of employment. Under the terms of the policy, the insurance company has undertaken to cover the risk of a passenger carried by reason of or in pursuance of a contract or employment ; thus if a person is being carried in the vehicle in pursuance of a contract or he is being carried in pursuance of employment, in both the cases the company has undertaken to indemnify the owner for the liabilities arising against the owner. The terms contained in the policy do not necessarily require that the passenger being carried in the vehicle should be travelling in pursuance of a contract or employment, instead the company has undertaken to indemnify the owner for the death of a passenger who may be travelling in the vehicle in pursuance of contract also. Owner of goods is entitled under the rules to be carried in the goods vehicle by reason of his contract of hiring the vehicle for the transport of his goods. His risk is thus covered by the terms of the policy. Under the aforesaid terms, the insurance company has clearly undertaken to indemnify the owner for his liability for the death of owner if travelling in the vehicle as a passenger in pursuance of a contract of hiring. We are, therefore, of the opinion that even if there be any doubt relating to the liability of the insurance company on the interpretation of proviso (ii) to Section 95(1)(b), it is fully liable in view of the express terms and conditions of the policy.

23. Learned counsel for the insurance company urged that one of the terms and conditions of the policy is that the vehicle shall not be used for conveyance of passengers for hire or reward and consequently the company is not liable to indemnify the owner if the vehicle is used for conveyance of passengers for hire or reward ; Section 96(2)(b) lays down that the insurance company may avoid its liability if there has been a breach of specified conditions of the policy which may include the use of the vehicle for hire or reward, where the vehicle is not covered by a permit to ply for hire or reward. In view of this condition providing limitation to the use of the vehicle, the insurance company will not be liable to indemnify the owner if the liability arises by the use of the vehicle for the conveyance of passengers for hire or reward. The appellant's vehicle was registered as a public carrier under the policy and the owner was entitled to ply the vehicle as a public carrier in accordance with the Act and the rules framed thereunder. One of the terms and conditions as contained in the policy is that the vehicle shall be used under a public carrier permit within the meaning of the M.V. Act, 1939. This means that the owner of the vehicle is entitled to use the vehicle for the purposes permitted under the Act and the rules framed thereunder. We have referred to the relevant provisions of the Act and the Rules to show that a public carrier which is a goods vehicle is authorised to carry the owner of the goods and his employees in the driver's cabin along with the goods. The conveyance of the owner or his employees in such a situation is permitted as a condition of the permit under which the appellant's public carrier has been plying. Section 96(2)(b)(i)(a) contemplates plying of vehicle in violation of the conditions of permit. If a goods vehicle is permitted to carry passengers under the terms and conditions of the permit granted to it, it would not fall within the ambit of Section 96(2)(b)(i) (a) of the Act. For these reasons the contention raised on behalf of the insurance company must be rejected.

24. The Tribunal has awarded a sum of Rs. 26,400 as damages to the respondent-claimants. The Tribunal has further held that the amount of compensation shall be recovered from the owner of the vehicle and not from the insurance company. No arguments on behalf of the appellant was addressed challenging the correctness of the assessment of the amount of damages determined by the Tribunal. In the circumstances, we hold that the claimants are entitled to a sum of Rs. 26,400 as damages. Since the insurance company, respondent No. 7, is liable to indemnify the owner, the said amount is recoverable from the insurance company.

25. The Tribunal has apportioned damages to the widow, three daughters and two sons. In the operative portion of the order of the Tribunal, it has, however, directed Smt. Sharifunnisa, the mother of the minor children, to withdraw the compensation on behalf of the minor daughters and sons by furnishing security to the satisfaction of the Claims Tribunal. She has further been directed to invest the amount in fixed deposit with post office or any other interest bearing account for the benefit of the minors. In our opinion, the Tribunal's direction requiring Smt. Sharifunnisa to furnish security for withdrawing the amount awarded to the daughters and sons is wholly misconceived. Smt. Sharifunnisa is the natural guardian of the minor daughters and sons. She has been looking after them and maintaining them. There has been no complaint from any quarter that Smt. Sharifunnisa will not take proper care of the children or that she will spend the money for other purposes. In the absence of any such material on record, it is not proper or desirable to require the widow to furnish security. Km Rashida Khatoon was aged 14 years, Km. Anisa Khatoon 11 years and Km. Sabiha Khatoon was 8 years on the date of filing of the claim petition in July, 1975. By now they all have attained the majority and age of discretion. As regards the two sons they are no doubt minors but the mother being natural guardian, she will look after their interest. In the circumstances, the direction for furnishing security need not be there.

26. We accordingly, modify the operative portion of the Tribunal's order to the extent that Smt. Sharifunnisa will be entitled to withdraw the money on behalf of the minor claimants without furnishing any security.

27. In the result, we partly allow the appeal and modify the order of the Tribunal as aforesaid. In the circumstances of the case, parties shall bear their own costs.


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