ORIENTAL INSURANCE CO. LTD.versusRAJNI DEVI & ORS.

                        [2008} 6 S.C.R. 822

                                                                   ')'
A               ORIENTAL INSURANCE CO. LTD.
                                v.
                        RAJNI DEVI & ORS.
                 (Civil Appeal No. 2892 of 2008)
                         APRIL 22, 2008
8                                                                  _,
            [S.8. SINHA AND V.S. SIRPURKAR, JJ]

       Motor Vehicles Act, 1988 - s. 163A - Motor accident -
  Death of owner of vehicle - Not clear as to deceased himself
c was tort-feasor- Compensation - Claim of uls 163A, by heirs
  of deceased - Liability of insurance company - Held: When
  compensation is claimed for death of owner or another
  passenger of vehicle, contract of insurance being governed
  by contract qua contract, liability of insurance company would
  depend upon the terms thereof - s. 163A is not applicable in
D
  regard to accident where owner of vehicle himself is involved
  - Liability u/s. 163A is on owner of vehicle as person cannot
  be both, claimant as also recipient - Thus, claim not
  maintainable uls 163A - In terms of contract of insurance,
  insurance company liable to the extent of Rs.1,00,0001-.
E
       J, owner of motor cycle was riding the motor cycle
  along with S. Motor accident took place and as a result J
  died. It is not clear as to who was driving the motorcycle.
  Respondent-heirs of J filed application uls 163A of the
F Motor Vehicles Act, 1988 seeking compensation for death
  of J. The tribunal allowed the application, taking into
  consideration the use of the motor vehicle irrespective of
  the fact as to whether the deceased or S was driving the
  motorcycle. This has been challenged in the present
  appeal.
G
       Partly allowing the appeal, the Court
          HELD: 1.1 In a case where third party is involved,
    the liability of the insurance company would be unlimited.
                                                                   "" ...
H                              822
              ORIENTAL INSURANCE CO. LTD. v. RAJNI DEVI          823
                              & ORS.
 /
     ">(
           However, where compensation is claimed for the death A
           of the owner or another passenger of the vehicle, the
           contract of insurance being governed by the contract qua
           contract, the claim of the insurance company would
           depend upon the terms thereof. Therefore, the tribunal
           was not correct in taking the view that while determining B
... -..-   the amount of compensation, the only factor which would
           be relevant would be merely the use of the motor vehicle.
           [Paras 6 and 7) [825-G, H; 826-A, BJ
                 1.2 Section 163 A of the Motor Vehicles Act, 1988
           cannot be said to have any application in regard to an c
           accident wherein the owner of the motor vehicle himself
           is involved. The liability under Section 163-A of the Act is
           on the owner of the vehicle as a person cannot be both, a
           claimant as also a recipient. The heirs of J could not have
           maintained a claim in terms of s. 163-A of the Act. For the D
           said purpose only the terms of the contract of insurance
           could be taken recourse to. According to the terms of
           contract of insurance, the liability of the insurance
           company was confined to Rs.1,00,0001- It was liable to the
           said extent and not any sum exceeding the said amount. E
           [Paras 7, 10 and 11) (826-G, H, 828-E, F, G]
                Oriental Insurance Co. Ltd. v. Smt. Jhuma Saha & Ors.
           AIR 2007 SC 1055; National Insurance Co. Ltd. v. Lax mi
           Narain Dhut 2007 (4) SCALE 36; Prem Kumari & Ors. v.
           Prahlad Dev & Ors. 2008 (1) SCALE 531; Oriental Insurance    F
     .A    Co. Ltd. v. Prithvi Raj 2008 (1) SCALE 727 - referred to .
                CIVILAPPELLATE JURISDICTION: Civil Appeal No. 2892
           of 2008.
                From the final Judgment and Order dated 12.10.2006 of G
           the High Court of Punjab and Haryana at Chandigarh in FAO
           No. 3859 of 2006 .
 . .;           Neerja Sachdeva and Parmanand Gaur for the Appellant.
               The Judgment of the Court was delivered by               H
    824         SUPREME COURT REPORTS                [2008] 6 S.C.R.


A         S.B. SINHA, J. 1. Leave granted.
          2. Respondent filed an application under Section 163-A
    of the Motor Vehicles Act, 1988 (the Act) claiming compensation
    for death of one Janak Raj (the deceased). He was riding on a

8
    motorcycle along with one Sukhdev Raj. Who was actually on
    the driver's seat is not known. The motorcycle is said to have
    gone out of control resulting in the accident.                      -;.   -
           3. Appellant herein, having been issued notice, resisted
    the claim, inter alia, contending that although the owner of the
c   vehicle deposited an extra amount of Rs.SO covering his
    personal insurance, the same would not cover the case of the
    pillion rider and in any event, the owner of the vehicle is not a
    third party within the meaning of Section 147 of the Act.
       The Motor Vehicles Accident Claims Tribunal, having
D regard to the pleadings of the parties, framed the following
  issues:
          "1.   Whether on 7.9.2004 at 4.05 pm Janak Raj had died
                in a road accident? OPP
E         2.    Whether the Claimants are LRs and were dependant
                upon the deceased? OPP
          3.    Whether the claimants are entitled to compensation?
                If so, how much and from which of the respondents?
                OPP
F         4.    Whether the motorcycle was being driven in
                contravention of terms and conditions of the
                insurance policy? OPR
          5.    Whether the driver of the motorcycle was not holding
                a valid and effective driving licence? OPR
G         6.    Whether the claim petition is bad for non-joinder of
                necessary parties? OPR
          7.    Relief."
                                                                         "' ...
       4. The Tribunal noticed that the First Information Report
H (FIR) lodged at the Police Station in relation to the said accident
                ORIENTAL INSURANCE CO. LTD. v. RAJNI DEVI                825
                          & ORS. [S.B. SINHA, J.]
...
       '     was not clear to establish as to who was driving the motorcycle A
             but despite the same proceeded to determine the question as
             to whether Janak Raj being himself the tort feasor, any
             application under Section 163-A of the Motor Vehicles Act was
             maintainable. The premise on which the Tribunal proceeded to

-     -t-
             determine the said issue was that a comprehensive insurance B
             policy having been taken, the only question which arose for its
             consideration was as to whether the accident took place by
             reason of use of the motor vehicle irrespective of the fact as to
             whether the deceased or the said Sukhdev Raj was driving the
             motorcycle or not. It, however, held that if the deceased was the
             tort feasor, the question of reimbursement of any amount of
                                                                               c
             compensation by the insurer would not arise, opining :
                  "If we presume that deceased had no comprehensive
                  policy even then, claimants are entitled to compensation
                  because evidence is silent as to who was driving the         D
                  offending vehicle."
      ")[·

                  5. On issue Nos.4, 5 and 6, the Tribunal held :
                  "Onus to prove all the issues was upon the Insurance
                   Company. As discussed in the preceding issues, offending
                  vehicle was insured but no evidence on the file as to who E
                  was driving the motor cycle. That is whether Janak Raj
                  was driving the motorcyele or Sukhdev Raj Was driving
                  the motorcycle. Janak Raj and Sukhdev Raj were on the
                  motor cycle. Both received injuries in the accident.
                  Sukhdevraj had succumbed to his injuries in the Civil F
                  Hospital, Dalhousie. Janak Raj was shifted to different
                  hospitals. Ultimately, Janak Raj had also succumbed to
                  his injuries. Motorcycle was owned by Janak Raj. Counsel
                  for the company failed to convince how the petition is bad
                  for non-joinder of necessary parties and what is the effect G
                  of non-production of driving licence when evidence is not
                  clear as to who was driving the offending vehicle. So, all
. .,,             the issues are decided against the Insurance Company."
                 6. It is now a well settled principle of law that in a case
             where third party is involved, the liability of the insurance     H
    826       SUPREME COURT REPORTS                     (2008) 6 S.C.R.


A   company would be unlimited. Where, however, compensation
    is claimed for the death of the owner or another passenger of
    the vehicle, the contract of insurance being governed by the
    contract qua contract, the claim of the insurance company would
    depend upon the terms thereof.
8        7. The Tribunal, in our opinion, therefore, was not correct
    in taking the view that while determining the amount of
    compensation, the only factor which would be relevant would
    be merely the use of the motor vehicle.

          Section 163-A reads thus :
c
          163A. Special provisions as to payment of
          compensation on structured formula basis-(1)
          Notwithstanding anything contained in this Act or in any
          other law for the time being in force or instrument having
D         the force of law, the owner of the motor vehicle of the
          authorised insurer shall be liable to pay in the case of
          death or permanent disablement due to accident arising
          out of the use of motor vehicle, compensation, as indicated
          in the Second Schedule, to the legal heirs or the victim, as
E         the case may be.
          Explanation.-For the purposes of this sub-section, "perma-
          nent disability" shall have the same meaning and extent
          as in the Workmen's Compensation Act, 1923 (8of1923).
          (2) In any claim for compensation under sub-section (1 ),
F         the claimant shall not be required to plead or establish
          that the death or permanent disablement in respect of
          which the claim has been made was due to any wrongful
          act or neglect or default of the owner of the vehicle or
          vehicles concerned or of any other person.
G
          (3) The Central Government may, keeping in view the cost
          of living by notification in the Official Gazette, from time to
          time amend the Second Schedule."                                  1"· ..

        The said provision cannot be said to have any application
H in regard to an accident wherein the owner of the motor vehicle
             ORIENTAL INSURANCE CO. LTD. v. RAJNI DEVI                  827
                       & ORS. [S.B. SINHA, J]
.... ~
          himself is involved. The question is no longer res integra.          A
                8. In Oriental Insurance Co. Ltd. v. Smt. Jhuma Saha &
          Ors. [Al R 2007 SC 1055], it was held :
               "10. The deceased was the owner of the vehicle. For the
,              reasons stated in the claim petition or otherwise, he himself   B
... ...        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.
                                                                               c
               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       D
               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.2 it is stated
               as follows:                                                     E

               "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
                                                                               F
               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.
               ***                                                             G
               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       H
    828       SUPREME COURT REPORTS                   [2008] 6 S.C.R.


A         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
B         out. In this case there is no such insurance."
         9. In National Insurance Co. Ltd. v. Laxmi Narain Dhut
    [2007 (4) SCALE 36], it has been held :
          "Where the claim relates to own damage claims, it cannot
          be adjudicated by the insurance company. But it has to be
c         decided by another forum i.e. forum created under the
          Consumer Protection Act, 1985(in short the 'CP Act').
          Before the Tribunal,, there were essentially three parties
          i.e. the insurer, insured and the claimants. On the contrary,
          before the consumer forums there were two parties i.e.
D         owner of the vehicle and the insurer. The claimant does
          not come into the picture. Therefore, these are cases where
          there is no third party involved."
       The said principle has been reiterated recently in Prem
  Kumari & Ors. v. Prahlad Dev & Ors. [2008 (1) SCALE 531] and
E Oriental Insurance Co. Ltd. v Prithvi Raj [2008(1) SCALE 727].
       10. The liability under Section 163-A of the Act is on the
  owner of the vehicle as a person cannot be both, a claimant as
  also a receipient. The heirs of Janakraj could not have
F maintained a claim in terms of Section 163-A of the Act. For the
  said purpose only the terms of the contract of insurance could
  be taken recourse to.
          11. According to the terms of contract of insurance, the
  liability of the insurance company was confined to Rs.1,00,000/
G - (Rupees one lac only). It was liable to the said extent and not
  any sum exceeding the said amount.
         12. To the aforementioned extent, the appeal is allowed.
    No costs.
H N.J.                                         Appeal partly allowed