SRI PRAMOD KUMAR AGRAWAL AND ORS.versusSMT. MUSHTARI BEGUM AND ORS.

          SRI PRAMOD KUMAR AGRA WAL AND ORS.                           A
                                  V.

               SMT. MUS HTARI BEGUM AND ORS.

                         AUGUST 18, 2004

                                                                       B
           [ARIJIT PASAYAT AND C.K. THAKKER, JJ.]

     Motor Vehicles Act, 1988; Section 166 with Amended Act, 1994;
Section 14 7 :

      Goods Vehicle-Accident-Death of a passenger-Claim Petition- C
Liability of insurer to passengers in the vehicle-Motor Accident Claims
Tribunal awarded compensation holding that owner liable to make payment
of compensation to claimant and not the insurer since the vehicle was not
insured for passengers-Affirmed by High Court-On appeal, Held :
Courts below rightly held that insurer not liable to indemnifY the award D
in terms of Section 147 of the Amended Act-However, the insurer has to
pay the amount of compensation to claimants subject to condition that the
owner has to furnish security for the entire amount and also to attach the
offending vehicle as a part ofsecurity-However, the insurer could recover
the said amount ji·om the owner by initiating a proceeding before E
Executing Court-Executing Court has to pass order as to the manner of
recovery of the amount from the owner-Jn case of default, it could be
realized by disposing of the security/property of the owner-Directions
issued.

      Truck of appellant No. I allegedly carrying passengers met with F
an accident due to rash and negligent driving by appellant No. 2,
driver. One of the passengers, sustained injuries and subsequently
died. A claim petition was filed by respondent-claimant. Motor Vehicles
Claims Tribunal awarded certain amount as compensation to be paid
by the owner observing that since the vehicle was a goods vehicle and G
owner had not insured it for carrying passengers, insurer was not liable
for making payment of compensation to claimants. The order was
affirmed by the High Court. Hence the present appeal.

     It was contended for the appellant that the insurer is liable to H

                                 613
    614                  SUPREME COURT REPORTS (2004] SUPP. 3 S.C.R.

A indemnify the award in terms of Section 147 of the Amended Motor
    Vehicles Act.

          Disposing of the appeal, the Court

B         HELD : The plea of the appellants has been rightly rejected both
    by the Tribunal and the High Court. The insurer shall pay the
    quantum of compensation fixed by the Tribunal, about which there
    was no dispute raised, to the respondents-claimants. For the purpose
    ofrecovering the same from the owner the insurer shall not be required
    to file a suit. It may initiate a proceeding before the concerned
C   Executing Court as if the dispute between the insurer and the owner
    was the subject matter of determination before the Tribunal and the
    issue is decided against the owner and in favour of the insurer. Before
    release of the amount to the claimants, owner of the vehicle-appellant
    No. 1 shall furnish security for the entire amount which the insurer will
D   pay to the claimants. The offending vehicle shall be attached, as a part
    of the security. If necessity arises the Executing Court shall take
    assistance of the concerned Regional Transport Authority. The
    Executing Court shall pass appropriate orders in accordance with law
    as to the manner in which the owner of the vehicle shall make payment
E   to the insurer. In case there is any default it shall be open to the
    Exe~uting Court to direct realization by disposal of the securities to
    be furnished or from any other property or properties of the owner
    of the vehicle, the insured. [618-C-GJ

          National Insurance Co. Ltd. v. Balj"it Kaur & Ors., [2004] 2 SCC 1,
F relied on.
         CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5287 of
    2004.

G        From the Judgment and Order dated 30.8.200 I of the Allahabad High
    Court in F.A.O. No. 1363 of 2001.

          L.K. Garg and Balraj Dewan for the Appellants.

        Arvendra Singh, J.M. Khanna, Vishnu Mehra and B.K. Satija for the
H   Respondents.
        P.K. AGRAWAL v. MUSHTARI BEGUM [PASAYAT, J.]                  615

     The Judgment of the Court was delivered by                             A
     ARIJIT PASAY AT, J.: Leave granted.

     Challenge in this appeal is to the judgment of a Division Bench of
the Allahabad High Court which did not find any error in the judgment B
of the Motor Accident Claims Tribunal, Bijnor (in short the 'Tribunal')
either on facts or law to warrant interference.

     Background facts in a nutshell are as follows:

     The present respondents I to I 0 filed a Claim Petition in terms of C
Section 166 of the Motor Vehicles Act, 1988 (in short the 'Act') claiming
compensation from the present appellants and United India Insurance
Company Ltd. (hereinafter referred to as the 'insurer').

      According to the claimants, Amir Hassan (hereinafter referred to as D
the 'deceased') sustained injuries and subsequently died due to an accident
on 11.11.2000 at about 4.00 p.m. The accident occurred on account of
rash and negligent driving by Kamal Kumar Agrawal (appellant No. 2) who
was the driver of the vehicle No. UPN-8975 which was involved in the
accident. It was stated that appellant No. I was the owner of the vehicle,
and that the vehicle was subject-matter of insurance with the insurer. Claim E
of Rs. 5,10,000/- was made as compensation.

      The insurer took the plea that the driver had no valid or eff~ctive
driving licence, vehicle was not insured and the claim petition was filed
in collusion with the owner and the driver of the vehicle in question.      F

     The Tribunal framed two issues which run as.follows:

         1)   Whether the accident took place due to rash and negligent
              driving of Truck No. UPN 8975 by O.P. No.2?
                                                                            G
         2)   To what relief and compensation, if any, are claimants
              entitled?

     The Tribunal found that the accident took place when it was coming
from Haridwar laden with sand. Thirty to forty persons were sitting on the H
    616                   SUPREME COURT REPORTS (2004] SUPP. 3 S.C.R.

A sand and at the place catied 'Chandighat' the said persons climbed on the
    truck and it overturned resulting in the accident. Three persons died
    including the deceased and several others were injured. According to the
    witnesses examined, none of them climbed on the truck forcibly. On the
    other hand, they had paid fare for travelling in the truck. They stated that
B Rs. 25/- per passenger as fare was taken. The driver was examined as DW-
    1. According to him, number of persons forcibly climbed on the truck and
    as a result the truck met with an accident. He admitted that there was a
    conductor in the vehicle who ran away from the place of accident. He also
    admitted in his written statement that the persons forcibly climbed on the
C   truck and 30 to 40 persons were in the truck. Analysing the evidence, the
    Tribunal came to hold that the conductor of the truck had collected fare
    and the persons had not climbed forcibly. In these circumstances, taking
    into account the age of the deceased and his estimated income, it was held
    that the claimants were entitled to Rs. 2,06,000 as compensation. It was
    further held that the vehicle was a goods vehicle and the owner had not
D   insured the vehicle for carrying passengers in a goods vehicle. Only the
    driver, conductor and certain number of labourers could be carried, but
    there was no scope for carrying any passenger. Taking note of the terms
    and conditions of the policy note it was held that the insurer was not liable
    to make payment of the compensation and it was the owner who has to
E   make the payment of the awarded amount with interest @ 9% p.a. from
    the date of presentation of the claim petition. As noted above, the appeal
    filed by the owner and the driver before the High Court did not bring any
    relief to them.

           Learned counsel for the appellants submitted that the accident took
F place after the amendment in 1994 in Section 147 of the Act and, therefore,
    the insurer ought to have been made liable to indemnify the award.

           Learned counsel for the insurer on the other hand submitted that the
    position has not changed after amendment in l 994.
G
          It is to be noted that in Ramesh Kumar v. National Insurance Co. Ltd.
    and Ors., [2001] 6 SCC 713 it was held that though the vehicle concerned
    was a goods vehicle yet the liability of the insurance company was not
    wiped out. The decision was subsequently reversed by a three-Judge Bench
H   of this Court in New India Assurance Co. Ltd. v. Asha Rani and Ors.,
       P.K. AGRAWAL v. MUSHTARI BEGUM [PASAYAT, J.]                  617

[2003) 2 sec 223 which was followed in Oriental Insurance Co. Ltd. v. A
Devireddy Kanda Reddy and Ors., [2003] 2 SCC 339. Recently in National
Insurance Co. Ltd. v. Baljit Kaur and Ors., [2004] 2 SCC I the effect of
1994 amendment vfa-a-vis Section 14 7 of the Act was considered. It was
observed as follows:
                                                                           B
             "17- By reason of the 1994 amendment what was added is
        "including owner of the goods or his authorised representative
        carried in the vehicle". The liability of the owner of the vehicle
        to insure it compulsorily, thus, by reason of the aforementioned
        amendment included only the owner of the goods or his authorized C
        representative carried in the vehicle besides the third parties. The
        intention of Parliament, therefore, could not.have been that the
        words "any person" occurring in Section 14 7 would cover all
        persons who were travelling in a goods carriage in any capacity
        whatsoever. If such was the intention, there was no necessity of
        Parliament to carry out an amendment inasmuch as the expression D
        "any person" contained in sub-clause (i) of clause (b) of sub-
        section (I) of Section 147 would have included the owner of the
        goods or his authorized representative besides the passengers who
        are gratuitous or otherwise.
                                                                           E
              19- In Asha Rani's case (supra) it has been noticed that sub-
        clause (i) of clause (b) of sub-section (I) of Section 14 7 of the
        1988 Act speaks of liability which may be incurred by the owner
        of a vehicle in respect of death of or bodily injury to any person
        or damage to any property of a third party caused by or arising F
        out of the use of the vehicle in a public place. Furthermore, an
        owner of a passenger carrying vehicle must pay premium for
        covering the risks of the passengers travelling in the vehicle. The
        premium in view of the 1994 amendment would only cover a third
        party as also the owner of the goods or his authorized representative
        and not any passenger carried in a goods vehicle whether for hire G
        or reward or otherwise.

             20- It is, therefore, manifest that in spite of the amendment
        of 1994, the effect of the provision contained in Section 14 7 with
        respect of persons other than the owner of the goods or his H
    618                    SUPREME COURT REPORTS [2004) SUPP. 3 S.C.R.

A             authorised representative remains the same. Although the owner
              of the goods or his authorized representative would now be
              covered by the policy of insurance in respect of a goods vehicle,
              it was not the intention of the legislature to provide for the liability
              of the insurer with respect to passengers, especially gratuitous
              passengers, who were neither contemplated at the time the
B
              contract of insurance was entered into, nor was any premium paid
              to the extent of the benefit of insurance to such category of
              people."

C        The plea of the appellants has been rightly rejected both by the
    Tribunal and the High Court.

        Therefore, while upholding the judgment of the High Court we direct
  in terms of what has been stated in Baljit Kaur 's case (supra) that the
  insurer shall pay the quantum of compensation fixed by the Tribunal, about
D which there was no dispute raised, to tfie ·respondents-claimants within
  three months from today. For the purpose of recovering the same from the
  owner the insurer shall not be required to file a suit. It may initiate a
  proceeding before the concerned Executing Court as ifthe dispute between
  the insurer and the owner was the subject matter of determination before
E the Tribunal and the issue is decided against the owner and in favour of
  the insurer. Before release of the amount to the claimants, owner of the
  vehicle i.e. appellant no. I shall furnish security for the entire amount
  which the insurer will pay to the claimants. The offending vehicle shall be
  attached, as a part of the security. If necessity arises the Executing Court
F shall take assistance of the concerned Regional Transport Authority. The
  Executing Court shall pass appropriate orders in accordance with law as
  to the manner in which the owner of the vehicle i.e. appellant no. I shall
  make payment to the insurer. In case there is any default it shall be open
  to the Executing Court to direct realization by disposal of the securities to
   be furnished or from any other property or properties of the owner of the
G vehicle, the insured (the appellant no.I).

             The appeal is disposed of accordingly. No costs.

    S.K.S.                                                     Appeal disposed of.