A Division Bench of the Chhattisgarh High Court comprising Hon’ble Justice PR Ramchandra Menon and Hon’ble Justice Parth Prateem Sahu allowed an appeal and modified the award.
Background of the Case:
On 20.04.2010, Bhavan Singh and Pramila and others were travelling on the offending vehicle and were heading to Manvari. At about 11.30 pm, the vehicle met with an accident and turned turtle. Pramila and Bhuvan Singh lost their lives in the accident.
Legal representatives of the parties filed claims before the claims tribunal which was partially granted, and the insurance company was held liable.
Aggrieved by the Tribunal’s order, the insurance company filed an appeal.
Arguments raised before the Court:-
Learned counsel for the appellants stated that the deceased’s vehicle(in which they were travelling) was a goods vehicle. Learned counsel for the appellants argued that the insurance policy was a Goods Carrying Vehicle Package Policy, and no premium was charged to cover labourers/occupants.
It was argued that the insurance policy could not be held liable to satisfy the amount of compensation of the offending vehicle.
As per Section 147 of 1988, the counsel stated that the insurance company could not be held liable to cover people other than the owner or the employee.
On the other hand, counsel for the respondent observed that the Tribunal had reached its decision after perusing evidence and facts of the case, and it required no interference from the Court.
Observations of the Court:-
The Court observed that the policy in question was issued under Section 147 of Act,1998, which did not cover passengers who travelled in the vehicle. Hon’ble Court relied on the judgement of National Insurance Company Limited vs Chollety Bharatamma wherein it was held that injury to any person covered u/s 147(1)(b) refers to only the third person.
It was further observed that as per the new Act, the legislative intent was to prohibit goods vehicles from carrying passengers. After going through the language of the Act, the Court opined that compulsory coverage only covered drivers and conductors(in case of a public service vehicle) and employees who travel in a goods vehicle would only be covered under Workmen’s Compensation Act.
The Bench further clarified that:-
- Provisions of the Act don’t enjoin statutory liability on the vehicle owner to get the vehicle insured for other passengers, and the insurer cannot be held liable.
- It was further clarified that ‘owner of a vehicle’ only refers to a person who travels in the vehicle’s cabin.
The Bench held that the Tribunal findings were contrary to law. The insurance company was not liable, and only the owner and driver of the vehicle are liable to pay the compensation.
According, the impugned award was set aside.
Title: HDFC ERGO General Insurance Co. Ltd vs Sitaram
Case No.: MAC No. 1090 of 2014
Date of Order:07.10.2020
Coram: Hon’ble Justice PR Ramchandra Menon and Hon’ble Justice Parth Prateem Sahu