CMA/2962/2022 of The Branch Manager Vs Narasimha Murthy on 29 September 2026

Judgment

(Judgment of the Court was delivered by N.Mala J.)

The Insurance Company, challenging the Award of the Claims Tribunal, dated 29.07.2022, made in MCOP.No.502/2019, has filed the above appeal.

The parties will be referred to as per their ranking in the claim petition.

The summary of facts, leading to this appeal, are as follows:- On 18.12.2018, at about 11.15 a.m., the claimant along with one Naveenkumar, went to one Nanja Reddy’s land situate in Kaleswaram – Chennasandram Road, to dig bore well, in Mahindra Bolero Maxi Truck Light Goods Vehicle, bearing Regn.No.KA-09-A-9139, fitted with a bore well pipe lifting crane. The vehicle belonged to the 1st respondent and was insured with the 2nd respondent. Due to the rashness and negligence of the driver of the Mahindra Bolero Maxi Truck, in reversing the vehicle, the claimant who was holding the pipe from the pipe lifting crane, got electrocuted, when the pipe came in contact with an electric line. Due to electrocution, the claimant suffered 40% third degree burns. According to the claimant, he was aged 21 years, was working as bore

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well mechanic and earning Rs.20,000/- per month. Since the claimant was not able to continue his work due to loss of his right arm, he filed the claim petition, claiming a sum of Rs.2 Crores as compensation.

Before the Claims Tribunal, the owner of the vehicle, the 1st respondent, remained exparte. The claim petition was contested by the Insurance Company. The 2nd respondent, in its counter, denied the manner of accident and the employer-employee relationship between the claimant and the 1st respondent. The 2nd respondent denied the involvement of the vehicle in the accident, and further contended that the driver of the vehicle was not holding a valid driving license at the time of the accident. The 2nd respondent contended that the vehicle in question, was not permitted to be used as a crane to lift bore pipes. The 2nd respondent contended that the in the Registration Certificate, the vehicle was shown as ‘’Light Goods Vehicle’’ and hence, it could not be used for coupling the crane to lift the bore pipe. The 2nd respondent denied the liability, age, occupation, monthly income, medical expenses incurred and the period of treatment of the claimant. The 2nd respondent also contended that the compensation claimed was excessive, exorbitant and speculative and hence, prayed for dismissal of the claim petition.

Before the Claims Tribunal, the 1st respondent was examined as PW1 and Exs.P1 to P10 were marked on the sides of the claimant. The respondents examined 2 witnesses and marked 7 documents in support of their case.

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The Claims Tribunal, on an assessment of the entire evidence on record and on the basis of Exs.P1, P2 and P3 and in view of the fact that despite receipt of the legal notice issued by the 2nd respondent, the driver Naveen Kumar, had not chosen to appear before the Tribunal and depose his evidence, held that the driver of the vehicle was responsible for the accident. The Claims Tribunal found that as per Ex.R2, the MVI Report, and Ex.P2, the Registration Certification, the driving license of the driver was not produced and that, there was no mention about the vehicle being fitted with a crane. The Claims Tribunal though found that there was violation of policy conditions, held that the insurer had to indemnify the compensation amount to the third party and thereafter, recover the same from the insured and ordered for ‘’pay and recovery’’. The Claims Tribunal, considering the nature of injuries sustained by the claimant and on the basis of Ex.P10, the Certificate issued by the Medical Board assessing the permanent disability of the claimant at 80%, and by adopting multiplier method, awarded Disability compensation at Rs.13,82,400/-. The Claims Tribunal, after awarding sums under other conventional heads, awarded a total compensation of Rs.22,24,355/- with 7.5% interest per annum. The Claims Tribunal, directed the 2nd respondent to pay the aforesaid compensation amount awarded by it and granted liberty to the Insurance Company to recover the said amount

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from the 1st respondent by directly filing the Execution proceedings. Aggrieved by the Award of the Tribunal, the Insurance Company has filed the above appeal.

The learned counsel for the appellant made two fold submissions. The learned counsel firstly submitted that there is a material alteration / conversion made to the Mahindra Bolero Maxi Truck and such material alteration was made in violation of Section 52 of the Motor Vehicles Act, and not disclosing the same to the appellant/Insurance Company. Secondly, the learned counsel submitted that the policy that was issued, fell under the category ‘Goods Carrying Vehicle’ and as per the policy, the Insurance Company is not liable to pay any compensation, not only because the insurable incident was not covered by the policy but also because the policy was rendered void for non-disclosure of material alteration. The learned counsel further submitted that as per the claimant’s own case, the claimant was employed as a borewell mechanic under the 2nd respondent and therefore, he was not statutorily covered under the proviso to Section 147[1][b] of the Motor Vehicles Act. The learned counsel submitted that even the principle of ‘pay and recover’ was inapplicable in the present case as it is a case of there being no insurance cover for the alleged accident/injury.

The learned counsel for the claimant, on the other hand, submitted that the Insurance Company was bound either to pay the entire compensation

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or in the alternative, to pay and recover since the claimant was covered by Section 147[1][b][i] of the Motor Vehicles Act.

We have heard both the learned counsels and perused the materials placed before us.

The issue for consideration is whether the appellant/Insurance Company is liable to pay the compensation to the 1st respondent and in the alternative, to pay and recover the same from the 2nd respondent.

The accident is not disputed. The claimant was electrocuted while the pipe which he was holding on a borewell pipe lifting crane, fitted to the Mahindra Bolero Maxi Truck vehicle, came in contact with a live electric wire, due to the rash and negilgent driving of the driver of the Mahindra Bolero Maxi Truck. Due to the electrocution, the claimant sustained 40% third degree burn injuries, rendering him unfit for future employment. He therefore filed the claim petition seeking compensation of Rs.2 Crores.

The learned counsel for the appellant/Insurance Company, at the time of hearing, submitted that for vehicles to which alterations are made, a Special Motor Vehicle Commercial Liability Policy for Miscellaneous and Special Type of Vehicles, is issued. Since the policy in the present case was only a motor policy covering Goods Carrying Vehicle, the appellant was not liable to pay any compensation. In view of the said submission of the learned counsel for the appellant, we directed the learned counsel to produce samples of various policies to show how these

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vehicles are covered. The learned counsel had also produced those policies relating to vehicles which had undergone material alteration, compliant with Section 52 of the Motor Vehicles Act. These policies are issued under the caption ‘’Miscellaneous and Special Types of Vehicles’’.

For brevity sake, the policies of such vehicles are extracted below:-

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In the present case, the policy of the offending vehicle was marked as Ex.P3, and is extracted hereunder:-

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Material Alteration - Non – Disclosure:

As far as material alteration – non-disclosure is concerned, the submission is two fold. That the material alteration was made in violation of Section 52 of the Motor Vehicles Act, and non-disclosure of material alteration renders the policy void. A perusal of the policy show that the type of policy is a ‘package goods vehicle’ policy. The make of the vehicle is mentioned as ‘Mahindra’, the model as ‘Bolero’ and the variant as ‘Maxi Truck PLUS MDI BS III PS’. There is absolutely no mention of any material alteration to the vehicle in the form of attachment of a borewell pipe lifting crane. That apart, the Registration Certificate, Ex.P2, also describes the vehicle as Maxi Truck with no mention about the same being fitted with a crane. We therefore find considerable force in the submission of the learned counsel for the appellant that the Insurance Company cannot be mulcted with liability.

In order to appreciate the contention of the learned counsel for the appellant, regarding the violation of Section 52 of the Motor Vehciles Act, it will be expedient to extract Section 52 of the Motor Vehicles Act, 1988, which reads as follows:- Alteration in motor vehicle. - (1) No owner of a motor vehicle shall so alter the vehicle that the particulars contained in the certificate of registration are at variance with those originally specified by the manufacturer : Provided that where the owner of a motor vehicle makes

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modification of the engine, or any part thereof of a vehicle for facilitating its operation by different type of fuel or source of energy including battery, compressed natural gas, solar power, liquid petroleum gas or any other fuel or source of energy, by fitment of a conversion kit, such modification shall be carried out subject to such conditions as may be prescribed: Where a registering authority receives a notice under sub-section (1), it shall, within seven days of the receipt thereof, communicate, by post, to the owner of the vehicle its approval to the proposed alteration or otherwise : Provided further that the Central Government may prescribe specifications conditions for approval, retrofitment and other related matters for such conversion kits; Provided also that the Central Government may grant exemption for alteration of vehicles in a manner other than specified above, for any specific purpose.

(2) Notwithstanding anything contained in sub-section (1), a State Government may, by notification in the Official Gazette, authorise, subject to such conditions as may be specified in the notifications, and permit any person owing not less than ten transport vehicles to alter any vehicle owned by him so as to replace the engine thereof with engine of the same make and type, without the approval of registering authority.

(3) Where any alteration has been made in motor vehicle without the approval of registering authority or by reason of replacement of its engine without such approval under sub-section (2), the owner of the vehicle shall, within

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fourteen days of the making of the alteration, report the alteration to the registering authority within whose jurisdiction he resides and shall for ward the certificate of registration to that authority together with the prescribed fee in order that particulars of registration may be entered therein.

(4) A registering authority other than the original registering authority making any such entry shall communicate the details of the entry to the original registering authority.

(5) Subject to the provisions made under sub-section (1), (2), (3) and (4), no person holding a vehicle under a hire- purchase agreement shall make any alteration to the vehicle except with the written consent of the registered owner. Explanation. - For the purpose of this section, “alteration” means a change in the structure of a vehicle which results in change in its basic feature.]

Upon a bare reading of the aforesaid provision, it is clear that all alteration made in variance to the particulars contained in the Registration Certificate, are to be made only after obtaining permission, as provided therein. Ex.P2, the Registration Certificate of Mahindra Bolero Maxi Truck, shows that the vehicle was registered under the class ‘’Light Goods Vehicle’’ and the model was referred to as ‘’Bolero Maxi Truck open’’. Therefore, it is clear that the attachment of the borewell pipe lifting crane to the Bolero Maxi Truck, is at variance with the Registration Certificate. Since the alteration by way of attachment of the

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borewell pipe lifting crane to the Bolero Maxi Truck, is at variance with the Registration Certificate, and is made in violation of the provisions of Section 52 of the Act, we find that the alteration itself is illegal.

It is fairly well settled that the contract of insurance is governed by the principle of ‘’utmost good faith’’. Therefore, when an owner of the vehicle makes structural alterations to the vehicle, such as fitment of a borewell pipe lifting crane as in the present case, the same ought to have been disclosed to the insurer and appropriate policy by paying the extra premium, ought to have been taken. In the absence of a disclosure of the alteration, we are of the view that the appellant/Insurance Company cannot be mulcted with the liability arising out of the accident, since such non-disclosure renders the contract of insurance void. That apart, the policy in respect of a Maxi Truck and a Maxi Truck which has been altered, are totally different. Therefore, we hold that the Insurance Company is not liable to compensate the claimant. Liability under Section 147[1][b][i] & an order of ‘Pay and Recover’:-

The next question is whether the Insurance Company can be ordered to ‘pay and recover’ the compensation from the owner of the offending vehicle.

The learned counsel for the claimant relied on the provision of Section 147[1][b][i]of the Act and would submit that the claimant falls under the expression ‘any person’ and therefore, the Insurance Company is liable to

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pay the compensation and thereafter, recover the same from the owner.

Section 147[1][b][i] of the Motor Vehicles Act reads as follows:- 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- [a]…….. [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. Provided that a policy shall not be required- [i]to cover liability in respect of the death, arising out of an 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 an din 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

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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.’’

In our view, the expression ‘any person’ employed in Section 147[1][b][i] of the Act, means a third party and not a person who is employed by the insured. Section 147[1][b][i] mandates the policy covering third parties, owner of goods, authorised representative of the owner of the goods and for damages to third party property. The proviso to the provisions of Section 147[1][b][i] of the Act explicitly limits the liability under the Employees’ Compensation Act to three categories of persons. It is the driver engaged in driving the vehicle, the conductor or ticket examiner for public service vehicles and an employee carried in the vehicle if it is a goods carriage, e.g., coolies or loadmen. Indisputably, the claimant is not a third party. Even as per the claim petition, the claimant was employed and he was electrocuted while holding a pipe on a borewell pipe lifting crane fitted to the Mahindra Bolero Maxi Truck vehicle. Being a mechanic, employed with the 2nd respondent, the claimant does not fall under any of the categories provided in the proviso. Even as per the policy marked as Ex.P2, the coverage is limited to third party, paid

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driver and the personal accident cover to owner-cum-driver. The claimant does not fall in any of the categories and therefore, as rightly contended by the appellant/Insurance Company, it is not liable to pay any compensation including the one under the principle of ‘pay and recover’. Since the claimant is a specialised technical person, the owner is not statutorily required to cover the claimant. For arguments sake, even if the claimant is considered as an employee carried in a goods vehicle, the undisclosed structural alteration made by the owner, in our view, is a bar to claim compensation against the appellant/insurance company. We therefore find merit in the appeal filed by the Insurance Company.

Accordingly, the Civil Miscellaneous Appeal is allowed and the judgment and decree dated 29.07.2022, made in MCOP.No.502/2019, insofar as it relates to the direction, directing the Insurance Company to pay the compensation with liberty to recover the same from the 2nd respondent herein, is set aside.

The 2nd respondent, the owner of the Mahindra Bolero Maxi Truck, is directed to deposit the Award amount of Rs.,22,24,355/- [Rupees Twenty Two Lakhs Twenty Four Thousand Three Hundred and Fifty Five only] along with 7.5% interest per annum, from the date of petition till the date of deposit, within a period of twelve weeks from the date of receipt of the web copy of this judgment. The 1st respondent, shall be entitled to withdraw the same along with accrued interest, on filing appropriate

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application before the Claims Tribunal. No costs. Consequently, the connected miscellaneous petition is closed. (P.T.A.,J.) (N.M.,J.) 29-09-2026 Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No AP To

1. The Additional District Judge Motor Accidents Claims Tribunal, Hosur.

2. The Branch Manager M/s. Cholamandalam MS General Insurance Company Limited, No.9, I Floor, Rajaji Road, State Bank of Travancore Upstairs, Peramanur, Salem-636 007.

3. The Section Officer VR Section High Court, Chennai.

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P.T.ASHA J. AND N.MALA J. AP CMA No. 2962 of 2022 AND CMP NO. 22935 OF 2022 29-09-2026

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