FAO/29/2011 of ORIENTAL INSURANCE CO. Vs BRAHMI on 30 December 2016

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

FAO No. 29 of 2011

Reserved on: 16.12.2016Decided on: 30.12.2016

Oriental Insurance Company Ltd.

…Appellant.

Versus

Smt. Brahmi and others

…Respondents.

Coram

The Hon’ble Mr. Justice Mansoor Ahmad Mir, Chief Justice.

Whether approved for reporting? Yes.

For the appellant:Mr. Ashwani K. Sharma, SeniorAdvocate, with Mr. Jeevan Kumar,Advocate.

For the respondents:Mr. Rajiv Rai, Advocate, forrespondent No. 1.

Nemo for respondents No. 2 to 6.

Mansoor Ahmad Mir, Chief Justice.

By the medium of this appeal, the appellant- insurer has called in question award, dated 15[th] December,2010, made by the Motor Accident Claims Tribunal, Fast Track Court, Chamba, District Chamba (HP) (for short “theTribunal”) in M.A.C. No. 17/2010, titled as Smt. Brahmi andothers versus The Oriental Insurance Company Limited and another, whereby compensation to the tune of 29,98,432/-₹with interest @ 7.5% per annum from the date of filing of the petition till its realization came to be awarded in favour ofthe claimants and the insurer was saddled with liability (forshort “the impugned award”).

2. The claimants and the owner-insured of theoffending vehicle have not questioned the impugned awardon any count, thus, has attained finality so far it relates tothem.

3. The appellant-insurer has called in question theimpugned award on the ground that deceased himself wasdriving the offending vehicle rashly and negligently at thetime of the accident, the claimants are the parents andchildren of the deceased and the owner-insured is the wife ofthe deceased, thus, the claim petition was not maintainable.

4. Heard learned counsel for the parties.

this appeal:

(i) Whether the legal representatives/heirs of deceased-Desh Raj, who wasdriving the offending vehicle at therelevant point of time and caused theaccident, can file a claim petitionunder Section 166 of the MotorVehicles Act, 1988 (for short “MV Act”)for grant of compensation? and

(ii) Whether the claim petition wasmaintainable?

6. In order to determine both these points, it isnecessary to give a brief resume of the facts of the case herein.

7. The claimants invoked the jurisdiction of the Tribunal under Section 166 of the MV Act for grant ofcompensation to the tune of 30,00,000/-, as per the break-₹ups given in the claim petition, on the ground that they losttheir bread earner, namely Shri Desh Raj, in the vehicularaccident, while driving the car, bearing registration No. HP- 54-2475, on 16[th] February, 2010, at about 4.30 P.M., at place Nand Gram near Maredi, P.S. Chamba, on his way backfrom Government Senior Secondary School, Jadera.

8. The respondents in the claim petition, i.e. theinsurer and the owner-insured of the offending vehicle, have filed the replies. The insurer has resisted the claim petitionwhereas the owner-insured, who is the widow of deceased-Desh Raj, has not resisted the claim petition.

9. On the pleadings of the parties, following issuescame to be framed by the Tribunal:

“1. Whether Des Raj died on 16.2.2010,at about 4.30 PM at Nand Gram nearMaredi within the jurisdiction of P.S.Chamba in a vehicular accidentinvolving vehicle No. HP-54-2475? OPP

2. If issue No. 1 is proved in affirmative,whether the petitioners being dependantof deceased are entitled for the grant ofcompensation, if so, to what amount andfrom which of the respondents? OPP

3. Whether the respondent No. 1 is liableto indemnify the owner in respect ofdeath of deceased, who is husband ofowner of offending vehicle? OPR-2

4. Whether the petition is notmaintainable? OPR-1

5. Whether the offending vehicle was nothaving valid registration certificate,fitness certificate, valid route permit etc.if so, its effect? OPR-1

6. Whether the driver of the offendingvehicle was not holding a valid andeffective driving licence? OPR-1

7. Whether the deceased was not thirdparty? OPR-1

8. Relief.”

10. In support of their claim, the claimants examined Dr. Davinder Kumar as PW-1, Shri PankajKapoor as PW-2, HC Pawan Kumar as PW-4 and one of theclaimants, namely Sh. Sarwan Kumar, himself stepped intothe witness box as PW-3. The insurer examined ShriRamesh Kumar, Branch Manager, as RW-1. The owner-insured has not led any evidence.

11. The Tribunal, after scanning the evidence, oralas well as documentary, held that the claimants are thevictims of the vehicular accident, which was caused bydeceased-Desh Raj while driving car, bearing registrationNo. HP-54-2475, on 16[th] February, 2010, at about 4.30 P.M.,at place Nand Gram near Maredi and decided issue No. 1 in favour of the claimants. The Tribunal determined issue No.3 in favour of the owner-insured. Issues No. 2 and 4 to 7came to be decided against the insurer and compensation tothe tune of ₹ 29,98,432/- with interest @ 7.5% per annumfrom the date of filing of the claim petition till its realizationwas granted in favour of the claimants.

Issues No. 1 and 4:

12. The claimants in para 24 of the claim petitionhave specifically stated that the offending vehicle was beingdriven by deceased-Desh Raj himself at the time of theaccident. The owner-insured of the offending vehicle hasadmitted the said factum. In the FIR, Ext. PW-4/A also, ithas specifically been recorded that the accident hadoccurred due to the rash and negligent driving of theoffending vehicle by deceased-Desh Raj. HC Pawan Kumar,while appearing in the witness box, has testified thecontents of the FIR to be correct. Thus, it can be safely heldthat deceased-Desh Raj had caused the accident because ofhis own rash and negligent driving. The findings of the Tribunal that deceased-Desh Raj was not responsible for theaccident, while deciding issue No. 1, are not legallysustainable and are accordingly set aside.

13. Had the claimants pleaded and proved that theaccident was outcome of the rash and negligent driving, theclaim petition under Section 166 of the MV Act would havebeen maintainable, as the rash and negligent driving is sinequa non for maintaining a claim petition seekingcompensation in terms of the provisions of Section 166 of the Act.14.My this view finds support from the judgmentrendered by the Apex Court in the case titled as Minu B.Mehta and another versus Balkrishna RamchandraNayan and another, reported in AIR 1977 SupremeCourt 1248, wherein it has been held that in a motoraccident claim case, the proof of negligence is necessary forsaddling the owner or the insurance company with liability.It is apt to reproduce para 36 of the judgment herein:

“36. In a recent judgment of MadrasHigh Court a Division Bench in A. A. O.Nos. 607 of 1973 and 296 of 1974 M/s.Ruby Insurance Co. Ltd. v. V.Govindaraj, delivered on 13th December,1976 has suggested the necessity ofhaving social insurance to provide coverfor the claimants irrespective of proof ofnegligence to a limited extent say Rs. 250to Rs. 300 a month .It has also suggestedthat instead of a lump sum paymentwhich does not often reach the claimantsa regular monthly payment to thedependants by the nationalsiedinsurance company or bank would bedesirable. Unless these ideas areaccepted by the legislature and embodiedin appropriate enactments Courts arebound to administer and give effect tothe law as it exists today. We conclude by stating that the view of the learnedjudges of the High Court has no supportin law and hold that proof of negligenceis necessary before the owner or theinsurance company could be held to beliable for the payment of compensation ina motor accident claim case.”

15. The correctness of the judgment in Minu B.

Mehta's case (supra) came up for consideration before the Apex Court in the case titled as Gujarat State Road TransportCorporation,Ahmedabadversus Ramanbhai Prabhatbhai, reported in (1987) 3 Supreme Court Cases 234, wherein it was held that the observationsmade by the Apex Court in Minu B. Mehta's case (supra)were in the nature of obiter dicta.

16. Both these judgments, i.e. Minu B. Mehta'sand Gujarat State Road Transport Corporation'scases (supra), came up for consideration and were re-examined by the Apex Court in the case titled as OrientalInsurance Co. Ltd. versus Meena Variyal and others,reported in (2007) 5 Supreme Court Cases 428. It would be profitable to reproduce paras 24 to 27 of the judgmentherein:

“24. It was argued by learned counsel forthe appellant that since on the findingthat the deceased was himself drivingthe vehicle at the time of the accident,the accident arose due to the negligenceof the deceased himself and hence theinsurer is not liable for thecompensation. Even if the case of theclaimant that the car was driven byMahmood Hasan was true, then also,the claimant had to establish thenegligence of the driver before theinsured could be asked to indemnify theinsured. The decision in Minu B. Mehta& Anr. Vs. Balkrishna RamchandraNayan & Anr. (1977) 2 SCC 441 : (1977)

SCR 886, of a three Judge Bench of thisCourt was relied on in support.

25. In that decision, this Courtconsidered the question whether in aclaim for compensation under the MotorVehicles Act, 1939, proof of negligencewas essential to support a claim forcompensation. On the facts in that case,their Lordships found that the appealwas liable to be dismissed subject tocertain directions issued therein. Buttheir Lordships, in the light of the factthat the High Court had discussed thelaw on the question and it was of someimportance, felt that it was necessary tostate the position in law. Noticing thatthe liability of the owner of the car tocompensate the victim in a car accidentdue to negligent driving of his servant isbased on the law of tort, the courtdiscussed the scheme of the Act of 1939and the law on the question. Regardingthe view of the High Court that it wasnot necessary to prove negligence, thecourt held: (Minu B. Mehta case, SCCpp. 455-56, para 33)

"33. The reasoning of the twolearned judges is unacceptable as itis opposed to basic principles of theowner's liability for negligence ofhis servant and is based on acomplete misreading of theprovisions of Chapter VIII of theAct. The High Court's zeal for whatit considered to be protection ofpublic good has misled it intoadopting a course which is nothingshort of legislation."

Their Lordships also noticed that proofof negligence remained the lynch pin torecover compensation. Their Lordshipsconcluded by saying: (Minu B. Mehtacase, SCC pp. 456-57, para 37)

"We conclude by stating that theview of the learned Judges of theHigh Court has no support in lawand hold that proof of negligence isnecessary before the owner or theinsurance company could be held tobe liable for the payment ofcompensation in a motor accidentclaim case."

26. Learned counsel for the respondentcontended that there was no obligationon the claimant to prove negligence onthe part of the driver. Learned counselrelied on Gujarat SRTC v. RamanbhaiPrabhatbhai and another, 1987 (3) SCC234 in support. In that decision, thisCourt clarified that the observations inMinu B. Mehta's case (supra) are in thenature of obiter dicta. But, this Courtonly proceeded to notice that departureshad been made from the law of strictliability and the Fatal Accidents Act,1855 by introduction of Chapter VIIA ofthe 1939 Act and the introduction ofSection 92A providing for compensationand the expansion of the provision as towho could make a claim, noticing thatthe application under Section 110A ofthe Act had to be made on behalf of orfor the benefit of all the legalrepresentatives of the deceased. ThisCourt has not stated that on a claimbased on negligence there is noobligation to establish negligence. ThisCourt was dealing with no-fault liability

and the departure made from the FatalAccidents Act, 1855 and the theory ofstrict liability in the scheme of the Act of1939 as amended. This Court did nothave the occasion to construe a provisionlike Section 163A of the Act of 1988providing for compensation withoutproof of negligence in contradistinctionto Section 166 of the Act. We may noticethat Minu B. Mehta's case was decidedby three learned Judges and the GujaratState Road Transport Corporation casewas decided only by two learned Judges.An obiter dictum of this Court may bebinding only on the High Courts in theabsence of a direct pronouncement onthat question elsewhere by this Court.But as far as this Court is concerned,though not binding, it does have clearpersuasive authority. On a carefulunderstanding of the decision inGujarat State Road TransportCorporation (supra) we cannotunderstand it as having held that in allclaims under the Act proof of negligenceas the basis of a claim is jettisoned bythe scheme of the Act. In the context ofSections 166 and 163A of the Act of1988, we are persuaded to think that theso called obiter observations in Minu B.Mehta's case (supra) govern a claimunder Section 166 of the Act and theyare inapplicable only when a claim ismade under Section 163A of the Act.Obviously, it is for the claimant tochoose under which provision he shouldapproach the Tribunal and if he choosesto approach the Tribunal under Section166 of the Act, we cannot see why theprinciple stated in Minu B. Mehta's caseshould not apply to him. We are, therefore, not in a position to accept theargument of learned counsel for therespondents that the observations inMinu B. Mehta's case deserve to beignored.

27. We think that the law laid down inMinu B. Mehta & Anr. Vs. BalkrishnaRamchandra Nayan & Anr. (supra) wasaccepted by the legislature whileenacting the Motor Vehicles Act, 1988 byintroducing Section 163A of the Actproviding for payment of compensationnotwithstanding anything contained inthe Act or in any other law for the timebeing in force that the owner of a motorvehicle or the authorised insurer shall beliable to pay in the case of death orpermanent disablement due to accidentarising out of the use of the motorvehicle, compensation, as indicated inthe Second Schedule, to the legal heirsor the victim, as the case may be, and ina claim made under sub-section (1) ofSection 163A of the Act, the claimantshall not be required to plead orestablish that the death or permanentdisablement in respect of which theclaim has been made was due to anywrongful act or neglect or default of theowner of the vehicle concerned.Therefore, the victim of an accident orhis dependants have an option either toproceed under Section 166 of the Act orunder Section 163A of the Act. Once theyapproach the Tribunal under Section166 of the Act, they have necessarily totake upon themselves the burden ofestablishing the negligence of the driveror owner of the vehicle concerned. But ifthey proceed under Section 163A of theAct, the compensation will be awarded in terms of the Schedule without calling upon the victim or his dependants toestablish any negligence or default onthe part of the owner of the vehicle or thedriver of the vehicle.”

17. The Apex Court, in the case titled as Oriental Insurance Company Limited versus Premlata Shukla & others, reported in 2007 AIR SCW 3591, held that proof of rashness and negligence on the part of the driver of thevehicle is sine qua non for maintaining an application under Section 166 of the MV Act.It is apt to reproduce para 10 ofthe judgment herein:

“10. The insurer, however, would beliable to re-imburse the insured to theextent of the damages payable by theowner to the claimants subject of courseto the limit of its liability as laid downin the Act or the contract of insurance.Proof of rashness and negligence on thepart of the driver of the vehicle, istherefore, sine qua non for maintainingan application under Section 166 of theAct.”

18. The Apex Court in the case titled as Surinder Kumar Arora & another versus Dr. Manoj Bisla &

others, reported in 2012 AIR SCW 2241, while approving the principle laid down by the Apex Court in MeenaVariyal's case (supra), held that once the victim of anaccident or his legal dependants approached the Tribunalfor grant of compensation in terms of the mandate of Section166 of the MV Act, they have necessarily to establish therash and negligent driving. It is worthwhile to reproduceparas 7 to 12 of the judgment herein:

“7. Having heard the learned counsel forthe parties to the lis, the question thatwould arise for our consideration anddecision is, whether the parents of thedeceased are entitled to the payment ofcompensation under the provisions of theAct by the respondent InsuranceCompany. In order to answer the issuethat we have framed for ourselves, thefacts in brief requires to be noticed:

8. The claimants are the parents of thedeceased person. The deceased was adoctor by profession. The deceased wastravelling in the motor vehicle driven byrespondent no.1, who happens to be a closeassociate/friend. It has come in theevidence of the claimants as well asrespondent no.1 that the vehicle inquestion was not driven in a rash andnegligent manner by respondent no.1.

9. Admittedly, the petition filed by theclaimants was under Section 166 of theAct and not under Section 163-A of theAct. This is not in dispute. Therefore, itwas the entire responsibility of the parents of the deceased to have established thatrespondent No.1 drew the vehicle in a rashand negligent manner which resulted inthe fatal accident. Maybe, in order to helprespondent No.1, the claimants had nottaken up that plea before the Tribunal.Therefore, High Court was justified insustaining the judgment and order passedby the Tribunal. We make it clear that iffor any reason, the claimants had filed thepetition under Section 163-A of the Act,then the dicta of this Court in the case ofKaushnuma Begum (Smt.) & Ors. (AIR2001 SC 485 : 2001 AIR SCW 85) (supra)would have come to the assistance of theclaimants.

10. In our view the issue that we haveraised for our consideration is squarelycovered by the decision of this Court in thecase of Oriental Insurance Co. Ltd. (AIR2007 SC 1609 : 2007 AIR SCW 2362)(supra). In the said decision the Courtstated:

“…….Therefore, the victim of anaccident or his dependents have anoption either to proceed underSection 166 of the Act or underSection 163-A of the Act. Once theyapproach the Tribunal underSection 166 of the Act, they havenecessarily to take upon themselvesthe burden of establishing thenegligence of the driver or owner ofthe vehicle concerned. But if theyproceed under Section 163-A of theAct, the compensation will beawarded in terms of the Schedulewithout calling upon the victim orhis dependants to establish anynegligence or default on the part of

the owner of the vehicle or thedriver of the vehicle.”

11. We are in agreement with theprinciples stated by this Court in theaforesaid decision.

12. In view of the above, in our opinion,neither the Tribunal nor the High Courthas committed any error whatsoeverwhich would call for our interference inthe appeal filed by the parents of thedeceased. Accordingly, we reject theappeal. However, we direct that theamount paid by the respondent InsuranceCompany by way of interim compensationunder Section 140 of the Act, shall not berecovered from the appellants by therespondent Insurance Company. No orderas to costs. Ordered accordingly.”

19. This Court in the case titled as United India Insurance Company Limited versus Sh. Mohan Lal and others, being FAO No. 281 of 2012, decided on 18[th]November, 2016,has laid down the same principle.

20. In the case titled as Ningamma and anotherversus United India Insurance Company Limited,reported in (2009) 13 Supreme Court Cases 710, the ApexCourt has held that when a claim is made by the legalrepresentatives of the deceased, it has to be proved that the deceased was not himself responsible for the accident by hisrash and negligent driving.It is apt to reproduce pars 21, 24and relevant portion of para 25 of aforesaid judgment herein:

“21. In our considered opinion, the ratioof the aforesaid decision is clearlyapplicable to the facts of the present case.In the present case, the deceased was notthe owner of the motorbike in question.He borrowed the said motorbike from itsreal owner. The deceased cannot be heldto be employee of the owner of themotorbike although he was authorised todrive the said vehicle by its owner, andtherefore, he would step into the shoes ofthe owner of the motorbike. We havealready extracted Section 163A of theMVA hereinbefore. A bare perusal of thesaid provision would make it explicitlyclear that persons like the deceased inthe present case would step into the shoesof the owner of the vehicle.

22. …...........

23. …..........

24. However, the question remains as towhether an application for demand ofcompensation could have been made bythe legal representatives of the deceasedas provided in Section 166 of the MVA.The said provision specifically providesthat an application for compensationarising out of an accident of the naturespecified in Sub-section (1) of Section165 may be made by the person who hassustained the injury; or by the owner ofthe property; or where death has resulted from the accident, by all or any of thelegal representatives of the deceased; orby any agent duly authorised by theperson injured or all or any of the legalrepresentatives of the deceased, as thecase may be.

25. When an application of the aforesaidnature claiming compensation under theprovisions of Section 166 is received, theTribunal is required to hold an enquiryinto the claim and then proceed to makean award which, however, would besubject to the provisions of Section 162,by determining the amount ofcompensation, which is found to be just.Person or persons who made claim forcompensation would thereafter be paidsuch amount. When such a claim ismade by the legal representatives of thedeceased, it has to be proved that thedeceased was not himself responsible forthe accident by his rash and negligentdriving..............”

21. Applying the test to the instant case, deceased- Desh Raj was himself driving the offending vehicle at thetime of the accident, as is evident from the perusal of theFIR, Ex. PW-4/A and also admitted by the parties. Thecontents of the FIR have not been disputed by theclaimants, rather, they themselves have proved the contentsof the FIR, which is exhibited as Ext. PW-4/A.

22. The legal representatives of deceased-Desh Rajhave not taken plea of rash and negligent driving for thereasons best known to them, which, as discussedhereinabove, is sine qua non for maintaining claim petitionunder Section 166 of the MV Act.

23. Having said so, the claim petition under Section166 of the MV Act was not maintainable.

24. Had the claimants filed the claim petition underSection 163-A of the MV Act, then rashness and negligencewas not required to be proved. The claimants were onlyrequired to prove that the death was outcome of the use ofthe motor vehicle. The claimants have not filed the claimpetition under Section 163-A of the MV Act.

25. The Tribunal or the Appellate Court can treatthe claim petition under Section 163-A of the MV Act, is notmaintainable in the instant case in view of the fact that theincome of the deceased has been proved to be 23,791/- per₹month and for maintaining the claim petition under Section163-A of the MV Act, the income of the victim of a vehicular accident should be less than 40,000/- per annum, as has₹been held by a Division Bench of this Court, of which(Justice Mansoor Ahmad Mir, Chief Justice) was a member, in a case titled as Oriental Insurance Company Ltd.

versus Sihnu Ram and others, being FAO No. 474 of2010, decided on 28[th] September, 2016, while replying uponthe various judgments rendered by the Apex Court.

26. In view of the discussions made hereinabove, theclaim petition was not maintainable. Viewed thus, thefindings returned by the Tribunal on issues No. 1 and 4 areset aside.

Issues No. 2, 3 and 5 to 7:

27. In view of the findings returned hereinabove, itis useless to discuss and determine these issues.

28. Both the points, framed hereinabove, aredetermined accordingly.

29. Having glance of the above discussions, theappeal is allowed, the impugned award is set aside and theclaim petition is dismissed.

30. Registry to release the deposited amount, if any, in favour of the appellant-insurer through payee's accountcheque. It is made clear that in case the claimants have received any amount of compensation under “No FaultLiability”, the same shall not be recovered by the appellant- insurer.

31. Send down the record after placing copy of the judgment on the Tribunal's file.

December 30, 2016 ( rajni )

(Mansoor Ahmad Mir) Chief Justice