Case Note & Summary
The case arises from a motor accident claim where the deceased, Radhakishan Lokhande, was traveling as a cleaner in a tipper bearing registration No. MH 10 A 6700. The tipper was insured with United India Assurance Company Ltd. under an 'Act policy' covering only third party risk. The Motor Accident Claims Tribunal, Jalna, in M.A.C.P. No. 324/2004, awarded compensation and held the insurance company jointly and severally liable with the owner. The insurance company appealed, arguing that the risk of the cleaner was not covered under the policy as per Section 147(1)(b) of the Motor Vehicles Act, 1988. The claimants supported the Tribunal's decision. The High Court examined the insurance policy (Exh. 37) and noted that the schedule of premium did not indicate coverage for the cleaner. The court held that under an Act policy, the insurer is not liable for the death of an employee like a cleaner unless additional premium is paid. The court allowed the appeal, setting aside the liability of the insurance company and directing the owner to pay the compensation. The court also ordered that if the claimants have already recovered the amount from the insurance company, the insurance company may recover it from the owner.
Headnote
A) Motor Vehicles Act - Insurance - Liability of Insurer - Section 147(1)(b) Motor Vehicles Act, 1988 - Act Policy - Cleaner - The insurance company issued an 'Act policy' covering only third party risk. The deceased was a cleaner traveling in the insured tipper. The Tribunal held the insurance company jointly liable. On appeal, the High Court held that under Section 147(1)(b), an Act policy does not cover the risk of an employee like a cleaner unless additional premium is paid. The insurance company is not liable to pay compensation for the death of the cleaner. (Paras 1-5)
Issue of Consideration
Whether the insurance company is liable to pay compensation for the death of a cleaner traveling in a tipper under an 'Act policy' which does not cover the risk of the cleaner.
Final Decision
Appeal allowed. The liability of the insurance company to pay compensation is set aside. The owner of the vehicle (respondent No.8) is liable to pay the compensation. If the claimants have already recovered the amount from the insurance company, the insurance company may recover the same from the owner.
Law Points
- Section 147(1)(b) of Motor Vehicles Act
- 1988
- Act policy covers only third party risk
- cleaner not covered under Act policy unless additional premium paid
- insurance company not liable for employee of owner
Case Details
2022 LawText (BOM) (02) 2
First Appeal No. 396 of 2012
Mr Swapnil Rathi for Appellant, Mr Swapnil M. Mule h/f Mr R.V. Gore for Respondent Nos.1 to 6, Mr B.R. Kedar for Respondent No.8
United India Assurance Company Ltd.
Yashodabai w/o Radhakishan Lokhande and others
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Nature of Litigation
Appeal against the judgment of Motor Accident Claims Tribunal, Jalna, in M.A.C.P. No. 324/2004, fastening liability on insurance company to pay compensation for death of cleaner.
Remedy Sought
Insurance company sought to be absolved from liability to pay compensation.
Filing Reason
Insurance company disputed liability on ground that cleaner's risk was not covered under Act policy.
Previous Decisions
M.A.C.T., Jalna, in M.A.C.P. No. 324/2004, held insurance company jointly and severally liable with owner to pay compensation.
Issues
Whether the insurance company is liable under an Act policy for the death of a cleaner traveling in the insured vehicle.
Submissions/Arguments
Appellant/Insurance Company: The policy is an Act policy covering only third party risk; cleaner's risk not covered; Tribunal erred in fastening liability.
Respondents/Claimants: Tribunal correctly considered evidence and turned down insurance company's defence; no error in fastening liability.
Ratio Decidendi
Under Section 147(1)(b) of the Motor Vehicles Act, 1988, an Act policy covers only third party risks and does not cover the risk of an employee like a cleaner unless additional premium is paid. Therefore, the insurance company is not liable for the death of a cleaner traveling in the insured vehicle under an Act policy.
Judgment Excerpts
The insurance company has disputed its liability to pay the compensation determined in M.A.C.P. No. 324/2004 by the M.A.C.T., Jalna.
He submitted that the deceased was travelling in a tipper bearing registration No. MH 10 A 6700 as a cleaner. The tipper was insured with the appellant. It was a ‘Act policy’ and thereby covering third party risk.
He pointed out that schedule of premium and submitted that risk of the cleaner is not covered.
The appellant/insurance company needs to be absolved from the liability in view of the provisions of section 147 (1) (b) of the Motor Vehicles Act, 1988.
Procedural History
The Motor Accident Claims Tribunal, Jalna, in M.A.C.P. No. 324/2004, awarded compensation and held the insurance company jointly and severally liable. The insurance company filed First Appeal No. 396 of 2012 before the High Court of Bombay at Aurangabad, which was heard and decided on 23.02.2022.
Acts & Sections
- Motor Vehicles Act, 1988: Section 147(1)(b)
