THE HIGH COURT OF SIKKIM : GANGTOK
(Civil Appellate Jurisdiction)
th
DATED : 10 December, 2024
-----------------------------------------------------------------------------------------------------------------
SINGLE BENCH :
THE HON’BLE MRS. JUSTICE MEENAKSHI MADAN RAI, JUDGE
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MAC App. No.12 of 2024
Appellant : The New India Assurance Co. Ltd.
versus
Respondent : Sunita Pradhan
and
MAC App. No.13 of 2024
Appellant : The New India Assurance Co. Ltd.
versus
Respondent : Sunita Pradhan
Appeal under Section 173 of the Motor Vehicles Act, 1988
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Appearance
Mr. Dipayan Roy, Advocate for the Appellant.
Mr. S. S. Hamal, Senior Advocate with Mr. Tashi Wongdi Bhutia,
Mr. Mahesh Subba, Mr. Varun Pradhan, Mr. Pradeep Sharma, Ms.
Ram Devi Chettri and Ms. Anjali Pradhan, Advocates for the
Respondent.
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JUDGMENT
Meenakshi Madan Rai, J.
1. Two Appeals, being MAC App. No.12 of 2024 and MAC
App. No.13 of 2024, assailing the Judgments, both dated 21-03-
2023, of the Learned Motor Accidents Claims Tribunal, at Gangtok,
Sikkim, MACT Case No.48 of 2019
(hereinafter, the “MACT”), in
(Sukmit Thapa vs. New India Assurance Co. Ltd. and Another) and
MACT Case No.49 of 2019 (Sukmit Thapa vs. New India Assurance Co.
Ltd. and Another) respectively, are being disposed of by this
common Judgment, as they concern a single motor vehicle
MAC App. Nos.12 and 13 of 2024 2
The New India Assurance Co. Ltd. vs. Sunita Pradhan
accident, in which the children (son and daughter), of the Claimant
perished.
2. In MAC App. No.13 of 2024, the motor vehicle
accident, involving a car (Maruti 800), snuffed out the life of
eighteen year old, Romila Thapa, the daughter of the Claimant.
She was travelling in the ill-fated vehicle with her cousin, her
neighbour and her brother, who was driving the vehicle, when it
went off the road near Singtam, East Sikkim, around 05.00 a.m, on
31-08-2005. The accident resulted in the fatality of all the
occupants of the vehicle and their bodies remained unrecovered.
Although the vehicle was recovered, the documents remained
untraced. A Claim Petition under Section 166 of the Motor Vehicles
compensation of a
Act, 1988 (hereinafter, the “MV Act”), seeking
800/- (Rupees nine lakhs, eighty nine thousand and
sum of ₹ 9,89,
eight hundred) only, before the Learned MACT, was filed by the
Claimant, where the Appellant was arrayed as a Respondent. The
Appellant contested the Claim Petition before the Learned MACT
inter alia, on grounds that, as the Claimant was the registered
owner of the accident vehicle, the deceased being her daughter
had and therefore did not qualify as
stepped into the owner’s shoes
a third party, thus disentitling the Claimant to compensation. The
deceased driver did not have a driving licence and in the facts of
the case, there was neither any statutory liability nor contractual
obligation, on the part of the Insurance Company, to pay
compensation to the Claimant or to indemnify the owner of the
vehicle.
(i) In MAC App. No.12 of 2024, the facts of the case are
similar to that of MAC App No.13 of 2024, save to the extent that
MAC App. Nos.12 and 13 of 2024 3
The New India Assurance Co. Ltd. vs. Sunita Pradhan
the deceased was the son of the Claimant and he was driving the
vehicle in accident. The Claim Petition was contested by the
Appellant (Respondent before the MACT), on the ground that, the
deceased being the son of the Claimant was a permissive user and
not a third party. Besides, he did not have a driving licence and
there no statutory liability nor contractual obligation of the
Appellant to pay compensation.
3. The Learned MACT on consideration of the pleadings of
the parties, settled the exact same issues for determination in both
the cases, i.e., MACT Case No.48 of 2019 and MACT Case No.49 of
2019, save for issue no.2;
(1) Whether the claim petition/application is
maintainable?;
(2) Whether the deceased died as a result of injuries
sustained by her in the accident that occurred on
31.08.2005 while she was travelling in the accident
vehicle belonging to the claimant?; (MACT Case No.49
of 2019);
(2) Whether the deceased died as a result of the injuries
sustained by him in the accident that occurred on
31.08.2005 while he was driving the accident vehicle
belonging to the claimant? (MACT Case No.48 of 2019);
(3) Whether the said vehicle was duly insured with the
respondents at the time of the accident?;
(4) Whether the deceased driver had a valid and effective
driving licence authorizing him to drive the accident
vehicle and whether the said vehicle had valid
documents at the time of the accident?;
(5) Whether any terms and conditions of the concerned
insurance policy have been violated in this case on
the basis of which the respondents can avoid its
liability? and;
(6) Whether the petitioner/claimant is entitled to the
reliefs prayed for by them?
(i) All issues were determined in favour of the Claimant in
both cases. The Learned MACT while deciding issues no.1 and 6
together, in both cases, observed in Paragraphs 19, 20 and 21 of
the impugned Judgments as follows;
19. Learned Counsel for the respondents on the
“
other hand contended that the deceased was
travelling i
n the accident vehicle as ‘permissive user’
MAC App. Nos.12 and 13 of 2024 4
The New India Assurance Co. Ltd. vs. Sunita Pradhan
and therefore, cannot make this claim. In support of
this argument, reliance was placed in the case of
Ramkhiladi and Another v. United India Insurance Co.
and Another, (2020) 2 SCC 50.
20. In this regard, it would be relevant to point out
that the facts of the case relied by the respondents
(supra) and the facts of the present case are
different. In the case referred above, the deceased
was travelling in a vehicle (borrowed vehicle) which
met with an accident with another vehicle which
caused the accident (i.e. the offending vehicle). The
appellants claimed compensation (under Section
163A) from the owner and insurer of the borrowed
vehicle. Though the allegation of rash and negligent
driving was made against the driver of offending
vehicle, no claim was made against the driver/owner
or insurer of the said offending vehicle. Under such
circumstances, it was held that the claimants could
have claimed compensation against the driver/owner
or insurer of the offending vehicle and not against the
borrowed vehicle since the deceased was a third party
with respect to the offending vehicle.
21. The facts of the present case is quite different.
There is no ‘other vehicle’ involved in the accident,
i.e. there is no offending vehicle. The cause of
accident is due rash and negligent driving of the
driver (Peter Rominsh Thapa) of the borrowed vehicle
itself. Hence, the claim of the petitioner/claimant
against the insurance company in the present case is
maintainable. ……………………………………..”
(ii) The income of the deceased, in MAC App. No.13 of
2024 - (Rupees six thousand) only,
although claimed to be ₹ 6,000/
per month, by the Claimant, - (Rupees six
was fixed at ₹ 6,600/
thousand and six hundred) only, per month, by the Learned MACT,
on grounds that, the victim being a student did not have any
income at the relevant time. Recourse was taken to the
Notification of the Labour Department, Government of Sikkim,
dated 01-11-2014 and her notional income was fixed
at wages of ₹
220/- (Rupees two hundred and twenty) only, per day.
Compensation was computed under various heads and a sum
of ₹
10,57,480/- (Rupees ten lakhs, fifty seven thousand, four hundred
and eighty) only, was granted to the Claimant, with interest @
MAC App. Nos.12 and 13 of 2024 5
The New India Assurance Co. Ltd. vs. Sunita Pradhan
10% per annum, from the date of filing of the Claim Petition (i.e.
02-12-2019) till full and final payment.
(iii) The deceased driver in MAC App. No.12 of 2024 was
aged twenty-two years at the time of the accident and it was
claimed that he was - (Rupees six thousand) only,
earning ₹ 6,000/
per annum. The Learned MACT on examination of the evidence
reached a finding that, the victim was a college student and
therefore unemployed. His notional income was consequently fixed
- (Rupees six thousand and six hundred) only, per
at ₹ 6,600/
month, taking into consideration Notification dated 01-11-2014, of
the Labour Department, Government of Sikkim (supra).
Compensation of a sum of 11,12,200/- (Rupees eleven lakhs,
₹
twelve thousand and two hundred) only, was granted to the
Claimant, with interest @ 10% per annum, from the date of filing
of the Claim Petition (i.e. 02-12-2019) till full and final payment.
4. In Appeal (in MAC App No.13 of 2024), it is contended
by Learned Counsel for the Appellant that the insurance cover was
only for three occupants of the vehicle. The deceased daughter
being the fourth person, disentitled the Respondent to the
compensation claimed. Besides, she being the daughter of the
Respondent, the owner of the vehicle, she stepped into the shoes
of the owner and is not a third party. The owner thus cannot claim
compensation on the death of her daughter. The insured having
paid an additional premiu - (Rupees three hundred)
m of ₹ 300/
only, to cover the risk of unnamed passengers in the vehicle a
- (Rupees two lakhs) only, per
limited liability of ₹ 2,00,000/
person, was created in terms of India Motor Tariff (IMT 16), in the
MAC App. Nos.12 and 13 of 2024 6
The New India Assurance Co. Ltd. vs. Sunita Pradhan
prescribed format of Insurance Regulatory and Development
Authority of India (IRDAI).
(i) In MAC App No.12 of 2024, it was argued that the
driver having driven rashly and negligently with no other vehicle
being involved in the accident, the insurance company is not liable
to pay the compensation as held by the Supreme Court in
National
1
and
Insurance Co. Ltd. vs. Ashalata Bhowmick Jhuma Saha (Smt.) and
2
.
Others
5. Per contra, Learned Senior Counsel for the Respondent
argued that, the contention advanced by Counsel for the Appellant
that they are not liable to make good the compensation as the
deceased persons had stepped into the shoes of their mother is
sans reasoning. The mother/Claimant was the insured while the
Appellant is the insurer, thereby the deceased persons were third
parties. A third party has been succinctly elucidated by this
“ ”
Court in
Branch Manager, National Insurance Co. Ltd., Gangtok vs.
3
,
Master Suraj Subba and Another Passi Lamu Sherpa and Another vs.
4
and
The Branch Manager, New India Assurance Co. Ltd. The Branch
Manager, The New India Assurance Co. Ltd. vs. Smt. Urmila Biswakarma
5
and by the Supreme Court in
(Chettri) and Others Ashalata Bhowmik
(supra). That, new grounds have been urged in Appeal which is
legally impermissible, these having not been raised during trial
viz.; that an - (Rupees three hundred)
additional premium of ₹ 300/
only, having been paid for covering the risk of unnamed
passengers in the vehicle, created a limited liability upon the
Insurance Company of - (Rupees two lakhs) only, per
₹ 2,00,000/
1
AIR 2018 SC 4133
2
(2007) 9 SCC 263
3
AIR 2014 Sikk 7
4
2024 SCC OnLine Sikk 24
5
MANU/SI/0030/2022
MAC App. Nos.12 and 13 of 2024 7
The New India Assurance Co. Ltd. vs. Sunita Pradhan
person. No grounds regarding the clause in IMT 16 or the IRDAI
were urged before. That, the Appeal therefore ought to be
dismissed.
6. The rival contentions of Learned Counsel for the parties
having been heard in detail, in extenso and the records having
been examined, the common question that falls for consideration
before this Court in both the Appeals is;
Whether the MACT was correct in having granted
“
compensation to the Respondent?
”
7. While addressing this question, it may relevantly be
recapitulated here that, this Court in (supra)
Master Suraj Subba
had opined that where the deceased, the husband of the insured,
was not a party to the agreement of insurance, he had a valid
driving licence and was driving the insured vehicle, he would
undoubtedly fall within the meaning of third party. The Learned
MACT had held as follows;
“
10(i)
…………………………………………………………………………………
32. In this regard one may go through
the Provisions of Section 146 of the M.V. Act
which speaks of necessity for insurance against
third party risk. The object of this provision is
to enable a thirty party to claim and recover
damages from the Insurance company without
recourse to the financial capacity of the driver
or owner of the vehicle. The policy of insurance
is thus a result of a contract between the
insurer and the insured under which the insurer
agrees to indemnify the insurer against the
liability incurred by him. Hence other then the
contracting party to the Insurance policy the
expression “the third party” should include
everyone else. It may be worthwhile to refer to
the following decision with regard to the said
issue.
”
(i) This High Court upholding the said view, explained as
to which person would qualify as a third party.
(ii) Bearing the above in mind, in the instant case, the
Appellant is the insurer, the Respondent (owner) is the insured,
MAC App. Nos.12 and 13 of 2024 8
The New India Assurance Co. Ltd. vs. Sunita Pradhan
any other person who is not a party to the insurance policy would
fall within the
ambit of a third person. The term ‘injury’ to any
person as reflected in Section 147 of the MV Act, 1988, is wide
enough to bring within its ambit the deceased, who was not a party
to the insurance policy and therefore not the insured.
(iii) In (supra), the deceased was the
Passi Lamu Sherpa
wife of the owner of the vehicle in which both of them were
travelling. An accident resulted in the fatality of the couple. The
Insurance Company claimed that the policy did not cover the
compensation claimed as it only covered the personal accident of
- (Rupees fifteen
the owner/driver amounting to ₹ 15,00,000/
lakhs) only. This Court while examining the provisions of Exhibit 7,
the insurance policy, dealt with the limits of liability which is
extracted hereinbelow as follows;
“8. ………………………………………………………………………………..
………………………………………………………………………………..
(iii)
…………………………………………………………………….…..
Limits of Liability
Limit of the amount the Company’s Liability Under
Section II 1(i) in respect of any one accident: as per
the Motor Vehicles Act, 1988.
Limit of the amount of the Company’s Liability Under
Section II 1(ii) in respect of any one claim or series of
claims arising out
of one event: Up to ₹ 7,50,000.”
It was observed that as per the IMT, the first (supra)
pertains to liability covered in respect of the death as stated in
Exhibit 7, as per the MV Act, which thereby makes the insurer
liable to pay compensation as computed in terms of the said Act.
The second pertains to the damages caused to property of a third
party. Thus, the contention that the claim therein would be limited
- (Rupees seven lakhs and fifty thousand) only, was
to ₹ 7,50,000/
found to be an erroneous interpretation advanced by the Counsel
MAC App. Nos.12 and 13 of 2024 9
The New India Assurance Co. Ltd. vs. Sunita Pradhan
for the Insurance Company. This Court also observed that the
argument that the deceased wife would step into the shoes of the
owner/driver disentitling the Claimants to compensation was a
preposterous proposition, more so, when both the Respondent and
wife succumbed to the accident. Compensation was allowed to the
Claimants.
(iv) It is worthwhile to refer to
Amrit Lal Sood and Another vs.
6
, where the Supreme Court was
Kaushalya Devi Thapar and Others
Comprehensive Policy , which
considering a policy termed as “ ”
contained amongst others .
“Section II — Liability to Third Parties”
It was held that, the expression “any person” appearing therein,
included the occupant of a car, who was travelling gratuitously and
that under the terms of the policy, the insurer is liable to satisfy
the award passed in favour of the Claimant. The Supreme Court
after noticing the relevant clause of the insurance policy found
that, under Section II(1)(a) of the policy, the insurer had agreed to
indemnify the insured against all sums, which the insured shall
become legally liable to pay, in respect of death or bodily injury to
any person.
8. In the case at hand, Document-
‘B’ is the certificate of
insurance, which
reveals that the policy is a “Package Policy
, whereby the premium was deposited for own
(Private Vehicle)”
damage and other liabilities, including compulsory personal
accident cover premium and additional personal accident cover
premium for three persons (IMT 16). In light of the contents of
Document- the argument that the Insurance Company is liable
‘B’
- (Rupees two lakhs) only, per deceased person,
to pay ₹ 2,00,000/
6
(1998) 3 SCC 744
MAC App. Nos.12 and 13 of 2024 10
The New India Assurance Co. Ltd. vs. Sunita Pradhan
is a misplaced submission as the limits of liability under Section
II(1)(i) is for death or bodily injury to any persons, including
occupants carried in the vehicle.
(i) The reliance placed by the Appellant on
Jhuma Saha
(supra) lends no succour to his case, as in the said case (supra),
the controversy related to fastening the liability on the insurer, for
the death of the owner of the registered vehicle in accident. The
owner had died and no premium had been paid for death or bodily
injury of the owner. The instant case, is distinguishable from
(supra), as the deceased persons were not the owner
Jhuma Saha
of the vehicle, but were the driver and occupant thereof. That
apart, it is indubitable
that the insurance policy was a “package
policy for private car”. While on this facet the observation of the
Supreme Court in
National Insurance Company Limited vs.
7
is indispensible. Reference was made in
Balakrishnan and Another
the ratiocination to the decision of the High Court of Delhi in
8
, wherein Circular
Yashpal Luthra vs. United India Insurance Co. Ltd.
dated 16-11-2009 was issued by IRDA to CEOs of all the insurance
companies, restating the factual position relating to the liability of
insurance companies, in respect of a pillion rider on a two-wheeler
and occupants in a private car, under the Comprehensive/Package
policy. The communication inter alia stated as follows;
Insurers’ attention is
“22. ……………………..
drawn to wordings of Section II(1)(ii) of Standard
Motor Package Policy (also called ‘the Comprehensive
-wheeler under the
Policy’) for private car and two
(erstwhile) India Motor Tariff (IMT). For convenience
the relevant provisions are reproduced hereunder:
Liability to Third Parties
‘Section II—
(1) Subject to the limits of liabilities as laid
down in the Schedule hereto the company will
7
(2013) 1 SCC 731
8
2011 ACJ 1415 (Del)
MAC App. Nos.12 and 13 of 2024 11
The New India Assurance Co. Ltd. vs. Sunita Pradhan
indemnify the insured in the event of an accident
caused by or arising out of the use of the insured
vehicle against all sums which the insured shall
become legally liable to pay in respect of
—
(i) death or bodily injury to any person
including occupants carried in the vehicle
(provided such occupants are not carried for
hire or reward) but except so far as it is
necessary to meet the requirements of the
Motor Vehicles Act, the Company shall not be
liable where such death or injury arises out of
and in the course of employment of such
person by the insured.’
It is further brought to the attention of
insurers that the above provisions are in line
with the following circulars earlier issued by the
TAC on the subject:
(i) Circular M.V. No. 1 of 1978 dated 18-
3-1978 (regarding occupants carried in private
car) effective from 25-3-1977.
(ii) MOT/GEN/10 dated 2-6-1986
(regarding pillion riders on a two-wheeler)
effective from the date of the circular.
The above circulars make it clear that the
insured’s liability in respect of occupant(s) carried in
a private car and pillion rider carried on a two-
wheeler is covered under the Standard Motor
Package Policy. A copy each of the above circulars is
enclosed for ready reference.
The Authority vide Circular No.
066/IRDA/F&U/Mar-08 dated 26-3-2008 issued under
File and Use Guidelines has reiterated that pending
further orders the insurers shall not vary the
coverage, terms and conditions wording, warranties,
clauses and endorsements in respect of covers that
were under the erstwhile tariffs. Further the
Authority, vide Circular No. 019/IRDA/NL/F&U/Oct-
08 dated 6-11-2008 has mandated that insurers are
not permitted to abridge the scope of standard
covers available under the erstwhile tariffs beyond
the options permitted in the erstwhile tariffs. All
general insurers are advised to adhere to the
aforementioned circulars and any non-compliance
with the same would be viewed seriously by the
Authority. This is issued with the approval of
competent authority.
sd/-
(Prabodh Chander)
Executive Director.
”
(emphasis supplied)
(ii) The insurance companies were advised to strictly
comply with the Circular dated 16-11-2009 and Order dated 26-11-
2009 of the High Court. It is revealed that the competent authority
of the IRDA had stated on 02-06-1986 that, the Tariff Advisory
Comprehensive policy
Committee had admitted that the “ ” is
MAC App. Nos.12 and 13 of 2024 12
The New India Assurance Co. Ltd. vs. Sunita Pradhan
Package policy The decision would show that,
presently called a “ ”.
the earlier Circulars dated 18-03-1978 and 02-06-1986, continued
to be valid and effective and all insurance companies are bound to
pay the compensation in respect of the liability towards an
Comprehensive/Package ,
occupant in a car, under the “ policy”
irrespective of the terms and conditions contained in the policy.
The Supreme Court further noted that, in (supra)
Yashpal Luthra
the Delhi High Court had inter alia observed that
“Comprehensive/Package policy” of a private car covers the
occupants and where the vehicle is covered under such policy,
there is no need for the MACT to go into the question whether the
insurance company is liable to compensate for the occupants in a
private car. In fact, in view of the Tariff Advisory Committee’s
directives and those of the IRDA, such a plea was not permissible
and ought not to have been raised in the said case. The Supreme
Court thus clarified that, if the policy is a omprehensive/Package
“C
policy , the liability would be covered.
”
9. On the bedrock of the above pronouncement of the
Supreme Court and taking into consideration the facts and
circumstances and evidence in the instant case, including
Document- , the insurance policy of the vehicle, which is
‘B’
admittedly a , there is no reason
“Comprehensive/Package policy”
to interfere with the impugned Judgments of the Learned MACT
which are accordingly upheld, save to the extent of modifying the
interest rate of 10% granted by the MACT, by reduction to 9%, for
the purpose of maintaining uniformity in the interest rate, on the
compensation in all MAC Appeals disposed of by this Court.
10. Both Appeals are disposed of on the above terms.
MAC App. Nos.12 and 13 of 2024 13
The New India Assurance Co. Ltd. vs. Sunita Pradhan
11. No order as to costs.
12. Copy of this Judgment be forwarded to the Learned
MACT for information.
13. Lower Court records be remitted forthwith.
( Meenakshi Madan Rai )
Judge
10-12-2024
Approved for reporting : Yes
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