THE HIGH COURT OF SIKKIM : GANGTOK
(Civil Appellate Jurisdiction)
th
DATED : 10 December, 2024
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SINGLE BENCH :
THE HON’BLE MRS. JUSTICE MEENAKSHI MADAN RAI, JUDGE
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MAC App. No.14 of 2024
Appellant : The New India Assurance Co. Ltd.
versus
Respondents : Hemlata Lucksom and Another
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. Varun Pradhan, Mr.
Pradeep Sharma and Ms. Ram Devi Chettri, Advocates for the
Respondent No.1.
Mr. Tashi Wongdi Bhutia, Mr. Mahesh Subba and Ms. Anjali
Pradhan, Advocates for the Respondent No.2.
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JUDGMENT
Meenakshi Madan Rai, J.
1. On 31-08-2005, at around 05.00 a.m., a car (Maruti
800) went off the road, into the river below, truncating the life of
, Junar Lucksom. He was travelling in the
the Claimant’s son
vehicle along with three of his neighbours. All the occupants of the
vehicle perished in the accident and their bodies remained
unrecovered. Although the vehicle was recovered, the documents
pertaining to the vehicle remained untraced. The victim at the
relevant time was aged about thirty-two years and said to have
been - (Rupees twelve thousand and five
earning ₹ 12,500/
hundred) only. The Claimant (Respondent No.1 herein), filed a
Petition under Section 166 of the Motor Vehicles Act, 1988
20,15,000/-
(hereinafter, the “MV Act”), seeking compensation of ₹
(Rupees twenty lakhs and fifteen thousand) only. The Appellant
MAC App. No.14 of 2024 2
The New India Assurance Co. Ltd. vs. Hemlata Lucksom and Another
who was arrayed as one of the two Respondents before the
Learned Motor Accidents Claims Tribunal, Gangtok, Sikkim
contested the Claim Petition on grounds
(hereinafter, the “MACT”),
that, as no other vehicle was involved in the accident thus rash and
negligent driving could not be established. That, there was neither
any statutory liability nor contractual obligation, on the part of the
insurance company to pay compensation to the Claimant as the
compensation, if any would be payable by the owner of the vehicle.
That, the insurance policy was a Private Car Liability Policy which
“ ”
thereby covers only the Personal Accident Claim. The Respondent
No.3, the owner of the vehicle, also contested the Claim Petition on
grounds that all the documents of the accident vehicle were valid
and effective at the time of the accident. The driver had a valid
driving licence, hence the liability to pay compensation was on the
insurance company.
2. On the basis of the pleadings of the parties, the
Learned MACT settled the following issues for determination;
(1) Whether the claim petition/application is
maintainable?;
(2) Whether the deceased died as a result of injuries
sustained by him in the accident that occurred on
31.08.2005 while he was travelling in the accident
vehicle belonging to respondent no.3?;
(3) Whether the said vehicle was duly insured with the
respondents no.1 and 2 at the time of the accident?;
(4) Whether the deceased driver Peter Rominsh Thapa
was an authorized driver of the said vehicle holding
valid and effective driving licence; 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 no.1 and 2 can
avoid their liability? and;
(6) Whether the concerned accident occurred due to rash
and negligent driving of the deceased driver? and
(7) Whether the petitioner/claimant is entitled to the
reliefs prayed for by her?
MAC App. No.14 of 2024 3
The New India Assurance Co. Ltd. vs. Hemlata Lucksom and Another
(i) The Learned MACT decided all the issues in favour of
the Claimant and concluded inter alia that the insurance policy
Document-
‘B’ was a Package policy. The accident was due to the
rash and negligent driving of the driver and hence the claim was
maintainable. The Learned MACT observed that there was no basis
for the income of the deceased, Junar Lucksom and taking recourse
to the Notification dated 01-11-2014 of the Labour Department,
- (Rupees two
Government of Sikkim, fixed his wages at ₹ 220/
hundred and twenty) only, per day, and consequently his notional
6,600/- (Rupees six thousand and six hundred) only,
income at ₹
per month. Compensation of 10,02,040/- (Rupees ten lakhs,
₹
two thousand and forty) only, was awarded to the Claimant,
Respondent No.1 herein, with interest @ 10% per annum, from the
date of filing of the Claim Petition (i.e. 02-12-2019) till full and
final payment.
3. Aggrieved with the finding of the MACT, the Appellant
is before this Court, assailing the Judgment in MACT Case No.50 of
2019 (Hemlata Lucksom vs. New India Assurance Co. Ltd. and Others),
dated 21-03-2023. Learned Counsel for the Appellant contended
that the vehicle in accident was a private car and it is a well settled
principle that an occupant in a private car is not a third party.
That, in all likelihood the deceased was an unauthorized passenger
in the accident vehicle. The insured having paid an additional
- (Rupees three hundred) only, the Appellant
premium of ₹ 300/
- (Rupees two lakhs) only, per
had a limited liability of ₹ 2,00,000/
person. That, there was no statutory liability nor contractual
obligation on the part of the Appellant to pay the compensation to
the Claimant or to indemnify the owner of the vehicle, in light of
MAC App. No.14 of 2024 4
The New India Assurance Co. Ltd. vs. Hemlata Lucksom and Another
the above circumstances. That, the owner of the vehicle was liable
to make good the compensation. To bolster his submissions,
reliance was placed on
New India Assurance Company Ltd. vs.
1
and
Sadanand Mukhi and Others Oriental Insurance Co. Ltd. vs. Jhuma
2
.
Saha (Smt.) and Others
4. Per contra, Learned Senior Counsel for the Respondent
No.1 argued that, the accident vehicle was insured with the
Appellant by the insurer, the owner of the vehicle, thereby the
deceased persons were third parties, who qualified as a third party
has been succinctly elucidated by this Court in
Branch Manager,
National Insurance Co. Ltd., Gangtok vs. Master Suraj Subba and
3
,
Another Passi Lamu Sherpa and Another vs. The Branch Manager, New
4
and
India Assurance Co. Ltd. The Branch Manager, New India
5
Assurance Co. Ltd. vs. Smt. Urmila Biswakarma (Chettri) and Others
and by the Supreme Court in
National Insurance Co. Ltd. vs. Ashalata
6
. The Appellant has urged new grounds in Appeal which
Bhowmik
were absent -
during trial viz.; that of additional premium of ₹ 300/
(Rupees three hundred) only, paid, which created a limited liability
upon the Insurance Company extending to - (Rupees
₹ 2,00,000/
two lakhs) only, per person. No ground regarding IMT 16 was
raised. It is now a settled legal position that new grounds cannot
be urged in Appeal. In light of the foregoing discussions the
finding of the Learned MACT warrants no interference.
5. Learned Counsel for the Respondent No.2 had no
specific submissions to advance besides contending that, all
1
AIR 2009 SC 1788
2
(2007) 9 SCC 263
3
AIR 2014 Sikk 7
4
2024 SCC OnLine Sikk 24
5
MANU/SI/0030/2022
6
AIR 2018 SC 4133
MAC App. No.14 of 2024 5
The New India Assurance Co. Ltd. vs. Hemlata Lucksom and Another
documents of the vehicle were valid and effective including the
insurance policy, which being a Package policy covered all
occupants of the vehicle making the Appellant liable to pay the
compensation.
6. The rival contentions of Learned Counsel for the parties
having been heard in detail, in extenso and the records of the
Learned MACT, including the impugned Judgment carefully
perused. The question that falls for consideration before this Court
is;
Whether the MACT was correct in having granted
“
compensation to the Respondent No.1?
”
7. While addressing this question, it may relevantly be
recapitulated that this Court in (supra) had
Master Suraj Subba
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 and ambit 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) Upholding the said view, this High Court explained as
to which person would qualify as a third party. In the instant case,
MAC App. No.14 of 2024 6
The New India Assurance Co. Ltd. vs. Hemlata Lucksom and Another
the Appellant is the insurer, the Respondent No.2 (owner) is the
insured, any other person who is not a party to the insurance
policy would fall within the ambit of a third person. The term
Section 147 of the MV Act,
‘injury’ to any person as reflected in
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.
(ii) 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/
MAC App. No.14 of 2024 7
The New India Assurance Co. Ltd. vs. Hemlata Lucksom and Another
found to be an erroneous interpretation advanced by the Counsel
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.
(iii) It is worthwhile to refer to
Amrit Lal Sood and Another vs.
7
, where the Supreme Court was
Kaushalya Devi Thapar and Others
Policy , which
considering a policy termed as “Comprehensive ”
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
premium was deposited for own
(Private Vehicle)”, whereby the
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- argument that the Insurance Company is liable
‘B’ the
7
(1998) 3 SCC 744
MAC App. No.14 of 2024 8
The New India Assurance Co. Ltd. vs. Hemlata Lucksom and Another
- (Rupees two lakhs) only, per deceased person,
to pay ₹ 2,00,000/
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.
8
is indispensible. Reference was made in
Balakrishnan and Another
the ratiocination to the decision of the High Court of Delhi in
9
, 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—
8
(2013) 1 SCC 731
9
2011 ACJ 1415 (Del)
MAC App. No.14 of 2024 9
The New India Assurance Co. Ltd. vs. Hemlata Lucksom and Another
(1) Subject to the limits of liabilities as laid
down in the Schedule hereto the company will
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
MAC App. No.14 of 2024 10
The New India Assurance Co. Ltd. vs. Hemlata Lucksom and Another
Comprehensive policy
Committee had admitted that the “ ” is
Package policy
presently called a “ ”. The decision would show that,
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
“Comprehensive/Package
, the liability would be covered.
policy”
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-
‘B’ the insurance policy of the vehicle, which is
admittedly a “Comprehensive/Package policy”, there is no reason
to interfere with the impugned Judgment of the Learned MACT
which is 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.
MAC App. No.14 of 2024 11
The New India Assurance Co. Ltd. vs. Hemlata Lucksom and Another
10. Appeal is disposed of on the above terms.
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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