The New India Assurance Co. Ltd. v. Sunita & Ors.

1. The Appellant New India Assurance Company Limited impugns the judgment dated 23.11.2006 passed by the Motor Accident Claims Tribunal (the Claims Tribunal), whereby the Claims Tribunal awarded a compensation of Rs.4,06,948/- in favour of Respondents no.1 to 6, who are the legal representatives of deceased Babu Lal, who suffered fatal injuries in a motor vehicular accident which took place on the intervening night of 30-31.08.2003 while driving a TSR No.DL-1RF-

7119.

2. As per the case set up by the Respondents, deceased Babu Lal used to take on rent TSR No.DL-1RF-7119 from its owners Respondents no.7 and 8 (Respondents no.2 and 3 before the Claims Tribunal) on daily 2015:DHC:335 hire charges of Rs.100/-.

3. It is averred that on the night intervening of 30-31.08.2003, deceased Babu Lal was plying the earlier stated TSR on Bahadur Shah Zafar Marg, New Delhi. When he reached opposite petrol pump, Delhi Gate, the TSR driven by him met with an accident, as a result of which the TSR overturned and deceased Babu Lal suffered injuries which proved fatal. Ultimately on 03.09.2003, he succumbed to the injuries.

4. FIR No.316/2003 dated 31.08.2003 was registered in Police Station I.P. Estate. The other vehicle alleged to be involved in the accident could not be traced. The legal representatives therefore, preferred a petition under Section 163-A of the Motor Vehicles Act, 1988 (the M.V. Act) against the owner and Insurance Company of the vehicle driven by him.

5. The Claims Tribunal awarded a compensation of Rs.3,84,948/- on the assumption that under Section 163-A of the M.V. Act, the compensation can be claimed from vehicle’s owner and insurer. Para 13 of the impugned judgment is extracted hereunder:-

6. In the instant case, deceased Babu Lal was not the employee of the owner of the vehicle as he used to rent the vehicle to ply it for hire and reward on daily basis. There was no relationship of employer and employee between the two and, therefore, the legal representatives of deceased Babu Lal would not be entitled to any compensation under the Workman’s Compensation Act, 1923.

7. Similarly, while plying the vehicle for hire and reward, deceased Babu Lal was not a third party and was, therefore, not covered by the terms and conditions of the insurance policy as well.

8. In Ningamma & Anr. v. United India Insurance Company Limited, (2009) 13 SCC 710, the Supreme Court relied upon the judgment in Oriental Insurance Company Limited v. Rajni Devi, (2008) 5 SCC 736 where it was held that Section 163-A of the M.V. Act cannot be said to have any application in respect of an accident wherein the owner of the motor vehicle himself is involved. While referring to Rajni Devi in para 18 of the report, in Ningamma & Anr.(supra) the Supreme Court held as under:-

9. Since the vehicle in question had been rented out by the owner to deceased Babu Lal, he stepped into the shoes of the owner. He will not be a third party as well and the Insurance Company therefore, will not be liable to indemnify the insured nor the owner will be treated as a tortfeasor.

10. The Claims Tribunal erred in not understanding the true purport of Section 163 of the M.V. Act. The impugned judgment cannot be sustained, the same is accordingly set aside.

11. The appeal is accordingly allowed.