Insurance Cliam under Sec.163 A – as per the terms of contract of insurance, the claimant is entitled only for Rs.1 lakh but not more – because the deceased cannot be said to be a third party with respect to the insured vehicle bearing registration No. RJ 02 SA 7811. – Amendement of 2nd schdule for Rs.5 lakhs not applicable as accident took place in the year 2006

Insurance Cliam under Sec.163 A – as per the terms of contract of insurance, the claimant is entitled only for Rs.1 lakh but not more – because the deceased cannot be said to be a third party with respect to the insured vehicle bearing registration No. RJ 02 SA 7811. – Amendement of 2nd schdule for Rs.5 lakhs not applicable as accident took place in the year 2006

It is true that, in a claim under Section 163A of the Act, there is no need for the claimants to plead or establish the negligence and/or that the death in respect of which the claim petition is

sought to be established was due to wrongful act, neglect or default of the owner of the vehicle concerned.

It is also true that the claim petition under Section 163A of the Act is based on the principle of

no fault liability. However, at the same time, the deceased has to be a third party and cannot maintain a claim under Section 163A of the Act against the owner/insurer of the vehicle which is borrowed

by him as he will be in the shoes of the owner and he cannot maintain a claim under Section 163A of the Act against the owner and insurer of the vehicle bearing registration No. RJ 02 SA 7811.

In the present case, the parties are governed by the contract of insurance and under the contract of insurance the liability of the insurance company would be qua third party only. In the present

case, as observed hereinabove, the deceased cannot be said to be a third party with respect to the insured vehicle bearing registration No. RJ 02 SA 7811.

There cannot be any dispute that the liability of the insurance company would be as per the terms and conditions of the contract of insurance.

As held by this Court in the case of Dhanraj (supra), an insurance policy covers the liability incurred

by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorized representative) carried in the vehicle or damage to any property of a third party

caused by or arising out of the use of the vehicle. In the said decision, it is further held by this Court that Section 147 does not require an insurance company to assume risk for death or bodily

injury to the owner of the vehicle.

In view of the above and for the reasons stated above, in the present case, as the claim under Section 163A of the Act was made only against the owner and insurance company of the vehicle which

was being driven by the deceased himself as borrower of the vehicle from the owner of the vehicle and he would be in the shoes of the owner, the High Court has rightly observed and held that such a

claim was not maintainable and the claimants ought to have joined and/or ought to have made the claim under Section 163A of the Act against the driver, owner and/or the insurance company of the

offending vehicle i.e. RJ 29 2M 9223 being a third party to the said vehicle.

However, at the same time, even as per the contract of insurance, in case of personal accident the owner­driver is entitled to a sum of Rs.1 lakh. Therefore, the deceased, as observed hereinabove, who would be in the shoes of the owner shall be entitled to a sum of Rs.1 lakh, even as per the contract of insurance. However, it is the case on behalf of the original claimants that there is an amendment to the 2nd Schedule and a

fixed amount of Rs.5 lakh has been specified in case of death and therefore the claimants shall be entitled to Rs.5 lakh. The same cannot be accepted. In the present case, the accident took place in

the year 2006 and even the Judgment and Award was passed by the learned Tribunal in the year 2009, and the impugned Judgment and Order has been passed by the High Court in 10.05.2018, i.e.

much prior to the amendment in the 2nd Schedule. In the facts and circumstance of the present case, the claimants shall not be entitled to the benefit of the amendment to the 2nd Schedule. At

the same time, as observed hereinabove, the claimants shall be entitled to Rs.1 lakh as per the terms of the contract of insurance, the driver being in the shoes of the owner of the vehicle.

1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 9393 OF 2019

Ramkhiladi & Anr. … Appellant

Versus

The United India Insurance Company & Anr. … Respondent

J U D G M E N T

M. R. Shah, J.

  1. Feeling aggrieved and dissatisfied with the impugned

Judgment and Order dated 10.05.2018 passed by the High Court of

Judicature for Rajasthan at Jaipur in SBCMA No. 2614 of 2009, by

which the High Court has allowed the said appeal preferred by the

respondent­insurance company by quashing and setting aside the

Judgment and Award passed by the learned Motor Accident Claims

Tribunal and consequently has dismissed the claim petition

2

preferred by the original claimants, the original claimants have

preferred the present appeal.

  1. The facts leading to the present appeal in nutshell are as

under:

2.1 That in a vehicular accident which occurred on 02.10.2006,

one Chotelal alias Shivram died. The deceased was travelling on

motorcycle bearing registration No. RJ 02 SA 7811. At this stage, it

is required to be noted that, even as per the claimants, the accident

occurred on account of rash and negligent driving of the driver of

another motorcycle bearing registration No. RJ 29 2M 9223. That

the appellants herein filed a claim petition before the Motor

Accident Claims Tribunal, Laxmangarh (Alwar), Rajasthan

(hereinafter referred to as the learned Tribunal) under Section 163A

of the Motor Vehicles Act (hereinafter referred to as the Act). At this

stage, it is required to be noted that the claim petition was preferred

only against the owner of the motorcycle bearing registration No. RJ

02 SA 7811 and its insurance company. Neither the driver nor the

owner or the insurance company of the vehicle bearing registration

No. RJ 29 2M 9223 were joined as opponents in the claim petition.

3

Therefore, as such, no claim petition was filed against the driver,

owner and the insurance company of the vehicle involved in the

accident i.e. motorcycle bearing registration No. RJ 29 2M 9223.

That an objection was raised by the respondent­insurance

company­insurer of motorcycle bearing registration No. RJ 02 SA

7811 that as according to the claimants and even so stated in the

FIR, the driver of the motorcycle bearing registration No. RJ 29 2M

9223 was rash and negligent and the claimants have not filed the

claim petition against the owner of the said vehicle, the claim

petition is required to be dismissed against the insurance company

of the motorcycle bearing registration No. RJ 02 SA 7811. The

learned Tribunal framed the following issues:

  1. Whether accident was caused on 02.10.2006 by driver

Chhotelal alias Shivram driving Motorcycle RJ 02 SA

7811 vehicle in question in rash and negligent manner?

  1. Whether the driver was driving the said vehicle being in

the employment of vehicle owner opposite party No. 1

Bhagwan Sahay in his interest or with his

permission/knowledge?

4

  1. Consequent to occurring death of Chhotelal alias

Shivram (driver) in the alleged accident, how much valid

amount and in what manner, the applicants are entitled

to get and from which opposite parties?

  1. Whether the objections raised in the preliminary/specific

statements are significant, if yes then its effect?

  1. Relief?

2.2 On appreciation of evidence, the learned Tribunal answered

Issue Nos. 1 and 2 in favour of the claimants and held that the

death of the deceased Chotelal alias Shivram had occurred from the

motorcycle involved in the accident and the said motorcycle was

insured with the respondent­insurance company, the insurance

company is liable to pay the compensation under Section 163A of

the Act. Consequently, by the Judgment and Award dated

24.02.2009, the learned Tribunal partly allowed the said claim

petition and awarded a total sum of Rs.3,67,000/­as compensation

along with the interest @ 6% per annum from the date of filing of

the claim petition till the date of the actual payment

5

2.3 Feeling aggrieved and dissatisfied with the Judgment and

Award passed by the learned Tribunal holding the insurance

company of the motorcycle bearing registration No. RJ 02 SA 7811

liable to pay the compensation, the respondent­insurance companyinsurer of motorcycle bearing registration No. RJ 02 SA 7811

preferred an appeal before the High Court. That, by the impugned

Judgment and Order, the High Court has allowed the said appeal

and has quashed and set aside the Judgment and Award passed by

the learned Tribunal and consequently has dismissed the claim

petition on the ground that even as per the informant Vikram

Singh, who lodged the FIR, the accident had occurred on account of

rash and negligent driving by the driver of motorcycle bearing

registration No. RJ 29 2M 9223, however, the claimants have not

filed the claim petition against the owner of the said vehicle and in

fact, the claim petition should have been filed by the claimants

against the owner of vehicle bearing No. RJ 29 2M 9223 to seek

compensation.

6

2.4 Feeling aggrieved and dissatisfied with the impugned

Judgment and Order passed by the High Court, the original

claimants have preferred the present appeal.

  1. Shri Abhishek Gupta, learned advocate appearing on behalf of

the appellants­original claimants has vehemently submitted that

the High Court has materially erred in dismissing the claim petition

solely on the ground that the claimants have not filed the claim

petition against the owner of the motorcycle bearing registration No.

RJ 29 2M 9223.

3.1 It is submitted by the learned advocate appearing on behalf of

the appellants­original claimants that, as such, the High Court has

not properly appreciated the fact that the claim petition preferred by

the original claimants was under Section 163A of the Act and,

therefore, when the claim petition was preferred under Section

163A of the Act, there is no need for the claimants to plead or

establish that the death in respect of which the claim petition has

been made was due to any wrongful act or neglect or default of

owner of vehicle concerned.

7

3.2 It is further submitted by the learned advocate appearing on

behalf of the appellants­original claimants that the claim petition

filed by the original claimants was based on the principle of no­fault

liability. It is submitted that the claimants could have elected to

file the claim petition either under Section 166 read with Section

140 of the Act against the owner/insurer of offending vehicle i.e. RJ

29 2M 9223 on the basis of the fault liability or under Section 163A

either against the owner/insurer of the vehicle being driven by the

deceased at the time of accident i.e. RJ 02 SA 7811 or against the

owner/insurer of offending vehicle i.e. RJ 29 2M 9223 on the basis

of no­fault liability. It is submitted by the learned advocate

appearing on behalf of the appellants­original claimants that, as

such, the deceased was not the owner of the vehicle bearing

registration No. RJ 02 SA 7811 and in fact and as observed by the

learned Tribunal, he was in employment of owner of the vehicle No.

RJ 02 SA 7811 and therefore a third party. It is submitted that

having elected to prefer the claim under Section 163A of the Act on

the principle of no­fault liability against the owner/insurer of the

vehicle being driver by the deceased at the time of the accident i.e.

8

RJ 02 SA 7811, the claim was perfectly just and maintainable and

the learned Tribunal made no error in allowing the same. In

support of the above, the learned advocate appearing on behalf of

the original claimants has heavily relied upon the decision of this

Court in the case of Reshma Kumari v. Madan Mohan (2013) 9

SCC 65.

3.3 Learned counsel appearing on behalf of the original claimants

has further submitted that Section 163A of the Act has to be

interpreted in keeping with the intention of the Legislature and the

social perspective it seeks to achieve. It is a provision which is

beneficial in nature and it has been enacted as a measure of social

security. It is submitted that Section 163A of the Act commences

with a “non­obstante” clause. Liability to pay the compensation is

on “owner of the motor vehicle” or “the authorized insurer”. It is

submitted that the word “owner” has been defined under Section

2(30) to mean “a person in whose name a motor vehicle stands

registered, and where such person is a minor, the guardian of such

minor, and in relation to a motor vehicle which is the subject of a

hire­purchase, agreement or an agreement of lease or an agreement

9

of hypothecation, the person in possession of the vehicle under that

agreement.” It is submitted that having regard to the said definition

of “owner”, this Court in Naveen Kumar v. Vijay Kumar (2018) 3

SCC 1 has held the registered owner of the vehicle as per the

registering authority liable in respect of the offending vehicle despite

sale/purchase of vehicle by him. It is submitted that, in paragraph

6, it is held that the person in whose name the motor vehicle stands

registered is the owner of the vehicle for the purpose of the Act.

3.4 It is further submitted by the learned counsel appearing on

behalf of the appellants­original claimants that for claiming the

compensation under Section 163A of the Act, the claimants are only

required to prove that the death or permanent disablement is as a

result of the accident arising out of the use of motor vehicle and it

will cover those who are themselves driving a vehicle, the

passengers and also pedestrians. It is submitted that in an

application under Section 163A of the Act, fault of the owner of the

vehicle or vehicles concerned or of any other person need not be

established.

10

3.5 It is further submitted by the learned counsel appearing on

behalf of the appellants­original claimants that, therefore, as the

present claim premised on the no­fault liability under Section 163A

of the Act by the legal heirs of the deceased, the same was

maintainable against the owner and insurer of the motor vehicle

which was being driven by him, more particularly, when the

deceased was not the owner of the vehicle and that respondent No.

2 was the registered owner of the concerned vehicle and, therefore,

the insurance company cannot be absolved from its liability to pay

the compensation as awarded by the learned Tribunal.

3.6 Making the above submissions, it is prayed to allow the

present appeal and quash and set aside the impugned Judgment

and Order passed by the High Court and to restore the Judgment

and Award passed by the learned Tribunal holding the owner of the

vehicle bearing registration No. RJ 02 SA 7811 and the insurer of

the said vehicle to pay the compensation.

3.7 It is further submitted by the learned counsel appearing on

behalf of the appellants­original claimants that, as such, the

amount of compensation awarded by the learned Tribunal i.e.

11

Rs.3,67,000/­ should be enhanced to Rs.5,00,000/­ with interest

as awarded by the learned Tribunal in light of the fact that the 2nd

Schedule to the Motor Vehicle Act has been amended with effect

from 22.05.2018 and a fixed compensation of Rs.5,00,000/­ has

been specified in the case of death. It is submitted that this Court

has enhanced the compensation even in those cases wherein no

appeal for enhancement has been preferred against the order of the

Tribunal. In support thereof, the learned counsel appearing on

behalf of the original claimants has relied upon the decision of this

Court in the case of Jitender Trivedi v. Kasam Daud (2015) 4

SCC 237.

  1. The present appeal is vehemently opposed by Shri Amit Kumar

Singh, learned advocate appearing on behalf of the respondentinsurance company.

4.1 It is submitted by the learned advocate appearing on behalf of

the respondent­insurance company that, in the present case, the

deceased borrowed the motorcycle bearing registration No. RJ 02

SA 7811 from the registered owner Bhagwan Sahay. It is submitted

that another motorcycle bearing registration No. RJ 29 2M 9223

12

which was driven in a rash and negligent manner came and hit the

motorcycle on which the deceased was travelling. It is submitted

that the FIR was lodged against the owner of motorcycle bearing

registration No. RJ 29 2M 9223. It is thus clear that the insured

vehicle on which the deceased was travelling i.e. RJ 02 SA 7811

was not negligent. It is submitted that, in the present case, the

claimants of the deceased filed an application under Section 163A

of the Act and sought compensation only from the owner of the

insured vehicle i.e. RJ 02 SA 7811. It is submitted that the

learned Tribunal without any evidence on record has concluded

that the deceased was working under the employment of the

registered owner. It is submitted that, therefore, in the facts and

circumstances of the case, the High Court has rightly allowed the

appeal preferred by the insurer by observing that the claimants

ought to have filed the claim petition against the owner of the

vehicle bearing registration No. RJ 29 2M 9223. In support of

impugned Judgment and Order passed by the High Court, learned

advocate appearing on behalf of the insurance company has made

the following submissions:

13

(i) That the deceased was not a third party with respect to the

insured vehicle. He was a third party with respect to the motorcycle

bearing registration No. RJ 29 2M 9223;

(ii) That the claimants when failed to claim the compensation

from the owner of the motorcycle bearing registration No. RJ 29 2M

9223, cannot be permitted, as the driver of the said motorcycle, to

claim compensation from the owner of the vehicle bearing

registration No. RJ 02 SA 7811;

(iii) That under the Motor Vehicles Act, only the third party claims

are payable;

(iv) That in the present case, the deceased was not a third party

given that he had borrowed the vehicle from the registered owner

Shri Bhagwan Sahay Meena;

(v) That in the case of Ningamma v. United India Insurance

Co. Ltd. (2009) 13 SCC 710 and New India Assurance Co. Ltd. V.

Sadanand Mukhi (2009) 2 SCC 417, this Court has held that the

owner of the vehicle or his legal representatives or the borrower of

the vehicle cannot raise a claim for an accident in which there was

no negligence on the part of the insured vehicle. It is submitted

14

that in the aforesaid decisions, this Court has held that the

borrower of the vehicle steps into the shoes of the owner and,

therefore, the borrower of the vehicle or his legal representatives are

not entitled to compensation from the insurer under the Act. It is

submitted that the deceased in the present case has stepped into

the shoes of the owner and therefore not entitled to any third party

compensation from the insured vehicle; and

(vi) That in the case of Dhanraj v. New India Assurance Co. Ltd.

(2004) 8 SCC 553 it is held by this Court that an insurance policy

covers the liability incurred by the insured in respect of death of or

bodily injury to any person (including an owner of the goods or his

authorized representative) carried in the vehicle or damage to any

property of a third party caused by or arising out of the use of the

vehicle. It is further held that Section 147 does not require an

insurance company to assume risk for death or bodily injury to the

owner of the vehicle.

4.2 It is further submitted by the learned advocate appearing on

behalf of the insurance company that in the present case the

contract of insurance specifically provides that in case of personal

15

accident the owner cum driver is only entitled to a sum of Rs.1

Lakh. It is submitted that therefore the deceased who had stepped

into the shoes of the owner at the most may be entitled to a sum of

Rs.1 Lakh only. It is submitted that in the case of Oriental

Insurance Co. Ltd. V. Rajni Devi (2008) 5 SCC 736 when the

compensation is claimed for the death of the owner or another

passenger of the vehicle, the contract of insurance being governed

by the contract qua contract, the claim of the insurance company

would depend upon the terms thereof. It is submitted that, in the

said decision, this Court did not accept the view taken by the

Tribunal that while determining the amount of compensation, the

only factor which would be relevant would be merely the use of the

motor vehicle. It is submitted that, in the aforesaid decision, in

paragraph 11, it is further observed by this Court that the liability

under Section 163A of the Act is on the owner of the vehicle as a

person cannot be both, a claimant as also a recipient.

4.3 Relying upon the decision of this Court, in the case of

National Insurance Co. Ltd. V. Ashalata Bhowmik (2018) 9

SCC 801, it is submitted that the parties shall be governed by the

16

terms and conditions of the contract of insurance. It is submitted

that, therefore, at the most, the claimants may be entitled to Rs. 1

lakh only, the deceased being in the shoes of the owner.

4.4 Now, so far as the submission on behalf of the appellantsoriginal claimants that there is an amendment to the 2nd Schedule,

and a fixed compensation of Rs.5 lakhs has been specified in the

case of death and, therefore, the claimants shall be entitled to Rs.5

lakhs, it is vehemently submitted by the learned advocate appearing

on behalf of the insurance company that the said amendment shall

not be applicable retrospectively. It is submitted that, in the

present case, the accident had taken place in the year 2006 and

even the Judgment and Award was passed by the learned Tribunal

in the year 2009, and the impugned Judgment and Order has been

passed by the High Court on 18.02.2018, i.e. prior to the

amendment in the 2nd Schedule.

4.5 Making the above submissions, it is prayed to dismiss the

present appeal and/or partly allow the appeal to the extent of Rs.1

Lakh as per the terms and conditions of the contract of insurance.

17

  1. Heard learned counsel appearing on behalf of the respective

parties at length. We have also perused and considered the

Judgment and Award passed by the learned Tribunal as well as the

impugned Judgment and Order passed by the High Court and the

evidence on record. The short question which is posed for

consideration of this Court is whether, in the facts and

circumstances of the case and in a case where the driver, owner

and the insurance company of another vehicle involved in an

accident and whose driver was negligent are not joined as parties to

the claim petition, meaning thereby that no claim petition is filed

against them and the claim petition is filed only against the owner

and the insurance company of another vehicle which was driven by

the deceased himself and the deceased being in the shoes of the

owner of the vehicle driven by himself, whether the insurance

company of the vehicle driven by the deceased himself would be

liable to pay the compensation under Section 163A of the Act?;

Whether the deceased not being a third party to the vehicle No. RJ

02 SA 7811 being in the shoes of the owner can maintain the claim

under Section 163A of the Act from the owner of the said vehicle?

18

5.1 The learned Tribunal held that even in absence of the driver,

owner and the insurance company of another vehicle involved in an

accident and whose driver was solely negligent, the application

under Section 163A of the Act would be maintainable against the

owner and the insurance company of the vehicle which was driven

by the deceased himself, firstly on the ground that the deceased

was in employment of the owner of the vehicle which was driven by

him and secondly, in an application under Section 163A of the Act,

the negligence is not required to be established and proved and it is

enough to establish and prove that the deceased has died in a

vehicular accident and while driving a vehicle. The High Court has

not agreed with the same and by the impugned Judgment and

Order has held that as the claimants have not filed the claim

petition against the owner of another vehicle whose driver was in

fact negligent, even as per the claimants and the claim petition

should have been filed by the claimants against the owner of

another vehicle to seek the compensation, the application under

Section 163A of the Act against the insurance company of the

vehicle driven by the deceased himself is liable to be dismissed.

19

5.2 While answering the aforesaid question involved in the present

case, first of all, the findings recorded by the learned Tribunal on

Issue No. 2 is required to be dealt with and considered. The learned

Tribunal framed Issue No. 2 to the effect whether the deceaseddriver was driving the vehicle­motor cycle bearing registration No.

RJ 02 SA 7811 being in employment of the vehicle owner­opposite

party­Bhagwan Sahay in his interest or with his

permission/knowledge?

5.3 While answering the finding recorded by the learned Tribunal

on Issue No. 2, it appears that, as such, the learned Tribunal has

not at all answered the aforesaid issue. While answering Issue No.

2, there is no specific finding whether the deceased­driver was in

employment of the opponent­owner Bhagwan Sahay or not. Even

otherwise, no evidence is led by the claimants to prove that the

deceased­driver was in employment of the opponent­owner

Bhagwan Sahay. Despite the above, while answering Issue No. 4

there is some observation made by the learned Tribunal that the

deceased­driver was in employment of the opponent­owner

Bhagwan Sahay, which is not supported by any evidence on record.

20

Under the circumstances, the deceased­driver cannot be said to be

in employment of the opponent­owner Bhagwan Sahay and,

therefore, he can be said to be permissible user and/or borrower of

motor vehicle owned by the opponent­owner Bhagwan Sahay. With

these findings, the main question posed for consideration of this

Court referred to hereinabove is required to be considered.

5.4 An identical question came to be considered by this Court in

the case of Ningamma (supra). In that case, the deceased was

driving a motorcycle which was borrowed from its real owner and

met with an accident by dashing against a bullock cart i.e. without

involving any other vehicle. The claim petition was filed under

Section 163A of the Act by the legal representatives of the deceased

against the real owner of the motorcycle which was being driven by

the deceased. To that, this Court has observed and held that since

the deceased has stepped into the shoes of the owner of the vehicle,

Section 163A of the Act cannot apply wherein the owner of the

vehicle himself is involved. Consequently, it was held that the legal

representatives of the deceased could not have claimed the

compensation under Section 163A of the Act. Therefore, as such, in

21

the present case, the claimants could have even claimed the

compensation and/or filed the claim petition under Section 163A of

the Act against the driver, owner and insurance company of the

offending vehicle i.e. motorcycle bearing registration No. RJ 29 2M

9223, being a third party with respect to the offending vehicle.

However, no claim under Section 163A was filed against the driver,

owner and/or insurance company of the motorcycle bearing

registration No. RJ 29 2M 9223. It is an admitted position that

the claim under Section 163A of the Act was only against the owner

and the insurance company of the motorcycle bearing registration

No. RJ 02 SA 7811 which was borrowed by the deceased from the

opponent­owner Bhagwan Sahay. Therefore, applying the law laid

down by this Court in the case of Ningamma (supra), and as the

deceased has stepped into the shoes of the owner of the vehicle

bearing registration No. RJ 02 SA 7811, as rightly held by the High

Court, the claim petition under Section 163A of the Act against the

owner and insurance company of the vehicle bearing registration

No. RJ 02 SA 7811 shall not be maintainable.

22

5.5 It is true that, in a claim under Section 163A of the Act, there

is no need for the claimants to plead or establish the negligence

and/or that the death in respect of which the claim petition is

sought to be established was due to wrongful act, neglect or default

of the owner of the vehicle concerned. It is also true that the claim

petition under Section 163A of the Act is based on the principle of

no fault liability. However, at the same time, the deceased has to be

a third party and cannot maintain a claim under Section 163A of

the Act against the owner/insurer of the vehicle which is borrowed

by him as he will be in the shoes of the owner and he cannot

maintain a claim under Section 163A of the Act against the owner

and insurer of the vehicle bearing registration No. RJ 02 SA 7811.

In the present case, the parties are governed by the contract of

insurance and under the contract of insurance the liability of the

insurance company would be qua third party only. In the present

case, as observed hereinabove, the deceased cannot be said to be a

third party with respect to the insured vehicle bearing registration

No. RJ 02 SA 7811. There cannot be any dispute that the liability

of the insurance company would be as per the terms and conditions

23

of the contract of insurance. As held by this Court in the case of

Dhanraj (supra), an insurance policy covers the liability incurred

by the insured in respect of death of or bodily injury to any person

(including an owner of the goods or his authorized representative)

carried in the vehicle or damage to any property of a third party

caused by or arising out of the use of the vehicle. In the said

decision, it is further held by this Court that Section 147 does not

require an insurance company to assume risk for death or bodily

injury to the owner of the vehicle.

5.6 In view of the above and for the reasons stated above, in the

present case, as the claim under Section 163A of the Act was made

only against the owner and insurance company of the vehicle which

was being driven by the deceased himself as borrower of the vehicle

from the owner of the vehicle and he would be in the shoes of the

owner, the High Court has rightly observed and held that such a

claim was not maintainable and the claimants ought to have joined

and/or ought to have made the claim under Section 163A of the Act

against the driver, owner and/or the insurance company of the

24

offending vehicle i.e. RJ 29 2M 9223 being a third party to the said

vehicle.

5.7 Now, so far as the reliance placed upon by the learned

Advocate for the claimants on the decision of this Court in the case

of Naveen Kumar (supra), on considering the issue involved in that

decision, we are of the opinion that the said decision shall not be

applicable to the facts of the case on hand and/or the same shall

not be of any assistance to the claimants. In that case, the issue

was as to who could be said to be the registered owner of the vehicle

and the liability of the owner who sold the vehicle, but his name

continued to be as the owner with the registering authority. To

that, it was held that the person in whose name the motor vehicle

stands registered is the owner of the vehicle for the purpose of the

Act.

5.8 However, at the same time, even as per the contract of

insurance, in case of personal accident the owner­driver is entitled

to a sum of Rs.1 lakh. Therefore, the deceased, as observed

hereinabove, who would be in the shoes of the owner shall be

entitled to a sum of Rs.1 lakh, even as per the contract of

25

insurance. However, it is the case on behalf of the original

claimants that there is an amendment to the 2nd Schedule and a

fixed amount of Rs.5 lakh has been specified in case of death and

therefore the claimants shall be entitled to Rs.5 lakh. The same

cannot be accepted. In the present case, the accident took place in

the year 2006 and even the Judgment and Award was passed by

the learned Tribunal in the year 2009, and the impugned Judgment

and Order has been passed by the High Court in 10.05.2018, i.e.

much prior to the amendment in the 2nd Schedule. In the facts

and circumstance of the present case, the claimants shall not be

entitled to the benefit of the amendment to the 2nd Schedule. At

the same time, as observed hereinabove, the claimants shall be

entitled to Rs.1 lakh as per the terms of the contract of insurance,

the driver being in the shoes of the owner of the vehicle.

5.9 Now, so far as the submission made on behalf of the claimants

that in a claim under Section 163A of the Act mere use of the

vehicle is enough and despite the compensation claimed by the

heirs of the owner of the motorcycle which was involved in the

accident resulting in his death, the claim under Section 163A of the

26

Act would be maintainable is concerned, in view of the decision of

this Court in Rajni Devi (supra), the aforesaid cannot be accepted.

In Rajni Devi (supra), it has been specifically observed and held

that the provisions of Section 163A of the Act cannot be said to

have any application with regard to an accident wherein the owner

of the motor vehicle himself is involved. After considering the

decisions of this Court in the cases of Oriental Insurance Co. Ltd.

V. Jhuma Saha (2007) 9 SCC 263; Dhanraj (supra); National

Insurance Co. Ltd. V. Laxmi Narain Dhut (2007) 3 SCC 700 and

Premkumari v. Prahlad Dev (2008) 3 SCC 193, it is ultimately

concluded by this Court that the liability under Section 163A of the

Act is on the owner of the vehicle as a person cannot be both, a

claimant as also a recipient and, therefore, the heirs of the owner

could not have maintained the claim in terms of Section 163A of the

Act. It is further observed that, for the said purpose, only the terms

of the contract of insurance could be taken recourse to. In the

recent decision of this Court in the case of Ashalata Bhowmik

(supra), it is specifically held by this Court that the parties shall be

governed by the terms and conditions of the contract of insurance.

27

Therefore, as per the contract of insurance, the insurance company

shall be liable to pay the compensation to a third party and not to

the owner, except to the extent of Rs.1 lakh as observed

hereinabove.

  1. In view of the above and for the reasons stated above, the

present appeal is partly allowed to the aforesaid extent and it is

observed and held that the original claimants shall be entitled to a

sum of Rs.1 lakh only with interest @ 7.5 per cent per annum from

the date of the claim petition till realization. In the facts and

circumstance of the present case, there shall be no order as to

costs.

………………………..J.

(ASHOK BHUSHAN)

…………………………..J.

(M. R. SHAH)

New Delhi,

January 7, 2020.