M.V. ACT = whether compensation in a motor vehicle accident case is payable to a claimant for both heads, viz., loss of earning/earning capacity as well as permanent disability. = The Tribunal, after holding that the accident was caused due to the negligence of the driver of the bus belonging to the Transport Corporation, by order dated 30.11.2000, awarded a sum of Rs. 9,42,822/- as total compensation by adopting the multiplier of 13 in terms of the second schedule to the Motor Vehicles Act, 1988 (hereinafter referred to as “the Act”). (c) Dis-satisfied with the award of the Tribunal, the appellant preferred an appeal being CMA No. 150 of 2001 before the High Court praying for higher compensation, on the other hand, the Transport Corporation also preferred an appeal being CMA No. 82 of 2001 for reduction of the compensation. (d) The High Court, by impugned common judgment dated 29.01.2007, reduced the compensation from Rs. 9,42,822/- to Rs. 6,72,822/-. Aggrieved by the reduction in the compensation amount, the appellant has preferred the present appeals by way of special leave for enhancement of the compensation. = In the light of the above discussion, the appellant is entitled to the following additional amount: a) Towards 85% permanent disability … Rs. 1,00,000/- b) Towards loss of earning/earning capacity by applying the multiplier 13 … Rs. 80,000/- (in addition to the amount of Rs. 3,20,000/- fixed by the High Court) Accordingly, in addition to the amount awarded by the High Court, the claimant/the appellant herein is entitled to an additional amount of Rs. 1,80,000/-. Further, we make it clear that altogether the appellant is entitled to a total compensation of Rs. 8,52,822/- with interest at the rate of 9% from the date of claim petition till the date of deposit. 19) The appeals filed by the claimant/appellant are allowed in part to the extent mentioned above with no order as to costs.

published in http://judis.nic.in/supremecourt/imgs1.aspx?filename=40482
Page 1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 4816-4817 OF 2013
(Arising out of SLP (C) Nos. 15531-15532 of 2007)
S. Manickam .... Appellant (s)
Versus
Metropolitan Transport Corp. Ltd. .... Respondent(s)
J U D G M E N T
P. Sathasivam, J.
1) Leave granted.
2) The important question which arise for consideration in
these appeals is
whether compensation in a motor vehicle
accident case is payable to a claimant for both heads, viz.,
loss of earning/earning capacity as well as permanent
disability. 
3) These appeals are directed against the common
judgment and order dated 29.01.2007 passed by the High
Court of Judicature at Madras in C.M.A. Nos. 82 and 150 of
1Page 2
2001 whereby the High Court partly allowed the appeal filed
by the respondent-herein and dismissed the appeal preferred
by the appellant-herein.
4) Brief facts:
(a) On 27.01.1997, when the claimant/the appellant herein
was alighting from the bus owned by the Metropolitan
Transport Corporation Limited (in short “the Transport
Corporation”) – respondent herein, the conductor of the bus
blown the whistle without noticing him.
Due to the sudden
movement of the bus, the appellant fell down and the rear
wheel of the bus rammed over on his right leg and he
sustained severe injuries on his head, right hand and chest.
After treatment, his right leg below the knee was amputated.
At the time of accident, he was 45 years of age. He made a
claim before the Motor Accidents Claims Tribunal (“the
Tribunal” for short), Chennai in O.P. No. 1667 of 1997
claiming a sum of Rs. 21,00,000/- as compensation. 
(b) The Tribunal, after holding that the accident was caused
due to the negligence of the driver of the bus belonging to
the Transport Corporation, by order dated 30.11.2000,
2Page 3
awarded a sum of Rs. 9,42,822/- as total compensation by
adopting the multiplier of 13 in terms of the second schedule
to the Motor Vehicles Act, 1988 (hereinafter referred to as
“the Act”). 
(c) Dis-satisfied with the award of the Tribunal, the
appellant preferred an appeal being CMA No. 150 of 2001
before the High Court praying for higher compensation, on
the other hand, the Transport Corporation also preferred an
appeal being CMA No. 82 of 2001 for reduction of the
compensation. 
(d) The High Court, by impugned common judgment dated
29.01.2007, reduced the compensation from Rs. 9,42,822/-
to Rs. 6,72,822/-. Aggrieved by the reduction in the
compensation amount, the appellant has preferred the
present appeals by way of special leave for enhancement of
the compensation. 
5) Heard Mr. P.B. Suresh, learned counsel for the
claimant/appellant and Mr. B. Balaji, learned counsel for the
Respondent-Transport Corporation.
Discussion:
3Page 4
6) As posed at the first instance, mainly, we have to
consider whether the High Court is justified in disallowing the
claim under the head permanent disability when the
appellant had sustained 85% permanent disability by way of
amputation of his right leg below the knee. Incidentally, this
Court has to consider whether the High Court is equally
justified in reducing the multiplier from 13, as adopted by the
Tribunal, to 10.
7) Inasmuch as the present appeals are preferred by the
victim/claimant for enhancement of the compensation, there
is no need to traverse the facts leading to the accident. In
other words, the finding that the accident occurred due to
the negligent driving of the driver of the bus belonging to the
Transport Corporation has become final.
8) It is also not in dispute that based on the evidence of
the claimant (PW-1), the evidence with regard to permanent
disability of 85%, amputation of the right leg below the knee,
his age and avocation, the Tribunal has awarded a sum of Rs.
9,42,822/- as compensation with interest @ 12% p.a. on the
said amount. The High Court, while considering the appeals
4Page 5
of the Transport Corporation as well as the claimant, placed
reliance on a Full Bench decision of the same Court in
Cholan Roadways Corporation Limited, Kumbakonam
vs. Ahmed Thambi and Others, 2006 (4) CTC 433 wherein
it was held that if the injured is compensated for loss of
earning and loss of earning capacity, compensation need not
be awarded separately for permanent disability. Based on
the said principle laid down in the Full Bench decision,
learned Single Judge directed a reduction of Rs. 1,00,000/-,
fixed under the head ‘permanent disability’, from the total
award.
9) This Court, in Ramesh Chandra vs. Randhir Singh
and Others, 1990 (3) SCC 723, has categorically held that
compensation can be payable both for loss of earning as well
as disability suffered by the claimant.
10) In addition to the same, in B. Kothandapani vs. Tamil
Nadu State Transport Corporation Limited, (2011) 6
SCC 420, this Court (speaking through one of us) after
considering the Full Bench decision of the Madras High Court
in Cholan Roadways (supra), disagreed with the said view
5Page 6
and granted separate compensation under the head
permanent disability even after grant of compensation under
loss of earning/earning capacity. The following conclusion is
relevant:
“14. In Ramesh Chandra v. Randhir Singh while
considering award of compensation for permanent
disability (right foot amputated) caused by the accident
under Section 110-B of the Motor Vehicles Act, 1939 which
is similar to Section 168(1) of the Motor Vehicles Act,
1988, this Court upheld the award of compensation under
the separate head of pain, suffering and loss of enjoyment
of life, apart from the head of loss of earnings. The
discussion and ultimate conclusion are relevant which read
as under:
“7. With regard to Ground 19 covering the question
that the sum awarded for pain, suffering and loss of
enjoyment of life, etc. termed as general damages
should be taken to be covered by damages granted for
loss of earnings is concerned that too is misplaced and
without any basis. The pain and suffering and loss of
enjoyment of life which is a resultant and permanent
fact occasioned by the nature of injuries received by
the claimant and the ordeal he had to undergo. If
money be any solace, the grant of Rs. 20,000 to the
claimant represents that solace. Money solace is the
answer discovered by the law of torts. No substitute has
yet been found to replace the element of money. This,
on the face of it appeals to us as a distinct head, quite
apart from the inability to earn livelihood on the basis
of incapacity or disability which is quite different. The
incapacity or disability to earn a livelihood would have
to be viewed not only in praesenti but in futuro on
reasonable expectancies and taking into account
deprival of earnings of a conceivable period. This head
being totally different cannot in our view overlap the
grant of compensation under the head of pain, suffering
and loss of enjoyment of life. One head relates to the
impairment of person’s capacity to earn, the other
relates to the pain and suffering and loss of enjoyment
of life by the person himself. For these reasons, we are
6Page 7
of the considered view that the contentions raised by
the truck owner appellant in that behalf must be
negatived and we hereby negative them.”
15. It is true that the compensation for loss of earning
power/capacity has to be determined based on various
aspects including permanent injury/disability. At the same
time, it cannot be construed that compensation cannot be
granted for permanent disability of any nature. For
example, take the case of a non-earning member of a
family who has been injured in an accident and sustained
permanent disability due to amputation of leg or hand, it
cannot be construed that no amount needs to be granted
for permanent disability. It cannot be disputed that apart
from the fact that the permanent disability affects the
earning capacity of the person concerned, undoubtedly,
one has to forego other personal comforts and even for
normal avocation they have to depend on others.
After laying down the above ratio regarding merits of that
case, it was concluded:
“16. In the case on hand, two doctors had explained the
nature of injuries, treatment received and the disability
suffered due to partial loss of eyesight and amputation of
middle finger of the right hand and we have already
adverted to the avocation, namely, at the time of accident,
he was working as foreman in M/s Armstrong Hydraulics
Ltd. Taking note of his nature of work, partial loss in
eyesight and loss of middle finger of the right hand, not
only affect his earning capacity but also affect normal
avocation and day-to-day work. In such circumstance, we
are of the view that the Tribunal was fully justified in
granting a sum of Rs. 1,50,000 towards permanent
disability.”
The above decision makes it clear that the ratio laid down by
the Full Bench of the Madras High Court in Cholan
Roadways (supra) has not been accepted by this Court.
7Page 8
11) Following the ratio in B. Kothandapani (supra) in the
subsequent decision, viz., K. Suresh vs. New India
Assurance Co. Ltd. and Another, 2012 (10) JT 484,
another Bench of this Court, awarded separate amount for
permanent disability apart from fixing compensation under
the head ‘loss of earning’ or ‘earning capacity’.
12) In matters of determination of compensation,
particularly, under the Motor Vehicles Act, both the tribunals
and the High Courts are statutorily charged with a
responsibility of fixing a “just compensation”. It is true that
determination of “just compensation” cannot be equated to a
bonanza. On the other hand, the concept of “just
compensation” suggests application of fair and equitable
principles and a reasonable approach on the part of the
tribunals and the courts. We hold that the determination of
quantum in motor accidents cases and compensation under
the Workmen’s Compensation Act, 1923 must be liberal
since the law values life and limb in free country in generous
scales. The adjudicating authority, while determining the
8Page 9
quantum of compensation, has to take note of the sufferings
of the injured person which would include his inability to lead
a full life, his incapacity to enjoy the normal amenities which
he would have enjoyed but for the injuries and his ability to
earn as much as he used to earn or could have earned.
While computing compensation, the approach of the tribunal
or a court has to be broad based and sometimes it would
involve some guesswork as there cannot be any precise
formula to determine the quantum of compensation.
13) Keeping the above principles in mind, there is no
difficulty in holding that the High Court has committed an
error in setting aside the award amount of Rs. 1,00,000/-
under the head ‘permanent disability’ on the ground that
substantial amount had been fixed under the head ‘loss of
earning’ and ‘loss of earning capacity’. It is not in dispute
that at the time of the accident, the appellant was aged
about 45 years and he was the proprietor of Parvathy
Furniture Mart and 15 persons were working under him.
Based on the evidence, the Tribunal has determined his
income as Rs. 8,000/- per month.
9Page 10
14) It is borne out from the records that the claimant was
treated as an inpatient in Pavithra Hospital from 27.01.1997
to 26.02.1997, and thereafter, he was treated as an
outpatient vide Exh. P-1, which is the Discharge Summary.
Further, it is seen from his evidence that he lost his earnings
during the period of treatment from 28.01.1997 to
31.12.1997, and because of severe injuries, his right leg
below the knee was amputated. Considering his age,
avocation and the fact that he cannot do the same work as
he was doing prior to the accident due to amputation of his
right leg, we are of the view that the Tribunal is fully justified
in fixing a sum of Rs. 1,00,000/- towards 85% permanent
disability. The order of the High Court setting aside the
compensation under the said head cannot be sustained.
Accordingly, in addition to the amount determined by the
High Court, we grant a sum of Rs. 1,00,000/-, as awarded by
the Tribunal, towards 85% permanent disability.
15) According to the counsel for the appellant, while
determining future loss of earning/earning capacity, the
Tribunal rightly applied the multiplier of 13 as provided in the
10Page 11
second Schedule to the Act. On the other hand, without any
acceptable reason/basis, the High Court reduced the
multiplier from 13 to 10.
16) In para 16 of the impugned judgment, the High Court,
while computing the loss of earning capacity, without any
acceptable reason, applied the multiplier of 10 and fixed a
sum of Rs. 3,20,000 (Rs. 8000/- x 10x12x1/3 ) as against Rs.
4,00,000/- determined by the Tribunal. Learned counsel
appearing for the appellant submitted that even for
determining just and fair compensation in the case of
injury/permanent disablement, the tribunal/courts are free to
apply multiplier method for which he relied on a decision of
the Madras High Court in United India Insurance Co. Ltd.
vs. Veluchamy and Anr. 2005 (1) CTC 38. While agreeing
with the said decision, though multiplier method cannot be
mechanically applied to ascertain the future loss of income
or earning power, depending on various factors such as
nature and extent of disablement, avocation of the injured
whether it would affect his or her employment or earning
power, we are of the view that the loss of income or earnings
11Page 12
may be ascertained by applying the same as provided under
the second Schedule to the Act. Inasmuch as in the case on
hand, the age of the claimant, i.e., 45 years, on the date of
the incident has not been disputed by the Transport
Corporation, we are of the view that the proper multiplier in
terms of the second Schedule is 13 which was rightly applied
by the Tribunal.
Accordingly, while modifying the quantum
under the loss of earning capacity, namely, Rs. 3,20,000/- as
fixed by the High Court, we restore the amount to Rs.
4,00,000/- as determined by the Tribunal. 
17) Though, learned counsel for the appellant prayed for
interest @ 12%, we are not inclined to accept the same, on
the other hand, the rate of interest, namely, 9%, as fixed by
the High Court, is reasonable and acceptable.
18) In the light of the above discussion, the appellant is
entitled to the following additional amount:
a) Towards 85% permanent disability … Rs. 1,00,000/-
b) Towards loss of earning/earning capacity
by applying the multiplier 13 … Rs. 80,000/-
(in addition to the amount of 
Rs. 3,20,000/- fixed by the High Court)
12Page 13
Accordingly, in addition to the amount awarded by the High
Court, the claimant/the appellant herein is entitled to an
additional amount of Rs. 1,80,000/-. 
Further, we make it
clear that altogether the appellant is entitled to a total
compensation of Rs. 8,52,822/- with interest at the rate of
9% from the date of claim petition till the date of deposit. 
19) The appeals filed by the claimant/appellant are allowed
in part to the extent mentioned above with no order as to
costs. 
...…………….…………………………J.
(P. SATHASIVAM)
.…....…………………………………J.
(M. Y. EQBAL)
NEW DELHI;
JULY 01, 2013.
13

Exclusion of Liability: Notwithstanding anything to the contrary contained in this policy, unless otherwise agreed to by the Corporation in writing, the Corporation shall cease to have any liability in respect of the gross invoice value of any shipment or part thereof, if: (a) the insured has failed to declare, without any omission, all the shipments required to be declared in terms of clause 8(a) of the policy and to pay premium in terms of clause 10 of the policy; (b) the insured has failed to submit declaration of overdue payments as required by clause 8(b) of the policy; or (c) ……………”- “An insurance contract, is a species of commercial transactions and must be construed like any other contract to its own terms and by itself…. The endeavour of the court must always be to interpret the words in which the contract is expressed by the parties. The court while construing the terms of policy is not expected to venture into extra liberalism that may result in re- writing the contract or substituting the terms which were not intended by the parties.”

REPORTABLE

                        IN THE SUPREME COURT OF INDIA
               CIVIL APPELLATE JURISDICTION


                     CIVIL APPEAL NO.  1557  OF 2004




      Export Credit Guarantee Corpn.
      …Appellant
      of India Ltd.




                                   Versus


      M/s Garg Sons International                      …Respondent


                                    With




      Civil Appeal Nos. 1553, 1548, 1555,  1556,  1549,  1552,  1551,  1558,
      1550, 1559, 1543, 1542, 1546, 1544, 1545 and 1547 of 2004.






                               J U D G M E N T




      Dr. B.S. CHAUHAN, J.




      1.    All the above-mentioned appeals have been preferred against  the
      common impugned judgment and  order  dated  18.2.2003  passed  by  the
      National  Consumer  Disputes  Redressal  Commission,  New  Delhi,   in
      Revision Petition Nos. 662, 663, 664, 665, 666, 667,  668,  669,  670,
      671, 672, 673, 674, 933 of 2002 and 238, 246 and 247 of 2001.
      2.    Facts and circumstances giving rise to these appeals are that:
      A.    The appellant herein, 
Export  Credit  Guarantee  Corporation  of India  Ltd., 
 (hereinafter  referred  to  as  `the  insurer’), 
 is a government company, which is in the business  of  insuring  exporters.
      
Respondent, M/s Garg Sons  International,  on  23.3.1995  purchased  a
      policy for the purpose of insuring a shipment to foreign  buyers  i.e.
      M/s Natural Selection Co. Ltd. of UK, and  
the  said  buyer  committed default  in  making  payments  
towards  such  policy  from  28.12.1995 on wards, with respect to the said consignment.


      B.    The  insured,  that  is  M/s  Garg  Sons  International,  sought
      enhancement of credit limit to the tune of Rs.50 lakhs with respect to
      the said defaulting foreign importer.  Subsequently, he  presented  17
      claims.


      C.    The insurer rejected all the abovementioned claims on the ground
      that the insured did not ensure compliance with Clause  8 (b)  of  the
      insurance agreement, which stipulated  the  period  within  which  the
      insurer is to be informed about any default  committed  by  a  foreign
      importer.


      D.    Thus, the insured then filed several complaints before the State
      Disputes Redressal Commission, to which the insurer filed replies. The
      State Disputes Redressal Commission  adjudicated  upon  the  case  and
      disposed of the said complaint, vide order dated  4.6.2001,  directing
      the insurer to make various requisite  payments  due  under  different
      claims, with 9 per cent interest and litigation expenses etc.


      E.    Being aggrieved against the orders passed in all 17 claims,  the
      insurer preferred appeals under Section 19 of the Consumer  Protection
      Act, 1986, before the National Consumer Disputes Redressal Commission,
      wherein the impugned judgment and order was disputed, stating that  it
      was evident from the said judgment that 11 claims  had  been  rejected
      and that 5 claims made by the insured were accepted.
            Hence, both the parties preferred these appeals.


      3.    Shri Santosh Paul, learned counsel appearing on  behalf  of  the
      insurer,  has  submitted  that 
 the  insured  failed  to   communicate
      information pertaining to the default made by the foreign importer, to
      the insurer, within the stipulated period, which was fixed as 45  days
      from the date on which the payment  became due, and  thus,  failed  to
      ensure compliance with  the mandatory requirement under Clause 8  (b),
      owing to which, the claims with respect to which the said  information
      was not furnished within the time period stipulated in the  agreement,
      have wrongly been allowed.  
Moreover, it is evident from the  judgment
      that only 5 claims made by the insured  were  accepted,  and  that  11
      claims were rejected, though in the said order,  only  9  claims  were
      found to be rejected and 4  were  shown  as  accepted.   
As  the  only
      numbers of 4 revisions have been mentioned, stating  that  only  these
      were worth acceptance, and those of 9 revisions have  been  mentioned,
      as those that were rejected, which was all  stated to show that  there
      were typographical errors in the judgment itself.
           In addition thereto, there were also certain appeals  and  thus,
      the order was required to be modified to  the  extent  that  only  two
      claims which were made in respect of Civil Appeal Nos.  1547  of  2004
      and 1557 of 2004, wherein all statutory  requirements  were   complied
      with deserve to be allowed, while the others, owing to  default on the
      part of the insured, are liable to be rejected.


      4.    On the other hand, Shri Satinder Singh Gulati,  learned  counsel
      appearing on behalf of the insured, has  submitted  that  
 admittedly,
      there is in fact a typographical error in the  impugned  judgment  and
      order, and has stated that the claims of the insured, with respect  to
      which there has been no default on the part  of  insured,  i.e.,  some
      claims have wrongly been rejected. 
Therefore, the appeals filed by him
      i.e. Civil Appeal Nos. 1559, 1544, 1545, 1543 and 1546 of 2004  should
      be allowed and the other appeals, should be rejected accordingly.


      5.    We have considered the rival submissions made by learned counsel
      for the parties and perused the record.


      6.    Relevant clauses of the insurance policy dated  23.3.1995,  read
      as under:
          “8. Declarations:
        a) Declaration of shipments :- …………
        b) Declaration of overdue payments:  The insured shall also deliver
           to the Corporation, on  or  before  the  15th  of  every  month,
           declaration in the term prescribed by the  Corporation,  of  all
           payments which remained wholly or partly unpaid for more than 30
           days from the due date of payment in respect of  shipments  made
           within the policy period and such declaration shall continue  to
           be rendered to the Corporation even  after  the  expiry  of  the
           policy period so long as any such payment remains overdue.
                       xx          xx         xx
           19.   Exclusion of Liability:
Notwithstanding  anything  to  the
           contrary contained in this policy, unless otherwise agreed to by
           the Corporation in writing, the Corporation shall cease to  have
           any liability in respect of  the  gross  invoice  value  of  any
           shipment or part thereof, if:
           (a)   the insured has failed to declare, without  any  omission,
           all the shipments required to be declared  in  terms  of  clause
           8(a) of the policy and to pay premium in terms of clause  10  of
           the policy;
           (b)   the insured has failed to submit  declaration  of  overdue
           payments as required by clause 8(b) of the policy; or
           (c)   ……………”

   7. If both the conditions referred to hereinabove are read  together,  it
      becomes evident that the  insured  must  make  a  declaration  in  the
      prescribed form (Form No. 205), on the 15th of every month as  regards
      whether or not, there has been any default committed  by  the  foreign
      importer, either in part, or in full, for a period exceeding  30  days
      from the date on which the payment fell due, with respect to shipments
      made within the policy period. Non-compliance with the said term(s) of
      contract, will exonerate the insurer of all liability in this regard.


      8.    It is a settled legal  proposition  that  while  construing  the
      terms of a contract of insurance, the words used therein must be given
      paramount importance, and it is not open for the Court to add,  delete
      or substitute any words. 
It is also  well  settled,  that  since  upon
      issuance of an insurance policy, the insurer undertakes  to  indemnify
      the loss suffered by the insured on account of risks  covered  by  the
      policy, its terms have to be strictly construed in order to  determine
      the extent of the liability of the insurer.
Therefore,  the  endeavour
      of the Court should always be to  interpret  the  words  used  in  the
      contract in the manner that will best express  the  intention  of  the
      parties. (Vide: M/s. Suraj Mal Ram Niwas Oil Mills (P) Ltd. v.  United
      India Insurance Co. Ltd.,  (2010) 10 SCC 567).


      9.    The insured cannot claim anything more than what is  covered  by
      the insurance policy. “…the terms of the contract have to be construed
      strictly, without altering the nature of the contract as the same  may
      affect the interests of the parties  adversely.”  The  clauses  of  an
      insurance policy have to be read as they are…Consequently,  the  terms
      of the insurance policy, that fix  the responsibility of the Insurance
      Company must also be read strictly. The contract must  be  read  as  a
      whole and every attempt should be made to harmonize the terms thereof,
      keeping in mind that the rule of contra proferentem does not apply  in
      case of commercial contract,  for  the  reason  that  a  clause  in  a
      commercial contract is bilateral and has mutually been agreed upon.
       (Vide : Oriental Insurance Co. Ltd. v.  Sony  Cheriyan  AIR  1999  SC
      3252;  Polymat India P. Ltd.  v.  National  Insurance  Co.  Ltd.,  AIR
      2005 SC 286; M/s. Sumitomo Heavy Industries Ltd. v. Oil & Natural  Gas
      Company, AIR 2010 SC 3400; and Rashtriya  Ispat  Nigam  Ltd.  v.  M/s.
      Dewan Chand Ram Saran AIR 2012 SC 2829).


      10.   In Vikram Greentech (I) Ltd. & Anr. v.  New India Assurance  Co.
      Ltd. AIR 2009 SC 2493, it was held :
           “An insurance contract, is a species of commercial  transactions
           and must be construed like any other contract to its  own  terms
           and by itself…. The endeavour of the court  must  always  be  to
           interpret the words in which the contract is  expressed  by  the
           parties. The court while construing the terms of policy  is  not
           expected to venture into extra liberalism that may result in re-
           writing the contract or substituting the terms  which  were  not
           intended by the parties.”


      (See also : Sikka Papers Limited v. National Insurance Company  Ltd  &
      Ors. AIR 2009 SC 2834).


      11.   Thus, it is not permissible for  the  court  to  substitute  the
      terms of the contract itself,  under  the  garb  of  construing  terms
      incorporated in the agreement of insurance. No exceptions can be  made
      on the ground of equity. The liberal attitude adopted by the court, by
      way of which it interferes in the terms of an insurance agreement,  is
      not permitted.  The same must certainly not be extended to the  extent
      of substituting words that were never  intended to form a part of  the
      agreement.


      12.   The instant case is required to be considered in  light  of  the
      aforesaid settled legal propositions. The requisite record reveals the
      factual matrix as under:

CA No. |Invoice No. |Invoice date |Date of shipment  |Due  date  of  payment
|Period for payment |Date for submission of Form-205 8(b) compliance  |Delay
in filing 8(b) compliance
(i.e. form 205) |Amount | |1555/04 |160/95 |3.11.95 |13.11.95 |28.12.95  |45
days |17.7.96 |More than  5  months  |8777/-  |  |1548/04  |163/95  |8.11.95
|20.11.95 |5.1.96 |45  days   |17.7.96  |More  than  5  months  |116424/-  |
|1552/04 |165/95 |13.11.95 |19.11.95 |4.1.96 |45 days |17.7.96 |More than  5
months |96474/- | |1549/04 |166/95  |13.11.95  |19.11.95  |4.1.96  |45  days
|17.7.96 |More than 5 months |67194/- |  |1551/04  |177/96  |2.1.96  |3.2.96
|18.3.96 |45 days |17.7.96 |More than 2 months |52629/- |  |1558/04  |182/96
|16.1.96 |3.2.96 |18.3.96 |45 days |17.7.96 |More than 2 months |249377/- |
|1553/04 |184/96 |29.1.96 |15.2.96 |31.3.96 |45 days |17.7.96 |More  than  2
months |414354/-  |  |1559/04  |186/96  |7.2.96  |6.3.96  |6.5.96  |60  days
|17.7.96 |More than 1 month |239656/- | |1550/04 |191/96  |22.2.96  |24.2.96
|24.4.96 |60 days |17.7.96 |More than 1 month |242055/- |  |1544/04  |192/96
|22.2.96 |6.3.96 |6.5.96 |60 days |17.7.96 |More than 1  month  |343777/-  |
|1545/04 |193/96 |26.2.96 |28.2.96 |30.4.96 |60 days |17.7.96 |More  than  1
month |267229/- | |1543/04  |195/96  |13.3.96  |25.3.96  |25.5.96  |60  days
|17.7.96 |2 days |306159/- | |1556/04  |196/96  |22.3.96  |25.3.96  |25.5.96
|60 days |17.7.96 |2 days |264400/-  |  |1547/04  |200/96  |19.4.96  |6.5.96
|6.7.96 |60 days |17.7.96 | |314961/- | |1546/04 |162/95 |8.11.95  |20.11.95
|5.1.96 |45 days |17.7.96 |More than 5 months |528257/- |  |1557/04  |201/96
|19.4.96 |6.5.96 |6.7.96 |60 days |17.7.96 | |1362688/- |  |1542/04  |164/95
|11.11.95 |19.11.95 |4.1.95 |45 days |17.7.96 |More than 5 months  |579766/-
| |13.      The aforesaid chart clearly establishes that the insured  failed
      to comply with  the  requirement  of  clause  8(b)  of  the  agreement
      informing the insurer about the non-payment of outstanding dues by the
      foreign importer within the stipulated time except in two cases.


      14.   Thus, we are of the view that only two claims which are subject-
      matters in Civil Appeal Nos. 1547 and  1557  of  2004  deserve  to  be
      allowed.  The others are dis-allowed.
            With these observations, all 17 appeals stand disposed of.





    ..………………………….J.
                                                                 (Dr.   B.S.
    CHAUHAN)




                                        .…………………………..J.
                                         (V. GOPALA GOWDA)
    New Delhi,
    January 17, 2013

whether the plea of the petitioner/complainant to treat the claim of the petitioner/complainant as a total loss in the light of the report of the second surveyor, Engineer Vinod Kumar Sharma, who was not appointed by the Insurance Company, should be accepted in spite of the petitioner/complainant having accepted the payment of Rs.22,99,000/- as full and final settlement from the respondents/opposite parties.=No doubt, later on the complainant has also filed an applicated dated 12.8.2009, for withdrawal of the above said consent letter dated 3.7.2009 with regard to full and final settlement. In our opinion, in the absence of any cogent evidence, the reasons given for withdrawal of the consent letter is meaningless. Moreover, the OPs have immediately released the claim amount to the complainant after receiving the consent letter, which was duly received by the complainant without any protest. As, in the present case, the OPs have already settled the claim of the complainant as per the surveyor report. Therefore, there is no deficiency in service or unfair trade practice on the part of OPs and the learned District Forum has rightly dismissed the complaint. Therefore, we are of the view that the appeal filed by the complainant against the order passed by the learned District Forum is liable to be dismissed as devoid of merit.

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

NEW DELHI

REVISION PETITION NO. 2270 OF 2011

[Against the order dated 01.04.2011 in Appeal No. 389/2010 of the

State Consumer Disputes Redressal Commission, U.T. Chandigarh]

M/s Worldwide Immigration Consultancy Services Ltd.

Through its Authorized Representative

Shri Rajiv Bajaj

SCO No. 2415-16, Sector 22-C

Chandigarh                                                …      Petitioner

Versus

1.     M/s Reliance General Insurance Co. Ltd.

(Anil Dhirubhai Ambani Group)

Through its Chairman

SCO No. 212-213, First Floor, Sector-34

Chandigarh

2.     M/s Reliance General Insurance Co. Ltd.

(Anil Dhirubhai Ambani Group)

Through its General Manager

SCO No. 212-213, First Floor, Sector-34

Chandigarh

3.     M/s Reliance General Insurance Co. Ltd.

Through Rajesh Sharma, Sr. Manager

SCO No. 212-213, First Floor, Sector-34

Chandigarh                                        …      Respondents

BEFORE:

HON’BLE MR. JUSTICE K.S. CHAUDHARI, PRESIDING MEMBER

HON’BLE MR. SURESH CHANDRA, MEMBER

For the Petitioner       :  Mr. Sunil Goyal, Advocate

                                   Mr. Sujit K. Singh, Advocate

For the Respondents  :  Mr. Navneet Kumar, Advocate

Pronounced on :  9^th JANUARY, 2013

O R D E R

PER SURESH CHANDRA, MEMBER

        This revision petition has been filed under Section 21(b) of the Consumer Protection Act, 1986 against the order dated 01.04.2011 passed by the State Consumer Disputes Redressal Commission, U.T. Chandigarh (‘State Commission’ for short), by which the State Commission dismissed the appeal filed by the petitioner.  

The petitioner had through his appeal before the State Commission challenged the order dated 31.08.2010 passed by the District Consumer Disputes Redressal Forum-II, U.T. Chandigarh (‘District Forum’ for short) in Complaint Case No. 1456 of 2009, by which the District Forum had dismissed the complaint of the petitioner.  The orders of the District Forum and the State Commission are placed on record.

2.     Briefly stated, the facts of the case are that the petitioner/complainant had purchased a vehicle BMW X Series X5 3.0 D from M/s Krishna Automobiles, Chandigarh vide invoice dated 29.07.2008 for an amount of Rs.57,95,000/-.  

This vehicle was insured with M/s Reliance General Insurance Co. Ltd., who are the respondents/opposite parties, vide Private Car Policy valid for the period 27.07.2008 till midnight 28.07.2009.  

The Insured Declared Value (IDV) of the vehicle was Rs.55,05,250/-.  

On 18.12.2008, the vehicle met with an accident at Chandigarh and suffered extensive damage, about which an FIR was lodged with the police station and accident was also reported to the office of the respondents/opposite parties.  

On 30.12.2008, the said vehicle was inspected by one Shri Kailash Chandra, Surveyor and Loss Assessor, who assessed the loss and prepared an estimate for repairs.  

As per the report of the surveyor, the damage to the vehicle was assessed at Rs.41,95,457/-. 

According to the petitioner/complainant, the repairs of the said vehicle had crossed 75% of the IDV and hence the vehicle was to be declared as total loss as per terms of the policy.  

However, the respondents/opposite parties refused to declare the said vehicle as total loss case and insisted on getting the repairs of the vehicle done.  

Later on, it appears that another surveyor, namely, Engineer Vinod Kumar Sharma, independently surveyed the vehicle on 12.02.2009 and vide his report dated 12.02.2009 assessed the loss at Rs.41,56,839/-.  

This surveyor also remarked that it would not be much economical to get the vehicle repaired as after the major repairs, the vehicle would not come to its original position.  

It is the case of the petitioner/complainant that despite the later survey report and his repeated requests, the respondents/opposite parties kept on delaying the settlement of the claim and 

paid only Rs.22,99,000/- to the petitioner/complainant as claim amount and 

additional sum of Rs.20,00,000/- was received on sale of the salvage to a third party with the help of the respondents/opposite parties.  

As such, according to the petitioner/complainant, the total amount paid to the petitioner/complainant was Rs.42,99,000/- i.e. 78.08% of the IDV, which is more than 75% of the IDV and, hence, it should have been treated as the case of total loss but since the respondents/opposite parties declined to do so, alleging deficiency in service on their part, the petitioner lodged a complaint before the District Forum, which, as stated above, the District Forum dismissed.  

The appeal filed against this order also came to be dismissed by the State Commission vide its impugned order and in these circumstances the petitioner/complainant has come to the National Commission through the present revision petition.

3.     We have heard Mr. Sunil Goyal, Advocate for the petitioner/complainant and Mr. Navneet Kumar, Advocate for the respondents/opposite parties and perused the record. 

4.     The broad facts of the case are more or less not under dispute.  The only question, which has arisen for our consideration in this case, is as to 

whether the plea of the petitioner/complainant to treat the claim of the petitioner/complainant as a total loss in the light of the report of the second surveyor, Engineer Vinod Kumar Sharma, who was not appointed by the Insurance Company, should be accepted in spite of the petitioner/complainant having accepted the payment of Rs.22,99,000/- as full and final settlement from the respondents/opposite parties.  

Both the Fora below have rejected the case of the petitioner/complainant while dismissing the complaint.  The State Commission while dismissing the appeal of the petitioner/complainant and upholding the order of the District Forum has recorded the following observations in support of the impugned order :-

“10.  The learned counsel for the OPs i.e. M/s Reliance General Insurance Company Limited has argued that the complainant has been compensated fully by the OPs.  As per the terms and conditions, an IRDA approved surveyor was deputed to assess the loss.  As per the report of the surveyor (Annexure R-2), the cash loss value was assessed at Rs.22,99,000/-.  As per this report, the vehicle was very much repairable and was not a case of total loss within the meaning of the policy and for this reason, the OPs requested the complainant to get the vehicle repaired.  Since the complainant was no(t) interested to get his vehicle repaired, therefore, the complainant has opted to settle the claim at cash loss basis and the OPs have settled the claim of the complainant after receiving the unconditional and free consent of the complainant for opting the cash loss and not choosing it to get the vehicle repaired.  Hence, as per the request and consent of the complainant, the cash loss settlement was agreed upon, and the value of the claim was assessed at Rs.22,99,000/-.  This was less than 75% of the IDV, which was duly accepted by the complainant in full and final settlement of the claim.  Further the complainant has also received a sum of Rs.20 lacs as a salvage value, hence the complainant in total has received a sum of Rs.42,99,000/-.  It is further argued that the report of Vinod Kumar Sharma, Surveyor is not admissible as this surveyor is not authorized surveyor of the OPs. It is next argued that the complainant has been fully compensated, hence prayed that the appeal filed by the complainant may kindly be dismissed with the heavy costs.

11.   After going through the facts of the case, even 

we are of the opinion that the report of the surveyor Sh. Vinod Kumar Sharma, placed on record by the complainant is only an estimate for the repair of the vehicle.  

Moreover, this report of Sh. Vinod Kumar Sharma, Surveyor is of no value because he was not appointed as a surveyor by the insurance company for settlement of the claim.  

The report of the authorized surveyor i.e. Sh. Kailash Chandra, who was duly appointed, has been placed on record by the OPs, Annexure R-2 wherein the net claim amount has been shown as Rs.22.99 lacs, which was duly accepted by the complainant as full and final settlement.  It is also clear that the complainant has also received a sum of Rs.20 lacs as salvage and in this respect, a discharge voucher was duly signed by the complainant.  It is an admitted fact that the complainant has issued a consent letter dated 3.7.2009. 

 No doubt, later on the complainant has also filed an applicated dated 12.8.2009, for withdrawal of the above said consent letter dated 3.7.2009 with regard to full and final settlement.  

In our opinion, in the absence of any cogent evidence, the reasons given for withdrawal of the consent letter is meaningless.  

Moreover, the OPs have immediately released the claim amount to the complainant after receiving the consent letter, which was duly received by the complainant without any protest.  

As, in the present case, the OPs have already settled the claim of the complainant as per the surveyor report.  Therefore, there is no deficiency in service or unfair trade practice on the part of OPs and the learned District Forum has rightly dismissed the complaint.  Therefore, we are of the view that the appeal filed by the complainant against the order passed by the learned District Forum is liable to be dismissed as devoid of merit.

5.     We agree with the view taken by the State Commission in the matter.  Besides the fact that the second surveyor was not appointed by the Insurance Company, admittedly the petitioner/complainant had accepted the net claim amount of Rs.22,99,000/- in full and final settlement of his claim and issued a consent letter dated 03.07.2009.  In the absence of any fraud, misrepresentation, undue influence or coercion being used by the Insurance Company to make the petitioner/complainant to sign the discharge voucher, the claim now made by the petitioner/complainant cannot be accepted.  In the given facts and circumstances, the three cases, namely, United India Insurance v. Ajmer Singh Cotton & General Mills & Ors. [II (1999) CPJ 10 (SC)]; Amir Ali A. Mukadam v. United India Insurance Co. Ltd. [IV (2007) CPJ 234 (NC)]; and National Insurance Co. Ltd. v. Boghara Polyfab Private Limited [(2009) 1 SCC 267] cited and relied on by learned counsel for the petitioner/complainant would not provide any comfort to the petitioner/complainant since each case has to be decided on its own merits in the light of the given circumstances. 

6.     Keeping in view the facts and circumstances of this case, we do not see any reason which would justify our interference with the impugned order. The revision petition, therefore,  stands dismissed but with no order as to costs.

……………Sd/-……………….

(K.S. CHAUDHARI, J.)

PRESIDING MEMBER

…………Sd/-…………………

     (SURESH CHANDRA)

MEMBER

Mukesh

(1) If an Insurance Company can prove that it does not have any liability to pay any amount in law to the claimants under the Motor Vehicles Act or any other enactment, can the Court yet compel it to pay the amount in question giving it liberty to later on recover the same from the owner of the vehicle. (2) Can such a direction be given under Article 142 of the Constitution, and what is the scope of Article 142? Does Article 142 permit the Court to create a liability where there is none?” = The pendency of consideration of the above questions by a larger Bench does not mean that the course that was followed in Baljit Kaur5 and Challa Bharathamma6 should not be followed, more so in a peculiar fact situation of this case. In the present case, the accident occurred in 1993. At that time, claimant was 28 years’ old. He is now about 48 years. The claimant was a driver on heavy vehicle and due to the accident he has been rendered permanently disabled. He has not been able to get compensation so far due to stay order passed by this Court. He cannot be compelled to struggle further for recovery of the amount. The insurance company has already deposited the entire awarded amount pursuant to the order of this Court passed on 01.08.2011 and the said amount has been invested in a fixed deposit account. Having regard to these peculiar facts of the case in hand, we are satisfied that the claimant (Respondent No. 1) may be allowed to withdraw the amount deposited by the insurance company before this Court along-with accrued interest. The insurance company (appellant) thereafter may recover the amount so paid from the owner (Respondent No. 2 herein). The recovery of the amount by the insurance company from the owner shall be made by following the procedure as laid down by this Court in the case of Challa Bharathamma6 . 26. Appeal is allowed and disposed of as above with no order as to costs.

                                                                  REPORTABLE


                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION




                     CIVIL  APPEAL NO.   5      OF 2013
                  (Arising out of SLP(C) No. 20127 of 2011)




Manager, National Insurance Co. Ltd.                   ……  Appellant

                   Vs.

Saju P. Paul and Another                                  ……Respondents








                                  JUDGMENT


R.M. LODHA, J.


            Leave granted.
2.          The appellant, insurance  company,   is  in  appeal  by  special
leave against the judgment and order dated 23.03.2011 whereby  the  Division
Bench of the Kerala High Court  allowed the review  petition   and  reviewed
its order dated 09.11.2010 and held that the insurance  company  was  liable
to pay compensation in sum of Rs. 2,88,000/- with  9%  interest  thereon  to
the claimant awarded by the Motor Accident  Claims  Tribunal  in  its  award
dated 23.07.2002.
3.          The question of law that arises in this appeal is as to  whether
having regard to the provisions of the Motor Vehicles Act, 1988 (for  short,
‘1988 Act’), the insurance company is liable to  pay  compensation  for  the
bodily injury caused to the claimant who was travelling in a  goods  vehicle
as a spare driver though he was employed as  a  driver  in  another  vehicle
owned by the owner of the vehicle under the policy of insurance.
4.          The above question arises in this way.  Saju P.  Paul,  claimant
(Respondent No. 1),  was a heavy vehicle   driver.   He  was  employed  with
Respondent No. 2 as a driver in some other vehicle.  On 16.10.1993,  he  was
travelling in a goods vehicle bearing No.  KL-2A/3411  in  the  cabin.   The
goods  vehicle was being driven by one Jayakumar.   In  that  vehicle,  many
other persons  were  also  travelling.     At  Nilackal,  due  to  rash  and
negligent driving of the driver Jayakumar, the  goods vehicle capsized.   As
a result of which the claimant suffered fracture and injuries. The  claimant
remained under treatment for quite  some  time  and  the  injuries  that  he
sustained in the accident rendered him permanently disabled.   In the  claim
petition  filed  by  him  before  the  Motor   Accident   Claims   Tribunal,
Pathanamthitta (for short,  ‘the  Tribunal’),  he  claimed  compensation  of
Rs.3,00,000/-.   The owner and insurer were  impleaded as respondent  no.  2
and respondent no. 3 respectively in the claim petition.
5.           The  insurer  filed  its  written  statement  and  opposed  the
claimant’s claim insofar as it was concerned. The insurer set  up  the  plea
that the vehicle was  a  goods  vehicle  and  the  risk  of  the  passengers
travelling in the  goods  vehicle  was  not  covered  under  the  policy  of
insurance.  It  was  stated  in  the  written  statement  that   nearly   50
unauthorised passengers were travelling at the time of accident;  they  were
not traveling in the vehicle in pursuance of  the  contract  of  employment,
such as loading and unloading nor they were travelling as the owner  of  the
goods or the representative of the owner of the goods and hence the  insurer
could not be saddled with any liability.
6.          The Tribunal, after  recording  the  evidence  and  hearing  the
parties, on 23.07.2002, passed an award in favour of  the  claimant  holding
that he was  entitled  to  a  total  compensation  of  Rs.  3,00,000/-.  The
liability of the insurer was made joint  and  several  with  the  owner  and
driver.
7.          Being not satisfied with the award of the Tribunal, the  insurer
filed an appeal before the Kerala High Court. The  Division  Bench  of  that
Court by relying upon decisions of this Court in  New  India  Assurance  Co.
Ltd. v. Asha Rani and others[1] and National Insurance Co. Ltd. v.  Cholleti
Bharatamma and Others[2]  allowed the appeal of the  insurer  vide  judgment
and order dated 09.11.2010.  The Division Bench held that  insurer  was  not
liable as gratuitous passengers travelling  in  a  goods  vehicle  were  not
covered under the policy and the claimant shall be entitled to  recover  the
awarded amount from the owner or driver of the vehicle.
8.          The claimant sought review of the order  dated  09.11.2010  and,
as noted above, by the impugned  order  that  review  application  has  been
allowed. While allowing the review application, the Division Bench  held  as
under:
           “It has already been noticed that the petitioner was  admittedly
           a spare driver of the vehicle.  It may be true that he  was  not
           driving the vehicle at the relevant point of time;  but  he  was
           directed to go to the worksite by his employer as a spare driver
           in the vehicle.  Therefore, by no stretch of imagination, it can
           be said that the petitioner was not travelling in the vehicle in
           the course of his employment and as directed  by  his  employer.
           Section 147(1)(b)(i) takes within its fold any  liability  which
           may be incurred by the insurer in respect of the death or bodily
           injury to any person.  Therefore, the argument of the  insurance
           company that no goods were being carried in the vehicle  at  the
           time of accident  and  therefore,  the  petitioner  was  only  a
           gratuitous  passenger  cannot  be  countenanced  at  all.   Even
           otherwise, the  first  proviso  to  Section147(1)  will  cast  a
           liability on the insurer to indemnify the owner  in  respect  of
           the injury sustained by the employee of the insured arising  out
           of and in the course of his employment.”

9.          It is appropriate to quote Section 147 of the 1988  Act  as  was
obtaining on the date of accident, i.e., 16.10.1993, which reads as  follows
:
            “147. Requirements of policies and limits of liability.—(1)  In
           order to comply with the requirements of this Chapter, a  policy
           of insurance must be a policy which—
           (a) is issued by a person who is an authorized insurer; and
           (b) insures the person or classes of persons  specified  in  the
           policy to the extent specified in sub-section (2)—
           (i) against any liability  which  may  be  incurred  by  him  in
           respect of the death of or bodily injury to any person or damage
           to any property of a third party caused by or arising out of the
           use of the vehicle in a public place;
           (ii) against the death of or bodily injury to any passenger of a
           public service vehicle caused by or arising out of  the  use  of
           the vehicle in a public place:


           Provided that a policy shall not be required—
           (i) to cover liability in respect of the death, arising  out  of
           and in the course of his employment, of the employee of a person
           insured by the policy or in respect of bodily  injury  sustained
           by such an employee arising out of and  in  the  course  of  his
           employment other than a liability arising  under  the  Workmen's
           Compensation Act, 1923 (8 of 1923), in respect of the death  of,
           or bodily injury to, any such employee—
           (a) engaged in driving the vehicle, or
           (b) if it is a public service vehicle engaged as a conductor  of
           the vehicle or in examining tickets on the vehicle, or
           (c) if it is a goods carriage, being carried in the vehicle, or
           (ii) to cover any contractual liability.
           Explanation.—For the removal of doubts, it  is  hereby  declared
           that the death of or bodily injury to any person  or  damage  to
           any property of a third party  shall  be  deemed  to  have  been
           caused by or to have arisen out of, the use of a  vehicle  in  a
           public place notwithstanding that the  person  who  is  dead  or
           injured or the property which is damaged was  not  in  a  public
           place at the time of the accident, if the act or omission  which
           led to the accident occurred in a public place.
           (2) Subject to the proviso  to  sub-section  (1),  a  policy  of
           insurance referred  to  in  sub-section  (1),  shall  cover  any
           liability incurred  in  respect  of  any  accident,  up  to  the
           following limits, namely—
           (a) save as provided in clause  (b),  the  amount  of  liability
           incurred;
           (b) in respect of damage to any property of  a  third  party,  a
           limit of rupees six thousand:
           Provided that any policy of insurance issued  with  any  limited
           liability and in force, immediately before the  commencement  of
           this Act, shall continue to be effective for a  period  of  four
           months after such commencement or till the  date  of  expiry  of
           such policy whichever is earlier.
           (3) A policy shall be of no effect  for  the  purposes  of  this
           Chapter unless and until there  is  issued  by  the  insurer  in
           favour  of  the  person  by  whom  the  policy  is  effected   a
           certificate of insurance in the prescribed form  and  containing
           the prescribed particulars of any condition subject to which the
           policy is issued  and  of  any  other  prescribed  matters;  and
           different forms, particulars and matters may  be  prescribed  in
           different cases.
            (4) Where  a  cover  note  issued  by  the  insurer  under  the
           provisions of this Chapter or the rules made thereunder  is  not
           followed by a policy of insurance within  the  prescribed  time,
           the insurer shall, within seven days of the expiry of the period
           of the validity of the  cover  note,  notify  the  fact  to  the
           registering authority in whose records the vehicle to which  the
           cover  note  relates  has  been  registered  or  to  such  other
           authority as the State Government may prescribe.
           (5) Notwithstanding anything contained in any law for  the  time
           being in force, an insurer issuing a policy of  insurance  under
           this section shall be liable to indemnify the person or  classes
           of persons specified in the policy in respect of  any  liability
           which the policy purports to cover in the case of that person or
           those classes of persons.”

10.         By the Motor Vehicles (Amendment) Act, 1994  (for  short,  ‘1994
Amendment  Act’),    Section  147  came  to  be  amended.   The   expression
“including owner of the goods or his authorised  representative  carried  in
the vehicle” was added in Section 147. The amended  Section  147   has  been
considered by this Court in various decisions, some of which  we  intend  to
refer  a little later.
11.         In New India Assurance Company v. Satpal  Singh  and  others[3],
this Court with reference to the  provisions  in  the  Motor  Vehicles  Act,
1939 and the  provisions in 1988 Act,  particularly Section 147,  held  that
under the 1988 Act an insurance policy covering third  party  risk  was  not
required to exclude gratuitous passengers in a vehicle no  matter  that  the
vehicle is of any  type  or  class.  It  was  also  held  that  the  earlier
decisions of this Court rendered under the 1939  Act   vis-à-vis  gratuitous
passengers  were  of  no  avail  while  considering  the  liability  of  the
insurance company in respect of any accident which occurred or  would  occur
after the 1988  Act came into force.
12.         The correctness of the judgment in Satpal  Singh3  was  doubted,
inter alia, in Asha Rani1 .  It was felt that Satpal Singh3  needed  re-look
insofar as cases covered under the 1988 Act prior to its amendment  in  1994
were concerned. A three-Judge Bench in Asha Rani1  noticed  Section  147  of
the 1988 Act prior to its amendment in 1994 and after its amendment in  1994
and held in paragraph 9 of the Report (Pgs. 231-232) as follows :
           “In Satpal case [(2000) 1 SCC 237] the Court  assumed  that  the
           provisions of Section 95(1) of the Motor Vehicles Act, 1939  are
           identical with Section 147(1) of the Motor Vehicles  Act,  1988,
           as it stood prior to its amendment. But a  careful  scrutiny  of
           the provisions would make it clear that prior to  the  amendment
           of 1994 it was not necessary for the insurer to  insure  against
           the owner of the goods or his  authorised  representative  being
           carried in a goods vehicle.  On  an  erroneous  impression  this
           Court came to the conclusion that the insurer would be liable to
           pay compensation in respect of the death or bodily injury caused
           to  either  the  owner  of   the   goods   or   his   authorised
           representative  when  being  carried  in  a  goods  vehicle  the
           accident occurred. If the Motor Vehicles Amendment Act  of  1994
           is examined, particularly Section 46, by  which  the  expression
           “injury to any person” in the original Act stood substituted  by
           the expression “injury to any  person  including  owner  of  the
           goods or his authorised representative carried in the  vehicle”,
           the conclusion is  irresistible  that  prior  to  the  aforesaid
           Amendment Act of 1994, even  if  the  widest  interpretation  is
           given to the expression “to any person” it will not cover either
           the owner of the goods or his  authorised  representative  being
           carried in the vehicle. The objects and  reasons  of  clause  46
           also state that it seeks to amend Section 147 to  include  owner
           of the goods or his authorised  representative  carried  in  the
           vehicle for  the  purposes  of  liability  under  the  insurance
           policy. It is no  doubt  true  that  sometimes  the  legislature
           amends the law by way of amplification and clarification  of  an
           inherent position which is there in the  statute,  but  a  plain
           meaning being given to the words used  in  the  statute,  as  it
           stood  prior  to  its  amendment  of  1994,  and  as  it  stands
           subsequent to its amendment in 1994  and  bearing  in  mind  the
           objects and reasons engrafted in the amended provisions referred
           to earlier,  it  is  difficult  for  us  to  construe  that  the
           expression “including owner  of  the  goods  or  his  authorised
           representative carried in the vehicle” which was  added  to  the
           pre-existing  expression  “injury  to  any  person”  is   either
           clarificatory or amplification of the pre-existing  statute.  On
           the other hand it  clearly  demonstrates  that  the  legislature
           wanted to bring within the sweep of Section 147  and  making  it
           compulsory for the insurer to insure even in  case  of  a  goods
           vehicle, the owner of the goods or his authorised representative
           being carried in a goods vehicle when that vehicle met  with  an
           accident and the owner of the goods or his representative either
           dies or suffers bodily injury. The judgment  of  this  Court  in
           Satpal case therefore must be held to have  not  been  correctly
           decided and the impugned judgment of the  Tribunal  as  well  as
           that of the High Court  accordingly  are  set  aside  and  these
           appeals are allowed. It is held that the  insurer  will  not  be
           liable for paying compensation to the owner of the goods or  his
           authorised representative on being carried in  a  goods  vehicle
           when that vehicle meets with an accident and the  owner  of  the
           goods or his representative dies or suffers any bodily injury.”




13.         S.B. Sinha, J. in his supplementary judgment  in  Asha  Rani1  ,
while concurring with the above, observed as follows (Pg. 235):
           “26. In view of the changes in the relevant  provisions  in  the
           1988 Act vis-à-vis the 1939 Act, we are of the opinion that  the
           meaning of the words “any person” must also be attributed having
           regard to the context in which they have been used i.e. “a third
           party”. Keeping in view the provisions of the 1988 Act,  we  are
           of the opinion that as the provisions thereof do not enjoin  any
           statutory liability on the owner of a vehicle to get his vehicle
           insured for any passenger travelling in  a  goods  vehicle,  the
           insurers would not be liable therefor.
           27. Furthermore, sub-clause (i) of clause (b) of sub-section (1)
           of Section 147 speaks of liability which may be incurred by  the
           owner of a vehicle in respect of death of or  bodily  injury  to
           any person or damage to any property of a third party caused  by
           or arising out of the use of the  vehicle  in  a  public  place,
           whereas sub-clause (ii) thereof deals with liability  which  may
           be incurred by the owner of a vehicle against the  death  of  or
           bodily injury to any  passenger  of  a  public  service  vehicle
           caused by or arising out of the use of the vehicle in  a  public
           place.
           28. An owner of a passenger-carrying vehicle  must  pay  premium
           for covering the risks of the passengers. If a  liability  other
           than the limited liability provided for under the Act is  to  be
           enhanced  under  an  insurance  policy,  additional  premium  is
           required to be paid. But if the ratio of this  Court's  decision
           in New India Assurance Co. v. Satpal Singh [(2000) 1 SCC 237] is
           taken to its logical conclusion, although for  such  passengers,
           the owner of a goods carriage need not  take  out  an  insurance
           policy, they would be deemed to  have  been  covered  under  the
           policy wherefor even no premium is required to be paid.

14.         Asha Rani1 has been relied upon in Oriental Insurance  Co.  Ltd.
v. Devireddy Konda Reddy and Others[4] wherein  it was held as  under  (Pgs.
342-343):
           “….The  difference  in  the  language  of  “goods  vehicle”   as
           appearing in the old Act and “goods carriage” in the Act  is  of
           significance. A bare reading of the provisions  makes  it  clear
           that the legislative intent was to prohibit goods  vehicle  from
           carrying any passenger. This is clear from  the  expression  “in
           addition to passengers” as contained in the definition of “goods
           vehicle” in the old Act.  The  position  becomes  further  clear
           because the expression used is “goods carriage”  is  solely  for
           the carriage of “goods”.  Carrying  of  passengers  in  a  goods
           carriage is not contemplated in the Act. There is  no  provision
           similar to clause (ii) of the proviso appended  to  Section   95
           of  the  old   Act  prescribing    requirement     of  insurance
           policy. Even Section 147 of the Act mandates compulsory coverage
           against death of or bodily injury to any  passenger  of  “public
           service vehicle”.  The  proviso  makes  it  further  clear  that
           compulsory coverage in respect  of  drivers  and  conductors  of
           public service vehicle and employees carried  in  goods  vehicle
           would be limited to liability under the  Workmen's  Compensation
           Act, 1923 (in short “the WC Act”). There is no reference to  any
           passenger in “goods carriage”.

14.1.       Then in paragraphs 10 and 11  of  the  Report  (Pg.  343),  this
Court held  in  Devireddy Konda Reddy4  as under :
           “10. The inevitable conclusion, therefore, is that provisions of
           the Act do not enjoin any statutory liability on the owner of  a
           vehicle to get his vehicle insured for any passenger  travelling
           in a goods carriage and the  insurer  would  have  no  liability
           therefor.
           11. Our view gets support from a recent  decision  of  a  three-
           Judge Bench of this Court in New India  Assurance  Co.  Ltd.  v.
           Asha Rani [(2003) 2 SCC 223]  in which it  has  been  held  that
           Satpal Singh case [(2000) 1 SCC 237] was not correctly  decided.
           That being the position, the Tribunal and the  High  Court  were
           not justified in holding that the insurer had the  liability  to
           satisfy the award.”

15.         In Cholleti Bharatamma2,  this  Court  was  concerned  with  the
question about the liability of  the  insurance  company  to  indemnify  the
owner of the vehicle in respect of death of passengers travelling  in  goods
vehicle. The Court  considered  the  applicability  of  Section  147  as  it
originally stood under 1988  Act  and  after  its  amendment  in  1994.   In
relation to the accident that occurred on  16.12.1993  i.e.,  prior  to  the
1994 amendment  in SLP(C) 7237-39/2003, this Court set  aside  the  judgment
of the High Court and  allowed  the  appeal  of  the  insurance  company  by
observing as follows (Pg. 430):
           “14. The  date  of  accident  being  16-12-1993,  the  amendment
           carried out in the  year  1994  in  Section  147  of  the  Motor
           Vehicles Act would not be applicable.
           15. The Motor Accidents Claims Tribunal, Nalgonda, by a judgment
           and award dated 13-11-1997 awarded various sums  overruling  the
           defence of the appellant  herein  that  they  were  unauthorised
           passengers. The High Court, however, by reason of  the  impugned
           judgment, relying on or on the basis of a decision of this Court
           in Satpal Singh [(2000) 1 SCC 237] directed as under:
               “The learned counsel for  the  Insurance  Company  submitted
              that the issue involved in these appeals is squarely  covered
              by the decision of the Supreme Court in New  India  Assurance
              Co. Ltd. v. Satpal Singh [(2000) 1 SCC  237],  wherein  Their
              Lordships held that under the Motor Vehicles  Act,  1988  all
              insurance  policies  covering  third-party  risks   are   not
              required to exclude  gratuitous  passengers  in  the  vehicle
              though vehicle is of any type or class.
              In view of the proposition of law laid down  by  the  Supreme
              Court  in  the  decision  stated  supra,  these  appeals  are
              dismissed. No costs.”
           16.  Following  the  aforementioned  principles,  the   impugned
           judgment cannot be sustained which is set aside. The appeals are
           allowed accordingly.”


15.1.       With reference to the accident that  took  place  on  24.12.1993
(prior to 1994  amendment)  in  SLP(C)  Nos.  7241-43/2003,  this  Court  in
Cholleti Bharatamma2  in paragraphs 17,18,19,20 and 21 (Pgs.  430-431)  held
as under :
           “17. In the aforementioned case, accident took place  on  24-12-
           1993. The respondents herein filed  a  claim  petition  claiming
           compensation for the  death  of  one  Kota  Venkatarao  who  had
           allegedly paid a sum of Rs 20 for travelling in the  lorry.  The
           Tribunal held:
              “In the absence of rebuttal evidence from  the  deceased  and
              some others who travelled in the said vehicle in the capacity
              of owner of the luggage which was carried by them at the time
              of accident, it cannot be said that it is a violation of  the
              policy, since it is not fundamental breach so as to afford to
              the insurer to eschew the liability  altogether  as  per  the
              decision in B.V. Nagaraju  v.  Oriental  Insurance  Co.  Ltd.
              [(1996) 4 SCC 647 : AIR 1996 SC 2054]”
           18. The High Court, however, relying upon Satpal Singh [(2000) 1
           SCC 237] opined:
              “This issue raised in this appeal is covered by the  decision
              of the Supreme Court in  New  India  Assurance  Co.  Ltd.  v.
              Satpal Singh wherein Their  Lordships  held  that  under  the
              Motor Vehicles Act,  1988  all  insurance  policies  covering
              third-party risks are  not  required  to  exclude  gratuitous
              passengers in the vehicles though the vehicle is of any  type
              or class. Following the same, the  appeal  is  dismissed.  No
              order as to costs.”
           19. It is now well settled that the owner  of  the  goods  means
           only the person who travels in the cabin of the vehicle.
           20. In this case, the High Court had proceeded on the basis that
           they were  gratuitous  passengers.  The  admitted  plea  of  the
           respondents themselves was that the  deceased  had  boarded  the
           lorry and paid an amount of Rs 20 as transport charges.  It  has
           not been proved that the deceased was travelling  in  the  lorry
           along with the driver or the cleaner as the owner of the  goods.
           Travelling with the goods itself  does  not  entitle  anyone  to
           protection under Section 147 of the Motor Vehicles Act.
           21. For the reasons aforementioned, this appeal is allowed.”



16.         In the present case, Section 147 as originally existed  in  1988
Act is applicable and, accordingly, the  judgment  of  this  Court  in  Asha
Rani1 is fully attracted. The High Court was clearly in error  in  reviewing
its  judgment and order delivered on 09.11.2010 in review petition filed  by
the claimant by applying Section 147(1)(b)(i).   The  High  Court  committed
grave error in holding that Section 147(1)(b)(i) takes within its  fold  any
liability which may be incurred by the insurer in  respect of the  death  or
bodily injury to any person. The High Court also erred in holding  that  the
claimant was travelling in the vehicle  in  the  course  of  his  employment
since he was a spare driver in the vehicle although he was not  driving  the
vehicle at the relevant time but he was directed to go to  the  worksite  by
his employer. The High Court erroneously assumed that the claimant  died  in
the course of employment and overlooked the fact that  the claimant was  not
in any manner engaged on the vehicle that met with an accident  but  he  was
employed as a driver in another vehicle  owned  by  M/s.  P.L.  Construction
Company.  The insured (owner  of  the  vehicle)   got  insurance  cover   in
respect of the subject goods vehicle for driver and  cleaner  only  and  not
for any other employee.  There is no insurance cover for  the  spare  driver
in the policy.    As a matter of law, the claimant did not  cease  to  be  a
gratuitous passenger though he claimed that  he  was  a  spare  driver.  The
insured had paid premium for one driver and   one  cleaner  and,  therefore,
second driver or for that purpose ‘spare driver’  was not covered under  the
policy.
17.         The High Court misconstrued the  proviso  following  sub-section
(1) of Section 147 of the 1988 Act.  What  is  contemplated  by  proviso  to
Section 147 (1)   is  that  the  policy  shall  not  be  required  to  cover
liability in respect of death or  bodily injury  sustained  by  an  employee
arising out of and in the course of his employment other  than  a  liability
arising under the Workmen’s  Compensation  Act,  1923.    The  claimant  was
admittedly not driving the vehicle  nor he  was engaged in driving the  said
vehicle. Merely because he was travelling in a  cabin  would  not  make  his
case different from  any other gratuitous passenger.
18.         The impugned judgment is founded on misconstruction  of  Section
147. The High Court was wrong in holding that the  insurance  company  shall
be liable to indemnify the owner of the vehicle and pay the compensation  to
the claimant as directed in the award by the Tribunal.
19.         The next question that arises for consideration  is  whether  in
the peculiar facts  of  this  case  a  direction  could  be  issued  to  the
insurance company to first satisfy the  awarded  amount  in  favour  of  the
claimant and recover the same from the owner of the vehicle (respondent  no.
2 herein).
20.         In National Insurance Co. Ltd. v.  Baljit  Kaur  and  others[5],
this Court was confronted with a similar situation. A three-Judge  Bench  of
this Court in paragraph 21 of the Report (Pg. 8) held as under :
           “21. The  upshot  of  the  aforementioned  discussions  is  that
           instead and in place of the insurer the  owner  of  the  vehicle
           shall be liable to satisfy the decree.  The  question,  however,
           would be as to whether keeping in view the fact that the law was
           not clear so long such a direction would be fair and  equitable.
           We do not think so. We, therefore, clarify  the  legal  position
           which shall have prospective effect. The Tribunal  as  also  the
           High Court had proceeded in terms of the decision of this  Court
           in Satpal Singh. The said decision has been  overruled  only  in
           Asha Rani. We, therefore, are of the opinion that  the  interest
           of justice will be subserved if the appellant herein is directed
           to satisfy the awarded amount in favour of the claimant, if  not
           already satisfied, and recover the same from the  owner  of  the
           vehicle. For the purpose of  such  recovery,  it  would  not  be
           necessary for the insurer to file a separate  suit  but  it  may
           initiate a proceeding before  the  executing  court  as  if  the
           dispute between the insurer and the owner was the subject-matter
           of determination before the Tribunal and the  issue  is  decided
           against the owner and in favour of the insurer. We  have  issued
           the aforementioned directions having regard  to  the  scope  and
           purport of Section 168 of the Motor Vehicles Act, 1988, in terms
           whereof, it is not only entitled  to  determine  the  amount  of
           claim as put forth by the claimant for recovery thereof from the
           insurer, owner or driver of the vehicle jointly or severally but
           also the dispute between the insurer on the  one  hand  and  the
           owner or driver of the vehicle involved in the accident inasmuch
           as can be resolved by the Tribunal in such a proceeding.”

21.         The above position has been followed by this Court  in  National
Insurance Co. Ltd. v. Challa Bharathamma & Ors.[6], wherein  this  Court  in
paragraph 13  (Pg. 523) observed as under:
           “13. The residual question is  what  would  be  the  appropriate
           direction. Considering the beneficial  object  of  the  Act,  it
           would be proper for the insurer to satisfy the award, though  in
           law it has no liability. In some  cases  the  insurer  has  been
           given the option and liberty to  recover  the  amount  from  the
           insured. For the purpose of recovering the amount paid from  the
           owner, the insurer shall not be required to file a suit. It  may
           initiate a proceeding before the executing court concerned as if
           the dispute between the insurer and the owner was  the  subject-
           matter of determination before the Tribunal  and  the  issue  is
           decided against the owner and in favour of the  insurer.  Before
           release of the amount to the claimants, owner of  the  offending
           vehicle shall furnish security for the entire amount  which  the
           insurer will pay to the claimants. The offending  vehicle  shall
           be attached, as a part of the security. If necessity arises  the
           executing court shall take assistance of the Regional  Transport
           Authority concerned.  The executing court shall pass appropriate
           orders in accordance with law as to  the  manner  in  which  the
           owner of the vehicle shall make payment to the insurer. In  case
           there is any default it shall be open to the executing court  to
           direct realisation by disposal of the securities to be furnished
           or from any other property or properties of  the  owner  of  the
           vehicle i.e. the insured. In the instant case,  considering  the
           quantum involved, we leave it to the discretion of  the  insurer
           to decide whether it would take steps for recovery of the amount
           from the insured.”


22.          In National Insurance Company Limited v.  Kaushalaya  Devi  and
Others[7].   In  paragraph 15 of the Report (pg. 250),  the  Court  observed
as follows:

           “15. For the reasons aforementioned, civil appeal arising out of
           SLP (C) No. 10694 is allowed and civil appeal arising out of SLP
           (C) No. 9910 of 2006 is dismissed. If the  amount  deposited  by
           the Insurance Company has since  been  withdrawn  by  the  first
           respondent, it would be open to the Insurance Company to recover
           the same in the manner specified by the High Court. But  if  the
           same has not been withdrawn the deposited amount may be refunded
           to the Insurance Company and the proceedings for realisation  of
           the amount may be initiated against the owner of the vehicle. In
           the facts and circumstances of the case, however, there shall be
           no order as to costs.”



23.         We are informed that by an order dated 19.01.2007  in   National
Insurance Co. v. Roshan Lal and Another [SLP (C) No. 5699/2006] in light  of
the argument raised before a two-Judge Bench that the  direction  ought  not
to be issued to the insurance company to discharge the liability  under  the
award first and then recover the same from the owner, the  matter  has  been
referred  to the larger Bench by the following order:
           “Having regard to the submissions urged before us, we are of the
           view that this petition may be placed for consideration before a
           larger Bench. We notice that in some of  the  decisions  such  a
           direction was made in cases where the compensation  had  already
           been paid by the insurer, but  there  are  observations  therein
           which support the view that such a direction can be made in  all
           cases where the owner has  insured  his  vehicle  against  third
           party risks. In Baljit Kaur’s case (supra) which is  a  judgment
           rendered by three Hon’ble Judges, such a direction was  made  in
           the special circumstances noticed by the Court in  paragraph  21
           of the report.  There are observations in Oriental Insurance Co.
           Ltd.  Vs. Ranjit Saikia and Ors.  (2002) 9  SCC  390  which  may
           support the contention of the petitioners before us.”

24.         In National Insurance Company  Ltd.  v.  Parvathneni  &  Another
[SLP(C)….CC No. 10993 of  2009],  
the  following  two  questions  have  been
referred to the larger Bench for consideration:
           (1) If an Insurance Company can prove that it does not have  any
           liability to pay any amount in law to the  claimants  under  the
           Motor Vehicles Act or any other enactment,  can  the  Court  yet compel it to pay the amount in question  giving  it  liberty  to later on recover the same from the owner of the vehicle.
           (2)    Can such a direction be given under Article  142  of  the Constitution, and what  is  the  scope  of  Article  142?   

Does Article 142 permit the Court to create a liability  where  there is none?”


 25.        The pendency of  consideration  of  the  above  questions  by  a larger Bench does not mean that the  course  that  was  followed  in  Baljit Kaur5  and Challa Bharathamma6   should  not  be  followed,  
more  so  in  a peculiar fact situation of this case. 
In the  present  case, 
 the  accident occurred in 1993.   
At that time,  claimant was 28 years’ old.  
He   is  now about 48 years.  
The claimant was  a driver on heavy   vehicle  and  due  to
the accident he has been rendered permanently disabled.   
He  has  not  been able to get compensation so far due to stay order passed by this Court.   
He cannot be compelled to struggle further for  recovery  of  the  amount.  
The insurance company  has already deposited the entire awarded amount  pursuant
to the order of this Court passed on 01.08.2011  and  the  said  amount  has
been invested in a fixed deposit account.  
Having regard to  these  peculiar
facts of the case in hand, we are satisfied that  the  claimant  (Respondent
No. 1) may be allowed to withdraw the  amount  deposited  by  the  insurance
company  before  this  Court  along-with accrued  interest.   
The  insurance company (appellant)  thereafter may recover the amount  so  paid   from  the
owner (Respondent  No.  2  herein).  
The  recovery  of  the  amount  by  the insurance company  from the owner shall be made by following  the  procedure as laid down by this Court in the case of Challa Bharathamma6 .
26.         Appeal is allowed and disposed of as above with no order  as  to
costs.

                                                  …………………….J.
                                                            (R.M. Lodha)

                                                          ..…………………….J.
                                                       (Anil R. Dave)
NEW DELHI.
JANUARY 3, 2013.
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[1]     (2003) 2 SCC 223
[2]     (2008) 1 SCC 423
[3]     (2000) 1 SCC 237
[4]     (2003) 2 SCC 339
[5]     (2004) 2 SCC 1
[6]     (2004) 8 SCC 517
[7]     (2008) 8 SCC 246

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