Insurer cannot take stand to escape legal liability that legal heirs of the deceased were not parties to the Claim Petition

IFFCO TOKIO GENERAL INSURANCE CO. LTD VS OM PRAKASH.
CITATION:2023 LIVELAW (JKL) 66
JAMMU & KASHMIR HIGH COURT

THE HON'BLE HIGH COURT HELD THAT

Insurer cannot take stand to escape legal liability that legal heirs of the deceased were not parties to the Claim Petition.

BRIEF FACTS

1. It appears that deceased Malkiyat Singh, Shanker Singh, Balwant Raj and injured Om Parkash, Anuradha and Sunil Kumar were travelling in an Eco Car bearing No. JK-11-A/4856 from Badkot Uttar Kashi towards Jammu.

2. On 26.02.2015 at about 11 pm, when the vehicle in question reached Hathyari, Uttrakhand, it suffered an accident as a result of which it fell into a deep gorge. Due to the said accident, the deceased as wellas the injured above named, who were travelling in the vehicle in question, suffered grievous injuries which led to the death of the deceased and permanent disablement of the injured. The accident also resulted in death of the owner cum driver of the vehicle in question.

3. The legal heirs/dependents of the deceased as also the injured filed as many as six different claim petitions before the Tribunal claiming compensation from the appellant-Insurance Company and the owner of the offending vehicle.

4. During pendency of the said claim petitions, the name of owner was deleted from the array of parties as he had died in the same accident which was subject matter of the claim petitions.

5. The claim petitions were contested by the appellant-Insurance Company by filing reply thereto. In its reply, it was contended by the appellant-Insurance Company that the driver of the vehicle in question was not holding a valid and effective driving license at the relevant time and even the documents of the vehicle were not valid.

Although the accident was not specifically denied by the appellant-Insurance Company, but it was pleaded that the claimants should be put to strict proof with regard to the alleged occurrence. The appellant-Insurance Company, inter alia, sought to take up all defenses available to it under the policy of insurance as also those defenses that are available to the owner in terms of Section 170 of the Motor Vehicles Act, 1988 (for short „the Act of 1988‟). In fact, an application under Section 170 of the Act was also made by the appellant Insurance Company before the Tribunal. Having regard to the manner in which the appellant-Insurance Company was allowed to cross-examine the witnesses on the aspect relating to quantum of compensation, it appears thatthe appellant-Insurance company was permitted to plead and take up all defenses as are available to an owner of the insured vehicle.

6. On the basis of pleadings of the parties, the following issues came to be framed by the Tribunal:

(i) Whether an accident took place on 26.02.2015 at Hathyari, Bhadwala, Juddo Road District Dehradoon involving offending vehicle bearing registration No. JK11- A/4856 as a result of which deceased Malkiyat Singh, Shanker Singh and Balwant Raj suffered fatal injuries and petitioners namely Om Parkash, Anuradha and Sunil Kumar received grievous injuries ?

(ii) If issue No.1 is proved in affirmative, whether petitioner is entitled to compensation ? If so, to what amount and from whom?

(iii) Whether there was any violation of terms and conditions of insurance policy with respect to the vehicle No. JK11- A/4856 on the date of occurrence, if yes, what is its effect?

7. The claimants led evidence in support of their case, whereas no evidence was led by the appellant-Insurance Company before the Tribunal.

8. The Tribunal vide the impugned award held that the accident had occurred due to rashness and negligence of the deceased driver. So far as the violation of terms of the policy of insurance is concerned, the same was not proved because no evidence was led by the appellant-Insurance Company before the Tribunal.

9. The Tribunal awarded a sum of Rs.8,06,400/- as compensation in favour of claimant Om Parkash who had suffered injuries due to the accident, a sum of Rs.6,56,000/- was awarded as compensation in favour of injured claimant Sunil Kumar, a sum of Rs.25,000/- was awarded as compensation in favour of injured claimant Anuradha, a sum of Rs.33,37,160/- was awarded in favour of dependents of the deceased Balwant Raj, a sum of Rs.23,96,162/- was awarded as compensation in favour of dependents of the deceased Shanker Singh and asum of Rs. 8,66,800/- was awarded as compensation in favour of dependents of the deceased Malkiyat Singh.

10. The appellant-Insurance Company has challenged the impugned award on the grounds that the claimants have not impleaded the legal heirs of owner of the offending vehicle as parties to the claim petitions and, as such, the claim petitions are not maintainable. It has also been contended that, in the instant case, no FIR relating to the accident was registered by the concerned Police Station, as such, the accident is not established. Lastly, it has been argued that, in the case of claim petition arising out of death of deceased Balwant Raj, who was working as a Sub Inspector in J&K Police, the Tribunal while assessing compensation has not taken into consideration the fact that as per the Service Rules applicable to the deceased, his widow is entitled to full pension up to a period of 7 years from the date of his death and the same was required to be deducted while assessing the compensation. In this regard, reliance has been placed upon a judgment of this Court in the case of New India Assurance Co. Ltd vs. Usha Baloria and others (MA No. 291/2012 and connected matters, decided on 24.07.2020).

OBSERVATIONS & DECISION OF COURT

11. The first ground that has been urged by learned counsel for the appellant-Insurance Company is that, without impleading the legal heirs of the deceased insured, the claim petitions are not maintainable. It has been submitted that owner cum driver of the offending vehicle had died in the same accident and the claimants, after deleting him from array of the parties, did not take steps to implead his Legal Representatives thereby rendering the claim petitions incompetent.

12. In the above context, it would be appropriate to refer to the provisions contained in Section 155 of the Act of 1988 which provides for effect of death on the cause of action.

It reads as under: "155. Effect of death on certain causes of action: Notwithstanding anything contained in section 306 of the Indian Succession Act, 1925 (39 of 1925), the death of a person in whose favour a certificate of insurance had been issued, if it occurs after the happening of an event which has given rise to a claim under the provisions of this Chapter, shall not be a bar to the survival of any cause of action arising out of the said event against his estate or against the insurer".

13. From a bare perusal of the aforesaid provision, it is clear that if death of an insured has occurred after the happening of accident which has given rise to a claim, the same would continue to survive against the estate of the insured or against the insurer. The question that arises for consideration is that whether, in the face of aforesaid provision, the present claim petitions without impleading the LRs of the deceased owner as parties, are maintainable.

PLEASE NOTE:A DIVISION BENCH OF THE KARNATKA HIGH COURT IN THE CASE OF NEW INDIA ASSURANCE CO. LTD VS. H. SIDDALINGA NAIKA AND OTHERS, 1985 ACJ 1989, has dealt with a similar issue as has been raised in the present case. In the said case, a grievance was projected by the insurance company that owner of the vehicle had died during the pendency of the claim petition before the Tribunal and since his legal heirs were not brought on record, the Tribunal could not have passed the award against the Insurance company. The Division Bench rejected the contention and observed as under:

"There is no substance in the contention so raised because section 102, Motor Vehicles Act,states: "Notwithstanding anything contained in section 306, Succession Act, 1925, the death of person in whose favour a certificate of insurance had been issued, if it occurs after the happening of an event which has given rise to a claim under the provisions of this Chapter, shall not be a bar to the survival of any cause of action arising out of the said event against his estate or against the insurer."

In this case, the claim petition was already filed before the Tribunal and insurance company had issued the policy. That being so, the fact that the owner of the lorry dies, makes no difference.

The Tribunal has rightly passed award against the insurer. Hence, there is no substance in this appeal and it is liable to be dismissed. Accordingly, it is dismissed. No costs in the appeal".

14. A Coordinate Bench of this Court in the case of Bajaj Allianz General. Insurance. Co. Ltd. vs. Naresh Kumar and another, (MA No. 18/2016, decided on 25.10.2021), has also observed that Section 155 of the Act of 1988 clearly states that the death of the person, in whose favour a certificate of insurance had been issued, after the happening of the accident, which gave rise to filing of claim petition, is no bar to the proceedings and, therefore, proceedings do not abate.

15. From the foregoing enunciation of law on the subject, it is clear that if death of the insured takes place after the cause of action for filing the claim petition has arisen in favour of the claimant, the claim petition cannot be thrown out merely because the legal heirs of the insured have not been impleaded as parties to the claim petition.

16. In the instant case, there is nothing on record to show that the claimant Anuradha, the widow of the deceased Balwant Raj, has, at any stage, received full pension in terms of the aforesaid Rule. Not even a suggestion has been made to her by the counsel for the insurer during her cross-examination before the Tribunal. Even otherwise, the aforesaid Rule, which is the basis of ratio laid down by this Court in Usha Baloria's case (supra) has been amended vide SRO 94 dated 15.04.2009 and now a widow of an employee, who dies in harness is entitled to family pension only @ 50% of the past pay drawn. The death of the deceased Balwant Raj has taken place on 26.02.2015 when the said Rule had been amended. Obviously, there was no occasion for the widow of deceased Balwant Raj to receive the full pension for a period of seven years in terms of the aforesaid Rule. Thus, ratio laid down in Usha Baloria's case (supra) is otherwise not applicable to the instant case. The argument advanced by learned is, therefore, without any merit.

17. For the foregoing reasons court do not find any merit in any of the aforesaid appeals.

18. The same are, accordingly, dismissed and the impugned award passed by the Tribunal is upheld. Registrar Judicial is directed to release the amount deposited by the appellant-insurance company, if any, in favour of the claimants as per the terms of the impugned award.

FOOTNOTES

APPLICABLE PROVISIONS:

SECTION 147 OF MVA, 1988

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 authorised 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, including owner of the goods or his authorised 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 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 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.

SECTION 149 OF MVA, 1988

Duty of insurers to satisfy judgments and awards against persons insured in respect of third-party risks.—

(1) If, after a certificate of insurance has been issued under sub-section (3) of section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (l) of section 147 (being a liability covered by the terms of the policy) or under the provisions of section 163A is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.

(2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:—

(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:—

(i) a condition excluding the use of the vehicle—

(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
(d) without side-car being attached where the vehicle is a motor cycle; or

(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving license during the period of disqualification; or

(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or

(b) that the policy is void on the ground that it was obtained by the non- disclosure of a material fact or by a representation of fact which was false in some material particular.

(3) Where any such judgment as is referred to in sub-section (1) is obtained from a Court in a reciprocating country and in the case of a foreign judgment is, by virtue of the provisions of section 13 of the Code of Civil Procedure, 1908 (5 of 1908) conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act, 1938 (4 of 1938) and whether or not he is registered under the corresponding law of the reciprocating country) shall be liable to the person entitled to the benefit of the decree in the manner and to the extent specified in sub-section (1), as if the judgment were given by a Court in India:

Provided that no sum shall be payable by the insurer in respect of any such judgment unless, before the commencement of the proceedings in which the judgment is given, the insurer had notice through the Court concerned of the bringing of the proceedings and the insurer to whom notice is so given is entitled under the corresponding law of the reciprocating country, to be made a party to the proceedings and to defend the action on grounds similar to those specified in sub-section (2).

(4) Where a certificate of insurance has been issued under sub-section (3) of section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any condition other than those in clause (b) of sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub-section (1) of section 147, be of no effect: Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person.

(5) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person.

(6) In this section the expression "material fact" and "material particular" means, respectively a fact or particular of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk and, if so, at what premium and on what conditions, and the expression "liability covered by the terms of the policy" means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy.

(7) No insurer to whom the notice referred to in sub-section (2) or sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in sub-section (1) or in such judgment as is referred to in sub-section (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be.

Explanation.—For the purposes of this section, "Claims Tribunal" means a Claims Tribunal constituted under section 165 and "award" means an award made by that Tribunal under section 168.

SECTION 155 OF MVA, 1988

Effect of death on certain causes of action.—Notwithstanding anything contained in section 306 of the Indian Succession Act, 1925 (39 of 1925), the death of a person in whose favour a certificate of insurance had been issued, if it occurs after the happening of an event which has given rise to a claim under the provisions of this Chapter, shall not be a bar to the survival of any cause of action arising out of the said event against his estate or against the insurer.

SECTION 170 OF MVA, 1988

Impleading insurer in certain cases.—Where in the course of any inquiry, the Claims Tribunal is satisfied that—
(a) there is collusion between the person making the claim and the person against whom the claim is made, or
(b) the person against whom the claim is made has failed to contest the claim, it may, for reasons to be recorded in writing, direct that the insurer who may be liable in respect of such claim, shall be impleaded as a party to the proceeding and the insurer so impleaded shall thereupon have, without prejudice to the provisions contained in sub-section (2) of section 149, the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made.

SECTION 306 OF THE SUCCESSION ACT, 1925

DEMANDS AND RIGHTS OF ACTION OF OR AGAINST DECEASED SURVIVE TO AND AGAINST EXECUTOR OR ADMINISTRATOR

All demands whatsoever and all rights to prosecute or defend any action or special proceeding existing in favour of or against a person at the time of his decease, survive to and against his executors or administrators; except causes of action for defamation, assault, as defined in the Indian Penal Code, 1860 (45 of 1860) or other personal injuries not causing the death of the party; and except also cases where, after the death of the party, the relief sought could not be enjoyed or granting it would be nugatory.

Illustrations

(i) A collision takes place on a railway in consequence of some neglect or default of an official, and a passenger is severely hurt, but not so as to cause death. He afterwards dies without having brought any action. The cause of action does not survive.
(ii) A sues for divorce. A dies. The cause of action does not survive to his representative.