# The National Insurance Co. Ltd., Lucknow v. Phoolmati & Ors

- **Citation:** (2020) 10 ILRA 302
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-02-26
- **Case number:** FAFO No. 691 of 2017
- **Bench:** Rakesh Srivastava
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/the-national-insurance-co-ltd-lucknow-v-phoolmati-ors-44978
- **Pages:** 6

## Headnote

(A) Civil Law - Motor Vehicles Act, 1988 -
Section 146 - necessity for insurance
against third party risk , Section 147 -
Requirements of policies andlimits of
liability, section 163-A - Special provisions
as
to
payment
of
compensation
on
structued formula basis - where the owner
of the motor vehicle is himself involved in
the accident, the provisions of Section
163-A have no application, Section 173 -
Appeals - impugned award cannot be
sustained .(Para-12)

Respondent no. 1 , father of sarvesh kumar -
owner of the said car - car was insured with
National Insurance Comapny( Appelant) for the
period 31.08.2014 to 31.08.2015 - accident -
car driven by Sarvesh kumar - suffered
grievous injuries and succumbed to his injuries
on the way to the hospital - Respondent No. 1,
the mother of the deceased and Respondent no.
2, the wife of the deceased - filed an application
under Section 163-A of the Act - claiming
compensation of Rs. 15,00,000/- (Rupees fifteen
lakhs only) - for the death of the deceased.
(para-2,3)
10 All. The National Insurance Co. Ltd., Lucknow Vs. Phoolmati & Ors.
303
HELD:- No liability can be fastened upon the
appellants to pay the compensation determined
by the Tribunal. The appellant is directed to
deposit the said amount with interest at the rate
of 7% per annum from the date of the claim
petition till the date of deposit with the
Tribunal.(Para-16,18)

First Appeal from order allowed. (E-7)

List of Cases Cited:-

## Text

302 INDIAN LAW REPORTS ALLAHABAD SERIES
by the driver in the Court of Judicial
Magistrate First class, Naraingarh in a
criminal case arising out of the same
accident. Fourth, in any event, once the
license was proved by the driver and
marked in evidence and without there being
any objection by the Insurance Company,
the Insurance Company had no right to
raise any objection about the admissibility
and manner of proving of the license at a
later
stage
(See
Oriental
Insurance
Company Ltd. Vs. Premlata Shukla & Ors.,
(2007) 13 SCC 476) and lastly, the
Insurance Company failed to adduce any
evidence to prove that the driving license
(Ex.R1) was either fake or invalid for some
reason."

23.

Considering
the
aforesaid
judgments the onus clearly lies upon the
Insurance Company to prove that driving
licensee of Sarvesh Kumar Verma was either
fake or invalid. The appellant have failed to
discharge the onus by adducing any credible
evidence to enable this Court to return a
contrary finding. Apart from the report of the
investigating officer who seems to have only
met the concerned dealing clerk in the office
of Regional Transport Officer, who orally
told him that the said license was not in his
record, no other material has been placed by
the appellant so as to return a finding of fact
in favour of the appellant.

24. The Tribunal has considered all the
evidence, including the evidence adduced by
respondent no. 7 with regard to the validity of
the driving license and also the information
obtained under Right to Information Act from
the transport authority which also confirmed
the existence of valid and effective driving
license, and therefore there is no occasion for
this Court to interfere with the judgment
passed by the Tribunal.

25. The appeal is without merits and is
dismissed at the admission stage itself.
----------
(2020)10ILR A302
APPELLATE JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 26.02.2019

BEFORE
THE HON'BLE RAKESH SRIVASTAVA, J.

FAFO No. 691 of 2017

The National Insurance Co. Ltd., Lucknow
 ...Appellant
Versus
Phoolmati & Ors. ...Respondents

Counsel for the Appellant:
Ramesh Chandra Sharma, Avadhesh Kumar

Counsel for the Respondents:
-----

(A) Civil Law - Motor Vehicles Act, 1988 -
Section 146 - necessity for insurance
against third party risk , Section 147 -
Requirements of policies andlimits of
liability, section 163-A - Special provisions
as
to
payment
of
compensation
on
structued formula basis - where the owner
of the motor vehicle is himself involved in
the accident, the provisions of Section
163-A have no application, Section 173 -
Appeals - impugned award cannot be
sustained .(Para-12)

Respondent no. 1 , father of sarvesh kumar -
owner of the said car - car was insured with
National Insurance Comapny( Appelant) for the
period 31.08.2014 to 31.08.2015 - accident -
car driven by Sarvesh kumar - suffered
grievous injuries and succumbed to his injuries
on the way to the hospital - Respondent No. 1,
the mother of the deceased and Respondent no.
2, the wife of the deceased - filed an application
under Section 163-A of the Act - claiming
compensation of Rs. 15,00,000/- (Rupees fifteen
lakhs only) - for the death of the deceased.
(para-2,3)
10 All. The National Insurance Co. Ltd., Lucknow Vs. Phoolmati & Ors.
303
HELD:- No liability can be fastened upon the
appellants to pay the compensation determined
by the Tribunal. The appellant is directed to
deposit the said amount with interest at the rate
of 7% per annum from the date of the claim
petition till the date of deposit with the
Tribunal.(Para-16,18)

First Appeal from order allowed. (E-7)

List of Cases Cited:-

1. Oriental Insurance Co. Ltd. Vs Jhuma Saha,
(2007) 9 SCC 263

2. New India Assurance Co. Ltd. Vs Sadanand
Mukhi, (2009) 2 SCC 417

3. Ningamma Vs United India Insurance Co.
Ltd., (2009) 13 SCC 710

(Delivered by Hon'ble Rakesh Srivastava, J.)

1. The Insurer has filed this appeal
under Section 173 of the Motor Vehicles
Act, 1988 (for short 'the Act') challenging
the judgment and award dated 31.05.2017
passed by the Motor Accident Claims
Tribunal/ Additional District Judge, Court
No. 4, Hardoi, in Claim Petition No. 306 of
2014 (Smt. Phoolmati and another v. Ram
Swaroop and another).

2. On 27.09.2014, Sarvesh Kumar and
one Aniruddh Kumar were going to Hardoi
by a new car (Alto 800 LXI, Engine No.
F8DN5263077
Chassis
No.
MA3EUA61S00479328, which by then had
not been registered) for its servicing. Ram
Swaroop, (Respondent No. 1 herein), the
father of Sarvesh Kumar, was the owner of
the said car. The said car was insured with
the National Insurance Company (the
appellant herein) for the period 31.08.2014
to 31.08.2015. At the relevant time, the said
car was being driven by Sarvesh Kumar.
When they reached near Dhatankheda,
suddenly a blue bull (nilgay) came in front
of the car and in an attempt to save the blue
bull the car went out of control and dashed
against a tree on the side of the road and
fell in a ditch. As a result of the said
accident, Sarvesh Kumar suffered grievous
injuries and succumbed to his injuries on
the way to the hospital.

3. Phoolmati, (Respondent No. 1
herein), the mother of the deceased and
Shalini (Respondent no. 2 herein), the wife
of the deceased, filed an application under
Section 163-A of the Act claiming
compensation of Rs. 15,00,000/- (Rupees
fifteen lakhs only) for the death of Sarvesh
Kumar (the deceased). Ram Swaroop and
the
appellant
were
impleaded
as
respondents in the claim petition. It was
alleged that at the time of the accident the
deceased was 22 years of age and was
earning around Rs. 12000/- per month from
selling milk and milk products and from
agriculture.

4. In his written statement, the
Respondent No. 3, admitted the averments
made in the claim petition, including the
fact that he was the owner of the car. The
appellant also contested the claim on the
ground that the deceased, who was driving
the car at the time of accident, was the
owner of the vehicle and as no other
vehicle was involved in the accident, as per
the Act and Rules, the deceased could not
be treated to be a third party. As such, the
claimants were not entitled to get any
compensation.

5. Based upon the pleadings of the
parties, the Tribunal framed four issues. In
support of their claim, the claimants
examined Phoolmati as PW 1, Aniruddh
Kumar as PW 2 and Vivek Kumar as PW
3. On the other hand, Respondent no. 3
examined himself as DW 1. The Tribunal,
304 INDIAN LAW REPORTS ALLAHABAD SERIES
after taking into account the oral and
documentary evidence on record, held that
the claimants were entitled to compensation
of Rs. 4,48,000/- along with interest at the
rate of 7% per annum. The Tribunal held
that the car was insured under a package
policy and concluded that the liability was
covered by the insurance policy.

6. Sri Ramesh Chandra Sharma,
learned counsel for the appellant has
submitted that in order to be entitled for
compensation under section 163-A of the
Act, the person who has suffered the loss
must be a third party. He argued that the
deceased was not a third party as he was
himself the owner of the car and no other
vehicle was involved in the accident.

7. Per contra, Sri S.K. Verma, the
learned counsel for the respondent nos. 1 &
2 has supported the award. No one
appeared on behalf of respondent no. 3 in
spite of sufficient service.

8. Heard the counsel for the parties
and perused the record.

9. Section 146 of the Act lays down
the requirements for insurance against
third-party risk. Where a third-party risk is
involved, an insurance policy is required to
be mandatorily taken. Section 147 of the
Act lays down the requirements of policies
and the limits of liability. The Act provides
for two types of insurance policy. The first
one is statutory in nature and the other is
contractual in nature. In case of death or
injury to a third party as a result of an
accident, the insurance company is bound
to compensate the owner or the driver of
the motor vehicle in case any person dies or
suffers injury as a result of an accident.
However, in case where the owner of the
vehicle or others are proposed to be
covered, an additional premium is required
to be paid for covering their life and
property.

10. Section 163-A of the Motor
Vehicles Act reads thus:

"163-A. Special provisions as to
payment of compensation on structured
formula
basis.--(1)
Notwithstanding
anything contained in this Act or in any
other law for the time being in force or
instrument having the force of law, the
owner of the motor vehicle of the
authorised insurer shall be liable to pay in
the case of death or permanent disablement
due to accident arising out of the use of
motor vehicle, compensation, as indicated
in the Second Schedule, to the legal heirs or
the victim, as the case may be.

Explanation.--For the purposes of
this sub-section, ''permanent disability'
shall have the same meaning and extent as
in the Workmen's Compensation Act, 1923
(8 of 1923).

(2) In any claim for compensation
under sub-section (1), the claimant shall not
be required to plead or establish that the
death or permanent disablement in respect
of which the claim has been made was due
to any wrongful act or neglect or default of
the owner of the vehicle or vehicles
concerned or of any other person.

(3) The Central Government may,
keeping in view the cost of living by
notification in the Official Gazette, from
time to time amend the Second Schedule."

11. Section 163-A of the Act begins
with a non obstante clause, and in case of
death or permanent disablement due to an
accident arising out of the use of motor
vehicle, imposes an obligation upon the
owner of the vehicle or the authorised
insurer to pay to the legal heirs or the
10 All. The National Insurance Co. Ltd., Lucknow Vs. Phoolmati & Ors.
305
victim, as the case may be, compensation
as per the Second Schedule.

12. It is no more res integra that where
the owner of the motor vehicle is himself
involved in the accident, the provisions of
Section 163-A have no application.

13. In Oriental Insurance Co. Ltd. v.
Jhuma Saha, (2007) 9 SCC 263, the Apex
Court has held as under:

"10. The deceased was the owner
of the vehicle. For the reasons stated in the
claim petition or otherwise, he himself was to
be blamed for the accident. The accident did
not involve motor vehicle other than the one
which he was driving. The question which
arises for consideration is that the deceased
himself being negligent, the claim petition
under Section 166 of the Motor Vehicles Act,
1988 would be maintainable.

11.
Liability
of
the
insurer
Company is to the extent of indemnification
of the insured against the respondent or an
injured person, a third person or in respect of
damages of property. Thus, if the insured
cannot be fastened with any liability under
the provisions of the Motor Vehicles Act, the
question of the insurer being liable to
indemnify the insured, therefore, does not
arise. (emphasis supplied)

14. In New India Assurance Co. Ltd. v.
Sadanand Mukhi, (2009) 2 SCC 417, the
Apex Court while holding that the insurance
company was not liable to pay the amount of
compensation in relation to the accident
which occurred by the use of vehicle which
was being driven by the son of the insurer,
observed as under:-

"15. Contract of insurance of
motor vehicle is governed by the provisions
of the Insurance Act. The terms of the
policy as also the quantum of premium
payable for insuring the vehicle in question
depends not only upon the carrying
capacity of the vehicle but also on the
purpose for which the same was being used
and the extent of the risk covered thereby.
By taking an 'act policy', the owner of a
vehicle fulfils his statutory obligation as
contained in Section 147 of the Act. The
liability of the insurer is either statutory or
contractual. If it is contractual its liability
extends to the risk covered by the policy of
insurance. If additional risks are sought to
be covered, additional premium has to be
paid. If the contention of the learned
Counsel is to be accepted, then to a large
extent, the provisions of the Insurance Act
becomes otiose. By reason of such an
interpretation the insurer would be liable to
cover risk of not only a third party but also
others who would not otherwise come
within the purview thereof. It is one thing
to say that the life is uncertain and the same
is required to be covered, but it is another
thing to say that we must read a statute so
as to grant relief to a person not
contemplated by the Act. It is not for the
Court, unless a statute is found to be
unconstitutional, to consider the rationality
thereof. Even otherwise the provisions of
the Act read with the provisions of the
Insurance Act to be wholly rational.

16. Only because driving of a
motor
vehicle
may
cause
accident
involving loss of life and property not only
of a third party but also the owner of the
vehicle and the insured vehicle itself,
different provisions have been made in the
Insurance Act as also the Act laying down
different types of insurance policies. The
amount of premium required to be paid for
each of the policy is governed by the
Insurance Act. A statutory regulatory
authority
fixes
the
norms
and
the
guidelines."
306 INDIAN LAW REPORTS ALLAHABAD SERIES

15. In Ningamma v. United India
Insurance Co. Ltd., (2009) 13 SCC 710, the
Apex Court has held as under:

"19. In Oriental Insurance Co.
Ltd. v. Rajni Devi wherein one of us,
namely, Hon'ble S.B. Sinha, J. was a party,
it has been categorically held that in a case
where third party is involved, the liability
of the insurance company would be
unlimited. It was also held in the said
decision
that
where,
however,
compensation is claimed for the death of
the owner or another passenger of the
vehicle, the contract of insurance being
governed by the contract qua contract, the
claim of the claimant against the insurance
company would depend upon the terms
thereof.

20. It was held in Oriental
Insurance Co. Ltd. case that Section 163-A
of the MVA cannot be said to have any
application in respect of an accident
wherein the owner of the motor vehicle
himself is involved. The decision further
held that the question is no longer res
integra. The liability under Section 163-A
of the MVA is on the owner of the vehicle.
So a person cannot be both, a claimant as
also a recipient, with respect to claim.
Therefore, the heirs of the deceased could
not have maintained a claim in terms of
Section 163-A of the MVA.

21. In our considered opinion, the
ratio of the decision in Oriental Insurance
Co. Ltd. case is clearly applicable to the
facts of the present case. In the present
case, the deceased was not the owner of the
motorbike in question. He borrowed the
said motorbike from its real owner. The
deceased cannot be held to be an employee
of the owner of the motorbike although he
was authorised to drive the said vehicle by
its owner and, therefore, he would step into
the shoes of the owner of the motorbike.
We have already extracted Section 163-A
of the MVA hereinbefore. A bare perusal
of the said provision would make it
explicitly clear that persons like the
deceased in the present case would step
into the shoes of the owner of the vehicle.

22. In a case wherein the victim
died or where he was permanently disabled
due to an accident arising out of the
aforesaid motor vehicle in that event the
liability
to
make
payment
of
the
compensation is on the insurance company
or the owner, as the case may be as
provided under Section 163-A. But if it is
proved that the driver is the owner of the
motor vehicle, in that case the owner could
not himself be a recipient of compensation
as the liability to pay the same is on him.
This proposition is absolutely clear on a
reading of Section 163-A of the MVA.
Accordingly, the legal representatives of
the deceased who have stepped into the
shoes of the owner of the motor vehicle
could not have claimed compensation
under
Section
163-A
of
the
MVA.
(emphasis supplied)

16. In view of the settled legal
position no liability can be fastened upon
the appellants to pay the compensation
determined by the Tribunal. The impugned
award cannot be sustained.

17. However, a perusal of the
insurance policy would show that the
owner-driver is covered for personal
accident. The liability is, however, limited
to Rs. 2,00,000/- for the insurance period.
This fact is not disputed by Sri Ramesh
Chandra Sharma. In the circumstances, the
liability of the insurer-appellant is confined
to Rs. 2,00,000/- and not any sum
exceeding the said amount. The Tribunal
has held that the Appellant No. 1, the
mother of the deceased is dependent upon
10 All. Smt. Shail Kumari & Ors. Vs. The New India General Insurance Co. Ltd. & Ors.
307
her husband. This fact is not disputed by
the Respondents. In the circumstances, out
of the compensation awarded, Rs. 20,000/-
shall be payable to Phoolmati (Respondent
No. 1 herein) and the balance Rs.
1,80,000/- to Shalini (Respondent No. 2
herein) together with proportionate interest.

18. The appellant is directed to
deposit the said amount with interest at the
rate of 7% per annum from the date of the
claim petition till the date of deposit with
the Tribunal.

19. The appeal is allowed to the
extent mentioned above. No order as to
cost.
----------
(2020)10ILR A307
APPELLATE JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 14.01.2020

BEFORE
THE HON'BLE RAKESH SRIVASTAVA, J.

FAFO No. 841 of 2017

Smt. Shail Kumari & Ors. ...Appellants
Versus
The New India General Insurance Co. Ltd.
& Ors. ...Respondents

Counsel for the Appellants:
Mukesh Singh

Counsel for the Respondents:
Ashok Kumar Rai, Ashok Mehrotra, Chandra
Shekhar Singh Yad, Rakesh K. Tripathi

(A) Civil Law - Motor Vehicles Act, 1988 -
Section
166
-
Application
for
compensation - (National Insurance Co.
Ltd. v. Pranay Sethi, (2017) 16 SCC 680) -
various heads under which compensation
is to be awarded in a death case - loss of
consortium - consortium - a compendious
term
which
encompasses
"spousal
consortium", "parental consortium", and
"filial consortium"- right to consortium
would include the company, care, help,
comfort, guidance, solace and affection of
the deceased, which is a loss to his family
- With respect to a spouse, it would
include sexual relations with the deceased
spouse.(Para - 10)

Claimants-appellants filed a claim petition - under
Section 166 of the Motor Vehicles Act, 1988 - claim
for compensation to the tune of Rs. 25,06,000/-
along with interest was made - accident was
caused due to the rash and negligent driving of
the offending truck which was owned by
respondent no. 2. - At the time of his death, the
deceased was 35 years of age - earning a sum of
Rs. 6,000/- per month. (Para - 2)

HELD:- In view of the above, the compensation
to which the appellants are entitled is Rs.
7,46,800/- rounded off to Rs 7,50,000/-. Out of
the aforesaid amount of Rs. 7,46,800/-, a sum
of Rs 3,75,000/- shall be payable to the wife of
the deceased, Rs. 2,25,000/- shall be payable to
the minor son and the balance amount of Rs.
1,50,000/- shall be payable to the parents of the
deceased in equal proportion. In addition to the
amounts mentioned above, the appellants would
also be entitled to a sum of Rs. 40,000/- each
under the head of loss of consortium. The
appellants
would
also
be
entitled
to
proportionate interest at the rate of 7% per
annum on the above amounts, from the date of
filing of the claim petition till the date of actual
payment.(Para-13)

Out of Rs. 3,75,000/- awarded to wife, the
Tribunal shall keep Rs 2,00,000/- in a fixed
deposit in a nationalised bank, for a period of 5
years, giving highest rate of interest. The
interest payable on this amount shall be
released on quarterly basis to her. On maturity
of the fixed deposit, the maturity proceeds will
be paid to her.(Para-14)

First Appeal from order allowed.(E-7)

List of Cases Cited:-

1. National Insurance Co. Ltd. Vs Pranay Sethi,
(2017) 16 SCC 680