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Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 8785­8786 OF 2015

Kalim Khan & Others  …Appellant(s)

Versus   Fimidabee & Others          …Respondent(s)

J U D G M E N T

Dipak Misra, CJI

The legal representatives of the deceased Firoz preferred a

claim  petition  being  MAC  Petition  No. 64 of 2006  before the

Chairman, Motor Accidents Claims Tribunal (for short, ‘the

tribunal’), Washim under Section 166 of the Motor Vehicles Act,

1988 (for brevity, “the Act”) claiming compensation of Rs. 15 lacs

on the foundation that the deceased was an Assistant Teacher in

Urdu Primary School at Pusad run by Zilla Parishad, Yeotmal

and was drawing monthly salary of Rs. 8,123/­ and they were

dependent on the income of the deceased.   The assertion in the

claim petition was that land situated in survey number 136 of

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village Kajleshwar, Tq Karanja, Washim District was belonging to

Respondent No. 1 who had commenced the work for digging of

well in the above agricultural land. On 08.04.2005 at about 4.15

p.m., when the deceased was returning towards his house after

purchasing certain articles from the grocery shop, a heavy stone

came flying and fell on his head, as a consequence of which, he

sustained grievous injuries and was carried for treatment in a

jeep to the hospital where he  was declared dead. The case of the

claimants before the Tribunal  was that the stone fell on the

deceased due to blasting operation carried out for digging of well

in the field of respondent No. 1. It is further put forth that the

tractor belonging to the 1st  respondent and insured  with the

respondent No. 4 was used for digging up well by keeping the

blasting machine and, therefore, the causing of death by the use

of the tractor was established.

2. The tribunal, appreciating the materials brought on record,

came to hold that digging of the well with use of blasting machine

was carried on in the field of the owner and the tractor was used

for digging of the well with the blasting machine.   Thereafter, it

proceeded to deal with fixing of the liability and the quantum of

the compensation. On the first aspect, it took note of the

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submission advanced on behalf of the insurer that the owner had

committed breach of the policy by using the tractor for

commercial use.  To bolster the said stance, the insurer asserted

that  the owner had not taken permission  from the  competent

authority for carrying on the blasting  work in his field and,

hence, there was violation of the policy.  On behalf of the owner,

the stand was taken that the tractor was used for agricultural

purposes, for digging of the well was carried on for the irrigation

of the crops which work was incidental to agriculture and hence,

there was no violation of the policy.

3. The tribunal came to hold that on the basis of the material

brought on record, the vehicle was used for commercial purpose

and, therefore, there was a fundamental breach of the insurance

policy. It further opined that the cause of the death of the

deceased was due to vehicular accident because of the evidence

brought on record.   Emphasis  was laid on the fundamental

breach of the insurance policy by the owner and, ultimately the

liability was fastened on him directing him and other respondent

to pay the compensation of Rs. 9,30,000/­ with interest at the

rate of 6% per annum from the date of the petition till realization.

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4. Two appeals were preferred before the High Court

challenging the award of the tribunal.  The High Court noted that

the power for trigger of the explosives came from the battery of

the tractor which  was parked nearby and as explosion took

place, a large stone flew in air and fell on the head of the

deceased who was standing in front of a shop that was 300 ft.

away. It addressed to the concept of ‘use of motor vehicle’ and in

that context stated that the tractor, when it is stationary with the

additional implements/machines can  be run  using the  power

generated  by its engine for thrashing  and cutting agriculture

produce.  It  also dwelt  upon the concept that when a storage

battery of a vehicle is disconnected and taken for some other use,

sometimes it  is used for other purposes without disconnecting

the  battery from  the  vehicle.  On  the factual issue, the  High

Court opined that the battery of  the vehicle was still installed

inside and the terminals were used for providing power to the use

of explosive. However, it further went on to say that the battery

was practically detached from the vehicle and was not a part of

the vehicle and on that basis ruled that use of battery for causing

explosion cannot be said to be use of  vehicle, for the vehicle was

not used for causing explosion. Eventually, it held that it could

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not be said that the accident that took place had arisen out of

the use of motor vehicle as defined in Section 165 of the Act and,

therefore, the claim petition under Section 166 was not

maintainable. Expressing the aforesaid view, the High Court set

aside the award passed by the tribunal.

5. We  have  heard  Ms.  Aparna  Jha, learned  counsel for the

appellants, Ms. Aishwarya Bhati, learned counsel for the

respondent No. 2 and Mr. Abhishek Kumar, learned counsel for

the respondent No.  4.  

6. As is noticeable, the High Court has recorded a finding that

the battery was practically detached from the vehicle. The

correctness of this finding is required to be determined first. It is

necessary to note here that the tribunal has treated the accident

to be a vehicular accident and entertained the claim. As we find,

the High Court has not analyzed any evidence brought on record

to  come to the conclusion that the battery  of the  vehicle  was

practically detached from the vehicle and was not a part of the

vehicle. On the contrary, the Tribunal had noticed that the

panchnama of the tractor, Ex­42, clearly showed that the tractor

was in the field and the blasting machine was found on tractor

with wrapped gas pipe and an explosive  battery  found on the

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tractor with the wooden cover.  It has referred to Ex­41 and other

oral evidence to record the finding that the blasting machine was

kept on the tractor driven by the driver engaged by the owner

and the tractor was used for digging of the well with the blasting

machine. The insurer, as is evident, had only raised a singular

plea with regard to use of the tractor, namely, ‘commercial

purpose’ and on that foundation, it had advanced the stance that

there had been fundamental breach of the insurance policy.

Keeping in view the evidence on record, we agree with the view

expressed by the tribunal that the battery was still installed on

the vehicle and the power was drawn from the battery for

explosive purposes.   Having arrived at the aforesaid conclusion,

we shall proceed to deal with the concept of ‘use’ and determine

whether the accident could be regarded as a vehicle accident.  

7. Section  165  deals  with the claims tribunals. It  uses the

word ‘use of motor vehicles’. For the sake of completeness, we

reproduce the relevant part of the said provision:­

“Section 165. Claims Tribunals.—

(1) A State Government may, by notification in the Official Gazette, constitute one or more Motor Accidents Claims Tribunals (hereafter in this Chapter referred to  as  Claims  Tribunal) for such area as may be specified in the notification for the purpose of adjudicating upon claims for

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compensation in respect of accidents involving the death of, or bodily injury to, persons arising out of the use of motor vehicles, or damages to any property of a third party so arising, or both…..”

The aforesaid provision makes it vivid that the tribunal can

adjudicate the claims for compensation in respect of  accidents

arising  out  of  use  of  motor vehicles.  Thus, the fundamental

requirement is that the accident should arise out of the use of

the motor vehicle.   If there is no use of the motor vehicle, the

question of vehicular accident will not arise.

8. In this context, reference to certain definitions, as stated in

the dictionary clause would be apt.  Section 2(28) defines ‘motor

vehicle’ or ‘vehicle’. It reads as follows:­

“(28) “motor vehicle” or “vehicle” means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of  not exceeding twenty­five cubic centimeters;"

Section 2(44) defines ‘tractor’ to mean a motor vehicle which

is not itself constructed to carry any load (other than equipment

used for the purpose of propulsion); but excludes a road­roller.

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9. Keeping the aforesaid definitions in view, we are required to

analyze whether the use of the vehicle in the manner in which it

is done can be treated as use of the vehicle to cause a vehicular

accident.   This Court in Shivaji Dayanu Patil and another v.

Smt. Vatschala Uttam More1  was dealing with conceptual

meaning of the phrase “arising out of the use of motor vehicle”

as contained  in Section 92­A of the Motor  Vehicles  Act,  1939

(hereinafter referred to as ‘the 1939 Act’). We may note with profit

that Section 92­A(1) used the words “an accident arising out of

the use of a motor vehicle” and Section 165 of the Act that has

been reproduced hereinabove also uses the words “arising out of

the use of motor vehicles”. Thus, there has been no change in

this part of the provision.  

10. In Patil’s case, there was a collision between a petrol tanker

and a tractor on the national highway as a result of which, the

petrol tanker went off the road and fell on its left side as a result

of its  turning turtle, the petrol  contained  in  it leaked out and

collected nearby.  The accident took place at about 3 a.m. and at

about 7.15 a.m. an explosion took place in the said petrol tanker

resulting in fire and the persons who had assembled near the

1 (1991) 3 SCC 530

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tanker sustained injuries  and  one  of them succumbed  to the

injuries.   On a claim petition being filed, the tribunal dismissed

the same on the ground that the explosion could not be said to

be an accident arising out of the use of the petrol tanker and that

the provision of Section 92­A of the 1939 Act were not attracted.

It expressed the view that the accident that took place at 7.15

a.m. was an independent explosion. On appeal, the learned single

Judge of the High Court held that though at the material time the

tanker was not being driven on the highway and was lying turtle

on its side on the highway but it would be covered by the

expression ‘use’ as contemplated in Section 92­A of the 1939 Act.

In Letters  Patent  Appeal, the  Division  Bench  opined that the

expression ‘use’ of motor vehicle covers a very wide field, a field

more extensive than  which  might  be called traffic  use of the

motor vehicle and that the use of a vehicle is not confined to the

periods when it was in motion or was moving and that a vehicle

would still  be  in use even when it was stationary.  It  had also

expressed the view that it could not be inferred that there was no

causal relation between the earlier event and the later incident of

explosion  and fire  and further, the earlier collision if  not the

cause, was at least the main contributory factor for the

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subsequent explosion.  Being of this view, the  Division  Bench

affirmed the judgment of the learned single Judge.  

11. This Court referred to the Statement of Objects and Reasons

for introduction of  Section 92­A  to  Section 92­E of the  Motor

Vehicles (Amendment) Act, 1982. Analyzing, Chapter VII­A of the

1939  Act  which  was amended  by  Act 47 of 1982  dealt  with

“Liability without fault in certain cases”,   the Court referred to

the anatomy of Section 92­A, the purpose behind it, the concept

of beneficial legislation and proceeded to interpret the  words

‘arising out of the use of motor vehicle’. Be it noted, on behalf of

the petitioners therein, a contention was raised that the tanker

had ceased  to  be  a  mechanically  propelled  vehicle.  The Court

relied on the decision in Newberry v. Simmonds2 wherein it was

held that the  motor  car  does  not  cease to  be  a  mechanically

propelled vehicle  upon the  mere removal of the engine if the

evidence admits the possibility that engine may shortly be

replaced and the  moving power restored.   The  Court further

referred to the authority in Smart v. Allan3 where the defendant

had brought a car for £ 2 and subsequently sold it as scrap for

30 cents. It was found that the engine was in a rusty condition

2 [1961] 2 ALL ER 318 3 [1962] 3 ALL ER 893

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and was incomplete and it did not work, and there was no gear­

box or electric batteries;  and the car was  incapable of  moving

under its own power, having been towed from place to place and

that it could only have been put in running order again by

supplying  a  considerable  number  of spare  parts  and  effecting

considerable repairs, the cost of which would have been out of all

proportion  to its  value. It  was  contended before the  House  of

Lords that every vehicle which starts its life as a mechanically

propelled vehicle remains as such until it is physically destroyed.

The said submission was rejected by Lord Parker, CJ who

observed thus:­

“… it  seems to me as a matter of  common sense that some limit must be put, and some stage must be reached, when one can say: ‘This is so immobile that  it  has ceased to be a mechanically  propelled vehicle’. Where, as in the present case, and unlike Newberry v. Simmonds, there is no reasonable prospect of the vehicle ever being made mobile again, it seems to me that, at any rate at that stage, a vehicle has ceased to be a mechanically propelled vehicle.”

This Court agreed with the aforesaid formulation and

reasoning and came to hold that the petrol tanker had not ceased

to be a motor vehicle.  

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12. The two­Judge Bench thereafter proceeded to interpret the

expression ‘use  of the  motor  vehicle’, for it  was  urged that  a

vehicular accident could only take place  when the vehicle is

mobile.    

13. Learned counsel for the petitioner therein urged for placing

a narrow meaning on the word ‘use’ by confining it to a situation

only when the vehicle is mobile.  On behalf of the respondent, it

was suggested that a wider connotation for the word ‘use’ should

be taken so as to include the period when the vehicle is

stationary.   On behalf of the respondents, observations made in

Elliott v. Grey4,  Government Insurance Office of New South

Wales v. R.J. Green & Lloyd Pty. Ltd.5, Pushpa Rani Chopra

v. Anokha Singh6,  General Manager, K.S.R.T.C. v. S.

Satalingappa7 and Oriental Fire and General Insurance Co.

Ltd. v. Suman Navnath Rajguru8 were pressed into service. The

Court, after referring to the decisions cited by the respondent and

the analysis made by the High Court, opined:­

“26. …In our opinion, the word “use” has a wider connotation to cover the period when the vehicle is not  moving and is stationary and the use of a vehicle  does  not cease on  account of the vehicle

4 [1960] 1 QB 367 : [1959] 3 All ER 733 5 (1965) 114 CLR 437 6 1975 ACJ 396 (Del HC) 7 1979 ACJ 452 (Kant HC) 8 1985 ACJ 243 (Bom HC)

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having been rendered immobile on account of a breakdown or mechanical defect or accident. In the circumstances, it cannot be said that the petrol tanker was not in the use at the time when it was lying on its side after the collision with the truck.”

14. After so holding, the Court proceeded to consider whether

explosion and fire  which caused injuries to the insured and

eventual death of one could be said to have taken place due to an

accident arising out of the use of the motor vehicle, i.e., the petrol

tanker. In that context, the question of causal relationship

between the user of the motor vehicle and the accident which has

resulted in death or disablement arose.  Be it stated, the stand of

the petitioner  that  the deceased and the  injured persons were

engaged in pilferage of petrol and the explosion of fire took place

because of the unlawful activities was negatived as the finding

recorded by the tribunal on the said score had been overturned

by the learned Single Judge whose view had been approved by

the appellate Bench of the High Court.

15. The Court referred to Heyman v. Darwins Ltd.9, Union of

India v. E.B. Aaby’s Rederi A/S10 and Samick Lines Co. Ltd.

v. Owners of the Antonis P. Lemos11 and thereafter adverted to

9  [1942] AC 356 : [1942] 1 All ER 337 10 [1975] AC 797 : [1974] 2 All ER 874 11 [1985] 2 WLR 468

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the decision of the High Court of Australia in  R.J. Green Case

wherein Lord Barwick, C.J. has stated:­

“Bearing in mind the general purpose of the Act I think the expression ‘arising out of’ must be taken to require a less proximate relationship of the injury to the relevant  use  of the vehicle than is required to satisfy the words ‘caused by’. It may be that an association of the injury with the use of the vehicle while it cannot be said that that use was causally related to the injury may yet be enough to satisfy the expression ‘arise out of’ as used in the Act and in the policy.”

 The observation of Windeyer, J. that was reproduced by the

Court is to the following effect:­

“The words ‘injury caused by or arising out of the use of the vehicle’  postulate a causal relationship between the use of the vehicle and the injury. ‘Caused by’ connotes a ‘direct’ or ‘proximate’ relationship of cause and effect. ‘Arising out of’ extends this to a result that is less immediate; but it still carries a sense of consequence.”

16. The two­Judge Bench, appreciating the wider connotation,

proceeded to lay down:­

“36.  This would show that as compared to the expression “caused by”, the expression “arising out of” has a wider connotation. The expression “caused by” was used in Sections 95(1)(b)(i) and (ii) and 96(2) (b)(ii) of the Act. In Section 92­A, Parliament, however,  chose to use the expression “arising out of” which indicates that for the purpose of awarding compensation under Section 92­A, the causal relationship between the use of the motor  vehicle

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and the accident resulting in death or permanent disablement is not required to be direct and proximate and it can be less immediate. This would imply that accident should be connected with the use  of the  motor  vehicle  but the  said  connection need not be direct and immediate. This construction of the expression “arising out of the use of a motor vehicle” in Section 92­A enlarges the field of protection made available to the victims of an accident and  is in consonance with the beneficial object underlying the enactment.”

17. Thereafter, the Division Bench posed the question, whether

the accident involving explosion and fire in the petrol tanker was

connected with the use of tanker as a motor vehicle.  Concurring

with the view of the High Court, it ruled:­

“37. …In our view, in the facts and circumstances of the present case, this question must be answered in the affirmative. The High Court has found that the tanker  in question was carrying petrol which  is a highly combustible and volatile  material  and after the collision with the other motor vehicle the tanker had fallen on one of its sides on the sloping ground resulting in escape of highly inflammable petrol and that there was grave risk of explosion and fire from the petrol coming out of the tanker.  In the light of the aforesaid circumstances the learned Judges of the High Court have rightly concluded that the collision between the tanker and the other vehicle which had occurred earlier and the escape of petrol from  the tanker  which  ultimately resulted in the explosion and fire were not unconnected but related events and  merely because there  was interval of about four to four and half hours between the said collision and the explosion and fire in the tanker, it cannot  be  necessarily inferred that there  was  no causal relation between explosion and fire.  In the

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circumstances, it  must be held that the explosion and fire resulting in the injuries which led to the death of Deepak Uttam More was due to an accident arising out of the use of the motor vehicle viz. the petrol tanker No. MKL 7461.”

[Emphasis supplied]

The aforesaid analysis throws immense light to understand

the concept of “related events” and “causal relation”. They have

been distinguished from an event which is not connected.

Needless to say, the appreciation of causal relation is a question

of fact in each case and is to be weighed and appreciated on the

basis of the materials brought on record.  

18. In Union of India v. United India Insurance Co. Ltd. and

others12, a two­Judge Bench has opined that the words ‘use of

the motor vehicle’ is to be construed in a wider manner.   The

learned Judges referred to the decision in  Patil’s  case wherein

reference was made to the Australian case in R.J. Green (supra)

and to the observations of Lord Barwick, C.J. that those words

have to be widely construed. The Court, in the latter case,

referred to the observations of Windeyer, J. in R.J. Green’s case

which read thus:­

 “… no sound reason was given for restricting the phrase, ‘the use of a motor vehicle’ in this way. The

12 (1997) 8 SCC 683

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only limitation upon it … that I can see is that the injury must be one in any way a consequence of a use of the vehicles as a motor vehicle.”

The aforesaid passage emphasizes on “consequence of a

use”. It is equated with a “related event”.  

19. The aforesaid view has been reiterated in Samir Chanda v.

Managing Director, Assam State Transport Corporation13.  In

the  said  case,  a bomb exploded  inside  the  bus as a  result  of

which the appellant sustained serious injuries on his legs.   The

tribunal passed an award in favour of the claimant.   In appeal

preferred by the respondent, the High Court, while not disturbing

the finding of the tribunal on facts, expressed the view that there

was no negligence on the part of the owner or the driver of the

vehicle and, therefore, the question of paying compensation did

not arise.  This Court referred to Patil’s case and placing reliance

on the same, opined:­

“14. … The explosion took place inside the bus is an admitted fact and the usual police escort was not there. The High Court, except observing that there was no negligence, has not upset the finding of the Tribunal that the atmosphere during the period of accident was so polluted requiring care on the part of the conductor and the driver of the bus. There cannot be any doubt that the accident arose out of

13 (1998) 6 SCC 605

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the use of the motor vehicle justifying the claim of the appellant.”  

20.  The decision in  United India Insurance Co. Ltd.  (supra)

has ruled that if it is ultimately found that there is no negligence

on the part of the driver of the vehicle or there is no defect in the

vehicle but the accident is only due to the sole negligence of the

other parties/agencies, then on that finding, the claim would go

out of  Section 110(1) of the 1939 Act because the case would

then become one of exclusive negligence of the Railways. Again if

the  accident  had  arisen  only  on  account of the  negligence of

persons other  than the driver/owner of the motor  vehicle, the

claim would not be maintainable before the tribunal.

21. The said opinion has been overruled by a three­Judge

Bench decision in  Union of India v. Bhagwati Prasad (Dead)

and others14.  We have placed reliance  on the  Division Bench

judgment,  as we are really  not  concerned about  the overruled

part.  However, we may note with profit that Bhagwati Prasad’s

case expands the horizon of the jurisdiction of the Motor

Accidents Claims Tribunal by stating that a combined reading of

Sections 110 and 110­A, which deal with the constitution of one

14 (2002) 3 SCC 661

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or more Motor Accidents Claims Tribunals  and application  for

compensation  arising  out  of  an  accident,  as  specified in  sub­

section (1) of Section 110 unequivocally indicates that the Claims

Tribunal would have the jurisdiction to entertain application for

compensation both by the persons injured or legal

representatives of the deceased when the accident arose out of

the  use of a  motor vehicle. The crucial expression conferring

jurisdiction upon the Claims Tribunal constituted under the

Motor Vehicles  Act is the accident arising out of the use of  a

motor vehicle and, therefore, if there has been a collision between

the motor vehicle and railway train then all those persons injured

or legal representatives of the deceased could make application

for compensation before the Claims Tribunal not only against the

owner, driver or insurer of the motor vehicle but also against the

Railway Administration. Once such an application is held to be

maintainable and the tribunal entertains such an application, if

in course of enquiry the tribunal comes to a finding that it is the

other joint tortfeasor connected with the accident who was

responsible and not the owner or driver of the motor vehicle then

the tribunal cannot  be  held to  be  denuded  of its jurisdiction

which it had initially. In other words, in such a case also tribunal

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would be entitled to award compensation against the other joint

tortfeasor.  

22. From the aforesaid authorities, it is limpid that the

expression ‘use of the vehicle’ under certain circumstances can

be attracted when the vehicle is stationary or static.   A Division

Bench of the High Court of Orissa in Kanhei Rana and another

v. Gangadhar Swain and others15  while dealing with a

situation  where the  deceased labourer  after loading the truck

with logs lost his life.   The tribunal had categorically found that

death was on the account of fall of a log, when the truck was

being loaded with logs.  The learned Single Judge, in appeal, had

concurred with the view of the tribunal by opining that the fall of

the log had no nexus with the use of the vehicle not even

remotely, and there was no material to show that the fall of the

log was occasioned due to use of the vehicle. He had further held

that the careless handling of goods being loaded on or unloaded

from a vehicle had no connection to the vehicle itself. Reversing

the conclusion of the learned single Judge, the Division Bench

opined that the concept of movement being not intrinsically or

inherently connected with the use and the term 'use' having been

15 AIR 1993 ORI 89

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connotatively expanded, there can be no doubt that the same can

also be extended to the arena/sphere of a claim advanced under

Section 110 of the 1939 Act. Heavy onus is cast on the driver to

avoid negligence while the vehicle is in use. If the term 'use' in its

conceptual sweep engulfs no motion or no movement or

stationariness, then by logical corollary it is made essential that

the driver or for that matter any agent of the owner should be

careful and non­negligent. Negligence in driving is regarded as a

fact that the vehicle is in  motion.  But the definition of 'use'

having been expanded in its broader canvas, it has to clothe in

its  sweep other  categories  of  negligence.  To elaborate,  when a

vehicle remains static, it cannot constitute that the driver is

negligent because of his rash and negligent driving. On the

contrary, it has to embody some other different types of

negligence.  Of course that  would depend  upon the facts and

circumstances of each case. The  Division  Bench of the  High

Court went on to say that the apex Court in  Patil  (supra)

was dealing with the negligence so far as it was concerned with

Section 92 of the Act, but as the language of Section 92­A and

Section 110 of the old Act used the same phraseology and there

is absence of any etymological distinction, the same

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meaning should be given to the expression under Section 110 of

the old Act. The appellate Bench held that

there was causal relationship with the accident which had

resulted in the death of the claimant.

23. We entirely  agree with  the  aforesaid analysis, for it is in

accord with the view of the decisions of this Court.

24. It may be reiterated here that the causal relationship should

exist between violation and the accident caused. There has to be

some act done by the person concerned in causing the accident.

The  commission or  omission must  have  some nexus  with the

accident.  The word ‘use’ as has been explained by the authorities

of this Court need not have an intimate and direct nexus with the

accident.   The Court has to bear in mind that the phraseology

used by the legislature is “accident arising out of use of the motor

vehicle”. The scope has been enlarged by such use of the

phraseology and this Court taking note of the beneficial provision

has placed a wider meaning on the same. There has to be some

causal relation or the incident must relate to it. It should not be

totally unconnected. Therefore, in each case what is required to

be seen is whether there has been some causal relation or the

event is related to the act.

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25. Presently, we shall scrutinse the factual score in the case at

hand. As is evincible, the battery was installed in the tractor and

the explosives were charged by the battery.  The purpose was to

dig the well in the field. In such an obtaining factual matrix, it

would be an erroneous perception to say that the vehicle was not

in use as stipulated under Section 165 of the Act. Hence, we have

no hesitation in holding that the Division Bench has fallen into

error on the said score.  

26. Having said that, we have to presently analyse on whom the

liability should be mulcted. As is evident, the insurer has

advanced the plea that the tractor was insured under “Farmer

Package Policy” for agriculture purpose by the owner of the

vehicle. However, it was used for commercial purpose by

mounting a blasting machine thereon.  That use was in breach of

insurance policy and, therefore, the insurer was not liable to pay

the compensation. The insurer also examined its employee,

namely, Mr. Chararkar to establish the fact that the owner of the

vehicle had committed breach of insurance policy by using it for

commercial purpose and for transporting the blasting machine.

The  tribunal  has  adverted  to  the plea of the  insured  that the

vehicle was used for digging of the well in the field of respondent

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No. 1 (Fimidabee  w/o  Abdul  Gaffar)  which obviously  was for

irrigation and incidental to agricultural activity and not in breach

of the insurance policy. The rival contention in this behalf has

been considered by the tribunal in the following words:­  

“29. The  Respondent  No.2  has admitted the fact that Insurance Policy  of  offending tractor  was  for the agricultural purpose.   The insurance of offending tractor was taken at Jaipur, Rajasthan. It was brought for commercial activity namely the blasting work. The blasting machine was found on the tractor. No permission from Competent Authority was taken for the blasting work and therefore, the Respondent No.2 has used tractor for commercial purpose and consequently there was fundamental breach of the Insurance Policy. The Respondent No.2 committed fundamental breach of the Insurance Policy allowing the use of tractor for commercial purpose and therefore, the decision cited supra is inapplicable.”

And again in paragraphs 35, 36 and 37, the tribunal has

observed:­

“35. The Respondent No. 1 has come with the case that digging work with blasting operation was given with sole responsibility of Respondent Nos. 2 and 3. The Respondent Nos. 2 and 3 have come with the case that blasting work for digging of well was taken at the risk of Respondent No.1 to 3 have not produced documentary evidence showing that digging  work of  well  with blasting operation  was being done on the sole responsibility either of Respondent No.1 or of the respondent Nos. 2 and 3. In absence of such evidence, the Respondent Nos. 1 to 3 are jointly and severally liable to pay compensation.

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36. It was submitted on behalf of Respondent No.4 that Respondent No.2 committed fundamental breach of Instruction Policy by using the tractor for commercial purpose and therefore, Respondent No.4  cannot  be  directed  to  make  the  payment to petitioners and recover the same from the owner of offending tractor.              xxx xxx xxx 37. The Respondent No.2 allowed the use of offending  tractor  for  doing  the blasting work and therefore there was fundamental breach of the Insurance Policy. Since there was fundamental breach of the Insurance Policy for using the offending tractor for commercial purpose and consequently, Respondent No. 4 is not liable to pay the compensation and directed to pay the same and recover the same from Respondent No. 2 owner of offending tractor.                      xxx xxx xxx”

The High Court, however, has not analysed this issue at all,

for it took the view that as the vehicle was not used for causing

explosion, it could not be said that the accident had arisen out of

use of motor vehicle as defined under Section 165 of the Act.

27. From the factual position as already analysed earlier, it is

noticed that the battery of the tractor was used for digging of well

in a field used for agricultural purpose. The insured had

contended that  the work of  digging of  well in  a  field  used  for

agricultural purpose would embrace an activity associated with

agriculture for irrigating the field and we have answered the same

in  the affirmative.  We may  immediately  state that  our  answer

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does not help in fastening the liability because there has been no

analysis as regards the terms and conditions of the policy and its

fundamental character. The High Court,  as we notice, has not

dealt  with any of these matters, the  adjudication whereof  has

now become inevitable to answer the issue about the liability to

be borne by the  insurer, the owner of the vehicle  (insured) or

otherwise. This adjudication requires analysis of relevant

material including the insurance policy and evidence of

concerned witnesses, for understanding the terms and conditions

of the policy regard being had to nature of policy and the extent

of the liability of the insurer, if any. As the High Court has not

considered this aspect at all, we deem it appropriate to relegate

the parties to the High Court for determining the singular issue

about fastening of the liability on the insurer or the owner of the

vehicle.  Under these circumstances,  we  are of the considered

opinion that  until that issue is finally  decided, the insurance

company  must pay the compensation amount payable to the

claimants as determined by the tribunal in terms of the award

dated 5th  January, 2008, which payment will be subject to the

outcome  of the remanded  appeals to  be  decided  by the  High

Court.  Needless to state that the claimants need not contest the

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remanded proceedings before the  High Court  as it is remitted

only for  limited purpose to determine the liability amongst the

insurer (United India Assurance Co. Ltd.) and owner of the

vehicle, Kanhaiyalal.  

28.  In view of the aforesaid analysis, we partly allow both the

appeals, set  aside the judgment  of the  High Court  dated 10 th

October, 2013 in First Appeal Nos. 494 of 2013 and 437 of 2008

and restore both the First Appeals to the file of the High Court to

their original numbers for being decided on the question as to

who should be made liable to pay the compensation amount as

determined  by the tribunal to  be  paid to the claimants.  We

request the High Court to decide the First Appeals expeditiously,

with reference to the limited issue of liability to pay

compensation.  In terms of this order, the insurance company is

directed to deposit the compensation amount before the tribunal

within eight weeks hence, which will be without prejudice to the

rights and contentions of the insurance company in the

remanded  First  Appeals. In the event the insurance company

succeeds, it will have the right to recover the same with interest

accrued thereon from the owner of the vehicle. The amount

deposited by the insurance company shall be disbursed by the

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tribunal keeping in view the law laid down in General Manager,

Kerala  State  Road Transport  Corporation,  Trivandrum v.

Susamma Thomas and others16.  

29. In the facts and circumstances of the case, there shall be no

order as to costs.  

……………………………CJI. (Dipak Misra)

……………………………...J. (A.M. Khanwilkar)

……………………………...J.                           (Dr. D.Y. Chandrachud)

New Delhi; 03 July, 2018

16 (1994) 2 SCC 176