Page 1

                    IN THE SUPREME COURT OF INDIA  CIVIL  APPELLATE JURISDICTION

   CIVIL APPEAL NO.477 OF 2007

NEW INDIA ASSURANCE COMPANY LIMITED Appellant(s)

       Versus

PRABHA DEVI AND OTHERS Respondent(s)

    W I T H

   CIVIL APPEAL NO. 479 OF 2007

NEW INDIA ASSURANCE COMPANY LIMITED       Appellant(s)

Versus

PRABHA DEVI AND OTHERS       Respondent(s)

O R D E R

This  order  will  dispose  of  Civil  appeal  

No. 477 of 2007 and Civil Appeal No. 479 of 2007, as  

both arise from the same accident.  

In view of the order that we propose to  

make, we shall notice the facts only from Civil appeal  

No. 479 of 2007.

Puran  Singh,  deceased  had  taken  an  

insurance policy on 29th June, 1994 in respect of his  

vehicle  bearing  registration  No.  UP-01-1489  for  the  

period 29.6.1994 to 28.6.1995.  The relevant clause in  

the policy on the basis of which the Insurance Company  

denies its liability is as under :-

“Subject to the limits of liability  as  laid  down  in  the  Schedule  here  to  the  company  will  indemnify  the  insured  against  all  sums  including  claimant's  cost  and

Page 2

expenses  which  the  insured  shall  become  legally liable to pay in respect of death to  any person caused by or arising out of the  use (including the loading and/or unloading)  of the motor vehicle.”

The other relevant condition of the policy  

relied upon by the insurer is as under :-

“IMT 12 Legal liability to passengers  excluding  liability  for  accidents  to  employee of the insured arising out of and  in the course of their employment.

In  consideration  of  an  additional  premium  of  Rs....  and  notwithstanding  anything  to  the  contrary  contained  in  Section  11-1(c)  but  subject  otherwise  to  the  terms  exceptions  conditions  and  limitations of this Policy the company will  indemnify the insured against liability at  Law for compensation (including Legal costs  of  any  claimant)  for  death  of  or  bodily  injury to any person other than a person  excluding  under  Section  11-1(b)  being  carried  in  or  entering  or  mounting  or  alighting from the Motor Vehicle but such  indemnity arising out of one cause.

Provided always that in the event of  an  accident  occurring  whilst  the  Motor  Vehicle is carrying ore than the number of  person mentioned in the schedule hereto as  being the License carrying capacity of that  vehicle in addition to the conductor if any  then the insured shall repay to the company  rateable  proportion  of  the  total  amount  which would be payable to the Company by  reason of this endorsement if not more than  the said number of persons were carried in  the Motor Vehicle.........”

On 22nd February, 1995, the insured vehicle  

was involved in an accident in which the owner thereof,  

Shri  Puran  Singh  was  travelling.   The  vehicle  

overturned and Puran Singh died as a result of the  

injuries caused in the accident.  The legal heirs of  

the deceased  owner of the insured Jeep filed a claim  

petition under Section 166 of the Motor Vehicles Act,

Page 3

1988 (in short 'the Act') for compensation before the  

Motor Accident Claims Tribunal (in short 'the MACT'),  

Almora, against the appellant – Insurance Company.  It  

was  alleged  that  at  the  time  of  the  accident,  one  

Chandan Singh was driving the vehicle.  The appellant  

contested the claim of the legal heirs of the deceased.  

In the written statement filed before the MACT, it was  

pleaded that the application for compensation was not  

maintainable inasmuch as the deceased was the owner of  

the vehicle and was not a passenger in the  Jeep and  

therefore, third party claim could not be granted to  

the legal representatives of the deceased.  The MACT  

allowed the claim petition and awarded compensation in  

the sum of Rs.3,20,000/- in favour of the claimants of  

the  legal  heirs  of  the  deceased,  by  Award  dated  

28.9.2001.   

Feeling  aggrieved  by  the  Award,  the  

Insurance Company filed First Appeal under Section 173  

of the Act in the High Court of Uttaranchal at Nainital  

being Appeal from Order No. 1541 of 2001.  The High  

Court dismissed the aforesaid appeal on 28th August,  

2004.  The High Court noticed that in the appeal, the  

Insurance Company apart from taking the usual defence  

of violation of policy condition, had also challenged  

the Award on the point of quantum of compensation.  It  

was pleaded that the Tribunal has wrongly determined  

the income of the deceased and therefore, granted the  

compensation contrary to the well settled principles

Page 4

for  determination  of  compensation  in  Motor  Accident  

Claim cases.  The High court affirmed the finding of  

the MACT since the deceased owner was travelling in the  

jeep.  The  appellant  cannot  escape  liability  on  the  

ground that he was not a passenger.  Therefore, the  

appeal filed by the Insurance Company was dismissed.

We  have  heard  learned  counsel  for  the  

parties.

Mr. Vishnu Mehra, learned counsel for the  

appellant in Civil Appeal No. 479 of 2007 has submitted  

that the MACT as well as the High Court have erred in  

granting any compensation to the legal representatives  

in view of Section 147 of the Act.  He submits that in  

similar  circumstances,  this  Court  in  the  case  of  

Dhanraj versus New India Assurance Company Limited and  

another reported in (2004) 8 SCC 553 has clearly held  

that the liability of the Insurance Policy is only for  

the purpose of indemnifying the insured against the  

liabilities  incurred  towards  a  third  party  or  in  

respect of damages to property.  Therefore, since the  

deceased himself was the insurer as well as the owner  

of the vehicle, no amount of compensation could have  

been awarded to  the claimants.   

We have perused the judgment of this Court  

in  the  case  of  Dhanraj  Supra.   In  that  case,  the  

appellant who was the insurer was travelling in the  

insured vehicle, which met with an accident.  In the  

accident, the appellant as well as the other passengers

Page 5

received injuries.  A number of claim petitions came to  

be filed.  The appellant who was the insurer also filed  

a claim petition.  The MACT held the driver of the Jeep  

responsible  for  the  accident.   In  all  the  claim  

petitions filed by the other passengers, MACT directed  

that the appellant (the owner) as well as the driver  

and  the  Insurance  Company  were  liable  to  pay  

compensation.  Furthermore, in the claim petition filed  

by the appellant, the MACT directed the driver and the  

Insurance Company to pay compensation to the appellant.  

The aforesaid finding of the MACT was upheld by the  

High  Court  in  the  appeal  filed  by  the  Insurance  

Company.  The Insurance Company was, in appeal before  

this Court challenging the judgment of the High Court  

awarding  compensation  to  the  owner  of  the  insured  

vehicle.   Taking  into  consideration  the  provision  

contained  in  Section  147  of  the  Act,  this  Court  

observed as follows :-

“8. Thus, an insurance policy covers  the  liability  incurred  by  the  insured  in  respect of death of or bodily injury to any  person (including an owner of the goods or  his 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.  Section 147 does not require an  insurance company to assume risk for death or  bodily injury to the owner of the vehicle.

9.In  the  case  of  Oriental  Insurance  Co. Ltd. versus Sunita Rathi it has been held  that the liability of an insurance company is  only  for  the  purpose  of  indemnifying  the  insured against liabilities incurred towards  a third person or in respect of damages to  property.  Thus, where the insured i.e. an  owner of the vehicle has no liability to a  third  party  the  insurance  company  has  no

Page 6

liability also.

10.In this case, it has not been shown  that the policy covered any risk for injury  to  the  owner  himself.   We  are  unable  to  accept  the  contention  that  the  premium  of  Rs.4989 paid under the heading “Own damage”,  the  words  “premium  on  vehicle  and  non- electrical accessories” appear.  It is thus  clear that this premium is towards damage to  the vehicle and not for injury to the person  of the owner.  An owner of a vehicle can only  claim provided a personal accident insurance  has been taken out.  In this case there is no  such insurance.”  

In view of the aforesaid ratio of law, the  

claim  made  by  the  respondents  could  not  have  been  

allowed.  Consequently, Civil Appeal No. 479 of 2007 is  

allowed.  The impugned Award as well as the impugned  

judgment of the High Court are set aside.

Civil Appeal No. 477 of 2007

In this appeal the respondents had claimed  

interest on Rs.3,20,000/- i.e. the amount awarded.  The  

High court, by the impugned order, granted 6% interest  

from the date of filing of the claim petition till  

payment.

In  view  of  the  order  passed  in  Civil  

Appeal No. 479 of 2007, no orders are required to be  

passed in this appeal as it is rendered infructuous.  

The appeal is disposed of accordingly.

                ...........................J.             (SURINDER SINGH NIJJAR)

Page 7

                ...........................J.                           (PINAKI CHANDRA GHOSE)

New Delhi, March 13, 2013

Page 8

ITEM NO.102               COURT NO.10             SECTION X

           S U P R E M E   C O U R T   O F   I N D I A                          RECORD OF PROCEEDINGS

                   CIVIL APPEAL NO(s). 477 OF 2007

NEW INDIA ASSURANCE COMPANY LIMITED               Appellant (s)

                           VERSUS

PRABHA DEVI AND OTHERS        Respondent(s)

WITH Civil Appeal NO. 479 of 2007 NEW INDIA ASSURANCE COMPANY LIMITED VERSUS PRABHA DEVI AND OTHERS

Date: 13/03/2013  These Appeals were called on for hearing today.

CORAM :         HON'BLE MR. JUSTICE SURINDER SINGH NIJJAR         HON'BLE MR JUSTICE PINAKI CHANDRA GHOSE

For Appellant(s) Mr. Vishnu Mehra, Adv. Ms. Sakshi Mittal, Adv.

                      Mr. B.K.Satija,Adv.

For Respondent(s)                        Mr. R.V. Kameshwaran,Adv.

Mr. Y. Lakesh, Adv.                       

          UPON hearing counsel the Court made the following                                O R D E R  

Civil Appeal No. 479 of 2007 is allowed in  

terms of the signed order.

Civil Appeal No. 477 of 2007 is disposed of  

in terms of the signed order.

     (Sukhbir Paul Kaur)                    (Indu Bala Kapur)         Court Master              Court Master   

       (Signed order is placed on the file)