LexASSURANCE COMPANY LTD. versus SADANAND MUKHI AND OTHERS
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[2008] 17 S.C.R. 1313 NEW INDIA ASSURANCE COMPANY LTD. A v. , SADANAND MUKHI AND OTHERS (Civil Appeal No. 7402 of 2008) DECEMBER 18, 2008 B [S.B. SINHA AND CYRIAC JOSEPH, JJ.] ~ Motor Vehicles Act, 1988: ss.147, 165 - Act policy - Death of son of owner of insured vehicle while driving the insured vehicle - Liability of insurance company to pay compensation to owner- Held: Not liable as son was not third c party - Insurance Act, 1938. Insurance Act, 1938: Liability of insurer - Statutory or contractual - Distinction between. The question which arose for consideration in the D present appeal is whether the insurance company is liable to pay the compensation in relation to the accident occurred by use of vehicle which was driven by the son of insured. Allowing the appeal, the Court E HELD:1.1. Contract of insurance of a motor vehicle is governed by the provisions of the Insurance Act. The terms of the policy as also the quantum of the premium payable for insuring the vehicle in question depends not only upon the carrying capacity of the vehicle but also F 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 fu!fils his statutory obligation as contained in Section 147 of the Motor Vehicles Act. The liability of the insurer is either statutory G 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. It is one thing to say that the life is uncertain and the same is required to be covered, but it is another thing 1313 H 1314 SUPREME COURT REPORTS [2008] 17 S.C.R. A to say that a statute must be read 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 B Insurance Act appear to "be wholly rational. [Para 15] (1320-F-A; 1321-8-C] 1.2. It is not a case where even Section 163-A of the Act was resorted to. Respondents filed an application ~ under Section 166 of the Act. Only an Act policy was j .... c taken in respect of the motor vehicle. Submission of the claimants that being a two wheeler, the vehicle was more · - prone to accident and, therefore, whosoever becomes victim of an accident arising out of the use thereof would «-:r r- come within the purview of the term "a person" as D provided for in Section 147 of the Act is not correct. (Paras 13 and 14] (1320-E-F] United India Insurance Co. Ltd. v. Tilak Singh, (2006) ~ SCC 404; Oriental Insurance Co. Ltd. v. Jhuma Saha, (2007) 9 SCC 263; Oriental Insurance Co. Ltd. v. Meena Variyal E (2007) 5 SCC 428; United India Insurance Co. Ltd. v. Davinder Singh, (2007) 8 SCC 698 and National Insurance Co. Ltd. v. Laxmi Narain Dhi.Jt, (2007) 3 SCC 700, referred to. Case Law Reference: (2006) 4 sec 404 referred to Para 18 - F (2007) 9 sec 263 referred to Para 18 (2001) s sec 428 referred to Para 18 f -. (2001) 8 sec 698 referred to Para 18 (2001) 3 sec 100 referred to Para 19 G CIVIL APPELAL TE JURISDICTION : Civil Appeal No. 7402 of 2008. From the final Judgment and Order dated 18.1.2007 of the High Court of Jharkhand at Ranchi in M.A. No. 135 of 2004. ~ Pradeep Kumar Bakshi, Rajat Navet and Madhur Yadav H for the Appellant. NEW INDIA ASSURANCE COMPANY LTD. v. SADANAND 1315 MUKHI AND OTHERS Arup Banerjee, R.K. Srivastava and T. Mukherjee for the A Respondent. .. The Judgment of the Court was delivered by S.B. SINHA, J. 1. Leave granted. 2. This appeal is directed against a judgment and order B dated 18th January, 2007 passed by a Division Bench of the High Court of Jharkhand at Ranchi whereby and-whereunder . an appeal preferred by the appellant herein under Section 173 -.. of the Motor Vehicles Act, 1988 (for short 'the Act') from a judgment and award dated 26th March, 2004 passed by the c District Judge-cum-Motor Vehicle Accident Claim Tribunal at Seraikella was dismissed. 3. The admitted fact of the mater is as under:- First respondent was owner of a motor cycle. He got the said vehicle insured with the appellant company; the policy D being valid for the period 9.9.1999 and 8.9.2000. On 8th September, 2000 Tasu Mukhi, son of the insured, wh
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