MANAGER, NATIONAL INSURANCE CO. LTD. versus SAJU P. PAUL AND ANOTHER

Citation: [2013] 2 S.C.R. 1 · Decided: 03-01-2013 · Supreme Court of India · Bench: RAJENDRA MAL LODHA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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[2013] 2 S.C.R. 1
MANAGER, NATIONAL INSURANCE CO. LTD.
v.
SAJU P. PAUL AND ANOTHER
(Civil Appeal No. 5 of 2013)
JANUARY 3, 2013
[R.M. LODHA AND ANIL R. DAVE, JJ.]
Motor Vehicles Act, 1988 - s. 147 - Motor accident of
goods vehicle - Injury to the claimant, who was travelling in
the vehicle and claiming to be a spare driver - Liability of the
insurance company - Held: Insurance company not liable to
pay compensation - Spare driver was not covered under the
policy - He was admittedly not driving the vehicle nor was
engaged for driving the said vehicle - Thus he was a gratuitous
passenger - In the facts of the case, Insurance Company
directed to pay the compensation and later to recover the
same from the owner-insured.
The question for consideration in the present appeal
was as to whether the insurance company was liable to
pay compensation for the bodily injury caused to the
claimant who was travelling in a goods vehicle as a spare
driver, though he was employed as a driver in another
vehicle owned by the vehicle owner-insured.
Allowing the appeal, the Court
HELD: 1.1 The impugned judgment is founded on
misconstruction of s. 147 of the Motor Vehicles Act, 1988.
The High Court was wrong in holding that the insurance
company was liable to indemnify the owner of the vehicle
and pay the compensation to the claimant [Para 18] [15-F]
1.2 The High Court committed grave error in holding
that s.147(1)(b)(i) takes within its fold any liability which
may be incurred by the insurer in respect of the death or
bodily injury to any person. The High Court erroneously
assumed that the claimant died in the course of
         SUPREME COURT REPORTS    [2013] 2 S.C.R.
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employment and overlooked the fact that the claimant
was not in any manner engaged on the vehicle that met
with an accident, but he was employed as a driver in
another vehicle. The insured (owner of the vehicle) got
insurance cover in respect of the subject goods vehicle
for driver and cleaner only and not for any other
employee. Therefore, second driver or for that purpose
'spare driver' was not covered under the policy. As a
matter of law, the claimant did not cease to be a
gratuitous passenger though he claimed that he was a
spare driver. [Para 16] [14-G-H; 15-A-C]
New India Assurance Co. Ltd. v. Asha Rani and Ors.
(2003) 2 SCC 223:2002 (4) Suppl. SCR 543; National
Insurance Co. Ltd. v. Cholleti Bharatamma and Ors. (2008)
1 SCC 423:2007 (11) SCR 531; Oriental Insurance Co. Ltd.
v. Devireddy Konda Reddy and Ors. (2003) 2 SCC 339:2003
(1) SCR 537 - relied on.
New India Assurance Company v. Satpal Singh and Ors.
(2000) 1 SCC 237:1999 (5) Suppl. SCR 149 - referred to.
1.3 The High Court misconstrued the proviso
following sub-section (1) of s. 147 of the Act. What is
contemplated by proviso to s.147 (1) is that the policy
shall not be required to cover liability in respect of death
or bodily injury sustained by an employee arising out of
and in the course of his employment other than a liability
arising under the Workmen's Compensation Act, 1923.
The claimant was admittedly not driving the vehicle nor
he was engaged in driving the said vehicle. Merely
because he was travelling in a cabin, would not make his
case different from any other gratuitous passenger. [Para
17] [15-D-E]
2. In the peculiar facts of the present case, a direction
is issued to the insurance company to first satisfy the
awarded amount in favour of the claimant and recover
the same from the owner of the vehicle. The insurance
company has already deposited the entire awarded
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MANAGER, NATIONAL INSURANCE CO. LTD. v.
SAJU P. PAUL AND ANOTHER
amount pursuant to the order of this Court passed on
01.08.2011 and the said amount has been invested in a
fixed deposit account. The claimant is allowed to
withdraw the amount deposited by the insurance
company before this Court, along-with accrued interest.
The insurance company thereafter may recover the
amount so paid, from the owner-respondent No. 2 by
following the procedure as laid down by this Court in the
case of *Challa Bharathamma case . [Paras 19 and 25]
[15-G; 19-E-F]
National Insurance Co. Ltd. v. Baljit Kaur and Ors. (2004)
2 SCC 1:2004 (1) SCR 274 ; *National Insurance Co. Ltd. v.
Challa Bharathamma and Ors. (2004) 8 SCC 517: 2004 (4)
Suppl. SCR 587; National Insurance Company Limited v.
Kaushalaya Devi and Ors. (2008) 8 SCC 246: 2008 (8) SCR
500 - relied on.
Case Law Reference:
1999 (5)  Suppl.  SCR 149
ref

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