ORIENTAL INSURANCE CO. LTD. versus RAJNI DEVI & ORS.

Citation: [2008] 6 S.C.R. 822 · Decided: 22-04-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Case Partly allowed
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Judgment (excerpt)

[2008} 6 S.C.R. 822 
A 
ORIENTAL INSURANCE CO. LTD. 
')' 
v. 
RAJNI DEVI & ORS. 
(Civil Appeal No. 2892 of 2008) 
8 
APRIL 22, 2008 
[S.8. SINHA AND V.S. SIRPURKAR, JJ] 
_, 
Motor Vehicles Act, 1988 - s. 163A - Motor accident -
Death of owner of vehicle - Not clear as to deceased himself 
c was tort-feasor- Compensation - Claim of uls 163A, by heirs 
of deceased - Liability of insurance company - Held: When 
compensation is claimed for death of owner or another 
passenger of vehicle, contract of insurance being governed 
by contract qua contract, liability of insurance company would 
D depend upon the terms thereof - s. 163A is not applicable in 
regard to accident where owner of vehicle himself is involved 
- Liability u/s. 163A is on owner of vehicle as person cannot 
be both, claimant as also recipient -
Thus, claim not 
maintainable uls 163A - In terms of contract of insurance, 
E 
insurance company liable to the extent of Rs.1,00,0001-. 
J, owner of motor cycle was riding the motor cycle 
along with S. Motor accident took place and as a result J 
died. It is not clear as to who was driving the motorcycle. 
Respondent-heirs of J filed application uls 163A of the 
F Motor Vehicles Act, 1988 seeking compensation for death 
of J. The tribunal allowed the application, taking into 
consideration the use of the motor vehicle irrespective of 
the fact as to whether the deceased or S was driving the 
motorcycle. This has been challenged in the present 
G appeal. 
Partly allowing the appeal, the Court 
HELD: 1.1 In a case where third party is involved, 
"" ... 
the liability of the insurance company would be unlimited. 
H 
822 
ORIENTAL INSURANCE CO. LTD. v. RAJNI DEVI 
823 
& ORS. 
/ 
">( 
However, where compensation is claimed for the death A 
of the owner or another passenger of the vehicle, the 
contract of insurance being governed by the contract qua 
contract, the claim of the insurance company would 
depend upon the terms thereof. Therefore, the tribunal 
was not correct in taking the view that while determining B 
... -..-
the amount of compensation, the only factor which would 
be relevant would be merely the use of the motor vehicle. 
[Paras 6 and 7) [825-G, H; 826-A, BJ 
1.2 Section 163 A of the Motor Vehicles Act, 1988 
cannot be said to have any application in regard to an c 
accident wherein the owner of the motor vehicle himself 
is involved. The liability under Section 163-A of the Act is 
on the owner of the vehicle as a person cannot be both, a 
claimant as also a recipient. The heirs of J could not have 
maintained a claim in terms of s. 163-A of the Act. For the D 
said purpose only the terms of the contract of insurance 
could be taken recourse to. According to the terms of 
contract of insurance, the liability of the insurance 
company was confined to Rs.1,00,0001- It was liable to the 
said extent and not any sum exceeding the said amount. E 
[Paras 7, 10 and 11) (826-G, H, 828-E, F, G] 
Oriental Insurance Co. Ltd. v. Smt. Jhuma Saha & Ors. 
AIR 2007 SC 1055; National Insurance Co. Ltd. v. Lax mi 
Narain Dhut 2007 (4) SCALE 36; Prem Kumari & Ors. v. 
F 
Prahlad Dev & Ors. 2008 (1) SCALE 531; Oriental Insurance 
. A 
Co. Ltd. v. Prithvi Raj 2008 (1) SCALE 727 - referred to . 
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 2892 
of 2008. 
From the final Judgment and Order dated 12.10.2006 of G 
the High Court of Punjab and Haryana at Chandigarh in FAO 
No. 3859 of 2006 . 
.. .; 
Neerja Sachdeva and Parmanand Gaur for the Appellant. 
The Judgment of the Court was delivered by 
H 
824 
SUPREME COURT REPORTS 
[2008] 6 S.C.R. 
A 
S.B. SINHA, J. 1. Leave granted. 
2. Respondent filed an application under Section 163-A 
of the Motor Vehicles Act, 1988 (the Act) claiming compensation 
for death of one Janak Raj (the deceased). He was riding on a 
motorcycle along with one Sukhdev Raj. Who was actually on 
8 the driver's seat is not known. The motorcycle is said to have 
gone out of control resulting in the accident. 
3. Appellant herein, having been issued notice, resisted 
the claim, inter alia, contending that although the owner of the 
c vehicle deposited an extra amount of Rs.SO covering his 
personal insurance, the same would not cover the case of the 
pillion rider and in any event, the owner of the vehicle is not a 
third party within the meaning of Section 147 of the Act. 
The Motor Vehicles Accident Claims Tribunal, having 
D regard to the pleadings of the parties, framed the following 
issues: 
"1.
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