SKANDIA INSURANCE CO. LTD. versus KOKILABEN CHANDRAVADAN & ORS.

Citation: [1987] 2 S.C.R. 752 · Decided: 01-04-1987 · Supreme Court of India · Bench: M.P. THAKKAR · Disposal: Dismissed

Cited by 5 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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SKANDIA INSURANCE CO. LTD. 
v. 
KOKILABEN CHANDRAVADAN & ORS. 
APRIL I, 1987 
[M.P. THAKKAR AND B.C. RAY, JJ.] 
Motor Vehicles Act, 1939-Ss. 94, 95 and 96-Victim of motor 
.vehicle accident-Compensation from insurance company-insurance 
against third party risk-Immunity of Insurance Company-Extent 
of-In case of breach of conditions of Insurance policy. 
Statutory Interpretation-Intention of Legislature-Ascertain-
ment of-To probe the motive and philosophy of the relevant statutory 
provisions. 
The driver of a truck handed over the control of his vehicle to the 
cleaner while its engine was running and the ignition key was in the 
ignition lock. In the absence of the driver, who had gone for bringing 
snacks the cleaner Interfered with the vehicle, which resulted in an accident. 
The Tribunal as well as the High Court held that this being the 
immediate cause of the accident, the owner of the truck was vicariously 
liable. The High Court further held that since the owner never gave 
permission to his cleaner to drive, be could not be held guilty of the 
breach of the contractual condition embodied in the policy of insurance 
and, therefore, the insurer cannot plead any exception on the ground 
that the owner had committed breach of the specified condition. 
In the appeal to Ibis Court, on behalf of the appellant-Insurance 
Company it was contended: (i) that in view oftbe exclusion clause in the 
insurance policy the Insurance Company would not be liable if it was 
established tMt the accident occurred when an unlicenced person was at 
the wheels; (ii) that the exdusion clause is strictly in accordance with 
the statutorily permissible exclusion embodied in s. 96(2)(h)(ii) of the 
Motor V ~bicles Act, 1939 and (iii) that under the circumstances the 
appellant-Company is not under a legal obligation to satisfy the judg-
ments against the insured. 
Dismissing the Appeal, 
HELD: 1. The exclusion clause in the policy of insurance does 
not exonerate the Insurer. [7668] 
752 
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SKANDIA INSURANCE v. CHANDRAVADAN 
753 
Ki/ari Mammi and Others. v. Barium Chemicals Ltd. & Ors., 
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A.l;R. 1979 (Andhra Pradesh) 75, approved. 
Kirpa Natha Chakravarthy and others v. Rup Chand Lunawat, 
A.I.R. 1955 Assam p. 157; Shankar Rao v. Mis Babula/ Fouzdar and 
another, A.I.R. 1980 (Madhya Pradesh) 9. 154; Orissa State Commer-
cial Transport Corporation, Cuttack v. Dhumali Bewa & Ors. etc., 
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A.I.R. 1982 (Orissa) 70 and Dwarka Prasad Jhunjhunwala and another 
v. Sushi/a Devi & Ors., A.I.R. 1983 Patna246, overruled. 
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2. The vicarious liability of the owner of the vehicle for damages 
arising out of the accident cannot be disputed having regard to the 
general principles of law also having regard to the violation of the c 
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obligation imposed by s. 84 or the Act which provides that no person 
driving or in charge of a motor vehicle shall cause or allow the vehicle to 
remain stationary in any public place, unless there is in the driver's seat 
a person duly licensed to drive the vehicle or unless the mechanism bas 
been stopped and a brake or brakes applied or such other measures 
taken as to ensure that the vehicle cannot accidentally be put in motion D 
in the absence of the driver. [764B-C] 
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3. In order to divine the intention or the legislature in the course 
~ of interpretation of the relevant provisions there can scarcely be a 
better test than that or probing into the motive and philosophy of the 
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relevant provisions keeping in mind the goals to be acllieved by enacting 
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the same. [761G] 
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4. Ordinarily it is not the concern of the legislature whether the 
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owner of the vehicle insures bis vehicle or not. If the vehicle is not 
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insured any legal liability arising on account or third party risk will 
have to be borne by the owner of the vehicle. Section 94 bas been F 
enacted to protect the members of the community travelling in vehicles 
or using the roads from the risk attendant upon the user of motor 
vehicles on the roads. The law may provide for compensation to victims 
of the accidents who sustain injuries in the course or an automobile 
accident or compensation to the dependents of the victims in the case of 
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a fatal accident. However, such protection would remain a protection G 
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on paper unless there is a guarantee that the compensation awarded by 
the Courts would be recoverable from the persons held liable for the 
con

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