THE NEW INDIA INSURANCE COMPANY versus DARSHANA DEVI AND ORS

Citation: [2008] 2 S.C.R. 810 · Decided: 12-02-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Disposed off
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Judgment (excerpt)

[2008] 2 S.C.R. 810 
A 
THE NEW INDIA INSURANCE COMPANY 
II. 
DARSHANA DEVI AND ORS. 
(Civil Appeal No. 1232 of 2008) 
B 
FEBRUARY 12, 2008 
[S.B. SINHA AND V. S. SIRPURKAR, JJ.] 
~ 
Motor Vehicles Act, 1988: 
·, 
ss. 149 & 166 - Motor accident - Liability of insurer -
c Extent of - Tractor driven by son of one of the co-owners -
; 
. Driver did not have a driving licence - Rash driving - Labourer 
r 
travelling on mudguard of the tractor in breach of the contract 
of insurance, fell down and died - Claims Tribunal awarded 
compensation of Rs. 2 lakhs to heirs of the deceased holding 
D that the. insurance company was liable in regard to third party 
risk but entitled to recover compensation amount from the 
owners - Order upheld by High Court- On appeal, held: Case 
not fit for interference under Art. 136 of the Constitution -
Insurance company permitted to recover dues from owners 
E by filing application before the Claims Tribunal - No need for 
it to file separate execution petition against the owners -
Constitution of India, 1950 - Art. 136. 
I 
A labourer travelling on mudguard of a tractor loaded 
~ 
F with 'Safeda wood' fell down due to rash and negligent 
-f 
driving by the driver and died. The driver, who was son of 
one of the co-owners of the tractor, did not have a driving 
licence. 
Heirs of the deceased filed claim petition. Appellant-
G insurance company, in its written statement, contended 
that the deceased being a passenger in the said tractor 
r.-
was not a third party within meaning of s.147 of the Motor 
Vehicles Act, 1988; that since he was travelling on the 
.. 
' 
mudguard of the tractor in breach of conditions of contract 
H 
. 810 
THE NEW INDIA INSURANCE COMPANY v. 
811 
DARSHANA DEVI AND ORS. 
j.. 
of insurance, the insurance company was not liable to A 
reimburse the owner of the vehicle and further that since 
driver of the vehicle did not have a driving licence, the 
case came within purview of the exeption as regards 
liability of the insurer as envisaged under sub-section (2) 
of s.149 of the Act. 
B 
The Tribunal held that, at the relevant time, the tractor 
.. 'I 
was not being used for agricultural purposes, for which it 
was insured, and that although owners of the tractor in 
question had contravened the contract of insurance, the 
appellant-insurance company was liable in regard to third c 
party risk but was entitled to recover the amount of 
compensation from the insurer, namely, the owner of the 
offending vehicle. The Tribunal awarded compensation 
of Rs.2,04,000/- to heirs of the deceased. Appeal filed by 
insurance company was summarily dismissed by the High D 
Court. 
-; 
In appeal to this Court, the contention of the 
Appellant-insurance company is that it was not liable at 
all in terms of the provisions of the Act. 
E 
Disposing of the appeal, the Court 
HELD: 1.1. The liability of an insurance company to 
recompense the owner and driver of a vehicle, who are 
primarily responsible for payment of compensation to a 
victim or dependent of a deceased arising out of use of a F 
motor vehicle, is statutory in nature. [Para 8] [815-B] 
1.2. Whereas an owner of a motor vehicle is under a 
statutory obligation to get it compulsorily insured, the 
defence of an insurance company is limited. [Para 8] G 
[815-C] 
-'\ 
1.3. The deceased was labourer. The Tribunal has 
found that besides being a labourer, he also used to deal 
;n Safeda wood. He was t~e owner of the 'Safeda' wood 
which was being transported to the market for its sale. H 
812 
SUPREME COURT REPORTS 
(2008] 2 S.C.R. 
~ 
A His income was assessed only at Rs.2,400 per month. In 
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this view of the matter, it is not a fit case where this Court 
... 
should exerci~e its discretionary jurisdiction under Article 
136 of the Constitution. [Paras 12, 13] [821-G, H; 822-A, B] 
B 
1.4. It is directed that for the purpose of realization of 
dues, the insurance company need not file a separate 
execution petition against the owner. If an application is 
filed for realization or recovery of dues before the Tribunal, · 
~ ;.. 
the Tribunal shall take appropriate steps in this behalf. 
...... 
[Para 14] [822-F, G] 
·C 
Dhanraj v. New India Assurance Co. Ltd. & Anr. (2004) 8 
SCC 553; United India Insurance Co. Ltd., Shim/a v. Tilak 
Singh & Ors. (2006) 4 SCC 404; National Insurance Company 
v. Swaran Singh & Ors. (2007) 3 SCC 297; New Indian 
D Insurance Company Ltd. v. Vedwati & Ors. (2007) 3 SCALE 
397; Oriental lnsuirance Co
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