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Accident claim -vehicle registered and insured in India – Accident in Nepal-Insurance Company liable to pay compensation – No extra premium can be charged for third party insurance even for extra territorial coverage: Punjab and Haryana High Court

It appeared that the competence of ‘India Motor Tariff’ to issue such instruction to limit the liability of the Insurance Company in terms of the geographical area has not been shown by the Insurance Company. No such instructions; which run counter to or dilute the liability of Insurance Company as defined under Sections 146 to 149 of the Act can be countenanced by the held by Hon’ble Justice Rajbir Sehrawat in Anil Kumar versus Roop Kumar Sharma and another [FAO No.152 of 2017].

The facts leading to this case relate to the on 14.06.1995, Kamal Sharma, along with 54 other pilgrims, left Kurukshetra at about 8.00 AM. They had to go to Haridwar, Ayodhya, Nepal and Jagan Nath Puri etc. They were in the Bus bearing registration No.UP-10B-0939. It is claimed in the claim petition that the bus was taken for the journey after getting permission from Regional Transport Controller, Haridwar as well as from Managing Director, Garhwal Vikas Nigam, and Haridwar. On the intervening night of 17/18.06.1995, at about 2.00 AM, when the bus, in which the deceased-Kamal Sharma was travelling along with other pilgrims, reached the area of Chitwan, District Chandi Bhajan, Village Vikas Samiti, situated in Parevar Bhir at the distance of two kilometres from Naraingarh, the driver of the Bus lost control and the bus fell in Trishuli Nadi. All 54 persons died in the accident. No dead body of any pilgrim could be traced because the river was about 30 meters deep. On account of the death of these persons, several claim petitions were filed, the previous one was of Sona Devi and others. The present petition was filed by Roop Kumar Sharma on account of the death of Kamal Sharma.

The counsel for the appellant submits that there was no limitation for use of the vehicle in terms of geographical area; as per the policy issued for this vehicle and the bus was authorised to travel to an area of Nepal. The Tribunal held that the claim petition is not maintainable in India if the accident had taken place out of India. However, this Court remanded the matter to the Tribunal for the decision of the same, on merits, after holding that claim petition can be filed in India. Counsel further submits that since there is no restriction in the policy regarding the use of the vehicle outside the geographical territory of India, therefore, the Insurance Company is liable to make the payments.

On the other hand, learned counsel for the respondent-Insurance Company has submitted that since the policy produced on record is limited to cover the vehicle to be used only in the geographical area of India, therefore, the Insurance Company is not liable for payment of compensation on account of any accident occurring outside India.

The Hon’ble High Court at Punjab and Haryana stated that the “Motor Vehicles Act has made elaborate provisions regarding compulsory insurance of vehicle qua damage to the third party in an accident involving the insured vehicle at any public place. Likewise, the liability of the Insurance Company to indemnify the insured has also been made compulsory by the Act. Section 146 of the Act makes the provision for the necessity of insurance of vehicle before taking it out on road. Section 147 of the Act determines the extent of liability of the Insurance Company. A perusal of Section 147 of the Act clarifies the limits of liability of the Insurance Company and the requirements of the policy of insurance. A bare perusal of Sections 146 and 147 of the Act makes it clear that the insurance policy is attached to the ‘vehicle’ in question and not to Geographical expense of the area of operation of the vehicle in question”. Therefore, the Insurance Company cannot avoid its liability to pay the compensation only on the ground that the vehicle was used in any particular city, state or a particular geographical area. Once a vehicle is insured by qua third party it is insured for all geographical areas as per the provisions of the Act.

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