The High Court of Bombay: Nagpur Bench passed a judgement on 06 June 2023. In the case of ORIENTAL INSURANCE CO. LTD. THR. DIVSNL MANAGER, NAGPUR Vs SURESH S/O SIDDHESHWAR BADWAIK, GONDIA and 2 OTRS IN FIRST APPEAL NO.1491 OF 2008 which was passed by a division bench comprising of HONOURABLE SHRI JUSTICE URMILA SACHIN JOSHI- PHALKE award by the Motor Accident Claims Tribunal in Gondia has come under scrutiny in an appeal filed by an insurance company. The case involves a compensation claim filed by the parents of the deceased, who lost his life in a motorcycle accident. The insurance company contests the liability for compensation, arguing that the deceased was not a third party but rather stepped into the shoes of the motorcycle owner. This article provides an overview of the case and analyzes the arguments presented by both parties.
The accident occurred on July 13, 2006, when the deceased, Prashant Badwaik, was riding a motorcycle near Marar Toli Railway Gate. To avoid a bicycle rider, he applied sudden brakes, causing the motorcycle to skid and resulting in severe head injuries. Despite receiving immediate medical attention, the deceased passed away during treatment.
The claimants, who are the parents of the deceased, filed a compensation claim stating that their son was a skilled Electronic Mechanic earning Rs. 4,000 per month. They argued that since the accident occurred while riding a motorcycle owned by another individual and validly insured, they were entitled to compensation.
The insurance company, the first respondent in the case, contested the claim on the grounds that the accident was caused by the deceased’s own negligence. They argued that as the deceased had borrowed the vehicle, he should be considered the owner, and therefore, the claimants were not eligible for compensation.
The second respondent, the owner of the motorcycle, also denied liability and stated that the vehicle was adequately insured, shifting the responsibility to the insurance company.
Section 147 of Motor Vehicle Act states that requirements of policies and limits of liability. —
(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which—
(a) is issued by a person who is an authorised insurer; and
(b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)—
(i) against any liability which may be incurred by him in respect of the death of or bodily 27 [injury to any person, including owner of the goods or his authorised representative carried in the vehicle] or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;
(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:
After considering the arguments and evidence presented, the Motor Accident Claims Tribunal ruled in favour of the claimants and awarded them compensation. The tribunal held that the deceased died in a vehicular accident involving a motorcycle owned by the second respondent and insured by the first respondent. The compensation amount was set at Rs. 3,69,500, along with an interest rate of 7.5% per annum from the date of filing the claim petition until the complete realization of the amount.
APPEAL BY THE INSURANCE COMPANY
Aggrieved by the tribunal’s decision, the insurance company filed an appeal, challenging the judgment and award. Their main contention was that the deceased, as the borrower of the motorcycle, should not be considered a third party and therefore not entitled to compensation. The insurance company argued that Section 147 of the Motor Vehicles Act, 1988, does not include the deceased under the definition of any person but rather as a tortfeasor.
Furthermore, the insurance company cited various judgments, including New India Assurance Co. Vs. Sadanand Mukhi and others (2009)2 SCC 417, Oriental Insurance Co. Ltd. Vs. Rajni Devi and others (2008) 5 SCC 736, and Ramkhiladi and another Vs. The United India Insurance Co. and another (2020) 2 SCC 550, to support their claim that the liability of the insurance company is limited to the owner-driver and does not extend to other named individuals or borrowed vehicles.
COUNTER ARGUMENTS AND ANALYSIS
In response to the appeal, the claimants’ counsel argued that the compensation claim was since the accident involved the vehicle insured by the first respondent. They emphasized that the deceased was not the owner of the motorcycle but had borrowed it, making him eligible for compensation under Section 163A of the Motor Vehicles Act.
JUDGMENT AND CONCLUSION:
Upon reviewing the arguments and evidence presented, the court upheld the decision of the tribunal and dismissed the appeal filed by the insurance company. The court found that the deceased, who borrowed the motorcycle, could be considered a third party in relation to the insured vehicle. Therefore, the claimants were entitled to compensation under Section 163-A of the Motor Vehicles Act.
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JUDGEMENT REVIEWED BY VETHIKA D PORWAL, BMS COLLEGE OF LAW