The Hindu Business Line : Be careful when driving own vehicle

IT happened about four years ago that Dhanraj was travelling in his own jeep along with certain other persons. Crash... ! Because around 6.30 a.m. the jeep met with an accident and everybody in the vehicle got injured. They all filed claim petitions to obtain insurance compensation.

Now the scene shifts to the Motor Accident Claims Tribunal (MACT), which heard the claim appeals. The tribunal said that driver of the jeep was responsible for the accident and it. "In all the claim petitions filed by the other passengers, MACT directed that the appellant (as the owner) as well as the driver, and insurance company were liable to pay compensation." These facts are narrated in the judgment of the apex court delivered about a fortnight ago in Dhanraj vs New India Assurance Co Ltd.

Let's resume the story. On who should give compensation to Dhanraj, the insurance company had a different view. New India said that it was not liable to pay him any compensation. So, when the case went to the Madhya Pradesh High Court, the decision delivered in 2003 went in favour of New India - that Dhanraj was the owner of the vehicle and so the "insurance company is not liable to pay him any compensation". Predictably, Dhanraj was disappointed with the verdict and so the case came up before the Supreme Court.

Justices S.N. Variava and A.K. Mathur studied the policy and noted that it was "a comprehensive policy". The question, therefore, was if a comprehensive policy would cover the risk of injury to the owner of the vehicle also. They looked at Section 147 of the Motor Vehicles Act, 1988, which is about requirements of policies and limits of liability. The provision speaks of liability which may be incurred "in respect of the death of or bodily 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", among other things.

The apex court observed: "Thus, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an 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. Section 147 does not require an Insurance Company to assume risk for death or bodily injury to the owner of the vehicle."

If you are unable to grasp the difference, go over the previous two paragraphs and note the difference in the usage of phrases `owner of the goods' and `owner of the vehicle'. The court cited a 1998 case Oriental Insurance Co Ltd vs Sunita Rathi where it was held that the liability of an insurance company is only for the purpose of indemnifying the insured against liabilities incurred towards third person or in respect of damages to property. "Thus, where the insured, i.e. an owner of the vehicle, has no liability to a third party the insurance company has no liability also."

Reverting to the current case, the judgment notes: "It has not been shown that the policy covered any risk for injury to the owner himself. We are unable to accept the contention that the premium of Rs 4,989 paid under the heading `own damage' is for covering liability towards personal injury." Why? Because under the heading `own damage', the words `premium on vehicle and non-electrical accessories' appear. Therefore, "this premium is towards damage to the vehicle and not for injury to the person of the owner."

Dhanraj, as owner of the vehicle, could have claimed if a personal accident insurance had been taken out. "In this case, there is no such insurance," said the court, dismissing the appeal, and affirming the earlier decision of the High Court.

A simple moral one can draw is that it is always better to travel in somebody else's vehicle. But do I hear somebody quipping that damage to vehicle body is covered, not of owner's body. Meanwhile, be careful when driving your own vehicle!

ExParte@TheHindu.co.in

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