T. Sathiadev, J.
1. First of the two appeals is preferred by third respondent-Insurance Company in M.A.C.O.P. No. 75 of 1980 on the file of Motor Accident Claims Tribunal, Madurai. Petitioner and respondents 1 and 2 are the three respondents in the said appeal. C.M.A. No. 782 of 1981 is preferred by second respondent before the Tribunal, impleading other parties as respondents in the appeal.
2. As common arguments have been advanced in both the appeals, they are dealt with together and ranking of parties is referred to as before the Tribunal.
3. Petitioner filed a petition under Section 110-A of the Motor Vehicles Act claiming compensation for damages caused to his goods at about 10.30 p.m. on 5.7.1979 at a time when his goods were carried in second respondent's lorry bearing registration No. MSL. 771. He had booked a consignment of 42 borals of M.C.U.5 cotton worth Rs. 70,000 on 5.7.1979 from Jayam Ginning Factory at Then by the second respondent's lorry to be carried to Rajapalayam. Freight was to be paid at the destination. The lorry was driven by second respondent's driver, who has been in pleaded as first respondent. It left Theni at 7 p.m. and due to the rash and negligent driving by first respondent, the load of cotton came into contact with the electric wire running east to west in the north South road, as a result of which the entire 42 barrels of cotton were burnt, ft was on 6.9.1979, on petitioner being informed by phone by one B. Joseph of Kovilpatti for whom the cotton was being sent, he rushed to the spot and found out that the burning was due to the rash and negligent driving of the lorry by the first respondent. Hence, he has claimed a compensation of Rs. 70,000 from the owner of the lorry, being the second respondent, and the Insurance Company with which the lorry had been insured, being the third respondent.
4. Respondents 1 and 2 stated that the accident was due to vis major and that the lorry was being driven carefully, and it being not a motor accident, the petition filed under Motor Vehicles Act is not maintainable, and therefore, the Tribunal had no jurisdiction to entertain the matter.
5. As for third respondent, it was stated that the accident was not due to any negligence on the part of the first respondent, and it was not aware of the consignment of the goods sent with, by lorry and that the policy issued by It does hot cover liability for damage to goods belonging to third parties, and therefore, the petition is liable to be dismissed.
6. Mr. K.S. Narasimhan, learned Counsel for the third respondent, submits that when first the policy issued by it contains a specific term in Clause 1(d) of Section 11 that it shall not be liable in respect of damage to property belonging to or held in trust by or in the custody or control of the Insured or a member of the Insured's household or being conveyed by the Motor Vehicle, no liability could be fastened on it by the petitioner. Regarding the approach made by the Tribunal that such a condition is in violation of Section 95 of the Motor Vehicles Act, it is pleaded that the said section had been misunderstood and misapplied. When contractual liability had been excluded, the transaction entered into between P.Ws. 1 and 4 and the consequent happening would not be binding upon it.
7. He would first rely upon G. Dhyanand v. Zaamni Bi 1982 A.C.J. 399, a Division Bench of this Court In which it was held that the policy (marked as Ex. B1 therein), being nothing but a reproduction of Section 95 of Motor Vehicles Act, and as it excludes liability in respect of a passenger in a lorry, Insurance Company is not liable to pay compensation for the death of the passenger in the lorry which was involved in the accident. A reference was made therein to the decision of the Supreme Court in Pushpabai Purshotam Udeshi v. Ranjit Ginning & Pressing Co. , wherein it was held that the insurance cover is not available to passengers in view of the proviso to Sub-section (ii) which provides that a policy shall not be required except where the vehicle, in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event, out of which a claim arises.
8. He then relies upon another Division Bench decision of this Court in M. Kandaswamy Pillai v. Chinnaswamy 1985 A.C.J. 232, in which the deceased and the injured boarded the lorry midway along with their goods, and the lorry met with an accident, and it was held that the Insurance Company cannot be held liable, as the policy of insurance and the Act did not cover such category of persons. In that case also, Ex. B4, the policy therein did not contain a term which was in consonance with the provisions of the Act, and therefore, it was held that the Insurance Company was not liable to pay compensation.
9. He then refers to the decision in Minu, B. Mehta v. Balkrishna Ramachandra Nayan , in which the Supreme Court held that the liability of the owner of a vehicle to compensate the victim is based on law of Tort and that the burden is upon the claimant to prove negligence before the owner or Insurance Company could be held liable to pay compensation. In para 24 it is stated as follows:
...The liability contemplated arises under the law of negligence and the principle of vicarious liability. The provisions as they stand do not make the owner or the insurance company liable for any bodily injury caused to a third party arising out of the use of the vehicle, unless the liability can be fastened on him. It is significant to note that under Sub-clause (ii) of Section 95-(b) of the Act the policy of Insurance must insure a person against the death or bodily injury to any passenger of a public service vehicle caused by or arising out the use of the vehicle in a public place....
It is then stated that Section 95 is similar to Section 36(1) of the English Road Traffic Act, 1930. As for the expression "liability", it was held that it is meant to cover any liability arising out of the use of the vehicle. Hence, whatever the concerned person is under liability, is covered by the insurance policy. Relying on this portion of the judgment, Mr. Narasimhan, learned Counsel for the third respondent, submits that the damage caused to the goods belonging to third party, is not covered by Section 95.
10.In Manohar Singh v. Canara Motor General Insurance Co. 1977 A.C.J. 280, a Division Bench of Madhya Pradesh High Court held that the Claims Tribunal has the jurisdiction to decide regarding claims pertaining to damage suffered to property carried in a motor Vehicle, and that for damage to property so suffered, the Insurance Company could be held liable.
11. In Pushpabai Purshottam Udeshi v. Ranjit Ginning and Pressing Co. , the Supreme Court held that when a passenger had
been taken by the manager of the company, when he had gone on business, it was held that the Insurance Company is liable to pay compensation to the heirs of the deceased passengers, and that the recent trend in law is to make the master liable for acts which do not strictly fall within the term "in the course of the employment", as ordinarily understood. In paragraphs 19 to 22, the comparison between the provisions of the Indian Act and the English Act had been referred to. Regarding the scope of Section 95, it was held as follows:
The plea that the words "third party" are wide enough to cover ail persons except the person and the insurer is negatived as the insurance cover is not available to the passengers is made clear by the proviso to sub-section which provides that a policy shall not be required:
(ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward, or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises.
22. Therefore, it is not required that a policy of insurance should cover risk to the passengers who are not carried for hire or reward. As under Section 95 the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured, the plea of the counsel for the insurance company will have to be accepted and the insurance company held not liable under the requirements of the Motor Vehicles Act.
12. One other contention put forth by Mr. Narasimhan, learned Counsel for the third respondent, is that, there being no definition of the words "third party" in Motor Vehicles Act or Insurance Act of 1938, the words "damage to any property of a third party caused by or arising out of the use of the vehicle in a public place" found in Section 95(1)(i) of Motor Vehicles Act, would not include goods damaged during transit in a motor vehicle. According to him, in the instant case, the goods involved would fall under proviso (iii) to Section 95(1) of Motor Vehicles Act, it being a contractual liability. He would then refer to Section 2(13-A) of Insurance Act and state that there is no separate business as "motor insurance business" and that the policy issued in respect of motor vehicles are covered only by "marine insurance business", and hence, there is no scope to extend a wider meaning to the provisions of Section 95 of Motor Vehicles Act.
13. He refers to certain passages in the Law of Insurances by Collnvaux (IV Edition) in which, dealing with the expression "motor vehicle insurance business", it is stated as follows:
Motor Vehicle Insurance Business means the business of effecting and carrying out contracts of insurance against loss of, or damage to, or arising out of or in connection with the use of, motor vehicles, inclusive of third party risks but exclusive of transit risk or bid. A person is not to be taken to carry on motor vehicle insurance business at risk only of the fact that goods, merchandise, or property upon which a contract of insurance is effected by him (being goods, merchandise or property on board of a vessel or aircraft or of a hovercraft to which the 1974 Act applies) consist of, or include, motor vehicles Section 24(3).
14. He also refers on the decision in C.M.A. No. 398 of 1979, wherein a Division Bench of this Court held that, if the owner of the goods accompanied it in a lorry, then the Insurance Company cannot be held liable to pay damages for any injury suffered by him, as the relationship of employer and employee did not exist to attract Section 95(2). Hence, he would submit that a strict interpretation of the section is called for.
15. During the course of the hearing, C.M.P. No. 12599 of 1986 was filed by the appellant in C.M.A. No. 782 of 1981 to implead the United India Insurance Company Limited on the ground that, in the said C.M.A., by oversight, it had not been impleaded. This claim was opposed by stating that having given it up earlier, after a lapse of five years, such an application cannot be filed, and yet, as it had participated in the hearing before the Tribunal and having preferred C.M.A. No. 645 of 1981 as appellant, this petition was ordered. The resultant effect is that, in both the appeals, it has become a party to the proceedings.
16. Mr. A.R. Ramanathan, learned Counsel for the third respondent, would submit that, when the words "damage to any property of third party caused by or arising out of the use of the vehicle in a public place" in Section 95(1)(b) would not include the property of the petitioner carried in the goods vehicle. "Third party" is defined in Section 93(d) of Motor Vehicles Act as "third party includes the Government." Chapter VIII deals with Insurance of Motor Vehicles against Third party risks. Therefore, it being an inclusive definition, he would submit that, it could only be referable to a property of a third party, not found inside the vehicle which is involved in the accident. He draws reference to Pushpabai v. Ran fit Ginning Co. , which is already referred in para 7 above, and which had taken the view that when passengers are taken in a vehicle gratuitously, they could not be treated as third parties, and therefore, in the light of the terms and conditions of the policy issued by it, the goods belonging to the petitioner carried inside the vehicle under contract cannot be treated as property of a third party. In Ex.Rl, the limit of liability under Section II-I(i) which relates to death or bodily injury to any person caused by or arising out of the use of the vehicle, was unlimited. As for the liability under Section II-I(i) which is referable to damage to a property caused by the use (including the loading and/or unloading) of the Motor Vehicle, it was Rs. 1,50,000. One other important clause in the policy relied upon is the proviso to Section II-1(d), which reads as follows:
The Company shall not be liable in respect of damage to property belonging to or held in trust by or in the custody or control of the Insured or a member of the Insured's household or being conveyed by the Motor Vehicle.
He also relies on Ex. R2, which is a printed specimen form relating to carriers' liability. It contemplates liability of the Company for damage to goods carried inside the vehicle and which would1 be covered by the said policy. Hence, he submits, that when this 'condition under Ex. R1 specifically excludes the liability regarding goods carried in trust, it cannot be made liable to pay damages for the loss, if any, suffered by the petitioner.
17. In Ahmed Ahaiyat Saiyed v. Ibrahim Bhachal Saah 1985 A.C.J. 83, the loss to the goods i.e. goats and sheep, which died on the spot of the accident was disallowed because the Insurance Policy (Ex. 46 therein), did not cover the risk to the goods of hirer, and therefore, the Insurance Company was held not liable to compensate the said loss. Yet, what is contended by Mr. Gopal, learned Counsel for the petitioner is that the concept of "third party" cannot be narrowly understood and it should be given a wider meaning and a condition in a policy which is contrary to Section 95 or any of the other provisions of the Motor Vehicles Act cannot prevail, because the right of claimants to use having been conceived of statutorily under certain circumstances, any condition in the policy contrary to the provisions of the Motor Vehicles Act would be a nullity. He states that the policy under Ex. R1 cannot override the liability under Section 95(1)(b)(i) of the Act. He refers to the decision in Pushpabai Purshottam Udeshi v. Ranjit Ginning and Pressing Co. , which dealt with a case of
liability of a Master when a passenger is accompanying his Manager in the course of his employment in a vehicle driven by him and gets involved in an accident, and submits that when the trend of the law as pointed out by the Supreme Court is to make the Master liable for acts which do not strictly fall within the term "in the course of the employment" as ordinarily understood, equally the expression "damage to any property of a third party" should also receive a more liberal interpretation. The decision above referred to, does not permit such at approach to be made because, the concept of "third party in Chapter VIH in Motor Vehicles Act is in respect of parties who are not inside the vehicle, unless they are carried for reward or hire. Therefore, any property of a third party, when carried in a vehicle under a contractual liability, then the proviso to Section 95(1)(b) can be applied. The goods belonging to the petitioner having been carried in the vehicle of second respondent, under a contract, the relationship between them being one of bailor and bailee, the goods were carried by second respondent for the benefit of the claimant, and hence, under Ex. R1, the loss occasioned in respect of respondent-Insurance Company cannot be made, liable to compensate for the loss alleged to have been suffered by the petitioner.
18. Mr. Arunagirinathan, learned Counsel for the second respondent, would then state that the petition filed under Section 110-A of Motor Vehicles Act itself was not maintainable on the finding that the goods which had suffered damage are not properties of a third party. His contention is based on Chapter VIII of Motor Vehicles Act, being confined only in respect of third party risks and no other. This Court having held that the goods involved in the petition are not properties of a third party coming within the scope of Section 95(1)(b)(i), in view of Section 110, the Claims Tribunal would have no jurisdiction to entertain such a claim. The Tribunal constituted under Section 110 could only adjudicate upon claims for compensation in respect of damage to any property of a third party so arising Therefore, the petition as filed was not maintainable before the Tribunal at Madurai.
19. Certain arguments were advanced regarding the burden of proving damages as conceived under the Carriers Act, but in the light of the findings above referred to, this point does not arise for consideration.
20. Therefore, both the appeals are allowed. No costs.