Summary
The owner of a Bolero Camper utility vehicle challenged a High Court 'pay and recover' order passed on the insurer's appeal on the footing that the policy's 'limitation as to use' barred carriage of passengers. The Court held that the clause restricting use to carriage of goods applies only to goods vehicles; the vehicle was registered as a utility van with a 4+1 seating capacity, held a contract carriage permit and the package policy itself recorded that capacity, so the insurer could not avoid its liability. The Tribunal's awards were restored, with a direction that a 1/3rd deduction for personal expenses be made in one of the claims.
Issues
- Whether the 'limitation as to use' clause in the package policy, which restricts use to carriage of goods, exempted the insurer from liability for passengers carried in a utility vehicle registered with a 4+1 seating capacity and holding a contract carriage permit.
- Whether the filing of five claim petitions showed that more than four passengers were carried, so as to justify an order of 'pay and recover'.
- Whether a 1/3rd deduction towards personal expenses was required in computing the loss of income in one of the claims.
Provisions considered
- Section 2(7) (contract carriage), Motor Vehicles Act, 1988A contract carriage is a motor vehicle carrying passengers for hire or reward under an express or implied contract. The permit for the offending vehicle was a contract carriage permit allowing five persons including the driver, which the Court treated as confirming that the vehicle was meant to carry passengers. (¶¶ 4, 5)
- Section 2(14) (goods carriage), Motor Vehicles Act, 1988A goods carriage is a vehicle constructed, adapted or used solely for the carriage of goods. The utility van, which carries both passengers and goods, was held not to be a goods carriage, so the policy's limitation as to use for carriage of goods did not apply to it. (¶¶ 4, 5, 6)
Held
- The 'limitation as to use' confining the vehicle to carriage of goods applies only to a goods vehicle. The certificate of registration described the offending vehicle as a Utility Van with a seating capacity of five including the driver, the permit was a contract carriage permit for five persons, and the package policy itself specified the 4+1 seating capacity. The vehicle was therefore not insured as a goods vehicle and the limitation did not apply. (¶¶ 4, 5)
- The insurer's Branch Manager admitted that the policy was issued after perusing the registration certificate, fitness and permit, that the seating capacity of 4+1 was written in the policy, that there was no recital that premium for passengers had not been charged, and that a utility van carries goods in one half and passengers in the other. Having issued the package policy with full knowledge that the vehicle could carry 4+1 passengers in addition to goods, the insurer could not wriggle out of its liability to indemnify the owner. (¶ 6)
- The contention that five claim petitions indicated that more than four passengers were carried had no significance on the facts found by the Tribunal: pedestrians were also dragged down when the vehicle fell into the gorge, the eyewitness (PW2) saw the vehicle carrying four passengers just before the accident and that evidence was not challenged in cross-examination, and one of the claims related to a pedestrian. There was no reason to sustain the direction of 'pay and recover'; the liability is on the insurer and must be satisfied fully by it. (¶ 7)
- In the claim relating to the death of Jagdish Prasad Gaur (MACT Case No. 134 of 2014), where the insurer had contended before the High Court that no 1/3rd deduction for personal expenses had been made, the Tribunal shall, since just compensation is to be awarded, ensure that a 1/3rd deduction is made from the total loss of income before disbursing the amount. (¶¶ 8, 9)
Result
Appeals allowed; judgment of the High Court set aside and the Tribunal's orders restored, with the modification that in MACT Case No. 134 of 2014 (relatable to Appeal No. 607 of 2016) the Tribunal shall make a 1/3rd deduction for personal expenses from the computed loss of income before disbursement; pending applications disposed of.