New India Assurance Co. Ltd vs Sri Hitendra Nath Sarma

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GAHC010008442016

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THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : MACApp./43/2016
NEW INDIA ASSURANCE CO. LTD
HAVING ITS REGISTERED AND HEAD OFFICE AT NEW INDIA ASSURANCE
BUILDING 87 MAHATMA GANDHI ROAD, FORT, MUMBAI 400001 AND
REGIONAL OFFICE AT GUWAHATI-5
VERSUS
SRI HITENDRA NATH SARMA
S/O SRI GAJENDRA NATH SARMA, R/O SANKARNAGAR, WARD NO.8, P.O.
MANGALDAI, P.S. MANGALDAI, DIST. DARRANG, ASSAM
BEFORE
HONOURABLE MR. JUSTICE DEVASHIS BARUAH
For the Appellant(s) : Ms. M. Choudhury, Advocate

For the Respondent(s) : None appears


· Date on which Judgment was reserved : NA
· Date of Pronouncement of Judgment : 03.11.2026
· Whether the pronouncement is of
the Operative Part of the Judgment : NA

Whether the full Judgment has been
·
Pronounced : Yes
JUDGMENT AND ORDER (ORAL)

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Heard Ms. M. Choudhury, the learned counsel for the Appellant.
2. None appears on behalf of the Respondent when the matter is
called, in spite of service having been duly effected.
3. This Appeal is directed against the Award dated 06.10.2015
passed in MAC No.(i) 242/2013 whereby the learned Court of the
Additional District Judge (FTC), Darrang, Mangaldai (hereinafter
referred to as, “the learned Tribunal”) awarded compensation of
Rs. 1,10,000/- along with interest at the rate of 6% per annum
from the date of filing of the claim petition till realization.
4. The Appellant, being aggrieved by the impugned Award dated
06.10.2015 has approached this Court by filing the present Appeal
solely on the ground that the claim proceedings was not
maintainable, as Section 147 of the Motor Vehicles Act, 1988 (for
short, “the Act of 1988”) does not require the insurance company
to assume the risk of death or bodily injury to the owner of the
vehicle and the liability of the insurance company is only for the
purpose of indemnifying the insured against liabilities incurred
towards a third person or in respect of damage to property.
5. Taking into account the sole contention on which the present
Appeal is premised, let this Court now take into consideration the

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relevant facts which led to the filing of the present Appeal.
6. The Respondent herein, as the claimant is the owner of a
Maruti Alto (LXi) bearing Registration No. AS-13-B-3903. The
claimant was travelling in the said vehicle. The vehicle met with an
accident on 05.05.2013 at 7:15 P.M. thereby causing bodily injuries
to the claimant/respondent herein.
7. Pursuant thereto, the claim proceedings was initiated which
was registered and numbered as MAC No. (i) 242/2013. The
Appellant Insurance Company, which was the opposite party in the
said claim proceedings filed a written statement challenging the
maintainability of the claim proceedings on the ground that the
claimant himself was the owner of the vehicle and had no third-
party liability, as the claimant himself was the first party under the
terms of the policy.
8. On the basis of the pleadings, three issues were framed,
which being relevant, are reproduced hereinbelow:
“ (1) Whether the injured sustained grievous injury in road traffic accident
due to rash and negligent driving involving vehicle No. AS-13-B-3903?
(2) Whether the offending vehicle was duly covered with the insurance
policy at the relevant time of the accident?

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(3) To what relief/reliefs, the parties are entitled to?”
9. The claimant, i.e., the respondent herein adduced evidence by
examining himself and exhibited some documents including the
Accident Information Report and medical documents. The
Appellant Insurance Company did not adduce any evidence.
10. The learned Tribunal passed the impugned Award on
06.10.2015 holding inter alia that the paid driver of the claimant
had driven the car in a rash and negligent manner, resulting in
injuries to the claimant and accordingly determined Rs. 1,10,000/-
as just compensation payable to the claimant. Being aggrieved, the
present Appeal has been filed.
11. I have heard the learned counsel appearing on behalf of the
Appellant who submitted that the claim proceedings was not
maintainable, taking into account that the claimant was the owner
of the vehicle. The learned counsel further submitted that the
claimant was a first party and not a third party and, therefore,
compensation could not have been awarded by the learned
Tribunal as has been done vide the impugned Award.
12. This Court has given an anxious consideration to the
submissions made by the learned counsel for the Appellant and has

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also perused the materials on record.
13. From the materials on record, it is seen that the policy in
question was a comprehensive policy issued to the claimant. Under
such circumstances, the question that arises is whether a
comprehensive policy would also cover the risk of injury to the
owner of the vehicle.
14. Section 147 of the Act of 1988 makes it clear that an
insurance policy covers the liability incurred by the insured in
respect of the death of or bodily injury to any person (including an
owner of the goods or his authorized 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 of the Act of 1988
does not require an insurance company to assume the risk of death
or bodily injury to the owner of the vehicle.
15. This aspect is no longer res integra in view of the judgment of
the Supreme Court in the case of Oriental Insurance Co. Ltd. Vs.
Sunita Rathi & Others reported in (1998) 1 SCC 365 wherein the
Supreme Court observed that the liability of an insurance company
is only for the purpose of indemnifying the insured against
liabilities incurred towards a third person or in respect of damage

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to property. In other words, where the insured, i.e., the owner of
the vehicle has no liability towards a third party, the insurance
company has no liability either.
16. This Court also finds it relevant to take note of another
Oriental Insurance
judgment of the Supreme Court in the case of
Co. Ltd. Vs. Jhuma Saha (Smt.) & Others reported in (2007) 9 SCC
263
wherein the Supreme Court categorically observed that the
liability of an insurance company is to the extent of indemnifying
the insured against the respondent or an injured person, a third
person or in respect of damage to property. It was further
observed that if the insured cannot be fastened with any liability
under the provisions of the Act of 1988, the question of the insurer
being liable to indemnify the insured, therefore does not arise.
17. This Court also, in the case of National Insurance Co. Ltd. Vs.
Nirada Devi & Another reported in 2021 SCC OnLine Gau 2686, and
more particularly at paragraph Nos. 8 and 9 held as hereinunder:
“ 8. From a reading of Section 147 which is quoted hereinabove as well as on a
perusal of the insurance policy it would reveal that an insurance policy covers
the liability incurred by the insured in respect to the death of or bodily injury to
any person (including an owner of the goods or his authorized 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 insurance

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company to assume risk for death or body injury to the owner of the vehicle. It
has been held in the case of Oriental Insurance Co. Ltd. Vs Sunita Rathi
reported in (1998) 1 SCC 365 that the liability of an insurance company is only
for the purpose of indemnifying the insured against liabilities incurred towards
a third person or in respect of damages to the 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. As already stated hereinabove a
perusal of Exhibit-A which is an insurance policy would go to show that the
premium was paid in respect of OD-Basic as well as for TP-Basic. Further to
that premium was also paid in respect to liability to passengers and workmen
compensation to employees. No evidence have been laid by the claimant to
that effect that OD-Basic shall also include the personal accident insurance of
the son of the claimant. OD-Basic normally refers to own damage which is a
premium being paid towards damage of the vehicle and not for the injury for
to the person of the owner. An owner of a vehicle can only claim compensation
provided a personal accident insurance has been taken out. In the instant case
there is no evidence to that effect . In this regard, the judgment of the
Supreme Court rendered in the case of Dhanraj (supra) at paragraph 8, 9 and
10 is quoted hereinbelow :
“ 8. 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 authorized 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 body injury to the owner of the vehicle.
9. In the case of Oriental Insurance Co. Ltd. Vs Sunita Rathi it has been
held that the liability of an insurance company is only for the purpose of
indemnifying the insured against liabilities incurred towards a third person

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or in respect of damages to the 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.
10. In the case, 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.4989 paid under the heading “Own damage” is for
covering liability towards personal injury. Under the heading “Own damage”,
the words “premium on vehicle and non-electrical accessories” appear. It is
thus clear that this premium is towards damage to the vehicle and not for
injury to the person of the owner. An owner of a vehicle can only claim
provided a personal accident insurance has been taken out. In this case
there is no such insurance.”
9. The said judgment of Dhanraj (supra) was subsequently followed by the
Supreme Court in the case of Prabha Devi (supra) and the relevant paragraph
of the said judgment is paragraph 8 & 9 which is quoted hereinbelow:
“ 8. We have perused the judgment of this Court in Dhanraj. In that case,
the appellant who was the insurer was travelling in the insured vehicle,
which met with an accident. In the accident, the appellant as well as the
other passengers received injuries. A number of claim petitions came to be
filed. The appellant who was the insurer also filed a claim petition. The
MACT held the driver of the jeep responsible for the accident. In all the
claim petitions filed by the other passengers, MACT directed that the
appellant (the owner) as well as the driver and the insurance company
were liable to pay compensation. Furthermore, in the claim petition filed by
the appellant, the MACT directed the driver and the insurance company to
pay compensation to the appellant. The aforesaid finding of the MACT was
upheld by the High Court in the appeal filed by the Insurance Company.

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The Insurance Company was, in appeal before this Court challenging the
judgment of the High Court awarding compensation to the owner of the
insured vehicle. Taking into consideration the provision contained in Section
147 of the Act, this Court observed as follows :
“ 8. 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 authorized 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 body injury to the owner of the vehicle.
9. In the case of Oriental Insurance Co. Ltd. Vs Sunita Rathi it has been
held that the liability of an insurance company is only for the purpose of
indemnifying the insured against liabilities incurred towards a third
person or in respect of damages to the 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.
10. In the case, 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.4989 paid under the head “Own damage” is for
covering liability towards personal injury. Under the heading “Own
damage”, the words “premium on vehicle and nonelectrical accessories”
appear. It is thus clear that this premium is towards damage to the
vehicle and not for injury to the person of the owner. An owner of a
vehicle can only claim provided a personal accident insurance has been
taken out. In this case there is no such insurance.”
9. In view of the aforesaid ratio of law, the claim made by the

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respondents could not have been allowed. Consequently, Civil Appeal
No.479 of 2007 is allowed. The impugned award as well as the impugned
judgment of the High Court are set aside.”
18. Taking into account the aforesaid settled propositions of law,
this Court is of the opinion that the learned Tribunal erred in law in
exercising its jurisdiction to entertain a claim for bodily injuries to
the claimant, who was the owner of the vehicle in question. Under
such circumstances, the impugned Award dated 06.10.2015 cannot
be sustained in law.
19. Accordingly, the impugned Award dated 06.10.2015 passed in
MAC No. (i) 242/2013 by the learned Tribunal is set aside and
quashed.
20. The Appellant Company shall be entitled to the refund of the
statutory deposit of Rs. 25,000/- upon filing an application before
the Registry of this Court.
21. Return the TCR.

JUDGE
Digitally signed by Satyam Sharma
Date: 2026.11.03 06:50:11 +05'30'
Comparing Assistant