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Saturday, September 1, 2018

what is a Motor vehicle ! what is a public place & Insurer's liability

Sadly, there are road accidents and people do get injured or lose their lives in accidents involving vehicles.  Motor Vehicles Act inter-alia, provides avenues for compensation for such victims and has evolved a simplified procedure wherein applications (petitions) can be filed before Motor Accident Claims Tribunals (MACT) .. .. there are thousands of petitions filed in various MACTs arising out / attributed to road accidents..

Here is one interesting case involving a leading Private Insurer filed before a MACT in Kerala.  In Mar 2013, a person (cleaner of a lorry) was standing by the side of the tipper which was being loaded by a Tata Hitachi equipment – it was loading granite stones to the tipper to be carried elsewhere.  Unfortunately, the bucket of the Hitachi whilst being moved hit the person, who suffered fractures and stress injuries ..the injured  filed a petition  u/s 166(1) (a) of MV Act claiming compensation of Rs. 10 lakhs.  The accident occurred in a quarry.  The injured though was a workman, did not claim against the owner of the truck but filed the petition against the Hitachi as third party.

The Insurer for the Hitachi (which was insured with them under Contractor’s Plant & Machinery) filed counter contending that the equipment insured   is not a Motor vehicle and the claim petition is not maintenable. They further contended that this being an Engineering Policy did not cover the liability as contemplated by the Motor vehicles Act. 

Hearing the pleadings, the Court framed the following issues : -

o    Whether the accident arose out of use of a motor vehicle
o    Whether the accident occurred due to negligent operation of Tata Hitachi
o    Whether the petitioner is entitled to compensation as claimed & the quantum
o    Who is liable to pay compensation.
o   Relief and costs. 

The petitioner reportedly was standing near the tipper when granite stones were being loaded and the operation of the Hitachi insured, caused the accident.  Insurer contended that the equipment is not a Motor vehicle -  the  Court concluded that as per sec 2(28) of MV Act definition : motor vehicle or vehicle is any mechanically propelled vehicle adopted for use upon road whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer but does not include a vehicle running upon fixed rails or a vehicle of a special type adopted for use only in a factory or in a closed premises .. .. or a vehicle having less than 4 wheels fitted with engine capacity of not exceeding 25 cc.

The Insurer’s Counsel submitted that Tata Hitachi is a vehicle running upon fixed rails and specially adapted for quarry and thus would not come under the purview of MV Act.  A picture of Hitachi equipment was also provided by the petitioner for awareness of the Tribunal wherein it was observed that it had wheels, driver cabin and adapted for road use.  The Tribunal concluded that it was a motor vehicle coming under the definition of Sec 2 (28) of the Motor Vehicle Act relying upon a judgment passed by Honble High Court of Bombay  inVikramIspatVs State of Maharashtra when the machine involved was a mechanically propelled vehicle having chassis, chain wheels, driver cabin and moving on rugged surfaces of quarry.   Relying upon this decision, it was submitted that a test whether particular vehicle is motor vehicle or not would be that, if the vehicle is reasonably suitable for being used along public roads and the fact that manufacturers have made or intended the vehicle for one purpose or other or the dealer has sold it for a particular purpose or that a particular vehicle is described by a particular name or description, is no criterion to decide whether the vehicle is adapted for use upon the  roads within the meaning of the definition given in Sec 2 of MV Act.

It was observed from the said decision that if the vehicle is fit and suitable for being used on road, it is immaterial whether it runs on a private road or a public road unless it is shown that it is of a special type adapted for use only in factories ro enclosed premises and is incapable of running on any types of roads or public roads.  From the picture of Hitachi, the Court observed that it had wheels and a driver cabin and it is suitable and adaptable for being used on a road.   Court further stated that though used in quarry, it can be used on roads and amenable for that and cannot be said to be adapted for use only in enclosed premises.  It was concluded that the equipment would fall under the definition of Sec 2(28) of the Motor Vehicles Act

On the occurrence, the Tribunal observed that the equipment handler should have exercised due diligence  and absence of the same can be termed as negligence  and concluded that the accident occurred due to negligent operation of Hitachi.

The insurer contended that the place of occurrence was a quarry owned by a private person.  This was brushed aside by the Tribunal that as per section 2 (34) – public place means a road, street, way or other place, whether a thoroughfare or not, to which the public have a right to access and includes any place or stand at which passengers are picked up or set down by a stage carriage.  The element of right of access dominates the definition, though the place of occurrence was a property owned by a private person, the act of loading granite stones, public had a right to access and at the time of accident, the tipper lorry had been taken to the place for loading – and it was concluded that it was a public place.

On the basis of petition, it was concluded that the petitioner sustained injuries out of use of Tata Hitachi, construed as a motor vehicle in a public place. Going by the wound certificate and other medical documents, age of petitioner @ 26 – adopting multiplier of 17 – under the head permanent disability Court calculated compensation and arrived at an amount of Rs.534036/-

Thus, before the Tribunal the accident was proved; petitioner’s injuries were proved; Tata Hitachi was deemed a motor vehicle, place of accident – a public place and accident caused by negligence of the operator of the equipment – considering  facts and circumstances of the case, Tribunal arrived at a compensation of Rs.5,34,036/- that included heads of loss of earning / medical bills, nourishment, amenities.With all these against the Insurers, normally, there would have been an award against the Insurers, more so, with the owner of the vehicle remaining ex-parte.   Well, that was not the end.

The insurers had carefully and thoughtfully drafted counter highlighting that it was a policy issued as CPM and not a policy issued under Chap XI under Sec 145 of Motor Vehicles Act.   They filed the policy alongwith its terms and printed conditions.  The Insurer’s counsel drew the attention of the Tribunal to clause (e) of exception of CPM which states that company shall not be liable in respect of loss or damage to vehicles designed and licensed for general road use.  Further it was forcefully contended that the policy was taken only to cover loss or damage to the vehicle with specific condition that the vehicle be exclusively used on construction site.  It was also pointed out by premium calculation and printed wording that there was no coverage for any third parties. 

The counter, pleading, and evidence by the Insurance Officer was led to prove that it was a policy covering equipment and no third party liability coverage was availed.   The Tribunal accepted the contention of the Insurer  and held that only R1 (owner of the vehicle) was liable, exonerating the Insurer from liability.

It is an example of case properly handled by Insurer, putting their contentions, neatly drafting the counter, filing documents and leading evidence.  A lot of learning for the Insurer in a case where they were exonerated, though every other aspect was proved against them.

Interesting !

With regards – S. Sampathkumar
10th Apr 2018.

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