Motor vehicle insurers will read with shock and awe a Supreme Court judgment delivered last week. The judgment made an insurance company pay for those who lost their lives while allegedly pilfering petrol from a truck that turned turtle. The case had come to the court twice in the last ten years, and each time the insurer lost.
According to the Motor Vehicles Act, there are two kinds of compensation for death or injury suffered in a road accident. The first is no-fault liability, which has to be paid even if the victim was at fault. The object of the rule is to provide immediate relief to the injured or the dependents of the deceased since it takes time to determine fault. A just and fair compensation after determining who caused the accident and whether the victim contributed to it will come later. Since a motor vehicle is compulsorily insured, the liability to pay the compensation falls on the insurance company. In the present case, the insurer had to pay on both counts.
A collision occurred between a petrol tanker and a truck on the Pune-Bangalore highway in the small hours. The tanker went off the road and fell in a ditch below at some distance from the highway. As a result, petrol started leaking from the tanker. In the morning, some villagers started pilfering petrol despite the warning given by the driver and the cleaner. This was followed by an explosion in which 46 people died. The dependents of the deceased moved the accident claims tribunal seeking compensation from the owner and the insurance company. The tribunal did not see any connection between the road accident and the deaths owing to the theft. But the Bombay High Court overruled the order and granted a no-fault liability in the case, Shivaji Dayanu Patil vs Smt Vatschala. The Supreme Court upheld it.
The latest judgment of the Supreme Court was the second round in which New India Assurance Co Ltd appealed against the high court order directing the insurer to pay compensation to some victims after analysing the facts. The tribunal ruled that the vehicle was not in use at the time of the fire; there was no connection between the road accident earlier and the explosion; and the victims who wanted to steal petrol were responsible for the disaster. The police report also blamed the victims for carrying lit beedis that caused the fire. But the high court reversed the finding and asked the insurer to pay all the claimants.
The owner and the insurer appealed against this order in the Supreme Court. They insisted the petrol tanker was not a motor vehicle as defined in law because it was “not in use” and was lying upturned in a ditch below and was not capable of movement on the road; and there was no causal relationship between the collision on the road above and the explosion that took place five hours later. The Supreme Court did not accept these arguments and ruled that even if a vehicle is not moving, if it is capable of moving, it was “in use”.
In the case Oriental Fire & General Insurance Co Ltd vs Suman Navnath Rajguru, a petrol tanker parked near a footpath on the road in front of a petrol pump exploded, causing a passerby fatal injuries. The Bombay High Court rejected the insurer’s contention that at the material time, the petrol tanker was not in “use”. Citing similar decisions, the Supreme Court held the insurance company liable to pay in the present case.
In compensation cases, the victim’s negligence is a hot issue. Insurance companies vehemently argue that road accident victims contribute to the accident (by jay-walking, for instance). If it is proved, the liability of the owner and the insurer would be reduced according to the proportion of contributory negligence. But in this case, neither of the Supreme Court judgments accepted the argument that the victims were doing anything unlawful. It did not accept the evidence. In any case, all those in the crowd may not have indulged in theft. Perhaps the court took a liberal view considering the fact that the victims were villagers and the provisions of the law were meant to be a welfare measure in the case of accidents. The court also might have judicially accepted the behaviour of some crowds at accident sites who first rob the victims of their cash, credit cards and jewellery and then start rescue operations. In any case, these judgments put a heavy burden on insurance companies, leaving them short of arguments when similar mishaps occur.
