NEW INDIA ASSURANCE CO LTD Vs. SATYANATH HAZARIKA

JUDGEMENT

(1.) This 5-Judge Bench has been constituted to consider whether certain observations made by a 3-Judge Bench of this Court in Hira Devi v. Bhaba Kanti, AIR 1977 Gauhati 31 need reconsideration in view of the later pronouncement of the Supreme Court in Pushpabai v. Ranjit Ginning and Pressing Co., AIR 1977 SC 1735. It may be stated that the case of Hira Devi had to be placed before a Full Bench of 3 Judges because of a reference by a Division Bench which was of the view that there is a difference of opinion expressed in Assam Corporation v. Binu Rani, AIR 1975 Gauhati 3 and Asha Rani v. The Commonwealth Assurance Company Ltd. (MA (F) 41/69 disposed of on 21-2-1974) on the question as to whether an insurer is liable to pay compensation in case of dealth or bodily injury to a gratuitous passenger. What is required to be determined by this Bench is whether an insurer can be asked to indemnify an insured who has been made liable to pay compensation in respect of death or bodily injury to gratuitous passenger.

(2.) To answer the above question, we shall have to apply our mind mainly to the provisions contained in section 95 of the Motor Vehicles Act, 1939, hereinafter referred to as the Act. This section finds place in Chapter VIII of the Act dealing with insurance of motor vehicles against third party risk. The provisions in this Chapter follow closely the recommendations of Motor Vehicles Insurance Committee and have been adopted from English Law. As accidents have been frequent and as in large number of cases injured persons or the dependents of those killed found it difficult to realise damages or compensation from the owner or driver who had no means to satisfy their claims, necessity for insurance against third party risk was keenly felt. This Chapter, therefore, makes provision for insurance of the vehicle against third party risk, that is to say, its provisions insure that a third party who suffers on account of the user of the motor vehicles would be able to get damages for injuries suffered and that their liability to get the damages will not be dependent on the financial condition of the owner or driver of the vehicle whose user led to the causing of the injury. It was, therefore stated in New Asiatic Insurance Co. v. Pessumal, AIR 1964 SC 1736 that the provisions of this Chapter have to be construed in such a manner as to ensure the aforesaid object of the enactment.

(3.) As we would be primarily concerned in answering the aforesaid question with section 95 of the Act, we may note the relevant provisions of this section at the outset.