On 22nd August, 2011, one Mr. Somu was riding a two wheeler belonging to his friend. The vehicle skidded, he lost balance, fell down and suffered injuries in the motor accident. There was no other vehicle involved in the accident. Alleging that he had suffered 35% partial and permanent disablement, the victim pursued a claim for compensation against the owner of the two wheeler and M/s. Royal Sundaram Alliance Insurance Co Ltd. The insurer denied liability on the ground that though motor insurance was compulsory under Motor Vehicles Act, 1988, the risk to such riders as Somu, who was a friend of the owner of the vehicle was neither required to be covered under the statute nor was covered under the package or comprehensive policy of insurance. Only the risk to a driver, as workman or paid driver was covered.
The claims tribunal concluded that the accident was due to the negligence on the part of the victim himself. However, adverting to the contractual portion of the insurance policy viz. Personal Accident Cover for owner cum driver, for which additional premium was paid, the claims tribunal awarded compensation against the insurance company. Aggrieved, the insurer filed an appeal before the High Court, that Somu had borrowed the vehicle and riding and as such they were not liable. And the nature of injuries did not come within the policy of insurance.
Agreeing with the insurer, the High Court, by orders dt. 4th March,2020 in Royal Sundaram Alliance Ins Co Ltd vs Somu, set aside the grant of compensation by the tribunal against the insurance company. This is not a one-off occurrence or incident. It happens day in and day out. Not the insurer escaping responsibility, but victims of such genre suffering mishaps leading to deaths or maiming of limbs and facing the prospect of Zilch compensation. It all seems so hazy and a maze that one has been confronted by even senior lawyers refusing to accept that such victims did not have the benefit of compulsory coverage of insurance policy and the victims and their families being exposed to a life of tragedy, distress and penury. That, however is the legal reality, and the commoner who happens to face such eventualities, better take notice. More importantly, it may be for Parliament and/or possibly the regulator of insurance companies- Insurance Regulatory & Development Authority to take note and tweak the dispensation, to protect the lives and limbs of Somus and his ilk.
It is singularly unfortunate that the Courts are compelled to mutilate the law sometimes, to ‘do injustice in spite of law’ as Lord Alfred Denning, once ruled, to the dismay of a true blue conservative originalist like Justice Antonin Scalia. What else can the courts do when they are faced with a hapless and helpless victim or his family pleading for compensation, upon proof of a genuine accident and its gruesome impact on their lives and limbs. The courts look for ways to ‘iron out the creases in the statute’ if possible, and at times go beyond and make a mockery of law, if they have no other option, to provide Just compensation to innocent victims. Why should it be so? Why should the remedy be in the grey area? Why cannot there be a certainty in the jurisdiction to protect the lives and limbs of such users of motor vehicles? So many of them. Why not?
All that it requires is for IRDA to take heart, put mind and provide for a contractual cover to provide for the risk to Somus. It may not even be necessary to go all the way to the Parliament to seek an amendment to MV Act, 1988. Only recently, we had Act 32 of 2019 introducing a new and polished Chapter 13 to MV Act, 1988 (not yet notified for it to take effect though), but not deigning to make the changes to relieve Somus of their anguish. Are our lawmakers even aware of such needs? They are too busy politicking that Nani Palkhivala once said, “ I was furious not amused, when I heard a distinguished Member of Lok Sabha unable to distinguish between Tariff and Traffic and held his ground that Tariffs were heavy in India and it needed to be reduced but people must co operate and not use all their vehicles on the roads all at the same time”. Not a joke this.
It needs to be flagged off that though occasions arose before the top court, more than once, to clarify the legal position in this regard and urge IRDA to contractually come up with a solution, they have failed. On the other hand a reading of the verdicts as in Sunitha, Sunil Kumar, Sadanand Mukhi, Ningamna, Ramkhiladi, all from the apex court,have compounded the confounding circumstances.
Of course, thankfully, the Madras High Court, had an occasion in United India Ins Co Ltd vs Rekha, and directed IRDA to provide for a better regime to protect the lives and limbs of owners cum drivers of motor vehicles vis a vis Personal Accident Cover. IRDA came up with a Rs.15 lakhs cover for owners cum drivers, on payment of additional payment of Rs.7,500/-. What happened? Alongside this mandate, we had the Supreme Court compelling 3 and 5 years’ insurance policies for new cars and two wheelers’ respectively. This meant that outgo for owners would have been huge and they beseeched IRDA to have graded PA covers for much lower sums, so that premium payable was manageable. Who lost? The victims’ and their families? Who else? It was most unfortunate that owners’ of vehicles failed to sacrifice their financial comfort today, to better protect the interest of their families tomorrow, with their myopic construct on the costs.
Be that as it may, even the newly introduced IRDA mandate to cover the lives and limbs, contractually, was as a Personal Accident cover to owners cum drivers alone. It did not provide for any coverage to those as Somus, as a friend, relative, colleague, neighbour, acquaintance borrowing the vehicle for the occasion. They are a different and distinct specie, requiring a special and specific cover. That is where there is a need for the regulator IRDA to offer a overage, contractually, to those who may care to seek it, even on pain of additional premium. More importantly, the cover may need to be tweaked to provide for deaths and all kinds of injuries and not those as amputation or loss of eyesight etc specifically. Why not a cover enabling the victim, be he a friend, neighbour, colleague, whoever, the right to move the claims tribunal for determination of Just compensation, as if a third party.
No statutory amendments need be introduced for a contractual change in the motor insurance policy would suffice for it. The ball is in IRDA’s Court, and Courts may only need to indulge in a nudge and a wink, as motor insurers may also be entitled to obtain additional source of premium, to run their businesses on commercial lines. If it happens, which it needs to, as early as it could, Somu, may after all have done a signal service?
(Author- Narasimhan Vijayaraghavan- is practising advocate in the Madras High Court)