Supreme Court Clarifies “Use of Motor Vehicle” in Accident Claims: Kalim Khan vs. Fimidabee (2018)

Date of the Judgment: 03 July 2018

Citation: (2018) INSC 606

Judges: Dipak Misra, CJI, A.M. Khanwilkar, J., Dr. D.Y. Chandrachud, J.

Can a vehicle be considered in “use” even when it is stationary? The Supreme Court of India recently tackled this question in a case concerning a fatal accident involving a tractor’s battery used for blasting. The core issue revolved around whether the accident arose from the “use of a motor vehicle” as defined under the Motor Vehicles Act, 1988, specifically Section 165. This judgment clarifies the scope of “use” under the Act. The bench comprised Chief Justice Dipak Misra, Justice A.M. Khanwilkar, and Justice Dr. D.Y. Chandrachud, with the judgment authored by Chief Justice Misra.

Case Background

The legal representatives of the deceased, Firoz, filed a claim petition before the Motor Accidents Claims Tribunal, Washim, seeking compensation of Rs. 15 lakhs. Firoz was an Assistant Teacher drawing a monthly salary of Rs. 8,123. The claim was based on the assertion that on 08 April 2005, around 4:15 PM, while Firoz was returning home after purchasing groceries, a heavy stone struck his head, causing fatal injuries. The claimants argued that the stone was propelled by a blasting operation conducted for digging a well in the field of Respondent No. 1. They further contended that a tractor owned by the 1st respondent, insured with Respondent No. 4, was used in the digging process, thus establishing a connection between the tractor and the death.

Timeline:

Course of Proceedings

The Motor Accidents Claims Tribunal ruled that the digging of the well using a blasting machine was carried out in the field of the owner and the tractor was used for this purpose. The Tribunal noted the insurer’s argument that the tractor was used for commercial purposes, violating the insurance policy. The Tribunal held that there was a fundamental breach of the insurance policy and fastened the liability on the owner to pay compensation of Rs. 9,30,000 with interest. Two appeals were filed before the High Court challenging the Tribunal’s award. The High Court reversed the Tribunal’s decision, stating that the use of the battery for causing the explosion could not be considered “use of a vehicle” as defined under Section 165 of the Motor Vehicles Act, 1988, as the battery was practically detached from the vehicle. The High Court concluded that the accident did not arise out of the use of a motor vehicle and thus the claim petition was not maintainable.

Legal Framework

The case is primarily concerned with the interpretation of Section 165 of the Motor Vehicles Act, 1988, which deals with the jurisdiction of Claims Tribunals. The section states that Claims Tribunals can adjudicate claims for compensation in respect of accidents involving death or bodily injury arising out of the use of motor vehicles. The key phrase is “arising out of the use of motor vehicles.”

Section 2(28) of the Motor Vehicles Act, 1988 defines “motor vehicle” or “vehicle” as:

“(28) “motor vehicle” or “vehicle” means any mechanically propelled vehicle adapted for use upon roads 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 adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding twenty-five cubic centimeters;”

Section 2(44) of the Motor Vehicles Act, 1988 defines “tractor” as:

“a motor vehicle which is not itself constructed to carry any load (other than equipment used for the purpose of propulsion); but excludes a road-roller.”

Arguments

Claimants’ Arguments:

• The claimants argued that the tractor belonging to the 1st respondent and insured with the 4th respondent was used for digging the well by keeping the blasting machine.
• They asserted that the death was caused by the use of the tractor, as the battery of the tractor was used to power the blasting machine.
• The digging of the well was for agricultural purposes, and therefore, incidental to agriculture and not a violation of the policy.

Insurer’s Arguments:

• The insurer contended that the tractor was insured under a “Farmer Package Policy” for agricultural purposes only.
• They argued that using the tractor for commercial purposes, such as mounting a blasting machine, was a breach of the insurance policy.
• The insurer stated that the owner had not taken permission from the competent authority for carrying out blasting work, which was a violation of the policy.
• The insurer’s employee stated that the tractor was used for commercial purpose and for transporting the blasting machine, thereby breaching the policy.

Owner’s Arguments:

• The owner contended that the tractor was used for agricultural purposes, specifically for digging a well for irrigation.
• They argued that digging the well was incidental to agriculture and not a commercial use, and therefore, there was no violation of the policy.

Issues Framed by the Supreme Court

The Supreme Court framed the following key issues for consideration:

1. Whether the accident arose out of the use of a motor vehicle as defined under Section 165 of the Motor Vehicles Act, 1988?
2. Whether the High Court was correct in holding that the battery was practically detached from the vehicle?
3. Who should be held liable to pay the compensation amount – the insurer or the owner of the vehicle, considering the alleged breach of the insurance policy?

Treatment of the Issue by the Court:

Authorities

The Supreme Court considered the following authorities:

On the Interpretation of “Use of Motor Vehicle”:

• Shivaji Dayanu Patil and another v. Smt. Vatschala Uttam More [1991] 3 SCC 530, Supreme Court of India: This case discussed the conceptual meaning of “arising out of the use of a motor vehicle” under the Motor Vehicles Act, 1939. The Court held that “use” has a wider connotation and covers the period when the vehicle is stationary.
• Newberry v. Simmonds [1961] 2 All ER 318: This case held that a motor car does not cease to be a mechanically propelled vehicle upon the mere removal of the engine if the engine may shortly be replaced.
• Smart v. Allan [1962] 3 All ER 893: This case discussed when a vehicle ceases to be a mechanically propelled vehicle. It was held that if there is no reasonable prospect of the vehicle ever being made mobile again, it ceases to be a mechanically propelled vehicle.
• Elliott v. Grey [1960] 1 QB 367: This case was cited to support the wider interpretation of the word “use” of a motor vehicle.
• Government Insurance Office of New South Wales v. R.J. Green & Lloyd Pty. Ltd. (1965) 114 CLR 437: This Australian case was referred to for the interpretation of the phrase “arising out of” in relation to the use of a motor vehicle.
• Pushpa Rani Chopra v. Anokha Singh 1975 ACJ 396 (Del HC): This case was cited to support the wider interpretation of the word “use” of a motor vehicle.
• General Manager, K.S.R.T.C. v. S. Satalingappa 1979 ACJ 452 (Kant HC): This case was cited to support the wider interpretation of the word “use” of a motor vehicle.
• Oriental Fire and General Insurance Co. Ltd. v. Suman Navnath Rajguru 1985 ACJ 243 (Bom HC): This case was cited to support the wider interpretation of the word “use” of a motor vehicle.
• Union of India v. United India Insurance Co. Ltd. and others (1997) 8 SCC 683, Supreme Court of India: This case reiterated that the words “use of the motor vehicle” should be construed in a wider manner.
• Samir Chanda v. Managing Director, Assam State Transport Corporation (1998) 6 SCC 605, Supreme Court of India: This case held that an explosion inside a bus was an accident arising out of the use of the motor vehicle.
• Kanhei Rana and another v. Gangadhar Swain and others AIR 1993 ORI 892, High Court of Orissa: This case held that the term ‘use’ can be extended to claims advanced under Section 110 of the 1939 Act, even when the vehicle is stationary.

On Causal Relationship:

• Heyman v. Darwins Ltd. [1942] AC 356: This case was referred to for the concept of causal relationship.
• Union of India v. E.B. Aaby’s Rederi A/S [1975] AC 797: This case was referred to for the concept of causal relationship.
• Samick Lines Co. Ltd. v. Owners of the Antonis P. Lemos [1985] 2 WLR 468: This case was referred to for the concept of causal relationship.

On Jurisdiction of Claims Tribunal:

• Union of India v. Bhagwati Prasad (Dead) and others (2002) 3 SCC 661, Supreme Court of India: This case expanded the jurisdiction of the Motor Accidents Claims Tribunal, stating that the tribunal can entertain claims against joint tortfeasors. This case **overruled** the decision in **Union of India v. United India Insurance Co. Ltd. and others (1997) 8 SCC 683** on the point that if the accident had arisen only on account of the negligence of persons other than the driver/owner of the motor vehicle, the claim would not be maintainable before the tribunal. The Court in Bhagwati Prasad held that the Claims Tribunal would have the jurisdiction to entertain applications for compensation both by the persons injured or legal representatives of the deceased when the accident arose out of the use of a motor vehicle.

On Disbursement of Compensation:

• General Manager, Kerala State Road Transport Corporation, Trivandrum v. Susamma Thomas and others (1994) 2 SCC 176, Supreme Court of India: This case was cited regarding the disbursement of compensation.

Judgment

How each authority was viewed by the Court?

• The Court relied on Shivaji Dayanu Patil [CITATION] to interpret “use of motor vehicle” broadly, including stationary vehicles.
• The Court used Newberry v. Simmonds [CITATION] and Smart v. Allan [CITATION] to determine that the tractor had not ceased to be a motor vehicle.
• The Court referred to Elliott v. Grey [CITATION], Government Insurance Office of New South Wales v. R.J. Green & Lloyd Pty. Ltd.[CITATION], Pushpa Rani Chopra v. Anokha Singh [CITATION], General Manager, K.S.R.T.C. v. S. Satalingappa [CITATION] and Oriental Fire and General Insurance Co. Ltd. v. Suman Navnath Rajguru [CITATION] to support the wider interpretation of “use”.
• The Court used Union of India v. United India Insurance Co. Ltd. [CITATION] to reiterate that the term “use of motor vehicle” has to be construed in a wider manner.
• The Court relied on Samir Chanda [CITATION] to support the view that an accident inside a vehicle can be considered as use of the vehicle.
• The Court agreed with the analysis in Kanhei Rana [CITATION] that the term ‘use’ can be extended to claims advanced under Section 110 of the 1939 Act, even when the vehicle is stationary.
• The Court referred to Heyman v. Darwins Ltd. [CITATION], Union of India v. E.B. Aaby’s Rederi A/S [CITATION] and Samick Lines Co. Ltd. v. Owners of the Antonis P. Lemos [CITATION] to explain the concept of causal relationship.
• The Court relied on Union of India v. Bhagwati Prasad [CITATION] to expand the jurisdiction of the Motor Accidents Claims Tribunal and also clarified that this case **overruled** the decision in **Union of India v. United India Insurance Co. Ltd. [CITATION]** on the point that if the accident had arisen only on account of the negligence of persons other than the driver/owner of the motor vehicle, the claim would not be maintainable before the tribunal.
• The Court cited General Manager, Kerala State Road Transport Corporation, Trivandrum v. Susamma Thomas [CITATION] regarding the disbursement of compensation.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Wider Interpretation of “Use”: The Court emphasized the need for a broader interpretation of “use of a motor vehicle”, consistent with previous judgments, to include situations where the vehicle is stationary but its components are being used, such as the tractor’s battery powering the blasting machine.
• Causal Link: The Court found a causal link between the use of the tractor’s battery and the accident, as the battery was directly used to power the blasting machine which caused the stone to fly and fatally injure the deceased.
• Beneficial Legislation: The Court reiterated that the Motor Vehicles Act is a beneficial legislation aimed at providing compensation to victims of accidents. The interpretation of “use” should be in line with this objective.
• Factual Matrix: The Court considered the factual context, noting that the battery was installed in the tractor and used for digging a well in an agricultural field, thereby establishing a connection between the vehicle and the accident.

The Court’s reasoning process for the issue of whether the accident arose out of the use of a motor vehicle can be illustrated as follows:

The Court rejected the High Court’s interpretation that the battery was practically detached from the vehicle, as the evidence showed that the battery was still installed and providing power. The Court also rejected the narrow interpretation of “use” that confined it to the vehicle being in motion, as it was against the spirit of the beneficial legislation.

The Court concluded that the accident did arise out of the use of a motor vehicle, but the liability of the insurer and the owner of the vehicle needs to be determined by the High Court.

The Court quoted the following from the judgment:

“The aforesaid provision makes it vivid that the tribunal can
adjudicate the claims for compensation in respect of accidents
arising out of use of motor vehicles.  Thus, the fundamental
requirement is that the accident should arise out of the use of
the motor vehicle.  If there is no use of the motor vehicle, the
question of vehicular accident will not arise.”

“In our opinion, the word “use” has a wider
connotation to cover the period when the vehicle is
not moving and is stationary and the use of a
vehicle does not cease on account of the vehicle
having been rendered immobile on account of a
breakdown or mechanical defect or accident.”

“The Court has to bear in mind that the phraseology
used by the legislature is “accident arising out of use of the motor
vehicle”.  The scope has been enlarged by such use of the
phraseology and this Court taking note of the beneficial provision
has placed a wider meaning on the same.”

Key Takeaways

• The term “use of motor vehicle” under Section 165 of the Motor Vehicles Act, 1988, has a broader interpretation and includes situations where the vehicle is stationary but its components are being actively used.
• A causal link between the use of a motor vehicle and the accident is essential for a claim to be maintainable under the Act.
• The Motor Vehicles Act is a beneficial legislation, and the interpretation of its provisions should be in line with the objective of providing compensation to victims of accidents.
• The High Court needs to analyze the terms and conditions of the insurance policy to determine the liability of the insurer and the owner of the vehicle.
• The Claims Tribunal has the jurisdiction to entertain applications for compensation both by the persons injured or legal representatives of the deceased when the accident arose out of the use of a motor vehicle.
• The decision in **Union of India v. United India Insurance Co. Ltd. and others (1997) 8 SCC 683** has been overruled on the point that if the accident had arisen only on account of the negligence of persons other than the driver/owner of the motor vehicle, the claim would not be maintainable before the tribunal.

Final Order

The Supreme Court partly allowed the appeals, setting aside the judgment of the High Court. The Court remanded the matter back to the High Court to consider the terms and conditions of the insurance policy and determine the liability of the insurer and the owner of the vehicle. The Court clarified that the accident did arise out of the use of a motor vehicle.