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1996 DIGILAW 72 (KER)

Oriental Insurance Co. Ltd v. Usha

1996-02-06

K.A.MOHAMMED SHAFI, T.V.RAMAKRISHNAN

body1996
Judgment :- Ramakrishnan, J. This is an appeal filed by the third respondent in O. P. (MV) No. 573 of 1992 before the Motor Accidents Claims Tribunal, Thodupuzha. Appellant is the insurer of an autorikshaw bearing registration No. KL-7A/1756 involved in an accident which took place on 29.5.1992. 2. The application was filed by the injured person claiming compensation for the injuries suffered by him in the accident. First respondent in the O. P. was the driver of the autorikshaw. According to the applicant the accident occurred due to the negligent driving of the autorikshaw by the first respondent. The third respondent herein was impleaded as the additional 4th respondent in the O. P. as the owner of the vehicle who has insured the autorikshaw in question. As the third respondent, the appellant filed a written statement admitting the fact that it has issued an insurance policy in respect of the vehicle in the name of the third respondent herein. However, the liability to pay compensation was specifically denied on the ground that there is violation one of the conditions of the policy in as much as the first respondent had no licence to drive the autorikshaw at the time of the accident. 3, The Tribunal found that the driver was not having a valid licence to drive the autorikshaw at the time of the accident. Even though such a finding was entered, the Tribunal relying upon the provisions contained in sub-section (4) of S.149 of the Motor Vehicles Act, 1988 directed the appellant to pay the compensation making it clear that the amount paid by the appellant shall be recoverable from the person insured and the driver of the vehicle. 4. Learned counsel for the appellant has contended that in the light of the finding that the driver was not having a valid licence to drive the autorikshaw, the award directing payment of the amount by the insurer is totally illegal and unsustainable law. The Tribunal ought to have totally excluded the insurer from the liability. The award directing payment of the amount by the insurer even conditionally on the insurer being allowed to recover the amount paid under the award from the insured is unsustainable in law. In this connection, strong reliance was placed by the learned counsel for the appellant on certain observations contained in the Full Bench decision of this Court reported in National Ins. Co. In this connection, strong reliance was placed by the learned counsel for the appellant on certain observations contained in the Full Bench decision of this Court reported in National Ins. Co. v. Roy George (1993(1) KLT 308 (FB) 5. In the award the Tribunal has made the insurer liable to pay the amount to the claimants specifically relying upon the provisions contained in the proviso to Section 149(4) of the Motor Vehicles Act. Section 149 (4) with the relevant proviso is as under: (4) Where a certificate of insurance has been-issued under sub-section (3) of Section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in clause (b) of sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub-section (1) of Section 147, be of no effect: Provided that any sum paid by the insurer in or towards the discharge of any liability of any persons which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person." The above provision is to the effect that where a certificate of insurance has been issued under sub-section (3) of Section 147 to the insured, the insurer can avoid liability to satisfy the award passed by the Tribunal only in cases where the insurer can plead and prove that conditions contained in clause (b) of sub-section (2) of Section 149 are violated. The provision specifically states that the violation of the conditions mentioned in sub-section (2) other than those in clause (b) of that sub-section, even if proved, will not enable the insurer to avoid liability of satisfying the award passed in favour of the claimants even though in such cases the insurer may be able to recover the amount paid by them under the award from the insured. The legal effect of the provision is to make a distinction between the grounds mentioned in clauses (a) and (b) of sub-section (2) of Section 149 and to say that only in case of violation of the conditions mentioned in clause (b) that the insurer will be able to avoid the liability under the award to the claimants and not on the violation of any of the conditions mentioned in clause (a) of sub-section (2) of Section 149. In the case of violation of the conditions mentioned in clause (a) of sub-section (2) of Section 149, the insurer can only claim reimbursement of the amount paid by them under the award to the claimants from the insured. They cannot disown their liability to pay the amount awarded to the claimants unlike in cases where they are able to plead and prove violation of the conditions mentioned in clause (b) of sub-section (2) of Section 149 of the Motor Vehicles Act. In cases coming under the latter category, the insurer cannot be made liable at all even conditionally on allowing them to recover such amount from the insured. This in fact is the view taken by the Tribunal in this case while making the insurer liable and permitting them to recover the amount paid by them under the award to the claimants from the insured. 6. As regards the observations contained in Roy George's case (1993(1) KLT 308 (FB), we find that the Full Bench has not specifically considered the issue involved in the present case. The Full Bench was considering only the contention that under Section 96(4) in as much as the word 'exceeds' is used, the insurance company shall in all cases first discharge the liability incurred by the insured in toto, whatever be such liability and then after deducting the amount covered by the statutory liability of the insurance company under S.95(2), the Company has to recover the excess amount from the insured by way of a separate action. In that case the liability of the insurance company under Section 95(2)(b)(ii) to a passenger carried in the stage carriage vehicle was only Rs. 5,000/- as on 25-11-1981. The award passed was for a total amount of Rs. 42,600-to the legal representatives of the deceased. The contention raised was that the insurer is bound to pay under Section 96(4) the entire amount awarded, namely Rs. 5,000/- as on 25-11-1981. The award passed was for a total amount of Rs. 42,600-to the legal representatives of the deceased. The contention raised was that the insurer is bound to pay under Section 96(4) the entire amount awarded, namely Rs. 42,600 and to recover the excess paid, namely Rs. 37,600 after deducting the statutory liability of Rs. 5,000/- from Rs. 42,600 from the insured. The Full Bench was only considering the above contention raised by the insured i n that case. As such whatever may be the wording of the observations contained in the said decision regarding the scope and effect of the provisions contained in Section 96(3) of the old Act corresponding to Section 149(4) of the new Act, the observations should be understood in the context in which they were made in the said judgment. Viewed in that manner, we do not thinking that there is any observational in the Full Bench decision which would stand against us in taking the above view. 7. In this view, we find that the Tribunal was right in taking the view that in cases where the only plea raised by the i usurer i s that the driver was not havi ng a valid licence at the time of the accident for driving the vehicle insured, it may not be possible for the insurer to avoid the liability to pay the amount-awarded to the claimants. The insurer in such circumstances is statutorily liable to pay the claimants the amount awarded and to recover the same from the insured as provided in the proviso. The proviso to Section 149(4) of the Motor Vehicles Act would enable the Tribunal to permit the insurer to recover such amount paid by them from the insured in execution of the award itself. As such, we would make it clear that the appellant will be entitled to recover the amount paid to the claimants, under the impugned award from the insured in execution of the award passed in O.P. (MV) No. 573 of 1992 itself. In fact the award itself has made it clear by saying that the appellant is entitled to recover the amount from the first respondent and additional 4th respondent. A specific finding to that effect has been entered in the award itself. In fact the award itself has made it clear by saying that the appellant is entitled to recover the amount from the first respondent and additional 4th respondent. A specific finding to that effect has been entered in the award itself. The operative portion of the award has made it clear that' on deposit of the amount due, R3 can recover the said amount with interest at the rate of 12% from date of deposit till recovery from R1 and Addl. R4'. Subject to the above observations and clarification, the appeal will stand dismissed in limine.