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2002 DIGILAW 693 (KER)

K. Raghavan v. National Insurance Company Ltd.

2002-10-23

G.SASIDHARAN, K.THANKAPPAN

body2002
Judgment :- Sasidharan, J. A Suit filed by the Insurance Company for realization of the amount paid towards compensation to a person who suffered injuries in a road traffic accident in excess of the limit to which the Company is liable from the owner of the vehicle, was decreed by the trial court. In O.P.(M.V.) 329/1984 on the file of the Motor Accidents Claims Tribunal, Thiruvananthapuram an award was made directing that the Insurance Company had to pay the entire amount awarded as compensation even though the Company was liable as per the Policy for payment of only an amount up to Rs. 50,000/-. The appellant is the owner of the vehicle which was involved in the road traffic accident and the decree passed by the trial Court was for realization of the amount paid in excess of the liability of the Insurance Company from him. The appellant raised the contention before the trial court that the Insurance Company would have raised the contention that the liability of the Company was to pay the amount of compensation up to the limit of Rs. 50,000/- and in so far as no such contention was raised the claim now made by the respondent Company for realization of the amount from the appellant is barred by constructive res judicata. The trial Court found that the liability of the appellant to pay the excess amount paid by the Insurance Company to the claimant in the Original Petition arises out of the provisions of the Motor Vehicles Act and that there can be no estoppel against the statute. Relying on the decision of this Court in Kelappan v. Vijayan (1986 K.L.T.874) the learned Sub Judge found that there is no basis for the contention raised by the appellant that the claim of the respondent is barred by constructive res judicata. 2. Admittedly as per the terms and conditions of the policy, the respondent was liable to indemnify the insured, the appellant in a third party claim only to a maximum of Rs. 50,000/- under Sec. 95(2) of the Motor Vehicles Act. The liability of the Insurer is limited to Rs.50,000/-. The Motor Accidents Claims Tribunal made an award directing that the Insurance Company had to pay the entire amount awarded as compensation. 50,000/- under Sec. 95(2) of the Motor Vehicles Act. The liability of the Insurer is limited to Rs.50,000/-. The Motor Accidents Claims Tribunal made an award directing that the Insurance Company had to pay the entire amount awarded as compensation. The argument advanced by the learned counsel appearing for the appellant is that no appeal was filed against the award made by the Motor Accidents Claims Tribunal and it had become final and since the direction in the award which had become final is that the entire amount had to be paid by the Insurance Company it is not open to the Insurance Company to contend that the liability of the Company is only to a maximum of Rs. 50,000/-. The contention that the liability of the Company is only to a maximum of 50,000/- was not raised in the case which was pending on the file of the Motor Accidents Claims Tribunal and a decision on merits on that question was made. The submission is that such a contention is one which ought to have been raised by the respondent in the Original Petition on the file of the Motor Accidents Claims Tribunal and since such a contention was not there, the claim now made is barred by principles of res judicata. 3. The learned counsel appearing for the appellant relied on the decision in Oriental Insurance Co. Ltd. V. Gopalakrishnan Nair (2000 (1) K.L.T. 91) in which a Division Bench of this Court held that the principles of res judicata will apply when appeal is filed only against two awards whereas four claim petitions were disposed of by the Motor Accidents Claims Tribunal jointly and the finding of the Tribunal in the other two cases in which appeals have not been filed rejecting the contention of the Insurance Company regarding limited liability had become final. There four claim petitions for compensation under the Motor Vehicles Act were tried together and the claim of Insurance Company regarding limited liability was rejected. There was appeal only against two awards and the Division Bench of this Court held that in the other two cases in which appeals were not preferred claim of Insurance Company regarding limited liability was rejected and that will operate as res judicata. There was appeal only against two awards and the Division Bench of this Court held that in the other two cases in which appeals were not preferred claim of Insurance Company regarding limited liability was rejected and that will operate as res judicata. The above decision has no application to the facts of the present case since this is a case in which the respondent claims realization of money from the appellant alleging that even though the respondent had to pay the entire amount awarded by the Motor Accidents Claims Tribunal it can realize from the appellant, the owner of the vehicle the amount paid in excess of the maximum liability as per the provisions of the statute. The case of the respondent is that even though there is an award passed by the Motor Accidents Claims Tribunal directing the respondent to pay the entire amount of compensation, by virtue of Sec. 96 (4) of the Motor Vehicles Act, 1939 and Sec. 149(5) of the Motor Vehicles Act, 1988 the respondent has the right to claim the amount from the appellant. 4. Reliance was placed by the learned counsel appearing for the appellant on the decision of the Supreme Court in Sulochana Amma v. Narayanan Nair (A.I.R. 1994 S.C. 152) for arguing that a decision by the Tribunal of limited jurisdiction will also operate as res judicata. In the above decision it was held that Sec.11 is to be read in combination and harmony with Explanation VIII and the result that would flow is that an order or an issue which had arisen directly and substantially between the parties or their privies and decided finally by a competent Court or tribunal, though of limited or special jurisdiction, which includes pecuniary jurisdiction, will operate as res judicata in a subsequent suit or proceeding, notwithstanding the fact that such Court of limited or special jurisdiction was not a competent court to try the subsequent suit. The above decision also does not apply to the facts of the present case since the claim of the respondent is that it is entitled to get the amount claimed from the appellant by virtue of Sec. 96(4) of the Motor Vehicles Act of 1939 notwithstanding the fact that there is a direction by the Tribunal that the respondent has to pay the entire amount. What the respondent claimed was enforcement of the right at got as per the provisions of the statute. 5. Sec. 96(4) of the Motor Vehicles Act, 1939 reads as follows: "If the amount which an insurer becomes liable under this section to pay in respect of liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart form the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person." 6. The present suit was filed by the respondent at the time when the Motors Vehicles Act,1939 was in force. Now the Act in force is the Motor Vehicles Act, 1988 and Sec.149(5) of the new Act is similar to Sec. 96(4) of the old Act. In the decision of the Supreme Court in Oriental Insurance Co. Ltd. V. Nafeessu (2001 (1) K.L.T. 498) the question what is the extent of liability of an insurance company towards third party as per Sec. 95(1)(b) of the Motor Vehicles Act, 1939 and what are its rights in case of payment of an amount in excess of the limits of the liability under the insurance policy vis-Ã -vis the injured, was considered. The liability of the insurance company to satisfy the judgment against persons insured in respect of the third party risk is covered by Sec. 96 of the Act. In the above decision, the Supreme Court said that even though it is found that the insurance company as per the terms of the policy is liable only to the extent of Rs. 50,000/- the Court will be justified in directing the company to pay the whole of the awarded amount to the claimants on the basis of the contractual obligations contained in clauses relating to the liability of the third parties and avoidance clause. There is no justification in rejecting the right of the Insurance Company to recover from the insured the excess amount paid in execution and discharge of the award of the Tribunal. There the Supreme Court said that the Insurance Company is liable to pay the entire award amount to the claimants and on making such payment the Insurance Company can recover the excess amount form the insured. 7. There the Supreme Court said that the Insurance Company is liable to pay the entire award amount to the claimants and on making such payment the Insurance Company can recover the excess amount form the insured. 7. In the decision of the Division Bench of this Court in Kelappan's case (supra) it was held that if the Insurer fails to plead and prove that the policy does not contain higher coverage than the statutory limit and that therefore insurer's liability is only upto the statute limit, in specifying in the award the sum of money payable by the insurer, the Tribunal cannot restrict the sum to the statutory limit. The Division Bench of this Court said that the entire sum awarded has to be specified as payable by the insurer and the insurer can seek remedies under Sec. 96(4) of the Act. A reading of Sec. 96 of the Motor Vehicles Act, 1939 would make it clear that the insurer can recover the excess amount paid from the insured irrespective of the fact whether the payment was made voluntarily or as per the direction in an award made by the Tribunal. In P.G.Eshwarappa v. M.Rudrappa ((1996) 6 S.C.C. 96) it was observed by the Supreme Court that the principles of estoppel or res judicata do not apply where to give effect to them would be to counter some statutory direction or prohibition and that a statutory direction or prohibition and that a statutory direction or prohibition cannot be overridden or defeated by previous judgment between the parties. The right of the Insurance Company to realise from the insured the amount it paid in excess of its liability is one given under the provisions of the Motor Vehicles Act and hence that claim cannot be defeated by saying that in a prior proceedings in the Motor Accidents Claims Tribunal the contention that the liability of the company is limited is not raised. The trial Court is fully justified in giving a decree allowing the respondent to realize the amount paid by the respondent in excess of the amount it is liable to pay. There is no merit in this appeal and it is dismissed.