Judgment 1. This appeal under Section 173 of the Motor Vehicles Act has been submitted by the claimants-appellants against the award dated 30.01.1997 passed by the Judge, Motor Accident Claims Tribunal, Nagaur, Camp Deedwana in MACT Case No. 18/1995, whereby the learned Judge held that the matter was already compromised between the claimants and the owner of the vehicle and hence the claim application was not maintainable against the Insurance Company. The appeal arises in and from the following circumstances. 2. The appellants claimants filed a claim application seeking compensation on various heads on account of death of Mahaveer Singh on 03.03.1995 who was travelling in a bus and when he got down from the bus at village Koliya, he was hit by a jeep bearing registration No. RJ 21 C 1150 which was being driven rashly and negligently. Mahaveer Singh, aged 7 years, died on the spot. Compensation to the tune of Rs. 15,10,000/-was claimed. 3. The aforesaid claim application was submitted on 03.07.1995, the same was registered and notices were ordered to be issued to the non applicants. The next date in the case was fixed on 06.09.1995. 4. Mahaveer Singh, aged 7 years, died on the spot. Compensation to the tune of Rs. 15,10,000/-was claimed. 3. The aforesaid claim application was submitted on 03.07.1995, the same was registered and notices were ordered to be issued to the non applicants. The next date in the case was fixed on 06.09.1995. 4. The proceedings in this claim case, which are directly relevant for the present appeal, as recorded in order-sheets show that the case proceeded from 06.09.1995 to 08.02.1996 thus:- Þ06-09-1995 % odhy izkFkhZ mifLFkrA vizkFkhZ la- 1] 2] o 3 dh jftLVªh ,-Mh- izkIr gks pqdh gSA vizkFkhZ la- 1 ls 3 ckotwn lwpuk ,-Mh- vuqifLFkr gSA Jheku ,-Mh-ts-lk- vodkk ij gSA fely okLrs vknsk fnukad 28-09-1995 dks isk gksA 28-09-1995 % odhy izkFkhZ mifLFkrA vizkFkhZ la- 1 o 2 dh vksj ls odhy Jh ujsUnz vks>k us odkyrukek isk fd;k tks kk- fe- gksA vizkFkhZ la- 3 dh vksj ,l-Mh-,e- mifLFkrA odhy izkFkhZ us Mh@,y dh QksVks izfr dh tks kk-fe- gksA i{kdjku dh vksj ls jkthukek #-60]000@& dk isk yksd vnkyr dh Hkkouk ls subject to verification and confirmation ofpolicy and D.L.isk gqvk tks kk-fe- gksA odhy izkFkhZ us izkFkhZx.k dh vksj ls jkthukek Loh-fr isk djus gsrq vuqefr pkghA fely okLrs isk gksus Loh-fr fnukad 05-10-1995 dks ukxkSj isk gksA 05-10-1995 % odqyk; mifLFkrA i=koyh yksd vnkyr esa j[kh xbZA odhy vizkFkhZ la- 3 jkthukek Loh-fr isk djus gsrq volj pkgkA fely okLrs isk gksus jkthukek Loh-fr fnukad 30-11-1995 dks isk gksA 30-11-1995 % odqyk; mifLFkrA Mh@,y dh izfr odhy vizkFkhZ dks fnyk; h x; hA i{kdkju i=koyh jkthukek gsrq yksd vnkyr esa j[kuk pkgrs gSaA fely okLrs jkthukek fnukad 19-01-1996 dks isk gksA jkthukek gksus u gksus dh lwjr esa fely fnukad 08-02-1996 dks isk gks 08-02-1996 % odqyk; mifLFkrA odhy vizkFkhZ la- 3 us tkfgj fd;k fd bl izdj.k esa jkthukek ugha gksxkA tokc gsrq volj -1 o 2 us tokc gsrq volj pkgkA fely okLrs tokc vizkFkhZx.k la pkgkA odhy vizkFkhZ la- 1 ] 2 o 3] 26-03-1996 dks isk gksA bruk fy[kus ds ipkr~ odhy vizkFkhZ la- 1] 2 us tkfgj fd;k dk gS ,oa {kfriw fd i{kdkju ds chp jkthukek #-10]000@& easfnukad 28-09-1995 dks gks pqfrZ dh jkf“k mUgsa vnk gks pq dh gS vr% tfj;s jkthuke vizkFkhZ la- 1 o 2 ds f[kykQ rLnhd fd;k tkdj Dyse [kkfjt fd;k tkrk gSA fely okLrs tokc vizkFkhZ la- 3 fnukad 26-03-1996 dks isk gksAß 5. It is apparent that on 06.09.1995, all the non-applicants were absent despite service but the Presiding Officer was on leave and the case was posted to 28.09.1995. On that date Counsel appeared for the Non-applicant Nos. 1 and 2 and the Senior Divisional Manager appeared for the Insurance Company, Non-applicant No. 3. An application was submitted before the Tribunal in which it was stated that the matter has been compromised between the claimants and the owner and driver whereby compensation amount of Rs. 10,000/-has been received and, therefore, proceedings against them may be dropped and that compromise with the Insurance Company has been settled for Rs. 60,000/-and, therefore, it was prayed that the matter be decreed accordingly. This application bears an endorsement from the said Senior Divisional Manager of the Insurance Company that it was subject to verification and confirmation of policy and DL. The said application and the endorsement read as under:- ÞU;k;ky; eksVj ;k nq?kZVuk U;k;kf/kdj.k ukxkSj dsEi & MhMokuk eq- uaizseflag cuke jkeiky oxSjg MACT Act. ekU;oj] mijksDr vuoku eqdnek esa DysesUV dh vksj ls fuEu izdkj ls fuosnu gSA & ¼1½ ;g gS fd DysesUV o ekfyd rFkk MkbZoj esa jkthukek gksdj {kfriwfrZ jkf”k 10]000@& izkIr gks pqds gSaA vr % muds f[kykQ dk si QjekosaA o bU;ksjsUl dEiuh ls 60]000@& #-easjkthukek r; gks pqdk gSA vr% jkthukek isk dj fuosnu gS fd izdj.k fMØh QjekosA bfrA fnukad 28-09-1995 g0 o- DysesUV Subject to verification and confirmation of policy and D.L. Sd/ -SDM OIC 28/9” The order-sheet dated 28.09.1995 further shows that time was sought for producing sanction for the compromise and, therefore, the case was posted to 010.1995. 6. On 010.1995, the case was placed before Lok Adalat where the Counsel for the Insurance Company sought time to produce sanction for the compromise and, therefore, the matter was posted to 30.11.1995. On 30.11.1995, the copy of driving licence was delivered to the Counsel for the non-applicant and it was observed that the parties wanted the case to be put up in Lok Adalat for compromise. It was ordered that the case be put up for compromise on 18.01.1996 and in either event, it be placed on 08.02.1996. 7. Therefore, the matter was taken up only on 08.02.1996 and it was evident that the compromise had not materalised. It was ordered that the case be put up for compromise on 18.01.1996 and in either event, it be placed on 08.02.1996. 7. Therefore, the matter was taken up only on 08.02.1996 and it was evident that the compromise had not materalised. It was given out by the Counsel for the Insurer that no compromise would be possible in this case and sought time to five reply. The matter was adjourned for filling of the reply of all the non-applicants. Thereafter, the Counsel for the Non-applicants No. 1 and 2 (owner and driver) expressed that compromise on Rs. 10,000/-had been concluded on 28.09.1995 and compensation amount has been paid. Thereupon compromise against the Non-applicants No. 1 and 2 was verified and the claim was rejected and then the case was posted to 26.03.1996 for the reply of Non- applicant No. 3. Thereafter the reply was submitted by the Non-applicant No. 3 on 26.03.1996 and the issues were framed on 28.09.1996. 8. The Non-applicant No. 3 Insurance Company took an objection in the reply that the claim having been rejected against Non-applicants No. 1 and 2 on account of compromise, the proceedings against the Non-applicant No. 3 Insurance Company cannot proceed and this objection was also put as a question in issue No. 2. 9. Upon submission of the Counsel for the non-applicants, this issue No. 2 was taken up at the first by the learned Judge, Motor Accident Claims Tribunal before recording any evidence and after hearing the parties, passed the impugned award dated 30.01.1997 which has been assailed in this appeal. 10. The learned Judge after hearing the parties observed that this was an admitted position in this case that the applicants have entered into compromise with Non-applicants No. 1 and 2 and the said compromise has been verified by the Court on 08.02.1996. The learned Judge observed that in the proceedings also the reference was made about the said compromise and about dropping of the proceedings against the Non-applicants No. 1 and 2. The learned Judge was of opinion that when the proceedings have been dropped against the principal party i.e., the owner of the vehicle, then no liability remained with the insurance Company because the liability of the Insurance Company was only to indemnify and to bear that compensation which would be payable by the owner of the vehicle on account of an accident. As the owner himself had already made payment of the compensation amount to the applicants, then no liability remains with the Insurer and, therefore, the matter was required to be rejected against the Insurance Company. On these considerations, the learned Judge rejected the claim application against the Insurance Company and observed that the proceedings have already been terminated against the vehicle owner and the driver. 11. Learned Counsel for the claimants-appellants submitted that the learned Judge has seriously erred in rejecting the claim application in toto without considering that the compromise dated 28.09.1995 was also settled with the Insurance Company for Rs. 60,000/-and the same was left subject to verification and confirmation of policy and driving licence. If the Insurance Company was not agreeing with the compromise, there was no occasion to believe that the matter had been finally settled and merely on the payment of Rs. 10,000/- by the owner and driver of the vehicle, the entire proceedings could not have been dropped. Learned Counsel for the appellant has submitted that the provisions concerning the applications for claim for compensation deal with beneficial legislation and the Tribunal had seriously erred in not considering the substance of the matter before dropping the proceedings. 12. The learned Counsel for the respondents with reference to a decision of this Court in Banarsi Das vs. Mohd. Safi, 1983 RLW 604, submitted that when the claimants did not wish to proceed against the owner and driver of the vehicle, after having compromised the matter with them, and the proceedings against them were dropped, the proceedings were rendered wholly incompetent against the insurer whose liability is only to indemnify and before its liability is taken up for consideration, the liability of owner has to be pronounced. 13. Having heard the learned Counsel for the parties, this Court is clearly of opinion that the impugned award dated 30.01.1997 whereby the learned Judge, Motor Accident Claims Tribunal, Nagaur (Camp Deedwana) has chosen to reject the claim application on the assumption that by way of compromise the matter was already settled out between the claimants and the vehicle owner and as the proceedings were dropped against the owner, therefore, could not be proceeded against the Insurer remains wholly unjustified and cannot be sustained. The learned Judge has neither looked into the record of the case properly nor has considered the substance of the matter. 14. The learned Judge has neither looked into the record of the case properly nor has considered the substance of the matter. 14. It is apparent from the application dated 28.09.1995 that the said proposal of compromise was a composite one amongst the claimants, owner and driver and so also the Insurance Company. Therein the owner and driver paid Rs. 10,000/-to the claimants and, therefore, proceedings were suggested to be dropped against them. However, coupled with that, it was also specifically stated that the compromise was settled at Rs. 60,000/-with the Insurance Company and thereafter the prayer was made to decree the claim. The same application dated 28.09.1995 carries an endorsement from Senior Divisional Manager that it was subject to verification and confirmation of policy and DL. 15. The proceedings in the case show it clearly that the matter remained pending for the aforesaid confirmation for which the Insurance Company kept on seeking time and thereafter stated on 08.02.1996 that the compromise would not materialise in this case. 10.16. With the specific and clear submission on the part of the Insurance Company that the compromise would not be possible, the entire substratum of the application dated 28.09.1995 was lost and, therefore, the proceedings were rightly adjourned for reply of the Non-applicants No. 1, 2, and 3. It was thereafter that the Counsel for the Non-applicants No. 1 and 2 (owner and driver) expressed that between the parties a compromise had already been entered for Rs. 10,000/-and the amount had been paid. Thereupon, the learned Judge proceeded to verify the so called compromise. Such endorsement of verification is available at the back of the application dated 28.09.1995 and on this basis the learned Judge ordered that the claim was rejected against them and thereafter adjourned the case for reply of the Non-applicant No. 3 Insurance Company. 117. Such an approach by the learned Judge, Motor Accidents Claim Tribunal, Nagaur cannot be appreciated. If the matter had been compromised and if the Court was satisfied that the matter was already compromised out upon its verification at the back of the application dated 28.09.1995, then the entire claim application ought to have been disposed of at that time itself . If the matter had been compromised and if the Court was satisfied that the matter was already compromised out upon its verification at the back of the application dated 28.09.1995, then the entire claim application ought to have been disposed of at that time itself . However, the course was adopted to drop the proceedings against the Non-applicants No. 1 and 2 on account of compromise without even looking at the other essential and integral part of the compromise about settlement for Rs. 60,000/-with the insurer. The learned Judge has only later on observed in the impugned order dated 31.01.1997 that with the dropping of the proceedings against the Non-applicants No. 1 and 2 the same were rendered incompetent against the Insurance Company. 118. At no stage, neither in the order dated 08.02.1996 nor while passing the order dated 31.01.1997, the learned Judge looked into an essential fact that the compromise was a composite deal between the parties where the owner and driver took upon themselves to pay Rs. 10,000/-and the Insurance Company took upon itself to; pay Rs. 60,000/-but that was made subject to verification and confirmation of policy and DL. 119. It was given out on 08.02.1996 on behalf of the Insurance Company that the compromise was not feasible. If that were so, the application dated 28.09.1995 was rendered redundant and then the matter was required to be decided on its own merits. Of course, the payment made by the owner and driver of Rs. 10,000/-as admitted by the claimants in the application dated 28.09.1995 was required to be given due weightage while quantifying the amount of compensation, if found admissible to the claimants. 120. A close reading of the application dated 28.09.1995 makes it clear that the settlement with the Insurance Company for Rs. 60,000/-was an essential and integral part of the deal and that is why it was prayed that the claim be decreed. It was the choice of the Insurance Company not to have entered into compromise for any reason, but then, on that count it was entirely impermissible for the learned Judge of the Tribunal to have dropped the proceedings against the owner and driver and then to adjourn the matter for contest by the Insurance Company and thereafter to dismiss the matter only on the ground that proceedings had already been dropped against the owner and the driver. 121. 121. This Court is clearly of opinion that the rules of procedure are intended to serve the cause of justice and the proceedings for compromise with the spirit of Lok Adalat in the Motor Accident Claims cases are not intended to trip up the claimants. With the Insurance Company resiling from the proposed compromise, the very basis of the application dated 28.09.1995 was gone and thereafter there was no justification for passing of the order dated 08.02.1996. The said order being wholly illegal and fundamentally erroneous, deserves to be and is set aside. 122. There is no quarrel with the proposition submitted by the learned Counsel for the respondents that had it been a case of the claimants willfully getting the proceedings dropped against the owner and still seeking to have the proceedings continued against the Insurance Company alone, then of course the claimants right to get an award for compensation would have been under serious dispute. However, in the present case the claimants have not prayed for dropping of the proceedings against the owner in isolation nor the application dated 28.09.1995 could be read to mean that they wanted the proceedings to be dropped against the owner and then to proceed against the Insurance Company. As noticed above, compromise for Rs. 60,000/-with the Insurance Company was an integral part of the entire agreement to which the Insurance Company was also a party, but reserved its right to sanction the compromise subject to verification and confirmation of policy and driving licence. In the case of Banarsi Das (Supra), the claimants-appellants entered into compromise with owner and driver of the vehicle and a compromise petition was filed before this Court stating that the claimants were compensated “to their satisfaction” and it was prayed that the appeal may be dismissed so far the driver and owner were concerned. It was however stated that they desired to proceed against the Insurer. In those circumstances, this Court held that when claimants-appellants have received compensation `to their satisfaction and the appeal is dismissed against the owner of the vehicle on account of withdrawal or abandonment of the claim, then it could no longer be maintained against Insurance Company alone. 123. It was however stated that they desired to proceed against the Insurer. In those circumstances, this Court held that when claimants-appellants have received compensation `to their satisfaction and the appeal is dismissed against the owner of the vehicle on account of withdrawal or abandonment of the claim, then it could no longer be maintained against Insurance Company alone. 123. In the present case, as noticed hereinbefore, the claimants neither stated that their claim was “satisfied” by owner and driver nor the claim was sought to be abandoned against the owner in isolation nor the terms of proposed compromise could be read in segregation for the insured and insurer against its very spirit. The insurer was directly a party to the proposed compromise and it was prayed that claim be decreed. The order-sheet dated 28.09.1995 shows clearly that compromise “at Rs. 60,000/-was filed in the spirit of Lok Adalat subject to confirmation of policy and driving licence. If that kind of settlement or compromise failed, for any reason, it failed in toto and then there was no justification for the learned Judge to have ordered dropping of the proceedings against the owner and driver. In the aforesaid view of the matter, this Court is clearly of opinion that the disposal of the claim application in this case on the assumption of compromise cannot be sustained. 124. It could also be pointed out that in the aforesaid claim case even though the claimants have made a prayer for granting compensation on the principle of No Fault Liability, under Section 140 of the Act also, but on the said prayer, claiming Rs. 50,000/-therein, no orders were passed before the proceedings took a turn towards the attempt of settlement and culminated into the impugned order dated 31.01.1997. The learned Judge has proceeded wholly erroneously and without considering the record of the case and so also the law applicable to the case. This appeal deserves to be allowed to the extent of reversing the findings on Issue No. 2. However, for trial and disposal, the case is required to be remanded as the Tribunal has not decided other issues involved. 25. Consequently, the appeal is allowed, the impugned award dated 30.01.1997 is set aside and the matter is remanded to the Motor Accidents Claim Tribunal, Nagaur. However, for trial and disposal, the case is required to be remanded as the Tribunal has not decided other issues involved. 25. Consequently, the appeal is allowed, the impugned award dated 30.01.1997 is set aside and the matter is remanded to the Motor Accidents Claim Tribunal, Nagaur. The MACT Case No. 18/1995 shall stand restored to its number and shall be tried on its merits and concluded as expeditiously as possible. The costs of this appeal shall follow the final result of Claim Case No. 18/1995. 26. The record be sent back immediately and the parties are directed to remain present before the Tribunal on 30.08.2005.