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2005 DIGILAW 344 (JK)

National Insurance Co. Ltd. v. Javaid Ahmad Khan

2005-12-02

NIRMAL SINGH

body2005
1. This appeal is directed against the award dated: 24.6.2004 passed by the Motor Accident Claims Tribunal, Anantnag (for short the Tribunal) in Claim Petition titled Javaid Ahmad Khan v. Mohammad Hussain Gujjar. 2. The relevant facts for disposal of this appeal are that respondents 1 and 2 being the father and mother of deceased Zahoor Ahmad Khan, a boy of four years, who had died in accident with Truck No. 6378-S which was driven rashly and negligently by respondent No.3 Mohammad Hussain Gujjar. The learned Tribunal after recording the evidence of the parties passed an award of Rs. 1,50,000/- with interest at the rate of 9% from the date of application till realization in favour of the claimants. Aggrieved by which the National Insurance Company filed the present appeal. 3. The counsel for the claimants/respondents raised the preliminary objection that the Insurance Company cannot file an appeal in the High Court against the award of the Tribunal and got the quantum of compensation reduced when the insured has not filed such appeal. He submitted that the appellant has not moved an application under Section 170 of the Motor Vehicle Act, 1988 (for short the Act) and for getting right to contest the proceedings on merit. 4. Learned counsel for the appellant has submitted that when the driver and owner did not contest the claim petition and proceeded exparte then there is no need to seek permission to contest the petition on merits and it will be presumed that there is implied permission. 5. I have heard learned counsel for the parties and perused the record. 6. Before considering the rival contentions raised by the learned counsel for the parties, it will be appropriate to refer Section 170 of the Act, which reads as under: "170. Impleading insurer in certain cases. 5. I have heard learned counsel for the parties and perused the record. 6. Before considering the rival contentions raised by the learned counsel for the parties, it will be appropriate to refer Section 170 of the Act, which reads as under: "170. Impleading insurer in certain cases. Where in the course of any inquiry, the Claims Tribunal is satisfied that-- (a) there is collusion between the person making the claim and the person against whom the claim is made, or (b) the person against whom the claim is made has failed to contest the claim, it may, for reasons to be recorded in writing, direct that the insurer who may be liable in respect of such claim, shall be impleaded as a party to the proceeding and the insurer so impleaded shall thereupon have, without prejudice to the provisions contained in sub-section(2) of section 149, the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made. 7. The perusal of the section shows that where there is collusion between the person making the claim and the person against whom the claim is made has failed to contest the claim, the insurer has to move an application under Section 170 of the Act. The Tribunal may allow the insurer to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made. 8. The Apex Court in National Insurance Co. Ltd. v. Swaram Singh. The Tribunal may allow the insurer to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made. 8. The Apex Court in National Insurance Co. Ltd. v. Swaram Singh. AIR 2004 SC 1531 has laid down as under: "Where an adjudication of the claim under the Act the tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of Section 149(2) read with sub-section(7); as interpreted by this court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the tribunal such determination of the claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on the certificate issued by the Tribunal to the Collector in the same manner under section 174 of the Act as arrears of land revenue only if, as required by sub section(3) Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the Tribunal." 9. This court has also taken the same view in National Insurance Company v. Mst. Habla, CIMA No. 61/2004. The Apex Court while interpreting Section 170 of the Act in Shankarayya vs. United India Insurance Co. Ltd. 1998 ACJ 513. has held in para No.4 as under: "It clearly shows that the insurance company when impleaded as a party by the court can be permitted to contest the proceedings on merits only if the conditions precedent mentioned in the section are found to be satisfied and for that purpose the insurance company has to obtain order in writing from the Tribunal and which should be a reasoned order by the Tribunal. Unless that procedure is followed, the insurance company cannot have a wider defence on merits than what is available to it by way of statutory defence." 10. A Division Bench of this court in Azad Ahmad vs. New India Assurance Co. Unless that procedure is followed, the insurance company cannot have a wider defence on merits than what is available to it by way of statutory defence." 10. A Division Bench of this court in Azad Ahmad vs. New India Assurance Co. Ltd. 2004 ACJ 1918 has also held as under: "The appeal by insurance company against the award of the Tribunal on merits without having obtained permission under Section 170 of the Motor Vehicle Act is incompetent. It is settled proposition of law that insurers right of appeal is limited unless any of the conditions contained in section 149(2) exist (that is there has been a breach of condition of the policy on policy is void) as such defence is taken in pleadings and pressed before the Claims tribunal, the insurer is legally bound to satisfy the award made by the Tribunal and is barred from filing an appeal against such award. The quantum of compensation is not a ground available to the insurer for the purpose of filing of an appeal, as has been held in Chinnama George v. N.K. Raju, 2000 ACJ 777 (SC)." 11. In view of the above precedent, the appeal filed by the Insurance Company on the quantum of compensation is not maintainable. 12. Learned counsel for the appellant Insurance Company submitted that even if the appeal against the quantum awarded by the Tribunal is not maintainable, but the appeal qua, the liability to indemnify to the insured is maintainable. He further submitted that driver of the offending vehicle was not having the valid driving licence as per the findings recorded by the learned Tribunal. These findings have not have challenged either by the driver or the owner, therefore, the appellant company is not liable to indemnify the insured. 13. The short question involved in this appeal is when a licence is found to be fake whether it absolved the Insurance Company from its liability. The Id. Tribunal after relying upon United India Insurance Company Ltd. vs. Lehru and Ors., Supreme Bound Reports 2003(4), page 345 held that it was for the Insurance Company to prove that the insured consciously employed the driver with fake driving licence but the Insurance Company has not proved any witness to prove the same. These findings recorded by the learned Tribunal are without any evidence. Respondent No. 4 is the owner of the offending vehicle. These findings recorded by the learned Tribunal are without any evidence. Respondent No. 4 is the owner of the offending vehicle. He has not stepped into witness box to depose that before hiring the driver he has checked the driving licence or when the driving licence was checked on the face of it, it look like a genuine. It has also not come on the record that the insured has taken the test of the driver before him. If he depose and say that he has taken all the precautions before employing then the Insurance Company would not have absolved from its liability as it has been laid down in United India Insurance Company Ltd. vs. Lehru and Ors., (supra) but the insured has failed to prove that he has handed over the vehicle to the driver by taking all the precautions and he was presuming that licence was genuine one. Under these circumstance, the Insurance Company has a right to recover the amount from the insured which has been paid to the third party i.e. claimant as it has been laid down in National Insurance Company Ltd. vs. Baljit Kaur AIR 2004, page 1340 as under: "We, therefore, are of the opinion that the interest of justice will be subserved if the appellant herein is directed to satisfy the awarded amount in favour of the claimant if not already satisfied and recover the same from the owner of the vehicle. For the purpose of such recovery, it would not be necessary for the insurer to file a separate suit but it may initiate a proceeding before the executing Court as if the dispute between the insurer and the owner was the subject matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer. We have issued the aforementioned directions having regard to the scope and purport of S. 168 of the Motor Vehicle Act, 1988 in terms whereof it is not only entitled to determine the amount of claim as put forth by the claimant for recovery thereof from the insurer, owner or driver of the vehicle jointly or severally but also the dispute between the insurer on the one hand and the owner or driver of the vehicle involved in the accident inasmuch as can be resolved by the Tribunal in such a proceeding." 14. For the reasons mentioned above, the appeal is dismissed with modification that the appellant will satisfy the award if already not satisfied and they can recover the awarded amount back from the insured i.e. respondent No.2 by filing the execution on the basis of the award before the same Tribunal.