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2006 DIGILAW 358 (HP)

NEW INDIA ASSURANCE CO v. KANT

2006-11-17

SURJIT SINGH

body2006
JUDGEMENT Surjit Singh, J. :- This appeal, by the Insurance Company, is directed against the award of the Motor Accident Claims Tribunal, whereby compensation awarded for the death of one Dalip Singh in an accident of car No. UPT-6397, which was insured with the appellant for third party risk, has been ordered to be paid by it (the appellant). 2. Relevant facts may be summed up first. Deceased Dalip Singh, aged 25 years, along-with his father respondent Chet Ram, was travelling by car No. UPT-6397, owned by respondent Manish Kumar, when it met with an accident resulting in the death of Dalip Singh as also the driver of the car. In the petition it was alleged that the deceased and his father Chet Ram had paid fare for travelling by the car. In the FIR also, which is duly proved and which had been lodged by Chet Ram, respondent (father of the deceased), it was stated that the car had been engaged as taxi by respondent Chet Ram. The accident was alleged to have taken place due to rash driving of the car by its driver. The owner was also reported to be travelling the car, when the accident took place, in the FIR that was lodged with the police. 3. The owner of the car respondent Manish Kumar did not put in appearance despite service. So he was proceeded against ex parte. The present appellant contested the claim, filed by the widow, the children and the father of the deceased. Inter alia, it was stated that the deceased was traveling by the car as a paid passenger and this was in violation of one of the conditions in the policy. It was also stated that the insurance policy in respect of the car had been purchased in the name of Shah Alam, a registered owner of the car, but in fact the car, at the time of the accident, belonged to Manish Kumar, as he had purchased it from Shah Alam and for this reason also the Insurance Company was not liable to pay any compensation. It was denied that the car was being driven in a rash or negligent manner and the dependents of the deceased were entitled to any compensation. 4. It was denied that the car was being driven in a rash or negligent manner and the dependents of the deceased were entitled to any compensation. 4. The Motor Vehicle Accident Claims Tribunal, on conclusion of the inquiry, found that the accident took place because of rash driving of the car and the car had not been engaged as a taxi nor had the deceased paid any fare. Plea of the appellant that there was no agreement of insurance because of the policy having been purchased in the name of Shah Alam and owner of the car being Manish Kumar, also did not find favour with the Tribunal. 5. Appellant has assailed the award on three grounds, namely (i) the finding by the Tribunal that the deceased was a gratuitous passenger and not a person traveling for hire or reward, is contrary to the evidence on record, (ii) liability could not have been fastened on the Insurance Company, when the policy had been purchased in the name of Shah Alam, registered owner, whereas the owner was Mani Kumar, impleaded as respondent No. 1 in the petition, and (iii) the compensation granted by the Tribunal is highly excessive. 6. I have heard the learned counsel for the parties and perused the record. 7. In the petition it is categorically stated that the deceased and his father Chet Ram, one of the petitioners, had paid the fare for travelling by the car. In the FIR Ext. P-1 also it was categorically got recorded by Chet Ram, father of the deceased, that the car had been engaged by him as a taxi. He was confronted with the FIR. He admitted that the FIR Ext. P-1 was lodged by him, though he denied that he stated that the vehicle had been engaged by him as a taxi. His denial is of no consequence, when in the petition also it is alleged that the fare had been paid by the deceased for himself and this witness (Chet Ram) for travelling by the vehicle. Therefore, the finding of the Tribunal that the deceased had not paid any fare or was simply a gratuitous passenger, cannot be upheld. 8. The policy Ext. R-1 has been held to have not been proved by the appellant and this has also been made a ground by the Tribunal for rejecting the plea regarding breach of condition of policy. Therefore, the finding of the Tribunal that the deceased had not paid any fare or was simply a gratuitous passenger, cannot be upheld. 8. The policy Ext. R-1 has been held to have not been proved by the appellant and this has also been made a ground by the Tribunal for rejecting the plea regarding breach of condition of policy. It is true that the policy was not proved as per procedure prescribed, but when it was tendered in evidence, the claimants did not object to its being tendered in evidence. Therefore, the policy cannot be excluded from consideration simply on the ground that it has not been proved as per requirement of law. 9. The policy specifically excludes the use of the vehicle for hire or reward. Sub-section (2) of Section 149 of the Motor Vehicles Act permits the insurer to defend the action on the ground that there has been breach of condition of the policy excluding the use of the vehicle for hire or reward, vide sub-clause (i) (a) of Clause (a). Under these circumstances, there cannot be any escape from the finding that there had been breach of condition of the policy, which breach is permitted to be raised as a ground of defence, under Section 149 (2) of the Motor Vehicles Act and hence the insurer is not liable to indemnify the insured. 10. This finding, however, does not mean that the appellant-Insurance Company cannot be ordered to pay the compensation to the third party, i.e. the claimants/respondents. As a matter of fact, in a case where breach of condition of policy, which can be taken as a ground of defence, under Section 149 (2) of the Motor Vehicles Act, is successfully set up by the insurer, the Insurance Company has to satisfy the award at the first instance and then it can recover the awarded amount from the owner. This is what has been concluded by the Honble Supreme Court in National Insurance Co. Ltd. v. Swaran Singh and others, (2004) ACJ 1 : AIR 2004 SC 1531, vide Paras 96, 97 and 98, after having discussed the statutory provisions in Paras 74, 75 and 76. 11. This is what has been concluded by the Honble Supreme Court in National Insurance Co. Ltd. v. Swaran Singh and others, (2004) ACJ 1 : AIR 2004 SC 1531, vide Paras 96, 97 and 98, after having discussed the statutory provisions in Paras 74, 75 and 76. 11. The contention that there was no valid agreement of insurance, because the policy was purchased in the name of Shah Alam, whereas the owner of the vehicle at the time of the occurrence of the accident was Manish Kumar, cannot be accepted. It is not the case of the appellant Insurance Company that at the time when the policy was purchased the vehicle already stood sold by Shah Alam to respondent Manish Kumar.Therefore, it has to be assumed that at the time of purchase of the policy Shah Alam himself was the owner. If that is so, the transferee of the vehicle is entitled to the benefit under the policy. The law is by now well settled on the point. 12. As regards the third ground, firstly the insurer is not entitled to challenge the award on the ground that the quantum of compensation is excessive. Secondly, the compensation awarded by the Tribunal is just Rs. 3,38,500/-, though the deceased was only 25 years of age and is survived by young widow, a minor son, a minor daughter and parents. 13. As a result of the above discussion, appeal is partly accepted and it is held that on account of breach of condition as to the use of the vehicle, the Insurance Company is not liable to indemnify the insured. However, in view of the law laid down by the Honble Supreme Court in National Insurance Co. Ltd. v. Swaran Singh and others, AIR 2004 SC 1531 (supra), it is ordered that the appellant is liable to satisfy the award and after satisfying the award, it may recover the entire amount, paid by it towards the satisfaction of the award, from the insured/owner of the vehicle and for such recovery it need not file any fresh suit or other case and may do so by executing this judgment itself. Appeal partly allowed.