NEW INDIA ASSURANCE CO. LTD. v. ASHIF PASHA, MAJOR S/O ABDUL JABBAR
2007-02-01
V.JAGANNATHAN
body2007
DigiLaw.ai
V. JAGANNATHAN, J. ( 1 ) MACT, Kolar while awarding compensation of Rs. 63,000/- to the 1st respondent - claimant directed the appellant - Insurance Company herein to pay the entire award amount and to recover 50% of the said amount from the driver and owner of the tempo bearing No. KA-07-2311. Aggrieved by the said direction given by the Tribunal, the appellant has approached this Court in this appeal. ( 2 ) THE facts necessary for the purpose of disposal of this appeal briefly stated are to the effect that an accident occurred on 2. 2. 1998 involving 3 vehicles. Lorry No. CAA 3748 belonging to Respondent No. 3 and insured with the appellant; tempo bearing No. KA-07-2311 driven by One Venkatesh and belonging to Respondent No. 2 and another vehicle bearing No. A. P.-03-T-9193 belonging to Respondent No. 4 and insured with Respondent No. 5 and MACT after considering the evidence placed before it came to the conclusion that the accident in question was caused due to the rash and negligent driving of the lorry No. CAA 3748 insured with the appellant and the tempo No. KA-07-2311 belonging to the 2nd respondent herein. After assessing the compensation in a sum of Rs. 63,000/-, the Tribunal on finding that the tempo No. KA-07-2311 has no insurance coverage, directed the appellant herein to pay the entire compensation amount to the 1st respondent - claimant although the liability of the appellant was fixed at 50% and the Tribunal further directed the appellant to recover the remaining 50% from the driver and owner of the tempo in question. It is this part of the operative portion of the order that is called in question by the Insurance Company in this appeal. ( 3 ) I have heard the submissions made by the learned Counsel Sri O. Mahesh for the appellant, learned Counsel Sri Ravishankar for Respondent No. 5 and the learned Counsel Sri Dildar Shiralli for the 1st respondent - claimant. ( 4 ) LEARNED Counsel Sri O. Mahesh submitted that the appeal is confined only to that part of the order of the Tribunal by which the appellant has been directed to pay the entire compensation and to recover 50% of the said amount from the driver and owner of the tempo.
( 4 ) LEARNED Counsel Sri O. Mahesh submitted that the appeal is confined only to that part of the order of the Tribunal by which the appellant has been directed to pay the entire compensation and to recover 50% of the said amount from the driver and owner of the tempo. The contention putforward is that when the Tribunal found that the drivers of two vehicles in question were equally at fault and having apportioned the liability between the two vehicles at 50% each, the appellant being the insurer of the lorry No. CAA 3748 can be asked to pay compensation only to the extent of 50% of the award amount, but the Tribunal could not have ordered the appellant to pay the remaining 50% of the compensation amount, which was to be paid by the driver and the owner of the tempo. It is submitted that when the appellant is not at all the insurer of the tempo in question, the question of the appellant being saddled with the burden of paying 50% of the award amount in respect of the vehicle which was not insured with it and in respect of the owner who is not the insured of the appellant, is not correct and the Tribunal could not have passed such an order, which order in substance amounts to an illegal order and without jurisdiction in so far as the direction given to the appellant to pay the compensation which is to be paid by the driver and owner of the tempo. Referring to the provisions of Order-41 of Civil Procedure Code, it is submitted that the appellate Court has got the Power to set right an illegal order and therefore this Court by exercising its discretion has to set aside that part of the order of the Tribunal making the appellant to pay even the compensation which is to be paid by the owner and driver of the tempo in question. ( 5 ) ON the other hand, learned Counsel for the 1st respondent - claimant submitted that the appellant had not obtained necessary permission from the Tribunal as required under Section-170 of the Motor Vehicles Act, 1988 ('act' in short) and therefore appeal itself is not maintainable.
( 5 ) ON the other hand, learned Counsel for the 1st respondent - claimant submitted that the appellant had not obtained necessary permission from the Tribunal as required under Section-170 of the Motor Vehicles Act, 1988 ('act' in short) and therefore appeal itself is not maintainable. Apart from this, the appellant is calling in question the quantum of compensation and therefore in the absence of permission being obtained under Section-170 of the Act, the appellant cannot be heard on the question of quantum. ( 6 ) LEARNED Counsel Sri Ravishankar for the 5th respondent submitted that as the finding of the Tribunal on the question of negligence is between the driver of the tempo and the lorry insured with the appellant, the question of making 5th respondent liable to pay any compensation will not arise and even the order of the Tribunal does not make it liable to pay any compensation. ( 7 ) HAVING heard the submissions made by the learned Counsel, the following points arise for consideration: 1. Whether the appeal is maintainable in the absence of permission having been sought under Section-170 of the Act? 2. Whether the order of the Tribunal directing the appellant to pay and recover 50% of the compensation amount from the driver and owner of the tempo is sustainable in law? point Nos. 1 and 2: ( 8 ) THE basic question that requires to be answered is as to the maintainability of the appeal, Learned Counsel for the 1st respondent - claimant submitted that it is not in dispute that the appellant did not contest the matter before the MACT nor any application was filed under Section-170 of the Act seeking permission to contest the claim petition on all grounds. Therefore the appeal itself is not maintainable. Learned Counsel Sri O. Mahesh for the appellant submitted that as the appeal is directed against only that part of the order of the Tribunal with regard to the liability is concerned, no permission under Section-170 of the Act is necessary and furthermore the appellant is not aggrieved by the liability being put to the extent of 50% on its insured nor the appellant is calling in question the finding on negligence or on the quantum of compensation. Under such circumstances, the appeal is maintainable notwithstanding the permission having been not sought under Section-170 of the Act.
Under such circumstances, the appeal is maintainable notwithstanding the permission having been not sought under Section-170 of the Act. ( 9 ) HAVING regard to the above submissions and on perusing Section-170 of the Act, it becomes clear that the right to contest the claim on all or any of the grounds available to the insured arises only in the event of the circumstances mentioned in the said Section. In the case on hand, the appellant is not aggrieved by the finding on negligence or on the quantum of compensation as the appellant is ready to indemnify the insured that is the owner of the lorry No. CAA 3748 to the extent of the liability put on the insured. ( 10 ) IN the instant case, the Tribunal by its order has made the appellant liable to pay that part of the compensation which is required to be paid by the driver and owner of the tempo in question. Since the tempo is not insured with the appellant herein, the question of the appellant becoming liable to pay the compensation on behalf of the owner of the tempo will not arise. There is no legal liability on the part of the appellant to indemnify the owner of the tempo since the tempo is not insured with the appellant. Under the said circumstances, the question of the appellant becoming liable to pay the compensation on behalf of the owner of the tempo will not arise and to the said extent, the order of the Tribunal has to be construed as illegal and without jurisdiction. ( 11 ) AT this juncture, it is relevant to refer to the observations of the Hon'ble Supreme Court in the case of New India Assurance Company Limited. v. C. M. Jaya. In the said case, the Apex Court has observed thus: The liability of Insurance Company could be statutory or contractual. A statutory liability cannot be more than what is required under the statute itself. However, there is nothing in Section 95 of the Act prohibiting the parties from contracting to create unlimited or higher liability to cover wider risk. In such an event, the insurer is bound by the terms of the contract as specified in the policy in regard to unlimited or higher liability as the case may be.
However, there is nothing in Section 95 of the Act prohibiting the parties from contracting to create unlimited or higher liability to cover wider risk. In such an event, the insurer is bound by the terms of the contract as specified in the policy in regard to unlimited or higher liability as the case may be. In the absence of such a term of clause in the policy, pursuant to the contract of insurance, a limited statutory liability cannot be expanded to make it unlimited or higher. If it is so done, it amounts to re-writing the statute or the contract of insurance, which is not permissible. (emphasis supplied) ( 12 ) THEREFORE it is clear from the above proposition of law that requiring the appellant herein to shoulder the liability in respect of a person who is not the insured as far as the appellant is concerned and in respect of the vehicle which is not insured with the appellant, therefore amounts to expanding the liability of the appellant to cover a sphere, in regard to which, the appellant will not be liable in law and its statutory liability cannot be expanded to cover the case of a vehicle and the owner thereof in respect of whom the appellant has no role to play. Under the above circumstances, I am of the view that permission under Section-170 of the Act is not necessary and the appeal is maintainable in law. Consequently, the order of the Tribunal requiring the appellant to shoulder the liability over and above 50%, is an order without jurisdiction and is unsustainable in law. The necessary consequence that flows from this is that the 1st respondent-claimant has to recover 50% of the compensation amount from the driver and owner of the tempo No. KA-07-2311. ( 13 ) IN the result, I pass the following order: order 1. Appeal is allowed. 2. The impugned order of the Tribunal directing the appellant to pay even the 50% of compensation amount which is payable by the driver and owner of the tempo is set aside. 3. The amount in deposit made by the appellant in the bank over and above the liability of the appellant, shall be refunded to it. - .