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2009 DIGILAW 485 (CAL)

Chandra Roy v. New India Assurance Co. Ltd

2009-07-09

ASHIM KUMAR BANERJEE, KALIDAS MUKHERJEE

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Judgment : ASHIM KUMAR BANERJEE AND KALIDAS MUKHERJEE, J (1) Although several points are involved in this appeal, only question of law which has surfaced in the rival contentions, is whether the insurance company is entitled to refuse the claim made under section 92-A of the Motor Vehicles Act, 1939 (section 140 of the Act of 1988), inter alia, on the ground that the subject provision did not make the insurance company liable for the compensation per se. (2) We have heard Mr, Krishanu Banik, learned counsel appearing for the appellant and Mr. Kamal Krishna Das, learned counsel appearing for the respondents. (3) Both the learned advocates have assisted us with citing the following decisions: (1) National Insurance Co. Ltd. v, Krishna Biswas, 2008 ACJ 480 (Calcutta); (2) Yallwwa v. National Insurance Co. Ltd., 2007 ACJ 1934 (SC); (3) Aloka Pusti (Bera) v. National Insurance Co. Ltd., 2007 ACJ 494 (Calcutta); (4) National Insurance Co. Ltd. v. Jethu Ram, 1998 ACJ 921 (SC); (5) United India Insurance Co. Ltd. v. Jagdish Singh, (1999) 9 SCC 57 ; and (6) Shivaji Dayanu Patil v. Vatschala Uttam More, 1991 ACJ 777 (SC). (4) Before we consider the subject controversy, let us first examine the provisions of the Act. Section 92-A of the Motor Vehicles Act, 1939 is quoted below: "92-A. Liability to pay compensation in certain cases on the principle of no fault.- (1) Where the death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall or, as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of this section. (2) The amount of compensation which shall be payable under subsection (1) in respect of the death of any person shall be a fixed sum of fifteen thousand rupees and the amount of compensation payable under that sub-section in respect of the permanent disablement of any person shall be a fixed sum of seven thousand five hundred rupees. (2) The amount of compensation which shall be payable under subsection (1) in respect of the death of any person shall be a fixed sum of fifteen thousand rupees and the amount of compensation payable under that sub-section in respect of the permanent disablement of any person shall be a fixed sum of seven thousand five hundred rupees. (3) In any claim for compensation under sub-section (1), the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person. (4) A claim for compensation under sub-section (1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim has been made nor shall the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement." (5) On perusal of sub-sections (3) and (4) of section 92-A it would clearly appear that once it was proved that the subject vehicle was involved in the accident, the claimant was entitled to compensation irrespective of the fact whether there had been any contributory negligence on the part of the victim and/or any other person. (6) Section 96 (2) of the said Act of 1939, however, prescribed the nature of defences which were available to the insurance company in case of a claim being made by any victim. Similar provisions have been incorporated in sections 140, 163-A and 149 (2) of the Act of 1988. (7) In the case of Yallwwa, 2007 ACJ 1934 (S C), the Supreme Court in para 10 observed: "The said provision, therefore, makes the owners of the vehicles liable but not the insurer per se. Irrespective of the fact whether a claim petition is required to be adjudicated under Chapter X or Chapter XII of the Act, it is permissible to raise a defence in terms of sub-section (2) of section 149 of the Act. Irrespective of the fact whether a claim petition is required to be adjudicated under Chapter X or Chapter XII of the Act, it is permissible to raise a defence in terms of sub-section (2) of section 149 of the Act. Even it is possible for the owner of the vehicle to raise a contention that his vehicle being not involved in the accident, he is not liable to pay any amount in terms of section 140 of the Act." (8) On perusal of the para quoted (supra) it would appear that the Supreme Court observed that the subject provision did not per se make the insurer liable under section 140 of the Act of 1988. The Supreme Court also observed that it was the liability of the owner and the owner was entitled to take the plea that his vehicle was not involved in the accident. (9) In case of a regular claim petition made under section 166 of the Act of 1988 or section 110-A of the old Act side by side with no fault liability provision being section 92A of the old Act or section 140 of the new Act, we would find that only difference is subsections (3) and (4) of section 92-A of the old Act [sub-sections (3) and (4) of section 140 of the new Act], wherein the owner had been relieved of the responsibility of proving rash and negligent driving of the vehicle. The defences of the insurance company which are available under section 149 (2) of the Act could also be available to the owner in case of being confronted under section 92-A or section 140 subject to the provisions of sub-sections (3) and (4). (10) Let us now come to the liability of the insurance company. In the case of Yallwwa, 2007 ACJ 1934 (SC), the Apex Court observed that the insurance company per se was not liable. This is clear on pleading of the said section. The said section does not per se make the insurance company liable. Such liability comes from the policy of insurance. (11) In this regard we may refer to the decision of the Apex Court in the case of United India Insurance Co. This is clear on pleading of the said section. The said section does not per se make the insurance company liable. Such liability comes from the policy of insurance. (11) In this regard we may refer to the decision of the Apex Court in the case of United India Insurance Co. Ltd. v. Jagdish Singh, (1999) 9 SCC 57 , wherein the Apex Court observed: "It is not necessary for us to go into the merits of the said contention which will be decided in the pending appeal, but the question that arises for consideration is whether at this stage while the appeal is pending, the insurer would be called upon to pay the entire amount awarded or a part of it. Admittedly, under the statute, a sum of Rs. 25,000 is payable for no fault liability. There is no justification for the insurer not paying the said amount. In view of the stand taken by the insurer in the pending appeal to the effect that insurer will not be liable at all and taking the statutory provisions into consideration, we modify the impugned interim order of the High Court and direct that the appellant shall pay to the claimants a sum of Rs, 25,000..." (12) The said judgment was delivered by the same Bench on the same day in the case of Jethu Ram, 1998 ACJ 921 (SC). Even if we consider the decision in the case of Jethu Ram (supra), we would find that the Division Bench did not absolve the insurance company from any liability. Para 2 of the decision in the case of Jethu Ram (supra) is quoted below: "On a close scrutiny of the aforesaid provisions, we do not find anything contained therein which would suggest that the liability which accrues under the provisions of section 92-A has to be borne by the insurer even if it is ultimately held that under the policy of insurance the insurer is not liable to pay the compensation in question. In our considered opinion, the Tribunal and the High Court have misread the aforesaid provisions of the Motor Vehicles Act. In the aforesaid premises, the impugned judgment of the Tribunal and High Court cannot be sustained so far as it relates to the liability of the insurer arising under sections 92-A and 92-B of the Act. These appeals are allowed. In our considered opinion, the Tribunal and the High Court have misread the aforesaid provisions of the Motor Vehicles Act. In the aforesaid premises, the impugned judgment of the Tribunal and High Court cannot be sustained so far as it relates to the liability of the insurer arising under sections 92-A and 92-B of the Act. These appeals are allowed. The insurer having paid the amount under the aforesaid provisions is entitled to get it reimbursed from the owner." (13) On a close reading of the para quoted supra we would find that the Apex Court in the said decision wanted to observe that in case it is ultimately held that the insurance company was not at all liable under the policy of insurance, they cannot be foisted with any liability under section 92-A. Same view was reiterated by Apex Court in the case of Yallwwa, 2007 ACJ 1934 (SC). Such observation has no conflict with the decision in the case of Jagdish Singh, (1999) 9 SCC 57 . Hence, we need not deal with the Division Bench decision of our court as we have been assisted at the Bar by the Supreme Court decisions on this score. (14) Let us now apply the ratio in the instant case. It is not the case of the insurance company that the vehicle was not covered by policy of insurance. Hence, the insurance company is duty-bound to discharge its liability under the policy of insurance to the extent that it has indemnified the owner from any unforeseen claim. It is true that the said section does not per se make the insurance company liable. Once the owner has taken insurance policy and the insurance company has undertaken to indemnify the owner, the liability of insured has to be discharged by the insurer. (15) The appeal thus succeeds and is allowed. The judgment and order impugned in this appeal is set aside. Respondents would be jointly and severally liable to pay a sum of Rs. 25,000 to the appellant. The said amount would carry interest at the rate of 6 per cent per annum from the date of filing of the claim petition until payment. (16) The said sum must be paid to the claimant directly by accounts payee cheque to be sent at her recorded address within a period of four weeks from the date of communication of this order. (16) The said sum must be paid to the claimant directly by accounts payee cheque to be sent at her recorded address within a period of four weeks from the date of communication of this order. (17) It is, however, made clear that in case the insurance company pays the said sum, it would be entitled to recover the sum from the owner being the respondent No. 2 without initiating any independent proceeding. If necessary, the insurance company would be entitled to execute this order as a decree of this court. (18) The appeal is disposed of without any order as to costs. (19) Urgent photostat certified copy of this order, if applied for, be given to the parties on priority basis.