United India Insurance Company Limited v. Lilaben W/o Decd. Bhikhabhai Premjibhai Kathiriya
2013-11-18
BHASKAR BHATTACHARYA
body2013
DigiLaw.ai
Judgment Mr. Bhaskar Bhattacharya, J.—This Appeal under section 173 of the Motor Vehicles Act is at the instance of an Insurance Company and is directed against an award dated 26th October 2005 passed by the Joint District Judge and Motor Accident Claims Tribunal (Aux.), Amreli, in MACP No. 394 of 2002 thereby awarding a sum of Rs. 5,52,600/- to the claimants with interest at the rate of 7.5% per annum from the date of filing of the claim-application till realization by holding that the driver and owner of the offending vehicles were jointly and severally liable to pay the amount. However, in spite of the above finding, the Tribunal below directed all the opponents including the Insurance Company to deposit the awarded sum with liberty to the Insurance Company to recover the amount from the insured without filing any suit but by execution of the award against the insured in accordance with Section 174 of the Motor Vehicles Act. 2. Being dissatisfied, the Insurance Company has come up with the present appeal. 3. The only question raised by Mr. Dave, the learned advocate appearing on behalf of the appellant in this appeal is, whether the Tribunal below was justified in directing the Insurance Company, first, to pay the amount and thereafter, to recover the same from the owner of the offending vehicle in spite of a specific finding recorded by the Tribunal below that the victim having died while travelling in a goods’ vehicle, the Insurance Company was not liable to make payment. 4. Therefore, the scope of this appeal is very limited as to whether in the above circumstance, the Tribunal could pass a direction upon the Insurance Company to make payment of the amount and thereafter, to execute the award against the owner of the vehicle. 5. Mr. Dave, the learned advocate appearing on behalf of the appellant has drawn my attention to the decision of the Supreme Court in the case of National Insurance Company Ltd. vs. Savitridevi & Ors. etc. reported in 2012 (4) SCALE 111 wherein in a similar circumstance like the present one, where the vehicle was insured only as goods-carrying-vehicle but the same was used for carrying passengers on a regular basis, the Supreme Court held that no liability could be fastened to the Insurance Company.
etc. reported in 2012 (4) SCALE 111 wherein in a similar circumstance like the present one, where the vehicle was insured only as goods-carrying-vehicle but the same was used for carrying passengers on a regular basis, the Supreme Court held that no liability could be fastened to the Insurance Company. The Supreme Court, however, clarified that if any amount had already been paid by the Insurance Company, it should not be permissible for it to recover the amount from the claimants and in such a case, the claimants would be entitled to recover the balance from the estate of the deceased owner. 5.1 Mr. Dave also relied upon the decision delivered by this Court in the case of United India Insurance Co. Ltd. vs. Jyotibala Ghanshyam Joshi & Ors. reported in 2012 (2) GLR 1681 where this Court pointed out that the decisions of the Supreme Court in the case of National Insurance Co. Ltd. vs. Baljit Kaur, 2004 (2) SCC 1 and Deddappa vs. National Insurance Co. Ltd. 2008 (2) SCC 595 where the Supreme Court passed similar direction upon the Insurance Company to first, pay and thereafter, recover, were passed in exercise of power conferred under Article 142 of the Constitution of India and thus, there is no scope of exercising such discretion at the instance of this Court. 6. Mr. Y.M. Thakkar, the learned advocate appearing on behalf of the claimants, on the other hand, has opposed the aforesaid contention of Mr. Dave and has placed strong reliance upon a recent decision of the Supreme Court in the case of S. Iyyapan vs. M/s. United India Insurance Company Ltd. & Anr. reported in 2013 AIR SCW 3941 where a two-judge-bench of the Supreme Court was of the view that for violation or breach of conditions of the insurance, it was the duty of the Insurance Company to pay the amount and thereafter, to recover the amount from the insured. Mr. Thakkar has also placed reliance upon another decision of the Supreme Court in the case of Manager, National Insurance Co.
Mr. Thakkar has also placed reliance upon another decision of the Supreme Court in the case of Manager, National Insurance Co. Ltd. vs. Saju P. Paul and another reported in 2013 ACJ 554 where, in the case of death of a gratuitous passenger, the Supreme Court held that the claimant should be permitted to withdraw the amount deposited by the Insurance Company and then, the Insurance Company may recover the amount from the owner by following the procedure in the case of National Insurance Co. Ltd. vs. Challa Bharathamma reported in 2004 ACJ 2094 (SC). 7. Before dealing with the above question, it should be recorded that the vehicle in question was a goods vehicle and the claimants were gratuitous passengers and in this case, no separate vehicle is involved. It is also not in dispute that the insurance in question was not a comprehensive one but covered only the third party risk. According to the claimants, the victims were in the goods vehicles and due to sharp turning of the vehicle with high speed, they were thrown out of the vehicle and due to injury, one died and the other were injured. 8. Therefore, the primary question that arises for consideration is whether the victim can be said to be a third party in respect of the vehicle wherein they were travelling as gratuitous passengers. 9. The Supreme Court, in the case of Oriental Insurance Co. Ltd. vs. Sudhakaran K.V. and Ors reported in AIR 2008 SC 2729 , has made the above question settled by making the following observations: “The law which emerges from the said decisions, is: (i) the liability of the insurance company in a case of this nature is not extended to a pillion rider of the motor vehicle unless the requisite amount of premium is paid for covering his/her risk; (ii) the legal obligation arising under Section 147 of the Act cannot be extended to an injury or death of the owner of vehicle or the pillion rider; (iii) the pillion rider in a two wheeler was not to be treated as a third party when the accident has taken place owing to rash and negligent riding of the scooter and not on the part of the driver of another vehicle.” 10.
Once it is found that in the present case no other vehicle is involved and the victims were travelling in a goods vehicle and the Insurance Company was liable for the third party risk, there is no scope of bringing the victim within the meaning of “third party” and the learned Tribunal below erred in law in directing the Insurance Company to pay the amount and then recover from the owner. 11. In the case of S. Iyyapan vs. M/s. United India Insurance Company Ltd. & Anr. (Supra), relied upon by Mr. Thakkar, the case was one of violation of the terms of a policy of insurance by the owner and in such circumstances, the Supreme Court made the following observations: “Hence, in our considered opinion, the insurer cannot disown its liability on the ground that although the driver was holding a licence to drive a light motor vehicle but before driving the light motor vehicle used as commercial vehicle, no endorsement to drive commercial vehicle was obtained in the driving licence. In any case, it is the statutory right of a third party to recover the amount of compensation so awarded from the insurer. It is for the insurer to proceed against the insured for recovery of the amount in the event there has been violation of any condition of the insurance policy.” 11.1 In the case before us, the victim not being a third party, the Insurance Company has no liability at all as pointed out in the case of Oriental Insurance Co. Ltd. vs. Sudhakaran K.V. and Ors. (Supra). 11.2 Therefore, the above decision cannot have any application to the facts of the present case. 12. In the case of Manager, National Insurance Co. Ltd. vs. Saju P. Paul and Anr. (Supra), the question of law that arose in the appeal was whether having regard to the provisions of the Motor Vehicles Act, 1988, the Insurance Company was liable to pay compensation for the bodily injury caused to the claimant who was travelling in a goods vehicle as a spare driver though he was employed as a driver in another vehicle owned by the owner of the vehicle under the policy of insurance.
The Supreme Court answered the question by holding that the High Court was wrong in holding that the Insurance Company should be liable to indemnify the owner of the vehicle and pay the compensation to the claimant as directed in the award by the Tribunal. Thereafter, the next question that arose for consideration was whether in the peculiar facts of that case, a direction could be issued to the Insurance Company to first satisfy the awarded amount in favour of the claimant and recover the same from the owner of the vehicle. 12.1 The Supreme Court in that context made the following observations: “We are informed that by an order dated 19.01.2007 in National Insurance Co. Ltd. vs. Roshan Lal [SLP (C) No. 5699/2006] in light of the argument raised before a two-Judges Bench that the direction ought not to be issued to the insurance company to discharge the liability under the award first and then recover the same from the owner, the matter has been referred to the larger Bench by the following order: “Having regard to the submissions urged before us, we are of the view that this petition may be placed for consideration before a larger Bench. We notice that in some of the decisions such a direction was made in cases where the compensation had already been paid by the insurer, but there are observations therein which support the view that such a direction can be made in all cases where the owner has insured his vehicle against third party risks. In Baljit Kaur’s case, (2004 ACJ 428 (SC) which is a judgment rendered by three Hon’ble Judges, such a direction was made in the special circumstances noticed by the Court in Paragraph 21 of the report. There are observations in Oriental Insurance Co. Ltd. vs. Ranjit Saikia (2002) 9 SCC 390 which may support the contention of the petitioners before us.” 24. In National Insurance Company Ltd. vs. Parvathneni and another [SLP(C) CC No. 10993 of 2009], the following two questions have been referred to the larger Bench for consideration: (1).
There are observations in Oriental Insurance Co. Ltd. vs. Ranjit Saikia (2002) 9 SCC 390 which may support the contention of the petitioners before us.” 24. In National Insurance Company Ltd. vs. Parvathneni and another [SLP(C) CC No. 10993 of 2009], the following two questions have been referred to the larger Bench for consideration: (1). If an Insurance Company can prove that it does not have any liability to pay any amount in law to the claimants under the Motor Vehicles Act or any other enactment, can the Court yet compel it to pay the amount in question giving it liberty to later on recover the same from the owner of the vehicle. (2). Can such a direction be given under Article 142 of the Constitution, and what is the scope of Article 142? Does Article 142 permit the Court to create a liability where there is none?” 25. The pendency of consideration of the above questions by a larger Bench does not mean that the course that was followed in Baljit Kaur 2004 ACJ 428 SC and Challa Bharathamma 2004 ACJ 2094 (SC) should not be followed, more so in a peculiar fact situation of this case. In the present case, the accident occurred in 1993. At that time, claimant was 28 years’ old. He is now about 48 years. The claimant was a driver on heavy vehicle and due to the accident he has been rendered permanently disabled. He has not been able to get compensation so far due to stay order passed by this Court. He cannot be compelled to struggle further for recovery of the amount. The insurance company has already deposited the entire awarded amount pursuant to the order of this Court passed on 01.08.2011 and the said amount has been invested in a fixed deposit account. Having regard to these peculiar facts of the case in hand, we are satisfied that the claimant (Respondent No. 1) may be allowed to withdraw the amount deposited by the insurance company before this Court along with accrued interest. The insurance company (appellant) thereafter may recover the amount so paid from the owner (Respondent No. 2 herein). The recovery of the amount by the insurance company from the owner shall be made by following the procedure as laid down by this Court in the case of Challa Bharathamma, 2004 ACJ 2094 (SC).” (Emphasis supplied).
The insurance company (appellant) thereafter may recover the amount so paid from the owner (Respondent No. 2 herein). The recovery of the amount by the insurance company from the owner shall be made by following the procedure as laid down by this Court in the case of Challa Bharathamma, 2004 ACJ 2094 (SC).” (Emphasis supplied). 12.2 The above observations make it clear that the direction to pay the amount first and then to recover such amount can only be given in exercise of power conferred under Article 142 of the Constitution and the Supreme Court in the peculiar facts of the above case, exercised such power notwithstanding the pendency of reference to the larger bench. 13. Be that as it may, there is no scope of passing such a direction either at the instance of the Tribunal below or of this court in this appeal under Section 173 of the Act. 14. On consideration of the entire materials on record, I, therefore, hold that the learned Tribunal below erred in law in passing the direction upon the Insurance Company to pay the amount and then recover such amount notwithstanding its finding that the Insurance Company has no liability to pay the amount as the victims are not the third parties within the meaning of law. 15. I, thus, modify the award impugned by exonerating the appellant to pay the amount as ordered by the Tribunal. The award would be executable against the owner and the driver of the vehicle. 16. It appears that pursuant to an interim order earlier passed in this appeal, the Insurance Company has deposited the awarded amount before the Tribunal; and the Tribunal below has already permitted the claimants to withdraw 30% of the amount deposited by the appellant and balance 70% is lying in deposit in the Tribunal in a fixed deposit. This appeal being allowed, I direct the claimants to return the amount received pursuant to the interim order within three months from today as it is well-settled law that any interim order passed in an appeal will necessarily abide by the final result of the appeal and as and when the claimant so deposits the amount, the Tribunal shall release it in favour of the Insurance Company.
Meanwhile, the Tribunal is directed to release the balance amount lying in the Fixed Deposit in favour of the Insurance Company within two months from today with all accrued interest. No Costs.