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2014 DIGILAW 1657 (BOM)

National Insurance Co. Ltd. v. Jayshri wd/o Pramod Gadbail

2014-07-30

S.B.SHUKRE

body2014
Judgment 1. This appeal is directed against the judgment and order dated 18/8/2012 passed in Claim Petition No.25 of 2006 by Motor Accident Claims Tribunal 2, Nagpur. 2. The facts of the case may be stated in brief as under:- Respondent No. 1 and respondents No. 2 and 3 are respectively the wife and parents of the deceased Pramod Gadbail and respondents Nos. 4 and 5 are respectively owner and the driver of the offending vehicle Scorpio make bearing registration No. MH-31 BB 5489, which was insured with the appellant at the time of the accident. On the fateful day i.e. on 10/12/2005 the said Scorpio vehicle gave dash to the cycle of deceased Pramod as a result of which, deceased Pramod suffered injuries to which he later on succumbed in the hospital. According to respondents No.1 to 3, the accident had occurred due to rash and negligent driving of the said vehicle and, therefore, they filed claim petition against respondents No. 4 and 5 and also against the appellant claiming compensation from them. 3. The petition was resisted by the appellant on the grounds, amongst others, that respondent No.5 was not holding valid and effective driving license to drive the offending vehicle at the time of accident and, therefore, there was breach of the terms and conditions of the insurance policy, thereby absolving the appellant from its liability to pay any compensation in the matter. 4. The Tribunal, upon consideration of the evidence brought on record, found that there was substance in the defence so taken by the Insurance Company and accordingly held that at the relevant time respondent No.5 did not possess any valid and effective driving license. It thus recorded a finding that there was breach of terms and conditions of the policy and, therefore, the Insurance Company would not be liable to pay compensation to respondents No. 1 to 3, however, at the same time, the Tribunal also found that the breach of the policy not being fundamental in nature, relying upon the decision of the Hon’ble three Judges Bench of the Apex Court in the case of National Insurance Co. v. Swaran Singh 2004 (1) T.A.C. 321 (SC). and also the decisions of this Court in the cases of United India Insurance Company Vs. Smt. Manisha Harmalkar & others 2011 (4) TAC 691, United India Insurance Company Vs. v. Swaran Singh 2004 (1) T.A.C. 321 (SC). and also the decisions of this Court in the cases of United India Insurance Company Vs. Smt. Manisha Harmalkar & others 2011 (4) TAC 691, United India Insurance Company Vs. Kamal Darekar and others – Oriental Insurance Company Vs. Pandit Ade and others – 2010 (4) TAC 36, directed the Insurance Company to first pay the compensation amount to the claimants and then recover it from the owner by its judgment and award dated 18/8/2012. Being aggrieved by the same, the appellant has preferred the present appeal. 5. Upon hearing Shri Godbole, learned Counsel for the appellant and Shri Asgarali, learned Counsel for respondents No. 1 to 3, the only point which arises for my determination is: Whether the Tribunal has jurisdiction to issue a direction to the insurer to first pay the compensation amount and then recover it from the owner, when it finds that the insurer is not liable to pay compensation on account of breach of terms of the policy? 6. The facts of the present case are identical with the facts of the cases of Bajaj Allianz General Insurance Co. Ltd., Pune Vs. Smt. Sangita wd/o Bhagwan Raut and others decided on 21/7/2014 in which this Court has taken a view that after taking into consideration the law laid down by the Hon’ble Apex Court consistently in its various judgments, particularly, in the case of Swaransingh (supra), which is a case decided by a larger Bench consisting of three Hon'ble Judges and also various judgments of this Court that the Tribunal has jurisdiction and power to issue direction to the insurer to first pay and then recover it from the owner, depending upon the facts and circumstances of each case. This Court has held that if the facts of the case justify issuance of such a direction, the Tribunal would not be precluded from doing so. Therefore, there is no reason for me to take a different view in the present case. The point is answered accordingly. 7. According to Shri Godbole, learned Counsel for the petitioner, this Court, in First Appeal No.1203 of 2013 (National Insurance Co. Ltd. Vs. Therefore, there is no reason for me to take a different view in the present case. The point is answered accordingly. 7. According to Shri Godbole, learned Counsel for the petitioner, this Court, in First Appeal No.1203 of 2013 (National Insurance Co. Ltd. Vs. Zanak Jaypal Morasiya & others) decided on 21/01/2014, has quashed and set aside a direction issued by the Tribunal to the insurer to first pay and then recover and, therefore, the facts and circumstances of the present case also justify that impugned direction be quashed and set aside by this Court. 8. Shri Asgarali, learned Counsel for respondents No. 1 to 3 has vehemently opposed the argument so canvassed on behalf of the appellant. He submits that the facts of the instant case are entirely different and that the decision given by this Court in the said case of Zanak Jaypal Morasiya & others having been rendered in entirely different set of facts, cannot be pressed into service by the appellant. 9. Learned Counsel for respondents No. 1 to 3 is right. The facts of the said case of Zanak Jaypal Morasiya & others were entirely different, in the sense that the claimants were the brothers and sisters of the deceased forming their own individual families and having their own earnings. In the instant case, the deceased and respondents No. 1 to 3 constituted one family and the respondents were dependent upon the income of the deceased. While respondent No.1 is a widow of the deceased, respondents No. 2 and 3 are aged parents of the deceased. Requiring such respondents to be on their own in recovering the compensation amount from the owner would be like adding salt to their injury that the respondents have suffered on account of untimely death of the sole bread earner of the family. It would be difficult for them to proceed against the owner, in case the owner fails to comply with the directions issued in the impugned award and they would certainly require some support from law so as to realize the fruits of the award. I find, it may not be so difficult for the insurer i.e. the appellant, with all paraphernalia and funds at its command to proceed against the owner for recovering the amount of compensation paid by it to the claimants in case the owner refuses or fails to fulfill his obligation under the award. I find, it may not be so difficult for the insurer i.e. the appellant, with all paraphernalia and funds at its command to proceed against the owner for recovering the amount of compensation paid by it to the claimants in case the owner refuses or fails to fulfill his obligation under the award. Therefore, I do not see any illegality in the impugned direction issued by the learned Member of the Tribunal in as much as this is not a case wherein the insurer has proved that the breach of the terms of the insurance policy was fundamental in nature. 10. Shri Godbole, learned Counsel for the appellant has also relied upon the judgment of the Hon’ble Apex Court in the case of National Insurance Co. Ltd. Vs. Parvatheneni & others reported in 2009 (4) TAC 382 (SC), wherein the Hon’ble Apex Court observing that when a person has no liability to pay at all, how he could be held to pay and that it may take years together for such a person to recover the amount from the owner of the vehicle, directed the matter to be placed before the Hon’ble the Chief Justice of India for constituting a larger Bench, to decide the question, “as to whether or not an insurer could be compelled by the Tribunal in a case where no liability is fastened upon it to first pay and then recover”. No doubt, this question is being referred to a larger Bench for its appropriate determination, the fact remains that there is a three Hon'ble Judges Bench's judgment in the case of Swaransingh (cited supra), wherein it has been held that the insurer cannot shake off it's liability only by saying that at the relevant time the offending vehicle was driven by a person not having effective valid license. It has also been held that unless the breach of the policy is fundamental in nature, the insurer could be directed to first pay to the claimant and then recover it from the owner. This decision still holds the field and, therefore, the principles laid down thereunder would have to be followed in appropriate cases and the present case is one such case where the principle of first pay and then recover can be justifiably followed. 11. This decision still holds the field and, therefore, the principles laid down thereunder would have to be followed in appropriate cases and the present case is one such case where the principle of first pay and then recover can be justifiably followed. 11. In the result, I find no merit in this appeal and the impugned direction in the award deserves to be confirmed. However, it appears that the learned Member of the Tribunal, while issuing the direction to pay and recover has not followed the law laid down by the Hon'ble Apex Court in the decision of Pramod Kumar Agrawal & ors. v. Mushtari Begum & ors. reported in III (2005) ACC 357 (SC) and, therefore, the impugned direction needs to be modified so as to mould it to be in line with the directions issued in the said case of Pramod Agrawal. The direction is accordingly modified as under.: It is directed that the appellant shall deposit the amount of compensation before the Tribunal within a period of three months from the date of the order. But, before release of the amount so deposited, the Tribunal, on an application filed by the Insurer, i.e. the appellant, issue notice to the owner to furnish security to the satisfaction of the Tribunal for the amount so deposited within a period of fifteen days from the receipt of the notice. The notice shall be issued at the cost of the Insurer. The offending vehicle shall also be attached by the Tribunal. In case the owner fails or neglects to furnish the security within the stipulated time or within such time as further extended by the Tribunal, for exceptional reasons, the Tribunal shall release the amount so deposited in favour of the claimants and simultaneously proceed against the owner by following the law laid down by the Hon'ble Apex Court in the case of Pramod Agrawal and also the provisions of Section 174 of the Motor Vehicles Act, 1988. The appeal is disposed of in the above terms with no order as to costs.