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2016 DIGILAW 264 (ORI)

HARAPRIYA NAYAK v. URMILA SENAPATI @ ACHARYA

2016-04-04

S.C.PARIJA

body2016
ORDER S.C. Parija, J. - Heard learned counsel for the parties. 2. This appeal by the claimants-appellants is directed against the judgment/award dated 24.3.2004, passed by the learned 3rd Motor Accident Claims Tribunal, Puri, in MAC No.190/974 of 1989/88, awarding an amount of Rs. 2,70,300/- as compensation along with interest @ 9% per annum from the date of filing of the claim application i.e. 28.10.1988, till realisation and while absolving the insurer of its liability to pay the awarded compensation amount, directing the legal heirs of the deceased owner of the offending vehicle i.e. respondent nos.1 and 2, to pay the same. 3. Learned counsel for the claimants-appellants submits that as the offending vehicle (truck) bearing no.ORP/5540 was covered under a valid policy of insurance at the time of accident, learned Tribunal erred in absolving the insurer of its liability under the policy and saddling the entire liability on the legal heirs of the deceased owner. It is submitted that as the Insurance Company, through its agent, had issued the insurance policy, after accepting premium in respect of the offending vehicle in the name of the deceased owner, it was not open for the insurer to avoid its liability on the plea that the policy had been issued in respect of a dead person. In this regard, learned counsel for the claimants has relied upon a Division Bench decision of Madhya Pradesh High Court in Nani Bai and others v. Ishaque Khan and others, 1995 ACJ 292 , where in a similar case, the Hon'ble Court, while referring to Section 146 of the Motor Vehicles Act, 1988, has held that the Insurance Company is liable to pay the compensation to the legal heirs of the deceased. 4. Learned counsel for the claimants-appellants further submits that as the insurance policy has been issued in respect of the offending vehicle, covering the risk of third party, the insurer cannot be allowed to avoid its liability towards such third party, on the plea that the policy had been issued in respect of a dead person. Accordingly, it is submitted that the Insurance Company is liable to pay the awarded compensation amount and it may recover the amount from the legal heirs of the deceased owner for any misrepresentation and/or suppression of material facts. 5. Accordingly, it is submitted that the Insurance Company is liable to pay the awarded compensation amount and it may recover the amount from the legal heirs of the deceased owner for any misrepresentation and/or suppression of material facts. 5. Learned counsel for the Insurance Company-respondent no.3, while supporting the impugned award submits that as there was clear evidence available on record to show that the owner of the offending truck Brajabandhu Senapati had died in the year 1982 and subsequent insurance policies were being obtained in the name of the deceased on a misrepresentation and/or suppression of material facts, learned Tribunal was fully justified in absolving the insurer of its liability and saddling the entire liability on the legal heirs of the deceased owner of the offending vehicle. It is further submitted that merely because a policy has been issued in respect of the offending vehicle, in the name of the deceased owner, the same cannot bind the insurer, especially when its liability is only to indemnify the owner of the vehicle, which he may incur from out of the use of the vehicle. It is submitted that in the present case, as the owner had died since 1982 and suppressing the said fact and by practicing fraud, the legal heirs of the deceased owner have been obtaining successive insurance policies in the name of the dead person, learned Tribunal was fully justified in absolving the insurer of its liability. In this regard, he has relied upon a Division Bench decision of Allahabad High Court in The Oriental Fire and General Insurance Co. Ltd. v. Smt. Shakuntala Devi, AIR 1991 ALLAHABAD 48, wherein it has been held that the liability for payment of any sum by the insurer arises only when the insured incurs any liability in respect of an accident arising out of the use of the vehicle. By his death arising out of the use of his own insured vehicle, the insured has not incurred any liability to pay any damages or compensation to any person. Consequently, no question of payment of damages or compensation to the insured arises. 6. It is further submitted that even otherwise, the assessment of the compensation amount is not just and proper, as there was no credible evidence on record with regard to the actual income of the deceased. Consequently, no question of payment of damages or compensation to the insured arises. 6. It is further submitted that even otherwise, the assessment of the compensation amount is not just and proper, as there was no credible evidence on record with regard to the actual income of the deceased. It is further submitted that the award of interest @9% per annum is highly excessive. 7. On a perusal of the impugned award, it is seen that the learned Tribunal has taken into consideration the fact that the owner of the offending truck Brajabandhu Senapati had died in the year 1982, as has been disclosed by his legal heirs. In spite of the death of the owner, insurance policies were being obtained in respect of the offending vehicle in the name of the deceased Brajabandhu Senapati. Considering the fact that a policy of insurance is a contract between the insurer and the insured, under which, the insurer agrees and undertakes to indemnify the insured against any liability incurred by him, learned Tribunal has held that the policy issued in the name of the deceased Brajabandhu Senapati cannot be taken to be a valid policy and therefore, the insurer cannot be held liable to pay the awarded compensation amount. Learned Tribunal has further held that the policy having been obtained by misrepresentation and practise of fraud, no liability can be fastened on the insurer on the basis of such a policy. Accordingly, learned Tribunal has saddled the entire liability on the legal heirs of the deceased owner of the offending vehicle. 8. From the facts detailed above, it is evident that the owner of the vehicle Brajabandhu Senapati had died in the year 1982, as has been disclosed by his legal heirs. It is further revealed that in spite of death of the owner of the offending vehicle, successive insurance policies were being issued by the Insurance Company in the name of the deceased owner of the offending vehicle. It is further revealed that in spite of death of the owner of the offending vehicle, successive insurance policies were being issued by the Insurance Company in the name of the deceased owner of the offending vehicle. In a similar case in Nani Bai (supra), where the owner of the vehicle had died much earlier to the date of accident and the Insurance Company had all along been accepting the premium and issuing insurance policy in respect of the said vehicle, the Hon'ble Court has held that having accepted the premium for the insurance of the vehicle, the insurer cannot be allowed to say that it is not liable to pay compensation to the persons, who have been injured or who died in the accident. The relevant findings of the Hon'ble High Court is as under: "We are not persuaded to uphold this argument though the Tribunal was. There is nothing in the policy issued in the name of Kartar Singh stating that it is purely personal to him. On the other hand, on plain reading of the condition of the policy it is clear that the coverage is that of the motor bus and not the insured. Section 94 of the Motor Vehicles Act insists for the compulsory insurance against the third party risk and prohibits user of vehicle in a public place unless there is a policy of insurance. The words "unless there is in force in relation to the use of the vehicle of that person...a policy of insurance" go to show that it is the vehicle that is required to be insured and not the person or the owner of the vehicle and in such a situation the insurance company cannot escape its liability. xxx" 9. Accordingly, the Hon'ble Court has proceeded to hold that despite the fact that the owner of the vehicle was dead at the time of accident and the premium was paid by his legal heirs, the Insurance Company is liable to pay compensation to the legal heirs of the deceased and if they are aggrieved by the concealment of fact or misrepresentation or fraud, if any, they may seek recovery of the amount from the legal heirs in appropriate proceeding. 10. 10. As regard the decision relied upon by the learned counsel for the Insurance Company in Smt. Shakuntala Devi (supra), the same has no application to the facts of the present case, inasmuch as, in the said case the insured, who was the owner of the vehicle, had himself died in the accident and therefore, the Hon'ble Court had held that in such a case the deceased owner has not incurred any liability to pay any damage or compensation to any person. The insured-owner of the vehicle cannot raise a claim for compensation against himself. Moreover, in the said case the insurance policy issued in respect of the vehicle did not cover the risk of the insured-owner. 11. The provisions of the chapter XI of the Motor Vehicles Act, 1988, is a beneficial piece of social legislation, providing for compulsory insurance of motor vehicles against third party risk. As there is no dispute in the present case that the offending truck was covered under a valid policy of insurance, which the Insurance Company had issued on receipt of premium, it cannot avoid its liability to pay the compensation amount, merely because the policy has been issued in the name of a dead person. 12. For the reasons as afore stated, the findings of the learned Tribunal absolving the Insurance Company of its liability cannot be sustained and the same is accordingly set aside. Instead, the Insurance Company-respondent no.3 is held liable to pay the awarded compensation amount with liberty to realise the same from the legal heirs of the deceased owner for alleged fraud and/or misrepresentation, if recoverable, in accordance with law. 13. Coming to the quantum of compensation amount awarded and the basis on which the same is arrived at, I feel, the interest of justice would be best served, if the awarded compensation amount of Rs. 2,70,300/- is modified and reduced to Rs. 2,50,000/- (rupees Two Lakhs Fifty Thousand), which is payable to the claimants. Further, the award of interest @ 9% per annum is also not proper and justified and therefore, the same is modified and reduced to @6% per annum. Accordingly, the claimants are entitled to the modified compensation amount of Rs. 2,50,000/- along with interest @6% per annum from the date of filing of the claim application. 14. The impugned award is modified to the above extent. 15. Accordingly, the claimants are entitled to the modified compensation amount of Rs. 2,50,000/- along with interest @6% per annum from the date of filing of the claim application. 14. The impugned award is modified to the above extent. 15. The Insurance Company-respondent no.3 is directed to deposit the modified compensation amount of Rs. 2,50,000/- along with interest @ 6% per annum from the date of filing of the claim application with the learned Tribunal within six weeks hence. On deposit of the amount, the same shall be disbursed to the claimants proportionately, as per the direction of the learned Tribunal given in the impugned award. MACA is accordingly disposed of. Final Result : Disposed Off