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2017 DIGILAW 207 (GUJ)

United India Insurance Company Ltd. v. Prajapati Shivabhai Virabhai

2017-01-27

N.V.ANJARIA

body2017
JUDGMENT : N.V. Anjaria, J. 1. Heard learned advocate Mr. Maulik Shelat for the appellant insurance company, learned advocate Mr. A.V. Prajapati for the respondent Nos. 1, 3, 4 and 5 and learned advocate Mr. Hiren Modi for respondent No. 7. The respondent Nos. 2 and 6 were deleted as per order dated 17.06.2016 of this court. 2. The present appeal by the appellant insurance company is directed against judgment and award dated 08.04.2005 of the Motor Accident Claim Tribunal (Auxi.), Meshana, delivered in Motor Accident Claim Petition No. 1268 of 1991. 3. The claimants were the heirs of the deceased Dasharathbhai Shivabhai Prajapati, who filed the claim petition claiming compensation to the tune of Rs. 2,00,000/- following an accident which took place on 26.08.1991 in which the said Dashrathbhai died. The deceased was travelling in a tractor bearing registration No. GJ-2B-185 from Mehsana to Chansol. When the tractor reached near village Sudipur at 9.30 in night, the said vehicle turned turtle on the road, due to which the said Dasharathbhai who was traveling therein, died on the spot. The Tribunal awarded compensation to the tune of Rs. 1,93,000/-. 4. The accident took place on 26th August, 1991. The contention of the insurance company before the Tribunal was that the deceased was a gratuitous passenger, which was accepted by the Tribunal. The Tribunal held that the insurance cover would not extend for the deceased who was travelling in the goods vehicle as a gratuitous passenger at the time of accident. There was no dispute that the vehicle involved was a goods vehicle. On going through the facts and evidence on record, it could not be said that the finding arrived at by the Tribunal about the deceased being gratuitous passenger was in any way erroneous. Therefore, looking to the law laid down in the decision of the Supreme Court in National India Insurance Company Limited v. Asha Rani, AIR 2003 SC 607 , the Tribunal committed no error in absolving the insurance company from liability to pay the compensation. The finding of the Tribunal on these score were not liable to be disturbed. 4.1 While passing the award in favour of the claimant, the Tribunal directed as above, as extracted from the operative order, "The claimant Nos. 3,4 & 5 do recover the sum of Rs. The finding of the Tribunal on these score were not liable to be disturbed. 4.1 While passing the award in favour of the claimant, the Tribunal directed as above, as extracted from the operative order, "The claimant Nos. 3,4 & 5 do recover the sum of Rs. 1,93,000.00 (RUPEES ONE LAC NINETY THREE THOUSAND ONLY) together with proportionate cost and interest at the rate of 9% per annum from the date of application till realisation from the Opponent Nos. 1 & 2 who are jointly and severally liable for the reason stated in the judgment. I direct the opponent No. 3 first to satisfied, award to be by making payment to Claimant No. 3,4 & 5 at equal share and then to recover from the owner of vehicle i.e. Opponent No. 2 by including this award." 4.2 Thus, the Tribunal while passing the award, directed that though insurance company was exonerated, it shall pay the amount of compensation to the claimant and thereafter the insurance company would be entitled to recover the same from opponent Nos. 3, 4 and 5. The Tribunal, therefore, though holding the insurance company not liable for compensation payment, applied the principle of pay-and-recover. 5. The only question is whether the Tribunal could have passed the direction against the insurance company to pay-and-recover. 6. It was submitted by learned advocate for the appellant-insurance company that in view of decision in Asha Rani (supra), there was no question of the appellant company being liable to satisfy the award as the accident had occurred prior to 14th November, 1994 - the date of amendment in Section 147 of the Motor Vehicles Act, 1988. It was submitted that the tribunal could not have given any direction to the insurance company to pay the amount and thereafter to recover the same from the owner of the vehicle. 7. It was submitted that the tribunal could not have given any direction to the insurance company to pay the amount and thereafter to recover the same from the owner of the vehicle. 7. In Manager, National Insurance Company Limited v. Saju P. Paul, AIR 2013 SC 1064 , the Apex Court observed thus, "In National Insurance Company Ltd. v. 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?" (Para 24) 7.1 The Court stated, "The pendency of consideration of the above questions by a larger Bench does not mean that the course that was followed in Baljit Kaur and Challa Bharathamma 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). 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." 7.2 From the aforesaid observations, it is clear that direction to the insurance company to pay the amount and giving liberty to it to later recover the same from the owner of the vehicle, wherever passed by the Apex Court, were passed in exercise of the powers under Article 142 of the Constitution. The High Court exercising appellate powers against the judgment and award of the Motor Accident Claims Tribunal does not have any such power whereby while holding the insurance company not liable to pay compensation, direct it to pay to the claimant and thereafter recover from the owner. 8. This position was unequivocally clarified by this Court in United India Insurance Company Limited v. Lilaben wd/o. Deceased Bhikhabhai Premjibhai Kathiriya being First Appeal No. 2121 of 2008 decided on 18th November, 2013. After referring the decision of the Supreme Court in Saju P. Paul (supra), this Court held as under. "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. 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." 8.1 Relying on the aforesaid decision in United India Insurance Company (supra), this Court in another decision being National Insurance Company v. Rajubhai Motibhai being First Appeal No. 1282 of 2010 and allied appeals, decided on 24th December, 2013, reiterated the principle. "8. In view of the above, appeals are partly allowed. Claim petitions are dismissed qua insurance company. It is clarified that if any amount is paid by the insurance company in pursuance of the directions of this Court, same will not be recovered from the claimants but insurance company will be at liberty to recover it from the owner of the vehicle. Excess amount, if any, lying deposited shall be refunded to the insurance company. Amount, if any, lying deposited in the Registry of this Court shall be transmitted to the Tribunal. There shall be no order as to costs." 9. Therefore, having considered the factual position as well as position of law highlighted above, the direction issued by the Tribunal in its impugned judgment and award to the appellant-insurance company to pay the compensation to the claimants and thereafter to recover from the owner and driver cannot sustain in eye of law. The judgment and award of the Tribunal deserves to be modified to the aforesaid extent. Therefore, the impugned judgment and award dated 8th April, 2005 passed by Motor Accident Claims Tribunal (Aux), Nehsana in claim petition No. 1268 of 1991 is hereby modified by exonerating the appellant-insurance company to pay the amount to the claimant as ordered by the Tribunal. It is, however, clarified that the award shall be executable and may be executed by the claimants of each claim petitions against the owner and driver of the vehicle. 9.1 It appears that pursuant to order dated 28th December, 2005 passed in Civil Application Nos. It is, however, clarified that the award shall be executable and may be executed by the claimants of each claim petitions against the owner and driver of the vehicle. 9.1 It appears that pursuant to order dated 28th December, 2005 passed in Civil Application Nos. 12956 of 2005, simultaneously while admitting the appeal, direction was issued to deposit the amount and appellant-insurance company has deposited the amount before the Registry of this Court. The said order reads as under. "Rule. Subject to deposit of the award amount with the claims tribunal concerned within two months, the award shall remain stayed. The amount, if any, deposited in the Registry of this Court under section 173 of the M.V. Act, 1988 be transmitted to the MAC concerned which will invest both the amounts in FDR with the Nationalized Bank for a period of three years in the first instance extendable in case the appeal is not heard within this period." 9.2 As the appeal is allowed holding the appellant-insurance company not liable to pay, it is directed that the amount deposited as per above order, shall be refunded to the insurance company along with interest accrued on the fixed deposit. Registry shall refund the amount after undergoing necessary procedure in this regard. 10. The appeal is allowed as above and stands disposed of. The Registry shall send back the Record & Proceedings.