Madhya Pradesh High Court
Raghavendra Naik And Anr. vs Mahavir And Ors. on 21 May, 2001
Equivalent citations: II(2002)ACC700, 2001ACJ1945
JUDGMENT S.P. Srivastava, J.
1. The appellants-claimants had filed an application under Section 166 of the Motor Vehicles Act, 1988 (hereinafter referred to as 'the Act', for short), for the award of compensation initiating the proceedings arising out of an accident involving a motor vehicle, a Maruti car bearing registration No. DID 6538 wherein Ratna Naik aged about 10 years had met her untimely death.
2. The Motor Accidents Claims Tribunal on a consideration of the evidence and the materials brought on record by the various parties had determined that the present appellants, i.e., the father and mother of the deceased were entitled to an amount of Rs. 45,000 towards compensation.
3. Accordingly, the aforesaid Tribunal granted an award under Section 168 of the Act, specifying that the said amount be paid by the insurer and the owner as well as the driver together with the interest awarded at the rate of 12 per cent per annum from the date of the filing of the application, i.e., 22.9.92, clarifying, however, that an amount of Rs. 25,000 which had already been paid to the claimants will be deductible from the said amount.
4. The Tribunal further ordered that the liability cast for the payment of the amount due under the award will be joint and several liability of the owner, driver and the insurer.
5. Feeling aggrieved by the aforesaid award, the father and mother of the deceased minor daughter have filed the present appeal seeking enhancement of the amount of the compensation to the extent of Rs. 5,55,000. The original claim has been thus reduced from Rs. 10,55,000 to Rs. 5,55,000.
6. During the pendency of the appeal, the appellants had moved an application being I.A. No. 1 of 1996 praying that the service of the notice on the respondent No. 1, i.e., the driver and the respondent No. 2, i.e., the owner be dispensed with.
7. The aforesaid application was allowed by this court vide the order dated 11.7.1996 and the service of the notices on the respondent Nos. 1 and 2 was dispensed with.
8. Subsequently, however, another application being LA. No. 7902 of 1999, was filed. The appellants had prayed for the recall of the aforesaid order and for the grant of permission to serve with the notices of the appeal on the respondent Nos. 1 and 2.
9. When the aforesaid application was taken up for hearing on 1.3.2000, the learned counsel for the appellants had made a statement that the appellants did not want to press the said application. The aforesaid application was, therefore, rejected as not pressed.
10. The net result, therefore, is that in this appeal filed under Section 173 of the Motor Vehicles Act, 1988, wherein the claimants seek enhancement of the amount of compensation, only the insurer, the respondent No. 3 stands served with the notices of the appeal. The owner of the offending motor vehicle and the driver of the offending motor vehicle against whom under the impugned award joint and several liability to pay the amount awarded as compensation had been fastened along with the insurer have not been served with the notices of the appeal. Obviously, the appellants seek the enhancement of the amount awarded by the Tribunal without affording an opportunity of being heard to the owner and driver of the offending motor vehicle.
11. The learned counsel for the insurer, in the circumstances as indicated above, has raised a preliminary objection in regard to the maintainability of this appeal asserting that the award fastening joint and several liability for the payment of the amount of compensation on the driver, owner and the insurer in respect of the amount specified thereunder cannot under the law be enhanced behind the back of the owner and driver of the offending motor vehicle.
12. It has further been asserted by the learned counsel for the insurer that the liability of the insurer was confined to the extent of the liability fastened on the owner and driver of the offending motor vehicle as determined by the Tribunal which has attained finality as against them and the same cannot be enhanced ex parte without affording an opportunity of being heard to the owner and the driver in their absence and behind their back.
13. The learned counsel for the appellants in opposition to the aforesaid preliminary objection has asserted that the liability fastened on the insurer is a statutory liability which taking into consideration the legislative intent underlying the relevant provisions of the Act, cannot be said to be dependent on the liability of the owner-insured or the driver of the offending motor vehicle and in that view of the matter even in the absence of the owner or driver of the offending motor vehicle, the question in regard to the enhancement of the amount of compensation could very well be gone into and the insurer is bound to discharge the enhanced liability, if so determined.
14. In the aforesaid view of the matter, it is urged that the mere fact that the owner and driver of the offending motor vehicle have not been served with the notices of the appeal is of no consequence so far as the question of enhancement of the amount of compensation is concerned. The appeal as it stands is maintainable and there is no impediment in the enhancement of the amount of compensation, as prayed for.
15. We have given our anxious consideration to the rival submissions made by the learned counsel for the parties and have carefully perused the record.
16. The relevant provisions of Sections 146, 147 and 149 of the Motor Vehicles Act, 1988, are to the following effect:
146. Necessity for insurance against third party risk.-(1) No person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this Chapter:
Provided that in the case of a vehicle carrying, or meant to carry, dangerous or hazardous goods, there shall also be a policy of insurance under the Public Liability Insurance Act, 1991.
Explanation.-A person driving a motor vehicle merely as a paid employee, while there is in force in relation to the use of the vehicle no such policy as is required by this sub-section, shall not be deemed to act in contravention of the sub-section unless he knows or has reason to believe that there is no such policy in force.
(2) xxx xxx xxx (3) xxx xxx xxx
147. Requirements of policies and limits of liability.-(1) In order to comply with the requirements of this Chapter a policy of insurance must be a policy which-
(a) is issued by a person who is an authorised insurer; and
(b) insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2)-
(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including owner of the goods or his authorised representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;
(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:
Provided that a policy shall not be required-
(i) xxx xxx xxx (ii) to cover any contractual liability.
Explanation.-For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.
(2) Subject to the proviso to Sub-section (1), a policy of insurance referred to in Sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely:
(a) save as provided in clause (b), the amount of liability incurred;
(b) in respect of damage to any property of a third party, a limit of rupees six thousand:
Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier.
(3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases.
(4) Where a cover note issued by the insurer under the provisions of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe.
(5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons.
149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.-
(1) If, after a certificate of insurance has been issued under Sub-section (3) of Section 147 in favour of the person by whom a policy has been effected judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of Sub-section (1) of Section 147 (being a liability covered by the terms of the policy) or under the provisions of Section 163A is obtained against any person insured by the policy then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment-debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.
(2) No sum shall be payable by an insurer under Sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as, execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:
(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:
(i) a condition excluding the use of the vehicle-
(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
(d) without side-car being attached where the vehicle is a motor cycle; or
(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or
(iii) condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or
(b) that the policy is void on the ground that it was obtained by the nondisclosure of a material fact or by a representation of fact which was false in some material particular.
(3) xxx xxx xxx (4) Where a certificate of insurance has been issued under Sub-section (3) of Section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in clause (b) of Sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of Sub-section (1) of Section 147 be of no effect: Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person.
(5) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section shall be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person.
(6) xxx xxx xxx (7) No insurer to whom the notice referred to in Sub-section (2) or Sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in Sub-section (1) or in such judgment as is referred to in Sub-section (3) otherwise than in the manner provided for in Sub-section (2) or in the corresponding law of the reciprocating country, as the case may be.
Explanation.-For the purposes of this section, 'Claims Tribunal' means a Claims Tribunal constituted under Section 165 and award means an award made by that Tribunal under Section 168.
17. It may be noticed from the aforesaid provisions that the use or the driving of a motor vehicle by any person in a public place is permissible only if there is in force in relation to the use of the vehicle by that person, a policy of insurance complying with the requirements of the Motor Vehicles Act. The policy of insurance further must be a policy which is issued by a person who is an authorised insurer and insures the person or classes of persons specified in the policy to the extent specified in Sub-section (2) of Section 147 of the Act, i.e., covering the entire liability incurred excepting the liability in respect of damage to any property of a third party, the limit whereof has been specified to be Rs. 6,000. It has further been provided that under such a policy notwithstanding anything contained in any law for the time being in force, the insurer issuing the policy of insurance as contemplated under the Act shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons. The insurer is bound to pay to the person entitled to the amount specified in the award as a judgment-debtor, the sum not exceeding the sum assured payable under the policy including interest accruing thereon. If the amount which the insurer becomes liable to pay in respect of the liability incurred by a person insured by a policy which exceeds the amount for which the insurer would apart from the provisions of Section 149 of the Act is liable under the policy in respect of that liability then in that case the insurer is entitled to recover the excess from that person.
18. In its decision in the case of New India Assurance Co. Ltd. v. Kamla 2001 ACJ 843 (SC) the Hon'ble Apex Court on a consideration of Sections 145 to 164 of the Motor Vehicles Act, had observed that it was the duty of the insurer to satisfy the judgments and awards in respect of third party claims as provided under Section 149 of the Act, wherein it has been stipulated that the insurer shall pay to the person entitled to the benefit of a judgment or award as if the insurer were the judgment- debtor in respect of the liability, when any such judgment or award is obtained against the insured in whose favour a certificate of insurance has been issued, indicating further that "of course, the said liability of the insurer is subject to the maximum sum assured payable under the policy".
19. Referring to Sub-sections (4) and (5) of Section 149 of the Act, the Apex Court had clarified that these provisions would indicate that they are intended to safeguard the interest of an insurer who otherwise has no liability to pay any amount to the insured but for the provisions contained in Chapter XI of the Act. It was also observed that "this means, the insurer has to pay to the third parties only on account of the fact that a policy of insurance has been issued in respect of the vehicle but the insurer is entitled to recover any such sum from the insured if the insurer were not otherwise liable to pay such sum to the insured by virtue of the conditions of the contract of insurance indicated by the policy".
20. Indicating the effect of the above provisions, it was pointed out by the Apex Court that when a valid insurance policy has been issued in respect of a vehicle as evidenced by a certificate of insurance, the burden is on the insurer to pay to third parties, whether or not there has been any breach or violation of the policy conditions. But the amount so paid by the insurer to third parties can be allowed to be recovered from the insured if as per the policy conditions the insurer had no liability to pay such sum to the insured.
21. Referring to its earlier decision, it was clarified by the Apex Court that the insistence of the legislature that a motor vehicle can be used in a public place only if that vehicle is covered by a policy of insurance is not for the purpose of promoting the business of the insurance company but to protect the members of the community who become sufferers on account of accidents arising from use of motor vehicles. Such protection would have remained only a paper protection if the compensation awarded by the courts were not recoverable by the victims or dependants of the victims of the accident. This was indicated to be raison d'etre for the legislature making it prohibitory for motor vehicles being used in public places without covering third party risks by a policy of insurance.
22. In para 25 of the aforesaid decision, the Apex Court had clearly indicated that the insurer and the insured are bound by the conditions enumerated in the policy and the insurer is not liable to the insured if there is violation of any policy condition. But the insurer who is made statutorily liable to pay compensation to third parties on account of the certificate of insurance issued shall be entitled to recover from the insured the amount paid to the third parties, if there was any breach of policy conditions on account of the vehicle being driven without a valid driving licence.
23. As has already been noticed herein-above, the provision contained in Section 149(5) of the Act clearly stipulates that if the amount which an insurer becomes liable under that section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of that section shall be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person.
24. The question which, therefore, arises for consideration is as to whether any amount over and above the amount found to be payable by the insurer as a judgment-debtor under an 'award' of the Motor Accidents Claims Tribunal can be enhanced without any notice to the insured from whom the insurer has to recover the excess amount. In this connection, it may be noticed that when a liability is to be fastened on the insured to pay any amount to the insurer, he cannot be denied his say in the matter and contest the claim of enhancement to resist the additional burden which might be cast on him in regard to the payment of the excess amount to the insurer as the provision contained in the statute as has already been noticed herein-above, clearly secures a benefit in favour of the insurer to get the amount recovered from the insured and cast a liability on the insured to pay the amount to the insurer.
25. We are clearly of the opinion that the insured cannot be saddled with any such liability behind his back without affording him an opportunity of being heard as it is open to him to demonstrate that in fact no enhancement in the amount of compensation was either possible or permissible and it is also open to him to demonstrate that the award which had attained the finality as against him cannot be varied or modified to his detriment without affording any opportunity of being heard afforded in opposition to the claim in regard to the enhancement sought for.
26. It may be noticed that the provisions contained in Section 149 of the Act, are intended to enable third parties who suffered on account of the user of the motor vehicle to get the damages/compensation which has not been made dependent on the financial condition of the driver of the offending motor vehicle or the contractual rights and obligations between the insurer and the insured.
27. It may further be noticed that the liability of the insurer to pay the compensation to the third parties in accordance with the provisions contained in Section 149 of the Act and the right of the third parties to recover the amount of compensation from the insurer flows from the statute.
28. The liability of the insurer to pay the compensation which becomes due under an award given on the application under Section 166 of the Motor Vehicles Act, is in the capacity of a judgment-debtor which flows from the statute as there is no privity of contract between the insurer and the third parties. The liability to this extent which stands cast upon the insurer and the right of the third parties to recover the compensation from the insurer clearly indicates that such liability is the statutory liability. However, this statutory liability is subject to the condition stipulated in Section 149(5) of the Act, which protects the interest of the insurer to the extent that if the amount which an insurer becomes liable to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of Section 149 be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess amount from that person.
29. The statutory liability contemplated under Section 149(5) of the Motor Vehicles Act means and extends only to the making of the payment of the amount of award to the victim/claimant for which ultimate liability has been fastened on the owner. It in its real meaning is a statutory measure to give a speedy relief to the claimant in the matter of recovery of the amount of award. In doing so, the insurer does not in any way indemnify the owner's liability inasmuch as that the amount so paid by the insurer is recoverable by it from the insured. The insurer does not stand exonerated of its liability to make the payment of award. The payment of the amount by the insured remains only deferred by the intervention of the insurer; in other words it is a stopgap arrangement towards the payment of the compensation amount fixing a statutory liability on the insurer in the interest of the claimant.
30. It may be noticed at this stage that in its decision in the case of Oriental Insurance Co. Ltd. v. Cheruvakkara Nafe-essu 2001 ACJ 1 (SC) after examining various provisions of the Motor Vehicles Act the Supreme Court had reiterated the position in law as indicated in its earlier decision in the case of New Asiatic Insurance Co. Ltd. v. Pessumal Dhanamal Aswani 1958-65 ACJ 559 (SC) pointing out that:
The Act contemplates the possibility of the policy of insurance undertaking liability to third parties providing such a contract between the insurer and the insured, that is, the person who effected the policy, as would make the company entitled to recover the whole or part of the amount it has paid to the third party from the insured. The insurer thus acts as security for third party with respect to its realising damages for the injuries suffered, but vis-a-vis the insured, the company does not undertake that liability or undertakes it to a limited extent.
31. This court in its decision rendered by a Division Bench in the case of Nani Bai v. Ishaque Khan 1995 ACJ 292 (MP) had observed that the words "unless there is in force in relation to the use of the vehicle of that person.. .a policy of insurance" clearly indicated 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. Drawing support from the observations made by the Supreme Court in its decision in the case of Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan 1987 ACJ 411 (SC) it was pointed out that the law may provide for compensation to victims of the accidents who sustain injuries in the course of an automobile accident or compensation to the dependants of the victims in the case of a fatal accident. However, such protection would remain a protection on paper unless there is a guarantee that the compensation awarded by the courts would be recoverable from the persons held liable for the consequences of the accident and it was clearly indicated that the insurance company is liable to pay compensation to the heirs of the deceased and to the injured in the accident if they are aggrieved by the concealment of fact or misrepresentation or fraud, if any, they can make a grievance before the appropriate forum separately.
32. It was further pointed out that in order to make the protection real the legislature had provided that the judgment obtained shall not be defeated by the incorporation of exclusion clauses other than those specifically authorised and apart from the aforesaid exclusion clauses, it was made obligatory on the insurance company to satisfy the judgment obtained against the person insured against third party risks.
33. It will be noticed that earlier the view expressed was that the provision for recovery of the amount of compensation from the person held liable for the consequences of the accident and the statutory liability in this respect being cast on the insurer was to provide a guarantee in respect of the payment of the compensation. However, this position stands amply clarified by the later decision of the Supreme Court wherein it has been indicated that the insurer acts as a security for the third party with respect to its realising damages for the injuries suffered but vis-a-vis the insured, the company does not undertake that liability or undertakes it to a limited extent.
34. Obviously to protect the interest of insurer, provision had to be made enabling him to recover any amount paid in excess of the amount which was liable to be paid to the insured towards indemnifying him and the provision in Section 149(5) of the Act was incorporated to achieve this object.
35. If the matter is viewed from this angle and that being the only view possible, we have no hesitation to hold that the status of the insurer in law so far as the statutory liability sought to be fastened upon it under the Act cannot be more than that of a guarantor and it acts as a security for the third party with respect to its realising damages for the injuries suffered but a right to get any amount paid in excess is refunded to it by the insured stands secured. The ultimate burden always remains cast or fastened on the insured-owner of the motor vehicle.
36. There is yet another aspect of the matter. Where the liability cast upon the insurer to pay the third parties the amount due under the award, a statutory liability is also cast upon the insured to pay back to the insurer the amount so paid by the insurer to the third parties in all those cases where in fact on account of any breach of the conditions either no amount is required to be paid by the insurer or any amount in excess of the amount secured under the insurance policy had in fact been paid by the insurer to the third parties.
37. As has already been noticed herein-above, the compulsory insurance in the coverage of third party risks is provided to ensure the third parties to get the compensation in the event of an accident resulting in injuries even without reference to the financial condition of the driver or the owner of the motor vehicle.
38. The provisions contained in Section 147 of the Act enable the claimants to claim the amount of compensation from the insurance company after due notice to the company. In such an event, the liability which stands fastened on the insurance company even in the absence of any privity of contract between the claimant and the insurer has been made enforceable in law casting a statutory liability on the insurance company in that regard.
39. The expression 'against any liability which may be incurred by him' as used in Section 147 of the Act is clearly indicative of the fact that what is intended to be covered by the policy of insurance is the risk of a person who has incurred liability for the death or bodily injury or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place. The policy covering a third party risk, therefore, comes into play and is enforceable when it is proved that the insured had incurred the liability. This legal liability may be vicarious liability and the owner may be responsible for the negligent act of his driver or the owner-servant. In the circumstances, therefore, if the owner has not incurred any liability in respect of the death or bodily injury to any person or damage to the property of a third party, there is no liability which is intended to be covered by the insurance.
40. It is, therefore, obvious that the insurer cannot be held liable even under Section 149 of the Act where the insured himself stands exonerated of any such liability.
41. The statutory liability indicated hereinabove, therefore, has to be understood to be subject to the aforesaid condition. The statutory liability is thus, limited to the extent that the insured must have been proved to be under a liability first and the liability cast on him must be covered by the insurance policy. If the insured himself stands exonerated of any liability, the question of forcing the insurer to make payment whether within the limits of the insurance policy or in excess thereof even on the terms and conditions subject to which the policy had been issued in favour of the insured cannot be said to arise. This is so as the role of the insurer primarily is that of an indemnifier as has been indicated by this court in its decision in the case of Sushila v. Rajveer Singh 2000 ACJ 719 (MP). Further as observed by the Supreme Court in its decision in the case of Oriental Insurance Co. Ltd. v. Sunita Rathi 1998 ACJ 121 (SC) the liability of the insurer arises only when the liability of the insured has been upheld for the purpose of indemnifying the insured under the contract of insurance.
42. Further, if the liability of the insured is proved to be irrespective of the limit of the liability or even in the case of any breach of the conditions subject to which the policy had been issued, the liability of the insurer has been made enforceable protecting its right to recover the amount so paid to discharge the liability cast upon it, from the insured. In the circumstances, therefore, notice to the insured before enhancing the statutory liability whether cast under the terms and conditions of the policy or in excess of the amount secured thereunder or irrespective of the breach of the terms and conditions subject to which the insurance policy had been given to the insured is a matter as the insured ought to be afforded an opportunity of being heard as his interest is necessarily and bound to be affected adversely in case there is any enhancement of the amount of compensation which under the statutory provision becomes recoverable from the insured.
43. Learned counsel for the appellants has placed strong reliance in support of his submissions on the decision of the Apex Court in the case of A. Robert v. United India Insurance Co. Ltd. 2000 ACJ 252 (SC) on the strength of the observations made in the aforesaid decision it is urged that even if the appeal stands dismissed as against the owner yet since the liability cast upon the insurer is statutory liability, the amount of compensation can be enhanced without affording any opportunity of hearing to the owner-insured. The contention is that it is not necessary to afford any hearing to the owner of the motor vehicle/insured while enhancing the liability in regard to the payment of compensation which is payable by the insurer while discharging its statutory liability.
44. A perusal of the judgment in the case of A. Robert, 2000 ACJ 252 (SC), indicates that the claimant-appellant's appeal had been dismissed for want of prosecution as against the owner of the motor vehicle/insured. In the claim petition filed under Section 110-A of the Motor Vehicles Act, 1939 the claimants had prayed for the award of compensation of an amount of Rs. 2,83,000 as against the insured, driver of the motor vehicle as well as the insurance company. The Tribunal after hearing the parties had granted the compensation of Rs. 99,000 only. The High Court had, however, reduced the amount to Rs. 96,500. The Apex Court had observed that for the accidental injuries caused in that case, the insurance company's statutory liability under the 1939 Act was limited to Rs. 1,50,000 and since the insured was not a party-respondent before the Supreme Court, the only question which survived for the consideration was as to whether the said statutory liability of the insurance company was required to be fully foisted on the sole respondent that is the insured. The Supreme Court came to the conclusion that the claimants were entitled to an amount of Rs. 1,52,500 towards compensation but since the respondent, insurance company's statutory liability was confined to Rs. 1,50,000 only the award was confined to the amount of Rs. 1,50,000 which award was to include compensation already allowed on all remaining items of expenditure on nourishment, medical treatment, travelling expenses and for actual injuries and disablement suffered by the claimant providing further that the awarded amount was to bear 6 per cent per annum interest from the date of the claim petition till payment.
45. It has been urged that although in the Motor Vehicles Act, 1939, the insurance company's statutory liability could not go above Rs. 1,50,000 in the Motor Vehicles Act, 1988, there is no limit fixed and the liability is unlimited. It is, therefore, urged that since the accident giving rise to this appeal had taken place subsequent to the enforcement of the amended Motor Vehicles Act, the liability of the insurance company is unlimited and in that view of the matter, even in the absence of the owner-insured the amount of compensation can be enhanced, as prayed for, as the insurer on whom the statutory liability stands cast to pay the amount of compensation determined is bound to discharge that liability.
46. The aforesaid submission overlooks the implications arising under the provisions of Section 149(5) of the Act of 1988 which makes it obligatory on the owner of the vehicle/insured to refund the entire amount paid by the insurer in excess of the amount which could be said to be due under the policy of insurance. This submission further overlooks that the statutory liability of the insurer is of a very limited extent and in law it could not be higher than a security or a guarantee or a stopgap arrangement for ensuring the payment to the claimant/victim resting the ultimate liability on the owner-insured. The insurer had to act as a security for the payment of the amount awarded to the claimants to the corresponding right to recover the same from the insured in case either nothing could be said to be due to be paid by the insurer to the insured or any amount had been paid in excess of the amount which could be claimed to be due to be paid to indemnify the insured/owner of the motor vehicle. The decision in the case of A. Robert, 2000 ACJ 252 (SC), was delivered on 27.8.1999. The decision of the Apex Court in the case of Oriental Insurance Co. Ltd., 2001 ACJ 1 (SC), was delivered on 14.12.2000 and the decision of the Apex Court in the case of New India Assurance Co. Ltd., 2001 ACJ 843 (SC), was delivered on 27.3.2001. The earlier decisions of the Supreme Court to which a reference has already been made herein-above covering the subject had not been brought to the notice of the Bench in the case of A. Robert (supra).
47. In this connection, it may be noticed that the Hon'ble Apex Court had observed in its decision in the case of State of U.P. v. Synthetics and Chemicals Limited (1991) 4 SCC 139 as follows:
In practice per incuriam appears to mean per ignoratium and the 'quotable in law' is avoided and ignored if it is rendered, 'in ignoratium of a statute or other binding authority'. The principle has been accepted, approved and adopted by this court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law. It was clearly indicated that a decision passes sub silentio, in the technical sense that has come to be attached to that phrase when the particular point of a law involved in the decision is not perceived by the court or present to its mind. The precedents sub silentio and without argument are of no moment. It was indicated that the courts thus have taken recourse to this principle for relieving from injustice perpetrated by unjust precedents. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. A decision is not binding because of its conclusions but in regard to its ratio and the principles, laid down therein. Any declaration or conclusion arrived without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent.
48. In its another decision in the case of Arnit Das v. State of Bihar AIR 2000 SC 2264 reiterating its earlier view it was observed that a decision not expressed, not accompanied by reasons and not proceeding on conscious consideration of an issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. That which has escaped in the judgment is not ratio decidendi. This is the rule of sub silentio, in the technical sense when a particular point of law was not consciously determined.
49. In its decision in the case of MM. Yaragatti v. Vasant AIR 1987 Karnataka 186 rendered by a Full Bench and in the case of Gujarat Housing Board v. Nagajibhai Laxmanbhai AIR 1986 Gujarat 81 and in the case of Gopalkrishna Indley v. 5th Addl. District Judge Kanpur AIR 1981 Allahabad 300 rendered by a Full Bench, it had been indicated that the latest judgment of Bench of the Apex Court of the same strength has binding force. Further it had been indicated by the Calcutta High Court in its decision in the case of Bholanath Karmakar v. Madanmohan Karmakar AIR 1988 Calcutta 1 and in the decision in the case of Boards & Boards Pvt. Ltd. v. Himalaya Paper (Machinery) Pvt. Ltd. AIR 1990 Rajasthan 120 that where there are contrary decisions of the Supreme Court rendered by Benches of equal strength, the High Court, in theory, being bound by each one, is not necessarily obliged to follow the later in point of time, but may follow the one which, according to it, is better in point of law.
50. It is, therefore, obvious that even where there is a direct conflict between the decisions of the co-equal Benches of Hon'ble Supreme Court, the High Court has to follow the judgment, which appears to it to state the law more elaborately and more accurately and in conformity with the scheme of the Act. Both the views of the Supreme Court cannot be binding on the courts below. In such a situation, a choice, however difficult it may be, has to be made.
51. Considering the ratio of the Division Bench decision of this court in the case of Sushila, 2000 ACJ 719 (MP) and the decision of the Apex Court in the case of Oriental Insurance Co. Ltd., 2001 ACJ 1 (SC), as well as in the case of Skandia Insurance Co. Ltd. 1987 ACJ 411 (SC), referred to hereinabove and considering the scheme of the new Act and identical provisions contained in the old Motor Vehicles Act, 1939 and further the implications arising under the observations made by the Supreme Court in its decision in the case of Skandia Insurance Co. Ltd. (supra), Oriental Insurance Co. Ltd. (supra) and New India Assurance Co. Ltd., 2001 ACJ 843 (SC), the decision in the case of A. Robert, 2000 ACJ 252 (SC), heavily relied upon by the appellants cannot come to their rescue.
52. Taking into consideration the facts and circumstances and the implications arising under the various provisions of the Motor Vehicles Act discussed herein-above we are clearly of the opinion that the preliminary objection in regard to the maintainability of the appeal is liable to be sustained.
53. In view of our conclusions indicated hereinabove, sustaining the preliminary objection, the appeal is dismissed as having been rendered incompetent.
54. There shall, however, be no order as to costs.