Gujarat High Court
National Insurance Company vs Trikambhai Gandabhai Solanki (Parmar) on 11 July, 2024
NEUTRAL CITATION
C/FA/2514/2010 JUDGMENT DATED: 11/07/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 2514 of 2010
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE SANDEEP N. BHATT
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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NATIONAL INSURANCE COMPANY
Versus
TRIKAMBHAI GANDABHAI SOLANKI (PARMAR) & ORS.
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Appearance:
MR DAKSHESH MEHTA(2430) for the Appellant(s) No. 1
MR.HIREN M MODI(3732) for the Defendant(s) No. 1
RULE SERVED for the Defendant(s) No. 3
RULE UNSERVED for the Defendant(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 11/07/2024
ORAL JUDGMENT
1. This appeal is filed under Section 173 of the Motor Vehicles Act, 1988 (`MV Act' for short), being Page 1 of 12 Downloaded on : Fri Jul 12 22:41:52 IST 2024 NEUTRAL CITATION C/FA/2514/2010 JUDGMENT DATED: 11/07/2024 undefined aggrieved and dissatisfied with the judgment and award dated 9.12.2009 passed by the Motor Accident Claims Tribunal, Ahmedabad (Rural), in MACP No.380 of 2005.
2. The brief facts leading to filing of this appeal are such that on 20.2.2005, the claimant was going in jeep no.GJ-18A-748 driven by opponent no.1 with full speed, rashly, negligently without observing traffic rules and when they were passing near IOC bottling plant at Sanand- Viramgam road, at that point of time, some vehicles came from opposite direction and driver got afraid and he took turn and because of that the claimant was thrown out of the jeep and therefore the claimant sustained serious injuries of fracture on his right leg and right hand and also on various parts of the body. Therefore, he filed the claim petition for Rs.3,00,000/-.
3. On issuance of notice, the original opponent nos. 1 and 2 did not appear before the learned Tribunal. However, the original opponent no.3-insurance company appeared and resisted the claim petitions. After considering the oral and documentary evidence and submissions made at the bar, the learned Tribunal has passed the impugned award which is challenged by the appellant by way of this first appeal.
4. Heard learned advocates for the parties. Page 2 of 12 Downloaded on : Fri Jul 12 22:41:52 IST 2024
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5. The only contention and the ground taken by the learned advocate for the appellant is that the insurance company is not liable to pay the compensation. He submitted that the policy itself states that "the policy covers use of the vehicle for any purpose other than a hire and reward." He submitted that learned Tribunal has failed to appreciate the examination of the claimant, wherein the claimant has admitted that nearly about 15 passengers were sitting in the jeep and the fare was agreed at Rs.15/- per person. He, therefore, submitted that when there is breach of the conditions of the policy, the insurance company is not liable to pay the compensation and it may be exonerated. He fairly submitted that at the most, the order of `pay and recover' may be passed so that the interest of the claimant and the insurance company, both can be secured.
6. Per contra, learned advocate for respondent no.1- original claimant has submitted that the learned Tribunal has rightly passed the impugned award which is not required to be disturbed by this Court. He, therefore, submitted to dismiss this appeal. Though rule is served on the driver and owner of the vehicle, they have chosen not to appear even before this Court.
7. Heard learned advocates for the parties and Page 3 of 12 Downloaded on : Fri Jul 12 22:41:52 IST 2024 NEUTRAL CITATION C/FA/2514/2010 JUDGMENT DATED: 11/07/2024 undefined perused the material placed on record including the impugned judgment and award.
8. It transpires from the record that the claimant was travelling in jeep by paying the fare of Rs.15/-, there were about 15 passengers travelling in the jeep. On perusing the policy, it is mentioned that `the policy covers use of the vehicle for any purpose other than a hire and reward.' Therefore, there is breach of policy on this ground. Further, the policy shows that the premium is paid for nine unknown persons, whereas there were 15 passengers travelling in the jeep at the time of accident. This is also another breach of conditions of the policy. On these two counts, the learned Tribunal ought to have exonerated the insurance company from paying the compensation, which is not done.
9. However, as the vehicle was insured with the insurance company and the premium was paid, the insurance company shall pay the quantum of compensation to the claimant and then recover the same from the insured, in view of the principles laid down in the judgments of the Hon'ble Apex Court.
10. In the case of Shamanna v. Oriental Insurance Co. Ltd., (2018) 9 SCC 650, it is held in paragraphs 12 to 14 as under:
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NEUTRAL CITATION C/FA/2514/2010 JUDGMENT DATED: 11/07/2024 undefined "12. The above reference in Parvathneni case [National Insurance Co. Ltd. v. Parvathneni, (2009) 8 SCC 785 :
(2009) 3 SCC (Civ) 568 : (2009) 3 SCC (Cri) 943] has been disposed of on 17-9-2013 [National Insurance Co. Ltd. v.
Parvathneni, (2018) 9 SCC 657] by the three-Judge Bench keeping the questions of law open to be decided in an appropriate case.
13. Since the reference to the larger Bench in Parvathneni case [National Insurance Co. Ltd. v. Parvathneni, (2009) 8 SCC 785 : (2009) 3 SCC (Civ) 568 : (2009) 3 SCC (Cri) 943] has been disposed of by keeping the questions of law open to be decided in an appropriate case, presently the decision in Swaran Singh case [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] followed in Laxmi Narain Dhut [National Insurance Co. Ltd. v. Laxmi Narain Dhut, (2007) 3 SCC 700 : (2007) 2 SCC (Cri) 142] and other cases hold the field. The award passed by the Tribunal directing the insurance company to pay the compensation amount awarded to the claimants and thereafter, recover the same from the owner of the vehicle in question, is in accordance with the judgment passed by this Court in Swaran Singh [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] and Laxmi Narain Dhut [National Insurance Co. Ltd. v. Laxmi Narain Dhut, (2007) 3 SCC 700 : (2007) 2 SCC (Cri) 142] Page 5 of 12 Downloaded on : Fri Jul 12 22:41:52 IST 2024 NEUTRAL CITATION C/FA/2514/2010 JUDGMENT DATED: 11/07/2024 undefined cases. While so, in our view, the High Court ought not to have interfered with the award passed by the Tribunal directing the first respondent to pay and recover from the owner of the vehicle. The impugned judgment [ Shamanna v. Laxman, 2016 SCC OnLine Kar 6928] of the High Court exonerating the insurance company from its liability and directing the claimants to recover the compensation from the owner of the vehicle is set aside and the award passed by the Tribunal is restored.
14. So far as the recovery of the amount from the owner of the vehicle, the insurance company shall recover as held in the decision in Oriental Insurance Co. Ltd. v. Nanjappan [Oriental Insurance Co. Ltd. v. Nanjappan, (2004) 13 SCC 224 : 2005 SCC (Cri) 148] wherein this Court held that :
(SCC p. 226, para 8) "8. ... For the purpose of recovering the same from the insured, the insurer shall not be required to file a suit. It may initiate a proceeding before the executing court concerned as if the dispute between the insurer and the owner was the subject-matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer."
10. In the case of Manuara Khatun v. Rajesh Kr. Singh, (2017) 4 SCC 796, it is held in paragraphs 11 to 16 as under:Page 6 of 12 Downloaded on : Fri Jul 12 22:41:52 IST 2024
NEUTRAL CITATION C/FA/2514/2010 JUDGMENT DATED: 11/07/2024 undefined "11. In reply, the learned counsel for the respondents (insurance companies) supported the impugned order and contended that no case is made out to interfere in the impugned judgment. It was his submission that once it is held and rightly that the insurance company is not liable because the victims were travelling in the offending vehicle as "gratuitous passengers", there did not arise any occasion to pay the awarded sum to the claimants by the insurance company and nor the principle " pay and recover" could be applied against the insurance company in such circumstances thereby making them liable to pay the awarded sum to the claimants.
12. Having heard the learned counsel for the parties and on perusal of the record of the case, we find force in the submission of the learned counsel for the appellants (claimants).
13. The only question, which arises for consideration in these appeals, is whether the appellants are entitled for an order against the insurer of the offending vehicle i.e. (Respondent
3) to pay the awarded sum to the appellants and then to recover the said amount from the insured (owner of the offending vehicle Tata Sumo) Respondent 1 in the same proceedings.
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14. The aforesaid question, in our opinion, remains no more res integra. As we notice, it was the subject-matter of several decisions of this Court rendered by three-Judge Bench and two-Judge Bench in the past viz. National Insurance Co. Ltd. v. Baljit Kaur [National Insurance Co. Ltd. v. Baljit Kaur, (2004) 2 SCC 1 : 2004 SCC (Cri) 370] , National Insurance Co. Ltd. v. Challa Upendra Rao [National Insurance Co. Ltd. v. Challa Upendra Rao, (2004) 8 SCC 517 : 2005 SCC (Cri) 357] , National Insurance Co. Ltd. v. Kaushalaya Devi [National Insurance Co. Ltd. v. Kaushalaya Devi, (2008) 8 SCC 246 : (2008) 3 SCC (Cri) 467] , National Insurance Co. v. Roshan Lal [National Insurance Co. Ltd. v. Roshan Lal, (2017) 4 SCC 803] and National Insurance Co. Ltd. v. Parvathneni [National Insurance Co. Ltd. v. Parvathneni, (2009) 8 SCC 785 :
(2009) 3 SCC (Civ) 568 : (2009) 3 SCC (Cri) 943] .
15. This question also fell for consideration recently in National Insurance Co. Ltd. v. Saju P. Paul [National Insurance Co. Ltd. v. Saju P. Paul, (2013) 2 SCC 41 :
(2013) 1 SCC (Civ) 968 : (2013) 1 SCC (Cri) 812 : (2013) 1 SCC (L&S) 399] wherein this Court took note of entire previous case law on the subject mentioned above and examined the question in the context of Section 147 of the Act. While allowing the appeal filed by the insurance company by reversing the judgment [ Saju P. Paul v.
National Insurance Co., 2011 SCC OnLine Ker 3791 : 2012 Page 8 of 12 Downloaded on : Fri Jul 12 22:41:52 IST 2024 NEUTRAL CITATION C/FA/2514/2010 JUDGMENT DATED: 11/07/2024 undefined ACJ 1852] of the High Court, it was held on facts that since the victim was travelling in offending vehicle as "gratuitous passenger" and hence, the insurance company cannot be held liable to suffer the liability arising out of accident on the strength of the insurance policy. However, this Court keeping in view the benevolent object of the Act and other relevant factors arising in the case, issued the directions against the insurance company to pay the awarded sum to the claimants and then to recover the said sum from the insured in the same proceedings by applying the principle of "pay and recover".
16. R.M. Lodha, J. (as his Lordship then was and later became CJI) speaking for the Bench held in paras 20 and 26 as under : (Saju P. Paul case [National Insurance Co. Ltd. v. Saju P. Paul, (2013) 2 SCC 41 : (2013) 1 SCC (Civ) 968 : (2013) 1 SCC (Cri) 812 : (2013) 1 SCC (L&S) 399] , SCC pp. 52 & 55) "20. The next question that arises for consideration is whether in the peculiar facts of this 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 (Respondent 2 herein).
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26. The pendency of consideration of the above questions by a larger Bench does not mean that the course that was followed in Baljit Kaur [National Insurance Co. Ltd. v. Baljit Page 9 of 12 Downloaded on : Fri Jul 12 22:41:52 IST 2024 NEUTRAL CITATION C/FA/2514/2010 JUDGMENT DATED: 11/07/2024 undefined Kaur, (2004) 2 SCC 1 : 2004 SCC (Cri) 370] and Challa Upendra Rao [National Insurance Co. Ltd. v. Challa Upendra Rao, (2004) 8 SCC 517 : 2005 SCC (Cri) 357] 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, the 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 the 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 1-8-2011 [National Insurance Co. Ltd. v. Saju P. Paul [National Insurance Co. Ltd. v. Saju P. Paul, (2013) 2 SCC 41, 55 (footnote 14)] ] 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 1) may be allowed to withdraw the amount deposited by the Insurance Company before this Court along with accrued interest. The Insurance Company (the appellant) thereafter may recover the amount so paid from the owner (Respondent 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 Challa Upendra Rao [National Insurance Co. Page 10 of 12 Downloaded on : Fri Jul 12 22:41:52 IST 2024
NEUTRAL CITATION C/FA/2514/2010 JUDGMENT DATED: 11/07/2024 undefined Ltd. v. Challa Upendra Rao, (2004) 8 SCC 517 : 2005 SCC (Cri) 357] ."
11. In the judgment in the case of Shivaraj V/s Rajendra and another reported in 2018 ACJ 2755, the Hon'ble Apex Court has held in paragraph 10 as under:
"10. At the same time, however, in the facts of the present case the High Court ought to have directed the insurance company to pay the compensation amount to the claimant(appellant) with liberty to recover the same from the tractor owner, in view of the consistent view taken in that regard by this court in National Insurance Co.Ltd. V.Swaran Singh, 2004 ACJ 1(SC); Mangla Ram v.Oriental Insurance Co.ltd., 2018 ACJ 1300(SC); Rani v.National Insurance Co.ltd., 2018 ACJ 2430(SC) and Manuara Khatun v.Rajesh Kumar Singh, 2017 ACJ 1031 (SC). In other words, the High Court should have partly allowed the appeal preferred by the respondent No.2, Appellant may, therefore, succeed in getting relief of direction to respondent No.2 insurance company to pay the compensation amount to the appellant with liberty to recover the same from the tractor owner (respondent No.1)."
12. However, the manifest object of the provisions of the MV Act is to ensure that the party, who suffers injuries due to the use of the motor vehicle, and may be able to get the damages for the injuries sustained/death. If the goods Page 11 of 12 Downloaded on : Fri Jul 12 22:41:52 IST 2024 NEUTRAL CITATION C/FA/2514/2010 JUDGMENT DATED: 11/07/2024 undefined vehicle is used for carrying the passengers, against the terms of insurance policy, as is in the case on hand, the claimant cannot suffer for the technicalities of whether the owner/insurance company should pay the amount. As the vehicle is insured with the insurance company, the insurance company shall first pay the compensation and it is for the insurance company to recover from the owner, if it so wishes.
13. In view of the facts and circumstances of the present case and the law laid down by the Hon'ble Apex Court in the above decisions, this appeal is required to be allowed and accordingly allowed. The impugned judgment and award is modified to the extent that the opponent no.3- insurance company shall first pay the compensation and it is for the insurance company to recover from the insured, if it so wishes. Rest of the judgment and award remains as it is. Modified decree be drawn accordingly.
14. The amount lying with the Tribunal and/or in the FDR, pursuant to the order of this Court if any, shall be immediately disbursed to the claimant/s, along with accrued interest thereon if any, by account payee cheque/RTGS/NEFT, after proper verification and after following due procedure.
15. Record and proceedings be sent back to the concerned Tribunal, forthwith.
(SANDEEP N. BHATT,J) SRILATHA Page 12 of 12 Downloaded on : Fri Jul 12 22:41:52 IST 2024