Punjab-Haryana High Court
The New India Assurance Company Limited vs Harbans Kaur And Others on 28 June, 2010
Author: K. Kannan
Bench: K. Kannan
FAO No.3053 of 2010 1
IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH
FAO No.3053 of 2010
Date of decision June 28, 2010
The New India Assurance Company Limited
....... Appellants
Versus
Harbans Kaur and others
........ Respondents
CORAM: HON'BLE MR. JUSTICE K. KANNAN
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Present:- Mr. R. K. Bashamboo , Advocate
for the appellant.
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1. While considering the defence of the Insurance Company that there had been no valid driving license for the driver, relying on the judgment of the Hon'ble Supreme Court in New India Insurance Company Vs. Kamla 2001 3 RCR that Insurance Company shall be bound to pay the amount due and claimed by the claimants, having regard to the provisions of Section 149 (4) and (5) which makes liable the Insurance Company to make the payment. The Tribunal has also granted recovery rights to the Insurance Company.
2. Learned counsel for the appellant refers to a judgment of the Hon'ble Supreme Court in National Insurance Com. Ltd., and others Vs. Parvathneni and another reported in 2010 1 PLR 228 expressing doubt about statement of law that even when a Insurance Company is not liable, it should be made to pay the amount to the claimants and could obtain a right of recovery against the insured. The reference to this Judgment, in my view, cannot help the appellant, for the Hon'ble Supreme Court had dealt with a situation where there existed no FAO No.3053 of 2010 2 liability at all for the Insurance Company. In the present case there is a valid insurance and although, the insurance Company has a ground of defence under Section 149 that there is no valid driving license it would still be made liable by proviso to Section 149 (4) (5). The law must be understood in this fashion. If there was no policy of insurance at all or the claim arose under a situation where the owner is not bound to cover the instances of compulsory insurance under Section 147 of the Motor Vehicle Act, (hereinafter referred to as the 'Act') the principle of pay and recover cannot apply. On the other hand, if there was a contract of insurance and the situation of the claim against the owner fell within the arena of compulsory insurance under Section 147 of the Act, the fact that there had been a breach of the condition in the manner set out under Section 149 (2) of the Act will not afford to the insurer to plead that it would not be liable to satisfy the claim of a third party also. This right of the third party is protected under proviso to Section 149 (4) and Section 149 (5) of the Act. This position was explained by the Supreme Court in National Insurance Company Vs. Swaran Singh in (2204) 3 SCC 297. In para 104, 105 and 110 the Court said as follows:
"104. It is, therefore, evident from the discussions made hereinbefore that the liability of the insurance company to satisfy the decree at the first instance and to recover the awarded amount from the owner or driver thereof has been holding the field for a long time.
105. Apart from the reasons stated hereinbefore, the doctrine of stare decisis persuades us not to deviate from the said principle.
110. The summary of our findings to the various issues as raised in these petitions is as follows:-
i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third-party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use FAO No.3053 of 2010 3 of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object.
ii) An insurer is entitled to raise a defence in a claim petition filed under Section 163-A or Section 166 of the Motor Vehicles Act, 1988, inter alia, in terms of Section 149 (2) (a) (ii) of the said Act.
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xi) The provisions contained in sub-section (4) with the proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover the amount paid under the contract of insurance on behalf of the insured can be taken recourse to by the Tribunal and be extended to claims and defences of the insurer against the insured by relegating them to the remedy before regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims."
3. The impugned award provides for a right of recovery to the insurer after satisfying the claimants. The decision accords with the law as stated by the Hon'ble Supreme Court. The appeal by the Insurance Company is without merit and is dismissed.
(K. KANNAN) JUDGE June 28, 2010 archana