Gujarat High Court
New vs Mashrubhai on 14 November, 2011
Author: H.K.Rathod
Bench: H.K.Rathod
Gujarat High Court Case Information System
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FA/577920/2008 24/ 24 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
FIRST
APPEAL No. 5779 of 2008
To
FIRST
APPEAL No. 5780 of 2008
With
CIVIL
APPLICATION No. 14617 of 2008
In
FIRST APPEAL No. 5779 of 2008
To
CIVIL
APPLICATION No. 14618 of 2008
=========================================================
NEW
INDIA ASSURANCE CO LTD - Appellant(s)
Versus
MASHRUBHAI
HINDUBHAI VAGHARI & 5 - Defendant(s)
=========================================================
Appearance
:
MR
HASMUKH THAKKER for
Appellant(s) : 1,
None for Defendant(s) : 1 -
6.
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE H.K.RATHOD
Date
: 29/12/2008
ORAL
ORDER
1. Heard learned advocate Mr. Hasmukh Thakker appearing on behalf of appellant New India Assurance Company Limited.
2. The appellant insurance company has challenged award passed by Motor Accident Claims Tribunal, Ahmedabad (Rural) at Navrangpura in MACP No.1740 of 1990 (main), MACP No.1647 of 1990, MACP No.752 of 1991 and MACP No.753 of 1991, Exh.78 dated 29th May 2008. Out of these, insurance company has challenged award in respect of MACP No.1740 of 1990 and MACP No.752 of 1991, where, claims tribunal has awarded Rs.3,57,215/- and Rs.1,92,000/- respectively with 7.5% interest in favour of respondents claimants.
3. Learned advocate Mr. Thakker raised a question before this Court that claims tribunal has committed gross error in directing insurance company to first pay amount of compensation to claimant and then to recover amount of compensation from owner of matador. He submitted that claims tribunal has no jurisdiction to pass such direction when claims tribunal has come to conclusion that there is no liability of insurance company to pay compensation to claimant and insurance company exonerated by claims tribunal then there is no power and jurisdiction to claims tribunal to direct insurance company to pay amount of compensation to claimant and then to recover from owner. He relied upon decision of Apex Court in case of National Insurance Co.Ltd. v. Prema Devi & Others reported in 2008 ACJ 1149 and in case of National Insurance Co.Ltd. v. Bommithi Subbhayamma and Others reported in 2005 ACJ 721.
Relying upon both decisions of Apex Court where the question was considered that in goods vehicle, whether insurance company is liable for gratuitous passenger risks travelling in truck when met with an accident. The Apex Court has held that in such cases, insurance company is not liable and claimants are entitled to recover awarded compensation from owner of vehicle. In decisions of Apex Court as referred above, in case of Bommithi Subbhayamma and other (supra), case of National Insurance Co.Ltd. v. Baljit Kaur reported in 2004 ACJ 428 (SC) has been considered. In case of Prema Devi & Others (supra), Apex Court has considered liability of insurance company in respect of claimant travelling in a goods vehicle as a gratuitous passenger and not travelling as an owner of goods and representative of the owner of goods being a transported in vehicle, insurance company is not liable and claimant may recover compensation amount from owner of vehicle by relying upon case of New India Assurance Co. Ltd. v. Vedwati reported in 2007 ACJ 1043 (SC). Except that, there is no contention raised by learned advocate Mr. Thakker before this Court.
4. I have considered both the decisions relied upon by learned advocate Mr. Thakker. After considering aforesaid two decisions of Apex Court that in case of goods vehicle, if, any passenger is travelling then there is no liability of insurance company to pay compensation to claimant and claimant can recover amount from owner. The further question which has to be arisen in facts of this case that whether in such circumstances, when insurance company is not liable to pay compensation, then, Can tribunal direct the insurance company to pay compensation to claimant and then to recover from owner ? This further question was not examined in aforesaid two decisions of Apex Court which have been relied upon by learned advocate Mr. Thakker. Simply, Apex Court has decided that in such circumstances, claimant can recover the amount of compensation from owner, but, subsequent stage which is arisen in facts of this case that in such circumstances, whether claims tribunal can direct the insurance company or not. That has not been discussed and examined by Apex Court in aforesaid two decisions, but, that has been discussed and decided by Apex Court in case of National Insurance Company Limited v. Challa Bharathamma and others reported in 2004 ACJ 2094 (SC). The relevant observations are made in Para 9, 10, 12 and 13 after considering the case of New India Assurance Co. Ltd. v. Asha Rani reported in 2003 ACJ 1 (SC) and case of National Insurance Co. Ltd. v. Nicolletta Rohtagi reported in 2002 ACJ 1950 (SC), therefore, the same are quoted as under
:
9. In New India Assurance Co. Ltd. v. Asha Rani and Ors. (2003 (2) SCC 223) it was observed as follows:
"We may consider the matter from another angle. Section 149(2) of the 1988 Act enables the insurers to raise defences against the claim of the claimants. In terms of clause (c) of sub-section (2) of section 149 of the Act one of the defences which is available to the insurer is that the vehicle in question has been used for a purpose not allowed by the permit under which the vehicle was used. Such a statutory defence available to the insurer would be obliterated in view of the decision of this court in Satpal Singh's case 2000 ACJ 1 (SC)."
10. Similarly, in National Insurance Co. Ltd., Chandigarh v. Nicolletta Rohtagi and Ors. (2002 (7) SCC 456), the scope of Section 149 (2) of the Act was elaborated. It was, inter alia, observed as follows:
"To answer the question, it is necessary to find out on what grounds the insurer is entitled to defend/contest against a claim by an injured or dependants of the victims of a motor vehicle accident. Under Section 96(2) of the 1939 Act which corresponds to Section 149(2) of the 1988 Act, an insurance company has no right to be a party to an action by the injured person or dependants of the deceased against the insured. However, the said provision gives the insurer the right to be made a party to the case and to defend it. It is, therefore, obvious that the said right is a creature of the statute and its content depends on the provisions of the statute. After the insurer has been made a party to a case or claim, the question arises, what are the defences available to it under the statute ? The language employed in enacting sub-section (2) of Section 149 appears to be plain and simple and there is no ambiguity in it. It shows that when an insurer is impleaded and has been given notice of the case, he is entitled to defend the action on grounds enumerated in the sub-section, namely, sub-section (2) of Section 149 of the 1988 Act, and no other ground is available to him. The insurer is not allowed to contest the claim of the injured or heirs of the deceased on other ground which is available to an insured or breach of any other conditions of the policy which do not find place in sub-section (2) of Section 149 of the 1988 Act. If an insurer is permitted to contest the claim on other grounds it would mean adding more grounds of contest to the insurer than what the statute has specifically provided for. Sub-section (7) of Section 149 of the 1988 Act clearly indicates in what manner sub-section (2) of Section 149 has to be interpreted. Sub-section (7) of Section 149 provides that 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. The expression "manner"
employed in sub-section (7) of Section 149 is very relevant which means an insurer can avoid its liability only in accordance with what has been provided for in sub-section (2) of Section 149. It, therefore, shows that the insurer can avoid its liability only on the statutory defences expressly provided in sub-section (2) of Section 149 of the 1988 Act. We are, therefore, of the view that an insurer cannot avoid its liability on any other grounds except those mentioned in sub-section (2) of Section 149 of the 1988 Act."
12. High Court was of the view that since there was no permit, the question of violation of any condition thereof does not arise. The view is clearly fallacious. A person without permit to ply a vehicle cannot be placed at a better pedestal vis-a-vis one who has a permit, but has violated any condition thereof. Plying of a vehicle without a permit is an infraction. Therefore, in terms of Section 149(2) defence is available to the insurer on that aspect. The acceptability of the stand is a matter of adjudication. The question of policy being operative had no relevance for the issue regarding liability of insurer. High Court was, therefore, not justified in holding the insurer liable.
13. The residual question is what would be the appropriate direction. Considering the beneficial object of the Act, it would be proper for the insurer to satisfy the award, though in law it has no liability. In some cases the insurer has been given the option and liberty to recover the amount from the insured. For the purpose of recovering the amount paid from the owner, the insurer shall not be required to file a suit. It may initiate a proceeding before the concerned Executing Court 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. Before release of the amount to the claimants, owner of the offending vehicle shall furnish security for the entire amount which the insurer will pay to the claimants. The offending vehicle shall be attached, as a part of the security. If necessity arises the Executing Court shall take assistance of the concerned Regional Transport Authority. The Executing Court shall pass appropriate orders in accordance with law as to the manner in which the owner of the vehicle shall make payment to the insurer. In case there is any default it shall be open to the Executing Court to direct realization by disposal of the securities to be furnished or from any other property or properties of the owner of the vehicle i.e. the insured. In the instant case considering the quantum involved we leave it to the discretion of the insurer to decide whether it would take steps for recovery of the amount from the insured.
5. Similarly, in case of Ravunammal and another v. Sambandham and others reported in 2008 ACJ 974 decided by Madras High Court, where, Apex Court decision in case of Challa Bharathamma and others (supra) has been considered in Para 10 to 12 which are quoted as under :
10. The above view taken by learned single Judge of this court has also been confirmed by the Supreme Court in its decision in National Insurance Co.Ltd. v. Challa Bharathamma, 2004 ACJ 2094 (SC), wherein it was held as under :
(13) The residual question is what would be the appropriate direction.
Considering the beneficial object of the Act, it would be proper for the insurer to satisfy the award, though in law it has no liability. In some cases the insurer has been given the option and liberty to recover the amount from the insured. For the purpose of recovering the amount paid from the owner, the insurer shall not be required to file a suit...
11. In the instant case, even as per the evidence of PW 2, an eyewitness to the accident who also happened to be a co-traveller, there was no separate seat as such for the cleaner who travelled on the mudguard. That being the case, it is clear that the deceased was sitting on the mudguard only with the knowledge of the driver and for the mistake of allowing the cleaner to travel on the mudguard, the driver is to be held liable and in turn, the owner of the tractor is is to be made liable for the mistake committed b his driver. Further, as already concluded in one of the earlier paras, the tractor driver is the cause for the accident and had he been careful, the accident could have been very well averted and the deceased would not have fallen on the road and would not have been run over by the trailer attached to the tractor.
12. For the mistake committed by the tractor driver by allowing the deceased to sit on the mudguard and travel, the insurer of the tractor cannot be made liable to pay the compensation. Therefore, the Tribunal has taken a considered stand that the liability should be fastened only on the part of the tractor owner. Yet, keeping in mind the beneficial object of the Motor Vehicles Act, 1988 and considering the fact that payment by owner is merely a possibility but payment by an insurance company is a certainty and also taking cognizance of the decisions of this court and the Supreme Curt (supra), this court directs the insurer of the tractor, viz., the respondent No.2 herein to first compensate the claimants and have the said sum recovered form the owner of the tractor in accordance with the Revenue Recovery Act. With this direction, this civil miscellaneous appeal is disposed of. No order as to costs.
6. In light of aforesaid law as discussed by this Court in respect of contentions raised by learned advocate Mr. Thakker, it is also necessary to consider that law which has been discussed by claims tribunal before passing directions against insurance company that first to pay compensation to claimant and then to recover said amount form owner is also necessary to appreciate by this Court as discussed in Para 12 to 20 of award which are quoted as under :
12. As far as the liability of the New India Insurance Co. is concerned, the learned advocate Mr. M.G. Dave for the applicant has vehemently submitted before me that the claimants were travelling in the goods vehicle alongwith the goods and at that time, the accident has taken place. Therefore, the insurance company is liable to pay the compensation. In support of this submission, the learned advocate Mr. Dave has relied upon the case of New India Assurance Co. Ltd. Vs. Satpal Singh & others reported in 2000 ACJ Page 1. In the cited case, at the time of accident a girl was traveling in the gods vehicle gratuitously and in the accident, she sustained serious injuries and succumbed to the same and the division bench of two judges of Hon'ble Supreme Court had held that the insurance company is liable to pay the compensation but this ruling has been overruled by the division bench of three Judges of Hon'ble Supreme Court in the case of New India Assurance Co. Ltd. Vs. Asha Rani & others reported in 2003 ACJ Page 1. Therefore, the cited case referred by the applicant's advocate is no longer a good law. It has been established on record that the deceased and the injured petitioners were travelling in goos vehicle. Therefore, the question may arise that when the deceased or the injured was travelling in the goods vehicle and he met with the accident and sustained the injuries or died, whether the insurance company is liable to pay and compensation or not. This question has been resoled by various pronouncements of Hon'ble Supreme Court holding that if any such person who is travelling in the goods vehicle sustains injury or dies, the insurance company is not liable to pay any amount of the compensation.
13. This point has been discussed in the case of Mallava & others Vs. Oriental Ins. Co. Ltd. & others reported in 1999 ACJ Page 1. The question before the Hon'ble Apex Court in the matter was that, whether the insurance company is liable for the death or injuries sustained by persons carried in a goods vehicle either along with their goos or after paying fare or gratuitously. It was held that the insurance company is not liable for the payment of compensation as there was breach of the condition of the policy.
14. It is also necessary to have a look on the case of New India Assurance Co. Ltd. Vs. Asha Rani & others reported in 2003(2) GLR 1001. In this case also, it was held that if the injured or the deceased is travelling in the goods vehicle then looking to the terms and conditions of the policy, if the passenger dies or sustains injury during the course of the accident as the risk of such passengers is not included in the policy, the insurance company is not liable for the payment of compensation to the claimants. This law point has been discussed very lucidly and elaborately in para 9 of this case which is as under :-
In Satpal case (supra), the court assumed that the provisions of sec.95(1) of the Motor Vehicles Act, 1989 are identical with sec.147(1) of the Motor Vehicles Act, 1988 as it stood prior to its amendment. But a careful scrutiny of the provisions would make it clear that prior to the amendment of 1994, it was not necessary for the insurer to insure against the owner of the goods or his authorized representative being carried in a goods vehicle. On an erroneous impression this Court came to the conclusion that the insurer would be liable to pay compensation in respect of the death or bodily injury caused to either the owner of the goods or his authorized representative when being carried in a goods vehicle, the accident occurred. If the Motor Vehicles Amendment Act of 1994 is examined, particularly sec.46, by which the expression, injury to any person in the original Act stood substituted by the expression injury to any person including owner of the goods or his authorised representative carried in the vehicle , the conclusion is irresistible that prior to the aforesaid Amendment Act of 1994, even if the widest interpretation is given to the expression to any person it will not cover either the owner of the goods or his authorised representative being carried in the vehicle. The objects and reasons of clause 46 also state that it seeks to amend Section 147 to include owner of the goods or his authorised representative carried in the vehicle for the purposes of liability under the insurance policy. It is no doubt true that sometimes the legislature amends the law by way of amplification and clarification of an inherent position which is there in the statute, but a plain meaning being given to the words used in the statute, as it stood prior to its amendment of 1994, and as it stands subsequent to its amendment in 1994 and bearing in mind the objects and reasons engrafted in the amended provisions referred to earlier, it is difficult for us to construe that the expression including owner of the goods or his authorised representative carried in the vehicle which was added to the preexisting expression injury to any person is either clarificatory or amplification of the pre-existing statute. On the other hand it clearly demonstrates that the legislature wanted to bring within the sweep of Section 147 and making it compulsory for the insurer to insure even in case of a goods vehicle, the owner of the goods or his authorised representative being carried in a goods vehicle when that vehicle met with an accident and the owner of the goods or hi representative either dies or suffers bodily injury. The judgment of this Court in Satpal Case therefore must be held to have not been correctly decided and the impugned judgment of the Tribunal as well as that of the High Court accordingly are set aside and these appeals are allowed. It is held that the insurer will not be liable for paying compensation to the owner of the goods or his authorised representative on being carried in a goods vehicle when that vehicle meets with an accident and the owner of the goods or his representative dies or suffers any bodily injury.
15. Another case which needs to be referred is reported in 2004 ACJ. There was breach of the terms of the policy on the part of the owner of the vehicle and therefore, it was held that as there was breach of terms of policy, the insurance company is not liable to pay the amount of compensation. But, however, it was directed by the Apex Court of India that at the first instance, the insurance company would pay the amount of the compensation to the third party and then to recover the awarded amount from the owner of the driver of the vehicle.
16. The same principle has also been discussed in the case of National Ins.
Co. Ltd. Vs. Baljit Kaur & others reported in 2004(2) GLR Page 1071. In this case also, it was held that the vehicle concerned, being a goods vehicle, it would not have to incur any liability with respect to passengers transported in the vehicle. But, however, the Hon'ble Supreme Court directed the Insurance Company to satisfy the awarded amount in favour of the claimant and recover the same from the owner of the vehicle and for the purpose of such recovery, it would not be necessary for the insurer to file a separate suit but it may initiate a proceeding before the Executing Court as if the dispute between the insurer and the owner was the subject matter determination before the Tribunal and issue is decided against the owner and in favour of the insurer.
17. The same principle has been reiterated and the same direction has been reiterated in the case of Oriental Insurance Co. Ltd. Vs. Nanjappan & others reported in 2004 ACJ 721.
The Hon'ble Supreme Court has discussed the same principle in the latest case of Pramod Kumar Agrawal and Others Vs. Mushtari Begum and others reported in 2004(3) T.A.C. 289. It was observed to the effect that the premium in view of 1994 amendment would only cover a third party as also the owner of the goods or his authorized representative and not any passenger in a goods vehicle whether for hire or reward or otherwise.
18. Therefore, in view of the above various pronouncements of Hon'ble Apex Court of India, now it is settled principle of law that if any, passenger is travelling in goods vehicle whether for hire or reward or otherwise and the vehicle met with the accident and such passenger sustains injury or dies then the insurance company is not liable to pay the amount of compensation to such passenger or the heirs of such passenger.
19. But, in view of the pronouncements of the Hon'ble Supreme Court in the case of New India Assurance Co. Ltd. Vs. Kamla & others reported in 2002(1) GLR page 916 and in view of the observations made in the case of Pramod Kumar Agrawal & Another Vs. Mushtrai Begum & Others reported in 2004 ACJ page 1903, the insurance company is supposed to pay the amount of compensation to such third party and can recover such amount of compensation from the owner of the vehicle and for that recovery, the insurance company is not supposed to file any separate suit but award passed in the claim petition can be treated award as if it was passed in favour of the insurance company and against the owner of the vehicle and thus, insurance company can recover the paid amount of compensation from the owner of the vehicle.
20. The leaned advocate Mr. S.S. Shah for the Insurance Company had submitted before me that before the accident took place, the vehicle was transferred to another person and that person the owner of the vehicle has not been joined as the party. The applicant has joined the previous owner of the vehicle and hence as the owner of the vehicle on the date of the accident has not been joined as the party, the insurance company is not liable to pay any compensation to the applicant. The learned advocate Mr. Shah in support of this submission, has drawn my attention towards a document which is produced at Exh. 64. According to the L.A. Mr. Shah for the New India Ins. Co., this document established the factum of sale by the previous owner to one Mr. Dipakkumar Bhogilal Vyas and who has not been joined as the party and therefore, the insurance company is not liable to pay any compensation. I am unable to agree with the submission of L.A. Mr. Shah. If this document is perused, then, it is very evident that this is not the sale transaction but it is the document of agreement to sell. In this document, it is mentioned that it is proposed to sell the vehicle for Rs.1,34,000/- and out of that amount, amount of Rs.15,000/- was paid on the date of the transaction and the remaining amount was to be paid by the installments on different date. And the installments made, were extended to one year and it was also the condition that if the proposed owner fails to pay one or two installments, then the seller is entitled to get back the possession of the vehicle. Thus, this agreement to sell shows that there was no transfer of the property to the proposed owner. Therefore, it cannot be said that on the date of the accident, the opponent owner Parshottambhai Khodidas was not the owner of the vehicle. Thus, on factual aspect, it cannot be said that the vehicle was transferred to someone else and opponent Parshottambhai was not the owner of the vehicle. In this connection, if Sec.157 of M.V. Act is taken into consideration, then, it is very much clear that along with ownership of the vehicle, the policy of insurance is also transferred. In Sec.157, explanation was added afterwards stating that such deemed transfer shall include transfer of rights and liabilities of the said certificate of insurance and policy of insurance. Therefore, in view of this provision of Sec.157 of M.V. Act even if it is believed that the vehicle is transferred, then also policy is supposed to be transferred along with the vehicle and thus, the risk of the vehicle goes with the vehicle and hence, the insurance company cannot be absolved from its liability to pay the compensation.
In view of the finding on issue No.1, the claim against the driver, owner and insurer of offending Truck No.GTH-7832 shall stand dismissed.
7. In view of discussion made by claims tribunal as above considering decision of Apex Court and also other decisions which are relating to subject matter, according to my opinion, claims tribunal has rightly directed to insurance company to pay first compensation to claimant and then to recover said amount from owner. Ultimately, it is a duty of claims tribunal to find out that whether any possibility is there when insurance company is exonerated to recover the said amount of compensation from the owner or driver of vehicle. This aspect has been rightly considered by claims tribunal and ultimately claims tribunal has passed balanced order, so, object of beneficial legislature may not be frustrated. Ultimately, victim may get compensation and they may not put in awkward condition because of technical approach and stand taken by insurance company. In light of this background, when total machinery has been given by claims tribunal to insurance company to join in execution proceedings and in separate suit is not necessary for recovering amount of compensation from owner and to initiate straightway execution proceedings against owner and then to recover from owner amount of compensation. In view of this, insurance company have given machinery by claims tribunal considering interest of insurance company and according to my opinion, claims tribunal has rightly examined matter and also considered interest of claimant in a vehicular accident and also considering the object of M.V. Act, claims tribunal has rightly awarded compensation in favour of claimant, which is reasonable, just and proper and claims tribunal has rightly exonerated insurance company for payment of compensation, but, ultimately, insurance company shall have to satisfy award then to recover said amount from owner. For such direction, there is no error committed by claims tribunal which requires interference by this Court.
8. Therefore, according to my opinion, claims tribunal has jurisdiction to pass direction in such circumstances and not only a higher forum have power to pass such direction. Ultimately, a duty of claims tribunal to consider the object of M.V. Act. To satisfy such object whatever necessary direction in the interest of justice are there, same must have to be given and accordingly, claims tribunal has rightly given. For that, no error is found apparently from face of record which requires interference by this Court.
9. Accordingly, under these circumstances, the present First Appeals are dismissed.
10. When the First Appeals are dismissed, no order is required to be passed in Civil Application. Accordingly, Civil Applications are also dismissed.
11. The amount, if any, deposited by appellant before registry of this Court, be transmitted to claims tribunal concerned immediately.
[H.K. RATHOD, J.] #Dave Top