Gujarat High Court
Oriental Insurance Company Ltd vs Kantaben Hematram Tilawat on 9 July, 2024
NEUTRAL CITATION
C/FA/348/2015 JUDGMENT DATED: 09/07/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 348 of 2015
With
R/FIRST APPEAL NO. 349 of 2015
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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ORIENTAL INSURANCE COMPANY LTD
Versus
KANTABEN HEMATRAM TILAWAT & ORS.
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Appearance:
MS KARUNA V RAHEVAR(3818) for the Appellant(s) No. 1
MR. ZALAK B PIPALIA(6161) for the Defendant(s) No. 1,2,3,4
RULE SERVED for the Defendant(s) No. 5.1,5.2
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 09/07/2024
COMMON ORAL JUDGMENT
1. These appeals are filed by the appellant-insurance company under Section 173 of the Motor Vehicles Act, 1988 Page 1 of 14 Downloaded on : Mon Jul 15 20:56:22 IST 2024 NEUTRAL CITATION C/FA/348/2015 JUDGMENT DATED: 09/07/2024 undefined (`MV Act' for short), being aggrieved and dissatisfied with the common judgment and award dated 11.11.2014 passed by the Motor Accident Claims Tribunal (Aux.), Junagadh in MACP No.411 of 2003 and other allied matters, whereby the claim petition of the claimants was partly allowed and the original opponents were held liable jointly and severally liable to to pay the amount of compensation along with proportionate costs and interest thereon at the rate of 9% p.a. from the date of filing till realization.
2. The brief facts leading to filing of this appeal are such that the claimants and the deceased were travelling in Maruti van bearing no.GJ-7R-2266 of the ownership of opponent no.1 and had gone at Bagdana for darshan and while returning on 30.3.2003, at about 3.30 a.m. when they reached near the bridge of just 4 k.m. away of Jamkandorana on Jamkandorana road, the deceased driver of this car drove the car very rashly, negligently and at a very excessive speed and thereby lost control, as a result of which the said maruti van dashed with one Babul tree beside the road with heavy force and accordingly, caused the accident in which some lost their lives and others were injured. The driver-cum-owner of the car also succumbed to the injuries. Therefore, total seven claim petitions were filed for getting compensation.
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NEUTRAL CITATION C/FA/348/2015 JUDGMENT DATED: 09/07/2024 undefined
3. On issuance of notice, the heirs of deceased opponent no.1 who was the owner and driver of the car in question filed written statement and the insurance company also filed the written statement to the claim petitions and resisted the claim petitions. The learned Tribunal framed the issues, considered the oral and documentary evidence led before it and passed the impugned judgment and award.
4. Against the said common judgment and award, six first appeals are filed, out of which four are disposed of today by a separate common order on the ground of smallness of amount. The present two appeals are considered on merits and disposed of by this common judgment.
5. Heard learned advocates for the parties. 5.1. Learned advocate for the appellant-insurance company has mainly assailed the judgment and award on the point of liability of the insurance company to pay the compensation. She submitted that the deceased and the injured persons were travelling in the private vehicle by paying fare charges and therefore their risk was not covered under the Act/liability policy; that even the gratuitous passengers/occupants of the vehicle are not covered under the Act/liability policy; that the risk of such passengers is not Page 3 of 14 Downloaded on : Mon Jul 15 20:56:22 IST 2024 NEUTRAL CITATION C/FA/348/2015 JUDGMENT DATED: 09/07/2024 undefined covered under the Act/liability policy. She, therefore, submitted that the learned Tribunal has erred in holding all the opponents liable jointly and severally to pay the compensation as the insurance company was required to be exonerated from the same.
5.2 In support of her submissions, she has relied on the following judgments of the Hon'ble Apex Court as well as of this Court:
(1) New India Assurance Co.Ltd. V/s Jaysukhlal Maganlal Doshi and others reported in 2013(3) GLR 2283. (2) United India Insurance Co.Ltd. V/s Tilak Singh & Others reported in 2006 ACJ 1441.
(3) General Manager, United India Insurance Co.Ltd. V/s M.Laxmi & Others reported in 2009 ACJ 104. (4) National Insurance Co.Ltd. V/s Balakrishnan and another reported in 2013 ACJ 199.
(5) First Appeal No.71 of 2014 decided on 17.3.2022. (6) First Appeal No.3735 of 2009 and another appeal decided on 9.12.2021.
(7) First Appeal No.1652 of 2019 and other appeals decided on 4.7.2024.
5.3 She, therefore, submitted that this appeal may be allowed. The appellant-insurance company be exonerated from Page 4 of 14 Downloaded on : Mon Jul 15 20:56:22 IST 2024 NEUTRAL CITATION C/FA/348/2015 JUDGMENT DATED: 09/07/2024 undefined the payment of compensation and the order of `pay and recover' be passed.
6. Per contra, learned advocate for the respondents- claimants has submitted that the award of the learned Tribunal is just and proper and there is no need of any interference by this Court. He submitted that as the vehicle in question was insured with the appellant-insurance company, it cannot be exonerated from the liability. He, therefore, submitted that the impugned judgment and award is just and proper and therefore, this appeal may be dismissed. The heirs of the owner and driver of the vehicle in question are not represented by anyone.
7. I have gone through the record and proceedings called for from the learned trial Court and also perused the impugned judgment and award.
8. From the documents on record, more particularly, the insurance policy, it transpires that no extra premium is paid covering risk of the passengers in the vehicle in question; that the insurance policy was a statutory policy and hence, the risk of the claimants who were passengers/occupants in the vehicle in question is not covered under it. Further, it is the say of the claimants that they Page 5 of 14 Downloaded on : Mon Jul 15 20:56:22 IST 2024 NEUTRAL CITATION C/FA/348/2015 JUDGMENT DATED: 09/07/2024 undefined have hired the said vehicle. However, again from the insurance policy, the vehicle is to be used other than hire and reward and it is a private car. Even if the say of the claimants that the car was not hired but it was a friend's car which they had taken for use to travel, then also, extra premium is not paid for the passengers, as is transpired from the insurance policy. Therefore, in any case, whether the claimants are travelling as gratuitous passengers as it is a friend's car or they have hired the car by paying the fare, in both the cases, the appellant-insurance company is not liable to pay the compensation as the policy is only act/liability policy and the extra premium for passengers is not paid.
9. The judgments relied on by learned advocate for the appellant-insurance company are helpful to the facts of the present case.
10. A reference to the following decisions would be fruitful at this stage:
In the case of Shamanna v. Oriental Insurance Co. Ltd. , (2018) 9 SCC 650, it is held in paragraphs 12 to 14 as under:
"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 Page 6 of 14 Downloaded on : Mon Jul 15 20:56:22 IST 2024 NEUTRAL CITATION C/FA/348/2015 JUDGMENT DATED: 09/07/2024 undefined 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] 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. Page 7 of 14 Downloaded on : Mon Jul 15 20:56:22 IST 2024
NEUTRAL CITATION C/FA/348/2015 JUDGMENT DATED: 09/07/2024 undefined 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."
11. In the case of Manuara Khatun v. Rajesh Kr. Singh, (2017) 4 SCC 796, it is held in paragraphs 11 to 16 as under:
"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 Page 8 of 14 Downloaded on : Mon Jul 15 20:56:22 IST 2024 NEUTRAL CITATION C/FA/348/2015 JUDGMENT DATED: 09/07/2024 undefined 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.
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. Page 9 of 14 Downloaded on : Mon Jul 15 20:56:22 IST 2024
NEUTRAL CITATION C/FA/348/2015 JUDGMENT DATED: 09/07/2024 undefined 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 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, Page 10 of 14 Downloaded on : Mon Jul 15 20:56:22 IST 2024 NEUTRAL CITATION C/FA/348/2015 JUDGMENT DATED: 09/07/2024 undefined 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). ***
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 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 Page 11 of 14 Downloaded on : Mon Jul 15 20:56:22 IST 2024 NEUTRAL CITATION C/FA/348/2015 JUDGMENT DATED: 09/07/2024 undefined 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. Ltd. v. Challa Upendra Rao, (2004) 8 SCC 517 : 2005 SCC (Cri) 357] ."
12. 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:
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NEUTRAL CITATION C/FA/348/2015 JUDGMENT DATED: 09/07/2024 undefined "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)."
13. In view of the above discussion, this Court is of the opinion that the learned Tribunal has erred in not exonerating the appellant-insurance from payment of compensation to the claimants. Accordingly, these appeals are required to be allowed.
13. Accordingly, these appeals are partly allowed. The impugned judgment and award dated 11.11.2014 passed in Page 13 of 14 Downloaded on : Mon Jul 15 20:56:22 IST 2024 NEUTRAL CITATION C/FA/348/2015 JUDGMENT DATED: 09/07/2024 undefined M.A.C.P.No.411 of 2003 and allied matters is modified to the extent that the insurance company is not held liable to pay the amount. However, the insurance company shall first pay the compensation and it is for the insurance company to recover from the insured, if it so wishes.
14. The amount lying with the Tribunal and/or in the FDR, pursuant to the order of this Court if any, shall be disbursed to the claimants, along with accrued interest thereon if any, by account payee cheque/RTGS/NEFT, after proper verification and after following due procedure, within a period of six weeks from the date of receipt of this order.
Rest of the award remains as it is. Modified decree be drawn accordingly.
Record and proceedings be sent back to the concerned Tribunal, forthwith.
(SANDEEP N. BHATT,J) SRILATHA Page 14 of 14 Downloaded on : Mon Jul 15 20:56:22 IST 2024