Himachal Pradesh High Court
The New India Assurance Company Limited vs Sandhya Devi And Ors on 13 December, 2019
Author: Tarlok Singh Chauhan
Bench: Tarlok Singh Chauhan
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
FAO (MVA) No.476/2015
Reserved on: 9.12.2019
.
Decided on: 13.12.2019
The New India Assurance Company Limited ...... Appellant
Vs.
Sandhya Devi and ors. ..... Respondents
Coram
The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge.
Whether approved for reporting?1 No.
For the Appellant: Mr. Praneet Gupta, Advocate.
For the Respondents: Mr. Sanjay K. Sharma, Advocate, for
respondents No. 1 to 4.
Mr. Ramakant Sharma, Senior
Advocate with Ms. Devyani Sharma,
Advocate, for respondents No. 5 and
6.
Tarlok Singh Chauhan, J.
Aggrieved by fastening liability to pay the award passed by the learned Motor Accident Claims TribunalII, Hamirpur, the appellantInsurance Company has filed the instant appeal.
1Whether the reporters of the local papers may be allowed to see the Judgment? Yes ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...2...
2 Since the findings regarding cause of accident and death of Piar Chand in the accident are not in question, .
therefore, it is not necessary to advert to the pleadings or for that matter even the evidence of the parties in detail.
3 Suffice it to state that the claimants/respondents No. 1 to 4 filed a claim petition under Section 166 of the Motor Vehicles Act before the learned Tribunal seeking compensation to the tune of Rs. 20 lac on account of death of Piar Chand. It was averred that on 8.7.2012 at about 2.00 P.M., when Pair Chand was standing on the extreme left side of the road, he was crushed by truck bearing No. HP67A1081 being driven in rash and negligent manner by its driver, Kashmir Singh.
4 The learned Tribunal, after evaluating the pleadings and evidence of the parties, awarded compensation of Rs.
10,60,000/ in favour of the claimants along with interest @ 7.5% per annum.
5 The impugned award is sought to be challenged mainly on two grounds:
(i) the learned Tribunal below has wrongly fastened liability on the appellantInsurance Company despite the fact that it has been pleaded and proved on record that the vehicle in question was being plied in ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...3...
violation of the terms and conditions of insurance policy besides it being plied without valid rout permit .
and fitness certificate at the time of accident; and
(ii) the award is extremely high and not in accordance with law.
6 I have heard the learned counsel for the parties and have also gone through the records of the case carefully.
7A perusal of the certificate of insurance, Ext. R1, would show that the same contains following limitations as to use: The policy covers use only under a permit within the meaning of the Motor Vehicles Act, 1988 or such a carriage falling under Subsection 3 of Section 66 of the Motor Vehicles Act, 1988. The policy does not cover use FOR a) Organized racing b) Pace Making c) Reliability Trials d) Speed Testing.
8 Now, adverting to the statement of RW1, Nitisha Kumari, Junior Assistant from the office of RTO, Hamirpur, she has categorically stated that the route permit of the vehicle in question was in the name of Sanjeev Kumar and was valid from 9.8.2012 to 8.8.2017.
9 It is not in dispute that the accident in question took place prior to the issuance of the route permit i.e. 8.7.2012, ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...4...
meaning thereby as on the date of accident, the vehicle was being plied without valid route permit.
.
10 At this stage, Mr. Ramakant Sharma, learned Senior Advocate assisted by Ms. Devyani Sharma, Advocate, representing respondent No.5owner would vehemently argue that it was on account of fault of the registering and licensing authorities that the route permit could not be issued within time, even though, the owner of the vehicle had applied for registration way back in May 2012.
11 Strong reliance is placed upon the statement of RW2, who has stated that owner of the vehicle had applied for registration on 16.5.2012 after depositing passing fee on 28.4.2012. The fee had been deposited for a period w.e.f.
14.5.2012 to 13.5.2014. Registration certificate however was ready on 19.5.2012 as the print thereof was taken out on 30.7.2012 due to installation of High Security Registration Plate, which was affixed in the vehicle on 28.7.2012 and thereafter on 30.7.2012, registration certificate was issued. It was only after issuance of registration certificate that the owner could have applied for route permit, which he applied on 9.8.2012 and his route permit was valid from 9.8.2012 to 8.8.2017.
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12 Taking the argument of the learned senior counsel representing the owner at its best that it was the fault of the .
office of the RTO, Hamirpur or any other office, in issuing the route permit, even that by itself cannot be a ground to fasten liability upon the appellantInsurance Company. Therefore, if at all, the owner was/is aggrieved by any wrongful act done by the office of RTO, Hamirpur or any other officer/official, he could have and is free to initiate any action against them, but under no circumstances, can the appellantInsurance Company be fastened with liability for the alleged negligence of others i.e. RTO, Hamirpur, in this case.
13 Learned senior counsel would then argue that the vehicle was not being plied in a public place and was in fact being taken for washing and hence,it is the appellantInsurance Company, who is liable to pay the compensation as it falls within the exception carved out in Section 66(3)(p) of the Motor Vehicles Act.
14 Strong reliance in support of this contention is placed upon the judgment of the Delhi High Court in Bajaj Allianz General Insurance Co. Ltd. vs. Sri Niwas Shukla and ors., ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...6...
2019 ACJ 2939, more particularly para 9 thereof, which reads as under: .
Upon hearing and on perusal of the impugned award, evidence on record and the decisions cited, I find that in the face of evidence of proprietor of Prem Coach Repari Workshop, R2W2, the benefit of section 66 (3) (p) of the Motor Vehicles Act, 1988 accrues to owner and driver of the insured vehicle in question. The Tribunal has rightly relied upon section 66(3) (p) of the Motor Vehicles Act, 1988 to deny the recovery rights to insurer. It is true that Supreme Court in Bijaya (supra) has made passing reference as to a valid certificate of fitness of insured vehicle, but I find that on this aspect, there is no crossexamination of driver and owner of the insured vehicle in, question. So, recovery rights cannot be granted to the insurer. In the considered opinion of this court, the Tribunal has rightly declined recovery rights to insurer.
15 Before adverting to this submission, it need to be noticed that from the material brought on record, it is duly proved that at the time of accident, the vehicle in question did not have valid route permit. Exceptions that have been carved under Section 66 of the Motor Vehicles Act, needless to emphasize, are to be pleaded and proved. The exceptions cannot be taken aid of in the course of an argument to seek absolution ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...7...
from liability. Use of a vehicle in a public place without a permit is a fundamental statutory infraction.
.
16 In taking this view, I am supported by the judgment of the Hon'ble Supreme Court in Amrit Paul Singh vs. TATA AIG General Insurance Company Limited, (2018) 7 SCC 558, wherein it was held as under:
24. In the case at hand, it is clearly demonstrable from the materials brought on record that the vehicle at the time of the accident did not have a permit. The appellants had taken the stand that the vehicle was not involved in the accident. That apart, they had not stated whether the vehicle had temporary permit or any other kind of permit.
The exceptions that have been carved out under Section 66 of the Act, needless to emphasise, are to be pleaded and proved. The exceptions cannot be taken aid of in the course of an argument to seek absolution from liability. Use of a vehicle in a public place without a permit is a fundamental statutory infraction. We are disposed to think so in view of the series of exceptions carved out in Section 66. The said situations cannot be equated with absence of licence or a fake licence or a licence for different kind of vehicle, or, for that matter, violation of a condition of carrying more number of passengers. Therefore, the principles laid down in Swaran Singh (supra) and Lakhmi Chand (supra) in that regard would not be applicable to the case at hand. That apart, the insurer had taken the plea that the vehicle in question had no permit. It does not require the wisdom of ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...8...
the "Tripitaka", that the existence of a permit of any nature is a matter of documentary evidence. Nothing has been .
brought on record by the insured to prove that he had a permit of the vehicle. In such a situation, the onus cannot be cast on the insurer. Therefore, the tribunal as well as the High Court had directed the insurer was required to pay the compensation amount to the claimants with interest with the stipulation that the insurer shall be entitled to recover the same from the owner and the driver. The said directions are in consonance with the principles stated in Swaran Singh (supra) and other cases pertaining to pay and recover principle.
17 Now, in the instant case, it would be noticed that it was not pleaded case of the owner before the learned Tribunal below that the vehicle was not being plied at a public place and was rather being taken for washing as now is being canvassed before this Court.
18 No doubt, the owner of the vehicle in question has tried to lead some evidence in this respect, but then it is settled law that no amount of evidence beyond pleadings can be looked into. It is further well settled principle of law that the evidence adduced beyond the pleading would not be admissible nor can any evidence be permitted to be adduced, which is at variance with the pleadings. The Court at the later stage of the trial as ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...9...
also the Appellate Court having regard to the rule of pleading would be entitled to reject the evidence wherefor there does not .
exist any pleading. (Refer: Harihar Prasad Singh vs. Balmiki Prasad Singh, (1975) 1 SCC 212), Ram Sarup Gupta vs. Bishun Narain Inter College, (1987) 2 SCC 555, M. Chinnasamy vs. K. C. Palanisamy (2004) 6 SCC 341 and 19 As regards r to Ramesh Kumar vs. Furu Ram, (2011) 8 SCC 613).
quantum of compensation, learned Tribunal on the basis of the evidence held that the deceased was 35 years of age at the time of accident and while working as cleaner of the Truck was earning Rs. 5000/ per month and thereafter awarded 50% increase towards future prospects and assessed the income of the deceased to be Rs. 7500/ per month, whereupon 1/3rd of the income was deducted towards personal expenses and annual dependency was worked out to be Rs.
60,000/, upon which multiplier of 16 was added and in this way, a sum of Rs.9,60,000/ was awarded in favour of the claimants towards dependency to the family. In addition thereto, a sum of Rs.50,000/ towards loss of estate and another sum of Rs.50,000/ towards transportation, funeral and post rites expenses was also awarded.
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20 To say the least, the award is not in tune with the decision of a Constitutional Bench of the Hon'ble Supreme Court .
in National Insurance Co. Ltd. versus Pranay Sethi and others 2017 ACJ 2700, therefore, the compensation awarded by the learned Tribunal is now required to be redetermined in accordance with the decision in Pranay Sethi's case.
21 Why this case
came to be referred
Constitutional Bench, the answer is not difficult to find and the same is set out in para1 of the judgment itself which reads the thus:
"Perceiving cleavage of opinion between Reshma Kumari v.
Madan Mohan, 2013 ACJ 1253 (SC) and Rajesh v. Rajbir Singh 2013 ACJ 1403 (SC), both threeJudge Bench decisions, a twoJudge Bench of this Court in National Insurance Co. Ltd. v. Pushpa, (2015) 9 SCC 166, thought it appropriate to refer the matter to a larger Bench for an authoritative pronouncement, and that is how the matters have been placed before us."
22 The conflict between the judgments as extracted above was resolved by concluding that the decision in Rajesh versus Rajbir Singh, 2013 ACJ 1403 (SC) was not a binding precedent as it had not taken note of the decision in Reshma ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...11...
Kumari versus Madan Mohan, 2013 ACJ 1253(SC). The Hon'ble Supreme Court after considering the entire conspectus .
of law arrived at the following conclusions: "i) The twoJudge Bench in Santosh Devi, 2012 ACJ 1428 (SC), should have been well advised to refer the matter to a larger Bench as it was taking a different view than what has been stated in Sarla Verma, 2009 ACJ 1298 (SC), a judgment by a coordinate Bench. It is because a coordinate Bench of the same strength cannot take a contrary view than what has been held by another coordinate Bench.
(ii) As Rajesh, 2013 ACJ 1403 (SC) has not taken note of the decision in Reshma Kumari,2013 ACJ 1253 (SC), which was delivered at earlier point of time, the decision in Rajesh is not a binding precedent.
(iii) While determining the income, an addition of 50% of actual salary to the income of the deceased towards future prospects, where the deceased had a permanent job and was below the age of 40 years, should be made. The addition should be 30%, if the age of the deceased was between 40 and 50 years. In case the deceased was between the age of 50 and 60 years, the addition should be 15%. Actual salary should be read as actual salary less tax.
(iv) In case the deceased was selfemployed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...12...
age of 40 years. An addition of 25% where the deceased was between the age of 40 and 50 years and 10% where .
the deceased was between the age of 50 and 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component.
(v) For determination of the multiplicand, the deduction for personal and living expenses, the tribunals and the courts shall be guided by paras 14 and 15 of Sarla Verma 2009 ACJ 1298 (SC), which we have reproduced hereinbefore.
(vi) The selection of multiplier shall be as indicated in the Table in Sarla Verma, 2009 ACJ 1298 (SC), read with para 21 of that judgment.
(vii) The age of the deceased should be the basis for applying the multiplier.
(viii) Reasonable figures under conventional heads, namely, loss to estate, loss of consortium and funeral expenses should be Rs.15,000, Rs.40,000 and Rs.15,000 respectively. The aforesaid amounts should be enhanced at the rate of 10 per cent in every three years."
Conclusions (iv) to (viii) are relevant for the adjudication of this case.
23 It is thus clear from the aforesaid that the compensation henceforth to be awarded in favour of the claimants is essentially to be abide by the aforesaid conclusions, ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...13...
more particularly, conclusions No.(iv) to (viii) which except for conclusions No.(v) and (vi) are selfspeaking.
.
24 Now, as regards conclusions No. (v) and (vi), it would be apposite to extract paragraphs No.14, 15 and 21 along with table as referred to in Sarla Verma and others versus Delhi Transport Corporation and another, 2009 ACJ 1298 (SC) which read thus: "14. Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in Trilok Chandra's case, 1996 ACJ 831 (SC), the general practice is to apply standardized deductions. Having considered several subsequent decisions of this court, we are of the view that where the deceased was married, the deduction towards personal and living expenses of the deceased, should be onethird (1/3rd) where the number of dependent family members is 2 to 3, onefourth (1/4th) where the number of dependant family members is 4 to 6, and onefifth (1/5th) where the number of dependant family members exceed six.
15. Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. In regard to bachelors, normally, 50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...14...
married in a short time, in which event the contribution to the parent/s and siblings is likely to be cut drastically.
.
Further, subject to evidence to the contrary, the father is likely to have his own income and will not be considered as a dependant and the mother alone will be considered as a dependent. In the absence of evidence to the contrary, brothers and sisters will not be considered as dependents, because they will either be independent and earning, or married, or be dependant on the father. Thus even if the deceased is survived by parents and siblings, only the mother would be considered to be a dependant, and 50% would be treated as the personal and living expenses of the bachelor and 50% as the contribution to the family. However, where family of the bachelor is large and dependant on the income of the deceased, as in a case where he has a widowed mother and large number of younger nonearning sisters or brothers, his personal and living expenses may be restricted to onethird and contribution to the family will be taken as twothird.
21. We therefore hold that the multiplier to be used should be as mentioned in column (4) of the Table above (prepared by applying Susamma Thomas, Trilok Chandra and Charlie), which starts with an operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25 years), reduced by one unit for every five years, that is M17 for 26 to 30 years, M16 for 31 to 35 years, M15 for 36 to 40 years, M 14 for 41 to 45 years, and M13 for 46 to 50 years, then reduced by two units for every five years, that is, M11 for ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...15...
51 to 55 years, M9 for 56 to 60 years, M7 for 61 to 65 years and M5 for 66 to 70 years."
.
Age of the Multiplier Multiplier Multiplier Multiplier Multiplier actually deceased scale as scale as scale in specified in used in Second envisaged in adopted in Trilok second Schedule to MV Susamma Trilok Chandra as column in Act (as seen from Thomas Chandra clarified in the Table in the quantum of Charlie Second compensation) Schedule to MV Act (1) (2) (3) (4) (5) (6) Up to 15 15 20 years 15 to 20 16 18 18 16 19 years 21 to 25 15 17 18 17 18 years 26 to 30 14 16 17 18 17 years 31 to 35 13 15 16 17 16 years 36 to 40 12 14 15 16 15 years 41 to 45 11 13 14 15 14 years 46 to 50 10 12 13 13 12 years 51 to 55 9 11 11 11 10 years 56 to 60 8 10 9 8 8 years 61 to 65 6 8 7 5 6 years Above to 65 5 5 5 5 5 years 25 Evidently, the judgment in Pranay Sethi's case (supra) has brought about radical and fundamental changes with regard to award of compensation. For this purpose, this Court ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...16...
would deal with the case by drawing a comparative table of the amount actually awarded by the learned Tribunal along with .
modified award.
26 As regards income of the deceased, there is no evidence led by the claimants to prove that the deceased was working as cleaner with the vehicle, more particularly, licence which he was supposed to be possessing as cleaner, had not been proved on record, therefore, the deceased can only be held to be an unskilled worker, who, as per minimum wages applicable to the State of Himachal Pradesh w.e.f. 1.4.2012, would be entitled to Rs. 130/ per day, meaning thereby that his income would be Rs. 3900/ per month (Rs. 4000/ rounded off).
27 Thus, on the basis of the aforesaid discussion, it can conveniently be held that the monthly income of the deceased would work out to be Rs.4000/ and since the deceased was aged about 35 years at the time of accident, an addition of 40% of the established income would have to be taken towards future prospects and thus, his total monthly income would work out to be Rs. 5600/ (Rs.4000+Rs.1600) and after deduction of 1/3rd of the income towards his personal expenses (Rs.1866/), annual ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...17...
income would work out to be Rs.44,808/ (Rs.3734 x12). In this way, the claimants, after applying multiplier of 16 would be .
entitled to Rs.7,16,928/ towards loss of dependency to family.
28 Learned counsel for the appellantInsurance Company has fairly conceded that a sum of Rs.15,000/ towards loss of estate and Rs.15,000/ towards funeral expenses would be admissible to the claimants in view of decision of the Hon'ble Supreme Court in Pranay Sethi's case (supra).
29 That apart, claimant No.1 being mother of the deceased has not been granted any compensation by the learned Tribunal towards loss of filial as held by the Hon'ble Supreme Court in Magma General Insurance Co. Ltd. vs. Nanu Ram @ Chandu Ram & Ors 2018 (11) SCALE 263. Therefore, the claimant No.1 would be held entitled to compensation of Rs.40,000/ towards loss of filial.
30 In view of the aforesaid discussion, the compensation that would eventually work out is as under: ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...18...
Sr. Award passed by the Modified Award by this Court No. Tribunal 1 Loss of dependency to the Loss of dependency to the family:
.
family: Rs.9,60,000/ Rs.7,16,928/
2 Loss of estate: 50,000/ Loss of estate: Rs.15,000/ 3 Funeral charges: 50,000/ Funeral charges: Rs.15,000/ 4 Loss of filial to claimant No.1 Loss of filial to claimant No.1:
and 1: NIL Rs.40,000/.
5 Total = Rs.10,60,000/ Total = Rs.7,86,928/
31 As regards liability to pay the amount, obviously it is
now owner of the vehicle, who is liable to pay the award amount, but the same is firstly required to be paid by the Insurance Company as per the principle of "pay and recover" as it is more than settled that plying the vehicle without a valid route permit is a fundamental breach of policy conditions, therefore, the Insurance Company would be liable to pay the same and thereafter recover the same from the owner as held by the Hon'ble Supreme Court in Shamanna vs. Divisional Manager, Oriental Insurance Company Limited (2018) 9 SCC 650, which read as under:
5. In the case of third party risks, as per the decision in National Insurance Company Ltd. v. Swaran Singh and others (2004) 3 SCC 297, the insurer had to indemnify the compensation amount payable to the third party and the insurance company may recover the same from the insured. Doctrine of "pay and recover" was considered by ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...19...
the Supreme Court in Swaran Singh case wherein the Supreme Court examined the liability of the insurance .
company in cases of breach of policy condition due to disqualifications of the driver or invalid driving licence of the driver and held that in case of third party risks, the insurer has to indemnify the compensation amount to the third party and the insurance company may recover the same from the insured. Elaborately considering the insurer's contractual liability as well as statutory liability visavis the claims of third parties, the Supreme Court issued detailed guidelines as to how and in what circumstances, "pay and recover" can be ordered. In para (110), the Supreme Court summarised its conclusions as under: "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 thirdparty risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use 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 163A or Section 166 of the Motor Vehicles Act, 1988, inter alia, in terms of Section 149(2)(a)(ii) of the said Act.
(iii) The breach of policy condition e.g. disqualification of the driver or invalid driving licence of the driver, as contained ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...20...
in subsection (2)(a)(ii) of Section 149, has to be proved to have been committed by the insured for avoiding liability .
by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant time.
(iv) Insurance companies, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish "breach" on the part of the owner of the vehicle; the burden of proof wherefore would be on them, (v) The court cannot lay down any criteria as to how the said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances of each case.
(vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards the insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply "the rule of main purpose" and the concept of "fundamental ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...21...
breach" to allow defences available to the insurer under Section 149(2) of the Act.
.
(vii) The question, as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver (a fake one or otherwise), does not fulfill the requirements of law or not will have to be determined in each case.
(viii) If a vehicle at the time of accident was driven by a person having a learner's licence, the insurance companies would be liable to satisfy the decree.
(ix) The Claims Tribunal constituted under Section 165 read with Section 168 is empowered to adjudicate all claims in respect of the accidents involving death or of bodily injury or damage to property of third party arising in use of motor vehicle. The said power of the Tribunal is not restricted to decide the claims inter se between claimant or claimants on one side and insured, insurer and driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes inter se between the insurer and the insured. The decision rendered on the claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and the award made thereon is enforceable and executable in the same manner as provided in Section 174 of the Act for enforcement and execution of the award in favour of the claimants.
(x) Where on adjudication of the claim under the Act the Tribunal arrives at a conclusion that the insurer has ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...22...
satisfactorily proved its defence in accordance with the provisions of Section 149(2) read with subsection (7), as .
interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the Tribunal. Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the Tribunal to the Collector in the same manner under Section 174 of the Act as arrears of land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by subsection (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the Tribunal.
(xi) The provisions contained in subsection (4) with the proviso there under and subsection (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,"
(emphasis supplied)
6. As per the decision in Swaran Singh case, onus is always upon the insurance company to prove that the driver had no valid driving licence and that there was ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...23...
breach of policy conditions. Where the driver did not possess the valid driving licence and there are breach of .
policy conditions, "pay and recover" can be ordered in case of third party risks. The Tribunal is required to consider as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver, does not fulfill the requirements of law or not will have to be determined in each case.
7. The Supreme Court considered the decision of Swaran Singh case in subsequent decision in National Insurance Co. Ltd. v. Laxmi Narain Dhut, (2007) 3 SCC 700, wherein this Court held that "the decision in Swaran Singh case has no application to cases other than third party risks and in case of third party risks the insurer has to indemnify the amount and if so advised, to recover the same from the insured".
8. The same principle was reiterated in Prem Kumari v. Prahlad Dev and others (2008) 3 SCC 193.
9. For the sake of completion, we may refer to few judgments where the breach of policy conditions was fundamental and the Supreme Court taking contrary view that the insurance companies were not liable to pay the compensation. In National Insurance Co., Ltd. v. Bommithi Subbhayamma and others, (2005) 12 SCC 243, the Supreme Court reversed the judgment of Andhra Pradesh High Court in making the insurance company liable for payment of compensation in respect of gratuitous passengers carried in the goods vehicle.
10. In Oriental Insurance Co. Ltd. v. Brij Mohan and others (2007) 7 SCC 56, the claimant was travelling in the trolley ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...24...
attached to tractor carrying earth to brick kiln. It was found that the tractor and the trolley were not used for .
"agricultural works", the only purpose for which the tractor was insured, when the claimant sustained the injuries. The Supreme Court though held that the insurance company is not liable to pay compensation, however, invoked the power vested in the Supreme Court under Article 142 of the Constitution of India in directing the insurance company to satisfy the award by paying compensation to the insured/claimant and realise the same from the owner of the tractor.
11. In the present case, to deny the benefit of 'pay and recover', what seems to have substantially weighed with the High Court is the reference to larger Bench made by the twoJudge Bench in National Insurance Co. Ltd. v.
Parvathneni and another (2009) 8 SCC 785 which doubted the correctness of the decisions which in exercise of jurisdiction under Article 142 of the Constitution of India directing insurance company to pay the compensation amount even though insurance company has no liability to pay. In Parvathneni case, the Supreme Court pointed out that Article 142 of the Constitution of India does not cover such type of cases and that:
"if the insurance company has no liability to pay at all, then, it cannot be compelled by order of the court in exercise of its jurisdiction under Article 142 of the Constitution of India to pay the compensation amount and later on recover it from the owner of the vehicle".
12. The above reference in Parvathneni case has been disposed of on 17.09.2013 by the threeJudges Bench ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...25...
keeping the questions of law open to be decided in an appropriate case.
.
13. Since the reference to the larger bench in Parvathneni case 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 followed in Laxmi Narain Dhut 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 and Laxmi Narain Dhut 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 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.
32 Now as regards the recovery of the amount from the owner of the vehicle, the appellantInsurance Company shall recover the same in accordance with the judgment of the Hon'ble Supreme Court in Oriental Insurance Company Ltd. vs. Nanjappan, (2004) 13 SCC 224,wherein it was held as under: ::: Downloaded on - 17/12/2019 20:26:11 :::HCHP ...26...
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 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."
33 Accordingly, the appeal is allowed and the award, dated 25.8.2015, passed by the learned Tribunal is modified to the extent that the claimants would now be entitled to a total compensation of Rs.7,86,928/ instead of Rs.10,60,000/ along with interest @ 7.5% per annum, from the date of filing of the petition till its realization, to be apportioned amongst them as ordered by the learned Tribunal. The appellantInsurance Company shall firstly pay the modified award amount to the claimants along with the accrued interest and then shall recover the same from the owner of the vehicle. Pending application(s), if any, also stands disposed of. The parties are left to bear their own costs.
13.12.2019 (Tarlok Singh Chauhan)
(pankaj) Judge
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