Calcutta High Court
United India Insurance Company Ltd. vs Smt. Smritikona Mistri & Ors. on 22 December, 1999
Equivalent citations: II(2001)ACC351, 2001ACJ520, (2000)2CALLT24(HC), 2000(1)CHN370
Author: S.B. Sinha
Bench: Satyabrata Sinha
JUDGMENT S.B. Sinha, J.
1. This appeal Js directed against a Judgment and award dated 28.3.1996 passed in M.A.C Case No. 219/93 by Sri Milan Chatterjee, Member, A.A.C Tribunal, Hooghly whereby and whereunder the learned Tribunal below has awarded a compensation of Rs. 1,19,000/- in addition to the amount of Rs. 25,000/- granted in terms of section 140 of the M.V Act for the death of one Chandan Mistri who was run over by a lorry bearing No. WMK-2217 insured with the appellant-company.
2. The fact that an accident took place is not in dispute. It is also not in dispute that the respondents are entitled to the compensation for death of the deceased Chandan Mistri being his wife, children and mother.
3. Before the learned Tribunal below the owner had not contested the case. The objection taken by the appellant was that the deceased was allegedly travelling on the right side foot rest of the driver's cabin violating the Motor Vehicles Rules. On the basis of the pleadings of the parties the learned Tribunal below framed the following issues:--
"1. Is the case maintainable in its present form?
2. Did the accident occur for the fault of the driver of the offending lorry?
3. Are the claimants entitled to have compensation from the insurance Company?
4. To what amount of compensation the claimants are entitled?"
4. Upon taking into consideration the materials brought on record the aforementioned award was passed.
5. Mr. C. Mathai, the learned counsel appearing on behalf of the appellant, inter alia, submitted that after the appeal was filed, the owner has died. According to the learned counsel the impugned award cannot be sustained as two vehicles were involved and, thus, without impleading the owner and insurer of other vehicle, the claim application was not maintainable.
6. It is now a well settled principles of law that keeping in view the provisions of section 149(2) of the Motors Vehicles Act, 1988, the defence of the insurance company is limited only to the following :
"(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:--
(i) a condition excluding the use of the vehicle--
(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
(d) without side-car being attached where the vehicle is a motor cycle, or
(ii) a condition excluding driving by a named person or persons or by any person who is not duly licenced, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or
(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or
(b) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular."
7. This aspect of the matter has been considered recently by this bench in F.M.A No. 1061 of 1997 (The New India Assurance Co. Ltd. v. Dhirendra Nath Saha & Ors.) disposed of on 9.12.1999 wherein upon taking into consideration a large number of decisions it was held :--
"This aspect of the matter has been considered by a Division Bench of this Court of which one of us (S.B. Slnha. J.) was a member in M/s. National insurance Co. Ltd. Ltd. v. Smt. Basantt Bagchi & Anr.. reported in 1997 AIHC 4303 wherein this court took note of the decision in Shantidebti (supra) and distinguished it on the ground that therein the High Curt allowed additional evidence to be adduced subject to a condition that the entire amount shall have to be paid by the insurance Company. In that case the said contention was held to be unreasonable. This court held :--
"Admittedly no argument was advanced before the learned Tribunal below. As indicated hereinbefore, even no question was put to the witnesses as regard alleged limited liability of the appellant. The appellant did not examine any witness. Before the learned Tribunal Judge it took only two points as would appear from the trend of the cross-examination which were not available to it in view of section 96(2) of the Motor Vehicles Act.
Sub-section (4) of section 96 of the Motor Vehicles Act cannot be held to mean that even the insurers can ignore its statutory liability.
Section 96 of the Act deals with the obligation of the insurer of which a vehicle must be insured and other indicated matters. The liability of the insurer is to indemnify the insured. Prior to 1939 Act, victim of an accident had no independent claim against the insurance. Such was the position in England also prior to coming into force of the Road Traffic Act. section 96 of the Act is a substantive provisions which deals the liability of the insurer to pay to the claimant directly."
8. This Court also noticed a decision of Jeevan Reddy, J. (as His Lordship then was) in National Insurance of Company Ltd. v. Smt. Tarak Bala Dos, reported in AIR 1978 A.P. 90 wherein it was held that in terms of section 96(4) of the said Act the insurer would be entitled to recover from the ensured the additional amount paid by the appellant.
9. It was further noticed:--
"In New Astatic Insurance Co. Ltd. v. Pessumaf Dhanamal Aswqno, , the Apex Court held:--
'Thus, the contract between the insured and the company may not provide for all the liabilities which the company has to undertake vis-a-vis the third parties. In view of the provisions of the Act, we are of the opinion that once the company had undertaken liability to third parties incurred by the persons specified in the policy, the third partiesright to recover any amount under or by virtue of the provisions of the Act is not affected by any condition in the policy. Considering this aspect of the terms of the policy, it is reasonable to conclude that proviso (a) of para 3 of section 11 is a mere condition affecting the rights of the insured who effected the policy and the persons to whom the cover of the policy was extended by the company, and does not come in the way of third parties' claim against the company on account of its claim against a person specified in para 3 as one to whom cover of the policy was extended."
However, the said decision was distinguished in British Indian General insurance Co. Ltd., Bombay v. Smt. Maya Banerjee, wherein also despite a finding that the insurer's liability was only to the extent of Rs. 20,000/- the Apex Court refused to interfere with the directions directing payment of the entire amount of Rs. 30.000/-.
The aforementioned decision, therefore, is also a pointer to show that in a given case the Court may refuse to exercise its discretion."
10. This Court further held that the Insurance Company being a State, it should comply with the directive principles of State Policy as envisaged in Part-IV of the Constitution of India. The Court observed:--
"The Court is not only a court of law but also a Court of Justice. If at this stage the appeal is allowed, irretrievable injury would be caused to the first respondent who has not been able to receive a single farthing despite the fact that she lost her son in August, 1981. The learned Accident Claim Tribunal has also merely awarded interest at the rate of 6% P.A. On the other hand, the appellant company which has its resources may pursue its right as against the owner of the vehicle in terms of sub-section (4) of section 96 of the Motor Vehicles Act. In this situation we are of the opinion that the interest of Justice demands that no interference is made in the appeal with liberty to the appellant to pursue its remedies in terms of sub-section (4) of section 96 of the Motor Vehicles Act."
11. The same view has been taken recently by a Division Bench of this Court in New India Assurance Company v. Smt. Uma Jhunjhunwala & Ors., reported in Cal. LT 1999(2) HC 563.
12. The questions raised in this appeal do not come within the purview 'of sub-section (2) of section 149 of the Motor Vehicles Act. Furthermore, the appellant being insurer, it has to indemnify the liability of the owner. As the owner has died, and no application for substitution having been filed after setting aside the abatement, the appeal stands abated as against the owner. The owner has neither contested the claim case nor preferred any appeal. The award made by made by the learned tribunal below upon the owner is, therefore, binding on him and, thus, the appellant cannot maintain this appeal as it has a statutory liability to indemnify the owner. This court, keeping in view the aforementioned settled principles of law cannot go into any question of fact at the instance of the insurance company.
For the reasons aforementioned, there is no merit in this appeal which is accordingly dismissed but in the facts and circumstances of this case there will be no order as to costs.
M.H.S Ansari, J.
13. I agree.
(Later) As prayed for, the respondents shall be entitled to withdraw the rest of the amount said to have been deposited with the Registrar, Appellate Side of this court.
14. Appeal dismissed