Gujarat High Court
National Insurance Co Ltd vs Shaikh Mustaq Mohammaed Kureshi on 14 October, 2022
Author: Ashutosh J. Shastri
Bench: Ashutosh J. Shastri
C/FA/2080/2011 JUDGMENT DATED: 14/10/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 2080 of 2011
With
R/FIRST APPEAL NO. 2081 of 2011
With
R/FIRST APPEAL NO. 2082 of 2011
With
R/FIRST APPEAL NO. 2083 of 2011
With
R/FIRST APPEAL NO. 2084 of 2011
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI
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1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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NATIONAL INSURANCE CO LTD
Versus
SHAIKH MUSTAQ MOHAMMAED KURESHI & 2 other(s)
==============================================================================
Appearance:
MS LILU K BHAYA(1705) for the Appellant(s) No. 1
MR MTM HAKIM(1190) for the Defendant(s) No. 1
RULE SERVED BY DS for the Defendant(s) No. 2,3
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CORAM:HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI
Date : 14/10/2022
COMMON ORAL JUDGMENT
1. The present group of appeals is arising out of common judgment and award passed by the Tribunal below. Hence, upon request of the learned advocates Page 1 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 appearing for the respective parties the group is heard conjointly and being dealt with by the present common judgment, and accordingly, First Appeal No.2080 of 2011 is treated as a lead matter for the sake of convenience.
2. First Appeal No.2080 of 2011 is filed by the appellant-Insurance Company (Original Opponent No.3) assailing the judgment and award passed by learned Motor Accident Claims Tribunal, (Aux.) Surat partly allowing the MACP No.1051 of 1997 and thereby awarded an amount of Rs.30,600/- by way of compensation with interest at the rate of 9% per annum from the date of Claim Petition till realization.
3. The facts in brief are that on 02.05.1997, the applicant along-with other applicants of other respective Claim Petitions were going toward the Surat from Umarpada in tempo bearing Registration No.GJ-7-T-9618 along-with goods and the said tempo was driven by Page 2 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 original opponent No.1 which was owned by opponent No.2 which was insured with the present appellant- Insurance Company which is original opponent No.3 in the Claim Petition. The said tempo when reached Buhada village in jurisdiction of Mandvi Police Station, since the tempo was running in a rash and negligent manner, the driver lost control, and resultantly, turtled, wherein, all the applicants sustained injuries.
4. So far as this applicant is concerned, he was admitted in Civil Hospital for treatment, later on, was required to be shifted in Lokhat Hospital and was treated and on account of such treatment not only he had incurred huge medical and other expenses, but has also lost future income. Hence, has filed a Claim Petition for seeking compensation of Rs.1,00,000/- (Rupees One Lakh Only) which was registered as MACP No.1051 of 1997. Page 3 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022
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5. So far as First Appeal No.2081 of 2011 is concerned, the same is arising out of a judgment and order passed in MACP No.40 of 1998. The background of this Claim Petition is that the claimants of this MACP were also traveling in tempo bearing registration No.GJ-7-T-9618 along-with other claimants and the said tempo as stated above has turtled on account of which the son of the claimant sustained serious injuries to which he succumbed and at that relevant point of time the son was aged about 12 years. He was shifted to the hospital for further treatment but he could not survive and expired. He was studying in standard 4th and as such on the various heads an amount of Rs.1,50,000/- was claimed by way of compensation. The learned Motor Accident Claims Tribunal (Aux.) Surat was pleased to award only Rs.1,54,000/- together with interest at the rate of 9% per annum till realization and since the Insurance Company has been saddled with liability, the appellant-Insurance Company Page 4 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 has filed present First Appeal to contend that Insurance Company cannot be held responsible.
6. So far as the First Appeal No.2082 of 2011 is concerned, the same is directed against the vary same judgment and award dated 21.03.2011 passed in MACP No.59 of 1998 and the facts in brief of this MACP No.59 of 1998 are that applicant was traveling in the aforesaid tempo along-with other claimants of respective Claim Petitions and on account of tempo having been turtled all received injuries and the applicant of this MACP No.59 of 1998 has sustained injuries of multiple fracture in left hand and also in the left leg on account of such serious injuries have sustained in addition to medical expenditure has also took medical treatment and as such by projecting the different heads, the petition was filed for claiming compensation of Rs.2,00,000/- (Rupees Two Lakh Only) and it is the grievance of the Insurance Company that Page 5 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 though there is no liability of Insurance Company, an award has been passed to the extent of Rs.1,04,000/- to be paid with 9% interest from the date of Claim Petition till realization and as such the Insurance Company has filed present First Appeal.
7. In so far as First Appeal No.2083 of 2011 is concerned, this appeal is filed by Insurance Company against the judgment and award dated 21.03.2011 passed by learned Motor Accident Claims Tribunal (Aux.) Surat in MACP No.60 of 1998 whereby, an award is passed to the extent of Rs.61,600/- together with interest at the rate of 9% from the date of Claim Petition till realization. The facts of this MACP No.60 of 1998 are that she was also traveling in the very same tempo along-with other claimants and she sustained serious injuries on account of which was admitted in the hospital and had to suffer great hardship and as such under various heads, a compensation Page 6 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 of Rs.2,00,000/- was claimed against which an amount of Rs.61,600/- came to be awarded and since the Insurance Company is saddled with the liability it has preferred present First Appeal challenging the said common award.
8. In respect of First Appeal No.2084 of 2011 an appeal has been filed by the Insurance Company against very same common judgment and award in so far as it relates to MACP No.176 of 1998 is concerned. The facts in brief are that the applicant No.1's husband as well as applicant Nos.2 to 6's father, named as Mohammedbhai Shaikh was traveling in the said tempo, sustained serious injuries and succumbed to the injuries. Said Mohammedbhai Shaikh as on the date of accident was running a floor mill and was earning Rs.4,000/- per month but due to such sudden death, the claimant lost the source of income, love and affection and had to spend expenditure for medical treatment who was a bread earner of family hence a claim Page 7 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 was put forth of Rs.4,00,000/- as compensation. The said Claim Petition was registered as MACP No.176 of 1998 in which an amount of Rs.2,68,400/- was awarded with 9% interest from the date of Claim Petition till realization and it is this common judgment and award is assailed by the Insurance Company since liability to pay the compensation was fixed upon it. Hence, this group of appeals.
9. The aforesaid appeals were admitted vide order dated 20.09.2011 and the same has been taken up conjointly for hearing upon request of learned advocates of respective sides.
10. Ms. Lilu K. Bhaya, learned advocate appearing on behalf of the Insurance Company has vehemently contended that all these Claimants or their respective relatives were traveling in the goods vehicle as passengers and in view of the well settled proposition of law the unauthorized gratuitous passengers of the goods vehicle are Page 8 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 not entitled to claim compensation against the Insurance Company since by virtue of Policy, the risk is not covered and as such the Tribunal has seriously erred in passing an award in so far as it has fixed the liability on Insurance Company. She has contended that by virtue of amendment, the Insurance Company is not responsible for such claim of compensation and it is the owner or the driver to be made a responsible for such claim and as such central controversy is that in case of unauthorized passengers in the goods vehicle whether Insurance Company can be held responsible or not? Ms. Bhaya, learned advocate has submitted that it was specifically contended before the Tribunal and also raised clearly in the written statement that the person herein was traveling as unauthorized passenger in the goods vehicle, and as such, in view of settled principle of law propounded in catena of decisions, the learned Tribunal could not have fix the liability of Insurance Company in any manner. It is submitted that the Page 9 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 learned Tribunal has failed to appreciate that even in the complaint filed by Ms. Qureshi, it has been stated that there was a marriage in the family of relatives of the complainant and they were returning from the marriage and they hired the tempo in question in which the gift articles as well as Kariavar given to newly married couple were also being carried in the said tempo and as such the learned Tribunal has concluded that all persons were traveling in tempo with their goods. According to Ms. Bhaya, learned advocate, the articles, which were shown cannot be said to be goods and as such the persons traveling in tempo cannot be said to be traveling as the owner of the goods and by referring to the decision delivered by this Hon'ble Court reported in 2010 (3) TAC 914 (Guj.) in the case of New India Assurance Company Limited v. Sahantaben Bava & Others, it is contended that an error is committed. The conclusion that Insurance Company is liable in such a situation is a finding which is Page 10 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 not sustainable in the eyes of law. Ms. Bhaya, learned advocate by referring to the relevant record has submitted that while dealing with an issue of liability of Insurance Company no relevant facts have been considered at all and simply because the tempo was insured no liability can be fastened upon. In fact while coming to such erroneous conclusion, the learned Tribunal has not even examined properly the relevant documents including Panchnama, the Policy itself as well as the contents of FIR, and hence, there is hardly any reason to justify the award. The date of accident i.e. 02.05.1997, whereas, the amendment has taken place in the year 1994 and hence even if the tempo is hired there appears to be a clear violation of Policy and further since the Kariavar cannot be treated as goods, the award which has been passed is quite erroneous and not sustainable in the eyes of law. The record has also indicated at Exhibit-39 and 51 that the items which were lying at the relevant point of time in the tempo were Page 11 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 kariavar articles and as such in view of settled proposition of law, it is not justified on the part of learned Tribunal to fix the liability of present Insurance Company. Hence, qua that, the order be set aside in so far as it relates to present appellant.
11. It has been contended that this settled position has well been propounded in a decision delivered by Hon'ble Apex Court reported in AIR 2009 SC 1999 and further consistently our Court has also taken a similar view that once Insurance Company is not responsible the question of pay and recovery principal cannot be applied and for that purpose, Ms. Bhaya, learned advocate has relied upon the decision delivered by co-ordinate bench dated 07.04.2014 in First Appeal No.710 of 2017 and allied matters. And by referring to the last paragraph of the said judgment contention is reiterated. Yet another decision which has been referred to is the decision delivered by co-ordinate Page 12 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 bench dated 30.04.2020 in case of ICICI Lombard General Insurance Company Limited reported in 2020 LS (Guj.)
137. In the said decision also a similar view is taken. However, the view was taken by Tribunal is quite in conflict with the view taken by a different co-ordinate bench. And by referring to yet another decision delivered by co-ordinate bench last in line dated 17.03.2022 in case of HDFC General Insurance Company Limited a contention is reiterated that pay and recover order may not be passed when Insurance Company is not liable at all.
12. As against this, Mr. MTM Hakim, learned advocate appearing on behalf of opponent contesting claimants has vehemently contended that here is the case in which claimants were traveling in a vehicle along-with Kariavar amounts to goods and has submitted that goods are goods it cannot be differentiated by the Insurance Company by referring to Section 2(30) of the Act as well as other Page 13 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 provisions and submitted that Insurance Company is liable to make payment. It has been vehemently contended that since traveling of respective applicants was with goods in the goods vehicle, the liability of Insurance Company rightly has been fixed and as such there is a hardly any reason for Insurance Company to come out from the responsibility which has already been fixed.
13. Mr. Hakim, learned advocate submitted that on the contrary, claimants are aggrieved by the awarded quantum against the reasonable claim which was put forth before the learned Tribunal and as such on the contrary all opponents are aggrieved by lessor amount of compensation awarded but now since the Insurance Company is trying to even come out from even less amount awarded, the Hon'ble Court may not allow Insurance Company to take a hyper technical view.
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14. In the alternative, Mr. Hakim, learned advocate has submitted that even assuming without admitting that Insurance Company may not be held responsible but in that case also when the amount has already been deposited at the relevant point of time by the Insurance Company, there is hardly any reason for Insurance Company to agitate even against pay and recovery order. In fact by referring to the decision delivered by yet another co-ordinate bench dated 10.05.2019 in a group of appeal headed by First Appeal No.1975 of 2005, a submission is reiterated that the same order be passed in the alternative, to disburse the amount to the claimant which has been deposited with a liberty that the Insurance Company can recover the same from owner or driver of the vehicle in question and by pointing out few other decisions also the contention is reiterated that such kind of orders are being passed in a routine manner whenever such controversy has arisen. Hence, it has vehemently Page 15 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 contended that the Hon'ble Court may kindly grant even that request to pay and recover and requested to dispose of these appeals. Mr. Hakim, learned advocate has relied upon following decisions:-
I. Judgment dated 10.05.2019 passed in group of appeals led by F.A. No.1975/2005.
II. 2012 (3) GLR 1985 (Full Bench).
III. 2018 (10) SCC 432.
IV. 2018 (5) SCC 762.
V. Decision dated 04.07.2013 passedin group of appeals head by F.A. No.2345/2005 and allied matters and the decision dated 03.04.2013 passed by a co-ordinate bench on 03.04.2013 in group of First Appeal ledby F.A. No.2741/2019.
15. Having heard learned advocates for the parties and having gone through the material on record, it appears that in the present case there is no grievance about the quantum of compensation awarded, to be paid to the claimants but the appellants have filed appeals only on the substantial issue that in a situation like this, the Insurance Company cannot be held responsible for liability to pay. It is only the owner and driver can be made responsible for Page 16 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 such payment of compensation, and as such, the Court is not called upon to deal with the aspect of quantum of compensation. Hence, the only questions left it to the Court is that whether in an accident like this on the basis of undisputed position Insurance Company can be held responsible or not? and if not whether pay and recovery order can be passed or not? Before dealing with the aforesaid central issues raised before the Court the record has indicated that all respective applicants were traveling in a vary same tempo bearing registration No.GJ-7-T-9618 and while reaching near village: Buhada on account of rash and negligent driving, the driver lost the control and tempo was turtled in which all persons traveling have sustained serious injuries and some were succumbed to the injuries which factum is not in dispute.
16. It is also not in dispute that all were returning from marriage and to attend the said marriage the respective Page 17 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 applicants had hired tempo and while returning, along- with them the gift articles i.e. kariavar for the newly married couple was also being carried on. This fact is also revealing from the FIR which has been lodged before Mandavi jurisdictional Police Station and in respect of this, Panchnama has also been executed which is at Exhibit-33. It is only the applicant-Insurance Company which has assailed the order in respect of its own liability and no other claimants have filed any counter appeals. The Court need not discuss further issues which are not called upon to be examined.
17. Now to test the liability of Insurance Company before dealing with an issue the set principles which are enunciated by catena of decisions, Court would like to consider with at this stage. In a decision delivered by a co-ordinate bench of this Court in a group of appeals led by F.A. No.710/2007 decided on 07.04.2014 after Page 18 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 analyzing the relevant statutory provisions and after considering the series of decisions the bench has clearly opined that once pointed that in an offending vehicle if the gratuitous passengers are traveling, the Insurance Company cannot be held responsible for liability to pay the compensation. The bench has further gone to opined clearly that when the Insurance Company itself is not responsible, the Court had no discretion to issue direction to first pay to the claimant and than to recover from the respective owner of the vehicle and as such in short when Insurance Company is not responsible, such pay and recover order cannot be passed.
18. Following are the observations made by the co- ordinate bench of this Court which deem it proper to be incorporated hereunder:-
"51. In National Insurance Co. Ltd. v. Baljit Kaur (supra), the question before the Supreme Court was as to whether an insurance policy in respect of a goods vehicle would also cover gratuitous passengers, Page 19 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 in view of the legislative amendment in 1994 to section 147 of the Motor Vehicles Act, 1988. The court after referring to its decision in the case of Asha Rani (supra) held that in place of the insurer, the owner of the vehicle shall be liable to satisfy the decree. The court, however, clarified that the legal position shall have prospective effect. The court was of the opinion that the interest of justice would be subserved if the appellant therein was directed to satisfy the awarded amount in favour of the claimants if not already satisfied and recover the same from the owner of the vehicle. It was further observed that for the purpose of such recovery, it would not be necessary for the insurer to file a separate suit but it could initiate a proceeding before the executing court as if the dispute between the insurer and the owner was subject matter of determination before the Claims Tribunal and the issue was decided against the owner and in favour of the insurer.
52. Thus, in the decisions on which reliance has been placed by the learned counsel for the claimants, majority of the decisions relate to cases wherein third parties were the claimants. In a few cases, the Supreme Court has issued directions to pay and recover even in cases where the victims were not third parties. For the reasons stated hereinabove, this court is of the view that in cases involving third parties, where the Supreme Court, after finding the insurance company not liable, has directed the insurance company to first pay the awarded amount and then recover the same from the insured/owner, such powers are relatable to sub-section (4) and (5) of the Act. Whereas in cases of gratuitous passengers travelling in a goods vehicle or other vehicle, where the Supreme Court after holding that the insurance company is not liable, has directed it to pay the awarded amount and then recover the same from the insured/owner, such powers can be correlated only with Article 142 of the Constitution of India. At this Page 20 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 stage it may be apposite to refer to the decision of the Supreme Court in the case of Indian Bank v. ABS Marine Products (P) Ltd. (supra), wherein the Supreme Court has observed that many a time, after declaring the law, in the operative part of the judgment, the court gives some directions which may either relax the application of law or exempt the case on hand from the rigour of the law in view of the peculiar facts or in view of the uncertainty of law till then, to do complete justice. While doing so, normally it is not stated that such direction/order is in exercise of power under Article 142. It is not uncommon to find that courts have followed not the law declared, but the exemption/relaxation made while moulding the relief in exercise of power under Article 142. When the High Courts repeatedly follow a direction issued under Article 142, by treating it as the law declared by the Supreme Court, incongruously, the exemption/relaxation granted under Article 142 becomes the law, though at variance with the law declared by the Supreme Court. The courts should, therefore, be careful to ascertain and follow the ratio decidendi and not the relief given on the special facts, exercising power under Article 142.
53. At this juncture, reference may be made to the decision of this court in the case of United India Insurance Co. Ltd. v. Lilaben (supra) wherein a co-
ordinate bench of this court after referring to the decisions of the Supreme Court in the case of National Insurance Company Ltd. v. Savitri Devi, United India Insurance Co. Ltd. v. Jyotibala Ghanshyam Joshi, 2012 (2) GLR 1681, National Insurance Co. Ltd. v. Baljit Kaur, Deddappa v. National Insurance Co. Ltd., S. Iyyapan v. M/s. United India Insurance Company Ltd., Manager, National Insurance Co. Ltd. v. Saju P. Paul, National Insurance Co. Ltd. v. Challa Bharathamma (supra) and Oriental Insurance Co. Ltd. v. Sudhakaran K.V., Page 21 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 AIR 2008 SC 2729, has held that in the case before it, the victim not being a third party, the insurance company has no liability at all as pointed out in the case of Oriental Insurance Co. Ltd. v. Sudhakaran K.V. (supra). The court referred to the observations made by the Supreme Court in the case of Manager, National Insurance Co. Ltd v. Saju P. Paul (supra) and was of the view that the said observations make it clear that the direction to pay the amount first and then to recover such amount can only be given in exercise of power conferred under Article 142 of the Constitution and the Supreme Court in the peculiar facts of the said case, exercised such power notwithstanding the pendency of reference to the larger bench. The court was of the view that there is no scope of passing such a direction either at the instance of the Claims Tribunal or of this court in the appeal under section 173 of the Act and held that the Claims Tribunal had erred in law in passing a direction upon the insurance company to pay the amount and then recover such amount notwithstanding its finding that the insurance company had no liability to pay the amount as the victims were not third parties within the meaning of the law.
53.2 Thus, the above referred decision had been rendered in the context of gratuitous passengers travelling in a goods vehicle and hence, the provisions of sub-section (4) and (5) of section 149 would not be attracted. Therefore, nonconsideration of the said provisions while rendering the said judgment would not render the said judgment per incuriam, having regard to the fact that this court has also found that in a case where the risk is not covered by the insurance policy and is also not a statutory risk as in the case of gratuitous passengers in a goods vehicle or other vehicle, the provisions of sub-section (4) and (5) would not be attracted and this court or the Claims Tribunal would have no Page 22 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 power to direct the insurance company to first pay the compensation and then recover the same from the owner. The Supreme Court in the cases where such direction had been issued was exercising powers under Article 142 of the Constitution of India. In these circumstances, this court is in full agreement with the view expressed by a co-ordinate bench of this court in the case of United India Insurance Co. Ltd. v. Lilaben (supra) and does not find any reason to take a different view so as to refer the matter to a larger bench.
54. The Bombay High Court, in the case of New India Assurance Company Ltd. v. Sindhu (supra) was dealing with a case of gratuitous passengers in a goods carrying vehicle wherein the Claims Tribunal had issued a direction to the insurer to satisfy the award and then recover the said amount from the original tortfeasor, that is, the owner of the vehicle. On behalf of the insurance company it was contended that such directions issued by the Supreme Court were in exercise of powers under Article 142 of the Constitution. The court held that the consistent view is that such directions were issued by the Supreme Court on consideration of the relevant provisions of the Motor Vehicles Act and not in exercise of powers under Article 142 of the Constitution. That the view taken by the said court in the case of United India Insurance Co. Ltd. v. Sindhubai Kondiram Darwante, 2010 (4) Bom CR 325, that there is a power vesting in the Claims Tribunal and the High Court depending upon the facts and circumstances of each case to direct the insurer to pay compensation amount and thereafter to recover the same from the insured, holds the field. In United India Insurance Co. Ltd. v. N. Appireddy (supra), the Andhra Pradesh High Court followed the decision of the Supreme Court in the case of Baljit Kaur (supra) and directed the insurance company to first satisfy the award and then recover Page 23 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 from the owner of the vehicle by initiating a proceeding before the executing court without filing a separate suit for the said purpose. This court for the reasons discussed hereinabove respectfully does not agree with the view taken by the Andhra Pradesh High Court as well as by the Bombay High Court in the above referred decisions. In Oriental Insurance Co. Ltd. v. Chandra Devi (supra) the Allahabad High Court was dealing with a case relating to a third party and, hence, the said decision would not have any applicability insofar as the present case is concerned.
55. In the light of the above discussion, this court is of the view that the Claims Tribunal was not justified in holding the appellant - insurance companies to be jointly and severally liable to pay the compensation awarded to the claimants after coming to the conclusion that the insurance company is not liable to indemnify the owner, in view of the fact that the victims were gratuitous passengers in the offending vehicle. While it is true that the Claims Tribunal has in the body of the judgment permitted the insurance company to recover the amount paid towards compensation from the owner after treating the award as a decree in favour of the insurance company, in view of the fact that the passengers were gratuitous passengers in the offending vehicle, the provisions of sub-section (4) and (5) of section 149 of the Act would not be attracted and, therefore, the Claims Tribunal had no power to issue such directions to the insurance company to first pay and thereafter recover the amount from the owner.
56. For the foregoing reasons, the appeals succeed and are accordingly allowed to the following extent. The impugned awards passed by the Claims Tribunal in all the appeals shall stand modified to the extent that instead of the opponents being jointly and severally liable to pay the compensation awarded Page 24 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 under the said award, it shall be only the driver and the owner of the vehicle who shall be so liable and the insurance company shall stand exonerated from such liability."
19. The aforesaid proposition has also further been reiterated by following decisions delivered by various Courts including High Court of Gujarat. The decision reported in 2013 Law Suit (Guj.) 1142, wherein, almost aforesaid similar proposition is made in paragraph Nos. 6 and 7, which reads as under:-
"6. I have heard the learned advocates for the parties. The learned advocate for the appellant - insurance company has mainly submitted that the insurance policy relating to the offending truck bearing registration No. GJ-06-G-201, forthcoming on the record of the tribunal vide exh. 70, is the Act policy. Referring the same, it is clear that it is the Act policy related to the said truck and when the occupant, as referred above, was there in truck, in that case, the insurance company is not liable, more particularly, when no extra premium was paid by the concerned insured/owner. Because the jawans were being carried in furtherance to their employment i.e. for the work of loading / unloading clay, it cannot be said that the vehicle was used for the purpose it was insured and it would not be of any help to the respondent No. 7 original opponent No. 2, because the concerned truck was insured under the Act Only Policy and when the same has not contained any endorsement on payment of additional premium, then in that circumstances, the Page 25 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 petitioner, insurance company is not liable, is the submission made by the learned advocate for the petitioner and I find myself in agreement with the same. Moreover, considering the observations made by the Hon ble the Apex Court in General Manager, United India Insurance Co. Ltd. Vs. M. Laxmi and Others, reported in 2009 ACJ 104, if the policy in question is the Act Policy, in that case, the insurance company cannot be held liable for compensation to be paid to the employees, who are travelling in the vehicle in question. The relevant part of the said decision is extracted hereunder:
8. In United India Assurance Co. Ltd. v. Tilak Singh and Ors. (2006 ACJ 1441 (SC), it has been noted as follows :
"(21) In our view, although the observations made in Asha Rani s case, 2003 ACJ 1 (SC) were in connection with carrying passengers in a goods vehicle, the same would apply with equal force to gratuitous passengers in any other vehicle also. Thus, we must uphold the contention of the appellant-Insurance Company that it owed no liability towards the injuries suffered by the deceased Rajinder Singh who was a pillion rider, as the insurance policy was a statutory policy, and hence it did not cover the risk of death of or bodily injury to a gratuitous passenger."
7. In the considered opinion of this Court, when the controversy involved in the present appeals is squarely covered by the the decisions of the Hon ble the Apex Court, present appeals deserve to be allowed. The same are accordingly allowed and the judgment and award impugned in the present appeals, is modified to the extent that the present appellant New India Assurance Co. Ltd. original opponent No. 3 is not liable to pay any compensation and instead, the respondent No. 7 original opponent No. 2 herein Director General and Inspector, S.R.P. Group 9 is held Page 26 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 liable to pay the compensation. The Cross Objection Nos. 96 to 104 of 2012 are accordingly rejected."
20. Yet another decision delivered in case of HDFC ERGO General Insurance Company Limited v. Sharmilaben Gopalbhai Vasava and 7 other decided on 17.03.2022 reported in 2022 Law Suit (Guj.) 2234 in which also it was held that Insurance Company cannot be saddled with a liability in case of "Act Policy" as if the Policy was comprehensive and in the said case also relying upon the decision delivered by Hon'ble Apex Court, the Insurance Company was exonerated.
21. In the recent past also such proposition has been led by High Court of Madras reported in 2019 SCC Online (Madras) 16849 para-3.i, ii and para-8, 13 and 14 observed as under:-
"3.The learned counsel for the appellant contended that the Insurance Company has marked the Ex.R.1- Insurance Policy which is an Act Policy and there is no liability on the part of the Insurance Company Page 27 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 towards claim of the pillion riders. The Act Policy does not cover the risk of death or bodily injuries to the gratuitous passengers. The liability of the Insurance Company can be determined only on the basis of premium collected and in the absence of additional premium, the Insurance Company is not liable to pay compensation. The Tribunal erred in holding that the 1st respondent is third party and failed to note that occupant of the vehicle cannot be treated as third party. Further, the Tribunal failed to take note of the Judgment reported in 2012 (2) TN MAC 637 (SC) and 2012 (2) TN MAC 650 (SC). Further, in support of his contention, he relied upon the following Judgments:
(i).New India Assurance Co. Ltd., Vs. S.Krishnasamy and others reported in 2015 (1) TN MAC 19 (DB).
"18.In view of the rulings cited above, we are of the considered view that since, the Policy is only an Act Policy issued by the Appellant-Insurance Company to the Insurer and the deceased Palanisamy was only an occupant of the Private Car, cannot be considered as 'Third party' of the vehicle and the Policy is covered risks to the third party alone. Hence, the deceased was only the occupant of the Private Car and the said Policy will not cover the risk of the deceased. The Doctrine of Pay and Recovery cannot be applied to the facts of the case, since the Appellant-Insurance Company is not liable to pay the Compensation. Hence, pay amount to the Claimants and then recover the same from the owner of the vehicle involved in the accident cannot be ordered and in view of the above, the rulings cited on the side of the Respondents 1 to 5/Claimants are not applicable to the facts of the present case."
(ii).National Insurance Co. Ltd., Vs. M.Padmini and others, reported in 2017 (1) TN MAC 566 "5.It is not an easy route that the Tribunal has adopted to Page 28 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 conclude that the Appellant was not liable. It helped itself to be guided by several Authorities commencing from New India Assurance Vs. Asha Rani and Others,2004 (2) TN MAC (SC) 387 : 2003 (2) SCC 223, to United India Insurance Company Limited Vs. Tilak Singh and others, 2006 (1) TN MAC 36 (SC) : 2006 (2) CTC 661, to arrive at its conclusion. I find the said finding is in order and does not call for any interference."
8.From the judgments relied on by the learned counsel appearing for the appellant as well as the 1st respondent, the following principles emerge:
(iii).The owner of the vehicle can pay extra premium to increase the liability of the insurer in respect of third party.
13. As per the judgments referred to above, in an Act Policy, the pillion rider in a two-wheeler is a gratuitous passenger and appellant is not liable to pay compensation to the 1 st respondent. In view of the fact that the appellant is not liable to pay any compensation, the question of pay and recovery does not arise.
14. In view of the Judgments of the Hon'ble Supreme Court, the award of the Tribunal is set aside and the Civil Miscellaneous Appeal is http://www.judis.nic.in allowed. The appellant / Insurance Company is permitted to withdraw the amount deposited in the credit of the claim petition, by filing necessary application before the Tribunal. No costs. Consequently connected miscellaneous petition is closed."
22. So the aforesaid principle that in case of gratuitous Page 29 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 passenger and in absence of any extra payment liability can be thrust upon Insurance Company and when the Insurance Company itself is not responsible pay and recover order cannot be passed. Hence, case is made out by the appellant - Insurnace Company to interfere with the order passed by Motor Accident Claims Tribunal (Aux.), Surat. Hence, the Court is of the opinion that following order would met the ends of justice.
I. The common impugned order dated 21.03.2011 passed by Motor Accident Claims Tribunal (Aux.) Surat is hereby quashed and set aside in so far as it relates to fixation of liability of Insurance Company and it is held that the Insurance Company is not responsible to pay the compensation. However, it is made clear that this order shall not construed as exonerating other opponents namely owner and/or driver of the vehicle in question. It would be open for original claimants opponent herein to take out Page 30 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022 C/FA/2080/2011 JUDGMENT DATED: 14/10/2022 appropriate proceedings or to take measure permissible in law to enforce the award.
23. With this modification and clarification, the appeals stand allowed.
(ASHUTOSH J. SHASTRI, J) Manoj Kumar Rai Page 31 of 31 Downloaded on : Wed Oct 19 20:11:19 IST 2022