Madras High Court
M/S.National Insurance Company ... vs Sakthivel on 23 February, 2022
Author: J.Nisha Banu
Bench: J.Nisha Banu
C.M.A.No.2174 of 2007
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 23.02.2022
CORAM:
THE HON'BLE MRS.JUSTICE J.NISHA BANU
C.M.A.No. 2174 of 2007
and C.M.P.Nos.2853 and 2855 of 2007
M/s.National Insurance Company Limited,
Promonade Road, Trichy-1. ... Appellant
vs.
1. Sakthivel
2.K.Subramanian
3.Sukumar
( Exparte in the Lower Cour)
4.M/s.United India Insurance Co.,Ltd.
T.K.M.Complex, Vellore. .. Respondents
Prayer :- Civil Miscellaneous Appeals filed under Section 173 read with
Section 170 of Motor Vehicles Act, 1988 against the Judgment and Decree
dated 27.10.2004 made in M.C.O.P.No. 98 of 1996, on the file of the Motor
Accident Claims Tribunal (Subordinate Judge) at Dharmapuri.
For Appellant : Mr/M.L.Ganesh for
M/s.S.Arunkumar
For Respondents : M/s.M.T.Selvam for R1
: No Appearance for R2
: R3-Exparte
: Mr.C.Paranthaman for R4
https://www.mhc.tn.gov.in/judis
Page No:1/12
C.M.A.No.2174 of 2007
JUDGMENT
The above civil miscellaneous appeal has been filed by the Insurance company against the award passed by the Tribunal in M.C.O.P.No. 98 of 1996 dated 27.10.2004, wherein, the Tribunal has passed a award granting a sum of Rs.1,11,500/- as compensation to the claimant therein and directed the insured and insurer to pay compensation jointly and severally.
2. The tribunal finding in respect of liability is that if there is violation of policy condition, it would be open to insurer to proceed against owner of vehicle in accordance with law; the insurance company is entitled to recover the amount from the owner of the vehicle who possessed the vehicle at the time of accident.
3. The insurance company/appellant herein has taken the ground that the insured has violated the policy condition by permitting to drive the vehicle without valid driving licence. It is also their contention that the coverage is “Act Policy” and the occupants are not covered under the said policy.
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4. In order to decide the issue on hand, the manner of accident is necessarily to be discussed in brief.
5. On 07.01.1995, the claimant and others were proceeded towards Tiruttani in the car bearing Reg.No.TCY 1265 belonging to the 1st respondent/owner of the vehcile who insured his vehicle with the 2nd resondent/appellant herein/insurance company. While the said car was proceeding towards Tiruttani, the driver of the van belonging to the 4 th respondent/4th respondent herein, drove the vehicle in a rash and negligent manner and the accident has occured due to head on collision. Due to the said impact, the claimant and the other passengers in the car were greviously injured. According to the 1st Respondent/Claimant, the accident occurred due to the rash and negligent driving of the driver of both the car and van. For the injuries sustained by her, the Claimant, claimed a sum of Rs.2,00,000/- as compensation in M.C.O.P.No. 98 of 1996.
6. Before the Tribunal, on the side of the Claimant, P.W.1 to P.W.4 were examined and Exs.P1 to P11 were marked. On the side of the Insurance Company, R.W.1 was examined and Exs.R1 to R5 was marked. https://www.mhc.tn.gov.in/judis Page No:3/12 C.M.A.No.2174 of 2007
7. After analyzing the materials and evidence available on record, the Tribunal found that the accident occurred only due to the rash and negligent act of both the drivers of the car as well as the van and fastened the liability on the appellant and 4th respondent Insurance Company. While considering the compensation, the Tribunal had taken into consideration the documents marked by the claimant and awarded total compensation of Rs.1,11,500/- with interest at the rate of 9% per annum and in the total compensation, 50% of the amount shall be payable by the appellant – Insurance Company and thereafter recover the same from the second respondent/owner of the car and remaining 50% of the amount shall be jointly and severally payable by the third and fourth respondents.
8. The learned counsel for the appellant – Insurance Company would submit that the 1st respondent/claimant was not covered by the policy and therefore, the Tribunal erred in awarding compensation to her. It is further submitted that the Tribunal erred in directing the appellant Insurance Company to pay and recover the amount from the owner of the vehicle. https://www.mhc.tn.gov.in/judis Page No:4/12 C.M.A.No.2174 of 2007
9. Learned counsel for the appellant/insurance company in support of his submissions and the grounds taken in appeal relied on the following decisions:-
“ i) United India Insurance Company Limited Vs. Sathis kumar and Another, 2019(1) TN MAC 332
ii) New India Assurance Company Ltd., vs. S.Krishnasamy and 6 Others, 2015(1) TN MAC 19 (DB)
iii) United India Insurance Co., Ltd., vs. Tilak Singh and Others, 2006 ACJ 1441”
10. The decisions that were relied on by the learned counsel for the appellant/insurance company is on the following points:
(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 https://www.mhc.tn.gov.in/judis Page No:5/12 C.M.A.No.2174 of 2007 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.”
11. The learned counsel for the appellant would point out that the circumstances in which the Doctrine of Pay and Recover might be applied is considered by a Full Bench of this Court in Branch Manager, United India Insurance Co. Ltd. v. Nagammal, 2009 (1) CTC 1, where the Court inter alia held that in all cases that were decided after the decision of National Insurance Co. Ltd. v. Baljit Kaur and others, 2004(1) CTC 210 (SC) : 2004 SCJ 428, Tribunal cannot apply the Doctrine of “Pay and Recover” where there is no Insurance cover.
12. On the other hand, the learned counsel appearing for first respondent/claimant would submit that as per the settled proposition of law and general principle, if there is breach of policy condition, the insurer can be directed to pay and later recover from the insured. This principle is based https://www.mhc.tn.gov.in/judis Page No:6/12 C.M.A.No.2174 of 2007 on the judicial discretion that the claimants should not suffer as the liability is an inter se dispute between the insurer and the insured.
13. So far as the present case is concerned, the Award was passed by the Tribunal on 27.10.2004, but the Judgment of the Full Bench in Nagammal case was pronounced only on 23.12.2008, and hence, the Tribunal could not be blamed for applying the Doctrine of “Pay and Recover”.
14. Taking into consideration the facts and circumstances of the case and in the light of the settled principles of law, this court is of the considered view that the decision of the Honourable Supreme Court reported in 2018 (2) TN MAC 151 (SC) [Shamanna Vs. Divisional Manager, The Oriental Insurance Company Limited, = 2018 ACJ 2163 (SC) = 2018 (9) SCC 650], is to be followed in the case on hand. The Apex Court in the said decision, in paragraph 10 to 13 has held as follows:-
“ 10. In Oriental Insurance Co. Ltd. v. Brij Mohan and others (2007) 7 SCC 56, the claimant was travelling in the trolley attached to tractor carrying earth to brick kiln. It was found that the tractor and the trolley were not used for https://www.mhc.tn.gov.in/judis Page No:7/12 C.M.A.No.2174 of 2007 “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 two-Judge 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”. The above reference in Parvathneni https://www.mhc.tn.gov.in/judis Page No:8/12 C.M.A.No.2174 of 2007 case has been disposed of on 17.09.2013 by the three- Judges Bench keeping the questions of law open to be decided in an appropriate case.
12. 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.
13. 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 and others (2004) 13 SCC 224 where this Court held that “….that for the purpose of recovering the same https://www.mhc.tn.gov.in/judis Page No:9/12 C.M.A.No.2174 of 2007 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.”
15. Following the above settled principles of law, interference to the award passed by the Tribunal does not arise. The impugned Award passed in MCOP.No.98 of 1996 directing the insurer and the insured to pay the compensation jointly and severally holds good. The insurance company is directed to pay the compensation at the first instance and recover from the owner of the vehicle later. 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., Vs. Nanjappan and others (2004) 13 SCC 224.
16. Accordingly, this Civil Miscellaneous Appeal is dismissed and the order passed by the learned Motor Accidents Claims Tribunal (Subordinate Judge) at Dharmapuri in M.C.O.P.No. 98 of 1996 dated 27.10.2004 is confirmed except the interest @ 9% p.a is modified to 7.5% p.a. The appellant insurance company is directed to deposit 50% of https://www.mhc.tn.gov.in/judis Page No:10/12 C.M.A.No.2174 of 2007 the compensation awarded by the Tribunal and thereafter recover the same from the second respondent herein. The third and fourth respondents are jointly and severally liable to pay the remaining 50% of the awarded amount and cost, less already deposited if any, together with interest at 7.5% per annum from the date of the claim petition till the date of deposit, within a period of six weeks from the date of receipt of a copy of this order. On such deposit, the claimant is entitled to withdraw the same. No costs. Consequently, connected, Miscellaneous Petitions are closed.
23.02.2022 (2/2) Index : Yes / No Internet : Yes / No To:
The Motor Accident Claims Tribunal, (Subordinate Judge) at Dharmapuri.
https://www.mhc.tn.gov.in/judis Page No:11/12 C.M.A.No.2174 of 2007 J.NISHA BANU,J.
msv C.M.A.No.2174 of 2007 23.02.2022 https://www.mhc.tn.gov.in/judis Page No:12/12