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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
FIRST APPEAL No.1256 OF 2016
New India Assurance Co. Ltd.,
Patni Bhawan, Gandhi Bagh,
Nagpur, through the Regional Manager,
Nagpur, Regional Office at
Dr. Ambedkar Bhawan, M.E.C.L.
premises 4th Floor, High Land Drive,
Seminary Hills, Nagpur-440 006 (M.S.). : APPELLANT
...VERSUS...
1. Smt. Phulabai wd/o. Jaydev Meshram,
aged about 35 years,
Occupation : Household.
2. Dhanraj s/o. Jaydev Meshram,
aged about 17 years,
Occupation : Education.
3. Amol s/o. Jaydev Meshram,
aged about 14 years,
Occupation : Education.
4. Ku. Sneha d/o. Jaydev Meshram,
aged about 7 years,
Occupation : Education.
All R/o. Betala, Tahsil Bramhapuri,
Distt. Chandrapur, Applicant No.2 to 4
are minors, represented by their natural
guardian mother, the Applicant No.1.
5. Shri Rajendra s/o. Ganpatrao Katole,
aged about ____ years,
Occupation : Business,
R/o. House No.508,
Ghat Road, Nagpur - 440 009.
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6. Naresh s/o. Panduran Waghmare,
Aged about 19 years,
Occ.: Driver, R/o. Pipala,
Tahsil Umrer, Distt. Nagpur. : RESPONDENTS
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Shri B.P. Bhatt, Advocate for the Appellant.
None for the Respondents.
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CORAM : S.B. SHUKRE, J.
th DATE : 14 NOVEMBER, 2017.
ORAL JUDGMENT :
1. This appeal questions the legality and correctness of the judgment and order which fastens liability to pay compensation while exonerating the insured and the owner of the offending vehicle from very same liability, which has been passed on 22 nd June, 2016 by Motor Accident Claims Tribunal, Chandrapur, in Motor Accident Claim Petition No.116/2003.
2. A claim petition was filed under Section 166 of the Motor Vehicles Act by the respondent Nos.1 to 4 against the appellant and respondent Nos.5 and 6, the insurer, the owner and the driver of the offending vehicle, one matador bearing registration No.MH-34/A-1630. Deceased Jaydev, husband and father of the respondent Nos.1 to 4 respectively was travelling by this vehicle on 26.3.2003. He was proceeding to Bramhapuri from Piprada and on way, due to rash and ::: Uploaded on - 16/11/2017 ::: Downloaded on - 17/11/2017 01:42:28 ::: J-fa1256.16.odt 3/9 negligent driving of the vehicle, the vehicle turned turtle and the accident occurred. In this incident, deceased Jaydev lost his life on the spot of the accident.
3. It appears that the claim petition was resisted only by the appellant which filed its written statement. The petition was dismissed against respondent No.5, the insured and the owner of the offending vehicle because, respondent Nos.1 to 4 the claimants took no steps to serve the respondent No.5. The dismissal order was specially passed below Exh.-1, the claim petition, on 15.7.2010 by the Claims Tribunal, Chandrapur. The respondent No.3 though duly served, chose to remain absent before the Tribunal and, therefore, the petition was proceeded against him exparte.
4. On merits of the case, the Tribunal found that the respondent Nos.1 to 4 were entitled to receive compensation of Rs.5,17,000/- together with interest at the rate of 7.5 % p.a. from 22.6.2016 till actual realization, inclusive of no fault liability of Rs.50,000/-. It further found that this compensation was payable jointly and severally by the insurance company and owner of the offending vehicle/insured and driver of the offending vehicle. The judgment and order in this regard were passed on 22.6.2006. Being aggrieved by the same, the appellant is before this Court in the present appeal.
5. I have heard Shri B.P. Bhatt, learned counsel for the ::: Uploaded on - 16/11/2017 ::: Downloaded on - 17/11/2017 01:42:29 ::: J-fa1256.16.odt 4/9 appellant. Nobody is present on behalf of respondent Nos.1 to 5 though duly served. Ample opportunities have also been granted to them to make their final submissions, but to no avail. In fact, the first notice that was issued by this Court on 21st December, 2016 itself indicated that the matter would be finally heard. On 3 rd October, 2017, the appeal was fixed for final disposal, by consent. On 10 th October, 2017, learned counsel for the appellant and learned counsel for the respondent Nos.1 to 4 were present, although nobody was present on behalf of respondent Nos.5 and 6. On 10 th October, 2017, the appeal was extensively heard but learned counsel for respondent Nos.1 to 4 was of the opinion that this Court must grant time to her. In deference, the time was granted and the matter was kept for final disposal on the next day i.e. 11 th October, 2017. On 11th October, 2017, it was urged by learned counsel for respondent Nos.1 to 4 that record and proceedings were necessary, which was inspite of the fact that it was agreed earlier that record and proceedings would not be required in the present case as the issue involved could be decided on the basis of admitted facts and applicable law. Yet, this Court, passed an order calling for record and proceedings. The record and proceedings were received on 13 th November, 2017 and now, this matter has been taken up for final disposal. But, as stated earlier, nobody is present on behalf of respondent Nos.1 to 4. Similarly, respondent Nos.5 and 6 are also absent. Therefore, I have considered the ::: Uploaded on - 16/11/2017 ::: Downloaded on - 17/11/2017 01:42:29 ::: J-fa1256.16.odt 5/9 submissions made by learned counsel for the appellant. I have gone through the record and proceedings and also the impugned judgment and order.
6. Now, the only point which arises for my determination is :
Whether any liability to pay compensation can be fastened upon the insurance company without first holding the insured and the owner of the offending vehicle as liable to pay compensation ?
7. Learned counsel for the appellant submits that this question has been answered affirmatively by the learned Member of the Motor Accident Claims Tribunal, Chandrapur, by not considering the applicable law. He submits that the judgment of the Hon'ble Apex Court rendered in the case of A. Robert vs. United India Insurance Co. Ltd., reported in 2000 ACJ 252 was misread by the Tribunal and the Tribunal failed to apply the law settled by the Hon'ble Apex Court. For his such submission, he places his reliance upon the cases Oriental Insurance Co. Ltd. vs. Sunita Rathi and others, reported in 1998 ACJ 121 and V. Raja Reddy vs. T. Venkata Subbarao and another, reported in 2013 (1) T.A.C. 872 (A.P.).
8. On going through the judgments relied upon by the learned counsel for the appellant and also the judgment relied upon by the Tribunal, I find great substance in the argument of learned counsel for the appellant.
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9. The law in this regard has been settled by the three Judges Bench of the Hon'ble Apex Court in the case of Sunita Rathi and others (supra). This judgment has clarified the nature of liability of the insurance company and held that the liability is in the nature of indemnifying the insured for the loss that he incurs on his being made to pay compensation to the claimants, in terms of contract of insurance entered into between the insurer and the insured. It is observed that the insurer cannot be held liable on the basis of insurance policy unless the owner of the vehicle who is insured is first fastened with liability to pay compensation. Relevant observations of the Hon'ble Apex Court as they appear in paragraph 3 are reproduced thus :
"It follows that the insurer cannot be held liable on the basis of the above policy in the present case and, therefore, the liability has to be of the owner of the vehicle. However, we find that the High Court, without assigning any reason, has simply assumed that the owner of the vehicle was not not liable and that the insurer alone was liable in the present case. This conclusion, reached by the High Court, is clearly erroneous. The liability of the insurer arises only when the liability of the insured has been upheld for the purpose of indemnifying the insured under the contract of insurance. There is, thus, a basic fallacy in the conclusion reached by the high Court on this point."
10. This judgment of the Hon'ble Apex Court has been followed by the learned Single Judge of Andhra Pradesh High Court in V. Raja Reddy (supra). The facts of V. Raja Reddy's case were almost identical to the facts of the present case wherein claim petition filed by the appellant ::: Uploaded on - 16/11/2017 ::: Downloaded on - 17/11/2017 01:42:29 ::: J-fa1256.16.odt 7/9 under Section 166 of the Motor Vehicles Act was dismissed against the owner of the offending vehicle and, therefore, no liability to pay compensation was fixed upon the owner of the offending vehicle.
11. In the instant case, there is no dispute about the fact that the claim petition was dismissed on 15.7.2010 against the respondent No.5, the owner of the offending vehicle and the insured, by the Tribunal for failure of respondent Nos.1 to 4/claimants to take steps for effective service upon him. This order was never sought to be recalled by the respondent Nos.1 to 4. It was also not challenged at any point of time by respondent Nos.1 to 4. Therefore, the order became final. The Motor Accident Claims Tribunal in the impugned judgment and order, has also found that the order of dismissal of the petition against the respondent No.5 having become final, no liability to pay compensation could be fastened upon the owner, who is the respondent No.5 in this appeal and accordingly, it exonerated respondent No.5 of his any liability to pay the compensation. This is reflected from the final order that has been made in the present case by the Tribunal. Under the final order, liability to pay compensation has been fastened only upon the insurance company and the driver of the offending vehicle and not upon the owner of the offending vehicle. This finding is completely inconsistent with the law laid down by the Hon'ble Apex Court in Sunita Rathi (supra). The law is clear and it is to the effect that liability of the insurance company arises ::: Uploaded on - 16/11/2017 ::: Downloaded on - 17/11/2017 01:42:29 ::: J-fa1256.16.odt 8/9 only after the liability of the insured is fixed because it is in the nature of indemnifying the insured for the loss that he would incur on his being made to pay compensation to a person seeking compensation under Section 166 of the Motor Vehicles Act. However, this law has not been applied by the Tribunal and thus it has committed an illegality in the present case.
12. In fact, what the Tribunal has done is to place its reliance upon the case of A Robert (supra) wherein facts were entirely different. The Hon'ble Apex Court observed that the name of respondent No.2, who was the insured and owner of the motor vehicle stood deleted and the Special Leave Petition against him was also dismissed by an order dated 14.9.1998 on account of absence of service to him and, therefore, the question of statutory liability of the insurance company would survive for its consideration. This observation has been made in the background of facts peculiar to the case of A. Robert. In that case, the liability to pay compensation was fixed upon the insured and the owner by the Tribunal and service upon him was not completed by the appellant in the Special Leave Petition filed by the appellant. That was the reason why the Special Leave Petition was dismissed against him and it was in this background that the Hon'ble Apex Court held that the question of statutory liability of the insurance company would survive for its consideration. It was not a case where the insured and the owner of the ::: Uploaded on - 16/11/2017 ::: Downloaded on - 17/11/2017 01:42:29 ::: J-fa1256.16.odt 9/9 offending vehicle had not been found to be liable to pay compensation. It was a case where the insured, after having been found liable to pay compensation, was absent before the Hon'ble Apex Court. Therefore, in my humble opinion, this case could not have been applied to the facts of the present case.
13. In the result, I find that the insurance company in the present case would have to be exonerated of its liability to pay the compensation as the insured, whom it indemnifies, has already been exonerated of his liability to pay compensation. Such being the facts of this case, there would be no question as well of directing the insurance company to first pay and recover later from the owner in the present case. The question is answered as in the negative. The appeal deserves to be allowed.
14. The appeal is allowed with costs.
15. The impugned judgment and order are hereby quashed and set aside.
16. The claim petition filed against the appellant stands dismissed with costs.
17. The amount deposited in this Court is permitted to be withdrawn by the appellant.
JUDGE okMksns ::: Uploaded on - 16/11/2017 ::: Downloaded on - 17/11/2017 01:42:29 :::