The New India Assurance Company ... vs Smt. Phoollmati And Others
2019 Latest Caselaw 236 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

								    Court No. - 10
 
A.F.R
 
									  Reserved
 

 
Case :- FIRST APPEAL FROM ORDER No. - 59 of 2001
 

 
Appellant :- The New India Assurance Company Ltd.
 
Respondent :- Smt. Phoollmati And Others
 
Counsel for Appellant :- V.B. Srivastava,Sanjeev Aggarwal
 
Counsel for Respondent :- Deepak Agarwal,Akhilesh Kumar Chaturvedi,Jitendra Narain Mishra,Om Prakash
 

 
Hon'ble Vikas Kunvar Srivastav,J.

1. This First Appeal From Order under Section 173 of Motor Vehicle Act, 1988 is moved against judgment and award dated 24.11.2000 of learned Motor Accident Claims Tribunal/11th Additional District Judge, Lucknow in claim petition no.149 of 1995 (Smt. Phoolmati Vs. Mashroor Sabir & The New India Assurance Company Ltd.) by the New India Assurance Company Ltd. which shall hereinafter be called as the "insurer" only.

2. By the impugned judgment and award the court below/Motor Accident Claims Tribunal, which shall hereinafter be called as "M.A.C.T." for the purpose of brevity and convenience, has awarded compensation for the unfortunate death of the husband of claim petitioner - Phoolmati due to accident caused by rash and negligent driving of truck no.HR-37/2286 by its driver. The said truck was owned by opposite party no.1 of the claim petition, Mashroor Sabir and is alleged to have been insured by the appellant. The validity of the insurance coverage was effective at the relevant time of accident.

3. The M.A.C.T. recorded finding as to the accident having taken place due to the driver's rash and negligent driving. It further decided issue no.3, against the insurer, which was as to the driver, whether was having valid driving license and other valid documents in accordance with the terms and condition of the insurance policy at the relevant date of accident. The learned M.A.C.T. on the basis of paper no.C-22/Ga the copy of the order passed by Munsif Magistrate Mohammadi decided the issue of insurance policy being valid and effective at the relevant date of accident. The insurer preferred the present appeal against the judgment of M.A.C.T. whereby it has directed to indemnify the owner for his liability to pay the compensation awarded therein for payment to the claimants.

4. On 26.11.2009, the division bench of this Court having pecuniary jurisdiction over the appeals as was prevailing at that time passed following order:-

"Heard learned counsel for the appellant as well as Sri Deepak Agarwal.

The factum of accident has not been disputed by the parties which has taken place on 6.7.1995 by Truck No.HR-37/2286. In the said accident, one Krishna Misra has died and legal heir of Sri Krishna Misra has filed claim before the Motor Accident Claims Tribunal and the Motor Accident Claim Tribunal after exchange of the pleadings has framed the following issues:-

While deciding the issue no.3, in spite of specific case of the insurance company that the driver of the vehicle did not possess the valid driving license, no finding was recorded by the Motor Accident Claim Tribunal to the same effect. It was only observed that the driver of the vehicle possessed the valid documents pertaining to the registration of the vehicle and insurance but no finding has been recorded with regard to the validity of the driving license at the relevant time, though issue no. 3 which has already been reproduced before us to the effect as to whether the driver of the vehicle possessed valid driving licence or not along with other papers.

Since, no specific finding has been recorded, as such the matter is remanded back to the Motor Accident Claims Tribunal for recording the specific finding after affording reasonable opportunity to the parties within three months from today.

List the matter in the month of April, 2010."

5. Accordingly, the matter was remanded to the concerned M.A.C.T. to decide the issue no.3 afresh by recording specific finding after hearing the parties as to 'whether the driver of the vehicle possessed valid driving license or not along with other papers'.

6. Consequent thereupon the learned M.A.C.T. decided the issue no.3 on 18.11.2013 by holding that at the relevant time of accident, the driver of the offending motor vehicle, the truck no. HR-37/2286 was not having any valid driving license but he was possessed with valid Registration Certificate, insurance, etc. The said order becomes the part of impugned judgment and award dated 24.11.2000. Before proceeding further, it would be relevant to mention that in order dated 26.11.2009, the Division Bench of this Court has after hearing the learned counsel for the appellant-insurer and counsel for the respondents, Sri Deepak Agarawal has observed an admitted fact as under:

"The factum of accident has not been disputed by the parties which has taken place on 6.7.1995 by Truck No.HR-37/2286. In the said accident, one Krishna Misra has died and legal heir of Sri Krishna Misra has filed claim before the Motor Accident Claims Tribunal"

7. Therefore, at this stage of hearing in appeal the factum of accident with the offending motor vehicle, the truck, resulting into death of the victim-Krishna Misra is not in issue to be decided. The appeal is preferred on various grounds inter-alia viz. the amount of compensation having not been worked out by the M.A.C.T., following the principle laid down by Hon'ble The High Court as well as Hon'ble The Supreme Court. The liability upon the insurer to indemnify the insured could not be fixed as driver was having no valid driving license, Tribunal has not exercised its jurisdiction properly for making enquiry in the matter and the rate of interest i.e. 10% p.a. is illegal and exorbitant. The appellant assailed the distribution of compensation amongst respondents nos. 2 to 7 also, on the ground that though they were not impleaded, but were considered as dependents and rateably got share under the award.

8. Heard the learned counsel for the parties and perused the lower court record.

9. Now two questions are left for deciding the appeal (i) whether the M.A.C.T. has not followed the norms and guidelines laid down by the Hon'ble High Court and Apex Court for calculating the amount of compensation to the accident victim or the legal representatives of the deceased/victim of accident and (ii) the liability of the insurer to indemnify its insured in case of breach of any terms and condition of policy as provisioned under Sub-Section (2) of Section 149 of Motor Vehicles Act. These two questions are considered below respectively.

Question No.1. Whether the M.A.C.T. has not followed the norms and guidelines laid down by the Hon'ble High Court and Apex Court for calculating the amount of compensation to the accident victim or the legal representatives of the deceased/victim of accident.

10. This question as raised by the appellant (insurer) in the present appeal and the claimant respondents though has not filed appeal but their learned counsel has vehemently argued on the point of enhancement of awarded amount relying on the judgment of Hon'ble The Apex Court in (Smt. Sarla Verma Vs. Delhi Transport Corporation & Anr.) reported in [AIR 2009 SC 3104] and (National Insurance Company Limited Vs. Pranay Sethi & Ors.) reported in [2018 (36) LCD 880]. An issue borne out from the arguments submitted by learned counsel for the parties that whether the awarded amount can be enhanced as the claimant have not filed appeal separately or any cross-objection. It is to be kept into mind that under Order XLI Rule 33 of the Code of Civil Procedure, the appellate courts are empowered to grant relief to a person who has neither appealed nor filed any cross-objection. The purpose of the legislation behind the enactment of provision of Order XLI Rule 33 of the Code of Civil Procedure is to do complete justice between the parties. The appellate court can by invoking the powers conferred under Order XLI Rule 33 of the Code of Civil Procedure, if satisfied can enhance the compensation. Beside the said provision of Order XLI Rule 33 of the Code of Civil Procedure, Section 168 of the Motor Vehicles Act 1988 also empowers the Tribunal/Court to award such compensation as appears to be just which has been interpreted to mean just in accordance with law and even it can be more than amount claimed by the claimants. The reason behind this is that the Motor Vehicles Act, 1988 is a benevolent Act and should be interpreted in a way to enable the Court to assess and ascertain a just compensation. In Nagappa Vs. Gurdayal & Ors. reported in [AIR (2003) Supreme Court 674] the Apex Court has discussed, the power of High Court to enhance the awarded amount in accident cases in the absence of cross-objection. The Hon'ble Apex Court has held that the court is required to determine just compensation and there is no other limitation or restriction for awarding such compensation and in appropriate cases where from the evidence brought on record if the Tribunal/court considers that the claimant is entitled to get more compensation than claimed, the tribunal may pass just award. The said ruling of Hon'ble Apex Court is also helpful for the courts in empowering it to enhance the compensation at the appellate stage even without the injured file an appeal or cross-objection with the aid of Order XLI Rule 33 C.P.C.

11. Hon'ble the Apex Court in Panna Lal Vs. State of Bombay & Ors. reported in [AIR 1963 Supreme Court 1516] has held that appellate court can give relief to the respondent against other respondent. Filing of cross-objection by respondent not always necessary. In para-14, Hon'ble Apex Court further held that if a party who could have filed a cross objection under Order XLI Rule 22 of C.P.C., has not done so, it cannot be said that the appellate court can under no circumstance give him relief under the provisions of Order XLI Rules 33.

12. Section 168 of the Motor Vehicle Act, 1988 enables to make enquiry into the matter of accident with motor vehicle through the summary procedure in accordance with the provision as given under Section 169 of the Act. Section 169 provides that while holding any enquiry under Section 168 of Motor Vehicles Act, 1988, the M.A.C.T. may subject to any rules that may be made or any rules that made in this behalf, follow such summary proceeding as it thinks fit. Sub-Section (2) of the Section provides that for this purpose, the tribunal shall have all the powers of civil court for taking evidence on oath and of enforcing the attendance of witnesses and of compelling the discovery and production of documents and material objects and for such other purpose as may be prescribed. It is further provided that the learned M.A.C.T. shall be deemed a civil court for all the purpose of Section 195 and Chapter 26 of the Code of Criminal Procedure, 1973. A plethora of judgments in this regard that claim petitioner is not required to prove a fact relating to motor accident and other relevant facts thereto under a strict burden of proof but it is sufficient to show the existence of such fact with preponderance of probabilities.

13. By a list of documentary evidences, the petitioner has filed before the court, the certified copies of FIR, the Post Mortem Report, the Charge-Sheet, the copy of the application moved before the Court of Magistrate, the Registration Certificate produced by the owner, the Insurance Cover Note issued by the insurer-appellant on 9.2.1995 and effective till mid night of 26.01.1996.

14. It is sufficient to prove the fact of accident, if the claim petitioner submitted the FIR of the accident, the death report and post-mortem report, the charge-sheet against the driver, etc. In the present case, owner of the offending motor vehicle Truck who was charge-sheeted by the police, in pursuance, of the FIR has applied for releasing his seized motor vehicle from the police station, as such fact of accident sufficiently proved and stand unrebutted as no evidence to the contrary were led or adduced in defense.

15. Hon'ble Apex Court in the case of Archit Saini & Anr. Vs. The Oriental Insurance company Limited & Ors. in Civil Appeal No.7300-7309 of 2016, decided on 9th February, 2018 by a Three Judges Bench of the then Chief Justice of India Hon'ble Justice Dipak Misra, Hon'ble Justice A.M. Khanwilkar and Hon'ble Justice Dr. D.Y. Chandrachud held as under:

".......while considering a claim petition, the Tribunal is required to hold an enquiry and act not as criminal court so as to find whether the claimants have established the occurrence beyond shadow of any reasonable doubt. In the enquiry, if there is prima facie evidence of the occurrence there is no reason to disbelieve such evidence. The statements coupled with the facts of registration of FIR and trial of the accused in a criminal court are sufficient to arrive at a conclusion that the accident has taken place. Likewise, in Kusum Lata Vs. Satbir, 2011 (2) RCR (C) 379 (SC) Hon'ble Apex Court has held that in a case relating to motor accident claims, the claimants are not required to rove the case as it is required to be done in a criminal trial. The Court must keep this distinction in mind. Strict proof of an accident caused by a particular bus in a particular manner may not be possible to be done by the claimants.

The claimants were merely to establish their case on the touchstone of preponderance of probability. The standard of proof beyond reasonable doubt could not have been applied."

16. Learned M.A.C.T. while deciding the issue no.4 relating to entitlement of claim petitioners for compensation, took into consideration the facts pleaded in this regard by the petitioner Smt. Phoolmati, widow of the deceased/victim of the accident. For proving the fact that her husband Krishna Misra aged about 44 years died on 06.07.1995 in accident caused by the motor vehicle No.HR.37/2286. At the relevant date of accident, the said Krishna Misra was a salaried employee under the D.I.O.S., Lakhimpur Kheeri as a primary school teacher, earning Rs.3,500/- p.m. She deposed herself before learned M.A.C.T. during her examination on oath and satisfactorily proved all the necessary facts and stood intact in cross-examination made by the insurer and the owner. On examining paper no. C-28. The certificate issued by the employer as to employment, post and salary it found the amount of salary and age. For determining compensation, the multiplicand is ascertained by the M.A.C.T. taking the monthly salary as proved by evidence Rs.3,500/- p.m. deducting Rs.173/- the statutory deductions from gross salary the take home salary comes to Rs.3200/-.

17. Learned M.A.C.T. further took into consideration the fact proved by PW-2, widow of the deceased that her husband used to give her Rs.3,000/- out of his salary for household expenses and kept with him Rs.200/- for the expenses on himself.

18. Learned M.A.C.T. further proceeded to find out compensation and took multiplier 13 arbitrarily taking help of Schedule Second attached with Section 163-A of the Motor Vehicles Act, 1988 and thus calculated the amount of compensation Rs.4,68,000/-. Further, no amount under conventional heads like loss of estate, loss of consortium and funeral expenses are given to the claim petitioners by the claim tribunal.

19. The question is whether the guidelines laid down by Hon'ble Apex Court in the case of (Smt. Sarla Verma Vs. Delhi Transport Corporation & Anr.) reported in [AIR 2009 SC 3104] and thereafter, the case of (National Insurance Company Limited Vs. Pranay Sethi & Ors.) reported in [2018 (36) LCD 880] would apply in the present case which has been decided vide judgment of the learned M.A.C.T. dated 24.11.2000 with regard to the accident which happened on 06.07.1995, this question that accident occurred prior to the decision of Hon'ble Apex Court and awarded amount towards future prospect as part of compensation to be awarded has answered in a case before division bench of our own High Court in U.P.S.R.T.C. Vs. Smt. Kamla Bhargava & Ors. reported in 2018 (36) LCD 880. Para 24 of the said judgment is quoted hereinunder:-

"24. Thus, the contention of the counsel for the respondent on the strength of the judgment of the Apex Court in the case of Kerala State Electricity Board Kerala State Electricity Board (Supra) is not sustainable for the reasons; firstly that the claimants are entitled for future prospect on the date of accident being part of compensation, and secondly the law declared by the Supreme court is law of the land and would be applicable to all pending proceedings unless the apex court declares its applicability prospectively. The judgement of the Apex Court in the case of Pranay Sethi (Supra) declares the limits of compensation to be given in matters arising out of insurance claims. The declaration is by a Constitution Bench and can be clearly co-related to Articles 141, 142 and 144 of the Constitution of India. It will, therefore apply to all the pending proceedings either before this Court or before the Tribunal and to that extent it would be binding. The Apex Court has nowhere indicated that the said judgement would apply only in cases relating to accidents having occurred after the date of the judgement. In the absence of any such indication, it is not for the High Court to deny the benefit of the said judgement in pending cases including the present one."

20. In cases of fatal accident to determine just compensation Hon'ble Apex Court in the case of Sarla Verma (Supra), for the purpose of uniformity and consistency issued several guidelines to be followed by tribunals and courts while determining compensation, these steps are as follows:-

"Step 1 (Ascertaining the multiplicand)

The income of the deceased per annum should be determined. Out of the said income a deduction should be made in regard to the amount which the deceased would have spent on himself by way of personal and living expenses. The balance, which is considered to be the contribution to the dependant family, constitutes the multiplicand.

Step 2 (Ascertaining the multiplier)

Having regard to the age of the deceased and period of active career, the appropriate multiplier should be selected. This does not mean ascertaining the number of years he would have lived or worked but for the accident. Having regard to several imponderables in life and economic factors, a table of multipliers with reference to the age has been identified by this Court. The multiplier should be chosen from the said table with reference to the age of the deceased.

Step 3 (Actual calculation)

The annual contribution to the family (multiplicand) when multiplied by such multiplier gives the ''loss of dependency' to the family. Thereafter, a conventional amount in the range of Rs. 5,000/- to Rs.10,000/- may be added as loss of estate. Where the deceased is survived by his widow, another conventional amount in the range of 5,000/- to 10,000/- should be added under the head of loss of consortium. But no amount is to be awarded under the head of pain, suffering or hardship caused to the legal heirs of the deceased.

The funeral expenses, cost of transportation of the body (if incurred) and cost of any medical treatment of the deceased before death (if incurred) should also added."

21. Further, Hon'ble Apex Court in the case of Pranay Sethi (Supra) issued guidelines to add an amount in the income of the deceased who had a permanent job, towards future prospect, this additional amount should be 30% of actual salary where, the age of the deceased was 40 to 50 years. Hon'ble Apex Court so as to provide just compensation, further directed that reasonable amount under the conventional heads like loss of estate, loss of consortium and funeral expenses quantifying the same to Rs.15,000/-, Rs.40,000/- and Rs.15,000/- respectively.

22. Since, in the present case the deceased/victim of the accident is proved to have been employed as primary school teacher having the age of 44/45 years on a salary as Rs.3500/- p.m. in accordance with the salary certificate issued by the school. Further less statutory deduction like GPF, Insurance and revenue stamps to the tune of Rs.173/-, the final take home salary comes Rs.3327/- p.m. and annual income comes Rs.39,924/- (Rs.3327 multiplied by 12). In accordance with the judgment of Hon'ble Apex Court 30% of the actual salary would be Rs.11,977.20/-, then total amount of income with future prospect is Rs.39,924/-+Rs.11,977.20/-= Rs.51,901.20/-.

23. Now in the case of Sarla Verma (Supra) Hon'ble Apex Court in its para-25 has held as under:-

"25. The appellants next contended that having regard to the fact that the family of deceased consisted of 8 members including himself and as the entire family was dependent on him, the deduction on account of personal and living expenses of the deceased should be neither the standard one- third, nor one-fourth as assessed by the High Court, but one-eighth. We agree with the contention that the deduction on account of personal living expenses cannot be at a fixed one-third in all cases (unless the calculation is under section 163A read with Second Schedule to the MV Act). The percentage of deduction on account personal and living expenses can certainly vary with reference to the number of dependant members in the family. But as noticed earlier, the personal living expenses of the deceased need not exactly correspond to the number of dependants. As an earning member, the deceased would have spent more on himself than the other members of the family apart from the fact that he would have incurred expenditure on travelling/transportation and other needs."

24. In the present case PW-1, the widow of the deceased has proved that the deceased used to keep with him Rs.200/- out of his salary for his living expenses and personal expenditure and rest of the salary he handed over to her wife for maintaining the family and other household expenses. As such from the annual income Rs.200/- multiplied by 12 equals to Rs.2,400/- will be deducted, so as to work out the actual amount whereupon the claim petitioners were dependent upon the deceased. As such the amount of annual income along with future prospect minus personal living expenses of the deceased respectively Rs.39,924/- + Rs.11,977.20/- - Rs.2,400/- = Rs.49,501.20/-, this amount will be the multiplicand. Now for choosing a proper multiplier aid may be taken from para-19 and it's table as given in the case of Sarla Verma (Supra). This is proved by evidence of PW-1 and as per the post-mortem report that the age of deceased has been falling under the age group of 41 to 45 years, the column 4 provides multiplier 15. As such, the compensation would be Rs.7,42,518/- (Rs.49,501.20/- multiplied by 15). Further in this amount as per guidelines given in para-61 of Pranay Sethi's (Supra) case, the amount under conventional heads namely viz; loss of estate, loss of consortium and funeral expenses Rs.15,000/- + Rs.40,000/- + Rs.15,000/- = Rs.70,000/- will be added then the compensation will comes to the tune of Rs.8,12,518.00/-.

25. Thus on the basis of discussion made here-in-above, I hold that the claimant respondents are entitled to get compensation to the tune of Rs.8,12,518/- along with the interest at the rate of 7% p.a. chargeable from the date of petition till the actual date of payment by the respondent no.8 (insured)-Mashroor Sabir.

Question No.2. The liability of the insurer to indemnify its insured in case of breach of any terms and condition of policy as provisioned under Sub-Section (2) of Section 149 of Motor Vehicles Act.

26. The second question based on the argument of learned counsel for the appellant is as to the liability of the insurer to indemnify the insured against any judgment or award passed as to the third party risk during the use of vehicle. In the present case, the insurer has filed its written statement in response to the claim petition wherein, it was impleaded as opposite party. In the written statement (paper no. Kha-12) in its para 10 the appellant has pleaded that the accident is itself denied the petitioner is strictly put to prove that the alleged accident was caused due to the rash and negligent driving of the vehicle driven by a duly licensed driver in course of his employment causing the death, however, this plea in written statement of insurer as to strict burden of proving the accident, in the manner argued, to rest upon the claim petitioner seems not correct as Section 168 of the Motor Vehicle Act, the enquiry which is envisaged is in nature of summary proceeding and while, the tribunal proceeds with the said enquiry under Section 169 of the Motor Vehicle Act, it has been treated as civil court and the proceeding is a civil proceeding. Strict burden of prove of the fact alleged in the petition regarding accident and death is not required, it is sufficient to prove the case only by preponderance of probability.

27. In the present case, one of the major ground for challenge through the appeal is that the driver at the relevant time of accident was not having a valid driving license. Vide order dated 26.11.2009 passed by this Court, the matter was remanded for deciding issue no.3 afresh and the same was decided by learned M.A.C.T. vide order dated 18.11.2013 which has now become a part of the judgment. As such the grievance against the finding of the lower court being erroneous stands pacified because learned M.A.C.T. has recorded the finding over the issue in favour of the appellant-insurer. However, the said finding is subject to scrutiny in this appeal.

28. The objection taken in the written statement and argued by learned counsel for the appellant is that the insurer is not liable to pay the compensation as vehicle allegedly involved in the accident was being driven by a person who was not authorized to drive, as such the driving license and other documents required by law which must be proved either by claimant or by the insured. In the proceeding apart the list of documentary evidences filed by the respective parties are described wherein, the Registration Certificate, the Insurance Cover Note are filed by the owner-insured. There is no rebuttal, either in pleading or evidences by the insurer-appellant however, they argued before this Court and the matter was remanded to the M.A.C.T. for deciding afresh. Vide order dated 28.11.2013, the learned court below (M.A.C.T.) has observed that at the relevant time of accident the Registration Certificate of the offending motor vehicle Truck bearing No. HR37/2286 and the insurance cover note bearing no.281718 of the offending motor vehicle are found valid and effective, the insurance cover note was effective from 9.2.1995 to 26.1.1996, therefore, in the absence of any rebuttal or evidence to the contrary, there is no force in the said argument in this appeal. This has clearly been established by law that the purpose of insurance policy is to protect the third party from risk which might be occurred from the use of motor vehicle, therefore, Section 146 and 147 of the Motor Vehicle Act are enacted and added in Motor Vehicle Act, 1988. The said sections run as under:-

"146 Necessity for insurance against third party risk. --

(1) No person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this Chapter: 26 [Provided that in the case of a vehicle carrying, or meant to carry, dangerous or hazardous goods, there shall also be a policy of insurance under the Public Liability Insurance Act, 1991 (6 of 1991).] Explanation. --A person driving a motor vehicle merely as a paid employee, while there is in force in relation to the use of the vehicle no such policy as is required by this sub-section, shall not be deemed to act in contravention of the sub-section unless he knows or has reason to believe that there is no such policy in force.

(2) Sub-section (1) shall not apply to any vehicle owned by the Central Government or a State Government and used for Government purposes unconnected with any commercial enterprise.

(3) The appropriate Government may, by order, exempt from the operation of sub-section (1) any vehicle owned by any of the following authorities, namely:--

(a) the Central Government or a State Government, if the vehicle is used for Government purposes connected with any commercial enterprise;

(b) any local authority;

(c) any State transport undertaking:

Provided that no such order shall be made in relation to any such authority unless a fund has been established and is maintained by that authority in accordance with the rules made in that behalf under this Act for meeting any liability arising out of the use of any vehicle of that authority which that authority or any person in its employment may incur to third parties. Explanation. --For the purposes of this sub-section, "appropriate Government" means the Central Government or a State Government, as the case may be, and--

(i) in relation to any corporation or company owned by the Central Government or any State Government, means the Central Government or that State Government;

(ii) in relation to any corporation or company owned by the Central Government and one or more State Governments, means the Central Government;

(iii) in relation to any other State transport undertaking or any local authority, means that Government which has control over that undertaking or authority.

147 Requirements of policies and limits of liability. --

(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which--

(a) is issued by a person who is an authorised insurer; and

(b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)--

(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including owner of the goods or his authorised representative carried in the vehicle] or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;

(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:

Provided that a policy shall not be required--

(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923 (8 of 1923) in respect of the death of, or bodily injury to, any such employee--

(a) engaged in driving the vehicle, or

(b) if it is a public service vehicle engaged as conductor of the vehicle or in examining tickets on the vehicle, or

(c) if it is a goods carriage, being carried in the vehicle, or

(ii) to cover any contractual liability.

Explanation. --For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.

(2) Subject to the proviso to sub-section (1), a policy of insurance referred to in sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely:--

(a) save as provided in clause (b), the amount of liability incurred;

(b) in respect of damage to any property of a third party, a limit of rupees six thousand:

Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier.

(3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases.

(4) Where a cover note issued by the insurer under the provisions of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe.

(5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons."

29. Further, Sub-Section (2) of Section 149 provides several defenses to the insurer in case of any breach on the part of the insured or any person on his behalf, Section 149 of the Motor Vehicles Act, 1988 runs as under:-

"149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.--

(1) If, after a certificate of insurance has been issued under sub-section (3) of section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (l) of section 147 (being a liability covered by the terms of the policy) 1[or under the provisions of section 163A] is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.

(2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:--

(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 licensed, 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."

(3) Where any such judgment as is referred to in sub-section (1) is obtained from a Court in a reciprocating country and in the case of a foreign judgment is, by virtue of the provisions of section 13 of the Code of Civil Procedure, 1908 (5 of 1908) conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act, 1938 (4 of 1938) and whether or not he is registered under the corresponding law of the reciprocating country) shall be liable to the person entitled to the benefit of the decree in the manner and to the extent specified in sub-section (1), as if the judgment were given by a Court in India: Provided that no sum shall be payable by the insurer in respect of any such judgment unless, before the commencement of the proceedings in which the judgment is given, the insurer had notice through the Court concerned of the bringing of the proceedings and the insurer to whom notice is so given is entitled under the corresponding law of the reciprocating country, to be made a party to the proceedings and to defend the action on grounds similar to those specified in sub-section (2).

(4) Where a certificate of insurance has been issued under sub-section (3) of section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any condition other than those in clause (b) of sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub-section (1) of section 147, be of no effect: Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person.

(5) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person.

(6) In this section the expression "material fact" and "material particular" means, respectively a fact or particular of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk and, if so, at what premium and on what conditions, and the expression "liability covered by the terms of the policy" means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy.

(7) No insurer to whom the notice referred to in sub-section (2) or sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in sub-section (1) or in such judgment as is referred to in sub-section (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be.

Explanation.--For the purposes of this section, "Claims Tribunal" means a Claims Tribunal constituted under section 165 and "award" means an award made by that Tribunal under section 168."

30. The learned court below, vide order dated 18.11.2013 on issue no.3 has found that despite having given several opportunities, the owner did not produce his driver or his license. On perusal of the lower court record, there is no driving license of the driver of the offending motor vehicle, found on record. As such the finding of the court below (M.A.C.T.) is correct that at the relevant date of accident, the driver having no license and therefore, there is a breach of condition of the policy giving right to defend the insurer-appellant under Section 149 (2) of the Motor Vehicle Act, 1988.

31. In the reported judgment of National Insurance Company Ltd. Vs. Swaran Singh & Ors. reported in [(2004) 3 SCC 297], the interpretation of Section 149 (2)(a)(ii) vis-a-vis the proviso appended to Sub-Section (4) & (5) of the Motor Vehicles Act, 1988, was the issue, in a bunch of Special Leave Petitions filed by the insurance companies, assailing various decisions of the Motor Accident Claims Tribunal and High Courts. The contentions raised before the Hon'ble Supreme Court by the insurance companies as summarized in paragraph-11 of the judgment, are as follows:-

"(1) The insurer in terms of sub-section (2) of Section 149 of the Act has an absolute right to raise a defence specified, inter alia, in sub-clause (ii) of clause (a) thereof;

(2) Such a right being clear and unequivocal having regard to the judgment of this Court in National Insurance Company Ltd., Chandigarh Vs. Nicolletta Rohtagi and Others [(2002) 7 SCC 456] must be allowed to be invoked by the insurer to its full effect. In the proceedings before the Tribunal, the insurers, thus, were entitled to show that the vehicle involved in the accident at the material point of time was driven by a person who was not 'duly licensed' or was 'disqualified to hold a licence'.

(3) A person cannot be said to be 'duly licensed' unless he has been granted a permanent licence for driving a particular vehicle in terms of the provisions of Chapter II of the Motor Vehicles Act and, thus, a vehicle cannot be held to be driven by a person duly licensed therefor if : (a) he does not hold a licence; (b) he holds a fake licence; (c) he holds a licence but the validity thereof has expired; or (d) he does not hold a licence for the type of vehicle which he was driving in terms of Chapter II of the Motor Vehicles Act, 1988, or (e) he holds merely a learner's licence.

(4) Once the defence by the insurer is established in the proceedings before the Tribunal, it is bound to discharge the insurer and fix the liability only on the owner and/or the driver of the vehicle.

(5) Once it is held that the insurer has been able to establish its defence, the Tribunal or the Court cannot direct the insurance companies to pay the awarded amount to the claimant and in turn recover the same from the owner and the driver of the vehicle."

32. In the present case, learned M.A.C.T. while the matter was remanded vide order of the court dated 26.11.2009 decided the issue relating to matter in question that owner and the driver could not established that at the relevant time of accident the driver had a valid driving license. On perusal of the record, it appears that neither the owner nor the driver placed on record any driving license, therefore, this is a case of no driving license and the motor vehicle in question could not be established by the owner having been driven by a person having a driving license. In the absence of any such evidence on record it is also not established by the owner of the offending vehicle that further the accident was committed for no fault of the driver, therefore, at this stage driver having no driving license at the time of accident makes serious breach of the terms of policy as well as provisions of motor vehicle act. In such a case in accordance with the provisions of Section 149 of the Act since, the insurer has successfully established the defense in proceeding before learned M.A.C.T. The M.A.C.T was bound to discharge the insurer and fixed the liability only on the owner and driver of the vehicle and then the tribunal had to take further step to direct the insurance company to pay the awarded amount to the claimant and in turn recover the same from the owner and driver of the vehicle.

33. Dealing with all these issues Hon'ble Supreme Court with respect to the defenses taken by the insurance companies with a view to avoid liability in its paragraph nos. 39 to 43, 50, 51, 53 has held as under:-

"39. The question as to whether an insurer can avoid its liability in the event it raises a defence as envisaged in Sub-section (2) of Section 149 of the Act corresponding to sub-section (2) of Section 96 of the Motor Vehicles Act, 1939 had been the subject matter of decisions in a large number of cases.

40. It is beyond any doubt or dispute that under Section 149 (2) of the Act an insurer, to whom notice of the bringing of any proceeding for compensation has been given, can defend the action on any of the grounds mentioned therein.

41. However, Clause (a) opens with the words "that there has been a breach of a specified condition of the policy", implying that the insurer's defence of the action would depend upon the terms of the policy. The said sub-clause contains three conditions of disjunctive character, namely, the insurer can get away from the liability when (a) a named person drives the vehicle; (b) it was being driven by a person who did not have a duly granted licence; and (c) driver is a person disqualified for holding or obtaining a driving licence.

42. We may also take note of the fact that whereas in Section 3 the words used are 'effective licence', it has been differently worded in Section 149 (2) i.e. ' duly licensed'. If a person does not hold an effective licence as on the date of the accident, he may be liable for prosecution in terms of Section 141 of the Act but Section 149 pertains to insurance as regard third party risks.

43. A provision of a statute which is penal in nature vis-`a-vis a provision which is beneficent to a third party must be interpreted differently. It is also well known that the provisions contained in different expressions are ordinarily construed differently.

50. Under the Motor Vehicles Act, holding of a valid driving licence is one of the conditions of contract of insurance. Driving of a vehicle without a valid licence is an offence. However, the question herein is whether a third party involved in an accident is entitled to the amount of compensation granted by the Motor Accidents Claims Tribunal although the driver of the vehicle at the relevant time might not have a valid driving licence but would be entitled to recover the same from the owner or driver thereof.

51. It is trite that where the insurers relying upon the provisions of violation of law by the assured takes an exception to pay the assured or a third party, they must prove a wilful violation of the law by the assured. In some cases violation of criminal law, particularly, violation of the provisions of the Motor Vehicles Act may result in absolving the insurers but, the same may not necessarily hold good in the case of a third party. In any event, the exception applies only to acts done intentionally or "so recklessly as to denote that the assured did not care what the consequences of his act might be".

53. In Skandia's case (supra), this Court held :

"14. Section 96(2)(b)(ii) extents immunity to the insurance company if a breach is committed of the condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified from holding or obtaining driving licence during the period of disqualification. The expression "breach" is of great significance. The dictionary meaning of "breach" is "infringement or violation of a promise or obligation" (See Collins English Dictionary). It is, therefore, abundantly clear that the insurer will have to establish that the insured is guilty of an infringement or violation of the promise that a person who is duly licensed will have to be in charge of the vehicle. The very concept of infringement or violation of the promise that the expression "breach" carries within itself induces an inference that the violation or infringement or violation. If the insured is not at all at fault and has not done anything he should not have done or is not amiss in any respect, how can it be conscientously posited that he has committed a breach ? It is only when the insured himself places the vehicle in charge of a person who did not hold a driving licence, that it can be said that he is "guilty" of the breach of the promise that the vehicle will be driven by a licensed driver. It must be established by the insurance company that the breach was on the part of the insured and that it was the insured who was guilty of violating the promise or infringement of the contract. Unless the insured is at fault and is guilty of a breach, the insurer cannot escape from the obligation to indemnify the insured and successfully contented that he is exonerated having regard to the fact that the promisor (the insured) committed a breach of his promise. Not when some mishap occurs by some mischance. When the insured has done everything within his power inasmuch as he has engaged a licensed driver and has placed the vehicle in charge of a licensed driver, with the express or implied mandate to drive it himself, it cannot be said that the insured is guilty of any breach."

34. In the present case, the fact and evidence on the record of the court below clearly show that the insured owner of the offending vehicle failed to establish that the driver of the offending vehicle was having a driving license or was duly licensed at the relevant date and time of accident he caused. This fact brings the insurer under the exception clause so as to exonerate them from liability under the contract of insurance. The Apex Court in the case of Swaran Singh (Supra) has held, "The insurer's liability arises both from contract as well as statute. It therefore may not be proper to apply the rules for interpretation of a contract for interpreting a statute.

35. Hon'ble the Apex Court further quoted Para-12 of United India Insurance Co. Ltd. Vs. Gian Chand [(1997) 7 SCC 558] and para-12 of Skandia Insurance Co. Ltd. Vs. Kokilaben Chandravadan [(1987) 2 SCC 654] in the case of Swaran Singh (Supra) as para nos. 63 and 65 respectively which reads as under:-

"63. Gian Chand's case (supra) relied on behalf of the petitioner is of not much assistance. Therein this Court was dealing with peculiar fact situation obtaining therein. In that case the insured admittedly did not have any driving licence and in that situation, the insurance company was held to be not liable. The Bench noticed the purported conflict between the two sets of decisions but did not refer the matter to a larger Bench. It merely distinguished the cases on their own facts stating :

"12. Under the circumstances, when the insured had handed over the vehicle for being driven by an unlicensed driver, the Insurance Company would get exonerated from its liability to meet the claims of the third party who might have suffered on account of vehicular accident caused by such unlicensed driver. In view of the aforesaid two sets of decisions of this Court, which deal with different fact situations, it cannot be said that the decisions rendered by this Court in Skandia Insurance Co. Ltd. v. Kokiolaben Chandravadan and the decision of the Bench of three learned Judges in Sohan Lal in any way conflict with the decisions rendered by this Court in the cases of New India Assurance Co. Ltd. vs. Mandar Madhav Tambe and Kashiram Yadav v. Oriental Fire & General Insurance Co."

65. Skandia (supra), on the other hand, has been approved by a three- Judge Bench, when the correctness thereof was referred to a larger Bench in Sohan Lal Passi's case (supra), wherein a three-Judge Bench of this Court noticed the ratio propounded in Skandia's case (supra) and observed :

"...In other words, once there has been a contravention of the condition prescribed in sub-section (2)(b)(ii) of Section 96, the person insured shall not be entitled to the benefit of sub-section (1) of Section 96. According to us, Section 96(2)(b)(ii) should not be interpreted in a technical manner. Sub-section (2) of Section 96 only enables the insurance company to defend itself in respect of the liability to pay compensation on any of the grounds mentioned in sub-section (2) including that there has been a contravention of the condition excluding the vehicle being driven by any person who is not duly licensed. This bar on the face of it operates on the person insured. If the person who has got the vehicle insured has allowed the vehicle to be driven by a person who is not duly licensed then only that clause shall be attracted. In a case where the person who has got insured the vehicle with the insurance company, has appointed a duly licensed driver and if the accident takes place when the vehicle is being driven by a person not duly licensed on the basis of the authority of the driver duly authorised to drive the vehicle whether the insurance company in that event shall be absolved from its liability ? The expression 'breach' occurring in Section 96(2)(b) means infringement or violation of a promise or obligation. As such the insurance company will have to establish that the insured was guilty of an infringement or violation of a promise. The insurer has also to satisfy the Tribunal or the Court that such violation or infringement on the part of the insured was wilful. If the insured has taken all precautions by appointing a duly licensed driver to drive the vehicle in question and it has not been established that it was the insured who allowed the vehicle to be driven by a person not duly licensed, then the insurance company cannot repudiate its statutory liability under sub-section (1) of Section 96..."

36. Thus on the basis of above discussion, I hold the insured, the owner of offending vehicle having breached the term of policy in permitting a person to drive his motor vehicle, who has not been duly licensed by the competent authority under the motor vehicle Act. The insured could not establish that the driver was having driving license at the relevant date of accident, therefore, liability to pay compensation to the claim petitioner on account of the risk suffered by them as death of the accident victim. This liability is covered under a compulsory insurance under Section 146 and 147 of the Motor Vehicles Act, therefore the claim petitioners who are persons falling within the class of third parties whose bodily injury, death or damage to whose property is covered by such policy, are entitled to maintain a right of action against the insurer directly.

37. Further, Hon'ble the Apex Court quoted relevant paras of Sohan Lal Passi Vs. P. Sesh Reddy [(1996) 5 SCC 21] and United India Insurance Co. Ltd. Vs. Jaimy [(1998) ACJ 1318] in the case of Swaran Singh (Supra) as para nos. 75 and 77 which reads as under:-

"75. As has been held in Sohan Lal Passi (supra), the insurance company cannot shake off its liability to pay the compensation only by saying that at the relevant point of time the vehicle was driven by a person having no licence.

77. In United Insurance Co. Ltd. Vs. Jaimy and others [1998 ACJ 1318], it is stated:

"Section 149(2) relates to the liability of the insurer and speaks of a situation in regard to which no sum shall be payable by an insurer to whom notice of bringing of any such proceeding is given, could defend the action stated in the said statutory provision. The contention in the context would be found in section 149(2)(a) in the event of a breach of a specified condition of the policy enabling the insurer to avoid liability in regard thereto. In the process in regard to the right of the insurer to recover the amount from the insured, it would have to be seen by referring to section 149(4) successfully recovered from the insured.

Section 149(4) says that where a certificate of insurance is issued, so much of the said policy as purports to restrict the insurance of the persons insured thereby by referring to any of the conditions mentioned and it is precisely enacted in regard thereto and that the liability covered by section 2(b) as are required to be covered by the policy would not be available. The position is made further clear by the provisions enacting that any sum paid by the insurer in or towards the discharge of any liability of any person who is covered by the policy by virtue of this sub-section shall be recoverable by the insurer from that person.

In other words, section 149(4) considers the right of the insurance company in regard to re-imbursement of the amount paid by them only in the context of a situation other than the one contemplated under Section 149(2)(b). It would mean that except under the situation provided by section 149(2)(b), the insurer would not be in a position to avoid the liability because he has got rights against the owner under the above provision.

The learned counsel strenuously submitted that this would not be the correct understanding and interpretation of the statutory provisions of section 149 of the 1988 Act. The learned counsel submitted that to read the statutory provision to understand that the insurance company could only claim from the owner in situations governed by section 149(2)(b) and to have no right under the said provision with regard to other situations under section 149(2)(a) would not be the proper reading of the statutory provision. The learned counsel submitted that in fact the provision would have to be meaningfully understood. It is not possible to consider the submission of the learned counsel in the light of the plain language of the statutory provision. It is necessary to emphasise that under the new Act the burden of the insurance company has been made heavier in the context of controlling the need of taking up contentions to legally avoid the liabilities of the insurance company."

38. Hon'ble Apex Court in its concluding para 110 in the Swaran Singh (Supra) given summary of findings, out of them relevant paras (ix)(x)(xi) read as under:-

"(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 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 satisfactorily proved its defence in accordance with the provisions of section 149(2) read with sub-section (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 sub-section (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 sub-section (4) with proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse of by the Tribunal and be extended to claims and defences of insurer against 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."

39. The division bench of this Court in First Appeal from Order No.2174 of 2014 (United India Insurance Co. Ltd. Vs. Smt. Shashi Prabha Sharma & 4 Ors.) where the question referred to the Full Bench reads as under:-

"(iii) In a situation where the Motor Accident Claims Tribunal has fastened the liability to pay compensation only on the owner of the offending vehicle but the insurer has been directed to pay the compensation to the claimant and recover it from the owner subject to the owner furnishing security to the extent of the compensation awarded and if the owner fails to furnish security, either due to incapability or for any other reason, should the award be allowed to be frustrated for want of security, thereby defeating the object of the legislature to protect the right of third parties?"

40. The Hon'ble Full Bench answered as follows-

"In these circumstances, we hold that where the insurer is directed to pay the amount in the first instance despite having been held not to be under a legal liability to pay the awarded amount, while permitting the insurer to recover the amount from the owner, the procedure which has been laid down in Challa Upendra Rao (supra) would have to be followed. This would envisage that before the amount is released to the claimant, the owner of the offending vehicle shall furnish security for the amount which the insurer has to pay to the claimants. The offending vehicle is to be attached as a part of the security for the purpose of recovering the amount from the insured. The insurer shall not be required to file a suit and may initiate a proceeding before the executing Court. The executing Court may pass appropriate orders in accordance with law as to the manner in which the insured, namely the owner of the vehicle, shall make payment to the insurer. In the event that there is any default, it is open to the executing Court to direct realisation by the disposal of the securities to be furnished or from any other property or properties of the owner of the vehicle. In the event that the person on whose behalf payment has been made by the insurer, does not furnish security or is not in a position to furnish security to the insurer, the insurer should promptly move the executing Court. The executing Court shall then duly ensure that it exercises all its available powers in execution in accordance with law so that while on one hand payment is made to the person to whom it is due, the concerns of the insurer are duly balanced. We may only add here that all necessary and proper steps should be taken by the executing Court to ensure that the intent and object of the legislature in enacting the beneficial provisions of the Act is duly preserved and are expeditiously implemented."

41. The court below without recording finding at issue no.3 specifically as to the fact whether, driver of the offending vehicle having valid driving license at the relevant date of accident fixed the liability of the insurer to pay the awarded amount of compensation, to the claimants so as to indemnify the insured, the judgment of the court below need to be interfered on this score because the owner (insured) failed to prove that at the relevant date of accident, the driver had a valid driving license. Therefore, for the reason of breach of policy terms, the insurer has ground to avoid it's liability under the judgment and award against the insured owner. Since the accident is of the year 1995 wherein, the deceased Krishna Mishra died leaving behind, his dependents. It would not be just and proper to leave the award of compensation unexecuted, therefore, as the observation of Hon'ble Supreme Court in the case of British India General Insurance Co. Ltd. Vs. Captain Itbar Singh & Ors.) reported in [1960] SCR 168], it was emphasized that if the insurer was to pay some thing which under the contract of insurance, it was not open to him to recover it from the insured. It was further observed by the Apex Court we may, however, hasten to add that the Tribunal and the Court below must further exercise their jurisdiction to issue such a direction upon the consideration of the facts and circumstances of each case and in the event such a direction has been issued despite arriving a finding of fact to the effect that the insurer has been able to establish that the insured has committed a breach of contract of insurance as envisaged under Sub-Clause (ii) of Clause (a) of Sub-Section (2) of Section 149 of the Act, the insurance company shall be entitled to realise the awarded amount from the owner or driver of the vehicle, as the case may be, in execution of the same award having regard to the provisions of Section 165 and 168 of the Act.

42. The same principle was adopted by the Supreme Court in the case of Oriental Insurance Co. Ltd. Vs. Nanjappan reported in [AIR 2004 SC 1630] in which the Supreme Court issued following directions:

"...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. Before release of the amount to the insured, owner of the vehicle shall be issued a notice and he shall be required to furnish security for the entire amount which the insurer will pay to the claimants. The offending vehicle shall be attached, as a part of the security. If necessity arises the Executing Court shall take assistance of the concerned Regional Transport Authority. The Executing Court shall pass appropriate orders in accordance with law as to the manner in which the insured, owner of the vehicle shall make payment to the insurer. In case there is any default it shall be open to the Executing Court to direct realization by disposal of the securities to be furnished or from any other property or properties of the owner of the vehicle, the insured..."

In the light of above discussion, the appeal of insurer deserves to be allowed and the judgment of learned M.A.C.T. in claim petition is to be modified.

Order

(A) The First Appeal From Order is allowed and the award of learned M.A.C.T. is modified as under:-

(B) The claimants-respondents, Smt. Phoolmati and others are awarded compensation to the tune of Rs.8,12,518/- with interest at the rate of 7% p.a. chargeable from the date of claim petition till the actual date of payment as against the owner of the offending motor vehicle, respondent no.8 in the appeal and opposite party no.1 in the claim petition. The appellant-insurer is directed to pay the entire award amount with interest as ordered above to the claim petitioners in the first instance within 45 days from the date of judgment and to recover the same from the owner (insured), failing which the learned M.A.C.T. is directed to proceed to execute and enforce the judgment and award of the Court against the appellant (insurer) within one month so as to pay off the compensation to the claimant/respondents.

(C) The claimant-respondent no.7 will be entitled to get a share of Rs.1,00,000/- out of the compensation awarded by the court. Further, the amount of compensation granted under the conventional heads viz. loss of consortium, loss of estate and funeral expenses to the tune of Rs.70,000/- will be paid to respondent no.1 exclusively. Rest of the awarded amount will be rateably distributed in equal shares amongst respondent nos. 1 to 6 i.e. the widow of the deceased/victim of the accident, Smt. Phoolmati along with her 5 children who have now attained majority.

(D) The learned M.A.C.T. is directed that before releasing the amount to the claimant/respondents, the owner of the offending vehicle will be called upon to furnish security for the amount which the insured and appellant-insurer has to pay to the claimants. The offending motor vehicle as well as the other valuable security movable or immovable belonging to the insured be also attached reciprocally as a part of the security for the purpose of recovering the amount from the owners/insured of the offending motor vehicle- Mashroor Sabir. The insurer may initiate the proceeding before executing court which shall pass appropriate order in accordance with law as to the manner in which the owners of the offending motor vehicle- Mashroor Sabir, shall make payment to the insurer (appellant). In the event of any default, the executing court (learned M.A.C.T. concerned) has to direct the realization by the disposal of the securities furnished by the owner or from the any other property of the owner of the offending motor vehicle.

(E) The statutory deposit or any other deposit if any, made by the appellant on account of compensation under order of the court will be adjusted towards the payment of compensation which shall also be recoverable from the owner along with the total compensation paid.

Lower court record be sent back to the concerned court.

No order as to costs.

Order Date :- 27.02.2019

Gaurav/-

[Vikas Kunvar Srivastav, J.]