Icici Lombard General Insurance Co Ltd vs Smt Pushpa Kumari And 5 Others
2024 Latest Caselaw 37765 ALL

Allahabad High Court

Icici Lombard General Insurance Co Ltd vs Smt Pushpa Kumari And 5 Others on 18 November, 2024

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 


?Neutral Citation No. - 2024:AHC:179891
 
Court No. - 36
 

 
Case :- FIRST APPEAL FROM ORDER No. - 1755 of 2024
 

 
Appellant :- Icici Lombard General Insurance Co Ltd
 
Respondent :- Smt Pushpa Kumari And 5 Others
 
Counsel for Appellant :- Saurabh Srivastava
 
Counsel for Respondent :- Satya Deo Ojha
 

 
Hon'ble Kshitij Shailendra,J.
 

1. Heard Sri Saurabh Srivastava, learned counsel for the appellant and Sri S.D. Ojha, learned counsel for the claimant-respondents.

2. The instant appeal is directed against the award dated 29.05.2024 passed by the Motor Accident Claims Tribunal, Allahabad in M.A.C.P. No.267 of 2017 (Smt. Pushpa Kumari and others Vs. Virendra Singh and others). The award is against the owner and insurance company, jointly and severely, with a further direction to the insurance company to deposit the amount awarded it giving right to recover the said amount from the owner.

3. Sri S.D. Ojha, learned counsel for the claimant-respondents, has raised an objection that in view of the decision of the Supreme Court in National Insurance Company Limited Vs. Swaran Singh: 2004 (1) T.A.C. 321 (SC), the instant appeal is not maintainable. He submits that the award is always against the owner of the vehicle in case breach of policy is alleged or established and, in the instant case also, the insurance company cannot avoid its liability to deposit the amount awarded without there being any effect on its right to recover from the owner or to contest the appeal filed by the owner.

4. Sri Saurabh Srivastava, learned counsel for the appellant submits that the judgment of Sawaran Singh (supra) would not come in the way of the appellant and by placing reliance upon Full Bench decision of this Court in United India Insurance Co. Ltd. Vs. Smt. Shashi Prabha Sharma and 4 others: 2015 (4) T.A.C. 650, it is contended that the appeal filed by the insurance company against the order of Tribunal giving right to recovery is always maintainable. He further submits that in the instant case, the appeal is on ground that owner and the claimant did not bring on record the driving licence or its copy and there was no involvement of the vehicle. He also submits that if the owner subsequently brings on record driving licence by leading any evidence under Order 41 Rule 27 CPC, he may succeed to get the award set aside to the extent it is against the owner and, in that event, the insurance company would suffer.

5. This Court has carefully read the judgment of Swaran Singh (supra) and also Smt. Shashi Prabha Sharma (supra). The Full Bench in Smt. Shashi Prabha Sharma (supra) discussed the ratio of Swaran Singh (supra) as under:-

"26. InSwaran Singh(supra), the Bench of three learned Judges noted that the social need of a victim who is to be compensated had been elucidated as far back as in 1959 by another Bench of three learned Judges of the Supreme Court inBritish India General Insurance Co Ltd Vs Captain Itbar Singh, (1960) 1 S.C.R. 168. In the earlier decision, it was emphasised that if the insurer was made to pay something which, under the contract of insurance, he was not bound to pay, it was open to him to recover it from the assured:

"...Secondly, if he has been made to pay something which on the contract of the policy he was not bound to pay, he can under the proviso to sub-section (3) and under sub-section (4) recover it from the assured. It was said that the assured might be a man of straw and the insurer might not be able to recover anything from him. But the answer to that is that it is the insurer's bad luck. In such circumstances the injured person also would not have been able to recover the damages suffered by him from the assured, the person causing the injuries."

Again, this principle was emphasised in the following observations:

"...The insurance company may not be liable to satisfy the decree and, therefore, its liability may be zero but it does mean that it did not have initial liability at all. Thus, if the insurance company is made liable to pay any amount, it can recover the entire amount paid to the third party on behalf of the assured. If this interpretation is not given to the beneficent provisions of the Act having regard to its purport and object, we fail to see a situation where beneficent provisions can be given effect to. ...The right to avoid liability in terms of sub-section (2) ofSection 149is restricted as has been discussed herein before. It is one thing to say that the insurance companies are entitled to raise a defence but it is another thing to say that despite the fact that its defence has been accepted having regard to the facts and circumstances of the case, the Tribunal has power to direct them to satisfy the decree at the first instance and then direct recovery of the same from the owner. These two matters stand apart and require contextual reading."

These observations indicate that there are two distinct aspects which have to be borne in mind. The first is the defence which the insurance company is entitled to raise under sub-section (2) ofSection 149. The second is that even if the defence is accepted, the Tribunal would have the power to direct the insurer to satisfy the decree in the first instance by permitting recovery of the amount which was paid from the owner. These are two separate issues. The first attaches to the availability of a statutory defence. The second attaches an obligation to pay in the first instance and allows a remedy to recover from the person upon whom the liability has actually fallen. The Supreme Court in its conclusions, held that the liability of the insurance company to satisfy the decree in the first instance and to recover the awarded amount from the owner or driver had held the field for a long time and the doctrine of stare decisis mandated that it should not be deviated from. However, it was held that a discretion is vested in the Tribunal and the Court so that if a direction is issued to the insurer to pay the amount awarded in the first instance, despite the fact that the insurer had been able to establish that there was a breach of the contract of insurance, the insurer would be entitled to realise the awarded amount from the owner or driver of the vehicle in execution of the award in view of the provisions ofSections 165and168of the Act. In this context, the Supreme Court observed thus:

"We may, however, hasten to add that the Tribunal and the Court must, however, exercise their jurisdiction to issue such a direction upon consideration of the facts and circumstances of each case and in the event such a direction has been issued despite arriving at 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) ofSection 149of the Act, the insurance company shall be entitled to realise the awarded amount from the owner or driver and the vehicle, as the case may be, in execution of the same award having regard to the provisions ofSections 165and168of the Act..."

(Emphasis supplied)

6. Thereafter, the Full Bench went to discuss other authorities on the issue and in paragraph no.28, it held as under:-

"28. In several decisions of the Supreme Court thereafter, it has been held that where the insurer is directed to satisfy the award despite the absence of a legal liability, it could be left open to the insurer to initiate a proceeding before the executing Court as if the dispute between the insurer and the owner was the subject matter of determination before the Tribunal and the issue had been decided against owner. In National Insurance Co Ltd Vs Challa Upendra Rao, 2004 (57) A.L.R. 284 (S.C.), the Supreme Court observed as follows:

"...Considering the beneficial object of the Act, it would be proper for the insurer to satisfy the award, though in law it has no liability. In some cases the insurer has been given the option and liberty to recover the amount from the insured. For the purpose of recovering the amount paid from the owner, 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 claimants, owner of the offending vehicle shall 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 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 i.e. the insured. In the instant case considering the quantum involved we leave it to the discretion of the insurer to decide whether it would take steps for recovery of the amount from the insured."

(Emphasis supplied)

The same principle was adopted in the decision of the Supreme Court inOriental Insurance Co Ltd Vs Nanjappan, 2004 (54) A.L.R. 704, 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..."

(Emphasis supplied)

7. In the concluding portion of its judgment, the Full Bench held 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 laid down in Challa Upendra Rao (supra) would have to be followed.

8. This Court is of the considered view that the Full Bench in Smt. Shashi Prabha Sharma (supra) has laid down that the appeal filed by the insurance company against the order of giving right to recovery may lie but it, after discussing the ratio of Swaran Singh (supra), held that the directions of Full Bench in Challa Upendra Rao (supra) as regards steps to be taken by the appellant-insurance company would apply, which involves breach of policy for want of bringing on record driving licence.

9. In view of the above discussion, even if the plea that neither the claimant nor owner of the vehicle brought on record driving licence and owner may attempt to lead additional evidence to that effect, this Court, at this stage, cannot comment on this aspect, inasmuch as owner has not yet assailed the impugned award. Normally, owners approach the High Court whenever the insurance company proceeds to recover the amount. In that event, all the grounds taken by the owner can be examined without affecting any right of the insurance company to oppose each and every ground taken in that appeal.

10. Without commenting upon the subsequent lis either way and reserving right of appellant-insurance company and following the decision of Swaran Singh (supra) as further discussed in Smt. Shashi Prabha Sharma (supra), the appeal is found to have no merit and is, accordingly, dismissed.

11. Further the directions of Full Bench in Challa Upendra Rao (supra) as regards steps to be taken by the appellant insurance company would apply in the present case, which involves breach of policy for want of bringing on record driving licence.

Order Date :- 18.11.2024

AKShukla/-