Santosh Son Of Ramesh Kathel vs Divisional Manager
2013 Latest Caselaw 295 Bom

                                       1                          fa538.03.odt


         IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
                    NAGPUR BENCH, NAGPUR




                                                                        
                                                
                   First Appeal No.538 of 2003

    Santosh son of Ramesh Kathel,
    Aged about 28 years,
    Occupation Business,




                                               
    Resident of Shaha (Poi),
    Taluka Karanja, District Washim.            ..... Appellant.

                            :: versus ::




                                  
    1. Divisional Manager, United India
                      
    Insurance Company Ltd., Old Cotton
    Market, Akola, Taluka and District Akola.
                     
    2. Haridas son of Motiram Telgote,
    Aged about 42 years,
    Occupation Nil,
    Resident of Shivani Khadan,
    Akola, Taluka and District Akola.      ..... Respondents.
      


    ==========================================
   



           Shri M.P.Khajanchi, Counsel for the Appellant.
           Shri M.R.Kalar, Counsel for R-1.
           Shri C.A.Joshi, Counsel for R-2.
    ==========================================





                       CORAM : A. P. BHANGALE, J.

DATE : 09th DECEMBER, 2013

ORAL JUDGMENT.

1. This appeal is preferred, against judgment and award

.....2/-

2 fa538.03.odt

dated 24.7.2003, passed by the learned Member, Motor

Accident Claims Tribunal, Akola, in MAC Petition No.244 of

2001, by the appellant, whereby the compensation was

awarded in the sum of Rs.50,000/- along with interest at

the rate of 9% per annum from the date of presentation

of the petition till realization.

The appellant is aggrieved by the said judgment and

award on the ground that the insurer ought to have been

held liable

to pay the compensation pursuant to

insurance policy, which was operative during the period

from 13.1.2001 to 12.1.2002.

2. The accident in question had occurred on 13.1.2001

on the same date when insurance policy was operating.

It is the grievance of the appellant that the learned

Member of the Tribunal without framing any issue as to

whether fraud is practised upon the insurer/owner of the

motor vehicle by one insurance agent i.e. B.M.Sadhwani

and the official of the bank concerned went on to decide

the controversy on the basis of the conjectures and

surmises and wrongly exempted insurer from the liability

.....3/-

3 fa538.03.odt

to pay the compensation. The quantum of compensation

is not disputed. Under these circumstances, since the

amount of compensation was awarded in the sum of Rs.

50,000/- only along with interest payable by the owner of

the offending motor vehicle despite of fact that the

insurance policy was produced as Article-B which appears

operative from 13.1.2001 to 12.1.2002. The insurer I

think was wrongly exempted from joint and several

liability to pay the compensation to the claimant more so

when the fraud is alleged. It is necessary to give details

and particulars as to the fraud which is allegedly

practised upon the insurance company. In the absence of

pleading such details and particulars as to alleged fraud

and also in the absence of framing any issue as to

whether fraud was practised upon the insurance company

by the insurance agent and its effect upon the liability of

the insurer to pay the compensation, it was not justified,

In the facts and circumstances of the case, on the part of

the learned Member of the Tribunal to exempt insurance

company from joint and several liability to pay the

compensation to the claimant. I think it is general rule

.....4/-

4 fa538.03.odt

that when prima facie it appears that insurance policy is

in operation it is necessary to insist upon the insurer to

pay the compensation and then to agitate the issue

before the Tribunal to recover it from the owner of the

offending motor vehicle. If according to the insurer, fraud

was practised upon it by the insurance agent and if at all

insurance policy was not operative on the date of the

accident.

3. The learned counsel appearing for the insurance

company disputed the liability on the ground that the

learned Member of the Tribunal discussed the liability of

the company and then exempted it from payment of the

compensation finding that the fraud was pracrtised upon

the insurance company. However, it is not disputed by

the learned counsel for the insurance company that no

specific pleadings were there and no any issue was

framed by the Tribunal so as to discuss the facts and

circumstances of case. When no issue was framed; no

discussion was warranted unless issue was framed as is

required to be answered. That being so, prima faice

.....5/-

5 fa538.03.odt

considering the insurance policy as produced on record

operating on the date of the accident, I think the

insurance company herein is jointly and severally liable to

discharge the liability for payment of compensation as

awarded by the impugned judgment and award.

However, the issue as to fraud is kept open. It may be

agitated by the insurer before the Tribunal even after the

payment of compensation and if so agitated, the

insurance company upon adjudication may recover the

amount paid from the owner of the offending vehicle in

case the Tribunal finds that the fraud was practised upon

the insurance company by its insurance agent. In this

regard, it is also pertinent to bear in mind the provision

under Section 237 of the Indian Contract Act, 1872. The

Tribunal will consider legal and factual position while

appreciating the contention as to fraud if raised before it

by the insurer after it discharges its joint and several

liability to pay the compensation pursuant to the

impugned judgment and award.

4. In the result, the impugned judgment and award is

.....6/-

6 fa538.03.odt

therefore, modified, thus:

The appeal is partly allowed.

The quantum of compensation is same as awarded by

the Tribunal. However, the insurance company and the

owner of the offending motor vehicle shall be liable jointly

and severally to pay the compensation to the claimant

along with interest in the sum of Rs.50,000/-.

5.

Needless to state that in case it is found by the

Tribunal that insurance company was not liable to pay

the entire amount paid by the insurance company, the

same shall be refunded to it.

6. The amount deposited in this Court, if any, be

transmitted to the Tribunal for disbursement to the

claimants. The Tribunal to decide the question, if

agitated, in relation to alleged fraud practised upon the

insurance company, expeditiously and as early as

possible.

JUDGE

!! BrWankhede !!

...../-