Bombay High Court

United India Insurance Company ... vs Raghunath Domaji Sahare And ... on 15 June, 2017

Bench: S.B. Shukre

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


                                                       FIRST APPEAL No.518 OF 2005


                         United India Insurance Company Limited,
                         Mount Road, Sadar, Nagpur-440001,
                         through its Regional Manager,
                         Shankar Nagar Square, Nagpur-440 010.                                        :      APPELLANT

                                            ...VERSUS...

                         1.    Raghunath Domaji Sahare,
                                Aged 50 years,
                                Occupation : Agricultural Labourer,
                                Resident of and Post Bina,
                                Tahsil Kamptee, District Nagpur.

Amended as per           2.    Kiriti J. Thakkar,
Court's order                   Aged : Major,
dt.26.8.2009, L.Rs.             Occupation : Transporting business,
brought on record of            Resident of Chuna Oli, Itwari,
Respondent No.2.                Nagpur (Truck Owner).

                                (i)  Hemant s/o. Kirti Thakkar,
                                      Aged 18 years, Occu.: Student.

                                (ii) Ku. Bhakti d/o. Kirti Thakkar,
                                      Aged 22 years, Occ.: Student.

                                (iii) Mr. Kavita wd/o. Kirti Thakkar,
                                       Aged 45 years, Occ.:Housewife.

                                         All (i) to (iii) R/o. Pardi Naka,
                                         Nagpur.                                                       :      RESPONDENTS


                         =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
                         Shri D.N. Kukday, Advocate for the Appellant.
                         None for the Respondents.
                         =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-




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                                                      CORAM  :   S.B. SHUKRE, J.

th DATE : 15 JUNE, 2017.

ORAL JUDGMENT :

1. This is an appeal preferred against the judgment and order

dated 4th April, 2005 rendered by the Member, Motor Accident Claims

Tribunal, Nagpur in Claim Petition No.792/1998.

2. The claim petition was filed under Section 166 of the Motor

Vehicles Act, 1988 claiming compensation for the untimely death of

deceased Janabai, who was the wife of the claimant i.e. the respondent

No.1 in an accident which occurred while deceased Janabai was

travelling in a truck bearing registration No.MH-31-M-8185 on a road

between village Bina and village Khaperkheda. The accident occurred on

2.5.1998 and according to the claimant, it was due to rash and negligent

driving of the truck. The claimant also contended that his deceased wife

was travelling in the said truck along with bagful of vegetables, as owner

thereof and, therefore, the appellant-insurer of the truck was also liable

to pay the compensation. The Tribunal, however, on merits of the case

found that the deceased Janabai was an unauthorized passenger and that

there was no evidence showing that she travelled by the said truck

alongwith goods as owner thereof and, therefore, exonerated the

appellant of its liability under the insurance policy by the award

J-fa518.05.odt 3/9

impugned in the instant petition. However, the Tribunal directed that

the appellant shall satisfy the award and may recover the amount of

award from the owner of the truck i.e. respondent No.2. The total

compensation awarded was of Rs.2,20,000/- together with interest at the

rate of 9% p.a. from the date of petition till realization. It is the direction

of pay and recover which is challenged in the present appeal.

3. I have heard Shri D.N. Kukday, learned counsel for the

petitioner. None for the respondent though duly served and noticed on

final disposal. I have gone through the record of the case including the

impugned judgment and order. The only point which arises for my

determination is as under :

Whether the direction of pay and recover issued by the Tribunal to the appellant is justified by the facts and circumstances available on record ?

4. Shri D.N. Kukday, learned counsel for the appellant submits

that it is the discretion of the Tribunal to issue a kind of direction which

is impugned in the present appeal, but the discretion has to be exercised

judiciously and not capriciously. He submits that although the learned

Member of the Tribunal has found support in the direction of the Hon'ble

Apex Court given in the case of National Insurance Co. Ltd., vs. Baljit

Kaur and others, reported in I (2004) ACC 259 (SC) to issue the

impugned direction, the direction issued in Baljit Kaur was on the facts

and circumstances of the case peculiar to that case and it was in exercise

J-fa518.05.odt 4/9

of Apex Court's jurisdiction under Article 142 read with Article 136 of the

Constitution of India for doing complete justice between the parties. He

invites my attention to the observations of the Hon'ble Apex Court

appearing in paragraphs 19 and 20 of the case Baljit Kaur (supra) to

support the contention. He also relies upon the Division Bench decision

of this Court in the case of Traders Pvt. Ltd., Ahmedabad and another

vs. Sunanda wd/o. Krishna Machivale and others, reported in

2009(1) Mh.L.J. 898.

5. A perusal of the impugned judgment and order shows that

the direction regarding pay and recover has been issued by the learned

Member of the Tribunal completely drawing strength from the case of

Baljit Kaur (supra). The decision of Baljit Kaur together with other

similar decisions, such as Oriental Insurance Co. Ltd. vs. Nanjappan

and others, reported in (2004) 13 SCC 224, National Insurance

Company Limited vs. Kusum Rai and others, reported in (2006) 4

SCC 250, Oriental Insurance Co. Ltd. vs. Brij Mohan and others,

reported in (2007) 7 SCC 56, Oriental Insurance Co. Ltd. vs. Syed

Ibrahim and others, reported in 2007 ACJ 2816 was considered by the

Division Bench of this Court in Traders Pvt. Ltd. (supra). The Division

Bench opined that the directions facilitating recovery of amount from the

owner of the offending vehicle were issued by the Hon'ble Apex Court in

exercise of its jurisdiction under Article 142 read with Article 136 of the

J-fa518.05.odt 5/9

Constitution of India in order to do complete justice between the parties

and that similar powers do not vest in the High Court. The Division

Bench then went on to hold that in that particular case, it was not

possible for it to pass any similar order. However, the Division Bench

was also of the view that such a direction as the one questioned in the

present appeal, in certain facts situations can indeed be issued, but those

facts situations must provide compelling reasons for the Court to issue

the direction of first pay and recover later to the Insurance company,

inspite of exoneration of its liability under the policy of insurance. The

Division Bench, in order to illustrate the point, referred to the cases

wherein there was involved a third party property damage and the

liability of the insurance company has been limited to a fixed amount. It

appears that this illustration was given by the Division Bench of this

Court to highlight the point that it is only when there are compelling

reasons that the direction to the insurance company to pay the amount of

compensation first and then recover it from the insured, can be given.

Relevant observations of the Division Bench as they appear in paragraph

67 are reproduced thus :

"In Swaran Singh's case (supra) and in Captain Itbar Singh's case (supra), the Supreme Court was concerned with situations where the insurance company was compelled to pay compensation. The Supreme Court observed that if the insurer proves the available satisfactory defences, or if he has been made to pay something which on the contract of policy he was not bound to pay, he can recover the same from the assured under the above mentioned provisions. These

J-fa518.05.odt 6/9

judgments, in our opinion, do not lay down a proposition that in all cases the insurance company has to pay the awarded amount and then recover it from the assured, whether it is liable to pay the amount or not. Such a course may be available under certain fact situations only. For instance, under the Motor Vehicles Act, 1988, for Third Party property damage, the liability is limited to Rs.6,000/- and if there is any policy which covers lesser amount viz. Rs.2,000/- as under the said Act, the amount of Rs.4,000/- would be recoverable from the insured by the insurer after paying it."

6. In the case of Baljit Kaur, the reason for invoking

extraordinary jurisdiction of the Hon'ble Apex Court under Article 142 of

the Constitution of India could be discerned, as rightly submitted by the

learned counsel for the appellant. In that case, the question was as to

whether or not an unauthorized passenger, especially a passenger who is

gratuitous could successfully lay a claim for compensation against the

insurance company when no premium is paid for such a passenger. The

law on this point was not clear till the decision was rendered in Baljit

Kaur and the legal position was clarified with prospective effect by the

Hon'ble Supreme Court. It held that inspite of Amendment of 1994, the

effect of the provision contained in Section 147 of the Motor Vehicles

Act, 1988 with respect to persons other than the owner of the goods or

his authorized representative remained the same and although the owner

of the goods or his authorized representative would now be covered by

the policy of insurance in respect of a goods vehicle, it was not the

intention of the Legislature to provide the liability of the insurer with

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respect to passengers, especially gratuitous passengers, who were neither

contemplated at the time when the contract of insurance was entered

into, nor any premium was paid to the extent of the benefit of insurance

to such category of people. Therefore, in order to sub-serve the interest

of justice that the Hon'ble Apex Court issued a direction to the insurance

company to satisfy the amount awarded in favour of the claimant and

then recover it from the owner of the vehicle. It also clarified that for the

purpose of such recovery, it was not necessary for the insurer to file a

separate proceeding and it could straight away initiate execution

proceedings before the competent Court as if the dispute between the

insurer and the owner was the subject matter of a determination before

the Tribunal and the issue was decided against the owner and in favour

of the insurer. The relevant para containing relevant observations of the

Hon'ble Apex Court is reproduced as below :

Para 20 :

"The upshot of the aforementioned discussions is that instead and in place of the insurer the owner of the vehicle shall be liable to satisfy the decree. The question, however, would be as to whether keeping in view the fact that the law was not clear so long such a direction would be fair and equitable. We do not think so. We, therefore, clarify the legal position which shall have prospective effect. The Tribunal as also the High Court had proceeded in terms of the decisions of this Court in Satpal Singh (supra). The said decision has been overruled only in Asha Rani (supra). We, therefore, are of the opinion that the interest of justice will be sub-served if the appellant herein is directed to satisfy the awarded amount in favour of the claimant if not already satisfied and recover the same from the

J-fa518.05.odt 8/9

owner of the vehicle. For the purpose of such recovery, it would not be necessary for the insurer to file a separate suit but it may 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 is decided against the owner and in favour of the insurer. We have issued the aforementioned directions having regard to the scope and purport of Section 168 of the Motor Vehicles Act, 1988 in terms whereof it is not only entitled to determine the amount of claim as put forth by the claimant for recovery thereof from the insurer, owner or driver of the vehicle jointly or severally but also the dispute between the insurer on the one hand and the owner or deriver of the vehicle involved in the accident inasmuch as can be resolved by the Tribunal in such a proceeding."

7. Now, having got the clear idea about the principles governing

exercise of discretion of the Tribunal to issue a direction of pay and

recover, now it would be necessary for us to consider the fact situation of

the instant matter. In the instant case, the Tribunal has found that the

deceased Janabai was travelling by the truck in question as an

unauthorized passenger. In other words, the finding recorded is that the

deceased was a gratuitous passenger of the truck in question. This

finding not having been challenged, at least nothing in this regard has

been brought to the notice of this Court by either of the parties, now has

attained finality. It is also a fact established on record that no premium

was paid for such a passenger travelling by truck in question. Therefore,

the deceased could not be considered to be a third party who was