The New India Assurance Co. Ltd. vs Niranjan Singh And Ors.
1989 Latest Caselaw 370 Del

JUDGMENT

Malik, J.

(1) The appellant has made a grievance in respect of an award dated 27th of February 1979 passed by the Motor Accident Claims Tribunal, Delhi, allowing a sum of Rs. 78,000 as compensation to the claimants. They are respondents No. I to 7 herein. It was further directed by the Tribunal that the amount shall be deposited in the court within two months' time, failing which the claimants' shall be entitled to receiver interest at the rate of 6 per cent per annum from the date of award till realisation.

(2) This claim arose out of an accident .which took place on 18th of December 1970 at 7.30 P.M. on Mathura .Road. At the time of the alleged accident the deceased one Thakur Singh was going as pillion rider on scooter No. DL0.61Q7 driven by one Inderjit Singh. The scooter was owned by Gurbax Singh, respondent No. 9 herein. It was alleged that the accident occurred as a result of reckless and negligent driving by Inderjit Singh. Consequent to the injuries sustained in the accident Thakur Singh died. The deceased was supposed to be 42 years old with robust health on the date of the accident.

(3) On the claim being preferred, notices were issued to the respondents in the claim petition, but none of the respondents excepting the insurance company turned up to contest the case Mr. Sabharwal appearing on behalf of the appellant did not contest before me the finding of the Tribunal either in respect. of the accident being the result of the rash and negligent driving or in respect of the amount of compensation arrived at. Understandably, this was done by him on the ground that he has urged a specific plea that there was no privity of contract between the insurer and the insured at the time of the accident. He in that view of the matter specifically urged before me that it was for the insurer to establish that there was a privity of contract between the insured and the insurer, and in the absence of any proof thereof the insurance company was not liable to pay the compensation. It is not necessary, therefore, for me to go into these two aspects of the case. But since the matter is in appeal before me I have gone through the evidence and I find that the learned Tribunal has correctly assessed the evidence and has come to the conclusion that the accident occurred due to rash and negligent driving of Inderjit Singh. I further find that the Tribunal has very appropriately applied the principles in assessment of the compensation.

(4) Now the principal and the primary contention of Mr. Sabharwal is that the insurance company is not liable as there is no proof of the fact that there was any privity of contract between the insurer and the insured. In fact, in the grounds of appeal in the very first para he has made a grievance that the Tribunal has failed to frame an issue to the effect if there was any privity of contract between the insurer and the insured. I am not concerned with the manner and the reasoning in which the Tribunal has dealt with this aspect of the matter and since the matter is before this court, it will be appropriate and proper to have an independent and fresh look at the matter. In order to appreciate the point, one has only to look at the pleadings. The claimants had pleaded that the offending scooter was insured with respondent No. 3 that is the appellant company by cover note- No. 52202. The plea in rebuttal raised by the insurance company was that this para a is not being admitted. Elaborating the plea, it is stated that records could not be traced. It was also stated in the plea that there is no privity of contract between the party and the respondent. The Tribunal rightly held that there is no specific denial of the scooter being insured for third party risk with the appellant. It was in that context that no issue was framed.

(5) The fact of the matter is that there was a specific plea indicating the insurance cover under which insurance policy was existing and this specific plea was sought to be vaguely replied possibly keeping in view the rule regarding burden of proof. It was the duty of the insurance company to clearly indicate that the cover note referred to and relied upon has not been issued by it. This was essential as that alone would have enabled the Tribunal to go into the fact of the existence of this cover note. Mr. P. P. Malhotra appearing for the respondents has taken me through the record of the case which shows that an application was moved by the claimants wherein they reiterated that the insurance note as indicated in the claim was in existence and that the insurance company be directed to place the insurance cover on the record with a view to help the Tribunal to have an effective adjudication of this case. .ft would' appear that pursuant to this application an order dated 4th of October 1978 was passed by the Tribunal in which the Tribunal made the following order. I am only quoting the relevant portion which is as under: "The copy of the said application has been received by Shri Khurana today. From a perusal of the statement filed by the respondent insurance company, it is evident that there is no categorical denial in respect of the insurance particulars and instead it has been mentioned in reply to para 16 of the petition that the record could not be traced' out. In the circumstances, the insurance company is directed to file insurance cover note as per particulars given in the application by the next date. In case insurance cover is filed on record there could be no need to summon the R.T.A. clerk. This is agreed to by both sides."

Reference to Mr. Khurana in the order I may say is to the counsel for the insurance company. This was followed by another order dated 18th of December 1978 wherein the counsel for the insurance company stated before the court that the insurance cover relating to the vehicle in question is not traceable in the office of the insurance company.

(6) It would, therefore, appear that all along the case of the insurance company, appellant herein, has been that the insurance cover in respect of the offending vehicle is not traceable. It has been very cautious throughout in raising any specific denial about the existence of the insurance cover. It is in this situation that the contention of Mr. Sabharwal that it is for the insured to prove the privity of the contract between him and the insurer is to be noticed to be rejected. The very existence of file contract gives rise to the liability of the insurance company and if the existence of the contract it not denied where is the question of asking the court that it was for the insured to establish the privity of the contract between the insured and the insurer. Proceeding on that premises, I must place my displeasure on record at the manner the insurance company has conducted itself in this case. It is a nationalised company and is an instrumentality of the. State within the ambit of Article 12 of the Constitution. The State is expected to be a virtuous litigant. Its interest lies in meeting the rightful claims and in not standing on the technicalities. Unfortunately, that is what is lacking in the present case and this has been dragging from 1970 onwards, near about a period of two decades.

(7) I may in this connection also refer to the observations of the Supreme Court in National Insurance Company Ltd., New Delhi vs. Jugal Kishore and others, .(l) It would appear that these observations have been made by the Supreme Court in somewhat similar circumstances. The Supreme Court has clearly disapproved this type of conduct on the part of insurance company. In para 10 of the judgment (supra) the Supreme Court has observed as under:

"Before parting with the case, we consider it necessary to refer to the attitude often adopted by the Insurance Companies, as was adopted even in this case, of not filing a copy of the policy before the Tribunal and even before the High Court in appeal. In this connection what is of significance is that the claimants for compensation under the Act are invariably not possessed of either the policy or a copy thereof. This Court has consistently emphasised that it is the duty of the party which is in possession of a document which would be helpful in doing justice in the cause to produce the said document and such party should not be permitted to take shelter behind the abstract doctrine of burden of proof. This duty is greater in the case of instrumentalities of the State such as the appellant who are under an obligation to act fairly. In many cases even the owner of the vehicle for reasons' known to him does not choose to produce the policy or a copy thereof. We accordingly wish to emphasise that in all such cases where the Insurance Company concerned wishes to lake a defense in claim petition that its liability is not in excess of the statutory liability it should file a copy of the insurance policy along with its defense."

(8) These observations of the Supreme Court, in my view, are on all fours with the facts of the present case. In the present case, the insurance company was made aware of the cover note under which the. liability was fastened upon it, but it did not deny the existence of the cover note. Instead of doing so, it said that the cover note is not traceable from its office. The further plea of the appellant that there is no privity of contract between the insured and the insurer in the light of the stand is only meant to confuse the court because once the existence of the contract is established and admitted the question of liability is settled. With these observations, I find no force in this appeal. It is hereby dismissed. The order under appeal is confirmed. The respondents are, however, entitled' to costs of this litigation which assess at Rs. 1000.