New India Assurance Co. Ltd. vs Zarina & Others
2011 Latest Caselaw 4851 Del

                                      UNREPORTED
*    IN THE HIGH COURT OF DELHI AT NEW DELHI

+                   FAO 357/2003


NEW INDIA ASSURANCE CO. LTD.          ..... Appellant
                 Through: Mr. Pankaj Seth, Advocate

                  versus


ZARINA & OTHERS                                   ..... Respondents
                           Through:   None


%                          Date of Decision :   September 29, 2011

CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL

1. Whether reporters of local papers may be allowed
   to see the judgment?
2. To be referred to the Reporter or not?
3. Whether judgment should be reported in Digest?

                           J U D G M E N T (ORAL)

: REVA KHETRAPAL, J.

1. The appellant, the New India Assurance Co. Ltd., seeks to

assail the judgment and award of the Motor Accidents Claims

Tribunal dated 10.02.2003, whereby a sum of ` 1,80,000/- with

interest at the rate of 9% per annum for 9 years was awarded in

favour of the respondents No.1 to 4/claimants and against the

appellant.

2. The essential facts leading to the passing of the aforesaid award

are not in dispute. On 09.12.1984, one Fazruddin while going on a

bicycle was hit by a truck bearing No.DHL-3096, being driven in a

rash and negligent manner by the respondent No.5. He sustained

grievous injuries to which he succumbed. The legal heirs of the

deceased filed a Claim Petition under Sections 110A and 92A of the

Motor Vehicles Act, 1939 claiming compensation in the sum of ` 2.5

lakhs on account of his untimely demise from the respondent No.5-

the driver of the offending truck, the respondents No.6 and 7-the joint

owners of the truck and the appellant/Insurance Company-the insurer

of the offending truck. After conducting an enquiry, the Motor

Accidents Claims Tribunal held the appellant-Insurance Company

liable to pay compensation to the respondents No.1 to 4 and passed an

award as set out hereinabove. Aggrieved by the aforesaid award, the

appellant has preferred the present appeal.

3. The sole contention of Mr. Pankaj Seth, the learned counsel for

the appellant, is that the appellant-Insurance Company having filed

and proved the copy of the policy pertaining to the truck involved in

the accident to show that the liability under the policy was limited to

the extent of ` 1,50,000/- only, the impugned award is liable to be set

aside, inter alia, on the following grounds:

(i) The learned Tribunal erroneously came to the conclusion

that no notice had earlier been issued by the appellant-

Insurance Company to the owner to produce the original

policy and that it was issued only on 15.01.2003 and,

therefore, the production of the policy Ex.RW1/1 at this

stage, was of no avail to the Insurance Company.

(ii) The learned Tribunal failed to take into consideration the

fact that the owner of the offending vehicle had

contested the petition and was aware of the defence of

the appellant that its liability under the insurance policy

was limited. It was only when the owners of the truck,

that is, the respondents No.6 and 7, failed to produce the

original policy, that the appellant was left with no

alternative but to serve upon them a notice calling for the

production of the original policy so that the appellant, in

the event of their failure to produce the original policy,

could adduce secondary evidence by proving the carbon

copy of the policy.

(iii) The learned Tribunal did not take into account the

judgment of the Five-Judge Bench of the Supreme Court

in New India Assurance Co. Ltd. vs. C.M. Jaya and

Ors., (2002) 2 SCC 278, wherein it has been held that

the Insurance Company cannot be asked to pay the

amount beyond its limit of liability.

(iv) The learned Tribunal erroneously relied upon the

decisions of the Supreme Court in New India Assurance

Company vs. Krishna Dev, 1998 RLR 387 and The

Oriental Insurance Co. Ltd. vs. Cheruvakkara

Nafeessu and Ors., (2001) 2 SCC 491 to come to the

conclusion that the appellant-Insurance Company, even

if its liability under the policy is limited, is liable to pay

the entire amount of compensation.

4. At the outset, it may be stated that the records of the learned

Tribunal, requisitioned by this Court, show that the respondents No.5,

6 and 7 though they initially appeared before the learned Tribunal and

the respondent No.6 even filed written statement, subsequently, all

the three respondents chose not to contest the case and were

proceeded ex parte in default of appearance. In this Court also, none

appeared on behalf of the respondents to address arguments, though

initially upon service of notice upon them the respondents No.5 and 7

had entered appearance through counsel.

5. Having perused the records of the Motor Accidents Claims

Tribunal, including the insurance policy (Ex.RW1/1), I am of the

view that the judgment and award of the learned Tribunal is liable to

be set aside to the extent prayed for by the appellant-Insurance

Company. I say so for the reason that a bare glance at the carbon

copy of the policy (Ex.RW1/1) affirms the fact that the liability of the

Insurance Company in terms of the insurance policy issued by it was

limited to ` 1,50,000/- only. RW1 Yogesh Chand Gupta, an official

from the appellant-Insurance Company, appeared in the witness-box

to state on oath that he had brought the attested true copy of the

policy No.4518356239/968, which was issued on 18th February, 1984

in the name of M/s. Kamruddin & Johny, Village Chaudullah, Police

Station Mehrauli, New Delhi in respect of truck No.DHL-3096. He

proved on record the carbon copy of the policy as Ex.RW1/1 and

deposed that as per RW1/1, the liability of the Insurance Company

was limited to ` 1,50,000/- and that the policy had been issued from

18th February, 1984 to 17th February, 1985. The testimony of this

witness was not challenged in cross-examination nor any evidence in

rebuttal was led.

6. In view of the aforesaid, I am inclined to agree with the

contention of the learned counsel for the appellant-Insurance

Company that the appellant, who is the insurer, cannot be called upon

to indemnify the insured beyond the limits of its liability. I say so on

the strength of the judgment of the Supreme Court rendered in the

case of C.M. Jaya (supra). While I am not oblivious of the fact that

the Supreme Court in a subsequent judgment rendered in

Cheruvakkara Nafeessu (supra) has held that the Insurance

Company shall, in the first instance, indemnify the insured by making

payment of the award amount to the claimants and shall thereafter be

entitled to recover the amount paid by it from the insured, I am

constrained to hold that the aforesaid judgment is not applicable to the

facts of the present case, for the reason that reliance was placed by the

Supreme Court in the aforesaid case on the 'Avoidance Clause' in the

insurance policy in that case. A bare glance at the insurance policy in

the present case (Ex.RW1/1) shows that it does not contain any

avoidance clause, and thus I have no hesitation in holding that the

facts in the aforesaid case are clearly distinguishable from the facts in

the present case.

7. Mr. Pankaj Seth, the learned counsel for the appellant, has

informed me that the award amount has already been paid to the

claimants and this fact is also borne out by the records of the learned

Tribunal. Accordingly, the only relief which can be granted to the

appellant by this Court at this stage is to afford to the appellant the

right to recover the amount paid by it in excess of its liability of

` 1,50,000/- with interest thereon from the respondents No.6 and 7,

who are the co-owners of the offending truck.

8. The award is accordingly modified to the extent that the

appellant is granted recovery rights to recover the amount exceeding

its liability from the insured.

9. The appeal is allowed in the above terms. Parties shall bear

their own costs.

10. Records of the Claims Tribunal shall be sent back to the

concerned Tribunal forthwith.

REVA KHETRAPAL (JUDGE) September 29, 2011 km