Delhi High Court
New India Assurance Co Ltd vs Bainy Singh & Ors on 5 July, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 5th July, 2012
+ MAC.APP. 672/2010
NEW INDIA ASSURANCE CO LTD ..... Appellant
Through: Mr. Kanwal Chaudhary,
Adv.
versus
BAINY SINGH & ORS ..... Respondent
Through: Nemo.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J. (ORAL)
CM APPL. 9939/2012
Service of Respondent No.1(a) and 1(b) is dispensed with for
the reasons as stated in the application.
The Application stands disposed of.
MAC.APP. 672/2010
1. The Appellant New India Assurance Company Limited
impugns a judgment dated 04.08.2010 whereby while awarding
a compensation of `4,18,480/- and upholding the Appellant's
plea that the driving licence held by Shanker (Respondent No.3)
was fake, instead of totally exonerating the Appellant, it made it
liable to pay the compensation with a right to recover the same
from the driver and the owner of the offending vehicle.
2. The case is squarely covered by the judgment of this Court in
NEW INDIA ASSURANCE COMPANY LTD. v. HARJIT SINGH
& ORS, MAC APP.717/2010 decided on 26.04.2012. Para 6 to 9
& 11 of the report are extracted hereunder:-
6. The issue is no longer res integra that even in a case
where the insurance company establishes a conscious
breach of the terms of the insurance policy, the liability
of the insurer to satisfy the decree vis-a-vis third party is
statutory.
7. There is an authoritative pronouncement of the
Supreme Court in National Insurance Company Limited
v. Swaran Singh, 2004 (3) SCC 297 paras 73, 104 and
105 are extracted hereunder :-
"73. The liability of the insurer is a statutory one.
The liability of the insurer to satisfy the decree
passed in favour of a third party is also statutory.
x x x x x x x
x x x x x x x
104. It is, therefore, evident from the discussions
made hereinbefore that the liability of the
insurance company to satisfy the decree at the first
instance and to recover the awarded amount from
the owner or driver thereof has been holding the
field for a long time.
105. Apart from the reasons stated hereinbefore,
the doctrine of stare decisis persuades us not to
deviate from the said principle."
8. Following Swaran Singh, (Supra) this Court in
National Insurance Company Limited v. Sanjay Kumar,
ILR, 2007 (2), Delhi, 733 held that even when breach of
the terms and conditions of policy of insurance in terms
of Section 149(2)(a) of the Motor Vehicle Act, 1988 is
proved, the insurance company would still be required to
pay the sum awarded to the claimant, but would be
entitled to the recovery rights against the insured.
9. In MAC APP 329/2010, Oriental Insurance Company
Limited Vs. Rakesh Kumar and Others, decided on 3rd
February, 2012, this Court noticed National Insurance
Company Limited v. Swaran Singh & Ors., (2004) 3 SCC
297, Sohan Lal Passi v. P. Sesh Reddy, (1996) 5 SCC 21,
New India Assurance Co., Shimla v. Kamla and Ors.,
(2001) 4 SCC 342 and United India Insurance Company
Ltd. v. Lehru & Ors., (2003) 3 SCC 338 and held that
even when there is a willful breach of the terms of policy
under Section 149(2)(a) of the Act, the Insurance
Company is under obligation to indemnify the liability
towards the third party and recover the same from the
owner.
10. x x x x x x x x x x
11. In the circumstances, the Claims Tribunal was
justified in making the Insurance Company liable to pay
the compensation with a right to recover the same from
the owner and the driver."
3. Thus, the Appellant Insurance Company was entitled to
recovery rights only, which have been duly granted.
4. It is clarified that the Appellant would be entitled to recover the
amount of compensation paid by it from the owner and driver of
the offending vehicle (Respondents No.2 and 3) in execution of
this very award without having recourse to separate
proceedings.
5. The Appeal is disposed of in above terms.
8. The statutory amount of `25,000/- shall be refunded to the
Appellant Insurance Company.
(G.P. MITTAL)
JUDGE
JULY 05, 2012
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