Delhi High Court
Shriram General Insurance Co Ltd vs Smt Bhawan Madhok & Ors. on 20 July, 2012
Author: G.P. Mittal
$~19
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision:20th July, 2012
+ MAC.APP. 375/2012
SHRIRAM GENERAL INSURANCE CO LTD ..... Appellant
Through Mr. K.L. Nandwani, Advocate
versus
SMT BHAWAN MADHOK & ORS. ..... Respondent
Through Mr. S.N. Parashar, Advocate
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J. (ORAL)
1. The Appellant impugns a judgment dated 26th November, 2011
passed by the Motor Accident Claims Tribunal (the Claims
Tribunal) on the basis of Detailed Accident Report (DAR).
2. Deceased Karan Madhok suffered fatal injuries in a motor
vehicle accident which occurred on 21st June, 2011. Along with
DAR (detailed accident report), the IO filed an Income Tax
Return for the Assessment Year 2010-11. No Income Tax
Return for the Assessment Year 2011-12 has been filed.
3. No offer of any compensation on the basis of DAR was made
by the Appellant/Insurance Company. The Motor Accident
Claims Tribunal accepted the Income Tax Return on the basis
of the judgment of this Court in Dalvinder Kaur and Ors. v.
United India Insurance Co. Limited, 2011 ACJ 2133, and made
addition of 50% towards future prospects without any evidence,
as no evidence had been produced as the DAR was not even
registered as a Claim Petition. All the more, there was a report
of the IO that the permit was fake.
4. The Claims Tribunal, without giving an opportunity to the
owner to produce the permit in respect of the vehicle involved
in the accident, proceeded to grant recovery rights against the
owner. The entire approach of the Claims Tribunal was not in
consonance with the Motor Accident Claims Tribunal Agreed
Procedure and the settled law with regard to the breach of terms
of the policy as laid down in Sohan Lal Passi v. P. Sesh Reddy,
(1996) 5 SCC 21.
5. Rule 6 of the Claims Tribunal Agreed Procedure (the Agreed
Procedure) is extracted hereunder:-
"6. Procedure on receipt of the detailed accident
report:-
(1) The Claims Tribunals shall examine whether the
Detailed Accident Report is complete in all respects and
shall pass appropriate order in this regard. If the
Detailed Accident Report is not complete in any
particular respect, the Claims Tribunal shall direct the
Investigating Officer to complete the same and shall fix a
date for the said completion.
(2) The Claims Tribunals shall treat the Detailed
Accident Report filed by the Investigating Officer as a
claim petition under Section 166(4) of the Motor Vehicles
Act. However, where the Police is unable to produce the
claimants on the first date of hearing, the Claims
Tribunal shall initially register the Detailed Accident
Report as a miscellaneous application which shall be
registered as a main claim petition after the appearance
of the claimants.
(3) The Claims Tribunal shall grant 30 days time to the
Insurance Company to examine the Detailed Accident
Report and to take a decision as to the quantum of
compensation payable to the claimants in accordance
with law. The decision shall be taken by the Designated
Officer of the Insurance Company in writing and it shall
be a reasoned decision. The Designated Officer of the
Insurance Company shall place the written reasoned
decision before the Claims Tribunal within 30 days of the
date of complete Detailed Accident Report.
(4) The compensation assessed by the Designated Officer
of the Insurance Company in his written reasoned
decision shall constitute a legal offer to the claimants
and if the claimants accept the said offer, the Claims
Tribunal shall pass a consent award and shall provide 30
days time to the Insurance Company to make the payment
of the award amount. However, before passing the
consent award, the Claims Tribunal shall ensure that the
claimants are awarded just compensation in accordance
with law. The Claims Tribunal shall also pass an order
with respect to the shares of the claimants and the mode
of disbursement.
(5) If the claimants are not in a position to immediately
respond to the offer of the Insurance Company, the
Claims Tribunals shall grant them time not later than 30
days to respond to the said offer.
(6) If the offer of the Insurance Company is not
acceptable to the claimants or if the Insurance Company
has any defence available to it under law, the Claims
Tribunal shall proceed to conduct an inquiry under
Sections 168 and 169 of the Motor Vehicles Act and shall
pass an award in accordance with law within a period of
30 days thereafter.
(7) Where the Claims Tribunal finds that the D.A.R. and
in particular the report under Section 173, The Criminal
Procedure Code, 1974 annexed to such D.A.R. has
brought a charge of rash and negligent driving, or the
causing of hurt or grievous hurt the Claims Tribunal
shall register the claim case under Section 166 of The
Motor Vehicles Act,1988. In cases where the DAR does
not bring a charge of negligence or despite the charge of
negligence the Claimant(s) before the court chose to
claim on a no-fault basis, the Claims Tribunal shall
register a claim case under Section 163A, The Motor
Vehicles Act,1988;
(8) Provided that in cases where the accident in question
involves more than one vehicle and persons connected to
all such vehicles stake a claim for compensation, the
D.A.R. shall be treated as an application for
compensation claim case shall be presumed to be a claim
case preferred by each of them."
6. As per Rule 6 (3) of the Agreed Procedure, the Claims Tribunal
is required to grant 30 days time to the Insurance Company to
examine the DAR and take a decision as to the quantum of
compensation payable to the Claimants in accordance with law.
It further enjoins the designated officer of the Insurance
Company to place the written reasoned decision before the
Claims Tribunal within the aforesaid period. A perusal of Rule
6 (6) extracted above makes it clear that if the offer of the
Insurance Company is not acceptable to the Claimants or if the
Insurance Company has any defence available to it under law,
the Claims Tribunal is expected to conduct an inquiry as
provided under Sections 168 and 169 of the Act and pass an
award in accordance with law within a period of 30 days
thereafter. Thus, it is not necessary as per the Claims Tribunal
Agreed Procedure that the designated officer must make an
offer for settlement to the Claimants.
7. In the instant case, the Insurance Company did not make any
offer of compensation. Moreover, it informed the Claims
Tribunal that the owner did not possess a valid permit and thus,
it was entitled to avoid liability under Section 149 (2) of the
Act. When owner of a vehicle obtains an Insurance policy
covering third party risk as mandated under Section 147 of the
Act, the onus to prove a conscious and willful breach of the
terms of policy lies on the Insurance Company. Obviously, the
owner also has to be put to notice whenever any such defence is
taken by the Insurance Company. In the instant case, the
Claims Tribunal awarded compensation and also granted
recovery rights on the ground that the owner did not have a
valid permit and thus, there was breach of the terms of policy
under Section 149 (2) (a) (i) (c) of the Act. Admittedly, the
owner of the vehicle was not present before the Claims Tribunal
nor any notice was issued to him as no Claim Petition was filed
by the Claimants. This can result into a very anomalous
situation as the owner who was fastened with the liability, can
approach the Court when the Insurance Company seeks
recovery of the compensation paid, on the ground that the
compensation is excessive and that the same was awarded to the
Claimants without any notice having been sent to him, apart
from pleading that he did not commit any conscious or willful
breach of the terms of policy.
8. It is also noteworthy that the deceased had a small child
Lavanya, whose name was initially not mentioned in the DAR.
By a subsequent Order dated 2nd March, 2012, her name was
incorporated as one of the LRs.
9. The impugned order, therefore, cannot be sustained and the
same is accordingly set aside.
10. The case is remanded back to the Claims Tribunal for treating
the DAR as the Claim Petition and deciding it in accordance
with law.
11. The Respondents/Claimants shall be at liberty to file a Petition
under Section 166 of the Act.
12. The award amount deposited by the Appellant shall be refunded
to it.
13. The statutory deposit of `25000/- shall also be refunded to the
Appellant Insurance Company.
14. CM APPL. 6395/2012 and 6393/2012 stand disposed of.
15. Parties are directed to appear before the Claims Tribunal on 13th
August, 2012.
16. A copy of the order may be given Dasti to the counsel for the
parties.
17. A copy of the judgment be transmitted to all the District Judges
for bringing it to the notice of all the Motor Accident Claims
Tribunals.
(G.P. MITTAL)
JUDGE
JULY 20, 2012
rs
