Delhi High Court
New India Insurance Co. Ltd. vs Vinay Kumar Saini & Ors. on 7 May, 2012
Author: G.P. Mittal
$~16
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision:7th May, 2012
+ MAC. APP. No.921/2011
NEW INDIA INSURANCE CO. LTD. ..... Appellant
Through: Mr.Sameer Nandwani,
Advocate
Versus
VINAY KUMAR SAINI & ORS. ..... Respondents
Through: Mr. Raj Singh, Advocate for the
Respondents No.1 & 2.
Mr. Vivek Sirohi, Advocate for
the Respondents No.3 & 4.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J. (ORAL)
1. The Appellant impugns a judgment dated 27.07.2011 whereby
while awarding a compensation of `6,61,660/- in favour of the
Respondents No.1 and 2, the Appellant was made liable to pay
the compensation in spite of the fact that it was proved that the
owner did not possess a valid permit for plying the offending
vehicle i.e. truck No. HR-38M-0275 in the State of NCT of
Delhi.
2. There is no Appeal by the Claimants or the owner of the
offending vehicle involved in the accident.
3. The learned counsel for the Appellant argues that once the
Appellant proved conscious breach of the terms of the policy,
the Appellant Insurance Company had no liability at all. The
learned counsel for the Appellant relies on Deddappa & Ors. v.
National Insurance Co. Ltd., 1(2008) ACC 1 (SC) and M.V.
Jayadevappa & Another v. Oriental Fire & General Insurance
Co. Ltd. & Ors., (2004) 13 SCC 43. The judgments cited by the
learned counsel for the Appellant are not applicable to the facts
of the present case as these are not on violation of the terms of
the policy. Deddappa & Ors.(supra) refers to the cancellation
of the contract of insurance in accordance with the provisions of
Section 147 of the Motor Vehicles Act, 1988. Similarly, M.V.
Jayadevappa & Another(supra) refers to the payment of
compensation in case where the victim or the deceased is a
gratuitous passenger who is not covered by the statutory
insurance policy under Section 147 of the Act.
4. 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.
5. There is an authoritative pronouncement of the Supreme Court
on this issue in National Insurance Company Limited v. Swaran
Singh, 2004 (3) SCC 297 Paras 73, 104 and 105 of which 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."
6. 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.
7. In MAC APP 329/2010, Oriental Insurance Company Limited
V. 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 satisfy the liability towards the
third party and recover the same from the owner.
8. Even if it is assumed that there was a conscious breach of the
terms of the policy by not obtaining a required permit to ply the
vehicle, the Appellant Insurance Company was under obligation
to satisfy the award.
9. The Appeal is devoid of any merit; the same is accordingly
dismissed.
10. The statutory amount of `25,000/- shall be refunded to the
Appellant Insurance Company.
(G.P. MITTAL)
JUDGE
MAY 07, 2012
pst
