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Judgment
M.G. Giratkar, J
Deceased appellant has challenged the judgment of Motor Accident Claims Tribunal (MACT), Achalpur in Motor Accident Claim Petition No.
21/2008 by which the claim petition is allowed against the driver and owner of the offending vehicle directing them to pay compensation of Rs.
17,36,217/Â along with interest at the rate of 6% per annum from the date of petition till the realization of the amount. Claim petition against the
respondent no. 3 i.e. insurance company came to be dismissed.
The appellant challenged the dismissal of claim petition against the insurance company. Fact in the claim petition is not in dispute. There is no
dispute about the accident. There is no dispute that at the relevant time, insurance company i.e. the respondent no. 3 insured the said offending vehicle
owned by the respondent no. 2.
Heard learned Advocate Shri Agrawal for the appellant. He has pointed out paragraph no. 19 of the judgment of MACT. By the side of claimants,
reliance was placed on the decision of Apex Court in the case of National Insurance Co. Ltd. Vs. Swaran Singh and ors. reported in 2004 ACJ .1
MACT not relied on the said judgment of National Insurance Co. Ltd. Vs. Swaran Singh and ors. but relied on the judgment oNf ational Insurance
Co. Ltd. Vs. Vidyadhar Mahariwala and ors. reported in 2008 AIR (SCW) 714 5and held that insurance company is not liable to pay the
compensation.
The material fact in dispute is that the driver of offending vehicle was not having licence at the time of accident. The judgment in the case of
National Insurance Co. Ltd. Vs. Swaran Singh and ors. (supra) is relied by all the Courts till date. Section 149 of the Motor Vehicle Act is clear. It is
the statutory duty of insurance company to pay the amount of compensation to the dependents of deceased in respect of accident by the vehicle which
is insured by the insurance company.
Learned counsel Shri Agrawal has pointed out decision of the Apex Court in the case of Shamanna and anr. Vs. The Divisional Manager, The
Oriental Insurance Co. Ltd. and ors. reported in 2018(9) Scale 456. In the cited decision, it is held by the Lordships of Apex Court that since the driver
of the jeep had not valid driving licence at the time of the accident and since there was violation of the terms of insurance policy, the Tribunal directed
the insurance company to pay the compensation to the claimants and granted liberty to the insurance company to recover the same from the owner of
the offending vehicle. In appeal, High Court enhanced the compensation awarded by the Tribunal while setting aside the direction to the insurance
company to 'pay and recover'. High Court reversed the award passed by the Tribunal. It is held that :
“In the case of third party risks, as per the decision in National Insurance Company Ltd. v. Swaran Singh and others (2004) 3 SCC 29,7 the insurer
had to indemnify the compensation amount payable to the third party and the insurance company may recover the same from the insured. Doctrine of
'pay and recover' was considered by the Supreme Court in Swaran Singh case wherein the Supreme Court examined the liability of the insurance
company in cases of breach of policy condition due to disqualifications of the driver or invalid driving licence of the driver and held that in case of third
party risks, the insurer has to indemnify the compensation amount to the third party and the insurance company may recover the same from the
insured. Elaborately considering the insurer's contractual liability as well as statutory liability visÂaÂvis the claims of third parties, the Supreme Court
issued detailed guidelines as to how and in what circumstances, 'pay and recover' can be ordered.â€
In another case pointed out by learned Advocate Shri Agrawal i.e. Kusum Lata and others Vs. Satbir and others reported in 2011 ACJ 926,
Hon'ble Apex Court has held that “the dispute about licence of driver of the offending vehicle : the Tribunal directed insurance company to pay
compensation amount to the claimants and then recover from owner of vehicle.†This decision is upheld by the Hon'ble Apex Court. In this judgment,
judgment in the case of National Insurance Company Ltd. Vs. Swaran Singh was referred.
Learned Advocate Shri Agrawal has pointed out following decisions.
(1) Parminder Singh Vs. New India Assurance Co. Ltd. and ors. In Civil Appeal No. 5123 of 2019 (Arising out of SLP (Civil) No. 23153 of 2018
delivered on 1Â7Â2019 by the Supreme Court,
(2) Oriental Insurance Co. Ltd. Vs. Zaharulnisha & Ors. [2008(4) ALL MR 413],
(3) Bajaj Allianz General Insurance Co. Ltd. Vs. Wahidbi w/o Pashabhai Shaikh and anr. [2015(3) ALL MR 707],
(4) New India Assurance Co. Ltd. & Anr. Vs. Netalina Margarida Fernandes & Ors. [2011(4) AIR Bom. R 41] and
(5) National Insurance Co. Ltd. Vs. Salouni Subhashchandra Nagzarkar and ors. [2014(2) AICJ 175].
In all the decisions cited by the side of appellant, it is held that it is the statutory duty of insurance company to pay the amount of compensation to
third party even there is breach of policy condition. The insurance company is at liberty to recover the same from the owner of offending vehicle. In
the present case, it is not in dispute that the respondent no. 3 insured the offending vehicle. There is no dispute that deceased appellant was injured in
the accident. Deceased appellant/ claimant was third party. Accident took place due to rash and negligent driving of offending vehicle. The said
vehicle was insured by the respondent no. 3 Â insurance company. Tribunal granted the claim of appellant but directed that it be recovered from the
driver and owner of offending vehicle. It is pertinent to note that direction given to driver is nothing but illegal. It is well settled law that driver of
vehicle only is not liable but it is vicarious liability of owner of vehicle to pay compensation. Therefore, direction given to driver along with owner is
liable to be set aside. Moreover, there is no dispute that the offending vehicle was insured at the time of accident. In view of decision in the case of
National Insurance Company Ltd. Vs. Swaran Singh (supra) and other reported decisions, it is clear that statutory liability is on insurance company as
per Section 149 of the Motor Vehicle Act to pay the compensation first to the claimant and thereafter insurance company may recover the same from
the owner of offending vehicle.
Learned Advocate Shri Pophaly for the respondent no. 3 â€" insurance company has strongly supported the impugned judgment and submitted that
there was breach of policy condition and, therefore, insurance company is not liable. If the appeal is allowed, then direction be given to pay and
recover.
In view of the cited judgments, the appeal is partly allowed.
The dismissal of claim against respondent no. 3 â€" insurance company is hereby quashed and set aside.
Impugned judgment in Motor Accident Claim Petition No. 21/2008 is modified as under :Â
The respondent nos. 2 and 3 i.e. owner and insurance company of offending vehicle shall jointly and severally pay amount of compensation of Rs.
17,36,217/Â to the applicant along with interest at the rate of 6% per annum from the date of petition till the realization of whole amount.
The respondent no. 3 â€" insurance company is at liberty to recover the amount of compensation from the owner of the vehicle i.e. from
respondent no. 2.
The appeal is disposed of in above terms.