AI Structured Summary
Not yet generated for this judgment
Judgment
Heard learned counsel for the parties on application filed by the respondent No. 1 and 2 seeking vacation of the interim order granted by this Court on
10.01.2018.
It is submitted by learned counsel for the respondents that the Insurance Company has been held liable for payment of compensation by the Tribunal
as the Insurance Company failed to prove that the driver of the vehicle was not in possession of an effective driving licence.
It is submitted that irrespective of the above aspect, Hon’ble Supreme Court in the case of Pappu & Ors. v. Vinod Kumar Lamba & Anr.: (2018)
3 SCC 208, has held that even in a case where the driver was not in possession of valid driving licence, the direction to pay & recover can be granted
against the Insurance Company and, therefore, even if the plea raised by the appellant-Insurance Company is ultimately accepted the direction to
recover the amount from the owner can always be granted and, therefore, the interim order passed by this Court deserves to be vacated.
Learned counsel for the appellant submitted that the judgment in the case of Pappu (supra) cannot be relied on for the purpose of imposing liability
upon the appellant-Insurance Company as in the said case the driver was not the owner, whereas in the present case, the driver is the owner of the
Insured vehicle and in terms of the judgment in the case of National Insurance Co. Ltd. vs. Swarn Singh and Ors. (2004) 3 SCC 297, as there is a
fundamental breach of policy and, therefore, the direction of pay & recover also ultimately could not be passed in the present case and, therefore, the
application filed by the respondents deserves to be dismissed.
I have considered the submissions made by learned counsel for the parties and have perused the material available on record as well as the judgment
in the case of Pappu (supra).
Hon’ble Supreme Court in the case of Pappu (supra) after posing the specific question and quoting judgment in the case of Swarn Singh
(supra), has inter alia laid down as under:-
“15. Be that as it may, no grievance about the quantum of compensation awarded by the Tribunal has been made by the appellant claimants (either
before the High Court or before us in this appeal). Hence, that issue does not warrant any scrutiny. Similarly, the owner of the vehicle (Respondent 1)
has not challenged the findings of the Tribunal as affirmed by the High Court in favour of the insurer (Respondent 2), including on the factum that the
vehicle was driven by a person who did not have a valid driving licence at the relevant time.
The next question is: whether in the fact situation of this case the insurance company can be and ought to be directed to pay the claim amount,
with liberty to recover the same from the owner of the vehicle (Respondent 1)?
This issue has been answered in National Insurance Company Ltd. In that case, it was contended by the insurance company that once the
defence taken by the insurer is accepted by the Tribunal, it is bound to discharge the insurer and fix the liability only on the owner and/or the driver of
the vehicle. However, this Court held that even if the insurer succeeds in establishing its defence, the Tribunal or the Court can direct the insurance
company to pay the award amount to the claimant(s) and, in turn, recover the same from the owner of the vehicle. The threeJudge Bench, after
analysing the earlier decisions on the point, held that there was no reason to deviate from the said well-settled principle. ………….
………..
In the present case, the owner of the vehicle (respondent 1) had produced the insurance certificate indicating that vehicle No. DIL 5955 was
comprehensively insured by respondent 2 (insurance company) for unlimited liability. Applying the dictum in National Insurance Company Ltd., to
subserve the ends of justice, the insurer (respondent 2) shall pay the claim amount awarded by the Tribunal to the appellants in the first instance, with
liberty to recover the same from the owner of the vehicle (respondent 1) in accordance with law.
Accordingly, the appeal is allowed to the extent that the compensation amount awarded by the Tribunal and confirmed by the High Court shall be
paid and satisfied by the insurer (respondent 2) in the first instance, with liberty to recover the same from the owner of the vehicle (respondent 1) in
accordance with law.
Appeal is disposed of in the aforementioned terms with no order as to costs.†(emphasis supplied)
In view of the directions given by the Supreme Court after noticing judgment in the case of Swarn Singh (supra), there is substance in the submissions
made by learned counsel for the respondents besides the fact that for the present, the finding of the Tribunal is against the appellant pertaining to the
driver being not in possession of a valid driving licence.
In view of the above, the application filed by the respondent Nos. 1 and 2 is partly allowed. The interim order dated 10.01.2018 is modified to the
extent that if the appellantInsurance Company deposits a sum of Rs.8,00,000/- alongwith interest as awarded by the Tribunal within a period of six
weeks, after taking into consideration amount, if any, deposited under Section 140 and/or proviso to Section 173 of the Motor Vehicle Act, 1988, only
the rest of the impugned award shall remain stayed.
The amount when deposited be disbursed to the claimant/s in terms of the award.
The stay application stands disposed of.
The service on respondent Nos. 3/1 and 3/2 is still due.
Issue fresh notice to the respondent Nos. 3/1 and 3/2.