Khem Chand vs Uma Devi and Others

Deepak Gupta, J.—In this appeal the short point involved is whether the Respondent insurance company can recover the awarded amount from the Appellant.

The facts, in brief, are that one Tara Chand died in the accident. The claimants filed a petition for grant of compensation which was allowed by the impugned award and compensation of Rs. 5,60,000 with interest at the rate of 7.5 per cent per annum was awarded in favor of the claimants and against the Respondent. The learned Tribunal held that the driver of the vehicle was driving the same in an intoxicated condition. It held the insurance company liable to pay the compensation at the first instance but learned Tribunal has further directed that the insurance company is at liberty to recover the same from the owner. It is against this portion of the award that the owner has come before this Court.

It would also be pertinent to mention here that the insurance company had filed an appeal being F.A.O. No. 181 of 2006 wherein it had raised a plea that no liability could have been fastened on it. The appeal was dismissed by this Court on 18.10.2006.

The law is very well settled that a claim which falls within the purview of an Act Policy, i.e., a liability falling within the ambit of Section 147 of the Motor Vehicles Act, 1988 (''the Act'') can only be contested by the insurance company on the grounds available to it u/s 149 of the Act. It is not permitted to contest the proceedings on any other ground. Intoxication of the driver is not a ground available to the insurance company u/s 149 of the Act. Therefore, the liability, which is statutory u/s 147 of the Act, has to be satisfied by the insurer. It may be clarified that in case the insurer in addition to the liability which it is bound to cover under the Act covers other liability then in case of such extended liability, it may raise the defenses available to it as per terms of the policy, but as far as statutory liability is concerned, the insurer has no authority to incorporate any term in the policy which is not contemplated in terms of Section 149 of the Act. Therefore, the insurance company could not have been permitted to raise this defense and it could not be permitted to recover the awarded amount from the insured.

In this case, I also find that the clause in the policy relied upon by the insurance company is not applicable. This clause which provides that the insurance company shall not be liable if the person driving the vehicle is intoxicated with the knowledge and consent of the insured is incorporated in Section l of the policy. This section only deals with own damage claims, i.e., damage caused to the vehicle in question. Section II of the Act deals with third parties and does not contain a similar clause. Therefore, it is apparent that even the policy did not contemplate that the insurance company would not be liable in case of third parties in case the driver drove the vehicle in an intoxicated condition, with the knowledge of the owner.

In view of the above discussion, the appeal is allowed and the finding of the learned Tribunal that insurance company is entitled to recover the amount from the owner is set aside.