National Insurance Co. Ltd. vs Bhagwati Devi and Others

S.S. Sudhalkar, J.—This appeal is filed by the insurance Company challenging the award of the Motor Accidents Claims Tribunal (hereinafter referred to as "the Tribunal") by which it was also liable to pay the compensation to be claimant-respondents.

The appellant amongst other contentions has contended before the Tribunal that the driver of the vehicle involved in the accident was not having a valid driving licence. The Tribunal hold that the driver was not having a valid driving licence for driving truck which fall under the category of heavy transport vehicle. The vehicle involved in the accident is a truck. After deciding that the driver was not having valid driving licence for driving a truck, the Tribunal considered the question of liability of the appellant. The Tribunal of course held that because of the above reasons Insurance Company is not liable to pay the compensation. However, relying on the case of New India Assurance Company v. Kamla and Ors. 2001 127 P.L.R. 830 it held that the appellant is liable to paj the compensation to the claimant-respondents because of statutory liability and it shall be entitled to recover the amount from the owner of the truck. (In fact the Tribunal has also ordered that respondents No. 2 and 3 i.e. driver and owner of the vehicle shall be liable to pay the compensation but has directed the appellant to pay the compensation and held that it would be entitled to recover the same from respondent No. 3.)

Counsel for the appellant argued that the Tribunal has not considered the question of bona fides of the owner of the vehicle. He has relied on certain observations made by the Supreme Court in the case of New India Assurance Company v. Kamla and Ors. (supra). It will be proper to reproduce the relevant portion of the judgment. It is as under :

"The position can be summed up thus; The insurer and insured are bound by the conditions enumerated in the policy and the insurer is not liable to the insured if there is violation of any policy condition. But the insurer who is made statutorily liable to pay compensation to third parties on account of the certificate of insurance issued shall be entitled to recover from the insured the amount paid to the third parties, if there was any breach of policy conditions on account of the vehicle being driven without a valid driving licence. Learned counsel for the insured contended that it is enough if he establishes that he made all due enquiries and believed bona fide that the driver employed by him has a valid driving licence, in which case there was no breach of the policy condition. As we have not decided on that contention it is open to the insured to raise it before the Claims Tribunal. In the present case, if the Insurance Company succeeds in establishing that there was breach of the policy condition, the claims Tribunal shall direct the insured to pay that amount to the insurer. In default the insurer shall be allowed to recover that amount (which the insurer is directed to pay to the claimants-third parties from the insured person."

Relying on this part of the judgment, learned counsel for the appellant argued that the Tribunal has not decided regarding the bona fides of the employer and consequential question of breach of provision of policy and hence the case requires to be remanded to the Tribunal. Of course the Supreme Court in that case has remanded the case to the Tribunal for deciding whether the Insurance Company entitled to recover the amount from the owner of the vehicle. However, it has not been laid down in the judgment that all such cases should be remanded. The Insurance Company can take recourse to the provision of law for recovering the amount and at that time it can be decided whether the insurance company is entitled to recover the amount from the owner or not. Learned counsel for the appellant has argued that insurance company will not be able to file the suit for recovery because under the Motor Vehicles Act, the suit is barred. He has referred to Section 175 of the Motor Vehicles Act. It is as under:

"Where any claims Tribunal has been constituted for any area, no Civil Court shall have jurisdiction to entertain any question relating to any claim for compensation which may be adjudicated upon by the claims Tribunal for that area, and no injunction in respect of any action taken or to be taken by or before the Claims Tribunal in respect of the claim for compensation shall be granted by the Civil Court."

This section does not convey the meaning which the learned counsel for the appellant wants us to derive from it. What is barred is filing of the Civil Suit relating to any claim for compensation. The claim is already decided and hence chapter in thai regard is over. Now what remains in the question of liability of one of the tort-feasors and his insurer and this has to be decided in view of the contract of insurance between them. This section, therefore, docs not bar a civil suit by any insurance company against the insured for recovery of the amount. No other provision or decision to the contrary has been shown to us by the learned counsel for the appellant.

No other ground has been argued.

In view of the above reasons, we do not find any merit in this appeal and the same is hereby dismissed.