National Insurance Company Limited vs Rajabhai Motibhai Khambhaliya and Others

M.D. Shah, J.—These appeals are filed by the Insurance Company against the common judgment and awards dated 27-11-2009 passed by the learned Motor Accident Claims Tribunal (Main), Rajkot, in Motor Accident Claim Petitions Nos. 1867 of 1999, 556 of 2000 and 2215 of 1999 respectively whereby driver and owner were held jointly and severally liable to pay compensation to the claimants and insurance company was exonerated from liability. Heard learned advocates, Mr. Maulik Shelat for the appellant-Insurance Company and Mr. Harshad Patel for the original claimants.

Learned advocate, Mr. Shelat took this Court through the evidence of the deposition of the claimants. He has also submitted that it appears from the evidence of the witness that claimants were all travelling in goods vehicle No. GJ-3-U-7863. It is also submitted that claimants were travelling as unauthorised passengers in the vehicle which is a breach of condition of policy and risk of such passengers was not covered under Sec. 147 of the Motor Vehicles Act and hence, insurance company is not liable to pay any compensation. In this connection, he has relied on a judgment of Hon''ble Supreme Court in the case of New India Assurance Co. Ltd. Vs. Asha Rani and Others, . It is further submitted that this Court (Coram: Hon''ble The Chief Justice Mr. Bhaskar Bhattacharya) in First Appeal No. 2121 of 2008 relying upon several judgments of Hon''ble Apex Court has held that insurance company is not liable to pay any compensation and direction to pay the amount and to recover amount can only be given in exercise of power conferred under Article 142 of the Constitution of India. It is therefore submitted that all the appeals deserve to be allowed and claim petitions are required to be dismissed qua insurance company.

It is however submitted by learned advocate Mr. Harshad Patel for the claimants that as per the decision of the Hon''ble Supreme Court in the case of Manager, National Insurance Company Ltd. Vs. Saju P. Paul and Another, insurance company is liable to pay compensation but insurance company is at liberty to recover from the owner of the vehicle. It is therefore submitted that the Tribunal has not committed any error as, after considering the evidence on record, legal and proper order is passed by the Tribunal. It is therefore urged that all the appeals deserve to be dismissed.

This Court has gone through the impugned judgment and awards together with the judgments delivered by the Hon''ble Apex Court as well as this Court.

It is to be noted that considering the oral as well as documentary evidence on record, just and adequate compensation has been awarded by the Tribunal. Since finding on the aspect of quantum is just and proper, it is not required to be interfered with.

This Court has gone through the impugned judgment and awards. It seems that claimants were travelling as unauthorized passengers in the goods vehicle which is a breach of condition of policy and risk of such passengers is not covered under the policy and, therefore, insurance company is not liable to pay any compensation. This Court (Coram: Chief Justice) in First Appeal No. 2121 of 2008 relying upon several judgments of Hon''ble Apex Court, has held that insurance company is not liable to pay any compensation and direction to pay the amount and to recover amount can only be given in exercise of power conferred under Article 142 of the Constitution of India. It has been observed by this Court in paragraphs 12.2, 13 and 14 as under:

12.2 The above observations make it clear that the direction to pay the amount first and then to recover such amount can only be given in exercise of power conferred under Article 142 of the Constitution and the Supreme Court in the peculiar facts of the above case, exercised such power notwithstanding the pendency of reference to the larger bench.

Be that as it may, there is no scope of passing such a direction either at the instance of the Tribunal below or of this court in this appeal u/s 173 of the Act.

On consideration of the entire materials on record, I, therefore, hold that the learned Tribunal below erred in law in passing the direction upon the Insurance Company to pay the amount and then recover such amount notwithstanding its finding that the Insurance Company has no liability to pay the amount as the victims are not the third parties within the meaning of law.

In view of the above observations of this Court, order to pay the amount and then to recover such amount from the owner can only be passed in exercise of power conferred under Article 142 of the Constitution of India and the Hon''ble Supreme Court in the peculiar facts of the above case, exercised such power notwithstanding the pendency of reference to the larger bench. In view of the above, this Court is of the opinion that the insurance company has been rightly exonerated by the Tribunal and hence, appeals are required to be allowed.

In view of the above, appeals are partly allowed. Claim petitions are dismissed qua insurance company. It is clarified that if any amount is paid by the insurance company in pursuance of the directions of this Court, same will not be recovered from the claimants but insurance company will be at liberty to recover it from the owner of the vehicle. Excess amount, if any, lying deposited shall be refunded to the insurance company. Amount, if any, lying deposited in the Registry of this Court shall be transmitted to the Tribunal. There shall be no order as to costs.

Records and proceedings are ordered to be sent back forthwith. Office shall place a copy of this judgment in each matter.