Oriental Insurance Company Ltd vs Monjuma Begum And 6 Ors

The present appeal is directed against the judgment and order dated 27-02-2015 passed by the learned Motor Accident Claims Tribunal No.2,

Kamrup, Guwahati.

1 The brief facts of the case is that the deceased, Rafiya Khatun while travelling on vehicle bearing registration No. AS-21-B-0116 (Tata ACE Van)

carrying goods towards Kakojan side from Naharani Majgaon met with an accident on reaching Naharani Chekora Railway Km.42/0-1, unmanned

Railway Crossing Gate under Farkating GRP, Out Post. The driver of the said vehicle is said to have negligently stopped the vehicle between the

railway crossing gate as a result of which, the passenger carrying train vide No. 903 proceeding from Guwahati towards Upper Assam knocked down

the vehicle and the deceased Rafiya Khatun sustained serious injuries. The deceased was aged 45 years and she was said to have been earning Rs.

6,000/- p.m.

A case was registered as accident case vide MXN GRP Case No.5 of 2012 under Sections 279/304(A), IPC and the driver of the offending

vehicle was charge sheeted and sent for trail for negligent driving and causing accident. At the stage of trail, the learned Tribunal found that the

vehicle was a goods carriage vehicle which was insured with the Oriental Insurance Company Limited covered under Policy

No.322102/31/2012/12528 which was found to be valid upto 11-03-2013. The learned Tribunal found that the vehicle Tata ACE AS-21-B-0116 was

responsible for the occurrence of the accident and ruled that the accident occurred because of the negligence of the ill fated vehicle. On scrutiny of

the documents, it was found that the policy concerned did not possess any coverage for the passenger. It was found to be a goods carriage vehicle

and no extra premium was paid to cover the risk for the passenger. Hence, it was decided that the respondent No.1, the appellant in the instant case

was not liable to pay any compensation the victim only being a gratuitous passenger. The learned Tribunal made assessment and awarded

Rs.10,54,000/- to the claimant. This was directed to be paid by the respondent No.1, the present appellant @ 6% per annum from the date of filing till

realization of the awarded amount. It was specifically directed that the awarded amount be made recoverable from the owner.

Being aggrieved, the Oriental Insurance Company, the appellant has filed the present petition on the ground that:

(a) the claimant have no locus standi as they are resident of Golaghat district and the accident took place in the district of Golaghat. The policy issuing

office is also from the district of Jorhat. Thus, as per the provision of Section 166 (2) of the M.V. Act, 1988, the MACT No. 2, Kamrup, did not have

jurisdiction to adjudicate the claim petition and the judgment obtained from court which has no jurisdiction is a nullity under law. Hence, the judgment is

liable to be quashed.

(b) Further, it has been pleaded that the deceased is a gratuitous passenger traveling in goods vehicle and the appellant company is not liable to pay

any compensation to the claimant. The liability to pay compensation is on the owner of the vehicle who was the tort feasor. Thus, the judgment

deserves to be quashed.

(C) The appellant has also challenged the order on the ground that the payment is directed to be made without making provision for security from the

owner of the vehicle as the company would not be in a position to recover the same from the vehicle owner in absence of any such security. All the

above decision of the learned Tribunal, are against the principles laid down by the Apex Court and hence, the judgment must be set aside.

Mr. A. R. Agarwal, learned counsel for the respondent No.1 submits that there are several decisions of the Courts for making payment by the

insurer to be recovered from the owner of the vehicle. Hence, he has argued that there is no illegality in the order passed by the learned Tribunal. He

has placed reliance on:

(2008) 12 SCC 385 Oriental Insurance Company Limited -vs- Zaharul Nisha and Others

(2017) AAC 1339: (2017) ACJ 1722 (2017) AIR (SCW) 1822: AIR (SC) 1822 Kempaiah -vs- S.S. Murthy

In the above referred cases the drivers were not in possession of a valid driving license. In both the above referred cases, the Apex Court directed

the Insurance Company to pay and recover. Hence, he has argued that the order of the learned Tribunal should not be disturbed or interfered with.

I have heard Ms. R.D. Mozumdar, learned counsel for the appellant as well as Mr. A. R. Agarwala, learned counsel for the respondent No.1.

There is no dispute as to the liability of the parties in the instant case. It is vividly clear from the order of the learned Tribunal that the appellant in

the instant case is not liable for making payment after having examined the evidences before it. Thus, other grounds raised by the appellant needs no

further discussion.

The main issue before the Court is whether in a circumstance where there was no coverage and liability is fixed on the actual tort feasor, the

MACT has the authority to direct the insurer to make payment of the awarded amount by the insurer and later on to be recovered by the insured from

the tort feasor.

This exercise is concerned with giving substantial justice to the litigant in an accident case on the issue of rendering substantial justice to litigant the

matter was discussed in the case of State of Punjab & Others-vs- Rafiq Masih, reported in (2014) 8 SCC 88,3 where the distinction between Article

141 and Article 142 of the Constitution of India was discussed. Article 142 of the Constitution of India is supplementary in nature and it cannot

supplant the substantive provision. Thus, a power that gives preference to equity over the law is a just oriented approach against the strict rigor of the

law. The provision of Article 142 is exercised to save litigant from the operation of rigor of law and keeping in view the equity. This is not a

declaration of law. Very often, when the Apex Court exercises this jurisdiction under the provision of Article 142, equity is misinterpreted as

declaration of law which has to be differentiated from the provision of Article 141 of the Constitution of India. Article 141 of the Constitution of India

declares that the law should be followed, whereas, the exercise of power under Article 142 is exercised to do complete justice and it cannot be

considered as ratio.

The Apex Court in exercise of powers under Article 142 of the Constitution has on certain occasions given directions to the Insurance Company

to pay and recover despite having no liability to do complete justice to the parties. In the case of National Insurance Company Ltd. â€"vs- Saju P.

Paul, reported in (2013) 2 SCC 41, the Apex Court having observed that after 20 years of litigation, the claimant did not receive any compensation

despite being permanently disabled and viewed that the claimant could not be compelled to struggle further for recovery of the awarded amount. This

being the position, the Apex Court directed the Insurance Company to pay and recover from the owner although liability was not established against

the insurer. Such exercise of power is to do complete justice which is a residual power vested only with the Apex Court as observed in several of the

rulings. In the referred cases of Zaharul Nisha and Kempaiah relied upon by the respondent, the Apex Court had given direction to pay and recover to

the Insurance Company as there was only breach of contract which is matter related to driving license. The claimants should not suffer because of

the breach of contract between the Insurer and the insured. However, in the case at hand, the Insurer has no liability at all as the victim was not a

party to the contract. Under the given facts, it would be unfair to direct the insurer to step in and salvage the hardship of a stranger to a contract.

These exercises are depending on the facts and circumstances and could not be treated as ratio. The question which is before us has been specifically

referred to 3 Bench Division of the Apex Court under Article 136 of the Constitution. In the case of National Insurance Company Limited-vs-

Parvathneni, reported in (2018) 9 SCC 657, the Apex Court disposed of without answering the referred question for consideration taking the view that

pecuniary amount involved was petty and left the matter open to be decided in an appropriate case. The specific question placed for consideration

were :-

(a) If an Insurance Company can prove that it does not have any liability to pay any amount in law to the claimants under the Motor

Vehicles Act or any other enactment, can the court yet compel it to pay the amount in question giving it liberty to later on recover the same

from the owner of the vehicle?

(b) Can such a direction be given under Article 142 of the Constitution, and what is the scope of Article 142? Does Article 142 permit the

Court to create a liability where there is none?

The above questions are relevant for our purpose today. However, the matter has been left unanswered and therefore, we are to exercise our

wisdom and pass necessary orders keeping in view the interest of justice in mind. It will be appropriate to mention that the same issue has been

resolved and answered in MAC Appeal No. 55 of 2014 by our own High Court wherein, it has taken the view that the exercise made by the Apex

Court in giving such direction was an exercise made under Article 142 of the Constitution. It was a power which was not available to a claims

Tribunal constituted under the Motor Vehicles Act, 1988. It is also clear that the power vested under Article 142 of the Constitution is an

extraordinary jurisdiction which is not exercisable by the MACT and therefore, the direction of the claims Tribunal was considered as incongruous.

The same being not in accordance with law was set aside. If this Court should even hold a different opinion, it would be a reference to a larger bench

and the same question having been unanswered would entail the same result and the casualty would be the litigants. It would cause inordinate delay in

the disposal of the matter giving no gain to either party.

It is sufficiently clear that exercise made under Article 142 of the Constitution cannot be considered as a ratio as decided in several rulings of the

Apex Court. It is also clear that the Motor Vehicle Act, 1988 does not provide for such power to the Tribunal. Hence, the direction needs to be

interfered with.

For reasons discussed above, this Court is of the view that the direction of the learned Tribunal to pay and recover by the appellant from the

owner of the vehicle is not sustainable in law. The burden of payment to the claim must therefore be transposed upon the owner of the vehicle.

The judgment and order dated 27-02-2015 passed by the learned Motor Accident Claims Tribunal No.2, Kamrup, Guwahati is modified to the

extent of directing the vehicle owner to satisfy the awarded amount to the claimant by depositing Rs. 10,54,000/- before the learned Tribunal with an

interest of 9% per annum from the date of filing till realization within a period of 60 days. The statutory deposit along with an amount of Rs. 5,27,000/-

which was directed to be deposited by this Court vide order dated 12-08-2015 drawn on Axis Bank, Guwahati be refunded to the appellant, Oriental

Insurance Company Limited forthwith.

The statutory deposit shall be refunded to the appellant.

Let LCRs be sent back to the concerned MACT Tribunal for further steps.