Harish and Others vs The Oriental Insurance Company Ltd.

Surya Kant, J.—This revision petition is preferred against the order dated November 24, 2006 passed by the Motor Accident Claims Tribunal, Faridabad whereby an application for setting aside the award dated 27.1.2004 has been dismissed.

The proforma respondents No. 2 to 4 filed a claim petition u/s 166 of the Motor Vehicles Act (in short "the Act") claiming compensation to the tune of Rs. 5 lacs on account of death of Akhilesh in a motor vehicular accident allegedly occurred due to rash and negligent driving of truck bearing No. HR-38-C-7452 driven by petitioner No. 2 (Banwari Lal) and owned by petitioner No. 1 (Harish). The Tribunal vide an award dated 27.1.2004 awarded a sum of Rs. 3,06,400/- along with interest at the rate of 9% per annum as compensation to the claimants.

It appears that a written statement was filed on behalf of the present petitioners who were arrayed as respondents No. 1 and 2 in the claim petition. The alleged driving licence of petitioner No. 2 was also placed on record. On the basis of the evidence on record which included the report of the Local Commissioner, the Tribunal arrived at the conclusion that the driving licence of petitioner No. 2 was allegedly forged and accordingly it absolved the Insurance Company of its liability. The Tribunal, however, held the Insurance Company liable to pay the compensation though with liberty to recover the same from the owner and driver of the delinquent vehicle.

The Insurance Company has paid the entire compensation to the claimants. Thereafter, it has initiated recovery proceedings against the petitioners. On receipt of the notice, the petitioners moved an application to set aside the award dated 27.1.2004 on the ground that they never engaged any counsel; never filed any written statement; never led any evidence and had no knowledge of the claim proceedings and/or the consequential award.

The above-stated application, however, has been dismissed by the Tribunal vide the impugned order.

In order to show their bona fide, the petitioners are stated to have furnished a bank guarantee for a sum of Rs. 5 lacs in favour of the respondent-Insurance Company.

The only question which arises for consideration is as to whether any fraud was played upon the petitioners which might to have led to the passing of the award dated 27.1.2004.

In my considered view, the learned Tribunal ought not to have dismissed the petitioners'' application solely on the basis of the findings contained in the award dated 27.1.2004 as the allegations of fraud pertain to the passing of the said award only. In other words, an issue could be framed regarding the allegations made by the petitioners so as to enable them to lead evidence and prove the same. This exercise, however, is required to be undertaken only for the purpose as to whether or not the Insurance Company is entitled to recover the amount of compensation, paid by it to the claimants, from the petitioners and not for recovering the same from the claimants. To be specific, the claimants shall not be asked to refund the amount of compensation already paid to them irrespective of the findings arrived at by the Tribunal on the aforementioned issue. No notice shall be served or required to be served upon the claimants in these proceedings.

However, with a view to strike balance and to protect the right of the Insurance Company vis-a-vis, the petitioners, learned Counsel for the parties have agreed that the Insurance Company may encash the bank guarantee of Rs. 5 lacs furnished by the petitioners subject to the condition that if the petitioners succeeded before the Tribunal, in that event, the Insurance Company shall be liable to refund the said amount along with interest, as may be determined by the Tribunal.

For the reasons aforestated, the impugned order dated 24.11.2006 is set aside and the matter is remitted to the Tribunal for a fresh decision in accordance with law.

The parties are directed to appear before the Tribunal on 2.6.2008.