Managing Director, Kerala State Road Transport Corporation vs Surendran and The Divisional Manager, National Insurance Company

Harun-Ul-Rashid, J.—This appeal is directed against the award dated 26.02.2009 passed by the Motor Accidents Claims Tribunal, Thrissur, in which a sum of Rs. 86,300/- has been awarded to applicant/claimant as compensation. Appeal is by owner of the vehicle involved in occurrence, KSRTC, represented by its Managing Director. The one and only challenge to assail the award set forth by appellant is that the offending vehicle KSRTC bus involved in the occurrence was having a valid insurance policy with additional second respondent in the appeal, but that had not been brought to the notice of Tribunal by claimant or appellant. In fact, appellant remained absent and the award was passed ex-parte. With the appeal the appellant has produced copy of the policy issued for the vehicle, KSRTC bus, involved in the occurrence by the additional 2nd respondent. Learned counsel appearing for additional second respondent submitted that policy covered the vehicle at the time of accident, but, since company was not made a party in the proceedings before the Tribunal, it did not get an opportunity to challenge the claim for compensation. First respondent in appeal is the claimant.

I heard counsel on both sides. Appellant is a public sector undertaking has to be taken note of though it is apparent on the facts and circumstances that there was laches or default on its part in not appearing before tribunal and bringing to its notice that the vehicle involved in the accident had a valid insurance coverage with additional second respondent. Insurer has to be given notice by tribunal to make it liable for providing compensation in terms of the undertaking given in its policy. There is force in the submission made by learned counsel for additional second respondent (insurer) that at this stage cannot be called upon to pay compensation, though there is a valid policy when it had not been provided an opportunity to contest the claim. Section 149(2) of the Motor Vehicles Act, provides what are the limited contentions that could be taken up by the insurer unless it is permitted by tribunal to take all contentions available to insured owner of the vehicle. That Sub Section also states that even if notice of the proceedings has not been given to the insurer by the tribunal notice in appeal where execution of the award passed by tribunal has been stayed will be sufficient to compel the company to pay the compensation awarded by tribunal. Still, the ends of justice demand that the insurer has to be provided an opportunity to contest the claim and it cannot be called upon to pay compensation fixed by tribunal without issuing notice to it even if it has not been made a party to the proceedings. That being so, I find setting aside award the case has to be remitted for fresh disposal by tribunal after impleading additional second respondent as a party in the proceedings.

Parties are directed to appear before tribunal on the date fixed hereunder to enable the tribunal to pass a fresh award. One half of the compensation awarded by tribunal had been directed to be deposited by the appellants by orders passed by this Court and the sum thereof, it is stated, on deposit had been collected by claimants. I make it clear that amount so deposited and collected shall form part of the amount of compensation to be re-fixed by the tribunal. In case insurance company has no further challenge over the quantum fixed or other matters raised in the proceedings, it is open to the tribunal to pass fresh award retaining the quantum fixed, but, making the insurance company liable for payment of such compensation.

Parties are directed before the tribunal on 21.10.2013, and the tribunal shall pass fresh award is the proceedings as expeditiously as possible, at any rate, within three months from the above date. Parties are directed to suffer their cost.