M/s T.S.G. and Co. and another vs M/s. Jeeva Transport Corporation Ltd.

This appeal is directed against the order of the Motor Accident Claims Tribunal, Coimbatore in MCOP No.324 of 1988. The owner of the

vehicle who suffered the damages and the insurance Company are the appellants in the above appeal.

The appellants had filed the said MCOP on the basis of the following suggestions:-

On 6.4.1987, at about 4.30 PM., the first petitioner''s car bearing registration No.TCG 6116 which was driven by one Chandrasekar was

proceeding from south to north in the P.S.G.Arts College Campus slowly and sounding the horn as and when necessary. As soon as the car

reached the main gate of the College to enter into Avinashi Main Road, and to proceed to the western direction, the driver of the vehicle turned to

the left side of the road. At that time, the respondent bus bearing registration No. TML 4850 came in a very rash and reckless speed from west to

east. All of a sudden, the vehicle came and dashed against the right front side of the first claimants car. On account of the violent impact, the car

was extensively damaged, necessitating repairs and replacements to a cost of Rs.49,503. The driver of the car also sustained grievous and severe

injuries. The accident was only due to the rash and negligent act on the part of the driver of the respondent. The driver was very negligent in driving

the bus without adhering to the traffic rules and without taking normal precautions. Since the claimant''s car was insured with the second petitioner

under a valid policy, it was surveyed by independent and qualified surveyor. The survey was conducted by incurring expenses of Rs.560 towards

survey fees. Subsequently, the first claimant effected repairs to his car at M/s. Stanes Motors Limited, Coimbatore. The petitioners further submit

that on account of the payment by the second petitioner to the first petitioner towards the repairs and replacement charges, the second petitioner

had subrogated to the first petitioner''s right and the right of the first petitioner to recover the loss from the respondent. The first petitioner had also

executed the letter of Subrogation dated 29.1.1988 in favour of the second petitioner transferring all his rights to recover the damages. On the said

ground also, the second petitioner was entitled to sue and recover the damages in its own name from the respondent. If, for any reason, the

Tribunal held that the first petitioner alone was entitled to sue, in that event, the petitioner had joined, in filing of the petition. Therefore, the

petitioner prayed for an award of Rs.50, 063 with interest at the rate of 12% per annum.

In the counter filed by the respondent, it was contended that the accident was only due to rashness and negligence on the part of the driver of

the car. On the particular date, when the bus was nearing the P.S.G.-Arts College, it was moving at a moderate speed on the left side of the road.

At that time, the car TCG 6116 coming from the College entered the main road without halting. Since it was a national highway, the car driver

ought to have halted and verified himself of the moving vehicles on both sides of the road. The bus driver did not expect the sudden coining of the

car to the main road but he applied brakes and turned the bus to the left side of the road. But inspite of his best efforts, the car hit the right front

side of the bus and got damaged. The contention that the driver of the bus had driven the vehicle rashly and negligently was not correct.

Immediately after the accident, the car driver ran away from the scene. The front side of the bus was also damaged. The details of the damage

caused to the car was not correct. The respondent did not admit the alleged damages caused to the car. The respondent does not also admit the

correctness and genuineness of the estimate report or the survey report regarding the damages to the car. The drivers of the vehicles also should

have been imp leaded as parties. An additional counter statement was also filed by the respondent and it was contended that the claim petition was

not maintainable. The car had been duly repaired and set right by the Insurer. Therefore, the first petitioner was not entitled to claim further

damages on the alleged accident. The petitioner was not entitled to claim any further damages. The petition filed u/s 110-A of the Motor Vehicles

Act was not at all maintainable. The contention that the second petitioner had subrogated to the first petitioner the right to recover the loss was not

correct. Such a right cannot be invoked under the provisions of the Motor Vehicles Act. The said relief was recognised only under Transfer of

Property Act and it is not applicable to the provisions of the Motor Vehicles Act. Until and otherwise there was an actionable claim, it cannot be

assigned or subrogated. The claims made under the Motor Vehicles Accident are only personal and the Insurance Company cannot maintain the

petition.

In reply to the additional counter, a reply statement was filed by the second petitioner. It is contended that the petition was maintainable u/s 110-

A (i) of the Motor Vehicles Act, 1939. It was further pointed out that u/s 110-A, the Jurisdiction of the Civil Court was barred and hence, the

claim can be adjudicated only before the Tribunal in view of the letter of Subrogation, the second petitioner was substituted in the place of the first

petitioner. Hence, the claim petition was maintainable.

On a consideration of the said pleadings and the evidence, the Tribunal found that the accident had resulted only as a result of rashness and

negligence on the part of the driver of the bus. The Tribunal also held on the basis of the evidence that the first petitioner had incurred damages and

the second petitioner had paid Rs.49, 503 pursuant to the Policy of Insurance and payable to the insured. The Tribunal also held that since the first

claimant had already claimed damages from the insurer, the second claimant, and also received the amount, the claim was not maintainable as

against the respondent. It was further held that the petition of this nature was not maintainable under the provisions of the Motor Vehicles Act,

1939 (hereinafter called as The Act''). In the result, the claim petition was dismissed and hence, the present appeal by both the claimants.

Mr. Narasimhan, learned counsel for the appellants contends that the right to claim damages was available only in favour of the first claimant, the

person who suffered damages and also the Insurance Company. It has been duly authorised and assigned the right of the insured. Since both the

insurer and the insured have jointly filed the claim petition, the question whether one of them alone can maintain a petition does not arise and from

either point of view, the right of the insurer or the insured to maintain the petition independently or not, will not arise since both of them have filed

the petition. It is further contended that the right to claim damages is not affected, since the claim exceeded Rs.2000. The choice of the forum is

allowed to the claimant and hence the petition was maintainable.

Refuting the said contention, Mr. Subbiah learned counsel for the respondent contends that the choice of the forum was available only with

reference to the right to claim damages and not in the case of subrogation and when the affected party had already been indemnified by the

Insurance Company. As far as the affected party is concerned, his claim has been settled and as such, no further claim can be pleaded in terms of

the Act. The principle of ''Subrogation'' is embodied u/s 92 of the Transfer of Property Act and states that the expression ''Subrogation'' can only

mean ''Substitution''. The substitute is not an agent or a legal representative who alone can invoke the provisions under the Act and hence the

remedy was available only before the Civil Court.

I have considered the submissions as well as the various rulings relied upon by the learned counsel for the appellant. From the angle of the

claimants/appellants, the issue is very simple viz., that the, tort-feasor, the respondent who had caused the accident is liable to compensate the

damages irrespective of the fact whether the victim had been compensated by the insurer or not. The counsel for the respondent does not seriously

dispute the right of the aggrieved person or the Insurance Company as assignee to sue the respondent, The amount paid to the insurer was subject

to the proof of negligence and actual damages, and for that proposition the appellants have relied on the following decisions:-

(i) Vasudev Mudaliar Vs. Caledonian Insurance Co. and Another, ; (ii) Sri Sarada Mills Ltd. Vs. Union of India and Others, ; (iii) Trustees of the

Port of Madras Vs. Home Insurance Co. Ltd., ; (iv) Union of India (UOI) Vs. Sri Sarada Mills Ltd., ; (v) Dr. A.C. Mehra v. Behari Lal and

another, 1998 ACJ 379.

The principle of Subrogation is not only statutorily recognised u/s 49 of the Marine Insurance Act, 1963, whereby an insurer becomes entitled to

take over the interest of the insured and to all the rights and remedies of the insured, the same is also applicable to all cases of general Insurance.

This is a principle evolved out of the English Law of Equity and later became recognised and engrafted under Sections 130-A and 135-A of the

Transfer of Property Act, 1882 and subsequently re-enacted under Marine Insurance Act, 1963. Infact, among the Judgments already cited

above, the decision in Vasudev Mudaliar Vs. Caledonian Insurance Co. and Another, relates to the claim relating to motor accident. The decision

in Sri Sarada Mills Ltd. Vs. Union of India and Others, as well as that of the Supreme Court in Union of India (UOI) Vs. Sri Sarada Mills Ltd.,

relate to claims against the railway administration, ft is true, they are cases arising out of Civil suits filed by the claimants. Those decisions establish

that the principle of Subrogation had been recognised in cases of all types of insurance claims and the claims between the bailor and bailee. It will

also be useful to refer to the provisions u/s 140 of the Indian Contract Act which entitles the surety to exercise all the rights Of the creditor against

the principal debtor.

Therefore, the finding by the Tribunal to the extent, that once the damage sustained by the claimant has been paid by the Insurance Company,

there can be no claim as against the tort-feasor, is liable to be set aside.

The crux of the objections of the learned counsel for the respondent is actually as regards the maintainability of the claim under the Motor

Vehicles Act based on his interpretation of Sections 110 and 110-A of the Motor Vehicles Act, 1939. Section 110-A (1) reads as follows:-

110-A Application for compensation:- (1) An application for compensation arising out an accident of the nature specified in sub-section (1) of

Section 110 may be made-

(a) by the person who has sustained the injury; or

[(aa) by the owner of the property; or]

(b) where death has resulted from the accident, by all or any of the legal representative of the deceased; or

(c) by any agent duly authorised by the person injured or all or any of the legal representatives of the deceased, as the case may be:

Provided that where all the legal representatives of the deceased have not joined in any such application for compensation, the application shall be

made on behalf of or for the benefit of all the legal representatives of the deceased and the legal representatives who have not so joined, shall be

impleaded as respondents to the application.

According to the learned counsel for the respondent u/s 110-A (1). It is only the person who is actually injured or his agent or the legal

representatives of the deceased alone are entitled to prefer the claim petition and none others and also that the assignee or holder of letter of

subrogation cannot be brought under any of the said categories. They cannot maintain the petition and hence the provisions of the act cannot be

invoked by the Insurance Company. Therefore, the claimants ought to have filed only a civil suit.

I am unable to accept the point so raised by the learned counsel for the respondent for the various reasons stated below:-

Apart from the reasons mentioned below, the teamed counsel for the respondent has not pointed out any binding decision on this issue. Firstly, the

interpretation which is sought to be placed on Section 110-A (1) listing the various categories of claims is rather narrow and does not fit with the

objects of the Act. The position of an insurer is peculiar under the Motor Vehicles Act and it Is not a third party/indemnifier, simpliciter who has no

nexus with the parties other than the insured. The right or liability of the insurer is a statutory one and bound by the provisions of Chapter VIII of

Motor Vehicles Act, 1939. The rights and the liabilities of the insurer under the Act are defined and restricted within the purview of the Act.

Section 95 (5) also stipulates a non-obstante clause and makes the insurer liable to indemnify person or classes of person specified in the policy in

respect of the liability covered under the policy, notwithstanding anything contained in any taw. Therefore, any relief which is available to the

insured or the insurer has to be enforced only within the ambit of the Motor. Vehicles Act. If under the common law, the insurer would be legally

entitled to recover from the tort-feasor the amount paid to the Insurer (which entitlement is not disputed), it would be placing the insurer in a

position without any remedy if the insurer is disabled to proceed under the Act. The legislature could not have intended such a situation much less

any intention to deprive the insurer to have their rights and remedies enforced. The Motor Vehicles Act Is a consolidating Act and therefore the

principles relating to common law and the Insurance Law are not abrogated except in so far as any issue or procedure which is specifically dealt

with under the Act. We have already seen that the insurer will be justified to recover the amounts paid by him from the person who had caused the

accident as recognised under common law and Insurance Law.

Therefore, the provisions u/s 110-A (1) requires to be interpreted in a manner consistent with the objects and reasons and the purpose of the

Act. In the present case, under Ex.A.7, the letter of the claimant, the claimant had transferred to the second claimant/Insurance Company the right

to recover the damages. Thus the Insurance Company had stepped into the shoes of the person who had sustained the injury or the owner of the

vehicle which had sustained damages. The following extract from Banerjee''s Law of Insurance IV Edition would be relevant:-

Subrogation:- Subrogation, in insurance law, is the doctrine by which the insurer steps into the shoes of the insured for the enforcement of all rights

against strangers or third persons who may primarily be liable to the loss incurred when the former indemnifies the latter in respect of the latter''s

loss. To put the doctrine shortly, the Insurer is subrogated to the insured''s : right of action. The insured will, under no circumstances unless there is

a contract to the contrary, be allowed to defeat this right of action of the insurer.

That the Parliament would not have intended to leave the Insurance Company high and dry can be inferred from various circumstances and that

the Insurance Company is always made answerable as a respondent in all the claim petitions. The Act provides many do''s and don''ts against the

Insurance Company and various provisions allow the Insurance Company to raise certain specific defences. The Company is also entitled to file an

appeal whenever an adverse award is passed against it. It would be anomalous to hold, that the Company has no right to file a claim petition even

after it had paid the amounts due to the injured or the aggrieved party, by proceeding against the tort-feasor.

Therefore, while reading Section 110-A(1), the entire sweep of the Act and the object of the Act should be taken for consideration and the

interpretation should be based on the well accepted principle of ""Purposive Construction"" evolved in Heydon''s case, which has been accepted and

followed by all our Courts. After referring to the said principle, the Supreme Court held in K.P. Varghese Vs. Income Tax Officer, Ernakulam and

Another, that plain meaning cannot be relied upon whenever it results in absurdity, injustice and unconstitutionality. In such a situation, Court must

construe having regard to the objects and purpose which the legislature had in view in enacting the provision.

Secondly, the bar of jurisdiction of the Civil Court as contained u/s 110-F of the Act cannot also be lost sight of. Section 110-F is as follows:-;

110F. ""Bar of Jurisdiction of Civil Courts:- 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.

The said provision clearly envisages that Motor Vehicles Act is a self-contained Act as far as the claim of compensation is concerned and for all

matters arising out of ""any question relating to any claim for compensation"". The only exception is the choice given to the claimant under the proviso

to Section 110-A (1) which entitles the claimant to refer the claim to the Civil Court for adjudication where the claim for compensation in respect

of damages to the property exceeds Rs.2000. It is very significant to note that the choice is given only to the claimant and not to the Insurance

Company, if one should adopt strict construction of the expression ""claimant"". If the Insurance Company is not to be treated as a claimant, then it

would mean that the Company cannot go before the Civil Court. Therefore, the Company has to be treated as a claimant. In this case, the

Company having chosen to come before the Tribunal, the Tribunal has to deal with the claim on its merits.

This issue of the bar of jurisdiction of the Civil Court is again a matter which should be weighed in favour of the Insurance Company for

adopting ""purposive interpretation"" of Section 110-A (1) while dealing with the locus-standi of the Company to file the claim petition.

Therefore, I am inclined to hold that the claim petition filed by the Insurance Company is maintainable.

As regards the negligence as well as the quantum of the claim, the Tribunal had upheld the contentions of the claimants. The amounts due to the

claimant had been fixed at Rs.49,503. The Tribunal had rightly disallowed Rs.500 claimed towards survey fee which cannot be treated as due

towards damages to the property. Therefore, on a proper consideration of the materials placed before the Tribunal, the Tribunal had held that the

first claimant had received Rs.40,503 from the second claimant towards the damages suffered by the first claimant. The claims are based on

Ex.A.1 the provisional estimate, Ex.A.2 the supplemental estimate, Ex.A.3 the survey report, Ex.A.4 receipt, Ex.A.5 work order, Ex.A.6 final bill

and Ex.A.8 receipt for payment to the repairer. In the counter, though the correctness of the estimate and the expenses incurred are disputed, there

has been absolutely no contra evidence or serious challenge either as regards the nature of damages or the payments made to the repairer. No

contra evidence had been produced questioning the correctness of the quantum of claim.

Therefore, the claimants are entitled to succeed. In the result, the appeal is allowed and the claimants are entitled to recover the damages of a

sum of Rs.49.503. Considering that the damages are referable only to the property of the claimants, it would be Just and proper to fix the rate of

interest only at 6% per annum from the date of the claim petition.

With the above observation, the appeal is allowed. No costs.