New India Assurance Company vs Mahendra Pratap Singh and Others

Pankaj Mithal, J.—The appeal is reported to be defective on account of non-filing of an application u/s 170 of the Motor Vehicles Act. The submission of Sri M.K. Nigam, learned Counsel for the appellant is that in the present case no such application was filed before the Tribunal and as such its copy can not be enclosed with the memo of appeal. In view of the above, the defect reported in presentation of the appeal does not exist. Appeal be given a regular number. Heard Sri M.K. Nigam, learned Counsel for the appellant on merits of the appeal. The submission is that the offending vehicle was being driven without a valid permit and therefore, the condition to pay and recover could not have imposed upon the Insurance Company.

It has to be remembered that the Motor Vehicles Act, 1988 is a beneficial piece of legislation which is meant to protect the interest of the sufferers/claimants. Therefore, the law Courts have evolved a principle that where the vehicle is insured and there is breach of policy, the liability to pay compensation may rest upon the owner but the insurer will pay the compensation in the first instance and recover it from the owner. This principle safeguards the interest of the sufferers/claimants and at the same time saves the insurer from the liability by giving right to recover the compensation from the owner of the vehicle.

The above principle placing initial burden to pay compensation upon the Insurance Company and permitting it to recover it from the owner of the vehicle, later on is enunciated in a number of decisions of the Supreme Court in Oriental Insurance Co. Ltd. Vs. Brij Mohan and Others, , The New Indian Insurance Company Vs. Darshana Devi and Others, , National Insurance Co. Ltd. Vs. Yellamma and Another, ; Samundra Devi and Others Vs. Narendra Kaur and Others, .

A Division Bench of this Court in National Insurance Company Limited v. Chotey Lal and others, 2009 (7) ADJ (DB) while considering the condition imposed in the award of the Motor Accident Claims Tribunal directing the insurer to pay and recover the amount from the owner held it is an equitable principle and that such a direction is only a stop gap arrangement which does not ultimately makes the insurer liable for compensation. Thus, principle of pay and recover as a condition in the award was held to be valid in view of the beneficial scheme of the Act.

Following the aforesaid principle and the Division Bench decision of this Court, I myself dismissed First Appeal From Order No. 3337 of 2011 including similar question vide my order dated 12th October, 2011.

In view of the aforesaid decision, I find that there is no substance in the present appeal and it is liable to the dismissed. The submission of the learned Counsel for the appellant that the validity of such a direction upon the Insurance Company to pay and recover has been referred to a larger Bench by the Supreme Court vide reference order dated 31st August 2009 reported in National Insurance Co. Ltd. Vs. Parvathneni and Another, , National Insurance Company Limited v. Parvathneni and another is not of much relevance as the said reference has not yet been answered and the law as referred to above holds the field as on date. Accordingly, the appeal lacks merit and is dismissed.

The statutory deposit made before this Court shall be remitted to the Tribunal immediately for adjustment towards payment of compensation to the claimants.