Smt. Haseena Begaum vs Motor Accident Claim Tribunal/Additional District Judge, Court No. 1 and Others

Dilip Gupta, J.—Motor Accident Claim Petition No. 121 of 2007 was filed by the Petitioner with four others with the allegation that compensation be paid as Majeed had died in an accident on 2nd May, 2007. The award was made by the Motor Accidents Claim Tribunal on 23rd September, 2008 by which the claimants were held entitled to Rs. 1,39,500/- with interest. The Insurance Company was directed to deposit the said amount within one month but it was also directed that the Insurance Company shall be entitled to recover the amount from the owner of the vehicle but the claimants can withdraw the amount only when the Insurance Company recovers the amount from the owner of the vehicle.

This petition has been filed for quashing this portion of the award dated 23rd September, 2008 which directs that the Petitioner can withdraw the amount only when the owner of the vehicle makes the payment of the amount to the Insurance Company.

It is the contention of the learned Counsel for the Petitioner that such a condition will work to the great prejudice to the Petitioner inasmuch as it is not certain when the owner of the vehicle will make payment of the amount to the Insurance Company. It is, therefore, his submission that the Petitioner should be permitted to withdraw the amount in terms of the decision of the Supreme Court in Oriental Insurance Co. Ltd. Vs. Shri Nanjappan and Others, which was subsequently followed by the Supreme Court in National Insurance Co. Ltd. Vs. Kusum Rai and Others,

On 22nd May, 2009 while entertaining the petition, the Court issued notices to Respondent Nos. 2 and 3 namely the National Insurance Company and the owner of the vehicle respectively. Steps were taken by the Petitioner for service of notice upon Respondent Nos. 2 and 3 by registered post. The office reported that neither the undelivered cover nor the acknowledgments were returned back after service. On 10th March, 2011, the Court directed the Petitioner to serve the National Insurance Company personally and file an affidavit of service by the next date of listing. An affidavit of service has been filed which states that the notices were served on the National Insurance Company on 4th April, 2011. However, no counsel has appeared for Respondent Nos. 2 and 3. The Court has, therefore, proceeded to hear the matter.

In Oriental Insurance Company (supra), the Supreme Court observed as follows:

The view of the High Court cannot be maintained in view of what has been stated in Asha Rani''s case (supra) and Devireddy''s case (supra). To that extent the judgment of the High Court is unsustainable. At the same time, the observations of this Court in Baljit Kaur''s case (supra) also need to be noted. In para 21 of the judgment, it was observed as follows:

The upshot of the aforementioned discussions is that instead and in place of the insurer the owner of the vehicle shall be liable to satisfy the decree. The question, however, would be as to whether keeping in view the fact that the law was not clear so long such a direction would be fair and equitable. We do not think so. We, therefore, clarify the legal position which shall have prospective effect. The Tribunal as also the High Court had proceeded in terms of the decision of this Court in Satpal Singh (supra). The said decision has been overruled only in Asha Rani (supra). We, therefore, are of the opinion that the interest of justice will be sub-served if the Appellant herein is directed to satisfy the awarded amount in favour of the claimant if not already satisfied and recover the same from the owner of the vehicle. For the purpose of such recovery, it would not be necessary for insurer to file a separate suit but it may initiate a proceeding before the executing Court as if the dispute between the insurer and the owner was the subject matter of determination before the tribunal and the issue is decided against the owner and in favour of the insurer. We have issued the aforementioned directions having regard to the scope and purport of Section 168 of the Motor Vehicles Act, 1988 in terms whereof it is not only entitled to determine the amount of claim as put forth by the claimant for recovery thereof from the insurer, owner or driver of the vehicle jointly or severally but also the dispute between the insurer on the one hand and the owner or driver of the vehicle involved in the accident inasmuch as can be resolved by the tribunal in such a proceeding.

Therefore, while setting aside the judgment of the High Court we direct in terms of what has been stated in Baljit Kaur''s case (supra) that the insurer shall pay the quantum of compensation fixed by the Tribunal, about which there was no dispute raised, to the Respondents-claimants within three months from today. The for the purpose of recovering the same from the insured, the insurer shall not be required to file a suit. It may initiate a proceeding before the concerned Executing Court as if the dispute between the insurer and the owner was the subject matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer. Before release of the amount to the insured, owner of the vehicle shall be issued a notice and he shall be required to furnish security for the entire amount which the insurer will pay to the claimants. The offending vehicle shall be attached, as a part of the security. If necessity arises the Executing Court shall take assistance of the concerned Regional Transport authority. The Executing Court shall pass appropriate orders in accordance with law as to the manner in which the insured, owner of the vehicle shall make payment to the insurer. In case there is any default it shall be open to the Executing Court to direct realization by disposal of the securities to be furnished or from any other property or properties of the owner of the vehicle, the insured. The appeal is disposed of in the aforesaid terms, with no order as to costs.

This decision was followed by the Supreme Court in National Insurance Company (supra).

The Insurance Company has deposited the amount. The grievance of the Petitioner is that in view of the award, the Petitioner is not being permitted to withdraw the amount till the owner deposits the same with the Insurance Company.

In view of the aforesaid decisions of the Supreme Court, the award dated 23rd September, 2008 is modified to the extent that before releasing the amount to the insured, owner of the vehicle shall be required to furnish security for the entire amount which the insurer will pay to the claimants. The offending vehicle can be attached as a part of the security and if necessity arises, the Executing Court shall take assistance of the concerned Regional Transport authority. However, if the amount is not paid by the owner of the vehicle then it will be open to the Insurance Company to recover the amount from the owner of the vehicle in execution proceedings.

Sufficient time has already lapsed. It is, therefore, expected that the Tribunal shall proceed with the matter expeditiously.

The writ petition is allowed to the extent indicated above.