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Judgment
This is an appeal preferred against the judgment and order dated 4th April, 2005 rendered by the Member, Motor Accident Claims Tribunal, Nagpur in Claim Petition No.792/1998.
The claim petition was filed under Section 166 of the Motor Vehicles Act, 1988 claiming compensation for the untimely death of deceased Janabai, who was the wife of the claimant i.e. the respondent No.1 in an accident which occurred while deceased Janabai was travelling in a truck bearing registration No.MH31M8185 on a road between village Bina and village Khaperkheda. The accident occurred on 2.5.1998 and according to the claimant, it was due to rash and negligent driving of the truck. The claimant also contended that his deceased wife was travelling in the said truck along with bagful of vegetables, as owner thereof and, therefore, the appellantinsurer of the truck was also liable to pay the compensation. The Tribunal, however, on merits of the case found that the deceased Janabai was an unauthorized passenger and that there was no evidence showing that she travelled by the said truck alongwith goods as owner thereof and, therefore, exonerated the appellant of its liability under the insurance policy by the award impugned in the instant petition. However, the Tribunal directed that the appellant shall satisfy the award and may recover the amount of award from the owner of the truck i.e. respondent No.2. The total compensation awarded was of Rs.2,20,000/ together with interest at the rate of 9% p.a. from the date of petition till realization. It is the direction of pay and recover which is challenged in the present appeal.
I have heard Shri D.N. Kukday, learned counsel for the petitioner. None for the respondent though duly served and noticed on final disposal. I have gone through the record of the case including the impugned judgment and order. The only point which arises for my determination is as under : Whether the direction of pay and recover issued by the Tribunal to the appellant is justified by the facts and circumstances available on record ?
Shri D.N. Kukday, learned counsel for the appellant submits that it is the discretion of the Tribunal to issue a kind of direction which is impugned in the present appeal, but the discretion has to be exercised judiciously and not capriciously. He submits that although the learned Member of the Tribunal has found support in the direction of the Hon''ble Apex Court given in the case of National Insurance Co. Ltd., vs. Baljit Kaur and others, reported in I (2004) ACC 259 (SC) to issue the impugned direction, the direction issued in Baljit Kaur was on the facts and circumstances of the case peculiar to that case and it was in exercise of Apex Court''s jurisdiction under Article 142 read with Article 136 of the Constitution of India for doing complete justice between the parties. He invites my attention to the observations of the Hon''ble Apex Court appearing in paragraphs 19 and 20 of the case Baljit Kaur (supra) to support the contention. He also relies upon the Division Bench decision of this Court in the case of Traders Pvt. Ltd., Ahmedabad and another vs. Sunanda wd/o. Krishna Machivale and others, reported in 2009(1) Mh.L.J. 898.
A perusal of the impugned judgment and order shows that the direction regarding pay and recover has been issued by the learned Member of the Tribunal completely drawing strength from the case of Baljit Kaur (supra). The decision of Baljit Kaur together with other similar decisions, such as Oriental Insurance Co. Ltd. vs. Nanjappan and others, reported in (2004) 13 SCC 224, National Insurance Company Limited vs. Kusum Rai and others, reported in (2006) 4 SCC 250, Oriental Insurance Co. Ltd. vs. Brij Mohan and others, reported in (2007) 7 SCC 56, Oriental Insurance Co. Ltd. vs. Syed Ibrahim and others, reported in 2007 ACJ 2816 was considered by the Division Bench of this Court in Traders Pvt. Ltd. (supra). The Division Bench opined that the directions facilitating recovery of amount from the owner of the offending vehicle were issued by the Hon''ble Apex Court in exercise of its jurisdiction under Article 142 read with Article 136 of the Constitution of India in order to do complete justice between the parties and that similar powers do not vest in the High Court. The Division Bench then went on to hold that in that particular case, it was not possible for it to pass any similar order. However, the Division Bench was also of the view that such a direction as the one questioned in the present appeal, in certain facts situations can indeed be issued, but those facts situations must provide compelling reasons for the Court to issue the direction of first pay and recover later to the Insurance company, inspite of exoneration of its liability under the policy of insurance. The Division Bench, in order to illustrate the point, referred to the cases wherein there was involved a third party property damage and the liability of the insurance company has been limited to a fixed amount. It appears that this illustration was given by the Division Bench of this Court to highlight the point that it is only when there are compelling reasons that the direction to the insurance company to pay the amount of compensation first and then recover it from the insured, can be given. Relevant observations of the Division Bench as they appear in paragraph 67 are reproduced thus : "In Swaran Singh''s case (supra) and in Captain Itbar Singh''s case (supra), the Supreme Court was concerned with situations where the insurance company was compelled to pay compensation. The Supreme Court observed that if the insurer proves the available satisfactory defences, or if he has been made to pay something which on the contract of policy he was not bound to pay, he can recover the same from the assured under the above mentioned provisions. These judgments, in our opinion, do not lay down a proposition that in all cases the insurance company has to pay the awarded amount and then recover it from the assured, whether it is liable to pay the amount or not. Such a course may be available under certain fact situations only. For instance, under the Motor Vehicles Act, 1988, for Third Party property damage, the liability is limited to Rs.6,000/ and if there is any policy which covers lesser amount viz. Rs.2,000/ as under the said Act, the amount of Rs.4,000/ would be recoverable from the insured by the insurer after paying it."
In the case of Baljit Kaur, the reason for invoking extraordinary jurisdiction of the Hon''ble Apex Court under Article 142 of the Constitution of India could be discerned, as rightly submitted by the learned counsel for the appellant. In that case, the question was as to whether or not an unauthorized passenger, especially a passenger who is gratuitous could successfully lay a claim for compensation against the insurance company when no premium is paid for such a passenger. The law on this point was not clear till the decision was rendered in Baljit Kaur and the legal position was clarified with prospective effect by the Hon''ble Supreme Court. It held that inspite of Amendment of 1994, the effect of the provision contained in Section 147 of the Motor Vehicles Act, 1988 with respect to persons other than the owner of the goods or his authorized representative remained the same and although the owner of the goods or his authorized representative would now be covered by the policy of insurance in respect of a goods vehicle, it was not the intention of the Legislature to provide the liability of the insurer with respect to passengers, especially gratuitous passengers, who were neither contemplated at the time when the contract of insurance was entered into, nor any premium was paid to the extent of the benefit of insurance to such category of people. Therefore, in order to subserve the interest of justice that the Hon''ble Apex Court issued a direction to the insurance company to satisfy the amount awarded in favour of the claimant and then recover it from the owner of the vehicle. It also clarified that for the purpose of such recovery, it was not necessary for the insurer to file a separate proceeding and it could straight away initiate execution proceedings before the competent Court as if the dispute between the insurer and the owner was the subject matter of a determination before the Tribunal and the issue was decided against the owner and in favour of the insurer. The relevant para containing relevant observations of the Hon''ble Apex Court is reproduced as below : Para 20 :
"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 decisions 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 subserved 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 the 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 deriver of the vehicle involved in the accident inasmuch as can be resolved by the Tribunal in such a proceeding."
Now, having got the clear idea about the principles governing exercise of discretion of the Tribunal to issue a direction of pay and recover, now it would be necessary for us to consider the fact situation of the instant matter. In the instant case, the Tribunal has found that the deceased Janabai was travelling by the truck in question as an unauthorized passenger. In other words, the finding recorded is that the deceased was a gratuitous passenger of the truck in question. This finding not having been challenged, at least nothing in this regard has been brought to the notice of this Court by either of the parties, now has attained finality. It is also a fact established on record that no premium was paid for such a passenger travelling by truck in question. Therefore, the deceased could not be considered to be a third party who was involved in the accident thereby leading to a claim of compensation involving third property damage. If this was the case, there was no occasion for the Tribunal, to have exercised its extraordinary discretion in issuing the impugned direction. The impugned direction thus would have to be found as contrary to the legal principles set out in the cases discussed earlier. Such a direction cannot be sustained in the eye of law and it must go. It was not justified by the facts and circumstances available on record. The point is answered accordingly.
In the circumstances, the appeal is allowed.
The impugned direction is quashed and set aside.
The amounts deposited in this Court as well as before the Tribunal towards satisfaction of the award are permitted to be withdrawn by the appellant. No costs.