·
By
A N Sabri
On 08th August, 2018, Supreme
Court in the matter of SHAMANNA AND ANOTHER
VERSUS THE DIVISIONAL MANAGER, THE ORIENTAL INSURANCE CO. LTD AND ORS. (
Civil Appeal No. 8144 of 2018) upheld the principle of “ pay and recover” in the motor
vehicle accident insurance claims matters.
Brief Facts of the Case:
On
14.04.20108, one Late Mr. Shankareppa Pattar was travelling in a jeep. The jeep
was driven negligently due to which door of the jeep suddenly opened and Late
Mr. Shankareppa was thrown out of the jeep and sustained grievous injuries and
died in the hospital.
The MAC Tribunal
awarded compensation of Rs. 3,55,500/- with interest @ 6% per annum from the
date of claim petition till realization. Since the driver of the jeep had no
valid driving licence at the time of the accident and since there was violation
of the terms of the insurance policy, the Tribunal directed the insurance
company to pay the compensation to the claimants and granted liberty to the
insurance company to recover the same from the owner of the vehicle.
Appeals
Against the
order of the Tribunal, Insurance company filed appeal in the High Court of
Karnataka at Dharwad Bench . Appeal was also filed by the LRs deceased for
enhancement of the compensation.
High Court Judgment
High Court while relying on in its
previous judgment in the case of Oriental
Insurance Co. Ltd V K.C.Subramanyam ( ILR 2012 KAR 5241) set aside the
award passed by the Tribunal directing the insurance company to pay
compensation to the claimants and recover the same from the owner of the
vehicle. The High Court held that only owner of the offending vehicle is liable
to make payment of the compensation amount awarded by the Tribunal. High Court
further enhanced the amount of compensation from Rs. 3,55,500/- to Rs.
4,94,700/- . It was observed by the High Court that where the Supreme Court
directed the insurance company to make payment to the claimants and to recover
the same from the owner of the vehicle in exercise of its discretionary power was
under Article 142 of the Constitution of India and such power is vested only
with the Supreme Court and no such power is vested with the High Court.
Judgments discussed:
1 National
Insurance Company Vs. Swaran Singh and others ( 2004) 3 SCC 297.
2 Oriental
Insurance
Co. Ltd Vs. Nanjappan and Others ( 2004)13 SCC 224.
3 National
insurance Co. Ltd Vs. Bommithi Subbhayamma and others ( 2005) 12 SCC 243.
4 National
Insurance Co. Ltd Vs. Laxmi Narain Dhut ( 2007) 3 SCC 700
5 Oriental
Insurance Co. Ltd Vs. Brit Mohan and others ( 2007) 7 SCC 56
6 Prem
Kumari Vs. Prahlad Dev and others ( 2008) 3 SCC 193.
7 National Insurance Co. Ltd Vs. Parvathneni and another ( 2009) 8 SCC 785
Findings of Supreme
Court
It was held by
the Supreme Court that since the reference to the larger bench in Parvathneni
case has been disposed of by the keeping the question of law open to be decided
in an appropriate case, presently the decision in Swaran Singh case followed in Laxmi
Narain Dhut and others hold the field. The award passed by the Tribunal
directing the insurance company to the compensation amount awarded to the
claimant and thereafter, recover the same from the owner of the vehicle in
question, is in accordance with the judgment passed by the Court in Swaran
Singh and Laxmi Narain Dhut cases. While so, the High Court ought not to have
interfered with the award passed by the Tribunal directing the first respondent
( Insurance Company) to pay the compensation and recovery from the owner of the
vehicle. The impugned judgment of the
High Court exonerating the insurance company from its liability and directing the
claimants ( Insurance company) to recover the compensation from the owner of
the vehicle set aside and the award passed by the Tribunal restored.
So far as the
recovery of the amount from the owner of the vehicle, the insurance company
shall recover as held in the decision of Oriental
Insurance Co.Ltd V Nanjappan and others case, wherein it was held that for the purpose of recovering the same from
insured, the insurer shall not be required to file a suit. It may initiate a
proceeding before the concerned Executive Court as if the dispute between the
insurer and the owner was subject matter of determination before the Tribunal
and the issue is decided against the owner and in favour of the insurer.
However, the
impugned judgment of the High Court insofar as enhancement of the compensation
to Rs. 4,94,700/- is affirmed.
Conclusion
Supreme Court
relied on Swaran Singh and Laxmi Narain Dhut case, wherein it was held that primarily
it is duty of the Insurance Company to pay the compensation to the LR of
deceased/ Injured person irrespective of the fact that the driver was not
holding the valid licence or there was violation of the terms of the insurance
policy. However, the insurance company can recover the said amount from owner. For
recovery of the said amount the insurance company needs not the initiate a suit
but it can initiate only the execution proceeding before the concerned Executing
Court.
( Author can
be contacted at azeez_nazar@rediffmail.com)
