The main legal point established in the judgment is that even if there is a breach of insurance policy terms and conditions, the insurance company can be directed to satisfy the award first and then recover the amount from the owner of the offending vehicle.

By its Judgment and Order dated 22.8.2005 passed in Claim Petition No. 230 of 2001, the Motor Accident Claims Tribunal, Nagpur held the appellant Insurance Company jointly and severally liable to pay compensation of Rs.11,03,000/- to the respondents with future interest @ 8% per annum from the date of petition till realization, with further directions that the appellant was to satisfy the Award first and then to recover the amount from the owner, in execution proceeding.

2. Being aggrieved by this Order and Judgment, the appellant-Insurance Company has preferred this appeal.

3. Brief facts of the appeal can be stated as follows:

On 7.11.2000 deceased Sanjay was travelling in a Jeep No. MH35/C0206 at about 6.00 a.m. on National High No.6. When the jeep came near Birsi Phata, it gave dash to stationary truck bearing No. MP23/DA8977. Resultantly, deceased Sanjay, who was one of the occupants in the jeep, suffered fatal injuries and died on the spot. The offence was registered against respondent no.3, the jeep driver by Sakoli police station under Section 279, 304-A of the Indian Penal Code. The jeep was insured with the present appellant and it was owned by respondent no.6 Narayan.

4. Respondent no.1 Veena is the widow of deceased Sanjay, whereas respondent nos. 2 to 5 are their minor children. As per the case of this respondent nos. 1 to 5, at the time of accident, deceased Sanjay was 39 years old. He was working as Pharmacist at Rural Hospital, Chichgad, District-Gondia and was drawing salary of Rs. 8,500/- per month. These respondents were totally dependent upon him. On account of his untimely death, they lost their only source of income. Therefore, they filed Claim Petition before the Tribunal against appellant and respondent nos. 6 and 7, claiming compensation of Rs.23,00,000/-.

5. The appellant resisted the said petition vide written statement at Exh.44, admitting the insurance of the jeep. However, raising a specific plea that there was breach of terms and conditions of the insurance policy. It was submitted that said jeep was insured as private car but at the time of accident it was being used for carrying fare-paying passengers and in that situation as the contractual liability of the Insurance Company being only towards bona fide occupants of the vehicle, that too to the extent of Rs.57,000/- per occupant, the liability of the deceased, who was travelling in the jeep, as fare paying passenger and, therefore, not a third party, is not covered under the insurance policy and hence, the appellant cannot be fastened with the liability of paying compensation to the respondents. An attempt was also made to contend that as the owner and insurer of the truck no. MP-23-DA-8977 were not joined in the Claim Petition, the claim petition was bad for non-joinder of necessary parties. It was submitted that the truck was standing without any indicator or signal and hence, truck driver was also equally responsible for the cause of accident. It was also submitted that the amount claimed in the petition towards compensation was excessive and exorbitant.

6. Respondent no.6, the owner and respondent no.7, the driver of the jeep, though appeared in the petition, did not file their written statement. At the time of hearing also, both of them remained absent.

7. On these respective pleadings of the parties, the Tribunal framed necessary issues for its consideration at Exh.45. In support of their case, respondent no.1 examined herself and led the evidence of witness Mahadeo Kanojiya, to prove the pay bill of the deceased. As against it, on behalf of appellant, P.S.I. Motiram Gohare was examined to prove that at the time of accident deceased was travelling in the jeep as fare paying passenger. Appellant also led the evidence of its Senior Branch Manager Sudhakar Shende to prove the terms and conditions in the policy Exh.101. As the owner of the jeep has not contested the petition, appellant was permitted to contest the claim on all ground