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2017 Supreme(Bom) 2420
IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT NAGPUR
INDIRA JAIN, J.
United India Insurance Company Limited - Appellant
Versus
Ramchandra s/o Dhondu Bawanthade & Anr. - Respondents
First Appeal Nos. 386, 387, 388 & 386 of 2008
Decided On : 06-09-2017
Advocate Appeared:
For the Appellant : Shri D.N. Kukday
For the Respondents: Shri Shashikant Borkar
The main legal point established in the judgment is that the insurance policy did not cover the risk of gratuitous passengers in a goods vehicle, and therefore, the insurer could not be directed to pay compensation and recover the same from the owner of the offending vehicle.
Headnote:
Insurer Liability - Motor Accident Claims - Motor Vehicles Act, 1988 - Section 147, Section 149
Fact of the Case:
The case involved a dispute over whether the insurer could be directed to pay compensation despite not being legally liable due to a fundamental breach of the policy and then recover the same from the owner of the offending vehicle. The claimants were seeking compensation for the death of their family members in a road accident involving a matador and an unknown vehicle.
Finding of the Court:
The court found that the insurance company was not liable to pay compensation due to the breach of the insurance policy terms regarding gratuitous passengers in a goods vehicle. The court held that the directions given by the tribunal to pay and recover the compensation were unsustainable in law and set aside the relevant part of the tribunal's award.
Issues: The main issue was whether the insurer could be directed to pay compensation and recover the same from the owner of the offending vehicle despite not being legally liable due to a breach of the insurance policy terms.
Ratio Decidendi: The court relied on the provisions of Section 147 and Section 149 of the Motor Vehicles Act, 1988, and various judgments to determine that the insurance policy did not cover the risk of gratuitous passengers in a goods vehicle. The court held that the directions given by the tribunal were unsustainable in law.
Final Decision: The court allowed the appeals to the extent of setting aside the directions issued by the tribunal for the insurer to pay/deposit the awarded amount and to recover the same from the owner. The court clarified that the merits of the award were not considered in the appeals and no costs were awarded.
By this common judgment, these appeals are being disposed of together. A short common question involved in all these appeals is, whether insurer can be directed to pay compensation amount determined by the Motor Accident Claims Tribunal, though legally not liable to pay due to fundamental breach of the policy and, thereafter, to recover the same from the owner of the offending vehicle.
2. The facts giving rise to the present appeals may be stated in nutshell as under :
(i) On 10.10.2005, owner of matador bearing No. MH-35-1797 engaged the services of Vandana wife and Bhagratha, mother of claimant for preparing meals on the eve of Navratri Utsav at Dongargad. Vandana and Bhagratha were to work as cooks and serve meals to 100 persons. Digambar, 11 months old son was with Vandana at the relevant time. Vandana, Bhagratha and Digambar were proceeding in matador towards Dongargad. Near Borgaon Shivar, an unknown vehicle came in high speed and gave a dash to matador. Due to dash, Bhagratha, Vandana and Digambar died on the spot.
(ii) First Appeal No.386/2008 arises out of the judgment and award passed by the Motor Accident Claims Tribunal, Gondia in Claim Petition No.38/2006 filed by Ramchandra s/o Dhondu Bawanthade under Section 163-A of the Motor Vehicles Act, 1988. (‘Act’ for short) for compensation on account of death of his wife Bhagratha.
(iii) First Appeal No.387/2008 is against the judgment and award passed by the tribunal in Claim Petition No.42/2006 filed by Devidas @ Devilal s/o Ramchandra Bawanthade under Section 163-A of the Act claiming compensation as a legal representatives of deceased Vandana.
(iv) First Appeal No.388/2006 arises against the judgment and award passed by the tribunal in the Claim Petition No.37/2006 under Section 163-A of the Act filed by Devidas @ Devilal s/o Ramchandra Bawanthade claiming compensation on account of death of his son Digambar.
3. In all the three claim petitions, tribunal held that insurance company is not liable to pay compensation, but directed the insurer to pay the amount of compensation to the claimants and recover the same from the owner of matador involved in the accident.
4. Shri Kukday, learned counsel for appellant- Insurance Company, vehemently contended that directions to pay and recover cannot be given by the tribunal once the tribunal comes to the conclusion that insurer is not legally liable to pay compensation. It is submitted that in the catena of judgments such directions given by the Hon’ble Apex Court are in the exercise of extra-ordinary jurisdiction, but the same cannot be so adopted by the tribunal in the exercise of statutory powers available under the Motor Vehicles Act, 1988. Learned counsel submitted that powers of the tribunal are governed by the statutory provisions and claim petitions are required to be tried in accordance with the procedure enumerated in the Act. It is submitted that tribunal committed patent error while giving such directions when it has been held that the goods vehicle was being used for carrying gratuitous passengers in breach of terms of insurance policy. It is urged that directions given by the tribunal to pay and recover are improper and illegal and such part of directions need to be set aside from the impugned judgment and award. In support of submissions, learned counsel for appellant-Insurance Company placed strong reliance on :
(I) National Insurance Company Limited vs. Saju P. Paul and another, 2013 (1) ACC 46 (SC),
(II) Manuara Khatun and others .vs. Rajesh Kr. Singh and others, AIR 2017 SC 1204,
(III) Traders Private Limited, Ahmedabad and another .vs. Sunanda wd/o Krishna Machivale and others, 2009 (1) Mh.L.J. 898,
(IV) United India Insurance Company Limited .vs. Anubai Gopichand Thakare and others, 2008 (1) Mh.L.J. 73.
5. Alternatively, it is submitted on behalf of appellant that if such direction is to be given then first owner should be directed to furnish solvent surety of the entire amount of award, then only liability c
