The duty of insurance to satisfy judgments and awards against persons insured in respect of third party risk under Section 149 of the Motor Vehicles Act.

1. Heard learned counsel for the appellants and respondent no. 2. None appeared to represent respondent no. 1, the owner of the vehicle, in spite of notices. With the consent of the learned counsel this appeal is hereby being disposed of at this stage.

2. The appeal has been preferred against judgment dated 17th May, 2004 passed by 7th Additional District Judge- cum-Motor Accident Claim Tribunal, Bhagalpur, in Claim Case No. 90 of 1997 awarding the claimants, that is, parents of deceased a sum of Rs. 82,000/- as compensation against death of deceased Anant Kumar @ Anand Kumar who lost his life in a road accident on 23rd August, 1997. Involvement of the vehicle in question in the accident and its coverage under insurance are not in dispute.

3. The only point, for determination in this appeal, as contended, is that whether the insurer can be exonerated from making payment of the amount awarding with a right to recovery from the owner and secondly whether the assessment income of the deceased on the principle of notional income is correct or the applicants are for enhanced amount as per the plea that the deceased was earning Rs. 2,500/- per month.

4. It is undisputed that owner never appeared before the Court below nor entered appearance in this appeal.

5. The only ground, as taken by the court below exonerating the insurance company from payment of liability is that since the owner or driver did not appear and furnished license of the person on the driving seat on the particular day or any other documents. The Claim Tribunal arrived at the conclusion that since owner did not produce particular document in spite of notice adverse inference may be drawn against him owner is liable to make payment but insurer is exonerated from such liability.

6. Learned counsel for the appellant vehemently contended that since vehicle in question was insured any pre-terms and conditions of the policy is the question to be determined in between insurer and insured but the claimants the sufferers are to pay (sicbe paid ?) the amount as death compensation of the deceased and insurer cannot be exonerated from making such payment as provided under sub-sections (4) and (5) of Section 149 of the Motor Vehicles Act, the insurer may realize the amount from the owner. Reliance has been placed by learned counsel upon the decisions of the Apex Court in the case of Narcinva V Kamat and Another V/s. Alfredo Antonio Doe Martins and Others; (1985)2 Supreme Court Cases 574, wherein it has been held that by mere failure to produce driving licence the insurer cannot be absolved from the burden of payment. Almost similar view has been taken by Madras High Court in a case of G. Nagendra Devi and Others V/s. Y. Mosses and Others, 2003 ACJ 221, the learned counsel appearing for the Insurance Company submitted that steps were taken to produce driving licence but neither the owner appeared to produce the same so court below has rightly drawn adverse inference against the owner and exonerated the Insurance Company from the liability. But in face of the decision aforementioned, coupled with the provisions as contemplated in Section 149 of the Motor Vehicles Act, relevant provisions reads as such:

"149. Duty of Insurance to satisfy judgments and Awards against persons insured in respect of third party risk:

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(4) Where a certificate of insure ance has been issued under sub-section (3) of Section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby reference to any conditions other than those in clause (b) of sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub-section (1) of Section 147, be of no effect: Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insure