Liability for breach of insurance policy conditions and reimbursement of compensation under the Motor Vehicles Act, 1988.

R.K.GAUBA, J.

1. The appellants are in appeal questioning the judgment dated 02.03.2006 of Motor Accident Claims Tribunal (“the Tribunal”), passed commonly in four different claim petitions under Section 166 and 140 of Motor Vehicles Act, 1988 (“MV Act”) holding them liable to reimburse the compensation awarded and made payable, in the first instance, by M/s United India Insurance Co. Ltd. (the fifth respondent).

2. The claim petitions were filed by four different persons claiming compensation for injuries sustained while travelling in an accident that occurred on 09.06.2001 at about 7.20 AM during return journey back to Delhi in Maruti Van No.DL 4C G 6540 (“the offending vehicle”). The first appellant admittedly is the owner of the offending vehicle and it is also undisputed that the second appellant was the driver of the offending vehicle at the time it met with an accident in the area of Karnal in Haryana allegedly on account of rash/negligent driving on his part. Concededly, the offending vehicle was insured with the fifth respondent for the period in question against third party risk though its liability was subject to the compliance with the provisions of MV Act.

3. The four claimants before the Tribunal were members of one family. They included Devi Dass (claimant in MACT case No.140/2004), his wife Panna Devi (claimant in MACT No.141/2004) and their sons Rajesh and Mahesh (claimants in MACT No.138 and 139 of 2004). It appears from the impugned judgment that Rajesh and Mahesh suffered minor injuries and were awarded compensation in the sum of Rs.5,000/- and Rs.7,500/- respectively. The injuries of Devi Dass were more serious and he was granted compensation in the sum of Rs.90,000/- having regard to the proof as to the extent of injuries, loss of earnings and medical expenses. The injuries of Panna Devi were far more serious and she was granted compensation in the sum of Rs.1,92,392/-. The element of interest was added. While the insurance company was directed to pay the amounts, the appellants herein were held liable jointly and severally to make good the compensation for which recovery rights were granted to the former (insurance company) against the first appellant (the owner), on the ground that he had committed breach of the insurance policy conditions by letting the offending vehicle to be taken on hire through M/s Tushar Travels, this as against the stipulation in the insurance contract that the vehicle would be used only for social or domestic purposes or pleasure and not for business purposes.

4. Though the claimants (respondents No.1 to 4) have been made party respondents, they have not appeared at the hearing to contest. This is inconsequential inasmuch as the dispute is between the first appellant (owner) and the fifth respondent (the insurer).

5. The tribunal noted the contentions, and the evidence with regard to the defence, taken by the insurance company and recorded its views thereupon as under :

“g) As regards the liability, the Ld. Counsel for the Ins. Co. Sh. Rajesh Goyal, vehemently submitted that the recovery rights in this case be granted in favour of the Ins. Co. On the other hand, Sh. S. K. Tripathi, Ld. Counsel for R-1 and 2 submitted that the rights of recovery can not be granted. Sh. Rajesh Goyal, relied on the ruling of Hon’ble Kerala High Court in Jayakumar V. Rajamma I (2005) ACC 41 and Sh. S K Tripathi, relied on the ruling of Hon’ble Punjab & Haryana High Court in Rosy Joshi & ors. V. Joginder Singh & ors. 2005 ACJ 1299.

h) To support his contention, Ld. Counsel for the Ins. Co. has taken me though the evidence of R3W1 who proved the policy pertaining to the offending vehicle. He deposed that as per the terms and conditions, the vehicle can be used only for social, domestic purposes or pleasure and not for the business purposes. He has also produced the applications at Ex.R3W1/B, C, D and E of the claimants herein along with DD report, D/L and RC of the offending vehicle. He deposed tha