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2012 Supreme(J&K) 668
JAMMU & KASHMIR HIGH COURT
Mansoor Ahmad Mir, J.
Future Generali India Insurance Co. -Appellant
Versus
Ab.Aziz Wani & Ors. -Resopndent
CIMA No. 15/2012
Decided On : 19-12-2012
Mr. Baldev Singh, Advocate for the Appellant.
Mr. S.A. Hussain, Advocate for R-1 to 4, None for the R-5 , 6.
The main legal point established in the judgment is that the defense available to the insurer under Section 149 of the Motor Vehicles Act cannot be pressed into service at the time of determination of application under Section 140 for grant of interim award on no fault liability.
Headnote:
Motor Vehicles Act - Interim Compensation - Section 140 - 140
Fact of the Case:
The appeal is against the interim order/award passed by the Motor Accidents Claims Tribunal, granting interim compensation in favor of the claimants-respondents 1 to 4 under Section 140 of the Motor Vehicles Act, 1988.
Finding of the Court:
The court found that the bouncing of the cheque issued by the owner of the offending vehicle towards the payment of premium and the denial of liability by the insurer to indemnify the owner would not affect the rights already accrued in favor of the third party under Section 140 of the Act.
Issues: The issues revolved around the applicability of Section 140 of the Motor Vehicles Act, the defense available to the insurer under Section 149 of the Act, and the effect of bouncing of the premium payment cheque on the liability of the insurer.
Ratio Decidendi: The court held that at the time of granting compensation on account of no fault liability, the defense adduced cannot be taken into consideration, as mandated by Section 140 of the Act. The court also emphasized that claims under Section 140 cannot be defeated on the ground of the owner's breach or the insurer's defense under Section 149, and that the Tribunal is required to satisfy itself on specific points while determining the petition under Section 140.
Final Decision: The appeal was dismissed, and the court directed the release of the awarded amount in favor of the claimants-respondents 1 to 4, while ensuring that the observations made in the judgment would not prejudice the appellant in contesting the main petition before the Tribunal.
2. The ground taken by the appellant-insurer in the memo of appeal, as argued by the learned, counsel for appellant is that the defence which was available to the insurer in terms of Section 149 of the Act was not considered. Further, it is contended that the cheque issued by the owner of the offending vehicle towards the payment of premium was bounced.
3. What would be its affect on account of bouncing of the cheque, can be gone through during trial. Denial of liability by insurer to indemnify the owner with respect to the claim of third party on the ground that cheque of the owner received by the insurer company was bounced and insurance policy was cancelled would not affect the rights already accrued in favour of the third party. My this view is fortified by the judgment of Apex Court in New India Assurance Co. Ltd. v. Rula, (2000) 3 SCC 195. This Court also in Oriental Insurance Co. v. Mohammad Akbar Ganai & Ors., 2011 (1) S.L.J. 335; 2011 (1) JKJ [HC] 551 has taken the same view.
4. It is beaten law that at the time of granting compensation on account of no fault liability, the defence adduced cannot be taken into consideration. It would be appropriate to reproduce Section 140 of the Motor Vehicles Act herein.
"140. Liability to pay compensation in certain cases on the principle of no fault. - (1) Where death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of this section.
(2) The amount of compensation which shall be payable under sub-section (1) in respect of the death of any person shall be a fixed sum of fifty thousand rupees and the amount of compensation payable under that sub-section in respect of the permanent disablement of any person shall be a fixed sum of twenty-five thousand rupees.
(3) In any claim for compensation under sub-section (1), the claimant shall not be required to plead and established that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person.
(4) A claim for compensation under sub-section (1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim has been made nor shall the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement.
(5) Notwithstanding anything contained in sub-section (2) regarding death or bodily injury to any person, for which the owner of the vehicle is liable to give compensation for relief, he is also liable to pay compensation under any other law for the time being in force:
Provided that the amount of such compensation to be given under any other law shall be reduced from the amount of compensation payable under this section or under section 163A."
5. This provision mandates how to grant interim compensation by making interim award on the basis of no fault liability.
6. While considering the application for grant of interim compensation, the Tribunal has to take i
