In the High Court of Punjab and Haryana at Chandigarh

F.A.O. No. 3447 of 2008 (O&M)

Date of decision: August 11, 2009

M/s Indusland Bank Limited

.. Appellant

Vs.

Ramesh and others

.. Respondents

F.A.O. No.3448 of 2008 (O&M)

M/s Indusland Bank Limited

.. Appellant

Vs.

Sharda and others

.. Respondents

Coram:

Hon'ble Mr. Justice A.N. Jindal

Present:

Mr. Ashwani Talwar, Advocate for the appellant.

Mr. Sanjay Mittal, Advocate for respondents No.1 and 2.

Mr. Arun Yadav, Advocate for respondent No.4.

A.N. Jindal, J

This order of mine shall dispose of two connected F.A.O. Nos.

3447 and 3448 of 2008, having arisen out of the judgment dated 19.7.2008

passed by the Motor Accident Claims Tribunal, Rewari, whereby the

Tribunal has awarded compensation as under :-

MACT Case No.42 of 2006, titled as Ramesh & Pankaj vs. Jile Singh and

others decided on 19.7.2008

Compensation to the tune of Rs.2,97,000/- .

MACT Case No.53 of 2006, titled as Sharda vs. Jile Singh and others

decided on 19.7.2008

Compensation to the tune of Rs.37,000/-.

However, claimant in both the petitions were awarded interest

at the rate of 7.5% per annum from the date of filing of the petition till

actual realization.

F.A.O. No. 3447 of 2008 &

F.A.O. No.3448 of 2008

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Since the appellant was also held responsible for payment of

compensation along others, therefore, this appeal.

Neither the claimant nor the Insurance Company have filed the

appeal. It is only Indusland Bank, who is the financier, has come up in

appeal.

It has been submitted by the learned counsel for the appellant

that while passing the impugned award the Tribunal has failed to appreciate

that the appellant could not be held liable for payment of the compensation

as respondent Om Parkash owner of the vehicle had taken the vehicle on

loan and purchased the same on hypothecation basis. Though, the vehicle

was only hypothecated with the appellant, but the possession and ownership

of the vehicle remained with the respondent Om Parkash, the appellant had

only lien over the vehicle. It was the duty of the respondent No.4 to get the

vehicle insured before bringing the same on the road. He failed to do so.

Even the convenants entered into between the parties also provide

responsibility of the borrower to get the vehicle insured. As such, the

learned Tribunal has wrongly held the appellant jointly and severely liable

along with the respondents No.3 and 4.

Heard.

There is no denying a fact that the respondent No.4 had

purchased the truck bearing registration No.HR-38-F-6097 on the basis of

hypothecation agreement. At the time of taking the loan, the borrower had

entered into an agreement regarding getting the vehicle insured. The

relevant extract of Rule 8 (d) of the Convenant/Undertaking of borrower is

reproduced as under :-

“8.0

The convenants / Undertaking of the borrower

The borrower shall

(a)

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XX

XX

(b)

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XX

XX

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(d)

Ensure that the Asset is always duly and properly

insured with any insurer approved by the Lender,

covering all the risks and hazards, including risks

F.A.O. No. 3447 of 2008 &

F.A.O. No.3448 of 2008

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against fire, riots, civil commotions, floods and such

wider liability to which the asset is normally exposed

and unlimited third party liability risk, in order to

safeguard the security of the loan and to ensure that the

lien of the lender is marked on the insurance policy, as

the beneficiary.

(e)

Immediately inform the insurance company of any loss

or damage to the Asset which he may suffer due to any

force majeure or act of God, such as earthquakes, flood,

tempest, theft or typhoon etc. or otherwise and

simultaneously keep the lender informed.”

On reading of the aforesaid convenanat, it reveals that the

appellant had no role to play in the insurance of the vehicle and it is only the

respondent Om Parkash who was to get the vehicle insured, therefore, the

appellant- finan