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CASE NO.:

Appeal (civil) 1140 of 2007

PETITIONER:

National Insurance Co. Ltd

RESPONDENT:

Laxmi Narain Dhut

DATE OF JUDGMENT: 02/03/2007

BENCH:

Dr. ARIJIT PASAYAT & S.H. KAPADIA

JUDGMENT:

J U D G M E N T

(Arising out of SLP (C) No.25305 of 2004)

WITH

(Civil Appeal NO.1141/2007 @SLP (C) No.1617/2005)

Civil Appeal NO.1142/2007 @SLP (C) No.12857/2005)

Civil Appeal NO.1143/2007 @SLP (C) No.15728/2005)

Civil Appeal NO.1144/2007 @SLP (C) No. 869/2006)

Civil Appeal NO.1145/2007 @SLP (C) No. 5048/2006)

Civil Appeal NO.1146/2007 @SLP (C) No.6208/2006)

Civil Appeal NO.1147/2007 @SLP (C) No. 11596/2005)

Civil Appeal NO.1148/2007 @SLP (C) No.8608/2006)

Civil Appeal NO.1149/2007 @SLP (C) No. 16568/2006)

Civil Appeal NO.1150/2007 @SLP (C) No. 22203/2005)

Civil Appeal NO.1151/2007 @SLP (C) No. 22957/2005)

Dr. ARIJIT PASAYAT, J

Leave granted.

In all these cases identical questions are involved and

therefore the appeals are disposed of by this common

judgment.

In each of the impugned judgments the concerned High

Court held that the principles laid down by this Court in

National Insurance Co. Ltd. v. Swaran Singh (2004 (3) SCC

297) is applicable even to claims other than third party

claims. Some of these appeals also relate to orders passed by

the National Consumer Disputes Redressal Commission, New

Delhi (in short the ’Commission’) where a similar view has

been taken.

Since there has been elaborate analysis of the factual

position it would be appropriate to decide the basic principles

in law and ask the High Courts/Commissions to decide the

cases afresh keeping in mind the view expressed in the

present judgment.

The decision in Swaran Singh’s case (supra) applied to

claims which involved only the insurance company and the

owner of the vehicle i.e. where there was no third party

involved. It has been highlighted by learned counsel for the

appellants that Swaran Singh’s case (supra) was rendered in

the background of Section 149 of the Motor Vehicles Act, 1988

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(in short the ’Act’) which has no application to cases where

there is no third party involved.

In response, learned counsel appearing for the

respondents have submitted that there can be no difference of

approach in cases where the dispute relates to the claim

relating to the insurer and the insured. According to them,

purposive interpretation of provisions is called for in view of

the fact that the statute itself is a beneficial piece of

legislation.

In order to appreciate the rival submissions, few

provisions of the Act and the corresponding provisions in the

Motor Vehicles Act, 1939 (hereinafter referred to as the ’Old

Act’) would be necessary.

Section 149 of the Act relates to duty of insurers to

satisfy judgments and awards against persons insured in

respect of third party risks. The language of the provision is

clear that it only relates to third party risk. The corresponding

provision in the Old Act is Section 96. Section 166 of the Act

relates to application for compensation. The same corresponds

to Section 110-A of the Old Act. Section 168 of the Act relates

to award of the Claims Tribunal which corresponds to Section

110-B of the Old Act. Section 170 deals with impleadment of

the insurer in certain cases. Section 149 of the Act needs to

be noted in full. The same reads as follows:

"149. Duty of Insurers to satisfy judgments

and awards against persons insured in

respect of third party risks- (1) If, after a

certificate of insurance has been issued under

sub-section (3) of Section 147, in favour of the

person by whom a policy has been effected,

judgment or award in respect of any such

liability as is required to be covered by a policy

under clause (b) of sub-section (1) of Section

147 (being a liability covered by the terms of

the policy) or under t