# Defendant/ v. Mohd. Yameen & another

- **Citation:** (2009) 3 ILRA 1026
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2009-10-05
- **Case number:** First Appeal From Order No. 2935 of 2009
- **Bench:** Satya Poot Mehrotra, Rajesh Chandra
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/defendant-v-mohd-yameen-another-41454
- **Pages:** 8

## Headnote

Motor Vehicle Act, 1988-Section 149Third party insurance-duty of insever to
satisfy the award-Tribunal directed the
3 All] New India Assurance Co. Ltd. V. Mohd. Yameen and others
1027
insurance Company to pay the entire
amount of award-recover the same from
vehicle owner-held perfectly justifiedappeal by insurance company dismissed.

Held: Para 19

In view of the above, it is evident that
the Tribunal did not commit any illegality
in directing the Insurance Company/
Appellant to make deposit of the amount
of compensation and recover the same
from the insured person i.e. the owner of
the vehicle in question - respondent no.3
herein.
Case law discussed:
AIR 1998 SC 588, 2004(3) SCC 297 : 2004 (1)
T.A.C. 321 : AIR 2004 SC 1531, 2008(1) T.A.C.
803 (S.C.), (2007) 3 S.C.C. 700 : 2007 (2)
T.A.C. 398, (2007) 5 S.C.C. 428: 2007 (2)
T.A.C. 417.

## Text

1026 INDIAN LAW REPORTS ALLAHABAD SERIES [2009
Principal
of
the
Institution.
The
Competent Appointing Authority has
been defined in Group-D Employees
Service Rules, 1985 and thereafter the
said rules for other matters, makes
provision under Rules 31, that for such
matters which are not specifically covered
under the rules, the rules pertaining to
government servants shall apply.

12. In view of the aforesaid and the
undisputed
position
with
regard
to
applicability of the rules, the competent
authority being the Principal, the order of
cancellation, termination or otherwise
could have only been passed by the
Principal of the institution. The State
Government does not have any power
either defined under the aforesaid Rules,
1985 or even as a residuary power to
determine status of employment of a
Class-IV employee of a Government Girls
Degree College.

13. In view of this, the directions
issued by the State Government and the
direction issued by the Director of
Education
at
the
best
can
be
administrative
recommendations.
The
proceedings are to be initiated by the
Competent Authority. Keeping in view
Rule 31 referred to herein above if the
appointment of the petitioner was illegal
or invalid, the cancellation has to be
initiated by the Principal of the Institution
and it is the Principal who has to issue a
notice to the petitioner and to cancel his
appointment. It is admitted in the counter
affidavit that the impugned orders have
emanated without there being any notice
or opportunity to the petitioner and the
Principal has, as a matter of fact
surrendered his jurisdiction in favour of
State Government as well as Director of
Education. This in the opinion of the
Court is impermissible under law.

14.

Accordingly,
the
orders
impugned are unsustainable and the same
are quashed. The impugned orders dated
27th September, 2007 and 19th October,
2007 are set aside with the direction to the
respondent No. 3 to offer an opportunity
to the petitioner and thereafter proceed to
pass an appropriate order in accordance
with law as expeditiously as possible
preferably within a period of three months
from the date of production of certified
copy of this order before him.

15. It is made clear that the payment
of salary shall be subject to any order
being passed by the Principal.
16. With the aforesaid direction, the
writ petition stands allowed.

No order is passed as to costs.
---------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 05.10.2009

BEFORE
THE HON'BLE SATYA POOT MEHROTRA, J.
THE HON'BLE RAJESH CHANDRA, J.

First Appeal From Order No. 2935 of 2009

New India Assurance Company Ltd.

 ...Defendant/Appellant
Versus
Mohd. Yameen & another ...Respondents

Counsel for the Appellant:
Sri Dhananjay Awasthi

Counsel for the Respondents:

Motor Vehicle Act, 1988-Section 149Third party insurance-duty of insever to
satisfy the award-Tribunal directed the
3 All] New India Assurance Co. Ltd. V. Mohd. Yameen and others
1027
insurance Company to pay the entire
amount of award-recover the same from
vehicle owner-held perfectly justifiedappeal by insurance company dismissed.

Held: Para 19

In view of the above, it is evident that
the Tribunal did not commit any illegality
in directing the Insurance Company/
Appellant to make deposit of the amount
of compensation and recover the same
from the insured person i.e. the owner of
the vehicle in question - respondent no.3
herein.
Case law discussed:
AIR 1998 SC 588, 2004(3) SCC 297 : 2004 (1)
T.A.C. 321 : AIR 2004 SC 1531, 2008(1) T.A.C.
803 (S.C.), (2007) 3 S.C.C. 700 : 2007 (2)
T.A.C. 398, (2007) 5 S.C.C. 428: 2007 (2)
T.A.C. 417.

(Delivered by Hon'ble Satya Poot Mehrotra, J.)

1. The present Appeal has been filed
by the Insurance Company under Section
173 of the Motor Vehicles Act, 1988
against
the
award
dated
22.5.2009
whereby Rs. 1,69,940/- with interest @
6% per annum has been awarded as
compensation
to
the
claimantsrespondents on account of the death of
Wasim in an accident which took place on
23.4.2005 at around 4.00 a.m. in the
morning wherein Canter No. UP23B2043 collided with a Truck.

2. The Motor Vehicles Accident
Claims Tribunal framed five issues.

3. Issue No.1 was in regard to the
factum of accident having taken place on
account of rash and negligent driving by
the driver of the aforesaid vehicle,
namely, Canter No. UP23B-2043. The
Tribunal decided the said Issue in the
affirmative.

4. Issue No.2 was as to whether the
vehicle in question was insured with the
Insurance Company/ Appellant and as to
whether the driver of the vehicle was
having a valid and effective Driving
License on the date of accident. The
Tribunal held that the vehicle in question
was insured with the Insurance Company/
Appellant on the date of the accident.
However, it was held that the driver of the
vehicle in question was not having valid
and effective Driving License on the date
of accident.

5. Issue No. 3 was as to whether the
Claim Petition was bad for non-joinder of
necessary parties. The said Issue was
decided against the opposite parties in the
Claim Petition.
6. Issue No.4 was as to whether the
deceased was travelling in the vehicle in
question as gratituous passenger in an
unauthorized manner which was violative
of the terms and conditions of the
insurance policy. The Tribunal decided
the said Issue in the affirmative in favour
of the Insurance Company/ Appellant. It
was held that the vehicle in question was
being used for commercial purposes, and
the same was against the terms and
conditions of the insurance policy.

7. Issue No.5 was as to whether the
claimants-respondents were entitled to get
compensation as against the opposite
parties in the Claim Petition jointly or
separately. It was held by the Tribunal
that the claimants/ respondents were
entitled for compensation amounting to
Rs.1,69,940/-
with
interest
@
6%.
However, the compensation was not
payable by the Insurance Company/
Appellant but was payable by Mahmood
Hasan, owner of the vehicle in questionrespondent no.3 herein.
1028 INDIAN LAW REPORTS ALLAHABAD SERIES [2009
8.

The
Insurance
Company/
Appellant has filed the present Appeal
impugning the aforesaid award.

9. We have heard Shri Dhananjay
Awasthi, learned counsel appearing for
the Insurance Company/ Appellant, and
perused the record.

10. The impugned award has,
interalia, directed that even though the
amount of compensation is not payable by
the Insurance Company/ Appellant, the
Insurance
Company/Appellant
would
deposit the amount within 60 days of the
award, and the Insurance Company/
Appellant would be entitled to recover the
same from the owner of the vehicle in
question, i.e., respondent no.3 herein.

11. It is submitted by Shri
Dhananjay Awasthi, learned counsel
appearing
for
the
Insurance
Company/Appellant that having decided
Issue Nos. 2 and 4 in favour of the
Insurance
Company/
Appellant,
the
Tribunal erred in directing the Insurance
Company/ Appellant to deposit the
amount of compensation and recover the
same from the owner of the vehicle in
question, i.e., respondent no.3 herein.

We have considered the submissions
made by Shri Dhananjay Awasthi, and we
find ourselves unable to accept the same.

Sub-section (5) of Section 147 of the
Motor Vehicles Act, 1988 lays down as
under:

"147. Requirements of policies and
limits of liability .- (1) to (4).................
(5) Notwithstanding anything contained in
any law for the time being in force, an
insurer issuing a policy of insurance
under this section shall be liable to
indemnify the person or classes of persons
specified in the policy in respect of any
liability which the policy purports to
cover in the case of that person or those
classes of persons."

The above provision, thus, provides
that an insurer issuing a policy of
insurance under Section 147 of the Motor
Vehicles Act, 1988 shall be liable to
indemnify the person or classes of persons
specified in the policy in respect of any
liability which the policy purports to
cover in the case of that person or those
classes of persons.

Section 149 of the Motor Vehicles
Act, 1988, in so far as is relevant,
provides 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 the
provisions of Section 163-A] is obtained
against any person insured by the policy,
then, notwithstanding that the insurer may
be entitled to avoid or cancel or may have
avoided or cancelled the policy, the
insurer shall, subject to the provisions of
this section, pay to the person entitled to
the benefit of the decree any sum not
exceeding the sum assured payable
thereunder, as if he were the judgmentdebtor, in respect of the liability, together
with any amount payable in respect of
3 All] New India Assurance Co. Ltd. V. Mohd. Yameen and others
1029
costs and any sum payable in respect of
interest on that sum by virtue of any
enactment
relating
to
interest
on
judgments.

(2) to (7)................."

The above-quoted provision shows
that in case any judgment or award in
respect of the 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 the provisions of Section
163-A is obtained against any person
insured by the policy, then the insurer
shall pay to the person entitled to the
benefit of the decree any sum not
exceeding the sum assured payable
thereunder, as if he were the judgment-
debtor, in respect of the liability, together
with the amount of costs and interest. This
will be so even though the insurer may be
entitled to avoid or cancel or may have
avoided or cancelled the policy.

In view of the aforesaid provisions,
we are of the view that the direction given
by the Tribunal directing the Insurance
Company/ Appellant to make deposit of
the amount of compensation and recover
the same from the insured person i.e. the
owner of the vehicle in question -
respondent no.3 herein, does not suffer
from any infirmity.

13. The above conclusion is
supported by the decisions of the Apex
Court:

In Oriental Insurance Co. Ltd. v.
Inderjit Kaur and others, AIR 1998 SC
588, their Lordships of the Supreme Court
opined as under (paragraph 7 of the said
AIR):
"7. We have, therefore, this position.
Despite the bar created by S. 64-VB of the
Insurance
Act,
the
appellant,
an
authorised insurer, issued a policy of
insurance to cover the bus without
receiving the premium therefor. By reason
of the provisions of Ss. 147(5) and 149(1)
of the Motor Vehicles Act, the appellant
became liable to indemnify third parties
in respect of the liability which that policy
covered
and
to
satisfy
awards
of
compensation
in
respect
thereof
notwithstanding its entitlement (upon
which we do not express any opinion) to
avoid or cancel the policy for the reason
that the cheque issued in payment of the
premium
thereon
had
not
been
honoured."
(Emphasis supplied)

14. This decision thus supports the
conclusion mentioned above on the basis
of Sections 147(5) and 149(1) of the
Motor Vehicles Act, 1988.

15. In National Insurance Co. Ltd..
v. Swaran Singh, 2004(3) SCC 297 :
2004 (1) T.A.C. 321 : AIR 2004 SC 1531,
their Lordships of the Supreme Court held
as follows (paragraph 105 of the said
AIR):

"105. The summary of our findings to
the various issues as raised in these
petitions is as follows :

(i) Chapter XI of the Motor Vehicles Act,
1988 providing compulsory insurance of
vehicles against third-party risks is a
social welfare legislation to extend relief
by compensation to victims of accidents
caused by use of motor vehicles. The
provisions
of
compulsory
insurance
coverage of all vehicles are with this
paramount object and the provisions of
1030 INDIAN LAW REPORTS ALLAHABAD SERIES [2009
the Act have to be so interpreted as to
effectuate the said object.

(ii) An insurer is entitled to raise a
defence in a claim petition filed under
Section 163-A or Section 166 of the Motor
Vehicles Act, 1988, inter alia, in terms of
Section 149(2)(a)(ii) of the said Act.
(iii) The breach of policy condition e.g.,
disqualification of the driver or invalid
driving licence of the driver, as contained
in sub-section (2)(a)(ii) of Section 149,
has to be proved to have been committed
by the insured for avoiding liability by the
insurer. Mere absence, fake or invalid
driving licence or disqualification of the
driver for driving at the relevant time, are
not in themselves defences available to
the insurer against either the insured or
the third parties. To avoid its liability
towards the insured, the insurer has to
prove that the insured was guilty of
negligence
and
failed
to
exercise
reasonable care in the matter of fulfilling
the condition of the policy regarding use
of vehicles by a duly licensed driver or
one who was not disqualified to drive at
the relevant time.
(iv) Insurance Companies, however, with
a view to avoid their liability must not
only establish the available defence(s)
raised in the said proceedings but must
also establish 'breach' on the part of the
owner of the vehicle; the burden of proof
wherefor would be on them.
(v) The Court cannot lay down any
criteria as to how the said burden would
be discharged, inasmuch as the same
would depend upon the facts and
circumstances of each case.
(vi) Even where the insurer is able to
prove breach on the part of the insured
concerning the policy condition regarding
holding of a valid licence by the driver or
his qualification to drive during the
relevant period, the insurer would not be
allowed to avoid its liability towards the
insured unless the said breach or
breaches on the condition of driving
licence is/are so fundamental as are found
to have contributed to the cause of the
accident. The Tribunals in interpreting
the policy conditions would apply "the
rule of main purpose" and the concept of
"fundamental breach" to allow defences
available to the insurer under Section
149(2) of the Act.
(vii) The question, as to whether the
owner has taken reasonable care to find
out as to whether the driving licence
produced by the driver, (a fake one or
otherwise),
does
not
fulfil
the
requirements of law or not will have to be
determined in each case.
(viii) If a vehicle at the time of accident
was driven by a person having a learner's
licence, the insurance Companies would
be liable to satisfy the decree.
(ix) The claims tribunal constituted under
Section 165 read with Section 168 is
empowered to adjudicate all claims in
respect of the accidents involving death or
of bodily injury or damage to property of
third party arising in use of motor vehicle.
The said power of the tribunal is not
restricted to decide the claims inter se
between claimant or claimants on one
side and insured, insurer and driver on
the other. In the course of adjudicating
the claim for compensation and to decide
the availability of defence or defences to
the insurer, the Tribunal has necessarily
the power and jurisdiction to decide
disputes inter se between the insurer and
the insured. The decision rendered on the
claims and disputes inter se between the
insurer and insured in the course of
adjudication of claim for compensation by
the claimants and the award made
thereon is enforceable and executable in
3 All] New India Assurance Co. Ltd. V. Mohd. Yameen and others
1031
the same manner as provided in Section
174 of the Act for enforcement and
execution of the award in favour of the
claimants.
(x) Where on adjudication of the claim
under the Act the tribunal arrives at a
conclusion
that
the
insurer
has
satisfactorily
proved
its
defence
in
accordance
with
the
provisions
of
Sections 149(2) read with sub-section (7),
as interpreted by this Court above, the
Tribunal can direct that the insurer is
liable to be reimbursed by the insured for
the compensation and other amounts
which it has been compelled to pay to the
third party under the award of the
tribunal. Such determination of claim by
the Tribunal will be enforceable and the
money found due to the insurer from the
insured
will
be
recoverable
on
a
certificate issued by the tribunal to the
Collector in the same manner under
Section 174 of the Act as arrears as land
revenue. The certificate will be issued for
the recovery as arrears of land revenue
only if, as required by sub-section (3) of
Section 168 of the Act the insured fails to
deposit the amount awarded in favour of
the insurer within thirty days from the
date of announcement of the award by the
tribunal.
(xi)The provisions contained in subsection (4) with the proviso thereunder
and sub-section (5) which are intended to
cover specified contingencies mentioned
therein to enable the insurer to recover
amount paid under the contract of
insurance on behalf of the insured can be
taken recourse to by the Tribunal and be
extended to claims and defences of the
insurer against the insured by relegating
them to the remedy before regular court
in cases where on given facts and
circumstances
adjudication
of
their
claims
inter
se
might
delay
the
adjudication of the claims of the victims."
(Emphasis supplied)

16. Proposition nos. (vi) and (x),
reproduced above support the conclusion
that the direction given by the Tribunal in
the award impugned in the present case is
in accordance with law.

In National Insurance Co. Ltd. v.
Laxmi Narain Dhut, 2007 (2) T.A.C. 398
(S.C.), their Lordships of the Supreme
Court considered the decision in National
Insurance Co. Ltd. v. Swaran Singh
(supra) and held as under (paragraph 35
of the said TAC):
"35. As noted above, the conceptual
difference between third party right and
own damage cases has to be kept in view.
Initially, the burden is on the insurer to
prove that the license was a fake one.
Once it is established the natural
consequences have to flow.
In view of the above analysis the
following situations emerge:
(1) The decision in Swaran Singh's case
(supra) has no application to cases other
than third party risks.
(2) Where originally the license was fake
one, renewal cannot cure the inherent
fatality.
(3) In case of third party risks the insurer
has to indemnify the amount and if so
advised to recover the same from the
insured.
(4)
The
concept
of
purposive
interpretation has no application to cases
relatable to Section 149 of the Act.
The High Courts/Commissions shall now
consider the matter afresh in the light of
the position in law as delineated above.
The appeals are allowed as aforesaid with
no order as to costs."
(Emphasis supplied)
1032 INDIAN LAW REPORTS ALLAHABAD SERIES [2009
17. In view of the above decision, it
is evident that in case of third party risks,
the decision in National Insurance Co.
Ltd. v. Swaran Singh and others (supra)
would apply, and the insurer has to
indemnify the amount to the third party
and thereafter may recover the same form
the insured.

18. In Prem Kumari and others Vs.
Prahlad Dev and others, 2008(1) T.A.C.
803 (S.C.), their Lordships of the
Supreme Court have reiterated the view
expressed in National Insurance Company
Limited Vs. Laxmi Narain Dhut case
(supra)
explaining
the
decision
in
National Insurance Company Limited Vs.
Swarn Singh and others (supra), and held
as under (paragraphs 8 and 9 of the said
TAC):

"8. The effect and implication of the
principles laid down in Swarn Singh's
case (supra) has been considered and
explained by one of us (Dr. Justice Arijit
Pasayat) in National Insurance Co.
Ltd.v. Laxmi Narain Dhut, (2007) 3
S.C.C. 700 : 2007 (2) T.A.C. 398. The
following conclusion in para 38 are
relevant:
"38. In view of the above analysis the
following situations emerge:
(1) The decision in Swaran Singh's case
(supra) has no application to cases other
than third party risks.
(2) Where originally the license was a
fake one, renewal cannot cure the inherent
fatality.
(3) In case of third-party risks the insurer
has to indemnify the amount, and if so
advised, to recover the same from the
insured.
(4)
The
concept
of
purposive
interpretation has no application to cases
relatable to Section 149 of the Act.
9.
In
the
subsequent
decision
Oriental Insurance Co. Ltd. v. Meena
Variyal and Others, (2007) 5 S.C.C. 428:
2007 (2) T.A.C. 417, which is also a two
Judge Bench while considering the ratio
laid down in Swaran Singh's case (supra)
concluded that in a case where a person is
not a third party within the meaning of the
Act, the Insurance Company cannot be
made automatically liable merely by
resorting to Swaran Sing's case (supra).
While arriving at such a conclusion the
Court extracted the analysis as mentioned
in para 38 of Laxmi Narain Dhut (supra)
and agreed with the same. In view of
consistency, we reiterate the very same
principle enunciated in Laxmi Narain
Dhut (supra) with regard to interpretation
and applicability of Swaran Singh's case
(supra)."
(Emphasis supplied)

19. In view of the above, it is
evident that the Tribunal did not commit
any illegality in directing the Insurance
Company/ Appellant to make deposit of
the amount of compensation and recover
the same from the insured person i.e. the
owner of the vehicle in question -
respondent no.3 herein.

20. After making the deposit of the
amount, as directed by the impugned
award, it will be open to the Insurance
Company/ Appellant to recover the same
from the insured person i.e. the owner of
the vehicle in question - respondent no.3
herein by moving appropriate application
before the Tribunal in this regard.

21. It is made clear that in case the
claimants-respondents or the owner of the
vehicle in question/ respondent no.3
herein files an Appeal against the
impugned award, it will be open to the
3 All] National Insurance Co.Ltd. V. Smt. Guddi Devi and others
1033
Insurance Company/ Appellant to contest
the same on the grounds legally open to it.

22. The amount of 25,000/-
deposited in this Court while filing the
present Appeal will be remitted to the
Tribunal for being adjusted towards the
amount to be deposited by the Insurance
Company/ Appellant, as per the directions
given in the impugned award.

23. Subject to the aforesaid
observations, the Appeal filed by the
Insurance
Company/Appellant
is
dismissed. However, on the facts and in
the circumstances of the case, there will
be no order as to costs.
---------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 14.10.2009

BEFORE
THE HON'BLE S.P. MEHROTRA, J.
THE HON'BLE RAJESH CHANDRA, J.

First Appeal From Order No. 3049 of 2009

National Insurance Company Ltd.

 ...Petitioner
Versus
Smt. Guddi Devi & others ...Respondent

Counsel for the Petitioner:
Sri Saral Srivastava

Counsel for the Respondents:

Motor Vehicle Act, 1988-Section-170,
readwith
149-Appeal
by
insurance
Company-Challenging the quantum of
award-application
by
insurance
Company already rejected by claim
tribunal-held-quantum of compensation
can not be questioned by insurance
company.

Held: Para 15
In our opinion, as the application of the
Appellant-Insurance
Company
under
Section 170 of the Motor Vehicles
Act,1988 was rejected by the Tribunal, it
is not open to the Appellant-Insurance
Company
to
raise
the
question
of
quantum of compensation, awarded by
the Tribunal in the impugned award. The
pleas raised in this regard by Sri Saral
Srivastava,
learned
counsel
for
the
Appellant-Insurance Company cannot,
therefore be considered.

(Delivered by Hon'ble S.P. Mehrotra, J.)

1. The present appeal has been filed
against the judgment and order /award
dated 25.7.2009 passed by the Motor
Accidents Claims Tribunal, Mainpuri in
Claim Petition No. 318 of 2006, filed by
the claimant-respondent nos. 1 to 7 under
Section 166 of the Motor Vehicles Act,
1988 on account of the death of Ram
Prakash in an accident which took place
at about 5.45 PM on 14.5.2006.

2. It was, inter-alia, averred in the
Claim Petition that on 14.5.2006 at about
5.45 PM, the deceased Ram Prakash with
his wife Smt. Guddi Devi, Balister Singh,
Prem Chandra, Raj Kishore and others
while returning after attending a marriage
ceremony in village Dalelpur at the place
of the sister of the deceased,was waiting
for vehicle on the road -side on GT Road,
Kurawali-Etah Marg, a Mini Truck Tata
407 DL-1LG 391,which was coming from
the direction of Etah and was being driven
by the Driver rashly and negligently, hit
the said Ram Prakash, resulting in his
death on the spot. The Driver ran away
with the said Mini Truck, i.e., the vehicle
in question from the spot. The accident
was witnessed by Smt.Guddi Devi and
others. The First Information Report was
lodged in regard to the accident, which
was registered as Case Crime No. 174 of