# Oriental Insurance Co. Ltd v. Smt. Sukhviri and others

- **Citation:** (2010) 1 ILRA 230
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2010-03-26
- **Case number:** First Appeal From Order No. 861 of 2010
- **Bench:** S.P. Mehrotra, Rajesh Chandra
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/oriental-insurance-co-ltd-v-smt-sukhviri-and-others-41561
- **Pages:** 13

## Headnote

Motor Vehicle Act, 1988-Section 173accident
claim
Tribunal-award
given
with direction to the insurance company
to-deposit entire amount of award of
compensation-recover the same from the
vehicle owner if there is breech of policyappeal
by
insurance
company-heldwarrant no interference-keeping it open
to initiate fresh recovery proceeding
against vehicle owner.
1 All] Oriental Insurance Co. Ltd. V. Smt. Sukhviri and others

231
Held: Para 42

In view of the above discussion, we are
of the opinion that the Tribunal did not
commit any illegality in directing the
Appellant-Insurance Company 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. 5 herein.
Case law discussed:
2004(2) TAC 12 (SC), 2005(1) TAC 4 (SC), AIR
1998 SC 588, 2004 (3) SCC 297: 2004 (1)
T.A.C.321:AIR 2004 SC 1531, (2007) 3
S.C.C700: 2007(2) TAC 398 (SC), 2008(1)
T.A.C.803 (SC), AIR 1998 SC 588, 2004(3)
SCC 297: 2004 (1) T.A.C. 321: AIR 2004 SC
1531, 2007 (2) T.A.C. 398 ( S.C.), 2008(1)
T.A.C. 803 ( S.C.), (2007) 5 S.C.C. 428: 2007
(2) T.A.C. 417, 2004(2) T.A.C.12 (SC), 2005
(1) T.A.C. 4 (SC), 2007 (1) T.A.C. 20 (All.),
2009 (1) A.W.C. 355, (2004) 3 SCC 297.

## Text

_Characters 0–39,834 of 41,622. This is a partial read: ask again with offset=39834 for what follows._

230 INDIAN LAW REPORTS ALLAHABAD SERIES [2010

inculpate
the
real
accused
except
regarding the demand of money or dowry
and harassment caused to the bride. But,
it does not mean that a crime committed
in secrecy or inside the house should go
unpunished.
If an offence takes place inside the
privacy of a house and in such
circumstances where the assailants have
all the opportunity to plan and commit the
offence at the time and in circumstances
of their choice, it will be extremely
difficult for the prosecution to lead
evidence to establish the guilt of the
accused
if
the
strict
principle
of
circumstantial evidence, as noticed above,
is insisted upon by the courts. A Judge
does not preside over a criminal trial
merely to see that no innocent man is
punished. A Judge also presides to see
that a guilty man does not escape. Both
are public duties. (See Stirland v.
Director of Public Prosecutions- quoted
with approval by Arijit Pasayat,J. In State
of Punjab v. Karnail Singh. (2003) 11
SCC 271) The law does not enjoin a duty
on the prosecution to lead evidence of
such character which is almost impossible
to be led or at any rate extremely difficult
to be led. The duty on the prosecution is
to lead such evidence which it is capable
of leading, having regard to the facts and
circumstances of the case. Here it is
necessary to keep; in mind Section 106 of
the Evidence Act which says that when
any
fact
is
especially
within
the
knowledge of any person, the burden of
proving that fact is upon him."

15. In view of the above discussions
considering the evidence of informant on
record coupled with the FIR, post mortem
report and false explanation put forward
by the appellant and the provision
contained u/s 106 of the Indian Evidence
Act we are of the considered view that
death of the deceased has been caused by
the
appellant
by
strangulation
and
thereafter her body was set on fire.
Considering the gravity of the offence and
nature
of
evidence
and
attending
circumstances and the finding of guilt of
the appellant recorded by the trial court,
the appellant does not deserve bail and
accordingly his prayer for bail is hereby
rejected.

16. Office is directed to prepare
paper book within three months and
hearing of the appeal is expedited and it
be listed thereafter.
---------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 26.03.2010

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

First Appeal From Order No. 861 of 2010

Oriental Insurance Co. Ltd. ...Appellant
Versus
Smt. Sukhviri and others ...Respondents

Counsel for the Appellant:
Sri Amaresh Sinha
Sri S.K. Mehrotra

Counsel for the Respondents:
Sri Anurag Sharma

Motor Vehicle Act, 1988-Section 173accident
claim
Tribunal-award
given
with direction to the insurance company
to-deposit entire amount of award of
compensation-recover the same from the
vehicle owner if there is breech of policyappeal
by
insurance
company-heldwarrant no interference-keeping it open
to initiate fresh recovery proceeding
against vehicle owner.
1 All] Oriental Insurance Co. Ltd. V. Smt. Sukhviri and others

231
Held: Para 42

In view of the above discussion, we are
of the opinion that the Tribunal did not
commit any illegality in directing the
Appellant-Insurance Company 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. 5 herein.
Case law discussed:
2004(2) TAC 12 (SC), 2005(1) TAC 4 (SC), AIR
1998 SC 588, 2004 (3) SCC 297: 2004 (1)
T.A.C.321:AIR 2004 SC 1531, (2007) 3
S.C.C700: 2007(2) TAC 398 (SC), 2008(1)
T.A.C.803 (SC), AIR 1998 SC 588, 2004(3)
SCC 297: 2004 (1) T.A.C. 321: AIR 2004 SC
1531, 2007 (2) T.A.C. 398 ( S.C.), 2008(1)
T.A.C. 803 ( S.C.), (2007) 5 S.C.C. 428: 2007
(2) T.A.C. 417, 2004(2) T.A.C.12 (SC), 2005
(1) T.A.C. 4 (SC), 2007 (1) T.A.C. 20 (All.),
2009 (1) A.W.C. 355, (2004) 3 SCC 297.

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

1. The present appeal has been filed
by the Appellant-Insurance Company
against the judgment and order/award
dated 30.5.2009 passed by the Motor
Accidents Claims Tribunal, Meerut in
Motor Accident Claim Petition No. 281 of
2008, filed by the claimant-respondent
nos. 1 to 4 on account of the death of
Soraj Singh in an accident which took
place on 10.2.2008 at about 6.30 P.M..

2. It was, interalia, stated in the
Claim Petition that on 10.2.2008 at about
6.30 P.M., the deceased Soraj Singh was
travelling alongwith Sahansar Pal and
others in Maruti Van bearing Registration
No. HR-26L-9129 from Muzaffar Nagar
to Sarur Pur Khurd; and that the driver of
the said Maruti Van was driving the same
at a moderate speed on his correct side on
Meerut Muzaffar Nagar Road; and that
when the said persons reached near Kanta
in jungle of village Bhaisi under Police
Station
Khatauli,
District-Muzaffar
Nagar, a Truck bearing Registration No.
HR-38J-8752 (hereinafter also referred to
as "the vehicle in question"), which was
being driven by its driver in a rash,
negligent and careless manner and at high
and excessive speed, came on wrong side
from the opposite direction and hit the
said Maruti Van, as a result of which, the
deceased Soraj Singh sustained multiple
grievous injuries, and he died on the spot.

3. It was, interalia, further stated in
the Claim Petition that at the time of the
accident, the said Soraj Singh was aged
about 52 years, and he was self-employed
in Milk Dairy, and his monthly income
was Rs. 5000/- per month.

4. It was, interalia, further stated in
the Claim Petition that at the time of the
accident, the vehicle in question was
insured with the Appellant-Insurance
Company, and the owner of the vehicle
was Suresh Kumar, respondent no.5 in the
present Appeal.

5. The claimant-respondent nos. 1 to
4 claimed Rs.15,20,000/- as compensation
with interest @ 18% per annum from the
date of the Claim Petition till the date of
actual payment of compensation to the
claimant-respondent nos. 1 to 4.

6. The Claim Petition was contested
by the Appellant-Insurance Company, i.e.,
the insurer of the vehicle in question.

7. In its Written Statement, the
Appellant-Insurance Company did not
admit the averments made in the Claim
Petition. It was, interalia, further stated by
the Appellant-Insurance Company that
without admitting the factum of accident,
involvement of the vehicle in question in
232 INDIAN LAW REPORTS ALLAHABAD SERIES [2010

the accident and any liability as insurer,
the accident (if any) had occurred due to
negligent act and driving of the driver of
the aforementioned Maruti Van, and no
such accident had occurred due to
negligent act or driving of the driver of
the vehicle in question.

8. It was, interalia, further stated by
the Appellant-Insurance Company that the
owner of the vehicle in question entrusted
the said vehicle to a person to drive the
same illegally, who had no valid and
effective driving licence, and thus, the
owner
of
the
vehicle
in
question
knowingly and intentionally committed
breach of terms and conditions of the
Insurance Policy, and the AppellantInsurance Company was not liable to pay
compensation, if any.

9. The case proceeded ex-parte
against the owner of the vehicle in
question, i.e., the respondent no.5 herein.

The Tribunal framed six Issues in the
case.

Issue no. 1 was regarding the factum
of the accident having taken place on
10.2.2008 at about 6.30 P.M. on account
of rash and negligent driving by the
Driver of the vehicle in question thereby
hitting the said Soraj Singh as a result of
which the said Soraj Singh travelling in
the Maruti Van sustained injuries and
consequently died.

Issue no.2 was as to whether there
was composite negligence on the part of
the driver of the Maruti Van bearing
Registration No. HR-26L-9129.

Issue no.3 was as to whether the
vehicle in question, i.e., Truck No. HR
38J-8752 was insured with the AppellantInsurance Company at the time of the
accident.

Issue no.4 was as to whether the
driver of the vehicle in question was not
having valid driving licence at the time of
the accident.

Issue no.5 was as to whether the
vehicle in question was being driven not
in accordance with the terms of the
Insurance Policy at the time of the
accident.

Issue No.6 was as to whether the
claimant-respondent nos. 1 to 4 were
entitled to get any compensation, and if
yes, quantum of such compensation and
against which opposite party in the Claim
Petition.

10. The claimant-respondent nos. 1
to 4 examined two witnesses on their
behalf.

11. Further, the claimant-respondent
nos. 1 to 4 filed documentary evidence.

12. No oral evidence was led on
behalf of behalf of the opposite parties in
the Claim Petition. The AppellantInsurance Company filed photostat copy
of the Insurance Policy (Paper No. 38
Ga).

13. Issue Nos. 1 and 2 were decided
by the Tribunal together. The Tribunal
decided Issue No.1 in the affirmative
holding that the accident took place on
account of rash and negligent driving of
the vehicle in question as a result of
which, the said Soraj Singh travelling in
the aforementioned Maruti Van sustained
grievous injuries, and consequently died.
1 All] Oriental Insurance Co. Ltd. V. Smt. Sukhviri and others

233
14. Issue No.2 was decided by the
Tribunal in the negative holding that there
was no composite negligence on the part
of the driver of the aforesaid Maruti Van.

15. Issue No.3 was decided by the
Tribunal in the affirmative holding that
the vehicle in question was insured with
the Appellant-Insurance Company at the
time of the accident.

16. As regards Issue Nos.4 and 5,
the Tribunal noted that the case had
proceeded ex-parte against the owner of
the
vehicle
in
question,
i.e.,
the
respondent no. 5 herein. The Tribunal
further noted that the driving licence of
the driver of the vehicle in question
(Khalid) was also not produced. In order
to absolve itself of the liability to pay
compensation, it was necessary for the
Appellant-Insurance company to prove
that the driver of the vehicle in question
was not having valid driving licence at the
time of the accident, and that the vehicle
in question was not having valid permit at
the time of the accident i.e., the vehicle in
question was being driven not in
accordance
with the terms of the
Insurance Policy. In the circumstances, it
was not established that the driver of the
vehicle in question (Khalid) was not
having valid driving licence at the time of
the accident, and the vehicle in question
was being driven not in accordance with
the terms of the Insurance Policy. Hence,
the liability to pay compensation was on
the Appellant-Insurance Company subject
to the condition that in case the
Appellant-Insurance
Company
was
convinced that the driver of the vehicle in
question was not having valid driving
licence and the vehicle in question was
being driven not in accordance with the
terms of the Insurance Policy, then it
would be open to the Appellant-Insurance
Company to recover the amount of
compensation paid by it from the owner
of the vehicle in question, i.e., the
respondent no.5 herein. Issue Nos. 4 and 5
were decided accordingly.

17. As regards Issue No.6, the
Tribunal assessed the income of the
deceased Soraj Singh as Rs.4000/- per
month, and applied multiple of 11
applicable in respect of the age group of
50 to 55 years as per the second schedule
to the Motor Vehicles Act, 1988.
Accordingly, the Tribunal assessed the
amount of compensation as Rs.3,61,500/-
with simple interest @7% per annum
from the date of the filing of the Claim
Petition till the date of payment. The
Tribunal further held that the initial
liability to pay compensation was on the
Appellant-Insurance Company subject to
the condition that if the AppellantInsurance Company was convinced that at
the time of the accident the driver of the
vehicle in question was not having valid
driving licence, and the vehicle in
question was not having permit, and was
being driven not in accordance with the
terms of the Insurance Policy, then it
would be open to the Appellant-Insurance
Company to recover the amount of
compensation paid by it from the owner
of the vehicle in question, i.e., the
respondent no. 5 herein.

18. We have heard Shri Amresh
Sinha, learned counsel for the Appellant-
Insurance Company, and perused the
record filed with the appeal.

19. Sri Amresh Sinha, learned
counsel
for
the
Appellant-Insurance
Company submits that having held that
the aforesaid Truck in question was being
234 INDIAN LAW REPORTS ALLAHABAD SERIES [2010

run against the terms and conditions of
the Insurance Policy, the Tribunal erred in
directing
the
Appellant-Insurance
Company
to
pay
the
amount
of
compensation and thereafter recover the
same from the owner of the Truck in
question, i.e., respondent no. 5 herein.

20. Sri Amresh Sinha submits that in
any case, the interest of the AppellantInsurance Company as against the owner
of the Truck in question (respondent no. 5
herein) should have been properly secured
so that after making the payment of
compensation under the impugned award,
the Appellant-Insurance Company would
be able to recover the same from the
owner of the aforesaid Truck in question.
Sri Amresh Sinha has relied upon the
following decisions in this regard:--

1.
Oriental Insurance Company Ltd.
Vs. Sri Nanjappan & Others,
2004(2) TAC 12 (SC)
2.
National Insurance Company Vs.
Challa
Bharathamma,
2005(1)
TAC 4 (SC)

21. We have considered the
submissions made by Sri Amresh Sinha,
learned
counsel
for
the
AppellantInsurance Company.

22. As regards the submission made
by Sri Amresh Sinha that the Tribunal
erred in directing the Insurance company
to make the payment of compensation and
thereafter recover the same from the
owner of the Truck in question, it is
pertinent
to
refer
to
the
relevant
provisions of the Motor Vehicles Act,
1988.

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."

23. The above-quoted provision thus
provides that an insurer issuing a policy
of insurance under Section 147 of the said
Act, 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.

24. Sub-section (1) of Section 149 of
the Motor Vehicles Act, 1988 provides as
follows:-

"149. Duty of insurers to satisfy
judgements 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
1 All] Oriental Insurance Co. Ltd. V. Smt. Sukhviri and others

235
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
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). . . . . . . . . . . . . . . . . . . . . ."

25. The above-quoted provision thus
provides that in case any judgment or
award 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 any amount payable in respect 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.

26. In view of the above provisions,
we are of the opinion that the directions
given by the Tribunal requiring the
Appellant-Insurance Company to make
the deposit of compensation awarded
under the impugned award and thereafter
recover the same from the owner of the
aforesaid Truck in question, is in
accordance with law, and the same does
not suffer from any infirmity.
27. The above conclusion is
supported by various decisions of the
Apex Court:

1.
Oriental Insurance Co.Ltd. Vs.
Inderjit Kaur and others, AIR 1998 SC
588.
2.
National Insurance Company Ltd.
Vs. Swaran Singh , 2004 (3) SCC 297:
2004 (1) T.A.C.321:AIR 2004 SC 1531.
3.
National Insurance Co. Ltd. Vs.
Laxmi Narain Dhut, (2007) 3 S.C.C700:
2007(2) TAC 398 (SC).
4.
Prem Kumari &
Others
Vs.
Prahlad
Dev
&
Others,
2008(1)
T.A.C.803 (SC).

28. In Oriental Insurance Co. Ltd.
v. Indrajit 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 therefore. 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)

29. This decision thus supports the
conclusion mentioned above on the basis
of Sections 147(5) and 149(1) of the
Motor Vehicles Act, 1988.
236 INDIAN LAW REPORTS ALLAHABAD SERIES [2010

30. 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 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, interalia, 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 vehicles;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
1 All] Oriental Insurance Co. Ltd. V. Smt. Sukhviri and others

237
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
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)

31. 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.
238 INDIAN LAW REPORTS ALLAHABAD SERIES [2010

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)

32. 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 from
the insured.

33. In Prem Kumari & 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's case (supra) explaining the
decision in National Insurance Company
Limited Vs. Swaran 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 Swaran 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 &
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 Singh'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)
1 All] Oriental Insurance Co. Ltd. V. Smt. Sukhviri and others

239
34. In view of the above decisions, it
is evident that the directions given by the
Tribunal
requiring
the
AppellantInsurance Company to deposit the amount
awarded under the impugned award in the
first instance, and thereafter, recover the
same from the owner of the Truck in
question, are valid and legal.

35. As regards the submission made
by Sri Amresh Sinha that the interest of
the Appellant-Insurance Company should
be protected as against the owner of the
Truck in question (respondent no. 5
herein) so that in case the AppellantInsurance Company deposits the amount
of compensation, it may be able to
recover the same from the owner of the
aforesaid Truck in question, it is pertinent
to refer to the decisions relied upon by
Shri Amresh Sinha.

36. In Oriental Insurance Company
Ltd. Vs. Sri Nanjappan and others,
2004(2) T.A.C.12 (SC) (supra), their
Lordships of the Supreme Court opined as
under (Paragraph 7 of the said T.A.C.):

"7. Therefore, while setting aside the
judgment of the High Court we direct in
terms of what has been stated in Baljit
Kaur's
case
2004(1) T.A.C.366(SC)(
supra) that the insurer shall pay the
quantum
of
compensation
fixed
by
Tribunal, about which there was no
dispute
raised
to
the
respondentsclaimants within three months from today.
For the purpose of recovering the same
from the insured, the insurer shall not be
required to file a suit. It may initiate a
proceeding
before
the
concerned
Executing Court as if the dispute between
the insurer and the owner was the
subject-matter of determination before the
Tribunal and the issue is decided against
the owner and in favour of the insurer.
Before release of the amount to the
insured, owner of the vehicle shall be
issued a notice and he shall be required to
furnish security for the entire amount
which the insurer will pay to the
claimants. The offending vehicle shall be
attached, as a part of the security. If
necessity arises the Executing Court shall
take assistance of the concerned Regional
Transport Authority. The Executing Court
shall
pass
appropriate
orders
in
accordance with law as to the manner in
which the insured, owner of the vehicle
shall make payment to the insurer. In case
there is any default it shall be open to the
Executing Court to direct realisation by
disposal of the securities to be furnished
or from any other property or properties
of the owner of the vehicle, the insured.
The appeal is disposed of in the aforesaid
terms, with no order as to costs."
(Emphasis supplied)

37.

In
National
Insurance
Company v. Challa Bharathamma, 2005
(1) T.A.C. 4 (SC) (supra), it was laid
down as follows (Paragraph 13 of the said
T.A.C):-

"The residual question is what would
be the appropriate direction. Considering
the beneficial object of the Act, it would
be proper for the insurer to satisfy the
award, though in law it has no liability. In
some cases the insurer has been given the
option and liberty to recover the amount
from the insured. For the purpose of
recovering the amount paid from the
owner, the insurer shall not be required to
file a suit. It may initiate a proceeding
before the concerned Executing Court as
if the dispute between the insurer and the
owner was the subject- matter of
determination before the Tribunal and the
240 INDIAN LAW REPORTS ALLAHABAD SERIES [2010

issue is decided against the owner and in
favour of the insurer. Before release of
the amount to the claimants, owner of the
offending vehicle shall furnish security for
the entire amount which the insurer will
pay to the claimants. The offending
vehicle shall be attached, as a part of the
security. If necessity arises the Executing
Court shall take assistance of the
concerned Regional Transport Authority.
The
Executing
Court
shall
pass
appropriate orders in accordance with
law as to the manner in which the owner
of the vehicle shall make payment to the
insurer. In case there is any default it
shall be open to the Executing Court to
direct realisation by disposal of the
securities to be furnished or from any
other property or properties of the owner
of the vehicle i.e. the insured. In the
instant case considering the Quantum
involved we leave it to the discretion of
the insurer to decide whether it would
take steps for recovery of the amount from
the insured."
(Emphasis supplied)

38. In our opinion, the directions
contemplated in the above decisions may
be sought by the Appellant-Insurance
Company before the Executing Court
when the Appellant-Insurance Company,
after depositing the amount awarded
under
the
impugned
award,
moves
appropriate
application
before
the
Executing Court to recover the said
amount from the insured person, i.e. the
owner
of
the
vehicle
in
question
(respondent no. 5 herein), while the
claimants file an application for the
execution of the award or for the release
of the amount deposited by the AppellantInsurance Company. We are refraining
from expressing any opinion in this
regard.
39. We may, however, refer to two
decisions of this Court wherein the above
decisions of the Supreme Court have been
considered.

40. In Smt. Bhuri and others Vs.
Smt. Shobha Rani and others, 2007 (1)
T.A.C. 20 (All.), a learned Single Judge of
this Court held as under (paragraph 5 of
the said T.A.C.):-

"5. From the aforesaid case law, as
referred to by the learned Counsel for the
parties, it would be evident that in spite of
the fact that the insurer is not made liable
to compensate the claimants under the
policy under Section 149 of the Motor
Vehicles Act, still the liability of payment,
under the law as developed by the Apex
Court in this context, has been assigned to
the Insurance Company. At the same time,
the Insurance Company has also been
given liberty to recover the said amount
from the insured within the provisions of
the Motor Vehicles Act itself and without
taking the burden of filing a suit for that
purpose. This principle of law was
initially propounded in Baljit Kaur's case
(supra) and it has been followed in the
aforesaid cases referred to by the parties
concerned. But in the subsequent cases
more especially in Nanjappan's case
(supra) it has also been observed that
before releasing the amount under deposit
before the Court the insured/owner of the
vehicle shall be issued a notice and he
shall be required to furnish security for
the entire amount which the Insurance
Company will pay to the claimants. After
that notice the Court may direct the
attachment of the offending vehicle as
part of the security and could also pass
appropriate orders in accordance with
law. In case of default it shall be open to
the Court to direct realisation of the
1 All] Oriental Insurance Co. Ltd. V. Smt. Sukhviri and others

241
amount from the insured/owner by
disposal of security or from any other
property or properties of the owner of the
vehicle. Therefore, all these modes have
been provided by the Apex Court for the
insurer to make recovery from the
insured. But from all these directions as
given by the Apex Court, the purport is
that the Court shall not undermine the
interest of the claimants for whose
welfare the Supreme Court has been
developing this law through all these
cases even by interpreting otherwise the
liability of the insurer with Section 149 of
the Motor Vehicles Act. Thus, what is the
crux of the matter in the present case is
that the revisionists-claimants cannot be
made to suffer even if the insured/owner
of the vehicle does not furnish security or
does not appear before the Court in
pursuance to the notice issued to him. The
burden of recovering the amount within
the provisions of the Act itself has been
placed upon the insurer in the aforesaid
judgments of the Apex Court. The
claimants who have obtained the award in
their favour have not been made to suffer
through any observation made by the
Supreme Court in these cases. Thus, in
the aforesaid view of the matter, what I
feel is that it would be just and proper if
the Court below is directed to first take
resort to the issuance of notice to the
insured/owner
of
the
vehicle
and
thereafter only the money under deposit
before the Court should be released in
favour of the claimants."
(Emphasis supplied)

41.

In
National
Insurance
Company Limited Vs. Smt. Khursheeda
Bano and others, 2009 (1) A.W.C. 355, a
Division Bench of this Court laid down as
follows (paragraph 4 of the said A.W.C.):

"4. Learned counsel has cited the
judgment of the Supreme Court in
National Insurance Company Ltd. v.
Challa Bharathamma and others, (2004)
8 SCC 517, to establish that the claim of
the insurance company should be secured
by the owner. We have no quarrel with
such proposition. What we want to say is
that unless and until an appropriate
application in the selfsame proceeding is
made by the insurance company for the
purpose of recovery, the question of
furnishing security by the owner cannot
arise. Such situation is yet to ripe. At this
stage, we are only concerned with the
payment of compensation to the claimants
which cannot be stalled and has got
nothing to do with the dispute regarding
liability between the owner and the
insurance company. The sufferer is a
third party. Moreover, in such judgment,
the Division Bench of the Supreme Court
has categorically held "considering the
beneficial object of the Act, it would be
proper for the insurer to satisfy the
award, though in law it has no liability."
In effect it is a stop-gap arrangement to
satisfy the award as soon as it is passed.
The judgment of 3 Judges' Bench of the
Supreme Court in National Insurance
Co. Ltd v. Swaran Singh and others,
(2004) 3 SCC 297, also speaks in para
110 that the Tribunal can direct that the
insurer is liable to be reimbursement 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. Therefore, the
intention of the Legislature as well as the
interpretation by the Supreme Court and
different High Courts is well settled to the
extent that under no circumstances
payment of compensation to the claimants
will be stalled. Even at the cost of the
repetition we say, it has nothing to do
242 INDIAN LAW REPORTS ALLAHABAD SERIES [2010

with the dispute with regard to liability of
owner
or
insurer,
which
can
be
considered in the separate application in
the selfsame cause or in an execution
application in connection thereto to be
initiated by the insurance company."
(Emphasis supplied)

42. In view of the above discussion,
we are of the opinion that the Tribunal did
not commit any illegality in directing the
Appellant-Insurance Company 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. 5 herein.

43. After making deposit of the
amount awarded under the impugned
award, it will be open to the AppellantInsurance Company to initiate appropriate
proceedings for recovery of the amount
from the owner of the aforesaid Truck in
question (respondent no. 5 herein), and
seek appropriate directions in such
proceedings.

44. It is made clear that in case any
appeal is filed by the claimant-respondent
nos.