# The New India Assurance Company Ltd v. Om Babu @Hari Babu and others

- **Citation:** (2012) 1 ILRA 286
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2012-02-28
- **Case number:** First Appeal From Order No. 3074 of 2011
- **Bench:** Satya Poot Mehrotra, Ashok Pal Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/the-new-india-assurance-company-ltd-v-om-babu-hari-babu-and-others-42122
- **Pages:** 11

## Headnote

Motor Vehicle Act 1988-Section 173Accident
Claim
Tribunal-directioninsurance company to pay entire amount
of compensation to the claimants with
liberty to recover from vehicle owner-in
view of law laid down by Apex Courtwarrant
no
interference-seeking
direction to protect interest by Tribunalin case owner fails to pay-same can be
raised before execution court itselfhowever if appeal filed by claimant or by
vehicle owner-liberty given to Insurance
Company to contest the same.

Held: Para 38, 39 and 40

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. 2 herein.

After making deposit of the amount
awarded under the impugned award, it
will be open to the Appellant-Insurance
Company
to
initiate
appropriate
proceedings for recovery of the amount
from the owner of the aforesaid vehicle
in question (respondent no. 2 herein),
and seek appropriate directions in such
proceedings.

It is made clear that in case any appeal
is filed by the claimant-respondent no. 1
or by the owner of the aforesaid vehicle
in question (respondent no. 2 herein), it
will be open to the Appellant-Insurance
Company to contest the same on the
grounds legally open to the AppellantInsurance Company.
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.C.
700:
2007(2)
TAC
398
(SC);
2008(1)
T.A.C.803 (SC); 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.)
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

## Text

286 INDIAN LAW REPORTS ALLAHABAD SERIES [2012
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 28.02.2012

BEFORE
THE HON'BLE SATYA POOT MEHROTRA, J.
THE HON'BLE ASHOK PAL SINGH, J.

First Appeal From Order No. 3074 of 2011

The New India Assurance Company Ltd.

 ...Petitioner
Versus
Om Babu @ Hari Babu and others

 ...Respondents

Counsel for the Petitioner:
Sri Saurabh Srivastava

Counsel; for the Respondents:
..........................

Motor Vehicle Act 1988-Section 173Accident
Claim
Tribunal-directioninsurance company to pay entire amount
of compensation to the claimants with
liberty to recover from vehicle owner-in
view of law laid down by Apex Courtwarrant
no
interference-seeking
direction to protect interest by Tribunalin case owner fails to pay-same can be
raised before execution court itselfhowever if appeal filed by claimant or by
vehicle owner-liberty given to Insurance
Company to contest the same.

Held: Para 38, 39 and 40

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. 2 herein.

After making deposit of the amount
awarded under the impugned award, it
will be open to the Appellant-Insurance
Company
to
initiate
appropriate
proceedings for recovery of the amount
from the owner of the aforesaid vehicle
in question (respondent no. 2 herein),
and seek appropriate directions in such
proceedings.

It is made clear that in case any appeal
is filed by the claimant-respondent no. 1
or by the owner of the aforesaid vehicle
in question (respondent no. 2 herein), it
will be open to the Appellant-Insurance
Company to contest the same on the
grounds legally open to the AppellantInsurance Company.
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.C.
700:
2007(2)
TAC
398
(SC);
2008(1)
T.A.C.803 (SC); 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.)
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

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

1. The present Appeal has been filed
under Section 173 of the Motor Vehicles
Act, 1988, against the Judgment and
Order/Award dated 27.5.2011 passed by
the Motor Accidents Claims Tribunal,
Auraiya in Motor Accident Claim Case
No.65 of 2004 filed by the claimantrespondent no.1 on account of the injuries
sustained by him in an accident which took
place on 18.12.2003 at about 1.30 P.M.

2. The case set-up in the Claim
Petition was that on 18.12.2003, the
claimant-respondent no.1 was going on a
Tempo bearing Registration No. UP 75 B
9104 (hereinafter also referred to as "the
vehicle in question") from Auraiya to
Bhikhaipur; and that at about 1.30 P.M.,
when the vehicle in question (Tempo)
reached near Jalaun Crossing, it overturned
on account of rash and negligent driving
1 All] The New India Assurance Company Ltd. V. Om Babu @Hari Babu and others
287
by its Driver resulting in serious injuries to
the claimant-respondent no.1.

3. The respondent no.2 was the
owner of the vehicle in question while the
Appellant-Insurance Company was the
insurer of the vehicle in question. The
respondent no.3 was the Driver of the
vehicle in question.

4. After exchange of pleadings
between the parties, the Tribunal framed
Issues in the said Claim Case.

5. Evidence was led in the said Claim
Case.

6. Having considered the material on
record, the Tribunal recorded its findings
on various Issues.

7. The Tribunal, inter-alia, held that
the accident in question took place on
account of rash and negligent driving by
the Driver of the vehicle in question
(Tempo) resulting in serious injuries to the
claimant-respondent no.1.

8. The Tribunal further held that it
was not established that the Driver of the
vehicle in question was having valid
Driving Licence for driving the vehicle in
question at the time of the accident.

9. The Tribunal further held that the
vehicle in question was duly insured with
the Appellant-Insurance Company at the
time of the accident.

10. In view of the above findings, the
Tribunal passed the impugned Judgment
and Order/Award dated 27.5.2011, interalia, awarding to the claimant-respondent
no. 1, compensation amounting to Rs.
1,19,334/- with interest at the rate of 6%
per annum with effect from one year prior
to the date of Award till the date of final
payment.

11. However, in view of the above
finding recorded by the Tribunal that it was
not established that the Driver of the
vehicle in question was having valid
Driving Licence for driving the vehicle in
question at the time of the accident, the
Tribunal directed that the amount of
compensation would initially be paid by
the Appellant-Insurance Company, and
thereafter,
the
Appellant-Insurance
Company would have right to recover the
same from the owner of the vehicle in
question (respondent no.2 herein).

12. We have heard Sri Saurabh
Srivastava,
learned
counsel
for
the
Appellant-Insurance
Company,
and
perused the record.

13. Sri Saurabh Srivastava, learned
counsel
for
the
Appellant-Insurance
Company submits that having held that the
aforesaid vehicle in question was being 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 vehicle in
question, i.e., respondent no. 2 herein.

14. Sri Saurabh Srivastava submits
that in any case, the interest of the
Appellant-Insurance Company as against
the owner of the vehicle in question
(respondent no. 2 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
288 INDIAN LAW REPORTS ALLAHABAD SERIES [2012
vehicle in question. Sri Saurabh Srivastava
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).

15. We have considered the
submissions
made
by
Shri
Saurabh
Srivastava,
learned
counsel
for
the
Appellant-Insurance Company.

16. As regards the submission made
by Sri Saurabh Srivastava 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 vehicle in question, it is pertinent to
refer to the relevant provisions of the
Motor Vehicles Act, 1988.

17. 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."

18. 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.

19. 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 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
judgment-debtor, 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). . . . . . . . . . . . . . . . ."

20. 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
1 All] The New India Assurance Company Ltd. V. Om Babu @Hari Babu and others
289
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.

21. 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
vehicle in question, is in accordance with
law, and the same does not suffer from any
infirmity.

22. 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).

23. 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 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)

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

25. 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
290 INDIAN LAW REPORTS ALLAHABAD SERIES [2012
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 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
1 All] The New India Assurance Company Ltd. V. Om Babu @Hari Babu and others
291
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)

26. 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.

27. 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.
292 INDIAN LAW REPORTS ALLAHABAD SERIES [2012

(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)

28. 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.

29. 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] The New India Assurance Company Ltd. V. Om Babu @Hari Babu and others
293

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

31. As regards the submission made
by Sri Saurabh Srivastava that the interest
of
the
Appellant-Insurance
Company
should be protected as against the owner of
the vehicle in question (respondent no. 2
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
vehicle in question, it is pertinent to refer
to the decisions relied upon by Sri Saurabh
Srivastava.

32. 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 subjectmatter
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)

33. 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 issue is decided against
the owner and in favour of the insurer.
294 INDIAN LAW REPORTS ALLAHABAD SERIES [2012
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)

34. 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. 2 herein), while
the claimant files 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.

35. We may, however, refer to two
decisions of this Court wherein the above
decisions of the Supreme Court have been
considered.

36. 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
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
1 All] The New India Assurance Company Ltd. V. Om Babu @Hari Babu and others
295
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)

37. 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 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)

38. In view of the above discussion,
we are of the opinion that the Tribunal did
not commit any illegality in directing the
296 INDIAN LAW REPORTS ALLAHABAD SERIES [2012
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. 2 herein.

39. 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 vehicle in
question (respondent no. 2 herein), and
seek
appropriate
directions
in
such
proceedings.

40. It is made clear that in case any
appeal is filed by the claimant-respondent
no. 1 or by the owner of the aforesaid
vehicle in question (respondent no. 2
herein), it will be open to the AppellantInsurance Company to contest the same on
the grounds legally open to the AppellantInsurance Company.

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

42.

Subject
to
the
above
observations, the Appeal filed by the
Appellant-Insurance
Company
is
dismissed.

43. However, on the facts and in the
circumstances of the case, there will be no
order as to costs.
---------

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 12.03.2012

BEFORE
THE HON'BLE SUDHIR AGARWAL, J.

Service Single No. 5412 of 1999

Chandra Bhwan Pushpakar ...Petitioner
Versus
State of U.P.

 ...Respondents

Counsel for the Petitioner:
Sri Ajmal Khan
Sri S.P. Tewari

Counsel for the Respondents:
C.S.C.

Constitution of India, Article 14 and 16appointment
on
post
of
Sinchpalpetitioner Stood first in merit-candidates
placed at Serial no. 4 and 5-appointed
after training-but ignored the petitionerauthorities
unable
to
explain
their
discriminatory action-held entitled to get
appointment from the date of juniors
appointment-with
all
consequential
benefits-salary for the period of non
working shall be recovered from erring
officer.

Held: Para 9

Be that as it may, petitioner neither can
be left at the mercy of respondents nor
can
be
denied
complete
justice
otherwise this Court will be failing in its
constitutional obligation of doing justice
in all perspective so as to uphold
confidence of the people in the system of
administration of justice and also to
maintain their faith that ultimately they
would get wholesome justice in the
hands of law. The respondents have
denied appointment to petitioner on
wholly nonest, illegal and unfounded
reasons despite having discriminated
him in the matter of appointment and
thereby denying his constitutional right