United India Insurance Co. Ltd.,Mettur Road, Erode v. A. Chandran.. 1st

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 19.01.2007CORAMTHE HON'BLE MR. JUSTICE P.D. DINAKARANCivil Miscellaneous Appeal No.3599 of 2006United India Insurance Co. Ltd.,Mettur Road, Erode...Appellant/3rd RespondentVs.1. A. Chandran.. 1st Respondent/Petitioner2. Subramaniam3. K. Subramaniam (R2 & 3 ex parte before lower court) ..Respondents 2 and and hence notice may be dispensed with3/Respondents 1 and 2Appeal under Section 173 of M.V. Act against the judgment anddecree dated 19.07.2004 made in M.C.O.P.No.131 of 2003 on the fileof the Motor Accidents Claims Tribunal (I Additional Sub Court),Erode.For Appellant: Mr. N. VijayaraghavanJ U D G M E N TThe above appeal is directed against the judgment and decreedated 19.07.2004 made in M.C.O.P.No.131 of 2003 on the file of theMotor Accidents Claims Tribunal (I Additional Sub Court), Erode.2. Brief facts leading to the filing of this appeal are that thefirst respondent, on 07.02.1999, sustained multiple grievousinjuries, in a motor accident as a result of collision of cardriven by the second respondent, insured with the appellant. Thefirst respondent claimed a compensation of Rs.15,00,000/- and theTribunal awarded Rs.9,75,000/- towards compensation. Aggrieved bythe same, the Insurance Company has preferred the above appeal. https://hcservices.ecourts.gov.in/hcservices/

3. The learned counsel for the appellant Insurance Companyraised the following contentions:(i) the driver of the vehicle was not having a valid licenceat the time of the accident and therefore there was violation ofthe conditions of the insurance policy and hence the InsuranceCompany is not liable to pay any compensation to the claimant; (ii) though the trial judge has observed in the order that theappellant/insurance company can recover the award amount from theowner of the vehicle, the same does not find place in the decree;(iii) the quantum of compensation awarded by the Tribunal isexcessive; and(iv) the award of interest at 9% is contrary to the decisionof the Supreme Court reported in 2005(4) Supreme 87 and4.1. With regard to first two contentions, it is trite lawthat the insurer cannot avoid the liability to answer the claim ofthe third parties, but the insurer is at liberty to proceed againstthe owner of the vehicle and recover the amount paid by it afterpaying the claimants/appellants vide 'NEW INDIA ASSURANCE COMPANYLIMITED, SHIMLA -VS- KAMALA AND OTHERS'{2001 (4) S.C.C.342},'UNITED INDIA INSURANCE CO., LTD -VS- LEHRU AND OTHERS{2003 (3) SCC338}, 'NATIONAL INSURANCE CO. LTD.,BHAVANI -VS- SAMIYATHAL ANDOTHERS' { 2003(1) L.W.539 (D.B)} and 'KUMAR -VS- NATIONAL INSURANCECO., LTD.' {2002 (4) L.W.691 (D.B)}.4.2. In a decision reported in 2004 (ACJ) 1 (NATIONALINSURANCE CO. LTD., -vs- SWARAN SINGH AND OTHERS), the Apex Courthas held as follows."96. It is, therefore, evident from the discussions madehereinbefore that the liability of the insurance companyto satisfy the decree at the first instance and torecover the awarded amount from the owner or driverthereof has been holding the field for a long time.97. Apart from the reasons stated hereinbefore thedoctrine of staris decisis persuades us not to deviatefrom the said principle.98. It is well settled rule of law and should notordinarily be deviated from [SEE BENGAL IMMUNITY CO.LTD., V. STATE OF BIHAR (1955) 2 SCR 603-632L; KESHAVMILLS CO. LTD V. COMMISSIONER OF INCOME-TAX, BOMBAY NORTH(1965) 2 SCR 908 AT 921-922; UNION OF INDIA V. RAGHUBIRSINGH (1989) 3 SCR 316 AT 323, 327, 334; GANNON DUNKERLEYAND CO. V. STATE OF RAJASTHAN (1993) 1 SCC 364; BELGAUMGARDENERS CO-OP. PRODUCTION SUPPLY AND SALE SOCIETY LTD.,V. STATE OF KARNATAKA, 1993 SUPP (1) SCC 96 ANDHANUMANTAPPA KRISHNAPPA MANTUR V. STATE OF KARNATAKA, https://hcservices.ecourts.gov.in/hcservices/ 1992 SUPP (2) SCC 213].99. We may, however, hasten to add that the Tribunal andthe Court must, however, exercise their jurisdiction toissue such a direction upon consideration of the factsand circumstances of each case and in the event such adirection has been issued despite arriving at a findingof fact to the effect that the insurer has been able toestablish that the insured has committed a breach ofcontract of insurance as envisaged under sub-clause (ii)of clause (a) of sub-section (2) of section 149 of theAct, the insurance company shall be entitled to realisethe awarded amount from the owner or driver of thevehicle, as the case may be, in execution of the sameaward having regard to the provisions of sections 165 and168 of the Act."4.3. In a decision of the Supreme Court in National InsuranceCo. Ltd. vs. Baljit Kaur, reported in 2004 (1) CTC 210, it wasobserved by the Supreme Court in the following words:"The upshot of the aforementioned discussions isthat instead and in place of the insurer the owner ofthe vehicle shall be liable to satisfy the decree. Thequestion, however, would be as to whether keeping inview the fact that the law was not clear so long such adirection would be fair and equitable. We do not thinkso. We, therefore, clarify the legal position whichshall have prospective effect...We, therefore, are of the opinion that the interestof justice will be sub-served if the appellant herein isdirected to satisfy the awarded amount in favour of theclaimant, if not already satisfied, and recover thesame from the owner of the vehicle. For the purpose ofsuch recovery, it would not be necessary for the insurerto file a separate suit but it may initiate a proceedingbefore the executing Court as if the dispute between theinsurer and the owner was the subject matter ofdetermination before the Tribunal and the issue isdecided against the owner and in favour of the insurer"4.4. In a recent decision of a Division bench of this Court inUnited India Insurance Co. Ltd. v. P.Jaya, reported in 2006 (1) CTC173, it is held as follows:"Following the decisions of the Supreme Courtreferred to above, we direct that the appellantInsurance Company is liable to pay the compensationamount to the claimants as awarded by the Tribunal andto recover the same from the owner in execution https://hcservices.ecourts.gov.in/hcservices/ proceedings, without filing any suit therefor." 4.5. Following the decisions cited supra, the appellantInsurance Company is directed to pay the compensation amount to thefirst respondent/claimant as awarded by the Tribunal and to recoverthe same from the owner in execution proceedings, without filingany suit therefor. 5.1. As regards the quantum of compensation;the first respondent/injured was aged about 48 years at thetime of accident. In the accident that took place, the firstrespondent suffered multiple injuries through out the body. TheDoctor who examined him had fixed the disability at 100%. Ex.P20is the Disability Certificate. 5.2. The Tribunal, taking into consideration the injured wasworking as sales tax consultant at the time of accident and thedocuments produced by him, viz. Ex.P15 license for working assales tax consultant, Ex.P16 vakalat seeking permission to filesales tax form and Ex.P17 various receipts showing payment of salestax, the Tribunal had fixed the monthly income of the firstrespondent at Rs.5,000/-, and arrived at the loss of future incomeas Rs.6,50,000/-. I am of the view that the Tribunal is justifiedin fixing the income of the first respondent at Rs.5,000/- and theloss of future income at Rs.6,50,000/-. 5.3. Taking into consideration the disability fixed at 100%,the Tribunal has awarded Rs.1,50,000/- towards permanent disabilityand Rs.25,000/- towards pain and suffering, which, in my view, isjustified.5.4. The Tribunal, taking into consideration Exs.P8 to 14,18, 19, 22 and 23, viz., various medical bills, x-ray reports andscan reports, has awarded Rs.1,50,000/- towards medical expenses,which cannot be said to be excessive.6.1. As regards interest, the Supreme Court in TAMIL NADUSTATE TRANSPORT CORPORATION LTD. v. S.RAJAPRIYA & ORS (2005 (4)Supreme 87), wherein the interest was fixed at 9% per annum by theTribunal, reduced the interest to 7.5% per annum taking note of thethen prevailing rate of interest in bank deposits.6.2. In view of the above decision, I am of the view that it wouldbe just and proper to reduce the interest awarded by the Tribunalto 7.5% per annum. https://hcservices.ecourts.gov.in/hcservices/

7. The appeal is disposed of in the following terms: The appellant Insurance Company is liable to pay thecompensation amount to the first respondent/claimant as awarded bythe Tribunal with interest @ 7.5% from the date of filing theoriginal petition till the date of payment and to recover the samefrom the owner of the vehicle in execution proceedings.ATRSd/Asst.Registrar/true copy/Sub Asst.RegistrarToThe I Additional Subordinate JudgeMotor Accident Claims TribunalErode.+ one cc to M/s. M.B. Gopalan, Advocate sr no. 3692GK(Co)NM(14.03.07)C.M.A.No.3599 of 2006