High Court · 2010

“3. Prima facie, we are of the opinion if the Insurance Company proves that it has no liability to pay compensation to the claimants, the Insurance Company cannot be compelled to make payment and later on recover it from the owner of the vehicle.

4. No doubt, there are some decisions which have taken the view that even if the insurance company has no liability, yet it must pay and later on recover it from the owner of the vehicle. [See for example National Insurance Co. Ltd. vs. Yellamma & Another (2008) 7 SCC 526, Samundra Devi vs. Narendra Kaur (2008) 9 SCC 100 (vide para 16), Oriental Insurance Co. vs. Brij Mohan (2007) 7 SCC 56 (vide para 13), New India Insurance Co. vs. Darshan Devi (2008) 7 SCC 416 (vide para 21), etc.]. We have some reservations about the correctness of the aforesaid decisions of this Court.

5. If the insurance company has no liability to pay at all, then, in our opinion, it can not be compelled by order of the Court in exercise of its jurisdiction under Article 142 of the Constitution of India to pay the compensation amount and later on recover it from the owner of the vehicle. In our view, Article 142 of the Constitution of India does not cover such type of cases.

6. When a person has no liability to pay at all how can it be compelled to pay? -10- It may take years for the insurance company to recover the amount from the owner of the vehicle, and it is also possible that for some reason the recovery may not be possible at all.

7. Hence, we direct that the papers of this case be placed before Hon'ble the ChiefJustice of India for constituting a largerbench to decide the following questions: “(1) If an Insurance Company can prove that it does not have any liability to pay any amount in law to the claimants under the Motor VehiclesAct or any other enactment, can the Court yet compel it to pay the amount in question giving it liberty to lateron recover the same from the owner of the vehicle? (2) Can such a direction be given under Article 142 of the Constitution,and what is the scope of Article 142? Does Article 142 permit the Court to create a liability where there is none?" इसी िविनण(cid:91)य को आधार बनाते हुए माननीय उ(cid:419)राख(cid:214)ड उ(cid:205)च (cid:219)यायालय ने यूनाइटेड इि(cid:214)डया इं(cid:230)योर(cid:581)स क(cid:224)पनी (cid:871)ल. बनाम तारा देवी एवं अ(cid:219)य 1(2010) ए सी सी 78 के पैरा सं(cid:201)या-8 म(cid:581) िन(cid:224)न (cid:292)कार उ(cid:227)लेख (cid:873)कया है: “8. Learned Counsel for the appellant drew attention of this Court to the judgment and order dated 31.8.2009, passed by the Apex Court in Special Leave to Appeal [Civil] C.C, No.10993/2009, in the case of National Insurance Co. Ltd. Vs. Parvathneni & Anr., an argued that the Tribunal has erred in law in directing the Insurance Company to pay the compensation, after holding that it was not liable to pay the compensation as there was violation of the terms of the policy, and the gratuitous passenger was not covered under the policy by which the vehicle was insured. This Court finds force in the submission of learned Counsel for the appellant for the reason that there is no law which empowers the Tribunal to direct the Insurance Company to pay compensation after holding that the Insurance Company is not liable to pay the amount, with liberty to the company to recover it from the owner of the vehicle. In the present case, owner -11- himself had died in the accident. Apart from this, in some of the cases in which the Apex Court has given similar directions relating to payment of compensation, it appears to have exercised its constitutional power under Article 142 of the Constitution of India. The Motor Accident Claims Tribunal has no such power to direct the Insurance Company to pay the amount, particularly, when it is found not liable to pay the amount under the policy. If the Tribunals start issuing such directions then Insurance Company would be made to pay amount of compensation not only in the cases where it is liable to pay under the policy, but also even if it is not liable to pay in terms of the policy. The Legislature in the Motor Vehicles Act, 1988, nowhere intends to make the Insurance Company liable to pay the compensation even in cases where it is not liable to pay under the policy. The burden of getting recovered the amount of compensation, cannot be put on a party by the Tribunal unless such orders can be passed under some law. That being so, this Court finds that the Tribunal has erred in law in directing the compensation to be paid by the appellant (United India Insurance Company Ltd.).”

12. इस (cid:292)कार (cid:232)प(cid:436) है (cid:873)क (cid:219)याया(cid:876)धकरण के आ(cid:162)ेिपत िनण(cid:91)य म(cid:581) कोई भी अवैधता, (cid:287)ु(cid:465)ट या कमी नह(cid:547)ं है (cid:873)क िजसके कारण अवाड(cid:91) क(cid:551) अदायगी का िनद(cid:566)श बीमा क(cid:224)पनी को (cid:465)दया जावे या इसम(cid:581) वृि(cid:424) क(cid:551) जावे। फल(cid:232)व(cid:510)प उ(cid:416) सम(cid:232)त ि(cid:232)थित के (cid:292)काश म(cid:581) अपीलाथ(cid:568) क(cid:551) ओर से (cid:292)(cid:232)तुत यह अपील (cid:232)वीकार (cid:873)कये जाने यो(cid:202)य नह(cid:547)ं है और एतद(cid:430)ारा अ(cid:232)वीकृ त क(cid:551) जाती है।

13. िनण(cid:91)य क(cid:551) (cid:292)ित के साथ (cid:219)याया(cid:876)धकरण को उससे (cid:292)ा(cid:431) अ(cid:871)भलेख वािपस (cid:871)भजवाया जावे। प(cid:162)कारान ् इस अपील का खचा(cid:91) अपना-अपना (cid:232)वयं वहन कर(cid:581)गे। “ all corrections made in the judgment/order have been incorporated in the judgment/order being emailed.” ( (cid:219)याo एस एस कोठार(cid:547) ) अिनलशमा(cid:91) /ps-