Partly allowed

New India Assurance Co.Ltd. v. Gul Jana and Ors.

J&K HC11 Aug 2021MA/401/2013

Case brief

AI extract

What is this about?

The High Court dismissed the insurance company's appeal against a Motor Accident Claims Tribunal award. The court held the insurer is statutorily liable to pay compensation to the third party and may invoke the 'pay and recover' principle thereafter, thereby modifying the award to include this liberty.

What did the court decide?

Appeal dismissed but impugned award modified to provide liberty to the appellant to recover the compensation amount paid to the claimants from the insured after satisfying the award.

New India Assurance Co.Ltd. Vs Gul Jana and Ors. — Insurance | J&K HC (2021)

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Serial No. 217

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HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT JAMMU

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MA No. 401/2013 IA No. 165/2014

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New India Assurance Co. Ltd. …Appellant(s)/Petitioner(s)

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Through:- Mr. Rupinder Singh, Advocate.

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v/s

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Gul Jana and others …Respondent(s)

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Through:- None.

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Coram: HON’BLE MR. JUSTICE JAVED IQBAL WANI, JUDGE

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ORDER

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1. Award passed by the Motor Accident claims Tribunal,

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Ramban (for short, „Tribunal‟) in claim petition No. 35/2010 titled, “Gul

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Jana V/S New India Assurance Company Ltd. And others” is being challenged by the appellant-insurance company through the medium of the instant appeal.

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2. Before adverting to the grounds of challenge brief background

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of the facts as stated in the appeal would reveal that the respondent No. 1 herein filed a claim petition under Section 166 of the Motor Vehicles Act (for short, the „Act‟) claiming compensation on account of injuries sustained

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2 MA No. 401/2013

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by her husband namely Mubeem in a vehicular accident committed by respondent No. 3 while driving the offending vehicle bearing registration no. JK02F-8587 rashly and negligently resulting into the death of the deceased.

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3. It is being stated that the deceased has been working as a

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labourer.

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4. It is being stated that the appellant-insurance company filed a detailed reply/objections contending inter-alia therein that the vehicle was being driven in contravention of the registration certificate in as much as against the terms and conditions of the insurance policy and that the driver was not holding a valid effective driving license, thus, not rendering the insurance company liable to indemnify the insured.

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5. It is being stated that the Tribunal upon the pleadings of the parties framed four issues and after adjudication passed the impugned award.

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6. The award is being challenged inter-alia on the grounds that the award has been passed contrary to the facts, law and record of the case and that the deceased was travelling in the offending vehicle which was a goods and carrier vehicle as a gratuitous passenger not rendering the insurance company to indemnify the insured. Further it is urged in the

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grounds that the Tribunal misdirected itself while passing the award and same is patently illegal, perverse, arbitrary, and not sustainable in the eyes of law.

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7. Heard learned counsel for the appellant and perused the

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record.

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8. Perusal of the record tends to show that while dealing with issue No. 1, onus whereof to prove had been placed on the claimant, the Tribunal upon evaluating and scanning the evidence led thereof by the claimants observed that the claimants proved the quantum of annual income of the deceased of Rs. 4,500/- per month and Rs. 54,000/- per annum and the respondent-appellant herein did not produce any evidence in rebuttal thereof.

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9. Record further tends to show that in respect of issue No. 2, onus whereof had also been placed upon the claimant to prove had been satisfactorily proved by the claimant. In so far as issue No. 3 is concerned, record would reveal that issue No. 3, onus whereof had been placed on respondent No. 1-appellant herein which had taken the plea that it is not liable to pay any compensation to the petitioner as the offending vehicle was being driven in contravention of the terms and conditions of the insurance policy and that the deceased was travelling in the vehicle as a gratuitous

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passenger manifestly has been rightly dealt by the Tribunal based on the law laid down by the Apex Court in the case titled as “New India Assurance Co. Ltd. Verus Satpal Singh and others” reported in 2000 ACJ 1, wherein it has been held that under the new Act an insurance policy covering the third party risk is not required to exclude gratuitous passenger in a vehicle, no matter that the vehicle is of any type and class.

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10. Admittedly, no liberty has been given in the award under challenge by the Tribunal to the appellant herein on the principle of “Pay and Recover”.

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11. Under Section 146 of the Act, there is a prohibition for driving a motor vehicle in a public place unless there is a policy of insurance in regard to the use thereof and as such, policy satisfies the requirement indicated in the provisions appearing under Chapter XI of the Act. The intention behind enacting this section seemingly is to cover the damage or loss that the use of a motor vehicle in a public place may result into the third party. There is no exhaustive definition of third party in Section 145 of the Act, but the definition appearing in Section 145(g) is only inclusive yet there may not be any difficulty in discerning the expression third party as contemplated by the legislature, in that, the policy of the insurance being an agreement between the insurer and insured, and all others who suffer

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damage and loss on account of a vehicular accident and whose risks have been covered in terms of Sections 146 and 149 of the Act as third party which could either be an occupant thereof or a passerby or in any other vehicle. The person travelling in a goods vehicle would therefore, also fall within the definition of third party under Section 146 and thus, to ensure payment of compensation to the third party for the loss or damage suffered or its property, Section 149 requires the insurer to satisfy the judgment and award against the persons in respect of third party risks irrespective of insurers right to avoid or cancel the insured policy on account of breach of conditions of the policy.

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12. Thus, what emerges from above is that under Section 145, 146 and 149 is that once a motor vehicle is insured against third party risks, the insurer is under a statutory obligation to satisfy judgment and award against the insured in respect of third party risk. The insurer thus, can satisfy the judgment or award and thereafter, recover the amount paid to the claimants from the insured.

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13. The grounds urged in the appeal against the impugned order as noticed above in view of the aforesaid analysis and legal position pales into insignificance.

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14. The appeal thus, entails dismissal and is accordingly, dismissed, however, the impugned award is modified to the extent by providing that the appellant shall satisfy the award while paying compensation to the claimants-respondents herein in terms of the award with a liberty to recover the amount of compensation covered under the award from the insured in accordance with law.

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15. The appeal accordingly shall stand disposed of.

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(JAVED IQBAL WANI)
JUDGE
Jammu
11.08.2021
SUNIL-I
Whether the order is speaking? : Yes/No
Whether the order is reportable? : Yes/No

New India Assurance Co.Ltd. v. Gul Jana and Ors.

Case brief

What is this about?

What did the court decide?

New India Assurance Co.Ltd. v. Gul Jana and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

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