(Prayer: Civil Miscellaneous Appeal filed under Section 173 of the Motor Vehicles Act, 1988 against the Judgment and Decree dated 07.07.2006 made in M.C.O.P.No.1 of 2002 on the file of the Motor Accident Claims/Tribunal Subordinate Court, Kuzhithurai.)
1. The appellant/United Insurance Company Ltd., filed the present C.M.A.(MD)No.64 of 2010, challenging the award passed in M.C.O.P.No.1 of 2002 by the Motor Accidents Claims Tribunal/ Subordinate Court, Kuzhithurai.
2. The facts in nutshell is that it is a case of fatal accident and the accident took place at about 4.00 a.m. on 30.12.1996 at Ayoor Agaram Over Bridge. The legal heirs of deceased filed application seeking compensation before the Motor Accident Claims Tribunal Subordinate Court, Kuzhithurai and the Tribunal considering the facts and circumstances of the case awarded Rs.2,02,000/- towards total compensation.
3. The award passed by the Motor Accident Claims Tribunal in M.C.O.P.No.1 of 2002 on 07.07.2006 is challenged by the appellant Insurance Company mainly on the ground that the Tribunal ought not to have fixed the entire liability on the appellant Insurance Company in view of the fact that the driver who was driving the Bus at the time of accident was not in possession of valid driving licence and further there was no insurance coverage.
4. Evidence on record shows that the driver had no valid driving license to drive the bus and there is a violation of policy condition. However, Ex.P.3 shows that the bus was insured with the appellant Insurance Company till 21.11.1997 and hence, the bus has Insurance Coverage. In respect of the liability of the appellant, this Hon'ble High Court and the Hon'ble Apex Court settled the principle that the claimant is a third party and even if there is any violation of policy condition, in respect of the claim made by the third parties, the Insurance Company has to pay the award amount to the claimant at the first instance and thereafter, to recover the same from the owner of the vehicle.
5. On this aspect, in the judgment reported in (2004)13 SCC 224 in the case of Oriental Insurance Co. Ltd., vs. Nanjappan and others, the Hon'ble Apex Court made the following observations:-
8.Therefore, while setting aside the judgment of the High Court we direct in terms of what has been stated in Baljit Kaur's case (supra) that the insurer shall pay the quantum of compensation fixed by the Tribunal, about which there was no dispute raised, to the respondent-claimants 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 realization 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. 6. In view of the settled principles both by this Hon'ble Court and the Hon'ble Supreme Court of India, as this case is one of violation of policy conditions, this Court is inclined to consider the principle of Pay and Recovery.
7. In the case on hand, the Tribunal while awarding Rs.2,02,000/- together with interest at the rate of 7.5% p.a. has not directed the appellant to pay the award amount and thereafter, recover from the owner of the vehicle. Hence, this Court modify the award of the Tribunal by directing the appellant Insurance Company to pay the award amount at the first instance and thereafter recover it from the owner of the vehicle in consonance with the settled position of law.
8. Accordingly, this Civil Miscellaneous Appeal is partly allowed. No costs. Consequently, connected Miscellaneous Petitions are closed.
9. The learned counsel for the appellant/Insurance Company informed that the entire award amount has been deposited before the Tribunal and accordingly the appellant Insurance Company is at liberty to recover the award amount from the owner of the vehicle by filing appropriate proceedings before the Executing Court. The respondents 1 and 2/claimants are permitted to withdraw the entire award amount with proportionate accrued interest and costs through RTGS by making necessary applications before the Tribunal.