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Sunday, February 26, 2017

The pendency of consideration of the above questions by a larger Bench does not mean that the course that was followed in Baljit Kaur, (2004) 2 SCC 1 and Challa Upendra Rao, (2004) 8 SCC 517 should not be followed, more so in a peculiar fact situation of this case. In the present case, the accident occurred in 1993. At that time, the claimant was 28 years old. He is now about 48 years. The claimant was a driver on heavy vehicle and due to the accident he has been rendered permanently disabled. He has not been able to get compensation so far due to the stay order passed by this Court. He cannot be compelled to struggle further for recovery of the amount. The Insurance Company has already deposited the entire awarded amount pursuant to the order of this Court passed on 1-8-2011 (National Insurance Co. Ltd. vs. Saju P. Paul, SLP© No. 20127 of 2011 and the said amount has been invested in a fixed deposit account. Having regard to these peculiar facts of the case in hand, we are satisfied that the claimant (Respondent 1) may be allowed to withdraw the amount deposited by the Insurance Company before this Court along with accrued interest. The Insurance Company (the appellant) thereafter may recover the amount so paid from the owner (Respondent 2 herein). The recovery of the amount by the Insurance Company from the owner shall be made by following the procedure as laid down by this Court in Challa Upendra Rao(supra).”= Accordingly, the appeals succeed and are allowed. Impugned order is modified to the extent that respondent No. 3-United India Insurance Company Ltd. is accordingly directed to pay the awarded sum to the appellants (claimants). Thereafter respondent No. 3 - United India Insurance Company Ltd. would be entitled to recover the entire paid awarded sum from the owner (insured) of the offending Vehicle (Tata Sumo)-respondent No.1 in these very proceedings by filing execution application against the insured

        REPORTABLE
                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                      CIVIL APPEAL No.  3047   OF 2017
                    (ARISING OUT OF SLP (C) No.5805/2013)

Manuara Khatun & Ors.                ...Appellant(s)

                             VERSUS

Rajesh Kr. Singh & Ors.                  …Respondent(s)

                                    WITH

                       CIVIL APPEAL No. 3065  OF 2017
                    (ARISING OUT OF SLP (C) No.791/2013)

Mamoni Saikia Mohanty & Ors.  ...Appellant(s)

                             VERSUS

Rajesh Kr. Singh & Ors.                      ...Respondent(s)



                               J U D G M E N T
Abhay Manohar Sapre, J.
1)    Leave granted.
2)    These appeals are filed against the common final  judgment  and  order
dated 22.06.2012 passed by the High Court of Gauhati  at  Guwahati  in  MACA
Nos. 7 and 8 of 2009 whereby the High Court dismissed the appeals  filed  by
the appellants herein for enhancement of the compensation amount awarded  by
the Motor Accident Claims Tribunal, Nagaon by order dated 05.09.2008 in  MAC
Case Nos. 653 and 652 of 2001.
3)    We herein set out  the  facts,  in  brief,  to  appreciate  the  issue
involved in these appeals.
4)    On 03.07.2001, Ismail Hussain, husband of  Manuara  Khatun  and  Nirod
Prasad Mohanty, husband of Mamoni  Saikia  Mohanty  along  with  some  other
passengers were  proceeding  towards  Guwahati  from  Nagoan  in  Tata  Sumo
bearing Registration No. AR-09-3997, when they arrived near  Jorabat,  there
was  a  head-on-collusion  between  the  Tata  Sumo  and  a  Truck   bearing
Registration No. AS-01-H-2598  coming  from  the  opposite  direction  as  a
result of which Ismail Hussain and Nirod Prasad Mohanty  died  on  the  spot
and some other passengers sustained   injuries.
5)    Manuara Khatun, wife of the Ismail Hussain and her  5  minor  children
filed Claim petition bearing  MAC  Case  No.  653  of  2001  claiming  total
compensation of Rs.55,20,400/- and Mamoni  Saikia  Mohanty,  wife  of  Nirod
Prasad Mohanty and her 3 minor children  preferred  claim  petition  bearing
MAC No. 652 of 2001 claiming total  compensation  of  Rs.54,62,500/-  before
the Motor Accident Claims  Tribunal,  Nagaon  against  Rajesh  Kumar  Singh,
owner of the Tata Sumo(respondent  No.1),  Bhadra  Kt.  Das,  owner  of  the
Truck(respondent No.2), the insurer of the Tata Sumo-United India  Insurance
Co. Ltd.(respondent No.3) and New India Assurance Company Ltd.,  Insurer  of
the Truck(respondent No.4).  The claim petitions were contested only by  the
Insurance Companies.  So far as the owners of the vehicles  were  concerned,
they remained ex parte.
6)    The Tribunal, vide award dated 05.08.2008,  partly  allowed  both  the
claim petitions and  awarded a sum  of  Rs.24,89,500/-  to  Manuara  Khatun,
wife of Ismail Khatun and Rs.24,09,500/- to Mamoni Saikia Mohanty,  wife  of
Nirod Prasad Mohanty with interest @ 7.5% p.a. from the date  of  filing  of
case till payment.  The Tribunal held that  Tata  Sumo  was  a  private  car
driven by the driver in a rash and negligent manner and  at  a  high  speed,
which resulted in the accident.  It was also held that  the  driver  of  the
Truck was not negligent in driving the  Truck.  The  Tribunal  further  held
that all the passengers including the two deceased were  traveling  in  Tata
Sumo for hire and hence they were held to be  “gratuitous  passengers”.   It
was held that due to this reason, United India Insurance Company  Ltd.,  the
insurer of Tata Sumo(offending vehicle) was not  liable.   Accordingly,  the
Insurance Company was exonerated  from  the  liability  and  the  award  was
passed only against the owner of   Tata Sumo (respondent No.1) in  both  the
claim cases. So far as the owner of the Truck(respondent No.2) and  the  New
India  Assurance  Co.  Ltd.-Insurer  of  the  Truck(respondent  No.4)   were
concerned, both were held not liable in any  manner  because,  as  mentioned
above, the driver of the Truck  was  not  found  negligent  in  driving  the
Truck.
7)    Dissatisfied with the award, appeals bearing MAC Appeal No.7  of  2009
and MAC Appeal No. 8 of 2009 under Section 173 of  the  Motor  Vehicle  Act,
1988 (hereinafter referred to as “the  Act”)  were  filed  before  the  High
Court by the claimants for enhancement of the compensation  amounts  awarded
by the Tribunal.  The other ground raised before the High Court was that  it
was the liability of the Insurance  Company  of  the  offending  vehicle  to
compensate the claimants jointly and severally with the owner  of  the  Tata
Sumo and in any event, the direction to pay the compensation by the  insurer
of offending vehicle and then to recover from its insured should  have  been
passed against the Insurer(respondent No.3).
8)    By impugned judgment, the High Court dismissed the  appeals  filed  by
the claimants  and  held  that  the  insurer  was  not  liable  because  the
passengers  or  occupants  were  being  carried  in  a  private  vehicle  as
“gratuitous passengers”.
9)    Aggrieved by  the  said  judgment,  the  claimants  have  filed  these
appeals by way of special leave petitions before this Court.
10)   Heard Mr. M.L. Lahoty, learned counsel for the  appellants,  Mr.  Ravi
Bakshi, learned counsel for respondent No.3  and  Mr.  S.L.  Gupta,  learned
counsel for respondent No.4.
11)   Learned counsel for the appellants while assailing       the  impugned
order argued only one point.  According to him, both the Courts below  erred
in not applying the    principle of "pay and  recover"  against  the  United
India Insurance Company Ltd. (insurer of the offending  vehicle-Tata  Sumo)-
Respondent No. 3 herein.  It was his submission  that  when  admittedly  the
driver of the Tata Sumo was held negligent in his driving, which caused  the
accident, the insurer of the offending vehicle-respondent No. 3 should  have
been made liable to pay the awarded  sum  or  in  any  event,  according  to
learned counsel, a direction to pay and recover the  awarded  sum  ought  to
have been issued against the Insurer  of  the  offending  vehicle.   Learned
counsel  placed  reliance  on  the  judgments  of  this  Court  in  Oriental
Insurance Co. Ltd. vs. Nanjappan & Ors., (2004) 13 SCC 224, Bhagyalakshmi  &
Ors. vs. United Insurance  Company  Ltd.  &  Anr.,  (2009)  7  SCC  148  and
Manager, National Insurance Company Limited vs. Saju P. Paul & Anr.,  (2013)
2 SCC 41 in support of this submission.
12)   In reply, learned counsel for the  respondents  (Insurance  Companies)
supported the impugned order and contended that  no  case  is  made  out  to
interfere in the impugned judgment.  It was his submission that once  it  is
held  and rightly that the Insurance  Company  is  not  liable  because  the
victims  were  travelling  in   the   offending   vehicle   as   “gratuitous
passengers”, there did not arise any occasion to pay the awarded sum to  the
claimants by the Insurance Company and nor the principle “pay  and  recover”
could be  applied  against  the  Insurance  Company  in  such  circumstances
thereby making them liable to pay the awarded sum to the claimants.
13)   Having heard the learned counsel for the parties  and  on  perusal  of
the record of the case, we find force   in the  submission  of  the  learned
counsel for the appellants (claimants).
14)   The only question, which arises for consideration  in  these  appeals,
is whether the appellants are entitled for an order against the  Insurer  of
the offending vehicle, i.e., (respondent No. 3) to pay the  awarded  sum  to
the appellants and then to recover the said amount from the  insured  (owner
of  the  offending  vehicle-Tata   Sumo)-respondent   No.1   in   the   same
proceedings.
15)   The aforesaid  question,  in  our  opinion,  remains     no  more  res
integra. As we notice, it was subject matter of several  decisions  of  this
Court rendered by three Judge     Bench and two Judge Bench in  past,  viz.,
National Insurance Co. Ltd.  vs.  Baljit  Kaur  &  Ors.,  (2004)  2  SCC  1,
National Insurance Co. Ltd. vs. Challa Upendra Rao  &  Ors.,  (2004)  8  SCC
517, National Insurance Co. Ltd. vs. Kaushalaya Devi & Ors.,  (2008)  8  SCC
246, National Insurance Co. Ltd. vs. Roshan Lal, [Order dated  19.1.2007  in
SLP© No. 5699 of 2006], and National Insurance Co. Ltd.  vs.  Parvathneni  &
Anr., (2009) 8 SCC 785.
16)   This  question  also  fell  for  consideration  recently  in  Manager,
National Insurance Company Limited vs. Saju P. Paul & Anr., (supra)  wherein
this Court took note of entire previous case law on  the  subject  mentioned
above and examined the question in the context of Section 147  of  the  Act.
While allowing the appeal filed by the Insurance Company  by  reversing  the
judgment of the High Court, it was held on facts that since the  victim  was
travelling in offending vehicle as "gratuitous  passenger"  and  hence,  the
Insurance Company cannot be held liable to suffer the liability arising  out
of accident on the strength of the insurance  policy.  However,  this  Court
keeping in view the benevolent object of the Act and other relevant  factors
arising in the case, issued the directions against the Insurance Company  to
pay the awarded sum to the claimants and then to recover the said  sum  from
the insured in the same proceedings by applying the principle  of  “pay  and
recover”.
17)   Justice R.M. Lodha (as His Lordship then was and  later   became  CJI)
speaking for the Bench held in paras 20 and 26 as under:

“20. The next question that arises  for  consideration  is  whether  in  the
peculiar facts of this case a direction could be  issued  to  the  Insurance
Company to first satisfy the awarded amount in favour of  the  claimant  and
recover the same from the owner of the vehicle (Respondent 2 herein).

26. The pendency of consideration of the above questions by a  larger  Bench
does not mean that the course that was followed in  Baljit  Kaur,  (2004)  2
SCC 1 and Challa Upendra Rao, (2004) 8 SCC 517 should not be followed,  more
so in a peculiar fact situation of this  case.  In  the  present  case,  the
accident occurred in 1993. At that time, the claimant was 28 years  old.  He
is now about 48 years. The claimant was a driver on heavy  vehicle  and  due
to the accident he has been rendered permanently disabled. He has  not  been
able to get compensation so far due to the stay order passed by this  Court.
He cannot be compelled to struggle further for recovery of the  amount.  The
Insurance Company has already deposited the entire awarded  amount  pursuant
to the order of this Court passed on 1-8-2011 (National Insurance  Co.  Ltd.
vs. Saju P. Paul, SLP© No. 20127 of  2011  and  the  said  amount  has  been
invested in a fixed deposit account. Having regard to these  peculiar  facts
of the case in hand, we are satisfied that the claimant (Respondent  1)  may
be allowed to withdraw the amount deposited by the Insurance Company  before
this  Court  along  with  accrued  interest.  The  Insurance  Company   (the
appellant) thereafter  may  recover  the  amount  so  paid  from  the  owner
(Respondent 2 herein). The recovery of the amount by the  Insurance  Company
from the owner shall be made by following the  procedure  as  laid  down  by
this Court in Challa Upendra Rao(supra).”


18)   The facts of the case at hand are somewhat identical to the  facts  of
the case mentioned supra because here also we find that  the  deceased  were
found travelling as “gratuitous passengers” in the offending vehicle and  it
was for this reason, the insurance companies were exonerated.   In  Saju  P.
Paul’s case (supra)  also  having  held  that  the  victim  was  “gratuitous
passenger”,  this  Court  issued  directions  against  the  Insurer  of  the
offending vehicle to first satisfy the awarded sum and then to  recover  the
same from the Insured in the same proceedings.
19)   Learned counsel for respondent No. 3 (United India  Insurance  Company
Ltd.), however, contended that the  facts  of  the  case  at  hand  are  not
identical to the one involved in the case of Saju P. Paul (supra) and  hence
the law laid down therein cannot be applied to the  facts  of  the  case  at
hand. Learned counsel pointed out that firstly, the awarded compensation  in
this case is quite substantial and secondly, it  is  not  yet  paid  to  the
claimants. Learned counsel also submitted that since the  question  involved
herein is referred to a larger Bench and hence this Court  should  not  give
such  directions,  as  prayed  by  the  appellants,  against  the  Insurance
Company.
20)   We find no merit in any of  the  submissions.  Firstly,  as  mentioned
above, we find marked similarity in the facts  of  this  case  and  the  one
involved in Saju P.  Paul’s  Case  (supra).  Secondly,  merely  because  the
compensation has not yet been paid to  the  claimants  though  the  case  is
quite old (16 years) like the one in Saju P. Paul’s Case (supra), it  cannot
be a ground to deny the claimants  the  relief  claimed  in  these  appeals.
Thirdly, this  Court  has  already  considered  and  rejected  the  argument
regarding not granting of the relief of the nature  claimed  herein  due  to
pendency of the reference to a larger Bench as would be clear from  Para  26
of  the judgment in  Saju  P.  Paul’s  case  (supra).  That  apart,  learned
counsel for the appellants stated at the bar that the reference made to  the
larger Bench has since been disposed of by keeping the issue undecided.   It
is for this reason also, the argument does not survive any more.
21)   It is for all these  reasons,  we  find  no  good  ground  to  take  a
different view than the one consistently being taken by this  Court  in  all
previous decisions, which are referred supra, in this regard.
22)   In view of the foregoing discussion, we  are  of  the  view  that  the
direction to United India Insurance Company (respondent No. 3) - they  being
the insurer of the offending vehicle which was  found  involved  in  causing
accident due to negligence of its driver needs to be issued  directing  them
(United India Insurance Company-respondent No.3) to first  pay  the  awarded
sum to the appellants (claimants) and then to recover the paid  awarded  sum
from the owner of the  offending  vehicle  (Tata  Sumo)-respondent  No.1  in
execution proceedings arising in this very case as per the law laid down  in
Para 26 of Saju P. Paul’s case quoted supra.
23)   Accordingly, the appeals succeed and are allowed.  Impugned  order  is
modified to the extent that respondent No. 3-United India Insurance  Company
Ltd. is accordingly directed to  pay  the  awarded  sum  to  the  appellants
(claimants).  Thereafter respondent No. 3 - United India  Insurance  Company
Ltd. would be entitled to recover the  entire  paid  awarded  sum  from  the
owner (insured) of the offending  Vehicle  (Tata  Sumo)-respondent  No.1  in
these very proceedings by filing execution application against the  insured.

                       ………...................................J.
                                  [J. CHELAMESWAR]


…...……..................................J.
                               [ABHAY MANOHAR SAPRE]     New Delhi;
February 21, 2017
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