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Tuesday, January 8, 2013

The writ petitioners make the prayer to constitute a Special Investigation Team comprising police officers from outside Manipur to investigate the cases of unlawful killings listed in the writ petition and to prosecute the alleged offenders but at this stage we are not inclined to appoint any Special investigation Team or to direct any investigation under the Code of Criminal Procedure. Instead, we would first like to be fully satisfied about the truth of the allegations concerning the cases cited by the writ petitioners. To that end, we propose to appoint a high powered commission that would tell us the correct facts in regard to the killings of victims in the cases cited by the petitioners. We, accordingly, constitute a three-member commission as under: 1. Mr. Justice N. Santosh Hegde, a former Judge of the Supreme Court of India, as Chairperson 2. Mr. J. M. Lyngdoh, former Chief Election Commissioner, as Member 3. Mr. Ajay Kumar Singh, former DGP and IGP, Karnataka. We request the Commission to make a thorough enquiry in the first six cases as detailed in “Compilation 1”, filed by the petitioners and record a finding regarding the past antecedents of the victims and the circumstances in which they were killed. The State Government and all other concerned agencies are directed to hand over to the Commission, without any delay, all records, materials and evidences relating to the cases, as directed above, for holding the enquiry. It will be open to the Commission to take statements of witnesses in connection with the enquiry conducted by it and it will, of course, be free to devise its own procedure for holding the enquiry. In light of the enquiries made by it, the Commission will also address the larger question of the role of the State Police and the security forces in Manipur. The Commission will also make a report regarding the functioning of the State Police and security forces in the State of Manipur and in case it finds that the actions of the police and/or the security forces transgress the legal bounds the Commission shall make its recommendations for keeping the police and the security forces within the legal bounds without compromising the fight against insurgency. The Commission is requested to give its report within twelve weeks from today. The Central Government and the Government of the State of Manipur are directed to extend full facilities, including manpower support and secretarial assistance as may be desired by the Commission to effectively and expeditiously carry out the task assigned to it by the Court. The Registry is directed to furnish a copy of this order and complete sets of briefs in both the writ petitions to each of the members of the Commission forthwith. Put up on receipt of the report by the Commission.


                                                                  REPORTABLE
                        IN THE SUPREME COURT OF INDIA

                    CRIMINAL/CIVIL ORIGINAL JURISDICTION

                   WRIT PETITION (CRIMINAL) NO.129 OF 2012

EXTRA JUDICIAL EXECUTION VICTIM FAMILIES
ASSOCIATION (EEVFAM) AND ANOTHER        PETITIONER(S)

                                   VERSUS

UNION OF INDIA & ANOTHER                           RESPONDENT(S)

                                    WITH

                    WRIT PETITION (CIVIL) NO.445 OF 2012

SURESH SINGH                                 PETITIONER(S)

                                   VERSUS

UNION OF INDIA & ANOTHER                RESPONDENT(S)

                                  O R D E R



                 These two writ petitions, each filed under  Article  32  of
the Constitution of India, raise some disquieting issues pertaining  to  the
State of Manipur.  In writ petition (criminal) No.129 of 2012, it is  stated
that, over the years, a large number of people, Indian citizens,  have  been
killed by the Manipur Police and other security forces while  they  were  in
custody or in stage-managed encounters or in ways broadly termed as  ‘extra-
judicial executions’.  In writ  petition  (civil)  No.445  of  2012,  it  is
stated that for a very long time,  the  State  of  Manipur  is  declared  as
“disturbed area” and is put under the Armed  Forces  (Special  Powers)  Act,
1958, subverting the civil rights of the citizens of the  State  and  making
it possible for the security forces to kill innocent persons with  impunity.


      In this order, we deal  with  the  first  writ  petition,  i.e.,  writ
petition (criminal) No.129/2012.

      In this writ petition it is stated that during the  period  May,  1979
to  May,  2012,  1528  people  were  killed  in  Manipur  in  extra-judicial
execution. The statement is mainly based on a memorandum prepared by  ‘Civil
Society Coalition on Human Rights in Manipur and the UN’  and  submitted  to
one  Christof  Heyns,  Special  Rapporteur  on  extrajudicial,  summary   or
arbitrary executions, Mission to India, 19-30 March,  2012.  The  Memorandum
compiles the list of 1528 people allegedly killed unlawfully  by  the  State
Police  or  the  security  forces.  The  writ  petitioners  later  on  filed
“Compilation 1” and “Compilation 2”. In “Compilation 1”  details  are  given
of ten (10) cases relating to the killings of eleven (11)  persons  (out  of
the list of 1528); in  “Compilation  2”,  similarly  details  are  given  of
thirteen (13) cases in which altogether seventeen (17) persons (out  of  the
list of 1528) are alleged to have been killed in extra judicial  executions.

      A counter affidavit is filed on behalf of the  State  of  Manipur.  In
the  counter  affidavit  there  is  not  only  a  complete  denial  of   the
allegations made in the writ petition but there also seems to be an  attempt
to forestall any examination of the matter by this Court. The plea is  taken
that the National Human Rights Commission (NHRC) is the proper authority  to
monitor the cases referred to in the writ petition. It  is  stated  that  in
regard to all the ten (10) cases highlighted in  “Compilation  1”  filed  by
the petitioners, reports have been submitted to it  and  in  none  of  those
cases the NHRC has recorded any finding of violation of human rights. It  is
stated that the occasion for this Court to examine those cases  would  arise
only if it  holds  that  the  NHRC  had  failed  to  perform  its  statutory
functions in safeguarding the human rights  of  the  people  in  the  State.
This Court should not examine this matter directly but should only  ask  the
NHRC to indicate the status of the cases listed and highlighted in the  writ
petition. We are unable even to follow such a plea. The course suggested  by
the State will completely dissipate the vigour and vitality  of  Article  32
of the Constitution. Article 21 coupled with Article 32 of the  Constitution
provides the finest guarantee and the  most  effective  protection  for  the
most precious of all rights, namely, the right to life and personal  liberty
of every person. Any indication of the violation of the  right  to  life  or
personal liberty would put all the faculties of this Court at high alert  to
find out the truth and in case the Court finds  that  there  has,  in  fact,
been violation of the right to life and personal liberty of any  person,  it
would be the Court’s  bounden  duty  to  step-in  to  protect  those  rights
against the unlawful onslaught by the State. We, therefore,  see  no  reason
not to examine the matter directly but  only  vicariously  and  second-hand,
through the agency of the NHRC.
      A reference is next  made  in  the  counter  affidavit  to  an  appeal
pending before this Court against the judgment of the Bombay High Court  and
a writ petition, also pending before this  Court,  filed  by  the  State  of
Gujarat on the subject of fake encounters and it is stated  that  this  case
should be tagged with those other two cases to be heard  together.  We  fail
to see any relevance of the two cases referred to in the  counter  affidavit
and, in our view, the plea that these two  writ  petitions  should  only  be
heard along with those two cases is meant to detract from consideration  the
grave issues raised in the writ petition.
      It is thirdly stated in  the  counter  affidavit  that  the  State  of
Manipur is faced with the menace of insurgency for many  years  and  details
are given of policemen and civilians killed and injured by  the  insurgents.
There are about 30 extremist organizations in the State  out  of  which  six
are very powerful and they are armed with sophisticated weapons.  Their  aim
and object is  to  secede  from  the  Republic  of  India  and  to  form  an
independent State of Manipur. For realization of their objective  they  have
been indulging in violent activities, including  killing  of  civilians  and
members of security forces.  It is stated  in  the  counter  affidavit  that
during the period 2000 to October, 2012, 105 policemen, 260 security  forces
personnel, and 1214 civilians were killed; the number of injured during  the
same period is 178 for the policemen, 466 for  members  of  security  forces
and 1173 for civilians.
      There is no denying  that  Manipur  is  facing  the  grave  threat  of
insurgency.  It is also clear that a number  of  the  insurgent  groups  are
operating there, some of which are heavily armed. These  groups  indulge  in
heinous crimes like extortion and  killing  of  people  to  establish  their
hegemony.  It is also evident from the counter affidavit filed by the  State
that a number of police personnel and members of security forces  have  laid
down  their  lives  or  received  serious  injuries  in   fighting   against
insurgency. But, citing the number of the policemen and the security  forces
personnel and  the  civilians  killed  and  injured  at  the  hands  of  the
insurgents  does  not  really  answer  the  issues  raised   by   the   writ
petitioners.
       In  People’s  Union  for  Civil  Liberties  v.  Union  of  India  and
another[1], this Court earlier dealt  with  a  similar  issue  from  Manipur
itself.  In that case, it was alleged that two  persons  along  with  others
were seized by the police and taken in a truck to a distant place  and  shot
there. In an inquiry by the District and  Sessions  Judge,  Manipur  (West),
held on the direction  of  this  Court,  the  allegation  was  found  to  be
correct. In that case, dealing with question of  the  right  to  life  in  a
situation where the State was infested with terrorism and  insurgency,  this
Court in paragraphs 5 and 6 of the judgment observed as follows:
    “5. It is submitted by Ms S. Janani, the learned counsel for the  State
    of Manipur, that Manipur is a disturbed area, that  there  are  several
    terrorist groups operating in the State, that Hamar Peoples' Convention
    is one of such terrorist organizations, that they have  been  indulging
    in a number of crimes affecting the public order  —  indeed,  affecting
    the security of the State. It is submitted that there have been regular
    encounters and exchange of fire between  police  and  terrorists  on  a
    number of occasions. A number of citizens have suffered at the hands of
    terrorists and many people have been killed. The  situation  is  not  a
    normal one. Information was received by the police that terrorists were
    gathering in the  house  on  that  night  and  on  the  basis  of  that
    information, police conducted the raid. The raiding party was fortunate
    that the people inside the house including the deceased did not  notice
    the police, in which  case  the  police  would  have  suffered  serious
    casualties.  The  police  party  was  successful  in   surprising   the
    terrorists. There was exchange of fire resulting in the  death  of  the
    terrorists.


    6. In view of the fact that we have accepted the  finding  recorded  by
    the learned District and Sessions Judge, it is not possible  to  accede
    to the contention of Ms Janani insofar  as  the  manner  in  which  the
    incident had taken place. It is true that Manipur is a disturbed  area,
    that there appears to be a good amount of terrorist activity  affecting
    public order and, may be, even security of that State. It may  also  be
    that under these conditions, certain additional and unusual powers have
    to be given to the police to deal with terrorism. It may  be  necessary
    to fight terrorism with a strong hand which may involve vesting of good
    amount of discretion in  the  police  officers  or  other  paramilitary
    forces engaged in fighting them. If the  version  of  the  police  with
    respect to the incident in question were true, there could have been no
    question of any interference by the court.  Nobody  can  say  that  the
    police should wait till they are shot at. It is for the  force  on  the
    spot to decide when to act, how to act and where to act. It is not  for
    the court to say how the terrorists should  be  fought.  We  cannot  be
    blind to the fact that even after fifty years of our independence,  our
    territorial integrity is not fully secure. There are several  types  of
    separatist and terrorist activities in several parts  of  the  country.
    They have to be subdued. Whether they should be fought  politically  or
    be dealt with by force is a matter of  policy  for  the  Government  to
    determine. The courts may not be the  appropriate  forum  to  determine
    those questions. All this is  beyond  dispute.  But  the  present  case
    appears to be one where two persons along with some  others  were  just
    seized from a hut, taken to a long distance away in a  truck  and  shot
    there. This type of activity cannot certainly be  countenanced  by  the
    courts even  in  the  case  of  disturbed  areas.  If  the  police  had
    information that terrorists were gathering at a particular place and if
    they had surprised them and arrested them, the proper course  for  them
    was to deal with them according to law.   “Administrative  liquidation”
    was certainly not a course open to them.”
                                  (emphasis added)


      We respectfully reiterate what  was  earlier  said  by  the  Court  in
   People’s Union for Civil Liberties.
      In 1997, in  the  Peoples’  Union  for  Civil  Liberties  this  Court,
dealing with the case of killing of two persons  in  Manipur  had  cautioned
the State against “Administrative liquidation”. But, after 15 years in  this
case, we are faced with similar allegations on a much larger scale.
      For this Court, the life of a policeman or a member  of  the  security
forces is no less precious and valuable than any  other  person.  The  lives
lost in the fight against terrorism  and  insurgency  are  indeed  the  most
grievous loss. But to the State it is  not  open  to  cite  the  numbers  of
policemen and security  forces  killed  to  justify  custodial  death,  fake
encounter or what this Court had called “Administrative liquidation”. It  is
simply not permitted by the Constitution.  And  in  a  situation  where  the
Court finds a person’s rights, specially the right to life under assault  by
the State or the agencies of the State, it must step-in and stand  with  the
individual and prohibit the State or its agencies from violating the  rights
guaranteed under the Constitution. That is the role of  this  Court  and  it
would perform it under all circumstances. We,  thus,  find  that  the  third
plea raised in the counter affidavit is equally without substance.
       Lastly,  the  counter  affidavit,  and  the   Supplementary   Counter
Affidavit filed by the State give  the  State’s  version  of  the  10  cases
highlighted in the Compilation 1, filed by the petitioners. But on  that  we
would not like to make any comment at this stage.
      The Union of India has also filed a separate counter affidavit. It  is
a more responsible affidavit in that it does not evade the issues  nor  does
it try to dissuade the Court from examining  the  cases  of  alleged  extra-
judicial executions brought to its notice by the writ  petitioners.  In  the
counter affidavit  filed  by  the  Union,  first  a  reference  is  made  to
different legal provisions (Section 146 and  Sections  129  to  132  of  the
Criminal Procedure Code, Sections 99 to 106 in  Chapter  IV  of  the  Indian
Penal Code and Section 4 of the Armed Forces  (Special  Powers)  Act,  1959)
and it is contended that subject  to  the  conditions  stipulated  in  those
provisions, killing of a person by a police  officer  or  a  member  of  the
armed forces may not amount to an offence and may be justified  in  law.  It
is stated in  the  counter  affidavit  that  all  the  cases  listed  and/or
highlighted in the writ petition and described as extra-judicial  executions
are cases of persons who died during  counter-insurgency  operations  or  in
performance of other lawful duties by the police and the  personnel  of  the
armed forces. It is emphasized that in  most  of  the  cases  the  so-called
victims might have been killed in the lawful exercise of the  powers  and/or
in discharge  of  official  duties  by  the  police  and  the  armed  forces
personnel.  It is further said that “public order” and, by implication,  the
maintenance of “law and order” are primarily State subjects and the role  of
the Central Government in deploying the armed forces personnel in the  State
is only supportive in aid of the law and order machinery of the State.   The
State  of  Manipur  has  the  primary  duty  to  deal  with  the  issue   of
investigation in relevant cases, except where provided to  the  contrary  in
any other law for the time being in force.  It  is  stated  that  the  “very
gloomy picture” of the State of Manipur sought to be presented by  the  writ
petitioners is incorrect and misleading. It  is  asserted  that  Manipur  is
fully and completely integrated with the rest  of  the  country  and  it  is
pointed out that in the  1990  elections  the  voting  turnout  for  the  60
assembly seats in the State was 89.95%. Similarly, during  the  recent  2012
assembly elections, the voting turnout was 83.24%.  It  is  added  that  the
voting percentage in Manipur is amongst the highest  in  the  country  as  a
whole and it clearly shows that the people  of  Manipur  have  taken  active
participation in the elections showing their full faith in the  Constitution
and the constitutional process.
      Coming to the issue  of  insurgency,  it  is  stated  in  the  counter
affidavit as under:
            “It is only a handful of disgruntled elements  who  have  formed
      associations/ groups that indulge in militant and unlawful  activities
      in order to retain their influence and hegemony in the society.  These
      groups also challenge the sovereignty and integrity of the country  by
      following aims and objectives which are secessionist in nature.  It is
      emphasized that only around 1500 militants are holding a population of
      23 lakhs in Manipur to ransom and keeping the people in constant fear.
      The root cause of militancy in Manipur is the  constant  endeavour  of
      these insurgent groups so that they can continue to extort  money  and
      the leaders of such groups can continue  to  lead  luxurious  life  in
      foreign countries.  The tribal divide and factions in the society  and
      the unemployed youth are being exploited by these militant outfits  to
      fuel tension in the society.”

      It is further stated in paragraph  13  of  the  counter  affidavit  as
under:
      “It may also be  submitted  that  the  ethnic  rivalries  amongst  the
      different tribal groups viz. Meities, Kukis and Nagas are  deep-rooted
      and the militant groups fervently advance their ideologies  by  taking
      advantage of the porous international border with Myanmar which is 256
      km long, heavily forested and contains  some  of  the  most  difficult
      terrain.  The border area is inhabited by the same  tribes  on  either
      side. These tribes have family relations and for social interactions a
      free movement regime for the locals to move up to 16 kms on both sides
      is permitted. Taking advantage of this situation the militant  outfits
      utilize the other side of the border (which is beyond the jurisdiction
      of  the  Indian  Armed  Forces)  for  conveniently  conducting   their
      operations of extortions/ kidnapping/ killing/ looting  and  ambushing
      the security forces.”

      The counter affidavit goes on to explain that the  operations  of  not
only the State Police but the different security forces  under  the  control
of the Central Government are being strictly monitored and kept  within  the
parameters set out by the different laws under which those  forces  operate.
It is stated that different statutory agencies  acting  as  watchdog  ensure
that the armed forces do  not  overstep  the  Constitutional  or  the  legal
limits in carrying out the anti-insurgency operations.
      Ms. Guruswamy, the learned amicus has, on the  other  hand,  presented
before us tables and charts showing the  inconsistencies  in  the  materials
produced by the State of Manipur itself concerning the 10 cases  highlighted
in “Compilation 1” filed by the petitioners. She also submitted that  though
enquiries were purported to be held by an Executive  Magistrate  in  the  10
cases described in “Compilation 1”, in none of those cases the  kin  of  the
victims came before the Magistrate to  give  their  statements  even  though
they were approaching the court, complaining that the  victims  were  killed
in fake encounters. She further pointed out that in some of the  cases  even
the police/security forces personnel who were engaged in  the  killings  did
not turn up, despite  summons  issued  by  the  Magistrate,  to  give  their
version of the occurrence and the Magistrate closed the  enquiry,  recording
that there was nothing to indicate that the victims were killed  unlawfully.
In some cases the Magistrate, even while  recording  the  finding  that  the
case did not appear  to  be  one  of  fake  encounter  made  the  concluding
observation that it would be helpful to sensitize  the  police/armed  forces
in human rights. She submitted that the  so-called  enquiries  held  by  the
Magistrate were wholly unsatisfactory and no reliance  could  be  placed  on
the findings recorded in those enquiries.
      Apart from the criticisms made by the amicus against  the  Magisterial
enquiries held in the 10 cases of “Compilation 1” it is  important  to  note
that a number of cases cited by the petitioners  had  gone  to  the  Gauhati
High Court and on the direction of the High Court, inquires, of  a  judicial
nature, were made  into  the  killings  of  (1)  Azad  Khan,  age  12  years
(according to the State, 15 years) (from  “Compilation  1”),  (2)Nongmaithem
Michael Singh, age 32 years, (3) Ningombam Gopal Singh, age  39  years,  (4)
(i) Salam Gurung alias  Jingo,  age  24  years,  (ii)  Soubam  Baocha  alias
Shachinta, age 24 years (5) (i) Mutum  Herojit  Singh,  age  28  years  (ii)
Mutum Rajen, age 22 years (6) Ngangbam Naoba alias Phulchand Singh,  age  27
years (7) Sapam Gitachandra Singh, age 22 years (8)  (i)  Kabrambam  Premjit
Singh, (ii) Elangbam Kanto Singh (9) Longjam Uttamkumar Singh, age 34  years
(10) Loitongbam Satish @ Tomba Singh, age 34  years  (11)  Thockhom  Inao  @
Herojit Singh, age 31 years, (12) Khumallambam  Debeshower  Singh  (13)  (i)
Km. Yumnam Robita Devi (ii) Angom Romajitn Singh  (14)  Thoudem  Shantikumar
Singh (all from “Compilation 2”).
      In all those cases the judicial inquiry found that  the  victims  were
not members of any insurgent or unlawful groups and they were killed by  the
police or security forces in cold blood and stage-managed encounters.
      It is  stated  on  behalf  of  the  petitioners  that  though  it  was
established in the judicial enquiry  that  those  persons  were  victims  of
extra-judicial executions, the High Court simply  directed  for  payment  of
monetary compensation to the kins of the victims. Learned  Counsel  for  the
petitioners submitted that payment of rupees two to four lakhs  for  killing
a person from funds that are not subjected to  any  audit,  instead  of  any
accountability for cold blooded murder, perfectly suits the security  forces
and they only get encouraged to carry out further killings with impunity.
      On a careful consideration of the averments made in the writ  petition
and the counter affidavits filed  by  the  respondents  and  on  hearing  Ms
Guruswamy, the amicus, Mr. Gonsalves the learned counsel appearing  for  the
writ petitioners, Mr. Kuhad, the Additional Solicitor General appearing  for
the Union of India, Mr. Ranjit Kumar,  senior  advocate  appearing  for  the
State of Manipur and Ms. Shobha, advocate appearing for the  NHRC,  we  find
it impossible to overlook the matter without further investigation.  We  are
clearly of the view that this matter requires  further  careful  and  deeper
consideration.
       The  writ  petitioners  make  the  prayer  to  constitute  a  Special
Investigation Team  comprising  police  officers  from  outside  Manipur  to
investigate the cases of unlawful killings listed in the writ  petition  and
to prosecute the alleged offenders but at this stage we are not inclined  to
appoint any Special investigation Team or to direct any investigation  under
the Code of Criminal Procedure. 
Instead, we would first  like  to  be  fully
satisfied about the truth of the allegations concerning the cases  cited  by
the writ petitioners. 
To that end, we propose  to  appoint  a  high  powered
commission that would tell us the correct facts in regard  to  the  killings
of  victims  in  the  cases  cited  by  the  petitioners.  
We,  accordingly,
constitute a three-member commission as under:
              1. Mr. Justice N.  Santosh  Hegde,  a  former  Judge  of  the
                 Supreme Court of India, as Chairperson
              2. Mr. J. M. Lyngdoh, former Chief Election Commissioner,  as
                 Member
              3. Mr. Ajay Kumar Singh, former DGP and IGP, Karnataka.

      We request the Commission to make a thorough enquiry in the first  six
cases as detailed in “Compilation 1”, filed by the petitioners and record  a
finding regarding the past antecedents of the victims and the  circumstances
in which they were killed. 
The State  Government  and  all  other  concerned
agencies are directed to hand over to the  Commission,  without  any  delay,
all records, materials and evidences relating  to  the  cases,  as  directed
above, for holding the enquiry. 
It will be open to the  Commission  to  take
statements of witnesses in connection with the enquiry conducted by  it  and
it will, of course, be free to devise its  own  procedure  for  holding  the
enquiry. 
In light of the enquiries made by  it,  the  Commission  will  also
address the larger question  of  the  role  of  the  State  Police  and  the
security  forces  in  Manipur.  
The  Commission  will  also  make  a  report
regarding the functioning of the State Police and  security  forces  in  the
State of Manipur and in case it finds that the actions of the police  and/or
the security forces transgress the legal bounds the  Commission  shall  make
its recommendations for keeping the police and the  security  forces  within
the legal bounds without compromising the fight against insurgency.
      The Commission is requested to give its  report  within  twelve  weeks
from today.
      The Central Government and the Government of the State of Manipur  are
directed  to  extend  full  facilities,  including  manpower   support   and
secretarial assistance as may be desired by the  Commission  to  effectively
and expeditiously carry out the task assigned to it by the Court.
      The Registry is directed to furnish a copy of this order and  complete
sets of briefs in both the writ petitions to each  of  the  members  of  the
Commission forthwith.
      Put up on receipt of the report by the Commission.








                             …..………………………….J.
                             (Aftab Alam)




                             …..………………………….J.
                             (Ranjana Prakash Desai)
   New Delhi;
   January 4, 2013.



-----------------------
[1]    (1997) 3 SCC 433

-----------------------
17


(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 Vehicles Act or any other enactment, can the Court yet compel it to pay the amount in question giving it liberty to later on 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?” = The pendency of consideration of the above questions by a larger Bench does not mean that the course that was followed in Baljit Kaur5 and Challa Bharathamma6 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, 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 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 01.08.2011 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 No. 1) may be allowed to withdraw the amount deposited by the insurance company before this Court along-with accrued interest. The insurance company (appellant) thereafter may recover the amount so paid from the owner (Respondent No. 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 the case of Challa Bharathamma6 . 26. Appeal is allowed and disposed of as above with no order as to costs.


                                                                  REPORTABLE


                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION




                     CIVIL  APPEAL NO.   5      OF 2013
                  (Arising out of SLP(C) No. 20127 of 2011)




Manager, National Insurance Co. Ltd.                   ……  Appellant

                   Vs.

Saju P. Paul and Another                                  ……Respondents








                                  JUDGMENT


R.M. LODHA, J.


            Leave granted.
2.          The appellant, insurance  company,   is  in  appeal  by  special
leave against the judgment and order dated 23.03.2011 whereby  the  Division
Bench of the Kerala High Court  allowed the review  petition   and  reviewed
its order dated 09.11.2010 and held that the insurance  company  was  liable
to pay compensation in sum of Rs. 2,88,000/- with  9%  interest  thereon  to
the claimant awarded by the Motor Accident  Claims  Tribunal  in  its  award
dated 23.07.2002.
3.          The question of law that arises in this appeal is as to  whether
having regard to the provisions of the Motor Vehicles Act, 1988 (for  short,
‘1988 Act’), the insurance company is liable to  pay  compensation  for  the
bodily injury caused to the claimant who was travelling in a  goods  vehicle
as a spare driver though he was employed as  a  driver  in  another  vehicle
owned by the owner of the vehicle under the policy of insurance.
4.          The above question arises in this way.  Saju P.  Paul,  claimant
(Respondent No. 1),  was a heavy vehicle   driver.   He  was  employed  with
Respondent No. 2 as a driver in some other vehicle.  On 16.10.1993,  he  was
travelling in a goods vehicle bearing No.  KL-2A/3411  in  the  cabin.   The
goods  vehicle was being driven by one Jayakumar.   In  that  vehicle,  many
other persons  were  also  travelling.     At  Nilackal,  due  to  rash  and
negligent driving of the driver Jayakumar, the  goods vehicle capsized.   As
a result of which the claimant suffered fracture and injuries. The  claimant
remained under treatment for quite  some  time  and  the  injuries  that  he
sustained in the accident rendered him permanently disabled.   In the  claim
petition  filed  by  him  before  the  Motor   Accident   Claims   Tribunal,
Pathanamthitta (for short,  ‘the  Tribunal’),  he  claimed  compensation  of
Rs.3,00,000/-.   The owner and insurer were  impleaded as respondent  no.  2
and respondent no. 3 respectively in the claim petition.
5.           The  insurer  filed  its  written  statement  and  opposed  the
claimant’s claim insofar as it was concerned. The insurer set  up  the  plea
that the vehicle was  a  goods  vehicle  and  the  risk  of  the  passengers
travelling in the  goods  vehicle  was  not  covered  under  the  policy  of
insurance.  It  was  stated  in  the  written  statement  that   nearly   50
unauthorised passengers were travelling at the time of accident;  they  were
not traveling in the vehicle in pursuance of  the  contract  of  employment,
such as loading and unloading nor they were travelling as the owner  of  the
goods or the representative of the owner of the goods and hence the  insurer
could not be saddled with any liability.
6.          The Tribunal, after  recording  the  evidence  and  hearing  the
parties, on 23.07.2002, passed an award in favour of  the  claimant  holding
that he was  entitled  to  a  total  compensation  of  Rs.  3,00,000/-.  The
liability of the insurer was made joint  and  several  with  the  owner  and
driver.
7.          Being not satisfied with the award of the Tribunal, the  insurer
filed an appeal before the Kerala High Court. The  Division  Bench  of  that
Court by relying upon decisions of this Court in  New  India  Assurance  Co.
Ltd. v. Asha Rani and others[1] and National Insurance Co. Ltd. v.  Cholleti
Bharatamma and Others[2]  allowed the appeal of the  insurer  vide  judgment
and order dated 09.11.2010.  The Division Bench held that  insurer  was  not
liable as gratuitous passengers travelling  in  a  goods  vehicle  were  not
covered under the policy and the claimant shall be entitled to  recover  the
awarded amount from the owner or driver of the vehicle.
8.          The claimant sought review of the order  dated  09.11.2010  and,
as noted above, by the impugned  order  that  review  application  has  been
allowed. While allowing the review application, the Division Bench  held  as
under:
           “It has already been noticed that the petitioner was  admittedly
           a spare driver of the vehicle.  It may be true that he  was  not
           driving the vehicle at the relevant point of time;  but  he  was
           directed to go to the worksite by his employer as a spare driver
           in the vehicle.  Therefore, by no stretch of imagination, it can
           be said that the petitioner was not travelling in the vehicle in
           the course of his employment and as directed  by  his  employer.
           Section 147(1)(b)(i) takes within its fold any  liability  which
           may be incurred by the insurer in respect of the death or bodily
           injury to any person.  Therefore, the argument of the  insurance
           company that no goods were being carried in the vehicle  at  the
           time of accident  and  therefore,  the  petitioner  was  only  a
           gratuitous  passenger  cannot  be  countenanced  at  all.   Even
           otherwise, the  first  proviso  to  Section147(1)  will  cast  a
           liability on the insurer to indemnify the owner  in  respect  of
           the injury sustained by the employee of the insured arising  out
           of and in the course of his employment.”

9.          It is appropriate to quote Section 147 of the 1988  Act  as  was
obtaining on the date of accident, i.e., 16.10.1993, which reads as  follows
:
            “147. Requirements of policies and limits of liability.—(1)  In
           order to comply with the requirements of this Chapter, a  policy
           of insurance must be a policy which—
           (a) is issued by a person who is an authorized insurer; and
           (b) insures the person or classes of persons  specified  in  the
           policy to the extent specified in sub-section (2)—
           (i) against any liability  which  may  be  incurred  by  him  in
           respect of the death of or bodily injury to any person or damage
           to any property of a third party caused by or arising out of the
           use of the vehicle in a public place;
           (ii) against the death of or bodily injury to any passenger of a
           public service vehicle caused by or arising out of  the  use  of
           the vehicle in a public place:


           Provided that a policy shall not be required—
           (i) to cover liability in respect of the death, arising  out  of
           and in the course of his employment, of the employee of a person
           insured by the policy or in respect of bodily  injury  sustained
           by such an employee arising out of and  in  the  course  of  his
           employment other than a liability arising  under  the  Workmen's
           Compensation Act, 1923 (8 of 1923), in respect of the death  of,
           or bodily injury to, any such employee—
           (a) engaged in driving the vehicle, or
           (b) if it is a public service vehicle engaged as a conductor  of
           the vehicle or in examining tickets on the vehicle, or
           (c) if it is a goods carriage, being carried in the vehicle, or
           (ii) to cover any contractual liability.
           Explanation.—For the removal of doubts, it  is  hereby  declared
           that the death of or bodily injury to any person  or  damage  to
           any property of a third party  shall  be  deemed  to  have  been
           caused by or to have arisen out of, the use of a  vehicle  in  a
           public place notwithstanding that the  person  who  is  dead  or
           injured or the property which is damaged was  not  in  a  public
           place at the time of the accident, if the act or omission  which
           led to the accident occurred in a public place.
           (2) Subject to the proviso  to  sub-section  (1),  a  policy  of
           insurance referred  to  in  sub-section  (1),  shall  cover  any
           liability incurred  in  respect  of  any  accident,  up  to  the
           following limits, namely—
           (a) save as provided in clause  (b),  the  amount  of  liability
           incurred;
           (b) in respect of damage to any property of  a  third  party,  a
           limit of rupees six thousand:
           Provided that any policy of insurance issued  with  any  limited
           liability and in force, immediately before the  commencement  of
           this Act, shall continue to be effective for a  period  of  four
           months after such commencement or till the  date  of  expiry  of
           such policy whichever is earlier.
           (3) A policy shall be of no effect  for  the  purposes  of  this
           Chapter unless and until there  is  issued  by  the  insurer  in
           favour  of  the  person  by  whom  the  policy  is  effected   a
           certificate of insurance in the prescribed form  and  containing
           the prescribed particulars of any condition subject to which the
           policy is issued  and  of  any  other  prescribed  matters;  and
           different forms, particulars and matters may  be  prescribed  in
           different cases.
            (4) Where  a  cover  note  issued  by  the  insurer  under  the
           provisions of this Chapter or the rules made thereunder  is  not
           followed by a policy of insurance within  the  prescribed  time,
           the insurer shall, within seven days of the expiry of the period
           of the validity of the  cover  note,  notify  the  fact  to  the
           registering authority in whose records the vehicle to which  the
           cover  note  relates  has  been  registered  or  to  such  other
           authority as the State Government may prescribe.
           (5) Notwithstanding anything contained in any law for  the  time
           being in force, an insurer issuing a policy of  insurance  under
           this section shall be liable to indemnify the person or  classes
           of persons specified in the policy in respect of  any  liability
           which the policy purports to cover in the case of that person or
           those classes of persons.”

10.         By the Motor Vehicles (Amendment) Act, 1994  (for  short,  ‘1994
Amendment  Act’),    Section  147  came  to  be  amended.   The   expression
“including owner of the goods or his authorised  representative  carried  in
the vehicle” was added in Section 147. The amended  Section  147   has  been
considered by this Court in various decisions, some of which  we  intend  to
refer  a little later.
11.         In New India Assurance Company v. Satpal  Singh  and  others[3],
this Court with reference to the  provisions  in  the  Motor  Vehicles  Act,
1939 and the  provisions in 1988 Act,  particularly Section 147,  held  that
under the 1988 Act an insurance policy covering third  party  risk  was  not
required to exclude gratuitous passengers in a vehicle no  matter  that  the
vehicle is of any  type  or  class.  It  was  also  held  that  the  earlier
decisions of this Court rendered under the 1939  Act   vis-à-vis  gratuitous
passengers  were  of  no  avail  while  considering  the  liability  of  the
insurance company in respect of any accident which occurred or  would  occur
after the 1988  Act came into force.
12.         The correctness of the judgment in Satpal  Singh3  was  doubted,
inter alia, in Asha Rani1 .  It was felt that Satpal Singh3  needed  re-look
insofar as cases covered under the 1988 Act prior to its amendment  in  1994
were concerned. A three-Judge Bench in Asha Rani1  noticed  Section  147  of
the 1988 Act prior to its amendment in 1994 and after its amendment in  1994
and held in paragraph 9 of the Report (Pgs. 231-232) as follows :
           “In Satpal case [(2000) 1 SCC 237] the Court  assumed  that  the
           provisions of Section 95(1) of the Motor Vehicles Act, 1939  are
           identical with Section 147(1) of the Motor Vehicles  Act,  1988,
           as it stood prior to its amendment. But a  careful  scrutiny  of
           the provisions would make it clear that prior to  the  amendment
           of 1994 it was not necessary for the insurer to  insure  against
           the owner of the goods or his  authorised  representative  being
           carried in a goods vehicle.  On  an  erroneous  impression  this
           Court came to the conclusion that the insurer would be liable to
           pay compensation in respect of the death or bodily injury caused
           to  either  the  owner  of   the   goods   or   his   authorised
           representative  when  being  carried  in  a  goods  vehicle  the
           accident occurred. If the Motor Vehicles Amendment Act  of  1994
           is examined, particularly Section 46, by  which  the  expression
           “injury to any person” in the original Act stood substituted  by
           the expression “injury to any  person  including  owner  of  the
           goods or his authorised representative carried in the  vehicle”,
           the conclusion is  irresistible  that  prior  to  the  aforesaid
           Amendment Act of 1994, even  if  the  widest  interpretation  is
           given to the expression “to any person” it will not cover either
           the owner of the goods or his  authorised  representative  being
           carried in the vehicle. The objects and  reasons  of  clause  46
           also state that it seeks to amend Section 147 to  include  owner
           of the goods or his authorised  representative  carried  in  the
           vehicle for  the  purposes  of  liability  under  the  insurance
           policy. It is no  doubt  true  that  sometimes  the  legislature
           amends the law by way of amplification and clarification  of  an
           inherent position which is there in the  statute,  but  a  plain
           meaning being given to the words used  in  the  statute,  as  it
           stood  prior  to  its  amendment  of  1994,  and  as  it  stands
           subsequent to its amendment in 1994  and  bearing  in  mind  the
           objects and reasons engrafted in the amended provisions referred
           to earlier,  it  is  difficult  for  us  to  construe  that  the
           expression “including owner  of  the  goods  or  his  authorised
           representative carried in the vehicle” which was  added  to  the
           pre-existing  expression  “injury  to  any  person”  is   either
           clarificatory or amplification of the pre-existing  statute.  On
           the other hand it  clearly  demonstrates  that  the  legislature
           wanted to bring within the sweep of Section 147  and  making  it
           compulsory for the insurer to insure even in  case  of  a  goods
           vehicle, the owner of the goods or his authorised representative
           being carried in a goods vehicle when that vehicle met  with  an
           accident and the owner of the goods or his representative either
           dies or suffers bodily injury. The judgment  of  this  Court  in
           Satpal case therefore must be held to have  not  been  correctly
           decided and the impugned judgment of the  Tribunal  as  well  as
           that of the High Court  accordingly  are  set  aside  and  these
           appeals are allowed. It is held that the  insurer  will  not  be
           liable for paying compensation to the owner of the goods or  his
           authorised representative on being carried in  a  goods  vehicle
           when that vehicle meets with an accident and the  owner  of  the
           goods or his representative dies or suffers any bodily injury.”




13.         S.B. Sinha, J. in his supplementary judgment  in  Asha  Rani1  ,
while concurring with the above, observed as follows (Pg. 235):
           “26. In view of the changes in the relevant  provisions  in  the
           1988 Act vis-à-vis the 1939 Act, we are of the opinion that  the
           meaning of the words “any person” must also be attributed having
           regard to the context in which they have been used i.e. “a third
           party”. Keeping in view the provisions of the 1988 Act,  we  are
           of the opinion that as the provisions thereof do not enjoin  any
           statutory liability on the owner of a vehicle to get his vehicle
           insured for any passenger travelling in  a  goods  vehicle,  the
           insurers would not be liable therefor.
           27. Furthermore, sub-clause (i) of clause (b) of sub-section (1)
           of Section 147 speaks of liability which may be incurred by  the
           owner of a vehicle in respect of death of or  bodily  injury  to
           any person or damage to any property of a third party caused  by
           or arising out of the use of the  vehicle  in  a  public  place,
           whereas sub-clause (ii) thereof deals with liability  which  may
           be incurred by the owner of a vehicle against the  death  of  or
           bodily injury to any  passenger  of  a  public  service  vehicle
           caused by or arising out of the use of the vehicle in  a  public
           place.
           28. An owner of a passenger-carrying vehicle  must  pay  premium
           for covering the risks of the passengers. If a  liability  other
           than the limited liability provided for under the Act is  to  be
           enhanced  under  an  insurance  policy,  additional  premium  is
           required to be paid. But if the ratio of this  Court's  decision
           in New India Assurance Co. v. Satpal Singh [(2000) 1 SCC 237] is
           taken to its logical conclusion, although for  such  passengers,
           the owner of a goods carriage need not  take  out  an  insurance
           policy, they would be deemed to  have  been  covered  under  the
           policy wherefor even no premium is required to be paid.

14.         Asha Rani1 has been relied upon in Oriental Insurance  Co.  Ltd.
v. Devireddy Konda Reddy and Others[4] wherein  it was held as  under  (Pgs.
342-343):
           “….The  difference  in  the  language  of  “goods  vehicle”   as
           appearing in the old Act and “goods carriage” in the Act  is  of
           significance. A bare reading of the provisions  makes  it  clear
           that the legislative intent was to prohibit goods  vehicle  from
           carrying any passenger. This is clear from  the  expression  “in
           addition to passengers” as contained in the definition of “goods
           vehicle” in the old Act.  The  position  becomes  further  clear
           because the expression used is “goods carriage”  is  solely  for
           the carriage of “goods”.  Carrying  of  passengers  in  a  goods
           carriage is not contemplated in the Act. There is  no  provision
           similar to clause (ii) of the proviso appended  to  Section   95
           of  the  old   Act  prescribing    requirement     of  insurance
           policy. Even Section 147 of the Act mandates compulsory coverage
           against death of or bodily injury to any  passenger  of  “public
           service vehicle”.  The  proviso  makes  it  further  clear  that
           compulsory coverage in respect  of  drivers  and  conductors  of
           public service vehicle and employees carried  in  goods  vehicle
           would be limited to liability under the  Workmen's  Compensation
           Act, 1923 (in short “the WC Act”). There is no reference to  any
           passenger in “goods carriage”.

14.1.       Then in paragraphs 10 and 11  of  the  Report  (Pg.  343),  this
Court held  in  Devireddy Konda Reddy4  as under :
           “10. The inevitable conclusion, therefore, is that provisions of
           the Act do not enjoin any statutory liability on the owner of  a
           vehicle to get his vehicle insured for any passenger  travelling
           in a goods carriage and the  insurer  would  have  no  liability
           therefor.
           11. Our view gets support from a recent  decision  of  a  three-
           Judge Bench of this Court in New India  Assurance  Co.  Ltd.  v.
           Asha Rani [(2003) 2 SCC 223]  in which it  has  been  held  that
           Satpal Singh case [(2000) 1 SCC 237] was not correctly  decided.
           That being the position, the Tribunal and the  High  Court  were
           not justified in holding that the insurer had the  liability  to
           satisfy the award.”

15.         In Cholleti Bharatamma2,  this  Court  was  concerned  with  the
question about the liability of  the  insurance  company  to  indemnify  the
owner of the vehicle in respect of death of passengers travelling  in  goods
vehicle. The Court  considered  the  applicability  of  Section  147  as  it
originally stood under 1988  Act  and  after  its  amendment  in  1994.   In
relation to the accident that occurred on  16.12.1993  i.e.,  prior  to  the
1994 amendment  in SLP(C) 7237-39/2003, this Court set  aside  the  judgment
of the High Court and  allowed  the  appeal  of  the  insurance  company  by
observing as follows (Pg. 430):
           “14. The  date  of  accident  being  16-12-1993,  the  amendment
           carried out in the  year  1994  in  Section  147  of  the  Motor
           Vehicles Act would not be applicable.
           15. The Motor Accidents Claims Tribunal, Nalgonda, by a judgment
           and award dated 13-11-1997 awarded various sums  overruling  the
           defence of the appellant  herein  that  they  were  unauthorised
           passengers. The High Court, however, by reason of  the  impugned
           judgment, relying on or on the basis of a decision of this Court
           in Satpal Singh [(2000) 1 SCC 237] directed as under:
               “The learned counsel for  the  Insurance  Company  submitted
              that the issue involved in these appeals is squarely  covered
              by the decision of the Supreme Court in New  India  Assurance
              Co. Ltd. v. Satpal Singh [(2000) 1 SCC  237],  wherein  Their
              Lordships held that under the Motor Vehicles  Act,  1988  all
              insurance  policies  covering  third-party  risks   are   not
              required to exclude  gratuitous  passengers  in  the  vehicle
              though vehicle is of any type or class.
              In view of the proposition of law laid down  by  the  Supreme
              Court  in  the  decision  stated  supra,  these  appeals  are
              dismissed. No costs.”
           16.  Following  the  aforementioned  principles,  the   impugned
           judgment cannot be sustained which is set aside. The appeals are
           allowed accordingly.”


15.1.       With reference to the accident that  took  place  on  24.12.1993
(prior to 1994  amendment)  in  SLP(C)  Nos.  7241-43/2003,  this  Court  in
Cholleti Bharatamma2  in paragraphs 17,18,19,20 and 21 (Pgs.  430-431)  held
as under :
           “17. In the aforementioned case, accident took place  on  24-12-
           1993. The respondents herein filed  a  claim  petition  claiming
           compensation for the  death  of  one  Kota  Venkatarao  who  had
           allegedly paid a sum of Rs 20 for travelling in the  lorry.  The
           Tribunal held:
              “In the absence of rebuttal evidence from  the  deceased  and
              some others who travelled in the said vehicle in the capacity
              of owner of the luggage which was carried by them at the time
              of accident, it cannot be said that it is a violation of  the
              policy, since it is not fundamental breach so as to afford to
              the insurer to eschew the liability  altogether  as  per  the
              decision in B.V. Nagaraju  v.  Oriental  Insurance  Co.  Ltd.
              [(1996) 4 SCC 647 : AIR 1996 SC 2054]”
           18. The High Court, however, relying upon Satpal Singh [(2000) 1
           SCC 237] opined:
              “This issue raised in this appeal is covered by the  decision
              of the Supreme Court in  New  India  Assurance  Co.  Ltd.  v.
              Satpal Singh wherein Their  Lordships  held  that  under  the
              Motor Vehicles Act,  1988  all  insurance  policies  covering
              third-party risks are  not  required  to  exclude  gratuitous
              passengers in the vehicles though the vehicle is of any  type
              or class. Following the same, the  appeal  is  dismissed.  No
              order as to costs.”
           19. It is now well settled that the owner  of  the  goods  means
           only the person who travels in the cabin of the vehicle.
           20. In this case, the High Court had proceeded on the basis that
           they were  gratuitous  passengers.  The  admitted  plea  of  the
           respondents themselves was that the  deceased  had  boarded  the
           lorry and paid an amount of Rs 20 as transport charges.  It  has
           not been proved that the deceased was travelling  in  the  lorry
           along with the driver or the cleaner as the owner of the  goods.
           Travelling with the goods itself  does  not  entitle  anyone  to
           protection under Section 147 of the Motor Vehicles Act.
           21. For the reasons aforementioned, this appeal is allowed.”



16.         In the present case, Section 147 as originally existed  in  1988
Act is applicable and, accordingly, the  judgment  of  this  Court  in  Asha
Rani1 is fully attracted. The High Court was clearly in error  in  reviewing
its  judgment and order delivered on 09.11.2010 in review petition filed  by
the claimant by applying Section 147(1)(b)(i).   The  High  Court  committed
grave error in holding that Section 147(1)(b)(i) takes within its  fold  any
liability which may be incurred by the insurer in  respect of the  death  or
bodily injury to any person. The High Court also erred in holding  that  the
claimant was travelling in the vehicle  in  the  course  of  his  employment
since he was a spare driver in the vehicle although he was not  driving  the
vehicle at the relevant time but he was directed to go to  the  worksite  by
his employer. The High Court erroneously assumed that the claimant  died  in
the course of employment and overlooked the fact that  the claimant was  not
in any manner engaged on the vehicle that met with an accident  but  he  was
employed as a driver in another vehicle  owned  by  M/s.  P.L.  Construction
Company.  The insured (owner  of  the  vehicle)   got  insurance  cover   in
respect of the subject goods vehicle for driver and  cleaner  only  and  not
for any other employee.  There is no insurance cover for  the  spare  driver
in the policy.    As a matter of law, the claimant did not  cease  to  be  a
gratuitous passenger though he claimed that  he  was  a  spare  driver.  The
insured had paid premium for one driver and   one  cleaner  and,  therefore,
second driver or for that purpose ‘spare driver’  was not covered under  the
policy.
17.         The High Court misconstrued the  proviso  following  sub-section
(1) of Section 147 of the 1988 Act.  What  is  contemplated  by  proviso  to
Section 147 (1)   is  that  the  policy  shall  not  be  required  to  cover
liability in respect of death or  bodily injury  sustained  by  an  employee
arising out of and in the course of his employment other  than  a  liability
arising under the Workmen’s  Compensation  Act,  1923.    The  claimant  was
admittedly not driving the vehicle  nor he  was engaged in driving the  said
vehicle. Merely because he was travelling in a  cabin  would  not  make  his
case different from  any other gratuitous passenger.
18.         The impugned judgment is founded on misconstruction  of  Section
147. The High Court was wrong in holding that the  insurance  company  shall
be liable to indemnify the owner of the vehicle and pay the compensation  to
the claimant as directed in the award by the Tribunal.
19.         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  no.
2 herein).
20.         In National Insurance Co. Ltd. v.  Baljit  Kaur  and  others[5],
this Court was confronted with a similar situation. A three-Judge  Bench  of
this Court in paragraph 21 of the Report (Pg. 8) held as under :
           “21. The  upshot  of  the  aforementioned  discussions  is  that
           instead and in place of the insurer the  owner  of  the  vehicle
           shall be liable to satisfy the decree.  The  question,  however,
           would be as to whether keeping in view the fact that the law was
           not clear so long such a direction would be fair and  equitable.
           We do not think so. We, therefore, clarify  the  legal  position
           which shall have prospective effect. The Tribunal  as  also  the
           High Court had proceeded in terms of the decision of this  Court
           in Satpal Singh. The said decision has been  overruled  only  in
           Asha Rani. We, therefore, are of the opinion that  the  interest
           of justice will be subserved if the appellant herein is directed
           to satisfy the awarded amount in favour of the claimant, if  not
           already satisfied, and recover the same from the  owner  of  the
           vehicle. For the purpose of  such  recovery,  it  would  not  be
           necessary for the insurer to file a separate  suit  but  it  may
           initiate a proceeding before  the  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. We  have  issued
           the aforementioned directions having regard  to  the  scope  and
           purport of Section 168 of the Motor Vehicles Act, 1988, in terms
           whereof, it is not only entitled  to  determine  the  amount  of
           claim as put forth by the claimant for recovery thereof from the
           insurer, owner or driver of the vehicle jointly or severally but
           also the dispute between the insurer on the  one  hand  and  the
           owner or driver of the vehicle involved in the accident inasmuch
           as can be resolved by the Tribunal in such a proceeding.”

21.         The above position has been followed by this Court  in  National
Insurance Co. Ltd. v. Challa Bharathamma & Ors.[6], wherein  this  Court  in
paragraph 13  (Pg. 523) observed as under:
           “13. The residual question is  what  would  be  the  appropriate
           direction. Considering the beneficial  object  of  the  Act,  it
           would be proper for the insurer to satisfy the award, though  in
           law it has no liability. In some  cases  the  insurer  has  been
           given the option and liberty to  recover  the  amount  from  the
           insured. For the purpose of recovering the amount paid from  the
           owner, the insurer shall not be required to file a suit. It  may
           initiate a proceeding before the executing court concerned 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 claimants, owner of  the  offending
           vehicle shall 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 Regional  Transport
           Authority concerned.  The executing court shall pass appropriate
           orders in accordance with law as to  the  manner  in  which  the
           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 realisation by disposal of the securities to be furnished
           or from any other property or properties of  the  owner  of  the
           vehicle i.e. the insured. In the instant case,  considering  the
           quantum involved, we leave it to the discretion of  the  insurer
           to decide whether it would take steps for recovery of the amount
           from the insured.”


22.          In National Insurance Company Limited v.  Kaushalaya  Devi  and
Others[7].   In  paragraph 15 of the Report (pg. 250),  the  Court  observed
as follows:

           “15. For the reasons aforementioned, civil appeal arising out of
           SLP (C) No. 10694 is allowed and civil appeal arising out of SLP
           (C) No. 9910 of 2006 is dismissed. If the  amount  deposited  by
           the Insurance Company has since  been  withdrawn  by  the  first
           respondent, it would be open to the Insurance Company to recover
           the same in the manner specified by the High Court. But  if  the
           same has not been withdrawn the deposited amount may be refunded
           to the Insurance Company and the proceedings for realisation  of
           the amount may be initiated against the owner of the vehicle. In
           the facts and circumstances of the case, however, there shall be
           no order as to costs.”



23.         We are informed that by an order dated 19.01.2007  in   National
Insurance Co. v. Roshan Lal and Another [SLP (C) No. 5699/2006] in light  of
the argument raised before a two-Judge Bench that the  direction  ought  not
to be issued to the insurance company to discharge the liability  under  the
award first and then recover the same from the owner, the  matter  has  been
referred  to the larger Bench by the following order:
           “Having regard to the submissions urged before us, we are of the
           view that this petition may be placed for consideration before a
           larger Bench. We notice that in some of  the  decisions  such  a
           direction was made in cases where the compensation  had  already
           been paid by the insurer, but  there  are  observations  therein
           which support the view that such a direction can be made in  all
           cases where the owner has  insured  his  vehicle  against  third
           party risks. In Baljit Kaur’s case (supra) which is  a  judgment
           rendered by three Hon’ble Judges, such a direction was  made  in
           the special circumstances noticed by the Court in  paragraph  21
           of the report.  There are observations in Oriental Insurance Co.
           Ltd.  Vs. Ranjit Saikia and Ors.  (2002) 9  SCC  390  which  may
           support the contention of the petitioners before us.”

24.         In National Insurance Company  Ltd.  v.  Parvathneni  &  Another
[SLP(C)….CC No. 10993 of  2009],  
the  following  two  questions  have  been
referred to the larger Bench for consideration:
           (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 Vehicles Act or any other enactment,  can  the  Court  yet compel it to pay the amount in question  giving  it  liberty  to later on 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?”


 25.        The pendency of  consideration  of  the  above  questions  by  a larger Bench does not mean that the  course  that  was  followed  in  Baljit Kaur5  and Challa Bharathamma6   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,  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 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 01.08.2011  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
No. 1) may be allowed to withdraw the  amount  deposited  by  the  insurance
company  before  this  Court  along-with accrued  interest.   
The  insurance company (appellant)  thereafter may recover the amount  so  paid   from  the
owner (Respondent  No.  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 the case of Challa Bharathamma6 .
26.         Appeal is allowed and disposed of as above with no order  as  to
costs.

                                                  …………………….J.
                                                            (R.M. Lodha)

                                                          ..…………………….J.
                                                       (Anil R. Dave)
NEW DELHI.
JANUARY 3, 2013.
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[1]     (2003) 2 SCC 223
[2]     (2008) 1 SCC 423
[3]     (2000) 1 SCC 237
[4]     (2003) 2 SCC 339
[5]     (2004) 2 SCC 1
[6]     (2004) 8 SCC 517
[7]     (2008) 8 SCC 246

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