UNITED INDIA INSURANCE CO. LTD Vs. KANTABAI

JUDGEMENT

(1.) THE original respondent No. 3 before the Motor Accidents Claims Tribunal, Amravati in Claim Petition No. 18 of 1985 by this appeal challenges the decree passed jointly against it and the original respondent No. 1, Dr. Anand Ghongade and the original respondent No. 2, Messrs Saikrupa Bore -Wells in which the claimant Nos. 1 to 6 had laid claim, the award being jointly and severally against the respondent Nos. 1 to 3 for Rs. 4,05,000/ - together with interest.

(2.) THE deceased Devidas was a partner of firm M/s. Saikrupa Bore -Wells which owned jeep No. MXG 9675 which met with an accident at 2.30 a.m. on 18.11.1984 while it was proceeding from Nagpur to Jamgaon near Warud. The jeep was at that time driven by Dr. Anand Ghongade and the deceased Devidas was one of the persons travelling in the jeep. The accident resulted in his death. The Tribunal held that the accident was due to the rash and negligent driving by Dr. Anand Ghongade and that the claimants were entitled to Rs. 4,05,000/ - and proportionate costs with interest as compensation. The appellant has not challenged the finding on this point. The only points which are being raised by the appellant are that there was no liability either statutory or under the contract of insurance on him to indemnify the claim made by the legal representatives of the deceased Devidas who was, by virtue of his being a partner of the firm, the owner of the vehicle. The Tribunal held that the claim could be made against the appellant on the grounds firstly that the policy of insurance was comprehensive and secondly Devidas was one of the passengers travelling in the jeep and the risk so far as pertained to him was covered by the special term of the contract of insurance under which the liability in respect of six passengers and the driver had been undertaken by the insurer by paying extra premium of Rs. 84.36.

(3.) RELIANCE was placed for urging that the appeal is not maintainable on the provisions of Section 96(2) of the Motor Vehicles Act. We may point out that the firm though made a party, did not appear and contest the claim before the Tribunal. Under Section 110 -C (2 -A) of the Motor Vehicles Act, where in the course of any inquiry, the Claims Tribunal is satisfied that: (i) there is collusion between the person making the claim and the person against whom the claim is made; or (ii) the person against whom the claim is made has failed to contest the claim, it may, for reasons to be recorded by it in writing, direct that the insurer, who may be liable in respect of such claim, shall be impleaded as a party to the proceeding and the insurer so impleaded shall thereupon have the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made. The appellant insurance company was a party before the Tribunal and under Section 110 -D of the Act, the insurance company being a person aggrieved by the award of the Tribunal, had a right of appeal. According to the learned counsel for the claimants the nature of the defence is restricted by the provisions of Sub -section (2) of Section 96 of the Motor Vehicles Act. But this overlooks the provisions of Sub -section (1) of Section 96 under which if, after a certificate of insurance has been issued under Sub -section (4) of Section 95 in favour of the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under Clause (b) of Sub -section (1) of Section 95 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgment. It is, therefore, clear that for the operation of Sub -section (2) it is necessary that the sum should be payable under Sub -section (1) and that is restricted to the liability covered by the policy under Clause (b) of Sub -section (1) of Section 95. It is, therefore, open to the insurer to urge that the claim which is made against the insurer is not covered either by the statutory liability imposed or Section 95 or by the terms of the policy of insurance. Reliance was, however, placed on behalf of the claimants on the observations in National Insurance Co. Ltd. v. Tulsi Devi 1988 ACJ 962 , but the decision there turned on the position that the Tribunal had merely permitted the insurance company to cross -examine the witnesses and so the case cannot be said to have come within the provisions of Section 110 -C (2 -A) of the Act. On the other hand, the view that we are taking finds support in a Division Bench judgment of the Karnataka High Court in Oriental Fire and General Ins. Co. Ltd. v. Shivanagouda 1984 ACJ 786 , where the contention which was only in respect of the liability to indemnify the insured was allowed to be raised in appeal. We, therefore, hold that the appeal is maintainable.