DIVISIONAL MANAGER NATIONAL Vs. RAJ KISHORE JETHY

JUDGEMENT

(1.) RESPONDENT Nos. 1 and 2 being the parents of the deceased filed a claim petition before the Second Motor Accidents Claims Tribunal, Cuttack for compensation. The said case was registered as Misc. Case No. 498 of 1993. In the said case the claimants filed an application under Section 140 of the Motor Vehicles Act, 1988 for interim no fault award. Admitted position is that the offending motor cycle was being driven by a minor. The insurance company raised an objection that under the Motor Vehicles Act a minor is not entitled to get a driving licence and accordingly is not authorised to drive any motor vehicle. The insurance company contended that under the terms and conditions of the insurance policy it was not liable to indemnify an owner of a motor vehicle if the same was being driven by a person not having valid driving licence or incapable of having a driving licence under the law. The Tribunal overruled the said objection raised on behalf of the insurance company and relying upon a decision in Ravi Kumar v. Ram Parkash, 1989 ACJ 550 (Delhi), directed the insurance company to pay Rs. 25,000 as interim award under Section 140 of the Motor Vehicles Act, 1988 (hereinafter referred to as 'the Act'). Being aggrieved by the aforesaid order the insurance company has filed this appeal.

(2.) THE question which arises for consideration in this appeal is whether at the stage of consideration for interim award under Section 140 of the Act the Tribunal is required to examine plea of any breach of the condition of the insurance policy or not. Mr. Roy, learned Counsel appearing for the appellant insurance company has submitted that the insurer's liability to indemnify the owner arises out of the contract of insurance and if there is any breach of material conditions or terms of the contract for insurance, the insurer is not liable to pay even interim compensation under Section 140 of the Act. On the other hand, Mr. P.K. Rath, appearing for the claimants has contended that at the stage of compensation under Section 140 of the Act, the Tribunal is not required to go into the question of any alleged breach of condition. According to him, if it is prima facie established that the offending vehicle is covered by the insurance policy at the time of accident the insurance company remains liable to pay the interim compensation subject to final determination in the claim case. The learned Counsel for both the parties have placed several decisions of different High Courts in support of their respective submissions and it appears that there is conflict of opinions on the aforesaid question. The Delhi High Court in Ravi Kumar's case, 1989 ACJ 550 (Delhi), has taken the view that various defences as provided under Sub -Section (2) of Section 96 of the 1939 Act are available to the insurance company, but those defences would not be available to the insurance company in respect of its liability to pay compensation under Section 92 -A in view of its overriding effect by virtue of Section 92 -E of the Act of 1939. According to the said decision, only defence that would be available is that the offending vehicle was not insured with the insurance company in question. It has been observed therein: Proceedings under Section 92 -A of the Act brook no delay. The only thing that is required to be seen is that the policy of insurance complies with the requirements as laid down in the Act. It is immaterial if ultimately the petition fails either on the 'principle of fault' or even on any of the defences permissible to the insurance company as laid in Sub -section (2) of Section 96 of the Act. Liability of the insurance company under Section 92 -A of the Act to the extent mentioned therein would, therefore, appear to be absolute.

(3.) THE Full Bench of the Karnataka High Court in the case of United India Insurance Co. Ltd. v. Immam Aminasab Nadaf, 1990 ACJ 757 (Karnataka), has taken a contrary view. It has been held therein in para 18: After giving our careful consideration, it appears to us that whether the compensation is claimed under 'no fault liability' of the owner of the vehicle under Section 92 -A or on ground of fault under Section 110 -A, as far as the insurer is concerned his liability, in view of Section 95 (5), is to indemnify the insured only to the extent such liability is undertaken or covered by the policy and not beyond that. Therefore, in order to fix the liability on the insurance company to pay the compensation awarded under Section 92 -A of the Act, the Tribunal, in addition to deciding as to whether the vehicle involved in the accident was covered by an insurance policy, has to decide as to whether prima facie the risk was covered by the insurance policy. If having regard to the facts stated in the claim petition itself and the contents of an insurance policy, a finding could be arrived at that the policy did not cover the risk, in such a case there is no reason as to why the insurance company should be compelled to pay the amount solely on the ground that the policy of insurance existed and compel the insurance company to collect later the money paid from the owner of the vehicle which would throw the insurance companies to innumerable litigations. It is nowhere provided and it is also not the case of the claimant that an insurer should pay the amount awarded under Section 92 -A even if the liability was not covered by the policy. Further, if the intention of the legislature was to deprive the defences available under Section 96 (2) of the Act at the stage of adjudication of a claim under Section 92 -A of the Act, the legislature would have incorporated such a condition. In fact, the only provision incorporated in Section 92 -B (2) of the Act is to require the Tribunal to dispose of the claim under Section 92 -A of the Act as expeditiously as possible. Thus when the legislature has not imposed the liability on the insurer to pay the amount awarded under Section 92 -A, even in cases in which the liability is not covered by the policy and further the legislature has not deprived the defences open to insurance company under Section 96 (2), in the course of adjudication of claims under Section 92 -A, such a bar cannot be assumed by the courts.