THE HONOURABLE SRI JUSTICE GHULAM MOHAMMED M.A C.M.A.No.2631 of 2005 JUDGMENT: This appeal under Section 173 of the Motor Vehicles Act, 1988, is directed against the award, dated 24.11.2003, passed by the Chairman, Motor Accidents Claims Tribunal-cum-District Judge, Khammam, (for short ‘the Tribunal’) in O.P.No.72 of 1999 filed by the claimants claiming compensation of Rs.10,00,000/- for the death of T. Papa Rao in a motor accident occurred on 03.06.1996 when himself and others were travelling in a Maruthi Van bearing No.AP 20-A-7209 to go to Shiridi and at about 3.30 PM when it reached the outskirts of Mohl Town of Maharashtra State, it’s driver drove it in a rash and negligent manner and dashed a big tree. Respondents 1 and 2 being driver and owner of the said Maruthi Van remained ex parte and Respondnet No.3- insurer filed counter denying the averments made in the petition and stated that Respondent No.1 was not holding valid driving licence and the vehicle had no road permit to ply on the date of accident. 2. The Tribunal having held that the accident occurred due to rash and negligent driving of the driver of Maruthi Van, awarded a sum of Rs.5,71,200/-towards loss of dependency, Rs.10,000/- towards loss of consortium, Rs.10,000/- towards love and affection and in all, a sum of Rs.5,91,200/- is awarded to the claimants with interest at 9% per annum from the date of the petition till realization payable by respondents 1 to 3 jointly and severally. Hence, the appeal. 3. Learned counsel appearing for the appellant contended that the Tribunal ought not to have fastened the liability on the appellant-insurer because the terms and conditions of the policy had been violated by the owner by engaging the said van on hire at the time of accident as it was issued only for domestic purpose and he relied upon the decision of the Apex Court in NATIONAL INSURANCE COMPANY LIMITED v. CHALLA BHARATHAMMA[1] wherein it was held as under: “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 concerned executing Court as if the dispute between the insurer and the owner was the subject matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer. Before release of the amount to the 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 concerned Regional Transport Authority. 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. 4. Learned counsel for the claimants contended that the vehicle involved in the accident is a passenger carrying vehicle, but not a goods vehicle. 5. There is no dispute with regard to the rash and negligent driving of the driver of Maruthi Van at the time of accident and the compensation awarded by the Tribunal. The dispute is with regard to fastening the liability on the part of the appellant-insurer. The appellant-insurer resisted the claim of the claimants on the ground that it had no liability to pay compensation to them as P.W.1, the wife of the deceased, admitted in her cross-examination that her husband and others were proceeded to Shirdi by engaging the Maruthi Van on hire basis. Therefore, in view of the policy conditions and the decision cited in NATIONAL INSURANCE COMPANY LIMITED (1) supra, this Court is of the view that the appellant-insurer had no liability to pay compensation awarded by the Tribunal since the said van was used by the deceased and others on hire at the time of accident by the deceased and others. The same is a violation of the terms and conditions of the policy- Ex.B1, which was obtained by the insured for domestic purpose. 6. Accordingly, the impugned award is liable to be modified as to the imposition of joint and several liabilities to the appellant to pay compensation to the claimants. In the result, the appellant- insurer is not liable to pay compensation to the claimants and the owner is liable to pay the same. The appellant-insurer is at liberty to take steps to recover the amount, if any paid, from the owner of the vehicle. However, the interest awarded by the Tribunal at 9% per annum is reduced to 7.5% per annum from the date of the petition till realisation. The award of the Tribunal in all other aspects shall remain unaltered. 7. With the above modification, the Civil Miscellaneous Appeal is allowed. No order as to costs. _____________________ GHULAM MOHAMMED, J Date:01.07.2010 sj [1] 2004 ACJ 2094