1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD FIRST APPEAL NO. 1043 OF 2009 United India Insurance Co. Ltd., Through its Divisional Manager, Ahmednagar Divisional Office, Kisan Kranti Building, Ahmednagar, Dist. Ahmednagar. ....Appellant. Versus 1. Sau. Aruna Sudhakar Zarekar R/o. Kedgaon Devi, Tal. Nagar, Dist. Ahmednagar. 2. Baban Tukaram Mane, R/o. Baburdi Ghumat, Tq. & Dist. Ahmednagar. 3. Eknath Maruti Salunke, R/o. Ambi Bk. Post Morgaon, Tal. Baramati, Dist. Pune. ....Respondents. Shri. A.B. Gatne, Advocate for appellant. Shri. P.B. Vikhe-Patil, h/f. Shri. L.B. Pallod, Advocate for respondent 1. Shri. R.R. Karpe, Advocate for respondent No. 3. CORAM : R.K. DESHPANDE, J. DATE : 20th August 2009 ORAL ORDER : 1. This is an appeal, challenging the judgment and award dated 2 10.10.2008, passed in MACP No. 553 of 2003 by the learned Member of the Motor Accident Claims Tribunal, Ahmednagar, holding the appellant Insurance Company liable to pay 50% of the total amount of compensation of Rs. 95,860/-, jointly and severally, along with the owner of the vehicle. 2. The facts leading to the case are as under :- The respondent No. 1 is the original claimant whereas the respondent No. 2 is the owner and driver of the tempo bearing No. MH-16/B-1869 and the respondent No. 3 is the owner of the tractor bearing MXX/7030 along with trolley No. MTL/6930. The respondent No. 1/claimant filed MACP No. 553 of 2003 against the appellant and respondent Nos. 2 and 3, alleging that the claimant along with other ladies had been to Mandhra Devi along with their goods in the tempo bearing No. MH-16/B-1869, for performing the religious ceremony. Thereafter, they came to Jejuri. While they were near the village Ambi, on Jejuri Moregaon road, one tractor bearing No. MXX/7030 along with trolley No. MTL/6930, came in rash and negligent manner, by which the said tempo and trolley dashed each other. As a result, the tempo turtled down in which the claimant and other persons sustained injuries. It was claim made in the said petition that the claimant sustained 10% permanent disability and also mental shock and injury. The respondent no. 1, therefore, claimed compensation of Rs. 50,000/- under the head of pains and sufferings. Further claim for medical expenses was also made 3 to the tune of Rs.15,814/-. The petitioner further claimed the amount of Rs.3,840/- towards her nutrition charges in the hospital. Thus, the total claim was for an amount of Rs.95,854/- which was rounded up to Rs. 96,860/-. 3. The appellant Insurance Company filed its written statement and denied the claim of the respondent No. 1. It was submitted that there was breach of conditions of Insurance Policy, as the passengers were travelling in a goods vehicle. It was admitted that the tempo in question was insured with the appellant Company. 4. The Tribunal, after considering the evidence on record, recorded a finding in para 27, which is reproduced below :- "After hearing the arguments of both counsels and after considering the principles in the above cited ruling, I am satisfied that Insurance Company i.e. the opponent No. 2 is liable to pay compensation to the petitioners under the principles to pay firstly and then to recover from the owner directly by filing execution proceedings before the Tribunal without filing of the suit, as indicated above." On the basis of aforesaid finding, the Tribunal passed an order, operative part of which is reproduced below :- 4 " ORDER The claim petition is hereby allowed with costs. The petitioner is entitled to recover total compensation amount of Rs. 95,860/- along with interest at the rate of 9% p.a. from the date of filing of this claim petition i.e. 6.10.2003 till its realization from the opponent Nos. 1 to 3. However, petitioner is entitled to recover 50% compensation amount from the opponent Nos. 1 and 2 and she is also entitled to recover remaining 50% compensation amount from the opponent No. 3 out of total compensation amount of Rs. 96,860/-. The opponent No. 2 is directed firstly to pay the 50% compensation amount to the petitioner and then to recover the same from the owner i.e. opponent No. 1 along with interest at the rate of 10% p.a. on the said amount, by filing directly execution proceeding before the Tribunal, in stead of filing suit for the purpose of such recovery. Final award be passed accordingly." It is, thus, apparent that the appellant Insurance Company is completely exonerated from payment of liability, by accepting the contention that there was breach of conditions of the policy, as the passengers were travelling in a goods vehicle. However, in spite of this, claimant is held entitled to recover the amount of compensation of Rs. 95,860/- along with interest at the rate of 9% p.a. from the date of filing of the petition till its realization, from the appellant Insurance Company. 5 The Tribunal further directed that the appellant to pay 50% of total amount of compensation to the claimant. This is the subject matter of the challenge in the instant appeal. 5. I have heard the the learned counsel Shri. A.B. Gatne, for appellant Insurance Company, Shri. P.B. Vikhe-Patil, holding for Shri. L.B. Pallod, Advocate for respondent 1 claimant and Shri. R.R. Karpe, Advocate for respondent No. 3, the owner of tractor. 6. Shri. Gatne, learned counsel for the appellant pointed out that the aforesaid order has been passed by the Tribunal on the basis of the judgment of the Apex Court reported in 2004 ACJ 428 (Supreme Court), National Insurance Co. Ltd. Vs. Baljit Kaur. The learned counsel submitted that when the Apex Court directed the Insurance Company to pay first and recover the said amount of compensation from the owner, it exercised it jurisdiction under Article 142 of the Constitution of India and hence, the said direction cannot be given by any other Court or Tribunal, much less by the Motor Accident Claims Tribunal. In support of his contention, the learned counsel relied upon following judgments. (a) 2008 (1) Mh.L.J. 73, United India Insurance Co. Ltd. Vs. Anubai Gopichand Thakare; (b) The order dated 12.1.2009 passed by the Apex Court in SLP (Civil) No. 30402/208, which was dismissed challenging the aforesaid judgment 6 of the learned Single Judge of this Court; (c) 2009 (1) Mh.L.J. 898, Traders Pvt. Ltd., Ahmedabad Vs. Sunanda Krisna Machiuale; (d) Full Bench judgment of the Madras High Court in 2009 (1) T.A.C. 920; and lastly (e) A.I.R. 2006 Supreme Court 1899, Indian Bank Vs. ABS Marin Product Private Ltd. 7. In Baljit Kaur's case, the question which was considered by the Apex Court, was whether an Insurance Policy in respect of goods vehicle would also cover gratuitous passenger in view of legislative amendment in 1994 to section 147 of the Motor Vehicle Act, 1988. The Tribunal as well as the High in the said judgment, relying upon the judgment of Apex Court reported in 2000 ACJ 1 (SC), New India Assurance Co. Ltd. Vs. Satpal Singh, has accepted the claim petition and rejected the contention of the appellant Insurance Company that the concerned vehicle being goods vehicle, it would not have to incur any liability with respect of passengers transported in the vehicle. The appellant was directed to pay an amount of Rs.1,32,000/- as compensation, with interest at the rate of 9 % from the date of application. The High Court upheld the verdict of the Claims Tribunal on appeal, and gave further direction that in the event the owner, respondent No. 3 herein, had committed any breach, the appellant insurer would be entitled to recover the amount of compensation from him. This was the subject 7 matter of the appeal before the Apex Court. The Apex Court held that the judgment of Satpal Singh's case has been overruled by the Apex Court in the matter of New India Assurance Company Ltd. Vs. Asharani, reported in 203 ACJ 1 (SC). It was held that the insurer was not liable to pay the compensation in respect of the passengers travelling in the goods vehicle. The question of law in Baljit Kaur's case was answered in favour of Insurance Company. However, the Apex Court directed that interest of justice would be subserved if the appellant (insurance company) is directed to satisfy the awarded amount in favour of claimant, if not already satisfied and recover the same from the owner of the vehicle. The question is whether such a direction is the law laid down by the Apex Court under Article 141 of the Constitution of India. 8. The learned Single Judge of this Court in Anubai's case cited supra has also taken a view that the directions issued by the Apex Court in Baljit Kaur's case to the Insurance Company to pay and then recover the amount, pertained to its jurisdiction under Article 142 of the Constitution of India and cannot, therefore, be said to be law laid down by the Apex Court. The relevant portion of the said judgment appearing in para 10 and 20 is reproduced below :- "19. It is conspicuous that the directions were given in respect of the procedure for recovery in the same proceedings having regard to the scope and purport of section 168 of the Motor Vehicle Act, 8 1988. The directions in the context of determination of such a dispute after depositing the amount by the insurer are subject matter of the scope of section 168 of the Motor Vehicles Act, 1988. The Apex Court did not, however, lay down that in all such cases, the insurer shall first be liable to pay and then to recover it from the insured. The directions in Baljit Kaur's case are given when the Apex Court came to the conclusion that the interest of justice would be subserved of the appellant (insurer) would be 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. Needless to say, in a particular case, when such directions are given to meet ends of justice, then same are given i exercise of extra ordinary jurisdiction of the Apex Court. The same powers, which are available to the Apex Court under Article 136 and under Article 142 of the Constitution, are not available to the Tribunal or High Court. 20. The purposive interpretation of section 168 of the Motor Vehicles Act would make it manifest that the provision relates to power of the Tribunal to determine the question of justness of the award and quantum of compensation. It may be said that section 168 is enabling provision but it does not empower the Tribunal to issue direction to the insurer to pay the amount of compensation, though a finding is reached that the insurer is not liable to pay such amount on account of fundamental breach of the terms of insurance policy. Considering all the 9 relevant aspects of the matter and having regard to the case law referred to above, I have no hesitation in holding that the directions given by the Tribunal in the bunch of present appeals are incorrect, improper and illegal. The impugned order, is therefore, unsustainable." 9. The SLP preferred against the same was dismissed on 12.1.2009. The Division Bench of this Court in its judgment in Sunanda's case cited supra has also in para 59 of the judgment has observed that, the view taken in the aforesaid judgment commends itself to us. The learned counsel for the appellant has also relied upon the judgment of the Full Bench of the Madras High Court and the para 30 of the same which is relevant, is reproduced below :- "30. From a conspectus of the decisions, thus analysed, it is now apparent that before Asha Rani's case was decided, the decision in Satpal Singh's case was holding the field and such latter decision was overruled only in Asha Rani's case. Under such peculiar circumstances in Baljit Kaur's case it was observed, that even though the Insurance Company was not liable to pay the compensation in respect of a passenger in a goods vehicle, yet since the law was not clear before Asha Rani's case was decided, the doctrine of prospective overruling was applied and a direction was issued in the interest of justice directing the Insurance Company to satisfy the award and recover the same from the owner of the vehicle. In other words, even though the 10 statutory provision under Section 149 (4) and Section 149(5) was not applicable, the Supreme Court applied the Doctrine of "pay and recover". The ratio of the said decision has been applied selectively in some of the later decisions and in some of the subsequent decisions, the doctrine of "pay and recover" in respect of matters which are not strictly covered under Sections 149 (4) and 149 (5) has not been applied by the Supreme Court depending upon the facts and circumstances of a particular case. Therefore, it cannot be said as an inexorable principle of law that in each case where the liability is in respect of a passenger in a goods vehicle, which is not required to be covered under Section 147 of the Act, the Insurance Company would be directed to first pay the amount and thereafter recover the same from the owner and such discretion is obviously with the Court either to apply such principle or not." 10. In view of the ratio of judgment cited supra, the position of law is very clear that when specific finding is recorded by the Tribunal that there was a breach of conditions of policy and defense taken by the Insurance Company under section 149 (2) of the Motor Vehicles Act, 1988 is accepted, then it gives no jurisdiction to the Tribunal under section 168 to pass an order holding the Insurance Company either jointly or severally liable for payment of compensation. Once it is held 11 that the Tribunal has no jurisdiction to pass an order holding Insurance Company liable, jointly or severally to pay compensation, then order directing Insurance Company to pay first and recover amount form owner or driver, is also without jurisdiction. 11. The judgment of the Apex Court reported in A.I.R. 2006 Supreme Court 1899, Indian Bank Vs. ABS Marin Product, is required to be considered on the question of directions issued under Article 142 of Constitution of India. In this judgment, the Apex Court has held in para 24 as under :- "24. One word before parting. Many a time, after declaring the law, this Court in the operative part of the judgment, gives some directions which may either relax the application of law or exempt the case on hand from the rigour of the law in view of the peculiar facts or in view of the uncertainty of law till then, to do complete justice. While doing so, normally it is not stated that such direction/order is in exercise of power under Article 142. It is not uncommon to find that courts have followed not the law declared, but the exemption/relaxation made while moulding the relief in exercise of power under Article 142. When the High Courts repeatedly follow a direction issued under Article 142, by treating it as the law declared by this Court, incongruously the exemption/relaxation granted under Article 142 becomes the law, though at variance with the law 12 declared by this Court. The courts, should, therefore, be careful to ascertain and follow the ratio decidendi, and not the relief given on the special facts, exercising power under Art. 142. One solution to avoid such a situation is for this Court to clarify that a particular direction or portion of the order is in exercise of power under Art. 142. Be that as it may." 12. The Apex Court in Indian Bank's case cited supra had held that many times after declaring the liability, the Supreme Court in the operative part of the judgment, gives some directions which may either relax the application of law or exempt the case on hand from the rigour of the law in view of the peculiar facts or in view of the uncertainty of law till then, to do complete justice. It has been further held that while doing so, normally it is not stated that such direction/order is in exercise of power under Article 142. In view of this, law laid down by the Supreme Court, in my view, the directions issued by the Apex Court in Baljit Kaur's case to the Insurance Company to pay the amount first and recover the same from the owner, pertained to its jurisdiction under Article 142 of Constitution of India as it had relaxed the rigour of the law laid down by it that Insurance Company is not liable to pay the compensation, in case whether there is a breach of condition of policy. 13. In view of above, the instant appeal must succeed. The judgment and award passed by the Tribunal which is impugned in the instant 13 appeal is, therefore, quashed and set aside only to the extent it operates appellant/Insurance Company so far as the liability of the owner of the vehicle is concerned. The same shall continue to be governed by the award. There shall be no order as to costs. 14. The learned counsel for the appellant has stated that he has deposited an amount of Rs. 25,000/- towards statutory deposit on 17.4.2009 in this Court and an amount of Rs. 12500/- by way of no fault liability in the Tribunal. The amount of Rs. 25,000/- deposited by the appellant in this Court shall be refunded to the appellant immediately and so far as the amount of Rs. 12,500/- paid by the appellant in the Tribunal by way of no fault liability is concerned, the appellant shall be entitled to recover the said amount either from the owner or from the claimants. [ R.K. DESHPANDE, J. ] ssc/fa1043.09