1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY: NAGPUR BENCH: NAGPUR C.A.F. NO.2370/2010 IN F.A. 782/2009 THE NEW INDIA ASSURANCE ..VS.. VINOD DEORAO ZODE & ORS Office Notes, Office Memoranda of Coram, Appearances, Court’s orders or directions and Registrar’s orders Court’s or judges Orders. CORAM: SMT. VASANTI A. NAIK, J. DATE: 8 /12 / 2010 Heard Miss Pathade, the learned counsel for the applicants, Shri Dhobe, the learned counsel for the respondent no.3 and Shri Chatterjee the learned counsel for the appellant/ insurance company. In the instant case, from a perusal of the judgment of the Motor Accident Claims Tribunal Nagpur dated 25.8.2010, it is clear that there was a breach of the insurance policy, as a minor was permitted to drive the offending vehicle and therefore, the tribunal had fastened the liability to pay the compensation only on the respondent no.3. The tribunal had however, directed the appellant/ insurance company to pay the compensation to the claimants with interest thereon and then recover the same from the respondent no.3. In pursuance of the order passed by this court on 17.7.2009 the appellant/ insurance company has deposited the decretal amount in this court. The respondent no.1 and 2/ applicants have filed the present application for withdrawal of the amount without furnishing surety/ security. Since in this case, there was a clear breach of condition of the policy and 2 the insurance company was absolved of its liability to pay compensation, this court, by an order dated 4.10.2010, asked the respondent no.3 to show cause as to why the respondent no.3 should not be directed to deposit certain amount in this court so that the applicants/ respondent no.1 and 2 can withdraw the same or as to why he should not be directed to furnish solvent surety/ security in case the applicants are permitted to withdraw apart of the amount deposited by the insurance company in the trial court. Shri Dhobe, the learned counsel for the respondent no.3 has filed a reply to the civil application and has stated that in case the applicants are permitted to withdraw the decretal amount and the present appeal is allowed, it would be very difficult for the respondent no.3 to recover the same from the respondent no.1 and 2. The aforesaid statement, however is not well founded, as it is made clear to this court by the learned counsel for the appellant/ insurance company that the appellant / insurance company is not challenging the quantum of compensation payable to the claimants, but is only challenging the condition imposed by the tribunal directing the insurance company to first pay the compensation to the claimants and then recover the same from the respondent no.3. The learned counsel for the respondent no.3 has relied on a decision of this court reported in 2010 (4) TAC Page 36 to submit that the principle of pay and recover can be applied by the tribunal in such cases. Shri Chatterjee, the learned counsel for the appellant/ 3 insurance company submitted that grave and serious prejudice would be caused to the insurance company in case the applicants/ respondent no.1 and 2 are permitted to withdraw the amount deposited by the insurance company in this court, as in the instant case a minor was driving the offending vehicle and there was a clear breach of policy condition. The learned counsel for the appellant/ insurance company relied on the judgment of the Division Bench of this court reported in 2009 (1)Mh.L.J. page 898 especially paragraphs 56 and 59 thereof to submit that a direction to pay and then recover cannot be issued against the insurance company, if it is not bound in law to pay compensation to the claimants. On hearing the learned counsel for the parties and on perusal of the relevant case law on the issue, it would be necessary in the interest of justice to direct the respondent no.3 to deposit certain amount in this court for payment of the same to the respondent on.1 and 2 and to furnish surety/ security in regard to certain amount which the respondent no1. and 2 / applicants may be permitted to withdraw from the amount deposited by the appellant/ insurance company in this court. Hence in the facts and circumstances of the case and in the interest of justice, the respondent no.3 is directed to deposit a sum of Rs.1,25,000/- in this court within a period of four weeks form the date of this order. The applicants are permitted to withdraw the amount of Rs.1,25,000/- which would be deposited by the respondent no.3 in this court without furnishing solvent surety/ security as the respondent no.3 has 4 not filed any appeal against the judgment passed by the Tribunal on 25.8.2008. The applicants/ respondent no1. and 2 are permitted to withdraw an amount of Rs.50,000/- from the amount deposited by the appellant/ insurance company in the trial court. The respondent no.3 is directed to furnish solvent surety/ security for the amount of Rs.50,000/- which is permitted to be withdrawn by the respondent no.1 and 2 / applicants, from the amount which is deposited by the insurance company in the trial court to the satisfaction of the trial court. The civil application is allowed in the aforesaid terms and disposed of. JUDGE SMP.