Case: New India Assurance Co.Ltd Vs. Kusum

High Court has noticed the decision of this Court in Nanjappa (supra), wherein it was held : 8. Therefore, while setting aside the judgment of the High Court we direct in terms of what has been stated in Baljit Kaur case that the insurer shall pay the quantum of compensation fixed by the Tribunal, about which there was no dispute raised, to the respondent claimants within three months from today. For the purpose of recovering the same from the insured, the insurer shall not be required to file a suit. It may initiate a proceeding before the executing court concerned 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 vehicle shall be issued a notice and he shall be required to 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 Regional Transport Authority concerned. The executing court shall pass appropriate orders in accordance with law as to the manner in which the insured, 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 realization by disposal of the securities to be furnished or from any other property or properties of the owner of the vehicle, the insured. The appeal is disposed of in the aforesaid terms, with no order as to costs. As noticed hereinbefore, similar directions were also issued in National Insurance Co. Ltd. v. Baljit Kaur [(2004) 2 SCC 1] in the following terms : 21. The upshot of the aforementioned discussions is that instead and in place of the insurer the owner of the vehicle shall be liable to satisfy the decree. The question, however, would be as to whether keeping in view the fact that the law was not clear so long such a direction would be fair and equitable. We do not think so. We, therefore, clarify the legal position which shall have prospective effect. The Tribunal as also the High Court had proceeded in terms of the decision of this Court in Satpal Singh1. The said decision has been overruled only in Asha Rani2. We, therefore, are of the opinion that the interest of justice will be subserved if the appellant herein is 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. For the purpose of such recovery, it would not be necessary for the insurer to file a separate suit but it may initiate a proceeding before the 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. We have issued the aforementioned directions having regard to the scope and purport of Section 168 of the Motor Vehicles Act, 1988, in terms whereof, it is not only entitled to determine the amount of claim as put forth by the claimant for recovery thereof from the insurer, owner or driver of the vehicle jointly or severally but also the dispute between the insurer on the one hand and the owner or driver of the vehicle involved in the accident inasmuch as can be resolved by the Tribunal in such a proceeding. Yet again, in National Insurance Co. Ltd. v. Kusum Rai [2006) 3 SCALE 519 ], it was held : Thus, although we are of the opinion that the appellant was not liable to pay the claimed amount as the driver was not possessing a valid licence and the High Court was in error in holding otherwise, we decline to interfere with the impugned award, in the peculiar facts and circumstances of the case, in exercise of our jurisdiction under Article 136 of the Constitution but we direct that the appellant may recover the amount from the owner in the same manner as was directed in Nanjappan (supra). Yet again in Oriental Insurance Co. Ltd. v. Zaharulnisha [(2008) 12 SCC 385] , this Court held : 22. In the result, the appeal is allowed to the limited extent and it is directed that the appellant Insurance Company though not liable to pay the amount of compensation, but in the nature of this case it shall satisfy the award and shall have the right to recover the amount deposited by it along with interest from the owner of the vehicle viz. Respondent 8, particularly in view of the fact that no appeal was preferred by him nor has he chosen to appear before this Court to contest this appeal. This direction is given in the light of the judgments of this Court in National Insurance Co. Ltd. v. Baljit Kaur and Deddappa v. National Insurance Co. Ltd. Again in Dedappa v. National Insurance Co. Ltd. [(2008) 2 SCC 595] , it was held : 26. However, as the appellant hails from the lowest strata of society, we are of the opinion that in a case of this nature, we should, in exercise of our extraordinary jurisdiction under Article 142 of the Constitution of India, direct Respondent 1 to pay the amount of claim to the appellants herein and recover the same from the owner of the vehicle viz. Respondent 2, particularly in view of the fact that no appeal was preferred by him. We direct accordingly. 9. Whenever, thus, a direction has been issued by the Tribunal, it must be held to have been done in exercise of its inherent power. It would be travesty of justice, if the Insurance Company which is directed to pay the amount and then face immense difficulties in executing a decree.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]7. An owner of a vehicle in terms of the provisions of the Motor Vehicles Act is legally obligated to get the vehicle insured. The rights and liabiltis of the parties to the contract of insurance would be governed thereby subject to the provisions of the Motor Vehicles Act. One of the conditions which would make the insurance company liable to reimburse the owner of the vehicle in respect of payment of the amount of compensation in favour of a claimant is that the driver of the vehicle must possess a valid driving licence. The owner has a duty to see that a vehicle is driven by a person having a valid driving licence. The licence of the driver of the said bus was proved to be invalid. The owner did not raise any contention that he has used due diligence in allowing the driver to drive the vehicle8. The courts, however, keeping in view the social justice doctrine in mind wherefor the Act was enacted and in the interest of the claimants had been passing such orders9. Whenever, thus, a direction has been issued by the Tribunal, it must be held to have been done in exercise of its inherent power. It would be travesty of justice, if the Insurance Company which is directed to pay the amount and then face immense difficulties in executing a decree.