Case: Smt. Yallwwa &amp; Others Vs. National Insurance Co. Ltd. &amp; Another

Tribunal and the High Court cannot be sustained so far as they relate to the liability of the insurer arising under Sections 92-A and 92-B of the Act." 22. The decision of this Court in United India Insurance Co. Ltd. v. Lehru and Others [(2003) 3 SCC 338] is not of much assistance in this case. The question which arose for consideration therein was as to whether in a case where the licence of the driver of the motor vehicle involved in the accident was fake, the court can direct the insurance company to pay the amount of the compensation and recover the same from the owner, as the insurance company is liable to satisfied the award. 23. Lehru (supra) has been taken into consideration in a subsequent decision of this Court in National Insurance Company Ltd. v. Swaran Singh and Others (2004) 3 SCC 297 ], which has in turn been considered in National Insurance Co. Ltd. v. Laxmi Narain Dhut [2007 (4) SCALE 36 ] and The Oriental Insurance Company Ltd. v. Meena Variyal & Ors. [2007 (5) SCALE 269 ].24. The recent decisions of this Court are authorities for the proposition that the insurance company would not be liable in cases where passengers of a vehicles are not third parties.25. In Sadhana Lodh (supra), this Court was concerned with a case where an application was filed under Articles 226 and 227 of the Constitution of India, despite the fact that an appeal was maintainable against the award and in that view of the matter, the court opined that when an insurer has a right to prefer an appeal on limited grounds available under Section 149 of the Act, the grounds of challenge cannot be enlarged by filing a petition under Articles 226 and 227 of the Constitution of India. It was observed therein: "7. The supervisory jurisdiction conferred on the High Courts under Article 227 of the Constitution is confined only to see whether an inferior court or tribunal has proceeded within its parameters and not to correct an error apparent on the face of the record, much less of an error of law. In exercising the supervisory power under Article 227 of the Constitution, the High Court does not act as an appellate court or the tribunal. It is also not permissible to a High Court on a petition filed under Article 227 of the Constitution to review or reweigh the evidence upon which the inferior court or tribunal purports to have passed the order or to correct errors of law in the decision." 26. The said decision has also no application to the facts of the present case. So far as the decision of the Bombay High Court in Bapu Onkar Chaudhari (supra) is concerned, the High Court proceeded on the basis that in terms of the rules framed by the State of Maharashtra under the Motor Vehicles Act, an order passed under Section 140 would not come within the purview of the term award.27. In Bapu Onkar Chaudhari (supra), the Bombay High Court appears to have placed strong reliance on Kaushnuma Begum and Others v. New India Assurance Co. Ltd. and Others [2001 ACJ 428 : (2001) 2 SCC 9 ]. In Kaushnuma Begum (supra), this Court was concerned with the question as to whether the amount of compensation to be paid under Section 140 of the Act can be deducted from the final amount awarded by the Tribunal and while doing so, opined: "20. "No fault liability" envisaged in Section 140 of the MV Act is distinguishable from the rule of strict liability. In the former, the compensation amount is fixed and is payable even if any one of the exceptions to the rule can be applied. It is a statutory liability created without which the claimant should not get any amount under that count. Compensation on account of accident arising from the use of motor vehicles can be claimed under the common law even without the aid of a statute. The provisions of the MV Act permit that compensation paid under "no fault liability" can be deducted from the final amount awarded by the Tribunal. Therefore, these two are resting on two different premises. We are, therefore, of the opinion that even apart from Section 140 of the MV Act, a victim in an accident which occurred while using a motor vehicle, is entitled to get compensation from a Tribunal unless any one of the exceptions would apply. The Tribunal and the High Court have, therefore, gone into error in divesting the claimants of the compensation payable to them." 28. In Bapu Onkar Chaudhary (supra), the High Court of Bombay observed: "19. A different phraseology is used in rules 273 and 281. The Claims Tribunal in passing orders, is required to record concisely in a judgment the findings of each of the issues framed and the reasons for such findings and make an award specifying the amount of compensation to be paid by the insurers and the owners of the vehicle, who may be found vicariously responsible for causing the accident and also the person or persons to whom compensation shall be paid." 29. The Bombay High Court posed unto itself a wrong question and, thus, misdirected itself in arriving at the said decision. Its endeavour to draw sustenance of its finding from the proposition that an order passed under Section 140 of the Act is not an award having regard to Rule 281 of the Maharashtra Motor Vehicles Rules, 1989 suffers from a manifest error as the Rule lays down the procedure for filing of an appeal and, thus, by reason thereof substantive right of appeal vested in a person under a legislative Act cannot be taken away.30. In our considered opinion, the said decision does not state the law correctly. In our opinion, an order of the Tribunal awarding compensation under Section 140 of the Act is appealable under Section 173 as it amounts to an award under Section 173.

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

Explanation:
0[ds]Although in a given situation having regard to the liability of the owner of the vehicle, a claim Tribunal need not go into the question as to whether the owner of the vehicle in question was at fault or not, but determination of the liability of the insurance company, in our opinion, stands on a different footing. When a statutory liability has been imposed upon the owner, in our opinion, the same cannot extend the liability of an insurer to indemnify the owner, although in terms of the insurance policy or under the Act, it would not be liable therefor.17. In a given case, the statutory liability of an insurance company, therefore, either may be nil or a sum lower than the amount specified under Section 140 of the Act. Thus, when a separate application is filed in terms of Section 140 of the Act, in terms of Section 168 thereof, an insurer has to be given a notice in which event, it goes without saying, it would be open to the insurance company to plead and prove that it is not liable at all.18. Furthermore, it is not in dispute that there can be more than one award particularly when a sum paid may have to be adjusted from the final award. Keeping in view the provisions of Section 168 of the Act, there cannot be any doubt whatsoever that an award for enforcing the right under Section 140 of the Act is also required to be passed under Section 168 only after the parties concerned have filed their pleadings and have been given a reasonable opportunity of being heard. A Claims Tribunal, thus, must be satisfied that the conditions precedent specified in Section 140 of the Act have been substantiated, which is the basis for making an award.19. Furthermore, evidently, the amount directed to be paid even in terms of Chapter X of the Act must as of necessity, in the event ofof directions has to be recovered in terms of Section 174 of the Act. There is no other provision in the Act which takes care of such a situation. We, therefore, are of the opinion that even when objections are raised by the insurance company in regard to its liability, the Tribunal is required to render a decision upon the issue, which would attain finality and, thus, the same would be an award within the meaning of Section 173 of the Act.The decision of this Court in United India Insurance Co. Ltd. v. Lehru and Others [(2003) 3 SCC 338] is not of much assistance in this case. The question which arose for consideration therein was as to whether in a case where the licence of the driver of the motor vehicle involved in the accident was fake, the court can direct the insurance company to pay the amount of the compensation and recover the same from the owner, as the insurance company is liable to satisfied the award.Lehru (supra) has been taken into consideration in a subsequent decision of this Court in National Insurance Company Ltd. v. Swaran Singh and Others (2004) 3 SCC 297 ], which has in turn been considered in National Insurance Co. Ltd. v. Laxmi Narain Dhut [2007 (4) SCALE 36 ] and The Oriental Insurance Company Ltd. v. Meena Variyal & Ors. [2007 (5) SCALE 269 ].24. The recent decisions of this Court are authorities for the proposition that the insurance company would not be liable in cases where passengers of a vehicles are not third parties.25. In Sadhana Lodh (supra), this Court was concerned with a case where an application was filed under Articles 226 and 227 of the Constitution of India, despite the fact that an appeal was maintainable against the award and in that view of the matter, the court opined that when an insurer has a right to prefer an appeal on limited grounds available under Section 149 of the Act, the grounds of challenge cannot be enlarged by filing a petition under Articles 226 and 227 of the Constitution of India. It was observedThe supervisory jurisdiction conferred on the High Courts under Article 227 of the Constitution is confined only to see whether an inferior court or tribunal has proceeded within its parameters and not to correct an error apparent on the face of the record, much less of an error of law. In exercising the supervisory power under Article 227 of the Constitution, the High Court does not act as an appellate court or the tribunal. It is also not permissible to a High Court on a petition filed under Article 227 of the Constitution to review or reweigh the evidence upon which the inferior court or tribunal purports to have passed the order or to correct errors of law in the decision.The said decision has also no application to the facts of the present case. So far as the decision of the Bombay High Court in Bapu Onkar Chaudhari (supra) is concerned, the High Court proceeded on the basis that in terms of the rules framed by the State of Maharashtra under the Motor Vehicles Act, an order passed under Section 140 would not come within the purview of the term award.27. In Bapu Onkar Chaudhari (supra), the Bombay High Court appears to have placed strong reliance on Kaushnuma Begum and Others v. New India Assurance Co. Ltd. and Others [2001 ACJ 428 : (2001) 2 SCC 9 ]. In Kaushnuma Begum (supra), this Court was concerned with the question as to whether the amount of compensation to be paid under Section 140 of the Act can be deducted from the final amount awarded by the Tribunal and while doing so,"No fault liability" envisaged in Section 140 of the MV Act is distinguishable from the rule of strict liability. In the former, the compensation amount is fixed and is payable even if any one of the exceptions to the rule can be applied. It is a statutory liability created without which the claimant should not get any amount under that count. Compensation on account of accident arising from the use of motor vehicles can be claimed under the common law even without the aid of a statute. The provisions of the MV Act permit that compensation paid under "no fault liability" can be deducted from the final amount awarded by the Tribunal. Therefore, these two are resting on two different premises. We are, therefore, of the opinion that even apart from Section 140 of the MV Act, a victim in an accident which occurred while using a motor vehicle, is entitled to get compensation from a Tribunal unless any one of the exceptions would apply. The Tribunal and the High Court have, therefore, gone into error in divesting the claimants of the compensation payable to them.In Bapu Onkar Chaudhary (supra), the High Court of BombayA different phraseology is used in rules 273 and 281. The Claims Tribunal in passing orders, is required to record concisely in a judgment the findings of each of the issues framed and the reasons for such findings and make an award specifying the amount of compensation to be paid by the insurers and the owners of the vehicle, who may be found vicariously responsible for causing the accident and also the person or persons to whom compensation shall be paid.The Bombay High Court posed unto itself a wrong question and, thus, misdirected itself in arriving at the said decision. Its endeavour to draw sustenance of its finding from the proposition that an order passed under Section 140 of the Act is not an award having regard to Rule 281 of the Maharashtra Motor Vehicles Rules, 1989 suffers from a manifest error as the Rule lays down the procedure for filing of an appeal and, thus, by reason thereof substantive right of appeal vested in a person under a legislative Act cannot be taken away.30. In our considered opinion, the said decision does not state the law correctly. In our opinion, an order of the Tribunal awarding compensation under Section 140 of the Act is appealable under Section 173 as it amounts to an award under Section