[2017] l S.C.R. 789

MANUARA KHATUN & ORS.

RAJESH KR. SINGH & ORS.

(Civil Appeal No. 3047of2017)

FEBRUARY 21, 2017

[J. CHELAMESWAR AND ABHAY MANOHAR SAPRE, JJ.]

Motor Vehicles Act, 1988 - Motor accident - Compensation - Victim travelling as gratuitous passenger in the offending vehicle which was found involved in causing accident due to negligence of its driver - Liability of Insurance Company of the offending vehicle - Held: Claimants are entitled for an order against the Insurer of the offending vehicle to pay the awarded sum to the claimants and then to recover the said amount from the insured, owner of the offending vehicle in the same proceedings.

Allowing the appeals, the Court

HELD: 1.1 It cannot be said that the law laid down in *Saju P. Paul's Case cannot be applied to the facts of th.e case at hand.

Firstly, marked similarity is found .in the facts of this case and the one involved in *Saju P. Paul's Case. Secondly, merely because the compensation has not yet been paid to the claimants though the case is quite old (16 years) like the one in *Saju P. Paul's Case, it cannot be a ground to deny the claimants the relief claimed in these appeals. Thirdly, this Court has already considered and rejected the argument regarding not granting of the relief of the nature claimed herein due to pendency of the reference to a larger Bench as would be clear from the *Saju P. Paul's case [Para 20]

[796-C-E]

1.2 There is no good ground to take a different view than t.he one consistently being taken by this Court in all previous decisions, in this regard. [Para 21] [796-F]

1.3 The direction to the Insurance company-respondent No. 3, they being the insurer of the offending vehicle which was found involved in causing accident due to negligence of its driver needs to be issued directing the Insurance Company-respondent No.3 to first pay the awarded sum to the appellants (claimants)

and then to recover the paid awarded sum from the owner of the offending vehicle respondent No.1 in execution proceedings arising in this very case as per the law laid down in *Saju P. Paul's case. [Para 22] [796-G]

1.4 The impugned order is modified to the extent that respondent No. 3-Insurance Company is directed to pay the awarded sum to the appellants (claimants). Thereafter, respondent No. 3 would be entitled to recover the entire paid awarded sum from the owner (insured) of the offending Vehicle-respondent No.1 in these very proceedings by filing execution application against the insured. [Para 23] [797-A-B]

Manage1; National Insurance Company Limited v. Saju P. Paul & Anr. (2013) 2 SCC 41 : [2013] 2 SCR 1 - relied on.

Oriental Insurance Co. Ltd v. Nanjappan & Ors. (2004) 13 SCC 224 : [2004] 2 SCR 365; Bhagyalakshmi & Ors. v. United Insurance Company Ltd & Anr. (2009) 7 SCC 148 : [2009] 7 SCR 1031; National Insurance Co. Ltd vs. Baljit Kaur & Ors. (2004) 2 SCC 1 : [2004] 1 SCR 274; National Insurance Co. Ltd. v. Challa

Upendra Rao & Ors. (2004) 8 SCC 517 : [2004] 4 Suppl. SCR 587; National flisurance Co. Ltd. v.

Kausha!aya Devi & Ors. (2008) 8 SCC 246 : [2008] 8 SCR 500; National Insurance Co. Ltd v. Roshan Lal [Order dated 19.1.2007 in SLP (C) No. 5699 of 2006]; National Insurance Co. Ltd. vs. Parvathneni & Anr.

(2009) 8 sec 785 - referred to.

Case Law Reference

(2004] 2 SCR 365 referred to Para 11

[2009] 7 SCR 1031 referred to Para 11

[2004] 1 SCR 274 referred to Para 15

[2004] 4 Suppl. SCR 587 referred to Para 15

[2008] 8 SCR 500 referred to Para 15

(2009) 8 sec 785 referred to Para 15

[2013] 2 SCR 1 relied on Paras 20, 22

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3047 A of20I 7.

From the Judgment and Order dated 22.06.2012 of the High Court at Gauhati in MAC Appeal No. 7 of 2009

WITH

C. A. No. 3065 of20l 7.

M. L. Lahofy, Paban K. Sharma, Himanshu Shekhar, Advs. for the Appellant.

Ravi Bakshi, Nitin Kumar Thakur, S. L. Gupta, Kuldeep Singh Tomar, Varinder Kumar Shanna, R. K. Gupta, D. P. Singh Yadav, B. S. Gautam, Ms. Shalu Shanna, Ailvs. for the Respondent.

The Judgment of the Court was delivered by

ABHAY MANOHAR SAPRE, J. l. Leave granted.

2. These appeals are filed against the common final judgment and order dated 22.06.20I2 passed by the High Court ofGauhati at Guwahati in MACA Nos. 7 and 8 of2009 whereby the High Court dismissed the appeals filed by the appellants herein for enhancement of the compensation amount awarded by the Motor Accident Claims Tribunal, Nagaon by order dated 05.09.2008 in MAC Case Nos. 653 and 652 of

2001.

3. We herein set out the facts, in brief, to appreciate the issue involved in these appeals.

4. On 03.07.2001, Ismail Hussain, husband of Manuara Khatun and Nirod Prasad Mohanty, husband ofMamoni Saikia Mohanty along

with some other passengers were proceeding towards Guwahati from F Nagoan in Tata Sumo bearing Registration No. AR-09-3997, when they arrived near Jorabat, there was a head-on-collusion between the Tata Sumo and a Truck bearing Registration No. AS-Ol-H-2598 coming from the opposite direction as a result of which Ismail Hussain and Nirod.

Prasad Mohanty died on the spot and some other passengers sustained G injuries.

5. Manuara Khatun, wife of the Ismail Hussain and her 5 minor children filed Claim petition bearing MAC Case No. 653 of200 l claiming total compensation ofRs.55,20,400/- and Mamoni Saikia Mohanty, wife ofNirod Prasad Mohanty and her 3 minor children preferred claim petition H

bearing MAC No. 652 of 200 I claiming total compensation of Rs.54,62,500/- before the Motor A£cident Claims Tribunal, Nagaon agaiqst Rajesh Kumar Singh, owner of the Tata Sumo( respondent No. I), Bhadra Kt. Das, owner of the Truck( respondent No.2), the insurer of the Tata Sumo-United India Insurance Co. Ltd.(respondent No.3) and New India Assurance Company Ltd., Insurer of the Truck(respondent No.4). The claim petitions were contested only by the Insurance Companies. So far as the owners of the vehicles were concerned, they remained ex pane.

6. The Tribunal, vide award dated 05.08.2008, partly allowed both the claim petitions and awarded a sum ofRs.24,89,500/- to Manuara Khatun, wife of Ismail Khatun and Rs.24,09,500/- to Mamoni Saikia Mohanty, wife of Nirod Prasad Mohanty with interest @ 7.5% p.a. from the date of filing ofcase tillpayment. The Tribunal held that Tata Sumo was a private car driven by the driver in a rash and negligent manner and at a high speed, which resulted in the accident. It was also held that the driver of the Truck was not negligent in driving the Truck.

The Tribunal further held that all the passengers in¢1uding the two deceased were traveling in Tata Sumo for hire and hence they were held to be "gratuitous passengers". It was held that due to this reason, United India Insurance Company Ltd., the insurer of Tata Sumo( offending vehicle) was not liable. Accordingly, the Insurance Company was exonerated from the liability and the award was passed only against the owner of Tata Sumo (respondent No. I) in both the claim cases. So far as the owner of the Truck(responaent No.2) and the New India Assurance Co. Ltd.-Insurer of the Truck(respondent No.4) were concerned, both were held not liable in any manner because, as mentioned above, the driver of the Truck was not found negligent in driving the Truck.

7. Dissatisfied with the aw!lrd, appeals bearing MAC Appeal No. 7 of2009 and MAC Appeal No. 8 of2009 under Section 173 of the Motor Vehicle Act, 1988 (hereinafter referred to as-.'ihe Act") were filed before the High Court by the claimants for enhancement of the compensation amounts awarded by the Tribunal. The other ground raised before the High Court was that it was the liability of the Insurance Company of the offending vehicle to compensate the claimants jointly and severally with the owner of the Tata Sumo and in any event, the direction to pay the compensation by the insurer of offending veicle and then to recover

MANUARA KHATUN & ORS. v. RAJESH KR. SINGH & ORS. 793

[ABHAY MANOHAR SAPRE, J.]

from its insured should have been passed against the In surer( respondent A No.3).

8. By impugned judgment, the High Court dismissed the appeals filed by the claimants and held that the insurer was not liable because the passengers or occupants were being carried in a private vehicle as "gratuitous passengers".

9. Aggrieved by the said judgment, the claimants have filed these appeals by way of special leave petitions before this Court.

10. Heard Mr. M.L. Lahoty, learned counsel for the appellants, Mr. Ravi Bakshi, learned counsel for respondent No.3 and Mr. S.L.

Gupta, learned counsel for respondent No.4.

11. Learned counsel for the appellants while assailing the impugned order argued only one point. According to him, both the Courts below erred in not applying the principle of "pay and recover" against the United India Insurance Company Ltd. (insurer of the offending vehicle- Tata Sumo)-Respondent No. 3 herein. Ii was his submission that when admittedly the driver of the Tata Sumo was ~1eld negligent in his driving, which caused the accident, the insurer of the offending vehicle-respondent No. 3 should have been made liable to pay the awarded sum or in any event, according to learned counsel, a direction to pay and recover the awarded sum ought to have been issued against the Insurer of the offending vehicle. Learned counsel placed reliance on the judgments of this 'court in Oriental Insurance Co. Ltd. vs. Nanjappan & Ors.,

(2004) 13 SCC 224, Bhagyalakshmi & Ors. vs. United Insurance Company Ltd. & Anr., (2009) 7 SCC 148 and Manager, National Insurance Company Limited vs. Saju P. Paul & Anr., (2013) 2 SCC 41 in support of this submission.

12. In reply, learned counsel for the respondents (Insurance Companies) supported the impugned order and contended that no case is made out to interfere in the impugned judgment. It was his submission that once it is held and rightly that the Insurance Company is not liable because the victims were travelling in the offending vehicle as "gratuitous passengers'', there did not arise any occasion to pay the awarded sum to the claimants by the Insurance Company and nor the principle "pay

and recover" could be applied against the Insurance Company in, such circumstances thereby mking them liable to pay the awarded sum to the claimants. ·.

13. Having heard the learned counsel for ihe parties and on perusal of the record of the case, we find force in the submission of the learned counsel for the appellants (claimants).

14. The only question, which arises for consideration in these appeals, is whether the appellants are entitled for an order against the Insurer of the offending vehicle, i.e., (respondent No. 3) to pay the awarded sum to the appellants and then to recover the said amount from the insured (owner of the offending vehicle-Tata Sumo)-respondent No. I

in the same proceedings.

15. The aforesaid question, in our opinion, remains no more res integra. As we notice, it was subject matter of several decisions of this Court rendered by three Judge Bench and two Judge Bench in past, viz., National Insurance Co. Ltd. vs. Baljit Kaur & Ors., (2004) 2

SCC I, National Insurance Co. Ltd. vs. Challa Upendra Rao & Ors., (2004) 8 SCC 517, Nationallnsurance Co. Ltd. vs. Kaushalaya Devi & Ors., (2008) 8 SCC 246, National Insurance Co. Ltd. vs.

Roshan Lal, [Order dated 19.1.2007 in SLP© No. 5699 of2006], and National Insurance Co. Ltd. vs. Parvathneni & Anr., (2009) 8 SCC

785.

16. This question also fell for consideration recently in Manager, National Insurance Company Limited vs. Saju P. Paul & Anr.,

(supra) wherein this Court took note of entire previous case law on the subject mentioned above and examined the question in the context of Section 147 of the Act. While allowing the appeal filed by the Insurance Company by reversing the judgment of the High Court, it was held on facts that since the victim was travelling in offending vehicle as "gratuitous passenger" and hence, the Insurance Company cannot be held liable to suffer the liability arising out of accident on the strength of the insurance policy. However, this Court keeping in view the benevolent object of the Act and other relevant factors arising in the case, issued the directions against the Insurance Company to pay the awarded sum to the claimants and then to recover the said sum from the insured in the same proceedings by applying the principle of"pay and recover".

17. Justice R.M. I.:odha (as His Lordship then was and later became CJ!) speaking for the Bench held in paras 20 and 26 as under:

"20. The next question that arises for consideration is whether in the peculiar facts of this case a direction could be issued to the Insurance Company to first satisfy the awarded amount in favour of the claimant

and recover the same from the owner of the vehicle (Respondent 2 herein).

26. The pendency of consideration of the above questions by a larger Bench does not mean that the course that was followed in Baljit Kaur, (2004) 2 SCC 1 and Challa Upendra Rao, (2004) 8 SCC 517 should uot be followed, more so in a peculiar fact situation of this case. In the present case, the accident occurred in 1993. At that time, the claimant was 28 years old.

He is now about 48 years. The claimant was a driver on heavy vehicle and due to the accident he has been rendered permanently disabled. He has not been able to get compensation so far due to the stay order passed by this Court. He cannot be compelled to struggle further for recovery of the amount. The Insurance Company has already deposited the entire awarded amount pursuant to the order. of this Conrt passed on 1-8-2011 (National Insurance Co. Ltd. vs.

Saju P. Paul, SLP© No. 20127 of 2011 and the said amount has been invested in a fixed deposit account.

Having regard to these peculiar facts of the case in hand, we are satisfied that the claimant (Respondent

1) may be allowed to withdraw the amount deposited by the Insurance Company before this Court along with accrued interest. The Insurance Company (the appellant) thereafter may recover the amount so paid from the owner (Respondent 2 herein). The recovery of the amount by the Insurance Company from the owner shall be made by following the procedure as laid down by this Court in Challa Upendra Rao( supra)."

18. The facts of the case at hand are somewhat identical to the facts of the case mentioned supra because here also we find that the deceased were found travelling as "gratuitous passengers" in the offending vehicle and it was for this reason, the insurance companies were exonerated. In Saju P. Paul's case (supra) also having held that the victim was "gratuitous passenger", this Court issued directions against the Insurer of the offending vehicle to first satisfy the awarded sum and then to recover the same from the Insured in the same proceedings.

19. Learned counsel for respondent No. 3 (United India Insurance Company Ltd.), however, contended that the facts of the case at hand ari:.not identical to the one involved in the case ofSaju P. Paul (supra) and hence the law laid down therein cannot be applied to the facts of the case at hand. Learned counsel pointed out that firstly, the awarded compensation in this case is quite substantial and secondly, it is not yet paid to the claimants. Learned counsel also submitted that since the question involved herein is referred to a larger Bench and hence this Court sho11ld not give such directions, as prayed by the appellants, against the Insurance Company.

20. We find no merit in any of the submissions. Firstly, as mentioned above, we find marked similarity in the facts of this case and the one involved in Sa.in P. Paul's Case (supra). Secondly, merely because the compensation has not yet been paid to the claimants though the case is quite old (16 years) like the one in Sa.iu P. Paul's Case (supra), it cannot be a ground to deny the claimants the relief claimed in these appeals.

Thirdly, this Court has already considered and rejected the argument regarding not granting of the relief of the nature claimed herein due to pendency of the reference to a larger Bench as would be clear from Para 26 of the judgment in Sa.iu P. Paul's case (supra). That apart, learned counsel for the appellants stated at the bar that the reference made to the larger Bench has since been disposed of by keeping the issue undecided. It is for this reason also, the argument does not survive any more.

21 . It is for all these reasons, we find no good ground to take a different view than the one consistently being taken by this Court in all previous decisions, which are referred supra, in this regard.

22. In view of the foregoing discussion, we are of the view that the direction to United India Insurance Company (respondent No. 3) - they being the insurer of the offending vehicle which was found involved in causing accident due to negligence of its driver needs to be issued directing them (United India Insurance Company-respondent No.3) to first pay the awarded sum to the appellants (claimants) and then to recover the paid awarded sum from the owner of the offending vehicle (Tata Sumo )-respondent No. I in execution proceedings arising in this very case as per the law laid down in Para 26 of Sa.in P. Paul's case quoted supra.

23. Accordingly, the appeals succeed and are allowed. Impugned order is modified to the extent that respondent No. 3-United India Insurance Company Ltd. is accordingly directed to pay the awarded sum to the appellants (claimants). Thereafter respondent No. 3 - United India Insurance Company Ltd. would be entitled to Tecover the entire paid awarded sum from the owner (insured) of the offending Vehicle (Tata Sumo )-respondent No. I in .these very proceediags by filing execution application against the insured.

Nidhi Jain Appeals allowed.