JUDGMENT
S.P. Srivastava, J.
1. In an accident involving the offending motor vehicle, a truck (goods vehicle), bearing registration No. C1H 7476, at about 12.30 p.m. on 16.11.1995, wherein Shakir Khan aged 20 years, Raju aged 23 years, Shahid Khan aged 30 years met their untimely death while Maharaj Singh suffered serious and grievous injuries, a claim case under Sections 166 and 140 of Motor Vehicles Act being Claim Case No. 68 of 1996 giving rise to Misc. Appeal No. 591 of 1997 was filed by the dependants of Shakir Khan, Claim Case No. 69 of 1996 was filed by the dependants of Shahid Khan giving rise to Misc. Appeal No. 589 of 1997, Claim Case No. 70 of 1996 giving rise to Misc. Appeal No. 592 of 1997 was filed by the dependants of Raju and Claim Case No. 67 of 1996 giving rise to Misc. Appeal No. 590 of 1997 was filed by Maharaj Singh, which were consolidated and disposed of by the 9th Additional Motor Accidents Claims Tribunal, Gwalior by a common judgment and order dated 30.8.97 where-under Motor Accidents Claims Tribunal granted an award of compensation for an amount of Rs. 35,000 together with 12 per cent per annum interest, in Claim Case No. 67 of 1996; in Claim Case No. 68 of 1996, Claims Tribunal granted an award of compensation for an amount of Rs. 1,13,000 carrying the same rate of interest; in Claim Case No. 69 of 1996 for award amount of Rs. 1,66,800 with the same rate of interest and in Claim Case No. 70 of 1996 for an amount of Rs. 1,49,200 with the same rate of interest.
2. The offending vehicle, the truck, was insured with National Insurance Co. Ltd. which was impleaded as a respondent in all the claim petitions.
2A. Feeling aggrieved the insurer has now come up in appeal seeking redress praying for the modification of the awards and its exoneration from the liability.
3. The aforesaid appeals were heard together taking into consideration the nature of the controversy raised therein and are being disposed of by a common judgment and order.
4. We have heard the learned Counsel for the insurer appellant and also the learned Counsel representing the respondents-claimants and have carefully perused the record.
5. The learned Counsel for the appellant has challenged the quantum of compensation determined by the Motor Accidents Claims Tribunal asserting that it was excessive. It has further been contended that since the terms and conditions on which the insurer had taken to indemnify the insured had been violated and the Tribunal had erred in not exonerating it from the liability in regard to the payment of the amount of award.
6. Learned counsel for the respondents have urged that it is not open to the insurer to challenge the quantum of compensation as no permission contemplated under Section 170 of the Motor Vehicles Act had been obtained.
7. So far as the aforesaid submission is concerned it has been pointed out by the learned Counsel for the appellant that in the written statement filed by the insurer company itself in para 10 thereof a request had been made for the grant of permission envisaged under Section 170 of the Act and the Motor Accidents Claims Tribunal vide order dated 30.1.1997 had granted the permission sought for. The order passed in this connection is a cryptic one but it expressly shows that the permission was granted after due consideration.
8. In the present case, it is not in dispute that the claim cases were proceeding ex parte against the owner of the offending vehicle impleaded as respondent No. 1. It is further not in dispute that no written statement/reply to the claim petition had been filed by the owner. It is further not disputed that the witnesses examined by the claimants had been permitted to be cross-examined by the insurer without any objection on the question relating to the income of the deceased, the number of dependants and other factors having a bearing on the question relating to amount of compensation which had been claimed.
9. It has been urged by the learned Counsel for the claimants that the Tribunal has not given any reason in the order granting the permission sought by the insurer and it is only a conclusion. What has been contended is that the Tribunal is required under the law to give reasons recorded in writing for the conclusion that the grant of permission was justified. The claimants had impleaded the insurer in their claim petition as a respondent. They had never challenged the order passed by the Tribunal granting the permission to the insurer to contest the claim on merits including the quantum of compensation. They had never raised any objection at the time of cross-examination of their witnesses by the insurer. It is, therefore, obvious that the grounds on the basis of which the permission could be granted as envisaged under Section 170 of the Act did exist and acting upon the permission so granted the claimants had proceeded with the case at the trial.
10. In the aforesaid circumstances, the insurance company could be allowed to contest the claim on the grounds which are available to the owner. The conclusion of the Tribunal in the matter relating to the grant of permission to the insurer in the facts and circumstances of the present case, as noticed hereinabove, is not liable to be disturbed.
11. The claimants have submitted to the award granted by the Tribunal.
12. We have carefully perused the oral evidence led by the claimants.
13. The appellant has challenged the awards asserting that the earnings of the deceased persons assessed by the Tribunal is against the evidence on record and the compensation awarded to the injured is excessive.
14. The Tribunal has assessed the evidence led by the claimants in support of their respective claims in a correct perspective and its appreciation and evaluation does not require any interference. The appellant has not been able to point out any such infirmity in the assessment of the evidence by the Tribunal which may require interference in the findings returned by it. In fact, what is apparent is that the insurer has not been able to lead any such evidence in rebuttal which could in any manner negate the findings returned by the Claims Tribunal on the aspects having bearing on the question relating to the determination of the income and the quantum of compensation.
15. In the aforesaid circumstances the findings returned by the Tribunal on the question of quantum of compensation is affirmed.
16. The learned Counsel for the appellant has next contended that in any view of the matter there having been a breach of conditions subject to which the insurance policy had been issued the Tribunal could not under the law impose any liability on the appellant company to pay the amount of compensation due under the award.
17. Learned counsel for the respondents has strenuously urged that in the present case, the insurer company could not have been exonerated in view of the provisions contained in the Motor Vehicles Act, 1988, which casts a statutory liability on the insurance company to pay the amount of compensation.
18. We have given our anxious consideration to the rival submissions.
19. In the present case, what we find is that the deceased persons and the injured were being carried in breach of the terms of the policy which was a fundamental breach as the passengers could not have been allowed to be carried or permitted to travel in the goods vehicle and in the absence of any evidence the driver of the offending vehicle could not be deemed to have been carrying the passengers though of a very limited number, on a fully loaded truck with the consent of or within the knowledge of the owner of the truck. Finding of the trial court that passengers were being carried by the driver after taking the fare from them without any knowledge of the owner is not liable to be disturbed.
20. The status of the insurer in law so far as the statutory liability sought to be fastened upon him under the Act cannot be more than that of a guarantor and he acts as a security for the third party with respect to its realising damages for the injuries suffered but a right to get any amount paid in excess refunded to it by the insured stands secured. The ultimate burden always remains cast or fastened on the insured-owner of the motor vehicle.
21. As has already been noticed herein-above, the terms and conditions of the insurance policy clearly stipulate that the insurer will not be liable to pay any compensation in case the motor vehicle in question was used for any purpose other than the agricultural use only. It was also clearly stipulated that the policy did not cover the liability of compensation in the case of use of the vehicle for hire and reward.
22. However, there is another aspect of the matter which is of considerable importance so far as the controversy raised in this appeal is concerned and it cannot be lost sight of.
23. In a recent decision, the Supreme Court in the case of Oriental Insurance Co. Ltd. v. Cheruvakkara Nafeessu 2001 ACJ 1 (SC), had elaborately dealt with the extent of liability of an insurance company towards the third party as per Section 95 (1) (b) of the Motor Vehicles Act, 1939 and on the question as to what are its rights in case of payment of an amount in excess of the limits of the liability under the insurance policy vis-a-vis the insured.
24. In the aforesaid case, the claimants had raised a claim for an amount of Rs. 2,00,000 as compensation on account of death of their predecessor-in-interest in a road accident on 6.7.1988 involving the offending motor vehicle an autorickshaw bearing registration No. KRN 1859. The insurer had contested the claim specifically stating therein that its liability was limited to Rs. 50,000 under the policy of insurance. The Claims Tribunal, however, had granted an award for an amount of Rs. 1,94,150 and fastened the entire liability on the appellant insurance company. The insurance policy in that case was of a date prior to the coming into force of the new Motor Vehicles Act, 1988 on 1.7.1989.
25. Under the aforesaid insurance policy the limit of the insurance company’s liability in respect of any one claim or series of claims arising out of one event was fixed at Rs. 50,000 only. However, the avoidance clause of the policy provided that “nothing in the said policy or the endorsement hereon shall affect the right of any person indemnified by this policy or any other person to recover an amount under or by virtue of the provisions of the Motor Vehicles Act, 1939, Section 96. But the insured shall pay to the company all sums paid by the company which the company would not have been liable to pay but for the said provisions”. Section II of the policy dealt with ‘liability of third party’ and provided that the company will indemnify the insured against all sums including claimants costs and expenses which the insured becomes legally liable to pay in respect of the death of or bodily injury to any person caused by or arising out of the use of the motor vehicle or damage to the property caused by such use.
26. Taking into consideration the earlier decisions of the Apex Court in the case of New Asiatic Insurance Co. Ltd. v. Pessumal Dhanamal Aswani 1958-65 ACJ 559 (SC) and Amrit Lal Sood v. Kaushalya Devi Thapar 1998 ACJ 531 (SC), the Hon’ble Supreme Court came to the conclusion that despite holding the liability under the policy limited to the extent of Rs. 50,000, the Claims Tribunal and the High Court were not unjustified in directing the appellant insurance company to pay the whole of the awarded amount to the claimants on the basis of the contractual obligations contained in clauses relating to the liability of the third parties and avoidance clause. However, it was further indicated that the Claims Tribunal and the High Court were not justified in rejecting the right of the appellant insurance company to recover from the insured the excess amount paid in execution and discharge of the award of the Tribunal.
27. In the aforesaid view of the matter, the Apex Court allowed the appeal holding that the appellant insurance company was liable to pay the entire award amount to the claimants. Upon making such payment, the appellant can recover the excess amount from the insured by executing the award against the insured to the extent of such excess as per Section 174 of the Motor Vehicles Act, 1988.
28. In its another decision in the case of New India Assurance Co, Ltd. v. Kamla 2001 ACJ 843 (SC), the Supreme Court had indicated taking into consideration the implications arising under Sub-section (4) and its proviso together with Sub-section (5) of Section 149 of the Motor Vehicles Act, 1988, that they are intended to safeguard the interest of an insurer who otherwise has no liability to pay any amount to the insured but for the provisions contained in Chapter XI of the Act. This, it was clarified means that the insurer has to pay to the third parties only on account of the fact that a policy of insurance has been issued in respect of the vehicle, but the insurer is entitled to recover any such sum from the insured if the insurer was not otherwise liable to pay such sum to the insured by virtue of the conditions of the contract of insurance as indicated by the policy.
29. In para 22 of the aforesaid decision, the Apex Court summarised the position in law indicating that when a valid insurance policy has been issued in respect of a vehicle as evidenced by a certificate of insurance the burden is on the insurer to pay to third parties, whether or not there has been any breach or violation of the policy conditions. But the amount so paid by the insurer to third parties can be allowed to be recovered from the insured if as per the policy conditions the insurer had no liability to pay such sum to the insured.
30. In para 25 of the aforesaid decision, it was indicated that the insurer and the insured are bound by the conditions enumerated in the policy and the insurer was not liable to the insured if there was violation of any policy condition. But the insurer who was made statutorily liable to pay compensation to third parties on account of the certificate of insurance issued shall be entitled to recover from the insured the amount paid to the third parties, if there was any breach of policy condition on account of the vehicle being driven without a valid licence.
31. In view of the aforesaid position in law and what has been indicated herein before, the appeal is allowed holding that the appellant insurance company is liable to pay the entire amount awarded to the claimants and upon making such payment, the appellant company can recover the excess amount from the insured by executing the award against the insured to the extent of such excess amount as per Section 174 of the Motor Vehicles Act, 1988. The impugned award shall stand modified to that extent. In other respects, since the owner has submitted to the impugned award, it shall remain intact.
32. There shall, however, be no order as to costs.