If the owner of the vehicle is found liable under Section 140, naturally, the liability of the insurer also would arise: Jammu and Kashmir High Court
Reading of Section 140 makes it clear that no fault liability is cast on the owner of the vehicle and not directly on the insurer. This was held in the judgment passed by a single judge bench comprising of HON’BLE MRS. JUSTICE SINDHU SHARMA in the matter of National Insurance Company Ltd V. Feroz-ud-Din &amp; anr [IA No. 01/2018], dealt with an issue where the petitioner filed a petition challenging the award passed by the Motor Accident Claims Tribunal, Doda in the four appeals. Claimants are grandparents of the deceased whose son was driving the said vehicle on the fateful day and they have filed four claim petitions against DM, National Insurance Company Limited &amp; others for compensation under Sections 166 and 140 of the Motor Vehicle Act, 1998. Appellant-Insurance Company objected to the claim petitions on the ground that the claim petitions are not maintainable because insurer can only indemnify the insured, who died and in the absence of his legal heirs arrayed as party.  Learned Tribunal, while considering the application under Section 140 of the MV Act, found that as the offending vehicle was duly insured with the appellant company, as such, the respondent/insurer is under legal obligation to indemnify the owner and the Tribunal has awarded interim award of Rs. 50,000/- in each claim petitions in favour of the respondents-claimants. It is argued that the appellant cannot be made liable to pay compensation under no fault liability in the absence of the insured because the Insurance Policy, contract is to indemnify the insured against the third party liability. Counsel for the appellant while elaborating on the contention, relying on the judgment of Supreme Court in Oriental Insurance Company Ltd. Vs. Sunita Rathi, 1998. The appeals filed by the Insurance Company involve only a short point relating to its liability under the policy of insurance issued subsequent to the accident, even though it was issued some time later on the same day. In the judgement they relied the High Court stated that, without assigning any reason, has simply assumed that the owner of the vehicle was not liable and that the insurer alone was liable in the present case. This conclusion, reached by the High Court, is clearly erroneous. The liability of the insurer arises only when the liability of the insured has been upheld for the purpose of indemnifying the insured under the contract of insurance. There is, thus, a basic fallacy in the conclusion reached by the High Court on this point. After hearing both sides, the Hon’ble High Court of Jammu and Kashmir dismissed the petition and held that Appellant-company is directed to deposit the amount of award passed in all the claim petitions within a period of one month from today, failing which, same will be payable with 12% interest per annum. Click here to view judgement Judgement reviewed by – Vaishnavi Raman
IA No HIGH COURT OF JAMMU AND KASHMIR AT JAMMU MA No. 254 2018 IA No. 01 2018 MA No. 252 2018 IA No. 01 2018 MA No. 253 2018 IA No. 01 2018 MA No. 255 2018 IA No. 01 2018 Pronounced on : 12 .06.2020 …. Appellant(s) National Insurance Company Ltd. V s Feroz ud Din & anr. Through: Mr. Sanjay K. Dhar Advocate …..Respondent(s) Through: Mr. M. P. Gupta Advocate Coram : HON’BLE MRS. JUSTICE SINDHU SHARMA JUDGE Appellant Company has challenged the award dated 04.10.2018 passed by the Motor Accident Claims Tribunal Doda in these four appeals. Since these appeals involve common questions of fact and law therefore the same were heard together and are being decided by a common judgment. Briefly stated facts which arises for the consideration in these appeals are that on 16.10.2017 about 10.15 a.m an accident occurred Near Kashor Jodhpur within the jurisdiction of Police Station Doda which resulted in the death of Nelofar Raza D o Late Sh. Bashir Ahmed Zia Bashir S o Late Sh. Bashir Ahmed Fehmida Begum W o Late Sh. Bashir Ahmed and Shaiqa Bano D o Late Sh. Bashir Ahmed. Bashir Ahmed being the owner of the vehicle No. JMU CC 2715 was driving the said MA Nos. 254 252 253 & vehicle at the time of accident and his wife & daughter were the occupants who died in the accident alongwith him. Claimants are grandparents of the deceased whose son was driving the said vehicle on the fateful day and they have filed four claim petitions against DM National Insurance Company Limited & others for compensation under Sections 166 and 140 of the Motor Vehicle Act 1998. Appellant Insurance Company objected to the claim petitions on the ground that the claim petitions are not maintainable because insurer can only indemnify the insured who died and in the absence of his legal heirs arrayed as party. Learned Tribunal while considering the application under Section 140 of the MV Act found that as the offending vehicle was duly insured with the appellant company as such the respondent insurer is under legal obligation to indemnify the owner and the Tribunal has awarded interim award of Rs. 50 000 in each claim petitions in favour of the respondents claimants. Appellant is aggrieved of the award dated 04.10.2018 and has assailed it on the ground that since insured has not been impleaded as party in the claim petitions therefore insurer would not be liable to pay compensation as the liability of the insurer is to indemnify the insured but this is a case where the insurer is dead. The question which therefore arises is whether the appellant can be held liable to indemnify the insured when he is dead and his legal heirs are the claimants. Since the insured being the driver at the time of accident is dead the claimants are his legal heirs. It is argued that the appellant cannot be made liable to pay compensation under no fault liability in the absence of the insured because MA Nos. 254 252 253 & under the Insurance Policy contract is to indemnify the insured against the third party liability. Learned counsel for the appellant while elaborating on the contention relying on the judgment of Supreme Court in Oriental Insurance Company Ltd. Vs. Sunita Rathi 1998 AIR257 however the but only question to be decided in these cases was ‘as stated by the lordship in Para 1 of the aforesaid judgment which is reproduced as follows: “1. This appeal by the insurer involves for decision only a short point relating to its liability under the policy of insurance issued subsequent to the accident even though it was issued sometime later on the same day. The Tribunal as well as the High Court have held against the insurer placing reliance on a two Judge Bench decision of this Court in New India Assurance Co. Ltd. Vs. Ram Dayal & Ors. 1990SCR 570. The question is whether that decision has been correctly applied in the facts of the present case.” The appeals filed by the Insurance Company involve only a short point relating to its liability under the policy of insurance issued subsequent to the accident even though it was issued some time later on the same day. After referring to the facts of the case their lordship held in Para 3 of Sunita Rathi’s casethat “insurer cannot be held liable on the basis of above policy in the present case and therefore the liability has to be of the owner of the vehicle ....”. By referring to the judgment of the High Court in Para 3 it was observed as under: “It follows that the insurer cannot be held liable on the basis of the above policy in the present case and therefore the liability has to be of the owner of the vehicle. However we find that the MA Nos. 254 252 253 & High Court without assigning any reason has simply assumed that the owner of the vehicle was not liable and that the insurer alone was liable in the present case. This conclusion reached by the High Court is clearly erroneous. The liability of the insurer arises only when the liability of the insured has been upheld for the purpose of indemnifying the insured under the contract of insurance. There is thus a basic fallacy in the conclusion reached by the High Court on this point.” However the question involved was referred in Para 1 of the judgment which has been decided finally. It appears that the judgment was against the final award and not against the order passed under Section 140 of the Motor Vehicles Act. Conclusive para of the said judgment reads as under: “For the aforesaid reasons the appeal is allowed. The judgment of the High Court and Tribunal are set aside. However as indicated earlier the claimants are not required to refund the amount already paid to them by the insurer.” Reliance has also been placed on the judgment of High Court of Kerala in National Insurance Company Ltd. vs. Sasilatha 2000(1) ACJ 661 holding that “a reading of Section 140 would make it clear that no fault liability is cast on the owner of the vehicle and not directly on the insurer. If the owner of the vehicle is found liable under Section 140 naturally the liability of the insurer also would arise”. Appellant has also referred the judgment of this Court in Oriental Insurance Company Limited vs. Sangeeta & ors. 1992 Kash.L.J. 661 but it was a case in which the final award was challenged. In Para 9 of the said judgment it was held that “I therefore hold that claimant’s failure to implead the insured as respondent and to obtain a MA Nos. 254 252 253 & judgment against him has disentitled her to be indemnified by the appellant company”. This was also the case of Sunita RathiKLT 343 has held as under: “4. Under Section 140 of the Act to pay compensation is absolute when the death or permanent disablement of any person is arising out of the use of a motor vehicle. Irrespective of the negligence there is no necessity for the claimant to plead or establish that the death or permanent disablement was due to the wrongful act or negligent act of the owner of the vehicle. No fault liability under Section 140 is created by the Statute is outside the law of tort and there is no necessity to enter into an enquiry that who was the wrong doer. This is a substantive right accrued and the liability is incurred on the date of the accident and not on the date of consideration of the claim. So the accidental death of the driver of the jeep occurred during the use of the vehicle by the owner and in turn insurance company to pay compensation under Section 140. Therefore the Tribunal was right in awarding compensation under Section 140 and direction to pay the above with interest by the insurance company. Direction to pay interest is also fully justified as amount due under Section 140 was not made in time and there is erosion of money value due to passage of time.” The Supreme Court in Para 6 of the judgment in Indra Devi & ors. Vs. Bagada Ram & anr. 2010 AIR2913 in which reference has been made to the judgment in Eshwarappa @ Maheshwarappa and Anr. vs. C. S. Gurushanthappa and Anr. 2010R.A.J. 31 has observed as under: MA Nos. 254 252 253 & “6. We have examined the nature of the `no fault compensation payable under section 140 of the Act Eshwarappa @ Maheshwarappa and Anr. vs. C.S. Gurushanthappa and Anr. 2010R.A.J. 31the judgment in which is pronounced today. We therefore do not wish to elaborate the point further. Suffice to say that in view of our judgment in Civil Appeal No.7049 of 2002 the Tribunal was patently in error in directing for the refund of the amount of `no fault compensation already paid to the claimants to the insurance company. The High Court was equally in error in missing out this grave mistake in the judgment and order passed by the Tribunal and not setting it In view of the above it is not necessary to refer to the cleavage of judicial opinion in the matter as the law regarding no fault liability has been settled by their lordships of Supreme Court and it is not necessary to implead the insured who is dead where the claimants are his legal heirs and entitled to compensation under Section 140 of the Motor Vehicle Act irrespective of the fact that whether the deceased was at fault as long as the Insurance Company is not disputing. Hence the appeals are dismissed being without any merit. Appellant company is directed to deposit the amount of award passed in all the claim petitions within a period of one month from today failing which same will be payable with 12% interest per annum. 12 .06.2020 Ram Murti Sindhu Sharma) Whether the order is speaking Whether the order is reportable 