The Divisional Manager, United India Insurance Co. Ltd. Vs. Bhawa Tirkey and ors. - Court Judgment

Pradipta Ray, J.

1. The Insurance Company has filed this appeal against an award dated July 2, 1999 under Section 140 of the Motor Vehicles Act 1988 (hereinafter referred to as the 'Act'), passed by the 2nd, Motor Accident Claims Tribunal, Sambalpur.

2. Mr. Ray, learned Advocate appearing for the Appellant-Insurance Company has urged that the Tribunal failed to appreciate the difference between an independent application under Section 140 of the Act and an application for interim award under Section 140 of the Act in a pending proceeding under Section 166 of the Act. According to him, if an application under Section 140 of the Act is filed as an independent application, the Tribunal has the obligation to consider the defence of the Insurance Company as available under Section 149 of the Act before giving any award, otherwise unscrupulous persons may take advantage of the said Section and in collusion with the owners may take away the public money without any cause. Mr. Ray has further submitted that even in an interim application under Section 140 of the Act, the Tribunal is to prima facie satisfy itself about the basic facts.

3. Mr. Udgata, learned Advocate appearing for the claimants submits that at the stage of determination of compensation under Section 140 of the Act, the Insurance Company cannot be permitted to put forward the defence available under Section 149 of the Act. He has referred to a decision of Gujarat High Court in United India Insurance Company Ltd. V. Maganlal Hirabhai Patel and Ors., 1999 ACJ 268 in support of his submission.

4. It appears that the Tribunal also referred to the said judgment of the Gujarat High Court and has proceeded on the basis that the Tribunal is not required to examine the insurer's defence available under Section 149 of the Act for the purpose of giving compensation under Section 140 of the Act. With due respect, it is difficult to agree with the view expressed by the Gujarat High Court, particularly when an application under Section 140 of the Act is filed independently without filing claim under Section 166 of the Act. Prima facie, if the said view is accepted, it is likely to encourage unscrupulous owners of motor vehicles and claimants to collude to misutilise Section 140 of the Act and to make windfall gain at public expenses. However, as a separate application under Section 166 of the Act being Misc. Case No. 412/1997 has been filed by the claimants and is pending in the 2nd Motor Accident Claims Tribunal, it is not necessary to consider the correctness of the views of the Gujarat High Court in details in this case.

5. This Court has already held that even for the purpose of determination of application under Section 140 of the Act, the Tribunal is to prima facie, satisfy itself that :

(i) there was an accident involving the insured vehicle;

(ii) the claimants suffered permanent disablement or death the said accident;

(iii) there was a valid Insurance Policy covering the insured vehicle on the date of the accident;

(iv) the Driver had a valid driving licence to drive the offending vehicle; and

(v) if the Insurance Company raises any plea of violation of material condition of the Insurance Policy as permissible under Section 149 of the Act, such plea is not ex facie acceptable without detailed examination of evidence.

6. No doubt where the claim under Section 140 of the Act is in the nature of an interim claim, the Court can adopt a more lenient view, but it should ensure that the claimant proceeds with the main claim case under Section 166 of the Act and Insurance Company gets opportunity to recover the amount from the owner or the claimant, as the case may be, if it is ultimately found that the Insurance Company is not liable to pay the compensation.

7. As already pointed out in the present case an application under Section 166 of the Act has been filed and it is pending in the 2nd Motor Accident Claims Tribunal, Sambalpur. Though this Court does not accept the views expressed in the impugned judgment and award, it does not want to interfere with it at this stage, in view of the pendency of the main claim case under Section 166 of the Act. The Court, however, feels it necessary to introduce safeguards so that the Insurance Company can recover the amount from the owner or claimant as the case may be, if it is ultimately held not liable to pay compensation.

8. For the foregoing reasons, the appeal is disposed of with the following directions:

(i) The impugned award would be treated as an interim award subject to the result of the claim case under Section 166 of the Act being Misc. Case No. 212 of 1997 of the 2nd. Motor Accident Claims Tribunal, Sambalpur.

(ii) The Insurance Company will deposit the awarded compensation in the Tribunal by 20th of June, 2002 without prejudice to its rights and contentions in the pending claim case under Section 166 of the Act.

(iii) The Tribunal will permit the claimants to withdraw the said amount only after the claimants filed an affidavit that they will proceed with the main claim case under Section 166 of the Act.

(iv) In case the claimants do not proceed with the main claim case under Section 166 of the Act and allow is to be dismissed for default, the Tribunal will pass appropriate order for recovery of the Compensation awarded under Section 140 of the Act.

(v) The Insurance Company will be permitted to take back the amount deposited in this Court in this appeal with interest accrued thereon.