New India Assurance Company Ltd. Vs. Chandra and ors. - Court Judgment

Excerpt:
- securitisation & reconstruction of financial assets & enforcement of security interest act, 2002 [c.a. no. 54/2002]section 17; power of tribunal to impose condition relating to deposit for grant of stay of auction held, there is no specific provision made under section 17 of securitisation act or under any other provisions of the said act empowering the tribunal to pass any interim order. but under sub-section (12) of section 19 of the recovery of debts due to banks and financial institutions act, 1993, the tribunal has been empowered to pass various interim orders. if sub-section (7) of section 17 of securitisation act is read along with sub-section (12) of section 19 of recovery of debts due to bank is and financial institutions act, it would be clear that the tribunal also has jurisdiction to pass interim orders under section 17 of the securitisation act in appropriate cases. the tribunal is empowered to grant interim stay subject to such conditions as may be deemed proper including condition of deposit. even under section 69 of the transfer of property act, the only remedy of the borrower whose mortgage has invoked section 69 of the transfer of property act, is to file a civil suit and in such suit the court has power to grant injunction and to impose condition for the grant thereof--section 17; [a.p. shah c.j., f.m. ibrahim kalifulla & v. ramasubramanian, jj] proceedings under section 17 power of the tribunal to pass any interim order held, once the possession of the secured asset is taken, there would be no occasion for the tribunal to order redelivery of possession till final determination of the issue. in other words, it is only when the tribunal comes to the conclusion that any of the measures, referred to in section 13 (4) taken by the secured creditor are not in accordance with the provisions of the act and the rules made thereunder, then only the tribunal can restore possession of such secured assets to the borrower. by virtue of sub-section (7) of section 17 of the securitisation act read with section 19 (12) of the recovery of debts due to banks and financial institutions act the tribunal undoubtedly possess ancillary power to pass interim orders subject to the conditions as it may deems fit and proper to impose, but it does not in any way override the special provisions contained in section 17(3) of the securitisation act. the statutory scheme of the securitisation act is such that the borrower could take recourse to application under section 17 only if one or other measure is taken by the secured creditor, and the tribunal can restore the status quo ante only if it comes to the conclusion that any of the measure taken by the secured creditor is not in accordance with the provisions of the act. the scheme cannot be bypassed by issuing a mandatory order for redelivery of the possession before conclusion of the proceedings under section 17--sections 17, 13 (4); [a.p.shah, c.j., f.m. ibrahim kalifulia &v. ramasubramanian, jj] scope of enquiry under section 17 held, the main purpose of the securitisation act, and in particular section 13 thereof, is to enable and empower the secured creditors to take possession of their securities and to deal with them without the intervention of the court. therefore, in an application under section 17, the tribunal is concerned only with the validity of the acts of the secured creditor in taking possession of the securities and dealing with the same under section 13. all such grounds, which would render the action of the bank/financial institution illegal, can be raised before the tribunal in the proceedings under section 17. it is for the tribunal to decide in each case whether the action of the bank was in accordance with the provisions of the act and legally sustainable. however, while considering the question of validity of the action of the bank, it is not necessary for the tribunal to adjudicate the exact amount due to the secured creditors. in other words, the purpose of an application under section 17 is not the determination of the quantum of claim per se as the tribunal is concerned with the issue of the validity of the measures taken by the banks/financial institutions under section 13(4)--sections 17(4), 13(4) ; [a.p. shan c.j.,f.m.ibrahim kalifulla & v. ramasubramanian, jj] appeal right of bank held, the right of the bank is not automatically suspended upon filing of an appeal by borrower under section 17 of the securitisation act and the bank as secured creditor can proceed to auction secured asset where no stay is granted by the tribunal. there is nothing in section 17 of the securitisation act which would indicate that the legislature intended that there would be automatic stay of recovery proceedings by bank under section 13(4) on filing an appeal by borrower under section 17. use of the expressions if and then under section 17 would not mean that the bank can take one or more measures laid down under section 13(4) only if the tribunal declares that the action taken already is in accordance with the provisions of the securitisation act and the rules made thereunder. use of the word if does not connote a condition precedent. it is a recognised rule of interpretation of statutes that expressions used therein should ordinarily be understood in a sense in which they harmonized with the object of the statute and which effectuate the object of the legislature. the provisions of section 17 must, therefore, receive such construction at the hands of the court as would advance the object and at any event not thwart it. in other words, the principle of purposive interpretation should be applied while construing the said provisions. the securitisation act is enacted to provide a speedy and summary remedy for recovery of thousands of crores which were due to the banks and financial institutions. ordert.v. masilamani, j.1. the revision petitioner m/s. new india assurance company ltd is the 4th respondent in the motor accident claim petition.2. the first respondent filed the claim petition in m.c.o.p. no. 235 of 1998 on the file of the motor accident claims tribunal (principal district judge), vellore for compensation in respect of the grievous injuries sustained by her in a motor vehicle accident. a goods vehicle bearing registration no. tn-23-b-7273 and insured with the revision petitioner herein and another bus bearing registration no. tn-27-z-6565 and insured with the 3rd respondent herein were involved in the accident.3. while the claim made by the first respondent was allowed, it was held by the learned principal district judge that the accident occurred on account of contributory negligence of both the drivers and therefore apportioned liability at 50% each and directed the respective insurance companies liable to pay the compensation amount.4. this revision is mainly based on the ground that since the first respondent's claim was in respect of an unauthorised passenger travelling in the goods vehicle, who sustained injuries, the revision petitioner-insurance company is not liable to pay the compensation. though such contention was raised before the tribunal, the learned principal district judge negatived the same and passed the impugned order. hence, the revision.5. heard mr. s. jayasankar, learned counsel for the revision petitioner and ms. p. jeya and mr. a.s. ekambaram, learned counsel appearing for respondents 1 and 3 respectively.6. there is no controversy regarding the findings rendered by the motor accident claims tribunal (principal district judge), with reference to the negligence and quantum of compensation.7. in this context, the learned counsel appearing for the revision petitioner herein referred to the decision new india assurance company v. satpal singh in support of his arguments that the revision petitioner is not liable to pay the compensation in respect of an unauthorised passeneger in the goods vehicle. in view of the finding of the tribunal, i am of the view that as per the ratio in the said decision, such contention of the revision petitioner has to be sustained. the only question now posed in this revision is with reference to the liberty to be extended to the revision petitioner to recover the amount from the owner of the goods vehicle after paying the compensation to the first respondent, as the revision petitioner is not duty bound to pay the compensation amount on the basis of vicarious liability for the simple reason that the policy of insurance had been violated in taking the gratuitous passenger in the goods vehicle.8. in view of the above said reasons, there is no difficulty in concluding that on account of violation of the policy condition, the revision petitioner/insurance company is not liable vicariously to pay the compensation amount (vide) the ratio laid down in the decision rendered by the hon'ble supreme court referred supra. if that be so, learned district judge (motor accident claims tribunal) ought to have given liberty to the revision petitioner to recover the amount from the owner of the vehicle after paying the same to the victim, namely, the first respondent herein. thus, this court is of the considered view that the order of the motor accident claims tribunal has to be modified to the extent pointed out in this revision.9. though the learned counsel for the 3rd respondent would also urge that the similar benefit should be extended to that insurance company also, as has been rightly pointed out by the learned counsel for the revision petitioner, the court below held on the basis of the recorded evidence that the 3rd respondent herein is vicariously liable to pay the compensation for the fact that the vehicle insured with them is a passenger vehicle and therefore covered by the policy of insurance on the date of the accident. hence, i am unable to accept the contention now put forth by the learned counsel for the 3rd respondent in that regard.10. for the aforesaid reasons, the revision petition is ordered modifying the impugned orders to the extent that the revision petitioner, after paying the compensation amount as per the award passed by the tribunal, is entitled to recover the same from the owner of the goods vehicle concerned by executing this order in the same proceedings, as laid down by the apex court in national insurance company v. baljit kaur .11. with the above modification in the impugned orders, the revision petition is ordered. consequently, c.m.p. no. 3399 of 2004 is closed. however, there shall be no order as to costs.

Judgment:
ORDER

T.V. Masilamani, J.

1. The revision petitioner M/s. New India Assurance Company Ltd is the 4th respondent in the Motor Accident Claim Petition.

2. The first respondent filed the claim petition in M.C.O.P. No. 235 of 1998 on the file of the Motor Accident Claims Tribunal (Principal District Judge), Vellore for compensation in respect of the grievous injuries sustained by her in a motor vehicle accident. A goods vehicle bearing registration No. TN-23-B-7273 and insured with the revision petitioner herein and another bus bearing registration No. TN-27-Z-6565 and insured with the 3rd respondent herein were involved in the accident.

3. While the claim made by the first respondent was allowed, it was held by the learned Principal District Judge that the accident occurred on account of contributory negligence of both the drivers and therefore apportioned liability at 50% each and directed the respective insurance companies liable to pay the compensation amount.

4. This revision is mainly based on the ground that since the first respondent's claim was in respect of an unauthorised passenger travelling in the goods vehicle, who sustained injuries, the revision petitioner-Insurance Company is not liable to pay the compensation. Though such contention was raised before the Tribunal, the learned Principal District Judge negatived the same and passed the impugned order. Hence, the revision.

5. Heard Mr. S. Jayasankar, learned counsel for the revision petitioner and Ms. P. Jeya and Mr. A.S. Ekambaram, learned counsel appearing for respondents 1 and 3 respectively.

6. There is no controversy regarding the findings rendered by the Motor Accident Claims Tribunal (Principal District Judge), with reference to the negligence and quantum of compensation.

7. In this context, the learned counsel appearing for the revision petitioner herein referred to the decision New India Assurance Company v. Satpal Singh in support of his arguments that the revision petitioner is not liable to pay the compensation in respect of an unauthorised passeneger in the goods vehicle. In view of the finding of the Tribunal, I am of the view that as per the ratio in the said decision, such contention of the revision petitioner has to be sustained. The only question now posed in this revision is with reference to the liberty to be extended to the revision petitioner to recover the amount from the owner of the goods vehicle after paying the compensation to the first respondent, as the revision petitioner is not duty bound to pay the compensation amount on the basis of vicarious liability for the simple reason that the policy of insurance had been violated in taking the gratuitous passenger in the goods vehicle.

8. In view of the above said reasons, there is no difficulty in concluding that on account of violation of the policy condition, the revision petitioner/Insurance Company is not liable vicariously to pay the compensation amount (vide) the ratio laid down in the decision rendered by the Hon'ble Supreme Court referred supra. If that be so, learned District Judge (Motor Accident Claims Tribunal) ought to have given liberty to the revision petitioner to recover the amount from the owner of the vehicle after paying the same to the victim, namely, the first respondent herein. Thus, this Court is of the considered view that the order of the Motor Accident Claims Tribunal has to be modified to the extent pointed out in this revision.

9. Though the learned counsel for the 3rd respondent would also urge that the similar benefit should be extended to that Insurance Company also, as has been rightly pointed out by the learned counsel for the revision petitioner, the Court below held on the basis of the recorded evidence that the 3rd respondent herein is vicariously liable to pay the compensation for the fact that the vehicle insured with them is a passenger vehicle and therefore covered by the policy of insurance on the date of the accident. Hence, I am unable to accept the contention now put forth by the learned counsel for the 3rd respondent in that regard.

10. For the aforesaid reasons, the revision petition is ordered modifying the impugned orders to the extent that the revision petitioner, after paying the compensation amount as per the award passed by the Tribunal, is entitled to recover the same from the owner of the goods vehicle concerned by executing this order in the same proceedings, as laid down by the Apex Court in National Insurance Company v. Baljit Kaur .

11. With the above modification in the impugned orders, the revision petition is ordered. Consequently, C.M.P. No. 3399 of 2004 is closed. However, there shall be no order as to costs.