Hon’ble Mrs Justice Sindhu Sharma heard the case of National Insurance Company Ltd v Feroz-ud-Din & Anr via video-conferencing. The Court directed the appellant-company to deposit the amount of the award passed. This Court heard the matter on June 12, 2020.
Facts of the Case
On 16th October 2017, at around 10:15 A.M., an accident occurred near Kashor, Jodhpur. Bashir Ahmed, the owner of the vehicle, was driving the vehicle at the time of the accident. However, the accident resulted in the death of Bashir Ahmed and his family. The Tribunal found that the appellant company insured the offending vehicle. Hence, the insurer was under a legal obligation to indemnify the owner.
The Tribunal issued an interim award of ₹50,000 in each claim petitions in favour of the claimants. Subsequently, the appellant — National Insurance Company — made four appeals challenging the Tribunal’s Award. These appeals involved common questions of fact and law. Thus, the Court decided to hear them together and decide upon them by a common judgment.
Contentions of the Appellant
The insured is not impleaded as a party in the claim petitions. Thus, the insurer is not liable to pay compensation. The liability of the insurer is to indemnify the insured. But in this case, the insured is dead. The appellant referred to the case of National Insurance Company Ltd. vs. Sasilatha, 2000(1) ACJ 661. The High Court of Kerala decided upon this case. It held that under Section 140 of the Motor Vehicle Act, no-fault liability is cast on the owner of the vehicle and not on the insurer.
Under an insurance policy, the contract is to indemnify the insured against third-party liability. Thus, the appellant is not liable to pay compensation under no-fault liability in the absence of the insured. Additionally, the appellant referred to the Supreme Court case of Oriental Insurance Company Ltd. vs. Sunita Rathi, 1998 AIR (SC) 257. In this case, the Court held that the insurer is not liable and the liability lies with the owner of the vehicle.
Contentions of the Respondents
The claimants-respondents are the grandparents of the deceased whose son was driving the said vehicle. They had filed claim petitions against National Insurance Company Limited & others. They sought compensation under Section 166 and Section 140 of the Motor Vehicles Act, 1998.
In Sunita Rathi’s case, the Supreme Court passed the judgment against the final award of the Tribunal. However, it was not against the order passed under Section 140 of the Motor Vehicles Act. The Court held that the appellant referred to the cleavage of judicial opinion unnecessarily. The Supreme Court has already settled the law regarding no-fault liability. Hence, it is not necessary to implead the insured who is dead. The claimants are entitled to compensation under Section 140 of the Motor Vehicles Act, 1988. This is irrespective of the fact whether the deceased was at fault as long as the insurance company is not disputing.
The appeals had no merits. Hence, the Court dismissed all four appeals. It directed the appellant to deposit the amount of the Award passed in all the claim petitions. This Court ordered the appellant to deposit the amount within a month. It added that the failure to do so would lead to an additional payment of 12% interest per annum.
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