Supreme Court: Procedure to be followed in Motor accident claim petition if offending vehicle is not insured

 Where there is no insurance cover for a vehicle, the owner should be directed to offer security or deposit an amount, adequate to satisfy the award that may be ultimately passed, as a condition precedent for release of the seized vehicle involved in the accident. If such security or cash deposit is not made, within a period of three months, appropriate steps may be taken for disposal of the vehicle and hold the sale proceeds in deposit until the claim case is disposed of. The appropriate Governments may consider incorporation of a rule on the lines of Rule 6 of the Delhi Motor Accident Claims Tribunal Rules, 2008 in this behalf.

{Para 28}

 IN THE SUPREME COURT OF INDIA

SLP (C) Nos. 11801-11804 of 2005

Decided On: 17.12.2009

Jai Prakash Vs. National Insurance Co. Ltd. and Ors.

Hon'ble Judges/Coram:

R.V. Raveendran, Mukundakam Sharma and K.S. Panicker Radhakrishnan, JJ.

Author: R.V. Raveendran, J.

Citation:  2009 INSC 1315,MANU/SC/1949/2009,(2010) 2 SCC 607.

Print Page

Supreme Court: What order the Motor accident claim tribunal should pass if it directs insurance company to pay and recover from owner of offending vehicle?

 The residual question is what would be the appropriate direction. Considering the beneficial object of the Act, it would be proper for the insurer to satisfy the award, though in law it has no liability. In some cases the insurer has been given the option and liberty to recover the amount from the insured. For the purpose of recovering the amount paid from the owner, the insurer shall not be required to file a suit. It may initiate a proceeding before the concerned Executive Court as if the dispute between the insurer and the owner was the subject matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer. Before release of the amount to the claimants, owner of the offending vehicle shall furnish security for the entire amount which the insurer will pay to the claimants. The offending vehicle shall be attached, as a part of the security. If necessity arises the Executive Court shall take assistance of the concerned Regional Transport Authority. The Executing Court shall pass appropriate orders in accordance with law as to the manner in which the owner of the vehicle shall make payment to the insurer. In case there is any default it shall be open to the Executing Court to direct realization by disposal of the securities to be furnished or from any other property or properties of the owner of the vehicle i.e. the insured.  {Para 13}

 IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 6178 of 2004.

Decided On: 21.09.2004

National Insurance Co. Ltd. Vs. Challa Bharathamma and Ors.

Hon'ble Judges/Coram:

Dr. Arijit Pasayat and C.K. Thakker, JJ.

Author: Arijit Pasayat, J.

Citation: (2004) 8 SCC 517,MANU/SC/0779/2004.

Print Page

When claimant is entitled to claim damages from insurer of offending vehicle?

 I have gone through the claim petition,
replies and the evidence on record. The case of the
claimant before the Tribunal was that in the said
accident his truck got totally damaged and it was
insured with his own insurance company, i.e. Oriental
Insurance Company, which has granted only

Rs.2,02,000/- as assessed by the insurer. He has also
received Rs.60,000/- as salvage but claimed that he
was also entitled to balance amount as compensation
from the insured of the offending Tata Mobile, which
has not been paid to him by his own insurance
company, for the reasons that the vehicle was
damaged and market value of the vehicle was
Rs.3,50,000/- at the time of the accident but the
insurance agency restricted his claim to the tune of
Rs.2,02,000/-, as per the insurance cap read with the
terms and conditions of the insurance policy. He has
obtained the loan from the Corporation, as mentioned
supra, details of which is already given in para 21 of
the claim petition.
 The Tribunal, after examining all the facts
of the case held that the insurer of the Tata Mobile has
to pay the said amount. Thus, it can be safely
concluded that the claimant has not made claim for the
loss of income. He has claimed damages and loss
suffered by him.
14. The Truck was insured and insurer has
granted the claim only viz-a-viz the risk covered, within

the insurance cap. The said amount plus the amount of
salvage cannot be claimed from another insurance
company. But at the same time he has suffered loss
because his vehicle has totally damaged and he is not
in a position to ply it and earn income, in order to adjust
the loan, the market value of which is stated to be
Rs.3,50,000/-. He has claimed the balance amount of
compensation from another insurance company which
is the insurer of Tata Mobile in terms of a different
insurance contract. Both the insurance contracts are
different and claimant has laid claim for difference of
amount and was entitled to the same. The insurance
contracts are different and the claimant has to claim
balance amount/difference of amount. My this view is
fortified by the judgment delivered by the Andhra
Pradesh High Court in case United India Insurance
Co. Ltd. versus K. Chandrasekharachari and
another reported in 2008 ACJ 640. It is apt to
reproduce paras 13 and 15 of the said judgment
herein.
“13. From a reading of Sections 165 and 166 of the Act
it is clear that the State Government may constitute
Claims Tribunal for the purpose of adjudicating claims

for compensation in respect of accidents involving the
death of or bodily injury to persons arising out of the
use of motor vehicles or damages to any property of a
third party or both and such application can be filed by
person sustain injury or by the owner of the property. In
the present case, the claimant who is the owner of the
damaged van who is a third party, filed petition for
damages and in view of the above provisions, there
cannot be any dispute with regard to the claim petition
being filed under Section 166 of the Act and the same
is maintainable.
14. …… ……. …….
15. The Tribunal has recorded finding of fact that the
accident occurred due to rash and negligent driving of
the lorry by its driver. This being a finding of fact,
cannot be interfered within the appeal. Because of the
accident, the van of the claimant got damaged and the
insurer of the lorry is jointly and vicariously liable to pay
compensation along with the owner of the lorry and as
per Sections 165 and 166, the claimant is entitled to
claim damages. As the van of the claimant was
covered under a comprehensive insurance policy with
the National Insurance Company, the claim of the
claimant was settled. As rightly observed by the
Tribunal, with regard to the present accident, which
was the result of the negligent driving of the driver of
the lorry, the contract is between the insured and
insurer and the insurer has to indemnify the insured.
Further there is no contract between the National
Insurance Company, which is the insurer of the van
and the United Indian Insurance Company, which is the
insurer of the lorry that in case of settlement of claim by
the claimant with the National Insurance Company for
repairs, he is not entitled to claim damages from the
United India Insurance Company which is the insurer of
the lorry responsible for the accident. Both the
contracts are for different purposes and operate in

different fields. In view of this reasoning, I answer the
issue in favour of the claimant holding that the claimant
is not barred from claiming damages from the insurer of
the lorry which is responsible for the accident.”
 [emphasis supplied]
IN THE HIGH COURT OF HIMACHAL PRADESH
SHIMLA
FAO (MVA) No. 3 of 2008.

 Date of decision: 01.1.2016.
National Insurance Co. Ltd.  V Shri Jhenta Ram and others 
Coram:
The Hon’ble Mr. Justice Mansoor Ahmad Mir, Chief justice.
Citation;(2016) 3 ALLMR(JOURNAL)46

Print Page