Supreme Court: Whether Insurance Company is liable to pay compensation if motor accident is done by driver who is minor child?

Section 4 of the Motor Vehicles Act prohibits driving of a vehicle by any person under the age of eighteen years in any public place. Section 5 of the Act imposes a statutory responsibility upon the owners of the motor vehicles not to cause or permit any person who does not satisfy the provisions of Sections 3 or 4 to drive the vehicle. {Para 15}

16. The vehicle in question admittedly was being driven by Karan Arora who was aged about fifteen years. The Tribunal, as noticed hereinbefore, in our opinion, rightly held that Karan Arora did not hold any valid licence on the date of accident, namely 5.2.1997.

17. The learned single Judge as also the Division Bench of the High Court did not put unto themselves a correct question of law. They proceeded on a wrong premise that it was for the Insurance Company to prove breach of conditions of the contract of insurance.

18. The High Court did not advert to itself the provisions of Sections 4 and 5 of the Motor Vehicles Act and thus misdirected itself in law.

19. This aspect of the matter has been considered by this Court in Oriental Insurance Co. Ltd. v. Prithvi Raj   MANU/SC/0685/2008 : AIR2008SC1408 wherein upon taking into consideration a large number of decisions, it was held that the Insurance Company was not liable.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 5876 of 2008 

Decided On: 24.09.2008

United India Insurance Co. Ltd. Vs. Rakesh Kumar Arora and Ors.

Hon'ble Judges/Coram:

S.B. Sinha and Cyriac Joseph, JJ.

Citation: 2008 INSC 1087,MANU/SC/8090/2008,2009 AIR SC 24.

Read full judgment here: Click here.

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Supreme Court: Minor and inconsequential deviations with regard to licensing conditions not constitute sufficient ground to deny benefit of coverage of insurance to third parties

In National Insurance Co. Ltd. v. Swaran Singh and Ors.   MANU/SC/0021/2004 : AIR2004SC1531 this Court held:

88. Section 10 of the Act provides for forms and contents of licences to drive. The licence has to be granted in the prescribed form. Thus, a licence to drive a light motor vehicle would entitle the holder there to drive the vehicle falling within that class or description.

89. Section 3 of the Act casts an obligation on a driver to hold an effective driving licence for the type of vehicle which he intends to drive. Section 10 of the Act enables the Central Government to prescribe forms of driving licences for various categories of vehicles mentioned in Sub-section (2) of the said section. {Para 21}

22. It was furthermore observed:

90. We have construed and determined the scope of Sub-clause (ii) of Sub-section (2) of Section 149 of the Act, Minor breaches of licence conditions, such as want of medical fitness certificate, requirement about age of the driver and the like not found to have been the direct cause of the accident, would be treated as minor breaches of inconsequential deviation in the matter of use of vehicles. Such minor and inconsequential deviations with regard to licensing conditions would not constitute sufficient ground to deny the benefit of coverage of insurance to the third parties.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 5876 of 2008 

Decided On: 24.09.2008

United India Insurance Co. Ltd. Vs. Rakesh Kumar Arora and Ors.

Hon'ble Judges/Coram:

S.B. Sinha and Cyriac Joseph, JJ.

Citation: 2008 INSC 1087,MANU/SC/8090/2008,2009 AIR SC 24.

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Whether court can order inspection of property which is not subject matter of suit and are in possession of third parties?

At the outset, it must be mentioned that Rule 7 (a) is not restricted to the subject-matter of the suit. The rule clearly empowers the Court to make an order for inspection of any property, which is the subject - matter of the suit of which any question may arise therein. At this stage, a reference may also be made to Order 18, Rule 18, which provides that the Court may at any stage of a suit inspect any property or thing concerning which any question may arise. Similarly, under Order 26, Rule 9, in any suit in which the Court deems a local investigation to be requisite or proper for the purpose of elucidating any mater in dispute, the Court may issue a commission to such person as he thinks fit directing him to make such an investigation and to report thereon to the Court. In view of the aforesaid provision, it is not possible to accept the contention of Mr. Jahagirdar that in exercise of the powers granted to the Court under the Code, the Court is precluded from directing inspection of some other property adjacent to the suit property should such inspection be necessary in the interest of justice. In my opinion, the Scope of Rule 7 (a) is wide enough to confer power on the Court to order inspection even in respect of properties, which are not the subject-matter of the suit; provided such inspection is necessary for determination of the controversy before the Court. At this staged, I may mentioned that is somewhat similar situation Guha, J. of Calcutta High Court has granted inspection of the flats, which were not the subject-matter of suit. Sankar Lal Daga v. Phulchand Agarwalla ILR (1960) 1 Cal 529. In the case, on an application made by the tenant to the Rent controller for fixation of fair rent the landlord applied for a direction on the Inspector to take measurement of an adjacent similar tenancy in the same premises. Access to the premises was, however, refused by the tenant. The question arose whether the Rent Controller could enforce an order for inspection of the adjoining tenancy. The question was answered in the affirmative by the learned Judge. Thus I do not find any error of infirmity in the impugned order. The order is passed within the four corners of the provision of Order 39, Rule 7 (a) and no exception can be taken of such order, which is an interlocutory order.

IN THE HIGH COURT OF BOMBAY

Writ Petn. No. 2599 of 1995

Decided On: 19.09.1995

Madhukar R. Javle  Vs. Baskar Ramnath Shibad

Hon'ble Judges/Coram:

A.P. Shah, J.

Citation: 1996 (1) MHLJ 245

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Whether court is under obligation to take action within reasonable time if no limitation is prescribed?

In Advanced Law Lexicon by P. Ramanatha Aiyar, 3rd Edn. 'reasonable time' is explained as follows:

That is a reasonable time that preserves to each party the rights and advantages he possesses and protects each party from losses that he ought not to suffer.

Thus time must be reckoned reasonably, not only in order to preserve rights and advantages a party possesses, but equally to protect each party from the losses he ought not to suffer. Thus whether an action has been taken within a reasonable time must also be viewed from the point of view of the party who might suffer losses.

 In our view, where no period of limitation is prescribed, the action must be taken, whether suo motu or on the application of the parties, within a reasonable time. Undoubtedly, what is reasonable time would depend on the circumstances of each case and the purpose of the Statute. In the case before us, we are clear that the action is grossly delayed and taken beyond reasonable time, particularly, in view of the fact that the land was transferred several times during this period, obviously, in the faith that it is not encumbered by any rights.

11. We are of the view that merely because the legislation is beneficial and no limitation is prescribed, the rights acquired by persons cannot be ignored lightly and proceedings cannot be initiated after unreasonable delay as observed by this Court in the case of Situ Sahu and Ors. v. State of Jharkhand reported in MANU/SC/0744/2004 : (2004) 8 SCC 340.

IN THE SUPREME COURT OF INDIA

C.A. No. 1250 of 2008

Decided On: 19.04.2017

 Chhedi Lal Yadav and Ors. Vs. Hari Kishore Yadav (D) thr. L.Rs. and Ors.

Hon'ble Judges/Coram:

S.A. Bobde and L. Nageswara Rao, JJ.

Citation: (2018) 12 SCC 527

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Whether Arbitrator has power to pierce corporate veil so as to bind other parties who have not agreed to arbitrate?

“Like consummated romance, arbitration rests on consent”

 The
agreement between parties to resolve their disputes by arbitration is the
cornerstone of arbitration. The arbitral tribunal derives its jurisdiction from
the consent of parties (other than statutory arbitrations). In absence of such
consent, the arbitral tribunal would have no jurisdiction to make an award
and the award so rendered would, plainly, be of no value. 
In the present case, admittedly, the Agreement is not signed by Mr
Sudhir Gopi in his personal capacity. None of the communications
produced provides a record of an agreement between Mr Sudhir Gopi and
IGNOU to arbitrate. The arbitral tribunal has also not proceeded on the
basis of any such agreement.
The jurisdiction of the arbitrator is circumscribed by the agreement
between the parties and it is obvious that such limited jurisdiction cannot
be used to bring within its ambit, persons that are outside the circle of
consent. The arbitral tribunal, being a creature of limited jurisdiction, has
no power to extend the scope of the arbitral proceedings to include persons
who have not consented to arbitrate. Thus, an arbitrator would not have the
power to pierce the corporate veil so as to bind other parties who have not
agreed to arbitrate.
IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment delivered on:16.05.2017
 O.M.P. (COMM) 22/2016
SUDHIR GOPI V INDIRA GANDHI NATIONAL OPEN
UNIVERSITY AND ANR.
CORAM
HON’BLE MR JUSTICE VIBHU BAKHRU

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Whether court can set aside order of discharge of accused on application of third party?

It is also pertinent to note that the respondent no.1 was discharged by

the order dated 30.12.2014. The CBI had not challenged the said order.

The aggrieved person, Rubabuddin had also not filed any revision

application within the period of limitation. Despite which the applicant,

who claims to be a socially responsible citizen, had not taken any steps to

challenge the said order. It is to be noted that one Shri Rajesh Kamble, who

was also not a party to the proceedings had opposed the withdrawal

application filed by Rubabuddin Shaikh, in his capacity of being "an alert

citizen". The said application was dismissed vide order dated 21.10.2015.

The Applicant has shown interest in this matter only after the dismissal of

the application filed by Rajesh Kamble.

42. It is also pertinent to note that several other accused in the said crime

have also been discharged, but the applicant has not challenged the said

orders, but has sought to challenge only the order whereby the present

respondent no.1 has been discharged. The social interest and responsibility

proclaimed by the Applicant is thus restricted only to the relief sought

against the Respondent No.1 and does not even extend to other accused in

the said case much less having larger implications beyond the case. This

is a predominant distinguishing feature in the relief sought in the present

case vis- a-vis a relief in Subramanian Swami (supra). The above facts

coupled with the fact that applicant has shown sudden interest in matter

after a period of over 10 years gives an indication of lack of bonafides.

Needless to state that the criminal law cannot be permitted to be used as an

instruments to wreck vengeance due to personal or political grudge or to

spite the accused for any other oblique purpose.

 IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPLICATION NO.1248 OF 2015

Harsh Mander Har Mander Singh

v/s.

Amit Anilchandra Shah

 CORAM : SMT. ANUJA PRABHUDESSAI, J.

 PRONOUNCED ON : MARCH 11, 2016.

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What will be effect if employee makes delay in making claim for seniority?

 From the aforesaid pronouncement of law, it is manifest
that a litigant who invokes the jurisdiction of a court for claiming
seniority, it is obligatory on his part to come to the court at the
earliest or at least within a reasonable span of time. The belated
approach is impermissible as in the meantime interest of third
parties gets ripened and further interference after enormous
delay is likely to usher in a state of anarchy.
 The acts done during the interregnum are to be kept in
mind and should not be lightly brushed aside. It becomes an
obligation to take into consideration the balance of justice or
injustice in entertaining the petition or declining it on the ground
of delay and laches. It is a matter of great significance that at
one point of time equity that existed in favour of one melts into
total insignificance and paves the path of extinction with the
passage of time.
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
 CIVIL APPEAL No. 4986-4989 OF 2007
Vijay Kumar Kaul and others 
Versus
Union of India and others 
Dated:May 25, 2012
 Dipak Misra, J.

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How to ascertain locus standi of third party to file appeal under Article 136 of constitution?

Further, it is
pertinent here to observe that it may not be possible
to strictly enumerate as to who all will have locus
to maintain an appeal before this Court invoking
Article 136 of the Constitution of India, it depends
upon the factual matrix of each case, as each case
has its unique set of facts. It is clear from the
aforementioned case law that the Court should be
liberal in allowing any third party, having bonafide
connection with the matter, to maintain the appeal
with a view to advance substantial justice. However,
this power of allowing a third party to maintain an
appeal should be exercised with due care and caution.
Persons, unconnected with the matter under
consideration or having personal grievance against
the accused should be checked. A strict vigilance is
required to be maintained in this regard.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 299 OF 2016

AMANULLAH AND ANR  Vs. STATE OF BIHAR AND ORS. 

V.GOPALA GOWDA, J.
Citation:2016 ALLSCR (CRI)763:(2016) 6 SCC 699

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Whether court can treat objection filed by third party as application given by decree holder under O 21 R 97 of CPC?

 In so far as the second submission of the learned counsel for the obstructionists that the application under Order XXI Rule 97 of the Code of Civil Procedure, 1908 was mandatory and since there was no separate application made by the decree holders under Order XXI Rule 97 for complaining of such resistance or obstruction made by the obstructionists, the Executing Court could not have passed any decree for possession against the obstructionists is concerned, it is a common ground that the obstructionists had filed an application before the Executing Court asserting their alleged rights and applied for adjudication thereof. It is not in dispute that in the said application filed by the obstructionists, decree holders had filed a detailed reply pointing out the previous orders and rights accrued in their favour on the basis of the consent decree and applied for possession of the suit property. The Trial Court proceeded with the application made by the obstructionists and also the reply of the decree holders seeking possession of the property by trying the same as suit and also followed the entire procedure under Order XXI Rule 97 of the Code of Civil Procedure, 1908 and rendered a finding of fact that the obstructionists had no right of whatsoever nature in the suit property and directed them to hand over the possession of the suit property to the decree holders.

22. A perusal of the orders passed by both the Courts below clearly indicates that both the Courts below, in my view, have rightly referred to the Civil Manual which prescribed the procedure to be adopted for entertaining the miscellaneous proceedings requiring judicial inquiry. It is held by the lower Appellate Court that the provisions laid down in paragraph 337 to 341 of the Civil Manual are permissive in nature which are the guidelines for the Court and therefore, it should be interpreted liberally. It is held that it is for the Executing Court to maintain the separate record in respect of the miscellaneous judicial proceeding like proceeding under Order XXI Rule 97 of the Code of Civil Procedure, 1908. The lower Appellate Court has held that the right of the decree holders cannot be defeated for this technical reason. In my view, the lower Appellate Court has rightly construed the provisions under Order XXI Rule 97 read with paragraph 339 of the Civil Manual and has rightly held that such procedure prescribed under the Code of Civil Procedure read with Civil Manual are the rules of procedure which are handmaid of justice and has to be interpreted liberally.

23. Be that as it may, In my view, since the Executing Court has followed the entire procedure prescribed under Order XXI Rule 97 of the Code of Civil Procedure, 1908 and has decided the objection of the obstructionists and the reply of the decree holders by trying the same as suit, I do not find any infirmity with the order passed by the Executing Court in rejecting the application made by the obstructionists and decided the prayer made by the decree holders in the detailed reply filed before the Executing Court.

IN THE HIGH COURT OF BOMBAY

Second Appeal (ST.) No. 30922 of 2015, Civil Application No. 1789 of 2015 in Second Appeal (ST.) No. 30922 of 2015, 

Decided On: 09.12.2015

 Avinash Uttam Kadam and Ors.
Vs.
 Hajira Begum Nisar Ahmad and Ors.

Coram:R.D. Dhanuka, J.

Citation:2016(3) ALLMR156

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Whether third party can file petition under order 21 R 97 of CPC?

On consideration of the entire facts and circumstances as discussed above, it is not possible to accept the submission of the counsel for the opposite party and accordingly it is held that the petition at the instance of a third party is not maintainable either under Order 21, Rule 97 or under S, 151 of the Code.

Patna High Court

Gopalji Prasad Keshari vs Md. Rayez Alias Fulan And Ors. Etc. on 3 September, 1994

Equivalent citations: AIR 1995 Pat 66, 1995 (43) BLJR 211

Bench: R N Prasad

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Whether third party can question passing of consideration under a sale deed?

It is also settled law that passing of consideration under a sale deed cannot bequestioned by third party. Defendant no. 3 has not been able to establish her case that
she is an adopted daughter of the deceased Yashoda and thus, she being the third party,
could not have questioned the execution of the sale deed by Buchamma on the ground of

passing of consideration as rightly laid down by the High Court of M.P. in Pandit
Ramjilal Tiwari v. Vijai Kumar & Ors. 1970 MPLJ 50. The High Court of Patna has also
held that passing of consideration can be questioned by a party or his representative in
Mt. Akli v. Mt. Daho AIR 1928 Patna 44. Similar is the view of the High Court of
Nagpur in Maroti Bansi Teli (supra). Thus, the High Court has erred in law on this

ground also in dismissing the suit.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4816 OF 2016

Muddasani Venkata Narsaiah Vs  Muddasani Sarojana 

Dated:May 5, 2016.
Arun Mishra, J.
Citation:AIR 2016 SC 2250

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Whether rights over property of third party can be claimed invoking S 9 of Arbitration Act 1996?

The question in this appeal is, whether in an application under Section 9 of the 1996 Act for interim relief, orders can be obtained for appointment of a Receiver to take possession of a property of a third party, who is not a party to the arbitration agreement and has admittedly not obtained finance from the respondent financier, Varun Finance Corporation Limited.

 The answer to the aforesaid question has to be in the negative. Merely because the number of a motor vehicle belonging to a stranger is inserted in a hire purchase agreement, possession thereof cannot be taken by making an application under Section 9 of the 1996 Act.

 Even assuming, as argued by Mr. Amitesh Banerjee, there was some arrangement between the borrower and the appellant for transfer of the auto rickshaw in question, orders could not have been obtained by the respondent financier, Varun Finance Corporation Limited in an application under Section 9 of the 1996 Act, there being no arbitration agreement, or for that matter, any other agreement between the respondent financier Varun Finance Corporation Limited and the appellant.

IN THE HIGH COURT OF CALCUTTA

F.M.A.T. 1209 of 2014

Decided On: 09.03.2016

 Md. Ghufran
Vs.
 Varun Finance Corporation Limited and Ors.

Coram:Indira Banerjee and Sahidullah Munshi, JJ.

Citaion: AIR 2016 cal 197

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What is liability of Insurance company towards third party in case of motor accident?

In the present, we are concerned with the liability of the
appellant Insurance
Company towards a third party, the deceased
herein. The law laid down by the Apex Court in Swaran Singh's case
(supra) and followed thereafter, is that the burden of proof lies upon
the Insurance Company to establish its defence, and in order to avoid
its liability towards the insured, it has to prove that the insured was
guilty of negligence and failed to exercise reasonable care in the
matter of fulfilling conditions of the policy regarding driving of vehicle
by a duly licensed driver or one who was not disqualified to drive at
the relevant time. In the absence of any such evidence, the insurer
cannot avoid its liability to pay the compensation to a third party,
particularly when the undisputed position is that the vehicle was
insured on the date of the accident with an Act policy. The insurer
remains liable to a third party and can institute the separate
proceedings to recover the said amount of compensation from the
owner or the driver of the offending vehicle, as is permissible in law.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
First Appeal No.684 of 2005
The Divisional Manager,

Versus
Vandana wd/o Prabhakar Gaigol,

Coram : R.K. Deshpande, J.
Dated : 18 th December, 2014
Citation; 2015(7)ALLMR407

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Whether third party having agreement with developer can claim specific performance of contract from society?

The clauses quoted above, read together and in their proper perspective to
be gathered from the whole agreement, clearly envisage the development and
sale of the free sale component of the project by Vaidehi on their own account
and as an independent contracting party, and not as agents of the Society. The
contract between Vaidehi and the Society is on a principal to principal basis; it
neither constitutes a partnership nor a joint venture or agency between the two.
The third party purchasers with whom Vaidehi might enter into agreements for
sale would have no privity of contract with the Society and the Society would in
no way be responsible for any claim made by such purchasers against Vaidehi
under their respective agreements for sale.
16.6 There being no privity of contract between the Society and the third party
purchasers claiming under Vaidehi, the third party purchasers cannot claim
specific performance of their respective agreements for sale except through
Vaidehi. They stand or fall by Vaidehi. If the rights of Vaidehi are brought to an
end upon a lawful termination of the Society Development Agreement, the third
party purchasers cannot lay any independent claim against the Society or anyone
claiming through the Society. The agreements with third party purchasers are
premised upon a valid, subsisting and enforceable agreement between their
vendors, namely, Vaidehi and the owners, namely, the Society and in fact refer to
the Society Development Agreement in this behalf. Admittedly, therefore, the third
party purchasers had, or at any rate, ought to have, notice of the Society
Development Agreement and its terms and conditions, and Vaidehi's obligations
to perform the same. If Vaidehi fails to perform these obligations, the purchasers
cannot but suffer the consequences. In other words, the purchaser's rights are
subject to Vaidehi's rights and not higher than those. Therefore, from a
contractual standpoint, the third party purchasers have no case against the

Society or Rustomjee, who claim through the Society.

  IN THE HIGH COURT OF JUDICATURE AT BOMBAY
 ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION NO. 961 OF 2013
IN
SUIT NO. 262 OF 2012

Vaidehi Akash Housing Pvt.Ltd. Vs. New D.N. Nagar Co-op.Housing Society Union Ltd. & Ors.
                                                                                                                           
 CORAM : S.C. GUPTE, J.
 PRONOUNCED ON : 01 DECEMBER 2014
Citation: AIR 2015(NOC)722 Bom

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Whether retiring partner will continue to be liable as partner to third parties for any act done by any other partners if notice of retirement is not published official Gazette?

This section provides that a retiring partner will continue to be liable as a partner to third parties for any act done by any other partners which would have been an act of the firm if done before the retirement till public notice is given for the retirement. Section 72 of the Indian Partnership Act prescribes the mode of giving public notice under the Act. Under this Section, notice of the retirement has to bo given to the Registrar of Firms under Section 63 and publication has to be made in the Official Gazette and at least in any vernacular newspaper circulating in the district where the firm to which it relates has its place or principal place of business. In this case, it may be noticed, that notice of retirement is published in three dailies one in English and two in Telugu, circulating in the district to which the place of business of the 11th defendant-firm belongs. Notice is also given under Section 63 of the Act to the Registrar of Firms; but admittedly, the publication was not made in the Official Gazette. Therefore it is dear that the requirement of Section 32, Clause (3) read with Section 72, Clause (a) of the Act is not satisfied in this case. The learned counsel for the appellants argues that Section 72 indicates only one mode of giving public notice and does not exclude any other mode of giving public notice under Section 32, Clause (3). We find it difficult to accept this contention.

Andhra High Court

Thummala Rama Rao And Ors. vs Chodagam Venkateswara Rao And ... on 14 July, 1961

Equivalent citations: AIR 1963 AP 154

Bench: Seshachelapathi, C Sastry

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