Page 1 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 3047 OF 2017

(ARISING OUT OF SLP (C) No.5805/2013)

Manuara Khatun & Ors. ...Appellant(s)

VERSUS

Rajesh Kr. Singh & Ors. …Respondent(s)

WITH

CIVIL APPEAL No. 3065 OF 2017

(ARISING OUT OF SLP (C) No.791/2013)

Mamoni Saikia Mohanty & Ors. ...Appellant(s)

VERSUS

Rajesh Kr. Singh & Ors. ...Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1)Leave granted.

2)These appeals are filed against the common

final judgment and order dated 22.06.2012 passed

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Page 2 by the High Court of Gauhati at Guwahati in MACA

Nos. 7 and 8 of 2009 whereby the High Court

dismissed the appeals filed by the appellants herein

for enhancement of the compensation amount

awarded by the Motor Accident Claims Tribunal,

Nagaon by order dated 05.09.2008 in MAC Case

Nos. 653 and 652 of 2001.

3)We herein set out the facts, in brief, to

appreciate the issue involved in these appeals.

4)On 03.07.2001, Ismail Hussain, husband of

Manuara Khatun and Nirod Prasad Mohanty,

husband of Mamoni Saikia Mohanty along with

some other passengers were proceeding towards

Guwahati from Nagoan in Tata Sumo bearing

Registration No. AR-09-3997, when they arrived

near Jorabat, there was a head-on-collusion

between the Tata Sumo and a Truck bearing

Registration No. AS-01-H-2598 coming from the

opposite direction as a result of which Ismail

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Page 3 Hussain and Nirod Prasad Mohanty died on the spot

and some other passengers sustained injuries.

5) Manuara Khatun, wife of the Ismail Hussain

and her 5 minor children filed Claim petition

bearing MAC Case No. 653 of 2001 claiming total

compensation of Rs.55,20,400/- and Mamoni Saikia

Mohanty, wife of Nirod Prasad Mohanty and her 3

minor children preferred claim petition bearing MAC

No. 652 of 2001 claiming total compensation of

Rs.54,62,500/- before the Motor Accident Claims

Tribunal, Nagaon against Rajesh Kumar Singh,

owner of the Tata Sumo(respondent No.1), Bhadra

Kt. Das, owner of the Truck(respondent No.2), the

insurer of the Tata Sumo-United India Insurance

Co. Ltd.(respondent No.3) and New India Assurance

Company Ltd., Insurer of the Truck(respondent

No.4). The claim petitions were contested only by

the Insurance Companies. So far as the owners of

the vehicles were concerned, they remained ex

parte.

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Page 4 6)The Tribunal, vide award dated 05.08.2008,

partly allowed both the claim petitions and

awarded a sum of Rs.24,89,500/- to Manuara

Khatun, wife of Ismail Khatun and Rs.24,09,500/-

to Mamoni Saikia Mohanty, wife of Nirod Prasad

Mohanty with interest @ 7.5% p.a. from the date of

filing of case till payment. The Tribunal held that

Tata Sumo was a private car driven by the driver in

a rash and negligent manner and at a high speed,

which resulted in the accident. It was also held that

the driver of the Truck was not negligent in driving

the Truck. The Tribunal further held that all the

passengers including the two deceased were

traveling in Tata Sumo for hire and hence they were

held to be “gratuitous passengers”. It was held that

due to this reason, United India Insurance

Company Ltd., the insurer of Tata Sumo(offending

vehicle) was not liable. Accordingly, the Insurance

Company was exonerated from the liability and the

award was passed only against the owner of Tata

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Page 5 Sumo (respondent No.1) in both the claim cases. So

far as the owner of the Truck(respondent No.2) and

the New India Assurance Co. Ltd.-Insurer of the

Truck(respondent No.4) were concerned, both were

held not liable in any manner because, as

mentioned above, the driver of the Truck was not

found negligent in driving the Truck.

7)Dissatisfied with the award, appeals bearing

MAC Appeal No.7 of 2009 and MAC Appeal No. 8 of

2009 under Section 173 of the Motor Vehicle Act,

1988 (hereinafter referred to as “the Act”) were filed

before the High Court by the claimants for

enhancement of the compensation amounts

awarded by the Tribunal. The other ground raised

before the High Court was that it was the liability of

the Insurance Company of the offending vehicle to

compensate the claimants jointly and severally with

the owner of the Tata Sumo and in any event, the

direction to pay the compensation by the insurer of

offending vehicle and then to recover from its

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Page 6 insured should have been passed against the

Insurer(respondent No.3).

8)By impugned judgment, the High Court

dismissed the appeals filed by the claimants and

held that the insurer was not liable because the

passengers or occupants were being carried in a

private vehicle as “gratuitous passengers”.

9)Aggrieved by the said judgment, the claimants

have filed these appeals by way of special leave

petitions before this Court.

10)Heard Mr. M.L. Lahoty, learned counsel for the

appellants, Mr. Ravi Bakshi, learned counsel for

respondent No.3 and Mr. S.L. Gupta, learned

counsel for respondent No.4.

11)Learned counsel for the appellants while

assailing the impugned order argued only one

point. According to him, both the Courts below

erred in not applying the principle of "pay and

recover" against the United India Insurance

Company Ltd. (insurer of the offending vehicle-Tata

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Page 7 Sumo)-Respondent No. 3 herein. It was his

submission that when admittedly the driver of the

Tata Sumo was held negligent in his driving, which

caused the accident, the insurer of the offending

vehicle-respondent No. 3 should have been made

liable to pay the awarded sum or in any event,

according to learned counsel, a direction to pay and

recover the awarded sum ought to have been issued

against the Insurer of the offending vehicle.

Learned counsel placed reliance on the judgments

of this Court in Oriental Insurance Co. Ltd. vs.

Nanjappan & Ors. , (2004) 13 SCC 224,

Bhagyalakshmi & Ors. vs. United Insurance

Company Ltd. & Anr. , (2009) 7 SCC 148 and

Manager, National Insurance Company Limited

vs. Saju P. Paul & Anr. , (2013) 2 SCC 41 in

support of this submission.

12)In reply, learned counsel for the respondents

(Insurance Companies) supported the impugned

order and contended that no case is made out to

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Page 8 interfere in the impugned judgment. It was his

submission that once it is held and rightly that the

Insurance Company is not liable because the

victims were travelling in the offending vehicle as

“gratuitous passengers”, there did not arise any

occasion to pay the awarded sum to the claimants

by the Insurance Company and nor the principle

“pay and recover” could be applied against the

Insurance Company in such circumstances thereby

making them liable to pay the awarded sum to the

claimants.

13)Having heard the learned counsel for the

parties and on perusal of the record of the case, we

find force in the submission of the learned counsel

for the appellants (claimants).

14)The only question, which arises for

consideration in these appeals, is whether the

appellants are entitled for an order against the

Insurer of the offending vehicle, i.e., (respondent No.

3) to pay the awarded sum to the appellants and

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Page 9 then to recover the said amount from the insured

(owner of the offending vehicle-Tata

Sumo)-respondent No.1 in the same proceedings.

15)The aforesaid question, in our opinion,

remains no more res integra. As we notice, it was

subject matter of several decisions of this Court

rendered by three Judge Bench and two Judge

Bench in past, viz., National Insurance Co. Ltd.

vs. Baljit Kaur & Ors., (2004) 2 SCC 1, National

Insurance Co. Ltd. vs. Challa Upendra Rao &

Ors., (2004) 8 SCC 517, National Insurance Co.

Ltd. vs. Kaushalaya Devi & Ors. , (2008) 8 SCC

246, National Insurance Co. Ltd. vs. Roshan Lal,

[Order dated 19.1.2007 in SLP© No. 5699 of 2006],

and National Insurance Co. Ltd. vs. Parvathneni

& Anr., (2009) 8 SCC 785.

16)This question also fell for consideration

recently in Manager, National Insurance Company

Limited vs. Saju P. Paul & Anr., (supra) wherein

this Court took note of entire previous case law on

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Page 10 the subject mentioned above and examined the

question in the context of Section 147 of the Act.

While allowing the appeal filed by the Insurance

Company by reversing the judgment of the High

Court, it was held on facts that since the victim was

travelling in offending vehicle as "gratuitous

passenger" and hence, the Insurance Company

cannot be held liable to suffer the liability arising

out of accident on the strength of the insurance

policy. However, this Court keeping in view the

benevolent object of the Act and other relevant

factors arising in the case, issued the directions

against the Insurance Company to pay the awarded

sum to the claimants and then to recover the said

sum from the insured in the same proceedings by

applying the principle of “pay and recover”.

17)Justice R.M. Lodha (as His Lordship then was

and later became CJI) speaking for the Bench held

in paras 20 and 26 as under:

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Page 11 “20. The next question that arises for

consideration is whether in the peculiar facts

of this case a direction could be issued to the

Insurance Company to first satisfy the

awarded amount in favour of the claimant

and recover the same from the owner of the

vehicle (Respondent 2 herein).

26. The pendency of consideration of the

above questions by a larger Bench does not

mean that the course that was followed in

Baljit Kaur, (2004) 2 SCC 1 and Challa

Upendra Rao, (2004) 8 SCC 517 should not

be followed, more so in a peculiar fact

situation of this case. In the present case,

the accident occurred in 1993. At that time,

the claimant was 28 years old. He is now

about 48 years. The claimant was a driver on

heavy vehicle and due to the accident he has

been rendered permanently disabled. He has

not been able to get compensation so far due

to the stay order passed by this Court. He

cannot be compelled to struggle further for

recovery of the amount. The Insurance

Company has already deposited the entire

awarded amount pursuant to the order of this

Court passed on 1-8-2011 (National Insurance

Co. Ltd. vs. Saju P. Paul, SLP© No. 20127 of

2011 and the said amount has been invested

in a fixed deposit account. Having regard to

these peculiar facts of the case in hand, we

are satisfied that the claimant (Respondent 1)

may be allowed to withdraw the amount

deposited by the Insurance Company before

this Court along with accrued interest. The

Insurance Company (the appellant) thereafter

may recover the amount so paid from the

owner (Respondent 2 herein). The recovery of

the amount by the Insurance Company from

the owner shall be made by following the

procedure as laid down by this Court in

Challa Upendra Rao(supra).”

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Page 12 18)The facts of the case at hand are somewhat

identical to the facts of the case mentioned supra

because here also we find that the deceased were

found travelling as “gratuitous passengers” in the

offending vehicle and it was for this reason, the

insurance companies were exonerated. In Saju P.

Paul’s case (supra) also having held that the victim

was “gratuitous passenger”, this Court issued

directions against the Insurer of the offending

vehicle to first satisfy the awarded sum and then to

recover the same from the Insured in the same

proceedings.

19)Learned counsel for respondent No. 3 (United

India Insurance Company Ltd.), however, contended

that the facts of the case at hand are not identical to

the one involved in the case of Saju P. Paul (supra)

and hence the law laid down therein cannot be

applied to the facts of the case at hand. Learned

counsel pointed out that firstly, the awarded

compensation in this case is quite substantial and

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Page 13 secondly, it is not yet paid to the claimants. Learned

counsel also submitted that since the question

involved herein is referred to a larger Bench and

hence this Court should not give such directions, as

prayed by the appellants, against the Insurance

Company.

20)We find no merit in any of the submissions.

Firstly, as mentioned above, we find marked

similarity in the facts of this case and the one

involved in Saju P. Paul’s Case (supra). Secondly,

merely because the compensation has not yet been

paid to the claimants though the case is quite old

(16 years) like the one in Saju P. Paul’s Case

(supra), it cannot be a ground to deny the claimants

the relief claimed in these appeals. Thirdly, this

Court has already considered and rejected the

argument regarding not granting of the relief of the

nature claimed herein due to pendency of the

reference to a larger Bench as would be clear from

Para 26 of the judgment in Saju P. Paul’s case

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Page 14 (supra). That apart, learned counsel for the

appellants stated at the bar that the reference made

to the larger Bench has since been disposed of by

keeping the issue undecided. It is for this reason

also, the argument does not survive any more.

21)It is for all these reasons, we find no good

ground to take a different view than the one

consistently being taken by this Court in all

previous decisions, which are referred supra, in this

regard.

22)In view of the foregoing discussion, we are of

the view that the direction to United India Insurance

Company (respondent No. 3) - they being the

insurer of the offending vehicle which was found

involved in causing accident due to negligence of its

driver needs to be issued directing them (United

India Insurance Company-respondent No.3) to first

pay the awarded sum to the appellants (claimants)

and then to recover the paid awarded sum from the

owner of the offending vehicle (Tata

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Page 15 Sumo)-respondent No.1 in execution proceedings

arising in this very case as per the law laid down in

Para 26 of Saju P. Paul’s case quoted supra.

23)Accordingly, the appeals succeed and are

allowed. Impugned order is modified to the extent

that respondent No. 3-United India Insurance

Company Ltd. is accordingly directed to pay the

awarded sum to the appellants (claimants).

Thereafter respondent No. 3 - United India

Insurance Company Ltd. would be entitled to

recover the entire paid awarded sum from the owner

(insured) of the offending Vehicle (Tata

Sumo)-respondent No.1 in these very proceedings

by filing execution application against the insured.

………...................................J.

[J. CHELAMESWAR]

…...……..................................J.

[ABHAY MANOHAR SAPRE]

New Delhi;

February 21, 2017

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