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High Court order to recover compensation from vehicle owner as the driver had no valid driving licence reversed by Supreme Court and directed the insurance company to pay the amount with a liberty to recover it from the vehicle owner.

August 8, 2018

 

 

Pay and Recover Judgment on Insurance claim

A Bench of Supreme Court Judges Justice Rangan Gogoi and Justice R. Banumathi in Civil Appeal No. 8144 of 2018, Shamanna and Another V. The Divisional Manager, The Oriental Insurance Company Ltd. & ors reversed the Judgment dated 14.09.2016 passed by High Court of Karnataka and partly allowed the appeal filed by the Vehicle owner.

 

 

 

Facts of the case
On 14.04.2008, Shankareppa Pattar son of the appellants/claimants was travelling in a jeep bearing Reg.No.KA22/M-3805. The jeep was driven negligently due to which door of the jeep suddenly opened and Shankareppa was thrown out of the vehicle and sustained grievous injuries and died in the hospital. In the claim petition filed by the appellants/parents of the deceased Shankareppa, the Tribunal awarded compensation of Rs.3,55,500/- with interest at 6% per annum from the date of claim petition till realisation. Since the driver of the jeep had no valid driving licence at the time of the accident and since there was violation of the terms of the insurance policy, the Tribunal directed the insurance company to pay the compensation to the claimants and granted liberty to the insurance company to recover the same from the owner of the offending vehicle.


Being aggrieved by the award directing the insurer to pay the compensation amount to the claimants and recover the same from the owner of the vehicle, the insurance company filed appeal before the High Court. The claimants have also filed appeal seeking enhancement of compensation. The High Court referred to its own judgment in the case of Oriental Insurance Co. Ltd. v. K.C. Subramanyam MANU/KA/0945/2012 : ILR 2012 KAR 5241 and held that the Supreme Court directed the insurance company to make payment to the claimants and to recover the same from the owner of the vehicle in exercise of its discretionary power under Article 142 of the Constitution of India. The High Court observed that power under Article 142 of the Constitution is vested only with the Supreme Court and such power is not vested with the High Court or the Tribunal and set aside the award passed by the Tribunal directing the insurance company to pay compensation to the claimants and recover the same from the owner of the vehicle is not sustainable. The High Court held that only the owner of the offending vehicle is liable to make the payment of the compensation amount awarded by the Tribunal. The High Court has enhanced the compensation awarded by the Tribunal from Rs.3,55,500/- to Rs.4,94,700/-. To determine the loss of dependency, the High Court has taken into consideration the age of the deceased Shankareppa and has adopted multiplier of '18' instead of multiplier of '14'. Being aggrieved by the judgment of the High Court setting aside the direction to the insurance company to "pay and recover", the appellants/claimants have preferred this appeal.

 

While partly allowing the appeal the court said that:


"In the result, the impugned judgment of the High Court insofar as enhancement of the compensation to Rs.4,94,700/- is affirmed. Insofar as direction of the impugned judgment directing the appellants/claimants to recover the compensation from the owner of the vehicle is set aside and the appeal is partly allowed. The first Respondent insurance company shall pay the enhanced compensation to the appellants/claimants along with the accrued interest and the insurance company shall recover the same from the owner of the vehicle. No costs."

 

 

Read the Judgment of Supreme Court of India in Civil Appeal No. 8144 of 2018, Shamanna and Another V. The Divisional Manager, The Oriental Insurance Company Ltd. & ors dated 8.8.2018

 

 

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