Case Note & Summary
The appellant, Rajendra s/o Ramkrishna Golait, owner of a motor vehicle bearing registration No. MH 31 H:8203, filed an appeal challenging an interim award passed under Section 140 of the Motor Vehicles Act, 1988 (the Act) by the Motor Accident Claims Tribunal, Nagpur. The Tribunal had exonerated the insurer, Reliance General Insurance Co. Ltd., from joint liability to pay compensation of Rs. 50,000/- on the basis of no fault liability. The accident occurred on 13.6.2007 at 1630 hours, and the vehicle was insured with the respondent insurer for the period from 12.6.2007 to 17.6.2008, covering the date of accident. The appellant contended that the insurer was jointly and severally liable to pay the interim compensation. The court held that under Section 140 of the Act, the liability is absolute and without fault, and the owner and insurer are jointly and severally liable to pay fixed compensation to the claimants/dependents of the victim in case of a fatal accident at the interim stage. The question of whether the insured had played fraud with the insurer is to be gone into at the time of recording evidence in the main petition under Section 166 of the Act, and cannot be a ground to exonerate the insurer at the interim stage. The court allowed the appeal, set aside the Tribunal's order exonerating the insurer, and directed the insurer to pay the interim compensation of Rs. 50,000/- to the claimants, with liberty to recover the same from the owner if fraud is proved later.
Headnote
A) Motor Vehicles Act - No Fault Liability - Section 140 - Interim Compensation - The liability under Section 140 is absolute and without fault, and the owner and insurer are jointly and severally liable to pay fixed compensation of Rs. 50,000/- in case of fatal accident at the interim stage. The question of fraud by the insured is to be gone into at the time of evidence in the main petition under Section 166, and cannot be a ground to exonerate the insurer at the interim stage. (Paras 2-3)
Issue of Consideration
Whether the insurer can be exonerated from joint liability to pay interim compensation under Section 140 of the Motor Vehicles Act, 1988, on the ground of alleged fraud by the insured, at the interim stage.
Final Decision
The appeal is allowed. The impugned order exonerating the insurer from joint liability is set aside. The insurer is directed to pay the interim compensation of Rs. 50,000/- to the claimants, with liberty to recover the same from the owner if fraud is proved later.
Law Points
- No fault liability
- joint and several liability of owner and insurer
- interim compensation under Section 140
- fraud defense not relevant at interim stage
Case Details
2010 LawText (BOM) (08) 161
First Appeal No. 542/2010
Mr. S.S. Deshpande for appellant, None for Respondents 1 & 2, Mr. Sachin Jaiswal for Respondent no.3
Rajendra s/o Ramkrishna Golait
Kalawati wd/o Sitaram Yedme, Sanjay s/o Sitaram Yedme, The Manager, Reliance General Insurance Co. Ltd.
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Appeal against interim award under Section 140 of Motor Vehicles Act, 1988
Remedy Sought
Appellant (owner of vehicle) sought to set aside the Tribunal's order exonerating the insurer from joint liability to pay interim compensation
Filing Reason
The Tribunal exonerated the insurer from joint liability to pay interim compensation of Rs. 50,000/- under Section 140, despite the vehicle being insured at the time of accident
Previous Decisions
The Motor Accident Claims Tribunal, Nagpur passed an interim award under Section 140 of the Motor Vehicles Act, 1988, exonerating the insurer from joint liability
Issues
Whether the insurer can be exonerated from joint liability to pay interim compensation under Section 140 of the Motor Vehicles Act, 1988, on the ground of alleged fraud by the insured, at the interim stage.
Submissions/Arguments
Appellant argued that the vehicle was insured with the respondent insurer for the period from 12.6.2007 to 17.6.2008, and the accident occurred on 13.6.2007, so the insurer is jointly and severally liable to pay interim compensation.
Insurer argued that the insured had played fraud, but the court held that this question must be gone into at the time of evidence in the main petition under Section 166, not at the interim stage under Section 140.
Ratio Decidendi
Under Section 140 of the Motor Vehicles Act, 1988, the liability is absolute and without fault, and the owner and insurer are jointly and severally liable to pay fixed compensation at the interim stage. The question of fraud by the insured is to be decided at the final stage under Section 166 and cannot be a ground to exonerate the insurer at the interim stage.
Judgment Excerpts
At the stage of proceedings u/s 140 of the Act, the liability of the owner and insurer as mentioned in Chapter X of the Act, is an absolute liability without fault and owner as well as insurer and/ or Driver are jointly and severally liable to pay fixed compensation to the claimants/dependents of victim in respect of the fatal accident, at interim stage, in the sum of Rs. 50,000/.
The question as to whether the insured had played fraud as alleged, with insurer will have to have to be gone into at the time of recording of the evidence in the main petition, under section 166 of the said Act.
Procedural History
The Motor Accident Claims Tribunal, Nagpur passed an interim award under Section 140 of the Motor Vehicles Act, 1988, exonerating the insurer from joint liability. The appellant (owner) filed this appeal challenging that order.
Acts & Sections
- Motor Vehicles Act, 1988: 140, 166
