Case Note & Summary
This judgment arises from three appeals against a common order dated 31/3/1987 passed by the Motor Accident Claims Tribunal. The appeals were filed by the owner of the vehicle (First Appeal No. 1063/1987) and the insurance company (First Appeal Nos. 587/1990 and 588/1990). The Tribunal had directed the owner to pay Rs. 14,800 and the insurer to pay Rs. 50,000, totaling Rs. 64,800, with interest at 12% p.a. from the date of petition. The owner contended that in view of the Supreme Court's judgment, the liability of the owner and insurer is joint and several, and the insurer should pay the entire amount with a right to recover from the owner if there is a breach of policy conditions. The insurance company argued that the Tribunal's apportionment was incorrect and that the insurer should not be liable due to breach of conditions. The court, relying on the Supreme Court's decision, held that the liability of the owner and insurer is joint and several. The insurer is liable to pay the entire compensation to the claimant, but if there is a breach of policy conditions, the insurer can recover the amount from the owner. The court set aside the Tribunal's apportionment and directed the insurer to pay the entire amount of Rs. 64,800 with interest at 12% p.a. from the date of petition till payment, and proportionate costs. The insurer was granted liberty to recover the amount from the owner if there was a breach of policy conditions. The appeals were disposed of accordingly.
Headnote
A) Motor Accident Claims - Joint and Several Liability - Apportionment of Liability - The Tribunal erred in apportioning liability between the owner and the insurer; the liability of the owner and insurer is joint and several. The insurer is liable to pay the entire compensation to the claimant, with a right to recover from the owner if there is a breach of policy conditions. (Paras 2-4)
B) Motor Accident Claims - Breach of Policy Conditions - Right of Recovery - Where the insurer proves a breach of policy conditions, the insurer must pay the award amount to the claimant but may recover it from the owner. The Tribunal's direction for the owner to pay a portion directly was set aside. (Paras 2-4)
C) Motor Accident Claims - Interest Rate - The rate of interest at 12% per annum from the date of petition till payment was upheld as reasonable. (Para 4)
Issue of Consideration
Whether the Motor Accident Claims Tribunal could apportion liability between the owner and the insurer, and whether the insurer is liable to pay the entire compensation with a right to recover from the owner in case of breach of policy conditions.
Final Decision
The appeals were disposed of by setting aside the Tribunal's apportionment. The insurer was directed to pay the entire amount of Rs. 64,800 with interest at 12% p.a. from the date of petition till payment and proportionate costs. The insurer was granted liberty to recover the amount from the owner if there was a breach of policy conditions.
Law Points
- Motor Accident Claims
- Joint and Several Liability
- Apportionment of Liability
- Breach of Policy Conditions
- Right of Recovery
- Interest Rate
Case Details
2005 LawText (BOM) (12) 58
First Appeal No. 1063 of 1987 with First Appeal No. 587 of 1990 and First Appeal No. 588 of 1990
Mr. Dushyant Punekar h/f Mr. R.L. Patil for appellant in FA 1063/1987; Mr. S.G. Deshpande for appellant in FA 587/1990 and FA 588/1990; Mr. Vivek Salunke with Mr. Prafulla Shah for respondent No.1 in FA 1063/1987 and FA 587/1990; Mr. Dushyant Punekar h/f Mr. R.L. Patil and Seema Sarnaik for respondent No.3 in FA 588/1990
Purshottam Narayan Mehta (in FA 1063/1987); The Oriental Fire and General Insurance Company Ltd. (in FA 587/1990 and FA 588/1990)
Smt. Mamati Jayram Ambonkar, Mr. Prabhakar Ambaji Ambonkar, The Oriental Fire and General Insurance Company Ltd., Shri Abdul Rahiman Ishamuddin Jamdar, Shri Mohamad Ayyas Ali Faki (in FA 1063/1987); Smt. Mamati Jayram Ambonkar, Mr. Prabhakar Ambaji Ambonkar, Purshottam Narayan Mehta, Shri Abdul Rahiman Ishamuddin Jamdar, Shri Mohamad Ayyas Ali Faki (in FA 587/1990); Shantaram Anna Ambonkar, Mr. Prabhakar Ambaji Ambonkar (deleted), Purshottam Narayan Mehta, Shri Abdul Rahiman Ishamuddin Jamdar, Shri Mohamad Ayyas Ali Faki (in FA 588/1990)
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Nature of Litigation
Appeals against a common order of the Motor Accident Claims Tribunal awarding compensation to the claimant.
Remedy Sought
The owner sought that the insurer be directed to pay the entire compensation; the insurer sought to avoid liability or reduce its share.
Filing Reason
The Tribunal apportioned liability between the owner and the insurer, which was challenged by both parties.
Previous Decisions
The Motor Accident Claims Tribunal passed a common order dated 31/3/1987 directing the owner to pay Rs. 14,800 and the insurer to pay Rs. 50,000 with interest.
Issues
Whether the Tribunal could apportion liability between the owner and the insurer in a motor accident claim.
Whether the insurer is liable to pay the entire compensation with a right to recover from the owner in case of breach of policy conditions.
Submissions/Arguments
The owner contended that in view of the Supreme Court's judgment, the liability of the owner and insurer is joint and several, and the insurer should pay the entire amount with a right to recover from the owner if there is a breach of policy conditions.
The insurance company argued that the Tribunal's apportionment was incorrect and that the insurer should not be liable due to breach of conditions.
Ratio Decidendi
The liability of the owner and insurer is joint and several. The insurer is liable to pay the entire compensation to the claimant, but if there is a breach of policy conditions, the insurer can recover the amount from the owner. The Tribunal cannot apportion liability between the owner and insurer.
Judgment Excerpts
The learned Counsel appearing for the appellant in First Appeal No.1063/1987-opponent NO.2, basically contended, that in view of the Supreme Court’s judgment, the liability of the owner and insurer is joint and several.
The liability of the owner and insurer is joint and several. The insurer is liable to pay the entire compensation to the claimant, but if there is a breach of policy conditions, the insurer can recover the amount from the owner.
Procedural History
The Motor Accident Claims Tribunal passed a common order on 31/3/1987. Three appeals were filed: by the owner (FA 1063/1987) and by the insurance company (FA 587/1990 and FA 588/1990). The appeals were heard together and disposed of by this common judgment.
Acts & Sections
- Motor Vehicles Act, 1939:
