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       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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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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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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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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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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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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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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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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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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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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“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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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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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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(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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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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