Case Title: Smt. Sampat Devi & Ors v. Branch Manager Shriram General Insurance Co. Ltd. & Anr.
Summary
The Madhya Pradesh High Court has criticized the Motor Accidents Claims Tribunal in Tikamgarh for failing to disburse the claim amount due to the proprietor of the offending vehicle’s failure to provide security. The court cited the Supreme Court’s three-judge bench decision in Pappu & Ors. v. Vinod Kumar Lamba & Anr. (2018) as a more persuasive decision than the two-judge bench decision in National Insurance Co. Ltd. v. Challa Bharathamma & Ors, (2004). The court argued that the insurance company could only disburse the amount deposited after the proprietor of the offending vehicle provided security. The court overturned the Claims Tribunal’s order and ordered the claimants to receive the full amount of the claim, plus interest, forthwith. The insurer has the option of obtaining an RRC certificate or seeking attachment of the offending vehicle, in accordance with the apex court judgments in Challa Bharathamma and Pappu, respectively.
About the case
The Madhya Pradesh High Court recently criticized the Motor Accidents Claims Tribunal in Tikamgarh for failing to disburse the claim amount. The court cited the proprietor of the offending vehicle’s failure to provide security. According to Justice Vivek Agarwal’s single-judge bench, the law as it currently stands prohibits the tribunal from withholding the award amount deposited by the insurance company, even if the driver or owner of the offending vehicle violates the terms and conditions of the insurance policy. The court clarified that the insurance company can always recover the specified amount from the latter without causing the claimant any harm in such situations.
Referring to the Supreme Court’s three-judge bench decision in Pappu & Ors. v. Vinod Kumar Lamba & Anr., (2018). Justice Agarwal maintained that it would be more persuasive than the two-judge bench decision in National Insurance Co. Ltd. v. Challa Bharathamma & Ors, (2004), which was emphasized by the respondent insurer. The respondents had contended that the insurance company, Shriram General Insurance, could only disburse the amount deposited after the proprietor of the offending vehicle provided security. They also argued that the High Court’s co-ordinate bench has adhered to the dictum in Challa Bharathamma.
In the order, the bench sitting in Jabalpur noted that the owner insured has already appeared and has failed to satisfy the requirement of the orders of the Coordinate Bench of this Court and the judgment of the Hon’ble Supreme Court by not furnishing the security. Consequently, the Tribunal is limited to the course of action outlined in the judgment of three judges in Pappu and others (supra). The Tribunal is incapable of withholding the amount in question.
Furthermore, the court criticized the tribunal for neglecting the three-judge bench judgment that was rendered in 2018. The High Court has granted all district court judges access to SCC software, the court reminded.
Accordingly, the court stated, “This judgment was accessible to the relevant Additional Judge of the Tribunal.”
The Tribunal is permitted to issue a certificate against the insured solely in accordance with the apex court’s ruling in Pappu & Ors, which can be executed as a Revenue Recovery Certificate, the court noted. The court concluded, “…But, instead of applying himself to the aforementioned judgment of the Hon’ble Court… the Tribunal became a tool in the hands of the insurance company, causing further damage to the claimants by not disbursing the amount by giving a narrow interpretation to the judgment of the High Court.”
The court also believed that the insurance company acted delinquently by failing to pursue the attachment of the offending vehicle, as per Challa Bharathamma & Ors. “…it is impossible to imagine that the claimants could be subjected to suffering due to the insurance company’s complacency.” The single judge bench clarified in the order that the flawed argument that the claim amount cannot be disbursed until the insured provides security will frustrate the basic purpose of the socially beneficial legislation, the Motor Vehicles Act, if this interpretation, as provided by the Tribunal or the Coordinate Bench of this High Court, is allowed to stand.
The court overturned the Claims Tribunal’s order and ordered that the claimants receive the full amount of the claim, plus interest, forthwith. The court cited the aforementioned reasons for its decision. The court also clarified that the insurer has the option of obtaining an RRC certificate or seeking attachment of the offending vehicle, in accordance with the apex court judgments in Challa Bharathamma and Pappu, respectively. The tribunal had previously ordered the owner of the offending vehicle to provide a bank guarantee for the amount that had been deposited by the insurance company. It refused to disburse the awarded amount to the claimants until the owner provided the security. The petitioners were represented by Advocate Sneh Misra. The Insurance Company was represented by Advocate Aditya Narayan Sharma.
