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CASE NO.: Appeal (civil)  412 of 2007

PETITIONER: National Insurance Co. Ltd.                     ...Appellant

RESPONDENT: Mam Chand & Anr.                                        ...Respondents

DATE OF JUDGMENT: 01/02/2007

BENCH: Dr. ARIJIT PASAYAT & S.H. KAPADIA

JUDGMENT: J U D G M E N T (Arising out of SLP(C) No. 5574 of 2005)  

Dr. ARIJIT PASAYAT, J.

       Leave granted.

Challenge in this appeal is to the order passed by a  Division Bench of the Punjab and Haryana High Court at  Chandigarh.  By the impugned order the High Court dismissed  the appeal, so far as related to the respondent No. 1-Mam  Chand and issued notice only to the driver cum owner i.e.  respondent No. 2.

Background facts in a nutshell are as follows:

Respondent No.1 (hereinafter referred to as the  ’claimant’)  filed a claim petition in terms of Section 166 of the  Motor Vehicles Act, 1988 (in short the ’Act’) claiming  compensation for alleged injuries caused to him by the   offending vehicle on 31.10.2001. The allegation was that the  respondent No. 2- Mohinder Pal i.e.  the driver and owner of  the offending vehicle, a motor cycle No. HR01C-1531 was  driving the same in rash and negligent manner. The same   dashed against the scooter which the claimant was riding  causing multiple injuries.  Adjudicating the claim petition the  Motor Accident Claims Tribunal, Jagadhari (hereinafter  referred to as the ’Tribunal’) held that claimant respondent No.  1 was entitled to compensation of Rs.60,000/- with interest at  the rate of 9% from the date of filing of the claim petition till  realization and cost of the petition.  The appellant was held to  be liable to pay the compensation amount.  Tribunal rejected  the plea of the appellant that the offending vehicle was not the  subject matter of insurance on the date of accident.  The  fixation of liability on the appellant was challenged by it by  filing the appeal before the High Court.  By the impugned  order, the High Court held that even if a vehicle was not  insured at the relevant time that was a dispute between the  appellant and the respondent no. 2 and there was no need for  issuing notice to respondent No. 1.

In support of the appeal, learned counsel for the  appellant submitted that challenge was to the fixation of  liability so far as the appellant is concerned.  In the absence of

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the claimant, dispute cannot be effectively adjudicated if the  appeal is dismissed in the manner done.  The result would be  that the appellant would be required to pay to the respondent  No. 1 even though it has no liability.

In response, learned counsel for the respondent No. 1  submitted that the appellant in any event has to pay the  claimant and if really the vehicle was not the subject matter of  insurance, it would be open to the appellant to recover the  amount from the respondent no. 2 i.e. the driver cum owner of  the offending vehicle. But it cannot avoid its liability to pay so  far as the respondent no. 1 is concerned.

We find that the High Court has held that the only  question related to the dispute between the appellant and the  driver cum owner of the offending vehicle i.e. respondent No.2  and the respondent no. 1 was not concerned with the said  dispute.

In the appeal before the High Court the appellant was  questioning the fixation of liability so far as it is concerned.  A  specific stand has been taken that since vehicle was not the  subject matter of insurance, it cannot be saddled with any   liability.  This question is intimately linked with the  entitlement of the respondent no. 1 to receive the amount from  the appellant.  In that sense it cannot be said that the  respondent No. 1 was not required to be heard and the appeal  was to be dismissed so far as he is concerned.

Therefore, we set aside the order of the High Court.   Since the respondent No. 1 is represented in this Court,  without further notice let him appear before the High Court.   The matter shall be taken in the High Court after a period of  four weeks from today for disposal in accordance with law.   The appeal has been admitted qua respondent No.2. Now  respondent No.1 is to be also heard.   It is to be further noted  that the matter was directed to be placed before the Lok Adalat  after completion of service.  It shall be open to the parties to  bring to the notice of the Court as to whether they want  the  matter to be settled by the Lok Adalat or not.  About that  aspect we expressed no opinion.  Appeal is allowed to the  aforesaid extent but without any orders as to costs.