Babu P.U. v. Abraham, Linu Susan and National Insurance Company Ltd.

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE ANIL K.NARENDRAN** **TUESDAY, THE 02ND DAY OF JULY 2019/11TH ASHADHA, 1941** **OP (MAC) No. 4 of 2019** **AGAINST THE ORDER IN IA NO.2012/2017 IN OPMV NO.490/2013 of MOTOR ACCIDENT CLAIMS TRIBUNAL MUVATTUPUZHA DATED 21-11-2018** ## **PETITIONER/1ST RESPONDENT:** **BABU P.U. AGED 55 YEARS S/O.ULAHANNAN, PANTHANATHOTTATHIL HOUSE, OORAMANA P.O., MEMURY, ERNAKULAM DISTRICT.** **BY ADV.SRI.JOBY JACOB PULICKEKUDY** ## **RESPONDENTS/PETITIONER AND RESPONDENTS 2 & 3:** |**1**|**ABRAHAM,**| |---|---| ||**AGED 57 YEARS**| ||**S/O.K.I.THOMAS, KARAYAKALLIL @ KARAYAPARAMBIL**| ||**HOUSE, MEMURY KARA, PAMPAKUDA, MUVATTUPUZHA,**| ||**ERNAKULAM DISTRICT- 686667.**| |**2**|**LINU SUSAN,**| ||**D/O.BABU P.U., PANTHANATHOTTATHIL HOUSE,**| ||**OORAMANA P.O, MEMURY, ERNAKULAM DISTRICT-**| ||**686663.**| |**3**|**NATIONAL INSURANCE COMPANY LTD.,**| ||**KOLENCHERRY, ERNAKULAM- 682311.**| ||**BY ADV. SRI.LAL GEORGE**| **THIS OP (MAC) HAVING COME UP FOR ADMISSION ON 05.04.2019, THE COURT ON 02.07.2019 DELIVERED THE FOLLOWING:** **OP(MAC)No.4/2019** -2- **==> picture [66 x 10] intentionally omitted <==** ## **JUDGMENT** The petitioner, who is the 1[st] respondent in O.P.(MV)No.490 of 2013 on the file of the Motor Accidents Claims Tribunal, Muvattupuzha, has filed this original petition under Article 227 of the Constitution of India seeking an order to set aside Ext.P5 order dated 21.11.2018 of the Tribunal in I.A.No.2012 of 2017 in O.P.(MV)No.490 of 2013 and to direct the Tribunal to dispose of the said interlocutory application after issuing notice to the petitioner and giving him an opportunity for settlement. 2. On 09.01.2019, when this original petition came up for admission, the Registry was directed to get a report from the Motor Accidents Claims Tribunal, Muvattupuzha as to whether a copy of I.A.No.2012 of 2017 in O.P.(MV)No.490 of 2013 was served on the learned counsel for the counter petitioner in that interlocutory application and also whether Ext.P5 order dated 21.11.2018 in I.A.No.2012 of 2017 is one passed after hearing the learned counsel for the counter petitioner. 3. Pursuant to the order dated 09.01.2019, a report **OP(MAC)No.4/2019** -3- dated 09.01.2019 is received from the Tribunal, wherein it has been reported that I.A.No.2012 of 2017 in O.P.(MV)No.490 of 2013 was filed on 05.08.2017 for issuance of revenue recovery certificate for realisation of the award amount from the counter petitioner (1[st] respondent in O.P.(MV)No.490 of 2013). Notice was not served on the learned counsel for the counter petitioner in I.A.No.2012 of 2017. On 07.08.2017, the Tribunal passed an order to issue revenue recovery certificate. As there is already an order to issue revenue recovery certificate, the learned counsel for the counter petitioner was not heard. Revenue recovery certificate was issued vide requisition No.2D18/13774/07 on 10.10.2018 and I.A.No.2012 of 2017 was closed on 21.11.2018. 4. On 11.01.2019, this Court ordered urgent notice on admission by speed post to respondents 1 and 2, returnable within two weeks. The learned Standing Counsel took notice on admission for the 3[rd] respondent insurer. This Court granted an interim order to the effect that, if the petitioner remits a sum of `50,000/-with the Tribunal in O.P.(MV)No.490 of 2013 within two weeks from 11.01.2019, revenue recovery proceedings initiated **OP(MAC)No.4/2019** -4- pursuant to Ext.P5 order of the Tribunal shall be deferred for a period of one month. It was made clear that, on such remittance being made, it would be open to the 3[rd] respondent insurer approach the Tribunal for release of the said amount. 5. On 31.01.2019, when this original petition came up for consideration, the learned counsel for the petitioner filed a memo stating that the petitioner has already complied with the condition stipulated in the interim order dated 11.01.2019, by depositing `50,000/- before the Tribunal. After recording the said memo, the original petition was ordered to be listed on 08.02.2019, awaiting return of notice. On 08.02.2019, the original petition was adjourned to 25.02.2019, awaiting return of notice on respondents 1 and 2, and the interim order was extended by three weeks. 6. A counter affidavit has been filed by the 3[rd] respondent insurer, opposing the reliefs sought for in this original petition. 7. Heard the learned counsel for the petitioner and also the learned Standing Counsel for the 3[rd] respondent insurer. Despite service of notice, none appears for respondents 1 and 2. **OP(MAC)No.4/2019** -5- 8. The issue that arises for consideration in this original petition is as to whether any interference is warranted on Ext.P5 order dated 21.11.2018 of the Tribunal in I.A.No.2012 of 2017 in O.P.(MV)No.490 of 2013, invoking the supervisory jurisdiction of this Court under Article 227 of the Constitution of India. 9. The 1[st] respondent herein filed O.P.(MV)No.490 of 2013 before the Tribunal, which is a claim petition filed under Section 166 of the Motor Vehicles Act, 1988 claiming a total compensation `4,50,000/- on account of the injuries sustained by him in a motor accident, which occurred on 18.01.2013, while he was riding a motor cycle bearing registration No.KL-07/U-4758, through Peruvammoozhy - Shivali road. When the motor cycle reached the place of accident, it was hit by another motor cycle bearing registration No.KL-17/H-3894 owned by the petitioner herein and ridden by the 2[nd] respondent, who is none other than the daughter of the petitioner. The 3[rd] respondent is the insurer of the offending motor cycle bearing registration No.KL-17/H3894. 10. The petitioner and her daughter, who are the owner **OP(MAC)No.4/2019** -6- and rider respectively of the offending motor cycle, filed joint written statement, contending that the accident occurred solely due to the negligence of the claimant and that the compensation claimed under various heads are excessive. The 3[rd] respondent insurer filed written statement contending that the 2[nd] respondent, who was riding the offending motor cycle, was a minor. As the motor cycle was ridden by the 2[nd] respondent without a valid and effective driving licence, there is violation of policy conditions and as such, the insurer is not liable to pay the amount of compensation. 11. The Tribunal by Ext.P1 award dated 19.09.2015, awarded a total compensation of `2,61,400/- to the claimant together with interest at the rate of 9% per annum from the date of petition, i.e., 20.07.2013, till realisation, with proportionate costs. On a finding that there is violation of policy conditions, the Tribunal found that the 3[rd] respondent insurer is not liable to indemnify the petitioner, who is the insured, and the insurer after satisfying the award is entitled to realise the amount from the insured and his assets. **OP(MAC)No.4/2019** -7- 12. As can be seen from Ext.P1 award, the rider of the offending motor cycle was charge sheeted under sub-section (1) of Section 3, read with Section 181 of the Motor Vehicles Act. The 3[rd] respondent insurer filed I.A.No.3032 of 2015 seeking an order directing the owner and rider of the offending motor cycle to produce the driving licence of the rider. Though, by an order in I.A.No.3032 of 2015, the petitioner and the 2[nd] respondent herein, who are the owner and rider respectively of the offending motor cycle were directed to produce the driving licence of the rider, they failed to produce the same. Hence the Tribunal closed I.A.No.2032 of 2015, after drawing adverse inference against them. In Ext.P1 award, the Tribunal noticed that as per Ext.A5 final report in Crime No.42/13 of Puthencruz Police Station, the rider of the offending motor cycle was not holding a valid and effective driving licence at the time of accident. 13. Section 149 of the Motor Vehicles Act deals with the duty of insurers to satisfy judgments and awards against persons insured, in respect of third party risks. As per sub-section (4) of Section 149, where a certificate of insurance has been issued **OP(MAC)No.4/2019** -8- under sub-section (3) of Section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in clause (b) of sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub-section (1) of Section 147, be of no effect. As per the proviso to sub-section (4) of Section 149, any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person. 14. Section 174 of the Motor Vehicles Act, which deals with recovery of money from insurer as arrear of land revenue, provides that where any amount is due from any person under an award, the Claims Tribunal, on an application made to it by the person entitled to the amount, issue a certificate for the amount to the Collector and the Collector shall proceed to recover the same in the same manner as an arrear of land revenue. **OP(MAC)No.4/2019** -9- 15. In **National Insurance Co. Ltd. v. Swaran Singh [(2004) 3 SCC 297]** , the Apex Court held that where on adjudication of the claim under the Motor Vehicles Act, the Tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of subsection (2) of Section 149, read with sub-section (7), the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the Tribunal. Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the Tribunal to the Collector in the same manner under Section 174 of the Act, as arrears of land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub-section (3) of Section 168 of the Act, the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the Tribunal. **OP(MAC)No.4/2019** -10- 16. In **Ghanshyam Gupta v. United India Insurance Company Ltd. and others [2012 ACJ 2289]** , a learned Judge of the High Court of Judicature at Allahabad had occasion to consider the objection that an application filed by the Insurance Company is beyond the scope of Section 174 of the Motor Vehicles Act, as the heading of that Section using the word 'insurer' provides mode of recovery from Insurance Company and nobody else. In the said decision, after referring to the provisions under Section 174 of the Motor Vehicles Act and the definition of the term 'person' in clause (42) of Section 3 of the General Clauses Act, 1897, it was held that, Section 174 clearly provides, when an amount is due from any person under the award, if such person move an application, the Claims Tribunal may issue a certificate to the District Collector for recovery of the said amount from the person liable to pay. The term 'person' in Section 174 of the Motor Vehicles Act includes natural and legal person both. In the award, the claimant was the person entitled to recover the amount from the opposite parties in the claim petition in the manner it was directed by the Tribunal. It includes the Insurance **OP(MAC)No.4/2019** -11- Company as well as the petitioner. The Insurance Company discharged its burden and paid the amount to the claimant. Thereafter, as per the direction in the award of the Tribunal, the Insurance Company was entitled to recover the amount from the petitioner, i.e., the owner of the vehicle. Therefore, the application made by the Insurance Company would also be covered by Section 174 of the Motor Vehicles Act. 17. In **Shajul Hameed v. Mohammed Habibullah [ILR 1997 (1) Kerala 176]** , in the context of Rule 41 of the Kerala Civil Rules of Practice, 1971, a Division Bench of this Court held that when an interlocutory application is filed, three days' time should be given for hearing. If that Rule is violated, there is violation of the procedural rules. In exceptional circumstances, three days' time as mentioned in Rule 41 need not be given. The Division Bench held further that, it is fundamental to fair procedure that both sides should be heard. The principle of ‘audi alteram partem’ or ‘hear the other side’ is a far reaching principle of natural justice. The hearing to be granted should be a fair hearing. Even when an order of determination is unchallengeable **OP(MAC)No.4/2019** -12- as regards to substance, the violation of the fundamental principles of natural justice will go to the root of the matter. Paragraphs 7 to 9 of the said judgment read thus; “7. It can be seen that I.A No.982 of 1994 was dismissed as not pressed and the present I.A No.1917 of 1994 was filed for amendment of the written statement. The question to be considered is whether the petitioners should have been given an opportunity to file their objection and hearing when they specifically applied for the same. It is not disputed that the case was posted on the next day of filing of the amendment application. No time for filing objection was granted in spite of the affidavit filed by the junior advocate appearing in the case that he has to contact the senior advocate at Ernakulam and to contact the party in Tamil Nadu. Under Rule 41 of the Civil Rules of Practice when an interlocutory application is filed, three days time should be given for hearing. In this case that rule is violated. Therefore, there is violation of the procedural rules. In exceptional circumstances three days' time as mentioned in the rule need not be given. Here there is no such circumstance especially when advocate applied for time with an affidavit mentioning cogent reasons. This defect cannot be cured because of the opportunity he has for hearing in this revision application. 8. It is fundamental to fair procedure that both sides should be heard. The principle of ‘audi alteram partem’ or **OP(MAC)No.4/2019** -13- ‘hear the other side’ is a far reaching principle of natural justice. The hearing to be granted should be a fair hearing. When a reasonable opportunity to file objection is not granted or a reasonable opportunity to contact the client in spite of specific prayer is refused, it cannot be held that there is fair hearing. Under the Civil Rules of Practice, there is three days' time to contact the parties, to prepare objection and for hearing. Even when an order of determination is unchallengeable as regards to substance, the violation of the fundamental principles of natural justice will go to the root of the matter. The hearing to be granted should be fair and party should get reasonable opportunity to place his defence. In **R. v. University of Cambridge [(1723) 1 STR 557]** it was held as follows: “I remember to have heard it observed by a very learned man upon such an occasion, that even God himself did not pass sentence even upon Adam, before he was called upon to make his defence. ‘Adam’ says God, where art thou? Hast thou not eaten of the tree, whereof, I commanded thee that thou shouldst not eat? And the same question was put to Eve also.” 9. It is true that procedural objections are often raised by unmeritorious parties. Judges may then be tempted to refuse relief on the ground that a fair hearing could have made no difference to the result. But in principle it is vital that the procedure and the merits should be kept strictly **OP(MAC)No.4/2019** -14- apart, since otherwise the merits may be prejudiced unfairly. In **General Medical Council v. Spademan [(1943) AC 627]** it was held by Lord Wright as follows: “If the principles of natural justice are violated in respect of any decision it is, indeed, immaterial whether the same decision would have been arrived at in the absence of the departure from the essential principles of justice. The decision must be declared to be no decision.” The general principle is stated in the maxim: “Qui Aliquid Statuerit parte inaudita altera, aeauum licet dixerit, hand aequum facerit” (He who shall decide anything without the other side having been heard, although he may have said what is right, will not have done what is right).” Therefore, at least three days' time was not given by the learned Munsiff as provided under the Civil Rules of Practice. He ought to have decided the matter after giving an opportunity to the petitioners to file objection. It is true that suit was filed in 1993. Therefore, long adjournment need not be given. It is to be taken note of that the application for amendment of the written statement was filed only in December 1994 after the suit was listed for trial. Therefore, at least three days' time required under **OP(MAC)No.4/2019** -15- the Civil Rules of Practice should have been given to the petitioners/plaintiffs to file objection and hearing.” 18. In **National Insurance Company Ltd. v. Sajeev and others [2018 (1) KHC 795]** a Division Bench of this Court held that, the provisions of the Code of Civil Procedure, 1908, except those provisions made specifically applicable, do not _proprio vigore_ apply to claim petitions before the Motor Accidents Claims Tribunals. As per Section 167 of the Motor Vehicles Act, the Tribunal acts generally as a court and vested with necessary powers under the Code of Civil Procedure in certain matters and in respect of other matters, the Tribunal is certainly bound to follow the procedure consistent with the principle of fair play, propriety and natural justice. 19. In **United India Insurance Company Ltd. and others v. Motor Accidents Claims Tribunal and others [1987 (1) ACC 386]** , the question that came up for consideration before a learned Judge of this Court is as to whether the Motor Accidents Claims Tribunal is bound to issue a notice to the Insurance Company concerned, before issuing a certificate under Section 110E of the Motor Vehicles Act, 1939, **OP(MAC)No.4/2019** -16- which is corresponding to Section 174 of the Motor Vehicles Act, 1988. This Court held that, though Section 110E as such does not provide any notice, but one can certainly visualise situations where such notices may be necessary, such as those where interest is awarded, or the nature of the relief granted in the award is such that it requires some computation with reference to the facts or factors in dispute. It may also probably be proper to suggest that the Insurance Company should get some time to look into the award and decide whether the matter should be taken in appeal or not. In the said decision, this Court noticed that all Motor Accidents Claims Tribunals were issuing such notices while the Tribunal at Ernakulam was not doing so. Since the Tribunal at Ernakulam has subsequently started issuing notice to the insurer, the writ petition was dismissed, recording the said fact. 20. Though the provisions under the Civil Rules of Practice are not made applicable in proceedings before the Motor Accidents Claims Tribunal, the Tribunal has to follow the procedure consistent with the principle of fair play, propriety and **OP(MAC)No.4/2019** -17- natural justice. In that view of the matter, it cannot be said that when an application under Section 174 of the Motor Vehicles Act is filed by the insurer, the Tribunal can pass orders on that application, by issuing recovery certificate, without notice to the owner of the offending vehicle against whom the recovery is permitted in the award passed by the Tribunal. 21. On receipt of a notice in the interlocutory application filed by the insurer under Section 174 of the Motor Vehicles Act, the owner of the vehicle can raise appropriate objection as to computation of the amount or he can even express his readiness to pay the amount in lumpsum, within a specified time limit, or even in monthly instalments. If such a course is agreeable for the insurer, there is no necessity to issue a certificate for initiating revenue recovery proceedings and that, the application can be closed or disposed of by passing appropriate orders. 22. In such circumstances, I find absolutely no merits in the contention raised by the learned Standing Counsel for the 3[rd] respondent insurer that in an application filed under Section 174 of the Motor Vehicles Act, the Tribunal is not bound to issue **OP(MAC)No.4/2019** -18- notice to the owner of the offending vehicle, against whom recovery is permitted in the award passed by the Tribunal. 23. In the instant case, in terms of Ext.P1 award, the 3[rd] respondent insurer has remitted a total sum of `3,39,100/-, which has already been disbursed to the 1[st] respondent/claimant in terms of that award. Thereafter, the insurer filed I.A.No.2012 of 2017 under Section 174 of the Motor Vehicles Act, seeking an order to issue revenue recovery certificate through the District Collector, Ernakulam for realisation of the said amount from the petitioner herein. In that interlocutory application, the Tribunal passed an order dated 07.08.2017 to issue revenue recovery certificate and a requisition was made on 10.10.2018. Thereafter, the said interlocutory application was closed by Ext.P5 order dated 21.11.2018. 24. An application for issuance of recovery certificate for initiating revenue recovery proceedings can be made in the form of an interlocutory application. In the instant case, admittedly, I.A.No.2012 of 2017 was moved by the 3[rd] respondent insurer without serving a copy of the same to the learned counsel who **OP(MAC)No.4/2019** -19- represented the petitioner herein, who is the registered owner of the offending motor cycle. The procedure adopted by the Tribunal in this regard is in violation of the principles of natural justice and inconsistent with the principle of fair play and propriety. In such circumstances, Ext.P5 order warrants interference in exercise of the supervisory jurisdiction of this Court under Article 227 of the Constitution of India. In the result, this original petition is disposed of by setting aside Ext.P5 order dated 21.11.2018 of the Tribunal and by directing the Tribunal to reconsider that interlocutory application, with notice to the petitioner and after affording him a reasonable opportunity to file objections, if any, as expeditiously as possible, at any rate, within a period of one month from the date of receipt of a certified copy of this judgment. **Sd/ANIL K. NARENDRAN JUDGE** dsn **OP(MAC)No.4/2019** -20- ## **APPENDIX** **PETITIONER'S EXHIBITS:** **EXHIBIT P1** **TRUE PHOTOCOPY OF AWARD DATED 19.09.2015 ON THE FILES OF M.A.C.T., MUVATTUPUZHA.** **EXHIBIT P2** **THE TRUE PHOTOCOPY OF NOTICE DATED 02.11.2018 ISSUED UNDER SECTION 7 OF THE REVENUE RECOVERY ACT.** **EXHIBIT P3** **THE TRUE PHOTOCOPY OF NOTICE DATED 27.11.2018 ISSUED UNDER SECTION 34 OF THE REVENUE RECOVERY ACT.** **EXHIBIT P4** **THE TRUE PHOTOCOPY OF I.A.NO.2012/2017 IN O.P(MV)NO.490/2013 FILED BY THE 3RD RESPONDENT.** **EXHIBIT P5** **THE TRUE PHOTOCOPY OF ORDER DATED 21.11.2018 IN I.A.NO.2012/2017 IN O.P(MV)NO.490/2013 ON THE FILES OF THE MOTOR ACCIDENTS CLAIMS TRIBUNAL, MUVATTUPUZHA.** **RESPONDENTS' EXTS: NIL**