NEW INDIA ASSURANCE CO. LTD. & ANR versus KUSUM & ORS.

Citation: [2009] 12 S.C.R. 343 · Decided: 04-08-2009 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2009] 12 S.C.R. 343 
NEW INDIA ASSURANCE CO. LTD. & ANR. 
A 
v. 
KUSUM & ORS. 
(Civil Appeal No. 5082 of 2009) 
AUGUST 4, 2009 
8 
[S.B. SINHA AND DEEPAK VERMA, JJ.] 
~ 
MOTOR VEHICLES ACT, 1988: 
" 
s. 168 - Motor accident- Driver not holding valid driving c 
licence - Tribunal's direction to Insurance Company to pay 
compensation to dependants of victim and to recover the 
amounts from driver and owner of offending vehicle -
Executing court directing Insurance Company to file suits for 
recovery - High Court declining to interfere - HELD: Tribunal D 
~ 
must be held to have issued the directions in exercise of its 
" 
inherent powers, keeping in view the social justice doctrine 
and in the interest of claimants - Impugned orders are set 
aside - Executing courts will proceed with the execution 
expeditiously - Execution of awards made by Motor Accident E 
Claims Tribunal - Social Justice. 
The claim petitions filed by the dependents of the 
,. .. 
persons killed in motor accidents were allowed by the 
Motor Accident Claims Tribunals. However, as the drivers 
of the offending vehicles did not hold valid licences at the F 
time of accidents, the Tribunals, primarily holding drivers 
and owners liable to pay the compensation, directed the 
Insurance Company to pay the amounts to the claimants 
and recover it from the respondent-drivers and owners 
of the offending vehicles. In the execution petitions, the G 
• +-
executing court directed the Insurance Company to file 
,,, 
suits for recovery. The petitions filed by the Insurance 
Company under Article 227 of the Constitution, having 
been dismissed by the High Court, it filed the appeals. 
343 
H 
344 
SUPREME COURT REPORTS 
[2009] 12 S.C.R. 
A 
Allowing the appeals, the Court 
HELD: 1. The rights and liabilities of the parties to the 
contract of insurance would be governed thereby subject 
to the provisions of the Motor Vehicles Act, 1988. One of 
8 
the conditions which would make the insurance 
company liable to reimburse the owner of the vehicle in 
respect of payment of the amount of compensation in 
favour of a claimant is that the driver of the vehicle must 
possess a valid driving licence. In the instant case, the 
licence of the driver of the offending vehicle was proved 
C to be invalid. The courts, however, keeping in view the 
social justice doctrine wherefor the Act was enacted and 
in the interest of the claimants had been passing orders 
directing Insurance Company to make the payment and 
recover the same from the drivers and/or owners of the 
D vehicles. The directions by the Tribunal must be held to 
have been issued in exercise of its inherent power. It 
would be travesty of justice, if the Insurance Company, 
which is directed to pay the amount, has to face immense 
difficulties in executing a decree. The impugned 
E judgments cannot be sustained, and are set aside. The 
executing courts are directed to proceed with the 
execution and dispose of the same as expeditiously as 
possible. [Para 7 and 10] [348-G-H; 349-A-B; 352-C-D] 
F 
National Insurance Co. Ltd. v. Baljit Kaur (2004) 2 SCC 
1; Oriental Insurance Company Ltd. v. Shri Nanjappan & Ors. 
(2004) 13 SCC 224; National Insurance Co. Ltd. v. Kusum 
Rai (2006) 3 SCALE 519; Oriental Insurance Co. Ltd. v. 
Zaharulnisha (2008) 12 SCC 385 and Oedappa v. National 
G Insurance Co. Ltd. (2008) 2 SCC 595, relied on. 
H 
Case Law Reference: 
(2004) 13 sec 224 
(2004J 2 sec 1 
relied on 
relied on 
para 6 
para 8 
NEW INDIA ASSURANCE CO. LTD. & ANR. v. 
345 
KUSUM & ORS. 
(2006) 3 SCALE 519 
relied on 
para 8 
A 
(2008) 12 sec 385 
relied on 
para 8 
,.. 
(2008) 2 sec 595 
relied on 
para 8 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 
B 
5082 of 2009. 
From the Judgment & Order dated 25.09.2006 of the High 
,I. 
Court of Punjab & Haryana at Chandigarh in C.R. No. 3231 of 
2004. 
c 
WITH 
C.A. No. 5083 of 2009. 
Nanita Sharma, Satbir Pillaina, M.K. Bhardwaj, Ashok K. 
D 
Mahajan, AK. De, Rajesh Dwivedi, R.C. Kaushik, Madhuri 
~ 
Gupta, Rani Chhabra for the appearing parties. 
'! 
The Judgment of the Court was delivered by 
S.B. SINHA, J. 1. Leave granted. 
E 
2. These appeals involving cortimon questions of law and 
t 
J.. 
fact were taken up for hearing together and are being disposed 
of by this common judgment. 
3. We would, however, notice the fact of the matter from 
F 
CA@ Special Leave Petition (C) No.3372 of 2007. 
On or about 14.7.1999, respondent No.3 was traveling in 
a bus bearing Regi
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