ORIENTAL INSURANCE CO. LTD. versus SHRI NANJAPPAN AND ORS.

Citation: [2004] 2 S.C.R. 365 · Decided: 13-02-2004 · Supreme Court of India · Bench: DORAISWAMY RAJU · Disposal: Disposed off
Cited by 2 judgment(s) · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

.,..._ 
ORIENT AL INSURANCE CO. LTD. 
A 
v. 
SHRI NANJAPPAN AND ORS. 
FEBRUARY 13, 2004 
[DORAISWAMY RAJU AND ARIJIT PASAYAT, JJ.] 
B 
MQtor Vehicles Act, 1988-Section 168-Claim for compensation-High 
Court holding that claimant entitled to compensation from the owner of the 
vehicle-insured and insurer liable to pay compensation by way of C 
indemnification-Correctness of-Held: Insurer would pay compensation fixed 
which it would recover from the insured, thus order of High Court set aside-
For recovery filing of suit not required-Proceedings may be initiated before 
Executing Court which will pass appropriate orders regarding the manner of 
payment to the insurer by the insured 
An accident took place and the respondent-claimant filed claim D 
petition. Courts below held that the insured-owner of the vehicle was only 
liable and not the insurer. High Court applying the decision of Satpal 
Singh 's case held that the respondent-claimant were entitled to 
compensation from the insured-owner of the vehicle which was insured 
with the appellant-insurer and the insurer was to pay compensation by E 
way of indemnification. 
Hence the present appeal. 
Respondent-claimant contended that though the view in Satpal 
Singh 's case has been overruled, yet in a recent decision in Baljit Kaur 's p 
case it is held that it would be equitable if the insurance company pays 
the amount of compensation to the claimant and recovers it from the 
insured. 
Disposing of the appeal, the Court 
HELD: The insurer shall pay the quantum of compensation fixed G 
by the tribunal to the respondents-claimant within three months from 
today which it will recover from the insured for which the insurer shall 
not file a suit but initiate a proceeding before the concerned Executing 
Court as if the dispute between the insurer and the owner was the subject 
365 
H 
366 
SUPREME COURT REPORTS 
[2004] 2 S.C.R. 
A matter of determination before the tribunal and the issue is decided against 
the owner and in favour of the insurer. Before release of the amount to 
the claimants owner of the vehicle shall be issued a notice and he shall be 
required to furnish security for the entire amount which the insurer will 
pay to the claimants. The offending vehicle shall be attached as a part of 
B the security. If necessity arises the Executing Court shall take assistance 
of the concerned Regional Transport Authority. It shall pass appropriate 
orders in accordance with law as to the manner in which the insured-owner 
of the vehicle shall make payment to the insurer. In case there is any 
default the Executing Court shall direct realization by disposal of the 
securities to be furnished or from any other property or properties of the 
C owner of the vehich~. (368-D-G) 
New India Assurance Company v. Satpal Singh and Ors., (2000) 1 SCC 
237, overruled. 
Mis. National Insurance Co. Ltd. v. Baljit Kaur and Ors., (2004) 1 
D SCALE 124, relied on. 
New India Assurance Co. Ltd. v. Asha Rani, [2003) 2 SCC 223 and 
Oriental Insurance Co. Ltd. v. Devireddy Konda Reddy, (2003) 2 SCC 339, 
referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1012 of 
E 2004. 
F 
From the Judgment and Order dated 28.10.2002 of the Madras High 
Court in L.P.A. No. 27 of 2001. 
Joy Basu for B.K. Satija for the Appellant. 
A.T.M. Sampath and Ms. Aarthi Radhakrishnan for the Respondents. 
The Judgment of the Court was delivered by 
ARIJIT PASAYA T, J. Leave granted. 
Oriental Insurance Company Limited (hereinafter referred to as an 
G 'insurer') calls in question legality of the judgment rendered by a Division 
Bench of the Madras High Court holding that the respondents (hereinafter 
referred to as the 'claimants') were entitled to compensation from the owner 
of the vehicle (described hereinafter as 'insured') which was the subject 
matter of insurance with the appellant and that the insurer had the liability to 
H pay the compensation by way of indemnification .. 
I 
! 
-
ORIENTAL INSURANCE CO. LTD. v. NANJAPPAN [PASA YAT . .I.] 
367 
The Motor Accident Claims Tribunal and Subordinate Court, Tirupur A 
(hereinafter referred to as the 'Tribunal') had held that the liability was of the 
insured alone, and the insurer had no liability. In appeal, for accepting the 
case of the respondents-claimants the High Court held that the decision of 
this Court in New India Assurance Company v. Satpal Singh and Ors., [2000] 
l SCC 237 was applicable. It has to be noted that the accident took place o
Excerpt shown. Read the full judgment & AI analysis in Lexace.