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Date of Decision: 7th May, 2012 MAC. APP. No.493/2012
NEW INDIA ASSURANCE CO. LTD ..... Appellant
Through: Mr. K.L. Nandwani, Advocate
Through: None
JUDGMENT
C.M. APPL No.8227/2012(Exemption)
Exemption allowed, subject to all just exceptions.
The application stands disposed of.
MAC. APP. No.493/2012 & CM. APPL No.8226/2012(stay)
1. The Appellant New India Assurance Co. Ltd. impugns a judgment dated 03.03.2012 whereby while granting a compensation of `4,29,779/- in favour of the Respondent No.1, the Appellant was made liable to pay the compensation in spite 2012:DHC:3119 of the fact that it successfully proved the breach of the terms of the policy.
2. It is urged by the learned counsel for the Appellant that since the Appellant proved the breach of the terms of the policy, it ought to have been exonerated from its liability to indemnify the insured instead of granting recovery rights.
3. The issue is no longer res integra that even in a case where the insurance company establishes a conscious breach of the terms of the insurance policy, the liability of the insurer to satisfy the decree vis-a-vis third party is statutory.
4. There is an authoritative pronouncement of the Supreme Court in National Insurance Company Limited v. Swaran Singh, 2004 (3) SCC 297 paras 73, 104 and 105 are extracted hereunder:-
5. Following Swaran Singh, (Supra) this Court in National Insurance Company Limited v. Sanjay Kumar, ILR, 2007 (2), Delhi, 733 held that even when breach of the terms and conditions of policy of insurance in terms of Section 149(2)(a) of the Motor Vehicle Act, 1988 is proved, the insurance company would still be required to pay the sum awarded to the claimant, but would be entitled to the recovery rights against the insured.
6. In MAC APP 329/2010, Oriental Insurance Company Limited v. Rakesh Kumar and Others, decided on 3rd February, 2012, this Court noticed National Insurance Company Limited v. Swaran Singh & Ors., (2004) 3 SCC 297; Sohan Lal Passi v. P. Sesh Reddy, (1996) 5 SCC 21; New India Assurance Co., Shimla v. Kamla and Ors., (2001) 4 SCC 342; and United India Insurance Company Ltd. v. Lehru & Ors., (2003) 3 SCC 338; and held that even when there is a willful breach of the terms of policy under Section 149(2)(a) of the Act, the Insurance Company is under obligation to indemnify the liability towards the third party and recover the same from the owner.
7. Thus, the Appellant was only entitled to recovery rights which have been granted.
8. The Appeal is devoid of any merit; the same is being dismissed accordingly.
9. The application pending, if any, is disposed of accordingly.
10. The statutory amount of `25,000/-, if deposited, shall be refunded to the Appellant Insurance Company.
JUDGE MAY 07, 2012 pst