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National Insurance Co. Ltd. and Ors.Vs. Sikandar Ali and Ors. - (High Court of Gauhati) (20 May 2019)

Security is to be furnished by insured owner prior to release of compensation amount by insurer


Motor Vehicles

Present appeal is directed against the judgment passed by the Additional District & Sessions Judge cum Member, Motor Accident Claims Tribunal, (the Tribunal), whereby an amount of Rs. 1,97,481 has been awarded as compensation to the claimant/Respondent No. 1 alongwith the interest at the rate of 6% per annum from the date of filing of the claim/application for the injury sustained by him.

Limited ground taken in the appeal by the appellant/Insurance Company is that, no security before disbursement of the amount was insisted by the Tribunal from the owner of the vehicle (motorcycle)

The learned counsel for the Appellant submits that, although the Tribunal permitted the Appellant to recover the compensation from the owner of the motorcycle but there is no mentioned about the owner of the motorcycle requiring to deposit adequate security against the payment to be made by the Appellant in terms of the Apex Court decision in Oriental Insurance Co. LTD. Vs. Shri Nanjappan and Ors.

From the evidence of the claimant himself, there were three persons riding on the motorcycle when the accident and therefore, violation of the Insurance policy by the rider of the motorcycle is obvious and for which, the interest of the insurer will have to be protected. Protection given to the insurer in the case of Nanjappan and Ors. will have to be given to the Appellant herein as well.

As per Nanjappan and Ors., before release of the amount to the insured, 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 the security. If necessity arises the Executing Court shall take assistance of the concerned Regional Transport authority. The Executing Court 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 it shall be open to the Executing Court to direct realization by disposal of the securities to be furnished or from any other property or properties of the owner of the vehicle, the insured.

The Apex Court has laid down in the manner in which, the security is to be furnished by the insured owner prior to the release of the compensation amount by the insurer. The same will have to be followed in the present case as well. The appeal is disposed of with a direction to the MACT, to comply with the direction issued in Nanjappan and Ors. before releasing the amount of compensation to the claimant.

Relevant : Oriental Insurance Co. LTD. Vs. Shri Nanjappan and Ors. MANU/SC/0122/2004


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