Whether Motor accident claim tribunal can recall award passed by it on ground of fraud?

In the above facts, when compensation was secured by playing
fraud on the Tribunal, the technical objection of the vehicle owner can’t be
accepted as the entertainment of the delay objection will defeat justice.
Therefore considering the ratio of Rajendra Singh (supra), it has to be declared
that the MAC Tribunal was competent to recall its award, if the same is found to
be obtained by practicing fraud or misrepresentation. Consequently, the learned
Tribunal’s decisions to reject the applications of the Insurance Company are held
to be unsustainable and accordingly the Tribunal’s impugned decisions are set
aside.
 The Apex Court in National Insurance Co. Ltd. Vs. Baljit Kaur
reported in (2004)2 SCC 1, held that the insurance company is entitled to recover
the wrongly awarded amount from the owner of the vehicle and such claim can
be entertained by the Tribunal itself. In view of this decision and since the
awarded amounts were disbursed to the claimants by the insurance company,
the petitioner is permitted to recover the same from the truck owner through the
forum of the MAC Tribunal.

THE GAUHATI HIGH COURT

 CRP No. 322/ 2010
United India Insurance Company Ltd., V Smt. Kulasori Mirdha,

BEFORE
 MR. JUSTICE HRISHIKESH ROY
Dated : 28th April, 2015
Citation;2016(1)ALLMR(JOURNAL)43

 Heard Ms. R.D. Mozumdar, the learned counsel for the petitioner
i.e. United India Insurance Company Ltd. (hereinafter referred to as the
“Insurance Company”). Also heard the learned Sr. counsel Mr. G.N. Sahewalla,
who appears for the respondent Jugal Kishor Sharma, who was the owner of the
goods carrying vehicle bearing Registration No.AS-25-C-5835. The following
order will dispose of both Revisions filed by the Insurance Company against the
decisions of the MAC Tribunal, Guwahati.
2. While proceeding towards Chabua from Dibrugarh on 03.11.2003,
the truck of the respondent was involved in an accident and the police report of
the accident indicates that 2(two) persons, namely, Tear Singh Mirdha and Pinki
Mirdha died in the accident and about 6 other passengers travelling in that truck
were injured. As the accidented vehicle was insured as a goods carrying CRP 322, 306/2010 Page 3 of 5
commercial vehicle under the Insurance Company, two separate claims were filed
by the family members of the deceased victims, under Section 166 and 140 of
the Motor Vehicles Act, 1988. These claim petitions were registered as the MAC
Case No.2328/2003 on behalf of the victim Tear Singh Mirdha and the MAC Case
No.2327/2003 on behalf of the victim Pinki Mirdha. Both the MAC cases were
settled in conciliation proceeding(s) on 23.04.2004, whereby the MAC Tribunal,
Kamrup, Guwahati, ordered payment of Rs.2.40 lakh, in respect of MAC Case
No.2328/2003 and Rs.1.40 lakh, in respect of MAC Case No.2327/2003 and these
two Revision petitions arise out of these two proceedings.
3. But alleging that the conciliation awards were forced upon them,
the insurance company filed the application(s) on 16.07.2005 before the
Tribunal, where the company alleged that the settlements were not voluntary
and thrust upon the company, by ignoring their prayer for awaiting the
investigation report. It was further stated that the claim petitions were filed
before the Guwahati MACT with false permanent address of the victims by
showing them to be residents of Guwahati and accordingly it was alleged that
fraud was the basis for the settlements. Thus prayer was made for recall of the
settlement order(s) dated 23.04.2004 or to alternately permit the insurance
company to recover the settlement amounts from the owner of the truck, who
was carrying gratuitous passengers not covered under the insurance policy for
the goods vehicle.
4. However, through the impugned order(s) dated 31.08.2009, the
learned Tribunal dismissed the applications of the insurance company by
observing that since the awards were passed on the basis of
compromise/settlement arrived at by the contesting parties, the Tribunal has no
jurisdiction to alter the awards and accordingly the applications of the insurance
company were dismissed.
5. Assailing the legality of the impugned decisions of the MAC
Tribunal, Ms. R.D. Mozumdar, the learned counsel submits that the insured truck
is not entitled to carry any passengers and she refers the statement given by the
truck owner Jugal Kishor Sharma on 03.06.2004 to project that the victims were
travelling unauthorisedly as passengers in the goods carrying vehicle. She refers
to the police report given in the Chabua P.S. Case No.100/2003 to project that
the TATA 207 Truck was ferrying 35/40 persons to Chabua from a cultural CRP 322, 306/2010 Page 4 of 5
programme in the Dibrugarh T.V. Centre, when it met with the accident at about
5.30 P.M. on 03.11.2003, resulting in fatal injuries to two passengers and other
injuries to 6 passengers travelling in the truck.
6. The petitioner refers to the insurance policy to project that a
goods carrying commercial vehicle is not authorized to carry any passenger and
therefore the counsel argues that the insurance company could not have been
burdened to pay for the gratuitous passengers carried illegally by the truck
owner.
7. Exploring the ambit of the High Court’s power when compensation
is secured by playing fraud on the MAC Tribunal, the Supreme Court in United
India Insurance Co. Ltd. Vs. Rajendra Singh reported in (2000)3 SCC 581,
declared as follows:
“3. “Fraud and justice never dwell together” (fraus et jus nunquam
cohabitant) is a pristine maxim which has never lost its temper over all
these centuries. Lord Denning observed in a language without
equivocation that “no judgment of a court, no order of a Minister can be
allowed to stand if it has been obtained by fraud, for, fraud unravels
everything” (Lazarus Estates Ltd. v. Beasley).
4. For a High Court in India to say that it has no power even to
consider the contention that the awards secured are the by-products of
stark fraud played on a tribunal, the plenary power conferred on the High
Court by the Constitution may become a mirage and people’s faith in the
efficacy of the High Courts would corrode. We would have appreciated if
the Tribunal or at least the High Court had considered the plea and found
them unsustainable on merits, if they are meritless. But when the courts
pre-empted the Insurance Company by slamming the doors against them,
this Court has to step in and salvage the situation.”
8. Placing reliance on the above decision, Ms. R.D. Mozumdar
submits that when the victims do not reside within the jurisdiction of the
Guwahati Tribunal and are permanent residents of Dibrugarh district, fraudulent
claims were raised by giving fake address and therefore since the resultant
awards were obtained by playing fraud, the decisions of the Tribunal should be
corrected.
9. Representing the respondent truck owner, Mr. G.N. Sahewalla, the
learned Sr. counsel however submits that the insurance company had belatedly
approached the Tribunal eight months after the conciliation awards and they CRP 322, 306/2010 Page 5 of 5
were also late in challenging the decisions of the MAC Tribunal in this Court.
Therefore, the Sr. counsel argues that the applications of the insurance company
should not be entertained.
10. What is glaring in the instant case is that compensations were
claimed for victims, who were travelling unauthorisedly in a goods carrying
vehicle. Moreover to prevent proper investigation of the claims by the insurance
company, the victims were falsely shown to be permanent residents of Guwahati,
whereas they are permanent residents of the Bhokel Tea Estate in the Dibrugarh
district. More importantly, the insurance company could not have been fastened
with any liability on account of gratuitous passengers who were ferried
unauthorisedly in a goods carrying vehicle since liability for such passengers rest
with the vehicle owner.[See: New India Assurance Co. Ltd. Vs. Vedwati – (2007)9 SCC
486].
11. In the above facts, when compensation was secured by playing
fraud on the Tribunal, the technical objection of the vehicle owner can’t be
accepted as the entertainment of the delay objection will defeat justice.
Therefore considering the ratio of Rajendra Singh (supra), it has to be declared
that the MAC Tribunal was competent to recall its award, if the same is found to
be obtained by practicing fraud or misrepresentation. Consequently, the learned
Tribunal’s decisions to reject the applications of the Insurance Company are held
to be unsustainable and accordingly the Tribunal’s impugned decisions are set
aside.
12. The Apex Court in National Insurance Co. Ltd. Vs. Baljit Kaur
reported in (2004)2 SCC 1, held that the insurance company is entitled to recover
the wrongly awarded amount from the owner of the vehicle and such claim can
be entertained by the Tribunal itself. In view of this decision and since the
awarded amounts were disbursed to the claimants by the insurance company,
the petitioner is permitted to recover the same from the truck owner through the
forum of the MAC Tribunal. It is ordered accordingly.
13. With the above order, both cases are allowed to the extent
indicated. No cost.
 JUDGE
Roy

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