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Issues Involved:
1. Jurisdiction of the Motor Accidents Claims Tribunal to substitute ex-directors as certificate-debtors. 2. Legal effect of the dissolution of the company under Section 560(5) of the Companies Act, 1956. 3. Liability of the insurer under the Motor Vehicles Act, 1939. 4. Determination of the insurer's liability limit under Section 95(2)(b) of the Motor Vehicles Act, 1939. 5. Legal remedies and reliefs available to the claimants. Issue-wise Analysis: 1. Jurisdiction of the Motor Accidents Claims Tribunal to Substitute Ex-directors as Certificate-debtors: The primary contention was whether the Motor Accidents Claims Tribunal had the jurisdiction to substitute the ex-directors of a dissolved company as certificate-debtors. The Tribunal had substituted the petitioners, ex-directors of the dissolved company, in place of the company for the realization of the awarded amount. The court held that the Tribunal had no jurisdiction to pass the impugned order as it misdirected itself in holding that the petitioners were "present directors" and liable for the award. The order was deemed to suffer from an error of law apparent on the face of the record and was quashed. 2. Legal Effect of the Dissolution of the Company under Section 560(5) of the Companies Act, 1956: The court examined the effect of the company's dissolution under Section 560(5) of the Companies Act, 1956. It was established that the company was dissolved as per the provisions, and a notification was published in the Gazette of India. The proviso (a) of Section 560(5) was scrutinized, which continues the liability of the officers of the company existing on the date of dissolution. The court concluded that the proviso does not convert the company's liability into that of the officers. Since the petitioners had no independent liability on the date of dissolution, they could not be held liable for the company's debts. 3. Liability of the Insurer under the Motor Vehicles Act, 1939: The court investigated whether the insurer could be held liable for the entire awarded amount. It was noted that the insurer had already paid Rs. 3,500, including costs and interest, but the claimants were entitled to the full award. The statutory obligation under Section 96 of the Motor Vehicles Act, 1939, mandates the insurer to satisfy any judgment against the insured, up to the sum assured. The court directed the insurer to pay the balance amount of the award, Rs. 13,000, plus costs and interest, to the claimants. 4. Determination of the Insurer's Liability Limit under Section 95(2)(b) of the Motor Vehicles Act, 1939: The court analyzed Section 95(2)(b) to determine the insurer's liability limit. It was determined that the deceased was not a passenger carried for hire or reward but was traveling in pursuance of a contract of employment. Therefore, the insurer's liability extended to Rs. 20,000. The Tribunal had erred in limiting the insurer's liability to Rs. 2,000, assuming the deceased was a passenger carried for hire or reward. 5. Legal Remedies and Reliefs Available to the Claimants: The court emphasized the need to ensure that the claimants received the full awarded amount. It was directed that the insurer, New India Insurance Co. Ltd., deposit the balance amount with the Tribunal within two months. The Tribunal was instructed to record satisfaction of the award and arrange disbursement to the claimants. The court also provided for an increased interest rate of 12% per annum if the payment was not made within the stipulated time, highlighting the prolonged deprivation of the claimants' dues. Conclusion: The petition was allowed, and the rule was made absolute. The impugned order and certificate were quashed. The insurer was directed to satisfy the entire award. The court exercised its discretion to provide complete justice, emphasizing the statutory duty of the insurer and the constitutional mandate to ensure economic justice for the claimants.
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