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2001 DIGILAW 184 (ORI)

New India Assurance Co. Ltd. v. Sanju Behera

2001-04-19

P.K.MOHANTY

body2001
JUDGMENT P. K. MOHANTY, J. — The appeal is by the Insurance Company against the order of the learned 5th Motor Accident Claims Tribu¬nal, Bhubaneswar awarding a sum of Rs. 2,65,500/- as compensation of favour of the claimant-respondents with interest. 2. Sri P. C. Pattnaik, learned counsel for the claimants/respondents has raised the question of maintainability of the appeal on merit at the instance of the Insurance Company in absence of an order of the Claims Tribunal passed under Sec. 170 of the Motor Vehicles Act, 1988 (hereinafter referred to as ‘the Act’) to contest the award on merit. It is his submission that the appellant/Insurance Company having not moved the learned Tribunal under Sec. 170 of the Act for being impleaded as a party to the proceeding and contesting the same, it cannot challenge the award on merits only because it was impleaded as a party to the claim proceeding by the claimants. The leaned counsel argues that the Insurance Company an only challenge the award of the Tribunal on the grounds as are available under Sub-sec. (2) of Sec. 149 of the Act. 3. Sri. S.S. Rao, learned counsel for the appellant/insurer, on the other hand, submits that since the Insurance Company was already impleaded as a party to the claim proceeding before the Tribunal at the instance of the claimants and having contested the same, the bar contemplated under Sec. 149(2) of the Act does not operate inasmuch as in view of specific clause and the reser¬vation subject to which the policy is granted, it can always challenge the award on merit. In support of his contention, learned counsel has relied on the decision of the Apex Court in Shankarayya and another v. United India Insurance Co. Ltd. : A.I.R. 1998 S.C. 2968, New India Assurance Co. Ltd. v. Sadasiv Misra and others : 1999 (II) O.L.R. 159 and National insurance Co. Ltd., New Delhi v. Jugal Kishore and others A.I.R. 1988 S.C. 719 and the decision of the Calcutta High Court in United India Insurance Co. Ltd. v. Smt. Namita Das and others A.I.R. 2000 Calcutta 145. In order to appreciate the submission of the learned counsel for the parties, the provision of Sec. 170 of the Act need be noted which reads thus : “170. Ltd. v. Smt. Namita Das and others A.I.R. 2000 Calcutta 145. In order to appreciate the submission of the learned counsel for the parties, the provision of Sec. 170 of the Act need be noted which reads thus : “170. Impleading insurer in certain cases — Where in the course of any inquiry, the Claims Tribunal is satisfied that - (a) there is collusion between the person making the claim and the person against whom the claim is made, or (b) the person against whom the claim is made has failed to contest the claim, it may, for reasons to the recorded in writing. direct that the insurer who may be liable in respect of such claim, shall be impleaded as a party to the proceeding and the insurer so im¬pleaded shall thereupon have, without prejudice to the provi¬sions contained in Sub-sec. (2) of Sec. 149, the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made.” Thus, on a careful perusal and reading of the aforesaid provi¬sion, there cannot be any manner of doubt that in course of an enquiry if the Tribunal is satisfied that the person against whom the claim is made has failed to contest the claim, it may, for the reasons recorded in writing, direct that the insurer who ultimately may become liable for such claim, shall be impleaded as a party to the proceeding. In that event, the insurer shall have a right to contest the claim on all or any of the grounds that are available to the person against whom claim is made without prejudice to the provisions contained in Sub-sec. (2) of Sec. 149. 4. In view of Sec. 170 of the Act, without prejudice to Sub-sec. (2) of Sec. 149, an insurer who is impleaded by the order of the Tribunal for the reasons recorded by it, shall have the right to contest on all grounds on merit and the provisions contained in Sub-sec. (2) of Sec. 149 limiting the right of the insurer to challenge the award would not be a bar. Sec. 149 (2) of the Act need be quoted, which runs thus : “149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks. (2) of Sec. 149 limiting the right of the insurer to challenge the award would not be a bar. Sec. 149 (2) of the Act need be quoted, which runs thus : “149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks. - (1) xx xx xx (2) No sum shall be payable by an insurer under Sub-sec. (1) in respect of any judgment or award unless, before the commence¬ment of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely : (a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely : (i) a condition excluding the use of the vehicles— (a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or (b) for organised racing and speed testing, or (c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or (d) without side-bar being attached where the vehicle is a motor cycle; or (ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or (iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or (b) that the policy is void on the ground that it was ob¬tained by the non-disclosure of a material fact or by a repre¬sentation of fact which was false in some material particular. Thus, the insurer under Sub-sec. (2) of Sec. 149 can chal¬lenge the award on any of the aforementioned grounds only. 5. Thus, the insurer under Sub-sec. (2) of Sec. 149 can chal¬lenge the award on any of the aforementioned grounds only. 5. The learned counsel referring to the decision in the case of New India Assurance Co. Ltd., (supra) submits that in view of the observation of the Court that unless the quatification of the Tribunal is grossly high or grossly low, the Appellate Court should not interfere and, therefore, in a case where quantifica¬tion is excessive or grossly high, the Appellate Court should interfere in the award in appeal even at the instance of the insurer which has not been impleaded in terms of Sec. 170 of the Act. The case cited directly goes against the contention of the appellant since in the said decision following the decision of the Supreme Court. In Shankaryya and another v. United India Insurance Co. Ltd. and another : 1998 (2) T.A.C. 379 (SC) it has been held that unless the Insurance Company was expressly permitted to contest the proceeding on merit, it cannot be permitted to contest nor an appeal at its instance can be filed. In the case of National Insurance Co. India Ltd., New Delhi (supra) the Apex Court ob¬served that no insurer to whom the notice referred to in Sub-sec. (2) of Sec. 96 of the 1939 Act has been given, is entitled to avoid his liability to any person entitled to the benefit of any such judgment as is referred to in Sub-sec. (2) thereof otherwise than in the manner provided for in Sub-sec. (2). In that case the Insurance Company having not undertaken in the policy any liabili¬ty in excess of statutory liability, the award against it was held to be only of the statutory liability. This decision also is of no avail to the learned counsel for the appellant. In view of the decision of the Hon’ble Apex Court and of this Court the decision of Calcutta High Court cannot come to the rescue of the appellant. 6. In National Insurance Co. v. Magikhaia Das (after him Mst. This decision also is of no avail to the learned counsel for the appellant. In view of the decision of the Hon’ble Apex Court and of this Court the decision of Calcutta High Court cannot come to the rescue of the appellant. 6. In National Insurance Co. v. Magikhaia Das (after him Mst. Laxmi Dibya and others) : A.I.R. 1976 Orissa 175 a Full Bench of this Court while considering such a question under 1939 Act, observed that under the statutory provision contemplated under Sec. 96(2) of the Motor Vehicles Act, 1939, the insurer which has been made a party to the proceeding for recovery of compensation, can resist the claim ony on those grounds mentioned in Sub-sec. (2) of Sec. 96 and it was not open to the insurer to raise any other plea. In the decisions in Divisional Manager, United India Insurance Co. Ltd. v. Smt. Labanya Sahu and others : A.I.R. 1999 Orissa 193, the Divisional Manager, New India Assur¬ance Company Ltd. v. Sulochana Jena and others : 87 (1999) C.L.T. 831, this Court has taken the similar view. The Apex Court in the case of Shankarayya and another (supra) considering the aforesaid relevant provisions of Sec. 170 of the Act, have held that the Insurance Company when impleaded as a party by the Court can be permitted to contest the proceeding on merits, only if the condi¬tion precedent mentioned in the sections are found to be satis¬fied and for that purpose the Insurance Company has to obtain an order in writing from the Tribunal and the said order should also be a reasoned one. The Apex Court further held that unless the procedure is followed, the Insurance Company cannot have a wider defence on merit than what is available to it by way of statutory defence. The impletion of the Insurance Company in the claim petition by the claimant and its participation in the said pro¬ceeding, cannot be construed as an order of the Tribunal permit¬ting the Insurance Company to avail of a larger defence on merit. 7. In New India Assurance Co. Ltd. v. Surendra Chandra Nayak and others : Misc. The impletion of the Insurance Company in the claim petition by the claimant and its participation in the said pro¬ceeding, cannot be construed as an order of the Tribunal permit¬ting the Insurance Company to avail of a larger defence on merit. 7. In New India Assurance Co. Ltd. v. Surendra Chandra Nayak and others : Misc. Appeal No. 521 of 1997, decided on 20.3.2001, I have also dealt with a similar question and dis¬cussed in details regarding the relevant decision on the point and have held that in absence of an order in writing by the Tribunal permitting the insurer to contest the proceeding on merit in terms of Sec. 170 of the Act, the Insurance Company can only challenge the award on the grounds as are available under Sub-sec. (2) of Sec. 149 of the Act. 8. In that view of the matter, the present appellant having not been impleaded as a party by the order of the Tribunal and not having been permitted to contest the matter on merit in terms of Sec. 170 of the Motor Vehicles Act the appeal at the instance of the insurer has to be held as not maintainable, the other questions on merit raised by the appellant, questioning the legality and validity of the award need not be gone into. Thus, the appeal is dismissed as not maintainable. Appeal dismissed as not maintainable.