AJOY NATH RAY, J. ( 1 ) SEVEN reference matters have come up before us on account of conflicting different bench decisions of our court. Those seven matters are as follows: (1) f. m. a. no. 1110 of 1997 tara sundari. (2) f. m. a. no. 1790 of 2000 anjan chowdhury. (3) f. m. a. no. 147 of 1998 md. Saitul haque. (4) f. m. a. no. 1107 of 1997 sujauddin sarkar. (5) f. m. a. no. 1453 of 2000 premlata chowbey. (6) f. m. a. no. 1429 of 2000 sanatan hazra. (7) f. m. a. no. 1472 of 2000 tripti majhi. ( 2 ) THE main reference was made in the case of tripti majhi, where v. k. gupta, j. , as his lordship then was, speaking for the division bench said as follows in the beginning of the judgment:"in this appeal, the point of law involved as to whether an appeal by an insurance company against an award of the motor accidents claims tribunal only on the question of quantum of compensation is maintainable or not. " ( 3 ) LATER on during the judgment his lordship further explained that the conflict arose out of an unreported division bench judgment (unreported at that time) in united india insurance co. Ltd. V. Gita rani mondal, 2001 acj 1692 (calcutta ). That judgment was delivered by me and the division bench consisted of myself and the hon'ble ranjan kumar mazumdar, j. (since retired ). ( 4 ) IN that judgment we had relied upon the case of british india genl. Ins. Co. Ltd. V. Captain itbar singh, 1958-65 acj 1 (sc), very heavily. Captain itbar singh's judgment was delivered by a apex court bench of strength three. Drawing upon the dicta of the supreme court in that case and relying upon a particular clause in the insurance policy which we shall presently refer to hereafter again, we opined that it was always open for the insurance company in cases where the insurance contract contained a clause of the above type, to contest in the name of the insured owner, the claim of the victim of the motor accident even on questions of quantum of damages only. ( 5 ) THAT clause is now found as a matter of course in almost all motor insurance policies. Mr. ( 5 ) THAT clause is now found as a matter of course in almost all motor insurance policies. Mr. K. k. das appearing for the insurance companies assures us of the ubiquitous presence of that clause as he had also assured us of such presence of the said clause when he was arguing the case of gita rani mondal, 2001 acj 1692 (calcutta), before the division bench. The said clause is as follows:" (2) no admission, offer/promise of payment shall be made by the insured without the written consent of the company which shall be entitled if it so desires to take over and conduct in the name of the insured the defence or settlement of any claim or to prosecute in his name for its own benefit any claim for indemnity or damages or otherwise and shall have full discretion in the conduct of any proceedings or in the settlement of any claim and the insured shall give all such information and assistance as the company may require. If the company shall make any payment in settlement of any claim and such payment includes any amount not covered by this policy the insured shall repay to the company the amount not so covered. " ( 6 ) WE make it clear that gita rani mondal, 2001 acj 1692 (calcutta), got decided differently from the other division bench judgment of this court because of the emphasis placed by mr. Das on the said insurance clause, and the importance given to such a clause by the supreme court in captain hbar singh's case, 1958-65 acj 1 (sc ). We proceed hereafter to decide the right of the insurance company, to prefer an appeal on the question of quantum of damages, but we consider that question only for those cases where the insurance cover contains a clause like the one quoted above. Since such a clause was there in gita rani mondal's case, there is as yet no conflict of division benches and no references to the special bench therefrom in regard to the maintainability of the insurer's appeal on grounds of quantum only in those cases, where the insurance cover does not contain a clause like the above. With this clarification we proceed with the answering of the referred question. With this clarification we proceed with the answering of the referred question. ( 7 ) THE facts in these seven cases are that excepting for only one in all other cases it was the insurance company and the insurance company alone which had put up any resistance before the tribunal against the compensation claims made. Only in the case of anjan chowdhury, i. e. , a. No. 1790 of 2000 had the owner appeared in the beginning and filed a written statement. But thereafter the owner dropped out and the insurance company continued the battle until the date of the award by the tribunal. ( 8 ) IN all these cases the insurance company had been impleaded from the very beginning as the defendant no. 2 by the claimant or the claimants as the case might have been. Continuing with the apathy which the owners had shown before the tribunal, the owners have taken no steps for filing any appeals from the awards which have gone against them as well as against the insurers. The insurers fought their battle in the tribunal without obtaining any special direction from the tribunal under section 170 of the motor vehicles act, 1988. We shall quote that section a little later along with its precursor which was introduced into the 1939 act by way of introduction of section 110-c (2-a ). ( 9 ) MR. Das appearing for the insurers in five cases and mr. Banerjee, appearing for them in the fifth case of premlata chowbey and mr. Rajesh singh appearing for the insurers in the second case of anjan chowdhury pressed for the rights of the insurer to make submission and to contest the claim on the ground of quantum. The main arguments were made by mr. Das and those were adopted and fully supported both by mr. Banerjee and by mr. Singh. ( 10 ) ON behalf of the claimants the principal argument was advanced by mr. K. Banik. Submissions were also made and authorities cited on behalf of some of the claimants by mr. Ghoshal. It was their submission that the insurers could raise the defence in relation to the applicability of the insurance cover as permitted under section 96 (2) of the motor vehicles act, 1939 and section 149 (2) of the motor vehicles act, 1988. These sections also we shall quote hereafter. Ghoshal. It was their submission that the insurers could raise the defence in relation to the applicability of the insurance cover as permitted under section 96 (2) of the motor vehicles act, 1939 and section 149 (2) of the motor vehicles act, 1988. These sections also we shall quote hereafter. It was their submission that if the cover granted by the insurance policy is adequate and none of these statutorily permitted defences can be taken up by the insurance company, then and in that event, for the purpose of obtaining a right to challenge the quantum of damages, the insurance company must, as of necessity, obtain a direction from the claims tribunal to that effect, such direction has to be now obtained under section 170 of the motor vehicles act, 1988. Without obtaining of such a direction the insurer cannot challenge the quantum before the tribunal and thus cannot continue such challenge before the court of appeal. ( 11 ) TO a lawyer of a common law country, who has not had any special experience in these motor insurance claims made by third parties in the last 50/70 years, it will appear to be too obvious that the insurance company must be having a right of say in regard to the quantum of damages. He will think, at first blush, that it is the insurance company which is paying and that it cannot be made to pay a sum larger than justly due, for the purpose of assisting the court in coming to the conclusion as to which sum is justly due, the insurer must have a say; it would appear to the lawyer to be but another instance a branch of the ever present rule of natural justice. ( 12 ) HOWEVER, the above view is only a superficial one. Motor insurance claims and the law in that regard have been statutorily developed to a large extent in the last 75 years. Many technicalities and rules have come into being. The interpretation of statutes in the field has been made by high authority on the basis of legal principles and experience and these interpretations have become widely accepted and binding. It is in the light of the developed law of motor insurance that the locus standi of the insurer before the court of appeal must now be determined. The interpretation of statutes in the field has been made by high authority on the basis of legal principles and experience and these interpretations have become widely accepted and binding. It is in the light of the developed law of motor insurance that the locus standi of the insurer before the court of appeal must now be determined. It is believed that if a short history of the development of the law and the sequence of authorities and statutes are discussed hereunder the answer to the above problem will present itself as obvious and inescapable. The position at common law before 1930 ( 13 ) AT common law, a victim who had been run over by a car owner could no doubt file a claim for damages in tort against the owner of the motor car, but he could not directly sue the insurer of the motor car. It must often have happened that a victim was run over by a motor car owner who had no insurance cover at all. Thus, the claim in negligence made by the victim against the owner would be a claim in which the insurance company would not be a party. ( 14 ) IF the insurance company was not to be a party it could have no say as to the amount of damages which might have been awarded to the victim by the court. ( 15 ) THE insurer would face a claim in its turn which would be made by the owner of the vehicle. In this case the victim of the accident would not be a party. Quite probably the judgment in the accident case would be tendered as a piece of evidence in the claim against the insurer to assist the court in arriving at the figure which the insurer would have to pay under the insurance cover. ( 16 ) IF everything went on smoothly and normally the victim and the owner would fight their battles in a fair and honest manner without any collusion and/or conspiracy. A just amount would be awarded by the court. That just amount would be claimed by the owner against the insurer. The insurer would either pay up directly or take the insured to the court on a point of the insurance policy [a point of the type mentioned in section 149 (2) of the motor vehicles act, 1988]. A just amount would be awarded by the court. That just amount would be claimed by the owner against the insurer. The insurer would either pay up directly or take the insured to the court on a point of the insurance policy [a point of the type mentioned in section 149 (2) of the motor vehicles act, 1988]. After resolution of the insurance point the insurer would suffer a decree, and pay up to the owner. The owner would handover the money to the victim, and all would be well with the world. However, the things did not happen smoothly at all times, and difficulties arose. The difficulty arose in a peculiar way. It sometimes happened that the insurance company paid the money to the insured which was itself a company, but before the money could be paid over to the victim, the receiving company went into liquidation. This happened in the case of harrington motor company, 1928 ch 105, a decision of the court of appeal. Lord atkin said in that judgment, to this effect: that the victim could not claim the money received by the company in liquidation as specially fixed for him. He would have to prove the debt before the liquidator like all others. The result was that the victim was left high and dry although he had suffered an injury and had obtained a judgment. Sometimes the insured would be an individual person and he would go bankrupt. The victim would be in an equally difficult position in this case also. He would have to prove the debt before the official assignee (as in india ). This in fact actually happened in the case of hood's trustees, 1928 ch 793, again a judgment of the court of appeal. ( 17 ) TO rectify these wrongs an english act was passed in 1930 into the details of which we need not enter. Our examination of statute law will start with the motor vehicles act, 1939 which was passed and made applicable to india. However, it can be mentioned that there is judicial notice of the fact that the english act of 1930 was passed to rectify the above hardships caused by liquidation and bankruptcy of the insured. Our examination of statute law will start with the motor vehicles act, 1939 which was passed and made applicable to india. However, it can be mentioned that there is judicial notice of the fact that the english act of 1930 was passed to rectify the above hardships caused by liquidation and bankruptcy of the insured. In the case of mccormick, (1934) 49 li lr 361, lord justice graton speaking in the court of appeal said that there was "no doubt as to why the first statute of 1930 was passed". His lordship then went on to refer the problems of bankruptcy and liquidation. The position in india ( 18 ) THE position in india now is that a claimant can claim directly against the owner and the insurer although as per the contract of insurance there is absolutely no privity of contract between the victim and the insurer. The rectification of the above hardships also changed the legal procedure and in effect combined two actions into one, instead of the victim suing in one action and the insured in another. Today the victim can, and quite often if not always, does sue both the owner and the insurer in the same action. The action is a claim petition before the motor accidents claims tribunal. The award in that claim becomes the subject-matter of an appeal before the high court, under section 173 of the 1988 act, which was section 110-d under the earlier statute law. ( 19 ) THE argument on behalf of the victims will now be better understood. The rationale of their argument is that although for the purpose of avoiding hardship to the victim the two actions have been joined together, yet the owners' defences remain the owners' defences and the insurers' defences remain the insurers'. If the quantum is to be challenged, then it is the owners' business to challenge the quantum. If any breach of the insurance policy is to be pleaded and proved then that is the business of the insurer. Victims argue that we should not allow the insurer to take up the owners' defences as that would unduly expose the victims to harassment and long- drawn litigation. ( 20 ) THE insurers argue, on the other hand, that these days the owner is never present, or almost never present. Victims argue that we should not allow the insurer to take up the owners' defences as that would unduly expose the victims to harassment and long- drawn litigation. ( 20 ) THE insurers argue, on the other hand, that these days the owner is never present, or almost never present. One of the principal reasons is that third party insurance in india is now compulsory for motor vehicles and that so far as death, disability and the personal injury are concerned, there is no limit to the liability of the insurer. This is to be seen from sub- section (2) (a) of section 147 of the motor vehicles act, 1988. However, instead of quoting only that part of the said section we quote below side by side section 95 of the 1939 act and section 147 of the 1988 act. These two sections come before sections 96 (2) and 149 (2) which, in their turn, lay down the peculiar defences that are admittedly available to the insurer: motor vehicles act, 1939 motor vehicles act, 1988 section 95. Requirements of policies and limits of liability. (1) in order to comply with the requirements of this chapter, a policy of insurance must be a policy which section 147. Requirements of policies and limits of liability. Requirements of policies and limits of liability. (1) in order to comply with the requirements of this chapter, a policy of insurance must be a policy which section 147. Requirements of policies and limits of liability. (1) in order to comply with the requirements of this chapter, a policy of insurance must be a policy which (A) is issued by a person who is an authorised insurer or by a co-operative society allowed under section 108 to transact the business of an insurer, and (a) is issued by a person who is an authorised insurer, and (B) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2) (b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2) (i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place; (i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including owner of the goods or his authorised representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place; (ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place: (ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place: provided that a policy shall not be required provided that a policy shall not be required (i) to cover liability in respect of the (i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment [other than a liability arising under the workmen 's compensation act, 1923 (8 of 1923)], in respect of the death of, or bodily injury to, any such employee death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the workmen 's compensation act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, any such employee (a) engaged in driving the vehicle, or (a) engaged in driving the vehicle, or (b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle, or (b) if it is a public service vehicle engaged as a conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods vehicle, being carried in the vehicle, or (ii) except where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liabilit in respect of the death of or bodily injury to persons being carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises, or (iii) to cover any contractual liability. (c) if it is a goods carriage, being carried in the vehicle, or (ii) to cover any contractual liability. explanation. For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property or a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place. Explanation. For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident in a public place. (2) subject to the proviso to sub-section (1), a policy of insurance shall cover any (2) subject to the proviso to sub-section (1), a policy of insurance referred to in liability incurred in respect of any one accident up to the following limits, namely sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely (A) where the vehicle is a goods vehicle, a limit of one lakh and fifty thousand rupees in all, including the liabilities, if any, arising under the workmen 's compensation act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, employees (other than the driver), not exceeding six in number, being carried in the vehicle, (a) save as provided in clause (b), the amount of liability incurred, (B) where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, (b) in respect of damage to any property of a third party, a limit of rupees six thousand: (i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all; (ii) in respect of passengers, a limit of fifteen thousand rupees for each individual passenger; provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier. (C) save as provided in clause (d), where the vehicle is a vehicle of any other class, the amount of liability incurred; (D) irrespective of the class of the vehicle a limit of rupees six thousand in all in res pect of damage to any property of a third party. ( 21 ) THE argument of mr. Das was that the owner being absent, if the insurer has no say as of right (as per the policy condition no. 2) on the quantum of damages, then it is most likely that in many cases, although might not be in all, unjustly huge awards would be passed and the insurer would have to satisfy those awards irrespective of ceiling limits. 2) on the quantum of damages, then it is most likely that in many cases, although might not be in all, unjustly huge awards would be passed and the insurer would have to satisfy those awards irrespective of ceiling limits. It should be noted that in india there is as yet no ceiling limit to the amount which might be awarded by the motor accidents claims tribunal in motor accident cases. The principal submissions of mr. Das for vindicating the rights of the insurer to speak on quantum was made on the basis of captain itbar singh's case, 1958-65 acj 1 (sc ). In that case it was argued [see para 15 of the judgment] that it was only fair that a person (meaning the insurer) sought to be made bound by a judgment should be entitled to resist his liability under it by all defences which he can in law advance against the passing of it. ( 22 ) IN the very next para, i. e. , para 16 of the judgment, justice a. k. sarkar (as his lordship then was), speaking for a bench of three had no hesitation in ruling that the above contention was wholly unacceptable. His lordship went on to state that though the statute (often of 1939) had no doubt created a liability upon the insurer yet it had also expressly confined the right to avoid that liability to certain grounds specified in it. His lordship said that it was not for their lordships to add to those grounds. ( 23 ) THEIR lordships were referring to section 96 of 1939 act and we set out below section 96 (2) and section 149 (2) of the acts of 1939 and 1988: ( 24 ) IT will be noticed that in section 96 (2), the insurer is allowed "to defend the action on any of the following grounds". It will be noticed that in the said section there are no express words to the effect that the defence of the insurer shall be limited to the grounds mentioned, and those grounds mentioned only, but these absent words have been supplied by the judgment of the hon'ble supreme court mentioned above. It will be noticed that in the said section there are no express words to the effect that the defence of the insurer shall be limited to the grounds mentioned, and those grounds mentioned only, but these absent words have been supplied by the judgment of the hon'ble supreme court mentioned above. It is no longer open to a party in india to contend that under section 96 (2) of the 1939 act or section 149 (2) of the 1988 act the insurer has, as of right, defences other than those mentioned in the said sections. ( 25 ) MR. Das next submitted that although their lordships confined the above sections strictly to the pure defences of the insurer yet in the very same para 16 of the said judgment their lordships went on to observe that such limitation of statutory defence did not cause any hardship to the insurer. Their lordships said that the insurer has the right, provided he has reserved it by the policy, to defend the action in the name of the assured and if he does so, all defences open to the assured can then be urged by him and there is no other defence that he claims to be entitled to urge for avoiding hardship. The insurer can, therefore, avoid all hardship, if any, by providing for a right to defend the action in the name of the assured and this he has full liberty to do. ( 26 ) THE next step in the argument of mr. Das was that a reservation of the above nature is now made as a matter of course by all the nationalised insurance companies. Such a reservation is to be found in each of the policies involved in the cases before us. The reservation takes the form of condition no. ( 26 ) THE next step in the argument of mr. Das was that a reservation of the above nature is now made as a matter of course by all the nationalised insurance companies. Such a reservation is to be found in each of the policies involved in the cases before us. The reservation takes the form of condition no. 2 in the policy which is set out below once again, although it has been already quoted once before:" (2) no admission, offer, promise or indemnity shall be made or given by or on behalf of the insured without the written consent of the company which shall be entitled if it so desires to take over and conduct in the name of the insured the defence or settlement of any claim or to prosecute in the name of the insured for its own benefit any claim for indemnity or damages or otherwise and shall have full discretion in the conduct of any proceedings or in the settlement of any claim and the insured shall give all such information and assistance as the company may require. " ( 27 ) ON the basis of the three-judge decision of the supreme court and on the basis of condition no. 2 in the policy mr. Das emphasised that the insured not being before the court of appeal, it is the right of the insurer to fight on the quantum of damages as the insured might have done if he had discharged his duties fully and properly as a litigant named and made a party in the claim case. The next argument of mr. Das was that this is not the first time that the insurer is facing the problem of an insured owner who does not care to defend an action because he will ultimately have no liability to pay himself. The situation had been recognised even by the legislature as early as in 1970. Captain itbar singh's case, 1958-65 acj 1 (sc), had been decided as early as in 1958 and at that time the statute contained no express provision as to what would happen if the owner decided to stay away from the accident claim even though he had been duly served with notice. Captain itbar singh's case, 1958-65 acj 1 (sc), had been decided as early as in 1958 and at that time the statute contained no express provision as to what would happen if the owner decided to stay away from the accident claim even though he had been duly served with notice. In 1970 a section was inserted by way of section 110-c (2-a) in the act of 1939 which gave the tribunal a power, under certain circumstances, to call upon the claimant to add the insurer as a party. If that were done the insurer would have all defences, i. e. , the defences of the insurer as well as the defences of the owner including those relating to assessment of quantum. We may quote below the above mentioned section 110-c (2-a) and also its successor which is section 170 in the act of 1988: section 110-c (2-a ). Where in the course of any inquiry, the claims tribunal is satisfied that (I) there is collusion between the person making the claim and the person against whom the claim is made, or (ii) the person against whom the claim is made has failed to contest the claim, it may, for reasons to be recorded by it 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 impleaded shall thereupon have the right to contest the claim section 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 be 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 impleaded shall thereupon have, without prejudice to the provisions on all or any of the grounds that are available to the person against whom the claim has been made. contained in sub-section (2) of section 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. ( 28 ) MR. contained in sub-section (2) of section 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. ( 28 ) MR. Das argued on the above basis that it was not the intention of the legislature that any claim should go ex pane or that the insurer should ever become a victim itself of a collusively large award obtained either by the active and supportive participation of the owner along with the victim or by an intentional staying away of the owner, allowing the victim to make a large score by way of default. On the point of the insurer's rights of defence, nearly a hundred of cases are now to be found decided by different high courts, single benches, division benches and special benches. Our own high court has made its due contribution also, as is proved by the difference between division benches, which has resulted in this reference. By way of a contribution from a special bench to this branch of the law, however, we are taking this one in this high court, as our first step. ( 29 ) THE decisions and opinions of the high courts including those of our own have largely been pushed into the background because of the apex court decisions which have been reported. The first and the only three-judge decision in the field is that given in the case of capt. Itbar singh, 1958-65 acj 1 (sc), mentioned above. That judgment has to be given its full and total effect but later and even very recent supreme court decisions have to be noticed by us as required by the law of precedent. We not only have to notice those but we have to apply those as best as we can and as harmoniously as possible for us. The first one to note is the case of shankarayya v. United india insurance co. Ltd. , 1998 acj 513 (sc ). It was a bench of strength of two. The appeal had been preferred by the insurance company. The victim was a young son of the claimant. The insurance company had resisted the claim on the quantum before the motor accidents claims tribunal without taking any special direction under section 170. The claim made was for rs. 2,60,000. It was a bench of strength of two. The appeal had been preferred by the insurance company. The victim was a young son of the claimant. The insurance company had resisted the claim on the quantum before the motor accidents claims tribunal without taking any special direction under section 170. The claim made was for rs. 2,60,000. Upon contest by the insurers defence on quantum, it was reduced to rs. 1,05,000. The insurers further appealed to the high court seeking yet a further reduction of the sum to rs. 60,000. Setting aside the high court's order passed in the appeal, the apex court ordered that since the insurance company did not move under section 170 it was not entitled to challenge the compensation on merits. The apex court further observed that the appeal filed by the insurance company on the merits of the claim before the high court was also incompetent. The supreme court further observed that unless the procedure under section 170 was followed the insurance company could not have a wider defence on merits than what is available to it by way of statutory defence. ( 30 ) IF shankarayya's case, 1998 acj 513 (sc), is to be followed and if we do not pay attention to condition no. 2 of the policy mentioned above the insurer has no locus standi as an appellant on the quantum. But condition no. 2 was not argued in the case of shankarayya. Condition no. 2 is being argued here. Condition no. 2 is exactly similar to the case of reservation mentioned by the bench deciding captain itbar singh's case, 1958-65 acj 1 (sc ). Therefore, if the appellant comes within the terms of apex court's dicta in captain hbar singh's case (given, inter alia, in para 16) then the appellant has a say before us on the quantum of damages. Accordingly we extract below in entirety para 16 in captain hbar singh's case:" (16) again, we find the contention wholly unacceptable. The statute has no doubt created a liability in the insurer to the insured person, but the statute has also expressly confined the right to avoid that liability to certain grounds specified in it. It is not for us to add to those grounds and, therefore, to the statute for reasons of hardship. We are furthermore not convinced that the statute causes any hardship. It is not for us to add to those grounds and, therefore, to the statute for reasons of hardship. We are furthermore not convinced that the statute causes any hardship. First, the insurer has the right, provided he has reserved it by the policy, to defend the action in the name of the assured and if he does so, all defences open to the assured can then be urged by him and there is no other defence that he claims to be entitled to urge. He can thus avoid all hardship, if any, by providing for a right to defend the action in the name of the assured and this he has full liberty to do. Secondly, if he has been made to pay something which on the contract of the policy he was not bound to pay, he can under the proviso to sub-section (3) and under sub-section (4) recover it from the assured. It was said that the assured might be a man of straw and the insurer might not be able to recover anything from him. But the answer to that is that it is the insurer's bad luck. In such circumstances the injured person also would not have been able to recover the damages suffered by him from the assured, the person causing the injuries. The loss had to fall on someone and the statute has thought fit that it shall be borne by the insurer. That also seems to us to be equitable for the loss falls on the insurer in the course of his carrying on his business, a business out of which he makes profit, and he could so arrange his business that in the net result he would never suffer a loss. On the other hand, if the loss fell on the injured person, it would be due to no fault of his, it would have been a loss suffered by him arising out of an incident in the happening of which he had no hand at all. " ( 31 ) APART from captain itbar singh's case, 1958-65 acj 1 (sc), mr. Das was lucky to get another reported decision of the supreme court which came into the reports between the time of the making of the reference and the commencement of the argument before us. That is the case of united india insurance co. " ( 31 ) APART from captain itbar singh's case, 1958-65 acj 1 (sc), mr. Das was lucky to get another reported decision of the supreme court which came into the reports between the time of the making of the reference and the commencement of the argument before us. That is the case of united india insurance co. Ltd. V. Bhushan sachdeva, 2002 acj 333 (sc ). In that case, the insurance company had filed a revision application before the high court. The owner had fought in the tribunal but had dropped away thereafter. Labouring under the impression that an insurer's appeal does not lie on the question of quantum the insurer brought to the high court the application for revision. When the supreme court was approached with regard to the propriety of maintaining a revision application it said in no uncertain terms, that, in case the owner did not continue to challenge the quantum in appeal, it would be open to the insurer to make such a challenge. The supreme court proceeded on a pragmatic and purposive view of the matter without sticking to the technicalities. It proceeded on the principle of section 170 which, basically, permits the insurer's participation on merits in case the matter is not properly fought out by the owner. The supreme court opined that the defence of the owner is as necessary before the tribunal as it is before the appellate court. It proceeded to rationalise the matter in this way that if, the insurer can fight on merits when the owner stays away from the tribunal the insurer can equally maintain an appeal on merits if the owner stays away from the court of appeal. We extract below a few paras from the case of bhushan sachdeva (supra), namely, paras 9, 10, 12, 14 and 15:" (9) the hub of the section is that the right of appeal is conferred on 'any person aggrieved by an award of a claims tribunal'. When can an insurance company be aggrieved with the award passed by a claims tribunal to entitle it to invoke the right envisaged in section 173 of the act? The permissible contours of the involvement of the insurance company in the claim preferred before the tribunals can be discerned from section 168 of the act. When can an insurance company be aggrieved with the award passed by a claims tribunal to entitle it to invoke the right envisaged in section 173 of the act? The permissible contours of the involvement of the insurance company in the claim preferred before the tribunals can be discerned from section 168 of the act. That section enjoins on the claims tribunal to hold an inquiry on receipt of an application for compensation. There is a statutory compulsion on the tribunal that such inquiry could be conducted only 'after giving notice of the application to the insurer' and to the parties and also only after giving an opportunity to the insurer as well as the parties of being heard. After holding such inqury, the claims tribunal has no jurisdiction to pass an award arbitrarily or as it likes, but only 'an award determining the amount of compensation which appears to it to be jusf. The tribunal shall specify in the award 'the amount which shall be paid by the insurer or the owner or the driver of the vehicle involved in the accident or by all or any of them as the case may be'. (10) can it be said that the insurance company should not have any grievance at all even in a case where the award appears to be unjust to the company? We must bear in mind that the nationalised insurance companies in india are holding public money. What they have to deal with is public fund. They are accountable to the public for every pie of it. If it is held that no insurance company should feel aggrieved even if the award is seemingly unjust and that such awarded amount should go out of the public fund, it is the public interest which suffers. If the insurance company has reason to believe that the award has been obtained fraudulently which fact was not known to the insured, should we allow public money to be given to satisfy such an award? In such cases, the insurance company must feel aggrieved. Any interpretation denying such aggrieved insurance companies the opportunity to seek the legal remedy of appeal should not be adopted unless there is a statutory compulsion. In such cases, the insurance company must feel aggrieved. Any interpretation denying such aggrieved insurance companies the opportunity to seek the legal remedy of appeal should not be adopted unless there is a statutory compulsion. There is nothing in section 173 or in the other relevant provisions of the act which debars the insurance company to resort to the remedy of appeal when it knows that the award is unjust. (12) before the claims tribunal itself the insurer can be permitted to resist the claim even apart from the limited grounds enumerated in section 149 (2) of the act under two eventualities. One is, when there is collusion between the claimant and the insured. Second is, when the insured failed to contest the claim. This has been incorporated in section 170 of the act 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 be 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 impleaded shall thereupon have, without prejudice to the provisions contained in sub-section (2) of section 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. ' (14) what is meant by the words 'failed to contest'? These words must be interpreted in a realistic manner. Right to contest would include the right to contest by filing an appeal against the award of the tribunal as well. Hence, the insured can continue to contest the claim by filing an appeal as provided under section 173 of the act. If the insured fails to prefer an appeal that also would amount to failure to contest that claim effectively. Quite often, the insured would lose the desire to contest the claim once he is told that he would not be mulcted with the liability as the same is siphoned off to the insurer. It means that the insured had dropped out from contesting a claim midway. Quite often, the insured would lose the desire to contest the claim once he is told that he would not be mulcted with the liability as the same is siphoned off to the insurer. It means that the insured had dropped out from contesting a claim midway. In such an eventuality, the act enables the insurer to contest it on all grounds available to the insured. (15) in narendra kumar v. Yarenissa, 1998 acj 244 (sc), a two-judge bench of the this court considered the maintainability of an appeal preferred jointly by the insured and the insurer under the provisions of the motor vehicles act, 1939. It is held by the learned judges that when the insured filed the appeal, it is not open to the insurer to prefer an appeal on the grounds available to the insured. In chinnama george v. N. k. raju, 2000 acj 777 (sc), a two-judge bench considered the scope of appeal preferred by the insurance company under the present act. That appeal was preferred at a time when the insured had also filed an appeal challenging the award. In that case also the situation was almost the same as in the former decision. Learned judges, therefore, observed that the insurer by associating with the owner or the driver cannot be allowed to mock at the law. Thus, the aforesaid two decisions involved a common situation when the appeal filed by the insurer was held to be not maintainable as the insured had preferred an appeal challenging the award. Hence, the principles stated therein are distinguishable on the fact situation. " ( 32 ) WE do not mention separately the cases of narendra kumar, 1998 acj 244 (sc) and chinnama george, 2000 acj 777 (sc), because those have been noticed by their lordships of the apex court in the case of bhushan sachdeva, 2002 acj 333 (sc ). We have to mention, however, the case of balbahadur singh v. Oriental insurance co. Ltd. , 2001 acj 1345 (sc), where it was urged that the insurance company will be entitled to defend the action against the insured on all permissible defences on the principles enunciated in cap?. Itbar singh's case, 1958-65 acj 1 (sc ). We have to mention, however, the case of balbahadur singh v. Oriental insurance co. Ltd. , 2001 acj 1345 (sc), where it was urged that the insurance company will be entitled to defend the action against the insured on all permissible defences on the principles enunciated in cap?. Itbar singh's case, 1958-65 acj 1 (sc ). The bench of the supreme court was of strength two; their lordships in para 4 said as follows:" (4) we are not inclined to consider this question on the facts of the present case for the simple reason that such a contention was not canvassed either before the claims tribunal or before the high court. Only on this short ground this additional aspect is not considered by us and the special leave petition stands disposed of subject to the clarification that the amount received by the petitioner-claimant, pursuant to order of this court dated 3. 12. 1999, will be treated to be towards the full and final satisfaction of the petitioner-claimant's claim against the respondents and there will be no occasion for him to refund the same. " ( 33 ) IN view of the above, the opinion has to be that if the insurer is fighting the case of the insured on merits as per the dicta in captain itbar singh's case, 1958-65 acj 1 (sc), it can do so wherever it is, and certainly in the court of appeal. ( 34 ) WHEN does the insurer get the right of taking up the insured's defence on merits? ( 35 ) IN my opinion, the insurer gets a right to challenge quantum whenever the insured acts in such a way as to raise a reasonable apprehension in the mind of the court that the decree about to be passed might not be fair and proper on account of the insured's unsatisfactory participation. Such apprehension will be raised when the question of quantum is going totally unopposed and unexamined. Such an apprehension will again be raised if the award of tribunal on quantum is not being challenged in appeal at all although a statutory right of appeal has been specially made available for such challenge. Such apprehension will be raised when the question of quantum is going totally unopposed and unexamined. Such an apprehension will again be raised if the award of tribunal on quantum is not being challenged in appeal at all although a statutory right of appeal has been specially made available for such challenge. ( 36 ) THE above decisions of the supreme court make it amply plain that at no point of time can the insurer and the insured both fight together hand in hand against the victim against the quantum of damages. If the insured is doing his proper duty as a litigant by way of putting up a proper defence against the victim's claim, the insurer cannot also say that i shall fight side by side with you on the question of quantum, such a double defence would be thoroughly unjust; for example, if the double defence were to be permitted, then same witness of the victim would be cross-examined twice by the same litigant really, as the insurer is challenging the quantum in the name of the insured only. Such problem of double attack would arise at every step. The insurer, however, always has a right to watch. Whenever the defence on quantum appears to become too weak and too inconsistent with a fair and proper resistance, the insurer can come in. In cases of fine distinction, the court will decide whether the insured's defence is becoming so insignificant, that the time has come for the insurer to step into the shoes of the insured for the purpose of getting a just and proper award; but those cases of fine distinction do not arise when the insured does not come at all. It becomes an ex pane case on quantum. The insurer has taken the provident step by reserving for stepping into the shoes of the insured by way of a clause in the policy. It can use that reservation in ex. Pane situations. No section of the motor vehicles act, 1988 and no judicial interpretation of it prevents such an intervention in ex pane situation. The insurer has taken the provident step by reserving for stepping into the shoes of the insured by way of a clause in the policy. It can use that reservation in ex. Pane situations. No section of the motor vehicles act, 1988 and no judicial interpretation of it prevents such an intervention in ex pane situation. Indeed, the cases of captain itbar singh, 1958-65 acj 1 (sc) and bhushan sachdeva, 2002 acj 333 (sc), indicate that for avoiding hardship of itself and for seeing to it that public money is not unduly claimed, the insurer should fight on the quantum when the owner has given up such fight or has not even commenced it. ( 37 ) ONE question we have to answer before we end. What happens to the insurer's appeal if the insured happens to come in tomorrow, may be with a condonation application, to put up resistance on quantum on his own? My answer is that if the appeal of the insured is entertained on quantum, the insurer will be relegated to the position of mere watcher and it cannot make submissions or arguments on quantum, so long as the owner is making such submissions, in a manner considered by the court to be fair and sufficient. ( 38 ) ON the above view i am of the opinion that the question posed to us should be answered in the following manner: the insurer has a right to maintain, argue and conclude an appeal by itself even on the question of quantum and merits provided the insured stays away from the appellate court altogether, or at any stage of the appeal makes it plain to the court of appeal that its attack put up against the quantum awarded by the tribunal has ceased to be fair and sufficient for the purposes of justice. This is the position, when the policy contains a condition like the condition no. 2 we have quoted twice in the judgment. ( 39 ) I would award no costs in any of these cases (for the stage of reference to us only) to any of these parties. Also, the appeals now would have to go before the appropriate division bench having jurisdiction in the matter for decision in accordance with law. Costs of the appeal, etc. , would also be in the discretion of the division bench. 25. 4. Also, the appeals now would have to go before the appropriate division bench having jurisdiction in the matter for decision in accordance with law. Costs of the appeal, etc. , would also be in the discretion of the division bench. 25. 4. 2002: m. h. s. ansari, j. The question referred by the division bench for decision by this larger bench constituted for the said purpose is of considerable importance. We had the benefit of hearing the arguments at length of the learned advocates for the respective parties. I have given the matter my utmost consideration and wish to express my own views, which are as under: ( 40 ) AS i read the order of the division bench in f. m. a. no. 1472 of 2000 dated 5 and 7. 9. 2000, it appears to me that the question of law referred by it and for consideration whereof this larger bench has been constituted, is the following:"whether an appeal filed by the insurance company against an award of the claims tribunal constituted under the motor vehicles act, 1988 on the quantum of compensation is maintainable even though the insurance company has not taken leave under section 170 of the said act but has invoked the reservation clause being condition no. 2 of the policy of insurance. "as because of the reference of the above question, several other appeals for the aforesaid reason have also been directed to be placed before us by several orders of the division benches. . ( 41 ) BEFORE, however, we take up the question referred to us or the contentions urged before court, in my view, it would be appropriate to have a brief look at the various judgments cited at the bar. Accordingly, the same shall be first considered in their chronological order. ( 42 ) BRITISH india genl. Ins. Co. Ltd. V. Captain itbar singh, 1958-65 acj 1 (sc), is a judgment of three-judge bench of the supreme court rendered on 11. 5. 1958. The said judgment is an authority for the proposition that the insurer is not entitled to take any defence which is not specified in section 96 (2) of the motor vehicles act, 1939 corresponding to section 149 (2) of the motor vehicles act, 1988. 5. 1958. The said judgment is an authority for the proposition that the insurer is not entitled to take any defence which is not specified in section 96 (2) of the motor vehicles act, 1939 corresponding to section 149 (2) of the motor vehicles act, 1988. ( 43 ) IT must also be stated here that the learned solicitor general on behalf of the insurance company (insurer) in that case raised a contention to the effect that it is only fair that a person sought to be made bound by a judgment should be entitled to resist his liability under it by all defences, which he can in law advance against the passing of it. The same was rejected by their lordships as wholly unacceptable, inter alia, with the observations as under:"we are furthermore not convinced that the statute causes any hardship. First, the insurer has the right, provided he has reserved it by the policy, to defend the action in the name of the assured and if he does so, all defences open to the assured can then be urged by him and there is no other defence that he claims to be entitled to urge. He can thus avoid all hardship, if any, by providing for a right to defend the action in the name of the assured and this he has full liberty to do. Secondly, if he has been made to pay something which on the contract of the policy he was not bound to pay, he can under the proviso to sub-section (3) and under sub-section (4) recover it from the assured. . . "two events of significance happened after the judgment in captain itbar singh's case, 1958-65 acj 1 (sc ). One is that as suggested by mr. Das, the learned counsel appearing for the insurance company, a 'reservation clause' was incorporated uniformly in the motor insurance policies by all the state owned insurance companies. The said clause being condition no. . . "two events of significance happened after the judgment in captain itbar singh's case, 1958-65 acj 1 (sc ). One is that as suggested by mr. Das, the learned counsel appearing for the insurance company, a 'reservation clause' was incorporated uniformly in the motor insurance policies by all the state owned insurance companies. The said clause being condition no. 2 in the insurance policy is extracted hereunder:"no admission, offer, promise or indemnity shall be made or given by or on behalf of the insured without the written consent of the company which shall be entitled if it so desires to take over and conduct in the name of the insured the defence or settlement of any claim or to prosecute in the name of the insured for its own benefit any claim for indemnity or damages or otherwise and shall have full discretion in the conduct of any proceedings or in the settlement of any claim and the insured shall give all such information and assistance as the company may require. "the second significant aspect was that sub-section (2-a) was introduced in section 110-c by act 56 of 1969 with effect from 2. 3. 1970, which is in pari materia with the provisions contained in section 170 of the 1988 act. ( 44 ) KEEPING in view the question referred for our consideration, it needs to be clarified, reference in this order will be made only to certain judgments which have dealt with either the said reservation clause and/or the provisions contained in section 110-c (2-a) of motor vehicles act, 1939 (section 170 of 1988 act) in the context of the maintainability of an appeal by the insurer (insurance company ). ( 45 ) THE full bench of the orissa high court in national insurance co. Ltd. V. Magikhia das, 1976 acj 239 (orissa), held that the insurance company can defend an action before the claims tribunal only on the grounds specified in section 96 (2) of 1939 act [section 149 (2) of 1988 act] and not on other grounds unless it had obtained leave of the claims tribunal under section 110-c (2-a) of the act. With respect to the reservation clause, it was observed as follows:"where the insured appears and defends the claim and the insurer intends to defend in his own name, the condition in the policy bond does not provide shelter to the insurer. With respect to the reservation clause, it was observed as follows:"where the insured appears and defends the claim and the insurer intends to defend in his own name, the condition in the policy bond does not provide shelter to the insurer. "their lordships then declared as under:"leave of the tribunal had admittedly not been taken under section 110-c (2-a) of the act. There exists a clause in the policy bond authorizing the insurer to defend in the name of the insured. . . the term in the policy bond did not authorize such defence by the insurer. . . none of the grounds in the memorandum of appeal appertains to defence raised within section 96 (2) of the act and what is being mainly challenged is the quantum and liability on a ground not covered by section 96 (2) of the act. On these grounds, the insurer was not entitled to contest the claim nor the award. The appeal filed on its behalf, therefore, is not maintainable. " ( 46 ) THE full bench of jandk high court in united india fire and general ins. Co. Ltd. V. Lakshmi short ganjoo, 1982 acj 470 (jandk), considered the question of the maintainability of an appeal by an insurance company on the quantum awarded by the claims tribunal. After an elaborate review of a catena of the authorities of the various high courts held that whereas an assured would have the right to challenge an award on all grounds which were available to it before the tribunal, an insurance company would be entitled to challenge the award only on the grounds which were available to it under section 96 (2) [section 149 (2)]. Dr. Anand (as his lordship then was), speaking for the full bench of jandk high court in that case also considered the question as to who would be regarded as an 'aggrieved party' for the purposes of section 110-d (section 173) in the light of the defences available to such party before the claims tribunal. ( 47 ) THE full bench of the kerala high court in new india assurance co. ( 47 ) THE full bench of the kerala high court in new india assurance co. Ltd. V. Celine, 1993 acj 371 (kerala), also has considered the aforesaid observations in captain itbar singh's case, 1958-65 acj 1 (sc), and also upon consideration of various english decisions and judgments of the high court in india and in the light of the 'reservation' clause in the insurance policy which is identical to the clause on hand, held as under:"in the light of the above principles of law, it is, therefore, clear that the insurance company has a right to defend or to take action against the third party in its own name, on the basis of the assignment by the insured in favour of the insurer in respect of the former's rights against third parties. It is not necessary in the case of assignment that the action by the insurer should be in the name of the insured. " ( 48 ) IN the said judgment, their lordships of the kerala high court differed with the view of the full bench of orissa high court, observing that "a full bench of the orissa high court in national insurance co. Ltd. V. Magikhia das, 1976 acj 239 (orissa), has also, in principle, taken the same view as regards the effect of a reservation clause but in the end it did not allow the insurer to raise the defence, on facts, on the ground that the insurer did not choose to defend the action in the name of the insured". ( 49 ) IT must also be stated that their lordships considered the clause in the insurance policy which is referred to either as a 'reservation' or 'assignment' clause and construed the words 'if it so desires' occurring therein as under:". . . IN our view, the words 'if it so desires' gain considerable importance in such a context. In our view, the insurer is given a choice 'if it so desires' to conduct the proceedings in the name of the insured. But this does not mean that the insurer is precluded from defending or prosecuting the proceedings in its own name, and there are no words in the reservation clause which take away such a right in favour of the insurer which is available under the general law of insurance. " ( 50 ) IN the judgment rendered on 12. 1. But this does not mean that the insurer is precluded from defending or prosecuting the proceedings in its own name, and there are no words in the reservation clause which take away such a right in favour of the insurer which is available under the general law of insurance. " ( 50 ) IN the judgment rendered on 12. 1. 96 by a two judges bench of the apex court in narendra kumar v. Yarenissa, 1998 acj 244 (sc), the question of maintainability was considered in the context of the provisions, viz. , sections 96 (2), 110-c (2-a) and 110-d [sections 149 (2), 170 and 173 of 1988 act], the supreme court observed as under:"it is a different matter that claimants normally make the insurance company a party to the claim application. That by itself cannot confer a right of appeal on the insurer. The ground on which the insurer can defend the action commenced against the tortfeasors are limited and unless one or more of those grounds is/ are available the insurance company is not and cannot be treated as a party to the proceedings. That is the reason why the courts have consistently taken the view that insurance company has no right to prefer an appeal under section 110-d of the act unless it has been impleaded and allowed to defend on one or more of the grounds set out in subsection (2) of section 96 or in the situation envisaged by sub-section (2-a) of section 110-c of the act. " (emphasis supplied) ( 51 ) ON 16. 1. 1998, another division bench of the supreme court (quorum two judges) in shankarayya v. United india insurance co. Ltd. , 1998 acj 513 (sc), considered the question as framed in para 2 of the judgment which reads as under:"the short question is whether respondent no. 1, insurance company could have filed an appeal in the high court against the award of the motor accidents claims tribunal and got the quantum of compensation reduced when the insured had not filed such appeal and when respondent no. 1 insurance company had not moved the tribunal under section 170 of the motor vehicles act, 1988 for getting the right to contest the proceedings on merits. 1 insurance company had not moved the tribunal under section 170 of the motor vehicles act, 1988 for getting the right to contest the proceedings on merits. "the same has been answered in para 4 as under:"it clearly shows that the insurance company when impleaded as a party by the court can be permitted to contest the proceedings on merits only if the conditions precedent mentioned in the section are found to be satisfied and for that purpose the insurance company has to obtain order in writing from the tribunal and which should be a reasoned order by the tribunal. Unless that procedure is followed, the insurance company cannot have a wider defence on merits than what is available to it by way of statutory defence. It is true that the claimants themselves had joined respondent no. 1, insurance company in the claim petition but that was done with a view tothrust the statutory liability on the insurance company on account of the contract of the insurance. That was not an order of the court itself permitting the insurance company which was impleaded to avail of a larger defence on merits on being satisfied on the aforesaid two conditions mentioned in section 170. Consequently, it must be held that on the facts of the present case, respondent no. 1, insurance company was not entitled to file an appeal on merits of the claim which was awarded by the tribunal. " ( 52 ) ON 6. 4. 2000, another division bench of the supreme court (quorum two judges) in chinnama george v. N. k. raju, 2000 acj 777 (sc), considered the question of the maintainability of an appeal filed jointly by the insurer and the assured (owner of the vehicle ). Their lordships in chinnama george's case observed as under:"the insurer by associating the owner or the driver in the appeal when the owner or the driver is not an aggrieved person cannot be allowed to mock at the law which prohibits the insurer from filing any appeal except on the limited grounds on which it could defend the claim petition. We cannot put our stamp of approval as to the validity of the appeal by the insurer merely by associating the insured. Provision of law cannot be undermined in this way. We cannot put our stamp of approval as to the validity of the appeal by the insurer merely by associating the insured. Provision of law cannot be undermined in this way. We have to give effect to the real purpose to the provision of law relating to the award of compensation in respect of the accident arising out of the use of the motor vehicles and cannot permit the insurer to give him right to defend or appeal on ground not permitted by law by a backdoor method. Any other interpretation will produce unjust results and open gates for the insurer to challenge any award. We have to adopt a purposive approach which would not defeat the broad purpose of the act. Court has to give effect to true object of the act by adopting a purposive approach. " ( 53 ) ON 27. 4. 2000, another division bench of the supreme court (quorum two judges) in rita devi v. New india assurance co. Ltd. , 2000 acj 801 (sc), following the judgment of the supreme court in shankarayya's case, 1998 acj 513 (sc), held that the appeal filed by the insurance company before the high court on merits of the amount awarded by the tribunal was not maintainable in law. ( 54 ) ON the authority of the decisions, cited supra, it can be stated that there is near unanimity amongst the courts in the country with the view that the insurance company when impleaded as a party can contest the proceedings before the claims tribunal on all grounds that are available to the assured only when the conditions precedent specified in section 170 are found to be satisfied and for that reason, the insurance company cannot have a wider defence on merits than what is available to it under section 149 (2) by way of statutory defence. This has been the consistent view since the judgment of the apex court in three judges bench in captain itbar singh's case, 1958-65 acj 1 (sc ). This has been the consistent view since the judgment of the apex court in three judges bench in captain itbar singh's case, 1958-65 acj 1 (sc ). ( 55 ) AS a corollary to the above, the consistent view of the courts including that of the apex court has been that the restrictions in section 96 (2) of 1939 act [section 149 (2) of 1988 act] would be applicable even at the appellate stage and, therefore, the right of appeal is restricted to raising of contentions specified in section 149 (2) unless of course the claims tribunal has passed an order under section 170 of the act. In my respectful view for the aforesaid reasons an insurance company is restricted to filing an appeal only on the grounds enumerated in section 149 (2) and, therefore, an appeal on quantum of compensation is not maintainable by the insurance company. This has been the consistent view of the courts in the country including the apex court up to shankarayya 's case, 1998 acj 513 (sc), which was followed subsequently in rita devi's case, 2000 acj 801 (sc ). ( 56 ) HOWEVER, in a very recent judgment rendered on 18. 1. 2002, a division bench (quorum two judges) of the apex court in united india insurance co. Ltd. V. Bhushan sachdeva, 2002 acj 333 (sc), considered the question as to the remedy available to the insurance company, if it is aggrieved by the award passed by a motor accidents claims tribunal. The provisions contained in section 173 of motor vehicles act, 1988, were construed with particular reference to the expression 'any person aggrieved by an award of a claims tribunal'. Their lordships in bhushan sachdeva's case (supra), observed as under:". . . ANY interpretation denying such aggrieved insurance companies the opportunity to seek the legal remedy of appeal should not be adopted unless there is a statutory compulsion. There is nothing in section 173 or in the other relevant provisions of the act which debars the insurance company to resort to the remedy of appeal when it knows that the award is unjust. We are, therefore, of the view that the insurance company can fall within the ambit of the words 'any person aggrieved by an award of a claims tribunal' as used in section 173 (1) of the act, when the insured failed to file an appeal against the award. We are, therefore, of the view that the insurance company can fall within the ambit of the words 'any person aggrieved by an award of a claims tribunal' as used in section 173 (1) of the act, when the insured failed to file an appeal against the award. "with respect to section 170 of the 1988 act and the words 'failed to contest' in clause (b) therein were construed as under:"what is meant by the words 'failed to contest'? These words must be interpreted in a realistic manner. Right to contest would include the right to contest by filing an appeal against the award of the tribunal as well. Hence, the insured can continue to contest the claim by filing an appeal as provided under section 173 of the act. If the insured fails to prefer an appeal that also would amount to failure to contest that claim effectively. "it must also be stated here that their lordships in bhushan sachdeva's case (supra), have distinguished the earlier judgments of the supreme court in narendra kumar's case, 1998 acj 244 (sc) and chinnama george's case, 2000 acj 777 (sc), in the following terms:"learned judges, therefore, observed that the insurer by associating with the owner or the driver cannot be allowed to mock at the law. Thus, the aforecited two decisions involved a common situation when the appeal filed by the insurer was held to be not maintainable as the insured had preferred an appeal challenging the award. Hence, the principles stated therein are distinguishable on the fact situation. "their lordships in bhushan sachdeva's case (supra), therefore, declared that:". . . THAT it is open to the insurance company to invoke the right under section 173 of the act as the insured had failed to appeal against the award passed against him. " ( 57 ) BEFORE us, on behalf of insurance company, appellants, the learned counsel mr. Das, mr. Rajesh singh and mr. R. p. banerjee have commended for our acceptance the latter judgment of the supreme court in bhushan sachdeva's case, 2002 acj 333 (sc) and, therefore, urged that the appeals are maintainable by the insurance company even dehors the reservation clause. ( 58 ) ON the other hand, learned counsel for the claimants contended that the consistent view of the courts being the one expressed in shankarayya 's case, 1998 acj 513 (sc), must be accepted by this court. ( 58 ) ON the other hand, learned counsel for the claimants contended that the consistent view of the courts being the one expressed in shankarayya 's case, 1998 acj 513 (sc), must be accepted by this court. It was further contended that in the latter judgment of the apex court in bhushan sachdeva's case, 2002 acj 333 (sc), shankarayya's case, 1998 acj 513 (sc), has not been noticed. ( 59 ) IT is not and cannot be denied that there is a direct conflict in the judgments of the apex court in the line of shankarayya's case, 1998 acj 513 (sc), on the one hand and the solitary case of bhushan sachdeva, 2002 acj 333 (sc), on the other hand. In the latter decision of the supreme court their lordships in bhushan sachdeva's case (supra) have not noticed the judgment in shankarayya's case, 1998 acj 513 (sc) or rita devi's case, 2000 acj 801 (sc ). ( 60 ) MR. Das relied upon the extracts from the full bench judgment of the allahabad high court in ganga saran v. Civil judge, hapur, ghaziabad, air 1991 allahabad 114, as also the full bench of punjab and haryana high court in the case of indo swiss times ltd. , dundahera v. Umrao, air 1981 pandh 213, extracted in the judgment of the division bench of allahabad high court in new india assurance co. Ltd. V. Jagdish prasad pandey, 1998 acj 404 (allahabad ). The full bench in ganga saran's case (supra), observed as under:"one line of decisions is that if there is a conflict in two supreme court decisions, the decision which is later in point of time would be binding on the high courts. The second line of decisions is that in case there is a conflict between the judgments of supreme court consisting of equal authorities, incidence of time is not a relevant factor and the high court must follow the judgment which appears to it to lay down law elaborately and accurately. "a similar view was taken by the full bench of punjab and haryana high court in the judgment, cited supra, and which is to the following effect:"now the contention that the latest judgment of a co-ordinate bench is to be mechanically followed and must have pre-eminence irrespective of any other consideration does not commend it self to me. "a similar view was taken by the full bench of punjab and haryana high court in the judgment, cited supra, and which is to the following effect:"now the contention that the latest judgment of a co-ordinate bench is to be mechanically followed and must have pre-eminence irrespective of any other consideration does not commend it self to me. When judgments of the superior court are of co-equal benches and, therefore, of matching authority then their weight inevitably must be considered by the rationale and the logic thereof and not by the mere fortuitous circumstances of the time and date on which they were rendered. It is manifest that when two directly conflicting judgments of the superior court and of equal authority are extant then both of them cannot be binding on the courts below. Inevitably a choice, though a difficult one, has to be made in such a situation. On principle it appears to me that the high court must follow the judgment which appears to it to lay down the law more elaborately and accurately. The mere incidence of time whether the judgments of co-equal benches of the superior court are earlier later is a consideration which appears to me as hardly relevant. " ( 61 ) A special bench of this high court in bholanath karmakar v. Madanmohan karmakar, air 1988 cal 1 , after taking into consideration the view of ancient jurist narada as also several judgments of the various high courts observed as under:"needless to say that it would be highly embarrassing for the high court to declare one out of two or more decisions of the supreme court to be more reasonable implying thereby that the other or others is or are less reasonable. But if such a task falls upon the high court because of irreconcilable contrary decisions of the supreme court emanating from benches of co-ordinate jurisdiction, the task, however, uncomfortable, has got to be performed. "significantly, however, their lordships in that case did not decide the question finally on the ground that "we should not decide the question unless such determination is indispensable". "significantly, however, their lordships in that case did not decide the question finally on the ground that "we should not decide the question unless such determination is indispensable". ( 62 ) ON the authority of the above decisions, it can be said that the later decision of the apex court should not be mechanically relied upon, but the task, however, uncomfortable must be performed to declare one of the two judgments to be more reasonable, unless such determination is indispensable. ( 63 ) IN my opinion, this conflict must first be resolved before taking up the question posed in the beginning of the judgment. ( 64 ) THE two judgments of the supreme court in narendra kumar's case, 1998 acj 244 (sc) and chinnama george's case, 2000 acj 777 (sc), have been noticed and distinguished by their lordships in bhushan sachdeva 's case, 2002 acj 333 (sc ). But shankarayya's case, 1998 acj 513 (sc) and rita devi's case, 2000 acj 801 (sc), which though earlier in point of time have neither been noticed in bhushan sachdeva's case nor stand distinguished. ( 65 ) ). As the judgments of the supreme court in shankarayya's case, 1998 acj 513 (sc) and bhushan sachdeva's case, 2002 acj 333 (sc), are judgments of coequal benches or co-ordinate benches, the theory of 'implied overruling' is not attracted nor can be applied. As a consequence, both the said judgments are of binding efficacy and are precedents binding upon the courts in the country under article 141. ( 66 ) WE are informed that the matter is under consideration of the supreme court in s. l. p. (civil) no. 279 of 2000 wherein an interim order of stay of the award was also passed by the supreme court on 18. 11. 1999. One of the grounds raised in support of the said s. l. p. before the supreme court is the reconsideration of the judgment in shankarayya's case, 1998 acj 513 (sc ). In that view of the matter, it would have been prudent for this court to await an authoritative pronouncement of the apex court resolving the conflict in the two decisions. However, as the matter has been placed before a larger bench of this court, we are required to and must perform the uncomfortable task. ( 67 ) MR. In that view of the matter, it would have been prudent for this court to await an authoritative pronouncement of the apex court resolving the conflict in the two decisions. However, as the matter has been placed before a larger bench of this court, we are required to and must perform the uncomfortable task. ( 67 ) MR. Das, learned counsel for the insurance company contended that section 173 of the act does not contain any fetter as regards the right of the insurer to maintain an appeal despite the embargo contained in sub-section (2) of section 149 thereof. According to the learned counsel, principle of harmonious construction should be applied and it should be held that the appeal by the insurance company is maintainable. Apart from relying upon the judgment of the supreme court in bhushan sachdeva's case, 2002 acj 333 (sc), mr. Das also relied upon the judgment in institute of chartered accountants of india v. Price waterhouse, (1997) 6 scc 312 , wherein it was held as under:"all the provisions must be read harmoniously and should be given effect to so as not to render any part of the provisions surplusage or otiose. "reliance was also placed upon davis v. Sibhastian, (1999) 6 scc 604 , wherein it was observed as follows:"words in a statute should be given their natural ordinary meaning, nothing should be added to them nor should any word by treated as otiose. "lastly, reliance was placed by mr. Das upon the judgment in sultana begum v. Prem chand, (1997) 1 scc 373 , wherein the principles of harmonious construction were laid down and it was, inter alia, observed that the provisions of one section of a statute cannot be used to defeat the other provisions unless the court, in spite of its efforts, finds it impossible to affect reconciliation between them. Courts should avoid such construction between two sections of the act, which appear to be in conflict with a view to avoid head-on clash. ( 68 ) THERE can be no doubt as to the binding nature of the decisions of the supreme court. Also, there can be no dispute with the law laid down therein which shall serve as a guide with respect to interpretation of statutes in the aforesaid judgments of supreme court relied upon by mr. Das and noticed supra. ( 68 ) THERE can be no doubt as to the binding nature of the decisions of the supreme court. Also, there can be no dispute with the law laid down therein which shall serve as a guide with respect to interpretation of statutes in the aforesaid judgments of supreme court relied upon by mr. Das and noticed supra. ( 69 ) I cannot, however, accede to the submissions made on behalf of the appellant insurance company by their learned advocate mr. Das that the provisions of section 173 are of such wide amplitude that no fetters can be placed thereon when parliament in its wisdom has not placed any such fetters and, therefore, the insurance company is entitled to file an appeal on all grounds against the award of a claims tribunal. The proposition is too wide to commend acceptance. Even their lordships in bhushan sachdeva's case, 2002 acj 333 (sc), held as noticed supra, that an insurance company can fall within the ambit of the words 'any person aggrieved by an award of a claims tribunal' as used in section 173 (1) of the act, when the insured has failed to file an appeal against the award. ( 70 ) EVEN, applying the doctrine of harmonious construction, section 173 of the act, in my view, should be read with subsection (2) of section 149 thereof. The words 'any person aggrieved' in section 173 may have wide amplitude but such 'person' in the context can be said to be 'aggrieved' only with respect to the claims or defences available to such person which did not find favour with the claims tribunal in making an award. In other words, it is only in respect of defences available to the insurer as enumerated in sub-section (2) of section 149 that insurer can be regarded as 'person aggrieved' if such claims or defences available to it did not find favour with the tribunal. On those claims and defences, if made a ground of challenge in appeal, the same would be maintainable under section 173. ( 71 ) I have already stated elsewhere in this judgment that the appeal by the insurance company is restricted to the statutory grounds available to it and as specified in section 149, unless, of course, the tribunal has passed an order under section 170 of the act. ( 71 ) I have already stated elsewhere in this judgment that the appeal by the insurance company is restricted to the statutory grounds available to it and as specified in section 149, unless, of course, the tribunal has passed an order under section 170 of the act. This at the cost of repetition, it must be stated, has been the consistent view of this high court at least since the division bench judgment in kantilal and bros. V. Ramarani debi, 1980 acj 501 (calcutta), various high courts and also of the supreme court in shankarayya 's case, 1998 acj 513 (sc), i must now state as to why i consider the ratio laid down in shankarayya's line of cases to be more reasonable than the view as expressed by their lordships in sachdeva 's case, 2002 acj 333 (sc ). ( 72 ) SOME of the relevant portions from the judgment in sachdeva's case, 2002 acj 333 (sc), have been extracted supra. It will appear therefrom that their lordships were of the view as taken by them that the insurance company can fall within the ambit of the words 'any person aggrieved' as used in section 173 (1) when the assured failed to file an appeal. In line with his reasoning their lordships construed the words 'failed to contest' in clause (b) of section 170. It was declared that right to contest would include right to contest by filing an appeal against an award. It was, therefore, held that if the assured fails to prefer an appeal that also would amount to failure to contest. ( 73 ) THE other reason expressed by their lordships was that it is inequitable to deny a remedy of appeal in the absence of any statutory compulsion. It was held that there is no such bar under section 173 or any other provisions of the act. ( 74 ) IN my respectful view, a somewhat similar contention on grounds of 'fairness' was raised by solicitor general, as noticed already, before the three judges bench in captain itbar singh's case, 1958-65 acj 1 (sc), and was rejected. No doubt, in that case, the contention was raised by the solicitor general in the context of the defences that the insurer ought to be permitted to raise before the claims tribunal. It is by now well settled that an appeal is a creature of the statute. No doubt, in that case, the contention was raised by the solicitor general in the context of the defences that the insurer ought to be permitted to raise before the claims tribunal. It is by now well settled that an appeal is a creature of the statute. Right to file an appeal is neither a natural, inherent or constitutional right. Such right, therefore, neither exists nor can be assumed unless expressly given by the statute. Section 173 confers such right of appeal upon 'any person aggrieved by an award of a claims tribunal'. There is no bar or fetters placed upon the person aggrieved with respect to the grounds upon which an appeal can be filed by him if aggrieved by an award made by the claims tribunal. The bar, however, arises in the context of the meaning to be assigned to the words 'person aggrieved'. A person can be regarded as 'person aggrieved' for the purposes of section 173 where the claims or defences available to that person did not find favour with the claims tribunal in making the award. Therefore, in respect of defences under section 149 (2), the insurer has a right of appeal on any of the statutory defences available to it. ( 75 ) THE question, however, that then arises is as to whether such person (insurer) can be regarded as person aggrieved in respect of defences other than the statutory defences available to him under section 149 (2 ). Answer to the said question is to be found in the judgment of the full bench of jandk. In the words of dr. Anand (as his lordship then was) and here i must quote the relevant statements made by his lordship in the judgment of the full bench of jandk high court in lakshmi shori ganjoo, 1982 acj 470 (jandk), both because i am in respectful agreement with the said statements and also because of reasons stated therein, putting beyond doubt as to who can be regarded as 'person aggrieved' in the context of section 110-d of the motor vehicles act, 1939 [section 173 of 1988 act]. This is what his lordship stated in the context of the defences available to such person (insurer) under section 96 (2) of motor vehicles act, 1939 [section 149 (2) of 1988 act]:"it is unimaginable that an insurer, which before claims tribunal had only limited defences can file an appeal on other grounds also. An appeal is rehearing of the claims petition and is, therefore, a continuation of it. It is elementary that in an appeal, a party cannot be allowed to raise a defence which was not available to it in the forum below. It, therefore, follows that an 'aggrieved party' for the purpose of section 110-d would only be such a party which is aggrieved of the award on the ground that its defence or claim as was available to it and was set up before the tribunal, did not find favour with it. If a particular defence was not available to a party before the tribunal, the question of it not having found favour with the tribunal does not arise because no party can be aggrieved of any adverse decision on a ground which was not available to it. " ( 76 ) NEXT, in my respectful view, even if section 173 is read with section 170 of 1988 act, the conclusion may not be that an appeal is maintainable by the insurer on any one of the situations envisaged under section 170. Firstly, because section 170 speaks of the satisfaction of the claims tribunal and not that of the appeal court as regards the existence of one of the two situations envisaged under section 170. Secondly, section 170 speaks of an order to be passed by the tribunal, upon such satisfaction, permitting the raising of defences by the insurer as available to an assured. Whereas, the appeal under section 173 itself is against the award of the tribunal. Therefore, if section 173 is to be read with section 170 the conclusion to be arrived is that if an order is passed by the tribunal enabling the insurer to avail of the defence on merits on being satisfied on either of the aforesaid two situations mentioned in section 170, an appeal on quantum is maintainable by the insurer under section 173. This is also the ratio of the judgment of the apex court in shankarayya's case, 1998 acj 513 (sc ). This is also the ratio of the judgment of the apex court in shankarayya's case, 1998 acj 513 (sc ). ( 77 ) LET us now consider the reference made to this court in view of the conflict in judgments of this court. The conflict in the judgments of the two division benches of this court has arisen in the context of the 'reservation clause'. ( 78 ) IT is nobody's case that the 'reservation clause' being condition no. 2 in the insurance policy, extracted in the earlier part of this judgment is one such clause where the right to defend has been reserved to the insurer as envisaged in the judgment in captain itbar singh's case, 1958-65 acj 1 (sc ). As noticed supra, the reservation clause has come up for consideration before the full bench of the orissa high court and it was held that the same did not authorise such defences by the insurer. The full bench of the kerala high court in celine's case, 1993 acj 371 (kerala), differed with the view of the orissa high court in magikhia das' case, 1976 acj 239 (orissa), and was of the view that the insurer has a right to take action against the third party in its own name or on the basis of the assignment by the assured. The clause was interpreted to be one in the nature of option. The insurance company thus, in terms of the said clause, is given an option to conduct the proceedings in the name of the assured or in its own name in the case of assignment. There is one other case, viz. , division bench of this court (which has given rise to the reference), being united india insurance co. Ltd. V. Gita rani mondal, 2001 acj 1692 (calcutta ). The appeal by the insurer in that case was held to be maintainable on the principle of 'advance subrogation'. ( 79 ) IT can hardly be denied that there exists a difference between subrogation and assignment. Such distinction is explained in the standard textbook, insurance law by macgillivray and parkington, 7th edn. , as under:"1131. Difference between subrogation and assignment. Both subrogation and assignment permit one party to enjoy the rights of another, but it is well established that subrogation is not a species of assignment. Such distinction is explained in the standard textbook, insurance law by macgillivray and parkington, 7th edn. , as under:"1131. Difference between subrogation and assignment. Both subrogation and assignment permit one party to enjoy the rights of another, but it is well established that subrogation is not a species of assignment. Rights of subrogation vest by operation of law rather than as the product of express agreement. Whereas rights of subrogation can be enjoyed by the insurer as soon as payment is made, as assignment requires an agreement that the rights of the assured be assigned to the insurer. The insurer cannot require the assured to assign to him his rights against third parties as a condition of payment unless there is a special clause in the policy obliging the assured to do so. This distinction is of some importance, since in certain circumstances an insurer might prefer to take an assignment of an assurer's rights rather than rely upon his rights of subrogation. If, for example, there was any prospect of the insured being able to recover more than his actual loss from a third party, an insurer, who had taken assignment of the assured's rights, would be able to recover the extra money for himself whereas an insurer who was confined to rights of subrogation would have to allow the assured to retain the excess. 1132. Another distinction lies in the procedure of enforcing the rights acquired by virtue of the two doctrines. An insurer exercising rights of subrogation against third parties must do so in the name of the assured. An insurer who has taken a legal assignment of his asured's rights under statute should proceed in his own name. . . " ( 80 ) THE supreme court in the light of the above distinction between subrogation and assignment construed the instrument of subrogation/assignment [in the case of oberal forwarding agency v. New india assurance co. Ltd. , 2000 ccj 238 (sc)], with a view to seeing whether the insur- ance company was a 'consumer' within the meaning of consumer protection act and entitled to maintain the complaint under that act. In that case reference has been made to the dissenting judgment of mathew, j. In union of india v. Sri sarada mills ltd. Ltd. , 2000 ccj 238 (sc)], with a view to seeing whether the insur- ance company was a 'consumer' within the meaning of consumer protection act and entitled to maintain the complaint under that act. In that case reference has been made to the dissenting judgment of mathew, j. In union of india v. Sri sarada mills ltd. , (1972) 2 scc 877 , to the effect that assignment of a mere right to sue by the assured to the insurance company would raise a question whether what was assigned was mere right to sue or something which the law of insurance recognized as assignable. The reason why a mere right to sue could not be assigned was that such an assignment offended the rule of champerty and maintenance. Therefore, mathew, j. Concluded that the assignment in that case had conveyed to the insurance company, the entire right in respect of the subject-matter of the insurance, including the right of the assured to sue in its own name and that after assignment, the assured had no cause of action to institute proceedings. The majority view, however, was that in the case before them the insurer was only subrogated to the rights of the assured and the assured had allowed the insurer to sue. The cause of action of the assured did not perish on giving the letter of subrogation. ( 81 ) THE object of referring to the above line of decisions is only to highlight that the clause as it exists apart from being optional in nature does not per se entitle nor make liable the insurer either to defend the action before claims tribunal or to file an appeal on behalf of the assured. The insurer would require to exercise that option reserved to itself. In which case it may either obtain letter of subrogation or assignment. The claims tribunal/appeal court would, thereafter, have to construe the said instrument (letter of subrogation/assignment) before granting the right to the insurer either to defend the action/to maintain an appeal. ( 82 ) BEFORE the apex court in balbahadur singh v. Oriental insurance co. Ltd. , 2001 acj 1345 (sc), an appeal on quantum was sought to be maintained placing reliance on the decision in captain itbar singh's case, 1958-65 acj 1 (sc) and the reservation clause. ( 82 ) BEFORE the apex court in balbahadur singh v. Oriental insurance co. Ltd. , 2001 acj 1345 (sc), an appeal on quantum was sought to be maintained placing reliance on the decision in captain itbar singh's case, 1958-65 acj 1 (sc) and the reservation clause. Their lordships had declined to consider the question for the simple reason that such contention was not canvassed either before the claims tribunal or before the high court. Mr. Das, learned counsel for the insurance company would urge that reservation clause is being invoked and being canvassed before this high court, the appeals should be entertained on the basis of the observation in balbahadur singh's case (supra ). The submission is misconceived in view of what has already been stated supra in the context of the distinction between subrogation and assignment. Unless, therefore, the option is properly exercised in the manner known to law and the court is satisfied upon the nature of the right claimed by the insurer, the question of maintainability of an appeal at the instance of the insurance company merely on an oral submission of counsel for the insurer based upon the reservation clause cannot be held to be maintainable. Though the code of civil procedure is not in terms made applicable to the proceedings under the act, the underlying principles or the procedures laid down therein can be usefully applied. In this context reference to order 22, rule 10, code of civil procedure would be relevant, with regard to the procedure that may be adopted. ( 83 ) LET us now briefly scrutinize the two division bench judgments of this court, which have given rise to the conflict in relation to the 'reservation clause'. ( 84 ) IN united india insurance co. Ltd. V. Gita rani mondal, 2001 acj 1692 (calcutta), a division bench of this court considered the reservation clause in the insurance policy in the light of the observations made in captain itbar singh's case, 1958-65 acj 1 (sc), and in para 22 of the said judgment observed as follows:"the principle which allows the insurer to take up before the claims tribunal, the defence which justly and appropriately belongs peculiarly to the insured only, i. e. , say, the defence as to the quantum of damages, is the principle of subrogation. "their lordships then observed that two conditions must be satisfied. "their lordships then observed that two conditions must be satisfied. The conditions being:" (I) the contract of insurance must provide for subrogation, in the sense that it must permit, upon satisfaction of the insurance liability or upon the making of due provisions of such satisfaction, the insurer to be subrogated to the insured's position as regards the taking of defences in suits and actions including motor vehicles compensation actions; (ii) the insurer must, in absolutely correct and technical theory, make it plain to the tribunal hearing the action, that the defence is being raised by the insurer in the name of the insured and for lessening the liability of the insured, so that in the insurer's turn, he is thereby benefited. "in para 33 while dealing with the question of subrogation in the light of the judgment in shankarayya 's case, 1998 acj 513 (sc), it was observed as under:"the point of subrogation and the point of the existence of a permissive subrogating contractual clause like clause 2 above was never argued in shankar- ayya's case, 1998 acj 513 (sc ). The apex court did not consider this aspect of the case at all. If this aspect of the case is not considered, then the ruling of captain itbar singh's case, 1958-65 acj 1 (sc) and the ruling of shankarayya are at one. The joint ruling is that the insurer shall not take up the peculiar defences of the insured relating to the merits of the case like the quantum of damages, unless upon a principle of advance subrogation, which we have explained above. " it was further observed as under: "there is nothing in shankarayya 's case, 1998 acj 513 (sc), which is contrary to this and there are clear propositions in para 16 of captain itbar singh's case, 1958-65 acj 1 (sc), which unmistakably support this proposition. "their lordships concluded that the appeals at the instance of the insurance company shall be heard on merits. ( 85 ) THE two conditions which must be satisfied by the insurer have been extracted supra. It is the second condition which lays down, in my respectful view, the procedure to be adopted by the insurer, based whereupon the satisfaction of the court as regards the option reserved to the insurer by the condition no. 2 (reservation clause) can be arrived at. It is the second condition which lays down, in my respectful view, the procedure to be adopted by the insurer, based whereupon the satisfaction of the court as regards the option reserved to the insurer by the condition no. 2 (reservation clause) can be arrived at. I am in respectful agreement with the said view of their lordships in gita rani mondal's case, 2001 acj 1692 (calcutta), to this extent. I cannot, however, subscribe to the view that if the condition no. 1 alone is satisfied as was observed in that case, the appeal would be maintainable by the insurance company. ( 86 ) A latter division bench of this court in oriental insurance co. Ltd. V. Bini bala mondal, 2001 acj 1959 (calcutta), fol- lowing shankarayya's case, 1998 acj 513 (sc), held that the two appeals before it are not maintainable at the instance of the insurer since no leave under section 170 was obtained by the insurer from the claims tribunal. ( 87 ) HOWEVER, their lordships have in para 24 observed as under:"with introduction of sub-section (2-a) in section 110-c in the 1939 act, the concept of subrogation was jettisoned and a discretionary power was vested with the tribunal on the grounds indicated to allow the insurer to contest the claim on merits, that is, on grounds other than those indicated in section 96 (2) of the 1939 act. " ( 88 ) WITH respect, i cannot subscribe to the view, as above, taken by their lordships in bini bala mondal's case, 2001 acj 1959 (calcutta ). Captain itbar singh's case, 1958-65 acj 1 (sc), no doubt is one rendered prior to the amendment by introduction of sub-section (2-a) in section 110-c in the 1939 act. In shankarayya's case, 1998 acj 513 (sc), the contractual clause (the reservation clause) was never argued as observed by the division bench in gita rani mondal's case, 2001 acj 1692 (calcutta ). ( 89 ) IN my respectful view, the insurer is not precluded from defending or prosecuting the proceedings if it so desires as such right is available under the general law of insurance to the insurer. ( 90 ) A contract of motor insurance is, in essence, one of indemnity. ( 89 ) IN my respectful view, the insurer is not precluded from defending or prosecuting the proceedings if it so desires as such right is available under the general law of insurance to the insurer. ( 90 ) A contract of motor insurance is, in essence, one of indemnity. The right of the insurer to subrogation or to get into the shoes of the assured as it were, need not necessarily flow from the terms of the motor insurance policy, but is inherent in and springs from the principles of indem nity. This is a matter of law relating to indemnity, and the basis of the right is justice, equity and good conscience, namely, the indemnifier should be in a position to reduce the extent of his liability within limits. An assignment or a transfer implies something more than subrogation and vests in the insurer the assured's interest, rights and remedies in respect of the subjectmatter and substance of the insurance. In such a case, therefore, the insurer, by virtue of the transfer or assignment in his favour will be in a position to defend or maintain a proceeding in his own name against third parties. [see: basudeva mudaliar v. Caledonian insurance co. , air 1965 mad 159 , extracted in the judgment of the supreme court in oberai forwarding agency's case, 2000 ccj 238 (sc)]. ( 91 ) IN the result, in my considered view, for all the reasons aforesaid the reference must be answered in the following terms: notwithstanding that no leave has been granted or no order has been passed by the claims tribunal under section 170 but the option reserved to the insurer under the reservation clause (condition no. 2 of the insurance policy) is invoked, it must be established by the insurer that such option was exercised by the insurer either by way of subrogation or assignment and evidence in support thereof (instrument of subrogation/assignment) had been placed before the tribunal based whereupon the claims tribunal had permitted the insurer to contest on merit, then and in that event appeal on quantum is maintainable by the insurer. Where, however, the option reserved to the insurer under the aforesaid 'reservation clause' (condition no. Where, however, the option reserved to the insurer under the aforesaid 'reservation clause' (condition no. 2) is invoked for the first time before the appeal court, which the insurer is entitled to so invoke, it must be established to the satisfaction of the appeal court by cogent evidence placed before it that the insurer has in fact exercised the option either by way of subrogation in which case the appeal has to be filed by the insurer in the name of the assured or if such right is claimed as and by way of assignment, appeal in its own name is maintainable by the insurer. It is on the tenor and true construction of the instrument (letter of subrogation/assignment) that the maintainability of the appeal would depend. ( 92 ) THE reference is accordingly answered. Let the appeals may now be placed before appropriate bench having determination for consideration of the question as to the maintainability of the said appeals. 2. 5. 2002 ( 93 ) ASHIM kumar banerjee, j. I have the privilege to listen to the judgments delivered by my esteemed brothers ajoy nath roy, j. And m. h. s. ansari, j. With all humility i am unable to agree with the view expressed by ajoy nath roy, j. And the conclusion arrived at by his lordship on the issue of reference. With all humility, i also respectfully differ with some of the findings and conclusions of ansari, j. In such view i want to express and subscribe my own view and conclusions. Hence, this effort. The points of difference would be discussed shortly hereinafter. ( 94 ) THE facts of this case and the rival contentions of the parties have been accurately recorded by my two esteemed brothers and my burden has been lessened to the said extent. As such i do not intend to deliberate on those aspects. ( 95 ) TO answer the points of reference may i first express my own understanding of the relevant statute in the light of the consistent view of the apex court and various high courts before the supreme court decision in bhushan sachdeva's case, 2002 acj 333 (sc ). ( 96 ) THE relevant sections have already been quoted by ajoy nath roy, j. Hence, i do not wish to repeat the same. ( 96 ) THE relevant sections have already been quoted by ajoy nath roy, j. Hence, i do not wish to repeat the same. Law prevalent at material times under 1939 act ( 97 ) SECTION 96 (2) of 1939 act bound the insurer to honour a claim under a motor accident policy duly supported by a judgment of an appropriate court of law set up for the said purpose provided a notice of bringing such proceeding was given to the insurer by the claimant prior to initiation of the proceeding; and no appeal was pending against the said judgment. The said section also gave liberty to the insurer to contest the said claim before any judgment was delivered on the same, on limited grounds specified in the said section. Section 110-b empowered the claims tribunal to hear the said claim petition upon affording adequate opportunity of hearing to the parties. Under section 110-d any person aggrieved by an award of a claims tribunal was given liberty to file an appeal before the high court on the grounds available to him in law. Change in law in 1970 ( 98 ) IN 1970, section 110-c (2-a) was brought in as and by way of amendment wherein the tribunal was given power to allow the insurer to contest the claim on all or any grounds in addition to the grounds specified under section 96 (2 ). The said section, however, postulates two prerequisites (i) there must be collusion between the person making the claim and the person against whom the claim is made; (ii) the person against whom the claim is made has failed to contest the claim. In short, if the insured colluded with the claimant and/ or in case the insured failed to contest the claim brought against him, the tribunal was empowered to grant liberty to the insurer to contest such claim on the grounds which are otherwise not available to the insurer under section 96 (2 ). Change in law in 1988 ( 99 ) THE entire 1939 act was repealed in the year 1989 and the new act of 1988 was enacted. Section 96 (2) under the old statute was replaced by section 149 (2) of the new statute. Similarly section 110-c (2-a) was replaced by section 170, similarly sections 110-b and 110-d were replaced by sections 168 and 173 respectively. Section 96 (2) under the old statute was replaced by section 149 (2) of the new statute. Similarly section 110-c (2-a) was replaced by section 170, similarly sections 110-b and 110-d were replaced by sections 168 and 173 respectively. ( 100 ) TAKING a sum total of the aforesaid change in law, in my view, prior to 1970 the insurer could not defend any claim on the grounds other than those specified in the said statute. So there was every scope for a collusion between the claimant and the insured or for an insured not contesting such claim. Legislature must have appreciated the difficulty being faced by the insurers who were being foisted with liabilities under the motor policies without having a chance to contest such claim before the tribunal on the grounds other than those specified under the said statute. Hence section 110-c (2-a) was brought in granting liberty to the tribunal to permit the insurer to contest all or any of the issues in addition to those specified in the statute. Since 1970 insurers are at liberty to approach the tribunal for permission to contest the claim on any of the grounds in addition to those specified in the statute and in case such approach is made before the tribunal and in case the tribunal is satisfied that any of the prerequisites is fulfilled, permission to contest on the additional grounds is a matter of course. ( 101 ) WITH regard to the right of appeal the law was consistent since 1939. Any aggrieved person was entitled to prefer an appeal on the grounds available to them. The appeal of the insurer was restricted to the grounds available to them under section 96 (2 ). Since 1970 the insurer is entitled to prefer appeal either on those grounds which are available to them under statute or those grounds available to the insurer because of the liberty and/or permission granted by claims tribunal under section 110-c (2-a) of 1939 act or under section 170 of the act of 1988. ( 102 ) RULE of interpretation does not permit a particular section to be interpreted independently without having regard to the other provisions of the same statute. ( 102 ) RULE of interpretation does not permit a particular section to be interpreted independently without having regard to the other provisions of the same statute. In my view, aggrieved person under section 110-d of the act of 1939 and section 173 of the act of 1988 must be construed in the light of the other provisions of the statute including section 96 (2) and section 149 (2) of the act of 1939 and act of 1988 respectively. ( 103 ) IF my above interpretations are correct (which i firmly believe to be so) any appeal by the insurer on quantum without being backed up by an expressed liberty given by the tribunal before the judgment was delivered, is not maintainable. ( 104 ) MY esteemed brothers have already discussed the cases cited before us and i do not wish to repeat those save and except three decisions of the apex court which i feel necessary and appropriate. Captain itbar singh's case, 1958-65 acj ksc) ( 105 ) IT is well settled law that a ruling has to be interpreted in the light of the law prevalent at that point of time. This decision of the apex court dealt with motor accident case in 50's while the 1939 act was in force prior to its amendment in 1970. The apex court rejected the appeal of the insurer on the ground that it was not maintainable because of the provisions of section 96 (2) of the said 1939 act. With all humility, may i say, the issue of subrogation as discussed by their lordships is being given too much importance while interpreting the said judgment. I again say with all humility that their lordships discussed in detail the true purport of section 96 (2 ). Their lordships held that since the said section did not empower the in surer to maintain any defence other than the grounds specified therein the defence of the insurer was not maintainable. To strengthen the ground of rejection their lordships had made a reference to the effect that had there been any right preserved in the policy itself the insurance company could have contested the claim on all points in the name of the insured. In the said case before their lordships neither the policy contained any such clause nor that issue was raised by any of the parties. In the said case before their lordships neither the policy contained any such clause nor that issue was raised by any of the parties. It would| further appear from the said judgment of the apex court that neither it was the contention of any of the parties to the effect that had there been any reservation clause such defence would have been maintainable nor any deliberation was made on that score. Their lordships, in my view, made\ that observation as and by way of hypo-thesis only to strengthen the grounds of rejection. Such observation, in my view, should be understood and should be given due consideration in the facts and circumstances as discussed by me in the foregoing : para. Shankarayya's case, 1998 acj 513 (sc) ( 106 ) IN this case apex court categorically held that without any prior leave being obtained by the insurance company before the tribunal under section 170, the appeal by the insurance company on the grounds other than those provided in section 149 (2) is not maintainable. Bhushan sachdeva's case, 2002 acj 333 (sc) ( 107 ) IN the case of bhushan sachdeva, the apex court had considered a peculia circumstance wherein an assured contested the claim all throughout in the tribunal and opted for accepting the judgment by not preferring any appeal. The apex court held that under section 173 insurance company can fall within the meaning of the words "any person aggrieved by an award of a claims tribunal". In my view, since the legislature empowered the tribunal to grant liberty to the insurer to contest the claim on additional grounds subject to fulfilling of two prerequisites and thought it fit not to extend such scope at the appellate stage we cannot sub-plant anything within the statute to give it a wider scope. In bhushan sachdeva 's case the claim was contested by the claimant all throughout. The tribunal gave its judgment. Insurance company is, therefore, bound to honour the same under section 149. They have right to prefer an appeal under section 173 only on the grounds available to them under section 149 (2 ). It is true that the supreme court expressed grave concern in para 10 of the said judgment to the effect that there is every likelihood of misuse of public fund through the insurance companies. In my view, we cannot go beyond the statute. It is true that the supreme court expressed grave concern in para 10 of the said judgment to the effect that there is every likelihood of misuse of public fund through the insurance companies. In my view, we cannot go beyond the statute. It is the full prerogative of the legislature and the legislature only. If they have not considered this aspect they should do so at their earliest. As long as the law as of the date stands we cannot extend the scope to reduce further hardship that the insurance company might suffer. Hence, such consideration of the apex court with all humility i am unable to accept. ( 108 ) HENCE, in my view, since the two decisions of the supreme court being shankarayya's case, 1998 acj 513 (sc) and sachdeva's case, 2002 acj 333 (sc), are having equal binding force on me. I prefer to accept shankarayya's case and hold that the quantum appeals by the insurer are not maintainable and i answer the point of reference accordingly. ( 109 ) SINCE there had been conflicting decisions of the apex court as discussed hereinbefore i had to do the unpleasant task of finding which one was more rational. While doing so i have made a comparative study of the said decisions. My endeavour had been to find out which one was more rational to give appropriate interpretation of the relevant provisions of the statute. My comments, if any, on the said apex court decisions should be construed in such perspective. ( 110 ) I do not find any reason to give any weight to the arguments on the reservation clause as there is nothing before us, at least not shown to us by the insurance company, to show that such an issue was brought at the tribunal stage. Moreover, from the memorandum of appeals filed before us i do not find any assertion to the effect that those appeals have been filed on behalf of the assured by the insurance company by virtue of such reservation clause. Hence, with all humility, may i say, any deliberation on the said issue would be superfluous in the facts and circumstances on the basis of which the subject appeals have been brought. Hence, with all humility, may i say, any deliberation on the said issue would be superfluous in the facts and circumstances on the basis of which the subject appeals have been brought. ( 111 ) FOR such reasons above, i am unable to accept the views expressed by my esteemed brother a. n. roy, j. And the conclusion arrived at by his lordship and with all humility i respectfully differ with his lordship on the said issue. ( 112 ) I am also unable to accept the views expressed by my esteemed brother m. h. s. ansari, j. With regard to his lordship's interpretation of the judgments on the reservation clause and with all humility i respectfully differ with his lordship on such score. ( 113 ) I, therefore, hold that the subject appeals, as framed, are not maintainable on the grounds other than those specified in section 149 (2) of the said act, 1988. ( 114 ) CERTIFIED xerox copy of the judgments be made available to the learned counsel appearing for the parties forthwith. ( 115 ) LET all these matters appear for further judgment and orders on 16. 5. 2002 at 2 p. m. 76. 5. 2002 ( 116 ) CHAPTER vii, rule 6-a of our appellate side rule is quoted below:"6-A. If a full bench consisting of three judges cannot come to a unanimous decision, they shall, instead of disposing of the matter, refer it to the chief justice, for constitution of a larger bench. " ( 117 ) IT appears that as the three of us delivered separate judgments we became less and less unanimous. As such, the matters are recommended to our hon'ble chief justice for formation of a full bench of five judges, subject to his lordship considering the same to be appropriate. Certified xerox copy of this order be made available to the learned counsel appearing for the parties forthwith. Matters referred to larger bench.