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2003 DIGILAW 366 (CAL)

NEW INDIA ASSURANCE CO. LTD v. TARA SUNDARI PHAUZDAR

2003-07-25

ALOKE CHAKRABARTI, ALTAMAS KABIR, ASOK KUMAR GANGULY, D.K.SETH, P.N.SINHA

body2003
KABIR, J. ( 1 ) A common question having arisen in these seven appeals as to whether an insurance company could maintain an appeal against an award of the Claims tribunal constituted under the Motor Vehicles act, 1988, on the quantum of compensation without having obtained leave under section 170 of the said Act but upon invocation of the reservation clause, being condition No. 2 of the policy of insurance, all the seven appeals were referred to a special Bench presided over by Ajoy Nath ray, J. [ 2002 ACJ 1646 (Calcutta)] to consider the said question. ( 2 ) ON consideration of section 96 (2) of motor Vehicles Act, 1939, corresponding to section 149 (2) of the Motor Vehicles act, 1988 and sections 110-C (2-A) and 110-D of 1939 Act, corresponding to sections 170 and 173 of the Motor Vehicles act, 1988, and in the light of the decision in British India Genl. Ins. Co. Ltd. v. Captain Itbar Singh, 1958-65 ACJ 1 (SC), ajoy Nath Ray, J. came to the conclusion that 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 stayed away from the appellate court altogether or at any stage of the appeal makes it plain to the court of appeal that the attack against the quantum awarded by the Claims Tribunal has ceased to be fair and sufficient for the purpose of justice. In his judgment, the learned Judge recorded that the above would be the position when the policy contains a condition whereunder the insurer reserves the right to 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 would have full discretion in the conduct of any proceedings or in the settlement of any claim. ( 3 ) IN a separate judgment, M,h. S. Ansari, J. observed as follows:"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 (conditionno. ( 3 ) IN a separate judgment, M,h. S. Ansari, J. observed as follows:"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 (conditionno. 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 or assignment) has 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. 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 ofsubrogation/assignment) that the maintainability of the appeal would depend. " ( 4 ) A different view was expressed by ashim Kumar Banerjee, J. His Lordship chose to follow the views expressed by the honble Supreme Court in Shankarayya v. United India Insurance Co. Ltd. , 1998 acj 513 (SC) and held that the appeals were not maintainable on the ground other than those specified under section 149 (2)of the Motor Vehicles Act, 1988. ( 5 ) IN view of the different conclusions arrived at in the reference, the Special bench under Chapter VII, rule 6a of the appellate Side Rules referred the matter to the Honble Chief Justice for constitution of a larger Bench. Pursuant thereto this bench was constituted by the Honble chief Justice on 28. 2. 2003, to consider afresh the question referred to the Special bench. Pursuant thereto this bench was constituted by the Honble chief Justice on 28. 2. 2003, to consider afresh the question referred to the Special bench. ( 6 ) AT the time when the reference was made, the Honble Apex Court had, in fact, already considered the question in the case of Shankarayya v. United India Insurance co. Ltd. , 1998 ACJ 513 (SC) and had, inter alia, held that notwithstanding the fact that the insurance company had been impleaded as a party in the claim petition, unless the procedure indicated in section 170 of the Motor Vehicles Act, 1988, was followed the insurance company could not have a wider defence on merits than what was available to it by way of statutory defence. In other words, without obtaining leave from the Claims Tribunal under section 170 of the Motor Vehicles Act, 1988, hereinafter referred to as the 1988 Act, an insurer could contest the claim only on the limited grounds set out in sub-section (2) of section 149 of the said Act involving breach of the conditions of policy referred to therein. ( 7 ) THE same view was expressed by the honble Apex Court in the case of Naren-dra Kumar v. Yarenissa, 1998 ACJ 244 (SC), which was a decision rendered under section 110-C (2-A) of 1939 Act, the provisions whereof are in part materia with the provisions of section 170 of the 1988 Act. ( 8 ) THE view taken by the Honble Apex court was subsequently reflected in two decisions of this court in (1) United India insurance Co. Ltd. v. Namita Das, 2001 acj 303 (Calcutta) and in (2) Oriental insurance Co. Ltd. v. Gurdial Singh, 2001 acj 94 (Calcutta ). ( 9 ) THE Honble Apex Court had gone even further in the case of (1) Chinnama george v. N. K. Raju, 2000 ACJ 777 (SC)and (2) Rita Devi v. New India Assurance co. Ltd. , 2000 ACJ 801 (SC), wherein while considering sections 173 and 149 (2)of the 1988 Act, the Honble Supreme court was of the view that a joint appeal by the owner of the vehicle and the insurer would be maintainable only if any of the permitted defences was available to the insurer. It was held that the insurer could not avoid the statutory bar merely by joining the insured-owner or the driver as coappellant in such appeal. It was held that the insurer could not avoid the statutory bar merely by joining the insured-owner or the driver as coappellant in such appeal. ( 10 ) THE law as it stood when the reference was made was that the provision for appeal under section 173 of the 1988 Act by the insurer was subject to the statutory bar imposed under sections 149 (2) and 170 of the said Act. ( 11 ) DESPITE the above, a Division Bench of this court took a different view in the case of United India Insurance Co. Ltd. v. Gita Rani Mondal, 2001 ACJ 1692 (Calcutta), following an earlier judgment of the Honble Supreme Court in the case of british India Genl. Ins. Co. Ltd. v. Captain itbar Singh, 1958-65 ACJ 1 (SC ). Distinguishing the decision of the Honble Apex court in Shankarayyas case, 1998 ACJ 513 (SC), the Division Bench, inter alia, held that in a situation where a policy contains a subrogation clause, it is allowed to the insurer to take up the defence on merits whether in the absence or presence of the insured, without invoking section 170 of the 1988 Act. ( 12 ) AFTER the aforesaid decision was rendered in Gita Rani Mondals case, 2001 acj 1692 (Calcutta), the same question fell for consideration before another division Bench of this court in case of Oriental insurance Co. Ltd. v. Bini Bala Mondal, 2001 ACJ 1959 (Calcutta), wherein it was explained that Captain Itbar Singhs case, 1958-65 ACJ 1 (SC), had been decided at a time when section 110-C (2-A) was not in the statute book and the reservation clause for the purpose of subrogation was no doubt relevant for an insurer to defend a claim on behalf of the insured. It was held that the position stood materially altered with the incorporation of section 110-C (2-A) in the 1939 Act, which is pari materia with section 170 in the 1988 Act and following the decision in Shankarayyas case, 1998 ACJ 513 (SC), as subsequently followed in various other cases, the Division Bench held that an appeal by the insurer on merits was not maintainable without leave having been obtained by the insurer from the Claims Tribunal under section 170 of the 1988 Act. ( 13 ) THE seven appeals were then referred to the Special Bench to clarify the position. ( 13 ) THE seven appeals were then referred to the Special Bench to clarify the position. As indicated hereinabove, the honble Judges comprising the Special bench took different views necessitating the constitution of a larger Bench. ( 14 ) APPEARING for some of the insurers in these appeals, Mr. K. K. Das urged that although the decision rendered in shankarayyas case, 1998 ACJ 513 (SC), was followed in subsequent cases, a different note was sounded by a Division Bench of the honble Apex Court in the case of United india Insurance Co. Ltd. v. Bhushan Sachdeva, 2002 ACJ 333 (SC), wherein it was observed that it was erroneous to assume that an insurance company could not file an appeal under section 173 of the 1988 act. It was further observed that so long the insured had not challenged the award passed against him and so long as the liability to pay compensation would fall only on the insurance company, it would be inequitable to deny a remedy of appeal to the insurance company on all grounds as available to the insured. ( 15 ) MR. Das who had appeared both before the Special Bench and the Division bench which had rendered the decision in gita Rani Mondals, case, 2001 ACJ 1692 (Calcutta), reiterated the submissions made by him on the basis of the decision of the honble Supreme Court in Captain Itbar singhs case, 1958-65 ACJ 1 (SC ). Mr. Das urged that the second condition incorporated in the policy of insurance reserving a right to defend the action in the name of the insured, allowed the insurer by subrogation to contest an appeal on all grounds available to the insured. According to Mr. K. K. Das and also Mr. R. P. Banerjee who appeared for one of the insurers, it would be illogical to leave the final assessment of a just award with the Tribunal without the insurer being able to test the correctness thereof before the appeal court. Both the learned counsel tried to impress upon us that it is to prevent such an eventuality that the right of subrogation is required to be seriously considered when the insured either chooses not to contest the award or to abandon such contest in midstream. ( 16 ) ON the other hand, Mr. Both the learned counsel tried to impress upon us that it is to prevent such an eventuality that the right of subrogation is required to be seriously considered when the insured either chooses not to contest the award or to abandon such contest in midstream. ( 16 ) ON the other hand, Mr. Krishanu banik and the other counsel appearing for the award-holders, submitted that there was, in fact, no scope for argument on the question referred to this Bench as the said question had again come up for consideration recently before a Division Bench of the Honble Apex Court comprised three learned Judges in the case of National insurance Co. Ltd. v. Nicolletta Rohtagi, 2002 ACJ 1950 (SC ). It was pointed out that in the said decision, all the earlier decisions rendered by the Honble Apex court on the said question, including the decision rendered in Shankarayyas case, 1998 ACJ 513 (SC) and Bhushan sachdevas case, 2002 ACJ 333 (SC), were considered and the views expressed in shankarayya s case (supra), as followed in narendra Kumar v. Yarenissa, 1998 ACJ 244 (SC); Chinnama George v. N. K. Raju, 2000 ACJ 777 (SC) and in Rita Devi v. New India Assurance Co. Ltd. , 2000 ACJ 801 (SC), were upheld and the decision rendered in Bhushan Sachdevas case (supra), was overruled. ( 17 ) INITIALLY, the task cut out for us promised to be a little hazardous having regard to the diametrically opposite views expressed by two Benches of co-ordinate jurisdiction both of the Honble Supreme court as also this court. Our task has, however, been considerably simplified by the recent decision of the Honble supreme Court in Nicolletta Rohtagis case, 2002 acj 1950 (SC ). ( 18 ) VIEWS similar to those expressed by a Division Bench of this court in Bini Bala mondals case, 2001 ACJ 1959 (Calcutta), regarding the effect of the incorporation of section 110-C (2-A) in the 1939 Act, were also expressed by the Honble Supreme court in Nicolletta Rohtagis case, 2002 acj 1950 (SC ). ( 18 ) VIEWS similar to those expressed by a Division Bench of this court in Bini Bala mondals case, 2001 ACJ 1959 (Calcutta), regarding the effect of the incorporation of section 110-C (2-A) in the 1939 Act, were also expressed by the Honble Supreme court in Nicolletta Rohtagis case, 2002 acj 1950 (SC ). It was observed that section 110-C (2-A) of the 1939 Act, which corresponds to section 170 of the 1988 Act, provides that the insurer has only statutory defences available as provided in section 149 (2) of the 1988 Act and where the tribunal is of the view that there is collusion between claimant and insured who does not contest the claim, the insurer can be made a party and on being so impleaded have all defences available to it. Honble apex Court, inter alia, observed further that section 173 of the 1988 Act provides for an appeal against the award of the tribunal and the consistent view of the honble Supreme Court has been that the insurer has no right to file an appeal to challenge the quantum of compensation. ( 19 ) IN the said scenario it was categorically held by the Honble Supreme Court that even if no appeal is preferred under section 173 of the 1988 Act by an insured against the award of the Motor Accidents claims Tribunal, it is not permissible for an insurer to file an appeal questioning the quantum of compensation as well as findings as regards negligence or contributory negligence of the offending vehicle without leave having been obtained from the claims Tribunal under section 170 of the 1988 Act. ( 20 ) AS will be evident from the above, the very question which has been referred to this Bench has been answered in the negative by the Honble Supreme Court in the aforesaid case of Nicolletta Rohtagi, 2002 ACJ 1950 (SC ). ( 21 ) CONSEQUENTLY, the reference made to this Bench as to whether an insurance company can maintain an appeal against an award of the Motor Accidents Claims tribunal constituted under Motor Vehicles act, 1988 on the quantum of compensation, without having obtained leave under section 170 of the said Act, upon invocation of the reservation clause relating to subrogation, is also answered in the negative. ( 22 ) IF an urgent xerox certified copy of this judgment is applied for, the same is to be supplied to the applicant expeditiously, subject to compliance with all the required formalities. ( 23 ) I agree. Pravendu Narayan Sinha, J. I agree. Chakrabarti, J. I had the privilege of going through the judgment prepared by kabir, J. I feel that one aspect of the matter requires consideration with regard to right of appeal of the insurer in respect of a motor accident claim. The Motor Vehicles act was enacted in the year 1939 repealing thereby various statutes as indicated in the 12th Schedule to the Act. Section 110 of the Motor Vehicles Act, 1939 earlier provided that a State Government may appoint a body or body of persons to investigate and report on accidents involving the death of or bodily injury to any person arising out of the use of motor vehicles and the extent to which their claim to compensatioa have been specified and to advise and assist such persons or their representative in presenting their claim for compensation. By Act 100 of 1956 new sections 100, 110-A, 110-B, 110-C, 110-D, 110-E and 110-F were introduced in place of original section 110 with effect from 16. 2. 1957. ( 24 ) NEW section 110 provided for the constitution of Motor Accidents Claims tribunal for the purpose of adjudicating upon claims for compensation in respect of accidents involving the death of or bodily injury to persons arising out of the use of motor vehicles or damages to any property of a third party so arising or both. ( 25 ) SECTION 110-A provided for filing application for compensation before the appropriate Claims Tribunal prescribing limitation for making such applications. ( 26 ) SECTION 110-B provided for award of the Claims Tribunal. This section provided that the Claims Tribunal shall after giving the parties an opportunity of being heard and holding an inquiry into the claim, may make an award determining the amount of compensation which appears to it to be just and specifying the,person or persons to whom compensation shall be paid and it was to be specified what amount shall be paid by the insurer or owner or driver of th vehicle involved in the accident or by all or any of them as the casemay be. ( 27 ) SECTION 110-C contained the procedure and powers of Claims Tribunal. It is provided that a summary procedure is to be followed. ( 28 ) SECTION 110-D provided for appeals to the High Court. This section permitted preferring of appeal against an award of a claims Tribunal by any persons aggrieved by such award. ( 29 ) NONE of the provisions in the said act at that stage, specifically permitted the insurer any opportunity of hearing. But under rule 241-A (5) of the Bengal Motor vehicles Rules, 1940, Tribunal was to give a notice of the claim application to the owner and the insurer. But no provision could be shown which permitted the insurer an opportunity of hearing in assessment of claim. . ( 30 ) SECTION 110-C was amended further by introducing sub-section (2-A) by the act 56 of 1969 with effect from 2. 3. 1970. The said sub-section (2-A) is set out as under:" (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 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 on all or any of the grounds that are available to the person against whom the claim has been made. " ( 31 ) THIS provision was introduced for impleading the insurer as a party to the proceeding only in case the Tribunal is satisfied that there is collusion between the person making the claim and the person against whom the claim is made or a person against whom the claim is made has failed to contest the claim. ( 32 ) WHEN the new Act being the Motor vehicles Act, 1988 was enacted, it has section 165 corresponding to section 110, section 166 corresponding to section. 110-A, section 168 corresponding to section 110-B and section 169 corresponding to section 110-C. The provisions introduced in the form of sub-section (2-A) in section 110-C is contained in a separate section 170 in the new Act. 110-A, section 168 corresponding to section 110-B and section 169 corresponding to section 110-C. The provisions introduced in the form of sub-section (2-A) in section 110-C is contained in a separate section 170 in the new Act. The appeal has been provided in section 173 corresponding to section 110-D of the old Act. ( 33 ) BUT a vital change was introduced in section 168 of the new Act whereby on receipt of a claim application, the Claims tribunal shall after giving notice of the application to the insurer and after giving the parties (including the insurer) an opportunity of being heard, will proceed to hold inquiry and to make an award determining the amount of compensation. This right of opportunity of hearing of the insurer was never recognised earlier. ( 34 ) IT appears that when the law was not recognizing right of an insurer to be a party entitled to an opportunity of hearing under the old law, sub-section (2-A) was introduced in section 110-C for impleading the insurer in special circumstances. ( 35 ) IN such circumstances, section 170 should be treated as an additional right of the insurer over and above the right under section 168 to be a party in the proceeding and getting opportunity of hearing. Therefore, after the above change in law making the insurer party to a proceeding having a right to hearing, cannot be curtailed even if the insurer does not exercise the right under section 170. ( 36 ) SIMILARLY, section 149 in the new act of 1988, is the section corresponding to section 96 of the old Act of 1939. Subsection (2) of section 96 was also a special provision entitling the insurer to be made party and to defend the action in a claim proceeding under the specified circumstances. This provision has been repeated in sub-section (2) to section 149 of the new Act of 1988. This also similarly, in my opinion, is an additional right which cannot curtail the right to be a party and to an opportunity of hearing as now recognised under section 168 of the new Act of 1988. This provision has been repeated in sub-section (2) to section 149 of the new Act of 1988. This also similarly, in my opinion, is an additional right which cannot curtail the right to be a party and to an opportunity of hearing as now recognised under section 168 of the new Act of 1988. ( 37 ) THEREFORE, it requires consideration as to whether in view of present recognition of the right of insurer under section 168 of the new Act for becoming a party and having an opportunity of hearing in the original claim application, non-exercise of power under section 149 of the new Act of 1988 (corresponding to section 96 of the old Act) or under section 170 of the new act of 1988 [corresponding to sub-section (2-A) of section 110-C of the old Act of 1939] can still deprive the insurer of its unconditional right to prefer appeal now recognised by legislature, under section 168. The judgments deciding such rights as conditional in various cases including the case of Shankarayya v. United India Insurance co. Ltd. , 1998 ACJ 513 (SC) and National insurance Co. Ltd. v. Nicolletta Rohtagi, 2002 ACJ 1950 (SC), having not decided the said aspect, whether requires a fresh consideration. ( 38 ) IN this connection, it also requires a consideration in view of such recognition of right of insurer under section 168 of the new Act, the right under section 173 to any aggrieved person to prefer an appeal- can be interpreted as not a right of a party to the proceeding to prefer such appeal. ( 39 ) THOUGH, in my opinion, these aspects require consideration but in view of the force of the precedents in various cases including the case of Shankarayya, 1998 acj 513 (SC) and Nicolletta Rohtagi, 2002 ACJ 1950 (SC) and the binding effect under Article 141 of the Constitution of india, I express my agreement with answer to the reference as given in the judgment of ( 40 ) O. K. Seth, J. I had the privilege of going through the judgment of my learned brother Kabir, J. I fully agree with the same. I would, however, like to add a few words of mine in support of the view taken by brother Kabir, J. ( 41 ) THIS reference to five-Judge Bench has been made to answer the question: whether the insurer can maintain an appeal on points other than those mentioned in section 149 (2) of the Motor Vehicles Act, 1988 (1988 Act) corresponding to section 96 (2) of the Motor Vehicles Act, 1939 (1939 Act) without having taken the aid of section 170 [110-C (2-A) of 1939 Act] of 1988 Act. ( 42 ) THE matter was referred to a three-judge Bench. While Honble A. N. Ray, J. and Honble M. H. S. Ansari, J. were pleased to answer the question in the affirmative in favour of the insurer with little modification supported by different reasons, honble A. K. Banerjee, J. was pleased to answer in the negative against the insurer. The majority view proceeded on the basis of the reservation clause now provided in the insurance policy by the insurer after the insertion of section 110-C (2-A) in the 1939 Act with effect from 2. 3. 1970. ( 43 ) OUR High Court had consistently been following the principle/ratio laid down in British India Genl. Ins. Co. Ltd. v. Captain Itbar Singh, 1958-65 ACJ 1 (SC ). But in United India Insurance Co. Ltd. v. Gita Rani Mondal, 2001 ACJ 1692 (Calcutta), this court had held that an appeal by the insurer is maintainable on the principle of advance subrogation in the form of reservation clause. A Full Bench of Kerala High Court in New India assurance Co. Ltd. v. Celine, 1993 ACJ 371 (Kerala), had differed from National insurance Co. Ltd. v. Magikhia Das, 1976 acj 239 (Orissa) and took the same view which was followed in Gita Rani Mondal (supra ). It is this decision in Gita Rani mondal (supra), has given rise to the present reference. ( 44 ) THE question could have been buried in view of the decision in Shankarayya v. United India Insurance Co. Ltd. , 1998 ACJ 513 (SC), but for the decision in United india Insurance Co. Ltd. v. Bhushan sach-deva, 2002 ACJ 333 (SC ). Now all these questions with regard to reservation clause are being sought to be raised. ( 44 ) THE question could have been buried in view of the decision in Shankarayya v. United India Insurance Co. Ltd. , 1998 ACJ 513 (SC), but for the decision in United india Insurance Co. Ltd. v. Bhushan sach-deva, 2002 ACJ 333 (SC ). Now all these questions with regard to reservation clause are being sought to be raised. However, it can be argued that in Shankarayya (supra), the Apex Court did not address itself on the question of the insurers right, vis-avis; the reservation clause on the principle of advance subrogation. ( 45 ) THE question would not expose us to any difficult problem if we follow the statute and the principle laid down by various Division Benches of different High courts and the Apex Court consistently right from the decision in British India genl. Ins. Co. Ltd. v. Captain Itbar Singh, 1958-65 ACJ 1 (SC ). ( 46 ) SECTION 96 (2) of the 1939 Act. provided the extent of the insurers right to contest a claim before a Motor Accidents claims Tribunal. The insurance of a motor vehicle is covered by section 95 of the 1939 Act. The liability of the owner to insure the vehicle is a statutory obligation created under section 95 of the 1939 Act. The liability of the insurer arising out of such statutory obligation is specified in section 96. Under sub-section (1), it makes the insurance company liable to pay the amount of the award to the claimant. Subection (2) specifies the defence available to the insurer. Sub-section (6) binds the insurer from avoiding the liability. These were explained in Itbar Singh, 1958-65 acj 1 (SC), but admitting of the principle of subrogation. This view has since been followed consistently and without the principle of subrogation after insertion of section 110-C (2-A) in the 1939 Act until united India Insurance Co. Ltd. v. Bhushan Sachdeva, 2002 ACJ 333 (SC ). ( 47 ) WITH effect from 2. 3. 1970, the insurer became entitled to defend the claim even on points other than those provided in section 96 (2) of the 1939 Act by reason of insertion of sub-section (2-A) in section 110-C of the 1939 Act in given circumstances. Ltd. v. Bhushan Sachdeva, 2002 ACJ 333 (SC ). ( 47 ) WITH effect from 2. 3. 1970, the insurer became entitled to defend the claim even on points other than those provided in section 96 (2) of the 1939 Act by reason of insertion of sub-section (2-A) in section 110-C of the 1939 Act in given circumstances. This has been provided for addition of an insurer if not added as a party in the proceedings, if the court is satisfied that any of the two grounds specified in clauses (a) and (b) of sub-section (2-A)exists. Upon being so added, the insurer would be entitled to contest the claim stepping into the shoes of the insured. Where the insurer is already a party in the proceedings, if the condition contained in clauses (a) and (b) of sub-section (2-A)of section 110-C of the 1939 Act, then it can obtain leave from the court under subsection (2-A) or even the court if satisfied might grant suo motu such leave to the insurer. But sub-section (2-A) provides that in order to grant such leave the court has to record reasons for granting such leave. Thus, the leave is not available to an insurer only on the mere asking. The courts power to grant such leave is also circumscribed by the test to be satisfied and the reason of satisfaction to be recorded in writing before the leave is so granted. The right to defend by an insurer is limited by section 96 (2) read with sub-section (6) thereof circumscribed by sub-section (2-A) of section 110-C creating a relaxation of the embargo or prohibition provided in section 96 (2 ). ( 48 ) THIS relaxation had also stood the scrutiny of different High Courts and the apex Court until the decisions by Kerala full Bench in Celines case, 1993 ACJ 371 (Kerala) and a Division Bench of our High court in Gita Rani Mondals case, 2001 acj 1692 (Calcutta) and then United India insurance Co. Ltd. v. Bhushan Sachdeva, 2002 ACJ 333 (SC ). ( 49 ) MADRAS High Court in Indian mutual Genl. Ins. Society Ltd. v. M. Kothandian naidu, 1966 ACJ 62 (Madras); Ayesha begum v. G. Veerappan, 1966 ACJ 101 (Madras) and United India Fire and Genl. Ins. Co. Ltd. v. Bhushan Sachdeva, 2002 ACJ 333 (SC ). ( 49 ) MADRAS High Court in Indian mutual Genl. Ins. Society Ltd. v. M. Kothandian naidu, 1966 ACJ 62 (Madras); Ayesha begum v. G. Veerappan, 1966 ACJ 101 (Madras) and United India Fire and Genl. Ins. Co. Ltd. v. Parvathy, 1979 ACJ 101 (Madras), before and after the insertion of section 110-C (2-A) in the 1939 Act had taken the same view following Captain itbar Singh, 1958-65 ACJ 1 (SC ). The madhya Pradesh High Court in Manjula devi Bhuta v. Manjusri Raha, 1968 ACJ 1 MP); New India Assurance Co. Ltd. v. Shiv Kumar, 1978 ACJ 137 (MP); New india Assurance Co. Ltd. v. Shakuntla Bai, 1987 ACJ 224 (MP) and Parmanand v. Manohardas, 1990 ACJ 888 (MP), had also taken the identical view. The Mysore high Court in Indian Mutual Genl. Ins. Society Ltd. v. Helen Minezes, AIR 1971 mys 207, had followed the same principle. The Orissa High Court in Orissa Co-op. Ins. Society Ltd. v. Adar Dei, 1976 ACJ 189 (Orissa); Orissa Co-op. Ins. Society ltd. v. Ranjan Kumar Garabaru, 1976 ACJ 21 (Orissa); Vanguard Insurance Co. Ltd. v. Raghunath Patra, 1976 ACJ 12 (Orissa) and in Full Bench in National Insurance co. Ltd. v. Magikhia Das, 1976 ACJ 239 (Orissa), had taken the identical view. The gujarat High Court in Punjabhai prabhudas and Co. v. Sakinaben Mohamadbhai, 1977 ACJ 44 (Gujarat); the Allahabad high Court in Oriental Fire and General ins. Co. Ltd. v. Rajendra Kaur, 1989 ACJ 961 (Allahabad); the Gauhati High Court in Hemendra Dutta Choudhury v. Arun kumar Bordoloi, 1988 ACJ 813 (Gauhati); the Karnataka High Court in Vellayya gounder v. N. Ramnathan, 1982 ACJ 251 (Karnataka); the Delhi High Court in New india Assurance Co. Ltd. v. Union of India, 1987 ACJ 763 (Delhi); the Kerala High court in K. R. Visalakshi v. Pookodan hamza, 1989 ACJ 600 (Kerala) and the full Bench of Jammu and Kashmir High court in United India Fire and Genl. Ins. Co. Ltd. v. Lakshmi Shori Ganjoo, 1982 acj 470 (Jandk), had taken the same view. However, the Kerala decision lost its significance in view of the Full Bench decision in Celine, 1993 ACJ 371 (Kerala ). Apart from Captain Itbar Singh, 1958-65 ACJ 1 (SC), the Apex Court in C. K. Subramonia iyer v. T. Kunhi Kuttan Nair, 1970 ACJ 110 (SC); Sheikhupura Trans. Co. However, the Kerala decision lost its significance in view of the Full Bench decision in Celine, 1993 ACJ 371 (Kerala ). Apart from Captain Itbar Singh, 1958-65 ACJ 1 (SC), the Apex Court in C. K. Subramonia iyer v. T. Kunhi Kuttan Nair, 1970 ACJ 110 (SC); Sheikhupura Trans. Co. Ltd. v. Northern India Transporters Ins. Co. Ltd. , 1971 ACJ 206 (SC) and Narendra Kumar v. Yarenissa, 1998 ACJ 244 (SC), had taken consistently the same view as were taken by various High Courts. In Narendra kumar (supra), rendered by the Supreme court on 12. 1. 1996; Shankarayya, 1998 acj 513 (SC), rendered by the Supreme court on 16. 1. 1998; in Chinnama George v. N. K. Raju, 2000 ACJ 777 (SC), rendered by the Apex Court on 6. 4. 2000 and rita Devi v. New India Assurance Co. Ltd. , 2000 ACJ 801 (SC), rendered by the apex Court on 27. 4. 2000; Balbahadur singh v. Oriental Insurance Co. Ltd. , 2001 acj 1345 (SC), had consistently followed the principle laid down in Itbar Singh (supra), however, subject to the relaxation provided in section 110-C (2-A) of the 1939 Act (170 of the 1988 Act ). In bhushan Sachdeva, 2002 ACJ 333 (SC), the apex Court had taken a different view. This decision was rendered on 18. 1. 2002. We may, however, note that all these decisions by the Apex Court are of co-ordinate benches, namely, of two Judges quorum. In Bhushan Sachdeva (supra), the decision in Narendra Kumar (supra) and Chinnama george (supra), were noticed and distinguished. Whereas Shankarayya (supra) and rita Devi (supra), though earlier in point of time have not been noticed nor distinguished in Bhushan Sachdeva (supra ). Before we deal with Bhushan Sachdeva (supra), vis-a-vis, Shankarayya (supra) and Rita devi (supra) and the other decisions of the supreme Court, we may refer to the views taken by this court. ( 50 ) THIS High Court in Hukam Chand insurance Co. Ltd. v. Subhashini Roy, 1971 ACJ 156 (Calcutta), had followed the principle laid down in Itbar Singh, 1958-65 ACJ 1 (SC ). In Calcutta insurance Co. ( 50 ) THIS High Court in Hukam Chand insurance Co. Ltd. v. Subhashini Roy, 1971 ACJ 156 (Calcutta), had followed the principle laid down in Itbar Singh, 1958-65 ACJ 1 (SC ). In Calcutta insurance Co. v. Rita Ganguli, 79 (1974-75)cal WN 69, it had again taken the same view and it continued to follow the same principle that the insurer has no right to agitate any point other than those in section 96 (2) of the 1939 Act repeatedly in motor Owners Ins. Co. Ltd. v. Hrishikesh das, 1975 ACJ 295 (Calcutta); Premier insurance Co. Ltd. v. Gitarani Ghosh, AIR 1975 Cal 239 ; Kantilal and Bros. v. Ramarani Debt, 1980 ACJ 501 (Calcutta); New india Assurance Co. Ltd. v. Ashutosh Bhattacharjee, 1988 ACJ 831 (Calcutta) and oriental Insurance Co. Ltd. v. Bini Bala mondal, 2001 ACJ 1959 (Calcutta ). In Rita ganguli (supra), the insurers right to challenge the quantum was negatived. Whereas in Kantilal and Bros. (supra), this court had held that the insurer has no right to defend except on the grounds provided in section 96 (2) and that a joint appeal is also not maintainable. The proposition of advance subrogation on the basis of the reservation clause as propounded in Gita rani Mondal (supra), does not find support from any other Division Bench of this court, though contemporary in time in Bini bala Mondal (supra), the old view has been followed. ( 51 ) IN this background, we may now approach to ascertain the position as is apparent from the statutory provision provided in the respective Acts. In fact, the 1988 Act has replaced the 1939 Act. But while replacing, the 1988 Act has adapted the provisions of sections 96 (2), 110-C (2-A) and 110-D of 1939 Act as it were, in sections 149 (2), 170 and 173 respectively. Therefore, in order to appreciate the situation, we may rely on the decisions on this proposition rendered under the 1939 act as well. ( 52 ) IN Bhushan Sachdeva, 2002 ACJ 333 (SC), the Supreme Court had attempted to make a distinction between the proceedings before the Tribunal and the High court. It is the original proceeding before the Tribunal out of which appeal is provided to the High Court. ( 52 ) IN Bhushan Sachdeva, 2002 ACJ 333 (SC), the Supreme Court had attempted to make a distinction between the proceedings before the Tribunal and the High court. It is the original proceeding before the Tribunal out of which appeal is provided to the High Court. But while making such distinction, the Apex Court did not take into consideration the settled proposition of law that appeal is a continuation of proceeding or in effect a re-hearing of the original proceeding. [see Vijai Nath v. Damodardas, AIR 1971 All 109 ; Damodar mukherjee v. Bonwarilal Agarwalla, air 1960 Cal 469 ; Dayawati v. Inderjit, air 1966 SC 1423 ]. The appeal cannot travel beyond the scope of the original proceeding. A ground, which is not available in the suit, cannot become available in an appeal unless there is a change in law in a given circumstance. Admittedly, in the present case, there has been no change in the law. In Bhushan Sachdeva (supra), though later in point of time, is a decision by a co-ordinate Bench, therefore, there is no question of implied overruling of shankarayya, 1998 ACJ 513 (SC) or Rita Devi, 2000 ACJ 801 (SC), or any of the earlier decisions. Though, two of the earlier decisions have been noticed and distinguished, yet these were not overruled. ( 53 ) CONFLICT between judgments of the supreme Court rendered by co-ordinate benches creates certain uncomfortable situations for the High Courts. Article 141 makes all decisions of the Supreme Court binding on all courts. But conflicting decisions, if bind the High Court, then High court would be at a fix as to which one is to be followed. At one point of time it was the latter decision that was to be followed, at one point of time it was the earlier decision, which was to be followed. But, these views have now been replaced. Now the high Court has to undertake an uncomfortable job of preferring one and not the other or others. The principle of preference is guided by the system of acceptability of the preferable judgment by the High Court on the basis which of them lay down the law elaborately and accurately. It is the decision, which, appears to the High Court to have elaborately and accurately dealt with the law, is to be preferred. The principle of preference is guided by the system of acceptability of the preferable judgment by the High Court on the basis which of them lay down the law elaborately and accurately. It is the decision, which, appears to the High Court to have elaborately and accurately dealt with the law, is to be preferred. ( 54 ) THE Full Bench of Allahabad High court in Ganga Saran v. Civil Judge, hapur, Ghaziabad, AIR 1991 All 114 , held that if there is conflict between the judgments of the Supreme Court consisting of equal authorities, incidence of time is not a relevant factor. The High Court must follow the judgment, which appears to lay down law elaborately and accurately. The full Bench of Punjab and Haryana High court in Indo Swiss Times Ltd. , Dundahera v. Umrao, AIR 1981 Pandh 213, had taken the same view. A Division Bench of allahabad High Court in New India Assurance co. Ltd. v. Jagdish Prasad Pandey, 1998 ACJ 404 (Allahabad), taken the same view following Indo Swiss Times (supra), by Punjab and Haryana High Court. The punjab and Haryana High Court had taken the view that when judgments of superior court are of co-equal Benches, namely, of matching authority, then their weight inevitably must be considered by the rationale and the logic thereof and not by mere fortuitous circumstances of the time and date on which they were rendered. Both of the conflicting judgments cannot be binding on the court below.-Inevitably a choice, though a difficult one, has to be made. On principle, the High-Court is to follow the judgment, which appears to lay down the law more elaborately and accurately. A special Bench of this High Court in bholanath Karmakar v. Madanmohan Karmakar, air 1988 Cal 1 , had also followed the same principle and held that it is highly embarrassing for the High Court to declare one out of two or more decisions of the apex 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 coordinate jurisdiction, the task however, uncomfortable, has got to be performed. ( 55 ) IN these circumstances, we may now undertake the uncomfortable task of examining Bhushan Sachdeva, 2002 ACJ 333 (SC ). But if such a task falls upon the High Court because of irreconcilable contrary decisions of the Supreme court emanating from Benches of coordinate jurisdiction, the task however, uncomfortable, has got to be performed. ( 55 ) IN these circumstances, we may now undertake the uncomfortable task of examining Bhushan Sachdeva, 2002 ACJ 333 (SC ). It had sought to distinguish narendra Kumar, 1998 ACJ 244 (SC) and chinnama George, 2000 ACJ 777 (SC), on the ground that in both these two cases the insured had filed an appeal. Therefore, the insurer could not avail of the grounds available to the insured. Therefore, interpreting section 170 of 1988 Act, particularly, the phrase fail to contest, it had interpreted that failure of the insured to prefer an appeal is a failure to contest. Therefore, it had held that the right to contest includes the right to contest by filing an appeal against the award of the tribunal as well. Thus, the insured can continue to contest the claim by filing an appeal. If the insured fails to prefer an appeal, it also amounts to failure to contest the claim effectively. Therefore, in such eventuality the insurer becomes entitled to contest the claim on all grounds available to the insured. ( 56 ) THUS, in principle Apex Court had accepted that continuation of contesting the claim does not end with decision of the tribunal, but continues even in appeal. It is an indirect acceptance of the proposition that the appeal is a continuation of the proceedings to which the failure to contest provided in section 170 of 1988 Act must also continue. But section 170 postulates a situation within the ambit of the proceedings before the Claims Tribunal which cannot travel beyond the award and be made applicable in the appeal because of the express terms used in section 170, which mistakably, unequivocally and unambiguously prescribes the power of the Tribunal upon being satisfied with the test of clauses (a)and (b) of section 170 to grant leave to the insurer to contest on all points by an order supported by reason to be recorded in writing. This provision of section 170 cannot be adapted and applied in an appeal before the High Court. Secondly, it has attempted to recognize insurer as a person aggrieved against an award entitled to contest the claim if the insured does not file the appeal. This provision of section 170 cannot be adapted and applied in an appeal before the High Court. Secondly, it has attempted to recognize insurer as a person aggrieved against an award entitled to contest the claim if the insured does not file the appeal. This proposition was attempted to be supported on the analogy that the insurance company deals with public money and unjust claims would be met out of public funds. This proposition does not seem to be of any relevance. Inasmuch as, the insurance company has entered into a business whether the funds are public funds or not is immaterial. The insurer had entered into such business with its eyes open and the risk involved having regard to the statute providing for compulsory insurance of all vehicles. The insurer seeks to make profit out of this statutory provision by reason whereof every vehicle is compulsorily insurable. Therefore, such a reasoning does not purport to lay down the law accurately or appears to be less reasonable. ( 57 ) THIS may also be considered from the point of view that the insurance of vehicle and the business arising out of it is governed by the statute. The insurance company has taken advantage of this compulsory insurance of every vehicle in order to carry on its business. Therefore, it has to take whatever has been provided in the statute, good, bad or indifferent. The insurance company was never compelled to enter into such business. It has entered into such business on its own volition. Therefore, it has to accept the rule of the game. That apart, sufficient protection has been provided to the insurance company by insertion of section 170 in the statute itself. By reason of this provision, an insurer has every right to apply before the Tribunal and allege collusion and prove the same and obtain the leave to defend the claim on points other than section 96 (2 ). The statutory provisions were enacted to enable the claimants to get the relief in the form of compensation at the earliest without involving them in protracted litigation. The statutory provisions were enacted to enable the claimants to get the relief in the form of compensation at the earliest without involving them in protracted litigation. The theory of suing the owner by the claimant and the owner-insured suing the insurer for reimbursement of the claim paid by it to the claimant was sought to be exploded by reason of insertion of sections 146 and 149 of 1988 Act (sections 94 and 96 of 1939 Act) and had restricted its right by insertion of section 149 (2) of 1988 Act [section 96 (2) of 1939 Act] circumscribed by sub-sections (5) and (7) thereof. It is the intention of the legislature, which has to be upheld. The enactment of these provisions clearly indicate the legislative intent to protect the claimant. When statute provides a particular prohibition, the same cannot be superseded by act of parties. The principle of advance subrogation is something, which has no statutory force, but is merely a contract. The principle of advance subrogation does not apply to render a statutory provision ineffective. Inasmuch as, it would simply be contracting out of statute, which, unless permitted by statute, is impermissible. Therefore, reservation clause can never enable the insurer to get rid of the prohibition provided under section 149 (2) of 1988 Act [section 96 (2) of 1939 Act]. The statute does not provide for any scope of contracting out of the statute and thereby attract the application of the principle of advance subrogation. There is no scope for advance subrogation or contracting out of statute when the statute itself provides for right to contest the claim in certain circumstances by inserting section 170 of 1988 Act [110-C (2-A)of 1939 Act] Such principle of advance subrogation or contracting out is in direct conflict with section 96 (2) read with subsection (6) thereof of 1939 Act corresponding to section 149 (2) and sub-section (7)of 1988 Act. ( 58 ) THUS, we find that the High Courts and the Apex Court had consistently been interpreting the said provisions and had dealt with different aspects thereof from different angles and had pointed out the scope of insurers right to contest a claim. The decision in Shankarayya, 1998 ACJ 513 (SC) and Rita Devi, 2000 ACJ 801 (SC), of the Supreme Court read with the other decisions appears to have laid down the law more reasonably and accurately. The decision in Shankarayya, 1998 ACJ 513 (SC) and Rita Devi, 2000 ACJ 801 (SC), of the Supreme Court read with the other decisions appears to have laid down the law more reasonably and accurately. We, therefore, could have preferred those decisions as against United India insurance Co. Ltd. v. Bhushan Sachdeva, 2002 acj 333 (SC ). ( 59 ) BUT our task has become simple by reason of the judgment of the Apex Court delivered on 17. 9. 2002 in National Insurance Co. Ltd. v. Nicolletta Rohtagi, 2002 acj 1950 (SC), in a three Judges Bench. This decision has reiterated the consistent view taken by the High Courts and the supreme Court and resolved the contradictory view taken in Bhushan Sachdeva, 2002 ACJ 333 (SC) and settled the controversy. In para 29 of the said decision in nicolletta Rohtagi (supra), it was held that the learned Judges in Bhushan Sachdeva (supra), failed to notice the limited grounds available to an insurer under section 149 (2) of the Act and the court was of the view that the decision in Bhushan Sachdeva (supra), did not lay down the correct view of the law. It had held that the view taken in Bhushan Sachdeva (supra), that a right to contest would also include the right to file an appeal is contrary to well established law that creation of a right to appeal is an act which requires legislative authority and no court or Tribunal can confer such right, it being one of limitation or extension of jurisdiction. Therefore, ratio decided in United India Insurance Co. Ltd. v. Bhushan Sachdeva, 2002 ACJ 333 (SC); new India Assurance Co. Ltd. v. Celine, 1993 ACJ 371 (Kerala) and United India insurance Co. Ltd. v. Gita Rani Mondal, 2001 ACJ 1692 (Calcutta), is no more good law. Reference answered.