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2004 DIGILAW 596 (GAU)

United India Insurance Co. Ltd. v. K. P. Gopinath

2004-12-03

BROJENDRA PRASAD KATAKEY, D.BISWAS

body2004
JUDGMENT B.P. Katakey, J. 1. By this appeal the Insurance Company, has challenged the judgment and order dated 4th March, 2004 passed in MAC Case No. 32/03 by the learned Member, Motor Accident Claims Tribunal, Nagaland, Dimapur awarding a sum of Rs. 5,32,000 with interest at the rate of 9% as compensation for the death of Sanjeeb Gopinath. 2. This appeal is taken up for disposal at the admission stage itself since the question that arose for consideration by this Court is "whether the Insurance Company can maintain an appeal challenging the quantum of compensation awarded by the Tribunal without applying and obtaining permission from the Tribunal as required under Section 170 of the Motor Vehicles Act (hereinafter referred to as the Act)". 3. The brief facts leading to the filing of the claim petition before the learned Tribunal is that, one Sanjeeb Gopinath son of the claimant Nos. 1 and 2 and brother of the claimant No. 3 died in a motor accident on 10th November, 2002. The deceased who was travelling in an auto-rickshaw was hit by a bus driven in reckless and negligent manner and as a result of which he died on spot. 4. Since the question involved in the present appeal is relating to the maintainability of appeal by the Insurance Company challenging the quantum of compensation, the finding regarding the negligence, age, monthly income vis-a-vis the loss of dependency need not be gone into in this appeal. Though the claimants claimed that the deceased's monthly income was Rs. 13,000 the learned Tribunal for the purpose of awarding a just and reasonable compensation took Rs. 8,000 as total monthly income of the deceased and by applying the multiplier method and taking the multiplier as 8 assessed the loss of dependency at Rs. 5,12,000 to which an amount of Rs. 20,000 was awarded on account of loss of estate and funeral expenses and, thus, quantified the compensation payable to the claimants as Rs. 5,32,000. The learned Tribunal in view of the fact that at the relevant point of time the offending vehicle was insured with the appellant-Insurance Company directed the Insurance Company to pay the awarded amount within 30 days. 5. 5,32,000. The learned Tribunal in view of the fact that at the relevant point of time the offending vehicle was insured with the appellant-Insurance Company directed the Insurance Company to pay the awarded amount within 30 days. 5. The factum of insurance has been duly proved by the claimant before the learned Tribunal and, therefore, there is no dispute regarding the insurance coverage of the offending vehicle as well as the award passed by the learned Tribunal against the Insurance Company. 6. We have heard Mr. D. Sur, learned Counsel appearing for the Insurance Company. Since the matter was taken up for disposal at the admission stage itself, no notice was issued to the O.P. respondents and hence none appears for the respondents. 7. Mr. Sur, learned Counsel for the appellant has contended that the Insurance Company being "person aggrieved" by the award passed by the Claims Tribunal, the appeal questioning the quantum of compensation awarded by the learned Tribunal can be maintained by the Insurance Company under Section 173 of the Act. The learned Counsel has further submitted that there is no bar under Section 173 of the Act in maintaining an appeal by the Insurance Company, if the quantum of compensation awarded by the learned Tribunal is unjust. Mr. Sur in support of his contention has referred to the decision rendered by the Apex Court in United Insurance Co. Ltd. v. Bhushan Sachdeva and Ors. reported in [2002] 1 SCR 352. 8. Section 170 of the Act has given right to the Insurance Company to seek permission from the Tribunal to contest the claim of the claimants if (a) there is collusion between the persons 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. In the event of making such application, the learned Tribunal may allow the Insurance Company to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made, without prejudice to the provisions contained in Sub-section 2 of Section 149 of the Act. 9. Section 149 of the 1988 Act imposes a duty on the insurer to satisfy the judgment awarded against person insured in respect of third party's risk, subject to the conditions contained in Sub-section 2 of Section 149 of the Act. 9. Section 149 of the 1988 Act imposes a duty on the insurer to satisfy the judgment awarded against person insured in respect of third party's risk, subject to the conditions contained in Sub-section 2 of Section 149 of the Act. 10. From a conjoint reading of Section 149 and Section 170 of the Act, it is clear that the Insurance Company can contest the claim on all or any of the grounds that are available to the person against whom claim has been made, only when they file an application under Section 170 of the Act and obtain permission from the learned Tribunal in that respect. Unless such permission is sought for and granted the Insurance Company cannot maintain an appeal under Section 173 of the Act challenging the quantum of compensation awarded by the learned Tribunal, since the Insurance Company cannot avoid its liability on any other grounds except those mentioned in Sub-section (2) of Section 149 of the Act. 11. Section 173 of the Act gives a right to the 'person aggrieved' by an award of the Tribunal to prefer an appeal. In an application for awarding compensation under the Act for the injury or death caused due to the accident, the award is passed against the owner and the driver of the offending vehicle and in the event, if there is a contract of insurance between the owner and an Insurance Company to indemnify the owner in respect of the compensation payable under the Act, the Insurance Company cannot escape its liability of satisfying the award except on the grounds mentioned in Sub-section (2) of Section 149 of the Act. The words 'person aggrieved' in Section 173of the Act cannot include the Insurance Company which has a contract of insurance with the owner. The person aggrieved would only be the owner of the offending vehicle and, therefore, the appeal under Section 173 of the Act is maintainable only at the instance of the owner and not at the instance of the Insurance Company. 12. Our said view is fortified by a series of decisions rendered by the Apex Court including the decisions rendered in National Insurance Co. Ltd., Chandigarh v. Nicolletta Rohtagi and Ors. reported in [2002] SUPP 2 SCR 456 and United India Insurance Co. Ltd. v. Jyotsnaben Sudhirbhai Patel and Ors. reported in AIR 2003 SC 3127 . 12. Our said view is fortified by a series of decisions rendered by the Apex Court including the decisions rendered in National Insurance Co. Ltd., Chandigarh v. Nicolletta Rohtagi and Ors. reported in [2002] SUPP 2 SCR 456 and United India Insurance Co. Ltd. v. Jyotsnaben Sudhirbhai Patel and Ors. reported in AIR 2003 SC 3127 . The Hon'ble Supreme Court in the National Insurance Co. Ltd. (supra) has held as under: 13. To answer the question, it is necessary to find out on what grounds the insurer entitled to defend/contest against a claim by an injured or dependants of the victims of a motor vehicle accident. Under Section 96(2)of the 1939 Act which corresponds to Section 149(2) of the 1988 Act, an Insurance Company has no right to be a party to an action by the injured person or dependents of the deceased against the insured. However, the said provision gives the insurer the right to be made a party to the case and to defend it. It is, therefore, obvious that the said right is a creature of the statute and its content depends on the provisions of the statute. After the insurer has been made a party to a case or claim, the question arises, what are the defences available to it under the statute? The language employed in enacting Section (2) of Section 149 appears to be plain and simple and there is no ambiguity in it. It shows that when an insurer is impleaded and has been given notice of the case, he is entitled to defend the action on grounds enumerated in the Sub-section, namely, Sub-section (2) of Section149 of the 1988 Act, and no other ground is available to him. The insurer is not allowed to contest the claim of the injured or heirs of the deceased on the ground which is available to an insured or breach of any other conditions of the policy which do not find place in Sub-section (2) of Section 149 of the 1988 Act. If an insurer is permitted to contest the claim on other grounds it would mean adding more grounds of contest to the insurer than what the statute has specifically provided for. 14. Sub-section (7) of Section 149 of the 1988 Act clearly indicates in what manner Sub-section (2) of Section 149 has to be interpreted. If an insurer is permitted to contest the claim on other grounds it would mean adding more grounds of contest to the insurer than what the statute has specifically provided for. 14. Sub-section (7) of Section 149 of the 1988 Act clearly indicates in what manner Sub-section (2) of Section 149 has to be interpreted. Section (7) of Section 149 provides that no insurer to whom the notice referred to in Sub-section (2) or Sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment as is referred to in Sub-section (1) or in such judgment or award as is referred to in Sub-section (3) otherwise than in the manner provided for in Subsection (2) or in the corresponding law of the reciprocating country, as the case may be. The expression 'manner' employed in Sub-section (7) of Section 149 is very relevant which means an insurer can avoid its liability only in accordance with what has been provided for in Sub-section (2) of Section149. It, therefore, shows that the insurer can avoid its liability only on the statutory defences expressly provided in Sub-section (2) of Section 149 of the 1988 Act. We are, therefore, of the view that an insurer cannot avoid its ability on any other grounds except those mentioned in Sub-section (2) of Section 149 of the 1988 Act. 15.It is relevant to note that Parliament, while enacting Sub-section (2) of Section 149 only specified some of the defences which are based on conditions of the policy and, therefore, any other breach of conditions of the policy by the insured which does not find place in Sub-section (2) of Section149 cannot be taken as a defence by the insurer. If Parliament had intended to include the breach of other conditions of the policy as a defence, it could have easily provided any breach of conditions of insurance policy in Sub-section (2) of Section 149. If we permit the insurer to take any other defences other than those specified in Sub-section (2) of Section 149, it would mean we are adding more defences to the insurer in the statute which is neither found in the Act nor was intended to be included. 16. If we permit the insurer to take any other defences other than those specified in Sub-section (2) of Section 149, it would mean we are adding more defences to the insurer in the statute which is neither found in the Act nor was intended to be included. 16. For the aforesaid reasons, we are of the view that the statutory defences which are available to the insurer to contest a claim are confined to what are provided in Sub-section (2) of Section 149 of the 1988 Act and not more and for that reason if an insurer is to file an appeal, the challenge in the appeal would confine to only those grounds. 13. The Apex Court in United India Insurance Co. Ltd. (supra) has also discussed the different provisions of the Act and has recorded definite finding and held that the Insurance Company can contest the claim preferred before the Tribunal only on the statutory grounds prescribed under Section 149(2) of the Act. But if there is a collusion between the persons making the claim and the persons resisting the claim or if the person against whom the claim is made has failed to contest the claim, the Insurance Company can seek permission of the Tribunal and in the event of granting such permission the insurer can contest the proceeding on the ground other than the grounds enumerated in Sub-section (2) of Section 149 of the Act. 14. In the proceeding before the learned Tribunal, which is the subject matter of the present appeal, the Insurance Company admittedly has not filed any application under Section 170 of the Act seeking permission from the learned Tribunal to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made. Therefore, the right to challenge the award by the Insurance Company is restricted to the grounds enumerated in Subsection (2) of Section 149 of the Act. The question of quantum of compensation being not one of the grounds enumerated under Section 149(2) of the Act, the Insurance Company cannot maintain an appeal under Section 173 of the Act challenging the quantum of compensation awarded by the learned Tribunal. The decisions cited by Mr. The question of quantum of compensation being not one of the grounds enumerated under Section 149(2) of the Act, the Insurance Company cannot maintain an appeal under Section 173 of the Act challenging the quantum of compensation awarded by the learned Tribunal. The decisions cited by Mr. Sur and on which he has placed reliance in support of his contention that the words 'person aggrieved' appears in Section 173 of the Act includes the Insurance Company, has already been held by the Apex Court as not a correct view of the law in National Insurance Co. Ltd., Chandigarh (supra). 15. This being the position, in our considered view, the appeal filed by the Insurance Company challenging the quantum of compensation is not maintainable and hence the same deserves dismissal, which we hereby do. 16. Since the appeal has been dismissed at the admission stage itself without issuing notice to the claimants/respondents, we do not make any order as to costs.