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2007 DIGILAW 241 (JK)

National Insurance Co. Ltd. v. Tarsem Lal

2007-11-05

J.P.SINGH

body2007
1. This appeal arising out of Motor Accidents Claims Tribunal, Jammus award dated 23rd of December, 2005 awarding an amount of Rs. 13,03,632/- along with interest @ 6% per annum for the death of one Kamal Raina who had died in a motor vehicular accident near K.C.Door, Muthi, Jammu, to the widow, son, daughter and father of the deceased, has been filed by National Insurance Company Limited questioning only the quantum of compensation on the ground that neither the multiplier had been appropriately fixed nor the income rightly determined. 2. Ms. Rashmi Bajaj appearing for the claimants raises a preliminary objection as to the maintainability of the appeal saying that in the absence of requisite permission having been obtained by the Insurance Company under Section 170 of the Motor Vehicles Act, 1988, during the trial of the claim petition, the appellant Company cannot maintain its appeal. She refers to Shankarayya and anr. versus United Insurance Co. Ltd. and another, reported as AIR 1998 SC, 2968, National Insurance Co. Ltd. versus Nicolletta Rohtagi and others, reported as AIR 2002 SC, 3350 and National Insurance Co. Ltd. v. Chander Jota and others, 20O7 (2) JKJ, 481. 3. Mr. Sunil Malhotra, learned counsel for the appellant, while conceding that no permission had been obtained by the Company from the Tribunal under Section 170 of the Motor Vehicles Act, to contest the claim on grounds other than those available to an insurer under Section 149 (2) of the Act, submits that award, which, on the face of it, has been made after accepting a multiplier which was far excess to the prescribed multiplier, would be liable to be set aside regardless of Companys omission to seek permission to contest the claimants claim on grounds other than those mentioned in Section 149 (2) of the Motor Vehicles Act. Learned counsel further submits that in similar facts, the Supreme Court had fixed a lesser multiplier and the Tribunal has erred in adopting 11 as the multiplier. 4. I have considered the submissions of learned counsel for the parties. 5. Learned counsel further submits that in similar facts, the Supreme Court had fixed a lesser multiplier and the Tribunal has erred in adopting 11 as the multiplier. 4. I have considered the submissions of learned counsel for the parties. 5. The question as to whether the Insurance Company has the right to file an appeal against an award which had not been contested by it after obtaining requisite permission under Section 170 of the Motor Vehicles Act, is no more res integra for it stands answered in various judgments including the three cited by learned counsel for the appellant. While dealing with the issue, Honble Supreme Court of India has held as follows:- "For the aforesaid reasons, an insurer if aggrieved against an award, may file an appeal only on those grounds and no other. However, by virtue of Section 170 of the 1988 Act, where in course of an enquiry the Claims Tribunal is satisfied that (a) there is a collusion between the person making a claim and the person against whom the claim has been made or (b) the person against whom the claim has been made has failed to contest the claim, the tribunal may, for reasons to be recorded in writing, implead the insurer and in that case it is permissible for the insurer to contest the claim also on the grounds which are available to the insured or to the person against whom the claim has been made. Thus, unless an order is passed by the tribunal permitting the insurer to avail the grounds available to an insured or any other person against whom a claim has been made on being satisfied of the two conditions specified in Section 170 of the Act, it is not permissible to the insurer to contest the claim on the grounds which are available to the insured or to a person against whom a claim has been made. Thus where conditions precedent embodied in Section 170 is satisfied and award is adverse to the interest of the insurer, the insurer has a right to file an appeal challenging the quantum of compensation or negligence or contributory negligence of the offending vehicle even if the insured has not filed any appeal against the quantum of compensation. Thus where conditions precedent embodied in Section 170 is satisfied and award is adverse to the interest of the insurer, the insurer has a right to file an appeal challenging the quantum of compensation or negligence or contributory negligence of the offending vehicle even if the insured has not filed any appeal against the quantum of compensation. Sections 149, 170 and 173 are part of one Scheme and if we give any different interpretation to Section 172 of the 1988 Act, the same would go contrary to the scheme and object of the Act. This matter may be examined from another angle. The right of appeal is not an inherent right or common law right, but it is a statutory right. If the law provides that an appeal can be filed on limited grounds, the grounds of challenge cannot be enlarged on the premise that the insured or the persons against whom a claim has been made has not filed any appeal. Section 149(2) of 1988 Act limits the insurers appeal on those enumerated grounds and the appeal being a product of the statute, it is not open to an insurer to take any other plea other than those provided in Section 149(2) of 1988 Act. The view taken in United India Insurance Co. Ltd. v. 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. Further, the view taken in United India Insurance (supra) that since the insurance companies are nationalised and are dealing with public money/fund and to deny them the right of appeal when there is a collusion between the claimants and the insured would mean draining out or abuse of public fund is contrary to the object and intention of the Parliament behind enacting Chapter XI of 1988 Act. The main object of enacting Chapter XI of 1988 Act was to protect the interest of the victims of motor vehicle accidents and it is for that reason the insurance of all motor vehicles has been made statutorily compulsory. Compulsory insurance of motor vehicle was not to promote the business interest of insurer engaged in the business of insurance. The main object of enacting Chapter XI of 1988 Act was to protect the interest of the victims of motor vehicle accidents and it is for that reason the insurance of all motor vehicles has been made statutorily compulsory. Compulsory insurance of motor vehicle was not to promote the business interest of insurer engaged in the business of insurance. Provisions embodied either in 1939 or 1988 Act have been purposely enacted to protect the interest of traveling public or those using road from the risk attendant upon the user of motor vehicles on the roads. If law would have provided for compensation to dependants of victims of motor vehicle accident, that would not have been sufficient unless there is a guarantee that compensation awarded to an injured or dependant of the victims of motor accident shall be recoverable from person held liable for the consequences of the accident. In Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan, 1987 (2) SCC 654, it was observed thus : "In other words, the legislature has insisted and make it incumbent on the user of a motor vehicle to be armed with an insurance policy covering third party risks which is in conformity with the provisions enacted by the legislature. It is so provided in order to ensure that the injured victims of automobile accidents or the dependants of the victims of fatal accidents are really compensated in terms of money and not in terms of premise. Such a benign provision enacted by the legislature having regard to the fact that in the modern age the use of motor vehicles notwithstanding the attendant hazards, has become an inescapable fact of life, has to be interpreted in a meaningful manner which serves rather than defeats the purpose of the legislation. The provision has therefore to be interpreted in the light of the aforesaid perspective." For the aforesaid reasons, our answer to the question is that even if no appeal is preferred under Section 173 of 1988 Act by an insured against the award of a 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." 6. In view of the above settled position of law, plea of Mr. Malhotra who had placed reliance on Oriental Insurance Co. In view of the above settled position of law, plea of Mr. Malhotra who had placed reliance on Oriental Insurance Co. Ltd. versus Kishore Chandra Sahu and another, reported as 1999 ACJ 122, that the award of the Tribunal could be questioned by the Insurance Company regardless of its having obtained permission under Section 170 of the Motor Vehicles Act, therefore, fails and is, accordingly, rejected. 7. That apart, I do not find the multiplier selected by the Tribunal in the present case higher than the one prescribed in the Second Schedule of the Motor Vehicles Act. The Tribunal, while dealing with the selection of appropriate multiplier in the case had taken into account, the prescribed multiplier of 13 for persons in the age group of 45 to 50 and had accordingly scaled it down to 11 keeping in view the facts and circumstances of the case which included the liability of a widow aged 40 years, daughter aged 17 years and son aged 15 years, besides the aged father. This is not a case in which it may be said that the award was unconscionable, requiring interference by the High Court. 8. For all what has been said above, the preliminary objection raised by Ms. Rashmi Bajaj prevails and insurers appeal is, accordingly, dismissed as not maintainable. 9. Registrar Judicial to release the awarded amount along with interest accrued thereon in favour of the claimants in accordance with the award taking into account the amount already received by them during the pendency of the litigation.