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2009 DIGILAW 397 (GAU)

National Insurance Co. Ltd. v. Shekahoto

2009-06-06

A.C.UPADHYAY

body2009
JUDGMENT A.C. Upadhyay, J. 1. This revision petition under Article 227 of the Constitution of India is directed against the order dated 20.3.2007 passed by the learned Member, Motor Accident Claims Tribunal-I, Dimapur, Nagaland, in MAC Case No. 45 of 2006. By the impugned order aforesaid, the learned Tribunal rejected the prayer of the petitioner-Insurance Company filed under Section 170 of the M.V. Act, 1988 to contest the claim on all the grounds that are available to the owner of the vehicle. 2. I have heard, Mr. B.N. Sarmah, learned Counsel appearing on behalf of the petitioner, Insurance Company and Mr. T.B. Jamir, learned Counsel for respondent Nos. 2 and 3. 3. The facts leading to filing of this revision petition may be briefly stated as follows: The respondent No. 1 as claimant filed a claim petition in the Court of learned Member, Motor Accident Claims Tribunal, Dimapur on account of injuries sustained by him in a motor vehicular accident which took place on 25.6.2005 at 3.30 p.m. near Asukuto town, Zunheboto, Nagaland, while the claimant was traveling as an occupant of the vehicle No. NL-06-T-0324 (Tata Sumo). The vehicle in which claimant was traveling rolled and fell down about 200 feet below the main road, along with all other occupants. The petitioner, Insurance Company entered appearance and submitted written statement denying the claim of the petitioner by taking the stand of non maintainability of the claim petition and absence of rash and negligent driving in the accident. The petitioner, Insurance Company also denied age, income, avocation, health condition of the claimant and objected that the claim was highly inflated and arbitrary. The owner of the offending vehicle also filed written statement and admitted occupation, factum of accident, nature of injuries, the alleged period of treatment of the claimant and also stated that the vehicle was insured with the petitioner/Insurance Company. 4. Mr. B.N. Sarmah, learned Counsel for the petitioner submitted that the petitioner, Insurance Company contested the case by filing written statement and was also allowed by the learned Court to cross examine all the witnesses adduced by the claimant on all such points on the merit of the claim. 4. Mr. B.N. Sarmah, learned Counsel for the petitioner submitted that the petitioner, Insurance Company contested the case by filing written statement and was also allowed by the learned Court to cross examine all the witnesses adduced by the claimant on all such points on the merit of the claim. However, when it was detected by the Insurance Company that the owner of the vehicle had entered into a collusion with the claimant to facilitate hefty payment of compensation from the Insurance Company, an application under Section 170 of M.V. Act, 1988 was filed, which however, was rejected by the learned Member, Motor Accident Claims Tribunal by it's order impugned, dated 20.3.2007. 5. Learned Counsel for the petitioner pointed out that as the owner of the vehicle i.e. respondent No. 2 intentionally did not cross examine the witnesses of the claimant, in such a situation, learned Counsel expressed apprehension that any other important witness such as Doctor, who may be adduced as witness in the proceedings will not be cross examined properly, which would prejudice the interest of the petitioner, Insurance Company, as the medical witness will only be able to throw light on the extent of injuries sustained by the injured in the accident. 6. Mr. T.B. Jamir, learned Counsel for the respondent, owner of the offending vehicle submitted that a sincere admission by the owner of the vehicle in the written statement cannot be branded as collusion and contended that defendant has been regularly contesting the case by appearing in the Court on every date so fixed by the learned Tribunal. 7. As per provisions of Section 170 of the M.V. Act, the Insurance Company is not required to be impleaded as party at the initial stage for the purpose of settlement of the claim of the claimant. Only if the claims Tribunal finds that the owner of the vehicle has entered into collusion with the claimant and/or has failed to contest the claim properly, implead the Insurance Company to contest the claim on merit without prejudice to the provisions contained in Sub-section (2) of Section 149 of the M.V. Act, 1988. However, in the instant case, Insurance Company was impleaded and accordingly, entered appearance and filed written statement and continued to contest the claim and defend it's stand, admittedly by cross examining the witness on all the available grounds. 8. However, in the instant case, Insurance Company was impleaded and accordingly, entered appearance and filed written statement and continued to contest the claim and defend it's stand, admittedly by cross examining the witness on all the available grounds. 8. Learned Counsel for the petitioner drawing attention of the Court to the cross examination of the claimant and its witnesses, has pointed out that the owner of the vehicle has declined to cross examine the witness of the claim on any of the points, which are essential for deciding the real question in controversy. Further, the Insurance Company has alleged that the owner by adducing his own testimony as witness has admitted all the claims of the petitioner. Apparently, it appears that not a single question has been put to the witness during the cross examination of the claimant's witnesses by the owner of the vehicle, i.e. defendant No. 2. 9. All the above factors satisfactorily conclude that the respondent No. 2, owner of the offending vehicle either failed to properly cross examine the claimant and thus failed to defend or has colluded with the claimant. Therefore, the prayer of the petitioner-Insurance Company, for allowing it to contest the claim on merit on all grounds available to the owner of the vehicle, as per the provisions of Section 170 of the M.V. Act, was just and reasonable. However, as it appears from the order passed by the learned Tribunal that when the prayer of the petitioner-Insurance Company was filed, it was rejected by the learned Tribunal in limine without having examined the grounds set up by the petitioner-Insurance Company, for invoking the provisions of Section 170 of the M.V. Act, 1988. Nevertheless, as it appears, the petitioner, Insurance Company was allowed to cross examine all the witness to its satisfaction covering all the areas of the claim case. 10. In this context, learned Counsel for the petitioner has referred to a Division Bench decision of this Court reported in National Insurance Company Ltd. v. Alila @ Nungsanglila Ao and Ors. 2005 (3) GLT 641. The Division Bench confronted with an identical situation like the present case, emphasized the need to accord permission to the Insurance Company under Section 170 of the M.V. Act in the following words: 8. 2005 (3) GLT 641. The Division Bench confronted with an identical situation like the present case, emphasized the need to accord permission to the Insurance Company under Section 170 of the M.V. Act in the following words: 8. Under Section 170 of the Act, power has been vested in a Claims Tribunal to allow an insurer to contest a claim on all or any of the grounds that are available to a person against whom the claim has been made in the event of either of the two contingencies, arising, as contemplated by Section 170 of the Act. Firstly, in a situation where there is a collusion between the party making a claim and the person against whom the claim is made and alternatively, in a situation, where the person against whom the claim is made has failed to contest the claim, leave may be granted to the insurer to contest the claim on merit. In either of the aforesaid situations the rights of the insurer to contest the claim, which is otherwise restricted by the provisions of Section 149(2) of the Act, could, for reasons to be recorded by the learned Tribunal, be enlarged to extent of any ground that may be available to a person against whom the claim has been made. The provisions contained in Section 149(2) of the Act limiting the right of an insurer to contest a claim made is based on public policy and the permissible departures, for which Section 170 of the Act has been enacted, is guided by the necessity by ensuring that in situations contemplated by Section 170 of the Act, the insurer should be allowed to contest a claim on merits. A clear legislative recognition that the Insurance Companies deal with public money and, therefore, should be permitted to contest a claim on merits in certain situations, as contemplated by Section 170 of the Act, is clearly discernible. The Tribunal in whom power has been vested by Section 170 of the Act, therefore, has a sacrosanct duty of exercise the power conferred after a full scrutiny to satisfy itself as regards to the existence of the contentions precedent contemplated by Section 170 of the Act. (emphasis supplied) 11. The Tribunal in whom power has been vested by Section 170 of the Act, therefore, has a sacrosanct duty of exercise the power conferred after a full scrutiny to satisfy itself as regards to the existence of the contentions precedent contemplated by Section 170 of the Act. (emphasis supplied) 11. As in the case of National Insurance Company Ltd. v. Alila, (supra), in the present case also, learned Court below granted implied permission under Section 170 of the M.V. Act to the Insurance Company, however, when a formal prayer was made under Section 170 of the M.V. Act, it was rejected. Thus, in the circumstances, the rejection of the prayer of the Insurance Company to contest the claim on merit is a jurisdictional error committed by the learned Court below. 12. In view of the above discussion, this Court is of considered view that it is a fit case in which the impugned order passed by the learned Court below is required to be interfered with in exercise of supervisory powers under Article 227 of the Constitution by permitting the Insurance Company to contest the claim on merit in terms of the provision of Section 170 of the M.V. Act. Consequently, as a corollary to the above decision, the impugned order dated 20.3.2007 passed by the learned Court below in MAC Case No. 45 of 2006 is hereby set aside. 13. In the result, this revision petition is allowed by setting aside the impugned order passed by the learned Tribunal. The learned Member, MACT, Dimapur, Nagaland is directed to pass necessary orders permitting the Insurance Company to contest the M.A.C. Case No. 45 of 2006 on all grounds available to owner of the offending vehicle in terms of the provision of Section 170 of the M.V. Act, 1988. However, it is' made clear that this MAC Case No. 45 of 2006 aforesaid, which is pending since 2006 should be heard and decided expeditiously. I pass no order as to costs.