TMI Blog2002 (9) TMI 855X X X X Extracts X X X X X X X X Extracts X X X X ..... on 29.5.1993. He preferred a claim petition before the Tribunal and the Tribunal granted a compensation to the tune of Rs. l ,50,415/ against the insurer and the insured jointly. The insurer was directed to deposit the decretal amount. The insured did not file any appeal. On appeal being filed by the insurer, the High Court reduced the compensation to ₹ 84,375/-. In this appeal, the appellant questioned the maintainability of the appeal preferred by the insurer. In Civil Appeal No. 4292/2002, an accident took place on 8.8.1995 in which one Anil Kishore Roghtagi died. The dependants of the deceased filed a claim petition before the Tribunal and the Tribunal awarded compensation to the tune of ₹ 13,13,150/- with @ 20% p.a. The appeal preferred against the said award before the High Court by the insurer was dismissed on the ground that no appeal at the instance of the insurer is maintainable as regards quantum of compensation. It is against the said judgment of the High Court, the insurer has preferred this appeal. When this matter came up for hearing before a Bench of this Court, Learned Judges were of the view that since two Benches of this Court comprising of two le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orkmen'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 (b) if it is a public service vehicle engaged as conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods carriage, being carried in the vehicle or (ii) to cover any contractual liability. (2) Subject to the proviso to sub-section (1), a policy of insurance referred to in sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely :- (a) save as provided in clause (b), the amount of liability incurred; (b) in respect of damage to any property of a third party, a limit of rupees six thousand. 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. (3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:- (a) that there has been a breach of a specified condition of the policy, being one of the following conditions namely:- (i) a condition excluding the use of the vehicle (a )for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or (b) for organised racing and speed testing, or (c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or (d) without side-car being attached where the vehicle is a motor cycle; or (ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person. (6) In this section the expression material fact and material particular means, respectively a fact or particular of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk and, if so, at what premium and on what conditions, and the expression liability covered by the terms of the policy means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy. (7) 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 or award as is referred to in sub-section (1) or in such judgment as is referred to in sub-section (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be. 170. Impleading insurer in certain cases. Where in the course of any inq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 Act and the same provides that the insurance company cannot avoid the liability to any person entitled to benefit of any judgment or award referred to in sub-section (1) except in the manner provided in sub-section (2) of the Act. Chapter VIII of 1939 Act and Chapter XI of 1988 Act have been enacted on pattern of several English statutes which is evident from the report 'Motor Vehicles Insurance Committee 1936-37'. In order to find out the real intention for enacting Section 96 of 1939 Act which corresponds to Section 149 of 1988 Act, it is relevant to trace the historical development of the law for compulsory third party insurance in England. Prior to 1930, there was no law of compulsory insurance in respect of third party rights in England. As and when an accident took place the injured (claimant) used to bring action against the motorist for recovery of damages. But in many cases it was found the owner of the offending vehicle had no means to pay to the injured or dependant of the deceased and in such a situation the claimants were unable to recover damages. It is under such circumstances various legislations were enacted. To meet the situation, it is for the first tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for interpreting Sections 149, 170 and 173 of 1988 Act, but only for showing that while enacting Chapter VIII of 1939 Act or Chapter XI of 1988 Act, the intention of legislature was to protect third party rights and not the insurer. To answer the question, it is necessary to find out on what grounds the insurer is entitled to defend/contest against a claim by an injured or dependants of the victims of motor vehicle accident. Under Section 96(2) of 1939 Act which corresponds to Section 149(2) of 1988 Act, an insurance company has no right to be a party to an action by the injured person or dependants of 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 sub-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 be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other defence other than those specified in sub-section (2) of Section 149, it would mean we are adding more defences to insurer in the statute which is neither found in the Act nor was intended to be included. 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 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. Before proceeding further, it may be noticed that while 'The Motor Vehicles Act, 1939' was in force, Section 110-C (2A) was inserted therein in the year 1970 which corresponds to Section 170 of the 1988 Act. The said provision provides that in course of an inquiry of a claim if the Tribunal is satisfied that there is a collusion between the claimant and the insured or the insured fails to contest the claim, the Tribunal 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, wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a joint appeal by the insurer and the owner of an offending vehicle, if an award has been made against the tortfeasors as well as the insurer, even though an appeal filed by the insurer is not competent, it may not be dismissed as such. The tortfeasor can proceed with the appeal after the cause title is suitably amended by deleting the name of the insurer. In the said case, it also held thus: The ground on which the insurer can defend the action commenced against the tortfeasors are limited and unless one or mare 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 the 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 sub-section (2) of Section 96 or in the situation envisaged by sub-section 2(A) of Section 110-C of the Act, In Chinnama George and Ors. v. N.K. Raju and Anr., [2000] 4 SCC 130, it was held that if none of the conditions as contained in sub-section (2) of Section 149 exists for the insurer to avoid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 170 is satisfied.. 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 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 Ors. [1987] 2 SCC 654, it was observed thus: In other words, the legislature has insisted and make i t 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 promise. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re an application for permission is erroneously rejected the insurer can challenge only that part of the order while filing appeal on grounds specified in sub-sections (2) of Section 149 of 1988 Act. But such application for permission has to be bona fide and filed at the stage when the insured is required to lead his evidence. So far as obtaining compensation by fraud by the claimant is concerned, it is no longer res integra that fraud vitiates the entire proceeding and in such cases it is open to an insurer to apply to the Tribunal for rectification of award. 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. For the aforesaid reasons, the order and judgment under challenge in Civil Appeal No. 5911/2002 @ S.L.P. (Civil) No. 9238/2000 is set aside and appeal is allowed. Civil Appeal No. 4292/2002, Civil Appeal No.5913/2002 @ S.L.P. (Civil) No.10616/2001 and Civil Appeal N ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
