M/s. National Insurance Company Ltd., vs Devaraju

Mrs. S. Sujatha, J.—This appeal is by the insurer challenging the impugned judgment and order passed by the Motor Accident Claims Tribunal (the "Tribunal" for short), Srirangapatna in MVC No. 288/2008.

Briefly stated the facts are:-

--that the 1st respondent filed the claim petition before the Tribunal seeking compensation for the accidental injuries sustained by him in the road traffic accident on 7.11.2007 owing to the actionable negligence of the driver of the motor cycle bearing No. KA-09-EJ-8628. The owner/insured, appeared through counsel and filed written statement contending that as on the date of the accident the motor cycle had valid insurance coverage, as such sought for dismissal of claim petition against 1st respondent. The appellant/insurer appeared and filed written statement denying the petition averments and resisted the claim and liability. The Tribunal on appreciating the evidence on record, allowed the claim petition in part awarding total compensation of Rs. 5,09,100/- and fastened the liability on the appellant-insurance company. Subsequently, the appellant-insurance company filed review petition, sought for setting-aside the judgment and award as the claimant had falsely implicated the insured vehicle in order to enrich unlawfully though, the insured vehicle was no way involved in the accident. It was contended that the claimant had played fraud in order to make unlawful gain. The said review petition was contested by the respondent. After hearing both the parties, the Tribunal dismissed the review petition. Being aggrieved by the judgment and award passed by the Tribunal, the appellant is before this Court.

The learned counsel appearing for the appellant vehemently contended that the Tribunal failed to look into the documents available on record wherein, it is apparent on the face of the record that there was delay of 53 days in lodging the complaint, the manner of the accident differed from the narration made in the complaint and the wound certificate. It can be inferred that the insured vehicle was implicated in the alleged accident by the claimant and the owner, hand-in-glove with the police to make unlawful gain. It is contended that the judgment and award dated 4-5-2009 passed by the Tribunal wrangled through fraud and misrepresentation and there was an error apparent on the face of the record which clearly called for rectification. The Tribunal lost sight off the factum of fraud played by the respondent, the delay in lodging the police complaint vis-a-vis the discrepancies found in the medical records. The vital aspects would have been noticed by the Tribunal while allowing the claim petition at the first instance and dismissing the review petition subsequently. No opportunity was provided to the appellant to tender evidence in the review petition. The documents produced such as the MLC register, copy obtained from K. R. Hospital, Mysore and the copy of the affidavit filed by one Mr. Kumar clearly establishes about the discrepancies and contra-directions demonstrating the fraud played by the claimant and the owner to make unlawful monetary gain which necessarily warrants interference at the hands of this Court. In support of her contentions, the learned counsel placed reliance on the following judgments:

S.P. Chengalvaraya Naidu (Dead) by LRs. v. Jagannath (Dead) by LRs. and others, 1994 (1) SCC 1 : (AIR 1994 SC 853).

Veerappa and another v. Siddappa and another, ILR 2009 Kar 3562.

Bajaj Allianz General Insurance Company Limited v. B.C. Kumar and another, ILR 2009 Kar 2921 : (2009 (6) AIR Kant HCR 349).

United India Insurance Co. Ltd. v. Kulasori Mirdha and others, 2016 (2) ACJ 1210 : (2015 AAC 2788 (Gau)).

United India Insurance Co. Ltd. v. Rajendra Singh and others, ILR 2000 Kar 1929 : (AIR 2000 SC 1165).

Placing reliance on these judgments, the learned counsel elaborated her arguments inviting the attention of the Court to the alleged fraud said to have been committed by the claimant. It was contended that the case sheet marked as Ex.P.68 read with the information discovered subsequent to the disposal of the claim petition i.e. certified copy of the MLC register obtained from K.R. Hospital, Mysore and certified copy of the affidavit filed by one Mr. Kumar before the RMO of K.R. Hospital Mysore would indicate the cause of the injuries sustained by the claimant at the initial stage of the admission to the hospital was self-fall from the bicycle, the same came to be manipulated implicating the vehicle Hero-Honda No. KA-1 l/R-7609 alleging the negligence of the driver of the said vehicle for the accident. However, it was contended in the complaint that the accident occurred while the injured was walking on the side of the road, hit by motorcycle bearing No. KA-09-EG-8628. The Tribunal without appreciating this vital evidence available on record, allowed the claim petition in part awarding compensation and dismissed the review petition without any valid reasons which is unsustainable and deserves to be set-aside. Accordingly, the learned counsel seeks to allow the appeal and to set-aside the impugned judgment and order of the Tribunal dismissing the claim petition or in the alternative to remand the matter back to the Tribunal to provide an opportunity to the appellant to substantiate the fraud said to have been committed by the respondents 1 and 2.

Per contra, learned counsel appearing for the respondent No. 2 supporting the impugned judgment and order would contend that the detailed statement of objections were filed by the appellant to the claim made by the claimant. No ground of fraud was taken as defence in the statement of objections. The claimant had led evidence and marked documents at Exhibits PI to P72. The doctor who had treated the claimant was examined as PW.2. In his evidence, Exhibits P67 to P72 were marked. Exhibit P68 is the case sheet. Page 13 of the said case sheet reveals history of self fall from height. This exhibit was produced by the claimant. Subsequently, the doctor had adduced evidence in support of the claim made by the claimant. No facts or documents were suppressed by the claimant as alleged by the appellant. The offending vehicle was very well involved in the accident. No connivance is made by the claimant with the owner of the offending vehicle and the police authorities a alleged. Indeed, even in the affidavit accompanying the application filed by the appellant before the Tribunal, the appellant was not firm in its allegation of fraud. To substantiate the same, learned counsel invited my attention to one paragraph of the affidavit accompanying the application filed under Section 151 of CPC read with Section 169 of the Motor Vehicles Act before the Tribunal in the review petition. The said paragraph reads thus:

"I submit that the petitioner might have fell down from the bicycle/house top and might have sustained injuries on his own fault. Though the Hero Honda Motor Cycle has not dashed to the petitioner the said Motorcycle bearing No. KA-09-EJ-8628 was fixed in the above case and a false case has been registered against the driver of the Motorcycle bearing No. KA-09-EJ-8628 with an intention to make unlawful gain and compensation from this respondent. The above said contradictions and discrepancies came to my knowledge only after detailed investigation made by our Company Investigator."

The review petition filed by the appellant was contested by the claimant. It was contended that no new discovery was made by the appellant to file a review petition on new material which was not within the knowledge of the appellant during the pendency of the proceedings before the Tribunal. The appellant was very much aware of Exhibit P68, in the absence of any evidence led by the appellant to dispute the involvement of the offending vehicle in the accident and no positive material being elicited from the doctor PW.2, to suspect the veracity of Exhibit P68, the appellant is acquiesced from raising new allegations against the claimant, of committing fraud to extract the accidental claim. The delay of 53 days in filing the complaint was also satisfactorily explained. The appellant keeping silent in the proceedings of the claim petition cannot come out with the allegations of fraud not supported by any material evidence. The documents on record clearly established the involvement of the offending vehicle in the accident. Considering these vital aspects, the Tribunal awarded the total compensation of Rs. 5,09,100/- dismissing the review petition which cannot be found fault with. Accordingly, he seeks for dismissal of the appeal.

Respondent No. 1 though duly served, remained absent.

Heard the rival submissions of the parties and perused the material on record.

It is discerned from the records that the Insurer resisted the claim of the claimant by filing objections/statement to the claim petition. Though the claimant has examined two witnesses PW. 1 and PW. 2, the insurer had not led any evidence. It is trite that fraud vitiates the proceedings. Fraud means non-disclosure of relevant and material information/manipulation of documents with a view to obtain an advantage.

Now, the short question before this court would be whether in the facts and circumstances of this case, the claimant Devaraju obtained the judgment and Award by playing fraud on the Tribunal.

The entire arguments of the learned counsel for the appellant revolves around Exhibit. P68 which is contended to be the source of further investigation made by the insurer to ascertain the truth. It is argued that the investigation report establishes the act of fraud played by the claimant to make unlawful gain. The Apex Court in the case of S.P. Chengalvaraya Naidu [supra] while considering the factum of fraud vis-a-vis the principle of finality of litigation in the background of the case of non-production and even not mentioning of the release deed at the trial, held that a fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a cheating intended to get an advantage. A litigant who approaches the court is bound to produce all the documents executed by him which are relevant to the litigation. If he withholds a vital document, in order to gain advantage on the other side then he would be guilty of playing fraud on the court as well as on the opposite party. In the case of Veerappa (supra), the Division Bench of this Court was considering a case wherein, the claim petition filed by the claimant was dismissed by the Tribunal. In the said case, the Insurance Company had appointed an Investigator to investigate the incident. He had submitted his report marked as Exhibit R1. No doubt on the direction issued by the jurisdictional Magistrate a case was registered and charge-sheet filed after conducting spot mahazar, on a careful appreciation of the entire documentary evidence, the Tribunal held that the admission of the offending vehicle involved in the accident was made by the owner with the sole object of getting compensation to the claimants as it is the insurance company which will pay and not the owner.

It is held thus:

"15. Fraus et. jus munquam cohabitant. Fraud and Justice never dwell together, is a pristine maxim which has never lost its temper over all these centuries. Fraud avoids all judicial acts, ecclesiastical or temporal. A judgment or decree obtained by playing fraud on the Courts is a nullity and non est in the eyes of law. Since fraud affects the solemnity, regularity and orderliness of the proceedings of the Court and also amounts to an abuse of the process of Court, the Courts have been held to have inherent power to set aside an order obtained by fraud practised upon that Court. Similarly, where the Court is misled by a party or the Court itself commits a mistake which prejudices a party, the Court has the inherent power to recall its order."

In Bajaj Allianz General Insurance Company Limited, case (2009 (6) AIR Kant HCR 349) (supra), this Court was examining the veracity of the defects pointed out by the Tribunal, inasmuch as, the history of the accident as given by the claimant himself.

In that context, the Court held thus:

The M.A.C.Ts. are constituted not only to allow the claim petitions which are genuine in nature but, at the same time, the Tribunals also will have to keep in view that compensation should not be awarded mechanically in every case and to accept the case of the claimant as if all that the claimant says about the accident and the injuries is a truthful one. On the other hand, there is a great responsibility on the part of the claims Tribunal to ensure that no false claims are allowed by it and it is in this context that the Claims Tribunals are required to examine the evidence before it very carefully. Merely because a claimant in a particular case comes out with the evidence that the driver of the vehicle is convicted on his pleading guilty, the Tribunal should not go by the plead guilty factor alone, but it is required to appreciate the evidence before it from every angle and if there is a good reason to question the very case of the claimant or doubt the very manner of the accident, in such cases, the Tribunal will have to view the factor of pleading guilty along with the entire evidence placed before it and make an assessment of the whole situation.

In the case of Rajendra Singh (AIR 2000 SC 1165) (supra), the Award passed by the Tribunal had become final as neither the owner of the motor vehicle nor the insurance company filed the appeal thereon. It transpires that four months after passing of the Award, a gentleman visited the Divisional Office of the Insurance Company at Ghaziabad and delivered the photocopy of a report prepared by the Assistant Sub-Inspector of Police, Sabzimandi, Police Station, Delhi, which contained a narration that the claimants received the injuries in a different circumstance at a different place altogether. The gentleman who delivered the said report to the company was prepared to disclose further details provided that his identity would be kept in anonymity. On receipt of the said information, the insurance company made enquiries. On enquiry, it came to the knowledge of the insurance company that the injuries sustained by the claimants had happened when the trailor trolley had slipped into the pit. In such circumstances, the Apex Court held that it is unrealistic to expect the insurance company to resist the claim at the first instance on the basis of the fraud because the appellant-company had at that stage no knowledge about the fraud allegedly played by the claimants. The remedy to move for recalling the order on the basis of the newly discovered facts amounting to fraud of high degree cannot be foreclosed. No court or tribunal can be regarded as powerless to recall its own order if it is convinced that the order was wrangled through fraud or misrepresentation of such dimension as would affect their basis of the claim.

In the light of the above settled legal principles set out by the Hon''ble Apex Court and this Court, the case on hand is examined. It is apparent that there was delay of 53 days in filing the complaint. It is pertinent to note that after passing of the judgment/Award, the Insurance Company filed a review petition to review the judgment/Award passed by the Tribunal based on the investigation report alleging fraud committed by the claimant in obtaining the judgment and award, the Tribunal dismissed the review petition as not maintainable.

It may be true that the appellant had no knowledge about the fraud allegedly played by the claimants at the time of filing the statement of objections, on investigation, if fraud played by the claimant is noticed and such plea is made, the doors of the Court cannot be closed to probe the allegations of fraud complained.

However, it is settled principles of law that fraud and justice cannot dwell together, Any order wrangled through fraud or misrepresentation deserves to be set-aside as fraud vitiates all the proceedings.

It is very well established principle that every trial is a voyage of discovery in which truth is the quest. At this juncture, it is beneficial to refer to the judgment of the Apex Court in the case of Rajendra Singh (AIR 2000 SC 1165) (supra):

The allegation made by the appellant Insurance Company, that claimants were not involved in the accident which they described in the claim petitions, cannot be brushed aside without further probe in the matter, for, the said allegation has not been specifically denied by the claimants when they were called upon to file objections to the applications for recalling of the awards. Claimants then confined their resistance to the plea that the application for recall is not legally maintainable. Therefore, we strongly feel that the claim must be allowed to be resisted, on the ground of fraud now alleged by the Insurance Company. If we fail to afford to the Insurance Company an opportunity to substantiate then contentions it might certainly lead to serious miscarriage of justice.

In the light of the judgment of the Apex Court in Rajendra Singh (supra), to meet the ends of justice, further probe into the matter would be necessary since the allegation of the insurer was of specifically denied by the claimant in the review proceedings. Claimant has confined the resistance that the application for recalling the order was not maintainable.

The appellant-insurance company dealing with the public money must be more scrupuious while conducting the case. Want of promptitude on the part of the appellant had caused multiplicity of proceedings involving much of the public time.

However, for the reasons aforesaid, the opportunity may be provided to the insurer to substantiate their contentions subject to imposing exemplary costs. Compensatory costs is determined at Rs. 10,000/-.

In the result, appeal is allowed with costs of Rs. 10,000/- liable to be paid to the respondents. The impugned judgment and award passed by the Tribunal are set aside. The matter is remitted back to the Tribunal to consider the matter afresh after affording reasonable opportunity of hearing to the parties. The Tribunal shall pass appropriate orders in accordance with law, not being influenced by any of the observations made in the course of the order herein above, on the merits or demerits of the allegations complained. All contentions are left open to be urged by the parties.

Amount in deposit, if any, shall be transferred to the jurisdictional Tribunal and shall be deposited in a fixed deposit in any Nationalized Bank l or a period of one year.