National Insurance Co. Ltd. vs Deepak Desh Pandey and Others

Sunil Kumar Sinha, J.—Being aggrieved with award dated 20-1-2000 passed in Claim Case No. 13/1998 by the Member, Motor Accidents Claims Tribunal, Jashpur, the Insurance Company has filed this appeal. The facts, briefly stated, are as under:--

Respondent No. 1/claimant filed a Claim Petition u/s 166 of the Motor Vehicles Act claiming compensation of Rs. 62,79,290/- on account of personal injuries and permanent disability suffered by him in the motor accident which took place on 24-12-97, when Jeep No. MP 26-C/5370, of which the injured was an occupant, met with an accident on account of rash and negligent driving of the said jeep by its driver.

The Tribunal recorded the finding that the accident occurred on account of rash and negligent driving of the offending jeep by its driver and the respondent/claimant was entitled to receive compensation of Rs. 5,75,000/-. The Tribunal also awarded interest at the rate of 12% per annum from the date of filing of the Claim Petition till realization. The Tribunal held that the owner, driver & insurer were jointly and severally liable to pay the aforesaid compensation to the claimant.

Though a written statement was filed by the Insurance Company but the Insurance Company did not file any application for grant of permission u/s 170 of the Motor Vehicles Act to contest the claim on all possible grounds. In fact, no permission u/s 170 was granted in favour of the Insurance Company.

Mr. B.N. Nande, learned Counsel appearing on behalf of the appellant/ Insurance Company, very fairly submitted that though a premium of Rs. 500/- was paid for covering the risk of occupants of the vehicle and the liability was limited, but he is not pressing this ground on account of recent circular dated 16th of November, 2009 issued by the Insurance Regulatory and Development Authority (IRDA) which reads as follows :--

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

Ref.: IRDA/NL/CIR/F & U/073/11/2009

November 16, 2009

To,

CEOs of all General Insurance Companies

Re.: Liability of Insurance Companies in respect of Occupant of a Private Car and Pillion Rider in a Two-Wheeler under Standard Motor Package Policy (also called Comprehensive Policy)

Insurers'' attention is drawn to wordings of Section (II)(1)(i) of Standard Motor Package Policy (also called Comprehensive Policy) for Private Car and Two-Wheel under the (erstwhile) India Motor Tariff. For convenience the relevant provisions are reproduced hereunder:--

Section II -- Liability to Third Parties

Subject to the limits of liability as laid down in the Schedule hereto the Company will indemnify the insured in the event of an accident caused by or arising out of the use of the insured vehicle against all sums which the insured shall become legally liable to pay in respect of--

(i) death or bodily injury to any person including occupants carried in the vehicle (provided such occupants are not carried for hire or reward) but except so far as it is necessary to meet the requirements of Motor Vehicles Act, the Company shall not be liable where such death or injury arises out of and in the course of employment of such persons by the insured

It is further brought to the attention of insurers that the above provisions are in line with the following circulars earlier issued by the Tariff Advisory Committee on the subject:--

(i) Circular M.V. No. 1 of 1978, dated 18th March, 1978 (regarding occupants carried in Private Car) effective from 25th March, 1977.

(ii) MOT/GEN/10, dated 2nd June, 1986 (regarding Pillion Riders in a Two-Wheeler) effective from the date of the circular.

The above circulars make it clear that the Insured''s liability in respect of Occupant (s) carried in a Private Car and Pillion Rider carried on Two Wheeler is covered under the Standard Motor Package Policy. A copy each of the above circulars is enclosed for ready reference.

The Authority vide circular No. 066/IRDA/F & U/Mar-08, dated March 26, 2008 issued under File & Use Guidelines has reiterated that pending further orders the insurers shall not vary the coverage, terms and conditions, wordings, warranties, clauses and endorsements in respect of covers that were under the erstwhile tariffs. Further the Authority, vide circular No. 019/IRDA/NL/F & U/Oct-08, dated November 6, 2008 has mandated that insurers are not permitted to abridge the scope of standard covers available under the erstwhile tariffs beyond the options permitted in the erstwhile tariffs beyond the options permitted in the erstwhile tariffs.

All General Insurers are advised to adhere to the aforementioned circulars and any non-compliance of the same would be viewed seriously by the Authority.

This is issued with the approval of Competent Authority.

Executive Director.

Admittedly, the policy of the vehicle was a package policy (comprehensive policy) and the injured was the occupant of the vehicle. Therefore, in light of the contents of the above circular now this ground is not available to the appellant/Insurance Company.

Mr. B.N. Nande then argued that looking to the nature of injuries sustained by respondent No. 1, the quantum of compensation is very high, therefore, it may be suitably reduced. In National Insurance Co. Ltd., Chandigarh Vs. Nicolletta Rohtagi and Others, , the Supreme Court held vide Paras 31 and 32 as follows :--

We have already held that unless the conditions precedent specified in Section 170 of the 1988 Act are satisfied, an Insurance Company has no right of appeal to challenge the award on merits. However, in a situation where there is a collusion between the claimants and the insured or the insured does not contest the claim and, further, the Tribunal does not implead the Insurance Company to contest the claim, in such cases it is open to an insurer to seek permission of the Tribunal to contest the claim on the ground available to the insured or to a person against whom a claim has been made. If permission is granted and the insurer is allowed to contest the claim on merits, in that case it is open to the insurer to file an appeal against an award on merits, if aggrieved. In any case where 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-section (2) of section 149 of the 1988 Act. But such application for permission has to be bonafide 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 re 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 u/s 173 of the 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.

Admittedly, the appellant/Insurance Company was not granted permission u/s 170 of the Motor Vehicles Act. Therefore, in view of the above judgment, the appellant/Insurance Company cannot challenge the quantum of compensation.

Though a ground of contributory negligence has been taken as ground No. D in memo of appeal filed by the Insurance Company and it has been pleaded that "the amount of liability to the extent of claimant''s negligence ought to have been reduced" by the Tribunal, but we do not find present to be a case of contributory negligence. Respondent/claimant was simply an occupant of the vehicle and the vehicle and the vehicle was being driven by respondent No. 3, therefore, there is not question of contribution in the accident by respondent/ claimant. The ground taken by the Insurance Company appears to be misconceived. Moreover, as we have already stated that no permission u/s 170 of the Motor Vehicles Act was granted to the Insurance Company, therefore, principally, even in a case based on contributory negligence and a finding recorded against it, this ground would not have been available to the Insurance Company in an appeal questioning the findings as regard of negligence or contributory negligence of the offending vehicle.

No other ground was pressed before us by the Counsel for the Insurance Company.

For the foregoing reasons, we do not find any substance in the appeal. The appeal filed by the Insurance Company, therefore, is liable to be dismissed and is hereby dismissed. There shall be no order as to costs.