National Insurance Company Ltd. vs Smt. Neetu and Others

Rajeev Gupta, C.J.

Learned Counsel for the appellant is heard on LA. No. 1 (application for condonation of delay in filing the appeal).

On due consideration of the submissions of learned Counsel for the appellant, we are satisfied that the appellant has succeeded in showing sufficient cause for the delay in filing the appeal.

Therefore, I.A. No. 1 is allowed and the delay in filing the appeal is hereby condoned.

Learned Counsel for the appellant is heard on admission.

This is insurer''s appeal against the award dated 11-5-2007, passed by the Additional Motor Accidents Claims Tribunal, Mungeli, District Bilaspur (for short "the Tribunal") in Claim Case No. 80/2006.

As against the compensation of Rs. 30,35,000/- claimed by the claimants, unfortunate widow and children of deceased Umashankar Dubey, for his death in the motor accident on 19-7-2006 when the bus bearing registration number CG07-ZA-0395, in which he was travelling met with an accident due to the rash and negligent driving of its driver, the Tribunal awarded a compensation of Rs. 5,48,750/- with interest @ 7.5% per annum from the date of filing of the claim petition till the date of actual payment.

Admittedly, permission u/s 170 of the Motor Vehicles Act, 1988 (for short "the Act") to contest the claim on all available defences was not granted to the appellant Insurance Company. In the absence of permission u/s 170 of the Act, it is not permissible for the insurer of the vehicle to challenge the quantum of compensation in view of the dictum of the Apex Court in the case of National Insurance Co. Ltd. v. Nicolletta Rohtagi and Ors. reported in 2003(3) T.A.C. 293 (SC), wherein it was categorically held in Paras 31 and 32 as under:

We have already held that unless the conditions precedent specified in Section 170 of 1988 Act is 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 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 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 reasons, our answer to the question is that even if no appeal is preferred u/s 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.

Shri Dashrath Gupta, learned Counsel for the appellant submitted that the appellant-Insurance Company had in fact filed an application u/s 170 of the Act for grant of permission to contest the claim on all available defences, but the Tribunal did not pass any order on the said application and the final award was passed against the appellant-Insurance Company.

In the present case as the claimants'' claim was contested by the owner of the offending vehicle bus, inasmuch as he even disputed the involvement of his bus in the accident, the application filed by the appellant-Insurance Company u/s 170 of the Act could not have been allowed by the Tribunal and the permission could not have been granted to the appellant-Insurance Company to contest the claim on all available defences, as it is the condition precedent before granting permission u/s 170 of the Act for the Tribunal to record a finding that the owner of the vehicle either was not contesting the claim or was in collusion with the claimants. As the owner of the vehicle vehemently contested the claim, the Tribunal could not have recorded a finding that the owner of the vehicle either was not contesting the claim or was in collusion with the claimants.

Seen from any angle, appellant-Insurance Company cannot be permitted to challenge the quantum of compensation awarded by the Tribunal in this appeal. That apart, we are satisfied that the compensation of Rs. 5,48,750/- awarded by the Tribunal to the claimants for the death of Umashankar Dubey, who was the owner of a bakery is just and proper compensation in the facts and circumstances of the present case.

The appeal filed by the appellant-Insurance Company, therefore, is liable to be dismissed and is hereby dismissed summarily.