Oriental Insurance Co. Ltd. vs Sh. Jeebach Sharma and Others

Kailash Gambhir, J.—The appellant, Oriental Insurance Co. Ltd., insurer of the offending vehicle has preferred an appeal challenging the impugned order dated 10.8.2004 passed by the learned MACT.

The impugned award has arisen out of the claim petition filed by respondent No. 1 against the appellant as well as against respondent Nos. 2 to 4 claiming compensation for the death of Shri Vijay Kumar Sharma.

The brief facts which are necessary for deciding the present appeal inter alia are that on 13.12.2001 at about 9:30 A.M. the deceased Vijay Kumar Sharma was going on his bicycle from Karkardoome village to Indraprastha Institute and when he reached near Indraprastha Engineering College, Link Road, Sahibabad, Dist. Ghaziabad, U.P. one TATA 407 No. UP-14E-1086, driven by the driver rashly and negligently came from opposite side and hit the cycle of the deceased. Due to the impact the victim received injuries and was taken to Narender Mohan Hospital for treatment, where he died on the very next day.

The Tribunal after taking into consideration the facts of the case as well as evidence led by the parties had passed an award in the sum of Rs. 5,11,167/- along with interest at the rate of 7% per annum payable from the date of the institution of the petition till the date of realisation. The said order passed by the Tribunal is now under challenge in the present appeal.

I have heard learned Counsel for the parties at considerable length.

Counsel appearing for the respondent has taken a preliminary objection to the very maintainability of the present appeal on the ground that the appellant cannot assail the findings of the Tribunal on the quantum of compensation as determined by the Tribunal. Counsel contends that the appellant did not take over the defence of the owner and driver as envisaged u/s 170 of the Motor Vehicles Act and, therefore, is debarred from challenging the impugned award so as to assail the findings of the Tribunal on the quantum of compensation.

The contention of counsel for the respondent is that right to file an appeal is a statutory right and the insurer can assail the findings of the Tribunal u/s 149(2) of the Motor Vehicles Act only if application is made before the tribunal for taking over the defence of the driver and the owner. Counsel further contends that it is only in a case where there is collusion between the claimants and the insured, the insurer can move the Tribunal to take over the defence of the owner or driver as the case may be as envisaged u/s 170 of the Motor Vehicles Act. Neither any such application was made nor permission was granted to the appellant u/s 170 of the Motor Vehicles Act by the Tribunal and, therefore, in the absence of the same, the appellant being the insurer of the offending vehicle cannot maintain the present appeal on grounds other than those available to it u/s 149(2) of the Motor Vehicles Act.

Mr. L.K. Tyagi, counsel for the appellant vehemently disputes this position and contends that the insurer cannot be rendered remedlyless especially in a case where the Tribunal has awarded an excessive amount of compensation in favour of the claimants ignoring all basic principles of law for the award of compensation. Counsel for the appellant has also placed reliance on the judgment of the Supreme Court reported in New India Assurance Company Ltd. Vs. Smt. Shanti Pathak and Others, . to contend that the Apex Court had interfered to lower down the compensation amount even in a case where the insurer had not taken any permission from the Court u/s 170 of the Motor Vehicles Act.

The counsel for the appellant also drew my attention to the order dated 03/12/2007 of the Hon''ble Apex Court in United India Insurance Co. Ltd. v. Shila Datta and Ors. in SLP (Civil) Nos. 17301-17302/2007 to contend that the Hon''ble Supreme Court has already referred the said issue of lack of competence of the insurer to assail the findings of the Tribunal on the ground of quantum of compensation and negligence to a larger Bench and, therefore, this Court may await the decision of the Supreme Court in this regard.

Motor vehicle accident claim is a tortious claim directed against tortfeasors who are the insured/owner and the driver of the vehicle. The insurer comes in to the picture as a result of the statutory liability created under the Motor Vehicles Act. The legislature intended and has ensured by enacting Section 149 of the Act that the victims of motor vehicle are fully compensated and protected. It is for that reason the insurer cannot escape its liability to pay compensation on any exclusionary clause in the insurance policy except those specified in Section 149(2) of the Act or where the condition enshrined in Section 170 is satisfied.

Right of appeal is a creature of statute. The Parliament, while enacting Sub-section (2) of Section 149 only specified some of the defences which are based on conditions of the policy and, therefore, any other breach of conditions of the policy by the insured which does not fall under Sub-section (2) of Section 149 cannot be taken as a defence by the insurer. Had it been the intention of the Parliament to include the breach of other conditions of the policy as a defence, it could have easily provided for ''any breach of conditions of insurance policy'' in Sub-section (2) of Section 149. But it is not the case, since the legislator has enumerated specifically the grounds of defences available to the insurer. If the insurer is permitted to take any 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.

After having given my thoughtful and conscious consideration to the issue involved in the present case, I am of the view that the issue is no more res integra as in catena of judgments including National Insurance Co. Ltd., Chandigarh Vs. Nicolletta Rohtagi and Others, ; National Insurance Co. Ltd. Vs. Mastan and Another, etc., the Hon''ble Supreme Court has authoritatively held that in the absence of permission sought from the Court as envisaged u/s 170 of the Motor Vehicles Act, the insurer has no right to file an appeal to challenge the quantum of compensation or finding of the Tribunal as regards the negligence or contributory negligence of offending vehicles is concerned. No such permission was sought by the appellant u/s 170 of the Motor Vehicles Act by the Tribunal and, therefore, in the absence of the same, the appellant being the insurer of the offending vehicle cannot maintain the present appeal on grounds other than those available to it u/s 149(2) of the Motor Vehicles Act.

It would be appropriate to refer Section 170 of the Motor Vehicles Act as under:

Impleading insurer in certain cases- Where in the course of any inquiry the Claims Tribunal is satisfied that:

(a) there is collusion between the person making the claim and the person against whom the claim is made, or

(b) the person against whom the claim is made has failed to contest the claim,

It may, 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, without prejudice to the provisions contained in Sub-section (2) of Section 149, the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made.

Admittedly, no such permission u/s 170 of the Motor Vehicles Act was sought by the appellant, which clearly means that the procedure laid down u/s 170 of the Motor Vehicles Act was not followed. In the judgment of the Supreme Court reported in Shankarayya and Another Vs. United India Insurance Co. Ltd. and Another, the Supreme Court has held that the insurance company when impleaded as a party by the Court can be permitted to contest the proceedings on merits only if the conditions mentioned in Section 170 are found to be satisfied and for that purpose the insurance company has to obtain an order in writing from the Tribunal and such an order should be a reasoned order of the Tribunal. In such circumstances unless the said procedure is followed, the appellant insurer cannot have a wider defence on merits than what is available to it by way of a statutory defence. Ralevant part of Para 4 of the said judgment in this regard is referred as under:

It clearly shows that the Insurance Company when impleaded as a party by the Court can be permitted to contest the proceedings on merits only if the conditions precedent mentioned in the section are found to be satisfied and for that purpose the Insurance Company has to obtain order in writing from the Tribunal and which should be a reasoned order by the Tribunal. Unless that procedure is followed, the Insurance Company cannot have a wider defence on merits than what is available to it by way of statutory defence.

In view of the said legal position, I cannot appreciate the argument of counsel for the appellant that even without seeking permission of the Court as required u/s 170, the Appellant can proceed with the appeal. Once the application u/s 170 of the Motor Vehicles Act was preferred by the appellant before the Tribunal for taking over the defence of an owner or driver, the Tribunal is required to pass specific order and that too a reasoned order as per the observations of the Supreme Court referred above and, therefore, in the instant matter the argument of counsel for the appellant cannot be appreciated that non-filing of an application u/s 170 of the Motor Vehicles Act by the appellant in this regard is no bar in preferring present appeal.

In the light of the above discussion, I do not find any merit in the submission of counsel for the appellant. In the judgment cited by the counsel in Shanti Pathak''s case (supra) the Hon''ble Apex Court has not dealt with the said legal proposition and, therefore, the same is not applicable in the facts and circumstances of the present case.

There is no merit in the appeal and the same is dismissed.

At this stage counsel for the appellant states that entire award amount was deposited by the appellant in terms of the award dated 8.10.2004 and order dated 5.10.2006. On the other hand counsel for the respondent states that the respondent has not received any amount till date. Vide order dated 5.10.2006, directions were given for the release of amount of Rs. 1,75,000/-, out of which 50% of the said amount was directed to be paid and rest of the amount was directed to be kept in monthly income scheme or FDR at the option of the respondent/claimant. The remaining amount was also directed to be kept in FDR. Since counsel for the respondent states that no such amount was received by the respondent as he was not aware of the directions given by this Court vide order dated 5.10.2006, let entire award amount as lying deposited in this Court be released in favour of the respondent claimant along with up-to-date interest accrued thereon.

With these directions, the present appeal is dismissed.