Oriental Insurance Company Ltd. vs Ramswaroop and Others

Rajeev Gupta, C.J.—By allowing I.A. No. 02/2009, the documents filed along with this application are taken on record.

As the Appellant/Insurance Company admittedly was not granted permission u/s 170 of the Motor Vehicles Act (for short ''the Act''), I.A. No. 03/2009 is allowed and the Appellant/insurance Company is granted exemption from filing certified copy of the order passed by the Tribunal on the application filed u/s 170 of the Act.

Shri Sudhir Agrawal, learned Counsel for the Appellant is heard on admission.

This is insurer''s appeal against the impugned award dated 06-02-2009. passed by 11th Additional Motor Accidents Claims Tribunal, Raipur (for short ''the Tribunal''), passed in Claim Case No. 09/2009.

As against the compensation of Rs. 21,50,000/- claimed by Respondents No. 1 and 2, the unfortunate parents of deceased Bhagwat Sen by filing a claim petition u/s 166 of the Act for his death in the motor accident on 30.03.2008, the Tribunal awarded a total sum of Rs. 3,89,400/- as compensation along with interest @ 6% per annum from the date of filing of the claim petition till the date of actual payment.

Shri Sudhir Agrawal, learned Counsel for the Appellant vehemently argued that the Tribunal has erred in awarding excessive amount of Rs. 3,89,400/- as compensation to the claimants; in holding that the driver of the offending vehicle Metador alone was responsible for the accident, whereas in fact it was a case of contributory negligence; though the Appellant/Insurance Company had in fact filed an application for grant of permission u/s 170 of the Act before the Tribunal, the Tribunal without passing any order on the said application passed the final award against the Appellant/Insurance Company.

The Appellant/Insurance Company has filed this appeal against the impugned award on the following grounds:

2.1 That, because in this case, filed by the mother and father, tribunal wrongly applied multiplier on the basis of age deceased son.

There is view/settled principle of the Hon''ble Supreme Court that in case of claim petition filed by mother and father, multiplier may be applied on the basis of age of mother and father, hence as per settled principle of Hon''ble Supreme Court also in this case multiplier may be adopted on the basis of age of mother and father.

2.2 That, because tribunal wrongly deducted only 1/3 for personal expenses of deceased, to calculate the dependency amount.

As per settled principle of Hon''ble Supreme Court, in case of claim petition filed by mother and father, deduction may be 1/2 and after that on the basis of 1/2 income of deceased, compensation may be calculated.

2.3 That, because as per record of tribunal this is the case of contributory negligence hence liability may be fasten as per contributory negligence.

2.4 That, because tribunal wrongly awarded excessive compensation hence, also awarded compensation may be produced.

2.5 That, because application u/s 170 MV Act filed by Appellant insurance company before tribunal, has been wrongly dismissed, because collusion of claimants and owner and driver are clear in the record of tribunal.

2.6 That, because owner and insurance company of the motor cycle No. CG 04, CP 3117 were necessary party and in absence of above, claim petition was liable to dismissed.

From the submissions of Shri Sudhir Agrawal, learned Counsel for the Appellant and the above quoted grounds of the appeal, it is apparent that the quantum of compensation awarded by the Tribunal and the finding in regard to the negligence/contributory negligence alone are under challenge in this appeal filed by the insurer of the offending vehicle Metador.

Admittedly, permission u/s 170 of the Act, 1988 to contest the claim on all available defences was not granted to the Appellant/Insurance Company by the Tribunal.

Section 170 of the Act reads as follows:

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.

From the above quoted Section 170 of the Act it becomes crystal clear that permission u/s 170 of the Act to contest the claim on all available defences can be granted only when the Claims Tribunal is satisfied that either there is collusion between the person making the claim (claimants) and the person against whom the claim is made (owner of the offending vehicle) or when the person against whom the claim is made (owner of the offending vehicle) has failed to contest the claim.

In the present case, the owner and driver of the offending vehicle Metador contested the claim, inasmuch as they in their written statements even disputed the involvement of their vehicle Metador in the accident. Thus no material was placed by the Appellant/Insurance Company before the Tribunal to infer any collusion between the claimants and the owner of the offending vehicle Metador. The Tribunal, thus, could not have allowed the application filed by the Appellant/Insurance Company and permission u/s 170 of the Act could not have been granted to the Appellant/Insurance Company to contest the claim on all available defences. As the Appellant/Insurance Company could not have been granted the permission u/s 170 of the Act by the Tribunal, no useful purpose would be served in remanding the matter to the Tribunal for passing an order on the Appellants application filed u/s 170 of the Act.

In the absence of permission u/s 170 of the Act, it is not permissible for the insurer of the offending vehicle to challenge the quantum of compensation and/or the finding about the negligence/contributory negligence, in view of the dictum of the Apex Court in the case of National Insurance Company Ltd. v. Nicolletta Rohtagi and Ors. 2003(3) TAC 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. 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 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 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.

Seen from any angle, the Appellant/Insurance Company cannot be permitted to challenge the quantum of compensation awarded by the Tribunal or the finding about the negligence/contributory negligence in this appeal, in view of the dictum of the Apex Court in the case of National Insurance Company Ltd. v. Nicolletta Rohtagi and Ors. (supra). The observations in the decision relied upon by learned Counsel for the Appellant in the case of New India Assurance Company Ltd. v. Smt. Shanti Pathak and Ors. AIR 2007 SCW 4779, in view of the foregoing reasons are of no help to the Appellant.

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