The New India Assurance Co. Ltd. vs Smt. Shah Jahan Begum and Others

V.B. Gupta, J.—Appellant-New India Assurance Company Ltd. has filed the present appeal u/s 173 of the Motor Vehicles Act, 1988 (for short as ''Act'') against the judgment dated 27th May, 2008 passed by Sh. J.P.S. Malik, Judge, MACT, Delhi (for short as ''Tribunal).

The brief facts of this case are that on 28th August, 2004 deceased Sultan Ahmad was driving his two wheeler scooter No. DL-35-AB-6109 and at about 4.00 p.m., when he reached near Arjan Garh Air Force Station on M.G. Road, New Delhi, he was hit by a tempo No. HR-38-BG-4899 which came all of a sudden. The tempo was being driven at a very high speed, rashly and negligently by respondent No. 10 Chander Mani Singh. Due to this accident deceased fell down on the road along with scooter and sustained fatal injuries. The vehicle was owned by respondent No. 9 Surinder Singh and is insured by the appellant.

Vide the impugned judgment, the Tribunal passed an award for a sum of Rs. 12,37,000/- along with simple interest @ 9 % p.a. from the date of filing of the petition till realisation.

It has been contended by learned Counsel for the appellant that the Tribunal ought to have considered the income of the deceased according to the minimum wages prevailing at the time of the accident for assessing the loss of dependency. Thus, the Tribunal has erred in taking the monthly income of the deceased at Rs. 8,000/- for the purpose of determining the loss of dependency without any proof of income.

The other contention made by the learned Counsel for the appellant is that the Tribunal in this case has taken the income of the deceased on presumptive basis and there was no material before the Tribunal to arrive at this income. u/s 166 of the Act, the Court has to grant reasonable compensation. The compensation to be awarded cannot be arbitrary and fanciful. There has to be some basis for awarding just compensation. Since the compensation has been awarded without any basis by the Tribunal, the appellant-Insurance company has every right to challenge the quantum of award even though appellant did not file any application u/s 170 of the Act before the Tribunal.

In the present appeal, the appellant/insurance company has challenged the quantum of award and admittedly no permission u/s 170 of the Act has been obtained by the appellant from the Tribunal.

Section 170 of the Act reads 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 filed 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.

In Shankarayya and Another Vs. United India Insurance Co. Ltd. and Another, , the Apex Court while dealing with the question as to whether Insurance Company could have filed an appeal in the High Court against the award of the Tribunal and got the quantum of compensation reduced when the insured had not filed such appeal and when Insurance Company had not moved the Tribunal u/s 170 of the Act for getting the right to contest the proceedings on merit, held 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. It is true that the claimants themselves had joined respondent No. 1- Insurance Company in the Claim Petition but that was done with a view to thrust the statutory liability on the Insurance Company on account of the contract of the insurance. That was not an order of the Court itself permitting the Insurance Company which was impleaded to avail of a larger defence on merits on being satisfied on the aforesaid two conditions mentioned in Section 170. Consequently, it must be held that on the facts of the present case, respondent No. 1- Insurance Company was not entitled to file an appeal on merits of the claim which was awarded by the Tribunal.

In National Insurance Co. Ltd. and Another Vs. Smt. Balbir Kaur and Others, , the Punjab and Haryana High Court held as under;

If the insurance company does not plead before the Tribunal that there was any collusion between the claimants and the person against whom the claim was made and does not ask the Tribunal to pass an order u/s 170 of the Act allowing it to contest the claim on merits it will have no right to contest the same on the grounds other than those mentioned in Sub-section (2) of Section 149 of the Act. In the case before us, the insurance company did not plead collusion between the claimants and the Insured and there is no order passed by the Tribunal allowing the insurance company to contest the claim on merits. As a matter of fact, the insurance company did not make any prayer to the Tribunal to allow it to contest the claim on all or any of the grounds available to the insured. Not having done so before the Tribunal, we are of the view that the insurer cannot be allowed to challenge the award on merits for the first time in appeal before this Court. The application filed by the appellant u/s 170 of the Act seeking permission to contest the claim on merits itself is, thus, misconceived and not maintainable as such a plea could only be made before the Tribunal and not before this Court as is clear from the plain language of the section.

Thus, it is well-settled that when permission of the Tribunal to contest the claim on merits had not been obtained as per requirement, the insurer cannot be permitted to challenge the award on merits, i.e., on the question of quantum, unless the conditions enacted in Section 170 of the Act are complied with.

Here, the appellant has filed the present appeal challenging the award on quantum only. Since no permission u/s 170 of the Act has been granted, the appellant, being the insurer of offending vehicle is barred from raising the plea with regard to quantum and merits of the claim, in the present proceedings during the course of appeal.

Though the Tribunal has taken the monthly income of the deceased on presumptive basis, nevertheless, this fact cannot be ignored that in the present case, deceased has left behind eight legal heirs and future prospects of the deceased has not been considered by the Tribunal. Moreover taking into consideration that deceased was aged only 38 years and has got a large family to support with, the amount of compensation as awarded by the Tribunal does not appears to be excessive.

Under these circumstances, the present appeal is not maintainable and the same is hereby dismissed.

No order as to costs.