United India Insurance Company Limited vs Rita Devi and Others

V.K. Ahuja, J.—This is an appeal filed by the appellant u/s 173 of the Motor Vehicles Act against the award of the Court of learned Motor Accident Claims Tribunal (II), Solan, dated 30.6.2009, vide which the petition filed by the claimants/respondents u/s 166 of the Motor Vehicles Act was allowed and a sum of Rs. 3,50,000/- was awarded as compensation payable by the appellant/respondent No. 4/Insurance company, with which the vehicle in question was insured.

I have heard the learned Counsel for the parties and have gone through the record of the case.

A preliminary objection has been raised by the learned Counsel correspondents No. 1 to 5 that no appeal lies by the Insurance Company against the award on any of the grounds except as provided u/s 149(2) of the Motor Vehicles Act. It has been pointed out that the application filed by the appellant u/s 170 of the Motor Vehicles Act before the learned Tribunal was rejected by it and as such, he cannot challenge the findings of the learned Tribunal on the ground of quantum including interest etc.

A reference can be made to the provisions of Sub-section (2) of Section 149 of the Motor Vehicles Act, which reads as under:

(2) No sum shall be payable by an insurer under Sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:

(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:

(i) a condition excluding the use of the vehicle-

(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or

(b) for organized racing and speed testing, or

(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or

(d) without side-car being attached where the vehicle is a motor cycle; or

(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or

(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or

(b) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular.

Reliance was placed on the decision of the Apex Court in National Insurance Co. Ltd., Chandigarh Vs. Nicolletta Rohtagi and Others, The observations made in Para-14 are relevant and are being reproduced below:

Sub-section (7) of Section 149 of the 1988 Act clearly indicates in what manner Sub-section (2) of Section 149 has to be interpreted. Sub-section (7) of Section 149 provides that no insurer to whom the notice referred to in Sub-section (2) or Sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in Sub-section (1) or in such judgment as is referred to in Sub-section (3) otherwise than in the manner provided for in Sub-section (2) or in the corresponding law of the reciprocating country, as the case may be. The expression "manner" employed in Sub-section (7) of Section 149 is very relevant which means an insurer can avoid its liability only in accordance with what has been provided for in Sub-section (2) of Section 149. It, therefore, shows that the insurer can avoid its liability only on the statutory defences expressly provided in Sub-section (2) of Section 149 of the 1988 Act. We are, therefore, of the view that an insurer cannot avoid its liability on any other grounds except those mentioned in Sub-section (2) of Section 149 of the 1988 Act.

It is, therefore, clear from perusal of the above provisions of the Act as well as the observations made by their Lordships that the insurer cannot avoid its liability on any other grounds except those mentioned in Sub-section (2) of Section 149 of the Motor Vehicles Act, 1988. The grounds available are that breach of condition in regard to the licence and the vehicle taken on hire or reward etc. However, no appeal lies on the ground of quantum by the Insurance Company once the permission has not been granted u/s 170 of the Act to contest the petition on other grounds also.

It follows from the above discussion that the appeal in question is not maintainable and as such, the appeal is dismissed at the admission stage itself being not maintainable alongwith costs including lawyer''s fee, which is assessed at Rs. 5,500/-, payable to claimants/respondents No. 1 to 5.

In view of the dismissal of the main appeal, all the miscellaneous applications pending, if any, shall also stand dismissed.