Andhra HC (Pre-Telangana)
New India Assurance Co. Ltd. And United ... vs B. Pattni Bai And Ors. And Mudrakolla ... on 8 January, 2003
Equivalent citations: 2003(2)ALD319, 2003 A I H C 2047, (2003) 2 ANDHLD 319, (2003) 1 ANDHWR 571, (2003) 2 CIVLJ 791
JUDGMENT Dubagaunta Subrahmanyam, J.
1. As in both the appeals common questions of law are to be answered, I propose to dispose of both the appeals by a common judgment even though the two appeals were heard on different dates.
2. C.M.A.No.152 of 2000 is filed against the award dated 24.3.1999 in O.P.No.420 of 1997 on the file of Motor Accidents Claims Tribunal-cum-Additional District Judge, Adilabad. The Insurance Company filed this appeal. On 6.6.1997 the first respondent in the claim petition was driving a Scooter owned by the second respondent and at that time the Scooter dashed against the deceased Ramji Nayak, who sustained injuries and later died as a result of the injuries sustained by him in the course of the accident. The claimants are the dependants on the deceased. They claimed a total compensation of Rs.2,50,000=00. The vehicle was insured by the second respondent - owner with the Insurance Company, namely the present appellant. All the respondents contested the claim petition. The Tribunal awarded a total compensation of Rs.1,91,000=00 to the claimants 1, 2, 6 and 7 only. Aggrieved by the said award of compensation, the Insurance Company alone preferred the present appeal.
3. C.M.A.No.400 of 2000 was filed against the award dated 18.2.1999 in O.P.No.378 of 1996 on the file of Motor Accidents Claims Tribunal-cum-Additional District Judge, Adilabad. In the claim petition first respondent was the owner of lorry A.P.-1-1212. It was insured with the Insurance Company - second respondent therein. The said second respondent is the appellant in the present appeal. The third respondent in the claim petition was the owner of another lorry bearing registrationNo.Ap-1-T-9223. It insured it with the 4th respondent - Insurance Company. The deceased Mudrakolla Nagesh was alighting from the stationary lorry belonging to the third respondent. According to the averments in the claim petition at that time the lorry belonging to the first respondent came in a rash and negligent manner and hit the stationary lorry belonging to the third respondent and as a result the deceased fell down under the wheels of lorry of the first respondent and died on the spot. The parents of the deceased filed the claim petition claiming a total compensation of Rs.2,00,000=00. The second respondent - appellant contested the claim application taking the plea that the accident took place due to the rash and negligent driving of the other vehicle owned by the third respondent. After contest, the Claims Tribunal held that the accident took place due to rash and negligent driving by the driver of the first respondent. It granted a total compensation of Rs.1,90,000=00 to the claimants payable by respondents 1 and 2 alone. The claim petition was dismissed against respondents 3 and 4. Aggrieved by the said award, the Insurance Company - second respondent alone preferred the present appeal.
4. The Tribunal in C.M.A.No.400 of 2000 applied the multiplier of 17 to compute the compensation payable to the claimants. In C.M.A.No.152 of 2000 the Claims Tribunal applied the multiplier of 13 to compute the compensation payable to the claimants.
5. In both the appeals the owners of the vehicles concerned did not prefer any appeal against the award. There is a latest judgment of the Supreme Court of India reported in NATIONAL INSURANCE CO. LTD. Vs. NICOLLETTA ROHTAGI, 2002 (6) ALT 43(SC). In this decision a Bench consisting of three Hon'ble Judges of the Apex Court held that insurer is not entitled to file an appeal questioning the quantum of compensation and the findings as regards negligence or contributory negligence of the offending vehicle even if insured has not preferred an appeal under Section 173 of Motor Vehicles Act, 1988. Relying upon this decision of the Apex Court, it was contended on behalf of the respondents that in both the appeals, the appellants - insurers questioned the quantum of compensation awarded by the Tribunal and therefore both the appeals are not maintainable and are liable to be dismissed. On the other hand, it is contended on behalf of the appellants that the Insurance Company is questioning the multiplier applied by the Tribunal in computing the compensation and in view of some decisions of this court, the present appeals are maintainable. Those decisions are rendered long before Apex Court rendered the above judgment. The learned counsel for the appellant in C.M.A.No.400 of 2000 further contended that the Insurance Company is an aggrieved person within the meaning of Section 173 of Motor Vehicles Act, 1988 and therefore the appeal is maintainable.
6. In the latest decision the Apex Court considered various relevant provisions in Motor Vehicles Act, 1939 as well as in Motor Vehicles Act, 1988. On a consideration of relevant provisions and some of its earlier decisions, the Apex court held categorically that the Insurance company is entitled to defend the claim application on grounds enumerated in Section 149(2) of Motor Vehicles Act, 1988 and no other ground is available to the Insurance Company. It also held that the insurer is not allowed to contest the claim of the injured or heirs of the deceased on other ground which is available to an insured or breach of any other conditions of the policy which do not find place in Section 149(2) of Motor Vehicles Act, 1988. To appreciate the contentions raised on behalf of the appellants - Insurance Companies, it is necessary to extract the relevant passages in the judgment of the Apex Court.
7. In para 13 of its judgment, the Apex Court observed as follows:
" Under Section 96(2) of 1939 Act which corresponds to Sec.149(2) of 1988 Act, an insurance company has no right to be a party to an action by the injured person or dependants of deceased against the insured. However, the said provision gives the insurer the right to be made a party to the case and to defend it. It is, therefore, obvious that the said right is a creature of the statute and its content depends on the provisions of the statute. After the insurer has been made a party to a case or claim, the question arises what are the defences available to it under the statute. The language employed in enacting sub-section (2) of Section 149 appears to be plain and simple and there is no ambiguity in it. It shows that when an insurer is impleaded and has been given notice of the case, he is entitled to defend the action on grounds enumerated in the sub-section, namely, sub-section (2) of Section 149 of 1988 Act, and no other ground is available to him. The insurer is not allowed to contest the claim of the injured or heirs of the deceased on other ground which is available to an insured or breach of any other conditions of the policy which do not find place in sub-section (2) of Section 149 of 1988 Act. If an insurer is permitted to contest the claim on other grounds, it would mean adding more grounds of contest to the insurer than what the statute has specifically provided for".
8. In para 14 of its judgment, the Apex Court further observed as follows:
" 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 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 1988 Act".
9. Para 16 of the judgment of the Apex Court reads as follows:
" For the aforesaid reasons, we are of the view that the statutory defences which are available to the insurer to contest a claim are confined to what are provided in sub-section (2) of Section 149 of 1988 Act and not more and for that reason if an insurer is to file an appeal, the challenge in the appeal would confine to only those grounds".
10. In para 18 of its judgment, the Apex Court held as follows:
" Under Section 173 any person aggrieved by an award is entitled to prefer an appeal to the High Court. Very often the question has arisen as to whether an insurer is entitled to file an appeal on the grounds available to the insured when either there is a collusion between the claimants and the insured or when the insured has not filed an appeal before the High Court questioning the quantum of compensation. The consistent view of this Court had been that 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 vehicle".
11. Having regard to the provisions in Section 170 of Motor Vehicles Act, 1988, the Apex court in para 26 of its judgment observed as follows:
" However, by virtue of Section 170 of the 1988 Act, where in course of an enquiry the Claims Tribunal is satisfied that (a) there is a collusion between the person making a claim and the person against whom the claim has been made or (b) the person against whom the claim has been made has failed to contest the claim, the Tribunal may, for reasons to be recorded in writing, implead the insurer and in that case it is permissible for the insurer to contest the claim also on the grounds which are available to the insured or to the person against whom the claim has been made. Thus, unless an order is passed by the Tribunal permitting the insurer to avail the grounds available to an insured or any other person against whom a claim has been made on being satisfied of the two conditions specified in Section 170 of the Act, it is not permissible to the insurer to contest the claim on the grounds which are available to the insured or to a person against whom a claim has been made. Thus where conditions precedent embodied in Sec.170 are satisfied and award is adverse to the interest of the insurer, the insurer has a right to file an appeal challenging the quantum of compensation or negligence or contributory negligence of the offending vehicle even if the insured has not field any appeal against the quantum of compensation".
12. In para 31 of its judgment the Apex Court held that unless the conditions precedent specified in Section 170 of 1988 Act are satisfied, the Insurance Company has no right of appeal to challenge the award on merits. In the ultimate para 32 of its judgment, the Apex Court answered the crucial question holding that even if no appeal is preferred under Section 173 of 1988 Act by an insured against the award of the 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.
13. As per Section 149(2) of Motor Vehicles Act, 1988, the insurer can defend a claim application on two grounds only. The first ground is that there has been a breach of a specified condition of the policy being one of the conditions mentioned in Section 149(2)(a) of the Act. The second ground is 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.
14. In the present appeals, it is not the case of any of the appellants that any of the appeals is filed on any of the two grounds covered by Section 149(2) of Motor Vehicles Act, 1988.
15. Regarding wrong or inappropriate application of a multiplier by the Tribunal in computing the compensation to be awarded to the claimants, in my considered opinion, such a question also invariably amounts only to questioning the quantum of compensation. It is not a ground covered by Section 149(2) of Motor Vehicles Act, 1988. In view of the binding decision of the Apex Court, questioning of the quantum of compensation in any appeal by the insurer cannot be permitted under some guise or pretext.
16. I would now deal with the earlier decisions of this court relied upon by the learned counsel for the appellant in C.M.A.No.152 of 2000. The first decision is a decision of a learned Single Judge of this court reported in UNITED INDIA INSURANCE CO. LTD. Vs. LATEEFUNNMISA BEGUM, . In that case the Tribunal applied the multiplier 15. It is contended in the appeal by the Insurance Company that the only multiplier that could be applied in the facts and circumstances of the said case is 12.79. The learned Single Judge accepted the said contention and applied the multiplier of 12.79 and modified the award passed by the Tribunal. In that case the appeal was not contested by the claimants taking the stand that the insurer is not entitled to prefer an appeal questioning the quantum of compensation. That question did not at all fall for consideration before the learned Single Judge who decided the above case. No principle of law holding that the insurer is entitled to prefer an appeal questioning the multiplier applied by the Tribunal is maintainable in law is laid down in the above decision.
17. The other decision relied upon is a decision of another learned Single Judge of this court reported in UNITED INDIA INSURANCE CO. LTD. Vs. M. RAMULU, 1988 (5) ALD 71. In this case the Tribunal applied different multipliers for different claimants. The Tribunal also granted compensation to the brother and sister of the deceased. According to the learned Single Judge applying different multipliers to different claimants is not legal. The learned Single Judge also held that brother and sister are not entitled for any separate compensation as they were not in law dependant on the victim. His Lordship applied common multiplier of 13.60 to all the claimants and modified the award passed by the Tribunal. It was contended before the learned Single Judge that the Insurance Company is not entitled to take the defences which are not permissible to it in view of Section 149 of the Motor Vehicles Act. The learned Single Judge accepted the said contention. After accepting the said contention, he held that the Insurance Company can take a defence that the method of calculation is totally unwarranted in law and is unsustainable. The relevant passage in para 5 of the said judgment reads as follows:
" It is true that the Insurance Company cannot take all the defences which are permissible to the driver or owner of the lorry. But, the Insurance company can take a defence that the method of calculation is totally unwarranted in law and is unsustainable. Otherwise, it is not open to the Insurance Company to challenge the quantum if legal and proper method of quantification is applied by the Tribunal".
18. In my considered opinion the choice of a multiplier by the Tribunal for computation of the amount of compensation is not one of the two grounds permitted by Section 149 (2) of Motor Vehicles Act, 1988. It is a ground that c an be taken only by the driver or owner of the vehicle. If any ground taken by the insurer is not a ground covered by Section 149(2) of Motor Vehicles Act, 19 88, the insurer is not at all entitled to defend the claim application by taking such a plea even before the Tribunal. If insurer is not entitled in law to take such a plea even before the Tribunal, raising the same ground he is not entitled to prefer an appeal before the High court. If the insurer had followed the procedure envisaged under Section 170 of Motor Vehicles Act, 1988 and obtained necessary permission from the Tribunal to contest the appeal on the grounds on which the insured can contest the claim application, then only the insurer will be entitled to prefer an appeal before this court questioning the quantum of compensation awarded by the Tribunal. In the appeal before the learned Judge, it is not the contention of the insurer that he followed the procedure laid down in Section 170 of Motor Vehicles Act, 1988 and obtained necessary permission from the Tribunal and thereafter contested the claim application before the Tribunal. The principle of law laid down by the learned Single Judge in the above decision is quite contra to the principles of law laid down by the Apex Court. A reading of the relevant passage extracted above from the decision of the learned Judge indicates that even according to the learned Judge, the defence regarding method of calculation is one of the defences to be taken by the driver or owner of the lorry. That is why His Lordship observed that the Insurance Company cannot take all the defences which are permissible to the driver or owner of the lorry. According to His Lordship, out of many defences available for the vehicle owner or driver, the defence relating to the method of calculation of amount of compensation can be availed by the insurer. This view is quite contra to the principle of law laid down by Apex Court. The insurer can plead grounds available to the insured only in cases where he invoked the provision in Section 170 of Motor Vehicles Act, 1988, and obtained necessary permission from the Tribunal. The further observation by His Lordship that otherwise it is not open to the insurer to question the quantum clearly indicates that in the appeal before him, the quantum of compensation alone is challenged. Such a challenge is expressly prohibited by Apex Court by many of its judgments. Therefore, in my considered opinion, the principle of law laid down in the said decision by the learned Single Judge is not a good law.
19. Regarding the contention of the learned counsel for the appellant in C.M.A. No. 400 of 2000 to the effect that insurer is an aggrieved person within the meaning of Section 173 of Motor Vehicles Act, 1988 and therefore insurer is entitled to file an appeal, the answer is the passage extracted supra from para 18 of the judgment of the Apex Court. In that passage the Apex court categorically held that the consistent view of the said Court had been that the insurer has no right to file an appeal to challenge the quantum of compensation or finding of the Tribunal as regards negligence or contributory negligence of offending vehicle. Therefore, the appellants in both the cases are not entitled to file the present two appeals. Accordingly both the appeals are liable to be dismissed.
20. In the result, both the appeals are dismissed. No costs.