Jammu & Kashmir High Court
New India Insurance Co. Ltd. vs Wahida Ali And Ors. And Javeed Ahmad And ... on 7 April, 2003
Equivalent citations: 2003(2)JKJ713, 2003 A I H C 4285, (2004) 2 TAC 338 (2004) 3 ACC 186, (2004) 3 ACC 186
JUDGMENT B.L. Bhat, J.
1. Two claim petitions titled as Wahida Ali and Anr. v. Raghubir Singh and Ors. and Javeed Ahmed v. Raghubir Singh and Ors. came to be filed before the learned Motor Accident Claims Tribunal, Jammu (herein referred to as the Tribunal below) where they came to be registered as Claim Petition Nos. 272 and 271 both of 21.5.2001. These claim petitions are alleged to have taken place with respect to the one and the same accident which took place on 22.6.95 at Garote Morhe, National High Way when one Mubarak Ali Shah S/o Hayat Ali Shah along with one Javeed Ahmad Bhat S/o Gh. Mohd. Bhat resident of No. 98 Phase III Industrial Area Gangyal Jammu while coming towards Jammu City from Lakhanpur. On his personal vehicle bearing registration No. 786 JK02B was hit by a rashly driven truck bearing Ch. No. 01-1/5305 driven by respondent No. 2 from opposite direction, as a result of which Mubarak Ali Shah and Javid Ahmad Bhat sustained injuries and were removed to hospital, where Mubarak Ali Shah scumbed to his injuries on 25.6.95 and Javaid Ahamd-who was yet in his teens and was a student of 12th class become totally handicapped because of the said injury which the doctors came to call as Traumatic Quader Plegia which has resulted in his total disability.
2. The respondents 1 and 2 resisted the claim petition inter alia on the ground that the offending vehicle does not belong to respondent No. 1; therefore, the claim petition is liable to be dismissed against them because of mis-rejoinder of the parties. The appellant Insurance Company who are impleaded as respondents in claim petition also resisted the petition by stating inter alia that alleged driver respondents at the time of the accident was not holding a valid and effective driving licence, hence are not liable to pay compensation. On 3.8.96 the parties were put to the following main issues:
(i) Whether accident involving injuries to petitioner Javeed Ahmad and death of Mubarak Ali Shah took place on 22.6.1995 because of rash and negligent driving by respondent No. 2 driver of the offending truck ? OPP
(ii) If issue No. 1 is proved affirmative to how much amount of compensation Petitioners are entitled to in each case and from whom? OPP.
(iii) Whether respondent driver was not holding valid licence if so what its effect? OPR-3.
3. In a bid to substantiate their cases, petitioners Wahida Ali and Javeed Ahmad Bhat besides themselves have examined Gh. Mohd Bhat, Mohd Ayoub Sheikh, Gajanfar and Dr. Gh. Rasool Reshi and have placed various medical bills on the file for inspection of the court. The respondents did not lead any evidence in support of their case and in rebuttal also. On conclusion of the proceedings, the Tribunal below after recording a firm finding that the accident has taken place due to the negligence of the driver of the offending vehicle in which the petitioner Javeed Ahmad and deceased Mubarak Ali Shah sustained injuries and the later lost his life came to decide issue No. 1 in favour of the petitioners and also decided issue No. 3 against the respondent Insurance Company and came to award compensation of Rs. 5,08,000 to the petitioners of claim petition No .272 and Rs. 11,58,242 to the Javeed Ahmad in claim petition No. 271/95 together with interest at the rate of 9% p.a. from the date of the petitions till the final realisation of the amount of the insurer in both the claim petitions and minus the compensation if paid in both the cases by virtue of compensation award dated 21.5.2001. It is this award which is impugned in these appeals.
4. The New India Insurance Company limited which is respondent No. 3 in both the claim petitions feeling aggrieved of the award has preferred the appeals in hand, wherein it has assailed the quantum of compensation.
5. Heard Mr. B. Singh, advocate appearing on behalf of the appellant company and Mr. Sunil Sethi Advocate appearing on behalf of respondent No. 1.
6. It is not denied by the appellant Insurance Company that the offending vehicle was not insured on the date of the accident in which one Mubarak Ali Shah list his life and Javeed Ahmad petitioner was injured and in turn become a totally disabled person. The learned counsel appearing on behalf of the Insurance Company appellant has vehemently argued that the appellant has right to file the appeal on all grounds available to the insured. In this behalf he has placed reliance on AIR 2002 SC 662. He further contends that the Insurance Company appellant is not liable to pay compensation on the ground that the insured by engaging respondent No. 2 as driver who was not holding effective and valid licence on the date of the accident committed breach of Insurance policy. The reliance placed by the learned counsel for the appellant at AIR 2002 SC 662 which is a judgment of the Apex Court comprising of two Judges, when this judgment stands overruled by the judgment of the three Judge Bench of the Apex Court in a case National Insurance Co. v. Nicolletta Rohtagi and Ors., AIR 2002 SC 3350. This being so, the argument of the learned counsel that the Insurance Company can contest the claim of the petitioner in a Motor Accident Claims Tribunal but all the grounds available to the insured is turn down. This takes me to consider as to whether and Insurance Company has proved as to whether the insured by engaging an un-authorised person as driver for driving the offending vehicle has committed breach of insurance policy. In this regard there is issue No. 3, on the file to the effect which at cost repetition is reproduced as under:
"Whether respondent driver was not holding valid licence if so what its effects OPR-3".
7. As indicated that the respondent company has not led any evidence in support of its claim or in rebuttal to the case of the petitioner, therefore, the Tribunal below has come to decide this issue against it. This finding of the Tribunal cannot be faulted. This takes me to the question as to whether the insurer can prefer an appeal under Section 173 questioning the quantum of compensation. This question arose before the Apex Court afore case i.e., to say National Insurance Co. Ltd, Chandigarh v. Nicolletta Rohtagi and Ors., AIR 2002, SC 3350, where in Their Lordship of the Apex Court comprising of three Judges Bench, while deciding the question to the effect that where in insured has not preferred an appeal under Section 173 of the Motor Vehicles Act, 1988 (hereinafter referred to as '1988 Act') against an award given by the Motor Accidents Claims Tribunal (hereinafter referred to as Tribunal') is it open to the insurer to prefer an appeal against the award by the Tribunal questioning the quantum of compensation, as well as finding as regards the negligence of the offending vehicle, have held:
"Even if no appeal, is preferred under Section 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 finding as regard negligence or contributory negligence of the offending vehicle unless the conditions precedent specified in Section 170 of 1988 Act is satisfied. Motor Vehicle Accident Claim is a tortious claim directed against tortfeasors who are the insured and the driver of the vehicle and the insurer comes to the scene as a result of statutory liability created under the Motor Vehicle Act. The Legislature 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 from 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 precedent, specified in Section 170 is satisfied.
United India Assurance Co. Ltd. v. Bhushan Sachdeva, 2002 AIR SCW 273 : AIR 2002 SC 662, overruled (Paras 25, 31, 32).
Under Section 96(2) of 1939 Act which corresponds to Section 149(2) of 1968 Act, an insurance company has no right to be a party to an action by the insured 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 show 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 Sub-section (2) of Section 149 of 1988 Act clearly indicated in what manner Section 149(2) has to be interpreted. The expression 'manner' employed in Section 149(7) is very relevant which means an insurer can avoid its liability only in accordance with what has been provided for in Section 149(2). It therefore, shows that the insurer can avoid its liability only on the statutory defences expressly provided in Section 149(2) of 1988 Act. The Parliament, while enacting Section 149(2) 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 find place in Section 149(2) cannot be taken a defence by the insurer. Permitting the insurer to take any other defence other than those specified in Section 149(2) would mean adding more defences to insurer in the statute which is neither found in the Act nor, was intended to be included, (Paras 13, 14 & 15) Section 110-C(2A) of old Act was inserted therein in the year 1970 which correspondents to Section 170 of the 1988 Act, The said provisions provides that in course of an inquiry of a claim if the Tribunal is satisfied that there is a collusion between the claimant and the insured or the insured fails to contest the claim, the Tribunal 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 Section 149(2) 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 The aforesaid provisions show two aspects. Firstly that the insurer has only statutory defences available as provided in Section 149(2) of 1988 Act and, secondly, where the Tribunal is of the view that there is a collusion between the claimant and the insured, or the insured does not contest the claim, the insurer can be made a party and on such impleadment the insurer shall have all defences available to it. Thus, unless an order is passed by the tribunal permitting the insured 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, 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 Section 170 is 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 on negligence or contributory negligence of the offending vehicle even if the insured has not filed by appeal against the quantum of compensation. Sections 149, 170 and 173 are part of one scheme and if given any different interpretation to Section 172 of the 1988 Act, the same would go contrary to the scheme and the object of the Act. (Paras 17, 26) The right of appeal is not an inherent right or common law right, but it is a statutory right,. If the law provides that an appeal can be filed on limited grounds, the grounds of challenge cannot be enlarged on the premise that the insured or the persons against whom a claim has been made has not filed any appeal. Section 149(2) of 1988 Act limits the insurer's appeal on those enumerated grounds and the appeal being a product of the statute, it is not open to an insurer to take any other plea other than those provided in Section 149(2) of 1988 Act. The view that a right to contest would also include the right to file an appeal is contrary to well established law that creation of a right to appeal is an act which requires legislative authority and no Court or Tribunal can confer such right. (Para 27) The 1939 Act as well as 1988 Act both were enacted on pattern of English statute with the object to receive the distress and miseries of victims of accidents and reduce the profitability of the insurer in regard to occupational hazard undertaken by them by way of business activities and not to promote business interest of insurance companies even though they may be nationalised companies." (Para 28)
8. In a case titled as New India Assurance Company Shimla v. Kamla, AIR 2001 SC 1419, wherein Their Lordships of the Apex Court in para 25 of the judgment have held:
"25. The position can be summed up thus: -- The Insurer and insured are bound by the conditions enumerated in the policy and the insurer is not, liable to the insured if there is violation of any policy condition. But the insurer who is made statutorily liable to pay compensate on to third parties on account of the certificate of insurance issued shall be entitled to recover from the insured the amount paid to the third parties, if there was any breach of policy conditions on account of the vehicle being driven without a valid licence,. Learned counsel for the insured contended that it is enough if he establishes that he made all due enquiries and believed bona fide that the driver employed by him had a valid driving licence, in which case there was no breach of policy condition. As we have not decided on that contention it is open to the insured to raise it before the Claims Tribunal. In the present case, if the Insurance Company succeeds in establishing that there was breach of the policy condition, the Claims Tribunal shall direct the insured to pay that amount to the insurer. In default the insurer shall be allowed to recover that amount (which the insurer is directed to pay to the claimants third parties) from the insured, person."
9. In a case titled as Shankarayya and Anr. v. United India Insurance Co. Ltd and Anr., AIR 1998 SC 2968 wherein Their Lordships of the Supreme Court in para No. 4 of the Judgment have held "4. 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 that 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 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 case, respondent No. 1 Insurance Company was not entitled to file an appeal on merits of the' claim which was awarded, by the Tribunal."
10. In view of the aforesaid law settled by the Apex Court from time to time, I find that there is no merit in the appeals in hand firstly because no appeal on the quantum is maintainable and secondly that no permission as contemplated under Section 170 M.V. Act has been sought by the appellant Company from the Tribunal below in the claim petitions to contest the claim of the petitioners on wider grounds available to the insured. Therefore, the appeals in hand are dismissed. The award amount be released in favour of the petitioners in terms of the award passed by the Tribunal below.