Calcutta High Court
The Oriental Insurance Co. Ltd. vs Smt. Bini Bala Mondal & Ors. on 29 August, 2000
Equivalent citations: II(2001)ACC45, 2001ACJ1959, (2001)1CALLT150(HC)
Author: A. Kabir
Bench: Altamas Kabir
ORDER A. Kabir, J.
1. These two appeals have been preferred by the respective Insurers against the Judgment and Award dated 7th February, 1996 in Motor Accident Claim case No. 21 of 1992 and the Judgment and Award dated 11th December, 1996 in Motor Accident Claim case No. 13 of 1993, passed by the learned Judgment, Motor Accident Claims Tribunal, Purulia.
2. Pursuant to a preliminary objection taken on behalf of the respondents, the two appeals were set down for hearing on the point of maintainability on identical grounds.
3. Appearing on behalf of the respondents in both the appeals, Mr. Krishanu Banik, learned advocate, submitted that the appeals were not maintainable since no leave had been obtained by the Insurers in both the appeals from the Claims Tribunal under section 170 of the Motor Vehicles Act, 1988, to contest the claims made by the Claimants on merits on grounds other than those indicated in section 149(2) of the said Act. Mr. Banik urged that failure to obtain such leave operated as a bar to the filing of an appeal by the Insurer challenging the Judgment/Award of the Claims Tribunals on merits.
4. Mr. Banik submitted that without obtaining leave from the Claims Tribunal under section 170 of the Motor Vehicles Act, 1988, hereinafter referred to as the "1988 Act", an Insurer could contest the claim only on the limited grounds set out in sub-section (2) of section 149 of the said Act regarding breach of the conditions of the policy referred to therein.
5. In support of his submissions Mr Banik firstly referred to the decision of the Hon'ble Supreme Court in the case of Shankarayya and Anr. v. United India Insurance Co. Ltd. and Anr. , wherein it was held, inter alia, that notwithstanding the fact that the Insurance Company had been impleaded as party in the Claim Petition, unless the procedure indicated in section 170 of the 1988 Act was followed, the Insurance Company could not have a wider defence on merits than what was available to it by way of statutory defence.
6. Mr. Banik submitted that the same view was expressed by the Hon'ble Supreme Court in the case of Narendra Kumar & Anr. v. Yarenissa & Ors., , which was a decision under section 110C(2A) of the Motor Vehicles Act, 1939, the provisions whereof are at part materia with the provisions of section 170 of the 1988 Act.
7. Reference was also made to two Bench decisions of this Court in (1) United India Insurance Co. Ltd. v. Smt. Namita Das and Others, reported in AIR 2000 Calcutta, Page 145, and in (2) Oriental Insurance Company Ltd. v. Gurdial Singh, reported in (2000)2 CAL LT 288 (HC) : 2000(2) CLJ 624, where the same view was expressed.
8. Mr. Banik submitted that even joint appeals filed by the owner of the offending vehicle and the insurer were not maintainable on the merits of the award made by the Tribunal unless leave was obtained under section 170 of the 1986 Act. Mr. Banik referred to the decisions of the Hon'ble Supreme Court in the case of (1) Chinnama George & Ors. v. N.K. Raju & Anr. (AIR 2000 SC, Page 1565) and (2) Smt. Rita Devi v. New India Assurance Company Ltd. (2000(3) Supreme, Page 698) wherein, while considering the provisions of sections 173 and 149(2) of the 1988 Act, the Hon'ble Supreme Court held that a joint appeal by the owner of the vehicle and the insurer was maintainable only if any of the permitted defences was available to the insurer. The insurer could not avoid the statutory bar merely by joining the insured owner or the driver as co-appellant in such appeal.
9. In other words, the provision for appeal under section 173 was subject to the statutory bar imposed under section 149(2) and section 170 of the 1988 Act.
10. Mr. Banik also referred to various other unreported decisions of this Court on the aforesaid lines to which reference will be made, if necessary.
11 Appearing for the appellant insurer, Mr. K.K. Das submitted that certain special facts were involved in this case which differentiated it from the various decisions referred to by Mr. Banik. Mr. Das submitted that the concept of subrogation had been introduced in the policy issued to the owner of the vehicle, as would be reflected from Clause 2 of the conditions set out in the policy which reads as follows :--
"2. No admission offer promise or indemnity shall be made or given by or on behalf of the insured without the written consent of the Company which shall be entitled if it so desires to take over and conduct in the name of the insured the defence or settlement of any claim or to prosecute in the name of the insured for its own benefit any claim for indemnity or damages or otherwise and shall have full discretion in the conduct of any proceedings or in the settlement of any claim and the insured shall give all such information and assistance as the Company may require."
12. Mr. Das urged that in view of the aforesaid clause, the question as to whether the insurer could contest the claim of the claimant on merits without obtaining leave under section 170 of the 1988 Act, fell for consideration before a Division Bench of this Court in United India Insurance Co. Ltd. v. Smt. Geeta Rani Mondal & Ors. (F.M.A. No. 390 of 1994). While taking note of the decision of the Hon'ble Supreme Court in the case of Shankarayya and the Division Bench of this Court in the case of Gurdial Singh, the Division Bench also took note of the decision of the Hon'ble Supreme Court in the case of British India General Insurance Company Limited v. Captain Itbar Stngh and Ors., reported in 1958-65 Accident Claims Journal, Page 1, wherein while considering the provisions of section 96 of the 1939 Act, the Hon'ble Supreme Court held that the insurer had the right to defend the action in the name of the assured, provided such right was reserved in the policy. It was also observed that in such a case if the insurer chose to defend the action in the name of the assured, all the defences available to the assured could then be urged by the insurer.
13. Apart from the decision in Itbar Singh's case, the Division Bench also took note of a Division Bench of the Kerala High Court in the case of New India Assurance Company Ltd. v. Leela, reported in 1999 Accident Claims Journal, Page 542, where a similar view was expressed.
14. Relying on the principle of subrogation, the Division Bench sought to distinguish the decision of the Hon'ble Supreme Court in Shankarayya's case by observing that in Shankarayya's case the Supreme Court had no occasion to consider the principle of subrogation and that, as a result, the ruling in Itbar Singh's case would be applicable in cases where a reservation clause had been included. Accordingly, even while considering the amended provision of section 110C(2A) of the 1939 Act, the Division Bench was of the view that the appeal at the instance of the insurer, where the award of the Tribunal had been challenged on merit, was maintainable on account of the reservation clause.
15. Mr. Das also referred to the Full Bench decision of the Kerala High Court in the case of New India Assurance Company Ltd. v. Coline and Anr., reported in 1993 Accident Claims Journal, page 371 wherein following the decision in Itbar Singh's case, it was observed that the decision of the Supreme Court in Captain Itbar Singh's case is a clear authority that it is open to the insured to reserve a right in the policy of insurance to defend the action in the name of the assured and in case there was such a reservation, all defences upon to the assured could be urged by the insurer.
16. Mr. Das then submitted that from a decision of a Division Bench of this Court in F.M.A.T. No. 3472 of 1999 (National Insurance Company Ltd. v. Anup Mukherjee), which had been dismissed on the ground that the appeal was not maintainable at the instance of the insurer without leave having been obtained under section 170 of the 1988 Act, the insurer had preferred a Special Leave Petition, being SLP (Civil) No. 279 of 2000, which had been admitted and stay had been granted. Mr. Das urged that since the Supreme Court was now in seisin of the matter, the present appeal on the self-same point must be held to be maintainable.
17. Mr. Das also referred to the provisions of section 173 of the 1988 Act which, inter alia, provides that subject to the provisions of sub-section (2) any person aggrieved of an award by a Claims Tribunal may, within 90 days from the date of the award, prefer an appeal to the High Court. Mr. Das urged that a statutory right had been given to "any person aggrieved" of an award of the Claims Tribunal, which would include the insurer which had cause to be aggrieved by the award made by the Tribunal. Mr. Das submitted that the said question had come up for consideration before a Division Bench of the Allahabad High Court in the case of New India Assurance Company Ltd. v. Jagdish Prasad Pandey and Ors., reported in 1998(1) Transport and Accidents Cases, Page 600 (All), and it was held that the insurer came within the category of "any person aggrieved" since it had to discharge the liability created against the insured and would, therefore, be entitled to challenge the award on all legal and factual grounds.
18. Mr. Das urged that since two views were possible with regard to the provision of sections 170 and 173 of the 1988 Act, an attempt should be made for the said provisions to be read harmoniously so as not to render surplus any part of the provisions. Referring to the decision of the Hon'ble Supreme Court in the case of (1) The Institute of Chartered Accountants of India v. Price Waterhouse and Ors., reported in 1977(6) SCC, page 312 and (2) Davis v. Sebastian, , Mr. Das urged that it was now well-settled that words in a statute should be given their natural ordinary meaning and nothing should be added to them nor should any word be treated as otiose.
19. Reference was also made to the decision of the Hon'ble Supreme Court in the case of Sultana Begum v. Premchand Jain, , wherein it was observed that while interpreting two inconsistent or obviously repugnant provisions of an Act, the Courts should construe them so as to harmonise them so that the purpose of the Act may be given effect to. It was observed further that the statute had to be read as a whole to find out the real intention of the legislature.
20. Mr. Das submitted that in Motor Accident Claim cases in the State the owners of the offending vehicle seldom appear and the insurers contest the claim on all grounds, notwithstanding the grounds as envisaged under section 149(2) of the Motor Vehicles Act. 1988. Mr. Das submitted that having regard to the above and in view of the provision of section 168 of the Motor Vehicles Act, 1988, where specific provision has been made for giving an opportunity being heard, the appeal filled by the insurer without leave having been obtained under section 170 of the 1988 Act, must be held to be maintainable.
21. We have carefully considered the submissions made on behalf of the respective parties and more particularly those of Mr. Das who attempted to distinguish the views expressed by the Hon'ble Supreme Court in Shankarayya's case and in other subsequent cases following the decision in Shankarayya's case.
22. The main pillar of Mr. Das's case is the decision of the Hon'ble Supreme Court in Captain Itbar Singh's case, which was followed by a Division Bench of this Court in Smt. Geeta Rani Mondal's case. With respect, we are unable to accept the reasoning in Smt. Geeta Rani Mondal's case in distinguishing the views expressed by the Hon'ble Supreme Court in Shankarayya's case. Captain Itbar Singh's case was decided on 11th May, 1958, when the provisions of section 110C of the 1939 Act had not been amended by the insertion of sub-section (2A). Sub-section (2A) of section 110C, which was inserted by Act 56 of 1969 with effect from 2nd March, 1970, reads as follows :--
"(2A) Where, in the course of any inquiry, the Claims Tribunal is satisfied that--
(i) there is collusion between the person making the claim and the person against whom the claim is made, or
(ii) the person against whom the claim is made has failed to contest the claim, it may, for reasons to be recorded by it 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 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."
23. The said provision is in pari materia with the provisions of section 170 of the 1988 Act which fell for consideration in Shankarayya's case and was not in the statute book when Captain Itbar Singh's case was decided by the Hon'ble Supreme Court. In our view, the point of distinction between Captain Itbar Singh's case and Shankarayya's case lies there and the reservation clause in the policy will now have to be considered in the light of the provisions of section 110C(2A) of the 1939 Act or section 170 of the 1988 Act. When section 110C(2A) was not available for consideration, the reservation clause for the purpose of subrogation was no doubt relevant for a decision as to the right of the issurer to defend a claim on behalf of the insured. Once section 110C(2A) was introduced in the 1939 Act, the entire perspective changed since it was not left to the tribunal to decide as to whether it would grant leave to the insurer to defend a claim on all or any of the grounds available to the person against whom a claim is made.
24. With the introduction of sub-section (2A) in section 110C in the 1939 Act, the concept of subrogation was jettisoned and a discretionary power was vested with the Tribunal on the grounds indicated to allow the insurer to contest the claim on merits, that is, on grounds other than those indicated in section 96(2) of the 1939 Act.
25. The same proposition holds good as far as the provisions of sections 149(2) and 170 of the 1988 Act are concerned.
26. In our view, having regard to the provisions of section 170 of the 1988 Act, the principle of subrogation has lost relevance and the decision in Shankarayya's case holds the field. What may be decided in the Special Leave Petition, pending before the Hon'ble Supreme Court, remains to be seen and cannot form the basis of a view not in conformity with the views expressed in Shankarayya's case.
27. We are also unable to accept Mr. Das's submission with regard to section 173 of the 1988 Act. In our view, there is no inconsistency between the provisions of section 170 and section 173 of the 1988 Act. The provisions of section 173 will have to be read in the context of section 170 and section 149(2) of the said Act. The expression "any person aggrieved" will include the insurer to the extent indicated in section 149(2) and section 170 of the said Act. Any other interpretation will give rise to inconsistencies and incongruities.
28. The decision of the Hon'ble Supreme Court in Shankarayya's case and in Narendra Kumar's case, has been reiterated in Chinnama George's case and in the case of Smt. Rita Devi. In fact, in Smt. Rita Devi's case, the provisions of section 173 of the 1988 Act were considered in the light of the provisions of section 149(2) of the said Act and it was held that a joint appeal by the insurer and the owner of the vehicle would be maintainable only if any of the permitted defences were available to the insurer and the insurer could not avoid the statutory bar merely by joining the insured owner or the driver as co-appellant in such appeal. In other words, without obtaining leave from the Tribunal under section 170 of the 1988 Act, an appeal on the merits of the award of the Claims Tribunal would not be maintainable at the instance of the insurer.
29. Having regard to the above, we are of the view that these two appeals are not maintainable at the instance of the insurer, since no leave under section 170 was obtained by the insurer from the Claims Tribunal.
30. The appeals are accordingly dismissed, but without any order as to costs.
31. The respondents in the two appeals will be entitled to withdraw the amount already deposited in this Court pursuant to orders passed by this Court.
Prayer for stay of this judgment is considered and refused, having regard to the views expressed by us.
As far as the balance amounts of the Awards are concerned, the respondents/claimants will be entitled to execute the awards before the Tribunal.
If an urgent xerox certified copy of this order is applied for, the same is to be supplied to the applicant at an early date.
G.C. De, J.--I agree.
32. Appeals dismissed