Chattisgarh High Court
Bajaj Allianz General Insurance ... vs Dasru Patel And Others 2 Janak Kori And ... on 28 April, 2011
HIGH COURT OF CHATTISGARH AT BILASPUR
WP 227 No 292 OF 2009 WP 227 No 410 OF 2009
Bajaj Allianz General Insurance Company Limited
...Petitioners
Versus
1 Dasru Patel and others 2 Janak Kori and others
...Respondents
! Shri Sachin Singh Rajput Advocate for the petitioner ^ Shri AV Sridhar Adv for the respondent No 1 Shri Santosh Tiwari Adv for the respondent No 3 Shri Akhil Agrawal Pa CORAM: HONBLE SHRI NK AGARWAL J Dated: 28/04/2011 : Judgement O R A L O R D E R
1. This order shall govern disposal of above two writ petitions.
2. Bajaj Allianz General Insurance Company Limited who is petitioner in both the writ petitions is challenging jurisdiction of Permanent Lok Adalat to entertain and adjudicate claim petitions under the Motor Vehicles Act, 1988 (briefly `the Act of 1988').
3. For proper appreciation of legal issues involved in the case, the facts in W.P.(227) No. 292/2009 is set down hereunder:-
Respondent No. 1 instituted a claim petition before the Permanent Lok Adalat, Bilaspur under Section 22- A of the Legal Services Authority Act, 1987 (briefly `the Act of 1987') claiming amount of Rs. 5,50,000/- as compensation for the injuries sustained by him in the motor accident dated 1-3-2008 against the driver, owner and petitioner i.e. insurer of the truck bearing registration No. CG07 C/7247. After receipt of notice, the petitioner/insurance company raised a preliminary objection challenging jurisdiction of Permanent Lok Adalat to entertain and adjudicate the claim under the Act of 1988. Vide impugned order, the Permanent Lok Adalat dismissed the objection raised by the petitioner. Hence this petition.
4. Shri Rajput, learned counsel for the petitioner would submit, power is not vested with respondent No. 4 to entertain and adjudicate and award compensation in respect of injuries sustained in an accident. Accident is a tortuous act and in order to obtain compensation, case has to be filed before motor accident claims tribunal specially constituted for the purpose under Section 165 of the Act of 1988. He would further submit, learned Permanent Lok Adalat has no jurisdiction to pass any order or award where parties do not agree for compromise or settlement of their dispute. It was further contended there is no privity of contract between respondent No. 1 and the petitioner. Hence it cannot take benefit of Section 22-A of the Act of 1987. Respondent No. 1 is a third party to the contract of insurance between the petitioner and the respondent No. 3. Hence provision of Section 22 of the Act of 1987 would not apply.
5. On the other hand, Shri S.K. Tiwari, learned counsel appearing for the respondent No. 3 would support the order impugned.
6. I have heard learned counsel for the parties and perused the order impugned.
7. The core question arises for decision making is whether the Permanent Lok Adalat constituted under Section 22-B of the Act of 1987 has jurisdiction to entertain and adjudicate a motor accident compensation claim under the Act of 1988.
8. Under Chapter VI of Act of 1987, Lok Adalats have been conferred jurisdiction to resolve any matter which is already pending in the court or which may be brought before the court except the cases or matters relating to an offence not compoundable under any law by means of amicable settlement.
9. Chapter VI-A of the Act was substituted by amendment of the Legal Services Authorities Act brought about in the year 2002. Section 22A(a) defines Permanent Lok Adalat as one established under sub-section (1) of Section 22B. Section 22A(b) defines the Public Utility Services as follows:-
(i) transport service for the carriage of passengers or goods by air, road or water; or
(ii) postal, telegraph or telephone service; or
(iii) supply of power, light or water to the public by any establishment; or (iv) system of public conservancy or sanitation; or (v) service in hospital or dispensary; or (vi) insurance service.
10. Section 22-B provides for the establishment of a Permanent Lok Adalat. Section 22B(1) reads as follows:-
"22B(1) Notwithstanding anything contained in Section 19, the Central Authority or as the case may be, every State Authority shall, by notification, establish Permanent Lok Adalats at such places and for exercising such jurisdiction in respect of one or more public utility services and for such areas as may be specified in the notification".
11. Section 22C provides for cognizance of cases by Permanent Lok Adalat. Section 22C provides that Permanent Lok Adalat should permanently settle the points in dispute between the parties and try to effect conciliation between them. But a distinguishing feature in so far as the powers of the Permanent Lok Adalat is concerned is what flows out of Section 23C(8) and the same reads as follows: "22C(8) Where the parties fail to reach at an agreement under sub-section (7), the Permanent Lok Adalat shall, if the dispute does not relate to any offence, decide the dispute.
12. Section 146 of M.V. Act under Chapter XI mandates that no person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this Chapter. Section 147 of the M.V. Act deals with the requirement of policies of insurance and limits of liability. Section 149 of M.V. Act shows that insurer is entitled to defend the action on the grounds enumerated in sub-section (2). Section 165 of M.V. Act found in Chapter XII of M.V. Act, 1988 provide for constitution of Claims Tribunal. A State Government may, by notification in the Official Gazette, constitute one or more Motor Accidents Claims Tribunals for such area as may be specified in the notification for the purpose of adjudicating upon claims for compensation in respect of accidents involving the death of, or bodily injury to, persons arising out of the use of motor vehicles, or damages to any property of a third party so arising or both. Under Section 166 of M.V. Act, application for compensation could be lodged. Section 167 of the Motor Vehicles Act, gives an option regarding claims for compensation in certain cases. It provides that notwithstanding anything contained in the Workmen's Compensation Act, 1923, where the death of, or bodily injury to, any person gives rise to a claim for compensation under this Act and also under the Workmen's Compensation Act, 1923, the person entitled to compensation may without prejudice to the provisions of Chapter X claim such compensation under either of those Acts but not under both. Award could be passed by the Motor Accident Claims Tribunal under Section 168 of M.V. Act. The procedure that is contemplated for holding any inquiry under Section 168 of M.V. Act is provided under Section 169 of the M.V. Act which would mandate that a claim petition shall follow rules that may be made and follows such summary proceedings as it thinks fit. The insurer could be impleaded as party to the proceedings under Section 170 of M.V. Act. Section 173 of the M.V. Act, 1988 would deal with the provisions relating to appeals that could be filed against the judgments and awards passed by the motor Accident Claims Tribunal. Section 175 of the Motor Vehicles Act, bars the jurisdiction of the Civil Courts to go into the claim for compensation in a motor vehicle accident. It states that where any claims Tribunal has been constituted for any area, no Civil Court shall have jurisdiction to entertain any question relating to any claim for compensation which may be adjudicated upon by the Claims Tribunal for that area, and no injunction in respect of any action taken or to be taken by or before the Claims Tribunal in respect of the claim for compensation shall be granted by the Civil Court. Section 176 of M.V. Act would mandate grant of power to State Government to frame rules for the purpose of carrying into effect the provisions of Section 165 to Section 175 of M.V. Act.
13. The Supreme Court in the case of National Insurance Company Ltd. v. Nicoletta Rohtagi, reported in [(2002) 7 SCC 456], interpreting the provisions of Motor Vehicles Act and the intention of the legislature was to protect the third party rights and not that of the insurer at paragraph 13 has held as under:
"Under Section 96(2) of 1939 Act which corresponds to Section 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 provisions gives in 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 defenses 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 the 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 statuette has specifically provided for.
14. The statutory liability of the Insurance Company to satisfy the third parties, i.e., a party who is not a party to a contract of insurance is found in Section 149 of M.V. Act. It casts a duty on the insurer to satisfy the judgments and awards against persons insured in respect of third party risk. The heading of the said section is significant. The duty is to satisfy judgment and awards and not the claim of the third parties. If the claim of the third party is adjudicated and the judgment and award is passed, then, the insurer shall pay to the person entitled to the benefit of the decree, any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of the costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments. So the condition precedent for such payment by the insurer is the passing of the judgment and award or decree. Till such time, there is no liability on the insurer under the Motor Vehicles Act. Sub-section (2) of Section 149 provides that as the insurer has to pay the amount awarded in the judgment or award, the insurer shall be made party to such proceedings before the commencement of the proceedings. Once the insurer is made party to such claim against the insured, the insurer has been given the right under the aforesaid provisions to defend the action on any of the grounds mentioned therein. The grounds set out in the said provision are breach of a specified condition of the policy or the policy being void on the ground that it was obtained by non-disclosure of material fact or by representation of fact which was false in sum material particulars. This is a defence against the insured and not against the claimant. However, Section 170 makes it clear that in the course of any enquiry, on such claim petition, if there is collusion between the person making the claim and the person against whom the claim is made, or the person against whom the claim is made has failed to contest the claim, the insurer has been conferred 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.
15. The Supreme Court in case of Oriental Insurance Co.
Ltd. v. Premlata Shukla, [(2007) 13 SCC 476, has held in para 9 and 10 of its judgment as under:
"9. Where an accident occurs owing to rash and negligent driving by the driver of the vehicle, resulting in sufferance of injury or death by any third party, the driver would be liable to pay compensation therefor. Owner of the vehicle in terms of the Act also becomes liable under the 1988 Act. In the event vehicle is insured, which in the case of a third party, having regard to sub- section (2) of Section 147 of the Act, is mandatory in character, the insurance company would statutorily be enjoined to indemnify the owner.
10. The insurer, however, would be liable to reimburse the insured to the extent of the damages payable by the owner to the claimants subject of course to the limit of its liability as laid down in the Act or the contract of insurance. Proof of rashness and negligence on the part of the driver of the vehicle, is therefore, sine qua non for maintaining an application under Section 166 of the Act."
16. Therefore under the provisions of the M.V.C. Act, the claim has to be preferred against the insured and the driver. Insurance Company is also added as a party by virtue of Section 149(2) of the Act. No claim against the Insurance Company is maintainable without the owner of the vehicle or the driver of the vehicle being made a party to the proceedings. Whereas the claim for compensation is validly maintainable against the insured and the driver without making the Insurance Company, a party. The Tribunal constituted under the MVC Act has been conferred the jurisdiction to entertain and adjudicate such claims. But, the Permanent Lok Adalat constituted under the Act has jurisdiction to entertain, conciliate and if it fails adjudicate a claim, only against a public utility service. It cannot entertain and adjudicate any claim against a private individual like the insured and the driver. The dispute should be between a public utility service and any party to the said dispute. Therefore, a dispute with reference to Insurance service necessarily means the claim is against the insurance company. The claim for compensation for the death of a victim of a road accident or for the injury sustained in an accident cannot be characterized as petty claims. It is a substantial claim. The Parliament has enacted the Motor Vehicles Act, 1988 specially constituting the Tribunal to adjudicate such claims and has specifically excluded the jurisdiction of the Civil Courts to entertain such claims. A statutory appeal is provided against such adjudication to the Hon'ble High Court. Normally, such claims are decided on the basis of evidence recorded, both oral and documentary. The Permanent Lok Adalat is broadly meant to decide petty cases. When the conciliation fails, the Permanent Lok Adalat has been vested with the power to decide the case on merits. However, no appeal is provided against such adjudication and the award passed by the Permanent Lok Adalat has been made final. It is in this back ground as is clear from the aforesaid statutory provisions the claims for compensation under the Motor Vehicles Act is not principally against the public utility services but against the insured and the driver of the vehicle and only in the event of the judgment/award or decree is passed, the Insurance Company is liable to pay the said amount.
17. In view of above, in the considered opinion of this Court, the Permanent Lok Adalat constituted under Section 22-B of the Legal Services Authorities Act, 1987 has no jurisdiction to entertain and adjudicate the motor accident compensation claim under the Motor Vehicles Act, 1988.
18. For the reasons mentioned hereinabove, the writ petitions are allowed. The impugned orders are quashed.
19. All the claims preferred by the claimants are rejected with liberty to them to prefer claim before motor accident claims tribunal constituted under Section 165 of the Motor Vehicles Act, 1988.
20. Parties to bear their own costs.
21. High Court registry is directed to send a copy of this order to all the Permanent Lok Adalat in the State for their guidance.
Judge