Himachal Pradesh High Court
Oriental Insurance Company Ltd vs Sh. Pappu & Others on 28 March, 2016
Author: Dharam Chand Chaudhary
Bench: Dharam Chand Chaudhary
IN THE HIGH COURT OF HIMACHAL PRADESH
SHIMLA
C.W.P. Nos.5023 of 2009 a/w CWP Nos.
1172 of 2006, 1749 of 2007, 459 of
2008, 4831 of 2009, 7552 of 2010,
.
7587 of 2010 and 7588 of 2010.
Date of Decision: 28th March,2016
1. C.W.P. No.5023 of 2009
Oriental Insurance Company Ltd. ...Petitioner.
of
Versus
Sh. Pappu & others. ...Respondents.
2. C.W.P. No.1172 of 2006
rt
Oriental Insurance Company Ltd.
Versus
... Petitioner.
Motor Accident Claims Tribunal Shimla & others....Respondents.
3. C.W.P. No.1749 of 2007
Oriental Insurance Company Ltd. ... Petitioner.
Versus
Sh. Vikas Bhopal & others ......Respondents.
4. C.W.P. No.459 of 2008
Oriental Insurance Company Ltd. ... Petitioner
Versus
Motor Accident Claims Tribunal-II Shimla & others
......Respondents.
5. C.W.P. No.4831 of 2009
Oriental Insurance Company Ltd. ... Petitioner.
Versus
Sh. Lal Chand & others ......Respondents.
6. C.W.P. No.7552 of 2010
Oriental Insurance Company Ltd. ... Petitioner.
Versus
Sh.Devinder Singh & others ......Respondents.
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2
7. C.W.P. No.7587 of 2010
Oriental Insurance Company Ltd. ... Petitioner.
Versus
Sh. Rakesh Kumar & others ......Respondents.
.
8. C.W.P. No.7588 of 2010
Oriental Insurance Company Ltd. ... Petitioner.
Versus
Sh. Kuldeep Negi & others ......Respondents.
of
Coram:
The Hon'ble Mr. Justice Dharam Chand Chaudhary, Judge.
Whether approved for reporting?1 Yes.
rt
For the Petitioner(s): Mr. Ashwani Kumar Sharma, Sr. Advocate
with Mr. Nishant Kumar, Advocate for the
petitioners (in CWP Nos.1172 of 2006,
459 of 2008 & CWP No.5023 of 2009).
Mr. G.C.Gupta, Sr. Advocate with Ms.
Meera Devi, Advocate, for the petitioners
(in CWP Nos.7552 of 2010,7587 of 2010 &
CWP No.7588 of 2010).
Dr. Lalit Kumar Sharma, Advocate for the
petitioners (in CWP No.1749 of 2007 &
4831 of 2009.
For the Respondents: Mr. J.L.Bhardwaj, Advocate, for the
respondents (in CWP No.5023 of 2009).
Mr. V.S.Chauhan, Advocate, for
respondent No.2 in CWP No.1172 of 2006
and for respondents No. 2 and 3 in CWP
No. No. 459 of 2008.
Mr. Sunil Mohan Goel, Advocate for
respondent No.1( in CWP No.1749 of
2007).
Mr. Ajay Kumar Dhiman, Advocate for
respondents No.2 and 3(in CWP No.1749
of 2007).
1
Whether reporters of the local papers may be allowed to see the judgment? Yes.
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3
Mr. Anupinder Rohal, Advocate vice Mr.
M.L. Chauhan, Advocate, for the
respondents in CWP Nos. 7552, 7587 and
7588 of 2010.
.
Mr. Arun Kumar Verma, Advocate for
respondents No.1 to 3 and Mr.
B.S.Kanwar, Advocate for respondent
No.4 and Mr. J.S.Bagga Advocate for
respondent No.5 in CWP No. 4831 of
2009.
Dharam Chand Chaudhary, Judge (Oral)
of In these writ petitions, awards passed by learned Motor Accident Claims Tribunal have been assailed by the rt Insurance companies on the ground inter-alia that the same are perverse and as the insurer cannot assail the same on the ground of quantum of compensation as awarded in an appeal, therefore, the insurer-petitioners cannot challenge the award on all the grounds except for the ground under Section 149(2) of the Motor Vehicles Act. Unless granted the permission by the claims Tribunal as envisaged under Section 170 of the Motor Vehicles Act, he has sought or obtained. Such permission in these cases either has been declined or not sought. Therefore, it is canvassed in all these petitions that the award(s) under challenge in the Tribunal deserves to be quashed and set-aside by this Court in exercise of its extraordinary writ jurisdiction.
2. It is seen that after filing of these writ petitions, the law has underwent change. The Hon' ble Apex Court in United India Insurance Company Limited Versus Shila Datta and others (2011)10 Supreme Court Cases 509; while discussing the ::: Downloaded on - 15/04/2017 19:59:27 :::HCHP 4 scope of Section 149 (2) and also Section 170 of the Motor Vehicles Act and making a distinction between the insurer only as a noticee under Section 149(2) of the Act and impleaded as .
respondent in the claim petition has concluded that in the cases where the insurer has been impleaded as respondent by the claimants-petitioners it is competent to contest the claim petition on all the grounds and also competent to file an appeal even on the grounds other than those prescribed under Section 149(2) of the of Act. As a matter of fact, in the judgment (supra) on a reference made, the three Judges Bench, has formulated the following five rt points:-
(i) There is a significant difference between an insurer as a "noticee" (a person to whom a notice is served as required by Section 149( 2) of the Act) in a claim proceedings and an insurer as a party-respondent in a claim proceedings. Where an insurer is impleaded by the claimants as a party, it can contest the claim on all grounds, as there are no restrictions or limitations in regard to contest. But where an insurer is not impleaded by the claimant as a party, but is only issued a statutory notice under Section 149(2) of the Act by the Tribunal requiring it to meet the liability, it is entitled to be made a party to deny the liability on the grounds mentioned in Section 149(2).
(ii) When the owner of the vehicle (the insured) and the insurer are aggrieved by the award of the Tribunal, and jointly file an appeal challenging the quantum, the mere presence of the insurer as a co-appellant will not render the ::: Downloaded on - 15/04/2017 19:59:27 :::HCHP 5 appeal, as not maintainable. When the insurer is the person to pay the compensation, any interpretation to say that it is not a "person aggrieved" by the quantum of compensation .
determined, would be absurd and anomalous.
(iii) When an insurer is aggrieved by the quantum of compensation, it is not seeking to avoid or exclude its liability, but merely wants determination of the extent of its liability. The of restrictions imposed upon the insurers to defend the action by the claimant or file an appeal against the judgment and award of the Tribunal rt will apply, only if it wants to file an appeal to avoid liability and not when it admits its liability to pay the amount awarded, but only seeks proper determination of the quantum of compensation to be paid.
(iv) Appeal is a continuation of the original claim proceedings. Section 170 provides that if the person against whom the claim is made, fails to contest the claim, the insurer may be permitted to resist the claim on merits. If and when an award is made by the Tribunal, which is excessive, arbitrary or erroneous, the owner of the vehicle has to challenge the same by filing an appeal before the High Court. If the insured( owner of the vehicle) fails to challenge an award even when it is erroneous or arbitrary or fanciful, it can be considered that the insured has failed to contest the same and consequently under Section 170, the High Court or the Tribunal may permit the insurer to file an appeal and contest the award on merits.
::: Downloaded on - 15/04/2017 19:59:27 :::HCHP 6(v) The Motor Vehicles Act, 1988("the Act", for short) creates a liability upon the insurer to satisfy the judgments and awards against the insured. The Act expressly restricts the right of .
the insurer to avoid the liability as insurer, only to the grounds specified in Section 149(2) of the Act. Though it is impermissible to add to the grounds mentioned in the statute, the insurer has a right, if it has reserved such a right in the policy, to defend the action in the name of the insured. If it of opts to step into the shoes of the insured, it can defend the action in the name of the insured and all defences open to the insured will be available rt to it and can be urged by it. Its position contesting a claim under Section 149(2) of the Act is distinct and different, when it is contesting the claim in the name of or on behalf of the insured owner of the vehicle. In cases, where it is authorized by the policy to defend any claim in the name of the insured, and the insurer does so, it cannot be restricted to the grounds mentioned in Section 149(2) of the Act, as the defence is on behalf of the owner of the vehicle.
3. Point No.1 deals with the right of the insurer to contest a claim petition on all the grounds including on the ground of quantum of compensation awarded, in addition to the grounds mentioned under Section 149(2) of the Act.
Similarly, point No.2 pertains to the right of the insurer to prefer an appeal under Section 173 of the Motor Vehicles Act against an award, questioning therein the quantum of ::: Downloaded on - 15/04/2017 19:59:27 :::HCHP 7 compensation as awarded. The discussion pertaining to these points in the judgment (supra) reads as follows:-
13. The scheme of the Motor Vehicles Act, 1988 as contained in Chapters XI (Insurance of Motor Vehicles .
against Third-party Risks) and XII( Claims Tribunals) proceeds on the basis that an insurer need not be pleaded as a party to the claim proceedings and it should only be issued a statutory notice under Section 149( 2) of the Act so that it can be made liable to pay of the compensation awarded by the Tribunal and also resist the claim on any one of the grounds mentioned in clauses (a) and (b) of sub-section (2) of Section 149.
rt Sub-sections (1), (2) and (7) of Section 149 clearly refer to the insurer being merely a noticee and not a party.
Similarly, Sections 158(6), 166(4), 168(1) and 170 clearly provide for an contemplate the insurer being merely a noticee for the purpose mentioned in the Act and not being a party-respondent. Section 170 specifically refers to impleading of insurer as a party to the claim proceedings.
14. When an insurer is impleaded a party- respondent to the claim petition, as contrasted from merely being a noticee under Section 149(2) of the Act, its rights are significantly different. If the insurer is only a noticee, it can only raise such of those grounds as are permissible in law under Section 149(2). But if he is a party-respondent, it can raise, not only those grounds which are available under Section 149(2 ), but also all other grounds that are available to a person against whom a claim is made. It, therefore, follows that if a claimant impleads the insurer as a party- respondent, for whatever reason, and then as such ::: Downloaded on - 15/04/2017 19:59:27 :::HCHP 8 respondent, the insurer will be entitled to urge all contentions and grounds which may be available to it.
15. The Act does not require the claimants to implead the insurer as a party-respondent. But if the .
claimants choose to implead the insurer as a party, not being a noticee under Section 149( 2), the insurer can urge all grounds and not necessarily the limited grounds mentioned in Section 149(2) of the Act. If the insurer is already a respondent (having being of impleaded as a party-respondent), it need not seek the permission of the Tribunal under Section 170 of the Act to raise grounds other than those mentioned in rt Section 149 (2) of the Act.
16. The entire scheme and structure of Chapter XI and XII is that the claimant files a claim petition only against the owner and driver and the Tribunal issues notice to the insurer under Section 149( 2) so that it can be made liable to pay the amount awarded against the insurer and if necessary, deny liability under the policy of insurance, on any of the grounds mentioned in Section 149( 2). If an insurer is only a noticee and not a party-respondent, having regard to the decision in Nicolletta Rohtagi, it can defend the claim only on the grounds mentioned in Section 149(2) and not any of the other grounds relating to merits available to the insured respondent. This is the position even where the claim proceedings are initiated suo motu under Section 149( 7) { sic Section 166( 4)} and 158(6) of the Act, without any formal application by the claimants, as the insurer is only a noticee under Section 149(2) of the Act.
17. Section 170 of the Act does not contemplate an insurer making an application for impleadment. Nor ::: Downloaded on - 15/04/2017 19:59:27 :::HCHP 9 does it contemplate the insurer, if he is already impleaded as a party-respondent by the claimants, making any application seeking permission to contest the matter on merits. Section 170 proceeds on the .
assumption that a claim petition is filed by the claimants, or is registered suo motu by the Tribunal, with only the owner and driver of the vehicle as the respondents. It also proceeds on the basis that in such a proceedings, a statutory notice would have been issued by the Tribunal to the insurer so that the of insurer may know about its future liability in the claim petition and also resist the claim, on any of the grounds mentioned in Section 149(2).
rt
18. Section 170 of the Act also assumes that the Tribunal will hold an inquiry into the claim, where only the claimants and the owner and driver will be the parties. Section 170 provides that if during the course of such inquiry, the Tribunal finds and satisfies itself that there is any collusion between the claimant and the owner/driver or where the owner/driver has failed to contest the claim, the Tribunal may suo motu, for reasons to be recorded in writing, direct that the insurer who may be liable in respect of the claim, who was till then only a noticee, shall be treated as a party to the proceedings. The insurer so impleaded, without prejudice to the provisions of Section 149(2), will have the right to contest the claim on all or any of the grounds that are available to the driver/owner.
19. Therefore, where the insurer is a party- respondent, either on account of being impleaded as a party by the Tribunal under Section 170 or being impleaded as a party-respondent by the claimants in the claim petition voluntarily, it will be entitled to contest the matter by raising all grounds without being ::: Downloaded on - 15/04/2017 19:59:27 :::HCHP 10 restricted to the grounds available under Section 149(2) of the Act. The claim petition is maintainable against the owner and driver without impleading the insurer as a party.
.
20. When a statutory notice is issued under Section 149(2) by the Tribunal, it is clear that such notice is issued not to implead the insurer as a party-
respondent but merely to put it on notice that a claim has been made in regard to a policy issued by it and of that it will have to bear the liability as and when an award is made in regard to such claim. Therefore, it cannot, as of right, require that it should be impleaded rt as a party-respondent. But it can, however, be made a party-respondent either by the claimants voluntarily in the claim petition or by the direction of the Tribunal under Section 170 of the Act. Whatever be the reason or ground for the insurer being impleaded as a party, once it is a party-respondent, it can raise all contentions that the available to resist the claim.
Re: Point(ii): Maintainability of a joint appeal by the owner of the vehicle(insured) and insurer.
21. There is no dispute that when an award is made by the Tribunal, the owner of the vehicle (the insured), being a person aggrieved, can file an appeal challenging his liability on any ground, or challenge the quantum of compensation. An appeal which is "maintainable" when the owner of the vehicle files it, does not become "not maintainable" merely on account of the insurer being a co-appellant, with the owner. When the insurer becomes a co-appellant, the owner of the vehicle does not cease to be a person aggrieved.
::: Downloaded on - 15/04/2017 19:59:27 :::HCHP 1122. This question came up for consideration of a two-Judge Bench of this Court with reference to the provisions of the Motor Vehicles Act, 1939 ("the old Act", for short) in Narendra Kumar V. Yarenissa. This .
Court held: (SCC pp.206-07 paras 6 &7) "6 The question, however, is if such a joint appeal is preferred must it be dismissed in toto or can the tortfeasor, the owner of the offending vehicle, be permitted to pursue the appeal while rejecting or dismissing the appeal of the insurer. If the award has gone against the of tortfeasors it is difficult to accept the contention that the tortfeasor is not 'an aggrieved person' as has been held by some of the High Courts vide Kantilal & rt Bros. V Ramarani Debi, New India Assurance Co. Ltd. Vs Shakuntla Bai, Nahar Singh V Manohar Kumar and Radha Kishan Sachdeva Vs Flt. Ltd. L.D. Sharma merely because under the scheme of Section 96 if a decree or award has been made against the tortfeasors the insurer is liable to answer judgment 'as if a judgment-debtor'. That does not snatch away the right of the tortfeasors who are jointly and severally liable to answer judgment from preferring an appeal under Section 110-D of the Act. If for some reasons or the other the claimants desire to execute the award against the tortfeasors because they are not in a position to recover the money from the insurer the law does not preclude them from doing so and, therefore, so long as the award or decree makes them liable to pay the amount of compensation they are aggrieved persons within the meaning of Section 110-D and would be entitled to prefer an appeal. But merely because a joint appeal is preferred and it is found that one of the appellants, namely, the insurer was not competent to prefer an appeal, we fail to see why the appeal by the tortfeasor, the owner of the vehicle, cannot be proceeded with after dismissing or rejecting the appeal of the insurer. To take a view that the owner is not an aggrieved party because the Insurance ::: Downloaded on - 15/04/2017 19:59:27 :::HCHP 12 Company is liable in law to answer judgment would lead to an anomalous situation in that no appeal would lie by the tortfeasors against any award because the same logic applies in the case of a driver of the vehicle. The question can be .
decided a little differently. Can a claim application be filed against the Insurance Company alone if the tortfeasors are not the aggrieved parties under Section 110-D of the Act? The answer would obviously be in the negative. If that is so, they are persons against whom the claim application must be preferred and an award sought for otherwise the insurer of would not be put to notice and would not be liable to answer judgment as if a judgment-debtor. Therefore, on first rt principle if would appear that the contention that the owner of a vehicle is not an aggrieved party is unsustainable........
7. For the reasons stated above, we are of the opinion that even in the case of a joint appeal by the insurer and the owner of the offending vehicle if an award has been made against the tortfeasors as well as the insurer even though an appeal filed by the insurer is not competent, it may not be dismissed as such. The tortfeasor can proceed with the appeal after the cause-title is suitably amended by deleting the name of the insurer."
23. When the issue again came up for consideration before another two-Judge Bench of this Court in Chinnama George Vs N.K. Raju, with reference to the provisions of the Motor Vehicles Act, 1988, this Court agreed with Narendra Kumar that the owner of the vehicle is an aggrieved person, but held that a joint appeal would not be maintainable. This Court held (Chinnama George case, SCC pp.134-35 & 136, paras 6 &10).
"6 Admittedly, none of the grounds as given in sub-section (2) of Section 149 exist for the insurer to defend the claims petition. The being ::: Downloaded on - 15/04/2017 19:59:27 :::HCHP 13 so, no right existed in the insurer to file appeal against the award of the Claims Tribunal. However, by adding N.K. Raju, the owner as co- appellant, an appeal was filed in the High Court which led to the impugned judgment. None of the grounds on which insurer could defend the .
claims petition was the subject-matter of the appeal as far as the insurer is concerned. We have already noticed above that we have not been able to figure out from the impugned judgment as to how the owner felt aggrieved by the award of the Claims Tribunal. The impugned judgment does not reflect any grievance of the owner or even that of the driver of the offending bus against the award of the Claims Tribunal.
of The insurer by associating the owner or the driver in the appeal when the owner or the driver is not an aggrieved person cannot be allowed to mock at the law which prohibit the insurer from rt filing any appeal except on the limited grounds on which it could defend the claims petition. We cannot put our stamp of approval as to the validity of the appeal by the insurer merely by associating the insured. Provision of law cannot be undermined in this way. We have to give effect to the real purpose to the provision of law relating to the award of compensation in respect of the accident arising out of the use of the motor vehicle and cannot permit the insurer to give him right to defend or appeal on grounds not permitted by law by a backdoor method. Any other interpretation will produce unjust results and open gates for the insurer to challenge any award. We have to adopt a purposive approach which would not defeat the broad purpose of the Act. The court has to give effect to true object of the Act by adopting purposive approach.
10 There is no dispute with the proposition so laid by this Court. But the insurer cannot maintain a joint appeal along with the owner or the driver if defence on any ground under Section 149(2) is not available to it. In that situation joint appeal will be incompetent. It is not enough if the insurer is struck out from the array of the appellants. The appellate court must also be satisfied that a defence which is permitted to be taken by the insurer under the Act was taken in the pleadings and was pressed before the Tribunal. On the appellate Court being so satisfied the appeal may be entertained for examination of the correctness or otherwise ::: Downloaded on - 15/04/2017 19:59:28 :::HCHP 14 of the judgment of the Tribunal on the question arising from/relating to such defence taken by the insurer. If the appellate Court is not satisfied that any such question was raised by the insurer in the pleadings and/or was pressed before the Tribunal, the appeal filed by the .
insurer has to be dismissed as not maintainable.
The court should take care to ascertain this position on proper consideration so that the statutory bar against the insurer in a proceeding of claim of compensation is not rendered irrelevant by the subterfuge of the insurance company joining the insured as a co-appellant in the appeal filed by it. This position is clear on a harmonious reading of the statutory provisions of in Sections 147, 149 and 173 of the Act. Any other interpretation will defeat the provision of sub-section (2) of Section 149 of the Act and throw the legal representatives of the deceased rt or the injured in the accident to unnecessary prolonged litigation at the instance of the insurer."
24. This issue did not arise for consideration of the three-Judge Bench decision in Nicolletta Rohtagi, as the question therein was whether an insurer could file an appeal.
25. On a careful consideration, we are of the view that the decision in Chinnama George to the extent it holds that a joint appeal is not maintainable, does not lay down the correct law. As observed in Narendra Kumar, the owner of the vehicle does not cease to be an aggrieved person, merely because the insurer is ultimately liable under the terms of the policy or under Section 149 of the Act. If the owner by himself can file an appeal as an aggrieved person and such appeal is maintainable, we fail to understand how the presence of the insurer as a co-appellant would make the appeal not maintainable. Whether the owner joins the insurer or the insurer joins the owner, ::: Downloaded on - 15/04/2017 19:59:28 :::HCHP 15 makes no difference to the fact that the owner continues to be a person aggrieved.
26. When a joint appeal is filed, to say that the insurer is not an aggrieved person and the owner of .
the vehicle is also not an aggrieved person, would lead to an anomalous situation and would border on an absurdity. Without entering upon the question whether an insurer is an aggrieved person (which requires to be considered separately), we make it clear of that on account of the insurer being a co-appellant, will not affect the maintainability of the appeal. So long as the owner is an appellant and he is a "person aggrieved"
rt in law, the question whether he is independently filing the appeal, or whether he is filing it at the instance of the insurer becomes irrelevant. When a counsel holds vakalatnama for an insurer and the owner of the vehicle in a joint appeal, the court cannot say that his arguments and submissions are only on behalf of the insurer and not on behalf of the owner. There is also no need to examine at the threshold in a joint appeal, whether the insurer should be deleted from the array of appellants.
4. The crux of the law laid down, therefore, is that the insurer when impleaded as a respondent in the claim petition has every right to contest the claim petition on all the grounds as available to a person against whom the claim laid and can also file an appeal under Section 173 of the Act on all available grounds i.e. in addition to one provided under Section 149(2) of the Act including on the ground of quantum of compensation as awarded. However, where the impleadment of the insurer is only as a noticee within the ::: Downloaded on - 15/04/2017 19:59:28 :::HCHP 16 meaning of Section 149(2) of the Act consequent upon an order passed by the Claims Tribunal, its entitlement to contest the petition on all the grounds including the quantum .
of compensation is still pending adjudication before a larger Bench of the Apex Court.
5. Now coming to these petitions, it is seen that the petitioner-insurer was impleaded as respondent in the claim petitions, therefore, in view of the law laid down by the of Hon'ble Apex Court in the judgment (supra)-the petitioner-
insurer is at liberty to challenge the award by filing an appeal rt under Section 173 of the Act. The writ petitions, as such, are not maintainable.
6. In view of the above, all the writ petitions are though disposed, however, with liberty reserved to the petitioner-insurer to challenge the award(s) in an appeal under Section 173 of the Act, if so advised. If the appeal is filed by the insurer, the period spent in pursuing the writ remedy before this Court shall be excluded while computing the period of limitation. The petitioner-insurer shall also be at liberty to seek transfer of the amount, if any, awarded/deposited during the course of proceedings in these writ petitions on the record of the appeal(s), if filed. Pending application(s), if any, shall also stand disposed of.
Copy dasti.
( Dharam Chand Chaudhary), Judge.
March 28, 2016.
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