Allahabad High Court
The New India Assurance Company Limited ... vs Dr. Prem Singh Bhadauria Son Of Shri Sher ... on 1 August, 2007
Equivalent citations: 2007(4)AWC3751
Author: Amitava Lala
Bench: Amitava Lala, Shishir Kumar
JUDGMENT Amitava Lala, J.
1. This appeal is made by the insurance company from the judgement and award passed by the learned Judge, Motor Accidents Claims Tribunal dated 6th December, 2004. The total claim amount was Rs. 17,70,000/- which is arising out of injury. Out of the claim amount, loss of income and disability in total is RS. 13,80,000/-. The total awarded amount is Rs. 5,92,000/- with interest @ 6% per annum.
2. The appeal has been preferred by the insurance company by saying that the awarded amount is more than the claimed amount of Rs. 3,00,000/- for loss of earning capacity on account of disablement.
3. According to us, such ground is factually incorrect since both the claims, loss of earning capacity and disability, if added, will come to the aforesaid Rs. 13,80,000/- as above.
4. However, the appeal is opposed by the claimants on a different ground. It has been contended by the claimants that appeal is not maintainable in the eye of law since the application of the insurance company under Section 170 of the Motor Vehicles Act 1988 (hereinafter called as the 'Act') had been rejected by learned Judge of the Tribunal. Therefore, the insurance company has no right to prefer this appeal independently from the ultimate judgement and award passed by the Tribunal.
5. The scope and ambit of Section 170 of the Act is as follows:
170. Impleading insurance in certain cases.- Where in the course of any inquiry, the Claims Tribunal is satisfied that.
(a) there is collusion between the person making the claim and the person against whom the claim is made, or
(b) the person against whom the claim is made has failed to contest the claim, it may, 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 Sub-section (2) of Section 149, 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.
6. Therefore, scope of impleading the insurance company in the claim of the claimants is very much limited unless, of course, it is falling under Section 149(2) of the Act which is as follows:
149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.
(1)...
(2) No sum shall be payable by an insurer under Sub-section(1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:
(a) that there Has been a breach of a specified condition of the policy, being one of the following conditions, namely:
(i) a condition excluding the use of the vehicle.
(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or (c ) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
(d) without side-car being attached where the vehicle is a motor cycle; or
(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification or
(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or
(b) 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.
(3)...
(4)...
(5)...
(6)...
(7)...
Explanation....
6. Upon going through the grounds of appeal of the insurance company, we do not find any grievance under Section 149(2) of the Act for preferring the appeal before this Court. The only grievance is with regard to quantum. Dispute regarding quantum cannot be agitated by the insurance company, who is an agent of its principal i.e. insured, as a matter of course unless application under Section 170 of the Act is allowed. It has no separate entity under the contract unless, of course, violative of Section 149(2) of the Act as aforesaid. Since there is no such case hereunder, there is no scope of composite appeal from the order of rejection and the award. Inspite of the same if the appeal is allowed the scope and ambit of Section 170 of the Act will be frustrated.
7. In 2007 (4) ADJ 101 (DB) Oriental Insurance Co. Limited v. Smt. Mahju and Ors. this Court had considered the issue at length with the support of various Supreme Court judgments and found that there is no scope of preferring an appeal by the insurance company when an application under Section 170 of the Act had been rejected. Where such rejection was proper or not that can be questioned only by filing a revisional application under Article 227 of the Constitution of india. It has further liberty to make a rectification application before the tribunal itself in case of collusion. An insurance company, being an agent of its Principal i.e. the Insured, is contractually obligated to fulfil the contract. Therefore, after rejection of the application under Section 170 of the Act, it cannot be allowed to wait till the award is passed and prefer the appeal from both the order of rejection and the award.
8. In this case insurance company has contended before this court that as witness of the insurance company i.e. Doctor was examined by the learned Judge of the Tribunal, therefore, permission is implied. We are of the view that this is a misconception of law. in case of necessity, Court can examine anybody under the Evidence Act, proyded there is no bar. In this case, tribunal wanted to see the veracity of the statement of the Doctor of the State and the insurance company to come to an appropriate finding about the disablement. Even if the insurance company is not made party, the Court can examine anybody as an independent witness upon service of subpoena. That does not necessarily mean that impliedly permission has been granted to the insurance company to participate in the proceeding. Judicial order is always explicit. No one can be allowed to draw any favourable inference. A further plea has also been taken by the appellant that the application is kept pending till the disposal of the proceeding. According to us, no application either interim or interlocutory or miscellaneous in nature can be treated to be pending when main proceeding is disposed of either way. Non-recording of any such order is a bonafide mistake. Therefore, no chance can be allowed to be taken about alleged pendency. On the other hand, pendency can be couched both ways. It can be said as implied permission or implied rejection. Therefore, balance of convenience is the only test to get answer. Balance of convenience says had it been the case of statutory violation, implied permission could have been couched but when it is dispute regarding quantum, it should have been couched as implied rejection. Position of the possessor is much better.
9. In 2007 ACJ 883 New India Assurance Co. Ltd. v. Sandeep Chanpuria and Ors. a Division Bench of Madhya Pradesh High Court held that since the circumstances warranting such permission were present and obtaining on record, mere omission to record them in the order did not vitiate the same. However, Division Bench held on the actual basis that an application was filed to seek such a permission, the permission was never granted and, therefore, there is no warrant for supposing that mere participation of the insurance company on all grounds in the proceedings had the effect of implied permission. Therefore, the Court disallowed the insurance company from assailing the quantum of compensation.
10. In United India Insurance Co. Ltd. v. Jyotsnaben Sudhirbhai Patel and Ors. the Supreme Court observed that it is now a settled position that an insurer can contest the proceeding before the Motor Accidents Claims Tribunal only on any of the grounds prescribed under Section 149(2) and unless specific order is passed by the tribunal under Section 170, the insurer cannot contest the claim on the grounds other than the grounds mentioned in Sub-Section (2) of Section 149 of the Act. Interestingly in that case although a cryptic order, was passed by the tribunal "Granted as prayed for" but the Supreme Court observed that it is not sufficient. The tribunal should; give reasons while passing such orders as per the provisions of such section. It has been further observed by the Supreme Court that when the driver and the owner did not file the written statement and failed to contest the proceeding the tribunal could have recorded such fact while allowing the application. However, ultimately Supreme Court held that the appeal should not be dismissed only on the sole ground that the appellant had obtained a reasoned order permitting it to contest under Section 170 of the Act From the observations of the Supreme Court, it is crystal clear, as aforesaid, that even non reasoning in the order might have been fatal therefore it is far to say that when no order is passed the same will also be considered as permission.
11. There are two features of this case; firstly whether the permission can be implied or not, and secondly whether the permission can be said to be granted in the circumstances. So far as the implied permission is concerned, according to us, unless and until an appropriate order is passed permitting to participate, no one can say that permission, is implied. Secondly, even if so, merely dispute regarding quantum cannot be allowed to be raised by the insurance company when there is no appeal on the part of its principal i.e. the insured inspite of contesting the claim petition in the tribunal.
12. Therefore, the appeal cannot be sustained. Hence the appeal stands dismissed.
13. However, no, order is passed as to costs.
Shishir Kumar, J.
14. I agree.