ICICI Lombard General Insurance Co. Ltd. vs Dhansay @ Buttu Yadav and Others

Dilip Raosaheb Deshmukh, J.—Heard on admission.

In this appeal as admitted by the learned counsel for the appellant/ insurer, only the quantum of compensation of Rs.5,38,200/- awarded by the Additional Motor Accidents Claims Tribunal, Katghora, Dist. Korba (henceforth ''the Tribunal'') vide order dated 17.04.2008 passed in claim case No. 169/2007 is under challenge.

It is not disputed by the learned counsel for the appellant that permission u/s 170 of the Motor Vehicles Act, 1988 (for short ''the Act'') to contest the claim on grounds available to the owner of the vehicle was not granted to the appellant/insurer.

u/s 149(2) of the Act, an insurer is entitled to defend the action initiated by the claimants on grounds enumerated in sub-section (2) of Section 149 of the Act and on no other ground. Thus, the insurer can avoid its liability only on the statutory defences, which are available to the insurer u/s 149(2) of the Act. Section 170 of the Act carves an exception to this and upon satisfaction that there is collusion between the person making the claim and the person against whom the claim is made or that the person against whom the claim is made has failed to contest the claim, the Tribunal may, for reasons to be recorded in writing, direct that the insurer, who may be liable in respect of such claim, shall have, without prejudice to the provisions contained in sub-section (2) of Section 149 of the Act, 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. Thus, it is only where conditions precedent embodied in Section 170 of the Act are satisfied, the insurer has a right to file appeal challenging the quantum of compensation on negligence awarded by the Tribunal.

In National Insurance Co. Ltd., Chandigarh Vs. Nicolletta Rohtagi and Others, it was held that the right of appeal to the insurer is not an inherent right or common law right, but in a statutory right. If the law provides that appeal can be filed on limited grounds the grounds of challenge available to the insurer u/s 149 (2) of the Act cannot be enlarged except u/s 170 of the Act. Therefore, it is not permissible for the insurer to file appeal questioning the quantum of compensation in the absence of permission granted by the Tribunal u/s 170 of the Act to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made.

It is thus crystal clear that this appeal by the insurer challenging the quantum of compensation awarded by the Tribunal is not maintainable. The appeal is, therefore, liable to be and is accordingly dismissed at the admission stage.