United India Insurance Co. Ltd. Manager vs Mostt. Shanti Prasad and Others

Gopal Prasad, J.—This Miscellaneous Appeal is directed against the judgment and award dated 29th April, 2002, passed by Mahendra Narain Singh, II Ird Addl. District Judge, Bhagalpur, in Claim Case No. 49 of 2001, by which allowed the claim worth Rs. 11,79,704.00 (Rupees Eleven lakhs seventy nine thousand seven hundred four) only with interest @ 8% till March, 2001 and 7%

The case of the claimant is that deceased Gagan Bihari Prasad while travelling on the Bus bearing BRC 2996 on 2nd October, 2000, met with an accident when the bus collided with a tree due to rash and negligent driving of the driver and succumbed to the injury. The claim petition filed in which the bus driver appeared and filed a rejoinder contested the claim and asserted that vehicle was insured and even produced the driving licence of the driver and road permit.

Several opportunity was given to the Insurance Company after due notice, but no written statement was filed on behalf of the Insurance Company and finally five issues were framed as follows;

(1)whether the claim of the Petitioner is maintainable.

(2)whether there is any cause of action,

(3)whether the accident took place due to rash and negligent driving of the vehicle,

(4)whether the Insurance Company is liable to pay

(5) Whether claimant entitled to relief.

On the issues framed parties adduced evidence. After considering the evidence and submissions of the

Being aggrieved with the judgment and award of the Tribunal the Insurance Company has preferred this appeal challenging the finding recorded by the Tribunal on quantum, contributory negligence and dependency of the claimant on deceased.

However, at the outset learned Counsel for the Respondent raised a preliminary objection about the maintainability of appeal preferred by the

Learned Counsel for the Insurance Company, however, submitted that there are several irregularities and illegalities on the face of the impugned order of the Tribunal. The Tribunal while deciding the quantum took the gross income, but not considered the deduction in gross salary and deduction for income tax to find out the net salary for computing the quantum as the dependency can be assumed on the net salary and not on gross salary. It has further been pointed out

It has further been contended that the preliminary objection raised that insurer could not raise the question of quantum and contributory negligence and dependency in appeal but the illegality is apparent on face of the impugned order. Hence. the Appellant can not be remedyless and it has further been contended that if miscellaneous appeal is prohibited on ground of quantum, contributory negligence and dependency, then miscellaneous appeal may be converted into civil revision to grant relief and relied upon decision in Jugeshwar Singh @ Sinha Vs. State of Bihar and Others, .

Hence, on respective submission the question for consideration whether the Appellant who is insurer can challenge the finding on quantum, contributory negligence and dependency when permission has not been granted by the Tribunal to contest u/s 170 of Motor Vehicle Act and whether the relief can be granted by converting the miscellaneous appeal into civil revision.

However, taking into consideration the fact that the case of the claimant that deceased Gagan Bihari Prasad while travelling in the bus met with an accident due to rash and negligence driving of the bus by the driver of the bus. The said vehicle was insured and in claim petition, owner of the bus and insurer were made party. The owner and driver appeared and filed their written statement asserting that the vehicle was insured and the driver had valid licence.

However, the Insurance Company did not prefer to file a written statement, though, from perusal of the record, it appears that only a rejoinder petition has been filed by the Insurance Company against the petition of claimant for interim compensation filed u/s 140 of the M.V. Act. But Insurance Company neither filed any W.S. in the case nor the Insurance Company even cross examined the witness as apparent from perusal of the deposition nor even filed any petition u/s 170 of M.V. Act for permission to contest on ground that claimant and

In the evidence of A.W.1 Anil Kumar, there is specific mention that on repeated call no one appeared on behalf of the Insurance Company. In the evidence of A.W. 2, 3 and 4 also there is no mention about cross examination by the Insurance Company. Hence, there is no material to suggest that even an implied consent sought for on behalf of insurer or granted by the Tribunal.

However, under the facts and circumstances, the question raised is "Is it open to the insurer to prefer appeal against the award of tribunal questioning the quantum of compensation as well as finding as regard the negligence of the offending vehicle". The point raised is not resintegra the same point raised in decision reported in National Insurance Co. Ltd., Chandigarh Vs. Nicolletta Rohtagi and Others, . The fact of that case that accident took place in which one person was dead. On the claim by the dependent of deceased, the Tribunal awarded compensation of Rs. 13,13,150 with interest @ 20% per annum. The appeal preferred against the award was dismissed by the High Court. Against the said judgment of High Court, an appeal was preferred before Supreme Court. Since, two decisions of two Judges Bench reported in Smt. Rita Devi and Others Vs. New India Assurance Co. Ltd. and Another, and United India Insurance Co. Ltd. Vs. Bhushan Sachdeva and Others, had contrary view, hence the matter

" 25. We have earlier noticed that motor vehicle accident claim is a tortuous claim directed against tortfeasors who are the insured and the driver of the vehicle and the insurer comes to the scene as a result of statutory liability created under the Motor Vehicles Act. The legislature has ensured by enacting Section 149 of the Act that the victim of motor vehicle are fully compensated and protected. It is for that reason the insurer cannot escape from its liability to pay compensation on any exclusionary clause in the insurance policy except those specified in Section 149(2) of the Act or where the condition precedent specified in Section 170 is satisfied.

13 . For the aforesaid reasons, an insurer if aggrieved against an award, may file an appeal only on those grounds and no other. However, by virtue of Section 170 of the 1988 Act, where in course of an enquiry the Claims Tribunal is satisfied that (a) there is a collusion between the person making a claim and the person against whom the claim has been made, or (b ) the person against whom the claim has been made has failed to contest the claim, the Tribunal may, for reasons to be recorded in writing, implead the insurer and in that case it is permissible for the insurer to contest the claim also on the grounds which are available to the insured or to the person against whom the claim has been made. Thus, unless an order is passed by the Tribunal permitting the insurer to avail the grounds available to an insured or any other person against whom a claim has been made on being satisfied of the two conditions specified in Section 170 of the Act, it is not permissible to the insurer to

This matter may be examined from another angle. The right of appeal is not an inherent right or common law right, but is a statutory right. If the law provides that an appeal can be filed on limited grounds, the grounds of challenge cannot be enlarged on the premise that the insured or the persons against whom a claim has been made have not filed any appeal. Section 149(2) of the 1988 Act limits the insurer''s appeal on those enumerated ground and the appeal being a product of the statute, it is not open to an insurer to take any plea other than those provided in Section 149(2) of the 1988 Act. The view taken in United India Insurance Co. Ltd. v. Bhushan Sachdevathat a right to contest would also include the right to file an appeal is contrary to well-established law that creation of a right to appeal is an act which requires legislative authority and no court or tribunal can confer such right, it being one of limitation or extension of jurisdiction. "

Hence the Hon''ble Apex Court held that Insurance Company has no right of appeal to challenge the award on merit unless condition precedent specified in Section 170 of the Motor Vehicle Act, 1956 are satisfied. Where permission is enormously rejected, insurer can challenge only that part of order by filing appeal as well as on ground specified in Section 149(2). So far ground for obtaining compensation by fraud, insurer may apply to the Tribunal as fraud vitiates the However, Parliament and Law Commission may consider introducing provision that insurer may contest but this Court cannot usurp the function of legislature to allow the insurer to maintain

The same question arose in decision reported in 2010 (3) PLJR 1003 . However relying on decision National Insurance Co. Ltd., Chandigarh Vs. Nicolletta Rohtagi and Others, it was held that insurer cannot be permitted to file appeal on ground other than 149(2) of Motor Vehicle Act. 17. The same question also arose in Gajendra Narayan Singh Vs. The State of Bihar and Others, whether the appeal at the instance of insurer challenging the quantum of compensation is maintainable u/s 173 of the Motor Vehicle Act when permission not granted u/s 170 Motor Vehicle Act and held that insurer cannot be permitted to challenge the award on that ground if permission has not been granted by Tribunal to contest as provided u/s 170 of Motor Vehicle Act.

However, the learned Counsel for the Appellant has further relied on second limb of argument that if appeal is barred then for the illegality of the order by Tribunal apparent on face of it, the Appellant cannot be remedyless and then miscellaneous appeal be converted into civil revision. It has further asserted that

However, the argument advanced by the learned Counsel for the Appellant that if appeal is not maintainable then Appellant cannot be remedyless, but the appeal be converted into civil revision to grant relief, the same argument was advance in decision reported in Branch Manager, National Insurance Co. Ltd. Vs. Arjun Prasad and Others, . The fact remained in that case that the Insurer preferred appeal challenging the quantum and in appeal the objection taken by Respondent that Appellant having not taken permission to contest from Tribunal, he is not entitle to challenge the award on quantum and contributory negligence and similar argument advance that if miscellaneous appeal is not maintainable then the appeal be converted into civil revision to grant relief relying on observation of Sadhna

"11.... In this case, the question for consideration was whether the petition under Articles 226/227 of the Constitution of India against an award made by the Tribunal under the provision of the Act is maintainable and the Supreme Court held that the right of appeal being a statutory right on limited grounds, the grounds of challenge cannot be enlarged by filing a writ under Articles 226/227 of the Constitution. Learned Counsel of Appellant relied upon the observation made by the Supreme Court in this judgment that where a remedy by way of appeal has not been provided for against the order and judgment of a District Judge, the remedy available to the aggrieved person is to file a revision before the High Court u/s 115 of the CPC but he has not taken note of the fact that in the same para which is para No. 6 of the judgment from where he has picked up the aforesaid observation, the Supreme Court has observed as follows; " Right of appeal is a statutory right and where the law provided remedy by filing an appeal on limited grounds, the grounds of challenge cannot be enlarged by filing a petition under Article 226/227 of the Constitution of India on the premise that the insurer has limited grounds available for challenging the award given by the Tribunal. Section 149(2) of the Act limits the insurer to file an appeal on those enumerated grounds and the appeal being a product of the statute it is not open to an insurer to take any plea other than those provided u/s 149(2) of the Act (see National Insurance Co. Ltd., Chandigarh v. Nicolleta Rohtagi and ors (Jt 2002(7) SCC 251. This being the legal position, the petition filed under Article 227 of the Constitution by the insurer was wholly misconceived. Where a statutory right to file an appeal has been provided for, it is not open to the High Court to entertain a petition under Article 227 of the Constitution."

After observing as above, the Supreme Court

it is not a case where no remedy by way of an appeal has been provided. Had it been so, learned Counsel of Appellant would have been right in his submission that in such circumstances, remedy was to file revision. Here the case is quite different. Remedy to appeal is provided u/s 173 of the Act but since Section 149(2) of the Act limits the ground of an insurer for challenging the award for contesting the claim on some

However, it is well settle that right of appeal.