& Ors Vs. S. Lakshmi & Anr  Insc 141 (5 February 2008)
Sinha & Harjit Singh Bedi
APPEAL NO 990 OF 2008 [Arising out of SLP(C) No. 19532 of 2006] S.B. SINHA, J :
First respondent is the owner of a bus. Allegedly, owing to rash and negligent
driving by the driver of the said vehicle, an accident took place wherein one Vadivelu,
the predecessor in interest of the appellants died.
application under Section 166 of the Act claiming compensation for a sum of
Rs.25 lakhs was filed by the appellants in the Court of Motor Accidents Claims
Tribunal (Additional District Judge-cum-Chief Judicial Magistrate, Karur). A
written statement was filed by the Insurance Company in the said proceedings.
The same was adopted by the owner of the vehicle. Before the Tribunal, the
appellants produced some documents to show that the income of the deceased was
about 12,500/- per month. He is said to have been deriving income both as an
agriculturist as also from his business as commission agent in the business of
Tribunal, inter alia, keeping in view the fact that the Income Tax Returns were
filed only after the death of the said Vadivellu, estimated at Rs. 9,600/- per
High Court, however, estimated the income of the deceased to be around a sum of
Rs. 4,000/- per month, from his agricultural operation and Rs. 3,000/- from his
commission business, totalling a sum of Rs. 7,000/- per month and upon
deducting 1/3rd thereof from the amount towards his personal expenses, the High
Court held that his contribution to his family would come to about of Rs.
4,667/- per month. Applying the multiplier of 18, the loss of income was
assessed at Rs. 10,08,072/-, instead and in place of Rs. 13,82,400/- as was
found by the Tribunal.
Appellant is, thus, before us.
service of notice, the first respondent has not appeared.
V. Krishnamurthy, the learned senior counsel appearing on behalf of the
appellant, inter alia, would submit that a joint appeal by the owner of the
vehicle and the Insurance Company was not maintainable. It was furthermore
urged that the High Court without analysing the evidence on records has
arbitrarily reduced the amount of income of the deceased from Rs. 9,600/- as
was found by the learned Tribunal, to a sum of Rs. 7,000/- per month.
Ashok Kumar Sharma, the learned counsel appearing on behalf of the second
respondent, on the other hand, submitted that the appeal before the High Court
in terms of Section 173 of the Act was maintainable.
to the learned counsel keeping in view the phraseology used in Section 173 of
the Act, an appeal subject to the limitation provided under sub-Section (2)
thereof would be maintainable against each and every award and, thus, if an
appeal is maintainable at the instance of the Insurance Company, it matters
little as to whether it was filed with the owner of the vehicle or not.
learned counsel furthermore urged that the Tribunal has failed to take into
consideration the fact that the documents filed by the claimants/appellants
purporting to establish the quantum of income of the deceased being wholly
unreliable, the same could not have been taken into consideration for the
purpose of computation of income.
may at the outset notice that the High Court was although of the opinion that
no appeal would be maintainable at the instance of an insurance company unless
permission of the court was obtained by it in terms of Section 170 Act,
observed that the owner of the vehicle being an appellant, the appeal would be
maintainable at his instance.
relevant statutory provisions, being Sections 149(2), 170 and 173 may be
noticed by us, which are as under :
(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 of 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 so given shall be entitled to be made a party thereto and to
defend the action on any of the following grounds, namely:-
there has been a breach of a specified condition of the policy, being one of
the following conditions, namely:-
condition excluding the use of the vehicle-
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
organised racing and speed testing, or
a purpose not allowed by the permit under which the vehicle is used, where the
vehicle is a transport vehicle, or
side-car being attached where the vehicle is a motor cycle; or
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
a condition excluding liability for injury caused or contributed to by
conditions of war, civil war, riot or civil commotion; or
the policy is void on the ground that it was obtained by the nondisclosure of a
material fact or by a representation of fact which was false in some material
170 - Impleading insurer in certain casesWhere in the course of any inquiry,
the Claims Tribunal is satisfied that
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, 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.
Subject to the provisions of sub-section (2) any person aggrieved by an award
of a Claims Tribunal may, within ninety days from the date of the award, prefer
an appeal to the High Court:
that no appeal by the person who is required to pay any amount in terms of such
award shall be entertained by the High Court unless he has deposited with it
twenty-five thousand rupees or fifty per cent, of the amount so awarded,
whichever is less, in the manner directed by the High Court:
further that the High Court may entertain the appeal after the expiry of the
said period of ninety days, if it is satisfied that the appellant was prevented
by sufficient cause from preferring the appeal in time.
appeal shall lie against any award of a Claims Tribunal if the amount in
dispute in the appeal is less than ten thousand rupees."
The maintainability of an appeal by the Insurance Company together with the
owner of the vehicle came up for consideration before this Court in wherein it
was clearly held that an appeal by the owner of the vehicle is maintainable
despite the fact that in terms of an Award, he is to be reimbursed by the
insurance company, stating;
the award has gone against the 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 & Bros . v. Ramarani Debi,
New India Assurance Co. Ltd . v. Shakuntla Bai, Nahar Singh v. Manohar Kumar, Radha
Kishan Sachdeva v. Flt. Lt. 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 reason 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 in surer 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 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 would not be put to notice and would not be liable to answer judgment
as if a judgment-debtor. Therefore, on first principle it would appear that the
contention that the owner of a vehicle is not an aggrieved party is
For the reasons stated above, we are of the opinion that even in the case of a
joint appeal by insurer and owner of 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."
However, another Bench of this Court in Chinnama George and "6.
Admittedly, none of the grounds as given in Sub-section (2) of Section 149
exist for the insurer to defend the claims petition. That being 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.
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. 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 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
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 vehicles 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 purposive approach which would not defeat the broad purpose of the
Act. Court has to give effect to true object of the Act by adopting purposive
Sections 146, 147, 149 and 173 are in the scheme of the Act and when read
together mean :
is legally obligatory to insure the motor vehicle against third party risk.
Driving an uninsured vehicle is an offence punishable with an imprisonment
extending up to three months or the fine which may extend to Rs. 1,000/-or
Policy of insurance must comply with the requirements as contained in Section
147 of the Act;
is obligatory for the insurer to satisfy the judgments and awards against the
person insured in respect of third party risks. These are Sub- sections (1) and
(7) of Section 149. Grounds on which insurer can avoid his liability are given
in Sub-section (2) of Section 149.
none of the conditions as contained in Sub- section (2) of Section 149 exist
for the insurer to avoid the policy of insurance he is legally bound to satisfy
the award, he cannot be a person aggrieved by the award. In that case insurer
will be barred from filing any appeal against the award of the Claims
Chinnamma George, the owner did not challenge the findings of the Tribunal that
the bus was being driven by the driver in a rash and negligent manner. It was
therefore, held that the owner was not an aggrieved person to maintain an
appeal. It was in the aforementioned context this Court observed that none of
the grounds as laid down under sub- Section (2) of Section 149 of the Act
having been satisfied, an appeal by the Insurance Company was not maintainable,
observing that an insurer having a limited area to defend the claim petition,
it cannot circumvent the same by associating itself with the owner/driver in an
appeal when the owner/driver is not an aggrieved person and, thus, cannot be
allowed to mock at the law.
the instant case, the owner of the bus was an aggrieved person. He could
maintain an appeal of his own. Section 173 of the Act confers a right on any
aggrieved person to prefer an appeal from an award.
the present case, it is not necessary for us to go into the larger question as
to whether having regard to the bar contained in sub-Section (2) of Section 149
of the Act, the second respondent could have preferred an appeal questioning
the quantum of compensation, as the High Court held that the appeal, even after
deletion of the second respondent from the array of the parties, the appeal
preferred by the first respondent was maintainable.
may only notice that the aforementioned two decisions although have been
referred to by a three Judge Bench of this Court in National SCC 456], it was
not specifically held even therein that a joint appeal by the owner and the insurer
would not be maintainable.
However, in this case, the appeal preferred by the Insurance Company has been
dismissed. The High Court has only entertained the appeal of the owner.
far as the question in regard to the quantum of compensation awarded in favour
of the appellants is concerned, we are of the opinion that the High Court has
taken into consideration all the relevant evidences brought on record.
accident took place on 7.5.1997. Income tax returns were filed on 23.6.1997.
Tax Returns (Exp. P-14), therefore, have rightly not been relied upon.
is a deed of lease. It was an unregistered document. Although the document was
purported to have been executed on 10.4.1993, the genuineness thereof was open
to question. The stamp paper was purchased in the year 1983 but an
interpolation was made therein to show that it was purchased in 1993. The
purported receipts granted by the tenant were also unstamped.
the aforementioned fact situation, the High Court has not relied upon all the
aforementioned documents, filed by the appellant. It may be true that there was
no basis for the High Court to arrive at the conclusion that the income of the
deceased was Rs.4,000/- from agricultural operation and Rs. 3,000/- from his commission
business, but no reliable document having been produced to show that the
deceased was earning an income of Rs.12,500/- per month, as claimed. The High
Court, in our opinion, cannot be held to have, thus, committed any grave error
in this behalf. There is no dispute as regards application of the multiplier.
case of this nature, some guess work is inevitable. This Court could have gone
into the question provided there was some materials had been brought on record
by the appellants upon which reliance could be placed. There being no such
material available on record, we are not in a position to interfere with the
impugned judgment of the High Court.
We, therefore, are of the opinion that it is not a fit case where this Court
should interfere with the judgment of the High Court. Appeal is dismissed.