2002 Supreme(SC) 937

2002(6) Supreme 362
SUPREME COURT OF INDIA
(From Punjab & Haryana High Court)
V.N. Khare, Shivaraj V. Patil & Ashok Bhan, JJ.
National Insurance Co. Ltd., Chandigarh -Appellant
versus
Nicolletta Rohtagi & Ors. -Respondents
Civil Appeal No. 4292 of 2002
With
Civil Appeal Nos. 5913, 5914, 5911 of 2002 (@ SLP (C) Nos. 10616, 17076/2001 & 9238/2000)
Decided on 17-9-2002
Counsel for the Parties :
For the Appearing Parties : Jitendra Sharma, Sr. Advocate, Kishore Rawat, M.K. Dua, Romy Chacko, Rajiv Mehta, P.N. Pillai, K. Veeranjaneyulu, Surya Kant, U.N. Goyal, Dr. Meera Agarwal, Ramesh Chandra Mishra, B.K. Pal, Ms. Minakshi Vij, Advocates.

VERY IMPORTANT POINT
Even if no appeal is preferred under Section 173 of Motor Vehicles Act, 1988 by an insured against the award of a Tribunal it is not permissible for an insurer to file an appeal questioning the quantum of compensation as well as findings as regards negligence or contributory negligence of the offending vehicle.

Headnote:Motor Vehicles Act, 1988-Sections 173, 147, 149 and 170-Motor Vehicles Act, 1939-Section 96/= Section 149 of 1988 Act)-Motor Accident-Tribunal granting compensation-No appeal preferred by claimant (insured)-Insurer preferring appeal-Dismissed by High Court as not maintainable-Appeal against to Supreme Court-Whether it is open to the insurer to prefer an appeal against the award of the Tribunal questioning the quantum of compensation, as well as against the negligence of the offending vehicle where insured has not preferred an appeal u/s 173 of 1988 M.V. Act? (No)-Result-Appeal dismissed-Case law discussed.

       Held : To answer the question, it is necessary to find out on what grounds the insurer is entitled to defend/contest against a claim by an injured or dependants of the victims of motor vehicle accident. Under Section 96(2) of 1939 Act which corresponds to Section 149(2) of 1988 Act, an insurance company has no right to be a party to an action by the injured person or dependants of deceased against the insured. However, the said provision gives the insurer the right to be made a party to the case and to defend it. It is, therefore, obvious that the said right is a creature of the statute and its content depends on the provisions of the statute. After the insurer has been made a party to a case or claim, the question arises what are the defences available to it under the statute. The language employed in enacting sub-section (2) of Section 149 appears to be plain and simple and there is no ambiguity in it. It shows that when an insurer is impleaded and has been given notice of the case, he is entitled to defend the action on grounds enumerated in the sub-section, namely, sub-section (2) of Section 149 of 1988 Act, and no other ground is available to him. The insurer is not allowed to contest the claim of the injured or heirs of the deceased on other ground which is available to an insured or breach of any other conditions of the policy which do not find place in sub-section (2) of Section 149 of 1988 Act. If an insurer is permitted to contest the claim on other grounds it would mean adding more grounds of contest to the insurer than what the statute has specifically provided for. (Para 13)

       For the aforesaid reasons, we are of the view that the statutory defences which are available to the insurer to contest a claim are confined to what are provided in sub-section (2) of Section 149 of 1988 Act and not more and for that reason if an insurer is to file an appeal, the challenge in the appeal would confine to only those grounds. (Para 16)

       Held also : For the aforesaid reasons, as well as that the learned Judges in United India Insurance Co. Ltd. (supra) have failed to notice the limited grounds available to an insurer under Section 149(2) of the Act, we are of the view that the decision in United India Insurance (supra) does not lay down the correct view of law. (Para 29)

       Held further : We have already held that unless the conditions precedent specified in Section 170 of 1988 Act is satisfied, an insurance company has no right of appeal to challenge the award on merits. However, in a situation where there is a collusion between the claimants and the insured or the insured does not contest the claim and, further, the tribunal does not implead the insurance company to contest the claim in such cases it is open to an insurer to seek permission of the tribunal to contest the claim on the ground available to the insured or to a person against whom a claim has been made. If permission is granted and the insurer is allowed to contest the claim on merits in that case it is open to the insurer to file an appeal against an award on merits, if aggrieved. In any case where an application for permission is erroneously rejected the insurer can challenge only that part of the order while filing appeal on grounds specified in sub-sections (2) of Section 149 of 1988 Act. But such application for permission has to be bona fide and filed at the stage when the insured is required to lead his evidence. So far as obtaining compensation by fraud by the claimant is concerned, it is no longer res integra that fraud vitiates the entire proceeding and in such cases it is open to an insurer to apply to the Tribunal for rectification of award. (Para 31)

       Held finally : For the aforesaid reasons, our answer to the question is that even if no appeal is preferred under Section 173 of 1988 Act by an insured against the award of a Tribunal, it is not permissible for an insurer to file an appeal questioning the quantum of compensation as well as findings as regards negligence or contributory negligence of the offending vehicle. (Para 32)

       Held consequently : For the aforesaid reasons; the order and judgment under challenge in Civil Appeal No. 5911/2002 @ SLP (Civil) No. 9238/2000 is set aside and appeal is allowed. Civil Appeal No 4292/2002, Civil Appeal No. 5913/2002 @ SLP (Civil) No. 10616/2001 and Civil Appeal No. 5914/2002 @ SLP (Civil) No. 17076/2001 are dismissed. There shall be no order as to costs. (Para 33)