The defences available to an insurer added as a party under S. 96(2) of the Motor Vehicles Act, 1939 are only those mentioned in the sub-section.

Judgement

A. K. SARKAR J. : These two appeals arise out of two suits and have been heard together. The suits had been filed against owners of motor cars for recovery of damages suffered by the plaintiffs as a result of the negligent driving of the cars. The owners of the cars were insured against third party risks and the insurers were subsequently added as defendants to the suits under the provisions of sub-s. (2) of S. 96 of the Motor vehicles Act, 1939. The terms of that sub-section will have to be set out later, but it may now, be stated that it provided that an insurer added as a party to an action under it was entitled to defend on the grounds enumerated in it.

2. On being added as defendants, the insurers filed written statements taking defended other than those mentioned in that sub-section. The plaintiffs contended that the written statements should be taken off the records as the insurers could defend the action only on the grounds mentioned in the sub-section and on no others. A question thereupon arose in the suits as to what defences were available to the insurers. In one of the suits it was held that the insurers could take only the defences specified in that sub-section and in the other suit the view taken was that the insurers were not confined to those defences. Appeals were preferred from these decisions to the High Court of Punjab. The High Court held that the insurers could defend the actions only on the grounds mentioned in the sub-section and on no others. Hence these appeals by the insurers.

3. The question is whether the defences available to an insurer added as a party under S. 96(2) are only those mentioned there. A few of the provisions of the Motor Vehicles Act have now to be referred to. Section 94 of the Act makes insurance against third party risk compulsory. Section 95 deals with the requirements of the policies of such insurance and the limits of the liability to be covered thereby. Sub-section (1) of this section provides:

. . . . . a policy of insurance must be a policy which-

(a).............

(b) insures the person or classes of person specified in the policy to the extent specified in sub-s. (2) against any liability which may be incurred by him or them in respect of the death or bodily injury to any person caused by or arising out of the use of the vehicle in a public place."

Sub-section (2) of S. 95 specifies the limits of the liability for which insurance has to be effected, and it is enough to say that it provides that in respect of private cars, which the vehicles with which these appeals are concerned were, the insurance has to be for the entire amount of the liability incurred. Then comes S: 96 round which the arguments advanced in this case have turned and some of its provisions have to be set out.

"Section 96. (1) If, after a certificate of insurance has been issued under sub-s. (4) of S. 95 in favour of the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under cl.(b) of sub S. (1) of S. 95 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then notwithstanding e. g., that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgement-debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on Judgments.

(2) No sum shall be payable by an insurer under sub-s. (1) in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice through the Court of the bringing of the proceedings, or in respect of any judgment so long as exe