1. Motor accident claim — Dispute over validity of insurance cover note — Allegation of fraudulent back-dating — Appeal against Tribunal's finding on liability. (Para 1 )
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2000 Supreme(SC) 855
SUPREME COURT OF INDIA
S.N.Phukan : V.N.Khare
National Insurance Company
Versus
Bhagu Devi
Case No. : 6823 , 6824 , 6825 of 1999
Date of Decision : 4/25/00
The court held that where sufficient cause is shown for a delay in filing an appeal, the delay should be condoned, and if a lower court fails to decide a key issue, the case must be remanded for determination of that issue.
Headnote:(A) Condonation of Delay - Sufficient cause shown for delay in filing an appeal should lead to condonation - High Court erred in dismissing the appeal on the grounds of delay without considering the merits of the specific issue raised. (Para 4)
(B) Remand of Case - Where a lower court fails to decide a key issue regarding the validity of an insurance policy and instead touches upon merits generally, the matter should be remanded for a decision on that specific issue. (Para 4)
Facts of the case:
Two pillion riders died in an accident involving a tractor. The insurance company contended that the insurance cover note was fraudulently obtained and backdated through the connivance of certain employees. The Tribunal decided the issue of fraud against the insurance company. An appeal was filed before the High Court with a delay of 47 days. The High Court refused to condone the delay and dismissed the appeal without deciding the specific issue of whether the insurance was obtained fraudulently.
Findings of Court:
The explanation provided by the appellant for the delay in filing the appeal was sufficient. The High Court erred by touching upon the merits of the matter without considering the central issue of fraudulent insurance.
Issues: Whether the delay in filing the appeal should be condoned and whether the case should be remanded to the High Court to decide the issue of fraudulent procurement of insurance.
Ratio Decidendi: If sufficient cause is shown for the delay in filing an appeal, the delay ought to be condoned. Furthermore, if an appellate court dismisses a matter without deciding a key issue framed by the lower tribunal, the case should be remanded for a proper determination of that specific issue.
Result: All appeals are allowed.
Act Referred
Legal Category Hierarchy
Table of Contents
2. Insurance company contends the insurance cover note was fraudulently obtained through connivance of employees, exempting it from liability for compensation. (Para 1 )
3. The High Court erred by refusing to condone a sufficient delay and by addressing merits without deciding the core issue of fraudulent insurance. (Para 4 )
4. Delay in filing an appeal should be condoned if sufficient cause is shown, and merits should not be decided without addressing the primary disputed issue. (Para 4 )
5. Delay condoned — High Court judgments set aside — Case remanded to Single Judge to decide the issue of fraudulent insurance. (Para 4 )
6. Under what circumstances should a court condone a delay in filing an appeal?
A court should condone the delay in filing an appeal when the cause shown by the appellant for the delay is found to be sufficient. (Para 4 )
7. What is the legal consequence when a court decides a case on merits without considering a primary framed issue?
If a court touches upon the merits of a matter without considering a primary framed issue, the case may be remanded to the lower court to specifically decide that issue. (Para 4 )
(1) TWO pillion riders, namely, Om Prakash and Kewa Ram died as a result of an accident with the tractor bearing no. RJN -2114 on April 15,1990. The case of the Appellant is that the aforesaid tractor was not insured with the Appellant at the time of accident. It is alleged that after the accident took place, owner of the tractor with the connivance of certain officers of the Appellant fraudulently got issued a back dated cover note. Subsequently when the said fraud came to the notice of the officials of the Appellant, the Appellant cancelled the said insurance cover note and informed the Regional Transport Officer also. The heirs of the deceased as well as the injured filed claim petitions before the Motor Accident Claims Tribunal claiming compensation. In the said claim petitions the Appellant along with owner of the tractor were impleaded as Respondents. The Appellant filed a written statement wherein it denied its liability for payment of compensation to the claimants. The Appellant stated therein that the insurance cover note dated 13th April, 1990 was fraudulently got issued with the connivance of certain employees of the Company. On this plea issue no. 3 was framed which runs as under: "Whether the owner of the vehicle has obtained insurance of tractor No. RJN 2114 and trolley No. RJN-2170 fraudulently due to which non-applicant no. 6 does not owe any liability to pay damages?"
(2) THE Tribunal while allowing the claim petitions decided issue no. 3 against the Appellant. The Appellant thereafter preferred a statutory appeal before the High Court. Since there was a delay of 47 days in filing the appeal, an application for condonation of delay along with an affidavit was filed. The learned Single Judge of the High Court was of the view that the delay has not been satisfactorily explained and, therefore, the delay cannot be condoned. Incidentally the learned Single Judge also touched certain aspects of the case on merits. However, so far as issue no. 3 was concerned it was not considered. The appeal was consequently dismissed. The Appellant thereafter preferred an LPA before a Division Bench of the High Court. The Division Bench agreed with the view taken by the Single Judge. Consequently, the Letters Patent Appeal was also dismissed. It is against the said Judgement the Appellant is in appeal before us. At the time when the Special Leave Petition was entertained following order was passed : "Issue notice to Respondent nos. 9-15 only. No notice need be sent to other Respondents who are the claimants in whose favour the award was made by the Motor Accident Claims Tribunal. We direct the petitioner to deposit the awarded sum within six weeks with the Tribunal. The claimants can withdraw the said sum after it is deposited. We make it clear that such deposit will be without prejudice to the right of the Insurance Company to establish their contentions in this Court. If they succeed, the Insurance Company will be permitted to realise the award amount from the purported insured."
(3) SHRI Parmanand Gaur, learned Counsel appearing for the Appellant stated that in pursuance of the order of the Court the Appellant had deposited the entire decretal amount. Therefore, the interest of the claimants has already been safeguarded by the aforesaid order passed by this Court.
(4) WE have looked into the explanation given by the Appellant for condonation of delay in filing the appeal before the High Court. We find that the cause shown by the Appellant in filing the appeal was sufficient and delay ought to have been condoned by the High Court and further the High Court touched upon the merits of the matter without considering issue no. 3. We, therefore, condone the delay in filing the appeal and set aside the judgments under appeal and send the case back to the learned Single Judge of the High Court to decide issue no. 3. On remand no notice shall be issued to the claimants. The claimants shall appropriate the
