The main legal point established in the judgment is that an insurance company must seek leave under Section 170 of the Motor Vehicles Act to contest a claim on additional grounds, and such leave cannot be granted at the appellate stage.

The insurer has preferred this appeal against the judgment and award of the Motor Accident Claims Tribunal, Alibag to challenge the quantum of compensation awarded to the respondent, the original claimant. The owner of the offending vehicle has not been impleaded to the appeal. The owner has also not preferred any appeal to challenge the impugned judgment and award. The two questions that fall for consideration in the appeal are (i) whether an insurance company, which had not moved the Tribunal under Section 170 of the Motor Vehicles Act, 1988 (hereinafter referred to as the Act") can maintain "an appeal to challenge quantum of the compensation awarded in a motor accident claim petition, where no appeal is preferred by the insured, (ii) whether leave under Section 170 of the Act can be granted to the insurance company for the first time in the appeal proceedings.

2. The respondent then a minor had filed application to the Tribunal claiming compensation for the injuries sustained by him in a motor vehicle accident. The opponents to the claim petition were the owner of the offending vehicle, the driver of the offending vehicle and the insurer of the offending vehicle. On receipt of the notice of the application, all the opponents had appeared before the Tribunal through their respective counsel, but failed to file written statement to contest the claim. The oral evidence in the application was limited to one witness examined by the claimant. The witness had been subjected to cross-examination by the appellant, insurer. On appreciation of the oral and documentary evidence, the Tribunal awarded compensation of Rs.87,100/-with interest @ 12% per annum from the date of the petition till realisation.

3. The grounds of challenge in the appeal by the insurance company are entirely based on the merits. The appellant contents that there was no negligence on the part of the driver of the offending vehicle and hence the owner of the offending vehicle is not liable to pay compensation to the respondent. It also contends that the compensation awarded to the respondent amounts to unjust enrichment and the calculation of the compensation is not in accordance with the established principles and admitted evidence on record.

4. Section 149(1) of the Act provides that after the issuance of the certificate of insurance, the insurance company shall satisfy the award against the insured as if it were the judgment debtor. Section 149(2) of the Act lays down that an insurance company can defend the action only on the ground of the breach of the condition of the policy referred to in the Sub-section or on the ground that the policy is void for the reasons referred to in the Subsection. Section 149(7) of the Act provides that the insurance company cannot avoid the liability to any person entitled to any benefit of any judgment or award referred to in Sub-section 1 except in the manner provided in Subsection 2 of the Act. Section 170 of the Act, however, enables an insurance company to make an application to the Tribunal for leave to contest the claim on all the grounds available to the insured on satisfaction of the Tribunal that either there 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.

5. Thus, the above scheme of the Act is seen to be such that ordinarily the defence available to the insurer while contesting the petition for compensation is limited to the statutory defences provided by Section 149(2). The defence can get expanded to all the general defences in only two circumstances. The first circumstance is where there is collusion between the claimant and the owner of the vehicle. The second circumstance, is where the owner i.e. the insured fails to contest the claim. Further, for availing itself to the expanded defence, the insurer must apply to the Tribunal seeking leave for the purpose which leave is to be