Extent of liability thereunder.

JUDGMENT.-This appeal by the Insurance Company with which the vehicle-lorry MSM. 1078 belonging to the third respondent Babu Reddi and which was involved in an accident on 25th May., 1970 at about 3-30 p.m. on the Poonamalle High Road which resulted in the death of one Chandran, the husband of the first respondent and father of the second respondent was insured. The Claims Tribunal awarded a sum of Rs. 10,000 as compensation to be paid to the first and second respondents and the Insurance Company, the appellant herein was directed to pay the compensation.

2. It is contended in this appeal that the Tribunal cried in finding that the accident was due to the negligent driving of the vehicle by the driver of the vehicle and it also erred in awarding such a huge sum as Rs. 10,000 as compensation and thirdly that the liability of the appellant as the insurer was limited to the extent of the liability arising under the Work-men’s Compensation Act. On the question as to whether there was adequate proof before the Motor Accidents Claims Tribunal for the rash or negligent driving of the lorry by the employee of the third respondent, the finding of the Tribunal has not been seriously challenged in this appeal. Moreover, the appellant Insurance Company is precluded from raising that defence by reason of section 96 (2) of the Motor Vehicles Act where the insurer can defend the action only on the grounds specified in that sub-section. This has also been made clear by the Kerala High Court by the decision in Kesavan Nair v. State Insurance Officer1, and in the decision in British India General Insurance Company Ltd. v. Captain Ithar Singh and others2, and Mangilal v. Parasram3, In Orissa Co-operative Insurance Society Ltd. v. Bhagaban and others4, it was held that the Insurance Company is not allowed to raise any plea outside the scope of the pleas specified in section 96 (2) of the Motor Vehicles Act; but if it has reserved a right in the policy to defend an action in the name of the insured, it can raise all the pleas that may be open to the insured, with the permission of the Tribunal. In the case now before me, however, there is no such reservation of right in the policy in question. Therefore in this case the insurer was not entitled to contend that the accident was not due to rash and negligent driving of the lorry by the third respondent’s employee. In Howrah Insurance Company Ltd. v. S. Sundaram5, also it has been made clear that the effect of section 96 (2) and sub-section (2-A) in section 110-C of the Motor Vehicles Act is that the Insurance Company would normally be confined in its defence to the grounds specified in section 96 (2). But under the exceptional circumstances contemplated in subsection 2-A, they would have the additional privilege of raising the defences which are normally available only to the person against whom the claim has been made, if either of the two conditions precedent are satisfied viz., (1) there is collusion between the person making the claim and the person against whom the claim is. made; or (2) the person against whom the claim is made has failed to contest the claim. But where neither of these two preconditions exists, the insurer would be confined in his defence to the grounds that have been enumerated in section 96 (2) which imposes a statutory embargo upon nsurance companies raising any defence to the action similar to the ones raised in that appeal which was that the accident was not due to rashness or negligence of the driver of the vehicle. In the case now before me none of these two preexisting conditions exists.

3. Even assuming that he has a right to raise such a defence, there is however over-whelming evidence in this case to prove that the accident which resulted in the death of the first respondent’s husband and father of the second respondent was due to the rash or negligent driving of the lorry. The facts which emerge from the evidence adduced before the Tribunal are that on 25th May, 197

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