An insurance company can contest an appeal regarding the quantum of compensation if there is collusion between the claimant and the insured, or if the insured has failed to contest the claim, as provided under Section 170 of the Motor Vehicles Act, 1988.

V.S.Aggarwal, J.

1. The New India Assurance Co. Ltd. (hereinafter described as the appellant) challenges the award of the Motor Accidents Claims Tribunal, Ambala dated 1.3.1997. By virtue of the impugned award the learned Tribunal had allowed the petition filed by Charanjit Singh (respondent injured). It was held that the respondent is entitled to receive Rs. 2,50,000 from the appellant and the respondent No. 2 before the Tribunal along with interest at the rate of 12 per cent per annum from the date of filing of application till the actual recovery. The appellant and respondent No. 2 before the Tribunal were held jointly and severally liable to pay the amount of compensation. It has further been directed that amount of compensation shall be deposited in a scheduled bank in a fixed deposit for a period of five years and paid to the respondent thereafter. He could only withdraw the amount with permission of the court.

2. Relevant facts are that on 25.10.1993 at about 4.00 p.m., the respondent along with one Parkash Singh was going from Pinjore to Parwanoo. They were driving through the Bazar of Kalka on a scooter bearing No. CH-01-H-2911. The respondent was on the pillion. When they were passing through the Bazar, a Maruti car bearing registration No. CH-01-H-9779 came from the side of Parwanoo. It struck the front right side of the scooter, as a result of which Parkash Singh fell down along with the scooter. Respondent suffered fracture on his right leg below the knee. Parkash Singh suffered minor injuries. The injured was removed to the hospital but it happened to be a holiday. Thereafter he was taken to a private Nursing Home. The doctor advised to take him to the Post-Graduate Institute of Medical Sciences & Research at Chandigarh. At the Medical Institute there was a strike. The injured was admitted in B.D. Hospital, Sector 23-B, Chandigarh by the owner of the car. Respondent injured was operated on 27.10.93. Parkash Singh, brother of the injured respondent No. 1 visited the Police Station, Kalka, but the first information report was not recorded. A complaint was made to the Inspector General of Police, Haryana, Chandigarh and to the Superintendent of Police, Ambala. It was contended that the accident was caused because of the negligence of the car owner (Phool Chand Dhiman), an advocate. Respondent injured claimed a compensation alleging that he was under treatment and had already spent Rs. 55,000 from 25.10.1993. He was working as proprietor of Sujjan Engineering Works, Mohali. His monthly income was about Rs. 10,000. He has suffered permanent disability. In all Rs. 4,00,000 were claimed as compensation including permanent disability, medical expenses, special diet and medicines.

3. The petition was contested by P.C. Dhiman. There was no controversy raised that there was an accident, as a result of which respondent received the injuries. However, respondent No. 2 claimed that accident was due to rush in the market and not because of his negligence.

4. The main contest was offered by the appellant No. 1. It was contended that there is a collusion between respondent P.C. Dhiman, the owner of the vehicle and the claimant. Plea was raised that P.C. Dhiman was not having a valid driving licence. In any case it was further asserted that the claim was highly exaggerated.

5. The learned Tribunal framed issues and recorded evidence. Thereupon a finding was recorded that accident in question had been caused on account of rash and negligent driving by Phool Chand Dhiman. It was concluded that respondent No. 2 held a valid driving licence. The learned Tribunal proceeded to hold that there was shortening of right leg of respondent by half an inch. There was circumferential wasting of quadriceps muscle of right thigh. There was no appreciable limp. There was permanent partial impairment of 8 to 10 per cent. The compensation was awarded as Rs. 50,000 for medical expenses, Rs. 50,000 for future expenses, Rs. 50,000 for loss of b