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IN THE HIGH COURT OF ALLAHABAD
R. B. MEHROTRA, V. P. GOEL
NEW INDIA ASSURANCE COMPANY LTD., ETAWAH - Appellant
Versus
SHAKUNTALA DEVI - Respondents
F. A. F. O. 278 Of 1994
Decided On : 07/28/1995
MOTOR VEHICLES ACT - INSURANCE - APPEAL - PROCEDURE - FIRST APPEAL FROM ORDER - DISMISSAL IN LIMINE - INSURANCE COMPANY - DEFENCE - GROUNDS - SCOPE - COMPENSATION - DETERMINATION - PRINCIPLES.
Fact of the Case:
The appellant, New India Assurance Company, challenged the procedure for deciding First Appeal From Order (F.A.F.O.) under Section 173 of the Motor Vehicles Act, 1988 (the Act), arguing that the same procedure should be followed as in deciding First Appeals under Section 96 of the Code of Civil Procedure (C.P.C.), and that notice should be issued to the opposite parties as a matter of right. The appellant also contended that the insurance company is entitled to urge all points in an appeal under Section 173 of the Act, even if those points were not permitted to be raised under Section 149(2) of the Act.
Finding of the Court:
The court held that the procedure for deciding F.A.F.O.s under Section 173 of the Act is governed by Chapter-XI, Rule 9 of the Rules of the Court, which permits the High Court to dismiss the appeal under Order XLI, Rule 11 of the C.P.C. without issuing notice to the opposite parties or summoning the record. The court further held that the insurance company can only defend the claim on the grounds specified in Section 149(2) of the Act, unless the court permits the insurance company to defend the claim on all grounds in exceptional circumstances, such as collusion between the parties or the owner's failure to contest the claim. The court also held that the principles laid down by the Supreme Court in General Manager, Kerala State Road Transport Corporation v. Mrs. Susamma Thomas (AIR 1994 SC 1631) for determining compensation in motor accident cases should be followed, and that the multiplier method is logically sound and legally well established.
Issues: 1. Whether a F.A.F.O. under Section 173 of the Act can be dismissed in limine? 2. Whether an insurance company can urge additional points under Section 173 of the Act in addition to points on which it is permitted to defend the action of the insurer as contemplated by Section 149(2) of the Motor Vehicles Act?
Ratio Decidendi: 1. The procedure for deciding F.A.F.O.s under Section 173 of the Act is governed by Chapter-XI, Rule 9 of the Rules of the Court, which permits the High Court to dismiss the appeal under Order XLI, Rule 11 of the C.P.C. without issuing notice to the opposite parties or summoning the record. This is because the provisions of the Act for awarding compensation in Motor Accident Claims Cases cannot be equated with a regular suit tried under the provisions of the C.P.C., and the two provisions, one under Section 96 of the C.P.C. providing appeal and the other under Section 173 of the Act both providing appeal before the High Court cannot be equated. 2. The insurance company can only defend the claim on the grounds specified in Section 149(2) of the Act, unless the court permits the insurance company to defend the claim on all grounds in exceptional circumstances, such as collusion between the parties or the owner's failure to contest the claim. This is because the Legislature was conscious of the provisions of the Motor Vehicles Act providing for the Claims Tribunals and the limited scope on which the Insurance company can defend the claim.
Final Decision: All three F.A.F.O.s were dismissed under Order XLI, Rule 11 of the C.P.C. read with Chapter 11, Rule 9 (b) of Rules of the Court.
( 1 ) SRI A. B. Saran, learned Senior Advocate appearing for New India Assurance Company in F. A. F. O. No. 278 of 1994 has raised following two submissions for consideration at the outset which also arise for consideration in other two F. A. F. O. s mentioned above, as such, all the three F. A. F. O. s are being decided together.
( 2 ) THE procedure contemplated for deciding First Appeal From Order before the High Court should be same as the procedure contemplated by S. 96 of C. P. C. in deciding the First Appeals and since there has been along consistent practice of this Court that the First Appeals have never been dismissed in limine, the same procedure should be applied for deciding the F. A. F. O. and the notice should be issued to the opposite parties as a matter of right and record of the case should be summoned in every case.
( 3 ) THOUGH under S. 149 of the Motor Vehicles Act, 1988 (hereinafter referred to as the Act) the Insurance Company can resist the claim of the insurer only on the grounds contemplated by S. 149 (2) of the Act, but at the stage of appeal filed by the Insurance Company under S. 173 of the Act, the Insurance Company is entitled to urge all the points which the Insurance Company was not permitted to raise under S. 149 (2) of the Act i. e. the Insurance Company at the stage of appeal is entitled to contest the claim even outside the provisions contained under S. 149 (2) of the Act. First Point :
( 4 ) WHETHER a F. A. F. O. under S. 173 of the Act can be dismissed in limine?
( 5 ) MOTOR Accident Claims Tribunals are constituted under S. 165 of the Act, which is pari materia with S. 110 (1) of the Motor Vehicles Act, 1939 (Old Act ). The procedure for making application has been provided under the Rules framed by the State Government under S. 169 of the Act. Section 170 provides the circumstance under which the insurer can be impleaded as opposite party in the claim application. Section 171 contemplates provisions for awarding interest in cases where claim is allowed. Section 172 contemplates award of compensatory costs in certain cases. Section 173 provides that any person aggrieved by an award of Claims Tribunals may prefer an appeal to the High Court.
( 6 ) IN exercise of powers under S. 3-A of the Old Act, the Governor of Uttar Pradesh has made rules providing procedure for making applications before the Claims Tribunal and the procedure for deciding the claims applications, determination of issues, method of recording evidence, local inspection etc. and the manner in which the Claims Tribunals are required to give judgment and pass orders. Under R. 12, the Claims Tribunal is required to make a brief memorandum of the substance of deposition of a witness before the Claims Tribunal and the said brief memorandum is required to be reduced in writing by the Claims Tribunal or by one of its members if the Claims Tribunal is constituted of more than one member. The said memorandum is to form part of the record.
( 7 ) RULE 21 provides that O. V, Rr. 9 to 13 and 15 to 23; O. IX; O. XIII, Rr. 3 to 10; O. XVI, Rr. 2 to 21; O. XVII and O. XVIII, Rr. 1 to 3 shall apply to the proceedings before the Claims Tribunal. Rule 22 contemplates that an appeal against the award of a Tribunal shall be preferred in the form of a memorandum stating concisely the grounds in which the appeal is preferred. No procedure for deciding the appeal is prescribed either under the Act or under the Rules. Since the appeal is to be decided by the High Court, the procedure contemplated by the High Court Rules for the decision of the appeal is relevant for the purposes of determining the controversy involved herein.
( 8 ) CHAPTER-XI, R. 9 of the Rules of the Court provides procedure for hearing of the appeals by this Court. The same is being reproduced hereinbelow for convenient reference:"hearing under O. XLI, Rule 11 of the Code- If the Bench before which a motion is made for the admission of an application or memorand
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