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High Court Of Madhya Pradesh
D. M. DHARMADHIKARI, USHA SHUKLA
UNITED INDIA INSURANCE CO.LIMITED - Appellant
Versus
RAMDAS PATIL - Respondents
Misc. Appeal 1138 Of 1999
Decided On : 08/09/1999
MOTOR VEHICLES ACT - INSURANCE - APPEAL - MAINTAINABILITY - GROUNDS - QUANTUM OF COMPENSATION - SHOCKINGLY EXCESSIVE AND DISPROPORTIONATE TO AGE AND INCOME OF VICTIM - STRUCTURED FORMULA UNDER SECTION 163-A - RESERVED RIGHT IN POLICY TO RAISE ALL DEFENCES - DISCOVERY OF FRAUD OR COLLUSION AFTER AWARD - CONTRIBUTORY NEGLIGENCE.
Fact of the Case:
The appellant, an insurance company, challenged the award of compensation by the Claims Tribunal for the death of Sanjay Patil in a motor accident. The insurance company contended that it should be allowed to appeal on grounds of quantum of compensation, contributory negligence, and fraud or collusion discovered after the award.
Finding of the Court:
The court held that the insurance company had no right to appeal on the ground of quantum of compensation, as this was a matter for the Tribunal to decide. However, the court held that the insurance company could appeal on the ground that the compensation awarded was shockingly excessive and disproportionate to the age and income of the victim. The court also held that the insurance company could appeal on the ground that the structured formula under Section 163-A of the Act had not been correctly followed. The court further held that the insurance company could appeal on the ground of contributory negligence if it had reserved the right to do so in the policy or had obtained permission from the Tribunal under Section 170 of the Act. Finally, the court held that the insurance company could appeal on the ground of fraud or collusion discovered after the award, but that this would be a matter for the Tribunal to decide.
Issues: 1. Whether the insurer can prefer an appeal on the ground of quantum of compensation awarded? 2. Whether an appeal on quantum of compensation by the insurer can be entertained where the ground urged is that the compensation awarded by the Tribunal is shockingly excessive and disproportionate to the age and income of the victim? 3. Whether right of appeal can be claimed by the insurer when the claim is based u/s. 163-A of the Act of 1988 and determination of compensation is sought on the basis of structured formula contained in the second Schedule of the Act? 4. Whether an insurer can have right of appeal on all grounds where it has reserved a right in the terms of the Insurance Policy to raise all defences for and on behalf of the insured? 5. Whether the insurer can prefer an appeal on discovery of fraud or collusion between the claimants and the insured after passing of the award? 6. Whether the insurer can urge a ground in appeal of contributory negligence in case of accident between two or more Motor vehicles?
Ratio Decidendi: The court held that the insurance company had no right to appeal on the ground of quantum of compensation, as this was a matter for the Tribunal to decide. However, the court held that the insurance company could appeal on the ground that the compensation awarded was shockingly excessive and disproportionate to the age and income of the victim. The court also held that the insurance company could appeal on the ground that the structured formula under Section 163-A of the Act had not been correctly followed. The court further held that the insurance company could appeal on the ground of contributory negligence if it had reserved the right to do so in the policy or had obtained permission from the Tribunal under Section 170 of the Act. Finally, the court held that the insurance company could appeal on the ground of fraud or collusion discovered after the award, but that this would be a matter for the Tribunal to decide.
Final Decision: The court dismissed the appeal, holding that the insurance company had no right to appeal on the grounds that it had raised.
( 1 ) THIS appeal is by the Insurance Company against the award dated 5-3-1999 of the Claims Tribunal, Durg, awarding a sum of Rs. 4,42,000/- with 12% interest, as compensation for the death of Sanjay Patil who was found to be 28 years of age on the date of motor accident which took place on 19-5-1996.
( 2 ) ON the question of maintainability of the appeal by the Insurance Company on the grounds of quantum and alleged contributory negligence of the other vehicle which collided with the vehicle in which the deceased was travelling, learned counsel sought permission of this Court to address the Court generally on the question as to under what circumstances the Insurance Company can be allowed to appeal against the award of the Claims Tribunal. Since the question of maintainability of the appeal arose in number of other cases filed by the Insurance Company, such as; M. A. 1143/99, 520/99, 1139/99, 363/97, 913/98 and M. A. 1195/95, this Court allowed all the counsel appearing for the Insurance Companies in all the above mentioned cases to address this Court in the question of maintainability of the appeal by the insurer alone. We are thankful that on our request Shri Alok Aradhe, Shri Sanjay K. Agarwal, and Shri Kishore Shrivastava, Advocates addressed this Court on the legal question, as amicus curiae. ( 3 ) ON behalf of the counsel appearing in different cases for the Insurance Company, the contentions mainly advanced are that the insurer should not be denied opportunity of appeal in cases where the compensation awarded by the Claims Tribunal is shockingly excessive and disproportionate to the age and income of the deceased or injured person. It is submitted that there are larger number of instances in claim cases where the claimants and insured join hands in the course of proceedings to obtain exorbitant awards against the Insurance Company and in such cases fraud or collusion are discovered only after passing of the award.
( 4 ) IN one of the cases in which the compensation was awarded on no fault liability under the amended provision of Section 163-A with computation provided in second Schedule of the Act, the contention advanced on behalf of the Insurance Company is that where the provisions of the Schedule indicating the manner of computation of compensation are disregarded, the insurer should have an opportunity of preferring an appeal on the ground that the quantum of compensation determined in a claim under Section 163-A is not in accordance with the second Schedule of the Act.
( 5 ) IN some of the cases, as in the present one, it is submitted that the accident took place due to collision of the 'tempo' in which the deceased was travelling with the truck coming from opposite direction. The owner and the driver of the offending truck were not make parties to the claim petition and the entire liability has been fastened on the insurer of the Tempo. It is submitted that in such cases the Insurance Company should be allowed to urge that there was contributory negligence on that part of the driver of the other vehicle i. e. the truck and by impleading the owner, driver and insurer of the Truck finding of contributory negligence should have been reached so that liability proportionate to the extent of negligence on the part of driver of the Truck could have been imposed on the insurer and owner and driver of the truck.
( 6 ) LEARNED counsel appearing in this case submitted that in the policy of Insurance Company, the insurer has reserved a right to take defences for and on behalf of the insured and, therefore, this Court should allow the Insurance Company as insurer of the vehicle Tempo to raise grounds of contributory negligence and consequent thereupon to challenge quantum of compensation awarded against the insurer.
( 7 ) WE have also heard the other counsel appearing for the Insurance Company in the batch of cases mentioned above and the learned Advocates who appeared as amicus curiae.
( 8 ) AFTER h
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