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2024 Supreme(Online)(GUJ) 8410
HIGH COURT OF GUJARAT
Gita Gopi, J
Cholamandalam MS General Insurance Company Limited – Appellant
Versus
Siju Sauka Kanjibhai – Respondent
R/SPECIAL CIVIL APPLICATION NO. 6675 of 2024
Important Points
Subject
Civil Law - Motor Accident Claims
Act Referred
Code of Civil Procedure, 1908: O.7 R.11, S.35, S.35A, S.35B, O.XV R.5
Limitation Act
Provincial Small Cause Courts Act, 1887
Headnote
Facts of the case:
An insurance company challenged an order by the Motor Accident Claims Tribunal (MACT) which imposed punitive costs of Rs. 5,000/- while rejecting an application regarding the limitation period of a claim petition. The Tribunal threatened to strike off the company's defence upon failure to pay such costs.
Findings of Court:
The Court held that legal arguments regarding the retrospective applicability of statutes cannot be equated to wasting the Court's time. It clarified that Section 172 of the MV Act does not authorize striking off a defence for non-payment of costs, and the maximum ceiling for special costs under Section 172 is Rs. 1,000/-. The Court expunged the disparaging remarks made against the legal assistance of the insurance company.
Issues: Whether the Tribunal was justified in imposing punitive costs and threatening to strike off the insurance company's defence for filing an application concerning the limitation of a claim petition.
Ratio Decidendi: Legal practitioners are officers of the Court and raising bona fide legal questions, even if unsuccessful, is an exercise of the right to be heard and cannot be penalized as a vexatious act. Discretion in imposing costs must be guided by law, and the penalty of striking off a defence is a severe measure not to be used as a routine mechanism for non-payment of costs.
Result: Petition allowed; impugned order concerning costs and striking off defence quashed.
For the Appellants/Petitioners: Masumi V Nanavaty, Vibhuti Nanavati
| Table of Content |
|---|
| 1. assessment of maintainability of claim petitions and retrospective effect of statutory amendments. (Para 1 , 2 , 3 , 4) |
| 2. court's power to impose compensatory costs and the duty to hear legal arguments. (Para 5 , 6 , 7 , 8 , 9 , 10) |
| 3. limitations on striking off defence and awarding exemplary costs in civil and benevolent litigation. (Para 11 , 12 , 13) |
| 4. correction of unwarranted judicial directions and final disposition of petition. (Para 14 , 15) |
ORAL JUDGMENT
| 1 | Whether Reporters of Local Papers may be allowed to see the judgment ? | No |
| 2 | To be referred to the Reporter or not ? | Yes |
| 3 | Whether their Lordships wish to see the fair copy of the judgment ? | No |
| 4 | Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ? | No |
1. The Insurance Company has challenged the order dated 26.02.2024 passed by MACT (Auxi) Kutch-Bhuj in Motor Accident Claims Petition No. 306 of 2022, passed below Exh.16.
2. Learned advocate Ms. Mausami Nanavaty, submitted that the Insurance Company would be willing to deposit the order of cost of Rs.5000/- with District Legal Service Authority, as the compliance of the order would be in view of the adherence to the object of the benevolent act.
3. Learned advocate Ms. Nanavaty submitted that the order impugned, notes that in non deposit of the amount the defence of the Insurance Company would be struck off. Learned advocate Ms. Nanavaty stated that such direction in the order would now become non-existence, since the amount of Rs.5000/- has already been deposited before the concerned authority.
3.1 Ms. Nanavaty referred to the Division Bench judgment of this Court in the case of Pravinsinh Himmatsinh Solanki Vs. Induben Solanki reported in 2017(3) GLR 2032, wherein it is observed that in case of striking off defence, an opportunity has to be given for resonable time period to deposit the amount and on failure to make such payment, in that case the petition can be dismissed or the defence can be struck off.
3.2 The Insurance Company has also taken an exception to the observations of the Tribunal at para(6) of page (3) of the impugned order. The observation refers as “the application is not tenable and as the opponent no.3 having wide legal assistance, even though, consumed the valuable time of this Court in lingering the matter, the application should be rejected with punishment costs…”
3.3 Learned advocate Ms. Nanavaty submitted that the application was moved by the Insurance Company on the ground of the amended provision of Section 53(3) of the Motor Vehicles Amendment Act, 2019(for short “MV Act”), as it occurs in Section 166(3) of the MV Act, 1988, as provided that “no application for compensation shall be entertained unless it is made within six months of the occurrence of incident”. Following this by way of an application, Ex.16, the Tribunal was moved to decide as to whether the amended provision would have retrospective effect to the accident which was pleaded to have occurred on 08.12.2021.
3.4 Learned advocate Ms. Nanavaty submitted that MV Act makes provision under Section 172 to award compensatory cost in certain cases, the Tribunal was required to go by that provision and should have examined the case of the Insurance Company, on the scale, as provided by the section to order compensatory costs. Ms. Nanavaty stated that the order of costs is premature and the application would not call for any observation against the person providing legal assistance to the Insurance Company.
4. As per the Insurance Company the claim petition was filed on 05.07.2022, whereas the amendment came into force earlier with effect from 01.04.2022. It was a legal question which was required to be determined by the Tribunal, as to whether the amended provision would have any retrospective effect on the claim petition which was filed after the amended provision, for the accident which had
