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CASE NO.:

Appeal (civil) 6295 of 2003

PETITIONER:

United India Insurance Co. Ltd.

RESPONDENT:

Jyotsnaben Sudhirbhai Patel & Ors.

DATE OF JUDGMENT: 11/08/2003

BENCH:

K.G. Balakrishnan & P. Venkataramma Reddi.

JUDGMENT:

J U D G M E N T

(Arising out of SLP[C] No. 13002 of 2002)

K.G. BALAKRISHNAN, J.

Leave granted.

Aggrieved by the order passed by the Division Bench of the Gujarat High

Court, the United India Insurance Company has come up in appeal by way of

special leave. The appellant was the third respondent in a motor accident claim

preferred by respondents 1 to 3 herein, who are legal heirs of one Sudhirbhai

Jayrambhal Patel who died in a motor accident on 27.8.1994. Respondents 1 to

3 claimed a total compensation of Rs.80 lacs and the Motor Accident Claims

Tribunal (Special), Vadodra, passed an award for RS.32,50,000/- with interest at

the rate of 12% per annum from the date of application till realisation. From the

impugned judgment of the Tribunal dated 15.5.1999, it appears that the first

respondent, the driver of the offending vehicle and the second respondent, the

owner of the vehicle appeared before the Tribunal, but did not file any written

statement refuting the allegations made in the petition. The Tribunal has stated

that these respondents did not step into the witness box to explain the

circumstances and the manner in which the actual mishap took place. It was

further stated that in view of that, the Tribunal was compelled to draw an adverse

inference against them. These observations have been made in paragraph 18

of the judgment of the Tribunal.

Before the Tribunal, the appellant Insurance Company filed a petition

under Section 170 of the Motor Vehicles Act, 1988 (hereinafter referred to as ’the

Act’) praying that the appellant herein be allowed to contest the proceedings.

That application was granted by the Tribunal by a cryptic order; "Granted as

prayed for". After the award was passed by the Tribunal, the appellant filed an

appeal before the Gujarat High Court impleading the legal heirs of the deceased

and also the driver and owner of the offending vehicle as respondents. When the

appeal came up for consideration, the Division Bench was of the view that in

view of Section 149(2) of the Act, the appeal under Section 170 was not

maintainable, especially in view of the observations made by this Court in

Shankarayya vs United India Insurance Co. Ltd. AIR 1998 SC 2968,

and the appeal preferred by the appellant was dismissed. Aggrieved by the

same, the present appeal is filed by the United India Insurance Company

Limited.

We heard the appellant’s counsel and also counsel for the respondents.

The short question that arises for consideration is whether the appeal

preferred by the appellant before the High Court was maintainable or whether it

was barred by the provisions of the Motor Vehicles Act. It is now a settled

position that an insurer can contest the proceedings before the Motor Accident

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Claims Tribunal only on any of the grounds prescribed under Section 149 (2) of

the Act and unless a specific order is passed by the Tribunal under Section 170,

the insurer cannot contest the claim on grounds other than the grounds

mentioned in sub-section (2) of Section 149 of the Act. It is relevant to extract

Section 149 and 170 of the Motor Vehicles Act. Sub-section (2) of Section 149 of

the Motor Vehicles Act, 1988 reads as under:

"(2) No sum shall be payable by an insurer under sub-section (1) in

respect of any judgment or award unless, before the

commencement of the proceedings in which the judgment or award

is given the insurer had notice through the Court or, as the case

may be, the Claims Tribunal of the bringing of the proceedin