The New India Assu. Co. Ltd. vs Shakuntala Devi And Ors.
2003 Latest Caselaw 698 Del

JUDGMENT

S.K. Mahajan, J.

1. This order will dispose of the appeal filed by the appellant against the award dated 11.4.1994, passed by the Motor Accident Claims Tribunal as well as the cross-objections filed by the respondents for enhancement of compensation.

2. The facts in short giving rise to this appeal and cross-objections are:-

That respondents 1 to 7 filed a petition under Section 110A of the Motor Vehicles Act claiming compensation for the death of Sh.Fateh Singh husband of respondent no.1 and father of respondents 2 to 7 in an accident alleged to have been caused by the rash and negligent driving of the bus bearing No. DLP-5843 by its driver. The bus at the relevant time was owned by respondent no.10 and was insured with the appellant. Respondents 8 to 10 as well as the appellant denied that the accident was caused due to the rash and negligent driving of the bus or that the appellants were entitled to any compensation. Besides the above, insurance company also took the plea that under the policy of insurance its liability was limited to Rs.50,000/-. The Tribunal on the basis of the pleadings of the parties framed the following issues:-

1. Whether the deceased Fateh Singh received fatal injury in accident on 19.9.1979, caused due to rash and negligent driving of bus no.DLP-5843 on the part of respondent no.1 as alleged in the petition?

2.Whether the petitioners are the LRs of the deceased?

3.Whether respondent no.3-Insurance Company is absolved of its liability for any of the preliminary objections taken in its written statement?

4.To what amount of compensation, if any, are the petitioners entitled and from which of the respondents?

5. Relief.

After recording evidence, the Tribunal held that the accident was caused due to the rash and negligent driving of the bus by its driver. Taking the income of the deceased as Rs.3,000/- per month the Tribunal awarded compensation of Rs.3,00,000/- in favor of respondents 1 to 7 along with interest @ 12% per annum from the date of the petition.

3. This award has now been challenged by the appellants on the ground that there was no evidence before the Tribunal to hold that the accident was caused due to the rash and negligent driving of the bus by its driver nor there was any evidence to hold that the monthly income of the deceased was Rs.3,000/-. It is the case of the appellant that the accident was caused due to the contributory negligence of the deceased and the Tribunal was, therefore, not justified in directing the entire compensation to be paid by the insurance company. Another ground on which the award has been challenged by the appellant is that under the policy of insurance issued by the appellant, its liability was limited to Rs.50,000/- and it was not liable to pay the entire compensation under the award. The respondents as already mentioned above have filed cross-objections seeking enhancement of compensation.

4. It is now well-settled that the insurance company can avoid its liability to pay under he policy of insurance only on the grounds contained in Section 149 of the Motor Vehicles Act and on no other ground. It is, therefore, not permissible to the insurance company to file an appeal questioning the quantum of compensation or the finding of negligence or contributory negligence of the offending vehicle. The insurance company cannot avoid its liability on any other ground except those mentioned in sub-Section 2 of Section 149 of the Motor Vehicles Act. It has recently been held by the Supreme Court in National Insurance Company Ltd. Versus Nicolletta Rohtagi and others 2002 ACJ 1950 that the right of appeal is not an inherent right or common law right, but it is a statutory right. The law provides that an appeal can be filed on limited ground, the ground of challenge cannot be enlarged on the premises that the insured or the persons against whom a claim has been made has not filed any appeal. Section 149(2) of 1988 Act limits the insurer's appeal on those enumerated ground and the appeal being a product of the statute, it is not open to an insurer to take any plea other than those provided in Section 149(2) of 1988 Act.

5. By holding that the insurance company does not have a right to challenge the award either on the question of quantum or on the finding of negligence or contributory negligence, the Supreme Court has held as under:-

"PARA 15 - It is relevant to note that Parliament, while enacting sub-section (2) of Section 149 only specified some of the defenses which are based on conditions of the policy and, therefore, any other breach of conditions of the policy by the insured which does not find place in sub-section (2) of Section 149 cannot be taken as a defense by the insurer. If Parliament had intended to include the breach of other conditions of the policy as a defense, it could have easily provided any breach of conditions of insurance policy in sub-Section (2) of Section 149. If we permit the insurer to take any other defense other than those specified in sub-Section (2) of Section 149, it would mean we are adding more defenses to insurer in the statute which is neither found in the Act nor was intended to be included.

PARA 16 - For the aforesaid reasons, we are of the view that the statutory defenses which are available to the insurer to contest a claim are confined to what are provided in sub-section (2) of Section 149 of 1988 Act and not more and for that reason if an insurer is to file an appeal, the challenge in the appeal would confine to only those grounds.

PARA - 17 Before proceeding, further, it may be noticed that while `the Motor Vehicles Act, 1939' was in force, section 110-C (2-A) was inserted therein in the year 1970 which corresponds to Section 170 of the 1988 Act. The said provision provides that in course of an inquiry of a claim if the Tribunal is satisfied that there is a collusion between the claimant and the insured or the insured fails to contest the claim, the Tribunal for reasons to be recorded in writing, direct that the insurer who may be liable in respect of such claim, shall be imp leaded as a party to the proceeding and the insurer so imp leaded shall thereupon have, without prejudice to the provisions contained in sub-Section (2) of Section 149, the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made.

PARA - 18 The aforesaid provisions show two aspects. Firstly, that the insurer has only statutory defenses available as provided in sub-Section (2) of Section 149 of 1988 Act and, secondly, where the Tribunal is of the view that there is a collusion between the claimant and the insured, or the insured does not contest the claim, the insurer can be made a party and on such impleadment the insurer shall have all defenses available to it. Then comes the provisions of Section 173 which provides for an appeal against the award given by the Tribunal. Under Section 173, any person aggrieved by an award is entitled to prefer an appeal to the High Court. Very often the question has arisen as to whether an insurer is entitled to file an appeal on the grounds available to the insured when either there is a collusion between the claimants and the insured or when the insured has not filed an appeal before the High Court questioning the quantum of compensation. The consistent view of this Court had been that the insurer has no right to file an appeal to challenge the quantum of compensation or finding of the Tribunal as regards the negligence or contributory negligence of the offending vehicle."

In view of the aforesaid pronouncement of the Supreme Court, the appeal insofar as it challenges the quantum of compensation or challenges the findings on the question of negligence or contributory negligence, is not maintainable. The only ground which may be considered in this appeal for challenging the award is that under the policy of insurance, the liability of the insurance company was limited to Rs.50,000/- and consequently it could not be directed to pay the entire compensation under the award. Reliance for this has been placed upon the photocopy of a document which is purported to be the policy of insurance. It is vehemently argued by Mr.Seth, learned counsel for the appellant that the policy of insurance having been duly proved clearly shows that the liability of the insurance company was limited and the Tribunal, therefore, could not direct the insurance company to pay the entire amount of compensation under the award.

6. The original policy of insurance has not been produced by any party. While it is not denied that the original policy of insurance was in the custody of the insured and he should have placed the same on record, however, the insurance company also had a carbon copy of the policy of insurance or at least an office copy and it was, therefore, incumbent upon the insurance company to place the said carbon copy of the policy of insurance on record to satisfy the Tribunal that its liability was limited. However, the carbon copy of the policy of insurance was not placed on record and what was placed on record was the photocopy of a document purported to be the policy of insurance. RW-1 a Legal Assistant from the office of the insurance company appeared as a witness to prove this copy of the alleged policy of insurance. It was stated by this witness that the original policy was signed by the Assistant Branch Manager whose signatures he identified. His statement was objected to by the claimants at the time of document being exhibited. It was further stated by the witness that as per the policy the liability of the insurance company was limited to the extent of Rs.50,000/- in respect of any one accident. In cross-examination the witness stated that the original records had been destroyed; that as per the company's policy, the policy of insurance was destroyed after three years of its issue, however, he did not bring anything to show that there was any policy of the company to destroy its records after three years, though the same were available with the company. He, however, admitted that if the company has the knowledge about a case pending in Court, the records are not destroyed. According to him the notice of the case was not received by the company prior to three years and the records might have been destroyed in the normal course of business. He, however, did not know as to how a photocopy of the document was prepared when the records were not available with the insurance company. He admitted that the photocopy placed on record was attested as true copy without verifying from the original record. He also admitted that the photocopy of the policy was found in the Court claim file when the same was received from the original office. He also admitted that the claim file was opened after the summons were received from the Court.

7. In the present case, the insurance company had entered appearance in Court on 23.1.1981. The accident in question had taken placed on 19.8.1979. The insurance policy was issued on 27.11.1978. It is thus clear that the insurance company was aware of the pendency of the claim petition before the expiry of the period of three years from the date of issue of the policy of insurance. Even a claim file was opened and the alleged photocopy was placed in the claim file. In these circumstances, it is not explained as to why and how the policy could be destroyed even if there was a policy of the company to destroy the records after three years. Admittedly, as per the case of the company, in case a claim was pending the policy could not be destroyed. It is also not explained as to how the photocopy of the document was available in the file when the original document had been destroyed and when and who prepared the photocopy. It was not correct on the part of this witness to state that notice of the case was not received by the company prior to the expiry of three years of the issue of policy of insurance. Insurance company had admittedly entered appearance in Court on 23.1.1981, i.e. within three years of the date of issue of the policy of insurance and it could not as per their own policy, destroy records relating to the said policy of insurance. An adverse inference has, therefore, to be drawn against the appellant for not producing the original policy as it is difficult to believe that the original policy of insurance was destroyed. In the absence of the original policy no reliance can be placed upon a copy of the policy which has admittedly not been attested from the original. The policy of insurance having thus not been proved it cannot be held that the liability of the insurance company was limited only to Rs.50,000/- under the said policy of insurance.

8. In view of the foregoing, I am of the view that no case is made out for interference with the award of the Tribunal. There are no merits in the appeal of the insurance company and the same is, accordingly, dismissed with no order as to costs.

9. Learned counsel for the respondents have not pressed the cross-objections and seek permission to withdraw the same. In view of the statement made, the cross-objections are dismissed as withdrawn.