Delhi High Court

The New India Assurance Co.Ltd. vs Smt.Shah Jahan Begum & Ors. on 18 November, 2008

Author: V.B.Gupta

*      HIGH COURT OF DELHI : NEW DELHI

    MAC App. No.504/2008 & CM No.13635/2008

%            Judgment reserved on:10th November, 2008

             Judgment delivered on:18th November, 2008


The New India Assurance Co.Ltd.
R.O.-II, Office at 12/1, Jeevan Rakshak
Building, Asaf Ali Road,
New Delhi.

Also at:
D.O. Office at A-58-59,
Sector-16,
Noida, Gautam Budh Nagar,
U.P.                                    ....Appellant

                      Through: Mr.Pankaj Seth, Adv.

                               Versus

1.Smt.Shah Jahan Begum,
Widow of Late Sh.Sultan Ahmad

2.Ms.Amreen,
D/o Late Sh.Sultan Ahmad,

3.Ms.Iram,
S/o Late Sh.Sultan Ahmad

4.Rihan
S/o Late Sh.Sultan Ahmad

5.Hamza
S/o Late Sh.Sultan Ahmad

6. Ms.Ikra,

MAC App.No.504/2008                             Page 1 of 10
 D/o Late Sh.Sultan Ahmad

7.Shabbir Ahmad
S/o Late Sh.Nazir Ahmad

8.Smt.Basheeran Begum
W/o Sh.Shabbir Ahmad

(All R/o, 20/1, Mehrauli, New Delhi-30)
(Respondents 1 to 6 being minors are under
Guardianship of respondent No.1 their mother)

9. Sh.Surinder Singh,
S/o Sh.Santokh Singh,
R/o 727, Govindpuri, Kalkaji,
New Delhi-19.

Also at:
b-422, Transit Camp Govindpuri,
Kalkaji, New Delhi.

Also at:
Permanent R/o Village Lakarpur,
Distt.Faridabad, Haryana.

10.Sh.Chander Mani Singh,k
S/o sh.Chet Narayan Singh,
Permanent R/o Village Ahi Rolli Police Station
Maharaj Ganj, Post Pyarepur,
Bijwar, U.P.

Also at:
R/o C-76/147, Scindia Road,
Gole Market, New Delhi.                ...Respondents.

                      Through: Nemo.

Coram:
HON'BLE MR. JUSTICE V.B. GUPTA


MAC App.No.504/2008                           Page 2 of 10
 1. Whether the Reporters of local papers may
   be allowed to see the judgment?                           Yes

2. To be referred to Reporter or not?                        Yes

3. Whether the judgment should be reported
   in the Digest?                                            Yes

V.B.Gupta, J.

Appellant-New India Assurance Company Ltd.

has filed the present appeal under Section 173 of the

Motor Vehicles Act, 1988 (for short as „Act‟) against

the judgment dated 27th May, 2008 passed by

Sh.J.P.S.Malik, Judge, MACT, Delhi (for short as

„Tribunal).

2. The brief facts of this case are that on 28th

August, 2004 deceased Sultan Ahmad was driving his

two wheeler scooter No.DL-35-AB-6109 and at about

4.00 p.m., when he reached near Arjan Garh Air Force

Station on M.G.Road, New Delhi, he was hit by a

tempo No.HR-38-BG-4899 which came all of a sudden.

The tempo was being driven at a very high speed,

rashly and negligently by respondent No.10 Chander

Mani Singh. Due to this accident deceased fell down

on the road along with scooter and sustained fatal

injuries. The vehicle was owned by respondent No.9

Surinder Singh and is insured by the appellant.

3. Vide the impugned judgment, the Tribunal passed

an award for a sum of Rs.12,37,000/- along with simple

interest @ 9 % p.a. from the date of filing of the

petition till realisation.

4. It has been contended by learned counsel for the

appellant that the Tribunal ought to have considered

the income of the deceased according to the minimum

wages prevailing at the time of the accident for

assessing the loss of dependency. Thus, the Tribunal

has erred in taking the monthly income of the

deceased at Rs. 8,000/- for the purpose of determining

the loss of dependency without any proof of income.

5. The other contention made by the learned counsel

for the appellant is that the Tribunal in this case has

taken the income of the deceased on presumptive basis

and there was no material before the Tribunal to arrive

at this income. Under section 166 of the Act, the Court

has to grant reasonable compensation. The

compensation to be awarded cannot be arbitrary and

fanciful. There has to be some basis for awarding just

compensation. Since the compensation has been

awarded without any basis by the Tribunal, the

appellant-Insurance company has every right to

challenge the quantum of award even though appellant

did not file any application under section 170 of the

Act before the Tribunal.

6. In the present appeal, the appellant/insurance

company has challenged the quantum of award and

admittedly no permission under Section 170 of the Act

has been obtained by the appellant from the Tribunal.

7. Section 170 of the Act reads as under:-

"170. Impleading insurer in certain cases.-Where in the course of any inquiry, the Claims Tribunal is satisfied that -

(a) there is collusion between the person making the claim and the person against whom the claim is made, or

(b) the person against whom the claim is made has filed to contest the claim, it may, for reasons to be recorded in writing, direct that the insurer who may be liable in respect of such claim, shall be impleaded as a party to the proceeding and the insurer so impleaded 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."

8. In Shankarayya and another v. United

India Insurance Co. Ltd. and another, AIR

1998 SC 2968, the Apex Court while dealing

with the question as to whether Insurance

Company could have filed an appeal in the High

Court against the award of the Tribunal and got

the quantum of compensation reduced when the

insured had not filed such appeal and when

Insurance Company had not moved the Tribunal

under Section 170 of the Act for getting the right

to contest the proceedings on merit, held as

under;

             "It    clearly    shows    that  the
             Insurance        Company        when

impleaded as a party by the Court can be permitted to contest the proceedings on merits only if the conditions precedent mentioned in the section are found to be satisfied and for that purpose the Insurance Company has to obtain order in writing from the Tribunal and which should be a reasoned order by the Tribunal. Unless that procedure is followed, the Insurance Company cannot have a wider defence on merits than what is available to it by way of statutory defence. It is true that the claimants themselves had joined respondent No.1- Insurance Company in the Claim Petition but that was done with a view to thrust the statutory liability on the Insurance Company on account of the contract of the insurance. That was not an order of the Court itself permitting the Insurance Company which was impleaded to avail of a larger defence on merits on being satisfied on the aforesaid two conditions mentioned in Section

170. Consequently, it must be held that on the facts of the present case, respondent No.1- Insurance

Company was not entitled to file an appeal on merits of the claim which was awarded by the Tribunal."

9. In National Insurance Co. Ltd. and another v.

Smt. Balbir Kaur and others, AIR 2000 P&H 210,

the Punjab and Haryana High Court held as under;

"If the insurance company does not plead before the Tribunal that there was any collusion between the claimants and the person against whom the claim was made and does not ask the Tribunal to pass an order under Section 170 of the Act allowing it to contest the claim on merits it will have no right to contest the same on the grounds other than those mentioned in sub- section (2) of Section 149 of the Act. In the case before us, the insurance company did not plead collusion between the claimants and the Insured and there is no order passed by the Tribunal allowing the insurance company to contest the claim on merits. As a matter of fact, the insurance company did not make any prayer to the Tribunal to allow it to contest the claim on all or any of the grounds available to the insured. Not having done so before the Tribunal, we are of the view that the insurer cannot be allowed to

challenge the award on merits for the first time in appeal before this Court. The application filed by the appellant under Section 170 of the Act seeking permission to contest the claim on merits itself is, thus, misconceived and not maintainable as such a plea could only be made before the Tribunal and not before this Court as is clear from the plain language of the section."

10. Thus, it is well-settled that when permission of

the Tribunal to contest the claim on merits had not

been obtained as per requirement, the insurer cannot

be permitted to challenge the award on merits, i.e., on

the question of quantum, unless the conditions enacted

in section 170 of the Act are complied with.

11. Here, the appellant has filed the present appeal

challenging the award on quantum only. Since no

permission under Section 170 of the Act has been

granted, the appellant, being the insurer of offending

vehicle is barred from raising the plea with regard to

quantum and merits of the claim, in the present