Delhi High Court

The New India Assurance Co.Ltd. vs Smt.Veena Shivpuri on 18 November, 2008

Author: V.B.Gupta

*      HIGH COURT OF DELHI : NEW DELHI

    MAC App. No.506/2008 & CM No.13641/2008

%            Judgment reserved on:10th November, 2008

             Judgment delivered on:18th November, 2008


The New India Assurance Co.Ltd.
5th Floor, Tower-II,
Jeevan Bharti Building,
Connaught Place,
New Delhi.

Also at:
Divisional Office,
Universal Insurance Building,
Asaf Ali Road,
New Delhi.                                   ....Appellant

                      Through:Mr.Pankaj Seth, Adv.

                               Versus
1) Smt. Veena Shivpuri,
w/o late Shri R.N.Shivpuri,

2)Shahalini,
D/o late Shri. R.N.Shivpuri,
Respondents 1 and 2, R/o D-1/68, Moti Bagh-I,
New Delhi.

3)Shri Surinder Kumar,
s/o Shri Jyoti Prakash,
R/o E-611, J.J.Colony,
Madipur, Delhi.

4)M/s. Swastik Pipes Ltd.,
1/23, Asaf Ali Road,
New Delhi.                              ....Respondents.

MAC App.No.506/2008                             Page 1 of 10
                       Through: Nemo.

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

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-Insurance company has filed the

present appeal under Section 173 of the Motor

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

dated 30th July, 2008 passed by Ms.Deepa Sharma,

Judge, MACT, New Delhi (for short as „Tribunal‟).

2. The brief facts of this case are that on 4th

December, 1999, deceased R.N.Shivpuri was going on

foot along with his daughter. At about 5.30 p.m.

suddenly offending vehicle bearing No.DL-1CB-3795

driven in a rash and negligent manner came and hit

the deceased from the backside. The vehicle in

question was driven by respondent No.3 Surinder

Kumar and the offending vehicle was owned by

respondent No.4 M/s Swastik Pipes Ltd. Due to the

impact the deceased fell down and was run over by the

offending vehicle. He was removed to the hospital

where he expired on 30th December, 1999.

3. The offending vehicle was insured with the

appellant.

4. Vide impugned judgment, the Tribunal awarded a

compensation of Rs.7,90,7,00/- along with interest @

7.5 p.a. from the date of filing of the petition till

realization.

5. It has been contended by the learned counsel for

appellant that the Tribunal has erred in calculating the

average gross future monthly income of the deceased

by adding of the triple of the proved monthly income of

the deceased, at the time of accident to prove the

monthly income of the deceased and thereafter

dividing the same by two in presuming that the income

of the deceased would have been tripled in view of the

Sixth Pay Commission.

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

proceedings during the course of appeal.

12. The Tribunal has taken the monthly income of the

deceased in view of the sixth pay commission. It held

that;

"The deceased was working with Archalogical Survey of India. He was a government servant. His date of birth is given in the certificate as 14.2.1953. He had expired in December, 1999 in the accident. He was aged as about 46 years at the time of his death. His salary as per Ex.PW1/1 excluding allowances, comes to Rs.3700/-. It is apparent that he had 14 years of service left behind at the time of his death. Since then sixth pay commission has already come in the current year i.e. 2008 and the income of the government employees has got tripled. Had deceased not died in accident, he also would have gotten benefit of revised

pay scale and his salary would have tripled."

13. Keeping in view of the reasoning given by the

Tribunal, the amount of compensation as awarded by

the Tribunal does not appears to be excessive.

14. The present appeal under these circumstances, is

not maintainable and same is, hereby, dismissed.

15. It has also been contended by learned counsel for

the appellant that in case this Court does not agree

with his contentions, then four weeks‟ time may be

granted to the appellant to deposit the award amount

with the Tribunal.

16. This prayer made by learned counsel for the

appellant is allowed and the appellant-Insurance