The Chairman, I C I C I Lombard ... vs Ranju Devi And Ors
2023 Latest Caselaw 687 Patna

         IN THE HIGH COURT OF JUDICATURE AT PATNA
                       Miscellaneous Appeal No.1244 of 2016
     ======================================================

The Chairman, I C I C I Lombard General Insurance Company Limited, Interface Building no. 11, 201/202, 4th Floor, New Link Road, Malad (w), Mumbai (Maharashtra) 700064, Appeal and Appellant through the Manager Legal & authorized signatory, ICICI Lombard General Insurance Company Limited, Uima Complex, Frazer Road, Patna.

... ... O.P. No.2/Appellant Versus

1. Ranju Devi, w/o Late Ramesh Kumar @ Ramesh Kumar Swarnkar

2. Shambhu s/o Late Ramesh Kumar @ Ramesh Kumar Swarnkar

3. Dipa Kumari d/o Late Ramesh Kumar @ Ramesh Kumar Swarnkar (Res. 2 & 3 are minor and are under the guardianship of mother, Res.1) All the above are Resident of Krishna Nagar, Saharsa, P.S.- Saharsa, District- Saharsa, at present residing at Mohalla- Suleman, Madhepura, P.S.- Madhepura, District- Madhepura, Bihar.

... ... Claimants/Respondents

4. Suraj Kumar s/o Bhageshwar Jha Resident of Village/P.O.- Bhaun, P.S. +district - Madhepura, Bihar. (Owner).

... ... O.P.-1/Respondent

5. Shyam Kishor Yadav s/o Khatar Yadav Resident of Village- Bhan Tekri, P.S./District Madhepura, Driver.

... ... O.P.-3/Respondent ====================================================== Appearance :

For the Appellant/s : Mr.Durgesh Kumar Singh, Advocate For the Respondent/s : Mr.Amandeep Kumar, Advocate ====================================================== CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD ORAL JUDGMENT Date : 07-02-2023

Heard learned counsel for the parties.

2. This miscellaneous appeal arises out of the judgment

dated 03.08.2016 passed by the learned 3rd Additional District and

Sessions Judge-cum-Motor Vehicle Accident Claim Tribunal,

Madhepura (hereinafter referred to as the 'Tribunal') in MACT

Case No. 31 of 2011 whereby and whereunder learned tribunal has

been pleased to direct the insurance company (the appellant) to Patna High Court MA No.1244 of 2016 dt.07-02-2023

pay a compensation of Rs. 19,97,480/- with interest thereon @ 9%

per annum from the date of filing of the application to the

claimants-respondent no. 1 to 3.

Brief facts and submissions on behalf of the

appellant.

3. Mr. Durgesh Kumar Singh, learned counsel for the

appellant has assailed the impugned judgment on various grounds.

His first submission is that the learned tribunal has assessed a

monthly income of Rs. 8190/- of the deceased by taking his daily

earning at the rate of Rs. 273/-. Learned counsel submits that it is a

case in which the deceased Ramesh Kumar @ Ramesh Kumar

Swarnkar while driving a two wheeler was dashed by a tempo on

20.02.2011. He died in the said accident. At the time of his death

he was aged about 33 years and the claimants who are the wife and

minor children of the deceased claimed that the deceased was

working as a skilled workman in a Jewellery Shop namely 'Anil

Jewellers' and he was earning a sum of Rs.300-350/- per day. His

submission is that to substantiate their claim as to his daily

income, the claimants did not bring credible evidence and it would

appear that apart from the family members and close relative of

the deceased no independent witness came in support of the case

of the claimants on the point of income. It is stated that the Patna High Court MA No.1244 of 2016 dt.07-02-2023

Jewellery Shop was owned by the co-brother of the deceased and

he deposed that the deceased was earning a sum of Rs. 300-350/-

per day.

4. Learned counsel further submits that the tribunal

could not appreciate that during the contemporary period in the

year 2011 the notified rate of the minimum wages of skilled

worker was only Rs. 151/-, therefore, even for the case shake if it

is assumed that the deceased was a skilled worker, the tribunal had

no reason to fix the monthly income of the deceased taking his

daily earning at Rs. 273/-. Learned counsel, therefore, submits that

the compensation is excessive on this account.

5. It is further submitted that in this case it has come in

evidence that the deceased was having a learners license, which

had already expired. He was driving the vehicle in question

without a valid driving license, therefore, on this ground alone the

appellant can avoid its liability to pay the claim.

6. Learned counsel further submits that the tempo was

not having a permit to ply the vehicle on the given route.

Therefore, in absence of permit if the tempo was plying and in

course of that due to rash and negligent driving of the vehicle the

accident took place which ultimately proved fatal for the life of the

deceased, the owner of the offending tempo bearing Registration Patna High Court MA No.1244 of 2016 dt.07-02-2023

No. BR-43B-4793 would be liable to pay the compensation. It is

submitted that in any case if the tribunal had directed the insurance

company to pay the claim amount despite no proof of their being a

permit of the tempo, in view of the judgment in the case of

National Insurance Co. Ltd. Vs. Challa Upendra Rao and Ors.

reported in (2004) 8 SCC 517, the tribunal should have directed

the owner to provide adequate security to the insurance company

for the award amount before release of the said amount by the

insurance company.

7. Learned counsel further submits that the tribunal has

allowed future prospect @ 50% which is not in accordance with

the Constitution Bench judgment of the Hon'ble Supreme Court in

the case of National Insurance Company Limited vs. Pranay

Sethi and others reported in (2017)16 SCC 680.

8. His further submission is that tribunal had allowed

excessive and higher sum of money on account of loss of love and

affection and guardianship of minor applicants, loss of consortium,

loss of estate and funeral expenses. It is his submission that on all

these counts the compensation allowed by the tribunal is liable to

be interfere with.

Patna High Court MA No.1244 of 2016 dt.07-02-2023

Submission on behalf of the claimants.

9. Mr. Amandeep Kumar, learned counsel for

respondent nos. 1 to 3 has opposed this appeal. Relying upon the

judgments of the Hon'ble Supreme Court in the case of

Shankarayya and Anr vs. United India Insurance Company Ltd.

reported in JT 1998 (4) SC 300 = AIR 1998 SC 2968, learned

counsel submits that the insurance company cannot maintain this

appeal as there is no order of the learned tribunal allowing the

insurance company to avail the larger defence. It is submitted that

the insurance company had not obtained any order as required

under Section 170 of the Motor Vehicle Act, 1988 (hereinafter

referred to as the 'Act of 1988'). Learned counsel has, in order to

strengthen his submission relied upon the judgment of the Hon'ble

Supreme Court in the case of National Insurance Co. Ltd.,

Chandigarh vs. Nicolleta Rohtagi and Ors. Reported in 2002 7

SCC 456; United India Insurance Co. Ltd. vs. Shila Datta and

Ors. reported in 2011 (7) SCC 129 and has further placed reliance

upon the judgment of the learned Co-ordinate Bench of this Court

in M.A. No. 493 of 2004 (Oriental Insurance Company Ltd. Vs.

Vidya Nand Yadav and Ors).

10. Learned counsel has submitted that even though

Shila Datta has doubted the Nicolleta Rohtagi (Supra) referring a Patna High Court MA No.1244 of 2016 dt.07-02-2023

passage from the British India General Insurance Co. Ltd. vs.

Captain Itwar Singh and Ors. reported in AIR 1959 SC 1331.

The fact remains that Nicolleta Rohtagi (Supra) has been followed

by the Hon'ble Supreme Court in a later judgment in the case of

Josphine James vs. United India Insurance Co. Ltd. and Anr.

reported in 2013 (4) TAC 22(SC). It is his submission that the

insurance company (the appellant) cannot be allowed to avail the

defence of the insured who has not preferred any appeal. Thus, the

appellant cannot be permitted to contest the case on merits. In his

submission the only limited defence available to the insurance

company/appellant is to contest the case in terms and the defences

provided under Section 149(2) of the Act of 1988.

11. Learned counsel further submits that as regards the

driving licence of the deceased, the insurance company has not

been able to prove on this ground alone that there was any

negligence on the part of the deceased in driving the vehicle. It is

his submission that to bring home a plea of contributory

negligence the insurance company was required to prove it by

bringing sufficient evidences on the record.

12. Attention of this Court has been drawn towards the

observations of the learned tribunal in paragraph '12' of the

impugned judgment wherein the learned tribunal has decided issue Patna High Court MA No.1244 of 2016 dt.07-02-2023

no. 4 as to whether the opposite party no. 1 deserves to be

indemnified by the opposite party no.2 as per policy of insurance.

The tribunal has recorded that the claimants had produced 4

witnesses in support of their claim and all of them have supported

the fact that on 20.02.2011, the accident took place near the

Dharmkata Chakla Chowk and they have further stated that the

tempo had dashed the deceased. It is not in dispute that at the

relevant time the tempo was insured by the insurance company. So

far as the insurance company is concerned, no oral or documentary

evidence were led on behalf of the insurance company to prove

that it was a case of contributory negligence.

13. Learned counsel has relied upon a judgment of the

Hon'ble Supreme Court in the case of Mangla Ram and Others

versus Oriental India Co. Ltd. and Ors. [Civil Appeal nos.

2499-2500 of 2018 (arising out of slp (civil) nos 28141-42 of

2017] to submit that in absence of there being any evidence to

show that the vehicle was being driven negligently by the deceased

at the time of accident, the same cannot be assumed. The Hon'ble

Supreme Court held that the argument of the respondents that the

appellant did not possess valid driving licence at the time of

accident will be of no significance. Learned counsel submits that

to succeed on this ground, the Insurance Company was obliged to Patna High Court MA No.1244 of 2016 dt.07-02-2023

bring legal evidence to answer the issue of contributory negligence

against the deceased.

On the point of income

14. Learned counsel submits that in such cases where

the deceased was a daily wage earner, no documentary evidences

could have been produced. It is submitted that in this case the shop

owner had himself deposed. One independent witness Rajesh

Kumar Singh had also deposed and so far as the occupation of the

deceased is concerned, no doubt was raised as regards the

occupation, therefore, the tribunal should have accepted the

income of the deceased at Rs.350/- per day, instead the Tribunal

has allowed only Rs.273/- per day. In his submission this finding

of the Tribunal is required to be interfered with and the income of

the deceased be taken at Rs.350/- per day. Learned counsel has

relied upon a judgment of the Hon'ble Supreme Court in the case

of Chameli Devi and Others versus Jivrail Mian and Others

reported in 2019 (4) T.A.C. 724 SC, to submit that in said case

the deceased was a carpenter and in an accident which took place

in the year 2001, the Tribunal assessed his income at Rs.1250/- per

month which was enhanced by the High Court at Rs.3,000/- per

month but the Hon'ble Supreme Court held that it would not be

unjustified to assess his income at Rs.200/- per day. It is, thus, his Patna High Court MA No.1244 of 2016 dt.07-02-2023

submission that in the present case of the year 2011, the Tribunal

would have been justified in assessing the income of the deceased

at Rs.350/- per day.

15. As regards the offending vehicle not having a

permit, learned counsel has further relied upon a judgment of the

Hon'ble Supreme Court in the case of National Insurance Co.

Ltd. versus Challa Upendra Rao and Ors. reported in (2004) 8

SCC 517 to submit that in the said case even as the Hon'ble

Supreme Court held that the vehicle was plying without a permit

and in such circumstance, the owner would be liable to pay the

claim and the insurer cannot be held liable, the Hon'ble Supreme

Court directed the insurer to satisfy the award, though in law it has

no liability and held that in some cases, the insurer has been given

option and liberty to recover the amount from the insured. In the

said case, the Hon'ble Supreme Court directed the owner of the

offending vehicle to furnish security for the entire amount which

the insurer will pay to the claimants, before release of the amount

to the claimants.

Consideration

16. Having heard learned counsel for the parties and

upon perusal of the records, this Court finds that so far as the

maintainability of the present appeal is concerned, the plea of Patna High Court MA No.1244 of 2016 dt.07-02-2023

learned counsel for the claimants-respondent nos. 1 to 3 that in

absence of there being an order under Section 170 of the Act of

1988, the appellant cannot be permitted to challenge the impugned

judgment and award on merit by taking a larger defence is liable to

succeed.

17. Since the present case requires a brief discussion on

the scope and ambit of Sections 149 and 170 of the Act of 1988

(prior to it's amendment) with a reference to various judicial

pronouncements on this subject, this Court deems it just and

proper to extract Sections 149 and 170 of the Act of 1988 as

under:-

"149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.-- (1) If, after a certificate of insurance has been issued under sub-section (3) of section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (1) of section 147 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.

Patna High Court MA No.1244 of 2016 dt.07-02-2023

(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 proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:--

(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:--

(i) a condition excluding the use of the vehicle--

(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or

(b) for organised racing and speed testing, or

(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or

(d) without side-car being attached where the vehicle is a motor cycle; or

(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or

(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or

(b) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular. (3) Where any such judgment as is referred to in sub-section (1) is obtained from a Court in a reciprocating country and in the case of a foreign judgment is, by virtue of the provisions Patna High Court MA No.1244 of 2016 dt.07-02-2023

of section 13 of the Code of Civil Procedure, 1908 (5 of 1908) conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act, 1938 (4 of 1938) and whether or not he is registered under the corresponding law of the reciprocating country) shall be liable to the person entitled to the benefit of the decree in the manner and to the extent specified in sub-section (1), as if the judgment were given by a Court in India:

Provided that no sum shall be payable by the insurer in respect of any such judgment unless, before the commencement of the proceedings in which the judgment is given, the insurer had notice through the Court concerned of the bringing of the proceedings and the insurer to whom notice is so given is entitled under the corresponding law of the reciprocating country, to be made a party to the proceedings and to defend the action on grounds similar to those specified in sub-section (2).

(4) Where a certificate of insurance has been issued under sub-section (3) of section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in clause (b) of sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub-section (1) of section 147, be of no effect:

Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person. (5) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person. Patna High Court MA No.1244 of 2016 dt.07-02-2023

(6) In this section the expressions "material fact" and "material particular" means, respectively a fact or particular of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk and, if so at what premium and on what conditions and the expression "liability covered by the terms of the policy" means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy.

(7) No insurer to whom the notice referred to in sub-section (2) or sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in sub-section (1) or in such judgment as is referred to in sub-section (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be.

Explanation.--For the purpose of this section, "Claims Tribunal" means a Claims Tribunal constituted under section 165 and "award" means an award made by that Tribunal under section 168.

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 failed 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. "

Patna High Court MA No.1244 of 2016 dt.07-02-2023

18. This issue is no longer a res-integra. In case of

Shankarayya (supra), the Hon'ble Supreme Court has taken note

of Section 170 of the Act of 1988 and thereafter proceeded to

observe in paragraphs '4' and '5' as under:-

"4. 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 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 1, Insurance Company was not entitled to file an appeal on merits of the claim which was awarded by the Tribunal.

5. It was not disputed before us that Respondent 1, Insurance Company on account of the contract of insurance is liable to comply with the entire award amount of compensation. That precisely is the reason why the insured has not thought it fit to challenge the compensation in these proceedings. Under these circumstances, Respondent 1, Insurance Company will have to satisfy the entire award amount as directed by the Tribunal.

If any part of the said amount remains still unpaid, the said balance amount shall be deposited by Respondent 1 in the Patna High Court MA No.1244 of 2016 dt.07-02-2023

Tribunal within eight weeks from the receipt of the copy of this order at its end. Office shall send a copy of this order to first respondent, Insurance Company."

19. In the case of Nicolletta Rohtagi (Supra), a Three-

Judges' Bench of the Hon'ble Supreme Court traced the legislative

history of the English Law as regards liability of an insurer in the

event of a motor accident. For brevity shake, this Court is not

reproducing those paragraphs but the resultant discussions may be

found in paragraphs '12' to '16' which are quoted hereinbelow for a

ready reference:-

"12. We have traced the legislative history of English law as regards liability of an insurer in the event of a motor accident in respect of third-party right not for interpreting Sections 149, 170 and 173 of the 1988 Act, but only for showing that while enacting Chapter VIII of the 1939 Act or Chapter XI of the 1988 Act, the intention of the legislature was to protect third-party rights and not the insurer.

13. To answer the question, it is necessary to find out on what grounds the insurer is entitled to defend/contest against a claim by an injured or dependants of the victims of a motor vehicle accident. Under Section 96(2) of the 1939 Act which corresponds to Section 149(2) of the 1988 Act, an insurance company has no right to be a party to an action by the injured person or dependants of the deceased against the insured. However, the said provision gives the insurer the right to be made a party to the case and to defend it. It is, therefore, obvious that the said right is a creature of the statute and its content depends on the provisions of the statute. After the insurer has been made a party to a case or claim, the question arises, what are the defences available to it under the statute?

Patna High Court MA No.1244 of 2016 dt.07-02-2023

The language employed in enacting sub-section (2) of Section 149 appears to be plain and simple and there is no ambiguity in it. It shows that when an insurer is impleaded and has been given notice of the case, he is entitled to defend the action on grounds enumerated in the sub-section, namely, sub-section (2) of Section 149 of the 1988 Act, and no other ground is available to him. The insurer is not allowed to contest the claim of the injured or heirs of the deceased on other ground which is available to an insured or breach of any other conditions of the policy which do not find place in sub-section (2) of Section 149 of the 1988 Act. If an insurer is permitted to contest the claim on other grounds it would mean adding more grounds of contest to the insurer than what the statute has specifically provided for.

14. Sub-section (7) of Section 149 of the 1988 Act clearly indicates in what manner sub-section (2) of Section 149 has to be interpreted. Sub-section (7) of Section 149 provides that no insurer to whom the notice referred to in sub-section (2) or sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in sub-section (1) or in such judgment as is referred to in sub-section (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be. The expression "manner" employed in sub- section (7) of Section 149 is very relevant which means an insurer can avoid its liability only in accordance with what has been provided for in sub-section (2) of Section 149. It, therefore, shows that the insurer can avoid its liability only on the statutory defences expressly provided in sub-section (2) of Section 149 of the 1988 Act. We are, therefore, of the view that an insurer cannot avoid its liability on any other grounds except those mentioned in sub-section (2) of Section 149 of the 1988 Act.

Patna High Court MA No.1244 of 2016 dt.07-02-2023

15. It is relevant to note that Parliament, while enacting sub- section (2) of Section 149 only specified some of the defences 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 defence by the insurer. If Parliament had intended to include the breach of other conditions of the policy as a defence, 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 defence other than those specified in sub-section (2) of Section 149, it would mean we are adding more defences to the insurer in the statute which is neither found in the Act nor was intended to be included.

16. For the aforesaid reasons, we are of the view that the statutory defences which are available to the insurer to contest a claim are confined to what are provided in sub- section (2) of Section 149 of the 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."

20. In the case of Shila Datta (supra) a Bench of equal

strength raised a doubt and took a view that Nicolletta Rohtagi

(Supra) requires reconsideration by larger Bench on issue nos. (iii) to

(v). The submissions advanced on behalf of the Insurer were taken

note of as issues which required consideration. Issue Nos. (iii) to (v)

framed in the case of Nicolletta Rohtagi (Supra) were as under:-

"(iii) When an insurer is aggrieved by the quantum of compensation, it is not seeking to avoid or exclude its liability, but merely wants determination of the extent of its liability. The restrictions imposed upon the insurers to defend the action by the claimant or file an appeal against Patna High Court MA No.1244 of 2016 dt.07-02-2023

the judgment and award of the Tribunal will apply, only if it wants to file an appeal to avoid liability and not when it admits its liability to pay the amount awarded, but only seeks proper determination of the quantum of compensation to be paid.

(iv) Appeal is a continuation of the original claim proceedings. Section 170 provides that if the person against whom the claim is made, fails to contest the claim, the insurer may be permitted to resist the claim on merits. If and when an award is made by the Tribunal, which is excessive, arbitrary or erroneous, the owner of the vehicle has to challenge the same by filing an appeal before the High Court. If the insured (owner of the vehicle) fails to challenge an award even when it is erroneous or arbitrary or fanciful, it can be considered that the insured has failed to contest the same and consequently under Section 170, the High Court or the Tribunal may permit the insurer to file an appeal and contest the award on merits.

(v) The Motor Vehicles Act, 1988 ("the Act", for short) creates a liability upon the insurer to satisfy the judgments and awards against the insured. The Act expressly restricts the right of the insurer to avoid the liability as insurer, only to the grounds specified in Section 149(2) of the Act.

Though it is impermissible to add to the grounds mentioned in the statute, the insurer has a right, if it has reserved such a right in the policy, to defend the action in the name of the insured. If it opts to step into the shoes of the insured, it can defend the action in the name of the insured and all defences open to the insured will be available to it and can be urged by it. Its position contesting a claim under Section 149(2) of the Act is distinct and different, when it is contesting the claim in the name of or on behalf of the insured owner of the vehicle. In cases, where it is authorised by the policy to defend any claim in the name of the insured, and the insurer does so, it cannot be restricted to the grounds mentioned in Patna High Court MA No.1244 of 2016 dt.07-02-2023

Section 149(2) of the Act, as the defence is on behalf of the owner of the vehicle."

21. The Hon'ble Supreme Court referred a passage from

the judgment in the case of British India General Insurance

(Supra) and made an observation which may be found in paragraph

'20' of the judgment which are being reproduced hereinbelow:-

"20. ...The Statute has no doubt created a liability in the insurer to the injured person but the statute has also expressly confined the right to avoid that liability to certain grounds specified in it. It is not for us to add to those grounds and therefore to the statute for reasons of hardship. We are furthermore not convinced that the statute causes any hardship. First, the insurer has the right, provided he has reserved it by the policy, to defend the action in the name of the assured and if he does so, all defences open to the assured can then be urged by him and there is no other defence that he claims to be entitled to urge. He can thus avoid all hardship if any, by providing for a right to defend the action in the name of the assured and this he has full liberty to do...." (emphasis supplied) Nicolletta Rohtagi did not consider the issue with reference to the situation where the insurer is enabled by a specific term in the insurance policy to take over and conduct the defence of the case in the name of the insured, presumably as the insurance policy did not have such an enabling provision. In fact if such a contention had been raised, the court would have noticed that the issue was covered by a binding three- Judge Bench judgment in British India General Insurance. Be that as it may. "

22. After Shila Datta was referred to a larger Bench, the

Hon'ble Supreme Court had occasion to consider the same issue in

the case of Josphine James. In the said case the High Court had

reduced the quantum of compensation under the heading of loss of

dependency of the appellant at the instance of the Insurance Patna High Court MA No.1244 of 2016 dt.07-02-2023

Company even as the Insurance Company had not obtained any

permission from the Tribunal under Section 170(b) of the Act of

1988. In paragraph '17' of the judgment in case of Josphine James,

the Hon'ble Supreme Court observed as under:-

" 17. The said order was reviewed by the High Court at the instance of the appellant in view of the aforesaid decision on the question of maintainability of the appeal of the Insurance Company. The High Court, in the review petition, has further reduced the compensation to Rs. 4,20,000/- from Rs. 6,75,000/- which was earlier awarded by it. This approach is contrary to the facts and law laid down by this Court. The High Court, in reducing the quantum of compensation under the heading of loss of dependency of the appellant, was required to follow the decision rendered by three judge Bench of this Court in Nicolletta Rohtagi case (supra)and earlier decisions wherein this Court after interpreting Section 170(b) of the M. V. Act, has rightly held that in the absence of permission obtained by the Insurance Company from the Tribunal to avail the defence of the insured, it is not permitted to contest the case on merits. The aforesaid legal principle is applicable to the fact situation in view of the three judge bench decision referred to supra though the correctness of the aforesaid decision is referred to larger bench. This important aspect of the matter has been overlooked by the High Court while passing the impugned judgment and the said approach is contrary to law laid down by this Court. "

23. A similar question fell for consideration before a

learned Co-ordinate Bench of this Court in M.A. No. 493 of 2004

(Oriental India Co. Ltd. vs. Vidya Nand Yadav and Ors.). In the said

case, the Insurance Company argued that under Section 173 of the

Act of 1988 any person aggrieved from the award of the tribunal is

entitled to file an appeal against the award and that the appellant

being aggrieved from the award has every right and competence to Patna High Court MA No.1244 of 2016 dt.07-02-2023

file an appeal. The learned Co-ordinate Bench, however, relied upon

the judgment of the Hon'ble Supreme Court in the case of Sadhana

Lodh versus National Insurance Co. Ltd. and Another reported in

(2003) 3 SCC 524 in which the Hon'ble Apex Court has held that an

insurer has right to file an appeal before the High Court on limited

grounds available under Section 149(2) of the Act and that the appeal

being a product of the Statute if is not open to an insurer to make any

plea other than those provided under Section 149(2). In case where

there is a collusion between the claimant and the insurer or the

insured does not contest the claim and further if the Tribunal does not

implead the Insurance Company to contest the claim, in such a

situation it is open to the insurer to seek permission of the Tribunal to

contest the claim on the ground available to the insured or to a person

against whom a claim has been made. The learned Co-ordinate

Bench, therefore, held that the appeal filed by the Insurance

Company under Section 173 of the Act of 1988 was not

maintainable.

24. In the present case, the admitted position is that the

insurance company (the appellant) has not obtained an order under

Section 170(a) or (b) of the Act of 1988, therefore, this Court has

no iota of doubt that in view of the express provision of Section

170, without satisfying those conditions and without obtaining an

order from the Tribunal the insurance company cannot be Patna High Court MA No.1244 of 2016 dt.07-02-2023

permitted to maintain this appeal on merit. This Court would,

therefore, not permit the insurance company (the appellant) to

challenge the impugned judgment and award by raising larger

defence.

25. So far as the plea raised on account of the deceased

not having a driving license is concerned, this Court finds that a

plea to this effect alone without proving that it is a case of

contributory negligence on the part of the deceased by bringing

sufficient evidence on the record, would not succeed. In this

regard, the judgment of the Hon'ble Supreme Court in the case of

Mangla Ram (supra), paragraph '24' thereof is being reproduced

hereunder:

"24. In other words, we are inclined to hold that there is no title of evidence about the motorcycle being driven negligently by the appellant at the time of accident. The respondents did not produce any such evidence. That fact, therefore, cannot be assumed. Resultantly, the argument of the respondents that the appellant did not possess a valid motorcycle driving licence at the time of accident, will be of no significance. Thus, we hold that there is no legal evidence to answer the issue of contributory negligence against the appellant."

26. The another submission of learned counsel for the

appellant that the offending vehicle was plying without a permit,

therefore, the insurance company has a defence available under

Section 149(2) of the Act of 1988 could have succeeded only and

only if the insurance company would have brought any evidence to Patna High Court MA No.1244 of 2016 dt.07-02-2023

bring home its plea. Unfortunately, the insurance company has not

led any evidence on this issue. In paragraph '8' of the impugned

judgment the learned Tribunal has categorically recorded that

opposite party nos. 1, 2 and 3 have not brought any oral or

documentary evidence. If this is the position which is not disputed

before this Court, this Court is bound to hold that the plea that the

vehicle was plying without having a permit cannot succeed.

27. At this stage, this Court would briefly deal with the

evidences available on the record as regards the income of the

deceased. Four witnesses have been examined on this issue. The

occupation of the deceased is not in doubt and in fact in the light

of the views already expressed by this Court hereinabove, the

insurance company cannot be allowed to challenge the judgment

of the Tribunal on this count by taking a larger defence. On the

point of income also, this Court finds that as against the then

prevailing minimum wages of Rs. 151/- for the skilled worker, in

the nature of the occupation being performed by the deceased if

the Tribunal has assessed the income of the deceased at Rs. 273/-

per day, no fault may be found with the same. Although, learned

counsel for the claimants - O.P. Nos. 1, 2 and 3 has submitted that

the Tribunal is not justified in allowing only Rs. 273/- per day

instead of Rs. 350/- as was being claimed by the claimants, this Patna High Court MA No.1244 of 2016 dt.07-02-2023

Court is of the considered opinion that the Tribunal has taken a

reasonable view of the matter on this issue and no interference is

required by this Court on the point of income.

28. This Court, however, finds that contrary to the

judgment of the Hon'ble Apex Court in the case of Pranay Sethi

the Tribunal has allowed future prospect @ 50%. Since in the case

of Pranay Sethi the Hon'ble Supreme Court has laid down the

law and the deceased in this case is less than 40 years old, in his

case 40% of the actual income shall be added as future prospect.

Similarly, on account of loss of love and affection the Tribunal has

allowed Rs. 2,00,000/- to the two minor children which in terms of

the judgment of the Hon'ble Apex Court in the case of Pranay

Sethi (supra) will be allowed under head 'parental consortium' at

the rate of Rs. 40,000/- plus increase @ 10%. It will, therefore

come down to Rs. 44,000/- each to the two minor children as

'parental consortium'. The claimant no. 1 (wife) has been allowed

loss of consortium at Rs. 1,00,000/- which will come down to Rs.

44,000/- and loss of estate at Rs. 15,000/-. The funeral expense

which has been allowed at Rs. 25,000/- will come down to Rs.

15,000/-.

29. In the light of the aforesaid discussions, this Court is

of the considered opinion that on merit no interference is required Patna High Court MA No.1244 of 2016 dt.07-02-2023

with the findings of the impugned judgment, however, the

quantum of compensation is to be rearranged in terms of the

judgment of the Hon'ble Apex Court in the case of Pranay Sethi

(supra) as indicated by this Court hereinabove.

30. The calculation in terms of Pranay Sethi would be

as under:

         (i)                     Monthly Income                   Rs.8,190.00
         (ii)              Add Future Prospect @ 40%              Rs.3,276.00
                                       Total                      Rs.11,466.00
         (iii)    Less Personal Expenses 1/4th of Rs.11466.00 Rs.2,866.00
         (iv)       Loss of Dependancy: Rs. 8,600 x 12 x17        Rs.17,54,400.00
         (v)                     Funeral Expenses                 Rs.15,000.00
         (vi)                     Loss of Estate                  Rs.15,000.00
        (vii)              Loss of Spousal Consortium             Rs.44,000.00
        (viii)     Loss of Parental Consortium to both of the     Rs.88,000.00
                   minor children at the rate of 44,000.00 each
                          Total compensation to be paid           Rs. 19,16,400.00
                            Less amount already paid              If Any
                 Award/Balance payable with interest @ 9%
                 per annum from the date of filing of the claim
                 till payment

31. The impugned judgment and award are accordingly

modified. The Insurance Company shall pay the awarded amount

after deducting the payments if any already made to the claimants

under the award within a period of thirty (30) days from the date

of receipt/communication of this order.

32. Learned counsel for the Insurance Company has

prayed for returning the statutory amount deposited by the Patna High Court MA No.1244 of 2016 dt.07-02-2023

appellant at the time of filing of the appeal. Learned counsel

submits that in view of the judgment of this court in the case of

United India Insurance Insurance Company Limited Vs.

Manju Devi and others reported in (1998) 3 PLJR 506 the

amount so deposited is to be adjusted against the award. Since the

Insurance Company has been made liable to pay the award

amount, the statutory amount be refunded. Let the statutory

amount be returned to the Insurance Company.

33. The Miscellaneous Application is disposed of.

(Rajeev Ranjan Prasad, J) Rajeev/Rajnish-

AFR/NAFR                         AFR
CAV DATE
Uploading Date             10.02.2023
Transmission Date