Sikkim High Court

National Insurance Company Limited vs Nim Lhamu Sherpa And Anr on 21 November, 2024

Author: Meenakshi Madan Rai

Bench: Meenakshi Madan Rai

               THE HIGH COURT OF SIKKIM : GANGTOK
                                    (Civil Appellate Jurisdiction)
                                 DATED : 21st November, 2024
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   SINGLE BENCH : THE HON'BLE MRS. JUSTICE MEENAKSHI MADAN RAI, JUDGE
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                                  MAC App. No.08 of 2024
                  Appellant                :        National Insurance Company Limited

                                                                    versus

                  Respondents              :        Nim Lhamu Sherpa and Another

        Appeal under Section 173 of the Motor Vehicles Act, 1988
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             Appearance
                  Mr. Sushant Subba, Advocate with Mr. Madan Kumar Sundas,
                  Advocate for the Appellant.
                  Mr. Sudesh Joshi, Advocate with Ms. Gazala Parvin, Advocate for
                  the Respondent No.1.
                  Mr. K. B. Chettri, Advocate (Legal Aid Counsel) for the Respondent
                  No.2.
          ---------------------------------------------------------------------------------------

                                           JUDGMENT

Meenakshi Madan Rai, J.

1. The Learned Motor Accidents Claims Tribunal

(hereinafter, the "MACT"), Gangtok, Sikkim, vide its impugned

Judgment, dated 17-10-2023, in MACT Case No.12 of 2023 (Nim

Lhamu Sherpa vs. Passang Lhamu Sherpa and Another), granted

the Respondent No.1 compensation of a sum of ₹ 21,56,000/-

(Rupees twenty one lakhs and fifty six thousand) only, on account

of the death of her husband, in a motor vehicle accident. It was

observed inter alia at Paragraph 13 that; in a case of this nature,

roving enquiry to prove rashness and negligence on the part of the

driver is not required. That, it is unnecessary for the Tribunal to go

into the technicalities because strict rules of procedure and

evidence are not followed. That, for the purpose of this case,

prima facie, there was rash and negligent driving on the part of the

National Insurance Company Limited vs. Nim Lhamu Sherpa and Another

driver, which resulted in the accident and consequential death of

the deceased. Having so determined the cause of the accident, the

compensation was computed in favour of the Respondent No.1,

under the following heads, with interest @ 10% per annum, from

the date of filing of the application (i.e. 06.04.2023) until its full

realization;

          Sl. No.                 Head                    Amount in ₹

               1       Loss of earning                20,16,000
               2       Loss of estate                 15,000
               3       Love and affection             1,00,000
               4       Cost of litigation             25,000
                       TOTAL                          ₹ 21,56,000

2. Before delving into the merits of the matter, the facts

leading to the claim of the Respondent No.1 (Claimant before the

Learned MACT) are briefly laid out. On 18-09-2011, a Maruti

Suzuki, Taxi vehicle, driven by one Bikash Pradhan in which the

Respondent No.1 and her husband were travelling with other

occupants was hit by boulders that rolled down the hillside after

being activated by the occurrence of an earthquake at that time.

The vehicle thus hit, careened off the road into the river, flowing

below in which all the occupants except Respondent No.1 were

swept away. The body of the deceased husband of Respondent

No.1 was recovered from the river on 23-09-2011. As per the

Respondent No.1 (the accident survivor), the accident was the

consequence of the vehicle being driven at high speed, due to

which the driver failed to bring the vehicle to a halt when the

boulders rolled down the hillside. The deceased, the only earning

member of his family, was aged twenty-four years, a truck driver

by occupation with monthly income of ₹ 10,000/- (Rupees ten

National Insurance Company Limited vs. Nim Lhamu Sherpa and Another

thousand) only. The compensation claimed was ₹ 25,40,000/-

(Rupees twenty five lakhs and forty thousand) only. The

Insurance-Company having been impleaded as Respondent No.1

and the owner of the vehicle as Respondent No.2, contested the

Claim Petition, denying the liability to pay the compensation. To

establish the cause of the accident as rash and negligent driving

the Claimant deposed before the Learned MACT. The Appellant did

not examine any witness. The MACT on consideration of the

entirety of the matter and finding all relevant documents pertaining

to the vehicle including the Insurance Policy Exbt-4, valid at the

time of the accident granted compensation as detailed

hereinabove.

3. Before this Court, Learned Counsel for the Appellant

submits that the accident was the result of vis major and beyond

human control as it is the Claimant‟s case itself, that, the ill-fated

vehicle fell into the river, having been hit by boulders falling from

the hill, due to the earthquake, which crushed the vehicle. Thus,

the Appellant is not liable to pay the compensation claimed.

Besides, the Claimant failed to establish the rash and negligent act

of the driver. That, the Respondent No.1 in fact ought to have filed

a Claim Petition under Section 163A of the Motor Vehicles Act,

1988 (hereinafter the "MV Act") and not under Section 166 of the

MV Act. That, as the finding of the Learned MACT is not in terms of

the law, the impugned Judgment deserves a dismissal.

4. Refuting these arguments, it was contended by

Learned Counsel for the Respondent No.1, that in the first

instance, the Appeal is not maintainable as no steps were taken by

the Appellant under Section 170 of the MV Act, before the MACT to

National Insurance Company Limited vs. Nim Lhamu Sherpa and Another

enable it to assail the Judgment of the MACT on all grounds as

raised herein. In the absence of an Order under Section 170 of the

Act, the Appeal is to be confined to the statutory defences as

provided under Section 149(2) of the MV Act. To fortify this

submission reliance was placed on Shankarayya and Another vs.

United India Insurance Co. Ltd. and Another , National Insurance Co.

Ltd., Chandigarh vs. Nicolletta Rohtagi and Others , Rekha Jain and

Another vs. National Insurance Company Limited and United India

Insurance Co. Ltd. vs. Chandi Rai and Another .

(i) In the next leg of his argument Learned Counsel

contended that, assuming but not admitting that the matter may

be argued on merits, the rash and negligent act of the driver has

been established by the evidence of Respondent No.1, the accident

survivor, which in any event is to be proved by a preponderance of

probability and not by proof beyond reasonable doubt. To buttress

this aspect Learned Counsel placed reliance on Jay Laxmi Salt Works

(P) Ltd. vs. State of Gujarat , Rajkot Municipal Corporation vs.

Manjulben Jayantilal Nakum and Others , M.S. Grewal and Another vs.

Deep Chand Sood and Others , Naresh Giri vs. State of M.P. , Bimla Devi

and Others vs. Himachal Road Transport Corporation and Others and

Mathew Alexander vs. Mohammed Shafi and Another .

(ii) The third argument advanced was that the point of vis

major which is being agitated in Appeal, was in fact never raised

before the Learned MACT. That, it is settled law that new grounds

(1998) 3 SCC 140

(2002) 7 SCC 456

(2013) 12 SCC 202

AIR 2006 Sikk 11

(1994) 4 SCC 1

(1997) 9 SCC 552

(2001) 8 SCC 151

(2008) 1 SCC 791

(2009) 13 SCC 530

2023 SCC OnLine SC 832

National Insurance Company Limited vs. Nim Lhamu Sherpa and Another

cannot be urged in Appeal. That, in light of the foregoing facts and

circumstances the Appeal deserves a dismissal.

5. Learned Counsel for the Respondent No.2 had no

submissions to advance.

6. Having considered the opposing arguments advanced

by Learned Counsel for the parties in extenso and having perused

the records placed before me, the questions that fall for

consideration before this Court are;

1. Can a new ground be urged in Appeal when it was not raised before the MACT.

2. Is the Appeal maintainable sans an application and consequently an Order under Section 170 of the MV Act, 1988, to enable the Appellant to raise grounds in Appeal beyond those prescribed under Section 149(2) of the MV Act?

(i) While addressing the first question formulated,

appositely, it has to be noticed that the question of vis major was

never raised by the Appellant before the Learned MACT. All that

the Appellant averred in the Written Statement at Paragraph (h) is

that; "........................, it is the case of the claimants that the

accident occurred due to the earthquake." This averment itself

appears to be erroneous as in the Claim Petition at Paragraph 27

the Claimant has inter alia averred that; "..........When the vehicle

driven by Bikash Pradhan reached Chuba under Ranipool P.S, an

earthquake hit the area, triggering landslide and rockslide. The

driver could not stop the vehicle even when the earthquake was

continuing since it was in high speed and failed to take necessary

preventive measures by stopping the vehicle.................". Be that

as it may, the Supreme Court dealt with a similar circumstance

National Insurance Company Limited vs. Nim Lhamu Sherpa and Another

viz., a new ground raised in Appeal in Rajesh Kumar alias Raju vs.

Yudhvir Singh and Another and observed as follows;

"11. ........................................It even does not appear that the contentions raised before us had either been raised before the Tribunal or the High Court. The Tribunal as also the High Court, therefore, proceeded on the materials brought on record by the parties. In absence of any contention having been raised in regard to the applicability of the Workmen's Compensation Act which, in our opinion, ex facie has no application, the same, in our opinion, cannot be permitted to be raised for the first time."

(ii) In Modern Insulators Ltd. vs. Oriental Insurance Co. Ltd.12,

the Supreme Court while again considering the fact of a new

ground raised in Appeal held as follows;

"10. We may refer to the next ground on which the appeal has to be allowed. It is a settled position of law that in an appeal the parties cannot urge new facts. From the pleadings of the respondent before the State Commission it is found that the respondent pleaded that the property damaged was not covered under the insurance policy. This plea was given a go- by before the National Commission and a new plea was taken up in the grounds of appeal that the terms and conditions of the insurance policy were violated by the appellant by using used kiln furniture. The National Commission accepted this new ground and allowed the appeal, which in our opinion is not sustainable in law."

(iii) In view of the settled position of law as expounded by

the Supreme Court hereinabove, it needs no reiteration that a new

ground cannot be urged in Appeal when it was not raised at all

before the Learned MACT. Hence, the argument pertaining to vis

major being a new ground in Appeal, is not sustainable in law and

is accordingly disregarded. The first question stands answered

accordingly.

7. Pertinently, it is noticed that the accident occurred on

18-09-2011, hence reference is made to all relevant provisions of

the MV Act before the amendments were made in the Act.

(2008) 7 SCC 305

(2000) 2 SCC 734

National Insurance Company Limited vs. Nim Lhamu Sherpa and Another

(i) Now to further comprehend the matter in its correct

perspective, it is essential to extract the provisions of Section 170

of the MV Act herein;

"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." (emphasis supplied)

(ii) Section 149(2) of the MV Act referred to in Section 170

of the MV Act (supra) reads as follows;

"149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.─(1)........................................................................

(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 its 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

National Insurance Company Limited vs. Nim Lhamu Sherpa and Another

(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 motorcycle; or

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

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

(b) that the policy is void on the ground that it was obtained by non-disclosure of a material fact or by representation of a fact which was false in some material particular."

8. While considering the ambit of the provisions of

Sections 147, 149, 170 and 173 of the MV Act, 1988, in Nicolletta

Rohtagi (supra) the Supreme Court considered the following

question;

"2. The short question that arises for our consideration in this group of appeals is:

Where an insured has not preferred an appeal under Section 173 of the Motor Vehicles Act, 1988 (hereinafter referred to as „the 1988 Act‟) against an award given by the Motor Accidents Claims Tribunal (hereinafter referred to as „the Tribunal‟), is it open to the insurer to prefer an appeal against the award by the Tribunal questioning the quantum of the compensation, as well as finding as regards the negligence of the offending vehicle?"

.......................................................................................

13. ............................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? 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

National Insurance Company Limited vs. Nim Lhamu Sherpa and Another

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."

(emphasis supplied)

(i) It was further observed that sub-section 7 of Section

149 of the 1988 Act clearly indicates the manner in which Section

149(2) is to be interpreted. That, 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. In

other words, an insurer cannot avoid its liability on any other

ground except those mentioned in sub-section (2) of Section 149

of the 1988 Act.

(ii) The Court was of the view that the statutory defences

which are available to the insurer to contest a claim are confined to

those 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 be limited to only those grounds.

(iii) The Supreme Court went on to elucidate that the

Legislature has, by enacting Section 149 of the Act ensured, that

the victims of motor vehicle accidents are fully compensated and

protected and compulsory insurance of motor vehicles was not to

promote the business interest of the insurer but to protect the

interest of the travelling public or those using the roads, from the

risks attendant upon the user of motor vehicles on the roads. If

law would have provided only for compensation to dependants of

victims of a motor vehicle accident, that would not have sufficed,

unless there was a guarantee that compensation awarded to an

National Insurance Company Limited vs. Nim Lhamu Sherpa and Another

injured or dependant of the victim of a motor vehicle accident,

could be recoverable from the person held liable, for the

consequences of the accident. It is for that reason the insurer

cannot escape from its liability to pay compensation on any

exclusionary clause in the insurance policy, except, those specified

in Section 149(2) of the Act or where the condition specified in

Section 170 of the Act is satisfied. Thus, if the insurer is aggrieved

against the award, they may file an Appeal on those grounds and

not any other, unless an Order is passed by the Tribunal under

Section 170 of the Act permitting the insurer to avail the grounds

available to an insured or any other person against whom claim

has been made, on being satisfied of the two conditions specified in

the said provision. It was concluded that, unless the conditions

specified in Section 170 of the 1988 Act are satisfied, an insurance

company has no right to Appeal to challenge the award on merits.

Even if no Appeal is preferred by the insured, it is not permissible

for an insurer to file an Appeal questioning the quantum of

compensation as well as the findings regarding negligence or

contributory negligence of the offending vehicle.

(iv) That, having cleared the aspect on the grounds for

Appeal that are available to the insurer/Appellant, we now turn to

the observation of the Supreme Court on Section 170 of the MV

Act. On this facet, in Nicolletta Rohtagi (supra) it was laid down as

follows;

"26. For the aforesaid reasons, an insurer if aggrieved against an award, may file an appeal only on those grounds and no other. However, by virtue of Section 170 of the 1988 Act, where in course of an enquiry the Claims Tribunal is satisfied that (a) there is a collusion between the person making a claim and the person against whom the claim has been made, or (b) the person against whom the claim has been

National Insurance Company Limited vs. Nim Lhamu Sherpa and Another

made has failed to contest the claim, the Tribunal may, for reasons to be recorded in writing, implead the insurer and in that case it is permissible for the insurer to contest the claim also on the grounds which are available to the insured or to the person against whom the claim has been made. Thus, unless an order is passed by the Tribunal permitting the insurer to avail the grounds available to an insured or any other person against whom a claim has been made on being satisfied of the two conditions specified in Section 170 of the Act, it is not permissible to the insurer to contest the claim on the grounds which are available to the insured or to a person against whom a claim has been made. Thus where conditions precedent embodied in Section 170 are satisfied and award is adverse to the interest of the insurer, the insurer has a right to file an appeal challenging the quantum of compensation or negligence or contributory negligence of the offending vehicle even if the insured has not filed any appeal against the quantum of compensation. Sections 149, 170 and 173 are part of one scheme and if we give any different interpretation to Section 173 of the 1988 Act, the same would go contrary to the scheme and object of the Act." (emphasis supplied)

(v) In Rekha Jain (supra) the Supreme Court reiterated the

ratio laid down in Nicolletta Rohtagi (supra).

(vi) Thus, it is no more res integra that where there is no

specific Order of the MACT under Section 170 of the MV, the

grounds for the Appeal are to be confined to the parameters

prescribed in Section 149(2) of the MV Act.

(vii) On the touchstone of the settled position of law, it is to

be examined herein, whether a Petition under Section 170 of the

MV Act was filed by the Insurance Company before the Learned

MACT. On meticulous perusal of the entire records placed before

me, including the response of the Appellant to the Claim Petition, it

is apparent that no such Petition was ever filed before the Learned

MACT. The Orders of the Learned MACT, it is trite to mention,

consequently bear no indication of Section 170 of the MV Act

Petition having been filed or Orders made thereto thereby lending a

closure to this point.

National Insurance Company Limited vs. Nim Lhamu Sherpa and Another

(viii) The suggestion offered by Learned Counsel for the

Appellant that the Claim Petition ought to have been filed under

Section 163A of the MV Act instead of Section 166 of the MV Act is

erroneous. Indeed, in a claim for compensation under sub-

section(1) of Section 163A of the MV Act the Claimant is not

required to plead or establish that death was due to the wrongful

act or neglect or default of the owner. At the same time, the

reason for the insertion of Section 163A to the MV Act, 1988,

cannot be lost sight of which was for the purpose of granting relief

to a specified section of society, whose income range is limited to

the extent of ₹ 40,000/- (Rupees forty thousand) only, per annum,