Appeals Nos 413 and 414 of 1958
Appeals from the order dated April 27 1955 of the Punjab High Court in Civil Revisions Nos
81 D of 1953 and 96 D of 1953 respectively
1959 April 21 22 23 24
C K Daphtary Solicitor General for India Ram Behari Lal D K Kapur and Sardar Bahadur for the appellants
The question in the present appeals turn around section 96 of the 
The purpose of sub section
2 of section 96 is to state those grounds based on the policy of insurance on which the insurer may rely for his defence
Sub section 3 makes certain conditions of the policy of no effect as against the 3rd party
Both Sub sections
2 and 3 are concerned only with the conditions of the policy
They should not be interpreted so as to oust other defences the insurer may wish to take eg that there was no accident or that the plaintiff was negligent or that there was contributory negligence etc
When a person is joined as a party he has the right to take all defences permissible in law
Subba Rao J Did the insurer have a right to be joined as a party apart from the statute  Could he be joined under Order 1 Rule 10 of the Code of Civil Procedure  169 I am not basing my case on Order 1 Rule to of the Code of Civil Procedure
Apart from the statute the insurer would not be liable to the third party but only to the assured
Das J Is it not correct that the statute gives the insurer a right to be joined as a party which he did not have previously  If so the right cannot be extended beyond what the statute gives It is true that the statute gives a right to the insurer to become a party to the action by the injured person which he did not have previously but the real question before the court is whether sub section
2 limits the right to defend on the grounds stated in that sub section
In my submission subS 2 exhausts only the defences based on the conditions of the policy which the insurer may wish to take
If it was intended that these were to be the only defences open to the insurer the word  only  should have been used instead of the words  any of  before the words  the following grounds
 What the legislature meant was that the insurer could defend the action  also  on the grounds stated in sub section
2 in addition to other grounds
If the court finds the section is clear no words can be added
However I submit the section is ambiguous
It can mean either that the insurer can take other defences or that he is limited to the matters stated in sub section
The Court should interpret the section to give effect to the interests of justice
The insurer is made liable to satisfy the judgmental It would be an extreme hardship if he were not allowed to defend the action on merits
Apart from the situations coming within sub section
2 the insurer would be condemned unheard
The legislature could not have intended such a result
Even the cases which hold that the defences of the insurer are limited to those stated in subS 2 recognise that this causes hardship
ILR  ILR and ILR
In those cases the hardship was sought to be overcome by allowing the insurer to defending the name of the insured
I do not say that this latter procedure is correct but it shows that there is hardship
Sarkar J How can that be done  How can the insurer be allowed to defend in the name of the insured How is the record to be kept  There is no provision under which it can be done not even under section 1 5 1 of the Code of Civil Procedure Probably not
But that question does not arise for deter mination in this appeal
The hardship recognised by the Bombay cases can be avoided if the interpretation of sub section 2 suggested by me is accepted
22 170 Das J How is that interpretation possible in the face of sub section
6  Sub sectioii 6 only prohibits the insurer from avoiding liability in a manner other than that stated in sub section
The manner of avoiding liability stated in sub section
2 is that the insurer should apply to be made a party
Consequently the insurer can avoid liability only by being joined as a party
The word  manner  in the context of sub section
6 refers only to the procedure the insurer may follow not to the grounds the insurer may wish to take
Hence the insurer can avoid liability only by being joined as a party but can take any defences he chooses including those stated in sub section
Otherwise the third party and the assured may collude and a judgment may be passed which the insurer would be bound to satisfy without having had an opportunity of defending himself
Or the case may go by default against the assured or may be compromised
The real party affected is the insurer and yet he is given no right to be heard except on the limited grounds stated in sub section
The assured is only a nominal party and is not likely to be interested in contesting the case as the decree has to be satisfied by the insurer
The legislature could not have intended such a result
It is contrary to natural justice that a party likely to be affected by the proceedings should not be heard on the merits
T P section Chawla with him Dipak Datta Choudhry for the respondent
Chapter VIII of the  is based on various English Statutes See Report of Motor Vehicles Insurance Committee 1936 37 known as the Roughton Committee
For a proper appreciation of section 96 it is necessary to consider the historical development of the law relating to compulsory third party insurance in England
Before 1930 there was no system of compulsory insurance in respect of third party risks in England
In the event of an accident the injured third party had a right to sue the motorist and recover damages
But if the motorist was a man of straw the injured party was in practice unable to obtain compensation
This was the situation the various Road Traffic Acts were designed to avoid
Even in those cases in which the motorist had taken out an insurance policy difficulties arose in the way of the injured third party recovering compensation
The injured third party had no direct right of action against the insurer
In the event of the insolvency of the assured the injured third party would rank a an ordinary creditor and would not receive complete satisfaction for his decree
The Third Parties Rights 171 Against Insurers Act 1930 created a system of statutory subrogation in such cases
Halsbury 3rd Edn Vol 22 PP
339 372
The provisions of this Act have been sub stantially reproduced in section 97 of the 
As a result the third party can sue the insurer directly in cases
Next the Road Traffic Act 1930 introduced a scheme of compulsory insurance
Section 351 made third party insur ance Compulsory
Section 941 of the is worded in the Same Way
Similarly section 36 Of the English Act is substantially reproduced in section 95 of the 
Section 38 of the Act of 1930 made certain conditions of the policy ineffective so far as third parties were concerned
The object was that claims of injured third parties should not fail because the assured had not complied with or committed a breach of certain conditions in the policy
Shawcross on Motor Insurance 2nd Edn pp 219 277
But the Act of 1930 did not go far enough
In 1934 another Road Traffic Act was passed the object of which was to compel Insurers to satisfy judgments obtained against the insured Shawcross ibid P 271
This Act contemplated three separate actions between the various parties
The first action was by the injured third party against the assured
By section 101 of that Act which is reproduced in section 961 the insurer was obliged to satisfy the decree against the assured
If the insurer failed to do so the third party had a right of action against the insurer based on the judgment Obtained against the assured
Shawcross p 296  Halsburry 3rd Edn Vol
This was the second action
It is doubtful if even the defence of collusion would be open to the insurer in the second action
Sliawcross P 296
Then section 102 of the Road Traffic Act of 1934 is substantially reproduced in section 962a
By this provision in certain events the insurers liability ceases
To appreciate section 962b it is necessary to keep in mind section 38 of the Road Traffic Act of 193o and section 12 of the Road Traffic Act of 1934
Both these letter sections made certain conditions of the policy ineffective against third parties
Whilst drafting the the legislature reversed the manner of statement
In section 962b the legislature has stated affirmatively what are the conditions on which the insurer can rely as against a third party
This was done to avoid doubt and uncertainly
Then section 103 of the Road Traffic Act 1934 gave the insurer a right to obtain a declaration that he was not liable on the policy due to non disclosure or misrepresentation as to 172 a material fact
In this action a notice had to be sent to the third party injured who was given a right to join as a party and oppose the action
This was the third action
The same result is achieved by section 962C
What section 96 does is to roll up into one these three actions which occurred in English Law
This saves time and money and enables the three parties involved to have their respective rights and liabilities settled in one action
But section 96 does not give any party greater rights than it would have had in English Law
At common law the insurer had no right to intervene in the action by the injured party against the insured and oppose the claim on merits eg that there was no accident or negligence or that there was contributory negligence etc
The insurer could avoid liability only by showing that he was not liable for some reason connected with the policy
This is the right which sub section
2 preserves
It does not give additional rights to the insurer over what he would have had at common law or in accordance with the English Statutes
On the interpretation suggested by the Solicitor General the insurer would get a right he never had before
This is contrary to the object of Chapter VIII which is to protect the injured third party and not the insurer
The insurer is neither a necessary nor a proper party
under Order 1 Rule 10 Code of Civil Procedure in the action by the injured third party against the assured
Subba Rao J You need not deal with Order 1 Rule 10 Code of Civil Procedure as the Solicitor General has not relied on it There is no ambiguity in section 962
The sub section clearly specifies the defences open to the insurer and it is not permissible to add to those defences
This is put beyond doubt by sub section
It prevents the insurer from avoiding liability in a  manner  other than that stated in sub section
The manner  provided by sub section
2 is by joining as a party and defending on the grounds stated There  fore  manner  refers to both the procedure and the grounds
To hold otherwise is to make sub section
2 unnecessary
If the Legislature intended that the insurer should be able to defend on grounds other than those stated in sub section
2 all it needed to say was that the insurer would be entitled to join as a party
As sub section
2 specifies the defenses the intention was clearly to limit the insurer to those defences
Subba Rao J Suppose the injured third party and the insured collude or judgment is allowed to go by default could not the insurer have the judgment set aside or bring a suit tohave it set aside  173 In
my submission even a suit for this purpose is barred as that would contravene sub section
Such a suit would enable the insurer to avoid liability in a  manner  which sub section
6 does not allow
There is no hardship caused by giving full effect to the section as it stands
The possibilities of collusion are remote and indeed illusory
Shawcross P 296
By section 963 the insurer is given a right to recover from the insured any sums paid by him which he was not bound to pay due to breaches of conditions in the policy but which conditions have been made ineffective as against the third party
Sub section 4 of the same section gives the insurer the right to recover from the assured the excess which he is made to pay by virtue of section 95 over his obligations in the policy
The judgment is still against the assured who is the party primarily liable
It is only made executable against the insurer
Apart from this by section 13 of the  the legislature gave insurers six years to insert provisions in their policies and take such other steps to protect themselves against the assured committing them to liability as they thought fit
Most insurers insert the control of proceedings clause in the policy Halsbury 3rd Edn VOl
22 p 338
Someone had to bear the loss ultimately and the legislature has tried so far as possible to ensure that the loss falls on the person causing the accident
But if the insured is impecunious the choice is between allowing the loss to fall on the injured party or the insurer
The legislature in its wisdom has provided that in such a situation the loss shall fall on the insurer
It is a part of the insurer s business to suffer such losses and when entering the contract of insurance he contemplates that he might be called upon to pay the loss
Now the Bombay cases referred to by the Solicitor General are right in so far as they hold that the insurer can defend only on the grounds stated in sub section
Those cases are wrong in proceeding on the assumption that there is hardship caused to the insurer by this view
They are based on a misunderstanding of the cases of Windsor vs Chalcraft and Jacques vs Harrison  and on appeal It was not noticed in the Bombay cases that the provisions of Indian Law equivalent to section 245 of the judicature Act and Order 27 Rule 15 RSC were not as wide as the English provisions
Order 9 Rule 7 Code of Civil Procedure allows an ex parte decree to be set aside only at the instance of the defendant whilst there is no such limitation in 0 27 R 15 RSC There is 174 no procedure known to law by which the insurer can be allowed to defend in the name of the insured
This cannot be done under section 151 CPC as it would contravene section 966 and allow the insurer to avoid liability in a manner  other than the one allowed
The Bombay cases have not noticed sub section
6 at all
The procedure stated in those cases is untenable
Sarkar J Are we called upon to decide that point in this case  Apparently there is a revision petition pending in the High Court between the same parties in which that question awaits determination
Should we express an opinion on that point  The Solicitor General has adopted it as apart of his reasoning He has said that if the insurer can take all the defences in the name of the insured that is an additional reason why sub section
2 should not be interpreted as to limit the defences available to the insurer
I wants show that view is wrong
The Court disallowed this branch of the argument
In the case reported as Windsor vs Chalcraft 1939 1 KB 279 the dissenting judgment of Slesser LJ states the correct position
The judgment of Greer LJ show  that lie was in considerable doubt as to the correct position in law but felt himself bound by the earlier judgments reported in jacques vs Harrison 12 OBD 165
Mckinnon LJ proceeded on the footing that the assured was only a nominal defendant
As already submitted this is not correct
Even in English Law the insurer could recover against the assured
Halsbury 3rd Edn Vol  379 385
The case of Windsor V Chalcraft was decided in May 1038
The was passed in February 1939
It is legitimate to assume that the persons who drafted the Act were aware of this case
I submit that the real purpose of sub section
6 was to give effect to the view of Slesser LJ Das J That is rather far fetched I submit it is not
Even in England the view of Slesser T J seems to have been approved
Subsequent English cases show that the principle of Windsor vs Chalcraft is not to be extended
See Murfin vs Ashbridge 1941 1 All ER231
It was not necessary to expressly over rule the case of Windsor vs Chalcraft as in 1946 the Motor Insurers Bureau was set tip in England as a result of which an insurer is bound to satisfy a judgment obtained by a third party against a motorist even if the motorist was not insured Halsbury 3rd Edn Vol
 Shawcross ibid Introduction LXXXVII et
seq This shows how strong 175 the attempt to protect the third party has been
Actually the words of section 962 and 6 are clear to show that the insurer can take only the defences mentioned in sub section
2 But if there be any doubt a consideration of the historical development of the law and the objects to be attained puts it beyond doubt that the legislature intended this result
C K Daphtari in reply
It is wrong that at common law the insurer could not be brought in as a party
At common law the guarantor or indemnifier could be brought in by means of third party procedure see ILR 35 All
168 and Halsbury 3rd Edn Vol
and Gray vs Lewis  1058
Apart from the common law the insurer could also be joined as a party under 0
I R 10 Code of Civil Procedure
I rely on the case of United Provinces vs Atiqa Begum A person should be joined as a party if his presence is necessary for an effectual and complete adjudication
On this principle the insurer ought to be joined as a party and thus can take all defences
Chaula in reply  The passage cited by the Solicitor General from Halsbury 3rd Edn Vol  is actually against him
The foot note e shows that at common law the insurer could not be joined as a party to the action by the insured
Third party procedure did not exist at Common Law
Even under third party procedure in England it is doubtful whether this could be done Shawcross pp 150 151
In any case there is no third party procedure in Punjab
The cases 35 All 168 and 1873 LR 8 ch
A 1035 are also against him
The insurer is neither a necessary nor a proper party as there can be a complete and effectual adjudication without his presence
The decree is to be a against the assured not against the insurer
May 11
The Judgment of the Court was delivered by SARKAR J
These two appeals arise out of two suits and have been heard together
The suits had been filed against owners of motor cars for recovery of damages suffered by the plaintiffs as a result of the negligent driving of the cars
The owners of the cars were insured against third party risks and the insurers were subsequently added as defendants to the suits 176 under the provisions of sub section
2 of section 96 of the 
The terms of that subsection will have to be set out later but it may now be stated that it provided that an insurer added as a party to an action under it was entitled to defend on the grounds enumerated in it
On being added as defendants the insurers filed written statements taking defences other than those mentioned in that sub section
The plaintiffs contended that the written statements should be taken off the records as the insurers could defend the action only on the grounds mentioned in the sub section and on no others
A question thereupon arose in the suits as to what defences were available to the insurers
In one of the suits it was held that the insurer could take only the defences specified in that sub section and in the other suit the view taken was that the insurers were not confined to those defences
Appeals were perferred from these decisions to the High Court of Punjab
The High Court held that the insurers could defend the actions only on the grounds mentioned in the subsection and on no others
Hence these appeals by the insurers
The question is whether the defences available to an insurer added as a party under section 962 are only those mentioned there
A few of the provisions of the have now to be referred to
Section 94 of the Act makes insurance against third party risk compulsory
Section 95 deals with the requirements of the policies of such insurance and the limits of the liability to be covered thereby
Sub section 1 of this section provides   a policy of insurance must be a policy which a         b insures the person or classes of person specified in the policy to the extent specified in subsection 2 against any liability which may be incurred by him or them in respect of the death or bodily injury to any person caused by or arising out of the use of the vehicle in a public place 177 Sub section 2 of section 95 specifies the limits of the liability for which insurance has to be effected and it is enough to say that it provides that in respect of private cars which the vehicles with which these appeals are concerned were the insurance has to be for the entire amount of the liability incurred
Then comes section 96 round which the arguments advanced in this case have turned and some of its provisions have to be set out
 Section 96
1 If after a certificate of insurance has been issued under sub section 4 of section 95 in favour of the person by whom a policy has been effected judgment in respect of any such liability as is required to be covered by a policy under clause b of sub section 1 of section 95 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
2 No sum shall be payable by an insurer under sub section 1 in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice through the Court of the bringing of the proceedings or in respect of any judgment so long as execution is stayed thereon pending an appeal and an insurer to whom notice of the bringing of any such proceeding 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 the policy was cancelled by mutual consent or by virtue of any provision contained therein before the accident giving rise to the liability and 23 178 that either the certificate of insurance was surrendered to the insurer or that the person to whom the certificate was issued has made an affidavit stating that the certificate has been lost or destroyed or that either before or not later than fourteen days after the happening of the accident the insurer has commenced proceedings for cancellation of the certificate after compliance with the provisions of sec tion 105 or b 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 on 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 public service vehicle or a goods vehicle or d without side car being attached where the vehicle in 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 e 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
2A       3 Where a certificate of insurance has been issued under sub section 4 of section 95 to the person by whom a policy has been effected so much of the policy as purports to restrict the insurance of the 179 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 95 be of no effect Provided that any sum paid by the insurer in or towards the discharge of any liability or any person which is covered by the policy by virtue only of this sub section shall be recoverable by the insurer from that person
4 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
5          6 No insurer to whom the notice referred to in sub section 2 has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment as is referred to in subsection 1 otherwise than in the manner provided for in sub section 2
 It may be stated that the policies that were effected in these cases were in terms of the Act and the certificate of insurance mentioned in section 96 had been duly issued
It will have been noticed that sub section
1 of section 96 makes an insurer liable on the judgment obtained by the injured person against the assured
Sub section 2 provides that no sum shall be payable by the insurer under sub section
1 unless he has been given notice of the proceedings resulting in that judgment and that an insurer who has been given such a notice shall be entitled to be made a party to the action and to defend it on the grounds enumerated
The contention of the appellants is that when an insurer becomes a party to an action under sub section
2 he is entitled to defend it on all grounds available at law including the grounds on which the assured himself could have relied for his 180 defence and that the only restriction on the insurer s right of defence is that he cannot rely on the conditions of the policy which sub section
3 makes as of no effect
This is the contention which we have to examine in these appeals
To start with it is necessary to remember that apart from the statute an insurer has no right to be made a party to the action by the injured person against the insured causing the injury
Sub section 2 of section 96 however gives him the right to be made a party to the suit and to defend it
The right therefore is created by statute and its content necessarily depends on the provisions of the statute
The question then really is what are the defences that sub section 2 makes available to an insurer  That clearly is a question of interpretation of the sub section
Now the language of sub section
2 seems to us to be perfectly plain and to admit of no doubt or confusion
It is that an insurer to whom the requisite notice of the action has been given  shall be entitled to be made a party thereto and to defend the action on any of the following grounds namely after which comes an enumeration of the grounds
It would follow that an insurer is entitled to defend on any of the grounds enumerated and no others
If it were not so then of course no grounds need have been enumerated
When the grounds of defence have been specified they cannot be added to
To do that would be adding words to the statute
Sub section6 also indicates clearly how sub section
2should be read
It says that no insurer to whom the notice of the action has been given shall be entitled to avoid his liability under sub section
1  otherwise than in the manner provided for in sub section
Now the only manner of avoiding liability provided for in subs
2 is by successfully raising any of the defences therein mentioned
It comes then to this that the insurer cannot avoid his liability except by establishing such defences
Therefore sub section
6 clearly contemplates that he cannot take any defence not mentioned in subS 2
If he could then he would have been in a position to avoid his liability in a manner other than that 181 provided for in sub section
That is prohibited by sub section
We therefore think that sub section
2 clearly provides that an insurer made a defendant to the action is not entitled to take any defence which is not specified in it
Three reported decisions were cited at the bar and all of them proceeded on the basis that an insurer had no right to defend the action except on the grounds mentioned in sub section
These are Sarup Singh vs Nilkant Bhaskar 1 Royal Insurance Co Ltd vs Abdul Mahomed 2 and The Proprietor Andhra Trading Co vs K Muthuswamy 3
It does not appear however to have been seriously contended in any of these cases that the insurer could defend the action on a ground other than one of those mentioned in sub section
The learned counsel for the respondents the plaintiffs in the action referred us to the analogous English statute The Road Traffic Act 1934 in support of the view that the insurer is restricted in his defence to the grounds set out in sub section
But we do not think it necessary to refer to the English statute for guidance in the interpretation of the section that we have to construe
We proceed now to consider the arguments advanced by the learned Solicitor General who appeared for the appellants
He contended that there was nothing in sub section
2 to restrict the defence of an insurer to the grounds therein enumerated
To support his contention he first referred to sub section
3 of section 96 and said that it indicated that the defences that were being dealt with in sub section
2 were only those based on the conditions of the policy
His point was that sub section
2 permitted defences on some of those conditions and sub section
3 made the rest of the conditions of no effect thereby preventing a defence being based on any of them
He said that these two sub sections read together show that sub section
2 was not intended to deal with any defence other than those arising out of the conditions of the policy and as to other defences therefore sub section
2 contained no prohibition
He further 1 ILR 2 ILR 3 AIR 1956 Mad
182 said that as under sub section
2 an insurer was entitled to be made a defendant to the action it followed that he had the right to take all legal defences excepting those expressly prohibited
We think that this contention is without foundation
Sub section 2 in fact deals with defences other than those based on the conditions of a policy
Thus cl
a of that sub section permits an insurer to defend an action on the ground that the policy has been duly cancelled provided the conditions set out in that clause have been satisfied
Clause c gives him the right to defend the action on the ground that the policy is void as having been obtained by non disclosure of a material fact or a material false representation of fact
Therefore it cannot be said that in enacting sub s2 the legislature was contemplating only those defences which were based on the conditions of the policy
It also seems to us that even if sub s2 and sub s3 were confined only to defences based on the conditions of the policy that would not have led to the conclusion that the legislature thought that other defences not based on such conditions would be open to an insurer
If that was what the legislature intended then there was nothing to prevent it from expressing its intention
What the legislature has done is to enumerate in sub section
2 the defences available to an insurer and to provide by sub section
6 that he cannot avoid his liability excepting by means of such defences
In order that sub section
2 may be interpreted in the way the learned Solicitor General suggests we have to add words to it
The learned Solicitor General concedes this and says that the only word that has to be added is the word  also after the word grounds
But even this the rules of interpretation do not permit us to do unless the section as it stands is meaningless or of doubtful meaning neither of which we think it is
The addition suggested will in our view make the language used unhappy and further effect a complete change in the meaning of the words used in the sub section
As to sub section
6 the learned Solicitor General contended that the proper reading of it was that an 183 insurer could not avoid his liability except by way of a defence upon being made a party to the action under sub section
He contended that the word it manner  in sub section
6 did not refer to the defences specified in subs
2 but only meant by way of defending the suit the right to do which is given by sub section
We think that this is a very forced construction of sub section
6 and we are unable to adopt it
The only manner of avoiding liability provided for in sub section
2 is through the defences therein mentioned
Therefore when sub section
6 talks of avoiding liability in the manner provided in sub section
2 it necessarily refers to these defences
If the contention of the learned Solicitor General was right sub section
6 would have provided that the insurer would not be entitled to avoid his liability except by defending the action on being made a party thereto
There is another ground on which the learned Solicitor General supported the contention that all defences are open to an insurer excepting those taken away by sub section
He said that before the Act came into force an injured person had no right of recourse to the insurer and that it was section 961 that made the judgment obtained by the injured person against the assured binding on the insurer and gave him a right against the insurer
He then said that being so it is only fair that a person sought to be made bound by a judgment should be entitled to resist his liability under it by all defences which he can in law advance against the passing of it
Again we find the contention wholly unacceptable
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 184 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
Secondly if he has been made to pay something which on the contract of the policy he was not bound to pay he can under the proviso to sub section
3 and under sub section
4 recover it from the assured
It was said that the assured might be a man of straw and the insurer might not be able to recover anything from him
But the answer to that is that it is the insurer s bad luck
In such circumstances the injured person also would not have been able to recover the damages suffered by him from the assured the person causing the injuries
The loss had to fall on some one and the statute has thought fit that it shall be borne by the insurer
That also seems to us to be equitable for the loss falls on the insurer in the course of his carrying on his business a business out of which he makes profit and he could so arrange his business that in the net result he would never suffer a loss
On the other hand if the loss fell on the injured person it would be due to no fault of his it would have been a loss suffered by him arising out of an incident in the happening of which he had no hand at all
We therefore feel that the plain words of sub s2 should prevail and that no ground exists to lead us to adopt the extraordinary course of adding anything to it
We think that the High Court was right in the view that it took In the result these appeals are dismissed with costs
Appeals dismissed


Summary:
The respondents as plaintiffs brought the suit out of which the present appeal arises under the provisions of 0 21 r 63 Of the Code of Civil Procedure for a declaration that the deed of trust executed in favour of the appellant deity was a sham and fictitious document and the properties covered by it were liable to sold in execution of their decree
The courts below dismissed the suit but the High Court by misplacing the onus on the deity to prove its title set aside the concurrent findings of the Courts below and decreed the respondents  suit
Held that the question whether a trust deed was a fictitious document or not was essentially a question of fact
Meenakshi Mills Madurai vs The Commissioner of Income tax Madras   referred to
It was well settled by a long series of decisions of the Privy Council and of this Court that the High Court could not in a second appeal interfere with findings of fact arrived at by the Courts below however erroneous they might be
Even assuming that it was open to the High Court to go behind the findings of fact it was clear that it had completely misdirected itself on the question of onus
In a suit such as the present where the plaintiff sought for a declaration that a document solemnly executed and registered was a fictitious one the burden lay heavily on him to prove that it was so and that burden became still more heavy where he sought a declaration that an order passed by the court upholding a claim of a third party under 0 21 r 60 of the Code was erroneous