Case: R. Mannakatti & Another Vs. M. Subramanian & Another

B.P. Singh, J. 1. Special leave granted. 2. We have heard Counsel for the parties.3. In this appeal by special leave the appellants are the parents of the deceased, who died in an accident which took place on 4th September, 1998. A claim petition was filed under Section 166(1) of the Motor Vehicles Act, 1988 before the Claims Tribunal in which a sum of Rs. 5 lakh was claimed by way of compensation. The Tribunal by its order of 30th March, 2001, held that the accident occurred due to negligence of driver of the vehicle owned by the first respondent and, therefore, the second respondent, namely, the Insurance Company was liable to pay the compensation. On the basis that the monthly income of the deceased was Rs. 2,500, after deducting 1/3rd of the annual income towards expenses of the deceased and applying the multiple of 17, the Tribunal awarded Rs. 3,40,000 by way of compensation and a sum of Rs. 12,000 towards burial expenses, etc. The Tribunal also awarded interest @ 9%. An appeal was preferred before the High Court by the owner as well as the insurer, namely M/s. United India Insurance Company Ltd. The said appeal was entertained by the High Court and was ultimately partly allowed by its judgment and order of 19th February, 2003. The High Court reduced the compensation awarded to the appellants considering the fact that the multiplier applied by the Tribunal was not justified. Instead of 17 it applied the multiple of 11. For reducing the multiplier, the High Court considered the age of the mother which was found to be 53.4. In this appeal preferred by the appellant-claimants, it is submitted that the appeal preferred by the Insurance Company before the High Court was not maintainable and for this, reliance is placed on the provisions of Section 170 of the Motor Vehicles Act, 1988. In a decision of this Court in National Insurance Co. Ltd. v. Nicolletta Rohtagi, V (2002) SLT 363=III (2002) ACC 292 (SC)=(2002) 7 SCC 456 , this Court held : (S.C.C. p. 470, paras 25-26) “25. We have earlier noticed that motor vehicle accident claim is a tortuous claim directed against tortfeasors who are the insured and the driver of the vehicle and the insurer comes to the scene as a result of statutory liability created under the Motor Vehicles Act. The Legislature has ensured by enacting Section 149 of the Act that the victims of motor vehicles are fully compensated and protected. 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 precedent specified in Section 170 is satisfied.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 inquiry the Claims Tribunal is satisfied that (a) there is 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 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.” 5. In view of the aforesaid principles laid down by this Court, in the instant case since the owner of the vehicle contested the claim of the appellants, the insurer could not prefer an appeal, even if the owner of the vehicle joined him as a party-appellant. Counsel for the respondent Insurance Company submitted that in this case his grievance is to the application of the multiple of 17 which was apparently incorrect. Since we have held that the appeal itself was not maintainable at the instance of the insurer, this cannot be examined by us.

Decision:
1[ds]In a decision of this Court in National Insurance Co. Ltd. v. Nicolletta Rohtagi, V (2002) SLT 363=III (2002) ACC 292 (SC)=(2002) 7 SCC 456 , this Court held : (S.C.C. p. 470, parasWe have earlier noticed that motor vehicle accident claim is a tortuous claim directed against tortfeasors who are the insured and the driver of the vehicle and the insurer comes to the scene as a result of statutory liability created under the Motor Vehicles Act. The Legislature has ensured by enacting Section 149 of the Act that the victims of motor vehicles are fully compensated and protected. 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 precedent specified in Section 170 is satisfied.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 inquiry the Claims Tribunal is satisfied that (a) there is 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 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.In view of the aforesaid principles laid down by this Court, in the instant case since the owner of the vehicle contested the claim of the appellants, the insurer could not prefer an appeal, even if the owner of the vehicle joined him as a party-appellant. Counsel for the respondent Insurance Company submitted that in this case his grievance is to the application of the multiple of 17 which was apparently incorrect. Since we have held that the appeal itself was not maintainable at the instance of the insurer, this cannot be examined by us.