iE=IE THE HIGH COURT OF SIKKIM : GANGTOK M.A.C. APPEAL NO.2 0F 2004 (2A#hs'%b%ry°,f2t§:4°pradsesresddbayte#r.6t:.F#rLueap%;a:°M°e4mabne:, Motor Accident Claims Tribunal, East & North Sikkim, Gangtok in M.A.C.T. Case Nos.26 and 23 of 2003) United India Insurance Company Ltd., Represented by and through its Divisional Manager, Bharat Bhawan, P.O. Siliguri, West Bengal. versus 1. Mr.ChandiRai, S/o Late K. 8. Rai, R/o Sakyong Busty, P.O. Kalimpong, Dist. Darjeeling, West Bengal, At present - Sichey Busty, P.O. & P.S. Gangtok, East Sikkim. I.,... Appellaht Mr. Tenzing Chopel Bhutia, S/o Late Thendup Dorjee Bhutia, R/o Reshi Busty, P.O. & P.S. Rhenock, East Sikkim. AND ...... Respondents M.A.C. APPEAL NO.3 0F 2004 National Insurance Company Ltd., Represented by and through its Branch Manager, Gangtok Branch, National Highway, P.O. & P.S. Gagntok, East Sikkim. versus BEE \ I,.... Appellant I, J7 Mr. Bijay Sharma, S/o Mr. Jhari Sharma, R/o Golitar Busty, P.O. & P.S. Singtam, East Sikkim. Mr. S. T. Lepcha, S/o Late D. D. Lepcha, R/o 5th Mile Tadong, P.O. Tadong, P.S. Ranipool, East Sikkim. Forthe appellants : Mr. A. Advocate. ...... Respondents K. Upadhyaya, Fortherespondentno.1 : Mr. N, Rai assisted with Ms. Jyoti Kharka, Advocates. Forthe respondent no.2 : None present. PRESENT: THE HON'BLE MR. JuSTICE A. P. SuBBA, JUDGE. Last date of hearing : 8th April, 209± DATE OF JUDGMENT : 26TH MAY, 2005. I ± E2 g M E J± I A. P. Subb_aj,i Since both these appeals involve common question of law about maintainability of the appeals filed by the Insurance Company under section 173 of the Motor Vehicles Act, 1988 without complying with the provisions of section 170 of the same Act they are heard together and are disposed of by this common judgment. The M.A.C. Appeal no.2 of 2004 filed by the United India Insurance Company Limited is directed against the Order dated 6th February, 2004 passed by the Motor Accident Claims NY -a Tribunal, East and North, Gangtok in M.A.C.T. Case no.26 of 2003 granting a sum of Rs.2,21,800/-as compensation in favour of the claimant who is respondent no.1 herein and the M.A.C. Appeal no. 3 of 2004 filed by the National Insurance Company Limited is directed against the Order dated 27th February, 2004 passed by the same Motor Accident Claims Tribunal, East and North, Gangtok in M.A.C.T. Case no,23 of 2003 granting a sum of Rs.1,77,000/-as compensation in favour of the claimant who is respondent no.1, herein. 3. The brief facts of the M.A.C. Appeal no.2 of 2004 are that the deceased late Subhas Rai was employed by the respondent no.2 as driver of his vehicle bearing no.SK-04/3933. On 6th May, 2002, the deceased who was on duty in the said vehicle sustained severe injuries on his head and spine in an accident that occurred at a place called Sawney Busty, East Sikkim when the vehicle was on its way from Rhenock to Gangtok and was being driven by its former driver one Dawa Bhutia. The deceased was immediately hospitalised for medical treatment following the accident. However, despite the medical treatment given to the deceased in hospitals at Kalimpong and Siliguri in West Bengal he succumbed to his injuries after 3 months. On his demise, the respondent no.1 who is the father of the deceased filed claim of Rs.7,48,800/- as compensation before the M.A.C.T., East and North, Gangtok against the present appellant who is the insurer and one Mr. Tenzing Chopel Bhutia, son of late Thendup Dorjee Bhutia who is the owner of ir i the vehicle involved in the accident. The present appellant who was respondent no.1 before the Tribunal filed written objection and denied any liability contending that there was neither any statutory liability nor contractual obligation cast upon them to pay any compensation to the respondent no.1 or to indemnify the owner of the vehicle for payment of any compensation. It was also contended that the claim petition suffered from non- disclosure of cause of action and also for non-joinder and mis- joinder of necessary parties. The owner of the vehicle who was respondent no.2 therein contested the claim without filing any written ob].ection. He contended that as he had insured his vehicle with the United India Insurance Company the appellant herein, the claim for compensation was not maintainable against him. The Tribunal on hearing the parties and on perusal of the materials on record, awarded total compensation of Rs.2,21,800/-to the claimant vide the impugned award dated 6th February, 2004 directing the Insurance Company Ltd. the appellant herein to make the payments. 4. The brief facts of the M.A.C. Appeal no.3 of 2004 are that the deceased Ukash Sharma, aged about 81/2 years, son of the claimant respondent no.1 herein was ran over and injured by a speeding truck at a place near M.P. Check Post at Bardang, East Sikkim on the National Highway at about 3 p.in. on 2nd April, 2002. The respondent no.1 took his injured son (the deceased) to different hospitals for medical treatment incurring ir heavy expenses but all in vein. Despite all the medical treatment being given to him, the deceased succumbed to his injuries in course of his treatment in the Medical College at Patna, Bihar on the llth day of his treatment. On his demise, the respondent no.1 the father of the deceased filed claim of Rs.7,04,915/- as compensation before the M.A.C.T., East and North, Gangtok against the Insurance Company, the present appellant and one Mr. S. T. Lepcha, son of late D. D. Lepcha, the owner of the vehicle involved in the accident. Both the respondents filed written objections, The appellant who was the respondent no.1 denied any liability contending that there was neither any statutory liability nor any contractual obligation on their part to pay the compensation to the respondent no.1 or to indemnify the owner of the vehicle for payment of any compensation. It was also stated that the claim petition suffered from non-disclosure of cause of action and also for non-joinder and mis-joinder of necessary parties. The respondent no.2, the owner of the vehicle contended that as he had insured his vehicle with the National Insurance Company, the appellant herein, the claim for compensation was not maintainable against him. The Tribunal on hearing the parties and on perusal of t:he materials on record awarded total compensation of Rs.1,77,000/-to the claimant vide the impugned award. BEE Being aggrieved by the above said impugned awards, the appellants filed the present appeals before this Court which have been registered as M.A.C. Appeal nos.2 and 3 of 2004. 5. In M.A.C. Appeal no.2 of 2004, it has been contended before this Court that the award passed by the learned Tribunal was contrary to law being against the weight of evidence on record, that since the deceased died after 3 months of the date of accident the cause of death of the deceased was not the vehicle accident as alleged. It was also contended that the claimant had failed to establish rash and negligent driving on the part of the driver at the time of the accident and that the learned Tribunal had erroneously followed the second schedule of the Motor Vehicles Act,1988 in awarding the compensation. 6. In M.A.C. Appeal no.3 of 2004, it has been similarly contended that the award passed by the learned Tribunal was contrary to law being against the weight of evidence on record, that the cause of death of the deceased was not the vehicle accident as alleged as the deceased died after 7 months of the date of accident. It was also contended that the claimant had failed to establish rash and negligent driving on the part of the driver at the time of the accident and that the learned Tribunal had erroneously followed the second schedule of the Motor Vehicles Act, 1988 in awarding the compensation. It was further contended that the item of the award on transportation charges amounting to Rs.3,000/-, extra nourishment amounting to Rs.5,000/- and damages of clothing and articles amounting to illEEEEi Rs.4,000/- were not covered by the second schedule of the Motor Vehicles Act and therefore the impugned award was bad to that extent. 7. Mr. A. K. Upadhyaya, learned counsel for the appellants and Mr. N. Rai assisted by Ms. Jyoti Kharga for the respondent no.1 were heard. Mr. Tenzing Chopel Bhutia, the respondent no.2 in M.A.C. Appeal no.2 of 2004 and Mr. S. T. Lepcha, the respondent no.2 in M.A.C. Appeal no.3 of 2004 who are the owners of the vehicle involved in the accident remained absent despite service and the matter was heard in their absence. At the very outset of the hearing of both the appeals, Mr. N. Rai, learned counsel for the respondent no.1 made a preliminary submission questioning the maintainability of these appeals. It was his submission that the present appellant had not moved the Tribunal under section 170 of the Motor Vehicles Act and no specific order was made by the Tribunal in writing permitting the insurer to avail grounds of appeal which are available to an insured or any person and as such, it was not permissible for the present appellants who are the insurers to file the present appeals questioning the quantum of compensation as well as the finding on merit. The submission advanced by Mr. Upadhyaya in reply is that it was open to the appellant who are the insurers to come in appeals before this Court as the insurers were parties in the proceedings before the Tribunal. It was also his submission that it was equally open to the insurers to raise wL- any of the grounds as available to the insured and as such, the appeals are maintainable. 9. It is clear from the above rival contentions advanced by the learned counsel for the parties that the short common question of law that arises in both the appeals is whether the present appeals filed by the Insurance Companies without obtaining the permission of the Tribunal under section 170 of the Motor Vehicles Act, 1988 to contest the proceedings on merits are maintainable. 10. Admittedly, no specific order was made under section 170 of the Motor Vehicles Act by the Tribunal permitting the insurer to contest the proceedings on merits. It transpires from the record that the insurers were impleaded as parties in the proceedings before the Tribunal by the claimants themselves and that is how the Insurance Companies came to be the parties in the proceedings before the Tribunal. 11. Shri N. Rai, learned counsel for the respondent no.1 in support of his contention that such appeals filed by the Insurance Companies without complying with the requirements of section 170 of the Motor Vehicles Act, 1988 were not maintainable relied on the decision of the Hon'ble Supreme Court in Shankarayya vs. United India Insurance Co. Ltd. and another reported in AIR 1998 SC 2968. In this decision the Hon'ble Supreme Court after referring to the provisions of section 170 of the Motor Vehicles Act held as follows:- L ``4. It clearly shows that the Insurance Company when impleaded as a party by the Court can be permitted to contest the proceedings on :::::::::=:::::::::::::-::::i::::i::: No.1 -Insurance Company in the Claim Petition but that was done with a view to thrust the statutory liability on the Insurance company on account of the contract of the insurance. That was not an order of the Court itself permitting the Insurance company which was impleaded to avail of a larger defence on merits on being satisfied on the aforesaid two conditions mentioned in Section 170. Consequently, it must be held that on the facts of the present case, respondent No.1 - Insurance Company was not entitled to file an appeal on merits of the claim which was awarded by the Tribunal." [emphasis added] The above Division Bench decision of the Hon'ble Supreme Court came to be approved by a larger Bench constituted in National Insurance Co. Ltd., Chandigarh vs. Nicolletta Rohtagi and others reported in AIR 2002 SC 3350. The Hon'ble Supreme Court after referring to the above Shankarayya case (supra) and several other decisions held in paragraph 26 of the judgment as follows:- ``26. For the aforesaid reasons, an insurer if aggrieved against an award, may file an appeal orty hL- 10 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. In Oriental Insurance Co. Ltd. vs. Man].ulaben Jayantbhai Patel and others AIR 2003 Gujarat 327 the High Court of Gujarat was faced with similar question of law. The learned Court after referring to and relying upon the above decision of the Hon'ble Supreme Court came to the conclusion that an appeal filed by the Insurance Company without complying with the provisions of section 170 of the Motor Vehicles Act,1988 was not maintainable. Placing reliance on the relevant observations made and following the guidelines laid down by the Court in the above decision of the Hon'ble Supreme Court, the High Court observed at paragraph 11 of the judgment as follows:- "11. The aforesaid principles laid down by the Apex Court after analysing the scheme of the Motor Vehicles Act, 1939 as well as the scheme of the Motor Vehicles Act, 1988 and several decisions make it abundantly clear beyond any pale of controversy i,!aj,:it;:i::;:n:a:nreii,:ef;ei::a:r:.:n:.:u:rFa::oEcf!i:feannntau:a:hte:::i JL, 11 12. made an aDplication before the Tribunal under Section 170.of the Motor Vehicles Act,1988 and a specific order was made bv the Tribunal in writing permitting the insurer to avail the grounds available to an insured or any other Derson against whom the claim has been made. The decision of the larger Bench in national Insurance Co. Ltd. v. Nicolletta Rohtagi (AIR 2002 SC 3350) (supra) has completely concluded the controversy and it is not open to his Court to circumvent the said binding decision by culling out any implied permission of the Tribunal in favour of the Insurance Company as is sought to be contended by the learned counsel for the appellant-Insurance Company." [emphasis added] Bearing in mind the position of law as enunciated in the above cases, we may now take up for consideration the submission made by Mr. Upadhyaya with regard to the maintainability of the appeals in questio'n. It is the submission of Mr. Upadhyaya that even if there is any bar for the Insurance Company to come in appeal on account of its failure to obtain permission under section 170 of the Motor Vehicles Act from the learned Tribunal it should be open to the Insurance Company to come in appeal particularly in a situation where the award of the Tribunal is unfair and unjust. Even though Mr. Upadhyaya did not make reference to or rely on any decision in support of his submission, it is noticed that such a question came up before the Hon'ble Supreme Court for consideration in United India Insurance Co. Ltd. vs. Bhushan Sachdeva and others AIR 2002 SC 662. It was held by the Hon'ble Supreme Court in that case that so long as the insured has not challenged the award passed against him and so long as the liability to pay compensation would only fall on the Insurance Company it is BEE 12 inequitable to deny a remedy of appeal to the Insurance Company. The ratio of the decision as may be apparent from the judgment was that the Nationalised Insurance Companies of India are holding public money and they are accountable to the public money for every pie of it. Therefore, if it is held that no Insurance Company should feel aggrieved even if the award is seemingly unjust and that such awarded amount should go out with the public fund it is public interest, which suffers. If the Insurance Company has reason to believe that the award was obtained fraudulently which fact was not known to the insured, the Insurance Company must feel aggrieved. Any interpretation denying such aggrieved Insurance Company the opportunity to seek the legal remedy should not be adopted unless there is a statutory compulsion. It was accordingly observed in paragraph 9 of the judgment that ``there is nothing in section 173 or in the other relevant provisions of the Act which debars the Insurance Company to resort to the remedy of appeal when it knows that the award is unjust". 13. Viewed in the light of the above interpretation placed on section 173 it might be noted that the submission made by Mr. Upadhyaya does not seem to be devoid of substance but at the same time we must hasten to add that the above interpretation of the law no longer holds good. The approach adopted earlier in such cases has undergone a change as may be noticed hereafter. A larger Bench of the Hon'ble Supreme Court constituted in Nicolletta Rohtagi's case (supra) did not find favour with the ratio RE= 13 of the above decision and the same was over-ruled. It is noticeable that the emphasis has now changed from public money to the contractual liability and the welfare of the insured. As already quoted above, it has been held in paragraph 26 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 vehicle 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 poliey except those specified in section 149(2) of the Act or where the condition precedent specified in section 170 is satisfied". It was accordingly observed in paragraph 29 of the judgment as follows:- "29. For the aforesaid reasons, as well as that the learned Judges in United India Insurance Co. Ltd. (supra) have failed to notice the limited grounds available to an insurer under Section 149(2) of the Act, we are of the view that the decision in United India Insurance (supra) does not lay down the correct view of law." In this context, it is worthwhile also to reproduce paragraph 27 of the same judgment as follows:- "27. This matter may be examined from another angle. The riaht of aDDeal is not an inherent right or common law right, but it is a statutory right. !£Jhe law Drovides that an aDDeal can be filed on limited grounds, the grounds of challenge cannot be enlarged on the premise that the insured or the persons against whom a claim has been made has not filed any appeal. Section 149(2) of 1988 Act limits the insurer's aDDeal on those enumerated ir 14 .::::_::untQ:i:±t:_i:::na:¥:htf:i:.E±=:;`Td:a::d¥Et::;£je=c:tj_;,:%T[rih:: the 1988 Act. The view taken in united India Insurance Co. Ltd. v. Bhushan Sachdeva, (supra) that a right to contest would also include the right to file an appeal is contrary to well established law that creation of a right to appeal is an act which requires legislative authority and no Court or tribunal can confer such right, it being one of limitation or extension of jurisdiction. .Further, the view taken in United India Insurance (supra) that since the insurance companies are nationalised and are dealing with public money/fund and to deny them the right of appeal when there is a collusion between the claimants and the insured would mean draining out or abuse of p.ublic fund is contrary to the object and intention of the Parliament behind enacting Chapter XI of 1988 Act. The main object of enacting Chapter XI of 1988 Act was to protect the interest of the victims of motor vehicle accidents and it is for that reason the insurance of all motor vehicles has been made statutorily compulsory. _CompulsQty ffi::f:a:;apt;t;::i:jsa::i::;::=§:d:t:h:;i:i;:::;i::::h:v:::b::i:c:::::in: compensation to dependants of victims of motor vehicle accident, that would not have been sufficient unless there is a guarantee that compensation awarded to an injured or dependant of the victims of motor accident shall be recoverable from person held liable for the consequences of the accident. In Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan, 1987 (2) SCC 654, it was observed thus: ``In other words, the legislature has insisted and made it incumbent on the user of a mot:or vehicle to be armed with an insurance policy covering third party risks which is in conformity with the provisions enacted by the legislature. It is so provided in order to ensure that the in]`ured victims of automobile accidents or the dependants of the victims of fatal accidents are really compensated in terms of money and not in terms of promise. Such a benign provision enacted by the legislature having regard to the fact that in the modern age the use of motor vehicles notwithstanding the attendant ir 15 hazards, has become an inescapable fact of life, has to be interpreted in a meaningful manner which serves rather than defeats the purpose of the legislation. The provision has therefore to be interpreted in the light of the aforesaid perspective.'' The above being the present position of law it follows that the submission made by Mr. Upadhyaya that an insurer can come in appeal and challenge finding on merit even in absence of permission in terms of section 170 cannot be accepted. Accordingly, it must be held that the present appeals are not maintainable and the same are liable to be dismissed. 14. Even though the above is sufficient to dispose of these appeals, it is desirable to deal with some further points urged by Mr. Upadhayay before coming to the final conclusion. The first of the further submissions made by Mr. upadhyaya is to the effect that in M.A.C. Appeal no.1 of 2004 National Insurance Company Ltd. vs. Kamala Rai and others decided by this Court on 21St March, 2005, the Insurance Company who was the appellant was allowed to challenge finding on merit even when there was no compliance with the provision of section 170 and there was no written permission obtained by the Insurance Company and as such, the grounds raised in the present appeals, being similar to the ones raised in the aforesaid appeal the present appellant cannot be precluded from raising the same points in these appeals as well. No doubt, a perusal of the judgments/orders of the related case shows that the appellant in the said appeal was allowed to challenge the finding on merit but at the same time it transpires ir 16 that the question relating to the necessity of obtaining the written permission of the Tribunal under Section 170 of the Motor Vehicles Act to contest the matter on the grounds available to the insured was not raised and argued nor the decisions, namely, Shankarayya's case (supra) and the later decision of the larger Bench in Nicolletta Rohtagi's case (supra) w.ere cited as authority on the issue. As a consequence there was no occasion for the Court to consider the issue. In view of this, the decision rendered in the above M.A.C. Appeal no.1 of 2004 must be treated as a decision given in per t.ncurt.am. The next submission made by Mr. Upadhyaya relates to the compensation awarded under the heads of transportation, extra nourishment and damages of clothing and articles in the impugned award in M.A.C. Appeal no. 3 of 2004. The point urged by Mr. Upadhyaya in this regard is that the learned Tribunal had blindly followed the second schedule of the Motor Vehicles Act, 1988 in awarding the total amount of compensation. It is contended that even if the Tribunal is right in following the second schedule the items of compensation awarded under the above heads, namely, transportation, extra nourishment and damages