IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. FAO No. 448 of 2003. Date of Decision: 13th May, 2008. New India Insurance ….Appellant Vs. Smt. Rukmi Devi and others ….Respondents. Coram The Hon’ble Mr. Justice Dev Darshan Sud,Judge. Whether approved for reporting?1 For the Petitioner: Mr. K.D. Sood, Advocate. For the Respondents: Mr. Neeraj Gupta, Advocate, for respondent Nos. 1 to 4 and 7. Mr. Ramakant Sharma, Advocate, for respondent No. 5. Mr. J.S. Bagga, Advocate, for respondent No. 9. Mr. K.S. Thakur, Advocate, for respondent No. 8 Dev Darshan Sud, Judge. The Insurance Company has preferred this appeal against the judgment and award of the learned Motor Accidents Claims Tribunal, Shimla awarding a sum of Rs. 3, 70,000/- to the claimants and interest thereon for the death of Shri Chander Singh. The claim arises out of an accident which occurred on 12th October, 1997 between Bhararighat and Namhol when truck 1 Whether Reporters of Local Papers may be allowed to see the judgment? - 2 - bearing No. HIH 335 struck with Scooter No. HP-07- 0407, on which the deceased was travelling as a pillion rider. The petition was contested by the owner of the vehicle, driver and insurer of the truck. There was also a contest and opposition to the petition by the owner and driver of the Scooter. Learned trial court, after a detailed appraisal of the evidence awarded a sum of Rs. 3,70,000/- along with interest to the claimants who are the widow, minor children and mother of the deceased. The Insurance Company is now in appeal. The challenge to the award is that the denial of permission under Section 170 of the Motor Vehicles Act (hereinafter referred to as the Act) to the appellant herein to contest the petition, by the learned Motor Accidents Claims Tribunal was illegal and against the provisions of the Act. The appellant had made out clear and cogent grounds to oppose the claim as it was collusive between the parties. The claimants have relied upon the judgment of the Supreme Court in National Insurance Co. Ltd. Chandigarh vs. Nicolletta Rohtagi and others (2002) 7 SCC 456, which reads:- “30. It was then urged that if there is a collusion between the claimants and the insured or the insured does not contest the claim and the tribunal does not implead the insurance company to contest the claim on grounds available to the insured or the persons against whom claim has been made, or in such a situation when the insurer files an application for permission to contest the claim on merit and the same is rejected or where claimant has obtained an award by playing fraud, in - 3 - such cases the insurer has a right of appeal to contest the award on merits and the appeal would be maintainable. 31. We have already held that unless the conditions precedent specified in Section 170 of 1988 Act is satisfied, an insurance company has no right of appeal to challenge the award on merits. However, in a situation where there is a collusion between the claimants and the insured or the insured does not contest the claim and, further, the tribunal does not implead the insurance company to contest the claim in such cases it is open to an insurer to seek permission of the tribunal to contest the claim on the ground available to the insured or to a person against whom a claim has been made. If permission is granted and the insurer is allowed to contest the claim on merits in that case it is open to the insurer to file an appeal against an award on merits, if aggrieved. In any case where an application for permission is erroneously rejected the insurer can challenge only that part of the order while filing appeal on grounds specified in sub-section (2) of Section 149 of 1988 Act. But such application for permission has to be bona fide and filed at the stage when the insured is required to lead his evidence. So far as obtaining compensation by fraud by the claimant is concerned, it is no longer res integra that fraud vitiates the entire proceeding and in such cases it is open to an insurer to apply to the Tribunal for rectification of award.” Section 170 of the Act 1988 provides:- - 4 - “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.” This court in National Insurance Company Ltd. & anr. Vs. Saveri Devi and Ors 2005 (1) Cur. L. J (H.P) 497 has held:- “6. Permission to contest the claim petition on all or any of the grounds which are available to the person against whom the claim has been made in terms of Section 170 of the Act can be granted only if either there is a collusion between the persons making the claim and the person against whom the claim is made, or the person against whom the claim is made has failed to contest the claim. Since none of the aforesaid is present or has been made out in this case, I have no hesitation in holding that the appellant’s application filed under Section 170 of the Act was totally devoid of any merit. It is accordingly dismissed. The consequence and the result is that the appellant is - 5 - relegated to the position where it could defend the claim petition or it could assail the award in this appeal only on the ground mentioned in sub-section (2) of Section 149 of the Act. Admittedly, neither any such ground finds mention in this appeal nor any such ground has been urged today in the course of hearing of this appeal, the appeal of the appellant-Insurer is totally devoid of any merit and accordingly deserves to be dismissed.” Learned counsel for the respondents has urged that there can be no dispute whatsoever regarding this principle of law. However, this case is covered squarely by the judgment passed by this Court (supra) and the record before the learned Motor Accidents Claims Tribunal does not suggest or even remotely indicate collusion. In fact, three witnesses CW-1 Sh. Roshan , CW- 2 Kuldeep Kumar (driver of the scooter) and CW-3 Sh. Balbir Singh, (driver of the truck) were summoned in evidence. The Insurance Company for reasons best known to it chose not to elicit its case of collusion from these witnesses by cross-examining them. There was no question about the petition not being contested as all the witnesses of fact have appeared in court. Non examination of these witnesses would have entailed dismissal of the claim petition and would not under any circumstances establish connivance or collusion. - 6 - Record shows that an application under Section 170 of the Act was moved by the Insurance Company which was dismissed by the learned trial court on 16.4.2001 holdings:- “….There is another application moved by the learned counsel for respondent No. 3 under Section 170 of the Motor Vehicles Act, for seeking leave to take all the defences available to the insured. Though the application is supported by an affidavit, it is vague and uncertain as it has been mentioned that there is “convenience” between the petitioners and the above said respondents and until and unless it is alleged that there is some sort of connivance or complicity between the claimants and the insured, the insurer is not entitled to any relief, under Section 170 of the Motor Vehicles Act. Accordingly, this application is rejected. It will remain tagged with the main matter file, after registration.” Again on 14.9.2001, on a second application filed by the appellant the Tribunal holds:- “Though this case is fixed for recording the evidence of the petitioners and Rukmani Devi petitioner as well as Roshan Lal, Surinder Singh Vikas Adhikari, Gram Panchayat Chaidy and Inder Kumar are present, an application has been moved by the third respondent under Section 170 of the Motor Vehicles Act stating therein that the applicant has strong apprehension that the first respondent will not contest the claim in order to benefit the non-applicants/petitioners and as such the Insurance Company has no option than to seek the permission to contest the claim on all the grounds and - 7 - defences available to the insured. It is also averred that non-applicants/petitioners and respondent No. 1 have colluded with each other with ulterior motive to fasten the liability to pay the compensation on the applicant-respondent Company. As the allegation of collusion is disputed by the counsel for the petitioners and the first respondent, let reply to the application along with supporting affidavit be filed on 25.9.2001 and also for consideration. Since issues in the present case were framed on 4.6.2001, the third respondent had ample time of more than three months to move the application, let the expenses incurred for summoning the witnesses by the petitioners for the day be defrayed by the third respondent. Also let the amount of Rs. 225/- be paid by the third respondent to the petitioners on or before the date fixed. Witnesses present for the day stand discharged.” On 25.9.2001, a detailed order has been passed by the learned Tribunal dismissing the application filed by the Insurance Company:- “Amount of costs as awarded on 14.9.2001 is stated to have been received by the petitioner’s learned counsel. Reply has been filed on behalf of the first and second respondent as well as the petitioners to the application moved by the third respondent, insurer of the vehicle involved in the accident, to the application moved under Section 170 of the Motor Vehicles Act for seeking leave to take all the defences available to the insured on the premise that the applicant has strong apprehension that the respondent No. 1 will not contest the claim in order to benefit the petitioners - 8 - and, as such, the Insurance Company has no option but to seek the permission to contest the claim petition on all the grounds and defences available to the insured, “to serve the end of justice”. It is averred that the non-applicants/petitioners and respondent No. 1 have colluded with each other with an ulterior motive to fasten the liability to pay compensation on the Insurance Company. Affidavit sworn by Dr. A.K. Shad, Senior Divisional Manager, New India Assurance Company, Shimla has been filed in support of the application. On the other hand, affidavit sworn by Rukmani Devi, petitioner has been filed in support of the counter filed by the petitioners, who have asserted that the Insurance Company has leveled false and frivolous allegations against the replying respondents and that there is no collusion between the petitioners and the first respondent. The first respondent has also contested the plea of the applicant and has filed his own affidavit in support of the counter. Since the claim is being contested by the insured as well as the person who was driving the vehicle at the time of the accident, it cannot be said that the persons against whom the claim has been made have failed to contest the claim. As the evidence is yet to be adduced by the petitioners, it is not reasonable to say at this stage that the petitioners or the witnesses as may be examined on behalf of them have not been effectively cross-examined. Since there is presumption that the parties do act fairly in a court of law, in my humble opinion, factum of collusion between the persons who filed the claim and the persons against whom the claim is made cannot be surmised. The apprehension - 9 - expressed by the Insurance Company in the absence of any cogent material cannot be countenanced. So the plea of the insurer cannot be granted at this stage. As pointed out by the learned counsel for the petitioners, similar application moved by the insurer on 26.3.2001 was dismissed by this Tribunal on 16.4.2001, through a speaking order. The above said application is accordingly disposed of. It will remain tagged with the main matter file, after registration. Be it relisted on 15.10.2001 for recording evidence of the petitioners. Witnesses be summoned on filing of P.F. etc. within three days.” These orders have been reproduced in detail to show that the Insurance Company had nothing but an unfounded apprehension of collusion without any indicative fact on the record to show or remotely suggest that by such collusion, liability was being deliberately passed on to the appellant. On 8.3.2002, learned Tribunal holds that:- “After due appraisal of the record of the case and the arguments advanced on behalf of the parties, I find that there is remissness on the part of the parties to lead cogent evidence in support of their version. It is alleged that a scooterist (respondent No. 4) and pillion rider, Chander Singh deceased were knocked down, from behind by the driver (respondent No. 1) of truck vehicle bearing No. HIH 335, during the dead night hours, intervening 12th and 13th October, 1997, in the area of State Highway between Bhararighat and Namhol, Tehsil Arki District Solan. It appears that the FIR was lodged by one Roshan - 10 - Lal. Involvement of the truck vehicle has been controverted by \its driver and owner. The scooterist has not cared to participate in the proceedings. Neither the scooterist nor the said person who lodged the FIR have been examined by either of the parties. Shri Inder Kumar, PW-3 has been examined as eye- witness of the alleged mishap. Neither implicit nor explicit reliance can be placed on the evidence of Inder Kumar in view of his conduct at the time of and after the incident being against natural human conduct. Neither the owner nor the driver of the truck vehicle allegedly involved in the accident has entered the witness box so as to refute the allegation of rash or negligent act, though it has been pleaded by them that false complaint was lodged with some oblique motive. Since it is the duty of this Tribunal to determine and award just compensation to the dependants of the victim of an accident involving motor vehicle, it is ordered that Roshan Lal son of Janki Ram, caste Rajput, resident of village Jablog, Tehsil Shimla, employed as Fireman, Fire Station, the Mall, Shimla as well as Kuldeep Kumar, respondent No. 4 and Balbir Singh, respondent No. 1, driver of the truck vehicle allegedly involved in the accident be summoned as court witnesses. The learned counsel for the first respondent is also directed to produce him. Let the said persons be summoned for 6.4.2002.” This is the crucial aspect of the matter. Three witnesses having been summoned by the court, the Insurance Company does not join in cross examination. No cogent reason has - 11 - been assigned for their absence from joining the proceedings. The eye witness to the accident Roshan Lal CW-1, driver of the Scooter CW-2 Kuldeep Kumar and driver of truck CW-3 Balbir Singh appeared in court to give their testimony but reasons for not cross- examining these witnesses are not clear. There is nothing on the record to suggest that these witnesses were deliberately kept out of the ambit of cross examination by the court or any objection has been taken by any party who were contesting the matter regarding the reception of their evidence. In these circumstances, it becomes difficult to hold that learned Tribunal has erred in rejecting application under Section 170 of the Act denying permission to the Insurance Company to contest the petition on the grounds as urged. There is no justification to hold that the Insurance Company has been deliberately kept out of the way to join proceedings to establish the genuineness of the claim, collusion quantum which has been determined by the learned Tribunal. This appeal is accordingly dismissed. There shall be no order as to costs. 13th May, 2008. (Dev Darshan Sud), (cm) Judge.