IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 24.11.2008 C O R A M THE HONOURABLE MR.JUSTICE P.R.SHIVAKUMAR C.M.A.No.1376 of 2002 and C.M.P.Nos.287 and 778 of 2008 National Insurance Co. Ltd., Gobi. ... Appellant/3rd Respondent Vs. 1. K.Ampujam 2. Selvi K.Sujatha 3. P.Venkatesan 4. E.Janakibama ... Respondents/Petitioners 1 & 2 and Respondents 1 & 2 This Civil Miscellaneous Appeal has been filed under Section 173 of the Motor Vehicles Act, 1988 as against the order of the Motor Accidents Claims Tribunal (Principal District Judge), Erode dated 17.10.2001 made in M.C.O.P.No.117 of 2001. For Appellant : Mr.N.Sundaravadanam for N.B.Surekha For Respondent : Mr.A.K.Kumarasamy J U D G M E N T The National Insurance company which figured as the third respondent in the MCOP is the appellant. 2. The respondents 1 and 2 herein claiming to be the dependents of deceased Krishnasamy, had filed the MCOP on the file of the Motor Accidents Claims Tribunal (Principal District Judge), Erode making the following averments:- The respondents 1 and 2 herein/petitioners in MCOP are the wife and daughter of deceased Krishnasamy. On 19.11.2000 at about 7.45 p.m when the deceased Krishnasamy was standing in front of the Tea stall of one Velumani in Aathiyur on the Kunnathur-Perundurai Road, the third respondent herein/first respondent in the MCOP came there in a TVS-50 moped bearing Registration No.TN-33 U-2602 riding the same in a rash and negligent manner with an uncontrollable speed and hit it against the deceased Krishnasamy. Due to the said impact, the deceased Krishnasamy was thrown on the road and he sustained serious head injuries. Immediately he was taken to a https://hcservices.ecourts.gov.in/hcservices/ private hospital, namely Senthil Neuro Hospital, at Erode and was kept in the intensive care unit. A surgery was also conducted for the head injury to remove the blood clot. Inspite of effective treatment, the said Krishnasamy died on the midnight of 21.11.2000 i.e. at about 0.15 AM on 22.11.2000. Postmortem examination was conducted at Government Hospital, Erode. At the time of death, the deceased was aged about 50 years and was having a monthly income of Rs.6,000/- as a producer and seller of "murukku". Though the respondents 1 and 2 herein/petitioners in the MCOP would assess the loss caused to them due to the death of the said Krishnasamy to a higher amount, they restrict their claim to Rs.5,00,000/-. 3. Based on the said pleadings, the respondents 1 and 2 herein had prayed that an award be passed against the 3rd and 4th respondents herein/first and second respondents in the MCOP being the rider and owner of the said TVS-50 moped vehicle and also against the appellant herein/third respondent in the MCOP being the insurer of the said vehicle, directing them jointly and severally to pay the above said amount of Rs.5,00,000/- together with future interest and cost to the respondents 1 and 2 herein/petitioners in the MCOP as compensation for the death of Krishnasamy. 4. The respondents 2 and 3 herein who had been arrayed as the respondents 1 and 2 in the MCOP did not contest the case and remained ex-parte before the Tribunal. 5. The appellant herein which figured as the third respondent in the MCOP alone submitted a counter statement and contested the case. The averments found in the counter statement are as follows:- The appellant herein/3rd respondent in the MCOP suspects collusion between the respondents 1 and 2/claimants and the respondents 3 and 4 herein/respondents 1 and 2 in the MCOP. The respondents 3 and 4 herein/respondents 1 and 2 in the MCOP did not inform the appellant/third respondent of the alleged accident. The accident did not take place due to the rash and negligent driving of the TVS-50 Moped bearing Registration No.TN-33 U-2602 by its rider namely, the third respondent herein/first respondent in the MCOP. The alleged motor accident itself is not admitted. The respondents 1 and 2/claimants 1 and 2 are put to strict proof of the accident. As the accident is said to have occurred after the amendment providing second schedule had been brought into force, the respondents 1 and 2/ claimants in the MCOP could claim only as per the second schedule. The respondents 1 and 2/claimants are bound to prove that the deceased had permanent employment and was earning Rs.6,000/- per month. The compensation claimed by the respondents 1 and 2/claimants is highly excessive and exorbitant. Therefore the petition should be dismissed with cost. 6. After framing necessary issues, the Tribunal conducted enquiry in which, two witnesses were examined as P.Ws.1 and 2 and 7 documents were marked as Ex.P1 to P7 on the side of the respondents 1 and 2 herein/claimants. On the side of the appellant/third https://hcservices.ecourts.gov.in/hcservices/ respondent, no witness was examined and no document was marked. 7. At the conclusion of enquiry, the Tribunal considered the evidence brought before it in the light of the arguments advanced by the counsel appearing on either side and upon such a consideration, came to the conclusion that the accident in question occurred due to negligent riding of TVS-50 moped belonging to the 4th respondent herein/2nd respondent in the MCOP by the 3rd respondent herein/first respondent in the MCOP in a rash and negligent manner. The Tribunal also held that the vehicle stood insured with the appellant herein/third respondent and hence the respondents 3 and 4 herein and the appellant herein (respondents 1 to 3 in the MCOP) were jointly and severally liable to pay compensation to the respondents 1 and 2 herein/claimants. 8. The Tribunal took the age of the deceased to be 55 years and the loss of dependency at Rs.2,000/- per month, applied the multiplier 10 and assessed compensation for loss of dependency at Rs.2,40,000/-. A sum of Rs.20,000/- was awarded towards loss of consortium, love and affection. As against the amount covered by the medical bills produced by the respondents 1 and 2 herein/claimants and marked as Ex.P6 series, a sum of Rs.40,180/- was awarded. A sum of Rs.1,500/- towards transport expenses has also been awarded. Thus arriving at a total sum of Rs.3,01,680/-, the Tribunal passed an award directing the respondents 3 and 4 herein and the appellant herein (respondents 1 to 3 in the MCOP) to pay the above said sum of Rs.3,01,680/- together with an interest at the rate of 9% per annum from the date of petition till realisation and with proportionate cost. 9. Aggrieved by and challenging the said award, the appellant insurance company (3rd respondent in the MCOP) has brought-forth this civil miscellaneous appeal on various grounds set out in the memorandum of appeal. 10. The points that arise for consideration in the civil miscellaneous appeal are 1. Whether the finding of the tribunal that the TVS- 50 moped bearing Regn.No.TN-33 U-2602 belonging to the 4th respondent herein was the one involved in the accident in question? 2. Whether the appellant/3rd respondent is not liable to pay compensation? 3. Whether the award of the tribunal is liable to be set aside or modified by reducing the quantum of compensation? 11. The appellant in the civil miscellaneous appeal has also filed a miscellaneous petition CMP No.778/2008 under Order 41 Rule 27 seeking permission to mark the report of the investigator engaged by the appellant herein dated 04.03.2005 as additional https://hcservices.ecourts.gov.in/hcservices/ evidence in the appeal. It has been stated therein that upon receiving several reports of the investigators in the year 2005 revealing the fact that several bogus claims had been made, a writ petition was filed to have such cases investigated by the CBCID or CBI; that similarly a private investigator was appointed to investigate the matter concerned in this appeal and that on receipt of the report of the investigator, they came to know that the claim made by the respondents 1 and 2 herein/claimants was also a bogus one. "Whether permission sought for under Order 41 Rule 27 can be granted?" - is the issue that has arisen for consideration in the civil miscellaneous petition. 12. This court heard the arguments advanced by Mr.N.Sundaravadanam, learned counsel for the appellant and that of Mr.A.K.Kumarasamy, learned counsel for the respondents. The materials available on record were also perused. 13. The appellant insurance company which figured as the 3rd respondent in the MCOP is the sole appellant in this civil miscellaneous appeal. The respondents 1 and 2 herein/claimants 1 and 2 are the wife and daughter of deceased Krishnasamy. According to their case, the deceased met with an accident on 19.11.2000 at 7.45 p.m when he was standing in front of the Tea stall of one Velumani in Aathiyur on the Kunnathur-Perundurai Road as he was hit by TVS-50 moped motorcycle, bearing Regn. No.TN-33 U-2602. According to the case of the respondents 1 and 2 herein/claimants in the MCOP, the said moped belonged to the 4th respondent herein/second respondent in the MCOP and the third respondent herein/first respondent in the MCOP was the rider of the motorcycle who caused the accident. Besides making a clear averment that the said TVS-50 moped vehicle was driven by the third respondent herein/first respondent in the MCOP in a rash and negligent manner with an uncontrollable speed as a result of which the said vehicle dashed against the deceased Krishnasamy who was standing in front of a tea shop; that the same resulted in serious head injuries to the said Krishnasamy, which ultimately proved to be fatal as he succumbed to the injuries despite medical treatment, the respondents 1 and 2 herein/claimants have also examined P.W.2 - Velumani as an eye witness for the accident. Of course, the second respondent herein/second claimant in the MCOP, while deposing as P.W.1, made an attempt to describe how the accident took place. But she has admitted that she did not actually witness the occurrence. At the same time she was categorical in her statement that soon after the accident, she received the message and went to the place of occurrence. 14. P.W.2 categorically asserted in his evidence that he actually saw the accident. He has also mentioned the Registration number of the TVS-50 moped motorcycle which caused the accident. It is the clear evidence of P.W.2 that his father was running a Tea stall at Aathiyur on the Kunnathur-Perundurai road; that on 19.11.2000 at about 7.45 p.m while he was standing in front of his father's Tea stall, the TVS-50 moped motorcycle bearing Registration number noted in the petition came there in a haphazard https://hcservices.ecourts.gov.in/hcservices/ manner and dashed against the deceased who was talking with another person; that as he was standing in front of his father's Tea stall at that point of time, he witnessed the occurrence and that after hearing the hue and cry raised by them, the relatives of the deceased who were residing in the nearby place rushed to the place of accident and took the deceased to a hospital at Erode where he died on failure of treatment on 22.11.2000. He would also state that the deceased was known to him for about 20 years. He stoutly denied the suggestion that he was not an eye witness to the accident and that he was giving false evidence as the deceased was known to him. 15. In addition to the above said oral evidence, the respondents 1 and 2 herein/claimants have also produced Ex.A1 - certified copy of the FIR, Ex.A2 - certified copy of the Motor Vehicle Inspector's Report, Ex.A3 - certified copy of the Postmortem certificate, Ex.A4 - certified copy of the charge-sheet and Ex.A5 - judgment of the criminal court in S.T.C.No.101/2000 on the file of the learned Judicial Magistrate, Perundurai. From the said documents, it is obvious that in respect of the said accident in which the deceased Krishnasamy sustained injuries leading to his death, a case was registered by the police in Crime No.211 of 2000 on the file of Kunnathur Police Station for an offence punishable under Section 304(A) against the 3rd respondent herein/1st respondent in the MCOP. From Ex.A4 and A5, it is obvious that after completion of investigation, the police submitted a charge- sheet for an offence punishable under Section 304(A) IPC; that the first respondent herein pleaded guilty and that based on the plea of guilty, he was convicted for the offence punishable under Section 304(A) and sentenced to undergo imprisonment till raising of the court and to pay a fine of Rs.3,500/-. From Ex.A2 it is quite obvious that the moped vehicle belonging to the 4th respondent herein/2nd respondent in the MCOP, bearing Registration No.TN-33 V-2602 (motorcycle without gear), was the one produced for inspection before the Motor Vehicle Inspector as the vehicle involved in the accident and on inspection, the Motor Vehicle Inspector found that the accident was not due to any mechanical defect found in the vehicle. Of course, judgments of the criminal court in criminal cases are not binding on the civil courts or the Motor Accidents Claims Tribunals and the same shall not be admissible as a relevant piece of evidence, except for a limited purpose of showing that there was a prosecution which resulted in either acquittal or conviction. There is one exception to the proposition that the judgment of the criminal court is not relevant in a civil case or MCOP case. If the judgment is pronounced based on the plea of guilty, then the same becomes relevant not as a judgment of the criminal court, but as a piece of evidence embodying the admission made by the person prosecuted. Admissions are the best pieces of evidence though not conclusive proof of the facts admitted therein. The party against whom admissions are sought to be used can prove that the facts admitted therein are not in fact true. https://hcservices.ecourts.gov.in/hcservices/ 16. In this case, though the admission made by the 3rd respondent herein/1st respondent in the criminal case was sought to be used by the respondents 1 and 2 herein/claimants, in support of their case that the accident occurred due to the rash and negligent driving of the motorcycle belonging to the 4th respondent herein by the 3rd respondent herein, the only contesting party (the appellant herein/3rd respondent in the MCOP) did not adduce any evidence to show that no such admission was made or that the fact admitted therein by the 3rd respondent herein was not true or could not be true. In the absence of any evidence on the part of the appellant herein, the Tribunal has come to the conclusion that the accident occurred due to the rash and negligent driving of the moped belonging to the 4th respondent herein by its rider namely, the 3rd respondent herein. 17. In the light of the foregoing discussions, this court feels that there could be no ground for interfering with the above said finding of the Tribunal. In fact the scope of contest by an insurance company in an MCOP or an appeal arising therefrom shall be confined to the grounds of defence enumerated under Section 149 (2) of the Motor Vehicles Act, 1988. However, Section 170 provides for permission being accorded to the insurer on the ground of collision between the claimant and the insured or on the ground that the insured has failed to contest the claim. Of course the appellant herein/3rd respondent in the MCOP had raised a plea in the counter statement that the claim itself seemed to have been made on the collusion between the respondents 1 and 2/claimants 1 and 2 and respondents 3 and 4/respondents 1 and 2. But the very same section provides that such a permission can be accorded by an order in writing assigning reasons for the same. There is no material to show that such a permission was obtained by the appellant herein/3rd respondent in the MCOP before the Tribunal. When that is so, the insurer cannot take a plea on the merits of the case regarding the question of negligence or the question of quantum. 18. On the other hand, it is the contention of the learned counsel for the appellant that though it is an established principle of law that without getting the leave under Section 170 of the Motor Vehicles Act, 1988 the insurer cannot raise a defence or file an appeal on the merits of the case, the same was subject to one exception i.e. the plea of fraud. According to the submissions made by the learned counsel for the appellant, fraud would vitiate the entire proceedings and the award of the Tribunal can be attacked on the ground of fraud itself. In support of his contention, the learned counsel for the appellant cited the judgment of the Hon'ble Supreme Court made in National Insurance Co. Ltd., Chandigarh Vs. Ltd. Nicolletta Rohtagi and others reported in 2002 (4) CTC 243. In the said case, after going through the relevant provisions regarding the scope of defence that can be raised by an insurer and the exception to the same, their lordships of the Hon'ble Supreme Court were categorical in their assertion that the insurer, in the absence of any permission under Section 170 of the Motor Vehicles ACt, 1988 could not file an https://hcservices.ecourts.gov.in/hcservices/ appeal or defend the MCOP on any ground other than those enumerated in Sub Section 2 of Section 149. The relevant paragraphs, namely paragraph 31 and 32 of the judgment are extracted hereunder. "31. We have already held that unless the conditions precedent specified in Section 170 of 1998 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 person against whom a claim has been made. In 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 order while filing appeal on grounds specified in sub-sections (2) of Section 149 of 1998 Act. But such application for permission has to be bona fide and filed at the stage 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." " 32. For the aforesaid reasons, our answer to the question is that, even if no appeal is preferred under Section 173 of 1998 Act by an insured against the award of a Tribunal, it is not permissible for an insurer to file an appeal questioning the quantum of compensation as well as finding as regard negligence or contributory negligence of the offending vehicle." 19. Ultimately in the said case, their lordships of the Hon'ble Supreme Court have held that, if no appeal had been preferred under Section 173 of the Motor Vehicles Act by the insured against the award of the Tribunal, it was not permissible for the insurer to file an appeal questioning the quantum of compensation as well as the finding regarding negligence or contributory negligence of the offending vehicle. Relying on the said observation made by their lordships of the Hon'ble Supreme Court in the above said case, the learned counsel for the appellant contended that the appellant was not questioning the correctness of the finding on the question of negligence or quantum of compensation awarded by the Tribunal, but the very award obtained for compensation by the respondents 1 and 2/claimants was challenged on the ground that the same was obtained by fraud and that hence the appellant was entitled to succeed in the appeal. https://hcservices.ecourts.gov.in/hcservices/ 20. A thorough reading of the said judgment of the Hon'ble Supreme Court and a close consideration of the observations made therein would clearly show that in the absence of any appeal preferred by the insured, the insurer cannot maintain an appeal under Section 173 of the Motor Vehicles Act. 21. On the other hand, it is quite clear that their lordships of the Supreme Court were of the view that in case of plea of fraud, the insurer could approach the Tribunal, which passed the award for rectification of the mistake by recalling such an award obtained fraudulently. When an award is attacked contending that the award was obtained by fraud, the plea of fraud should be established by adducing proper and sufficient evidence. The person who raises the plea of fraud shall have the burden of proving it. Such an exercise cannot be undertaken conveniently in an appeal. That is why their lordships of the Hon'ble Supreme Court, in the above said case, were of the view that in the absence of an appeal preferred by the insured and in the absence of permission obtained under Section 170 of the Motor Vehicles Act, the insurer could not prefer an appeal and that in case the insurer would plead "fraud" as a ground of attack, the court which passed the award, namely the Motor Accidents Claims Tribunal could be approached for rectifying the defect by recalling the award if the fraud alleged would be proved. Therefore, the contention of the learned counsel for the appellant that an insurer can maintain an appeal on the ground that the award had been obtained by the claimants by fraud cannot be countenanced. 22. As clearly indicated by the Hon'ble Apex Court, the insurer, in such cases, has to approach the Tribunal which passed the award for recalling the award on the ground of fraud. In case of fraud being pleaded as a ground of attack challenging the award, the question of latches also has to be considered. "When did the party pleading fraud come to know that the award had been obtained by fraud?" and "Why such a plea was not raised at the earlier stages?" - are the questions to be considered in such a case. In this case the fraud alleged by the appellant is that the vehicle belonging to the 4th respondent herein/2nd respondent in the MCOP, namely TVS-50 moped motor cycle bearing Regn. No.TN-33 U-2602, was not the vehicle which caused the accident; that the 3rd respondent herein was not the person who caused the accident; that another TVS-50 vehicle not covered by insurance policy was the actual vehicle which caused the accident and that since the vehicle which involved in the accident was not covered by a valid insurance policy, the respondents 1 and 2/claimants 1 and 2 colluded with the respondents 2 and 3 herein/respondents 1 and 2 in the MCOP and foisted a case as if the TVS-50 belonging to the 4th respondent was the one involved in the accident. 23. In this regard, the delay in lodging the FIR for about 2½ days has been cited as the ground for suspicion that the vehicle could have been changed. The appellant has come forward with a miscellaneous petition (CMP No.778 of 2008) for reception of the report of the private investigator engaged by the appellant https://hcservices.ecourts.gov.in/hcservices/ insurance company as additional documentary evidence. According to the appellant's case, when the investigator went and approached the persons who knew about the accident, all of them gave statements to the effect that the accident was caused by a TVS-50 moped in which three persons belonging to Ammapalayam Harijan street came there and dashed against the deceased Krishnasamy on 19.11.2000 at about 7.45 p.m; that after the death of the deceased Krishnasamy at the midnight on 21.11.2000, a case was foisted by changing the vehicle as the vehicle