MAC APP. No. 4/2005 Page 1 of 11 IN THE HIGH COURT OF DELHI AT NEW DELHI + MAC APP. No. 4/2005 Judgment delivered on: March 05, 2008 Oriental Insurance Co. Ltd ..... Appellant Through: Mr. S.L. Gupta, Adv. versus Aishi Lal Saluja And Ors. ..... Respondents Through: Ms. Priyanka Kasana, Adv. CORAM: HON'BLE MR. JUSTICE KAILASH GAMBHIR, 1. Whether the Reporters of local papers may Yes be allowed to see the judgment? 2. To be referred to Reporter or not? Yes 3. Whether the judgment should be reported Yes in the Digest? KAILASH GAMBHIR, J. Oral: * Perusal of the present appeal shows that the defence was not taken over by the appellant as envisaged under Section 170 of the Motor Vehicles Act. MAC APP. No. 4/2005 Page 2 of 11 In view of the settled legal position, the present appeal filed by the insurance company challenging the quantum of compensation is not maintainable. Reference in this regard is made to the judgment of the Apex Court in New India Assurance Company Ltd. Vs. Smt. Shanti Pathak and Ors. 2007 ACJ 2188. The facts of the case inter alia are that on 22.10.1998 Shri Aishi Lal Saluja was going on his scooter bearing registration no. DL-9SA 0171 from Punjabi Bagh Chowk towards the direction of Jakhira and when he reached beyond the Power House, a bus bearing registration no. DL-1P 7563 driven by Shri Dharambir in a rash and negligent manner came from behind and hit Shri Aishi Lal Saliya. The Tribunal after taking into consideration the facts of the case as well as evidence led by the parties had passed an award in the sum of Rs. 9,24,000/-along with interest at the rate of 9% per annum payable from the date of the institution of the petition till the date of realisation. MAC APP. No. 4/2005 Page 3 of 11 The said order passed by the Tribunal is now under challenge in the present appeal. I have heard learned counsel for the parties at considerable length. Counsel appearing for the respondent has taken a preliminary objection to the very maintainability of the present appeal on the ground that the appellant cannot assail the findings of the Tribunal on the quantum of compensation as determined by the Tribunal. Counsel contends that the appellant had not taken over the defence of the owner and driver as envisaged under Section 170 of the Motor Vehicles Act and, therefore, is debarred from challenging the impugned award so as to assail the findings of the Tribunal on the quantum of compensation. The contention of counsel for the respondent is that right to file an appeal is a statutory right and the insurer can assail the findings of the Tribunal confining to defences as available under Section 149(2) of the Motor Vehicles Act. Counsel further contends that it is only in a case where MAC APP. No. 4/2005 Page 4 of 11 there is collusion between the claimants and the insured, the insurer can assail the findings of the Tribunal on the grounds of quantum as well as negligence subject however to the condition that the insurer had taken permission of the Court to take over the defence of the owner or driver as the case may be as envisaged under Section 170 of the Motor Vehicles Act. No such permission was sought by the appellant under Section 170 of the Motor Vehicles Act by the Tribunal and, therefore, in the absence of the same, the appellant being the insurer of the offending vehicle cannot maintain the present appeal on grounds other than those available to it under Section 149(2) of the Motor Vehicles Act. On the other hand, counsel for the appellant strongly disputes this position and contends that the insurer cannot be rendered remedlyless especially in a case where the Tribunal has awarded an excessive amount of compensation in favour of the claimants ignoring all basic principles of law for the award of compensation. Counsel for the appellant has also placed reliance on the judgment MAC APP. No. 4/2005 Page 5 of 11 of the Supreme Court reported in 2007 (9) Scale 216, New India Assurance Company Ltd. Vs. Smt. Shanti Pathak & Ors. to contend that the Apex Court had interfered to lower down the compensation amount even in a case where the insurer had not taken any permission from the Court under Section 170 of the Motor Vehicles Act. Counsel for the appellant also contends that the Hon'ble Supreme Court has already referred the said issue of lack of competence of the insurer to assail the findings of the Tribunal on the ground of quantum of compensation and negligence to a larger Bench and, therefore, this Court may await the decision of the Supreme Court in this regard. Motor vehicle accident claim is a tortious claim directed against tortfeasors who are the insured/owner and the driver of the vehicle, the insurer comes in to the picture as a result of the statutory liability created under the Motor Vehicles Act. The legislature intended and 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 MAC APP. No. 4/2005 Page 6 of 11 compensation on any exclusionary clause in the insurance policy except those specified in Section 149(2) of the Act or where the condition enshrined in Section 170 is satisfied. Right of appeal is a creature of statute. The Parliament, while enacting Sub-section (2) of Section 149 only specified some of the defences which are based on conditions of the policy and, therefore, any other breach of conditions of the policy by the insured which does not fall under Sub-section (2) of Section 149 cannot be taken as a defence by the insurer. Had it been the intention of the Parliament to include the breach of other conditions of the policy as a defence, it could have easily provided for ‘any breach of conditions of insurance policy’ in Sub-section (2) of Section 149. But it is not the case, since the legislator has enumerated specifically the grounds of defences available to the insurer. If the insurer is permitted to take any other defence other than those specified in Sub-section (2) of Section 149, it would mean we are adding more defences to insurer in the statute which is neither found in the Act nor was intended to be included. MAC APP. No. 4/2005 Page 7 of 11 After having given my thoughtful and conscious consideration to the issue involved in the present case, I am of the view that the issue is no more res integra as in plethora of cases, the Hon'ble Supreme Court has authoritatively held that in the absence of permission sought from the tribunal as envisaged under Section 170 of the Motor Vehicles Act, the insurer has no right to file an appeal to challenge the quantum of compensation or finding of the Tribunal as regards the negligence or contributory negligence of offending vehicles is concerned. It would be appropriate to refer Section 170 of the Motor Vehicles Act as under:- “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, MAC APP. No. 4/2005 Page 8 of 11 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.“ It is an admitted case between the parties that no such permission under Section 170 of the Motor Vehicles Act was sought by the appellant which clearly means that the procedure laid down under Section 170 of the Motor Vehicles Act was not followed. In the judgment of the Supreme Court reported in (1998) 3 SCC 140, Shankarayya Vs. United India Insurance Co. Ltd., the Supreme Court has held that the insurance company when impleaded as a party by the Court can be permitted to contest the proceedings on merits only if the conditions mentioned in Section 170 are found to be satisfied and for that purpose the insurance company has to obtain an order in writing from the Tribunal and such an order should be a MAC APP. No. 4/2005 Page 9 of 11 reasoned order of the Tribunal. In such circumstances unless the said procedure is followed, the appellant insurer cannot have a wider defence on merits than what is available to it by way of a statutory defence. Relevant part of Para 4 of the said judgment in this regard is referred as under:- “4. It clearly shows that the Insurance Company when impleaded as a party by the Court can be permitted to contest the proceedings on merits only if the conditions precedent mentioned in the section are found to be satisfied and for that purpose the Insurance Company has to obtain order in writing from the Tribunal and which should be a reasoned order by the Tribunal. Unless that procedure is followed, the Insurance Company cannot have a wider defence on merits than what is available to it by way of statutory defence.“ In view of the said legal position, I cannot appreciate the argument of counsel for the appellant that even without seeking permission of the Court as required under Section 170, the Appellant can proceed with the appeal. The procedure to be followed is that an application under MAC APP. No. 4/2005 Page 10 of 11 Section 170 of the Motor Vehicles Act is to be preferred by the appellant insurance company before the Tribunal for taking over the defence of an owner or driver and then the Tribunal is required to pass specific order and that too a reasoned order, as per the observations of the Supreme Court referred above and therefore, in the instant matter the argument of counsel for the appellant cannot be appreciated that non-filing of an application under Section 170 of the Motor Vehicles Act by the appellant in this regard is no bar in preferring the present appeal. In the light of the above discussion, I do not find any merit in the submission of counsel for the appellant. The judgment cited by the counsel in Shanti Pathak's case (supra) has not dealt with the said legal proposition and, therefore, the same is not applicable in the facts and circumstances of the present case. MAC APP. No. 4/2005 Page 11 of 11 There is no merit in the appeal. Dismissed. March 05, 2008 KAILASH GAMBHIR, J 'raj'