-1- IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL CIVIL CIVIL APPELLATE JURISDICTION APPELLATE JURISDICTION APPELLATE JURISDICTION FIRST FIRST FIRST APPEAL NO.583 OF 2000 APPEAL NO.583 OF 2000 APPEAL NO.583 OF 2000 The Oriental Insurance Co.Ltd. ...Appellant vs. 1.Rajkaur Ranjitsingh Bhatti 2. Miss Ramandevi R.Bhatti 3. M/s.Total Carriers Pvt.Ltd. ...Respondents Mr.S.S.Vidyarthi for the Appellant Mr.M.G.Barve for the Respondent No.1 CORAM: CORAM: CORAM: A.S.OKA,J. A.S.OKA,J. A.S.OKA,J. DATE DATE DATE : APRIL 4, 2008. : APRIL 4, 2008. : APRIL 4, 2008. ORAL JUDGMENT: ORAL JUDGMENT: ORAL JUDGMENT: 1. The submissions of the learned counsel for the parties were heard on 18th March 2008. As the Admission Board was very heavy, after concluding the hearing, the Judgment was reserved and the Appeal is kept today for dictation of the Judgment. 2. The Appellant-Oriental Insurance Company Ltd. has taken an exception to the Judgment and Award dated 4th October 1999 passed by the Ex-Officio Member of the Motor Accident Claims Tribunal, Raigad-Alibag. The first and Second Respondents are the original claimants who filed a claim petition invoking section 166 of the Motor Vehicles Act,1988 (hereinafter referred to as "the said Act of 1988"). 3. According to the first and second respondents, the -2- accident occurred on 30th July 1992. According to the case of the first and second Respondents, deceased Ranjit Singh Bhatti was employed as a driver with M/s. Total Carriers P.Ltd. The said employer (Respondent No.3 herein) was the owner of the heavy goods vehicle No.MH-06 7121. At the time of accident, the deceased was driving the said heavy goods vehicle. The case made out by the first and second respondents is that when the deceased was driving the truck on Bombay-Goa national highway within the limits of Sukeli village, the deceased tried to apply brakes but it went off the road and turned turtle. The allegation is that the vehicle was not in a roadworthy condition and the accident was caused as the third Respondent failed to maintain the goods vehicle in a proper condition. 4. As a result of the injuries sustained in the accident, the said Ranjit succumbed to death. The first Respondent is the widow of the deceased. The second Respondent is the minor daughter of the deceased. The forth and fifth Respondents are the parents of the deceased. The present Appellant was impleaded as an opponent to the claim in its capacity as the insurer of the heavy goods vehicle. The third Respondent did not choose to appear before the tribunal. The Appellant filed the written statement. The contention of the Appellant was that the claim ought to have been made under the provisions of Workmen’s Compensation Act,1923. A contention was raised that -3- considering the fact that the age of the deceased was 40 years, under the said Act of 1923, the entitlement was to compensation of Rs.73,768/-. The first and second Respondent lead evidence. However, the Appellant did not adduce any evidence. The tribunal held that the accident was the result of non maintenance of the vehicle in roadworthy condition by the third Respondent. The tribunal proceeded to grant compensation in the sum of Rs.3,35,000/- with interest at the rate of 12% p.a. from the date of registration of the claim petition till the date of Award. The compensation was made payable not only to the first and second Respondents but also to the fourth and fifth Respondents. In the Award, it was observed that the compensation payable under the no fault liability was not deposited in the court. 5. Initially, when the Appeal appeared before this court on 14th February 2008, the learned counsel for the Respondent raised a preliminary objection to the maintainability of the Appeal. His contention was that the Appellant had not obtained a leave of the tribunal under section 170 of the said Act of 1988. His submission was that the Appellant has not raised any defence covered by sub-section 2 of section 149 of the said Act of 1988. 6. Though the submissions were heard, thereafter, time was granted to the learned counsel for the Appellant to produce a -4- copy of the order, if any, granting a leave under section 170 of the said Act of 1988 . The Appeal was adjourned on 14th February 2008 to 21st February 2008. Thereafter, the Appeal was adjourned to 29th February 2008. Lastly, the Appeal was placed on board on 11th March 2008 and 18th March 2008. The learned counsel for the Appellant stated that in spite of the best efforts, he could not get instructions in that behalf from the appellant-insurance Company. A xerox copy of the Rozmana of the claim petition was placed on record by the learned counsel for the first Respondent. 7. Submission of the learned counsel appearing for the Appellant is that the claim petition filed by the first and second respondent was not maintainable under section 166 of the said Act of 1988. He pointed out that a specific contention was raised that the first and second Respondents ought to have filed the claim under the said Act of 1923. 8. Apart from the aforesaid submissions, his contention is that the deceased cannot be treated as a third party as the deceased was actually driving the vehicle concerned at the time of accident. He submitted that by no stretch of imagination, the driver can be termed as a third party. He submitted that there was no statutory requirement under the said Act of 1988 of covering the liability of a driver. Moreover, the driver cannot be treated as a third party. -5- 9. He submitted that since the aforesaid contentions go to the root of the matter and relate to the jurisdiction of the tribunal, it cannot be said that this Appeal was not maintainable. On the question of liability of the Appellant-insurer, he placed reliance on the several decisions of the Apex Court, this court and other High Courts. The said decisions are produced on record in the form of a compilation. 10. The learned counsel for the first and second Respondents invited my attention to the Roznama of the proceedings of the claim petition and submitted that there is no order passed in favour of the Appellant granting a leave under section 170 of the said Act of 1988. He submitted that none of the defences raised by the Appellant are covered by sub-section 2 of section 149 of the said Act of 1988. He submitted that in view of the law laid down by the Apex Court in case of the National Insurance Company Ltd. Vs. Nicolletta Rohtagi [(2002) 7 S.C.C. page 456], the present Appeal at the instance of the Appellant-insurer was not maintainable. He has also made submissions on the issue of maintainability of the claim petition as well as on the issue of liability of the Appellant by relying upon certain decisions. 11. I have given careful consideration to the submissions. the first question which will have to decided is regarding the -6- maintainability of the Appeal. If the Appeal is held to be maintainable, the questions of liability of the Appellant and the maintainability of the claim petition under section 166 of the said Act of 1988 will have to be gone into. 12. It is well settled proposition of law that an Appeal is always a creation of a statute. Right of the Appeal is always created by a statute and the same can be taken away by the statute. The right of the Appeal can be always curtailed or limited by the statute. In the present case, under the said Act of 1988, right of appeal is created under section 173 thereof. In so far as the scope of right of appeal is concerned, the legal position is no more res integra. One of the leading Judgments on the point is in the case of the National Insurance Company Ltd.(supra). The issue which arose for consideration before the Apex Court can be found in paragraph 2 of the said decision. The question formulated by the Apex Court reads thus : . "Where an insured has not preferred an appeal under section 173 of the Motor Vehicles Act,1988 (hereinafter referred to as ‘1988 Act’) against an award given by the Motor Accidents Claims Tribunal (hereinafter referred to as ‘the Tribunal’), is it open to the insurer to prefer an appeal against the award by the Tribunal questioning the quantum of compensation, as well as the finding as -7- regards the negligence of the offending vehicle". The Apex Court considered the provisions of sections 147,149,170 and 173 of the said Act of 1988. The Apex Court considered the scheme of the said Act of 1988 as well as the scheme of the Motor Vehicles Act,1939. 13. It will be necessary to refer to paragraph 15 of the decision of the Apex Court. In paragraph 15 of the said decision, the Apex Court referred to the defences specified in sub section 2 of section 149 thereof. In paragraphs 15 and 16 the Apex Court has proceeded to hold thus : 15. It is relevant to note that 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 find place in sub-section (2) of section 149 cannot be taken as a defence by the insurer. If Parliament had intended to include the breach of other conditions of the policy as a defence, it could have easily provided any breach of conditions of insurance policy in sub-section (2) of section 149. If we permit the insurer 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 -8- intended to be included. 16. for the aforesaid reasons, we are of the view that the we are of the view that the we are of the view that the statutory statutory statutory defences which are available to the insurer to defences which are available to the insurer to defences which are available to the insurer to contest contest contest a claim are confined to what are provided in a claim are confined to what are provided in a claim are confined to what are provided in sub-section sub-section sub-section (2) of section 149 of 1988 Act and not more (2) of section 149 of 1988 Act and not more (2) of section 149 of 1988 Act and not more and and and for that reason if an insurer is to file an appeal, for that reason if an insurer is to file an appeal, for that reason if an insurer is to file an appeal, the the the challenge in the appeal would confine to only those challenge in the appeal would confine to only those challenge in the appeal would confine to only those grounds. grounds. grounds. (Emphasis added) 14. Thus, the clear pronouncement of the law by the Apex Court is that statutory defences which are available to the insurer to contest the claim under section 166 of the said Act of 1988 are confined to those which are provided in sub section 2 of section 149 of the said Act of 1988. The Apex Court specifically held that the statutory defences are confined to the aforesaid provision and no more. the Apex Court goes further and states that even if the insurer is to file an Appeal, the challenge in the Appeal will be confined only to those grounds. 15. While dealing with the liability of the insurer to honour the award which is made against the insured, in paragraph 25 of the said decision, the Apex court observed thus : -9- 25...The legislature has ensured by enacting section 149 of the Act that the victims of motor vehicle accidents 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. In paragraph 26, the Apex court discussed the scope of Appeal under section 173 of the said Act of 1988 and observed that section 149, 170 and 173 are the part of the same scheme. Paragraph 26 of the Judgment reads thus : 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 enquiry the Claims Tribunal is satisfied that (a) there is a 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 insurer or to the -10- persons against whom the claim has been made. Thus, Thus, Thus, unless unless unless an order is passed by the Tribunal permitting the an order is passed by the Tribunal permitting the an order is passed by the Tribunal permitting the insurer insurer insurer to avail the grounds available to an insured or to avail the grounds available to an insured or to avail the grounds available to an insured or any any any other person against whom a claim has been made on other person against whom a claim has been made on other person against whom a claim has been made on being being being satisfied of the two conditions specified in satisfied of the two conditions specified in satisfied of the two conditions specified in section section section 170 of the Act, it is not permissible to the 170 of the Act, it is not permissible to the 170 of the Act, it is not permissible to the insurer insurer insurer to contest the claim on the grounds which are to contest the claim on the grounds which are to contest the claim on the grounds which are available available available to the insured or to a person against whom a to the insured or to a person against whom a to the insured or to a person against whom a claim claim claim has been made. Thus, where conditions precedent has been made. Thus, where conditions precedent has been made. Thus, where conditions precedent embodied embodied embodied in section 170 are satisfied and the award is in section 170 are satisfied and the award is in section 170 are satisfied and the award is adverse adverse adverse to the interest of the insurer, the insurer has a to the interest of the insurer, the insurer has a to the interest of the insurer, the insurer has a right right right to file an appeal challenging the quantum of to file an appeal challenging the quantum of to file an appeal challenging the quantum of compensation compensation compensation or negligence or contributory negligence of or negligence or contributory negligence of or negligence or contributory negligence of the the the offending vehicle even if the insured has not filed offending vehicle even if the insured has not filed offending vehicle even if the insured has not filed any any any appeal against the quantum of compensation. appeal against the quantum of compensation. 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 170 of the 1988 Act, the same would go contrary to the scheme and object of the Act." (Emphasis added) 16. In paragraph 27, the Apex Court noted the well settled position that as the right of Appeal is not an inherent right and is only a statutory right, if the law provides that the Appeal can be filed on a limited ground, the ground of challenge cannot be enlarged on the premise that the insured or the persons against whom the claim has been made have not -11- preferred any Appeal. The Apex Court reiterated that section 149(2) of the said Act of 1988 limits an Appeal by an insurer on limited grounds provided in sub-section 2 of section 149 and an Appeal being a creation of the statute, it is not open to the insurer to take any other grounds other than those provided in sub-section 2 of section 149 of the said Act of 1988. Thus, what has been held by the Apex court is that on conjoint reading of sections 149,170 and 173 of the said Act,1988, a right of Appeal will be available to the insurer either when a leave under section 170 of the said Act of 1988 is granted or a defence raised is within the purview of sub section 2 of section 149 of the said Act of 1949. The Apex court also dealt with another contingency where an application for permission under section 170 of the said Act is erroneously rejected by the Tribunal. Therefore, an Appeal under section 173 is maintainable only if a leave is granted under section 170 of the said Act of 1988 or if a defence under sub-section 2 of Section 149 of the said Act of 1988 is available. 17. Now coming back to the factual position in the present case, perusal of Roznama shows that no application for grant of leave under section 170 of the said Act of 1988 was made. At exh.18, an application was made by the Appellant for permission to file written statement which was granted and the written statement was taken on record. Perusal of the Roznama -12- shows that on 20th July 1995, an order was passed on claim petition directing that the claim petition will proceed without written statement of the Appellant. Issues were framed on 2nd December 1995. The application at Exh.18 was decided on 12th March 1996 which obviously was an application for setting aside the earlier order to proceed without written statement and for permission to file the written statement. Even without obtaining a leave under section 170, an insurer can always file the written statement raising the defences which are otherwise permissible. Therefore, mere grant of permission to file written statement after setting aside the earlier order to proceed without written statement does not amount to grant of a leave under section 170 of the said Act. This is not a case where an application for leave was made or was granted or that the application for leave was erroneously rejected. It is submitted that the written statement was accepted by the tribunal thereby granting a leave. However, in absence of an express order under section 170 of the said Act of 1988, the said submission cannot be accepted. There is nothing produced on record to show that a leave was even applied for by the Appellant. 18. It will be necessary to refer to sub section 2 of section 149. Sub section 1 of section 149 imposes a duty on the insurer to satisfy the Judgment and Award passed against the insured in respect of a liability towards a third party. Sub -13- section 2 provides that notwithstanding sub section 1, the insurer shall be entitled to defend the action on any of the grounds which are enumerated the said in sub section 2. The said grounds are as under : (a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:- (i) a condition excluding the use of the vehicle- (a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or (b) for organised racing and speed testing, or (c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or (d) without side-car being attached where the vehicle is a motor cycle; or (ii) a condition excluding driving by a named person or -14- persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or (iii)a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or (b) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular. 19. The grounds of challenge which are raised in the present Appeal are not the grounds covered by sub section 2 of section 149. None of the submissions made by the Appellant which are noted in paragraph Nos.7 to 9 above are covered by sub-section 2 of section 149. Thus, this is a case where the Appellant cannot take benefit either of section 170 or sub section 2 of section 149 and hence, it will have to be held that this Appeal is not maintainable under section 173 of the said Act of 1973. 20. The submissions are made on the issue of jurisdiction and the issue of maintainability of the claim petition. However, these submissions could have been considered on merits -15- provided the Appeal preferred by the Appellant was competent. The right of Appeal is not an inherent right and it is a creation of a statute. Therefore, I have not considered the submissions made on the merits of the claim by the learned Advocate for the Appellant. 21. Hence, I pass the following order: i) Appeal is dismissed as not maintainable with no order as to costs. A sum of Rs.25,000/- deposited in this court by the Appellant shall be refunded to the Appellant. . At this stage, the learned counsel for the Appellant states that if the compensation amount is not withdrawn by the claimants till today the same should not be allowed to be withdrawn for a reasonable time. He pointed out that there will be vacation to the Apex Court. . Considering the facts of the case, it is directed that till 31st July 2008, unconditional withdrawal of the compensation amount in favour of the claimants will not be permitted. However, if the claimants furnish adequate security for the compensation amount, the tribunal will permit the withdrawal. The Appellant will be heard before accepting the security. -16- JUDGE JUDGE JUDGE