1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED:15.11.2011 CORAM: THE HONOURABLE MR.JUSTICE T.MATHIVANAN C.M.A.(MD)No.861 of 2011 and M.P.(MD)Nos.2 & 3 of 2011 The Oriental Insurance Co. Ltd., Having its Branch Office, North Cotton Road, Tuticorin. : Appellant/2nd Respondent Vs. 1.Maria Navies 2.Rajesh 3.Suresh 4.Minor Monisha : Respondents 1 to 4/Petitioners 1 to 4 [Minor 4th Respondent through her Guardian Mother and Next Friend 1st respondent Maria Navies] 5.Rufus Amirtharaj :5th Respondent/1st Respondent Prayer: This Civil Miscellaneous Appeal is filed under section 173 of Motor Vehicles Act,1988 to set aside the judgment and decree, dated 01.08.2008 and made in MCOP No.19 of 2004 on the file of the Motor Accident Claims Tribunal-cum-Additional District Judge, (Fast Track Court No.2), Thoothukudi. For Appellant : Mr.K.Bhaskaran For R1,3 to 4 : Mr.R.Vijayakumar For 5th Respondent : Mr.G.Prabhu Rajadurai For 2nd respondent :No appearance J U D G M E N T Having been aggrieved by the award, dated 1.8.2008 and made in MCOP No.19 of 2004 on the file of the learned Motor Accident Claims Tribunal/Additional District Judge, (Fast Track Court No.2), Thoothukudi, the 2nd respondent Insurance Company has preferred this Civil Miscellaneous Appeal questioning the liability. 2.The appellant herein is the 2nd respondent in the claim petition. The respondents 1 to 4 are the wife and children of the deceased Thirukudumba Jesuraj @ Thinakaran. Whereas the 5th respondent herein is the owner of the car involved in the accident. 3.That on 6.5.2003 at about 4.00 p.m. at Kovankadu Branch Road, the deceased Thriukudumba Jesuraj @ Thinakaran was thrown out of the motor cycle bearing Registration No.TN-69-F-2935, which was ridden by him along https://hcservices.ecourts.gov.in/hcservices/ 2 with his employer one Muthu, when the car bearing registration No.TN-59- B-1704 had hit against the said motor cycle, while he was returning from Periyathazhai. In the said accident, the deceased had succumbed to injuries instantaneously on the spot. 4.The deceased was aged about 48 years at the time of accident and was doing business on dry fish commission & marketing and thereby, earned a sum of Rs.20,000/- per month. The respondents 1 to 4 have, therefore, filed a claim petition in MCOP No.19 of 2004 claiming a sum of Rs.20,00,000/-. 5.The 5th respondent herein, who is the owner of the Ambassador Car, had contested the claim on two grounds:- (i)He had sold the ambassador car bearing registration No.TN-59-B-1704 to one Rajasekar in the year 2003 and that the said car was also transferred in the name of the said Rajasekar. (ii)The car was insured with the appellant Insurance Company under the policy bearing No. 0651104/31/03/6711260 and since, the policy was in force with the appellant Insurance Company at the relevant period, the Insurance Company alone is liable to pay the compensation. But the said Rajasekar to whom the car was sold, had not been impleaded as a party to the claim proceedings. 6.The appellant Insurance Company, being the 2nd respondent in the claim petition, has projected its contention on two grounds:- (i)The accident was not taken place due to rashness and negligence on the part of the driver of the first respondent; and (ii)The avocation and the monthly income of the deceased at the rate of Rs.20,000/- per month were disputed. The claimants are put to strict proof of the avocation and the monthly income of the deceased at the rate of Rs.20,000/- 7.In its additional counter, the appellant Insurance Company has disputed the involvement of the Ambassador Car bearing registration No.TN-59-B-1704 in the accident said to have been taken place on 6.5.2003 and hence, the Insurance Company is not at all liable to pay the compensation. 8.The respondents 1 to 4/claimants have filed their written statement questioning the dual stand taken by the appellant Insurance Company. 9.The parties to the claim proceedings, in order to substantiate their respective contentions, went for trial. The first respondent Mrs.Marianevis, being the wife of the deceased Thirukudumba Jesuraj, has examined herself as PW1 and one Muthu, who was the pillion rider, has been examined as PW2 and during the course of their examination Exs.P1 to P10 were marked. On the other hand, a Senior Assistant and the Investigator of the Insurance Company, have been examined as RW1 and RW2 https://hcservices.ecourts.gov.in/hcservices/ 3 respectively, and the 5th respondent, who is the owner of the Ambassador Car, has been examined as RW3. During the course of their examination, Exs.R1 and R2 were marked. 10.On appreciation of evidences, the learned Motor Accident Claims Tribunal has found that:- (i)The accident was taken place owing to the rash and negligent act arising out of using of the motor cycle of the first respondent, who is the owner of the car. (ii)The claimants being the legal heirs of the deceased are entitled to compensation. (iii)The accident was taken place on account of rashness and negligence on the part of the driver of the offending vehicle, during the course of his employment, under the first respondent. Hence, the first respondent is vicariously liable to pay compensation at the relevant period, the vehicle was insured with the 2nd respondent and therefore, the 2nd respondent is liable to indemnify the 1st respondent. Thus, the liability of both the respondents are joint and several. Ultimately, the learned Motor Accident Claims Tribunal has proceeded to pass an award of Rs.6,84,500/- directing the appellant Insurance Company and the 5th respondent, the owner of the car, to pay this amount to the respondents 1 to 4/claimants, within 30 days with interest at the rate of 9.5% per annum. Impugning the award, this appeal is preferred by the appellant Insurance Company. 11.Heard Mr.S.Bhaskaran, the learned counsel appearing for the appellant Insurance Company and Mr.R.Vijayakumar, the learned counsel appearing for the respondents 1, 3 & 4 as well as Mr.G.Prabhu Rajadurai, the learned counsel appearing for the 5th respondent. 12.The entire argument advanced on behalf of the appellant Insurance Company has been revolving around the question given below:- “Whether the appellant Insurance Company is not liable to pay the compensation, as the 5th respondent herein, the owner of the car, had violated the policy condition? 13.In accordance with Mr.K.Bhaskaran, the learned counsel for the appellant Insurance Company, the car bearing registration No.TN-59-B-1704 is a private car and hence, it should not have been hired. He has further maintained that on the material period, the car was hired, infringing the policy condition, and therefore, the liability of the appellant Insurance Company to indemnify the loss of the 5th respondent, owner of the car, did not arise. 14.As manifested from the records, the white Ambassador Car bearing registration No.TN-59-B-1704 is belonged to the 5th respondent, Rufus Amirtharaj, a practising Lawyer in Thoothukudi. Ex.P1, Copy of the First Information Report, reveals that the information pertaining to the accident was given by one Muthu, who was travelling along with the deceased as pillion rider in the two wheeler. https://hcservices.ecourts.gov.in/hcservices/ 4 15.On a perusal of the averments of the First Information Report, it discloses that the car came from the opposite direction in a hectic speed and dashed against the two wheeler, in which the complainant as well as the deceased were proceeding and after hitting against the two wheeler, the car had fled away from the scene of occurrence without even taking a halt. 16.In this regard, Mr.K.Bhaskaran, the learned counsel for the appellant Insurance Company has submitted that this is the case of hit and run and that, the actual car, which caused the accident was not identified by Muthu, who has been examined as PW2. He has also adverted to that the identity and the inclusion of the car, in the charge sheet, is nothing, but a clear collusion of the claimants and the owner of the car with the hands in glow along with the concerned police officials. 17.It is significant to note here that the plea in respect of the non-involvement of the above said car in the accident was not taken by the appellant Insurance Company at the earliest point of time, when it happened to file its counter to the claim petition. 18.As observed in the opening paragraph of the judgment, the appellant Insurance Company, in its counter, filed before the learned Claims Tribunal on 23.02.2005, has projected its contention only on two grounds:- (i)Negligence; and (ii)Quantum 19.In its additional counter, the appellant Insurance Company has disputed the involvement of the car bearing registration No.TN-59-B-1704 in the accident, which took place on 6.5.2003. 20.The Insurance Company has further contended that the police authority had falsely registered the case against one Thangaraj, who was said to be the driver of the car at the time of accident and on his statement given before the Investigator, he had confessed himself that he was not the driver of the said car on the date of accident and that he had admitted in his evidence given before the learned Judicial Magistrate, Thoothukudi, that only on the request made by the 5th respondent, who is the owner of the Ambassador Car, he had admitted the offence. 21.When the appeal came up for hearing, Mr.S.Bhaskaran, the learned counsel for the appellant Insurance Company, has, for the first time that too in the appeal stage, contended that the 5th respondent, the owner of the car had violated the policy condition, as he had used the car for hire. He has also contended that the car being a private car should not have been used for hire. 22.From the materials available on record and based on the arguments projected by Mr.K.Bhaskaran, the learned counsel for the appellant Insurance Company, this Court can easily infer that the appellant Insurance Company has taken three different pleas, which seems to be conflicted with each other. https://hcservices.ecourts.gov.in/hcservices/ 5 23.Firstly, the appellant Insurance Company, before the learned Motor Accident Claims Tribunal has taken a stand that:- (a)The accident was not caused on account of the rashness and negligence on the part of the driver of the 5th respondent/owner of the car. (b)The monthly income and the total claim of compensation have not been supported by any documentary evidence and hence, appears to be exorbitant. 24.Secondly, in the additional counter, the appellant Insurance Company has taken another plea that the car bearing registration No.TN- 59-B-1704 was not at all involved in the accident, which took place on 6.5.2003. 25.Thirdly, the appellant Insurance Company is not liable to pay the compensation, as the owner of the car has violated the policy condition, as he had used the car for hire purpose. 26.The 5th respondent, being the owner of the car, has not disputed the involvement of the car in the accident. He has stated in his counter that his Ambassador Car baring registration No.TN-59-B-1704 was sold in the year 2003 to one Rajasekar and following the transfer of the car, the name transfer was also effected. He has also submitted that the car at the relevant period was insured with the appellant Insurance Company under a valid insurance policy bearing No.651104/31/03/6711/260. 27.It is significant to note here that the Insurance coverage pertaining to the car with the appellant Insurance Company was in force at the material time. 28.It is apparent from the evidence of RW2, that he was appointed by the appellant Insurance Company on 26.06.2006 as an Investigator to investigate about the manner as well as the involvement of the car in the accident, which took place on 6.5.2003. Accordingly, he had investigated and submitted a report under Ex.R2. 29.As it reveals from the evidence of RW1, a Senior Assistant of the appellant Insurance Company, based on the investigation report under Ex.R2, a complaint was lodged on 30.07.2007 before the District Crime Branch Police. On the basis of the complaint, the District Crime Branch police had registered a case in crime No.28 of 2007 and transferred to the file of CBCID for further investigation. The records are also manifested that the case in crime No.28 of 2007 was duly investigated and subsequently, closed as 'Mistake of Fact' and the closure of the case in crime No.28 of 2007 would go to show that the plea of non-involvement of the car bearing registration No.TN-59-B-1704 was ruled out. 30.On perusal of the award of the learned Motor Accident Claims Tribunal, it reveals that the contention of the appellant Insurance Company with regard to negligence and quantum of compensation have been rejected and the another plea of non-involvement of the car, has also been rejected. The learned Tribunal has ultimately proceeded to pass the awarded as fore-stated. After the passing of the award, dated 01.08.2008 https://hcservices.ecourts.gov.in/hcservices/ 6 and made in MCOP No.19 of 2004, the appellant Insurance Company has taken out the application in I.A.No.69 of 2009 before the learned Motor Accident Claims Tribunal seeking the relief of reopening the case and to review the judgement and decree, dated 1.8.2008, so as to enable the Insurance Company to file a petition under section 170 of the Motor Vehicles Act. That petition was contested vehemently by the respondents/claimants 1 to 4 as well as the 5th respondent herein, the owner of the car. 31.In this regard, it may be quite relevant to note here that the 5th respondent, in para No.6 of his counter has submitted that the above case could not be reviewed only to allow the Insurance Company to file an application under section 170 of the Motor Vehicles Act 1988, seeking leave to contest the case on all grounds, which are available for the owner of the vehicle. In para 7 of his counter, the 5th respondent, the owner of the car, has also submitted that the complaint filed by the appellant Insurance Company before the DGP, CBCID, was forwarded to the Superintendent of Police, Tuticorin and subsequently, it was closed and hence, the plead of fraud raised by the Insurance Company had already lost its veracity and it is bereft of truth and as such, the petition to reopen the case is totally without any justification. After hearing both sides, the petition in I.A.No.69 of 2009 was dismissed by the learned Claims Tribunal and only thereafter, the award and the decretal order, dated 1.8.2008 and made in MCOP No.19 of 2004 have been challenged in this appeal by the appellant Insurance Company. 32.Mr.R.Vijayakumar, the learned counsel appearing for the respondents 1, 3 & 4/claimants, while advancing his argument has projected the following issue for consideration of this court:- “Whether the Insurance Company can be allowed to take the plea of violation of policy by the insured for the first time in the appeal stage to avoid or exclude its liability under the policy?” 33.Admittedly, the defence of breach of a specified condition of the policy, i.e., a condition excluding the use of the vehicle, bearing the registration No.TN-59-B-1704 for hire or reward was not taken by the appellant Insurance Company at the earliest point of time. Neither the Insurance Company had taken this defence in its first counter, nor had it pleaded in its review petition in I.A.No.69 of 2009. Having failed to avail the opportunities in all the above said stages, during the pendency of claim proceedings before the learned Tribunal, whether the Insurance Company can be allowed to take this plea at the appeal stage? 34.It is settled proposition of law that the appeal is a continuation of the original claim proceedings. The insured, who is the 5th respondent herein, has not disputed the accident as well as the involvement of his car in the accident, which took place on 6.5.2003. Instead, he has contended that at the time of accident, his car was insured with the appellant Insurance Company and that the policy was in force. He, therefore, has contended that the appellant Insurance Company alone is liable to pay the compensation, if any. 35.Mr.G.Prabhu Rajadurai, the learned counsel appearing for the 5th respondent/the owner of the car, has submitted that there shall not be https://hcservices.ecourts.gov.in/hcservices/ 7 any strict rule for pleadings, but the Insurance Company ought to have been taken the plea of violation of policy, i.e., the vehicle was used for hire or reward at the time of accident, at the first instance. He has also adverted to that having been failed to avail the opportunity to take that plea, now the appellant Insurance Company could not be allowed to avail this defence to avoid its liability. 36.In order to bring more clarity on this issue, it may be quite relevant to extract the proviso to section 149(1) and (2) & (7) of the Motor Vehicles Act 1989:- “Section 149 deals with the duty of the insurers to satisfy judgments and awards against persons insured in respect of third party risks.- (1), If, after a certificate of insurance has been issued under sub-section (3) of Section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub- section (1) of Section 147 (being a liability covered by the terms of the policy) or under the provisions of Section 163-A is obtained against any person insured by the policy then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgment. (2)No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:- (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 ........................ 37.Section 149(7):- No insurer to whom the notice referred to in sub-section (2) or section (3) has been given shall be entitled to avoid his https://hcservices.ecourts.gov.in/hcservices/ 8 liability to any person entitled to the benefit of any such judgment or award as is referred to in sub-section (1) or in such judgment as is referred to in sub-section (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be. 38.On coming to the instant case on hand, Mr.K.Bhaskaran, the learned counsel appearing for the appellant Insurance Company has canvassed that the car belonging to the 5th respondent, which was insured with the appellant Insurance Company at the relevant period was a private car and in accordance with the insurance policy, a condition has been incorporated specifically excluding the use of the car for hire or reward. 39.He has also maintained that when the car on the date of accident was not covered by a permit to ply for hire or reward and it was specifically excluded for the use of hire or reward, the 5th respondent was not supposed to use the car for hire. 40.He has also added that since the 5th respondent had violated the policy condition by using the car for hire at the time of accident, the appellant Insurance Company is entitled to avail the defence, as envisaged under section 149(2)(a)(i)(a). 41.The copy of the insurance policy has been marked as Ex.P5. In this circumstance, the Insurance Company has also filed a petition along with this appeal in M.P.(MD)No.3 of 2009 to receive the policy of insurance as an additional documentary evidence on the side of the appellant. Since, the copy of the insurance policy has already been marked through the claimants, the petition in M.P.(MD)No.3 of 2009 to receive the same policy as additional documentary evidence is not necessary and hence, liable to be dismissed as infructuous. 42.In the insurance policy, it is specifically stated that:- “The Policy covers use of the vehicle for any purpose other than;- (a)Hire or Reward other than the purpose of driving tution. 43.From the above said conditions, it is thus made clear that the insurance policy, which was in force at the relevant period covers the car bearing registration No.TN-59-B-1704 for any purpose other than hire or reward. Having come forward with the definite plea that the car was used for hire in adverse to the policy condition, the burden rests upon the appellant Insurance Company to substantiate this contention. 44.R.W.2 is a private Investigator, who was appointed by the appellant Insurance Company on 26.02.2006 to investigate about the accident. 45.It is obvious to note here that the accident was taken place on 6.5.2003 and after the lapse of three years, R.W.2 was appointed as Investigator. He had submitted a report under Ex.R2 on 5.9.2006 before the appellant Insurance Company. Even in his report also, R.W.2 did not say that the car was used for hire. The appellant Insurance Company has https://hcservices.ecourts.gov.in/hcservices/ 9 not chosen to led any evidence to strengthen his contention. Under this circumstance, the question of maintainability of this appeal also arises. 46.Mr.K.Vijayakumar, the learned counsel appearing for the respondents 1, 3 & 4/claimants, in support of his contention has placed reliance upon the decision in Bachhaj Nahar vs. Nilima Mandal and others [2009-2-L.W.485]. In this case, the Honourable Division of the Apex Court has held that:- “In the absence of pleadings and an opportunity to the first defendant to deny such claim, the High Court could not have converted a suit for title into a suit for enforcement of an easementary right.” 47.It has also been held that:- “The Object and purpose of pleadings and issues is to ensure that the litigants come to trial with all issues clearly defined and to prevent cases being expanded or grounds being shifted during trial. When the facts necessary to make out a particular claim, or to seek a particular relief, are not found in the plaint, the court cannot focus the attention of the parties, or its own attention on that claim or relief, by framing an appropriate issue.” 48.On the footing of the above cited decision, it may also be quite relevant to extract the Rule 2 to Order 8 of Civil Procedure Code. 49.Rule 2 to Order 8 CPC:- “R.2.New facts must be specially pleaded:- The defendant must raise by his pleading all matters which show the suit not to be maintainable, or that the transaction is either void or voidable in point of law, and all such grounds of defence as, if not raised, would be likely to take the opposite party by surprise, or would raise issues of fact not arising out of the plaint, as, for instance, fraud, limitation, release, payment, performance, or facts showing illegality.” 50.As envisaged under Rule 2 to Order 8 CPC, if a particular plea or ground of defence raises issue of facts not arising out of the plaint, such plea or ground is likely to take the plaintiff by surprise and therefore, is required to be pleaded. 51.In the present case on hand, the plea taken by the appellant Insurance Company before this Court has taken the claimants by surprise. Had this plea was taken at the earliest point of time,