FA/2199/2006 1/42 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 2199 of 2006 To FIRST APPEAL No. 2204 of 2006 For Approval and Signature: HONOURABLE MR.JUSTICE H.K.RATHOD ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= UNITED INDIA INSURANCE CO. LTD - Appellant(s) Versus RUSHIKA AMRUTJI THAKORE & 2 - Defendant(s) ========================================================= Appearance : MR HASMUKH THAKKER for Appellant(s) : 1, MR VB MALIK for Defendant(s) : 1, RULE SERVED for Defendant(s) : 2 - 3. ========================================================= CORAM : HONOURABLE MR.JUSTICE H.K.RATHOD Date : 07/07/2008 ORAL JUDGMENT 1. Heard learned Advocate Mr. Hasmukh Thakkar on behalf of the appellant United India Insurance Co. Ltd. And Mr.VB Malik, learned Advocate for the respondents claimants in each appeal. These FA/2199/2006 2/42 JUDGMENT First Appeals are admitted on 13.7.2006. Today, with consent of both the learned advocates, taken up for final hearing. 2. In the present First Appeals, the appellant has challenged the order passed by Motor Accident Claims Tribunal in MACP filed by the respondents claimants under section 140 of the Motor Vehicles Act,1988. The accident occurred on 1st October,2004 at about 3.30 at Nava Mota sim near Garnala and police complaint was lodged against the driver at Khedbrahma Police Station. Respondents had received injury in the said accident, therefore, application was filed under section140 of the Motor Vehicles Act,1988 claiming amount on No Fault Liability. Tribunal has issued notice to the appellant insurance company, driver and owner of the vehicle in question. All the three respondents filed their respective replies before the Claims Tribunal. Thereafter, the Tribunal has heard the learned advocates appearing for the parties. Application was made for interim compensation claimed under section 140 of the Motor Vehicles Act, 1988 based on No Fault Liability. Respondent has produced panchanama, insurance policy, RC Book of the vehicle, injury certificate and certificate of permanent disability and relevant X-Ray on record. At the time when the application was heard by the Claims Tribunal, the Insurance Company had not raised contention FA/2199/2006 3/42 JUDGMENT that against the Insurance Company, such application under section 140 of the Motor Vehicles Act, 1988 is not maintainable. The Insurance Company has also not raised objection against having insurance policy of the vehicle in question, means, not disputed insurance policy of the vehicle in question. Therefore, the Claims Tribunal has considered relevant provisions of section 140 of the Motor Vehicles Act, 1988 and after examining the relevant documents produced on record by the respondents, came to the conclusion that the respondents are entitled for compensation based on No Fault Liability being interim measure. Therefore, accordingly, order was passed by the Claims Tribunal against all the respondents namely driver, owner and insurance company of the vehicle in question. The Tribunal has also directed to invest 70 per cent of the said amount in Nationalized Bank in Fixed Deposit Receipt and 30% of the amount is ordered to be paid to the claimant by account payee cheque. Said order was passed by the Claims Tribunal on 23rd January, 2006. Before the Claims Tribunal, an application under section 166 of the Motor Vehicles Act, 1988 was also filed by the claimants. The application under section 140 of the Motor Vehicles Act, 1988 was filed vide Exh. 5 before the Claims Tribunal on 30th October, 2004. From one accident, six motor accident claims petitions were filed from MACP FA/2199/2006 4/42 JUDGMENT No. 1200 of 2004 to 1205 of 2005. Present appeals have been filed by the appellant insurance company against the order passed by the Claims Tribunal below application Exh. 5 dated 23rd January, 2006. Matter was examined by the Claims Tribunal and thereafter, reasoned order was passed after considering the documents on record not disputed by the advocate for the appellant insurance company. Appellant Insurance company had not raised any contention before the claims tribunal about the liability and had also not raised contention that such application is not maintainable against the Insurance Company. Therefore, the Claims Tribunal has decided the application under section 140 of the Motor Vehicles Act, 1988 on the basis of the documents which are on record and granted the amount of interim compensation on the basis of No Fault Liability with a direction to the appellant insurance company to deposit the said amount before the Claims Tribunal. Thereafter, a purshis was filed by the respondents claimants before the Claims Tribunal for permission to withdraw the main Motor Accident Claim Petitions filed under section 166 of the Motor Vehicles Act, 1988 on the ground that looking to the injury and disability received by the claimants, they are not able to get more than Rs.25,000.00 from the insurance company and, therefore, they are not willing to proceed further with the main application under section 166 of the Motor FA/2199/2006 5/42 JUDGMENT Vehicles Act, 1988 and, therefore, they are filing purshis for a permission to allow to withdraw the main application. This purshis was filed on 23rd January, 2006 by the respondents original claimants wherein endorsement of “Seen” was made by the advocate for the appellant insurance company before the claims tribunal. The Claims Tribunal has permitted the claimants to withdraw the main application under section 166 of the Motor Vehicles Act, 1988. It is necessary to note that the appellant insurance company has not objected against the withdrawal of the main application under section 166 of the Motor Vehicles Act, 1988. 3. Learned Advocate Mr. Thakkar appearing on behalf of the appellant insurance company has raised the following contentions before this Court: (A) That the Claims Tribunal has committed an error of law. It was submitted that had the claimant not withdrawn the application under section 166 of the MV Act and had the claimant been successful in the application under section 166, the amount that could have been awarded based on the medical certificate produced by the claimant would be less than Rs.25,000.00. (B) That the learned Tribunal failed to appreciate that the appellant did not get an opportunity to contest the claim on the ground of age, income, FA/2199/2006 6/42 JUDGMENT disability, quantum of amount on account of withdrawal of the application filed by the opponent – claimant under section 166 of the MV Act. It was submitted that while awarding compensation, normally 50 % of the disability is awarded as a whole and if the disability at the rate of 50 per cent is considered based on the medical certificate produced by the opponent claimant, the amount that could have been awarded in the application filed under section 166 of the MV Act on being successful would be much less than Rs.25,000.00. (C) That the learned Tribunal failed to appreciate that the disability certificate has been issued almost after one year i.e. In the month of September, 2005 from the date of filing of the application under section 140 of the MV Act though as per the injury certificate issued in November, 2004, the claimant was required to take rest only for four to six weeks. 4. He relied upon the decision of the Hon'ble apex court in case of YALLWWA (SMT.)AND OTHERS VERSUS NATIONAL INSURANCE CO. LTD. AND ANOTHER reported in (2007) 6 SCC 657. Relying upon the aforesaid decision of the apex court, he emphasized his submission that the application made by the claimant under section 140 of the MV Act 1988 makes the owner liable but not the insurer per se. When a statutory liability has been imposed FA/2199/2006 7/42 JUDGMENT on the owner, same cannot extend the liability of an insurer to indemnify the owner although in terms of the insurance policy or under the Act, the insurer would not be liable therefor. Learned Advocate Mr. Thakkar submitted that when application under section 166 of the Motor Vehicles Act, 1988 is withdrawn by the claimants, then, how such amount can be recovered from the owner if the application under section 140 of the MV Act, 1988 is not maintainable against the insurance company. He also submitted that if the application under sec. 166 is decided, then, this much amounts are not available to the claimants, meaning thereby that more than that was granted by the claims tribunal to the claimants under the No Fault Liability and, therefore, orders passed by the Claims Tribunal are erroneous and contrary to the apex court decision and, therefore, same are required to be quashed and set aside. 5. On the other hand, learned Advocate Mr. Malik appearing for the respondents claimants submitted that such contention was not at all raised by the insurance company before the claims tribunal when the applications under section 140 of the MV Act, 1988 were decided by the claims tribunal. As per his submission, such contention has been raised by the appellant insurance company for the first time before this court. He also submitted that the documents FA/2199/2006 8/42 JUDGMENT which were produced by the respondents have not been disputed by the insurance company, meaning thereby, that insurance policy produced by the respondent was not in dispute and not denied the liability arising from the insurance policy in respect of the vehicle in question. He also submitted that when the withdrawal purshis was filed by the respondent in the main application under section 166 of the MV Act, 1988, at that time also, advocate for the insurance company had not raised any objection but, on the contrary, endorsement of “seen” was made on such purshis for withdrawal of application under sec. 166 of the MV Act, 1988 without raising any objection and in view of that, the claims tribunal has granted permission to withdraw the main application under sec. 166 of the MV Act, 1988. He submits that now the appellant insurance company is raising such a contention before this court for the first time having objection against the withdrawal of the main application under section 166, therefore, it is not open for the insurance company to raise such contention before this court when same was not raised by the insurance company before the claims tribunal. Learned Advocate Mr. Malik also submitted that the application under section 140 of the MV Act, 1988 is an independent proceeding and claimants are entitled for the amount under section 140 of the Act irrespective of the fact whether application under section 166 of the FA/2199/2006 9/42 JUDGMENT Motor Vehicles Act, 1988 has been filed by the claimants or not. In support of this contention, he relied upon the decision of the Division Bench of this Court in case of NEW INDIA ASSURANCE CO. LTD. V. BABUBHAI PURSHOTTAMBHAI HARIJAN & ORS. reported in 2006 (1) GLH 695 and submitted that the decision of the Division Bench of this Court has been considered by the Full Bench of this Court in case of UNITED INDIA INSURANCE CO. LTD. V. KADVIBEN UDABHAI RATHWA AND ANOTHER reported in 2006 ACJ 2019. Therefore, he submitted that the withdrawal of application under section 166 of the Motor Vehicles Act, 1988 has no adverse effect on the right of the respondent to claim compensation on the principles of No Fault Liability under section 140 of the Motor Vehicles Act, 1988. He, therefore, submitted that there is no substance in the present appeals and same are liable to be dismissed. 6. I have considered the submissions made by both the learned advocates. I have also perused the order passed by the Claims Tribunal under section 140 of the Motor Vehicles Act, 1988. I have also perused the Record and Proceedings called by this court and referred to it and relied upon the same. 7. Looking to the Records and Proceedings of the main application, Insurance Company, driver and FA/2199/2006 10/42 JUDGMENT owner of the vehicle in question have filed separate replies before the Claims Tribunal. Respondent has produced original documents before the Claims Tribunal. Respondent has produced complaint, panchanama of the accident, injury certificate and certificate of permanent disability and copy of charge sheet filed against the driver and copy of X-Ray and insurance policy of the vehicle in question. Said documents have not been disputed by the Insurance Company. Said documents have not been denied by the insurance company. Vehicle in question was insured with the appellant insurance company. Therefore, Insurance Company is having statutory liability for the payment under section 140 of the Motor Vehicles Act, 1988 based on No Fault Liability. Before the Claims Tribunal, the Insurance Company has not disputed the liability because the policy was on record. Learned Advocate Mr. Thakkar has relied upon the decision of apex court as referred to above where only question examined by the apex court was, whether the order passed under section 140 of the Motor Vehicles Act, 1988 is appealable one or not. This aspect has been discussed by the apex court in detail. The apex court in the said decision held that when a statutory liability has been imposed upon the owner the same cannot extend the liability of an insurer to indemnify the owner although in terms of the insurance policy or under the Act, the FA/2199/2006 11/42 JUDGMENT insurer would not be liable therefor. Meaning thereby, the insurance company must have to satisfy the Claims Tribunal that in terms of the insurance policy, the insurance company is not liable to make the payment to the claimant but this is not a case of the insurance company before Tribunal and before this Court. Opportunity was given by the Tribunal to the Insurance Company while issuing notice. At that time, it was open for the insurance company to plead and prove that it is not liable at all in terms of the policy of insurance. When the objections are raised by the Insurance Company in regard to its liability, the Tribunal is required to render its decision upon the issue which would attain the finality and thus, same would be an award within the meaning of section 173 of the Motor Vehicles Act, 1988 but in this case, after receiving notice issued by the Claims Tribunal for claiming compensation by the respondents under the No Fault Liability, the Insurance Company has not pleaded and proved that it is not liable at all. It is not case of insurance company that owner has committed breach of the condition of policy. No such defence was raised and it has also not raised contention that Insurance Company is under no obligation whatsoever in terms of section 147(2) of the Act. These facts are very much clear from the order of the Tribunal. These facts are very much clear from the order of the Claims Tribunal FA/2199/2006 12/42 JUDGMENT passed under section 140 of the Motor Vehicles Act, 1988. Detailed reply was filed by the Insurance Company against the main application but not raised any contention while deciding the application Exh. 5 filed by the respondent claiming compensation on the basis of No Fault Liability, therefore, relevant discussion made by the apex court in the aforesaid decision in YALLWA (SMT.) AND OTHERS VERSUS NATIONAL INSURANCE CO. LTD. AND ANOTHER (supra) is reproduced as under: “Held : Section 140 makes the owners of the vehicles liable but not the insurer per se, irrespective of the fact whether a claim petition is required to be adjudicated under Chapter X or Chapter XII of the Act, it is permissible for the insurer to raise a defence in terms of section 149(2) of the Act. One of the defences available to the insurer is breach of conditions specified in the policy. When such a defence is raised, the Tribunal is required to go into the said question. Section 140 of the Act does not contemplate that an insurance company shall also be liable to deposit the amount while it has no obligation whatsoever in terms of Section 147 (2) of the Act. (paras 10 and 11) FA/2199/2006 13/42 JUDGMENT Determination of the liability of the insurance company stands on a different footing from that of the owner under section 140. When a statutory liability has been imposed upon the owner the same cannot extend the liability of an insurer to indemnify the owner although in terms of the insurance policy or under the Act, the insurer would not be liable therefor. In a given case, the statutory liability of an insurance company, therefore, either may be nil or a sum lower than the amount specified under section 140 of the Act. Thus, when a separate application is filed in terms of section 140 of the Act, in terms of section 168 thereof, an insurer has to be given a notice in which event, it goes without saying it would be open to the insurance company to plead and prove that it is not liable at all. When objections are raised by the insurance company in regard to its liability, the Tribunal is required to render a decision upon the issue, which would attain finality and, thus, the same would be an award within the meaning of section 173 of the Act. It is even possible for the owner of the vehicle to raise a contention that his vehicle being not involved in the FA/2199/2006 14/42 JUDGMENT accident, he is not liable to pay any amount in terms of section 140 of the Act. [Paras 16, 17, 19 and 10] There can be more than one award, particularly when a sum paid may have to be adjusted from the final award. Keeping in view the provisions of section 168 of the Act, there cannot be any doubt whatsoever that an award for enforcing the right under section 140 of the Act is also required to be passed under section 168 only after the parties concerned have filed their pleadings and have been given a reasonable opportunity of being heard. A claims tribunal, thus, must be satisfied that the conditions precedent specified in section 140 of the Act have been substantiated, which is the basis for making an award. [Para 18] Further Chapter X of the Act provides for no forum for enforcement of the right under section 140. The only forum available is in Chapter XII. The right under section 140 can only be enforced under section 168 as an award. The amount directed to be paid even in terms of Chapter X of the Act has as of necessity, in the event of non compliance with directions, to be FA/2199/2006 15/42 JUDGMENT recovered in terms of section 174 of the Act. There is no other provision in the Act which takes care of such a situation. [Paras 13 and 19] Thus an order of the Tribunal awarding compensation under section 140 of the Act is appealable under section 173 as it amounts to an award under section 168.” 8. In view of the observations made by the apex court, the contention raised by the learned advocate Mr. Thakkar that the application Exh. 5 under section 140 of the Motor Vehicles Act, 1988 is not maintainable against the Insurance CO. cannot be accepted and same is, therefore, rejected as no such contention was raised by the Insurance Company before the Claims Tribunal and even apex court has also not decided accordingly but liberty was given to the insurance company to raise defence in terms of section 149 sub section (2) but the insurance company has not disputed the legal obligation in terms of section 147 (2) of the Motor Vehicles Act, 1988. This is the basic difference between two sections as decided by the apex court in the aforesaid decision. Apex Court has made it clear that even while raising contention against the application under section 140, the Insurance Company is entitled to raise defence in terms of FA/2199/2006 16/42 JUDGMENT section 149(2) and to raise the contention that the company has no legal obligation whatsoever to do so in terms of section 147(2) of the Motor Vehicles Act, 1988 but in the case on hand, before the Claims Tribunal, no such contention was raised by the Insurance Company and, therefore, according to my opinion, this decision is not helpful to the submission made by the learned advocate Mr. Thakkar because the insurance company has not disputed the legal obligation in terms of section 147(2) of the Motor Vehicles Act, 1988 and, therefore, the Insurance Company is under legal obligation to deposit the compensation which has been granted by the Claims Tribunal under section 140 of the Motor Vehicles Act, 1988 based on no fault liability in favour of the claimants. 9. Next contention raised by the learned advocate Mr. Thakkar is to the effect that the application under section 166 of the Motor Vehicles Act, 1988 is also withdrawn by the respondent. No doubt, it is made clear from the record that no such objection was raised by the insurance company before the Claims Tribunal when application for withdrawal was filed by the claimants before the Claims Tribunal. Advocate for the insurance Company has not raised any objection against the said application for withdrawal but has made endorsement of “Seen” on the said application. Apart from that, in UNITED INDIA INSURANCE CO. LTD. VERSUS KADVIBEN UDABHAI FA/2199/2006 17/42 JUDGMENT RATHWA AND ANOTHER reported in 2006 ACJ 2019 Full Bench of this Court has considered this aspect that while getting interim compensation under section 140 of the Motor Vehicles Act, 1988, is it necessary for the claimant to file application under section 163A or 166 of the Act or not. Answer given by the Full Bench of this Court was that it is not necessary. It has been held that in absence of an application under section 163A or 166 of the Motor Vehicles Act,1988, application under section 140 of the Motor Vehicles Act, 1988 being independent, is maintainable. Relevant discussion made by the Full Bench of this Court after considering the Division Bench decision as referred above reported in 2006 (1) GLH 695, made following observations in para 21 to 24: “21. The Division Bench decision (Coram: Bhawani Singh C.J. And Abhilasha Kumari J.) in Babubhai Purshottambhai Harijan case(supra) deals with this question extensively maintaining the view of this Court in Mithakhan Dinakhan Notiyar, Mahendrabhai Kalyanjibhai, Munshiram and Maganlal Hirabhai Patel cases (supra). It has been said that: “10. The object behind these Sections is to speed up payment of compensation on “no fault” principle. The victim(s) of accident are, under these beneficial provisions, entitled FA/2199/2006 18/42 JUDGMENT to get the minimum statutory relief expeditiously. Speed for expeditious disposal and payment of compensation is the essence. Otherwise, injustice and breach of legislative intent is the consequence. Section 140 is a piece of legislation intended to provide immediate relief to the victim(s). This provision is clearly a departure from the usual common law principle that claimant should establish negligence on the part of the owner or driver of the motor vehicle before claiming compensation for the death or permanent disablement caused on account of the use of a motor vehicle [See: Gujarat State Road Transport Corporation, Ahmedabad v. Ramanbhai Prabhatbhai and another (AIR 1987 SC 1690)]. The claimant is required to state that death or permanent disablement has resulted from an accident arising out of the use of a motor vehicle or motor vehicles. He is not required to prove it like claim of fault liability under Section 166. Sub- section 2 of Section 141 provides that claim for compensation under Section 140 in respect of death or permanent disablement shall be disposed of as expeditiously as possible and where compensation is claimed in respect of such death or FA/2199/2006 19/42 JUDGMENT permanent disablement under Section 140 and also in pursuance of any other