^-.. ' l^ IN THE HON*BLE HIGH COURT OF CHHATTISGARHAT BILASPUR W.P.227NO. ^-[^ /2009 PETITIONER Bajaj Allianz General Insurance Company Limited, Through Branch Manager, Shiv Mohan Bhavan, Vidhan Sabha Marg, Pandri, Raipur Tahsil Ss Distt. Raipur (C.G.) {Insurer} RESPONDENTS VERSUS 1) Janak Kori S/o Maniram Kori, aged aboat 40 years, R/o Village Sendari, Post Koni, Than Koni, Tahsil & District Bilaspur (C.G.) {Claimant} / 2) Santosh Kumar Shyam S/o Smmar Singh, aged about 25 years, R-/o- Village Sis Ghorkipara, Thana Ratanpur, District Bilaspur (C.G.) {Driver} 3) Rakesh Kumar Agrawal S/o Not Known to the Petitioner, R/o (M.R.B.L.) T.P. Nagar, Korba District Korba (C.G.) {Owner} ,f 4) Public Utility Permanent Lok Adalat, Bilaspur (C.G.) WRIT PETITION UNDER ARTICLE 227 OF CONSTITUTION OF INDIA ..s^<^ A^"^" ^yy ^•'^y?: ^' V v^^ HIGH COURT OF CHHATTISGARH AT BILASPUR W.P. (2271 No. 292/2009 PETITIONER Bajaj AUianz General Insurance Company Limited Versus RESPONDENTS Dasru Patel and others W.P. (227t No. 410/2009 PETmONER Bajaj AUianz General Insurance Comparay Limited Versus RESPONDENTS Janak Kori and others SBs- HON*BLB SHRI N.K. AGARWAL. J PRBSENT:- Shri Sachin Singli Rajput, Advocate, for fhe petitioner. Shri A.V. Sridhar, Adv. for the respondent No. 1. Shri Santosh Tiwari, Adv. for fhe respondent No. 3. Shri Akhil Agrawal, Panel Lawyer for the State. ORAL ORDER (28-4-2011) !; 1. This order shall govem disposal of above two writ petitions. 2. Bajaj AIUanz General Insurance Company Limited who is petitioner in botli the writ petitions is challenging jurisdiction of Permanent Lok Adalat to entertain and adjudicate claim petitions under the Motor Vehicles Act, 1988 (briefly <the Act of 1988'). ; 3. For proper appreciation of legal issues involved in the case, the facts in W.P.(227) No. 292/2009 is set down hereunder:- Respondent N0. I mstituted a claim petition before the Permanent Lok Adalat, Bilaspur uilder Section 22-A of the Legal Services Auftiority Act, 1987 (briefly <the Act of N ^^ss^ ••^ 1987') claimiag amount of Rs. 5,50,000/- as compensation for fhe injiiries siistained by him in the motor accident dated 1-3-2008 against fhe driver, owner and petitioner i.e. insurer of the truck beai:ing registration No. CG07 C/7247. After rcceipt of notice, fhe petitioner/insurance company 'raised a preliininary objection challenging jurisdiction of Permanent Lok Adalat to entertain and adjudicate fhe claim under the Act of 1988. Vide tmpugned order, the Permanent Lok Adalat dismissed the objection raised by fhe petitioner. Hence this petition. 4. Shri Rajput, learned counsel for the petitioner would submit, power is not vested with respondent No. 4 to entertain and adjudicate and award compensation in respect of injuries sustauied m an accident. Accident is a tortuous act and in order to obtain compensation, case has to be filed before motor accident claims tribunal specially constituted for the purpose under Section 165 of the Act of 1988. He would furfher submit, leamed Permanent Lok Adalat has no jiirisdiction to pass any order or award where parties do not agree for compromise r.'l or settlement of fheir dispute. It was further contended there is no privity of contract between respondent No. 1 and the petitioner. Hence it cannot take benefit of Section 22-A of the Act of 1987. Respondent No. 1 is a third party to the contract of insurance between the pefitioner and the respondent No. 3. Hence provision of Section 22 of the Act of 1987 would not apply. l s 5. On the ofher hand, Shri S.K. Tiwari, leamed counsel appearing for the respondent Nq. 3 would support the order unpugned. 6. I have heard leamed counsel for fhe parties and perused the order impugned. ] ^ t^N^^^ 7. The core question arises for deci^ion maldng is whefher the Permanent Lok Adalat constituted under Sectk>n 22-B of the Act of 1987 has jurisdi^tion toi entertain and adjudicate a motor accident coi(ipensation claim iinder the Act of 1988. ^| 8. Under Chapter Y[ of Act of 1987, ;Lok Adalats have been conferred jurisdiction to resoWi any matter whkdi is already pending in the court 01" which may be brought before tiie court except fhe cases or matters relating to an offence not compoundable under any law by means of amicable settlemeat. ! 9. Chapter YI-A of the Act was substituted by amendment of fhe Legal Services Authorities Act brought about in fhe year 2002. Section 22A(a) defines Permanent Lok Adalat as one established under sub-seGUon (1) of Section 22B. Section 22A(b) defmes the PuMc Utffity Services as fbUows:- ^ (i) transport service for the .earriage of passengers or goods by air, road or water;?or (ii) postal, telegraph or telephone sen/ice; or (iii) supply of power, light or water to the public by any establishment; or (iv) system of public conservanoy or sanitation; or (v) service in hospital or dispensary; or (vi) insurance servlce. ^ 10. Section 22-B provides for th^ estabUshment of a Permanent LokAdalat Section 22B(1) reads as foUows:- "22B(1) Notwithstandmg anything contained in Section 19, the Central Authority or as the case may be, eveiy State Authority^; shall, by notificatk>n, estabUsh Permanent Lok Adalats at such places and for exercising such jurisdiction in respect of one or more public utility services and for such areas as may be specified in the notification>>. 4 11. Section 22C provides for cogiiizance of cases by Permanent Lok Adalat. Sectid^ 22C provides that Permanent Lok Adalat should permanently settle the points in dispute between the parties and try to effect concUiation between them. But a dlstinguishtag feature tn so far as the powers of the Pennanent Lok Adalat is concemed is what flows out of g^ction 23C(8) and the saine reads as follows: "22C(8) WIiere the parti.es fail to reach at an agreement under| sub-sectkin (7), the Permanent Lok Adalat shall, if the dispute does not relate to any ofience, decide the dispute. | 12. Section 146 Of M.V. Act under Chapter XI mandates ttiat no person shaU use, except as a passenger, or cause or allow any other person to use, a mptor vehicle in a public ^•} place, unless fhere is in force in relation to the use of ftie vehicle by that person or that other person, as the case may be, a policy of insurance;! complying with the requirements of fhis Chapter. Sectibn 147 offhe M.V. Act deals with the requirement of policies of insiirance and limits of liability. Section 149 of;;M.V. Act shows that insurer is entitled to defend the action on the grounds enumerated in sub-section (2). Section 165 of M.V. Act found in Chapter XII of M.V. Act, 1988 provide for constitution of Claims Tribunal. A State Government may, by notification in the Official Gazette, constitute one or more Motor Accidents Claims Tribunals for such area as may be specified in fhe notification for the purpose of adjudicattng upon claims for compensation m respect of accidents mvolving the death ct,1 or bodily injury to, persons aristng out of the use ^bf motor vdtudes, or damages to any property of a third party SQ adsing or both. Under Sectkai 166 of M.V. Act, app]icatk>n for compensation coiild be lodged. Seietion 167 of the Motor Vehteles Act, gives an option regardtng daims for compensation in certaln cases. It provides that ''%<",.,. ^^^^s^-2-.^ -^^m^^> notwithstanding anything contaiiied ia the Workn:ien?s Compensation Act, 1923, ,where te death of, or bodily tnjury to, any person gives cise to a claim fbr compensadon under fhis Act ;|and also under the Workmen's Compensation Act, 1923, the person entitled to compensation may without prqjudice to the provisions of Chapter X claim such compeilsatkan under eifher of those Acts but not under both. Aword could be passed by the Motor Accident Claims Triburial under Section 168 of M.V. Act. The procedure that is cdntemplated for holding any inquiry under Section 168 of M.V. Act is provided under Section 169 of the M.V. Act which would mandate that a claiin petition shaU follow rules that may be made and follows such summaiy proceedings as it thinks fit. The uisurer could be impleaded as party to fhe proceedings under Section 170 ofM.V. Act Section 173 of the M.V. Act, 1988 would deal witti the provisions relating to appeals that could be filed against fhe judgments and awards passed by the motor Accident Claims Tribunal. Section 175 of the Motor Vehicles Act, bars the jurisdiction of the Civil Courts tc^ go tnto the clajm for compensation tn a motor vehicld'accident. It states that where any claims Tribunal has been constituted for any area, no Civil Court shall have jurisdiction to entertaln any question relating to any claim for compensation which may be adjudicated upon by the Glaims Tribunal for that area, and no mjunctk^n in respectl of any actkm taken or to be taken by or before the Clauris Tribunal in respect of the claim for compensatk>n shall t>e granted by fhe Civil Court. Section 176 of M.V. Act ^ould mandate grant of power to State Govemment to frame rules for fhe purpose of canying uito effect fhe provisions of Section 165 to Section 175 ofM.V. Act. ^ £-i 13. The Supreme Court tn the case of National Insuraace Company Ltd. v. Nicoletta Rohtagi, reported in {(2002) 7 ^^ .^^ w-w<<, '^^ #.^. ;?•;' SCC 456J, mterprctmg fhe prdvfsipns of Motor Vehicles Act and the intention of the legislature was to protect fhe thtrd party rights and not that of ftle msurer at paragraph 13 has held as under: i "Under Section 96(2) of 1939 ^ct which corresponds to Section 149(2) of 1988 Act, ^n insurance company has no right to be a party to ah action by the injiired person or dependants of deceased against the tnsured. However, the said provisions gives in the insurer the right to be made a party to the case and to defend it It is therefore, obvious that tfae said right is a creature of tiie statute and its content depends on the provisions of the statute. After fhe insurer has been inade a party to a case or claim the questk>n artses what are the3defenses available to it under the Statute. The language employed in enacting sub-section (2) of Section 149 appears to be platn and smiple and there is no ambiguity m it. It shows fhat when an insurer^is ioipleaded and has been given notice of the case, he is entitled to defend the action on the grounds eiiumerated in fhe sub- section, namety sub-sectton s(2) of Sectk>n 149 of 1988 Act and no other ground is avaUable to him. The insurer is not aUowed to eontest fhe claiin of the injured or heirs of the deceased on other ground which is avaUable to an insured or breach of any ottier conditions of the policy wluch do not find place insub-section (2) of Sectionrfl49 of 1988 Act. If an insurer is permitted to contest the claim on other grounds it would mean adding more grounds of contest to the insurer ftian what the statuette has specifically provided for. 14. The statutory Uability of the Insurance Company to satis^ the third parties, i.e., a party who is not a party to a contract of insurance is found ui Section 149 of M.V. Act. ^f^^'t^ It casts a duty on the insurer to satisfy the judgments and awards against persons insured in respect of third party risk. The heading of fhe said seOtion is significant. The duty is to satisfy judgment and awards and not the claim of the third parties. tf Uie claim of the third party is adjudicated and ttie judgment and award is passed, then, fhe insurer shall pay to the person entitied to the benefit of fhe decree, any sum not exceedmg fhe sum assured payable thereunder, as ifhe were the judgment debtor, in respect of the UabiMty, together wifh any amount payable in respect of the costs and any si.im payable in respect of interest on that sum by virtue of atiy enactment relating to interest on judgments. So the condition precedent for such payment by the insurer is the passing of fhe judgment and award or decree. TiU such time, fhere is no Uability on the insurer under the Motor Vehicles Act. Sub- section (2) of Secdon 149 provide§that as the insurer has to pay the amount awarded in tlie judgment or award, the insurer shall be made party to such proceedings before the commencement of ftie proceedings. Once the tnsurer is made party to such clami against the insiired, the insurer has been given the ri^ht under the aforesaid provisions to defend fhe action on any of fhe grounds mentioned therein. The grourids set out ia the said provision are breach of a specified condition of the policy or the policy being void on fhe ground that it was obtained by non-disclosure of material fact or by represenfation of fact which was false m sum material particulars. This is a defence against fhe insured aad faot against the clatmant. However, Section 170 makes it clear that in the course of any enquiry, on such claim petition, if tiiere is collusion between the person making th!e claim and the person agauist whom the claim is made, or the person against whom the claim is made has failed to contest fhe claim, fhe insurer has been conferred'"Ifae right to contest the .,^^. "%. •"fS^ 'J 'f^'.^^r .^y '':<Si%a ^m^:w^ claim on aU or any of the groiinds fhat are avaitable to the person against whom fhe claim has been made. I.; 15. The Supreme Court in. case of Oriental Insurance Co. Ltd. v. Premlata Shukla, [(2007) 13 SCC 476, has held m para 9 and 10 of its judgment as under: ^ "9. Where an accident occurs owing to rash and negligent driving by the driver of ftie vehicle, resultin.g in sufferance of injury or death by any third party, the driver would be liable to pay compensation therefor. Owner of the vehicle in temis of the Act also becomes liable luider the 1988 Act In fhe event vehicle is insured, which in the case of a third party, having regard to sub-section (2) of Section 147 of the Act, is mandatoiy in character, the insurance cbmpany would statutorily be enjoined to?{ 'indemmfy the owner. 10. The insurer, however, would be liable to reimburse the insured to tlie extent of the damages payable by thej?owner to the claimants subject of course to the limit of its liability as laid down in the Act or the contract of insurance. Proof 6f rashness and negligence on the part of the driver of the vehicle, is therefbre, sine' qua non fbr maintaining an application under Sectk>n 166oftheAct." 16. Therefore under the provisions of the M.V.C. Act, the clatm has to be preferred against the insured and fhe driver. Insurance Company is also added as a party by virtue of Section 149(2) of the Ac^t. No claim against fhe Insurance Company is maintainat?le without the owner of the vehicle or the driver of the vehicle being made a party "T^^^i^" .^' ...^ -^. .^y^>, s? '^"'"SKSh. ^ ,^,^—^3\ ^.j^y ~^^^^r' to the proceedings. Whereas the c]aim for compensation is validly maintainable against the insured and the driver without maMng the Insurance Company, a party. The Tribunal constituted under the; MVC Act has been conferred the jurisdiction to entertain and adjudicate such clauns. But, ftie Permanent Lok Adalat constituted under the Act has jurisdiction to entertain, conciliate and if it fails adjudicate a claim, only against a public utility service. It cannot entertain andl adjudicate any cdaim against a private individual like the insured and the driver. The dispute should be between a public utility service and any party to the said dispute. Therefore, a dispute with reference to Insiirance service necessarily means the claim is against the insurance company. The claim for compensatk>n fbr the deafh of a victim of a road accident or for fhe injiiry sustained in an accident cannot be characterized as petty claims. If is a substantial clatm. The Parliament has enacted the Motor VehiclesMct, 1988 specially constituting fhe Tribunal to adjudicate such claims and has specifically excluded the jurisdiction of the CivU Courts to entertaui such claims. A statutory appeal is provided agatnst such adjudicatioh to the Hon'ble Hi^i Court. Normally, such claims are decided on fhe basis of evidence recorded, both oral and dociimentaiy. The Permanent Lok Adalat is broadly' meant to decide petty cases. When the conciliation fails, the Permanent Lok Adalat has been vested with the power to decide the case on merits. However, no appeal is provided against such adjudicatkai and the award passedlby the Permanent Lok Adalat has been made fmal. It is in this back ground as is clear from the aforesaid statutory provisions the claims for compensatmn under the MotoriVehicles Act is not prindpally against the public utiliity sendces but against the insured and fhe driver of the vehicle and only in the 1 1 ^•'. "%'^ '•^:. b ^^.^^^ event of the judgment/award or decree is passed, the Insurance Company is liable to pay the said amount. 17. In view of above, in the considered opinion of this Court, the Permanent Lok Adalat constityted under Section 22-B of fhe Legal Services Aufhorities Act, 1987 has no jiirisdiction to entertain aad adjudicate the motor accident compensation claim under fhe Motor Vehicles Act, 1988, 18. For the reasons mentioned hereinabove, fhe writ petitions are aUowed. The impugned orders are quashed. 19. All the claims preferred by the claimants are rejected with liberty to them to prefer claim before motor accident claims tribunal constituted under Section 165 of fhe Motor Vehicles Act, 1988. 20. Parties to bear their own costs. 21. High Court registry is directed to ^end a copy of this order to all fhe Permanent Lok Adalaf; in the State for thetr guidance. !" Sd/- N.K. Agarwal Judge