Case: United India Insurance Co. Ltd Vs. Jyotsnaben Sudhirbhai Patel

the appeal need not be dismissed and the insured may proceed with the appeal. This Court stated as under: Thus, the decision of this court in the case of Chinnama Gerorge can be of no avail to the appellant and we do not find any merit in the submission that joint appeal by the insurer as well as the insured was not maintainable. In such an eventuality, the course which a Court should adopt is as noticed in the case of Narendra Kumar to delete the name of the insurer from the cause title and proceed with the appeal of the insured and decide the same on merit. 10. The lone dissenting view was expressed by this Court in United India Insurance Co. Ltd. vs. Bhushan Sachdeva & others (2002) 2 SCC 265 . There, it was held that it is open to the Insurance Company to invoke the right under Section 173 of the Act and maintain an appeal against the award made by the Tribunal. It was held that the insurer shall be treated as a person aggrieved by the award as the amount of compensation is to be paid by the insurance company. The Court also went on the observe that failure to file an appeal by the insurer would amount to failed to contest and therefore, the Insurer can maintain an appeal under Section 173 of the Act. 11. The view taken in the above decision was not accepted by a three Judge bench of this Court in National Insurance Co. Ltd. Chandigarh vs. Nicolletta Rohtagi and others (2002) 7 SCC 456, which considered the question elaborately and held that the right of appeal is not an inherent right and as the Insurance Company is permitted to contest only on the grounds stated in Section 149(2) of the Motor Vehicles Act, the insurer cannot file an appeal on any other ground, except in accordance with the procedure prescribed under Section 170 of the Act. In that case, this Court observed as follows: The aforesaid provisions show two aspects. Firstly, that the insurer has only statutory defences available as provided in sub-section (2) of Section 149 of the 1988 Act and secondly, where the tribunal is of the view that there is a collusion between the claimant and the insured, or the insured does not contest the claim, the insurer can be made a party and on such impleadment the insurer shall have al defences available to it. Then comes the provision of Section 173 which provides for an appeal against the award given by the Tribunal Under Section 173, any person aggrieved by an award is entitled to prefer an appeal to the High Court. Very often the question has arisen as to whether an insurer is entitled to file an appeal on the grounds available to the insured when either there is a collusion between the claimants and the insured or when the insured has not filed an appeal before the High Court questioning the quantum of compensation. The consistent view of this Court had been that 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 vehicle. 12. In view of the aforesaid decisions on the point and on a consideration of the relevant provisions under the Motor Vehicles Act, it is plain and clear that the Insurance Company can contest the claim preferred before the Tribunal only on the statutory grounds prescribed under Section 149(2) of the Act, but, if there is collusion between the person making the claim and the person resisting the claim or if the person against whom the claim is made has failed to contest the claim, the Insurance Company can step in and seek permission of the Tribunal and make a prayer for getting itself impleaded as a party to the proceeding and the insurer so impleaded can then contest the proceeding on grounds other than the grounds enumerated in sub-section 2 Section 149 of the Act. This is an enabling provision in the event of a collusion between the claimant and the insured or the tortfeaser. 13. In the instant case, the Insurance Company was impleaded as third respondent. The driver and owner of the vehicle, though appeared before the Tribunal, did not contest the proceedings. They did not file the written statement nor did they choose to give evidence before the Tribunal. Admittedly, the appellant filed an application under Section 170 of the Act seeking permission of the Tribunal to contest the proceedings giving the necessary details. The award passed by the Tribunal also evidently shows that pursuant to this permission, the counsel for the appellant-Insurance Company cross-examined the witnesses produced by the claimant to prove the negligence of the offending vehicle. Unfortunately, however, the Tribunal, while passing its orders on the petition filed under Section 170 of the Act only stated that the prayer was granted, though the mandate of Section 170(b) of the Motor Vehicles Act states that the Tribunal while passing an order shall record its reasons. This Court in Shankaravvas case (supra) had emphasised this aspect. But it is very much evident in this case that the driver and the owner of the motor vehicle did not file the written statement and failed to contest the proceedings. The Tribunal could have merely recorded that fact while allowing the application. In a situation contemplated by clause (b) of Section 170, nothing more was required than recording that indisputable fact. For failure to do so, the appellant shall not suffer prejudice. Therefore, the appellant-Insurance Company was justified in contesting the proceedings on the grounds other than those enumerated under sub-Section (2) of Section 149 of the Act, pursuant to the permission granted by Court. For the same reason, the Insurance Company can be legitimately considered to be person aggrieved within the meaning of Section 173 of the Act. 14. Having regard to the above facts,

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]13. In the instant case, the Insurance Company was impleaded as third respondent. The driver and owner of the vehicle, though appeared before the Tribunal, did not contest the proceedings. They did not file the written statement nor did they choose to give evidence before the Tribunal. Admittedly, the appellant filed an application under Section 170 of the Act seeking permission of the Tribunal to contest the proceedings giving the necessary details. The award passed by the Tribunal also evidently shows that pursuant to this permission, the counsel for the appellant-Insurance Company cross-examined the witnesses produced by the claimant to prove the negligence of the offending vehicle. Unfortunately, however, the Tribunal, while passing its orders on the petition filed under Section 170 of the Act only stated that the prayer was granted, though the mandate of Section 170(b) of the Motor Vehicles Act states that the Tribunal while passing an order shall record its reasons. This Court in Shankaravvas case (supra) had emphasised this aspect. But it is very much evident in this case that the driver and the owner of the motor vehicle did not file the written statement and failed to contest the proceedings. The Tribunal could have merely recorded that fact while allowing the application. In a situation contemplated by clause (b) of Section 170, nothing more was required than recording that indisputable fact. For failure to do so, the appellant shall not suffer prejudice. Therefore, the appellant-Insurance Company was justified in contesting the proceedings on the grounds other than those enumerated under sub-Section (2) of Section 149 of the Act, pursuant to the permission granted by Court. For the same reason, the Insurance Company can be legitimately considered to be person aggrieved within the meaning of Section 173 of the Act