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

2. Aggrieved by the order passed by the Division Bench of the Gujarat High Court, the United India Insurance Company has come up in appeal by way of special leave. The appellant was the third respondent in a motor accident claim preferred by respondents 1 to 3 herein, who are legal heirs of one Sudhirbhai Jayrambhai Patel who died in a motor accident on 27.8.1994. Respondents 1 to 3 claimed a total compensation of Rs. 80 lacs and the Motor Accident Claims Tribunal (Special), Vadodra, passed an award for Rs. 32,50,000/- with interest at the rate of 12% per annum from the date of application till realisation. From the impugned judgment of the Tribunal dated 15.5.1999, it appears that the first respondent, the driver of the offending vehicle and the second respondent, the owner of the vehicle appeared before the Tribunal, but did not file any written statement refuting the allegations made in the petition. The Tribunal has stated that these respondents did not step into the witness box to explain the circumstances and the manner in which the actual mishap took place. It was further stated that in view of that, the Tribunal was compelled to draw an adverse inference against them. These observations have been made in paragraph 18 of the judgment of the Tribunal.  3. Before the Tribunal, the appellant Insurance Company filed a petition under Section 170 of the Motor Vehicles Act, 1988 (hereinafter to as the Act) praying that the appellant herein be allowed to contest the proceedings. That application was granted by the Tribunal by a cryptic order; Granted as prayed for. After the award was passed by the Tribunal, the appellant filed an appeal before the Gujarat High Court impleading the legal heirs of the deceased and also the driver and owner of the offending vehicle as respondents. When the appeal came up for consideration, the Division Bench was of the view that in view of Section 149(2) of the Act, the appeal under Section 170 was not maintainable, especially in view of the observations made by this Court in Shankarayya vs. United India Insurance Co. Ltd., AIR 1998 SC 2968 , and the appeal preferred by the appellant was dismissed. Aggrieved by the same, the present appeal is filed by the United India Insurance Company Limited.

Court's reasoning:
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