[2008] 11 S.C.R. 714

-+ A .,

SAMUNDRA DEVI AND-ORS.

NARENDRA KAUR AND ORS. (Civil Appeal No. 4748 of 2008)

AUGUST 1, 2008

[S.8. SINHA AND CYRIAC JOSEPH, JJ.] ,..

Motor Vehicles Act, 1988 - ss. 149, 166 and 170:

Accident between two vehicles - Causing death of a perc son - Compensation claim - Driver of offending vehicle did not possess a valid driving license - Ori that ground, Tribunal held that there was breach of insurance policy in respect of the offending vehicle, and consequently, the insurer was not liable to reimburse the owner of, the offending vehicle, the 0 amount payable by him by way of compensation - Claimants filed appEJ, al contending that the insurer also ought to be made

~- liable to pay compensation - High Court held the insurer jointly and se_vrally liable and gave it liberty to recover the amount of cpinpensation from owner of the vehicle, but considering

E the contention raised before it by the insurer that in the event it was held liable to reimburse the owner of the vehicle, it was entitled to contest the quantum of compensation as being excessive, reduced the quantum of compensation - lnterference of High Court with regard to quantum of compensation -

F Challenge to - Held.· Ordinarily and subject to just exceptions, the insurer would have no right to question the quantum of compensation in absence of any leave having been granted

)'-

in its favour in terms of s. 170 - In the instant case, no leave was obtained in terms of s.170- Or.41, r.33, CPC has limited application and was not applicable - High Court could not have G considered contention raised by insurer which was not available to it in law - It erred in issuing the impugned directions, despite noticing that no appeal was filed by owner or driver of +" the offending vehicle as also the insurer thereof - Code of

Civil Procedure, 1908 - Or.41, r.33.

H 714

SAMUNDRA DEVI & ORS. v. NARENDRA 715

KAUR & ORS. ~

Truck owned by Respondent No.1 and at the relevant A time driven by Respondent No.2 met with accident with a --" car. The truck was insured with Respondent No.3. The j person seated in the car died as a result of the injuries . sustained in the said accident. The car was also damaged.

Appellants filed compensation claim under s.166 of B ....

the Motor Vehicles Act, 1988. The Accident Claims Tribu-

--\ nal inter alia held that Respondent No.2 did not possess a valid and effective driving licence and, therefore, breach of policy of the contract of insurance was established, and consequently, Respondent No.3 was not liable to rec imburse Respondent No.1 any such amount payable by him by way of compensation. The Tribunal awarded compensation of Rs.13,32,000/-.

Against the award, Appellants filed appeal in terms D of s.173 of the Act inter a/ia contending that the insurer-

~ Respondent No.3 ought to have been made liable to pay compensation along with the owner-Respondent No.1 and driver-Respondent No.2. No appeal however was filed by Respondent Nos. 1 and 2 as also Respondent No.3.

E The High Court held Respondent No.3 jointly and severally liable and gave it liberty to recover the amount of compensation from Respondent No.1, but considering the contention raised before it by Respondent No.3 that in the event it was held liable to reimburse Respondent No.1, F

...j it was entitled to contest the quantum of compensation as being excessive, reduced the quantum of compensation from Rs.13,32,000/- to Rs.6,96,000/-.

The question which arose for consideration in the present appeal is as to whether it was permissible for the G High Court to interfere with the quantum of compensat

tion as awarded by the Tribunal, although no appeal was preferred either by the owner or the driver of the truck nor any appeal was preferred by the insurer.

~ A Allowing the appeai, the Court

HELD:-1 Jn relation to a third party, the grounds upon which the insurer can deny its !ibility .are contained in sub-section (2) of s.149 of the Motor Vehicles Act, 1988.

B Ordinarily and subject to just exceptions, the insurance ,,,_ company .would have no rigtit to question the quantum of compensation in absence of any leave having been ,..

granted in i'ts favour in terms of s.170 of the Act. The High

~ ,.

Court failed to consider this aspect of the matter~ Appelr

1-- lants prefe-rred appeals before it on limited grounds. Their I c contentions could have been rejected or accepted. The Hi.gh Court,.howevE::r, could not have considered the contention raised on behalf of respondent No.3 which was not available to them in law. It was legally impermissible for respondent No.3 to question a finding. of fa.ct arrived D at by the Tribunal, taking umbrage under Or.41, r.33, CPC or otherwise. It could not have been permitted to do so.

What cannot be permitted to be done directly; cannot be ,..

prmitted. to be done indirectly. No leave was obtained in terms of s.170 of the Act. The quantum of compensation E awarded by the Tribunal was accepted by the owner. Only

jn some exceptional cases and that too when the liability to pay the amount of compensation is fastened upon the

insurance company and insured, it can be heard on is--

.·:

sues relating to the. quantum of compensation and not otherwise. [Para 16] [722-F-H; 723-A-C]

2; In this case, Respondent No.3 has be_en given lib- ,. erty to recover the amount of compensation from the owner of the vehicle. The insurance company has been held to have no statutory liability as-one ofits contentions G tliat the driver was not holding a valid and effective driving licence has been upheld. In the aforementioned situ- ation';: everi Order 41 Rule 33, CPC was not applicable as in i1 situation of this nature, respondent No.3 ordinarily -t could not have maintained an independent ap'peal on the

H quantum of compensation having regard to the fact situation obtaining herein, and, thus the High Court commit- A ted a serious error in issuing the impugned directions, despite noticing that even no appeal has been preferred by the owner or driver of the vehicle as also Respondent No.3. Or.41, r.33, CPC has limited application. When there

- exists a legal interdict, the same would not apply. [Paras B

- 17, 18, 19) [729-0-G]

S. Nazeer Ahmed v. State Bank of Mysore & Ors., (2007) 11 sec 75relied on.

Case Law Reference

. (2001) 11 sec 75 relied on Para 19

CIVILAPPELLATE JURISDICTION: Civil Appeal No. 4748 of 2008

From the final Judgment and Order dated 16.05.2005 of D the High Court of Judicature of Madhya Pradesh at Jabalpur in Misc. Civil Appeal No~ 621 of 2001

Kamini Jaiswal for the Appellants.

, M. K. Dua for the Respondents.

The Judgment of the Court was delivered by

S.8. SINHA, J. 1. Leave granted.

2. This appeal is directed against a judgment and order dated 16.05.2005.passed by the High Court of Madhya Pradesh F at Jabalpur reducing the amount of compensation awarded in favour of the appellants herein by the Tribunal from Rs.13,32,000i

- to Rs.6,96,000/- in an appeal preferred by the claimants in terms of Section 173 of the Motor Vehicles Act, 1988.

3. One Shiv Shakti Singh while proceeding in a car on 9.4.1998 met with an accident having been hit by a truck bearing registration No.MP-09-KA-6899. The said true~ was owned

by the first respondent herein and was being driven at the relevant time by the second respondent. The said truck was in- H

A sured with the respondnt No.3. As a result of the injuries sustained in the said accident, Shiv Shakti Singh died. The car was also damaged.

4. Appellants herein filed an application under Section 166 of the Motor Vehicles Act, 1988 claiming compensation for a 8 sum of Rs.31,89,000/-. One of the contentions raised by respondent No.1 was that the accident took place owing to the acts of negligence on the part of the deceased himself. Respondent No.3 furthermore contended that the respondent No.2 did not c possess a valid and effective driving licence.

Several issues were framed by the Tribunal, inter alia, as regards the breech of policy conditions as also the quantum of compensation.

By an award dated 8.2.2001, the Motor Vehicles Accident D Claim Tribunal, held :

(a) The accident took place due to the negligence of the driver of the truck;

(b) The deceased having been earning a sum of Rs.10,000/-, the amount of contribution to his family was about 8,000/- per month and, thus, on application of the multiplier of 16, theJotal loss of dependency wouldbeasumofRs,12, eo; ooO/-AsumofRs.15,000 as loss of companionship for applicantNo.2, a sum of Rs.2,000/- tqwards fun.era! expenses and Rs:35,00.0l-:towards costs.of repairing of the Maruti Car, were also granted.

(c) The driver of the truck did not possess a valid .driving licence and, therefore, breach ofpolicy ofthe contract ofi.nsurahcewas established.as a result whereof the respond¢nt No.3 was not. liable to reimburse the owner of the vehicle any such amount payable by him by way of compensation payable.

5. Appellants preferred an appeal thereagainst, contending:

I .,.

t '

','

a) The insurer ought to have baan found to be liable to A _. pay the amount of compensation along with the owner -'\ and driver; and • b) The appropriate multiplier adopted should have been 20 instead of 16.

6. Admittedly, no appeal was preferred against the said judgment and award by the owner and driver of the vehicle as

also the insurer thereof. Before the High Court, the respondent No.3, inter alia, contended that in the event it be held that it was liable to reimburse the owner of the vehicle, it was entitled to c contest the quantum of compensation as being excessive.

In view of the said contention, the High Court formulated the following questions for its consideration :

"(i) Whether the insurer is liable to indemnify the owner D of the vehicle and therefore liable to pay the

.... compensation?

(ii) If so, what will be th.e just compensation?"

7. The High Court, on perusal of the driving licence, the E contract of insurance as also the testimonies of witnesses examiried on behalf of the parties, held:

"8.We accordingly hold that the Insurer-having established that the driver was not 'duJy lienced: to drive t.he.truck in question and also hmi!ngestab.lished want_:of care on, the F part of the insured in allowing the insured tr.uck-to be driVE; H'l by a driver who possessed.only a LMV (Private)licence, on paying the compensation amount to the Appellants/ Claimants and recover the same from the Insured (Respondent No.1 )." G

8. Despite noticing the fact that the appeal was by the claimants, the High Court took into consideration the contention raised by the respondent No.3 that no documentary evidence having been produced to establish the income of the deceased, it should be reduced to 49,000/- for the period ending 31.3.1996 H

~ A and Rs.53,000/- for the year 31.3.1997. As regards to the finding of the learned Tribunal that the deceased had income from tthe agricultural lands, it was opined that as agricultural land con- 'I

tinued to be owned by the family; what was lost was only the "'- "- valuable supervision of the deceased. On the said findings, it B was held:

"14. On an overall consideration of the evidence, we are of the view that 'the income of the deceased from the profession and the value (cost) of supervision of agriculture land should be as Rs.5,000/- per month or Rs.60,.000/- c per annum. If one-third is deducted towards personal and living expenses of the deceased, the contribution to the family would be Rs.40,000/- per annum. As the deceased was 39 years, the appropriate multiplier is 16. Therefore, the total loss of dependency will be Rs.6,40,000/-......

D .15. Normally, we would not have. interfered by reducing the compensation in an appeal filed by the claimants. But as noticed above, the insurer was exonerated and when

it is sou'ght to be made liable, it can point out that the

E compensation is excessive. Though we pointed to the Appellants' counsel that by not pressing the appeal, the claimants may have the advantage of an award for Rs.13,32,000/- against the owner as the owner has not challenged the award, he submitted that unless.the insurer is made 1iable, the chances of rcovery are difficult and F therefore the appellants would lik 3 to pursue the appeal."

9. The appeal was, thus, allowed directing :

,.._

"(a) The insurer (Third Respondent) is also jointly and

severally made liable to p< y the compensation to G Appellants.

I (b) The comepsnation is reduced from Rs.13,32,000/- tto Rs.6,96,000/- with interes' @ 12% per annum from +- the date of petitioner till dat.e of deposit.

H (c) On payment by the lnsurer:, it shall be entitled to

rrecover the amount paied from the owner of the A vehicle (insured), namely the First Respondent, by executing the award."

"Normally, we would not have interfered by reducing the compensation in an appeal filed by the claimants. But as B =-'"" noticed above, the insurer was exonerated and when it is sought to be made liable, it can point out that the compensation is excessive. Though we pointed to the Appellants' counsel that by not pressing the appeal, the claimants may have the advantage of an award for Rs:13,32,000/- against the owner as the owner has not c challenged the award, he submitted that unless the insurer is made liable, the chances of recovery are difficult and therefore the appellants would like to pursue the appeal."

10. The appellant is, thus, before us.

D "

11. Ms. Kamini Jaiswal, learned counsel appearing on behalf of the appellant, would submit that the High Court committed a serious error in reducing the amount of compensation from Rs.13,32,000/- to Rs.6,96,000/-. It was urged that the reasonings of the High Court are not legally sustainable as the owner E and driver as also the insurer had not preferred any appeal against the award dated 8.2.2001 passed by the learned Motor Vehicles Accident Claims Tribunal.

12. Mr. M.K. Dua, learned counsel appearing on behalf of F the respondent, on the other hand, would support the judgment. 1-

13. The claimants/appellants filed an application for grant of compensation on the premise that they suffered damages owing to the acts of rashness and negligence in driving on the part of the respondent No.2. The owner of the vehicle as also G the driver thereof were, thus, principally liable to pay compensation to the dependents of the deceased.

14. A contract of insurance as is well known is a contract of indemnity. In a case of accident, the primary liability under law for payment of compensation is that of the driver. The owner H

- ....

A of the vehicle also becomes vicariously liable therefor. In a case ..

involving a third-party to the contract of insurance in terms of Section 147 of the Motor Vehicles Act, 1988 providing for a compulsory insurance, the insurer becomes statutorily liable to indemnify the owner. Indisputably, the insurance company would

B be liable to indemnify the insured in respect of loss suffered by a third party or in respect of damages of property. In a case, ~

therefore, where the liability is fastened upon the insurer, the insurer would be bound to indemnify the insured unless the exceptions contained in Section 149 of the Act are attracted. c

15. It has not been disputed befon~ us that in certain situations while opining that the insurance company would not be liable to reimburse the insured, a direction upon the insurance company to pay the amount of compensation to a third party and recover the same from the owner of the vehicle is perm is- D sible. Such a direction has been issuecl by the High Court. The said directions are not under challenge!.

';.' "

Keeping in view the aforementioned principle in mind, the question which arises for our consideration is as to whether it

E was permissible for the High Court to interfere with the quantum of compensation as awarded by the learned Tribunal, although no appeal was preferred either by the owner or the driver of the vehicle nor any appeal was preferred by the insurance company.

16. Indisputably, in relation to a third party, the grounds

F upon which the insurer can deny its liability are contained subsection (2) of Section 149 of the Act. Ordinarily and subject to just exceptions, the insurance company would have no right to question the quantum of compensation in absence of any leave having been granted in its favour in terms of Section 170 of the

G Act. The High Court, with respect, failecl to consider this aspect of the matter. Appellants preferred appt:!als before it on limited grounds. Their contentions could havi= been rejected or accepted. The High Court, however, cou.ld not have considered ,,..

the contention raised on behalf of the respondent No.3 which

H was not available to them in law. It was l(=gally impermissible for

SAMUNDRA DEVI & ORS. v. NARENDRA

KAUR & ORS. [S.B. SINHA, J.] 723

the respondent No.3 to question a finding of fact arrived at by A the Tribunal, taking umbrage under Order 41 Order Rule 33 of the Code of Civil Procedure or otherwise. It could not have been permitted to do so. It is well settled that what cannot be permitted to be done directly, cannot be permitted to be done indirectly. Indisputably, no leave was obtained in terms of Section B 170 of the Act. The quantum of compensation awarded by the learned Tribunal was accepted by the owner. Only in some exceptional cases and that too when the liability to pay the amount of compensation is fastened upon the insurance company and insured, it can be heard on issues relating to the quantum of C compensation and not otherwise.

17. in this case, the respondent No.3 has been given liberty to recover the amount of compensation from the owner of the vehicle. The insurance company has been held to have no statutory liability as one of its contentions that the driver was not D holding a valid and effective driving licence has been upheld.

18. In the aforementioned situation, we are of the opinion that even Order 41 Rule 33 of the Code of Civil Procedure was not applicable as in a situation of this nature, the respondent No.3 ordinarily could not have maintained an independent ap- E peal on the quantum of compensation having regard to the fact situation obtaining herein, and, thus, in our opinion, the High Court committed a serious error in issuing the impugned directions, despite noticing that even no appeal has been preferred by the owner or driver of the vehicle as also respondent No.3.

19. Order 41 Rule 33 of the Code of Civil Procedure has limited application. When there exists a legal interdict, the same would not apply. It was so held in S. Nazeer Ahmed v. State Bank of Mysore & Ors. [(2007) 11 SCC 75], stating :

G "8. We also see considerable force in the submission of learned Counsel for the appellants that the High Court has misconceived the object of Order XLI Rule 33 of the Code and has erred in invoking it for the purpose of granting the plaintiff Bank a decree. This is a case where the suit filed H

by the plaintiff Bank had been dismissed by the trial court.

The plaintiff Bank had come up in appeal. ltwas entitled to challenge all the findings rendered against it by the trial court and seek a decree as prayed for in the plaint, from the appellate court. Once it is found entitled to a decree on the basis of the reasoning of the appellate court, the suit could be decreed by reversing the appropriate findings of the trial court on which the dismissal of the suit was based. For this, no recourse to Order XLI Rule 33 is necessary. Order XU Rule 33 enables the appellate court to pass any decree that ought to have been passed by the trial court or grant any further decree as the case may require and the power could be exercised notwithstanding that the appeal was only against a part of the decree and could even be exercised in favour of the respondents, though the respondents might not have filed any, appeal or objection against what has been decreed. There is no need to have recourse to Order XLI Rule 33 of the Code, in a case where the suit of the plaintiff has been dismissed and the plaintiff has come up in appeal claiming a decree as prayed for by him in the suit. Then, it will be a question of entertaining the appeal considering the relevant questions and granting the plaintiff the relief he had sought for if he is found entitled to it. In the case on hand therefore there was no occasion for applying Order XLI Rule 33 of the Code. If the view of the High Court was that the suit was barred by Order II Rule 2 of the Code, it is difficult to see how it could have resorted to Order XU Rule 33 of the Code to grant a decree to the plaintiff in such a suit. In that case, a decree has to be declined. That part of the reasoning. of the High Court is therefore unsustainable."

20. In view of our findings aforementioned, the impugned judgment cannot be sustained. It is set aside accordingly. The appeal is allowed. However, in the facts , and circumstances of the case, there shall be no order as to costs.

H B.B.B.

Appeal allowed.