REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  4748            OF 2008 (Arising out of SLP (C) No.26125 of 2005)

Samundra Devi & Ors.          … Appellants

Versus

Narendra Kaur & Ors.          … Respondents

J U D G M E N T

S.B. 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  at  Jabalpur

reducing  the  amount  of  compensation  awarded  in  favour  of  the

appellants herein by the Tribunal from Rs.13,32,000/- 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 truck was owned by the first respondent herein

and was being driven at the relevant time by the second respondent.  The

said  truck  was  insured  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  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 possess a valid and effective driving licence.   

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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 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, the total loss of

dependency  would  be  a  sum  of  Rs.12,80,000/-    A  sum  of

Rs.15,000 as loss of companionship for applicant No.2, a sum of

Rs.2,000/- towards funeral expenses and Rs.35,000/- 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  of  policy  of  the  contract  of  insurance  was

established as a result whereof the respondent 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 :

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a) The insurer ought to have baan found to be  liable  to  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 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 of the vehicle and therefore liable to pay the compensation?

(ii) If  so,  what  will  be  the  just compensation?”

7. The High Court, on perusal of the driving licence, the contract of

insurance as also the testimonies of witnesses examined on behalf of the

parties, held :

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“8. We  accordingly  hold  that  the  Insurer having established that the driver was not ‘duly licenced’ to drive the truck in question and also having established want of care on the part of the insured in allowing the insured truck to be driven 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).”

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 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 the agricultural lands, it was opined that as agricultural land

continued  to  be  owned  by  the  family;  what  was  lost  was  only  the

valuable supervision of the deceased.  On the said findings, it 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/- 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

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39  years,  the  appropriate  multiplier  is  16. Therefore, the total loss of dependency will be Rs.6,40,000/-……

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 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 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.”

9. The appeal was, thus, allowed, directing :

“(a) The  insurer  (Third  Respondent)  is  also jointly  and  severally  made  liable  to  pay  the compensation to Appellants.

(b) The  comepsnation  is  reduced  from Rs.13,32,000/- to Rs.6,96,000/- with interest @ 12% per annum from the date of petitioner till date of deposit.

(c) On payment  by  the  Insurer,  it  shall  be entitled to  recover the amount  paied from the owner of the 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 noticed above, the insurer was  exonerated  and  when  it  is  sought  to  be made  liable,  it  can  point  out  that  the

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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  liable,  the  chances  of recovery  are  difficult  and  therefore  the appellants would like to pursue the appeal.”

10. The appellant is, thus, before us.

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 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  the

respondent, on the other hand, would support the judgment.

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

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No.2.  The owner of the vehicle as also 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 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 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.   

15. It has not been disputed before 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  permissible.   Such a direction has been issued by the High

Court.  The said directions are not under challenge.   

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Keeping  in  view  the  aforementioned  principle  in  mind,  the

question  which  arises  for  our  consideration  is  as  to  whether  it  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 upon which

the insurer can deny its liability are contained sub-section (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 Act.  The High Court, with respect, failed to consider

this  aspect  of  the  matter.   Appellants  preferred  appeals  before  it  on

limited grounds.  Their contentions could have been rejected or accepted.

The  High  Court,  however,  could  not  have  considered  the  contention

raised on behalf of the respondent No.3 which was not available to them

in law.  It was legally impermissible for the respondent No.3 to question

a finding of fact arrived at by 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

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permitted to be done directly, cannot be permitted to be done indirectly.

Indisputably, no leave was obtained in terms of Section 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 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  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  appeal  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.

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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 :

“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  by  the plaintiff  Bank had been dismissed by the trial court.  The  plaintiff  Bank  had  come  up  in appeal.  It  was  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 XLI 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

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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 XLI 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.

………………………….J.        [S.B. Sinha]

………………………….J.              [Cyriac Joseph]

New Delhi; August 1, 2008

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