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PETITIONER: BRITISH INDIA GENERAL INSURANCE CO., LTD.

       Vs.

RESPONDENT: CAPTAIN ITBAR SINGH AND OTHERS

DATE OF JUDGMENT: 11/05/1959

BENCH:

ACT: Motor  Car  lnsurance--Suit  for  damages  by  third  Party- Insurance  company added defendants- Defence  if other  than statutory  available-Interpretation of--Motor Vehicles  Act, 1939 (4 of 1939), SS. 95, 96,

HEADNOTE: A  suit  claiming damages, for negligent driving  was  filed aginst  the  owner of a motor car, who was  insured  against third  party risks.  The insurer, was subsequently added  as defendant  to the suit under s. 96(2) of the Motor  Vehicles Act, 1939. it contended that the defence available to it was not restricted to the grounds enumerated in s. 96(2) Of  the Act, but that it was entitled to take all defences including those on which the assured himself could have relied for his defence,  subject only to the restriction that it could  not in view of S. 96(3) Of the Act rely on the conditions of the policy as a defence. Held,  that an insurer made a defendant to the action  under S.  96(2)  of  the Act was not entitled to defend  it  on  a ground not specified in that section.

JUDGMENT: CIVIL  APPELLATE JURISDICTION: Civil Appeals Nos.  413,  and 414 of 1958. Appeals  from the order dated April 27, 1955, of the  Punjab High Court in Civil Revisions Nos. 81-D of 1953 and 96-D  of 1953 respectively. 1959 April 21, 22, 23, 24.-C. K. Daphtary  Solicitor General for  India, Ram Behari Lal, D. K. Kapur and Sardar  Bahadur, for  the  appellants.  The question in the  present  appeals turn  around  S. 96 of the Motor Vehicles  Act,  1939.   The purpose  of  sub-s. (2) of S. 96 is to state  those  grounds based  on the policy of insurance on which the  insurer  may rely  for  his  defence.   Sub-section  (3)  makes   certain conditions  of  the policy of no effect as against  the  3rd party.  Both Sub-ss. (2) and (3) are concerned only with the conditions of the policy.  They should not be interpreted so as to oust other defences the insurer may wish to take  e.g. that  there  was  no  accident or  that  the  plaintiff  was negligent  or  that there was contributory  negligence  etc. When a person is joined as a party he has the right to  take all defences permissible in law. [Subba Rao, J.-Did the insurer have a right to be joined  as a  party, apart from the statute ? Could he be joined  under Order 1, Rule 10, of the Code of Civil Procedure ?] 169

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I  am not basing my case on Order 1, Rule to of the Code  of Civil Procedure.  Apart from the statute, the insurer  would not be liable to the third party, but only to the assured. [Das,  J.-Is  it  not correct that  the  statute  gives  the insurer  a  right to be joined as a party which he  did  not have previously ? If so, the right cannot be extended beyond what the statute gives.] It is true that the statute gives a right to the insurer  to become a party to the action by the injured person which  he did  not have previously, but the real question  before  the court  is whether sub-s. (2) limits the right to  defend  on the  grounds stated in that sub-section.  In my  submission, subS. (2) exhausts only the defences based on the conditions of the policy which the insurer may wish to take.  If it was intended that these were to be the only defences open to the insurer  the word " only " should have been used instead  of the  words  "  any of " before the  words  "  the  following grounds."  What the legislature meant was that  the  insurer could  defend the action " also " on the grounds  stated  in sub-s. (2) in addition to other grounds.  If the court finds the  section  is clear no words can be  added.   However,  I submit  the section is ambiguous.  It can mean  either  that the insurer can take other defences or that he is limited to the  matters  stated  in  sub-s.  (2).   The  Court   should interpret  the: section to give effect to the  interests  of justice.   The  insurer  is  made  liable  to  satisfy   the judgmental  It would be an extreme hardship if he  were  not allowed  to  defend the action on merits.   Apart  from  the situations  coming  within sub-s. (2) the insurer  would  be condemned unheard.  The legislature could not have  intended such a result.  Even the cases which hold that the  defences of  the  insurer are limited to those stated  in  subS.  (2) recognise that this causes hardship.  I.L.R. 1953 Bom.  109, I.L.R. 955 Bom. 39 and I.L.R. 1955 Bom. 278.  In those cases the  hardship  was  sought to be overcome  by  allowing  the insurer to defending the name of the insured.  I do not  say that  this  latter procedure is correct, but it  shows  that there is hardship. [Sarkar, J.-How can that be done ? How can the -,insurer  be allowed  to defend in the name of the insured?  How  is  the record to be kept ? There is no provision under which it can be  done,  not  even under s. 1 5 1 of  the  Code  of  Civil Procedure.] Probably  not.  But that question does not arise for  deter- mination  in  this appeal.  The hardship recognised  by  the Bombay cases can be avoided if the interpretation of sub- S.   (2) suggested by me is accepted. 22 170 [Das, J.-How is that interpretation possible in the face of sub-s. (6) ?] Sub-sectioii  (6) only prohibits the insurer  from  avoiding liability in a manner other than that stated in sub-s.  (2). The  manner  of avoiding liability stated in sub-s.  (2)  is that  the  insurer  should  apply,  to  be  made  a   party. Consequently, the insurer can avoid liability, only by being joined  as a party.  The word ’ manner ’ in the  context  of sub-s.  (6)  refers only to the procedure  the  insurer  may follow,  not  to the grounds the insurer may wish  to  take. Hence  the insurer can avoid liability only by being  joined as a party, but can take any defences, he chooses  including those  stated  in sub-s.Otherwise the third  party  and  the assured  may collude and a judgment may be passed which  the insurer  would  be bound to satisfy without having  had  ’an opportunity  of  defending himself.  Or the case may  go  by

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default against the assured or may be compromised.  The real party  affected is the insurer and yet he is given no  right to  be heard except on the limited grounds stated in  sub-s. (2).  The assured is only a nominal party and is not  likely to  be interested in contesting the case, as the decree  has to  be satisfied by the insurer.  The legislature could  not have  intended  such a result.  It is  contrary  to  natural justice   that  a  party  likely  to  be  affected  by   the proceedings should not be heard on the merits. T.   P.  S. Chawla (with him, Dipak Datta Choudhry) for  the respondent.   Chapter VIII of the Motor Vehicles Act,  1939, is  based on various English Statutes (See Report  of  Motor Vehicles  Insurance Committee 1936-37 known as the  Roughton Committee).   For  a  proper appreciation of  s.  96  it  is necessary to consider the historical development of the  law relating to compulsory third party insurance in England. Before 1930, there, was no system of compulsory insurance in respect of third party risks in England.  In the event of an accident  the  injured third party had a right  to  sue  the motorist and recover damages.  But if the motorist was a man of straw, the injured party was in practice unable to obtain compensation.   This  was  the situation  the  various  Road Traffic Acts were designed to avoid. Even  in those cases in which the motorist had taken out  an insurance  policy,  difficulties  arose in the  way  of  the injured  third party recovering compensation.   The  injured third  party  had  no direct right  of  action  against  the insurer.  In the event of the insolvency of the assured, the injured third party would rank a,; an ordinary creditor  and would not receive complete satisfaction for his decree.  The Third Parties Rights                             171 Against  Insurers Act, 1930, created a system  of  statutory subrogation in such cases. (Halsbury, 3rd Edn., Vol. 22, PP. 339,  372).   The  provisions of this  Act  have  been  sub- stantially  reproduced in s. 97 of the Motor  Vehicles  Act. As a result the third party can sue the insurer directly  in cases. Next  the  Road Traffic Act, 1930, introduced  a  scheme  of compulsory insurance.  Section 35(1) made third party insur- ance Compulsory.  Section 94(1) of the Motor Vehicles Act is worded in the Same Way.  Similarly s. 36 Of the English  Act is substantially reproduced in s. 9.5 of the Motor  Vehicles Act.  Section 38 of the Act of 1930 made certain  conditions of  the  policy  ineffective so far as  third  parties  were concerned.   The  object was that claims  of  injured  third parties should not fail because the assured had not complied with  or  committed a breach of certain  conditions  in  the policy.  (Shawcross on Motor Insurance, 2nd Edn.,  pp.  219, 277). But the Act of 1930 did not go far enough.  In 1934 another Road  Traffic  Act  was passed the object of  which  was  to compel  Insurers to satisfy judgments obtained  against  the insured  (Shawcross  ibid P. 271).   This  Act  contemplated three  separate  actions between the various  parties.   The first  action  was by the injured third  party  against  the assured.   By s. 10(1) of that Act, which is  reproduced  in s.  96(1),  the insurer was obliged to  satisfy  the  decree against  the, assured.  If the insurer failed to do so,  the third party had a right of action against the insurer, based on the judgment Obtained against the assured. (Shawcross, p. 296 ; Halsburry 3rd Edn., Vol. 22,PP. 374-5).  This was  the second  action.   It  is doubtful if  even  the  defence  of collusion would be open to the insurer in the second action. (Sliawcross, P. 296).  Then S. 10(2) of the Road Traffic Act

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of 1934, is substantially reproduced in s. 96(2)(a).   By this  provision  in certain events  the  insurers  liability ceases.   To appreciate s. 96(2)(b) it is necessary to  keep in  mind s. 38 of the Road Traffic Act of 193o and S. 12  of the  Road Traffic Act of 1934.  Both these  letter  sections made  certain conditions of the policy  ineffective  against third  parties.  Whilst drafting the Motor Vehicles Act  the legislature  reversed  the  manner  of  statement.   In   s. 96(2)(b)  the legislature has stated affirmatively what  are the  conditions on which the insurer can rely as  against  a third party.  This was done to avoid doubt and uncertainly. Then  s.  10(3)  of the Road Traffic  Act,  1934,  gave  the insurer  a  right to obtain a declaration that  he  was  not liable   on   the   policy   due   to   non-disclosure    or misrepresentation as to 172 a material fact.  In this action a notice had to be sent  to the  third party injured who was given a right to join as  a party  and  oppose the action.  This was the  third  action. The same result is achieved by s. 96(2)(C).  What s. 96 does is to roll up into one these three actions which occurred in English  Law.   This saves time and money  and  enables  the three  parties involved to have their respective rights  and liabilities settled in one action.  But s. 96 does not  give any  party greater rights than it would have had in  English Law.  At common law the insurer had no right to intervene in the  action  by the injured party against  the  insured  and oppose the claim on merits, e.g., that there was no accident or negligence or that there was contributory negligence etc. The  insurer could avoid liability only by showing  that  he was  not liable for some reason connected with the  -policy. This  is the right which sub-s. (2) preserves.  It does  not give  additional  rights to the insurer over what  he  would have  had  at common law or in accordance with  the  English Statutes.  On the interpretation suggested by the Solicitor- General  the insurer would get a right he never had  before. This  is contrary to the object of Chapter VIII which is  to protect  the injured third party and not the  insurer.   The insurer  is  neither a necessary nor a proper  party.  under Order 1, Rule 10, Code of Civil Procedure, in the action  by the injured third party against the assured. [Subba Rao, J.-You need not deal with Order 1, Rule 10, Code of Civil Procedure, as the Solicitor-General has not  relied on it.] There is no ambiguity in s. 96(2).  The sub-section  clearly specifies  the  defences open to the insurer and it  is  not permissible  to add to those defences.  This is  put  beyond doubt by sub-s. (6).  It prevents the insurer from  avoiding liability  in a ‘ manner’ other than that stated  in  sub-s. (2). The ’manner’ provided by sub-s. (2) is by joining as  a party  and  defending on the grounds stated There’  fore,  ’ manner’  refers to both the procedure and the  grounds.   To hold  otherwise is to make sub-s. (2) unnecessary.   If  the Legislature  intended  that the insurer should  be  able  to defend on grounds other than those stated in sub-s. (2)  all it  needed to say was that the insurer would be entitled  to join  as a party.  As sub-s. (2) specifies the defenses  the intention  was  clearly  to  limit  the  insurer  to   those defences. [Subba  Rao,  J.-Suppose  the injured third  party  and  the insured  collude  or judgment is allowed to go  by  default, could not the insurer have the judgment set aside or bring a suit to,have it set aside ?] 173 In. my submission even a suit for this purpose is barred  as

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that would contravene sub-s. (6).  Such a suit would  enable the  insurer to avoid liability in a.’ manner’ which  sub-s. (6) does not allow. There  is  no hardship caused by giving full effect  to  the section  as it stands.  The possibilities of  collusion  are remote,  and indeed illusory. (Shawcross, P. 296).   By-  s. 96(3)  the  insurer  is given a right to  recover  from  the insured any sums paid, by him which he was not bound to  pay due  to  breaches  of conditions in the  policy,  but  which conditions  have been made ineffective as against the  third party.   Sub-section  (4)  of the  same  section  gives  the insurer  the  right to recover from the assured  the  excess which  he  is  made  to pay by virtue of  s.  95,  over  his obligations  in the policy.  The judgment is  still  against the  assured who is the party primarily liable.  It is  only made executable against the insurer.  Apart from this, by s. 1(3)  of the Motor Vehicles Act, 1939, the legislature  gave insurers  six years to insert provisions in  their  policies and take such other steps to protect themselves against  the assured  committing  them  to  liability  as  they   thought fit.Most  insurers insert the control of proceedings  clause in the policy (Halsbury, 3rd Edn., VOl. 22 p. 338).  Someone had  to  bear the loss ultimately, and the  legislature  has tried  so far as possible to ensure that the loss  falls  on the  person  causing the accident.  But, if the  insured  is impecunious the choice is between allowing the loss to  fall on  the injured party or the insurer.  The  legislature,  in its  wisdom has provided that in such a situation  the  loss shall  fall on the insurer.  It is a part of  the  insurer’s business  to  suffer  such  losses  and  when  entering  the contract  of  insurance  he contemplates that  he  might  be called upon to pay the loss. Now,  the Bombay cases referred to by the Solicitor  General are right in so far as they hold that the insurer can defend only  on the grounds stated in sub-s. (2).  Those cases  are wrong in proceeding on the assumption that there is hardship caused  to  the insurer by this view.  They are based  on  a misunderstanding  of  the  cases of  Windsor  v.  Chalcraft, [1939]  1 K.B. 279 and Jacques v. Harrison, 12  Q.B.D.  136, and  on  appeal, 12 Q.B.D. 165.  It was not noticed  in  the Bombay cases that the provisions of Indian Law equivalent to S.  24(5)  of  the judicature Act and  Order  27,  Rule  15, R.S.C.,  were not as wide as the English provisions.   Order 9,  Rule  7,  Code of Civil Procedure,  allows  an  ex-parte decree to be set aside only at the instance of the defendant whilst  there is no such limitation in 0. 27, R. 15,  R.S.C. There, is 174 no  procedure  known  to law by which  the  insurer  can  be allowed  to defend in the name of the insured.  This  cannot be done under s. 151, C.P.C. as it would contravene s. 96(6) and allow the insurer to avoid liability in a ’manner’ other than  the  one allowed.  The Bombay cases have  not  noticed sub-s.  (6) at all.  The procedure stated in those cases  is untenable. [Sarkar, J. -Are we called upon to decide that point in this case  ? Apparently there is a revision petition  pending  in the  High  Court  between the same  parties  in  which  that question awaits determination.  Should we express an opinion on that point ?] The  Solicitor-General  has  adopted  it  as  apart  of  his reasoning He has said that if the insurer can take all the defences in the name of the insured, that is an additional reason why sub-s. (2) should not be interpreted as to limit the defences available to the insurer. I wants show that view is

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wrong. (The Court disallowed this branch of the argument). In  the case reported as Windsor v. Chalcraft [1939] 1  K.B. 279,  the dissenting judgment of Slesser, L.J.,  states  the correct position.  The judgment of Greer, L.J., show-,  that lie was in considerable doubt as to the correct position  in law,  but  felt  himself  bound  by  the  earlier  judgments reported  in jacques v. Harrison, 12 O.B.D. 165.   Mckinnon, L.J.,  proceeded on the footing that the assured was only  a nominal  defendant.   As  already  submitted  this  is   not correct.   Even  in English Law the  insurer  could  recover against the assured. (Halsbury, 3rd Edn,, Vol. 22, PP.  374, 379, 385).  The case of Windsor V. Chalcraft was decided  in May  1038.  The Motor Vehicles Act was passed  in  February, 1939.   It  is  legitimate to assume that  the  persons  who drafted the Act were aware of this case.  I submit that  the real purpose of sub-s. (6) was to give effect to the view of Slesser, L.J. [Das, J.-That is rather far fetched.] I  submit it is not.  Even in England the, view of  Slesser, T..J.,  seems  to have been  approved.   Subsequent  English cases  show that the principle of Windsor v.  Chalcraft,  is not  to be extended.  See Murfin v. Ashbridge [1941]  1  All E.R.231.  It  was not necessary to expressly over  rule  the case  of Windsor v. Chalcraft as in 1946 the Motor  Insurers Bureau  was  set  tip in England, as a result  of  which  an insurer  is bound to satisfy a judgment obtained by a  third party  against  a,  motorist even if the  motorist  was  not insured  (Halsbury,  3rd Edn., Vol. 22, PP.  382  et.  seq., Shawcross,  ibid, Introduction LXXXVII et. seq.) This  shows how strong 175 the  attempt to protect the third party has been.   Actually the  words  of s. 96(2) and (6) are clear to show  that  the insurer  can take only the defences mentioned in sub-s.  (2) But if there be any doubt, a consideration of the historical development  of the law and the objects to be attained  puts it beyond doubt that the legislature intended this result. C.   K. Daphtari, in reply.  It is wrong that at common  law the  insurer could not be brought in as a party.  At  common law  the  guarantor or indemnifier could be  brought  in  by means of third party procedure (see     I.L.R.  35 All.  168 and  Halsbury, 3rd Edn., Vol. 18, P. 535 and Gray v.  Lewis, L.R. (1873) 8 Ch. 1035, 1058). Apart from the common law, the insurer could also be  joined as a party under 0. I, R. 10, Code of Civil Procedure. I  rely  on  the case of United Provinces  v.  Atiqa  Begum, [1941] A.C. 16.  A person should be joined as a party if his presence   is  necessary  for  an  effectual  and   complete adjudication.   On  this principle the insurer ought  to  be joined as a party, and thus can take all defences. Chaula,  in  reply  : The passage  cited  by  the  Solicitor General  from  Halsbury,  3rd  Edn., Vol.  18,  P.  535,  is actually  against  him.   The foot note (e)  shows  that  at common law the insurer could not be joined as a party to the action by the insured.  Third party procedure did not  exist at Common Law.  Even under third party procedure in  England it  is doubtful whether this could be done  (Shawcross,  pp. 150-151).  In any case there is no third party procedure  in Punjab.   The  cases 35 All. 168 and (1873) L.R. 8  ch.   A. 1035 are also against him. The  insurer  is neither a necessary nor a proper  party  as there  can be a complete and effectual adjudication  without his  presence.  The decree is to be a against  the  assured, not against the insurer.                                    Cur. adv. vult.

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1959.  May 11.  The Judgment of the Court was delivered by SARKAR J.-These two appeals arise out of two suits and  have been  heard  together.   The suits had  been  filed  against owners of motor cars for recovery of damages suffered by the plaintiffs as a result of the negligent driving of the cars. The  owners  of the cars were insured  against  third  party risks and the insurers were subsequently added as defendants to the suits 176 under  the  provisions of sub-s. (2) of s. 96 of  the  Motor Vehicles Act, 1939.  The terms of that subsection  will have to  be  set  out later, but it may now  be  stated  that  it provided that an insurer added as a party to an action under it was entitled to defend on the grounds enumerated in it. On  being  added as defendants, the insurers  filed  written statements  taking  defences other than those  mentioned  in that sub-section.  The plaintiffs contended that the written statements  should be taken off the records as the  insurers could defend the action only on the grounds mentioned in the sub-section and on no others.  A question thereupon arose in the  suits  as  to  what  defences  were  available  to  the insurers.  In one of the suits it was held that the  insurer could  take only the defences specified in that  sub-section and  in the other suit the view taken was that the  insurers were not confined to those defences.  Appeals were perferred from these decisions to the High Court of Punjab.  The  High Court  held that the insurers could defend the actions  only on the grounds mentioned in the subsection and on no others. Hence these appeals by the insurers. The question is whether the defences available to an insurer added  as  a party under s. 96(2) are only  those  mentioned there.   A few of the provisions of the Motor  Vehicles  Act have  now  to be referred to.  Section 94 of the  Act  makes insurance  against third party risk compulsory.  Section  95 deals  with  the  requirements  of  the  policies  of   such insurance  and  the limits of the liability  to  be  covered thereby.  Sub-section (1) of this section provides "............ a policy of insurance must be a policy which- (a).................................................... (b) insures the person or classes of person specified in the policy to the extent specified in subsection (2) against any liability which may be incurred by him or them in respect of the  death  or  bodily injury to any  person  caused  by  or arising out of the use of the vehicle in a public place." 177 Sub-section  (2)  of  s.  95 specifies  the  limits  of  the liability for which insurance has to be effected, and it  is enough  to say that it provides that in respect  of  private cars,  which  the  vehicles ’with which  these  appeals  are concerned  were,  the  insurance has to be  for  the  entire amount  of the liability incurred.  Then comes s.  96  round which  the arguments advanced in this case have  turned  and some of its provisions have to be set out. "  Section 96. (1) If, after a certificate of insurance  has been issued under sub-section (4) of section 95 in favour of the  person by whom a policy has been effected, judgment  in respect  of any such liability as is required to be  covered by  a policy under clause (b) of sub-section (1) of  section 95 (being a liability covered by the terms of the policy) is obtained  against  any person insured by the  policy,  then, notwithstanding that the insurer may be entitled to avoid or cancel  or  may have avoided or cancelled  the  policy,  the insurer  shall, subject to the provisions of  this  section, pay to the person entitled to the benefit of the decree  any

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sum  not exceeding the sum assured payable thereunder as  if he  were the judgment debtor, in respect of  the  liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue  of any enactment relating to interest on judgments. (2)  No sum shall be payable by an insurer under sub-section (1)  in respect of any judgment unless before or  after  the commencement  of  the proceedings in which the  judgment  is given  the  insurer  had notice through  the  Court  of  the bringing  of the proceedings, or in respect of any  judgment so  long as execution is stayed thereon pending  an  appeal; and  an insurer to whom notice of the bringing of  any  such proceeding is so given shall be entitled to be made a  party thereto  and  to defend the action on any of  the  following grounds, namely:- (a)  that  the policy was cancelled by mutual consent or  by virtue  of  any  provision  contained  therein  before   the accident giving rise to the liability, and 23 178 that either the certificate of insurance was surrendered  to the  insurer or that the person to whom the certificate  was issued  has made an affidavit stating that  the  certificate has  been  lost or destroyed, or that either before  or  not later than fourteen days after the happening of the accident the  insurer has commenced proceedings for  cancellation  of the certificate after compliance with the provisions of sec- tion 105; or (b)  that  there has been a breach of a specified  condition of  the  policy,  being one  of  the  following  conditions, namely:- (i)  a condition excluding the use of the vehicle- (a)  for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a  permit to ply for hire on reward, or (b)  for organised racing and speed testing, or (c)  for a purpose not allowed by the permit under which     the vehicle is used, where the vehicle is a public    service vehicle or a goods vehicle, or (d)  without side-car being attached, where the vehicle in a motor cycle; or (ii) a  condition  excluding driving by a  named  person  or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining  a driving licence during the period of disqualification; or (iii)     a condition excluding liability for injury  caused or  contributed to by conditions of war, civil war, riot  or civil commotion; or, (e)  that  the  policy  is void on the ground  that  it  was obtained  by the non-disclosure of a material fact or  by  a representation  of  fact which was false  in  some  material particular. (2A)...................................... (3)  Where a certificate of insurance has been issued  under sub-section (4) of section 95 to the person by whom a policy has  been  effected, so much of the policy  as  purports  to restrict the insurance of the 179 persons insured thereby by reference to any conditions other than  those  in  clause (b) of  sub-section  (2)  shall,  as respects such liabilities as are required to be covered by a policy  under clause (b) of sub -section (1) of section  95, be of no effect: Provided that any sum paid by the insurer in or towards  the discharge of any liability or any person which is covered by the  policy  by  virtue only of this  sub-section  shall  be

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recoverable by the insurer from that    person. (4)  If the amount which an insurer becomes liable under     this section  to  pay  in respect of a liability  incurred  by  a person insured by a policy exceeds the amount for which  the insurer  would apart from the provisions of this section  be liable  under the policy in respect of that  liability,  the insurer  shall be entitled to recover the excess  from  that person. (5)....................................................... (6) No insurer to whom the notice referred to in sub-section (2) has been given shall be entitled to avoid his  liability to  any person entitled to the benefit of any such  judgment as  is referred to in subsection (1) otherwise than  in  the manner provided for in sub-section (2)." It  may  be stated that the policies that were  effected  in these cases were in terms of the Act and the certificate  of insurance mentioned in s. 96 had been duly issued.  It  will have been noticed that sub-s. (1) of s. 96 makes an  insurer liable  on  the  judgment obtained  by  the  injured  person against  the assured.  Sub-section (2) provides that no  sum shall  be payable by the insurer under sub-s. (1) unless  he has  been given notice of the proceedings resulting in  that judgment,  and  that an insurer who has been  given  such  a notice  shall be entitled to be made a party to  the  action and to defend it on the grounds enumerated.  The  contention of the appellants is that when an insurer becomes a party to an  action under sub-s. (2), he is entitled to defend it  on all grounds available at law including the grounds on  which the assured himself could have relied for his 180 defence and that the only restriction on the insurer’s right of  defence is that he cannot rely on the conditions of  the policy which sub-s. (3) makes as of no effect.  This is  the contention which we have to examine in these appeals. To  start with it is necessary to remember that  apart  from the  statute an insurer has no right to be made a  party  to the action by the injured person against the insured causing the injury.  Sub-section (2) of S. 96 however gives him  the right to be made a party to the suit and to defend it.   The right  therefore  is  created by  statute  and  its  content necessarily  depends on the provisions of the statute.   The question  then really is, what are the defences that  sub-S. (2)  makes  available  to an insurer ?  That  clearly  is  a question of interpretation of the sub-section. Now  the language of sub-s. (2) seems to us to be  perfectly plain and to admit of no doubt or confusion.  It is that  an insurer to whom the requisite notice of the action has  been given " shall be entitled to be made a party thereto and  to defend the action on any of the following grounds,  namely," after  which comes an enumeration of the grounds.  It  would follow  that an insurer is entitled to defend on any of  the grounds  enumerated and no others.  If it were not so,  then of  course no grounds need have been enumerated.   When  the grounds of defence have been specified, they cannot be added to.  To do that would be adding words to the statute. Sub-section(6)  also indicates clearly how sub-s.  (2)should be read.  It says that no insurer to whom the notice of  the action  has  been  given  shall be  entitled  to  avoid  his liability  under sub-s. (1) " otherwise than in  the  manner provided  for in sub-section. (2)".  Now the only manner  of avoiding   liability  provided  for  in  subs.  (2)  is   by successfully raising any of the defences therein  mentioned. It  comes  then to this that the insurer  cannot  avoid  his liability except by establishing ,such defences.   Therefore

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sub-s.  (6)  clearly contemplates that he  cannot  take  any defence  not mentioned in subS. (2).  If he could,  then  he would  have been in a position to avoid his liability  in  a manner other than that 181 provided  for in sub-s. (2).  That is prohibited  by  sub-s. (6). We therefore think that sub-s. (2) clearly provides that  an insurer  made a defendant to the action is not  entitled  to take any defence which is not specified in it. Three  reported decisions were cited at the bar and  all  of them proceeded on the basis that an insurer had no right  to defend the action except on the grounds mentioned in  sub-s. (2).   These are Sarup Singh v. Nilkant Bhaskar  (1),  Royal Insurance Co. Ltd. v. Abdul Mahomed (2) and The  Proprietor, Andhra Trading Co. v. K. Muthuswamy (3).  It does not appear however  to  have been seriously contended in any  of  these cases  that the insurer could defend the action on a  ground other than one of those mentioned in sub-s. (2). The  learned counsel for the respondents, the plaintiffs  in the  action, referred us to the analogous  English  statute, The Road Traffic Act, 1934, in support of the view that  the insurer is restricted in his defence to the grounds set  out in sub-s. (2).  But we do not think it necessary to refer to the  English statute for guidance in the  interpretation  of the section that we have to construe. We  proceed  now to consider the arguments advanced  by  the learned  Solicitor-General who appeared for the  appellants. He  contended  that  there  was nothing  in  sub-s.  (2)  to restrict  the defence of an insurer to the  grounds  therein enumerated.  To support his contention, he first referred to sub-s.  (3)  of s. 96 and said-that it  indicated  that  the defences that were being dealt with in sub-s. (2) were  only those based on the conditions of the policy.  His point  was that  sub-s.  (2)  permitted  defences  on  some  of   those conditions and sub-s. (3) made the rest of the conditions of no  effect, thereby preventing a defence being based on  any of them.  He said that these two sub-sections read  together show  that  sub-s.  (2) was not intended to  deal  with  any defence  other than those arising -out of the conditions  of the  policy, and as to other defences therefore  sub-s.  (2) contained no prohibition.  He further (1) I.L.R. [1953] Bom. 296.    (2) I.L.R. [1954] Bom. 1422.                  (3) A.I.R. 1956 Mad. 464. 182 said that as under sub-s. (2) an insurer was entitled to  be made  a defendant to the action it followed that he had  the right  to take all legal defences excepting those  expressly prohibited. We  think that this contention is without foundation.   Sub- section  (2)  in fact deals with defences other  than  those based  on the conditions of a policy.  Thus cl. (a) of  that sub-section  permits an insurer to defend an action  on  the ground that the policy has been duly cancelled provided  the conditions  set  out  in that clause  have  been  satisfied. Clause  (c) gives him the right to defend the action on  the ground  that the policy is void as having been  obtained  by non-disclosure  of  a  material fact  or  a  material  false representation of fact.  Therefore it cannot be said that in enacting  sub-s.(2) the legislature was  contemplating  only those  defences  which were based on the conditions  of  the policy. It  also  seems to us that even if sub-s.(2)  and  sub-s.(3) were  confined only to defences based on the  conditions  of the  policy that would not have led to the  conclusion  that

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the  legislature  thought that other defences not  based  on such  conditions, would be open to an insurer.  If that  was what  the  legislature intended, then there was  nothing  to prevent   it  from  expressing  its  intention.   What   the legislature  has  done  is to enumerate in  sub-s.  (2)  the defences  available to an insurer and to provide  by  sub-s. (6) that he cannot avoid his liability excepting by means of such defences.  In order that sub-s. (2) may be  interpreted in the way the learned Solicitor-General suggests we have to add  words  to it.  The learned  Solicitor-General  concedes this and says that the only word that has to be added is the word  " also" after the word "grounds".  But even  this  the rules  of interpretation do not permit us to do  unless  the section as it stands is meaningless or of doubtful  meaning, neither  of  which we think it is.  The  addition  suggested will,  in  our  view, make the  language  used  unhappy  and further effect a complete change in the meaning of the words used in the sub-section. As  to  sub-s. (6) the learned  Solicitor-General  contended that the proper reading of it was that an 183 insurer  could  not avoid his liability except by way  of  a defence  upon being made a party to the action under  sub-s. (2).   He contended that the word it manner " in sub-s.  (6) did  not refer to the defences specified in sub.s.  (2)  but only  meant,  by way of defending the suit the right  to  do which is given by sub-s. (2).  We think that this is a  very forced construction of sub-s. (6) and we are unable to adopt it.   The only manner of avoiding liability provided for  in sub-s.  (2)  is  through  the  defences  therein  mentioned. Therefore when sub-s. (6) talks of avoiding liability in the manner  provided  in sub-s. (2), it  necessarily  refers  to these defences.  If the contention of the learned Solicitor- General  was right, sub-s. (6) would have provided that  the insurer would not be entitled to avoid his liability  except by defending the action on being made a party thereto. There  is  another ground on which  the  learned  Solicitor- General supported the contention that all defences are  open to an insurer excepting those taken away by sub-s. (3).   He said that before the Act came into force, an injured  person had  no right of recourse to the insurer and that it was  s. 96(1) that made the judgment obtained by the injured  person against  the assured binding on the insurer and gave  him  a right  against the insurer.  He then said that being so,  it is  only  fair that a person sought to be made  bound  by  a judgment should be entitled to resist his liability under it by  all  defences which he can in law  advance  against  the passing of it. Again,  we  find the contention  wholly  unacceptable.   The Statute  has no doubt created a liability in the insurer  to the  injured  person  but the  statute  has  also  expressly confined  the  right  to avoid  that  liability  to  certain grounds  specified in it.  It is not for us to add to  those grounds  and  therefore  to  the  statute  for  reasons   of hardship.  We are furthermore not convinced that the statute causes  any  hardship.  First, the insurer  has  the  right, provided  he  has reserved it by the policy, to  defend  the action  in  the name of the assured and if he does  so,  all defences  open to the assured can then be urged by  him  and there is no 184 other defence that he claims to be entitled to urge.  He can thus avoid all hardship if any, by providing for a right  to defend the action in the name of the assured and this he has full  liberty to do.  Secondly, if he has been made  to  pay

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something  which on the contract of the policy he  was  not, bound  to  pay, he can under the proviso to sub-s.  (3)  and under  sub-s. (4) recover it from the assured.  It was  said that  the  assured might be a man of straw and  the  insurer might  not  be able to recover anything from him.   But  the answer  to  that is that it is the insurer’s bad  luck.   In such  circumstances the injured person also would  not  have been  able to recover the damages suffered by him  from  the assured,  the person causing the injuries.  The loss had  to fall  on  some one and the statute has thought fit  that  it shall be borne by the insurer.  That also seems to us to  be equitable for the loss falls on the insurer in the course of his  carrying  on his business, a business out of  which  he makes  profit, and he could so arrange his business that  in the  net result he would never suffer a loss.  On the  other hand,  if the loss fell on the injured person, it  would  be due  to no fault of his; it would have been a loss  suffered by him arising out of an incident in the happening of  which he had no hand at all. We  therefore feel that the plain words of sub-s.(2)  should prevail  and that no ground exists to lead us to  adopt  the extraordinary course of adding anything to it. We think that the High Court was right in the view that it took, In the result these appeals are dismissed with costs.                           Appeals dismissed.        185