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CASE NO.: Appeal (civil)  990 of 2008

PETITIONER: V. Subbulakshmi & Ors

RESPONDENT: S. Lakshmi & Anr

DATE OF JUDGMENT: 05/02/2008

BENCH: S.B. SINHA &  HARJIT SINGH BEDI

JUDGMENT: J U D G M E N T

CIVIL APPEAL NO 990 OF 2008 [Arising out of SLP(C) No. 19532 of 2006]

S.B. SINHA,  J :

1.      Leave granted.

2.      First respondent is the owner of a bus.   Allegedly, owing to rash and  negligent driving by the driver of the said vehicle, an accident took place  wherein one Vadivelu, the predecessor in interest of the appellants died.    3.      An application under Section 166 of the Act claiming compensation  for a sum of Rs.25 lakhs was filed by the appellants in the Court of Motor  Accidents Claims Tribunal (Additional District Judge-cum-Chief Judicial  Magistrate, Karur).   A written statement was filed by the Insurance  Company in the said proceedings.  The same was adopted by the owner of  the vehicle.   Before the Tribunal, the appellants produced some documents  to show that the income of the deceased was about 12,500/- per month.   He  is said to have been deriving income both as an agriculturist as also from his  business as commission agent in the business of coconut.   4.      The Tribunal, inter alia, keeping in view the fact that the Income Tax  Returns were filed only after the death of the said Vadivellu, estimated at    Rs. 9,600/- per month.

       The High Court, however, estimated the income of the deceased to be  around a sum of Rs. 4,000/- per month, from his agricultural operation and  Rs. 3,000/- from his commission business, totalling a sum of Rs. 7,000/- per  month and upon deducting 1/3rd thereof from the amount towards his  personal expenses, the High Court held that his contribution to his family  would come to about of Rs. 4,667/- per month.  Applying the multiplier of  18, the loss of income was assessed at Rs. 10,08,072/-, instead and in place  of Rs. 13,82,400/- as was found by the Tribunal.    5.      Appellant is, thus, before us.                  Despite service of notice, the first respondent has not appeared.  

6.      Mr. V. Krishnamurthy, the learned senior counsel appearing on behalf  of the appellant, inter alia, would submit that a joint appeal by the owner of  the vehicle and the Insurance Company was not maintainable.  It was  furthermore urged that the High Court without analysing the evidence on  records has arbitrarily reduced the amount of income of the deceased from  Rs. 9,600/- as was found by the learned Tribunal, to a sum of Rs. 7,000/- per  month.

7.      Mr. Ashok Kumar Sharma, the learned counsel appearing on behalf of  the second respondent, on the other hand, submitted that the appeal before  the High Court in terms of Section 173 of the Act was maintainable.

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According to the learned counsel keeping in view the phraseology used in  Section 173 of the Act, an appeal subject to the limitation provided under  sub-Section (2) thereof would be maintainable against each and every award  and, thus, if an appeal is maintainable at the instance of the Insurance  Company, it matters little as to whether it was filed with the owner of the  vehicle or not.    The learned counsel furthermore urged that the Tribunal has failed to  take into consideration the fact that the documents filed by the  claimants/appellants purporting to establish the quantum of income of the  deceased being wholly unreliable, the same could not have been taken into  consideration for the purpose of computation of income.          8.      We may at the outset notice that the High Court was although of the  opinion that no appeal would be maintainable at the instance of an insurance  company unless permission of the court was obtained by it in terms of  Section 170 Act, observed that the owner of the vehicle being an appellant,  the appeal would be maintainable at his instance.

9.      The relevant statutory provisions, being Sections 149(2), 170 and 173  may be noticed by us, which are as under : "149. (2) No sum shall be payable by an insurer  under sub-section (1) in respect of any judgment or  award unless, before the commencement of the  proceedings in which the judgment of award is  given the insurer had notice through the Court or,  as the case may be, the Claims Tribunal of the  bringing of the proceedings, or in respect of such  judgment or award so long as execution is stayed  thereon pending an appeal; and an insurer to whom  notice of the bringing of any such proceedings 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 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 or 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 transport  vehicle, or (d)     without side-car being attached where  the vehicle is 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 (b)     that the policy is void on the ground that it  was obtained by the nondisclosure of a  material fact or by a  representation of fact  which was false in some material particular.

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Section 170 - Impleading insurer in certain  cases\027Where in the course of any inquiry, the  Claims Tribunal is satisfied that\027 (a) there is collusion between the person making  the claim and the person against whom the claim is  made, or (b) the person against whom the claim is made has  failed to contest the claim, it may, for reasons to be recorded in writing, direct  that the insurer who may be liable in respect of  such claim, shall be impleaded as a party to the  proceeding and the insurer so impleaded shall  thereupon have, without prejudice to the  provisions contained in sub-section (2) of section  149, the right to contest the claim on all or any of  the grounds that are available to the person against  whom the claim has been made. Section 173 \026 Appeals--(1) Subject to the  provisions of sub-section (2) any person aggrieved  by an award of a Claims Tribunal may, within  ninety days from the date of the award, prefer an  appeal to the High Court:  

Provided that no appeal by the person who is  required to pay any amount in terms of such award  shall be entertained by the High Court unless he  has deposited with it twenty-five thousand rupees  or fifty per cent, of the amount so awarded,  whichever is less, in the manner directed by the  High Court:

Provided further that the High Court may entertain  the appeal after the expiry of the said period of  ninety days, if it is satisfied that the appellant was  prevented by sufficient cause from preferring the  appeal in time. (2) No appeal shall lie against any award of a  Claims Tribunal if the amount in dispute in the  appeal is less than ten thousand rupees."

10.    The maintainability of an appeal by the Insurance Company together  with the owner of the vehicle came up for consideration before this Court in  Narendra Kumar and Another Vs. Yarenissa and Others [(1998) 9 SCC 202],  wherein it was clearly held that an appeal by the owner of the vehicle is  maintainable despite the fact that in terms of an Award, he is to be  reimbursed by the insurance company, stating; "6.\005\005If the award has gone against the tortfeasors it  is difficult to accept the contention that the tortfeasor  is not "an aggrieved person" as has been held by some  of the High Courts vide Kantilal & Bros . v.  Ramarani Debi, New India Assurance Co. Ltd . v.  Shakuntla Bai, Nahar Singh v. Manohar Kumar,  Radha Kishan Sachdeva v. Flt. Lt. L.D. Sharma   merely because under the scheme of Section 96 if a  decree or award has been made against the tortfeasors  the insurer is liable to answer judgment "as if a  judgment-debtor". That does not snatch away the right  of the tortfeasors who are jointly and severally liable  to answer judgment from preferring an appeal under  Section 110-D of the Act. If for some reason or the  other the claimants desire to execute the award against  the tortfeasors because they are not in a position to  recover the money from the in surer the law does not

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preclude them from doing so and, therefore, so long as  the award or decree makes them liable to pay the  amount of compensation they are aggrieved persons  within the meaning of Section 110-D and would be  entitled to prefer an appeal. But merely because a  joint appeal is preferred and it is found that one of the  appellants, namely, the insurer was not competent to  prefer an appeal, we fail to see why the appeal by the  tortfeasor, the owner of the vehicle, cannot be  proceeded with after dismissing or rejecting the  appeal of the insurer. To take a view that the owner is  not an aggrieved party because the Insurance  Company is liable in law to answer judgment would  lead to an anomalous situation in that no appeal would  lie by the tortfeasors against any award because the  same logic applies in the case of a driver of the  vehicle. The question can be decided a little  differently. Can a claim application be filed against  the Insurance Company alone if the tortfeasors are not  the aggrieved parties under Section 110-D of the Act?  The answer would obviously be in the negative. If that  is so, they are persons against whom the claim  application must be preferred and an award sought for  otherwise the insurer would not be put to notice and  would not be liable to answer judgment as if a  judgment-debtor. Therefore, on first principle it would  appear that the contention that the owner of a vehicle  is not an aggrieved party is unsustainable."

       It was furthermore held; "7. For the reasons stated above, we are of the opinion  that even in the case of a joint appeal by insurer and  owner of offending vehicle if an award has been made  against the tortfeasors as well as the insurer even  though an appeal filed by the insurer is not competent,  it may not be dismissed as such. The tortfeasor can  proceed with the appeal after the cause-title is suitably  amended by deleting the name of the insurer."  

11.     However, another Bench of this Court in Chinnama George and  Others Vs. N.K. Raju and Another [(2000) 4 SCC 130] opined : "6. Admittedly, none of the grounds as given in  Sub-section (2) of Section 149 exist for the insurer  to defend the claims petition. That being so, no  right existed in the insurer to file appeal against the  award of the Claims Tribunal. However, by adding  N.K. Raju, the owner as co-appellant, an appeal  was filed in the High Court which led to the  impugned judgment. None of the grounds on  which insurer could defend the claims petition was  the subject matter of the appeal as far as the insurer  is concerned. We have already noticed above that  we have not been able to figure out from the  impugned judgment as to how the owner felt  aggrieved by the award of the Claims Tribunal.  The impugned judgment does not reflect any  grievance of the owner or even that of the driver of  the offending bus against the award of the Claims  Tribunal. The insurer by associating the owner or  the driver in the appeal when the owner or the  driver is not an aggrieved person cannot be  allowed to mock at the law which prohibit the  insurer from filing any appeal except on the  limited grounds on which it could defend the  claims petition. We cannot put our stamp of

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approval as to the validity of the appeal by the  insurer merely by associating the insured.  Provision of law cannot be undermined in this  way. We have to give effect to the real purpose to  the provision of law relating to the award of  compensation in respect of the accident arising out  of the use of the motor vehicles and cannot permit  the insurer to give him right to defend or appeal on  grounds not permitted by law by a backdoor  method. Any other interpretation will produce  unjust results and open gates for the insurer to  challenge any award. We have to adopt purposive  approach which would not defeat the broad  purpose of the Act. Court has to give effect to true  object of the Act by adopting purposive approach.

7. Sections 146, 147, 149 and 173 are in the  scheme of the Act and when read together mean :  (1) it is legally obligatory to insure the motor  vehicle against third party risk. Driving an  uninsured vehicle is an offence punishable with an  imprisonment extending up to three months or the  fine which may extend to Rs. 1,000/-or both; (2)  Policy of insurance must comply with the  requirements as contained in Section 147 of the  Act; (3) It is obligatory for the insurer to satisfy the  judgments and awards against the person insured  in respect of third party risks. These are Sub- sections (1) and (7) of Section 149. Grounds on  which insurer can avoid his liability are given in  Sub-section (2) of Section 149.

8. If none of the conditions as contained in Sub- section (2) of Section 149 exist for the insurer to  avoid the policy of insurance he is legally bound to  satisfy the award, he cannot be a person aggrieved  by the award. In that case insurer will be barred  from filing any appeal against the award of the  Claims Tribunal."

12.     In Chinnamma George, the owner did not challenge the findings of  the Tribunal that the bus was being driven by the driver in a rash and  negligent manner.  It was therefore, held that the owner was not an  aggrieved person to maintain an appeal.   It was in the aforementioned  context this Court observed that none of the grounds as laid down under sub- Section (2) of Section 149 of the Act having been satisfied, an appeal by the  Insurance Company was not maintainable, observing that an insurer having a  limited area to defend the claim petition, it cannot circumvent the same by  associating itself with the owner/driver in an appeal when the owner/driver  is not an aggrieved person and, thus, cannot be allowed to mock at the law.          13.     In the instant case, the owner of the bus was an aggrieved person.   He  could maintain an appeal of his own.   Section 173 of the Act confers a right  on any aggrieved person to prefer an appeal from an award. 14.     In the present case, it is not necessary for us to go into the larger  question as to whether having regard to the bar contained in sub-Section (2)  of Section 149 of the Act, the second respondent could have preferred an  appeal questioning the quantum of compensation, as the High Court held  that the appeal, even after deletion of the second respondent from the array  of the parties, the appeal preferred by the first respondent was maintainable.  15.     We may only notice that the aforementioned two decisions although  have been referred to by a three Judge Bench of this Court in National  Insurance Co. Ltd., Chandigarh Vs. Nicolletta Rohtagi and Others [(2002) 7  SCC 456], it was not specifically held even therein that a joint appeal by the

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owner and the insurer would not be maintainable.    16.     However, in this case, the appeal preferred by the Insurance Company  has been dismissed.  The High Court has only entertained the appeal of the  owner.   17.     So far as the question in regard to the quantum of compensation  awarded in favour of the appellants is concerned, we are of the opinion that  the High Court has taken into consideration all the relevant evidences  brought on record.  

The accident took place on 7.5.1997.  Income tax returns were filed  on 23.6.1997.            The Income Tax Returns (Exp. P-14), therefore, have rightly not been  relied upon.   Ex.P-8 is a deed of lease.  It was an unregistered document.  Although  the document was purported to have been executed on 10.4.1993, the  genuineness thereof was open to question.  The stamp paper was purchased  in the year 1983 but an interpolation was made therein to show that it was  purchased in 1993.   The purported receipts granted by the tenant were also  unstamped. 18.     In the aforementioned fact situation, the High Court has not relied  upon all the aforementioned documents, filed by the appellant.  It may be  true that there was no basis for the High Court to arrive at the conclusion  that the income of the deceased was Rs.4,000/- from agricultural operation  and Rs. 3,000/- from his commission business, but no reliable document  having been produced to show that the deceased was earning an income of  Rs.12,500/- per month, as claimed.  The High Court, in our opinion, cannot  be held to have, thus, committed any grave error in this behalf.  There is no  dispute as regards application of the multiplier.         In a case of this nature, some guess work is inevitable.  This Court  could have gone into the question provided there was some materials had  been brought on record by the appellants upon which reliance could be  placed.  There being no such material available on record, we are not in a  position to interfere with the impugned judgment of the High Court.

19.   We, therefore, are of the opinion that it is not a fit case where this Court  should interfere with the judgment of the High Court.   Appeal is dismissed.   No costs.