Whether Insurance Company can file appeal against award passed by claim tribunal without obtaining its permission as per S 170 of Motor vehicle Act?

 The learned Counsel appearing on behalf of the claimants took preliminary objection to the maintainability of the appeal filed by the respondent No. 3, the Insurance Company. Counsel submitted that the owner of the offending vehicle i.e. the insured has not preferred any appeal and the respondent no 3-insurer had not filed any application under section 170 of the M.V. Act, before the Tribunal. He relied upon the judgment of the Hon'ble Apex Court in the cases of (i) "National Insurance Company Limited, Chandigarh Vs. Nicolletta Rohtagi" (MANU/SC/0810/2002 : (2003) 7 SCC 456) : (2002 (4) ALL MR 874 (S.C.); (ii) "Rekha Jain Vs. National Insurance Company Ltd. & Ors." (MANU/SC/0773/2013 : 2013 SAR (Civil) 921) : (2013 ALL SCR 2833); and (iii) "Josphine James Vs. United India Insurance Co. Ltd. & Anr." (MANU/SC/0845/2013 : 2013 SAR (Civil) 1143). Learned Counsel further relied upon the Judgments of the learned single Judge of this Court in the case of (i) "Sharad Ganpat Deshmukh and Ors. Vs. Smt. Kunda Ashok Polade" (MANU/MH/1170/2002 : 2004 (1) T.A.C. 718 (Bom)); and "United India Assurance Co. Ltd. Vs. Milind Dattaram Bandagle" (MANU/MH/0690/2011 : 2011 (7) ALL MR 299). On the contrary, Mr. Afonso, learned Counsel appearing on behalf of the respondent No. 3 submitted that in view of the judgment of the three Judge Bench of Hon'ble Supreme Court in the case of "United India Insurance Company Limited Vs. Shila Datta and others" MANU/SC/1256/2011 : ((2011) 10 SCC 509) : (2012 (1) ALL MR 411 (S.C.)), the respondent No. 3, Insurance Company has right to file appeal against the judgment and award.

18. In the case of "United India Assurance Co. Ltd. Vs. Milind Dattaram Bandagle" MANU/MH/0690/2011 : (2011 (7) ALL MR 299), the facts were similar to the facts of the present case to the extent that the insurer was permitted by the Tribunal to contest on merits despite not following the procedure laid down under Section 170 of the M.V. Act. Relying upon the decisions of the Apex Court in the case of "Shankarayya and another Vs. United India Insurance Company Ltd. and another" reported in MANU/SC/0980/1998 : AIR 1998 SC 2968 and Nicolletta Rohtagi's case, (2002 (4) ALL MR 874 (S.C.)) (supra), the learned single Judge of this Court held that the appeal filed by the insurance company to challenge the impugned judgment and award on the grounds not covered by Section 149(2) of the M.V. Act, for want of leave under section 170 of the M.V. Act, was not maintainable.

19. Therefore, it follows that in the present case, since the respondent No. 3-Insurance Company had not obtained permission as required under Section 170(b) of the M.V. Act, to avail the defence of the insured to contest the case, it could not have challenged the findings, on merits. Hence, the appeal is not maintainable.

IN THE HIGH COURT OF BOMBAY AT GOA

First Appeal No. 13 of 2014

Decided On: 07.05.2014

 Royal Sundaram Alliance Insurance Co. Ltd. Vs. Hanamava Yamanappa Jedi

Hon'ble Judges/Coram:

U.V. Bakre, J.

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Leading Supreme court judgment on S 170 Motor vehicle Act

A. Motor Vehicles Act, 1988 - Sections 149 (2) & 170 - If the insurer is only a 'noticee' under Section 149(2) and not a party - Respondent or where the claim is initiated suo motu under Section 149(7), 158(6) or 170, it can defend the claim only on the grounds mentioned in S. 149(2). But if the insurer is made a party-respondent, it can raise other grounds also.

B. Motor Vehicles Act, 1983 - Sections 149(2) & 170-A claim petition may be filed only against the driver and owner of the vehicle without making the insurer a party-respondent. If the insurer is not made a party to the claim petition, the Tribunal shall issue notice to the insurer under Section 149(2). Where the insurer is not made a party, the Tribunal shall hold an enquiry into the claim under Section 170 and, if found necessary, suo motu direct that the insurer be treated as a party to the proceedings.

C. Motor Vehicles Act, 1988 - Sections 149(2) & 170 - S.170 does not contemplate an insurer making an application for impleadment The insurer need not seek the permission of the Tribunal under Section 170 to raise grounds other than those mentioned in Section 149(2) if it is already impleaded as a party-respondent.

D. Motor Vehicles Act, 1988 - Section 173-A joint appeal filed by the owner and insurer is maintainable since the owner does not cease to be a 'person aggrieved' even if the insurer joints him to file the appeal.

E. Motor Vehicles Act, 1988 - The following questions have been referred to larger bench for fresh consideration:

(i) Whether the insurance company can challenge the quantum of compensation claimed/awarded if the insurer was only a 'noticee' under Section 149(2)?

(ii) Whether the insurer can be permitted under Section 170 to file an appeal and contest the award if the insured fails to challenge the award even when the award was erroneous or arbitrary?

(iii) Whether the insurer is restricted to defend the claim only on the grounds available under Section 149(2) even in cases where the Company is authorised by the policy to defend the claim in the name of the insured owner?

IN THE SUPREME COURT OF INDIA

C.A. No. 6026 of 2007

Decided On: 13.10.2011

 United India Insurance Company Ltd. Vs.  Shila Datta and Ors.

Hon'ble Judges/Coram:

R.V. Raveendran, H.L. Dattu and K.S. Panicker Radhakrishnan, JJ.

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Whether insurance company can contest MACT proceeding on merits without leave of claim tribunal U/S 170 of MV Act?

In this connection, we may profitably refer to Section 170 of the Motor Vehicles Act, 1988, which reads as under:

"170. Impleading insurer in certain cases.-Where in the course of any inquiry, the Claims Tribunal is satisfied that-

(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 implicated 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."

4. It clearly shows that the Insurance Company when impleaded as a party by the Court can be permitted to contest the proceedings on merits only if the conditions precedent mentioned in the section are found to be satisfied and for that purpose the Insurance Company has to obtain order in writing from the Tribunal and which should be a reasoned order by the Tribunal. Unless that procedure is followed, the Insurance Company cannot have a wider defence on merits than what is available to it by way of statutory defence. It is true that the claimants themselves had "joined Respondent 1, Insurance Company in the claim petition but that was done with a view to thrust the statutory liability on the Insurance Company on account of the contract of the insurance. That was not an order of the Court itself permitting the Insurance Company which was impleaded to avail of a larger defence on merits on being satisfied on the aforesaid two conditions mentioned in Section 170. Consequently, it must be held that on the facts of the present case, Respondent 1, Insurance Company was not entitled to file an appeal on merits of the claim which was awarded by the Tribunal.

Supreme Court of India

Shankarayya And Anr. vs United India Insurance Co. Ltd. ... on 16 January, 1998

Equivalent citations: I (1999) ACC 497, 1998 ACJ 513, 1998 VIAD SC 33, AIR 1998 SC 2968, JT 1998 (4) SC 300, (1998) IIMLJ 124 SC, (1998) 119 PLR 624, (1998) 3 SCC 140

Bench: S Majmudar, S Kurdukar

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