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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Guidelines of Supreme Court for protection of money paid to victim of motor accident

The tribunal while awarding the compensation had stated

that the amount payable to the share of Kajal would be kept in a

Fixed Deposit till she attains the age of 18 years. The High

Court while enhancing the amount of compensation has directed

that the enhanced amount be paid to the appellant within 45

days. This is totally contrary to the guidelines laid down by this

Court in General Manager, Kerala State Road Transport

Corporation, Trivandrum v. Susamma Thomas and Ors.15 (1994) 2 SCC 176,

wherein it has been held clearly that the amount payable to the

minors should not be normally released. The guidelines in this

case were as follows :

“17….(i) The Claims Tribunal should, in the case of minors,

invariably order the amount of compensation awarded to

the minor be invested in long term fixed deposits at least

till the date of the minor attaining majority. The expenses

incurred by the guardian or next friend may, however, be

allowed to be withdrawn;

(ii) In the case of illiterate claimants also the Claims Tribunal

should follow the procedure set out in (i) above, but if

lump sum payment is required for effecting purchases of

any movable or immovable property such as, agricultural

implements, rickshaw, etc., to earn a living, the Tribunal

may consider such a request after making sure that the

amount is actually spent for the purpose and the demand

is not a ruse to withdraw money;

(iii) In the case of semiliterate

persons the Tribunal should

ordinarily resort to the procedure set out at (i) above

unless it is satisfied, for reasons to be stated in writing,

that the whole or part of the amount is required for

expanding and existing business or for purchasing some

property as mentioned in (ii) above for earning his

livelihood, in which case the Tribunal will ensure that the

amount is invested for the purpose for which it is

demanded and paid;

(iv) In the case of literate persons also the Tribunal may

resort to the procedure indicated in (i) above, subject to

the relaxation set out in (ii) and (iii) above, if having regard

to the age, fiscal background and strata of society to

which the claimant belongs and such other

considerations, the Tribunal in the larger interest of the

claimant and with a view to ensuring the safety of the

compensation awarded to him thinks it necessary to do

order;

(v) In the case of widows the Claims Tribunal should

invariably follow the procedure set out in (i) above;

(vi) In personal injury cases if further treatment is necessary

the Claims Tribunal on being satisfied about the same,

which shall be recorded in writing, permit withdrawal of

such amount as is necessary for incurring the expenses

for such treatment;

(vii) In all cases in which investment in long term fixed

deposits is made it should be on condition that the Bank

will not permit any loan or advance on the fixed deposit

and interest on the amount invested is paid monthly

directly to the claimant or his guardian, as the case may

be;

(viii) In all cases Tribunal should grant to the claimants

liberty to apply for withdrawal in case of an emergency. To

meet with such a contingency, if the amount awarded is

substantial, the Claims Tribunal may invest it in more

than one Fixed Deposit so that if need be one such F.D.R.

can be liquidated….”

These guidelines protect the rights of the minors, claimants who

are under some disability and also widows and illiterate person

who may be deprived of the compensation paid to them in lump

sum by unscrupulous elements. These victims may not be able

to invest their monies properly and in such cases the MACT as

well the High courts must ensure that investments are made in

nationalised banks to get a high rate of interest. The interest in

most cases is sufficient to cover the monthly expenses. In

special cases, for reasons to be given in writing, the MACT or the

trial court may release such amount as is required. We reiterate

these guidelines and direct that they should be followed by all

the tribunals and High Courts to ensure that the money of the

victims is not frittered away.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 735 OF 2020

KAJAL Vs  JAGDISH CHAND 

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Whether motor accident claim tribunal can grant higher rate of interest if there is default in payment of compensation?

National Insurance Company Limited (hereinafter referred to as 'the insurer') questions legality of the judgment of a Division Bench of the Jharkhand High Court holding that the insurer has to pay the compensation of Rs.72,000/- awarded to the legal representatives of one Hasta Bahadur (hereinafter referred to as 'the deceased') who lost his life in a vehicular accident on 5.6.1987. The deceased was working as a Chowkidar of Hydel Project, Sikidri. A claim petition was filed by his sons under Section 110A of the Motor Vehicles Act 1939 (in short 'the Act'). The Motor Vehicle Accidents Tribunal (hereinafter referred to as 'the Tribunal') awarded compensation of Rs.72,000/- along with interest @ 12% per annum. The amount was directed to be paid within 60 days. It was further directed that in case of failure to pay within 60 days, the rate of interest would be 18%. The insurer questioned the legality of the direction that the whole amount of compensation was to be paid by the insurer; and the direction regarding default rate of interest. According to it, the liability was limited to Rs.50,000/- in terms of Section 95(2)(b)(i) of the Act; and there was no legal basis for the default rate.
Though Section 110CC of the Act (corresponding to Section 171 of the New Act) confers a discretion on the Tribunal to award interest, the same is meant to be exercised in cases where the claimant can claim the same as a matter of right. In the above background, it is to be judged whether a stipulation for higher rate of interest in case of default can be imposed by the Tribunal. Once the discretion has been exercised by the Tribunal to award simple interest on the amount of compensation to be awarded at a particular rate and from a particular date, there is no scope for retrospective enhancement for default in payment of compensation. No express or implied power in this regard can be culled out from Section 110CC of the Act or Section 171 of the new Act. Such a direction in the award for retrospective enhancement of interest for default in payment of the compensation together with interest payable thereon virtually amounts to imposition of penalty which is not statutorily envisaged and prescribed. It is, therefore directed that the rate of interest as awarded by the High Court shall alone be applicable till payment, without the stipulation for higher rate of interest being enforced, in the manner directed by the Tribunal.

Supreme Court of India

National Insurance Co. Ltd vs Keshav Bahadur And Ors on 20 January, 2004

Bench: Doraiswamy Raju, Arijit Pasayat

Citation:2004 ACJ648:2004(2) TAC 1

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Whether owner is entitled to claim damages for vehicle involved in accident before civil court?

 In all the aforesaid decisions, it is clearly stated that the owner is entitled to claim damages for the vehicle involved in the accident. The Civil Court has no jurisdiction to award compensation after the amended provisions of Sections 165 and 166 of the Act which have come into force after the motor vehicle accident of 1988 as there is express bar of entertaining by civil court and the civil court cannot entertain a claim in respect of damage caused to the vehicle involved in the accident. The owner has been conferred with a right of presenting an application for compensation under Section 166 of the Act in respect of damages. The only thing that has to be decided is whether computation can be made in respect of business loss, which is part of the policy of insurance and whether the Tribunal has got jurisdiction under the head - Damages of compensation. It is clear from the principles laid down by the decisions rendered by the English Courts that the loss occasioned due to non-availability of the vehicle under repair can be awarded during the period of repair. It is not stated in those decisions that the entire business loss of income can be entertained or awarded. What is contemplated under the law is that the loss of income sustained during the period of vehicle under repair is an incidental loss, which resulted due to the damages to the vehicle, and it can be awarded and the Tribunal alone can entertain such a thing. Section 166 mentioned about the application to be made for compensation. Section 165 says that compensation can be claimed for damages to any property of a third party so arising out of the use of motor vehicle. Does it cover the loss of incidental income of the owner? It must be held that loss of incidental income due to non-availability of vehicle, which is under repairs, is covered. That has to be taken into consideration while awarding compensation. It cannot be stated that the incidental loss sustained by the owner due to the damage to the vehicle and due to non-availability of the vehicle cannot be taken into consideration. The Court has to take into consideration about the ousting of Civil Court's jurisdiction for claiming compensation in respect of damages to any property. The incidental loss of income has to be taken into consideration while awarding compensation for damages to the property. The single Judge of this Court has rightly observed that there cannot be two forums for claiming compensation. The incidental loss of income is part of the damages to be awarded by way of compensation. The same view has been taken by the English Courts. The method that has to be adopted is to calculate the loss of income due to non-availability of the vehicle. If the vehicle is insured with the Insurance Company, it is liable to pay damages which inclusive of incidental loss of income due to non-availability of the vehicle. The incidental loss of income differs from business loss. The business loss has to be arrived at after taking into consideration of the non-availability of the vehicle on the particular period and its availability after repairs. We are of considered view that just compensation has to be arrived at by calculating the compensation towards damages including the incidental loss occasioned during the period of non-availability of the vehicle. On a consideration of the entire law, we are of the view that the owner of the vehicle is entitled to claim incidental loss of income under the head Damages caused to the vehicle before the Tribunal and the civil court has no jurisdiction.
IN THE HIGH COURT OF ANDHRA PRADESH AT HYDERABAD

Civil Miscellaneous Appeal No. 1242 of 1993

Decided On: 30.12.2003

Appellants: G. Md. Masoom
Vs.
Respondent: S.K. Khader Vali and Anr.

Compensation under Motor Vehicles Act Case

Hon'ble Judges/Coram:
B. Prakash Rao and CH. S.R.K. Prasad, JJ.

Citation:2004(2) T A C 433 AP

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Whether application for compensation under motor vehicles Act can be dismissed in default?

 The Act and the Rules framed there under also do not empower the Claims Tribunal to dispose an application merely for default of the applicant without arriving at findings on merits of the case, after the stage of framing issues. In the instant case, issues were framed, and thereafter, the learned Tribunal was required to decide the case on merits with a view to provide substantial justice, instead of entering into the technicalities.

6. On perusal of the application and other relevant papers, it appears that the restoration application was filed by the applicants on 22nd November, 2001 and another restoration application is filed on 28th January, 2004, under Order 9, Rule 4 of the Code, wherein, the applicants have described the reasons and tried to justify their case for restoration of the application. On perusal of the papers, it appears that the applicants are poor persons and coming from the lower strata of the society as they belong to Tribal Community. Therefore, instead of entering into the technicalities and with a view to do the substantial justice, the Court below was required to adopt lenient view. However, the learned Judge has rejected the said application by holding that there is no provision to restore the restoration application in the Code, and therefore, the application was dismissed by the learned Judge. In my opinion, the learned Judge has also failed to appreciate that the parties to such benevolent legislation should not be allowed to suffer on account of lapse or inaction on the part of their Advocate. The Hon'ble the Apex Court also expressed this view in its judgment in the matter of Rafiq (supra). The Court should adopt a liberal approach in dealing with and deciding such an application.

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

Civil Revision Application No. 263 of 2004

Decided On: 11.03.2011

 Bharatbhai Narsinghbhai Chaudhary and Ors. Vs.
Malek Rafik Malek Himantbhai Malek and Ors.

Hon'ble Judges/Coram:
P.P. Bhatt, J.

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Landmark Judgment of Delhi high court on procedure to be followed in MACT case

The Claims Tribunal Agreed Procedure formulated by the
Committee of the Secretaries/nominees of the Ministries of
Road Transport and Highways; Finance (Department of
Insurance); Law, Justice and Company Affairs; and Joint
Commissioner of Police (Northern Range), to which all the
Insurance Companies have consented, has been accepted by
this Court vide orde

r dated 16th December, 2009. The Delhi
Police has given their consent to implement the Claims
Tribunal Agreed Procedure on a trial basis as a pilot project
for a period of six months. 
. The approved Claims Tribunal Agreed Procedure has
been appended to this order (which will be uploaded on the
internet) so as to enable access by all concerned.

9. The copy of this order along with order dated 16th
December, 2009 and Claims Tribunal Agreed Procedure, as
finally modified and approved be sent to all Claim Tribunals
and Delhi Legal Services Authority through the Registrar
(Vigilance) of this Court. All the Claims Tribunals shall send a
monthly report giving particulars of total number of cases
received by them in a tabular form containing the particulars
of age, occupation, income, number of dependents, amount
offered by the Insurance Company and the amount awarded
by the Claims Tribunals in death cases and relevant
particulars in injury cases. The monthly report of the Claims
Tribunals be sent to this Court through Registrar (Vigilance).
The report with respect to the period between 15th January,
2010 to 14th February, 2010 be sent to this Court by 28th
February, 2010. The same be placed before this Court along
with the comments of Registrar (Vigilance) by 15th March,
2010, which shall be considered on 23rd March, 2010.
10. Copy of this order along with order dated 16th
December, 2009 and approved Claims Tribunal Agreed
Procedure be also sent to the Principal Secretary (Law),
Government of NCT of Delhi for issuing appropriate
instructions to all authorities under Government of NCT of
Delhi for compliance of the order dated 16th December, 2009.
11.The copy of this order be given Dasti to learned amicus
curiae, Committee members, Standing Counsel for Union of

India, Additional Standing Counsel for Delhi Police, Delhi
Legal Services Authority and all the Insurance Companies.
IN THE HIGH COURT OF DELHI AT NEW DELHI
 FAO No.842/2003
Date of Decision: 21st December, 2009

RAJESH TYAGI Vs  JAIBIR SINGH 
CORAM :-
THE HON'BLE MR. JUSTICE J.R. MIDHA

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Landmark judgment of Supreme court revolutionizing MACT Cases

The learned counsel submitted that in respect of the
legislative changes suggested in the judgment rendered in Jai
Prakash v. National Insurance Company Limited and Others, reported
in (2010) 2 SCC 607, there is a Bill already introduced for
amendment to the Motor Vehicles Act and that it is currently
pending before the Parliament for consideration. Barring that, one
other aspect which required to be dealt with immediately by way of
suggestion to the Insurance Councils is in paragraph 23, which
reads as under:-
“23. In cases of death, where the liability of
the insurer is not disputed, the insurance
companies should, without waiting for the
decision of the Motor Accidents Claims Tribunal
or a settlement before the Lok Adalat,
endeavour to pay to the family (legal
representatives) of the deceased, compensation
as per the standard formula determined by the
decisions of this Court.”
Insofar as the said suggestion is concerned, learned Solicitor
General drew our attention to the response filed before us on
behalf of the General Insurance Council, in particular paragraph 4,
which states that presently the procedure suggested in Paragraph 23
is being followed by the Insurance Companies in Delhi by way of a
Scheme called “Claims Tribunal Agreed Procedure” which was
formulated by the Delhi High Court in the judgment dated 16.12.2009
passed in FAO No.843 of 2003 in Rajesh Tyagi & Ors. v. Jaibir Singh& Ors. It is also mentioned therein that Tribunal
 as well as the
Legal Service Authority are taking effective steps to implement the
said procedure, which is being carried out in the National Capital
Territory of Delhi. In paragraph 5, it is further submitted that
since this procedure has been successful in Delhi it can be
extended on pan India basis. The agreed procedure has also been
filed as Annexure R5 with the response filed on behalf of the
General Insurance Council.
We have also perused the procedure, which has been placed
before us as Annexure R5 with the response which, in our view,
appears to be a comprehensive one and that we can issue further
directions to the Registrar General of the Delhi High Court to
ensure that procedure is strictly followed insofar as Delhi is
concerned and also circulate the said procedure to all the other
High Courts and the Registrar General of all the other High Courts
are directed to ensure that the said procedure is implemented
through the Motor Accidents Claims Tribunals in coordination with
the Legal Service Authorities as well as the Director General of
Police of the States concerned.
 S U P R E M E C O U R T O F I N D I A

Petition(s) for Special Leave to Appeal (C) Nos.11801-11804/2005

JAI PRAKASH Vs M/S. NATIONAL INSURANCE CO. & ORS.

Date : 13/05/2016 
CORAM :
 HON'BLE MR. JUSTICE FAKKIR MOHAMED IBRAHIM KALIFULLA
 HON'BLE MR. JUSTICE S.A. BOBDE

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Whether findings of criminal court are binding over claim tribunal?

From the perusal of the award, it could been seen that during cross examination, RW1, has fully admitted that disciplinary proceedings have been taken against him, for his act of negligence and that he was under suspension for three months. While adverting to the evidence adduced, on behalf of both parties, the claims tribunal has considered the judgment, made in Zoological Park Vs. S.Kalyana Raman and others, reported in 2008 ACJ 133 wherein, the Court has held that the finding of the criminal court, is not binding on the claims tribunal.  Mere acquittal in the criminal case does not amount to absolving a person of his rash and negligent driving.  It is well known that the test to prove the guilt of an offence in the court of criminal jurisdiction is proof beyond all reasonable doubt,  whereas, in claim for compensation under the Motor Vehicles Act, 1988, it is suffice that the claims tribunal adjudge, negligence on the principles of preponderance of probability. 
IN THE HIGH COURT OF JUDICATURE OF MADRAS
DATED:  23.06.2014
CORAM:
THE HON BLE MR. JUSTICE S. MANIKUMAR
C.M.A.No.1781 of 2014
and M.P.No.1 of 2014

The Managing Director,
... Appellant

Vs.

1.Santhi
Citation;2016(2) ALLMR(JOURNAL)40 Madras

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When claim tribunal can not direct Insurance company to first pay and thereafter recover from owner of vehicle?

In the light of the above discussion, this court is of the view that the Claims Tribunal was not justified in holding the appellant - insurance companies to be jointly and severally liable to pay the compensation awarded to the claimants after coming to the conclusion that the insurance company is not liable to indemnify the owner, in view of the fact that the victims were gratuitous passengers in the offending vehicle. While it is true that the Claims Tribunal has in the body of the judgment permitted the insurance company to recover the amount paid towards compensation from the owner after treating the award as a decree in favour of the insurance company, in view of the fact that the passengers were gratuitous passengers in the offending vehicle, the provisions of sub-section (4) and (5) of section 149 of the Act would not be attracted and, therefore, the Claims Tribunal had no power to issue such directions to the insurance company to first pay and thereafter recover the amount from the owner.

Gujarat High Court

United India Insurance company ltd vs Minor Mahesh Kanubhai & 2 on 7 April, 2014

     Citation;2015(2) ALLMR(JOURNAL)1

HONOURABLE MS. JUSTICE HARSHA DEVANI

Read full Judgment here; click here

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