Deciding Authority: The Supreme Court of India
Name of the Judges: K.T. THOMAS & S.N. PHUKAN
Date of Judgement: 18/01/2002
Facts:
A claim was made before the Claims Tribunal, Patiala House, New Delhi, by the legal heirs of one Dr. Tulsi Dass Sachdeva for awarding compensation in respect of a motor accident which took place on 27.8.1994. Dr. Tulsi Dass Sachdeva died in the said accident and some of his kith and kin sustained serious injuries therein. The total amount claimed in the petition was Rs. 55.56 lakhs. The Claims Tribunal awarded Rs. 12.53 lakhs as compensation to be paid by the 5th respondent Dr. Ramesh Tandon and the appellant Insurance Company, jointly and severally. The claimants averred in the application for compensation filed before the Claims Tribunal that a Maruti Van (No. HR-03-1300) in which the deceased and his wife and relatives were travelling had collided with a Maruti car (No. DL-4C-7741) which was driven by the 5th respondent in a very rash and negligent manner. The 5th respondent Dr. Ramesh Tandon contended before the Claims Tribunal that the accident had happened on account of the rash and negligent driving of the Maruti van and therefore the driver of the Maruti car is to be totally absolved from the fault and hence the owner of the Maruti car has no liability to bear the compensation. Further again it was contended that the amount of compensation claimed in the application was highly excessive and grossly inflated. The Claims Tribunal repelled he contentions of the 5th respondent and passed the award directing the appellant-Insurance Company with whom the Maruti car was insured during the time of accident, to pay the entire compensation amount assessed. The award of the Claims Tribunal was not challenged by the 5th respondent who is the insured-cum-owner of the Maruti car, evidently because he need not pay a single pie towards the awarded sum as the whole brunt of the burden was ordered to be borne by the insurer. According to the appellant-Insurance Company the Tribunal’s award was in gross violation of the principles of natural justice laid down by this Court in various judgments and is very unjust and arbitrary. However, as appellant felt that an appeal could not be filed by the insurer in challenge of the award he had chosen to file the revision petition before the High Court.
Judgement: In the Court’s view, the stand of the appellant is that it cannot file an appeal at all before the High Court under Section 173 of the Act is based on an erroneous assumption. So long as, the insured has not challenged the award passed against him and so long as the liability would only fall on the Insurance Company it is inequitable to deny a remedy of appeal to the Insurance Company. The hub of the section is that the right of appeal is conferred on “any person aggrieved by an award of a Claims Tribunal”. When can an insurance company be aggrieved with the award passed by a Claims Tribunal to entitle it to invoke the right envisaged in Section 173 of the Act. The permissible contours of the involvement of the insurance company in the claims preferred before the Tribunals can be discerned from Section 168 of theAct. That section enjoins on the Claims Tribunal to hold an inquiry on receipt of an application for compensation. There is a statutory compulsion on the Tribunal that such inquiry could be conducted only “after giving notice to the application to the insurer” and to the parties and also only after giving an opportunity to the insurer as well as the parties of being heard. After holding such inquiry the Claims Tribunal has no jurisdiction to pass an award arbitrarily or as it likes, but only “an award determining the amount of compensation which appears to it to be just”. The Tribunal shall specify in the award “the amount which shall be paid by the insurer or the owner or the driver of the vehicle involved in the accident or by all or any of them as the case may be.”
The nationalised insurance companies in India are holding public money. What they have to deal with is public fund. They are accountable to the public for every pie of it. If it is held that no insurance company should feel aggrieved even if the award is seemingly unjust and that such awarded amount should go out of the public fund it is public interest which suffers. If the insurance company has reason to believe that the award was obtained fraudulently which fact was not known to the insured, should this Court allow public money to be given to satisfy such an award? In such cases the insurance company must feel aggrieved. Any interpretation denying such aggrieved insurance companies the opportunity to seek the legal remedy of appeal should not be adopted unless there is a statutory compulsion. There is nothing in Section 173 or in the other relevant provisions of the Act which debars the insurance company to resort to the remedy of appeal when it knows that the award is unjust.
The Court is, therefore, of the view that the insurance company can fall within the ambit of the words “any person aggrieved by an award of a Claims Tribunal” as used in Section 173(1) of the Act, when the insured failed to file an appeal against the award.
After perusing the Sections 170 and 149 of the Act, the Court is of the view that the person against whom the claim is made is normally the insured of the vehicle involved in the accident. When he failed to contest that claim made against him the insurer gets the opportunity to contest such claim on all or any of the grounds available to the insured. Such a provision was absent in the Motor Vehicles Act, 1939 initially and the Parliament inserted it therein only in March 1970. The right of the insured to contest a claim does not stop with the end of the proceedings before the Tribunal.
Two decisions, Narendra Kumar & Anr. v. Yarenissa & Ors., [1998] 9 SCC 202 and Chinnama George & Ors. v. N.K. Raju & Ors., [2000] 4 SCC 130, involved a common situation when the appeal filed by the insurer was held to be not maintainable as the insured had preferred an appeal challenging the award. Hence the principles stated therein are distinguishable on the fact situation.
Decision:
The Court, therefore, took the view that it is open to the insurance company to invoke the right under Section 173 of the Act as the insured had failed to appeal against the award passed against him.
Sudipta Bhowmick, 4th Year, School of Law, KIIT University
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