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Case Number

F.A.O No. 4-D of 1958

Attorney(S)

Chet Ram Mittal with S.P. Aggarwal
S.S. Chadha with S.K. Taneja
for Respondent (Nos. 1 to 4)

Judges

I.D Dua
M.M Ismail, JJ.

Acts

section 96(2) of the Motor Vehicles Act (hereinafter called the Act),

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Smart Summary

Structured Summary of the Opinion — Dua, J.

Factual and Procedural Background

The Premier Insurance Company Ltd. (impleaded as defendant No. 5 pursuant to a notice under section 96(2) of the Motor Vehicles Act) has preferred a Regular First Appeal against a judgment and decree dated 9.12.1957 of a learned Subordinate Judge 1st Class, Delhi. The trial Court granted a decree for Rs. 20,000/- in favour of four plaintiffs (respondents here) against defendants Nos. 1, 2 and 5. The decretal distribution was: plaintiff No. 1 (widow of the deceased Ajit Singh) Rs. 5,000/-, plaintiffs Nos. 2 and 3 (daughters) Rs. 3,000/- each, and plaintiff No. 4 (minor son) Rs. 9,000/-.

On 17.8.1954 at about 7:30 P.M., Ajit Singh (deceased) was travelling in a motor-cycle rickshaw near the Terminal Tax Post Seelampur when a truck belonging to defendant No. 2 and driven by defendant No. 1 collided with the rickshaw. Ajit Singh sustained serious injuries, was taken to Irwin Hospital, and died on 18.8.1954 at about 1:45 A.M. Defendants Nos. 1 and 2 did not appeal. The Insurance Company alone has appealed.

A preliminary objection was raised by the respondents that the appeal by the Insurance Company is incompetent because of section 96(2) of the Motor Vehicles Act and because counsel for the Insurance Company had, by a statement dated 18.4.1956 in the trial Court, given up all pleas except those admissible under section 96(2). It is conceded that defendant No. 5 (the Insurance Company) did not raise any plea covered by section 96(2) either in the Court below or in this Court.

Legal Issues Presented

Whether the appeal preferred by the Insurance Company (defendant No. 5) is competent in view of section 96(2) of the Motor Vehicles Act and the statement of the Insurance Company's counsel dated 18.4.1956 in the Court below abandoning pleas other than those permissible under section 96(2).
Whether clause 2 of the insurance policy (purporting to give the insurer the right to take over and conduct in the name of the insured the defence or settlement of claims) enables the insurer, at this stage, to raise defences not previously contested or to impugn the competence objection despite the earlier concession.
Whether an erroneous concession of law made by counsel in the Court below binds the client in the circumstances of this case and can be set aside at this stage.

Arguments of the Parties

Respondents' Arguments (represented by Mr. S.S. Chaddha)

The appeal by the Insurance Company is incompetent under section 96(2) of the Motor Vehicles Act.
Counsel for the Insurance Company made a clear statement on 18.4.1956 in the Court below giving up all pleas except those admissible under section 96(2); that statement is binding and prevents the insurer from raising other pleas now.
Relied on several authorities (cited in the opinion) in support of the preliminary objection that the insurer cannot now expand its stance on appeal.

Appellant / Insurance Company's Arguments (represented by Mr. Chet Ram Mittal)

Clause No. 2 of the insurance policy entitles the Insurance Company to take over and conduct in the name of the insured the defence or settlement of any claim and to prosecute claims for indemnity or damages for its own benefit; the clause gives the insurer full discretion in the conduct of proceedings and the insured must give information and assistance.
On the basis of clause 2, the insurer is entitled to adopt all defences open to the insured and defend the claimant's suit on those grounds, notwithstanding section 96(2).
The Supreme Court's observations in Itbar Singh support the position that, where the insurer has reserved the right to defend in the insured's name, it may urge all defences open to the insured.
The statement by counsel on 18.4.1956 was allegedly made under a misapprehension of law; counsel submitted that an erroneous concession on a point of law does not bind the client and sought to rely on authorities (including Nawa-1-Waqt and Vedachala v. Rangaraju) to be relieved of the concession.
Also cited Unique Motor & General Insurance Co. Ltd. v. Kartar Singh and other cases to support entitlement to rely on the policy clause.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Sarupsingh v. Nilkant, A.I.R. 1953 Bombay 109	Cited by respondents in support of the preliminary objection under section 96(2) of the Motor Vehicles Act.	Noted as one of the authorities relied on by respondents for the incompetence objection; the Court considered it among other authorities but did not rest its decision solely on this case.
Itbar Singh v. P.S. Gill, A.I.R. 1955 Punjab 187 (considered on appeal by the Supreme Court)	The Supreme Court's observations that the insurer's liability is created by statute and that the statute confines the grounds to avoid liability to those specified; but the insurer, if reserved by policy, may defend in the name of the assured and urge defences open to the assured.	The Court relied on and quoted the Supreme Court observations from Itbar Singh to explain the legal position proffered by the appellant, but noted that in the present case the insurer had in fact given up its pleas in the trial Court and had not relied on section 96(2) pleas.
British India General Insurance Co. Ltd. v. Captain Itbar Singh, A.I.R. 1959 S.C. 1351	Reported dismissal of appeal against the Itbar Singh decision (noted to show the Punjab decision was considered and upheld by the Supreme Court).	Used to indicate that the Itbar Singh principle had been examined by the Supreme Court and the appeal was dismissed; Court referenced this to contextualise the legal authorities cited by counsel.
Vanguard Fire and General Insurance Co. Ltd. v. Sarla Devi, A.I.R. 1959 Punjab 297	Cited by respondents among authorities supporting the preliminary objection (specific principle not elaborated in the opinion).	Recognised as one of the cases relied upon by respondents; no distinct, separate application of its principle is described beyond being part of respondents' support.
New Zealand Insurance Co. Ltd. v. Kalu Ram, 1967 A.C.J. 186 (Bench decision of this Court)	Cited for the proposition that consent or transposition issues arise where a company seeks to be treated as appealing in the name of the insured; questioned whether in absence of consent the company can ask for transposition.	The Court quoted a passage from this decision to show that the issue of transposing the insured as appellant without consent raises difficulties; respondents relied on it to oppose the insurer's attempt to assert defences in the insured's name at this stage.
Unique Motor & General Insurance Co. Ltd. v. Kartar Singh, A.I.R. 1965 Punjab 102	Cited by the appellant as supportive of the insurer's entitlement to rely on the policy clause to adopt defences.	Referenced by the appellant's counsel to buttress the argument that the insurer can rely on the policy clause; the Court noted the citation but found the insurer's prior concession determinative.
Nawa-1-Waqt (Urdu) Lahore (as cited by counsel)	Cited by appellant's counsel as authority on relieving a client from an erroneous concession on a point of law (specific citation details in the opinion are limited).	Noted as one of the authorities relied upon by appellant to argue that counsel's erroneous concession should not bind the client; the Court nevertheless held the concession here to be binding on the facts.
Vedachala v. Rangaraju, A.I.R. 1960 Mad. 457	Cited by appellant's counsel for the proposition that a concession by an advocate on a point of law may not bind the client.	Recognised as part of the appellant's submissions; the Court rejected the attempt to rely on this principle to escape the clear unqualified statement made in the trial Court in this case.

Court's Reasoning and Analysis

The Court first addressed the respondents' preliminary objection that the appeal by the Insurance Company was incompetent under section 96(2) of the Motor Vehicles Act and that the insurer was bound by its counsel's statement of 18.4.1956 in the trial Court giving up all pleas except those admissible under section 96(2).

The Court considered the appellant's reliance on clause No. 2 of the insurance policy, which purportedly permits the insurer to take over and conduct in the name of the insured the defence or settlement of any claim and to exercise full discretion in the conduct of proceedings. The appellant relied on the Supreme Court's observations in Itbar Singh to argue that an insurer, when reserved by policy, can defend in the insured's name and urge all defences open to the insured.

However, the Court observed that the insurer had not in fact relied on any plea covered by section 96(2) either in the trial Court or in its pleadings, and that the counsel's statement dated 18.4.1956 had "distinctly and categorically" given up all the pleas raised in the written statement. The Court treated that statement as a clear and unqualified abandonment of the insurer's defences.

The Court considered the appellant's submission that counsel's concession on a point of law is not binding on a client and that the statement was made under a misapprehension of the law. The Court noted authorities cited for that general principle (including Vedachala and Nawa-1-Waqt) but concluded that, on the facts and circumstances of this case, the categorical statement in the trial Court must be held binding. The Court emphasised that the insurer did not go to trial on any of the pleas raised and therefore it was too late at this stage to permit the insurer to retract the earlier clear unqualified statement without prior notice to the opposite party.

The Court nonetheless permitted the appellant's counsel to address the Court on the evidence and to point out any infirmity in the trial Court's judgment. The appellant contended there was no evidence of negligence on the part of the insured (truck driver) and referred to witness Ramesh Chand (P.W.3), who gave an account of the collision. The Court analysed that testimony and other evidence and concluded that when the motor-cycle rickshaw was on its correct side and the right side of the truck coming from the opposite direction collided with it, that was prima facie evidence of negligence by the truck driver. The Court observed that there was no reliable evidence showing the truck was on its correct side, and in the absence of a cogent explanation, the evidence fairly supported a conclusion of negligence by the truck driver.

The Court reiterated the appellate standard: the onus on the appellant is to show that the trial Court's decision is wrong and not merely that it was possible to reach a different conclusion on the evidence. The appellant failed to demonstrate a reasonable margin of probability against the trial Court's factual conclusion.

Finally, the Court commented on procedure: the respondents should have raised the question of incompetence at the earliest stage after notice of the appeal, preferably before printing the record, because waiting until later after parties have spent money on printing is neither just nor proper. The Court expressed that future practice should avoid such delay.

Holding and Implications

Holding: The appeal is dismissed with costs.

Implications:

The decree of the trial Court for Rs. 20,000/- in favour of the four plaintiffs against defendants Nos. 1, 2 and 5 stands affirmed.
The Court treated the clear and unequivocal statement by the Insurance Company's counsel on 18.4.1956 (abandoning all pleas except those admissible under section 96(2)) as binding on the insurer in the circumstances of this case; the insurer could not at the appellate stage be permitted to retract that statement and raise the abandoned pleas without prior notice to the opposite party.
The Court rejected the appellant's attempts to rely on the policy clause and cited authorities to reopen the conceded position; the insurer's failure to put forward section 96(2) pleas earlier was determinative.
The opinion contains a procedural admonition that objections to the competence of an appeal should be raised at the earliest stage after notice of appeal, and certainly before the record is printed; otherwise the successful objector's costs may be in issue in future cases.

This summary is confined exclusively to the content and statements appearing in the provided opinion. No information beyond the text has been added.

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Premier Insurance Co. Ltd., Madras v. Swaran Kaur And Others

Dua, J.:— The Premier Insurance Company Ltd., impleaded as defendant No. 5 in the Court below in pursuance of a notice issued under section 96(2) of the Motor Vehicles Act (hereinafter called the Act), has preferred this Regular First Appeal from the judgment and decree of a learned Subodinate Judge 1st Class, Delhi, dated 9.12.1957 granting to the four plaintiff-respondents a decree for Rs. 20,000/- against defendants Nos. 1, 2 and 5. Out of the total decretal amount, plaintiff No. 1, widow of the deceased Ajit Singh, was entitled to get Rs. 5,000/-, plaintiffs Nos. 2 and 3, daughters of the deceased, Rs. 3,000/- each and plaintiff No. 4, minor son of the deceased, Rs. 9,000/. Defendant No. 1 Nichhattar Singh is the motor driver of the vehicle which was; involved in the occurrence causing Ajit Singh's death and defendant No. 2, Nahan Singh its owner, whereas defendant No. 4, as already observed, is the Insurance Company.

2. On 17.8.1954 at about 7.30 P.M Ajit Singh deceased was travelling in a motor-cycle rickshaw, when he was near the Terminal Tax Post Seelampur, the truck belonging to defendant No. 2 and driven by defendant No. 1 coming from the opposite direction collided with the aforesaid motorcycle rickshaw as a result of which deceased Ajit Singh sustained serious injuries. He was taken to the Irwin Hospital where he died on 18.8.1954 at about 1.45 A.M Defendants Nos. 1 and 2 have not preferred any appeal.

3. A preliminary objection has been raised by Mr. S.S Chaddha on behalf of respondents Nos. 1 to 4 that the present appeal at the instance of the Insurance Company is incompetent. In support of his objection, he has relied on section 96(2) of the Act and on the statement dated 18.4.1956 of the learned counsel for the Insurance Company, defendant No. 5 in the Court below, giving up all pleas except those admissible under section 96(2) of the Act. Here it may be recalled that originally the Insurance Company was not impleaded as a party but was included in the array of defendants at a later stage pursuant to a notice under section 96 of the Act. In reply to the written statement by the Insurance Company, the plaintiffs in their replication raised the objection based on section 96(2) of the Act and it was in these circumstances that the above statement by the counsel for defendant No. 6 was made. It is not disputed at the bar before us that neither in the Court below nor on appeal in this Court has defendant No. 5 raised any plea covered by section 96(2) of the Act.

4. Mr. Chaddha has cited Sarupsingh v. Nilkant . A.I.R 1953 Bombay 109.', Itbar Singh v. P.S Gill . A.I.R 1955 Punjab 187., Vanguard Fire and General Insurance Co. Ltd. v. Sarla Devi . A.I.R 1959 Punjab 297., and a Bench decision of this Court in New Zealand Insurance Co. Ltd. v. Kalu Ram . 1967 A.C.J 186., in support of his preliminary objection. The decision of the Punjab High Court in Itbar Singh's case, was considered on appeal by the Supreme Court in British India General Insurance Co. Ltd. v. Captain Itbar Singh . A.I.R 1959 S.C 1351., and appeal against the same was dismissed.

5. In reply to the preliminary objection Mr. Chet Ram Mittal, learned counsel for the appellant, has in his usual quiet manner drawn our attention to condition No. 2 of the insurance policy in question which inter alia, entitles the insurance company to take over and conduct in the name of the insured the defence or settlement of any claim or to prosecute in his name for its own benefit any claim for indemnity or damages or otherwise and has full discretion in the conduct of any proceedings or in the settlement of any claim. The insured, according to this clause is obliged to give all such information and assistance as the Company may require. The learned counsel has taken his stand on this clause as against the limitation placed on the Insurance Company under section 96(2) of the Act.

6. The learned counsel has in support of this submission sought assistance from the following observations of the Supreme Court in Itbar Singh's case:

“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 futhermore 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 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.”

7. According to the learned counsel, these observations of the Supreme Court fully entitle the Insurance Company to adopt all defences open to the injured party and defend the claimant's suit on those grounds. The learned Counsel has in this connection also drawn our attention to a Bench decision of the Punjab High Court in Unique Motor & General Insurance Co. Ltd. v. Kartar Singh . A.I.R 1965 Punjab 102. In so far as his own statement dated 18.4.1956 is concerned, the counsel has submitted that a concession by an Advocate on a point of law does not bind his client and the Court should not pin-down the client to his counsel's erroneous concession on a question of law. The statement giving up the other pleas, says Mr. Mittal, was apparently made under a misapprehension as to the correct legal position and this, according to him, is for all practical purposes, similar to the case of concessions erroneously made on questions of law. The counsel has sought support for getting out of the aforesaid statement from in the matter of Nawa-1-Waqt (Urdu) Lahore7 and Vedachala v. Rangaraju . A.I.R 1960 Mad. 457..

8. Mr. Chaddha has attempted to meet the argument based on clause (2) of the insurance policy with the submission that this clause has to be expressly relied upon by the Insurance Company in its pleas and the Company can only seek its benefit by taking over in actual fact the defence of the suit in the name of the insured. If the Company does not choose to do so, then this clause can be of no avail to it. In support of this submission, the counsel has referred us to the Bench decision of this Court in the case of New Zealand Insurance Co. Ltd. v. Kalu Ram. Our attention has been specifically drawn to the following passage in the judgment:

“No consent has been obtained from respondent No. 2 for his being transposed as the appellant. Without deciding whether in the absence of such consent, the Company can ask for such transposition, we are of the opinion that the appellants have not made out any case for being permitted to transpose respondent No. 2 as the appellant or to be permitted now to say that their appeal should be treated as an appeal by or in the name of respondent No. 2”.

9. Clause (2) in the insurance policy, as we construe it, is meant for safeguarding the interests of the Insurance Company against any possible collusion to the prejudice of the Company between the injured party and the insured guilty party in so far as the liability as a result of the accident is concerned. We are, therefore, extremely doubtful if such a clause in an insurance policy must for its operation be construed so as to depend on the consent of the insured, for that may in conceivable cases defeat to an extent the very purpose of its inclusion in the policy. We are unable, as at present advised to persuade ourselves to hold that this clause has the effect of assignment or devolution of the interest of the insured to or on the insurance company so as to remove the insured from the picture altogether. The interest of the insured does not appear to be eliminated or even affected but further interest seems to be created in the Insurance Company (the insurer) with a corresponding obligation on the insured to assist the Company for effectively safeguarding its interest consistently with its obligation created under the insurance policy.

10. But the insured and the insurer would Seem to be entitled in their own right to remain on the record as necessary parties to the litigation, and the aforesaid enforceability of the insurer's right does not depend on the sweet will, desire or whim of the insured. Whether or not in a given case the Insurance Company has intended to take over and conduct the defence in the name of the insured would thus seem to depend on the facts and circumstances of each case and the matter calls for consideration from the point of view of substance and not of mere form. In the present case, however, in view of our decision on the other points, we do not consider it necessary to express our considered opinion on this point.

11. In so far as the statement of the learned counsel dated 18.4.1956 in the Court below is concerned the counsel quite clearly gave up all pleas which had been taken by the Insurance Company, for it is conceded that no plea covered by section 96(2) was put forth in the written statement filed by the appellant. All the pleas raised were accordingly distinctly and categorically given up with the result that it was essentially and basically a case of no pleas by the Insurance Company. Even in the grounds of appeal in this Court, no case has been sought to be made out to sustain the argument that the concession had been made under a misapprehension regarding the legal position.

12. Mr. Chet Ram Mittal has very frankly and fairly submited that he discovered the legal position to be clarified only on reading the Supreme Court judgment in the case of Itbar Singh which was published after the decision of the Court below and indeed even after the filing of the present appeal. In our opinion, the statement, categorical as it is, must be held on the facts and circumstances of this case to be binding on the parties and little assistance can be drawn from the rule that an erroneous concession on a point of law by the counsel is not binding on his client.

13. It appears that the Insurance Company did not go to trial on any one of the pleas raised by it in the written statement and, therefore, it would seem to be too late now to permit the counsel to go back on the clear unqualified statement giving up all defences and to allow him to rely on and take over in the name of the insured the defences put forth by the insured in the Court below. We are not unmindful of the fact that there may not be much prejudice caused to the plaintiffs by permitting the Insurance Company to take over the defences urged by the insured in the Court below, but even so, we are inclined to think that on the facts and circumstances of this case it would not be a sound and judicious exercise of discretion to permit the appellant at this late stage of arguments in this Court, without any prior notice to the opposite party, to go back on clear and unequivocal statement made on 18.4.1956

14. We have, however, also allowed the learned counsel for the appellant to take us through the evidence and point out if there is any infirmity in the judgment and decree of the Court below. Mr. Chet Ram Mittal has submitted that there is no evidence of negligence on the part of the insured and for that purpose he has referred us to the evidence of Ramesh Chand P.W 3 our attention has been invited to the following statement of this witness:

“I had just started the return journey when I observed a motor cycle rickshaw coming from behind me which overtook me. Santosh Singh defendant present in Court was driving the cycle rickshaw in question. That rickshaw had four passengers. From Shahdara side a truck came at excessive speed with full head lights on. The motor cycle rickshaw was going on its correct side. The right side of the truck collided with the motor cycle rickshaw. As a result of the impact the motor cycle rickshaw was thrown over to some distance where it struck against a stationary truck. The truck which had caused the accident sped away from the spot”.

15. The statement of the other witnesses, according to the learned counsel, is much to the same effect. It is submitted that from this testimony one cannot safely infer and come to the conclusion that the truck was on the wrong side. In our view, the submission is not well founded. When the motor cycle rickshaw was stated to be on its correct side and the right side of the truck coming from the opposite direction is stated to have collided with the motor cycle rickshaw than it is prima facie evidence of the truck driver having been negligent in driving his vehicle far too close to the motor cycle rickshaw. It is noteworthy that there is no reliable evidence showing that the truck was on its correct side. In the absence of any cogent explanation, this evidence can very fairly and reasonably be held to found the conclusion of negligence on the part of the truck driver. The accident indeed speaks for itself.

16. It may also be pointed out here that on appeal the onus is on the appellant to show that the decision of the Court below is wrong and this onus cannot be discharged by merely showing that it is possible on the evidence to come to a conclusion in favour of either party. And then the appellate Court does not consider the decision of the trial Court on a question of fact, based on appreciation of oral testimony from balanced niceties in calculation, but it must be convinced that there is a reasonable margin of probability against the conclusion of the Court below being correct. This the appellant in the present case has failed to show.

17. For the foregoing reasons, this appeal fails and is dismissed with costs.

18. Before finally closing, however, we consider it proper to point out that in a case of this nature it would certainly have been more appropriate for the respondents to have raised the question of incompetence of the appeal soon after notice of the appeal was served on them, and certainly before the record was printed. This objection is almost similar to the objection of the appeal being barred by limitation. To lie by and wait till the parties have spent money on getting the record printed is neither just nor proper and the cause of justice both from the point of view of the litigant and of the Court would have been better served if the point had been raised at the earliest possible stage. It is hoped that in future the practice suggested would be adopted, for otherwise the question of depriving the successful objector of the costs may require serious consideration by the court.

19. Appeal dismissed.

Premier Insurance Co. Ltd., Madras v. Swaran Kaur And Others

Structured Summary of the Opinion — Dua, J.

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Respondents' Arguments (represented by Mr. S.S. Chaddha)

Appellant / Insurance Company's Arguments (represented by Mr. Chet Ram Mittal)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Premier Insurance Co. Ltd., Madras v. Swaran Kaur And Others

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