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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • Mr. D.K Bhattacharjee, Mr. B.P Borah & Mr. H.K Sacma, for the Appellant.
  • Mr. S.N Bhuyan, Mr. S.N Chetia & Mr. A.C Bora, for the Respondent.
Judges
  • Hon'ble Mr. Justice Tarun Chandra Das
Acts
  • provisions of Section HOC (2) of the Motor Vehicles Act. Section 96(2)
  • Provisions of Sub-section 2A of Section 110-C
  • provision of sub-section (2-A) of Section
  • Section 96(2) of the Motor Vehicles Act.
  • Act of 1969 of the Motor Vehicles Act
  • provisions of sub-clauses (a) to (c).
  • Section 110A of the M.V Act, 1939
  • sub-section (2A) of Section 110-C
  • sub-section (2) of Section 96
  • provisions of Section 96(2)
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • Mr. D.K Bhattacharjee, Mr. B.P Borah & Mr. H.K Sacma, for the Appellant.
  • Mr. S.N Bhuyan, Mr. S.N Chetia & Mr. A.C Bora, for the Respondent.
Judges
  • Hon'ble Mr. Justice Tarun Chandra Das
Acts
  • provisions of Section HOC (2) of the Motor Vehicles Act. Section 96(2)
  • Provisions of Sub-section 2A of Section 110-C
  • provision of sub-section (2-A) of Section
  • Section 96(2) of the Motor Vehicles Act.
  • Act of 1969 of the Motor Vehicles Act
  • provisions of sub-clauses (a) to (c).
  • Section 110A of the M.V Act, 1939
  • sub-section (2A) of Section 110-C
  • sub-section (2) of Section 96
  • provisions of Section 96(2)
See more information ...
Smart Summary

Concise Analytical Summary of the Provided Opinion

Factual and Procedural Background

This appeal challenges aspects of an award made by the Member, Motor Accident Claims Tribunal, Nowgong in Motor Accident Claims Case No. 7 of 1973. The Tribunal awarded total compensation of Rs. 20,000 on a claim brought by respondent No. 1 (the father of the deceased). The Tribunal directed the appellant (owner of the bus) to pay Rs. 5,000 and directed the Insurance Company (respondent No. 2, Sterling General Insurance Co. Ltd., later renamed The Oriental Insurance Company Limited) to pay the balance Rs. 15,000.

The underlying accident occurred on 5.12.1972: the claimant's eldest son (about 13 years, class V) was struck from behind by the appellant's public bus while standing at the eastern side of the road at Singimari, suffered head injuries and died the next day. The original claim sought Rs. 50,000; the Tribunal, after evidence, fixed compensation at Rs. 20,000.

The owner (appellant) challenged only the Tribunal's direction that he pay Rs. 5,000 of the award. The Insurance Company filed a cross-objection on many grounds but its counsel limited argument at the hearing to two principal points: (1) that the bus was overcrowded in violation of permit conditions making insurer not liable; and (2) that the claimant failed to comply with the proviso to Section 110A (non-joinder of all legal representatives), which the insurer could now raise. The Tribunal had earlier framed three issues: (1) whether the claim is bad for non-joinder of necessary parties; (2) whether the offending vehicle is liable for payment of compensation; and (3) what reliefs parties are entitled to.

Legal Issues Presented

  1. Whether the claim was bad for non-joinder of necessary parties (as framed by the Tribunal).
  2. Whether the offending vehicle was liable to pay compensation (as framed by the Tribunal).
  3. What reliefs the parties were entitled to under law and equity (as framed by the Tribunal).
  4. Whether the owner (appellant) should be saddled with Rs. 5,000 of the award despite the vehicle being insured and the insurer's statutory liability up to the prescribed limit.
  5. Whether the Insurance Company could resist liability on the ground of overcrowding/violation of permit (as argued based on P.W.5's evidence).
  6. Whether the Insurance Company could raise, in this appeal (though not raised before the Tribunal), the legal defect of non-compliance with the proviso to Section 110A (non-joinder of all legal representatives) and thereby avoid liability.
  7. Whether the insurer's right to defend the claim is restricted to the grounds enumerated in Section 96(2) of the Motor Vehicles Act or whether, by virtue of Section 110-C (sub-section 2A), the insurer may be permitted to contest on any grounds available to the owner (person against whom claim is made) when impleaded by the Tribunal.

Arguments of the Parties

Appellant (Owner)'s Arguments

  • The appellant challenged only the Tribunal's direction that he pay Rs. 5,000 out of the award; he contended the insurer was liable to pay the entire award within the statutory limit and thus the owner should not be saddled with part of the award.
  • Counsel for the appellant relied on precedent (British India General Insurance Co. Ltd. v. Captain Itabar Singh, AIR 1959 SC 1331) and on a decision of this Court (Shri Bhagabat Kundu v. Shri Debidutta Agarwalla) to argue that the insurer's right to defend is limited to grounds in Section 96(2) and cannot be extended in this appeal to new grounds not raised below.

Insurance Company (Respondent No. 2)'s Arguments

  • The insurer argued (in cross-objection) principally on two points: (a) that the bus was overcrowded in violation of the permit and therefore the insurer cannot be held liable for the owner's breach; and (b) that the claimant failed to comply with the proviso to Section 110A (non-joinder of all legal representatives), a legal defect that could be raised to contest the claim.
  • The insurer's counsel further contended that the amendment introducing sub-section (2A) to Section 110-C (by the 1969 amendment, effective 2.3.1970) permits the insurer—if impleaded by the Tribunal under that provision—to contest the claim on all or any grounds available to the person against whom the claim is made, thereby potentially widening the insurer's right of defence beyond Section 96(2).

Claimant (Respondent No. 1)'s Arguments

  • The claimant (respondent No.1) opposed the insurer's contentions and submitted that the grounds advanced in the cross-objection were not legally available to the insurer either before the Tribunal or in this appeal.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
British India General Insurance Co. Ltd. v. Captain Itabar Singh, AIR 1959 SC 1331 Establishes that the insurer's right to defend is limited to grounds specified in Section 96(2) of the Motor Vehicles Act; it cannot be extended beyond those grounds. The court relied on this principle to support the view that an insurer cannot raise new grounds of defence in appeal that were not available under Section 96(2) and not raised before the Tribunal.
Shri Bhagabat Kundu v. Shri Debidutta Agarwalla, M.A.(F) No. 51 of 1975 (decision dated 22.11.85) Holds that the insurer may defend an action only on the limited grounds in Section 96(2) (e.g., policy lapsed, policy cancelled, breach of specified conditions including unlicensed driver or disqualified driver). The court cited this decision to reinforce that the insurer's defence is restricted to those grounds and to support rejection of insurer's broader contentions in the present appeal.
Kuntilal & Bros. v. Ramarani Debt, AIR 1979 Calcutta 152 Holds that an appeal filed by the insurance company was not maintainable when it contained no ground available under Section 96(2); insurer remains responsible under the award unless a ground to avoid liability under Section 96(2) exists. The opinion drew on this Division Bench decision to conclude that grounds beyond Section 96(2) are not generally available to the insurer and that the insurer remains liable absent those enumerated grounds.

Court's Reasoning and Analysis

The court proceeded in a factual and legal sequence:

  1. Evaluation of factual contention about overcrowding/permit violation:
    • The insurer's contention that the bus was overcrowded rested on the evidence of P.W.5. The court examined P.W.5's testimony and observed that P.W.5 stated the upper class of the bus was full and passengers were holding the open door, but P.W.5 did not expressly state the bus was "over-crowded" nor that any permit condition was violated.
    • The court held that carrying "full passengers" did not, on the evidence before it, amount to violation of permit conditions. There was no other supporting evidence; therefore the insurer's overcrowding argument failed on the record.
  2. Procedural/joinder contention under Section 110A proviso:
    • The insurer argued that the proviso to Section 110A (requiring impleadment of legal representatives not joined) had not been complied with and that this defect could be raised in this appeal. The court noted that this plea was not raised before the Tribunal, was not averred in the written statement, no issue was framed on it, and no evidence was led on this point. Consequently, the matter could not be entertained in the appeal.
  3. Statutory interpretation of insurer's right to defend:
    • The court analysed Section 96(2) of the Motor Vehicles Act and emphasised that the statute grants the insurer only a limited right to defend, enumerated in sub-clauses (a) to (c) of that subsection. Reading sub-sections (1), (2) and (6) together, the court concluded the law does not recognise a general right to defend in favour of the insurer beyond the specified grounds.
    • The insurer asserted that Section 110-C, as amended (specifically sub-section (2-A) introduced by the 1969 amendment effective 2.3.70), permits an insurer who is impleaded (where Tribunal is satisfied of collusion or failure to contest) to contest on "all or any of the grounds" available to the person against whom the claim is made. The court carefully quoted sub-section (2-A) and noted its limited trigger: impleadment is discretionary and requires the Tribunal to be satisfied of collusion or failure to contest, with reasons recorded in writing.
    • The court concluded that Section 110-C(2A) is not a general provision to expand the insurer's rights in every case; it applies only when the specific conditions (collusion or failure to contest) are present and recorded by the Tribunal. In the present matter the owner had contested the claim, so the special condition to broaden the insurer's rights under Section 110-C(2A) did not obtain.
  4. Reliance on precedent and synthesis:
    • The court accepted the appellant's position that the law is settled by British India (AIR 1959 SC 1331) and subsequent authority that the insurer's defence is limited to Section 96(2) grounds. The court also relied on the cited Calcutta Division Bench decision to the same effect.
    • Applying these precedents and statutory analysis to the facts, the court found no ground on the record to avoid insurer liability under Section 96(2). Therefore, the Tribunal's direction that the owner pay Rs. 5,000 was improper.
  5. Relief and practical consequences:
    • The court ordered that the Insurance Company is alone liable to pay the entire awarded compensation of Rs. 20,000. The cross-objection filed by the insurer was rejected as meritless on the grounds argued.
    • Because it was submitted that the insurer had already paid Rs. 15,000, the court directed the insurer to pay the remaining Rs. 5,000 (if that was the position), with interest at 6% per annum on the balance amount from the date of judgment until payment, and fixed costs of Rs. 1,000 to be paid by the insurer.

Holding and Implications

Holding:

APPEAL ALLOWED; the Insurance Company is solely liable to pay the entire awarded compensation of Rs. 20,000 and the cross-objection of the Insurance Company is rejected.

Implications (direct effects on the parties):

  • The Tribunal's direction that the owner pay Rs. 5,000 is set aside; the insurer must discharge the full award amount. If the insurer already paid Rs. 15,000, it shall pay the remaining Rs. 5,000 with interest at 6% per annum from the date of judgment until payment, and shall pay Rs. 1,000 as costs.
  • The court declined to permit the insurer to raise new grounds not taken before the Tribunal (including the non-compliance with proviso to Section 110A) or to rely on the asserted overcrowding absent supporting evidence.

Broader legal implications: The opinion restates and applies existing principles limiting an insurer's right of defence to grounds enumerated in Section 96(2) and affirms that the expansion under Section 110-C(2A) applies only when the Tribunal is satisfied, for recorded reasons, of collusion or failure to contest. The opinion does not purport to establish any novel legal principle beyond applying those provisions and cited precedents.

Show full summary ...

    Ananda Ram Saikia v. Nurul Haque And Another .

    This appeal arises out of an award passed by the learned Member, Motor Accident Claims Tribunal, “the Tribunal” for short, in Motor Accident Claims Case No. 7 of 1973. The learned Tribunal, Nowgong on the claim application of respondent No. 1 awarded a compensation of Rs. 20,000/- in total with a further direction that the appellant shall pay a sum of Rs. 5,000/- and the balance amount of Rs. 15,000/- would be paid by the Insurance Company, the respondent No. 2. Sterling General Insurance Co. Ltd., Nowgong, Assam was the insurer of the vehicle. The said Insurance Company has been renamed as “the Oriental Insurance Company Limited”. The original claim stood at Rs. 50,000/- but the learned Tribunal after considering the facts and circumstances of the case and on scrutiny of the evidence found that a sum of Rs. 20,000/- would be ‘just compensation’ and accordingly awarded the same. The owner has preferred this appeal being aggrieved by the direction of the learned tribunal for saddling the liabilities with him to pay a sum of Rs. 5,000/- out of the award amount. The facts giving rise to the claim of the respondent No. 1 may briefly foe put herein below:

    2. On 5.12.72 the eldest son of the claimant who was a student of Class V and aged about 13 years met with an accident which was caused by public bus No. ASN 672 belonging to the Appellant. The bus was coming from North to South direction on the Rupahi Silghat P.W.D road carrying full passengers. The eldest son of the claimant-respondent No. 1 Abu Bakkar Siddique was standing by the eastern side of the road at Singimari. It was stated that the back door of the bus was open and it hit Abu Bakkar from behind causing severe head injuries. The boy was immediately removed to Nowgong Civil Hospital but he succumbed to his injuries on the next day. The doctor found three injuries which appeared to him to be major. According to the doctor there was a fracture on the humerus and it was narrated by the doctor as injury No. 1. As per the opinion of the doctor Injury Nos. 2&3 were sufficient to cause death apart from injury No. 1. However, none disputed the death of the boy due to the said accident. The claimant (father of the boy) preferred the claim for payment of compensation before the Tribunal. The present appellant who was arrayed as opposite party No. 1 as well as respondent No. 2. Insurance Company contested the claim by filing their separate written statement. There is no denial that vehicle in question was insured and that the accident took place within the coverage period. The insurance company, respondent No. 2 submitted the written statement with limited grounds of contest, in paragraph 1 of the written statement the Insurance Company has stated that there was no cause of action for the claim against the Insurance Company. It was also denied in the written statement that there was any fault on the part of the vehicle in question resulting in the death of the body. The present appellant, however, on various grounds contested the claim denying the liabilities for death. On the basis of the pleadings the learned Tribunal finally framed three issues as follows:

    1. Whether the claim is bad for non-joinder of necessary parties?

    2. Whether the offending vehicle is liable for payment of compensation?

    3. To what relief or reliefs, the parties are entitled under the law and equity?”

    3. In support of the claim, the claimant examined as many as 5 witnesses including the claimant. None was examined on behalf of the opposite parties. On consideration of the evidence on record the learned Tribunal passed the impugned award which has been challenged in this appeal by the owner only on the point of distribution of the liabilities to pay the award amount. There is no other point raised in this appeal except the point as raised by Mr. B.P Borah, learned counsel for the appellant that since the Insurance Company is liable to pay the entire compensation to the limit as prescribed by the provisions of law and the amount being less than that limit, the Insurance company is liable to pay the entire amount of award and the owner is in no way liable to pay the same as directed by the learned Tribunal. Admittedly, the limit as it stands now under the provisions of law is to the extent of Rs. 15,000/- in case of death and the liability to the extent of that limit is upon the Insurance Company to pay the award money to the claimant. That being the position, let me consider the case of the Insurance Company as advanced before me by Mr. S.N Bhuyan, learned counsel for the Insurance Company in view of the cross-objection filed in this appeal. Though the cross-objection has been filed on very many grounds by the Insurance Company Mr. S.N Bhuyan, learned counsel for the Insurance Company has very fairly limited his ground of attacks on two points. Firstly, Mr. Bhuyan has submitted that the evidence of P.W 5 is clear to the effect that the bus which was involved in the accident was over-crowded on the day of occurrence and hence there was a violation of the terms of the permit and as such the Insurance Company cannot be made liable for such violation caused by the owner of the vehicle. Let me examine the evidence of P.W 5, on this point. It is seen in the evidence (cross-examination) that this P.W 5 has stated “I was sitting in the eastern side (i.e left hand side) of the bus. I was coming in the lower class. Upper class was full of passengers. At the time of occurrance no motor vehicles passed through that road. Passengers were holding the open door. People raised alarm when the boy was knocked.” It has not been stated in the evidence as observed by the learned Tribunal that the bus was over-crowded. It was only loaded with full passengers. This is the solitary evidence in respect of the point raised by Mr. Bhuyan. It is very difficult to hold that the concerned bus violated any condition of the permit as because it carried full passengers on the day of occurrence. Therefore, this submission as made by Mr. Bhuyan cannot stand. Moreover, there is no evidence to support this contention. The next submission of Mr. Bhuyan is that it is open for the Insurance Company to defend and/or to resist the claim on any other legal point which is not enumerated under Section 96(2) of the Motor Vehicles Act. Referring to claim petition the learned counsel has submitted that the proviso to Section 110A was inserted by the amendment Act of 1969 of the Motor Vehicles Act and it came in to force with effect from 2.3.70 The proviso to Section 110A runs as follows:

    “Provided that where all the legal representatives of the deceased have not joined in any such application for compensation, the application shall be made on behalf of or for the benefit of all the legal representatives of the deceased and the legal representatives who have not so joined, shall be impleaded as respondents to the application.”

    With reference to the claim application Mr. Bhuyan, learned counsel for the Insurance Company has made his submission that the proviso to Section 110A has not been complied with by the claimant and it being a legal defect in entertaining the claim application, the Insurance Company can take this legal plea in this appeal. Admittedly, this plea was not raised before the Tribunal nor there was any averment in the written statement to this effect. Consequently no issue could be framed on this point. Therefore no evidence could be led by the party in this regard.

    4. Now let me examine the provisions of Section 96(2) and also the effect of the provisions of Section HOC (2) of the Motor Vehicles Act. Section 96(2) has enumerated the right of defence or to resist the claim by the Insurance Company under the provisions of sub-clauses (a) to (c). It does not give right to resist the claim by the Insurance Company save and except what are enumerated in those clauses. By virtue of these provisions it can be said that in an application filed under Section 110A of the M.V Act, 1939 the insurer can defend the action only on the ground mentioned in Section 96(2) of the Act, and as such, it cannot even cross-examine the witnesses of the claimant on merit. From the provisions of sub-sections (1), (2) and (6) of Section 96 of the Act, if read together, it will be clear that the law does not recognise a general right to defend the action in favour of the insurer. The right to defend, which is given to the insurer, is only a limited right and it can defend the action on grounds specified in-sub-section (2) of Section 96 of the Act.

    5. Mr. B.P Borab, learned counsel appearing on behalf of the appellant has submitted that this point is no longer res integra. As far back in the year 1959 their Lordships of the Supreme Court in British India General Insurance Co. Ltd. v. Captain Itabar Singh as reported in AIR 1959 SC 1331, ruled that the right given to the insurer to defend the claim is a limited right as envisaged by the provisions of Section 96(2) of the Act and the right cannot be extended beyond that. Therefore, According to Mr. Borah, learned counsel for the appellant the Insurance Company now cannot agitate on any of the grounds to contest the claim which was not taken either before the learned Tribunal at the time of evidence. According to the learned counsel for the appellant, as this has not been prescribed in any of the clauses as enumerated in Section 96(2) of the Act, the Insurance Company cannot urge this plea at all. Mr. Borah, learned counsel for the appellant has also placed reliance on a decision of this Court rendered on 22.11.85 in M.A (F) No. 51 of 1975 (Shri Bhagabat Kundu v. Shri Debidutta Agarwalla). In the said case it was held—

    “The insurer may defend an action only on the limited grounds mentioned in Sec. 96(2) of “the Act”. The insurer can take up the defence that the policy has elapsed or the policy has been cancelled or that there has been a breach of specified conditions of the policy including the plea that the vehicle has been driven by a person not duly licensed or by any person who has been disqualified for holding or obtaining driving license during, the period of dis-qualification and that the policy was void”.

    6. In reply to the above submission of the counsel for the appellant Mr. Bhuyan, learned counsel appearing on behalf of the Insurance Company has drawn my attention to the provisions of Section HOC of the Act. It is submitted by Mr. Bhuyan that the decision in British India (supra) was prior to the amendment of the Act which was given effect to on and from 2.3.70 It was only by the amendment, the provisions of Section HOC has been introduced. Referring to the amended provision of sub-section (2-A) of Section HOCg Mr. Bhuyan has submitted that the right to defend by the Insurace Company in a claim petition has been extended by these provisions. Provisions of Sub-section 2A of Section 110-C runs as follows:

    “(2-A) Where, in the course of any inquiry, the Claims Tribunal is satisfied that—

    (i) there is collusion between the person making the claim and the person against whom the claim is made, or

    (ii) the person against whom the claim is made has failed to contest the claim,

    it may, for reasons to be recorded by it 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 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.”

    On bare perusal of the above provisions it becomes clear that the Tribunal in course of enquiry must be satisfied that the claim petition was collusive in nature between the person making the claim and the person against whom the claim is made or the person against whom the claim is made failed to contest the claim. The ??? also will have to record the reasons in writing that it was satisfied that both or any of the conditions being, present the insurer was to be impleaded as a party to the proceeding to enable the insurer to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made. In general this provision is not attracted unless the conditions laid down in sub-section (2A) of Section 110-C are not present. Therefore, the limited or restricted right as enumerated in sub-section (2) of Section 96 of the Act cannot be extended by invoking the provisions of Section 110C of the Act for the insurer to defend the case on all or on any of the grounds that are available to the person against whom the claim has been made. In the present case the owner has contested the claim by denying the liabilities. Therefore, the provisions of Section HOC to take any other ground besides what are enumerated in sub-section (2) of Section 96 of the Act cannot be made available to insurer. Incidentally this matter also came up for consideration before a Division Bench of Calcutta High Court in Kuntilal & Bros. v. Ramarani Debt reported in AIR 1979 Calcutta 152. Relying on a Division Bench decision of that Court it was held in Kant Hal (supra) that the appeal filed by the insurance company was not maintainable as because it contained no ground available to them under Section 96(2) of the Act. The grounds that are available under Section 96(2) of the Act may be urged only by the insurer in a claim. It was further held that according to law there is no doubt that the insurer would be responsible for the amount under the award unless there is ground to avoid the same as indicated in sub-section (2) of Section 96 of the Act.

    7. Mr. A.C Bora, learned counsel appearing on behalf of respondent No. 1, (the claimant) has replied to the contentions raised by Mr. S.N Bhuyan, learned counsel for the insurance company on the score that the grounds as urged in cross-objection are not at all available for the insurer either to resist the claim application or in this appeal.

    8. I have considered the rival contentions of learned counsels of the parties. I cannot agree to the contentions as raised by Mr. Bhuyan, learned counsel for the insurer that the grounds as advanced herein are available to the Insurance Company by virtue of the provisions as laid down under Section HOC of the Act. No other point has been raised by Mr. Bhuyan. On persual of the evidence or record I find that the compensation as awarded by the learned Tribunal is a “just compensation”. The liability of the Insurance Company is to pay the entire compensation amount and having considered the amount as awarded in this case, the direction issued by the Tribunal to the owner to pay a sum of Rs. 5,000/- appears to be not proper. The award amount has not crossed the limit of the liability of the Insurance Company and as such the Insurance Company is liable to pay the entire compensation amount of Rs. 20,000/- as awarded by the learned Tribunal.

    In the result the appeal filed by the owner is allowed. The Insurance Company is alone liable to pay the entire compensation amount. Therefore, the cross-objection is rejected being meritless. The Insurance Company is also liable to pay the balance amount which was directed to be paid to the claimant.

    It is submitted at the bar that the Insurance Company has already paid Rs. 15,000/-. If that be the position, only the remaining balance amount of Rs. 5,000/- shall be paid by the Insurance Company. The Insurance Company shall also pay interest at the rate of 6% per annum on the balance amount of Rs. 5,000/- which will accrue from today till payment is made. The Insurance Company shall pay a sum of Rs. 1,000/- as cost.

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    Comments

    Ananda Ram Saikia v. Nurul Haque And Another .
    (Jun 2, 1986)