1. This is an appeal under Section 110-D of the Motor Vehicles Act (hereinafter referred to as 'the Act') filed jointly by the driver, owner and the insurer pertaining to the offending tractor bearing registration No. CPE 7515 against the award dated 22.6.1984 made by the IIIrd Motor Accidents Claims Tribunal, Indore in Claim Case No. 69 of 1982 whereby the learned Tribunal has awarded compensation amounting to Rs. 50,000/- to the injured claimant-respondent against the appellants jointly and severally in respect of the injuries sustained by the injured claimant in the motor accident due to collision between the offending tractor and the scooter bearing registration No. MPE 7430 on which the claimant-respondent was a pillion rider.

2. The facts giving rise to this appeal, briefly stated, are as follows:

On 28.2.1982 at about 6.30 p.m. while the claimant-respondent was riding the pillion of the scooter bearing registration No. MPE 7430 which was being driven by one Prem Kumar on the road going from Nawalakha to Musakhedi the offending tractor with the attached trolley being driven by its driver, appellant No. 1, was proceeding ahead of the scooter and when the scooter after getting the signal from the tractor driver was overtaking the said tractor, the offending tractor dashed against the scooter with the result that the claimant was thrown on the ground and the wheel of the trolley, attached to the tractor, passed over his body resulting in serious injuries to the claimant who was rushed to T. Choithram Hospital where he remained as an indoor patient from 28.2.1982 to 13.3.1982. The claimant at the time of accident was a student of M.Com. (Final) but on account of grievous injuries sustained by him in the motor accident he was unable to appear in the M.Com. (Final) examination and consequently one year of his career was wasted. On a claim petition having been filed by the claimant-respondent against the appellants before the Illrd Motor Accidents Claims Tribunal, Indore the learned Tribunal on appreciation of evidence adduced in the case found that the motor accident resulting in the injuries to the claimant, occurred due to rash and negligent driving of the offending tractor by its driver and that the claimant who was given treatment in T. Choithram Hospital had to spend Rs. 10,000/- on treatment, medicine and special diet during treatment. As regards the quantum of compensation the learned Tribunal has held the claimant entitled to get Rs. 40,000/- as damages besides Rs. 10,000/- spent on treatment, i.e., a total amount of Rs. 50,000/- from the appellants as compensation in respect of the injuries sustained by him in the said motor accident with interest at the rate of 12 per cent per annum from the date of application till the date of realisation.

Being aggrieved by the award the appellants who are driver, owner and the insurer pertaining to the offending tractor, have filed this appeal.

3. Learned counsel for the respondent-claimant has raised a preliminary objection as to the maintainability of this appeal jointly preferred by the driver, the owner and the insurer on the submission that none of the appellants can claim to be a 'person aggrieved' within the meaning of Section 110-D of the Act which provides for appeal by any person aggrieved by the award of a Claims Tribunal. The argument is that the amount of compensation would be payable by the insurer and not the owner of the vehicle, the latter having been insured for the relevant period, in respect of the liability incurred on account of accident involving the vehicle and the entire amount of liability being covered by the insurer. Thus, it is submitted that the driver and the owner cannot make a grievance against the award because the amount under the award is to be recovered from the insurer and not from them. They are, therefore, not the persons aggrieved and as such, not entitled to file appeal against the award. As regards the insurer, it can make grievance only on the grounds of defences provided in Sub-section (2) of Section 96 of the Act, but since no grievance is made in this appeal on any of the grounds under Section 96 (2) of the Act, the insurer cannot validly be termed as a person aggrieved within the meaning of Section 110-D of the Act. Accordingly, it has been submitted on behalf of the respondent that the appeal is not maintainable, it having been preferred by persons, none of whom can be called a 'person aggrieved'.

4. In support of the above submission, the learned Counsel for the respondent has placed reliance on the following single Bench decisions of this court, viz., New India Assurance Co. Ltd. v. Shakuntla Bai 1987 ACJ 224 (MP); National Insurance Co. Ltd. v. Nekramsingh 1985 MPWN Note 319; National Insurance Co. Ltd. v. Rita Nigam 1985 MPWN Note 572 and Mansukhlal v. Bhagwantibai, M.A No. 18 of 1981; decided on 31.10.1988 (Indore Bench). In all these decisions, the view taken is that the owner or the driver of the vehicle cannot be treated as person aggrieved in terms of Section 110-D of the Act merely because of finding that vehicle was driven rashly and negligently, if no amount is specified due and payable by him in the award. Similar view appears to have been taken in United India Fire & Genl. Ins. Co. Ltd. v. Gulab Chandra Gupta 1985 ACJ 245 (Allahabad) and Kantilal and Bros. v. Ramarani Debi 1980 ACJ 501 (Calcutta). These cases have been relied upon in the case of Nekramsingh, (supra).

5. In this appeal against the award of the learned Tribunal the appellants have in substance raised two grounds, viz., (i) that the Tribunal erred in holding that the accident occurred due to rash and negligent driving of the tractor involved in the accident; and (ii) that the amount of compensation awarded is unreasonable and highly excessive.

There can be no doubt that both the aforesaid grounds cannot be raised at the instance of the insurer as these are not covered in the limited defence available to the insurer under Section 96 (2) of the Act. The said grounds are available for being raised by the driver and/or the owner in contesting the claim. But the question that arises for consideration in order to decide the preliminary objection as to the maintainability of the appeal is that if the Tribunal gives a finding of negligence and awards compensation whether the driver and/or the owner who dispute the finding of negligence and the amount of compensation can be allowed to contest these questions in appeal under Section 110-D of the Act, i.e., whether the forum of appeal is available to them for the purpose.

6. In a claim for compensation arising out of a motor accident when the Tribunal makes an award on a finding of negligence against the driver of the vehicle involved in the accident, the primary liability for compensation payable to the claimant is determined against the driver and on account of relationship between the owner of the vehicle and its driver as master and servant or principal and agent, the owner becomes vicariously liable for the act of the driver, but this primary liability of the driver and/or the owner who is insured in respect of the concerned vehicle, gets transferred by virtue of the contract of indemnity entered into between the insurer and the insured owner, namely, the policy of insurance in respect of the concerned vehicle. The primary liability on a finding of negligence being of the driver and/or the owner either of them has every reason to feel aggrieved against the finding of negligence if it is not accepted as correct by them and they fall, in our opinion, in the category of 'person aggrieved' so as to come up in appeal under Section 110-D of the Act for challenging the adverse finding against them. We are unable to agree with the view taken in the single Bench decisions cited before us as above, since in our view a narrower meaning of the expression 'person aggrieved' in Section 110-D of the Act, has been taken therein, which leads to unjust and anomalous situations as we would presently show.

7. According to the submission of the learned Counsel for respondent, even if the owner's vehicle was not involved in the accident he cannot challenge the Tribunal's finding in that behalf if his insurer is directed to pay the amount of compensation. The situation would be unjust since the contract of indemnity, viz., the insurance policy is based on the implicit faith that the insured's vehicle should truly be involved in the accident. But if the insured is not regarded as 'person aggrieved' and is precluded from filing an appeal against the wrong finding as to the identity of vehicle involved, the insurer would be compelled to pay under the award even where the insured's vehicle is not involved, there being no opportunity to appeal against the wrong finding as to the identity of the offending vehicle.

8. The submission of the learned Counsel for the respondent amounts to this that once it is found by the Claims Tribunal that the amount of compensation as determined by it, does not exceed the extent of liability covered by the insurance policy, the finding of rash and negligent driving cannot be disputed and becomes final since according to the submission no appeal lies either at the instance of the driver, owner or the insurer. On such submission the corollary that necessarily follows is that if the amount of compensation awarded exceeds the amount covered by the insurance policy the finding of rash and negligent driving can be disputed and it does not become final since an appeal shall lie at the instance of the driver and/or the owner. This would give rise to a discriminatory treatment in as much as in some cases, the finding of fault is made assailable by way of appeal while not in others without reasonable basis.

9. The finding of fault is the basis for determining liability in tort and is germane to the making of an award for compensation apart from the benevolent provision of no fault liability newly introduced in the Motor Vehicles Act. The finding of fault concerns the driver and/or the owner of the vehicle and if the driver and the owner are not satisfied with the finding of the Tribunal on the question of fault the right of appeal under Section 110-D of the Motor Vehicles Act to challenge that finding ought to be available and in our view it cannot be made to depend on the consideration as to how the amount of compensation determined by the Tribunal compares with the amount covered by insurance, i.e., whether or not it exceeds the amount named in the policy of insurance. If it were not permissible to dispute the correctness of the finding of the Tribunal with regard to the question of rash and negligent driving on the view that no appeal lies even at the instance of the driver or the owner of the vehicle, the provision of appeal under Section 110-D would lose much of its purpose and the result would be that even in cases of there being no fault and the driver and owner disputing their primary liability, the insurer shall still be made to pay compensation which would be an unjust situation not contemplated in the scheme of the Act.

10. The finding of fault of the driver and/or the owner of the vehicle is certainly prejudicial to the driver and the owner and can affect either of them adversely at some forum or on some occasion in future, e.g., if there be a criminal trial pending against the driver on the allegation of rash and negligent driving, the finding of the Tribunal if not allowed to be appealed against on a view that it is not appealable, can seriously prejudice him in that criminal trial though unjustifiably on the view that the driver is precluded from challenging the finding because the amount of compensation awarded does not exceed the amount covered by insurance.

11. The finding of rash and negligent driving of the vehicle involved in the accident cannot be regarded as conclusive and final if the driver and the owner have filed the appeal under Section 110-D and the insured is properly entitled to transfer his primary liability to the insurer upto the extent of liability insured only when the finding of fault is finally decided in appeal against the appellants. For a just and fair decision between the parties on the question of liability it must be held that the driver and the insured owner have a right of appeal under Section 110-D to challenge the award, if they dispute the finding of fault and the consequent primary liability against them. The scheme of the Act contemplates a just and fair contest between the parties. In this regard we may usefully refer to Section 110-C (2-A) and its implications as under:

Section 110-C (2-A) of the Act provides that where the driver or the insured owner of the vehicle against whom the claim is made colludes with the claimant or does not contest the claim, the insurer can be permitted to contest the claim also on the grounds available to the driver or the owner, e.g., that there was no fault on the part of the driver and no tortious liability accrued on the insured and consequently the insurer was not liable under the insurance policy and if the Tribunal gives a positive finding of fault there is nothing to preclude the insurer from disputing the correctness of that finding of the Tribunal in an appeal against the award in the situation since the insurer is necessarily the 'person aggrieved' within the meaning of Section 110-D of the Act.

12. The provision of Section 110-C (2-A) reads as under:

(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.

13. The aforesaid section, in the event of collusion or failure to contest the claim on the part of the person against whom the claim is made (driver and/or the insured owner of the vehicle), empowers the Tribunal for reasons to be recorded in writing to confer on the insurer 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 and if the insurer in a given case after being conferred that right to contest the claim under Section 110-C (2-A) of the Act actually contests the claim on the grounds available to the driver and/or the owner and the Tribunal gives a finding of fault and makes an award for compensation, the insurer being an 'aggrieved person' shall be entitled to file an appeal under Section 110-D to challenge the finding of fault and the award of compensation irrespective of the fact whether or not the compensation awarded exceeds the amount named in the insurance policy.

14. It would, thus, appear that if the driver and/or the owner contested the claim of the claimant and the Tribunal gives the finding of rash and negligent driving and determines an amount of compensation not exceeding the amount named in the insurance policy that finding cannot be challenged at the instance of either of them in appeal as contended by the learned Counsel for the respondent on the basis of the authorities cited as above but if a driver and/or the owner insured did not come forward to contest the claim and the insurer is permitted to contest the claim on the grounds available to the driver and/or the owner, the finding of rash and negligent driving could be challenged in appeal. Such a position is apparently anomalous. The appeal which is not maintainable at the instance of the driver and/or the owner on the basis of the authorities relied upon by the learned Counsel for the respondent, becomes maintainable at the instance of the insurer if the driver and/or the owner were not to come forward to contest the claim and the Tribunal permits the insurer to contest on the grounds available to the driver and/or the owner. In fact the insurer, if permitted to contest on the grounds available to the driver and/or the insured, contests the claim as the driver and/or the owner in fairness should have contested and, therefore, if the insurer who contests under Section 110-C (2-A) and has the right to challenge the finding of rash and negligent driving in appeal, being 'person aggrieved', there does not appear any valid reason why that right should be denied to the driver and/or the owner who contested the claim before the Tribunal in a given case from the very inception.

15. In a decision of the High Court of Orissa in New India Assurance Co. Ltd. v. Surjyamoni Padhi 1980 ACJ 253 (Orissa), a case covered under Section 110-C (2-A), the appellant insurer was held entitled to challenge the quantum of compensation as also its basis in appeal. The relevant observations in that case are as follows:

A conjoint reading of both the Sections 96 (2) and 110-C (2-A) indicates that when there is collusion between the person making the claim and the person against whom the claim is made or the person against whom the claim is made has failed to contest the claim, the insurance company is entitled to defend the suit on all or any of the grounds that are available to the person against whom the claim has been made. In the present case, the insured did not enter contest and remained ex parte before the Tribunal. He has also not preferred any appeal. It was contended on behalf of the respondents that the appellant should have obtained permission of the Tribunal to contest the claim. I am unable to accede to his contention. The appellant was served with a notice as contemplated under Section 96 (2) of the Act and was impleaded as a party to the claim proceedings. Before the Tribunal the respondents did not take the stand that the appellant was not entitled to defend the suit without obtaining permission. The appellant was allowed to contest the claim and cross-examine the witnesses without any objection by the respondents. The appellant has been saddled with the entire liability for payment of compensation. The appellant is, therefore, entitled to challenge the quantum of compensation as also its basis in this appeal. The preliminary objection raised on behalf of the respondents is without any merit.

The High Court of Rajasthan in its decision in National Insurance Co. Ltd. v. Tulsi Devi 1988 ACJ 962 (Rajasthan), held that since no permission in writing allowing the insurance company to contest the claim was recorded by the Tribunal the insurance company cannot take advantage of the provisions of Section 110-C (2-A) of the Act to enable it to file an appeal against the award before the High Court.

16. From the provision of Section 110-C (2-A) it is clear that the anxiety of the legislature is to afford an opportunity both before the Tribunal and in appeal to disprove the allegation of rash and negligent driving so that the correct finding may be reached on the question which is the foundation for determining tortious liability and hence compensation to be awarded primarily against the driver and the owner and if the latter be insured in respect of the offending vehicle the burden of paying the compensation to the claimant is shifted on the insurer by virtue of the contract of indemnity contained in the policy of insurance. If the insurer could be permitted under Section 110-C (2-A) to challenge the finding of fault and the quantum of compensation founded on such finding where the driver of the insured has not come forward to contest the claim, it does not, in our opinion, stand to reason why the driver or the insured who comes forward to contest the claim should be held precluded to challenge the finding of fault and the compensation founded thereon, in appeal before this court, on the ground that the amount of compensation is covered by the insurance policy. There is nothing in the language of Section 110-D so as to carve out an exception for precluding the challenge to the finding of fault at the instance of the driver or the insured on the consideration whether or not the compensation determined by the Tribunal exceeded the amount named in the insurance policy.

17. On considering the implication of Section 110-C (2-A) it becomes clear that the anxiety of the legislature is to afford opportunity both before the Tribunal and in appeal, to disprove the allegation of rash and negligent driving so that the correct finding may be reached on the question, which is the foundation for determining compensation to be awarded primarily against the driver and the owner and then on the basis of the policy of insurance against the insurer.

18. From the scheme of the provisions, it appears to us that the driver and the owner are under an obligation to dispute and contest the allegation as to fault while contesting the claim and also in appeal, if according to them there has been no fault on the part of the driver. Where the driver and the owner do not discharge this obligation faithfully and collude with the claimant the Act ensures a fair contest by making a provision for grant of permission to the insurer to contest the claim on the ground that there was no fault of the driver.

19. The finding of fault against the party held responsible for the accident alone justifies fixing liability against such party and as such, makes him a 'person aggrieved', if he disputes the correctness of that finding. An appeal at the instance of such a person is, therefore, competent under Section 110-D of the Act. A narrower meaning given to the expression 'person aggrieved' occurring in Section 110-D of the Act on the view taken by the single Bench authorities of this court, referred to above, does not appeal to us and we are unable to agree with the view taken. Where the primary liability is fixed on a person on a finding as to fault which is disputed by him, he is a 'person aggrieved' and he does not cease to be so merely because he is able to avoid payment of compensation on account of the policy of insurance in respect of the concerned vehicle. He will be an 'aggrieved person' if he disputes the correctness of the finding as to fault on account of which the primary liability is fastened on him. The single Bench decisions of this court aforesaid taking the contrary view are hereby overruled.

20. The Tribunal's finding of rash and negligent driving against the driver and the finding of primary liability against the driver and the owner are sufficiently prejudicial to the interest and reputation of the driver and the owner of the vehicle so as to entitle them to file an appeal against the award as 'person aggrieved' by the award, even if the entire compensation as awarded may be payable by the insurer on account of the coverage of the policy. This view of ours also incidentally avoids injustice to the insurer, which, on the contrary view, is likely to result on account of the right of appeal depending on a chance of the amount of award exceeding or not exceeding the insurance amount in a given case.

21. In view of the discussion aforesaid, the preliminary objection raised by the learned Counsel for the respondent is, therefore, held untenable and must be rejected and it is held that this appeal is competent for challenging the finding of rash and negligent driving as also the amount of compensation payable, at the instance of the driver and the owner of the vehicle, who are entitled to maintain this appeal, the insurer being entitled to consequential benefit, in the event of the appeal succeeding.

22. Having heard learned Counsel for the parties on the question of rash and negligent driving of the tractor by its driver appellant, DW 1, and having perused the evidence we are of the opinion that the finding of rash and negligent driving has been reached by the learned Tribunal on a proper appreciation of evidence and that the testimony of the appellant driver Parmanand, DW 1, has been rightly rejected as not worthy of credence. As regards quantum of compensation the learned Tribunal has awarded Rs. 40,000/- for loss of hearing of the right ear of the claimant and for mental and physical agony caused by the said accident. The evidence of Dr. Sudhir-kumar Bhargava, PW 5, discloses that he had found partial loss of hearing in the right ear of the injured claimant when he examined him, but he has also stated that he could not say whether or not after discharge from the hospital, the claimant was completely cured in respect of defect of hearing. The Medical Record Officer, PW 6, has stated on the basis of the medical records pertaining to the injured claimant that his ribs and scapula had been fractured and he had several injuries on the face and jaw. In the circumstances, we find that there has been no such permanent disability so as to justify an award of Rs. 40,000/- by way of compensation. Having regard to some impairment in the hearing of the right ear and some injuries on the face which according to the claimant have caused some disfiguration, we think that an amount of Rs. 25,000/- would be just and fair compensation in respect of the injuries suffered by the claimant. The learned Tribunal has awarded Rs. 10,000/- by way of expenses on medical treatment of the injuries sustained by the claimant in T. Choithram Hospital, Indore and other expenses like medicines and special diet etc., the award on the medical treatment does not, in our opinion, call for any interference.

23. Accordingly, this appeal is partly allowed and the award of the learned Tribunal is modified inasmuch as respondent-claimant is held entitled to get from the appellants an amount of Rs. 35,000/- with interest at the rate of 12 per cent per annum from the date of claim petition till realisation instead of Rs. 50,000/- with interest at the rate of 12 per cent per annum as awarded by the learned Tribunal. There shall, however, be no order as to costs of this appeal.