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Sadhana Lodh v. National Insurance Co. Ltd. And Another
Factual and Procedural Background
The appellant’s 24-year-old son, who earned approximately Rs 4,000 per month, died in a motor vehicle accident. The appellant filed a claim before the Motor Accidents Claims Tribunal, which awarded Rs 3,50,000 as compensation. Respondent 1 (the insurer) challenged this award by filing a writ petition under Articles 226 and 227 of the Constitution before the Gauhati High Court instead of pursuing a statutory appeal under Section 173 of the Motor Vehicles Act, 1988. A learned Single Judge dismissed the writ petition, but in a letters patent appeal the Division Bench reduced the compensation to Rs 3,00,000, overruling the claimant’s objection to the maintainability of the writ petition. The claimant sought special leave, leading to the present Supreme Court appeal.
Legal Issues Presented
- Whether the High Court could entertain a writ petition under Articles 226/227 filed by an insurer when Section 173 of the Motor Vehicles Act provides a statutory appellate remedy (albeit on limited grounds).
- Whether the insurer could enlarge the scope of its challenge to the Tribunal’s award by resorting to writ jurisdiction instead of the statutorily prescribed appeal.
Arguments of the Parties
Appellant’s Arguments
- Section 173 of the Motor Vehicles Act grants the insurer a right of appeal; therefore, the writ petition under Article 227 was misconceived and should have been dismissed at the threshold.
- The High Court, by entertaining and deciding the writ petition on merits, exceeded its supervisory jurisdiction.
Respondent’s Arguments
- The insurer possesses only limited grounds of challenge under Section 173 read with Section 149(2) of the Act; hence it is entitled to invoke Articles 226/227 to contest quantum and other issues beyond those statutory grounds.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| National Insurance Co. Ltd. v. Nicolletta Rohtagi (2002) 7 SCC 456 | An insurer’s right of appeal against a Tribunal award is confined to the grounds enumerated in Section 149(2) of the Motor Vehicles Act. | Relied upon to hold that the insurer cannot circumvent the limited statutory grounds by filing a writ petition; its remedy lies only in the statutorily provided appeal. |
Court's Reasoning and Analysis
The Supreme Court emphasized that the right of appeal is purely statutory. Section 173, read with Section 149(2), narrowly defines the grounds on which an insurer may appeal against a Tribunal’s award. Allowing a writ petition under Articles 226/227 to challenge matters beyond those grounds would impermissibly enlarge the insurer’s statutory rights.
Article 227 jurisdiction is supervisory, limited to ensuring that subordinate courts or tribunals act within their jurisdiction; it does not permit re-appraisal of evidence or correction of mere errors of law. Because an efficacious statutory appeal was available, the High Court should have declined to entertain the writ petition. The Court further clarified that writ jurisdiction is not a substitute for an appeal, and that even where appellate or revisional remedies are expressly barred, Article 227 (not Article 226) may be invoked only to supervise jurisdictional errors, not to revisit merits.
Holding and Implications
Appeal Allowed; High Court’s judgment and order set aside. The compensation awarded by the Tribunal stands restored, subject to any appeal the insurer may lawfully file.
Implications: The ruling reaffirms that insurers must confine themselves to the statutory appellate remedy under Section 173 and cannot enlarge their grounds of challenge through writ proceedings. It strengthens the boundary between supervisory writ jurisdiction and statutory appellate processes but does not create new substantive rights; its primary effect is to restore the original compensation award and guide future procedural conduct of insurers.
Khare, C.J— Leave granted.
2. The appellant's son, aged 24 years and drawing a sum of Rs 4000 per month, died in a motor vehicle accident. The appellant herein filed a claim petition before the Motor Accidents Claims Tribunal (hereinafter referred to as “the Tribunal”). The Tribunal awarded a sum of Rs 3,50,000 as compensation. Aggrieved, the insurer, who is Respondent 1 herein, filed a writ petition under Articles 226 and 227 of the Constitution of India before the Guwahati High Court. A learned Single Judge of the High Court dismissed the writ petition. Aggrieved, the insurer preferred a letters patent appeal before the Division Bench of the High Court. Before the High Court, the claimant took an objection that since petition under Articles 226/227 is not maintainable, therefore, the appeal is totally misconceived and the same deserves dismissal on that ground alone. However, the Division Bench of the High Court, after overruling the objection allowed the appeal preferred by the insurer and reduced the compensation from Rs 3,50,000 to Rs 3,00,000. It is against the said judgment, the present appeal has been filed by way of special leave petition.
3. Learned counsel appearing for the appellant urged that in view of the fact that under Section 173 of the Motor Vehicles Act, 1988 (hereinafter referred to as “the Act”) a remedy by way of appeal to the High Court is available to the insurer against an award given by the Tribunal, therefore, the filing of a petition under Article 227 of the Constitution was misconceived and deserved dismissal and the High Court ought not to have entertained and decided the writ petition on merits. We find merit in the submission.
4. It is not disputed that under Section 173 of the Act, an insurer has right to file an appeal before the High Court on limited grounds available under Section 149(2) of the Act. However, in a situation where there is a collusion between the claimant and the insured or the insured does not contest the claim and further, if the Tribunal does not implead the insurance company to contest the claim, in such a situation it is open to an insurer to seek permission of the Tribunal to contest the claim on the ground available to the insured or to a person against whom a claim has been made. If permission is granted and the insurer is allowed to contest the claim on merit, in that case it is open to the insurer to file an appeal against the award of the Tribunal on merits. Thus, in such a situation, the insurer can question the quantum of compensation awarded by the Tribunal.
5. However, learned counsel for the respondent argued that since an insurer has limited grounds available under Section 173 of the Act, it is open to an insurer to file a petition under Articles 226/227 of the Constitution.
6. The right of appeal is a statutory right and where the law provides remedy by filing an appeal on limited grounds, the grounds of challenge cannot be enlarged by filing a petition under Articles 226/227 of the Constitution on the premise that the insurer has limited grounds available for challenging the award given by the Tribunal. Section 149(2) of the Act limits the insurer to file an appeal on those enumerated grounds and the appeal being a product of the statute it is not open to an insurer to take any plea other than those provided under Section 149(2) of the Act (see National Insurance Co. Ltd. v. Nicolletta Rohtagi (2002) 7 SCC 456). This being the legal position, the petition filed under Article 227 of the Constitution by the insurer was wholly misconceived. Where a statutory right to file an appeal has been provided for, it is not open to the High Court to entertain a petition under Article 227 of the Constitution. Even if where a remedy by way of an appeal has not been provided for against the order and judgment of a District Judge, the remedy available to the aggrieved person is to file a revision before the High Court under Section 115 of the Code of Civil Procedure. Where remedy for filing a revision before the High Court under Section 115 CPC has been expressly barred by a State enactment, only in such case a petition under Article 227 of the Constitution would lie and not under Article 226 of the Constitution. As a matter of illustration, where a trial court in a civil suit refused to grant temporary injunction and an appeal against refusal to grant injunction has been rejected, and a State enactment has barred the remedy of filing revision under Section 115 CPC, in such a situation a writ petition under Article 227 would lie and not under Article 226 of the Constitution. Thus, where the State Legislature has barred a remedy of filing a revision petition before the High Court under Section 115 CPC, no petition under Article 226 of the Constitution would lie for the reason that a mere wrong decision without anything more is not enough to attract jurisdiction of the High Court under Article 226 of the Constitution.
7. The supervisory jurisdiction conferred on the High Courts under Article 227 of the Constitution is confined only to see whether an inferior court or tribunal has proceeded within its parameters and not to correct an error apparent on the face of the record, much less of an error of law. In exercising the supervisory power under Article 227 of the Constitution, the High Court does not act as an appellate court or the tribunal. It is also not permissible to a High Court on a petition filed under Article 227 of the Constitution to review or reweigh the evidence upon which the inferior court or tribunal purports to have passed the order or to correct errors of law in the decision.
8. For the aforesaid reasons, we are of the view that since the insurer has a remedy by filing an appeal before the High Court, the High Court ought not to have entertained the petition under Articles 226/227 of the Constitution and for that reason, the judgment and order under challenge deserves to be set aside. We, accordingly, set aside the judgment and order under appeal. The appeal is allowed. There shall be no order as to costs. However, it would be open to the insurer to file an appeal if it is permissible under the law.
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