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  • section 96(2) and (6) of the Motor Vehicles Act.
  • section 96(2).6.
  • section 95(2)(d).
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Citation Codes
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citation codes
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Attorney(S)
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  • section 96(2) and (6) of the Motor Vehicles Act.
  • section 96(2).6.
  • section 95(2)(d).
Smart Summary

Factual and Procedural Background

An accident occurred on 27.4.1975 near Kottiyam on National Highway-47 involving two motor cars: K.L.R 7366 driven by the petitioner and K.L.Q 7729 owned by the first respondent and driven by the second respondent. The petitioner, a lawyer from Ernakulam, sustained serious injuries including a grievous fracture to his leg, requiring hospital and Ayurvedic treatments. He suspended his legal practice during this period. The petitioner filed a petition for compensation against the owner and driver of K.L.Q 7729 and the insurance company (third respondent). The respondents contested the petition, denying rashness or negligence and alleging contributory negligence on the petitioner’s part. The Motor Accidents Claims Tribunal awarded compensation of Rs. 62,378.24 to the petitioner, which the insurance company challenged by way of appeal.

Legal Issues Presented

  1. Whether the insurance company can challenge the merits of the compensation award under the prohibitions contained in section 96(2) and (6) of the Motor Vehicles Act.
  2. Whether the insurance company can raise objections not falling within the permissible grounds under section 96(2) of the Motor Vehicles Act.
  3. Whether the Tribunal’s award allowing Rs. 5,355.08 for car repair charges in excess of the statutory limit of Rs. 2,000 under section 95(2)(d) can be modified in the present appeal.

Arguments of the Parties

Appellant's Arguments

  • The insurance company challenged the compensation awarded by the Tribunal.
  • It sought modification of the award on the ground that the sum allowed for car repairs exceeded the statutory limit under section 95(2)(d) of the Motor Vehicles Act.

Respondent's Arguments

  • The petitioner contended that the insurance company was barred from contesting the merits of the award under section 96(2) and (6) of the Motor Vehicles Act.
  • The petitioner relied on the recent Kerala High Court decision in United India Fire & General Insurance Company v. Kalyani and the Supreme Court decision in British India General Insurance Co. v. Capt. Itbar Singh to support the bar on the insurance company’s appeal.
  • The petitioner argued that the insurance company had not produced the insurance policy or reserved any right to defend the action in the name of the assured as required under section 96(2).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
United India Fire & General Insurance Company v. Kalyani (1983 A.C.J 29 Ker) Prohibition on insurance companies challenging compensation awards under section 96(2) and (6) of the Motor Vehicles Act. Followed to hold that the appellant insurance company cannot agitate contentions outside the specified grounds under section 96(2).
British India General Insurance Co. v. Capt. Itbar Singh (1958-1965 A.C.J 1 S.C) Supreme Court precedent establishing the limitation on insurance companies’ right to defend claims not reserved in the policy. Applied as binding authority supporting the bar on the appellant’s appeal.
Oriental Fire & General Insurance Co. v. Gopalakrishnan Pillai (1978 A.C.J 473 Ker) Application of the bar under section 96(2) to appeals from Motor Accidents Claims Tribunals. Relied upon to confirm the applicability of the bar to appeals from the Tribunal in the present case.

Court's Reasoning and Analysis

The Court examined whether the insurance company was entitled to challenge the merits of the compensation award. It noted that the appellant failed to produce the insurance policy or demonstrate that any defense rights were reserved under section 96(2) of the Motor Vehicles Act. The Court relied on the Kerala High Court decision in United India Fire & General Insurance Co. v. Kalyani and the Supreme Court ruling in British India General Insurance Co. v. Capt. Itbar Singh, which restrict insurance companies from contesting awards unless expressly permitted by the policy and statute.

The Court further observed that the bar on appeals by insurance companies applies equally to awards from Motor Accidents Claims Tribunals, as confirmed by the decision in Oriental Fire & General Insurance Co. v. Gopalakrishnan Pillai. Consequently, the appellant’s appeal was barred from raising contentions outside the statutory grounds.

Regarding the appellant’s contention about the excess car repair charges awarded beyond the statutory limit under section 95(2)(d), the Court acknowledged the merit but declined to modify the award in the defective appeal. It also declined to exercise revisional jurisdiction, noting that the appellant had not raised this objection before the Tribunal and had thereby acquiesced to the claim.

Hence, the Court confirmed the Tribunal’s award and dismissed the appeal with costs.

Holding and Implications

DISMISSED

The Court dismissed the insurance company’s appeal, confirming the compensation awarded by the Motor Accidents Claims Tribunal. The decision reinforces the statutory bar under section 96(2) and (6) of the Motor Vehicles Act that precludes insurance companies from challenging compensation awards except on specified grounds or where rights are reserved in the insurance policy. The Court declined to interfere with the award despite the appellant’s contention on repair costs, emphasizing procedural propriety and the appellant’s failure to raise the objection earlier. The appellant was directed to pay or deposit the compensation within one month. No new legal precedent was established beyond affirming existing statutory and judicial principles.

    New India Assurance Co. Ltd. v. O.V Radhakrishnan And Others

    The Judgment of the Court was delivered by

    Balagangadharan Nair, J.:— An insurance company which was the 3rd respondent in a petition for compensation before the Motor Accidents Claims Tribunal, Trivandrum has brought the appeal challenging the decision awarding compensation of Rs. 62,378.24 to the first respondent herein who was the petitioner before the Tribunal. The petitioner was involved in an accident at a place near Kottiyam on the National Highway-47 on 27.4.1975 at about 5 p.m while he was returning to Ernakulam from Trivandrum in his motor car K.L.R 7366. The accident was caused by the collision of another car K.L.Q 7729 owned by the 1st respondent and was driven by the 2nd respondent in the petition. As a result of the accident the petitioner sustained serious injuries and had to undergo treatment in hospitals at Quilon, Ernakulam and Kolancherry, besides taking Ayurvedic treatment for improving the condition of his leg which was grievously fractured in the accident. He is a lawyer at Ernakulam and had to suspend practice during the period he was undergoing these treatments. The petitioner alleged that the accident was caused by the rashness and negligence with which the 2nd respondent was driving K.L.Q 7729. The petition, was brought for compensation general and special against the owner and driver of K.L.Q 7729 and the appellant who was the insurance company. All the respondents entered appearance and contested the petition, though the main contesting party appears to have been the appellant before us. They denied that the accident was caused by the rashness or negligence of the 2nd respondent or that the petitioner had suffered damages to the extent claimed by him. They also contended that the petitioner was guilty of contributory negligence and had no right to claim damages.

    2. The Tribunal over-ruled these defences. On the question of compensation it awarded general damages of Rs. 40,000/- and special damages of Rs. 22,378.24 of which Rs. 5355.08 constitutes the charges which the petitioner had to incur for repairing his K.L.R 7366.

    3. The insurance company alone has come up in appeal challenging the decision of the Tribunal.

    4. At the hearing of the appeal counsel for the petitioner relying upon the recent decision of this Court in United India Fire & General Insurance Company v. Kalyani . 1983 A.C.J 29 Ker. contended that it was not open to the appellant to canvass the merits of the award on account of the prohibitions in section 96(2) and (6) of the Motor Vehicles Act. He also pointed out that there is no case for the appellant that the defences taken by it are these which are specified in section 96(2) or that any right has been reserved for it in the insurance policy to defend the action in the name of the assured.

    5. Indeed the appellant has not produced or caused the production of the insurance policy. In the above decision besides discussing the provisions of law we followed the Supreme Court case British India General Insurance Co. v. Capt. Itbar Singh . 1958-1965 A.C.J 1 S.C. We’ also noted several cases of various High Courts following the Supreme Court decision. In the light of United India Fire & General Insurance Co. v. Kalyani the respondents' objection is well-founded and the appellant cannot be allowed to agitate its contentions against the award as they do not fall within section 96(2).

    6. Although the decision in United India Fire & General Insurance Co. v. Kalyani was concerned with an appeal from a civil suit the same bar must apply to appeals from awards of Motor Accidents Claims Tribunals as well. This point was not decided in United India Fire & General Insurance v. Kalyani, but we noted a few decisions in paragraph 9 of the judgment and left it open. Counsel for the respondent brought to our notice an earlier Bench decision of this Court Oriental Fire & General Insurance Co. v. Gopalakrishnan Pillai . 1978 A.C.J 473 Ker. which had applied the bar under section 96(2) to an appeal from the decision of a Tribunal. In addition to this decision he also placed before us some decisions of other High Courts taking the same view. As the point is covered by Oriental Fire & General Insurance Co. v. Gopalakrishnan Pillai. we do not think it necessary to quote the other decisions.

    7. Although in this view the appeal has to fail counsel for the appellant sought to get at least a modification of the award by pointing out that the sum of Rs. 5,355-08 allowed by the Tribunal on account of repairing charges of the car, is in excess of the statutory limit of Rs. 2,000/- fixed by section 95(2)(d). On the merits the objection appears to be correct but we do not think that we would be justified in making a modification of the award in this appeal which is defectively constituted, and in which the appellant is precluded from raising the objection. We could perhaps interfere only by exercising our power of revision. Even so we are disinclined to exercise the revisional power, for the appellant which must have been fully alive to this point never urged it before the Tribunal either in its written objection or during the hearing. The result is that the appellant allowed the Court below to accept the petitioner's claim under this head and pass the award. In this situation we do not feel persuaded to interfere with the award by exercising our revisional jurisdiction. We therefore refuse the request of counsel for the appellant.

    8. We confirm the award of the Tribunal and dismiss the appeal with costs to the first respondent.

    9. The accident which led to the petition occurred on 27.4.1975, more than 7 years ago. The award itself was passed on 19.7.1980 and apart from presenting a barren appeal the insurance company had not paid the compensation to the petitioner. We, therefore, direct the appellant to pay the compensation to the first respondent-petitioner or deposit it before the Tribunal for such payment within one month from to-day.

    10. Appeal dismissed.

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    New India Assurance Co. Ltd. v. O.V Radhakrishnan And Others
    (Oct 14, 1982)