Gopal Rao Ekbote, J.:— This is an appeal from the judgment of our learned brother Krishna Rao, J., given in A.A.O No. 175 of 1965 on 6-2-1968.

2. The 1st respondent filed O.P No. 94 of 1963 before the Claims Tribunal, Secunderabad under Section 110-A of the Motor Vehicles Act, hereinafter referred to as “the Act” claiming Rs. 20,000/- as compensation on account of the death of his son Ramulu. Ramulu was 19 years old on the date of his death. He was run over by a lorry No. APJ 979 on 9-9-1963 and his death was caused solely by the fault of the driver. The lorry was owned by the 2nd respondent and was driven on that date by the 3rd respondent, the driver. Ramulu was a peon in the office of the Andhra Pradesh Khadi and Village Industries Board, Hyderabad. The lorry has insured against third party risk. The insurance company was made a party to the Claim petition. The Insurance company admitted that the vehicle APJ 979 was insured with the company for the period commencing from 16-10-1962 to 15-10-1953. It was averred that the claim of Rs. 20,000/- as compensation was excessive and legally untenable. It was contended that the company was liable only to the extent of the loss suffered.

3. The 2nd respondent, the owner of the vehicle remained exparte throughout. At the time of arguments however, he filed an application to set aside the ex parte order. There upon he was permitted to contest from the stage where the proceedings stood at that time. He examined himself and participated in the arguments.

4. The 3rd respondent remained throughout exparte.

5. The claims Tribunal framed two issues. After recording the evidence adduced by the parties and marking the documents produced by them, the Claims Tribunal held that the death of Ramulu was due to his having been knocked down by the lorry. It was also held that the owner of the lorry was liable for the compensation. The claims Tribunal determined the quantum of damages at the rate of Rs. 40/- per month for the next 36 years and granted a decree in favour of the petitioners for a sum of Rs. 17,300/-. It held that the petitioner would be entitled to recover the said amount from the insurance company.

6. Dissatisfied with that award, the insurance company preferred an appeal to the High Court which came up for consideration before our learned brother Krishna Rao, J. The owner of the lorry did not prefer any appeal to this Court, nor did he appear in the appeal filed by the Insurance company although he was made a party to the appeal. The driver was ex parte in the trial court and continued to be so before the Appellate Court.

7. The learned Judge held that it is not open to the insurance company to raise a plea relating to the quantum of compensation as Section 96 permits it to raise such defences as are enumerated in Section 96 and no more. The learned Judge, however, gave a finding that the claimant would have been entitled to Rs. 7,200/- calculated at Rs. 30/- per month for 20 years. Since the learned Judge was of the opinion that such a defence could not be raised by the insurance company, he refused to reduce the amount of compensation. As a result of his first finding, the appeal was dismissed. The Insurance company has preferred this Letters Patent Appeal against the said judgment.

8. It was firstly contended by Sri K. Ramgopal, the learned counsel for the appellant, that section 96 is applicable only to a suit instituted before civil court and that it is not applicable to a proceeding instituted before the Claims Tribunal. His contention was that the language of section 95 necessarily leads to that conclusion. He argued that Section 96(1) uses the words ‘Judgment’ ‘Judgment debtor & and. ‘Decree’ which terminology, according to him, is appropriate only to a suit instituted before a Civil Court and not a proceeding before the Claims Tribunal.

9. It is no doubt true that the said words do appear in Section 96(1) of the Act. It is also true that at the time when section 96 was enacted, there was no question of any Claims Tribunal being constituted anywhere in India. It is only when old section 110 with the proviso was substituted by the present section 110 with the other connected sections 110-A to 110-F by Section 80 of the Motor Vehicles (Amendment) Act 100 of 1956 that the State Government were empowered to constitute claims Tribunals for adjudicating upon claims for compensation in respect of accidents involving the death or bodily injury to persons arising out of the use of Motor Vehicles. The position after these provisions were inserted was that some of the State Governments appointed claims Tribunal and that too for some of the areas within such a State, while others have not so appointed with the result that today such claims are tried by the claims Tribunals wherever they are set up while the civil courts continue to entertain suits where claims Tribunals have not been constituted.

10. It is perhaps profitable to survey the scheme of the provisions relating to these claims Tribunals. Section 110-A uses the word ‘application’ instead of a suit. Section 110-B uses the word ‘award’ instead of judgment. Section 110-A specifies the persons who can make application for compensation and enjoins that the application has to be made to the concerned claims Tribunal in the prescribed form. It further prescribes 60 days limitation for filing the claims from the date of the accident. On sufficient cause being shown, however, the claims tribunal is empowered to condone the delay. Section 110-B enjoins that the claims Tribunal shall hold enquiry and make an award determining ‘just’ compensation specifying the person who would be entitled to it and also specifying the amount which shall be paid by the insurer.

11. Section 110-C then states that the claims tribunal may follow such summary procedure as it thinks fit. The claims Tribunal, however, has all the powers of a Civil Court for the purpose of taking evidence etc., and is deemed to be a Civil Court for the purposes of section 195, Cr. P.C Against the award passed by Claims Tribunal, under Section 110-D appeal lies only to the High Court. But in cases where the amount in dispute in the appeal is less than Rs. 2000/- no appeal lies. Section 110-E authorises the amount of award due from the insurer to be recovered as arrears of land revenue on an application made by a proper person in that behalf. The section, however, is silent as to how the award can be executed against the insured person. Lastly Section 110-E bars the jurisdiction of the Civil court where any claims Tribunal has been constituted for any area.

12. The scheme of proceedings before the claims Tribunal, as seen from these provisions, is distinctly separate from the scheme of the suit and its trial before a Civil Court under the Civil Procedure Code. In a suit no question of summary trial can arise. The Civil Court has no choice except to try it as any other regular suit is tried. It has to write the judgment and prepare a decree-strictly in terms of C.P.C Against such judgement and decree first and second appeals would lie according to the provisions of the C.P.C Even in a case where the subject-matter of the appeal is less than Rs. 2,000/- an appeal is provided and a second appeal also lies subject to Section 102 of the C.P.C The decree passed in such a suit can be executed in a manner provided in Order XXI C.P.C by the Civil Court. There is thus a marked difference between the procedure that has to be followed before the Civil Court and the one that is to be followed before the Claims Tribunal. In these circumstances, it cannot be a matter for surprise if section 95 is made applicable only to suits tried by the Civil Court.

13. In this connection, it is pertinent to note that under Section 110-B the claims tribunal is bound to give a chance to the parties of being heard. The term ‘parties’ would obviously include the insurer. It is bound to hold an enquiry into claim. It is only after such an enquiry in which parties are given a fair and reasonable opportunity of being heard that the claims Tribunal will make an award. It shall determine the ‘just’ compensation. Whether the compensation is just or not therefore can be pointed out by any party. If it is in this connection remembered that Sec. 110-B also enjoins on the claims Tribunal to specify the amount which shall be paid by the insurer, then the insurer who is a party and is required to pay the amount specified cannot be asked to pay the amount unless he is given a fair chance to contest the justness of the compensation. That is what the section permits. This provision also in a way confines the operation of section 95 to the suits before the Civil Court and not to a proceeding before the claims Tribunal. Thus from the language of Sec. 96 and that of Section 110-B there is much which can be said in support of the contention advanced before us by the learned counsel for the appellant.

14. The Parliament itself while legislating has made a distinction between the cases which go to the court and the cases which go before the claims Tribunal. It is of course clear that the intention of the legislature seems ultimately to cover the entire area by the claims Tribunals so that eventually all claims arising out of the motor accidents shall be summarily tried by the claims Tribunal. Till all the claims Tribunals covering the entire area appointed, the dichotomy is bound to continue. We are not here called upon to consider the validity of such a dichotomy. We are only concerned to see whether section 95 is applicable to the suits tried by the Civil Courts and not to the proceedings before the claims Tribunals. In view of the fact that section 96 was enacted when the constitution of the claims tribunal was not even conceived and in view further of the language of Section 110-B the intention of the Legislature appear to us clear that it was originally meant that section 95 would apply to the suits before the Civil Courts. Even after sections 110 to 110-F were introduced, there is nothing to show that sec. 96 was intended to apply to the Claims Tribunal. We have already noticed that Section 110-B on the other hand applies to the proceedings before the claims Tribunal. A different pattern of proceedings seems to have been evolved for the claims Tribunal in 1956. If the intention of the Legislature was to have similar procedure for both the Civil Courts as well as the claims Tribunals, nothing could have prevented the Parliament from applying the procedure made applicable to the claims Tribunal to the Civil Courts and vice versa. But we have already seen that in 1955 when the claims Tribunal pattern was introduced, an altogether different procedure has been brought into existence for the purpose of trying the claims before the claims Tribunal and that too without amending section 95 with a view to get claims tribunal into its fold. The said pattern was not made applicable to the suits before the Civil Courts. Thus when the Parliament evolved a new pattern of procedure for the proceedings before the claims Tribunal without amending Section 95, it becomes plain that the procedure laid down by the provisions of sec. 110 to 110-F would govern the proceedings before the claims Tribunal while, apart from C.P.C the procedure laid down in section 95 would govern the proceedings before the Civil Court. The amending Act of 1955 nowhere indicated its intention in any manner that section 96 of the Act would apply to the proceedings before the claims Tribunal. The easiest thing would have been to amend section 96 and make it applicable both to the Civil Courts as well as to the claims Tribunals. It would not therefore be unreasonable to infer that the Parliament left the old mode of enquiry to the civil court and adopted the pattern of procedure for the proceedings before the claims Tribunal. The Parliament perhaps thought that the provisions relating to the civil court are transitory in their nature and will fade out the moment the entire area is covered by the claims Tribunal. That is why the procedure before the civil court was left untouched in 1956. There are, in our view, clear indications in the scheme of sections 110 to 110-F that the Parliament intended to provide a distinctly separate procedure for the claims Tribunal.

15. This conclusion of ours gathers sufficient strength from the recent amendments profusely made to the Motor Vehicles Act by the Motor Vehicles (Amendment) Act 56 of 1969. It is note-worthy that even now no amendment is made to Section 96 allowing it to embrace the proceedings before the claims Tribunal. The phraseology of the amended provisions continued to be the same. We have already seen that a different phraseology was adopted for Claims Tribunal in the amendments made in 1956 and the same phraseology is being used even now in the new-Amendment Act. Section 110 C is amended. Sub-Section 2-A is added to it. According to this sub-section, it is only the claims Tribunal which is empowered and not the Civil Courts to permit in certain cases the insurer to raise all the pleas which the insured could raise. There is no reference to section 96 in this sub-section. It means that even under the circumstances mentioned in this sub-section, the civil court is not permitted to give such a permission to the insurer. Otherwise, there is no reason why the said provision is not made applicable to a civil court. That term is conspicuously absent from that provision. In section 62 of the Amendment Act whereby new Section 110-C is added the terms ‘court’ and ‘claims Tribunal’ are used. Thus it is clear that wherever the Parliament wanted a particular provision to apply both to court and claims Tribunal, it mentioned it clearly. The irresistible inference from this is that whenever the Parliament did not want any particular power to be exercised either by the court or the Tribunal, it omitted reference to it.

16. One thing must, in this connection, be noticed. While section 96 declares that the insurer shall be entitled to be made a party only when a notice is served upon him, and if he so chooses can defend the action but only on the grounds enumerated therein, but under Section 110-C as amended, the insurer shall be imp leaded as party to the proceedings only when the claims Tribunal is satisfied about one of the two things mentioned therein and upon thus being impleaded the insurer shall have a right to contest on all or any of the grounds that are available to the person against whom the claim has been made. It is, significant that no reference is made to Section 95. Till the insurer is thus impleaded, the question of his setting up any defence cannot arise. It is necessary to carefully mark the difference between the language of Section 96 and the language of Section 110-C in this respect. It is in this connection pertinent to note that Section 110-B enjoins upon the claims Tribunal in imperative language to specify the amount which shall be paid by the insurer. There undoubtedly is some omission and some discrepancy in evolving a well knitted scheme regarding the procedure to be adopted before the claims Tribunal. But the courts are not concerned with such defects nor we can supply them. It is enough to note that section 96 was and is continued to be applied only to suits before the civil courts and therefore it is not applicable to the proceedings before the claims Tribunal.

17. We are fortified in our conclusion by a Bench decision of the Madras High Court in K. Gopalakrishnan v. Sankara Narayan . A.I.R 1968 Madras 436. it was observed:

“Thus the insurer is an important party in the claim before the Tribunal as the amount payable by it should be clearly specified in the award. The claims Tribunal has restricted the rights of the insurance company to cross-examine the claimant and his witnesses on its construction of section 96 of the Act. It should be noted that Sec. 95 of the Act was introduced several years before the constitution of the claims Tribunals by the present section 110 of the Act. At the time when Section 96 of the Act first came into force there was no claims tribunal. Section 96 was introduced in order to enforce the duty of insurers to satisfy judgments against persons insured in respect of third party risk by giving them notice after judgment obtained by third party against persons insured in respect of third party risk. It is only in such cases the defences open to the insurer are restricted to the grounds mentioned in section 96(2) of the Act. A reading of Sec. 96 would clearly show that it was not intended to govern enquiry before a Claims Tribunal. Section 96 contemplates proceedings in a court and not a proceedings before a Tribunal. It contemplates notice being given to the insurer which may be before or after judgment is obtained against the person who had effected insurance for third party risk. The insurer is no doubt entitled to be made a party and defend the action on the grounds mentioned in that Section. But in the proceedings before a claims Tribunal the insurer is a party.”

18. We are therefore satisfied that the trial court as well as the learned judge erred in refusing the Insurance company permission to raise the plea that the compensation demanded by the claimant is unjust or that the compensation awarded by the Claims Tribunal is excessive. The Insurance company has a aright to raise such a plea and the court is bound to deal with it. Section 95 not being applicable to the claims Tribunal and since no other provision applicable to the proceedings before the claims Tribunal precludes the insurer from raising such a plea the insurer was entitled to raise that plea. It cannot be refused to be considered and disposed of. We have therefore no hesitation in accepting the argument of the learned Advocate for the appellant.

19. The next contention, which was alternatively raised by the learned advocate for the appellant was that the insurance company can by way of defence or in appeal urge that the principles on which the compensation is awarded are not legally valid and that the quantum of compensation determined by the claims Tribunal is wrong. It was contended that the claimant at best is entitled to recover from the insurance company Rs. 7,2000/- as is held by the learned Judge. Section 96 of the Act, even if it is considered as applicable to the proceedings before the claims Tribunal, does not in fact preclude the insurance company from raising such a plea either in defence or in any case in appeal, particularly when the owner of the vehicle had not contested the claim before the claims. Tribunal nor had he preferred any appeal against the award of the claims Tribunal.

20. In order to appreciate the implications of this contention, it becomes necessary to read section 96 in so far as it is relevant.

“(1) If, after a certificate of insurance has been issued under sub-section (4) of section 95 in favour of the person by whom a policy has been effected, Judgment in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (1) of section 95 (being a liability covered by the terms of the policy is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree, any sum not exceeding the sum assured, payable there under, as if he etc. the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.

(2) No sum-shall be payable by an insurer under sub-section (1) in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice through the court of the bringing of the proceedings, or in respect of any judgment so long as execution is stayed thereon pending on appeal:

and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the act on any of the following grounds, namely:—

(a) that the policy was cancelled by mutual consent or by virtue of any provision contained therein before the accident giving rise to the liability, and that either the certificate of insurance was surrendered to the insurer or that the person to whom the certificate was issued has made an affidavit stating that the certificate has been lost or destroyed, or that either before or not latter than fourteen days after the happening of the accident the insurer has commenced proceedings for cancellation of the certificate after compliance with the provisions of Section 105; or

(b) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely.

(i) a condition excluding the use of the vehicle;

(a) for hire or re-award, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or

(b) for organized racing and speed testing, or

(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a public, service vehicle or a goods vehicle, or

(d) without side-car being attached, where the vehicle is motor cycle, or

(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification, or

(iii) a condition excluding liability for injury, caused or contributed to by conditions of war, civil war, riot or civil commotion; or

(c) that the policy is void on the ground that it was obtained by the non disclosure of a material fact or by a representation of fact which is false in some material particulars.

(6) No insurer to whom the notice referred to in sub-section (2) or sub-section (2-A) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment as is referred to in sub-section (1) or sub-section (2-A) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the State of Jammu and Kashmir or of the reciprocating country, as the case may be”.

21. An analysis of this section if, carefully made, would reveal that sub-section (1) is a declaratory provision. It lays down the statutory liability of the insurer to pay the amount due under a decree. Prior to this section, the injured could not have sued the insurance company as there was no privity of contract between them. But for the section, even today the position would have been the same. Sub-section (1) declares that the liability created by that section can be enforced as if the insurance company were a judgment-debtor. Notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer is now liable to pay a sum not exceeding the sum assured together with interest and costs thereon.

22. Sub-section (2), however, subjects the enforcement of liability declared by sub-section (1) to certain conditions. Firstly the insurance company must have been given a notice through the court, of the bringing of the proceedings, or in respect of any judgment so long as execution is stayed pending an appeal either before or after the commencement of the proceedings. And secondly the insurance company shall be entitled to be made a party and to defend the action on any of the grounds mentioned in sub-section (2).

23. It will thus be seen that the injured is given a right to sue the insurance company and enforce liability under the decree against it on the one hand and on the other the insurance company has been conferred with a right to be a party and defend the action on any of the grounds mentioned therein. Thus section 95 avoids two successive or separate suits being filed and permits all the disputes between the three parties in a single suit to be determined. In this triangular fight, however, the insurance company has to defend itself on the grounds enumerated in sub-section (2) while the insured can set up any defence which is available to him.

24. The defence available to the insurance company, if broadly characterised, it will be seen that they relate to the terms of the insurance polity; in other words, they relate to the contract of insurance between the injured and the insurer.

25. Under clause (a) of sub-section (2) one of the defences available is that the policy was cancelled by mutual consent or according to the terms of the policy before the accident giving rise to the liability had occurred. In such a case, however, the certificate of insurance must have been surrendered or the insured by affidavit declares that the certificate was lost or destroyed, or that either before or not later than fourteen days after the happening of the accident, the insurer has commenced proceedings for the cancellation of the certificate after complying with the provisions of section 105.

26. Under clause (b), the other defence which is available is that there has been a breach of a specified condition of the policy. Such condition must be of the character mentioned in sub-sections (1), (2) and (3) of clause (b). A reading of these conditions would reveal that the first relates to the use of the vehicle. The second relates to the person driving the vehicle, and the third relates to the exclusion of liability in specified circumstances.

27. It can be noticed that all these defences have a bearing only on the terms of the contract of insurance, or in other words, they relate to the terms and conditions of the policy of insurance. These defences have very little to do with the defences which the defendant is entitled to set up under the general law, such as want of jurisdiction, limitation or the like.

28. We are not very much concerned in this case with sub-sections (2-A), (3), (4) and (5).

29. Sub-section (6) declares that no insurer shall be entitled to avoid his liability otherwise than in the manner provided for in sub-section (2). Thus sub-sec. (2) enumerates the defences available to an insurance company and sub-section (6) provides that the insurance company cannot avoid its liability otherwise than in the manner provided in sub-section (2), that is to say, otherwise, than by raising the defences enumerated therein.

30. The question of construction of section 96(2) and (6) came up for consideration before the Supreme Court in British India General Insurance Co. v. Itbar Singh . A.I.R 1959 SC 1331.. The question arose in two appeals which arose out of two suits. The contention raised before the Supreme Court was that “when an insurer becomes party to an action under sub-section (2) he is entitled to defend it on all grounds available at law including the grounds on which the assured himself could have relied for his defence and that the only restriction of the insurer's right of defence is that he cannot rely on the condition of the policy which sub-section (3) makes as of no effect.”

31. The Supreme Court held:

“It would follow that an insurer is entitled to defend on any of the grounds enumerated and no others. If it were not so then of course no grounds need have been enumerated. When the grounds of defence have been specified, they cannot be added to. To do that would be adding words to the statute”.

“Sub-section (6) also indicates clearly how sub-section (2) should be read. It says that no insurer to whom the notice of the action has been given shall be entitled to avoid his liability under sub-section (1), ‘otherwise than in the manner provided for in sub-section (2)’. Now the only manner of avoiding liability provided for in sub-section (2) is by successfully raising any of the defences therein mentioned. It comes then to this that the insurer cannot avoid his liability except by establishing such defences. Therefore sub-section (6) clearly contemplates that he cannot take any defence mentioned in sub-section (2). If he could then he would have been in a position to avoid his liability in a manner other than that provided for in sub-section (2) That is prohibited by sub-section (6)”.

32. Our learned brother thought that the said decision precludes the Insurance company from raising any defence such as it has now tried to raise, that is, that the trial court in determining the quantum of damages applied a wrong principle of law and that the amount awarded is so inordinately high that it should be held to be a wholly erroneously estimate of the damages. Although the learned Judge was of the view that the compensation awarded is excessive and that the figure was arrived at without having regard to the principles governing the same, he refused to interfere in appeal on the ground that such a defence either before the claims Tribunal or even before the appellate court was not available to the insurance company in view of section 95(2) read with sub-section (6) of the Act.

33. Let us then examine whether section 96 really precludes even such a defence and whether the supreme court has so interpreted section 96. We have already seen that section 95(2) merely enumerates the defences available to the insurance company and section 96(6) enjoins that the insurance company shall not be entitled to avoid its liability otherwise than in the manner referred to in sub-section (2). The section nowhere says expressly that these are the only defences available to the insurance company and no other. Interpretation of a section normally should not be made which would have the effect of adding some words to it. While it is true that no other grounds can be added to sub-section (2) by the Courts while interpreting section 95, it is also equally true that while saying that only the grounds enumerated in sub-section (2) and no other would also involve addition of some words. The Supreme Court did not approve of a construction which would result in adding some words to the section. The Supreme Court therefore while saying that an insurer is entitled to defend on any of the grounds enumerated and no other and if it were not so, no grounds need have been enumerated”, reached that conclusion obviously on the strength of the maxim expressio unius est exclusio ultariun which can mean “express enactment shuts the door to other implication”, or, in other words, “expression of one thing is the exclusion of others”.

34. If there be any one rule of law clearer than another it is this, that where the legislature have expressly prescribed one or more particular modes of dealing with property or a suit or claim, such expression would always exclude any other mode except as specifically authorised. It is, however, clear that in applying the principle embodied in the maxim the court should exercise a good deal of caution. Because it is well settled that the said maxim may be a valuable servant, “but is certainly a dangeruous master to follow in the construction of statutes. The exclusion may be the result of inadvertence, accident or even indifference. It may have not been intended to exclude everything else but only some such defences which are alike to those enumerated or relating to the contract of insurance and not to those commonly available to all the litigants. One thing, however, is clear that the maxim ought not to be applied, where its application, having regard to the subject-matter to which it is to be applied leads to inconsistency, absurdity or injustice. It cannot be applied even where the section if so construed would become uncertain and capricious in its application. That this is so is seen from Dean v. Wiesetigrund(3).

35. What follows is that we should exercise caution and not allow the maxim to override the justice involved in the process. It should be used as a servant or an instrument for the purpose of carrying out the intention of the Legislature and not allow the rule embodied in the maxim to be our master making the courts helpless even in reaching the intention of the Legislature. It is obvious that if the import of the rule deprives a party of his right to defend even under the common law, then in applying such a maxim, greater caution should be exercised. If, on the other hand, the purpose would be served if the maxim is applied in a restricted way, an attempt should be made to restrictively apply that rule. In this case, it is no doubt true that section 96(2) read with sub-section (6) permits the insurance company to raise certain defences and by implication on the basis of the said maxim precludes other defences being raised by the insurance company. The question, however, is whether such preclusion is total and covers not only matters or defence which the insurance company could have raised under the policy or relating to the contract of insurance against the insured with a view to avoid liability on the basis of the contract of insurance or does this preclusion includes all the other defences available to any defendant to an action in any civil court or tribunal. Such defences may not all relate to the contract of insurance in which case it can be contended that such defences are not set up to avoid the liability arising out of the contract of insurance. Many of such defences are set up under the general law. They cannot be said to have been set up for the purpose of avoiding the liability under the contract. Such defences may relate to the question of jurisdiction of the court where the action is brought. They may relate to the question of limitation or they may relate to the standing of the party who has brought the action or they may even relate to pure questions of law under which compensation is determined or the principles relating thereto. Except in a loose sense such grounds of defence cannot be said to have been raised for the purpose of avoiding the liability under the contract of insurance. In fact and in truth such defences relate strictly to matters extraneous to such liability, that is to say that they relate to the forum where such liability is sought to be enforced or the liability cannot be enforced because it is barred by limitation or the action is not maintainable because some essential preliminary step has not been taken, or that the liability sought to be enforced is not just or legally enforceable. These are some of the grounds which could certainly be raised by the insurance company against the insured even in an action between them. We fail to see why the insurance company should now be deprived of such defence because of section 96. Section 96[2] read with sub-section [6] therefore, has to be read in a manner which will not deprive the insurance company of its right to raise such pleas under the common law which do not effect the liability but affects something outside it. We are therefore satisfied that the observance of the maxim must be limited to the objections relating to the contract of policy; in other words, the defences relating to the policy other than the one permitted by section 96(2). Beyond this the observance of the maxim would make section 96 inconsistent and absurd and would result in injustice. We do not find any unreasonableness in such an interpretation of section 95. We cannot, allow section 95 to be permitted to, be construed in a manner which would result in inconsistency, absurdity and injustice. The present case is the best example of such a construction.

36. The Supreme Court has undoubtedly laid down that the insurance company can avoid its liability only on the grounds enumerated in section 96(2) and no other ground. But we are not sure that the Supreme Court even wanted to shut out the defences which go to the root of jurisdiction etc. In fact from some of the observations made by the Supreme Court, we are inclined to take that the decision confine the defences to sub-section (2) of the section 95 and does not permit any other defences relating to the contract of insurance on the basis of which the liability is sought to be avoided. The defences available under general law to any defendant such as those mentioned by us above are not shut out.

37. The Supreme Court has categorically laid down that if the insurance policy specifies a contract that the insurance company can defend the action in the name of the insured, the insurer can in such a case raise all such defences available to the insured. Literally taken this defence would not be permissible under section 96(2) read with sub-section (6). It is true that in such a case it is said that the insurance company defends the action in the name of the insured. But that hardly would be a justification to permit such a defence if section 95(2) read with sub-section (5) is rigidly confined to the defences available under sub-section (2) and to no other defences even under the common law. In our view, that is not the view of the Supreme Court. From no part of the judgment the learned Advocate for the respondent could point out that the Supreme Court wanted even to shut but the defences such as mentioned by us above. The Supreme Court nowhere says that either expressly or even by necessary implication. Any such appreciation of the Supreme Court's decision would be erroneous.

38. It is pertinent in this connection to note that the attention of the Supreme Court was specifically drawn to some cases including Royal Insurance Co. v. Ablul Mohammed . AIR 1955 Bombay 39.. That was a case in which Chagla, C.J, speaking for the Bench observed that “in a case where the defendant does not wish to resist the plaintiff's claim or he may not wish to resist it because he may not be interested knowing that the decree will ultimately be satisfied by the insurance company, the insured may collude with the plaintiff or he may submit to a consent decree which may be prejudicial to the interest of the insurance company. In all such cases, the interests of justice would justify the court in using its inherent power under section 151 CPC to permit the insurance company to defend in the name of the defendant.”

39. It will immediately be seen that although section 96 is said to put an embargo-upon the right to defend in certain cases on the insurance company, the Bombay High Court has found out a way to meet the exigencies of justice and equity relying upon section 151 C.P.C Thus the said decision in spite of preclusion of any such defences permits the insurance company to raise all defences available to the insured in the circumstances mentioned in that judgment.

40. It is pertinent to note that this decision of the Bombay High Court was not dissented or overruled by the Supreme Court. The Supreme Court merely observed in reference to this and other decisions referred to it “It does not appear however to have been seriously contended in any of those cases that the insurer could defend the action on a ground other than one of those mentioned in sub-section 2”.

41. In Vanguard Fire and General Insurance Co. Ltd. v. Sarla Devi . AIR 1949 Punjab 297. Bench of Punjab High Court took a different view than what was taken by the Bombay High Court. The judgment says:

“After the enactment of the Motor Vehicles Act it is not possible to permit the insurers to defend the suit or appeal on those grounds which under Section 96(2) and 96[6] it is not open to them to defend. Section 151 Civil Procedure Code, cannot be used to nullify or negative a statutory provision of this nature.”

42. It has, however, been seen that although the decision of the Bombay High Court was cited to the Supreme Court, it did not expressly disapprove of what was held in that decision. The Bombay High Court even in an earlier case had taken the same view.

43. It would not therefore be improper if it is inferred from the decision of the Supreme Court that in the circumstances mentioned by the Bombay High Court, an insurance company can in spite of Section 99 be permitted to raise other defences also. It is already seen that the Supreme Court itself thought it unobjectionable if in pursuance of the contract the insurance company defends the action in the name of the insured. These two approaches it cannot be doubted are inconsistent with section 96(2) read with sub-section (6). If that provision of law is very strictly construed as is sought to be so construed before us by the learned Advocate for the respondent, such defences could not be permitted. They cannot be permitted to be raised as an exception to section 96 because there is no provision to that effect. Then on what basis such defences are permitted?. Obviously on the basis that the application of the maxim referred to above must be made in a cautious and restricted way so that the insurer is not deprived of his right to defend more than what is necessary. This approach of the Bombay High Court in fact supports the view which we are taking that except defences which are permitted under section 96, other defences relating to the terms and conditions of policy which are raised with a view to avoid liability on the basis of that contract cannot be permitted to be raised. But section 96 does not preclude the insurer like any other defendant to raise such pleas which he can under the general or common law such as those we have referred to above.

44. We see no particular reason, to hold that the Legislature intended to even shut out such defences. If the history of section 96 and the purpose for which specific defences alone are permitted are kept in view, there can be little difficulty in reaching the conclusion that the Legislature intended to shut out only those defences which relate to the contract of insurance and on the basis of which liability is sought to be avoided. The Legislature could have never intended to shut out the defence to the insurance company such as mentioned above generally available to it under the general law. We are therefore satisfied that the insurance company can raise the defences that the claimant has claimed excessive or unjust compensation or that the Claims Tribunal having disregarded the principles on which damages can be ascertained decided to award excessively inordinate damages to the claimant.

45. We are supported in this reasoning and conclusion of ours by a Bench decision of the Madras High Court in M. Bhoopathy v. Vijayalakshmi. The facts in brief were: A car owned by V was insured in his name under a policy covering third party risk. During the currency of the policy, V sold the car to W. The Insurance company had no knowledge of the transfer. The car then knocked down the plaintiff. In a suit by the injured, the insurance company set up a defence that it is not liable under the circumstances mentioned above. It was held:

“The insurance company was not liable. Section 95(1) of the Motor Vehicles Act itself presupposed and proceeded on the basis that there, was a subsisting policy. In the absence of an express stipulation to the contrary in the policy, the continued ownership of the car with the insured was basic to the subsistence of the policy. Once the subject matter of the policy was gone as when parted with by the insured by sale or transfer, the policy automatically lapsed and there was nothing for the insurer to avoid it.”

46. In Vimlabhai v. Central Assurance Society Limited . A.I.R 1955 Bombay 278., Tendolkar, J. was concerned with a case where none of the grounds enumerated in Section 96(2) existed which would have entitled the insurance company to be made a party and defend the same. The learned judge observed:

“Is the position any different in India? In my opinion, this court is clothed with all the equity jurisdiction that is vested in the King's Bench Division under the judicature Acts in England and for the purposes of securing justice as between the parties to a litigation and third parties affected by the litigation the court has inherent jurisdiction to make any order that it may consider just and equitable. It seems to me to be a matter of elementary justice to the insurer that if a judgment is to be enforced against him he should have the right to defend the suit before judgment, not by being a party which he cannot be except on any of the grounds set out in S. 96(2), but through the defendant or in the name of the defendant. Ordinarily he would have to defend the suit through the defendant, and therefore he must in the first instance offer to the insured that he shall indemnify him against the consequences of defending the suit and request the insured to defend the suit. But if the insured unreasonably refused to defend the suit on those terms, it seems to me that this court has ample jurisdiction to authorise the insurer to enter an appearance and to defend the suit in the name of the insured so that the judgment does not go by default.”

47. Even if we are found elsewhere to be wrong on the construction which we have placed on section 95 of the Act, the conclusion to which we have reached can be supported on another ground. Section 110-C along with some other provisions of the Act have been amended by the Motor Vehicle (Amendment) Act 56 of 1959. The Central Government by their notification published in the Gazette of India on 27-2-1970 appointed 2-3-1970 as the date on which the amended Section 110-C shall come into force. The following is the amendment made in the provision:

110-C Procedure and powers of Claims Tribunal:—

(2)(a) where in the course of any inquiry, the claims tribunal is satisfied that—

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

(2) 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 proceedings 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”.

48. The point for consideration is whether the above said provision which has come into force during the pendency of the letters patent Appeal can be applied to such a pending claim. The marginal note of Section 110-C is “Procedure and powers of Claims Tribunal”. Section 110-C therefore is partly a procedural provision. Sec-96, which permits the insurance company to raise certain defences and precludes others of the same kind being raised, is also a procedural provision.

49. It is now-well-settled that “a law which merely alters the procedure may, with perfect propriety, be made applicable to past as well as future transactions, and no secondary meaning is to be sought for all enactment of such a kind. No person has a vested right in any course of procedure. He has only the right of prosecution or defence in the manner prescribed for the time being, by or for the court in which he sues, and, if an act of Parliament alters that mode of procedure he has no other right than to proceed according to the altered mode. The remedy does not alter the contract of the tort, it takes away no vested right, for the defaulter can have no vested right in a state of the law which, left the injured party without, or with only, a defective remedy”. See Maxwell in ‘Interpretation of Statutes’ page 216. To the same effect is an observation at page 400 of Craies on Statute Law.

50. It is equally well settled that a remedial law should be interpreted liberally. The term ‘remedial’ is often employed to describe legislation which is procedural in nature, in that it does not affect substantive rights. It is on this basis that such statutes are given a retrospective effect apart from being liberally construed. It is necessary to bear in mind that the method designed to enforce and establish substantive rights or set up a defence to such an action as a general rule is enacted not for an end in itself but to provide a better way of achieving in end. Such procedural provisions are avenues to justice and not dead-end streets without direction or purpose. That is why the courts have generally been very generous in the treatment of statutes relating to procedure. Such approach does not permit mere technicalities to impede the administration of justice. So an interpretation, which this highly technical or which results in absurdity and in justice should always be avoided.

51. What must follow from these principles is that Section 110-C as amended being a procedural provision, would apply to a pending case such as the present one. That the litigation is at the Letters Patent Appeal stage hardly alters the position. The claim even then would be pending. Since the appellate Court-re-hears the claim, it has power to give any judgment or to make any order which ought to have been made and to make such further order or other orders as the Court may think fit. It seems clear therefore that the Court of appeal is entitled and night to re-hear the case as at the time of re-hearing. As Section 110-Case amended provides that if the person against whom the claim is made has failed to contest the claim, the claims Tribunal shall permit the insurance company to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made, that is, the owner of the lorry which caused the fatal accident. Since the appellate court enjoys all powers which the claims Tribunal has, in a fit case the Appellate Court can and should permit the insurance company to raise such defences as would have been raised by the defendant against whom the action has been brought.

52. The question then is whether this is a fit case in which the discretion vested by the amended Section 110-C can be exercised in favour of the insurance company. We think that it is an eminently fit case to exercise the discretion in favour of the insurance company. We have already noticed that the owner of the lorry remained exparte before the Claims Tribunal. He appeared at the fag end of the case. He was permitted by the Tribunal to participate only from the stage at which he had appeared, with the consequence that he merely examined himself and advanced arguments in the case. There was no substantial or effective contest between the plaintiff and the said defendant. He failed to raise the objection which now is sought to be raised by the insurance company. Even after the case went against him before the Claims Tribunal, he failed to appeal and thus contest the claim on the ground amongst others now set up by the insurance company. In these circumstances, it is not at all difficult to hold that the person against whom the claim is made has failed to contests the claim. And for the reasons given above, we think that this is a fit case to permit the insurer, who was already impleaded as a party, to contest the claim on the ground which is sought to be raised before us and it is not doubted that this is a ground which was and is available to the defendant against whom the action really has been brought i.e the owner of the lorry.

53. The question then arises as to whether the Claims Tribunal has erred in determining the quantum of compensation at Rs. 17,280/-. It is appropriate to bear in mind the principles which ought to be observed by an appellate court in deciding whether it is justified in disturbing the finding of the court of first instance. Before the Appellate Court can properly intervene, it must be satisfied that the claims Tribunal in assessing the damages applied a wrong principle of law (as by taking into account some irrelevant factor or leaving out of account some relevant one), or, short of this, that the amount awarded by way of compensation is either so inordinately low or so inordinately high that it must be wholly erroneous estimate of the damages. That this is so is seen from the following decisions: Flint C. Lovell7, Dvies v. Pwell Duffryn Associated Collieries . 1942 Appeal Cases 601. and Faylor v. O'Comon . 1976 2 W.L.R 472. (House of Lords)

54. The law on the question as to how in a case such as the present damages should be determined is clear. The plaintiff is entitled to such a sum as will make good to him the financial, loss which he has suffered and will suffer as a result of the death of his son. In calculating the pecuniary loss to the dependants many imponderables, however, enter into the calculations. Broadly stated the principle is that the pecuniary loss should be ascertained by balancing on the one hand the loss to the claimants of the future pecuniary benefits and on the other any, pecuniary advantage which from what ever source comes, to them by reason of the death, i.e the balance of loss and gain to a dependant by the death must be ascertained. It is however, clear that future loss is necessarily conjectural. It is necessarily compounded of prophesy and calculation. If all has gone well, the deceased son would have earned larger sums for a longer period so that he could have maintained the father and the other dependants at least at their standard of living at the time of his death and made other provisions for their future. But all may not have gone well. Any of them might have died prematurely, he might not have been able to earn larger, sums and other misfortunes might have occurred. So allowance must be made for this. In such circumstances what the court can do best is to arrive at a figure on a reasonable balance of the probabilities avoiding undue optimism as well as undue pessimism.

55. Damages to make good the loss of dependency over a period of years must be awarded as a lumpsum and that sum is generally calculated by applying a multiplier to the amount of one year's dependency. A sound common sense and experience alone can be the adequate guide to the selection of an act multiplier. The aim of the multiplier is to provide a figure which is proportional to the injury resulting from the death. It is intended to provide in a rough measure adequate Compensation for the loss sustained. In this exercise no precise method can be expected. It is hallowed in practice and depends on experience of the judges and the counsel appearing in the case.

56. In an oft-quoted decision of the Privy Council Nance v. British Columbia Electric Railway Company . 1951 Appeal Cases 601. Viscount Simon observed at page 615:

“…………It is necessary first to estimate what was the deceased man's expectation of life if he had not been killed when he was; (let this be ‘X’ years) and next what sums during the X years he would probably have applied to the support of his wife. In fixing X, regard must be had not only to his age and bodily health, but to the possibility of a premature determination of his life by a later accident. In estimating future provision for his wife, the amount's he usually applied in this way before his death are obviously relevant, and often the best evidence available, though not conclusive, since if he had survived, his means might have expanded or shrunk, and his liberality might have grown or wilted.”

57. Then having arrived at a sum as the estimated annual sum which would have been applied for the benefit of the wife for X more years, the sum to be awarded would not simply have been the amount of the annual sum multiplied by ‘X’ because that sum is a sum spread over a period of years and must be discounted so as to arrive at its equivalent in the form of a lumpsum payable at his death as damages.

58. The learned Lord pointed out that there was in that case deduction to be made for the benefit accruing to the widow, from the acceleration of her interest in her husband's estate.

“………… and a future allowance must be made for a possibility which might have been realised if he had not been killed but had embarked on his allotted span of X years namely, the possibility that the wife might have died before he did. And there is a further possibility to be allowed for though in most cases it is incapable of evaluation namely, the possibility that, in the events which have actually happened, the widow might remarry, in circumstances which would improve her financial position.”

Finally it is pointed out that there was the question “…… what additional amount he would probably have saved during the X years if he had so long endured, and what part, if any, of these additional savings his family would have been likely to inherit.

59. To the same effect is the case of the House of Lords in Dvus v. Powell Duffryn Associated Collieries . 1942 Appeal Cases 601. Taylor v. O'Cunnor . 1970 2 W.L.R 472. and C.K Subramania Iyar v. T. Kunhikuttum Nair . Judgment of the Supreme Court in C.A No. 2227 of 1966 dt. 8-10-1969..

60. Now although the principles in this behalf are well settled, their application to individual cases is not free from difficulties.

61. Although it is easy to remember that the sum which is awarded will be the final amount which the father must deploy so that to the extent reasonably possible he gets the equivalent of what he has lost, the assessment of damages, as stated earlier, is not an easy affair. There is no tariff fixed or a formula determined according to which compensation can be fixed. There can never be perfect compensation because they cannot be measured by mathematics. The Court cannot be expected to prophesy as to future earnings. It is therefore necessary to take a reasonable, realistic and common sense view of all aspects of the matter and the court must try to fix a figure which is neither unfair to the recipient and to the one who has to pay it. The Court would be entitled to award compensation which would be gradually drawn upon over a number of years but which until exhausted would yield interest and so would produce during each of years the annual sum which the Court decides to be the appropriate sum. The prudent person receiving a lumpsum to make good the loss over a period is expected to invest it and to use it up gradually. If the period is a long one, the multiplier will necessarily be much smaller than the number of years. The reason is that while and in so far as the lumpsum of damages is still unspent, it will be earning interest and damages and interest together should be adequate to last out for the period.

62. This is the right perspective with which we must determine the damages in the present case. The judgment of the Claims Tribunal awards Rs. 17280/- as compensation. The Claims Tribunal arrived at the figure holding that Ramulu would have rendered assistance to his father and other members of the family for a period of 36 years. He would have got a maximum of Rs. 70/- per month out of which he would have financially assisted his father and other members of the family to an extent of Rs. 40/- per month. The Tribunal therefore multiplied this sum of Rs. 40/- by 12 and arrived at a figure of Rs. 480/- as the annual dependency. Taking 36 as the multiplier, the Tribunal awarded a sum of Rs. 17280/- by way of compensation to the father.

63. In the light of what we have stated earlier, it immediately becomes plain that not only the principles governing the determination of damages in such a case have been totally disregarded but the figure arrived at by applying a wrong multiplier is fantastically high which could not have been awarded. All the relevant factors do not appear to have entered into the mind of the Tribunal. The excessiveness of the figure can easily be seen if we assume that as a prudent man the claimant if he deposits the lumpsum in a Bank in a fixed deposit account for a longer period, he would easily get interest thereon at 6% per annum. Thus calculated it will be seen that an interest amount of Rs. 1,035-80 Np. could be received. That means the father and the other members of the family would get about Rs. 99/- per month to wards, interest during the period of their lives leaving the principal sum in tact and unspent. The Tribunal in fact has arrived at the conclusion that Ramulu, whose salary was taken into account, could have at least provided financial assistance of Rs. 40 per month. Now the financial assistance granted by the Tribunal is Rs. 99 per month apart from allowing lumpsum damage to remain unspent. It is plain that the dependents are not expected to exploit the unfortunate death and make business out of it. The compensation must be equivalent to the loss of dependency and nothing more. The judgment of the Claims Tribunal therefore is patently wrong and cannot be allowed to be sustained. Let us then examine the view expressed by the learned judge on this behalf. The learned Judge observed that the deceased was 19 years old at the time of his death and was drawing a salary of Rs. 50/- per mensem in the pay scale of Rs. 50-1-55-½-70. The learned judge found that the compensation awarded by the Tribunal is opposed to law and that the Tribunal failed to take into consideration the correct legal basis. The learned Judge taking into consideration the factors mentioned in his judgment thought that the deceased would have contributed a sum of Rs. 30/- per month and after applying the reduced multiplier of 20 fixed Rs. 7200/- as the reasonable amount of compensation. If the amount so granted is invested what interest it would draw. It would bring an interest of Rs. 432/- per year which means that the claimant would get Rs. 36/- per month whatever may be length of his life. And after his death, he will be leaving behind him the invested sum in tact and unspent. Thus the principle that the damages and interest together must last out for the period of dependency does not seem to have been kept in view. Thus considered this figure also is on high side. In selecting the multiplier an important aspect of the principle seems to have been lost sight of. We would have selected, keeping in view of the facts mentioned above, what we think a proper multiplier. But in this case we are relieved from selecting the multiplier and determining the reasonable compensation which could be awarded to the petitioner because the correctness or otherwise of the amount of compensation determined by the learned judge was not canvassed before us by the learned advocate, appearing for the appellant. The grounds of appeal accepts the correctness of the figure of Rs. 7200/- determined by the learned Judge. The prayer in the letters Patent Appeal is that the letters Patent Appeal be allowed by reducing the amount of award from Rs. 17280/- to Rs. 7200/- as agreed to be the just and reasonable compensation by the lower appellate Court and be pleased to award the costs of appeal in both the courts. This concession relieves us from considering the relevant factors enumerated by us above and determining the approximately correct multiplier after deciding as to what would be the period of dependency and what would be the annual sum of dependency and then work out a figure which if invested would have brought some interest. Thus the damages fixed and the said interest together would be adequate to last out for the period of dependency determined. Even otherwise, the figure which we may have fixed after carefully taking into consideration the factors mentioned above would not have substantively differed from the sum fixed by the learned judge. So in our view, there not being any substantial discrepancy between the estimate which we may haw arrived at and the learnd Judge's determination, we cannot justifiably interfere with that part of the judgment of our learned brother where the sum of compensation is fixed. Moreover, as stated above, the appellant has not questioned the correctness of the figure and in fact has asked us specifically to fix that sum as the correct compensation. We do not therefore see any valid reason to change the figure of compensation which the learned judge has fixed, that is to say Rs. 7200/-.

64. For the aforesaid reasons, we allow the appeal and set aside the judgment of the Claims Tribunal completely and that of the learned Judge partly. We make an award in favour of the claimant for a sum of Rs. 7200/- against the real defendant. The claimant, however, will also be entitled to recover the said amount from the 1st defendant i.e the insurance company, the appellant herein. Since the parties have succeeded partly and failed partly and in the circumstances of the case, we direct them to bear their own costs throughout.