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Can Insurer Impleaded As Respondent In Claim Petition Challenge Quantum Of Compensation Without Leave Under Section 170 MV Act? Supreme Court To Consider

Mehal Jain
31 May 2022 7:40 AM GMT
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The Supreme Court has issued notice on a plea urging that an Insurance Company, if impleaded as a party respondent under the Motor Vehicles Act, can question the quantum of compensation as a person against whom a claim is made.

The bench of Justices S. K. Kaul and M. M. Sundresh was hearing the SLP against a March decision of the Bombay High Court at Goa dismissing the appeal filed by the Insurance Company challenging the award made under Section 166 of the Motor Vehicle Act, 1988 (said Act).

"There is no dispute in this case that no leave was obtained under Section 170 of the said Act by the appellant/Insurance Company before the Motor Accident Claims Tribunal. Therefore, by following the law laid down by the Division Bench of this Court in I.C.I.C.I. Lombard General Insurance Co. Ltd., Amravati V/s. Surekha w/o. Prakash Ghurde and ors. (2020) 2 Bom.CR 465), this appeal will have to be dismissed as not maintainable", the High Court had said in the impugned judgment.

The bench of Justices Kaul and Sundresh noted, "Learned counsel for the petitioner contends that the legal position was settled in United India Insurance Co. Ltd. v. Shila Datta & Ors. - (2011) 10 SCC 509 in para 14 to the effect that when an insurer is impleaded as a party respondent to the claim petition, as contrasted from merely being a noticee under Section 149 (2) of the Motor Vehicles Act, 1988 the significance is different. If he is the party respondent, he can not only raise grounds which are available under Section 149(2) but also other grounds that are available to a person against whom a claim is made"
The bench further observed in its order, "It is his submission that though on this matter certain appeals were pending before this Court, they were subsequently summarily dismissed without examining this question of law which has been kept open. It is his submission that this principle is affecting a large number of cases."
The bench then directed as follows- "Issue notice. On the issue of interim relief, it has been stated that amount of compensation has been deposited before the High Court. In view thereof, 75% of the amount be released to the claimant and 25% be retained in the High Court to be kept in an interest bearing account."

In the impugned judgment, the High Court recorded that "the counsel for the appellant/Insurance Company however pointed out that in Oriental Insurance Ltd. V/s. Sangita Devi and Ors., the Delhi High Court, relying upon the decision of the Hon'ble Supreme Court in United India Insurance Co. V/s. Sudha Rani has held that once the insurance company is voluntarily impleaded as a party to the claim petition by the claimants, it can raise all defences, including the defences concerning the quantum of compensation. He submitted that despite best efforts he was not in a position to obtain the copy of the decision of the Hon'ble Supreme Court in Sudha Rani (supra)"

"He also referred to the decision of the Hon'ble Supreme Court in Bajaj Alianz General Insurance Co. Ltd. V/s. Kamala Sen which according to him holds that where the insurance company is impleaded as a party respondent, it can raise all contentions that are available to resist the claim. He pointed out that this is what was held by the Hon'ble Supreme Court in the case of United India Insurance Company Ltd. V/s. Shila Datta", the High Court had recorded.
The High Court had observed, "Although the Division Bench of this Court in I.C.I.C.I. Lombard General Insurance Co. Ltd. case (supra), may have not referred to the decision of the learned Single Judge of the Delhi High Court in Sangita Devi (supra) or the decision of the Hon'ble Supreme Court that was referred to therein, the Division Bench, has considered the decisions of the Hon'ble Supreme Court in National Insurance Company Limited V/s. Nicolletta Rohtagi, United India Assurance Company Ltd. Vs. Bhushan Sachdev, Shila Datta (supra) and Josephine James V/s. United India Insurance Company Limited and held that notwithstanding the reference made, the decisions in Nicoletta Rohtagi (supra) and Josephine James (supra) hold good and based upon the same, the appeal filed by the Insurance Company questioning the quantum of compensation, would not be maintainable in the absence of permission under Section 170(b) of the said Act".

The High Court had then stated, "Accordingly, this appeal is dismissed. However, dismissal of this appeal will not come in the way of the appellant-insurance company from instituting any other proceedings, if maintainable in law. The appellant/Insurance Company has deposited the awarded amount in this appeal. Accordingly, the claimants are permitted to withdraw the amount deposited in this Court together with interest if any that may have accrued thereon after four weeks from today unless, of course, the appellant/Insurance Company, in the meanwhile, secures restraint orders for such withdrawal. The claimants will have to furnish the necessary identification and bank details so that the Registry can directly deposit the amounts into the respective bank accounts of the claimants. The claimants will also be entitled to the interest that may have accrued on the deposited amounts after adjusting the amounts already withdrawn by the claimants".

Case Title: THE NEW INDIA ASSURANCE CO. LTD. v. KRISHNA SAKHARAM BAING & ORS.

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