Can the insurer implicated as a defendant in the motion for a claim contest the amount of compensation without notice under article 170 of the MV law? Supreme Court to consider

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The Supreme Court has issued a plea opinion requesting that an insurance company, if named as a respondent under the Motor Vehicle Act, may challenge the amount of the compensation as a person against whom a claim is made.

The bench of Justices SK Kaul and MM Sundresh was hearing the SLP against a March decision of the Bombay High Court in Goa dismissing the appeal filed by the insurance company challenging the decision made under Section 166 of the Motor Vehicles Act 1988 (the said law).

“It is not disputed in this case that no authorization was obtained under section 170 of the said Act by the appellant/insurance company before the Accident Claims Tribunal car. Therefore, following the law established by the Bench Division of this Court in ICICI Lombard General Insurance Co. Ltd., Amravati V/s. Surekha w/o. Prakash Ghurde and ors. (2020) 2 Bom.CR 465 ), this appeal shall be dismissed as inadmissible,” the High Court had said. in the impugned judgment.

The bench of Justices Kaul and Sundresh noted, “The learned attorney for the claimant argues that the legal position has been settled in United India Insurance Co. Ltd. v. Shila Datta & Ors. – (2011) 10 SCC 509 at paragraph 14 to the effect that where an insurer is placed at issue as a party the respondent to the claim, as opposed to being merely a notice under section 149(2) of the Motor Vehicle Act 1988, the meaning is different If he is the respondent, he may not only invoke grounds which are available under section 149(2) but also other grounds which are available to a person against whom a claim is made. “

The bench further observed in his order, “He maintains that, although on this subject certain appeals were pending before this Court, they were subsequently summarily dismissed without examining this question of law which remained open. He maintains that this principle affects a large number of cases.”

The bench then ordered the following – “Issue an opinion. On the matter of interim measures, it was stated that the amount of compensation has been filed in the High Court. In view of this, 75% of the amount will be returned to the plaintiff and 25%% will be withheld at the High Court to be kept in an interest-bearing account.”
In the judgment under appeal, the High Court noted that “the appellant/insurance company’s solicitor however pointed out that in Oriental Insurance Ltd. V/s. Sangita Devi and Ors., Delhi High Court, s ‘Relying on the decision of Hon.’ble Supreme Court in United India Insurance Co. V/S Sudha Rani ruled that once the insurance company is voluntarily implicated as a party to the claim of claim by the plaintiffs, she can raise all the defenses, including the defenses concerning the amount of He submitted that despite his best efforts, he was unable to obtain the copy of the decision of the Honorable Supreme Court in the Sudha Rani case (supra)”
“He also referred to the decision of the Honorable Supreme Court in the case of Bajaj Alianz General Insurance Co. Ltd. V/s. Kamala Sen which he said held that when the insurance company is implicated as a defendant, it can raise all the arguments that are available to resist the claim. He pointed out that this was ruled by the Honorable Supreme Court in United India Insurance Company Ltd. V/s. Shila Datta,” the High Court had recorded.
The High Court had observed that “although the bench of division of this Court in the case of ICICI Lombard General Insurance Co. Ltd. (supra), may not have referred to the decision of the learned single judge of The Delhi High Court at Sangita Devi (supra) or the decision of the Honorable Supreme Court referred to therein, the Divisional Bench, considered the decisions of the Honorable 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 concluded that notwithstanding the reference made, the decisions in Nicoletta Rohtagi (supra) and Josephine James (supra) are valid and based on the same, the appeal brought by the insurance company questioning the amount of the indemnity, would not be admissible in the absence of authorization under section 170 (b) of the said law”.
The High Court then said: “Consequently, this appeal is dismissed. However, the dismissal of this appeal will not preclude the appellant insurance company from pursuing any further proceedings, if admissible at law. The appellant /insurance company has deposited the amount awarded in this appeal.Accordingly, the plaintiffs are authorized to withdraw the amount deposited in this Court together with any accrued interest after four weeks from today, at unless, of course, the appellant/insurance company, in the meantime, obtains restraining orders for such withdrawal.Claimants will be required to provide the necessary identification and bank details so that the Registry can directly deposit the amounts into the respective bank accounts of the applicants.Applicants will also be entitled to interest which may accrue on the amounts deposited after adjustment of the amounts already withdrawn p by the plaintiffs”.

Case title: THE NEW INDIA INSURANCE CO. LTD. v. KRISHNA SAKHARAM BAING & ORS.

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