NATIONAL INSURANCE COMPANY LTD Vs. MEGHJI NARAN SORATIYA

JUDGEMENT

(1.) The insurer has challenged the dismissal of its appeals (against the awards of Motor Accident Claims Tribunal, by the Gujarat High Court on the sole ground that the Tribunal while granting permission to the insurer to contest the claim under Section 170 of the Motor Vehicles Act, 1988 (Act for short) did not assign reasons for granting permission.

(2.) Chapter XII of the Act relates to Claims Tribunals. Chapter XI relates to insurance of motor vehicles against third party risks. The scheme, in particular, the provisions of section 170 read with section 149, contemplate the claimants in a motor accident claim filing the claim petition against the driver and owner of the motor vehicle. The claimants are required to furnish the particulars relating to insurance and the name and address of the insurer, but are not required to implead the insurer as a party to the proceedings. Having regard to the statutory obligation imposed on the insurer to satisfy judgments and awards against persons insured in respect of third party risks, the tribunal is required to issue notice to the insurer about the initiation of the claim proceedings. When such notice is given, the insurer can seek impleadment only for the limited purpose of defending the action on the grounds mentioned in sub-section (2) of section 149, that is, breach of a specified condition of the policy by the insured (owner of the vehicle) or voidness/invalidity of the policy by reason of the policy having been obtained by non-disclosure of material facts or by representation of any fact which was false in some material particular. An insurer is not entitled to contest the claim on merits when it received such notice under section 149(2).

(3.) However, section 170 of the Act requires the Tribunal to implead the insurer as a party to contest the claim in the following two circumstances, where it is satisfied that : (a) there is collusion between the persons making the claim and the person against whom the claim is made; or (b) the person against whom claim is made, failed to contest the claim. The Tribunal is required to record the reasons in writing while directing the insurer who may be liable in respect of such claim to be impleaded as a party to the proceedings. On being so impleaded in pursuance of an order under section 170 of the Act, the insurer, without prejudice to the provisions contained in sub-section (2) of section 149, has 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.