ORIENTAL INSURANCE CO LTD Vs. ANITA

JUDGEMENT

(1.) The matter here concerns the defences available to an insurance company in a claim for compensation arising from a motor accident.

(2.) In dealing with the point in issue reference must, at the very outset, be made to the relevant statutory provisions, these being Sections 149 and 170 of the Motor Vehicles Act, 1988 (hereinafter referred to as 'the Act') which are reproduced here-under: 149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.

(3.) The corresponding provisions, which were in the same terms under the Motor Vehicles Act, 1939 (for brevity referred as 'the old Act') were Sections 96 and 110-C (2-A). It may be mentioned here that the said Section 110-C (2-A) was incorporated by the Amendment Act 56 of 1969 with effect from 2.3.1970. This would be relevant to bear in mind when we turn now to what must be taken to be the primary judicial precedent on the subject, namely, the judgment of the Supreme Court in British India Insurance Co. Ltd. v. Captain Itbar Singh 1958-65 ACJ 1 (SC), where the issue raised was precisely the one here, namely, the defences open to an insurer. In dealing with the matter it was held "apart from the statute an insurer has no right to be made a party to the action by the injured person against the insured causing the injury. Sub-section (2) of Section 96, however, gives him the right to be made a party to the suit and to defend it. The right, therefore, is created by the statute and its content necessarily depends on the provisions of the statute" and consequently the insurer was held entitled to defend only on the grounds enumerated in Section 96 (2) of the old Act and none else.