NATIONAL INSURANCE CO LTD Vs. BALWINDER KAUR

JUDGEMENT

(1.) The point urged in both the appeals is that when, under the terms of the policy, the insurer has reserved to itself a right to contest on all grounds and, therefore, notwithstanding the statutory restriction under Section 149(2) delineating the permissible defences, the insurer is entitled to challenge even the issue of negligence and compensation. The basis or justification for such a contention is that the owner has died and, therefore, it was not possible for the insured to prefer an appeal against the quantum and negligence. Making a vague allegation of collusion for the first time in appeal, the insurer also pleads for granting permission to the insurer at the appellate stage for contesting the claim on quantum and negligence under Section 170 of the Motor Vehicles Act. The learned Counsel would refer to an order of reference made by this Court in New India Assurance Co. Limited v. Binu Sidhu and Anr.,2007 1 PunLR 764, that the issue whether the Insurance Company could be permitted to challenge the award on grounds other than what are provided under Section 149(2) has been referred to a larger Bench by this Court and, therefore, the case has to await consideration till a larger Bench decides the issue.

(2.) The terms of the clause referred to above nowhere allows the insurer to take up defences on all grounds. On the other hand, it is a mechanism against any collusive conduct of the insured with the claimant. It states expressly that the insured shall not make any admission or promise or undertake indemnity to be given without the consent of the Company. The right to take over and conduct in the name of the insured shall arise by an act to compel the insured to cooperate at the trial and make his own evidence available if the insurer wants to put the evidence of the owner or the driver. Situation could be where the insurer's vehicle was not involved in the accident at all. The evidence of the driver or the owner may be relevant and it shall become possible for the insurer to compel the attendance of the witness in Court to make the appropriate defence on behalf of the insured also. The particular clause relied on by the insured is really stating the obvious. If the insurer wants to take a common line of defence alongwith the insured and deny the issue of quantum and negligence, it shall become possible. Practically it may take shape in the same Counsel appearing both for the insurer and the insured. Beyond this, the clause referred to above, cannot be understood as permitting an insurer to take all defences notwithstanding the statutory limitations contained under Section 149(2). Such a contention is not merely impermissible but it is untenable. Even an insurer cannot contract out of statute or draft to itself special privileges which the M.V. Act does not give.

(3.) Restriction of defences made under Section 149(2) has a certain objective to fulfill.