# National Insurance Co. Ltd v. Smt. Madhulika Lal and others

- **Citation:** (2007) 2 ILRA 375
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2006-12-07
- **Case number:** First Appeal From Order No. 820 of 1999
- **Bench:** V M Sahai, Sabhajeet Yadav
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/national-insurance-co-ltd-v-smt-madhulika-lal-and-others-40894
- **Pages:** 8

## Headnote

376 INDIAN LAW REPORTS ALLAHABAD SERIES [2007
Smt. Madhulika Lal, (In Person)
Pooja Agarwal.

Motor Vehicle Act. 1988 Section 173
Appeal by Insurance Company-without
permission -cannot be challenged on the
ground of Quantum of Compensation
including the negligence.

Held: Para 6

In our opinion, it is not open for the
insurer/appellant
to
challenge
the
quantum of compensation fixed by the
tribunal on merits including the ground
of
negligence
and/or
contributory
negligence of the offending vehicle.

Held: Para 8

In view of our findings the argument of
the learned counsel for the appellant
that the accident took place due to
contributory negligence of drivers of
both
the
vehicles
had
not
been
considered by the tribunal cannot be
accepted.
Case Law discussed:
2002(7) SCC-456
1988(3) SCC-140
1998(9) SCC-202
2000(4) 138,1987(2) SCC-654.

## Text

2 All] National Insurance Co. Ltd. V. Smt. Madhulika Lal and others
375
and plants and are essential oils, hence the
same is taxable as Oil of all kinds.
Learned counsel for the assessee has
further submitted that in the assessee's
case in second appeal no.691 of 1983,
Commissioner of Sales Tax Versus M/S
Ram Narain Pratap Narain (assessee) for
the assessment year 1975-76 decided on
14.04.1983, the Kanpur Bench of the
Tribunal, after relying on the case of M/S
R. Oil and Chemicals, Bareilly Versus
Commissioner of Sales Tax, reported in
1983 STI (Alld. H.C.) page 295 has held
that Raunsa and Menthol Oils are
manufactured from Rausa and Mentha
grass and they are covered under the
general entry "Oil of all kinds". There is
nothing on record to show that the said
decision of the Tribunal is either set aside
or the operation of the order is stayed.

7. Learned Standing Counsel was
asked to file the copy of the order of the
Tribunal for the assessment year, 1975-76
and to inform whether any revision
against the order of the Tribunal was filed
or not. By supplementary affidavit dated
15th December, 2006, it has been
informed that the file relating to the
assessment year, 1975-76 is not available
and the order dated 14.04.1984 passed in
appeal no. 691 of 1983 is not traceable.
Learned Standing Counsel is not able to
show any illegality in the decision of the
Tribunal.

8. There is no dispute that Nagar
Motha Oil, Peppermint Oil and Raunsa
Oil are the oils and they are not been
classified elsewhere under any of the
Notification. The entry "Oil of all kinds"
is a generic entry and includes all kinds of
oil. Thus, there appears to be no reason
why Nagar Motha Oil, Peppermint Oil
and Raunsa Oil are not covered under the
entry "Oil of all kinds". It is settled
principle of law that effort should be to
classify a commodity under the entry and
if it is not possible to classify under any
of the entry then only the commodity
should be taxed as an unclassified goods.
In the case of Collector of Central
Excise, Shillong Versus Wood Craft
Products Ltd. reported in 1995 (3) SCC
page 454, Apex Court held that the
residuary can be resorted to only when
even a liberal construction of the specific
headings is not capable of covering the
goods in question. Thus, in the absence of
any specific entry relating to the aforesaid
three items, being essential oils has been
rightly covered under the generic entry
"Oil of all kinds".

9. In the result, both the revisions
are allowed in part. The order of the
Tribunal is set aside. Tribunal is directed
to pass appropriate orders under section
11 (8) of the Act. Revision allowed.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 7.12.2006

BEFORE
THE HON'BLE V M SAHAI, J.
THE HON'BLE SABHAJEET YADAV, J

First Appeal From Order No. 820 of 1999

National Insurance Company Ltd.

 ...Appellant
Versus.
Smt. Madhulika Lal and others

 ...Claimant-respondents

Counsel for the Appellant:
Sri. M.S. Haq.

Counsel for the Respondents:
Sri. Shashi Nandan
Miss Awantika Banerji
376 INDIAN LAW REPORTS ALLAHABAD SERIES [2007
Smt. Madhulika Lal, (In Person)
Pooja Agarwal.

Motor Vehicle Act. 1988 Section 173
Appeal by Insurance Company-without
permission -cannot be challenged on the
ground of Quantum of Compensation
including the negligence.

Held: Para 6

In our opinion, it is not open for the
insurer/appellant
to
challenge
the
quantum of compensation fixed by the
tribunal on merits including the ground
of
negligence
and/or
contributory
negligence of the offending vehicle.

Held: Para 8

In view of our findings the argument of
the learned counsel for the appellant
that the accident took place due to
contributory negligence of drivers of
both
the
vehicles
had
not
been
considered by the tribunal cannot be
accepted.
Case Law discussed:
2002(7) SCC-456
1988(3) SCC-140
1998(9) SCC-202
2000(4) 138,1987(2) SCC-654.

(Delivered by Hon'ble V.M. Sahai, J.)

1. The short question that arises for
our consideration in this appeal is where
an insured has not preferred an appeal
under Section 173 of the Motor Vehicles
Act, 1988 (hereinafter referred to as 'Act')
against an award given by the Motor
Accident Claims Tribunal, is it open to
the insurer to prefer an appeal against the
award by the Tribunal questioning the
quantum of the compensation, as well as
finding as regards the negligence of the
offending
vehicle
in
absence
of
permission under Section 170 of the Act
granted by the Tribunal?
2. This appeal is preferred by the
Insurance
Company/insurer
of
the
offending vehicle under Section 173 of
the Act against the award dated 5.5.1999
passed
by
Motor
Accident
Claim
Tribunal/Special
Judge,
Essential
Commodities Act, Bareilly in M.A.C.T.
No. 340 of 1993 whereby Tribunal has
awarded a sum of Rupees 10,80,000/-
(Ten
lacs
eighty
thousand)
as
compensation along with 8% (eight
percent) interest thereon from the date of
filing of claim petition before Tribunal to
the claimants-respondents. No appeal
appears to have been filed by the
insured/owner of the offending motor
vehicle.

3. The facts leading to this appeal
are that on 13.8.1993 Amod Lal and
.Sunil Kumar Jain were travelling in
Maruti Van No. D.N.J. 194 from Bareilly
to Nainital when an accident took place at
about 5.15 p.m. due to head on collision
between Maruti Van and Mini Bus No.
U.P. 25/6493. In the accident Amod Lal
died. The heirs of the deceased filed a
Claim Petition which was numbered as
M.A.C.T. No. 340 of 1993 before the
Motor Accident Claim Tribunal claiming
Rs.30-00 lakhs as compensation on the
ground that the accident took place due to
rash and negligent driving of Mini Bus
No. U.P. 25/6493. It was claimed that
Amod Lal was serving in M/s. Western
Electronics Okhla Industrial Area, New
Delhi and his monthly salary was
Rs.8,000/- per month and Rs. 4,000/- was
given to him as House Rent Allowance
and other perks car, telephone, bonus etc
was also provided. The owner of the Mini
Bus, the respondent no. 5 filed written
statement alleging that the vehicle was
being driven by a driver, who was having
a valid driving licence and the vehicle
2 All] National Insurance Co. Ltd. V. Smt. Madhulika Lal and others
377
was insured with National Insurance
Company from 7.7.1993 to 6.7.1994 as
per cover note no. 704436 and liability, if
any, to pay compensation was of the
Insurance
Company.
The
National
Insurance Company contested the claim
on the ground that the vehicle was not
driven by a driver who was having valid
driving lincence and details of Insurance
Policy had not been given. The claimants
are not legal representatives of the
deceased and they are not entitled for any
compensation. The accident took place
due to the negligent driving of the vehicle
in which the deceased was travelling and
the Insurance Company was not liable to
pay any compensation. However, the
Motor Accident Claim Tribunal by its
award
dated
5.5.1999
awarded
Rs.
10,80,000/- compensation to the claimants
for the death of deceased Amod Lal.
While awarding aforesaid compensation
the Tribunal has held that the accident
took place due to rash and negligent
driving of the Mahindra Mini Bus No.
U.P. 25/6493 due to which Amod Lal
who was travelling in the Maruti Van had
died. The tribunal has further held that on
the date of accident the vehicle was
insured by National Insurance Company
and
has
awarded
Rs.
10,80,0001-
compensation to be paid by the Insurance
Company to the claimants.

3. We have heard Sri M.S. Haq,
learned counsel for the appellant and Sri
Shashi Nandan, learned Senior Counsel
assisted by Miss Awantika Banerji for the
respondents. Learned counsel for the
appellant has urged that quantum of
compensation
was
excessive
as
dependency and multiplier had wrongly
been worked out. There was contributory
negligence of drivers of both the vehicles
but this had not been considered by the
tribunal in correct perspective though it
was argued. On the other hand learnedcounsel for the claimants has urged that
this appeal on quantum of compensation
on
merits
including
negligence
or
contributory
negligence
is
not
maintainable as no permission had been
granted by the tribunal under Section 170
of the Act.

4. Hon'ble Apex Court has occasion
to consider similar question in National
Insurance Company Ltd., Chandigarh
Vs. Nicolletta Rohtagi & others (2002)
7 S.C.C.456= J.T. 2002 (7) S.C. 251
wherein after analyzing the relevant
provisions of Sections 147, 149, 170 and
173 of the Act in para 18 of the decision,
Hon'ble Apex Court held as under:

"18. The aforesaid provisions show
two aspects. Firstly, that the insurer has
only statutory defences available as
provided in sub section (2) of Section 149
of the 1988 Act and, secondly, where the
Tribunal is of the view that there is a
collusion between the claimant and the
insured, or the insured does not contest
the claim, the insurer can be made a party
and on such impleadment the insurer
shall have all defences available to it.
Then comes the provision of Section 173
which provides for an appeal against the
award given by the Tribunal. Under
Section 173, any person aggrieved by an
award is entitled to prefer an appeal to
the High Court. Very often the question
has arisen as to whether an insurer is
entitled to file an appeal on the grounds
available to the insured when either there
is a collusion between the claimants and
the insured or when the insured has not
filed an appeal before the High Court
questioning the quantum of compensation.
The consistent view of this Court had
378 INDIAN LAW REPORTS ALLAHABAD SERIES [2007
been that the insurer has no right to file
an appeal to challenge the quantum of
compensation or finding of the Tribunal
as regards the negligence or contributory
negligence of offending vehicle."

5. For better understanding of the
controversy, it would be useful to refer
the cases considered by Hon'ble Apex
Court in para 19 to 23 of the aforesaid
decision as under:

"19. In Shankarayya V. United
India Insurance Co. Ltd. (1998) 3 SCC
140 it was held that an insurance
company when impleaded as a party by
the court can be permitted to contest the
proceedings on merits only if the
conditions precedent mentioned in Section
170 are found to be satisfied and for that
purpose the insurance company has to
obtain an order in writing from the
Tribunal and which should be a reasoned
order by the Tribunal. Unless this
procedure is followed, the insurance
company cannot have a wider defence on
merits than what is available to it by way
of statutory defences. In absence of the
existence of the conditions precedentmentioned in Section 170, the insurance
company was not entitled to file an appeal
on merits questioning the quantum of
compensation.

20.
In
Narendra
Kumar
V.
Yarenissa (1998) 9 SCC 202:1999 SCC
(Cri) 245 question arose whether there
can be a joint appeal by an insurer and
owner of the offending vehicle. It was held
that even in the case of a joint appeal by
the insurer and the owner of an offending
vehicle, if an award has been made
against the tortfeasors as well as the
insurer, even though an appeal filed by
the insurer is not competent, it may not be
dismissed as such. The tortfeasor can
proceed with the appeal after the cause
title is suitably amended by deleting the
name of the insurer. In the said case, it
also held thus: (SCC p. 206, para 5).

"The grounds on which the insurer
can defend the action commenced against
the tortfeasors are limited and unless one
or more of those grounds is/are available
the Insurance Company is not and cannot
be treated as a party to the proceedings.
That is the reason why the courts have
consistently taken the view that the
Insurance Company has no right to prefer
an appeal under Section 110-D of the Act
unless it has been impleaded and allowed
to defend on one or more of the grounds
set out in sub-section (2) of Section 96 or
in the situation envisaged by sub-section
(2-A) of Section 110-C of the Act. "

21. In Chinnama George V. N.K
Raju (2000) 4 SCC 130 : 2000 SCC (Cri)
780 it was held that if none of the
conditions as contained in subsection (2)
of Section 149 exists for the insurer to
avoid the liability, the insurer is legally
bound to satisfy the award and the insurer
cannot be a person aggrieved by the
award. In such a case, the insurer will be
barred from filing an appeal against the
award of the Tribunal. It was also held
that the insurer cannot maintain a joint
appeal along with the owner or driver if
defence of any ground under Section 149
(2) is not available to it.

22. In Rita Devi V. New India
Assurance Co. Ltd. it was held that· the
insurer having not obtained permission
under Section 170 of the 1988 Act, is not
entitled to prefer any appeal to the High
Court against the award given by the
Tribunal on merits.
2 All] National Insurance Co. Ltd. V. Smt. Madhulika Lal and others
379

23. However, in United India
Insurance
Co.
Ltd.
V.
Bhushan
Sachdeva it was held that where the
insured fails to file an appeal to the High
Court
against
the
quantum
of
compensation awarded by the Tribunal,
the insurer is entitled to file an appeal as
the insured has failed to contest the claim
and in that view of the matter, the insurer
could be a person aggrieved. This is the
only decision which has taken a contrary
view to the consistent view of this Court in
regard to maintainability of appeal at the
instance of an insurer. In our view, the
decision in United India Insurance does
not lay down the correct view of law for
the reasons stated hereinafter."

Thereafter Hon'ble Apex Court in
para 26,27,30,31 and 32 of the decision
held as under:

26. For the aforesaid reasons, an
insurer if aggrieved against an award,
may file an appeal only on those grounds
and no other. However, by virtue of
Section 170 of the 1988 Act, where in
course of an enquiry the Claims Tribunal
is satisfied that (a) there is a collusion
between the person making a claim and
the person against whom the claim has
been made, or (b) the person against
whom the claim has been made has failed
to contest the claim, the Tribunal may, for
reasons to be recorded in writing,
implead the insurer and in that case it is
permissible for the insurer to contest the
claim also on the grounds which are
available to the insured or to the person
against whom the claim has been made.
Thus, unless an order is passed by the
Tribunal permitting the insurer to avail
the grounds available to an insured or
any other person against whom a claim
has been made on being satisfied of the
two conditions specified in Section 170 of
the Act, it is not permissible to the insurer
to contest the claim on the grounds which
are available to the insured or to a person
against whom a claim has been made.
Thus
where
conditions
precedent
embodied in Section 170 are satisfied and
award is adverse to the interest of the
insurer, the insurer has a right to file an
appeal challenging the quantum of
compensation
or
negligence
or
contributory negligence of the offending
vehicle even if the insured has not filed
any appeal against the quantum of
compensation. Sections 149, 170 and 173
are part of one scheme and if we given
any different interpretation to Section 173
of the 1988 Act, the same would go
contrary to the scheme and object of the
Act.

27. This matter may be examined
from another angle. The right of appeal is
not an inherent right or common law
right, but it is a statutory right. If the law
provides that an appeal can be filed on
limited grounds, the grounds of challenge
cannot be enlarged on the premise that
the insured or the persons against whom
a claim has been made have not filed any
appeal. Section 149(2) of the 1988 Act
limits the insurer's appeal on those
enumerated grounds and the appeal being
a product of the statute, it is not open to
an insurer to take any plea other than
those provided in Section 149(2) of the
1988 Act. The view taken in United India
Insurance Co. Ltd. V. Bhushan Sachdeva
that a right to contest would also include
the right to file an appeal is contrary to
well-established law that creation of a
right to appeal is an act which requires
legislative authority and no-court or
tribunal can confer such right, it being
one
of
limitation
or
extension
of
380 INDIAN LAW REPORTS ALLAHABAD SERIES [2007
jurisdiction. Further, the view taken in
United India Insurance that since the
insurance companies are nationalised and
are dealing with public money/fund and to
deny them the right of appeal when there
is a collusion between the claimants and
the insured would mean draining out or
abuse of public fund is contrary to the
object and intention of Parliament behind
enacting Chapter XI of the 1998 Act. The
main object of enacting Chapter XI of the
1988 Act was to protect the interest of the
victims of motor vehicle accidents and it
is for that reason the insurance of all
motor vehicles has been made statutorily
compulsory. Compulsory insurance of
motor vehicle was not to promote the
business interest of the insurer engaged in
the business of insurance.' Provisions
embodied either in the 1939 or the 1988
Act have been purposely enacted to
protect the interest of the travelling public
or those using the road from the risk
attendant upon the user of motor vehicles
on the roads. If law would have provided
for compensation to dependants of victims
of a motor .vehicle accident, that would
not have been sufficient unless there is a
guarantee that compensation awarded to
an injured or dependant of the victims of
a motor accident shall be recoverable
from the person .held liable for the
consequences of the accident. In Skandia
Insurance
Co.
Ltd.
Vs.Kokilaben
Chandravadan (1987) 2 SCC 654 it was
observed thus:

"In other words, the legislature has
insisted and made it incumbent on the
user of a motor vehicle to be armed with
an insurance policy covering third-party
risks which is in conformity with the
provisions enacted by the legislature. It is
so provided in order to ensure that the
injured victims of automobile accidents or
the dependants of the victims of fatal
accidents are really compensated in
terims of money and not in terms of
promise. Such a benign provision enacted
by the legislature having regard to the
fact that in the modern age the use of
motor
vehicles
notwithstanding
the
attendant
hazards,
has
become
an
inescapable fact of life, has to be
interpreted in a meaningful manner which
serves rather than defeats the purpose of
the
legislation.
The
provision
has
therefore to be interpreted in the twilight
of the aforesaid perspective".

30. It was then urged that if there is
a collusion between the claimants and the
insured does not contest the claim and the
Tribunal does not implead the insurance
company to contest the claim on the
grounds available to the insured or the
persons against whom claim has been
made, or in such a situation when the
insurer files an application for permission
to contest the claim on merit and the same
is rejected or where the claimant has
obtained an award by playing fraud, in
such cases the insurer has a right of
appeal to contest the award on merits and
the appeal would be maintainable.

31. We have already held that unless
the conditions precedent specified in
Section 170 of the 1988 Act are satisfied,
an insurance company .has no right of
appeal to challenge the award on merits.
However, in a situation where there is a
collusion between the claimants and the
insured or the insured does not contest
the claim and, further, the Tribunal does
not implead the insurance company to
contest the claim, in such cases it is open
to an insurer to seek permission of the
Tribunal to contest the claim on the
ground available to the insured or to a
2 All] National Insurance Co. Ltd. V. Smt. Madhulika Lal and others
381
person against whom a claim has been
made. If permission is granted and the
insurer is allowed to contest the claim on
merits, in that case it is open to the
insurer to file an appeal against an award
on merits, if aggrieved. In any case where
an
application
for
permission
is
erroneously rejected the insurer can
challenge only that part of the order while
filing appeal on grounds specified in subsection (2) of Section 149 of the 1988 Act.
But such application for permission has to
be bonafide and filed at the stage when
the insured is required to lead his
evidence.
So
far
as
obtaining
compensation by fraud by the claimant is
concerned, it is no longer res integra that
fraud vitiates the entire proceeding and in
such cases it is open to an insurer to
apply to the Tribunal for rectification of
award.

32. For the aforesaid reasons, our
answer to the question is that even if no
appeal is preferred under Section 173 of
the 1988 Act by an insured against the
award of a Tribunal, it is not permissible
for an insurer to file an appeal
questioning the quantum of compensation
as well a, findings as regards negligence
or
contributory
negligence
of
the
offending vehicle."

6. In view of the aforesaid legal
position as explained by the Apex Court,
it is clear that in absence of any
permission granted by the tribunal under
Section 170 of the Motor Vehicle Act the
insurer/ Insurance Company can file
appeal challenging the award only on the
limited grounds available to the insurer
under Section 149(2) of the Act. In our
opinion,
it
is
not
open
for
the
insurer/appellant
to
challenge
the
quantum of compensation fixed by the
tribunal on merits including the ground of
negligence and/or contributory negligence
of the offending vehicle.

7. The contention of the learned
counsel for the appellant that if an insured
has not filed any appeal, it means he has
failed to contest the claim and that the
right to contest includes the right to
contest by filing an appeal against the
award of Tribunal as well and in such
situation an appeal by the insurer
questioning the quantum of compensation
including
negligence
or contributory
negligence would be maintainable or in a
situation when the insurer files an
application for permission to contest the
claim on merit and the same is rejected or
where the liability of payment of
compensation is fastened upon the insurer
and the insured does not prefer appeal
against the award of Motor Accident
Claim Tribunal in that situation the award
made by Motor Accident Claim Tribunal
on
the
question
of
quantum
of
compensation
inasmuch
as
on
the
question of negligence or contributory
negligence howsoever erroneous it may
be, would attain the finality and if the
insurer cannot be permitted to challenge
the same by filing appeal under Section
173 of the Act on the quantum of
compensation
on
merit
including
negligence of offending vehicle in that
situation it would cause serious mischief
and miscarriage of justice, cannot be
accepted for the simple reason that the
Hon'ble Apex Court has dealt with the
issue in quite detail and has also repelled
somewhat similar contention raised by
appellant in the aforesaid case, therefore,
this court cannot take different view in the
matter as the law declared by Hon'ble
Apex Court is binding upon us.
382 INDIAN LAW REPORTS ALLAHABAD SERIES [2007

8. From the records, we do not find
that any ground had been taken by the
Insurance Company that there was any
breach of insurance policy. We have also
examined the records. We do not find that
any permission had been applied by the
Insurance Company under Section 170 of
the Motor Vehicle Act, 1988 and the same
was either refused or granted by the
Tribunal.

9. In view of our findings the
argument of the learned counsel for the
appellant that the accident took place due
to contributory negligence of drivers of
both the vehicles had not been considered
by the tribunal cannot be accepted.

Thus, the appeal fails and is
dismissed.

10. Office is directed to send back
the
records
of
the
court
below
expeditiously.

Parties shall bear their own cost
Appeal dismissed.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 23.02.2007

BEFORE
THE HON'BLE AMITAVA LALA, J.
THE HON'BLE V.C. MISRA, J.
THE HON'BLE MRS. POONAM SRIVASTAVA, J.

Criminal Misc. Writ Petition No. 11998 of
2006

Smt. Nausheeda and others ...Petitioners
Versus
State of U.P. and others ...Respondents

Counsel for the Petitioners:
Mohd. Aslam Ansari
Sri Mukhtar Alam
Counsel for the Respondents:
Sri V.K. Mishra, Government Advocate
Sri Vijay Shanker Mishra, Government
Advocate
Sri Neeraj Kant Verma,
Sri Lal Vijay Singh,
Sri S. Murtaza Ali, Addl.Govt.Advocate.

Constitution of India Art. 21 and 226Personal
Liberty-Writ
petitionchallenging the FIR-offence u/s 363,
366, 325, 504 and 506 IPC-the boy and
girl both found major-generally writ
court refused to interfere in respect of
heinous crime-but in social object court
can not give absolute go bye-No persons
shall be deprived from personal liberty
established by law-in absence of valid
age proof-person concerned to go for
ossification to determine actual age.

Held: Para 12,13 & 14

A boy and a girl are at liberty to choose
their own bride and bridegroom. This is
neither a crime nor disrespect to the
elders even within the social framework
of the country. No person shall be
deprived of his life or personal liberty
except
according
to
procedure
established by law under Article 21 of
the Constitution of India.

If
such
determination
supports
the
requisite age, then the right of marriage
of such persons cannot be said to be a
criminal offence. As soon as it is proved
by the medical test that both the boy and
girl are not minors, their willingness of
the marriage to each other cannot be
ignored. If it is ignored, the same will be
interference with the fundamental right
of such persons.

We normally refuse to pass any order in
respect of heinous crimes. But where the
question of social object is involved, we
can not give an absolute go bye.
Therefore, we cannot construe that the
writ petition is not maintainable and
deserves to be dismissed in limine
without the test of bonafide.