# United India Insurance Co. Ltd v. Motor Accident Claim Tribunal, Bareilly and others

- **Citation:** (2009) 1 ILRA 152
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2008-11-28
- **Case number:** Civil Misc. Writ Petition No.60787 of 2008
- **Bench:** Rakesh Tiwari
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/united-india-insurance-co-ltd-v-motor-accident-claim-tribunal-bareilly-and-41303
- **Pages:** 9

## Headnote

Motor Vehicle Act 1988-Section 170Rejection
of
application-Insurance
company at the stage of final hearing of
claim petition moved application to
contest the case as the owner of vehicle
not contesting-without disclosing any
material of collusion between claimants
as well as owner of vehicle-held-where
the insurer already - in claim-petitionfiled separate written statement-detail
reasons as permission to contest the
case
not
required-nor
every
order
requires detail discussions-the rejection
held-proper.

Held: Para 17 & 20

In my opinion Section 170 of the Motor
Vehicles Act would come into force
where the Insurance company is not
party and therefore if it is not impleaded
as party to contest the claim on behalf of
the owner, who might be collusion with
the claimants or has failed to contest the
case. Since the petitioner was a party in
the claim application, it could have filed
separate
written
statement
for
contesting the claim. I am supported by
a
judgment
in
National
Insurance
Company Ltd. Versus B. Veer Swamy and
others 1996 ACJ 394.

The case was admittedly listed for final
hearing,
witness
had
been
cross
examined and it was at this final stage of
hearing that application u/s 170 of the
Motor Vehicle Act was filed without any
supporting documents or basis regarding
collusion between the claimant and the
owner or the owner not contesting the
claim.
It
was
an
application
filed
mechanically which after hearing has
been rejected by the court below as the
petitioner
failed
to
establish
any
collusion between the claimants and the
owner except making bald allegations in
this regard which did not make the
application a genuine application.
Case law discussed:
2007 (1) TAC 233, (2003)7 SCC 212, 2006 (1)
TAC 71, 2003 (3) TAC 293(SC), 1996ACJ 394.

## Text

152 INDIAN LAW REPORTS ALLAHABAD SERIES [2009
court, against which, a revision was
filed, which was also rejected. The
petitioner, being aggrieved, has filed the
present writ petition.

2. The learned counsel for the
petitioner submitted that in view of
Section 15 (b) (iv) of the Code of Civil
Procedure (Amendment Act, 2002), the
amended provision of the Order VIII, as
made by the Amendment Act, would be
applicable to the proceedings, which
was pending prior to the enforcement of
the Amendment Act. Consequently, no
written statement could be filed after the
expiry of the stipulated period as
provided under Order VIII, Rule 1. The
learned
counsel,
consequently,
submitted that the trial court committed
an error in keeping the written statement
on record.

3. In my opinion, the submission
of the learned counsel for the petitioner
is bereft of merit.

4. The Supreme Court in a large
number of decisions in Salem Advocate
Bar
Association,
Tamilnadu
Vs.
Union of India, AIR 2005 SC 3353;
Kailash Vs. Nanhku &. Ors. (2005) 4
SCC 480; Rani Kusum (Smt) Vs.
Kanchan Devi (Smt) &. Ors., (2005) 6
SCC 705; and Shaikh Salim Haji
Abdul Khayum sab Vs. Kumar &.
Ors. AIR 2006 SC 396 has held that
even after the amendment of the
provision of Order VIII, Rule 1,
pursuant to the Amendment Act of
2002, the provision of the Order VIII,
Rule 1 is still directory in nature and is
not mandatory and that time could be
extended on sufficient cause being
shown.

5. In the present case, the order to
proceed ex parte against the defendants
was allowed on payment of cost, and
pursuant thereto, the written statement
was filed immediately. Once ex parte
proceedings are recalled, the time
elapsed during the interim period was
liable to be ignored, for which, no
explanation or reason was required to be
given. The trial court passed an order on
17.4. 2007 recalling the ex parte decree
against the defendants, and on the same
day, the written statement was filed
without any further delay.

6. Consequently, this Court is of
the opinion that the order of the trial
court keeping the written statement on
the record, does not suffer from any
error of law.

7.

The
writ
petition
is
misconceived
and
is
dismissed
summarily.
---------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 28.11.2008

BEFORE
THE HON'BLE RAKESH TIWARI, J.

Civil Misc. Writ Petition No.60787 of 2008

United India Insurance Co. Ltd. ...Petitioner

Versus
Motor Accident Claim Tribunal, Bareilly
and others

 ...Respondents

Counsel for the Petitioner:
Sri S.N. Pandey
Sri Havaldar Verma

Counsel for the Respondents:
Sri Amaresh Sinha
1 All] United India Insurance Co. Ltd. V. Motor Accident Claims Tribunal & others
153
Motor Vehicle Act 1988-Section 170Rejection
of
application-Insurance
company at the stage of final hearing of
claim petition moved application to
contest the case as the owner of vehicle
not contesting-without disclosing any
material of collusion between claimants
as well as owner of vehicle-held-where
the insurer already - in claim-petitionfiled separate written statement-detail
reasons as permission to contest the
case
not
required-nor
every
order
requires detail discussions-the rejection
held-proper.

Held: Para 17 & 20

In my opinion Section 170 of the Motor
Vehicles Act would come into force
where the Insurance company is not
party and therefore if it is not impleaded
as party to contest the claim on behalf of
the owner, who might be collusion with
the claimants or has failed to contest the
case. Since the petitioner was a party in
the claim application, it could have filed
separate
written
statement
for
contesting the claim. I am supported by
a
judgment
in
National
Insurance
Company Ltd. Versus B. Veer Swamy and
others 1996 ACJ 394.

The case was admittedly listed for final
hearing,
witness
had
been
cross
examined and it was at this final stage of
hearing that application u/s 170 of the
Motor Vehicle Act was filed without any
supporting documents or basis regarding
collusion between the claimant and the
owner or the owner not contesting the
claim.
It
was
an
application
filed
mechanically which after hearing has
been rejected by the court below as the
petitioner
failed
to
establish
any
collusion between the claimants and the
owner except making bald allegations in
this regard which did not make the
application a genuine application.
Case law discussed:
2007 (1) TAC 233, (2003)7 SCC 212, 2006 (1)
TAC 71, 2003 (3) TAC 293(SC), 1996ACJ 394.

(Delivered by Hon'ble Rakesh Tiwari, J.)

1. Heard learned counsel for the
parties.

2. The brief facts of the case are
that Sri Himmat Arora died in an
accident said to have been caused by
Maruti Van No. U.P.25K-7081 which
was insured by the petitioner's company.
He was husband of respondent no. 2
Smt. Namita Arora aged about 43 years,
father of Ms. Shweta Arora aged about
22 years and son Manish Arora aged
about 20 years. The petitioner is a
United India Insurance Ltd. filed an
application under Section 170 of Motor
Vehicles Act for granting permission to
contest the claim petition on the ground
that owner of the vehicle was not
contesting the claim the claim petition
properly.

3. The Motor Accident Tribunal
rejected the application of the petitioner
filed under Section 170 of the Motor
Vehicle Act vide order dated 22.8,2008.

4. Learned counsel for the
petitioner has strenuously argued that
they have full right to file application
under Section 170 of the Motor Vehicle
Act to contest the claim. He has urged
on two points that:-

(1)
unless
conditions
precedent
specified In Section 170 is satisfied,
Insurance company will not be able to
take any defence beyond the other
provision of the Act in appeal or even if
no appeal is preferred by the Insured
against award of Tribunal AND
(2) The application of the petitioner
under Section 170 of the Motor Vehicle
Act has been illegally rejected by the
154 INDIAN LAW REPORTS ALLAHABAD SERIES [2009
Tribunal vide order impugned dated
22.08.2008 by a non speaking order and
therefore
it
the
petitioner
is
not
permitted by the Tribunal to contest the
claim on merits by taking all the
grounds available on behalf of the
owner
of
the
vehicle,
it
will
undoubtedly prejudiced Insurer to a
great extent.

5. In respect of his first contention
the counsel for the petitioner has relied
upon paragraph 10 of the judgment
rendered by the Kerla High Court in
Oriental Insurance Company Ltd. Vs.
Narayanan Nair and others:2007(1)
TAC 233(Kerala). In the aforesaid
judgment the maintainability of the
appeal was under challenge, which was
opposed on the ground that the insurer
was not entitled to file an appeal
disputing involvement of the vehicle,
since the Tribunal did not grant
permission to appellant under Section
170 of the Act. The Court in the
aforesaid circumstances considered the
scope of Section of the Motor Vehicles
Act for grant of permission to contest
the case on all grounds available to the
owner of the insured vehicle. The Court
considered as to whether the Tribunal
would
without
disposing
of
the
application allow the insured to cross
examine the claimant and thereafter
pass the award directing the insurer to
pay
compensation
whether
it
was
permissible for insured to challenge the
award on merits in appeal on grounds
other than those are specified in Section
149 (2) of the Act, in absence of the
specific order by the Tribunal under
Section
170
of
the Act granting
permission?

6. It appears that Motor Accident
Claims Tribunal in the case of Oriental
Insurance Company (supra) had failed
to disposed of the application filed
under Section 170 of the Act and it was
pleaded that in those circumstances the
Insurance Company did not have any
permission to contest the case on all
grounds other than those specified in
Section 149(2) of the Act.

7. The crux of the contention of
learned counsel for the petitioner in that
case
was
that
the
appeal
was
maintainable even in the absence of the
specific order under Section 170 of the
Act. Even if there is omission on the
part of the Tribunal to pass order on the
said application, it will not affect the
right to file the appeal.

8. The High Court in that case,
relying upon the judgment rendered by
the
Apex
court
in
United
India
Insurance Co. Ltd. Vs. Jyotsnaben
Sudhirbhai Patel, (2003) 7 SCC 212 for
holding that award passed without
disposal of an interlocutory application
is
unsustainable
and
deserves
an
interference for fresh consideration by
the Tribunal. The Court in that case held
that the Tribunal applied its mind to the
condition stated in Section 170 and
allows the Insurer's Company to contest
the case on merit by cross-examining
the claimant on merit as it was a case
where the owner-cum-driver did not file
any written statement and he failed to
contest the case.

9. A perusal of the judgment
shows that Tribunal in the aforesaid
peculiar facts and circumstances had
passed an order on the application filed
insurer under Section 170, "granted as
1 All] United India Insurance Co. Ltd. V. Motor Accident Claims Tribunal & others
155
prayed for", It was not a speaking order
and in view of the settled legal position
a non-speaking order passed under
Section 170 of the Act is illegal and
hence it was contended before the
Supreme Court that the insurer was not
entitled to file an appeal on merit in the
absence of a legally valid order being
passed under Section 170 of the Act.
The Supreme Court after considering
the various aspects held in Jyotsnaben's
case as follows:

"Section 170 (b) of the M. V. Act
states that the Tribunal while passing
an order shall record its reasons. But it
is very much evident in the present case
that the driver and the owner of the
motor vehicle did not file the written
statement and failed to contest the
proceedings. The Tribunal could have
merely
recorded
that
fact
while
allowing the application. For failure to
do so, the appellant shall not suffer
prejudice.
Therefore,
the
appellant
Insurance Company was justified in
contesting the proceedings on grounds
other than those enumerated under
Section
149
(2)
pursuant
to
the
permission granted by Court. For the
same reason, the Insurance Company
can be legitimately considered to be a
"person aggrieved" within the meaning
of Section 173 of the Act. "

10. In case of Oriental Insurance
Company (supra) while considering the
case of Jyotsnaben, the Court observed
in paragraph 8 to 12 as under:-

"8. As rightly argued by learned
counsel for appellant, it would appear
from
the
dictum
laid
down
in
Jytsnaben's case that the Supreme court
is of the view that a mere commission on
the part of a Court to do some thing
shall not prejudice any party. If from
the records, it can be inferred that the
requirements of Section 170 are made
out and that the Tribunal had also
applied its mind to those relevant facts,
a non-speaking order is to be treated as
in
consequential.
Therefore,
even
though the order passed under Section
170 in Jyotsnaben's case did not specify
that
the
conditions
precedent
for
granting permission under Section 170
of the ACT are satisfied, the supreme
Court held? that an appeal filed by
insurer is still maintainable.
9. But, the situation herein is
different. Unlike in Jyotsnaben's case,
there is total lack of an order under
Section 170 of the Act in this case.
Further, the owner-cum-driver herein
fled
written
statement,
specifically
disputing involvement of his vehicle in
the accident. He also examined himself
as a witness on his side. Despite all
these the Tribunal had allowed the
insurer to cross examine claimant at a
stage
when
the
owner
failed
to
challenge his evidence on merits. This
may be because the Tribunal was
satisfied
that
the
requirements
of
Section 170 of the Act are made out.
10. it is needless to say that even in
cases where written statement is field by
the owner or driver, and they examine
themselves as witnesses, the Tribunal
may be able to conclude elements of
collusion between the claimant and the
owner/ owner, depending upon the facts
and circumstances of each case. It may
be possible to infer that there is failure
on the part of the owner or driver to
contest the case, notwithstanding the
positive steps taken by them like filing
of
written
statement,
examining
witnesses etc. A contest, in this context
156 INDIAN LAW REPORTS ALLAHABAD SERIES [2009
does
not
mean
filing
of
written
statement or examining a witness. A
contest must be a genuine contest
challenge or opposition and not a mere
eye-wash
11.
Looking
into
the
various
aspects, the Tribunal will be in a
position to say whether there is bona
fide contest or not, or whether there is
any collusion or not. In cases where the
driver and owner have filed written
statement and examined witness, the
Tribunal will have to scan through the
relevant matters and decide whether
there is collusion or not and whether
they are actually contesting the matter
or not. In such a situation, a reasoned
order will be required, showing reasons
to support the conclusions, either way
.In the absence of a speaking order in
writing, it will not be possible for this
court to infer from vacuum, that the
tribunal
was
satisfied
of
the
requirements of Section 170 of the Act
and it had granted permission.
12. This is a case where a speaking
order ought to have been passed by the
tribunal on the application filed under
Section 170 of the Act without leaving it
to this court or the parties to read its
mind from emptiness. The failure to
dispose off the application, doubtlessly,
has prejudiced the insurer to a great
extent. It, has jeopardised appellant's
entitlement to file an appeal, since the
very right of appeal of the insurer
dangles on the decision that ought to
have been taken by the tribunal on an
application under Section 170 of the
Act. This court is prevented from even
deciding the question of maintainability
of this appeal, in the absence of an
order passed on the application filed
under Section 170 of the Act.

11.

As
regards
the
second
contention, learned counsel for the
petitioner has relied upon the judgment
of Single Judge rendered by National
Insurance Company Ltd. Vs. Smt.
Kamla Khaitan, 2006 (1) TAC 71
(Delhi). The paragraphs nos. 9 to 12 are
as under:-

"9.lt is not disputed on behalf of the
claimant that the owner and driver of
the offending vehicle have omitted to
file their written statement and also did
not contest the claim otherwise. The
learned counsel for the respondent
submits that the cross-examination of
the claimant on behalf of the appellant
Insurance Company is not restricted to
the statutory defences enumerated in
Section 149 (2) of the Act only and
stretches beyond that. He points out that
the appellant sought to summon the
owner and driver of -the offending
vehicle in order to examine them as its
witnesses but failed to secure their
presence and eventually closed its
evidence without examining them. He
therefore, contends that the respondent
having already examined the claimant
on defences other than statutory ones
available under Section 149 (2) of the
Act and having availed the opportunity
of producing their witness no prejudice
has been caused to it on account of
Tribunal's refusal to grant permission to
it widen the scope of its defence.
10.
Learned
Counsel
for
the
appellant however disputed that the
cross-examination of the claimant is not
restricted to statutory defences only as
available under Section 149 (2) of the
Act. He alternatively contended that
even if it be accepted that the claimant
had been cross-examined on the points
beyond those permissible under Section
1 All] United India Insurance Co. Ltd. V. Motor Accident Claims Tribunal & others
157
149 (2) of the Act, in the absence of a
permission under Section 170 the
appellant would be handicapped in
asserting the defences other than the
one contemplated under Section 149(2)
of the Act while resisting the claim of
respondent no. 1. Further he added that
on an award being passed against it, in
the absence of permission under Section
170 to widen its defences, it would be
incompetent on its part to maintain its
appeal against the award on grounds
other than those available under Section
149(2) of the Act.
11.
Learned
counsel
for
the
respondent argued that presently the
matter is pending at the stage of final
arguments and in the event of appellants
application under Section 170 being
granted it would amount to putting the
clock back. This however would not
appear to be a valid argument where it
is found that the permission sought by
the appellant under Section 170 of the
act on an application in that regard has
been wrongly refused by the tribunal.
Since the impugned order declining the
permission to widen the scope of ' its
defences
is
found
to
have
been
erroneously declined to the appellant
the same is liable to be set aside.
12. In the result, the appeal is
allowed and the impugned order dated
26th
March,
2004
is
set
side.
Permission is granted to the appellant
to widen the scope of its defences and to
produce evidence in support thereof
which would include an opportunity to
further cross- examine the claimant. "

12. A perusal of the aforesaid case
shows that the permission was sought
by the Insurer under Section 170 of the
Act, 1988, which was dismissed by the
'Tribunal, considering the scope and
ambit of Section as well as justification
of the order passed by the Court held
that permission sought by the Insurer to
widen scope of its defences where
owner and driver had omitted to file
their written statement and also did not
contest the claim otherwise permission
was wrongly refused by the Tribunal. It
was in those circumstances the Court
has set aside the order of Tribunal.

13. Learned counsel for the
petitioner has then placed reliance In
paragraph 19 of the judgment rendered
in National Insurance Co, Ltd. Vs.
Nicolletta Rohtagi and others 2003 (3)
TAC 293 (SC) for the purpose of
placing legislative intent and the scope
of Section 170 of the Motor Vehicles
Act, 1988. In paragraph 19 wherein the
case of Sankaracharya and another Vs.
United India Insurance Co. Ltd. and
another has been considered by the
Apex Court, learned counsel for the
petitioner has relied upon in support of
his argument that the order passed by
the Tribunal should be a reasoned order.
Paragraph 19 is as under:-

"In Shankarayya and another Vs.
United Insurance Co. Ltd. and another,
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
158 INDIAN LAW REPORTS ALLAHABAD SERIES [2009
statutory defences. In absence of the
existence of the conditions precedent
mentioned in Section 170, the Insurance
Company was not entitled to file an
appeal
on
merits
'questioning the
quantum of compensation. "

14. After hearing the learned
counsel for the petitioner and on perusal
of the record as well as aforesaid
judgments, it is necessary to refer the
Section 170 of the Motor Vehicle Act,
which is as under:-

"Impleading insurer in certain
cases where in the course of any
inquiry, the Claims Tribunal is satisfied
that-
(a) there is collusion between the
person making the claim and the person,
against whom the claim is made, or
(b) the person against whom the
claim is made has failed to contest the
claim, it may, for reasons to be
recorded in writing, direct that the
insurer who may be liable in respect of
such claim, shall be impleaded as a
party to the proceeding and the insurer
so impleaded shall thereupon have
without prejudice to the provisions
contained in sub-section (2) of Section
149J 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."

15. Perusal of the Section bring
out the procedures and powers of the
court and its scope within which the
application may be made by the Insurer
without impleading as party by the
Court.

16. In the instant case, a perusal of
annexure no. 6 the claim application
shows that case was fixed for final
hearing on 22.8.2008. The ground taken
by the Insurance Company was that the
owner of the Maruti Car contested the
case in collusion with the claimant after
filing of the written statement, hence
they prayed for permission to defend the
said case on behalf of the owner of the
Maruti Car. A perusal of annexure no. 7
impugned in the writ petition shows that
Insurance company was heard on the
application. The owner of the vehicle
was also present in the Court and had
cross
examined
the
witness
i.e.
Claimants, therefore it cannot be said
that order rejecting the application is a
non speaking order. The reasons for
rejecting an application may be short
but they do give an indication for
rejection of the application of the
Company and is a speaking order.

17. In my opinion Section 170 of
the Motor Vehicles Act would come
into force where the Insurance company
is not party and therefore if it is not
impleaded as party to contest the claim
on behalf of the owner, who might be
collusion with the claimants or has
failed to contest the case. Since the
petitioner was a party in the claim
application, it could have filed separate
written statement for contesting the
claim. I am supported by a judgment in
National
Insurance
Company
Ltd.
Versus B. Veer Swamy and others 1996
ACJ 394.

18. The Petitioner insurance
company has also appended the copy of
the claim petition. It is apparent from
the array of parties that United India
Insurance company Ltd. was also a
party in the aforesaid claim petition.
Hence it has the right to contest the
1 All] United India Insurance Co. Ltd. V. Motor Accident Claims Tribunal & others
159
claim on all grounds available to the
owners.

19. The Insurance company being
a party before the Motor accident
Claims Tribunal had filed written
statement, they had to satisfy the
tribunal that there was a collusion
between the owner and the claimant
which
has
power,
authority
and
jurisdiction
to
either
allow
the
application of the Insurance Company
under Section 170 or to dismiss it giving
cogent reasons.

20. The case was admittedly listed
for final hearing, witness had been cross
examined and it was at this final stage
of hearing that application u/s 170 of the
Motor Vehicle Act was filed without
any supporting documents or basis
regarding
collusion
between
the
claimant and the owner or the owner not
contesting
the
claim.
It
was
an
application filed mechanically which
after hearing has been rejected by the
court below as the petitioner failed to
establish any collusion between the
claimants and the owner except making
bald allegations in this regard which did
not make the application a genuine
application.

21. Per contra from the judgment
in Oriental Insurance company (supra)
relied upon by the petitioner it is clear
that the tribunal has considered the facts
and circumstances of each case and
looking
into
the
various
aspects
thereafter the tribunal was in a position
to say as to whether there was a
bonafide contest or not or whether there
is any collusion or not. It appears that in
the instant case there was no material
brought on record by the tribunal for
coming to the conclusion that there was
any elements of collusion or improper
contest of the case by the owner of the
vehicle, Merely because bald statement
in the application was made in this
regard it would not be sufficient for
allowing an application.

22. It may be noted that in
paragraph 10 of the judgment cited by
the petitioner it has also been observed
that the contest must be a genuine. The
challenge or opposition must not be a
mere eyewash. If any person including
the insurer, who contests the case,
should move application based genuine
reasons for challenging or opposing it.

It
was
incumbent
upon
the
petitioner in the facts and circumstances
to have brought all facts before the
tribunal from which it could be deduced
by it that there was an element of
collusion between claimant and owner
or the owner was not contesting the case
properly. Even otherwise as stated
above
the
petitioner
could
have
produced its witnesses after filing his
written statement in the case on all the
grounds available to it for contesting the
case.

The petitioner simply made an
application mechanically under Section
170 of the Motor Vehicle Act.

The cases cited by the petitioner in
fact do not help his case in the writ
petition.

In my opinion the petitioner did not
satisfy the ingredients of Section 170 of
the Act for its applicability. The Court
has
given
brief
cogent
reasons
indicating the grounds and backdrop of
passing
the
order
impugned.
The
reasons may be given in a three line
order to indicate the mind of the Court
160 INDIAN LAW REPORTS ALLAHABAD SERIES [2009
and detailed reasons in every order is
not a must. Since the application filed
by the petitioner did not indicate any
collusion or non contest between the
parties, the order passed by the Court
being based on sufficient reasons does
not require interference in discretionary
jurisdiction of the High Court under
Article 226 of the Constitution.

For all reasons stated above, the
writ petition is accordingly dismissed.
No order as to costs.
---------