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New India Assurance Company Vs. Venkatamma and anr. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtKarnataka High Court
Decided On
Case NumberMiscellaneous First Appeal No. 815 of 1981
Judge
Reported in[1983]54CompCas356(Kar); ILR1981KAR952
ActsMotor Vehicles Act - Sections 96(2) and 110C(2A)
AppellantNew India Assurance Company
RespondentVenkatamma and anr.
Excerpt:
.....the claim is made, or (ii) the person against whom the claim is made has failed to contest the claim, it may, for reasons to be recorded by it 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 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......appellant is the insurance company. the question that arises for our consideration is, whether the insurance company can take up contentions which are not covered under s. 96(2) of the motor vehicles act when the supreme court of india has settled the point holding that the defence available to an insurance company is confirmed to the subject mentioned in s. 96(2) of the motor vehicles act (vide british india general insurance co. ltd, v. captain itbar singh : [1960]1scr168 . 2. in this case, however, sri chinnappa, the learned counsel appearing for the appellant, submitted that the owner of the vehicle remained absent before the tribunal and the insurance company defended the case. simply because the owner remained absent the insurance company does not get ipso facto the right to defend.....
Judgment:

Sabhahit, J.

1. The appellant is the insurance company. The question that arises for our consideration is, whether the insurance company can take up contentions which are not covered under s. 96(2) of the Motor Vehicles Act when the Supreme Court of India has settled the point holding that the defence available to an insurance company is confirmed to the subject mentioned in s. 96(2) of the Motor Vehicles Act (vide British India General Insurance Co. Ltd, v. Captain Itbar Singh : [1960]1SCR168 .

2. In this case, however, Sri Chinnappa, the learned counsel appearing for the appellant, submitted that the owner of the vehicle remained absent before the Tribunal and the insurance company defended the case. Simply because the owner remained absent the insurance company does not get ipso facto the right to defend and does not become a party to the proceeding. Section 110C of the Motor Vehicles Act reads :

'11OC. (1) In holding any inquiry under section 110B, the Claims Tribunal may, subject to any rules that may be made in this behalf, follow such summary procedure as it thinks fit ......

(2A) Where in the course of any inquiry, the Claims Tribunals is satisfied that -

(i) there is collusion between the person making the claim and the person against whom the claim is made, or

(ii) the person against whom the claim is made has failed to contest the claim,

it may, for reasons to be recorded by it 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 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.

3. Thus, it becomes clear that normally, the insurance company is not impleaded as a party to the proceeding. It is only in the contingencies mentioned in sub-s. (2A) of s. 110C of the Act that the court, for reasons to be recorded, shall pass an order to implead the insurance company. It is only thereupon the company gets right of defending the case on all grounds available to the insured.

Section 96(2) states :

'No sum shall be payable by an insurer under sub-section (1) in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice through the court of the bringing of the proceedings, or in respect of any judgment so long as execution is stayed thereupon pending an appeal; ...

'Thus, what is contemplated under the Act, normally, is to issue notice through court to the insurance company after the commencement of the action against the owner (insured). Therefore, simply because, the party gives the name and address of the insurance company in the petition, the insurance company does not ipso facto get impleaded in the proceeding. The name and address of the company is given to enable the court to issue notice to the insurer under s. 96(2) of the Act. If the insurance company wants to take up all grounds available to the owner in defence, the procedure contemplated under s. 110C (2A) has to be followed. Admittedly, in this case, the procedure contemplated under s. 110C (2A) is not followed. Hence, there is no substance in the submission made by the learned counsel for the appellants that the insurance company gets a right to defend on all grounds as its name is shown by the claimants in the petition.

4. In the result, therefore, the appeal is not maintainable. Hence, it is dismissed in limine.


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