1. The appellant in these two appeals is M/s. Vanguard Insurance Co. Ltd. They arise out of MVC No. 22 of 1970 on the file of the Motor Accidents Claims Tribunal and District Judge, Tumkur, and Mis. No. 30 of 1968 on the file of the Motor Accidents Claims Tribunal and District Judge, Shimoga, respectively.
2. As a common question of law has been raised in these two appeals, we propose to dispose of these two appeals by a common judgment.
3. The two accidents, out of which the said claim cases were instituted, took place much prior to 2-3-1970. The owners of the vehicles concerned in the two accidents disputed the claims put forward by the claimants and contended that there was no rash and negligent driving of the concerned vehicles at the relevant points of time and, therefore, they were not liable to pay any compensation. Evidence was adduced and the claims Tribunal held in both the cases that the drivers of the concerned vehicles had driven the concerned vehicles rashly and negligently and caused the accidents and, therefore, the owners of the vehicles were vicariously liable to pay the amount of compensation. Both the Tribunals in the course of their judgments recorded a finding to what extent the liability of the Insurance Company was limited. The owners did not prefer any appeals against the awards. Only the Insurance Company has preferred these appeals. If may also be mentioned at this stage that the owners in both these appeals have remained ex parte after service of notices of these appeals.
4. Sri H. B. Shankarappa, the learned Advocate appearing on behalf of the Insurance Company in both these matters, urged that in law the Insurance Company is entitled to put forward in these appeals all the defences that were available to the owners because of Section 110-C (2-A) of the Motor Vehicles Act (to be hereinafter referred to as the Act).
5. We do not think that this contention of Sri Shankarappa is acceptable because this provision was introduced by way of an amendment by Act No. 56 of 1969 and it came into force on 2-3-1970. We have already pointed out that the two accidents in question had happened much prior to 2-3-1970. The rights of Insurance Companies to defend claims arising out of motor accidents that had occurred prior to 2-3-1970 were limited by Section 96 (2) of the Act. The Supreme Court in British India General Insurance Co. Ltd. v. Itbar Singh. : 1SCR168 . dealt with this aspect of the matter and laid down that only those defences specifically mentioned in Section 96 (2) of the Act were open to the Insurance Companies to be raised in claims cases. What Section 110-C (2-A) of the Act lays down is that if the claims Tribunal is satisfied, during an enquiry in a claims case, that there has been collusion between the person making the claim and the person against whom the claim is made, such claims Tribunal, may, for reasons to be recorded in writing, direct the insurer, who may be liable in respect of such claim, to be impleaded as a party to the proceeding and permit the insurer impleaded to contest the claim on all or any of the grounds available to the person against whom the claim is made. Section 96 (2) of the Act does not permit all such defences to an insurer. It is plain that this provision deals with substantive rights. Hence, it cannot be, in the absence of a specific provision in the Act. held that Section 110-C (2-A) of the Act is retrospective in operation. Therefore, the contention of Sri Shankarappa that the provision of Section 110-C (2-A) of the Act would be available for the benefit of the Insurance Company, which is the appellant in these two appeals, cannot stand.
6. Even if it is assumed for the sake of argument that the benefit of Sub-section (2-A) of Section 110-C of the Act would be available to the Insurance Company in these appeals, it is found that in both these matters the owners of the two vehicles had contested the claims tooth and nail before the concerned Tribunals and had failed in their attempt. In view of the position being so, the question of applying the said provision in favour of the Insurance Company did not arise before the Tribunals and the Tribunals had no occasion to find out whether there was any collusion between the owners of the concerned vehicles and the claimants. The way in which the matters were contested by the owners show that there could have been no such collusion. The argument of Sri Shankarappa that the fact that in both these appeals the owners of the vehicles have remained absent even after service of notices of these appeals on them, leads to an irresistible inference that the owners must have colluded with the claimants and, therefore, they have not preferred any appeals against the awards passed in the said two matters, is in our opinion not acceptable because a reading of the awards passed in these two matters shows that the liability has been saddled on the owners also In spite of the awards being so. the owners did not choose to file any appeals. Hence, even on facts, it would not be possible to draw a conclusive inference that in these two appeals the owners have colluded with the claimants. Therefore, even if the principle underlying Sub-section (2-A) of Section 110-C of the Act is, as contended by Sri Shankarappa. extended to the stage of appeals also no benefit accrues to the appellant-insurance Company.
7. In view of the foregoing reasons, it is not open to the Insurance Company to contend in these appeals that it has a right to question the finding recorded by the Tribunal that there was rash and negligent driving by the drivers of the concerned vehicles in these two cases and such driving had caused the accidents.
8. Sri Shankarappa nextly attempted to contend that according to the terms of the policies, the Insurance Company could take over the defences available to the Insured and, hence it had a right to contest these appeals on these grounds. This contention has to be negatived in view of the decision of the Supreme Court in British India General Insurance Co's case : 1SCR168 . We, therefore, hold that there is no substance in these two appeals and dismiss them with costs.