Holding

The insurer cannot question the quantum of compensation without leave under s.170 and is not liable where the driver lacked a valid licence; the High Court erred in reducing the compensation.

Summary

A truck owned by Respondent No.1 and driven by Respondent No.2, insured by Respondent No.3, collided with a car, causing the death of the car occupant. The claimants filed a compensation claim under s.166 of the Motor Vehicles Act, 1988 and the Accident Claims Tribunal awarded Rs.13,32,000, holding that the driver lacked a valid licence and that the insurer was not liable due to breach of the insurance policy. The claimants appealed under s.173, seeking to make the insurer jointly liable and the High Court reduced the compensation to Rs.6,96,000 and directed the insurer to recover the amount from the vehicle owner. No appeal was filed by the owner, driver or insurer. The Supreme Court held that, under s.149(2), the insurer could not be held liable when the driver lacked a valid licence, and that the insurer could not question the quantum of compensation without leave under s.170. Consequently, the High Court’s interference with the quantum of compensation was impermissible, and the appeal was allowed, setting aside the High Court’s order.

Issues considered

Whether the insurer is liable to pay compensation when the driver of the insured vehicle does not possess a valid licence, invoking s.149(2) of the Motor Vehicles Act, 1988.
Whether the insurer can contest the quantum of compensation awarded by the Tribunal without obtaining leave under s.170 of the Act.
Whether the High Court could lawfully reduce the quantum of compensation in the absence of an appeal by the vehicle owner, driver, or insurer, invoking Order 41 Rule 33 of the CPC.

Legislation cited

Motor Vehicles Act, 1988s. 147, s. 149, s. 149(2), s. 166, s. 170, s. 173

Subjects

Motor Vehicles Actinsurance liabilitycompensationbreach of policydriving licenceSection 149Section 170Order 41 Rule 33appellate jurisdictionquantum of compensation

Judgment

[2008] 11 S.C.R. 714
-+
.,
A SAMUNDRA DEVI AND-ORS.
v.
NARENDRA KAUR AND ORS.
(Civil Appeal No. 4748 of 2008)
AUGUST 1, 2008
B
[S.8. SINHA AND CYRIAC JOSEPH, JJ.]
,..
Motor Vehicles Act, 1988 - ss. 149, 166 and 170:
··Accident between two vehicles - Causing death of a per-
c son - Compensation claim - Driver of offending vehicle did
not possess a valid driving license - Ori that ground, Tribunal
held that there was breach of insurance policy in respect of
the offending vehicle, and consequently, the insurer was not
liable to reimburse the owner of, the offending vehicle, the
0 amount payable by him by way of compensation - Claimants
filed appEJ,al contending that the insurer also ought to be made
~-
liable to pay compensation - High Court held the insurer jointly
and se_v~rally liable and gave it liberty to recover the amount
of cpinpensation from owner of the vehicle, but considering
the contention raised before it by the insurer that in the event
E
it was held liable to reimburse the owner of the vehicle, it was
entitled to contest the quantum of compensation as being
excessive, reduced the quantum of compensation - lnterfer-
ence of High Court with regard to quantum of compensation -
Challenge to - Held.· Ordinarily and subject to just exceptions,
F the insurer would have no right to question the quantum of
)'-
compensation in absence of any leave having been granted
in its favour in terms of s. 170 - In the instant case, no leave
was obtained in terms of s.170- Or.41, r.33, CPC has limited
application and was not applicable - High Court could not have
G considered contention raised by insurer which was not avail-
able to it in law - It erred in issuing the impugned directions,
despite noticing that no appeal was filed by owner or driver of
+"
the offending vehicle as also the insurer thereof - Code of
Civil Procedure, 1908 - Or.41, r.33.
H 714
SAMUNDRA DEVI & ORS. v. NARENDRA 715
KAUR & ORS.
~

Truck owned by Respondent No.1 and at the relevant A
time driven by Respondent No.2 met with accident with a
--"
j car. The truck was insured with Respondent No.3. The
person seated in the car died as a result of the injuries .
sustained in the said accident. The car was also damaged.
Appellants filed compensation claim under s.166 of B
....
the Motor Vehicles Act, 1988. The Accident Claims Tribu-
--\ nal inter alia held that Respondent No.2 did not possess a
valid and effective driving licence and, therefore, breach
of policy of the contract of insurance was established,
and consequently, Respondent No.3 was not liable to re- c
imburse Respondent No.1 any such amount payable by
him by way of compensation. The Tribunal awarded com-
pensation of Rs.13,32,000/-.
Against the award, Appellants filed appeal in terms
D
of s.173 of the Act inter a/ia contending that the insurer-
~ Respondent No.3 ought to have been made liable to pay
compensation along with the owner-Respondent No.1
and driver-Respondent No.2. No appeal however was filed
by Respondent Nos. 1 and 2 as also Respondent No.3.
E
The High Court held Respondent No.3 jointly and sev-
erally liable and gave it liberty to recover the amount of
compensation from Respondent No.1, but considering the
contention raised before it by Respondent No.3 that in
the event it was held liable to reimburse Respondent No.1, F
...j it was entitled to contest the quantum of compensation
as being excessive, reduced the quantum of compensa-
tion from Rs.13,32,000/- to Rs.6,96,000/-.
The question which arose for consideration in the
present appeal is as to whether it was permissible for the G
High Court to interfere with the quantum of compensa-
tion as awarded by the Tribunal, although no appeal was
t preferred either by the owner or the driver of the truck
nor any appeal was preferred by the insurer.
H
716 SUPREME COURT REPORTS [2008] 11 S.C.R.

~

A Allowing the appeai, the Court
HELD:-1 Jn relation to a third party, the grounds upon
which the insurer can deny its !i~bility .are contained in
sub-section (2) of s.149 of the Motor Vehicles Act, 1988.
Ordinarily and subject to just exceptions, the insurance
B company .would have no rigtit to question· the quantum
,,,_
of compensation in absence of any leave having been
,..
granted in i'ts favour in terms of s.170 of the· Act. The High ,.~
Court failed to consider this aspect of the matter~ Appel- r
1--
lants prefe-rred appeals before it on limited grounds. Their I

c contentions could have been rejected or accepted. The
Hi.gh Court,.howevE::r, could not have considered the con-
tention raised on behalf of respondent No.3 which was
not available to them in law. It was legally impermissible
for respondent No.3 to question a finding. of fa.ct arrived
D at by the Tribunal, taking umbrage under Or.41, r.33, CPC
or otherwise. It could not have been permitted to do so.
,..
What cannot be permitted to be done directly; cannot be
p~rmitted. to be done indirectly. No leave was obtained in
terms of s.170 of the Act. The quantum of compensation
E awarded by the Tribunal was accepted by the owner. Only
jn ·some exceptional cases and that too when the liability
to pay the amount of compensation is fastened upon the
insurance
.·:
company and insured, it can be heard on is--
sues relating to the. quantum· of compensation and not
F otherwise. [Para 16] [722-F-H; 723-A-C]
2; In this case, Respondent No.3 has be_en given lib- ,.
· erty to recover the amount of compensation from the
owner of the vehicle. The insurance company has been
held to have no statutory liability as-one ofits contentions
G tliat the driver was not holding a valid and effective driv-
ing licence has been upheld. In the aforementioned situ·-
ation';: everi Order 41 ·Rule 33, CPC was not applicable as
in ·i1 situation of this nature, respondent No.3 ordinarily -t
could not have maintained an independent ap'peal on the
H quantum of compensation having regard to the fact situ-
SAMUNDRA DEVI & ORS. v. NARENDRA 717
KAUR & ORS. [S.B. SINHA, J.]

ation obtaining herein, and, thus the High Court commit- A
ted a serious error in issuing the impugned directions,
despite noticing that even no appeal has been preferred
by the owner or driver of the vehicle as also Respondent
No.3. Or.41, r.33, CPC has limited application. When there
- exists a legal interdict, the same would not apply. [Paras B
- 17, 18, 19) [729-0-G]
-~

S. Nazeer Ahmed v. State Bank of Mysore & Ors., (2007)
11 sec 75- relied on.
Case Law Reference c
. (2001) 11 sec 75 relied on Para 19
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 4748
of 2008
From the final Judgment and Order dated 16.05.2005 of D
the High Court of Judicature of Madhya Pradesh at Jabalpur in
Misc. Civil App·eal No~ 621 of 2001

Kamini Jaiswal for the Appellants.
, M. K. Dua for the Respondents. E
The Judgment of the Court was delivered by

S.8. SINHA, J. 1. Leave granted.

2. This appeal is directed against a judgment and order
dated 16.05.2005.passed by the High Court of Madhya Pradesh F
at Jabalpur reducing the amount of compensation awarded in
favour of the appellants herein by the Tribunal from Rs.13,32,000i
- to Rs.6,96,000/- in an appeal preferred by the claimants in
terms of Section 173 of the Motor Vehicles Act, 1988.
G
3. One Shiv Shakti Singh while proceeding in a car on
· 9.4.1998 met with an accident having been hit by a truck bear-
ing registration No.MP-09-KA-6899. The said true~ was owned
by the first respondent herein and was being driven at the rel-
evant time by the second respondent. The said truck was in- H
718 SUPREME COURT REPORTS (2008] 11 S.C.R.

A sured with the respondnt No.3. As a result of the injuries sus-
tained in the said accident, Shiv Shakti Singh died. The car
was also damaged.
I
4. Appellants herein filed an application under Section 166 I
.,.
of the Motor Vehicles Act, 1988 claiming compensation for a
8 sum of Rs.31,89,000/-. One of the contentions raised by respon-
dent No.1 was that the accident took place owing to the acts of
negligence on the part of the deceased himself. Respondent
No.3 furthermore contended that the respondent No.2 did not
possess a valid and effective driving licence.
c
Several issues were framed by the Tribunal, inter alia, as
regards the breech of policy conditions as also the quantum of
compensation.
By an award dated 8.2.2001, the Motor Vehicles Accident
D Claim Tribunal, held :
(a) The accident took place due to the negligence of the
driver of the truck;
(b) The deceased having been earning a sum of
E Rs.10,000/-, the amount of contribution to his family
was about 8,000/- per month and, thus, on application
of the multiplier of 16, theJotal loss of dependency
wouldbeasumofRs,12,eo;ooO/-AsumofRs.15,000
as loss of companionship for applicantNo.2, a sum
F of Rs.2,000/- tqwards fun.era! expenses and
t
Rs:35,00.0l-:towards costs.of repairing of the Maruti '
Car, were also granted.
(c) The driver of the truck did not possess a valid .driving
licence and, therefore, breach ofpolicy ofthe contract
G ofi.nsurahcewas established.as a result whereof the
respond¢nt No.3 ·was not. liable to reimburse the
owner of the vehicle any such amount payable by
him by way of compensation payable.
5. Appellants preferred an appeal thereagainst, contending:
H

)
SAMUNDRA DEVI & ORS. v. NARENDRA 719
KAUR & ORS. [S.B. SINHA, J.]

a) The insurer ought to have baan found to be liable to A
_. pay the amount of compensation along with the owner
-'\
and driver; and
• b) The appropriate multiplier adopted should have been
20 instead of 16.
B
·~ 6. Admittedly, no appeal was preferred against the said
judgment and award by the owner and driver of the vehicle as
also the insurer thereof. Before the High Court, the respondent
No.3, inter alia, contended that in the event it be held that it was
liable to reimburse the owner of the vehicle, it was entitled to c
contest the quantum of compensation as being excessive.
In view of the said contention, the High Court formulated
the following questions for its consideration :
"(i) Whether the insurer is liable to indemnify the owner
D
of the vehicle and therefore liable to pay the
.... compensation?
(ii) If so, what will be th.e just compensation?"
7. The High Court, on perusal of the driving licence, the
E
contract of insurance as also the testimonies of witnesses ex-
amiried on behalf of the parties, held:
"8.We accordingly hold that the Insurer-having established
that the driver was not 'duJy li~enced: to drive t.he.truck in
question and also hmi!ng·estab.lished want_:of care on, the F
part of the insured in allowing· the insured tr.uck-to be driVE;H'l
by a driver who possessed.only a LMV (Private)licence,
on paying the compensation amount to the Appellants/
Claimants and recover the same from the Insured
(Respondent No.1 )." G
8. Despite noticing the fact that the appeal was by the claim-
ants, the High Court took into consideration the contention raised
-t by the respondent No.3 that no documentary evidence having
been produced to establish the income of the deceased, it
should be reduced to 49,000/- for the period ending 31.3.1996 H
720 SUPREME COURT REPORTS (2008) 11 S.C.R.

~

A and Rs.53,000/- for the year 31.3.1997. As regards to the find-
ing of the learned Tribunal that the deceased had income from t-
the agricultural lands, it was opined that as agricultural land con- 'I

tinued to be owned by the family; what was lost was only the "'-
"-
valuable supervision of the deceased. On the said findings, it
B was held:
"14. On an overall consideration of the evidence, we are
of the view that 'the income of the deceased from the
profession and the value (cost) of supervision of agriculture
land should be as Rs.5,000/- per month or Rs.60,.000/-
c per annum. If one-third is deducted towards personal and
living expenses of the deceased, the contribution to the
family would be Rs.40,000/- per annum. As the deceased
was 39 years, the appropriate multiplier is 16. Therefore,
the total loss of dependency will be Rs.6,40,000/- ......
D
.15. Normally, we would not have. interfered by reducing
the compensation in an appeal filed by the claimants. But ~·
as noticed above, the insurer was exonerated and when
it is sou'ght to be made liable, it can point out that the
compensation is excessive. Though we pointed to the
E Appellants' counsel that by not pressing the appeal, the
claimants may have the advantage of an award for
Rs.13,32,000/- against the owner as the owner has not
challenged the award, he submitted that unless.the insurer
· is made ·1iable, the chances of r~covery are difficult and
F therefore the appellants would lik 3 to pursue the appeal."
,.._
9. The appeal was, thus, allowed directing :
"(a) The insurer (Third Respondent) is also jointly and
severally made liable to p< y the compensation to
G Appellants. I

(b) The comepsnation is reduced from Rs.13,32,000/- t-
to Rs.6,96,000/- with interes' @ 12% per annum from
the date of petitioner till dat.e of deposit.
+-
H (c) On payment by the lnsurer:, it shall be entitled to
r-
SAMUNDRA DEVI & ORS. v. NARENDRA 721
.. ~
KAUR & ORS. [S.B. SINHA, J.]

recover the amount paied from the owner of the A
vehicle (insured), namely the First Respondent, by
executing the award."
"Normally, we would not have interfered by reducing the
compensation in an appeal filed by the claimants. But as
noticed above, the insurer was exonerated and when it is B
=-'""
sought to be made liable, it can point out that the
compensation is excessive. Though we pointed to the
Appellants' counsel that by not pressing the appeal, the
claimants may have the advantage of an award for
Rs:13,32,000/- against the owner as the owner has not c
challenged the award, he submitted that unless the insurer
is made liable, the chances of recovery are difficult and
therefore the appellants would like to pursue the appeal."
10. The appellant is, thus, before us.
D
11. Ms. Kamini Jaiswal, learned counsel appearing on
" behalf of the appellant, would submit that the High Court com-
mitted a serious error in reducing the amount of compensation
from Rs.13,32,000/- to Rs.6,96,000/-. It was urged that the rea-
sonings of the High Court are not legally sustainable as the owner E
and driver as also the insurer had not preferred any appeal
against the award dated 8.2.2001 passed by the learned Mo-
tor Vehicles Accident Claims Tribunal.
12. Mr. M.K. Dua, learned counsel appearing on behalf of
the respondent, on the other hand, would support the judgment. F
1-
13. The claimants/appellants filed an application for grant
of compensation on the premise that they suffered damages
owing to the acts of rashness and negligence in driving on the
part of the respondent No.2. The owner of the vehicle as also
G
the driver thereof were, thus, principally liable to pay compen-
sation to the dependents of the deceased.
14. A contract of insurance as is well known is a contract
of indemnity. In a case of accident, the primary liability under
law for payment of compensation is that of the driver. The owner H
722 SUPREME COURT REPORTS [2008) 11 S.C.R. r
;
.,.... _,
·- ....
A of the vehicle also becomes vicariously liable therefor. In a case .
involving a third-party to the contract of insurance in terms of
Section 147 of the Motor Vehicles Act, 1988 providing for a
compulsory insurance, the insurer becomes statutorily liable to
indemnify the owner. Indisputably, the insurance company would
B be liable to indemnify the insured in respect of loss suffered by
a third party or in respect of damages of property. In a case, ~

therefore, where the liability is fastened upon the insurer, the
insurer would be bound to indemnify the insured unless the ex-
ceptions contained in Section 149 of the Act are attracted.
c 15. It has not been disputed befon~ us that in certain situa-
tions while opining that the insurance company would not be
liable to reimburse the insured, a direction upon the insurance
company to pay the amount of compe~nsation to a third party
and recover the same from the owner of the vehicle is perm is-
D sible. Such a direction has been issuecl by the High Court. The
said directions are not under challenge!.
';.'
"
Keeping in view the aforementioned principle in mind, the
question which arises for our consideration is as to whether it
was permissible for the High Court to interfere with the quantum
E of compensation as awarded by the learned Tribunal, although
no appeal was preferred either by the owner or the driver of the
vehicle nor any appeal was preferred by the insurance company.

16. Indisputably, in relation to a third party, the grounds
F upon which the insurer can deny its liability are contained sub-
section (2) of Section 149 of the Act. Ordinarily and subject to
just exceptions, the insurance company would have no right to
question the quantum of compensation in absence of any leave
having been granted in its favour in terms of Section 170 of the
Act. The High Court, with respect, failecl to consider this aspect
G
of the matter. Appellants preferred appt:!als before it on limited
grounds. Their contentions could havi= been rejected or ac-
cepted. The High Court, however, cou.ld not have considered ,,..
the contention raised on behalf of the respondent No.3 which
was not available to them in law. It was l(=gally impermissible for
H

..
SAMUNDRA DEVI & ORS. v. NARENDRA 723
KAUR & ORS. [S.B. SINHA, J.]

the respondent No.3 to question a finding of fact arrived at by A
the Tribunal, taking umbrage under Order 41 Order Rule 33 of
the Code of Civil Procedure or otherwise. It could not have been
permitted to do so. It is well settled that what cannot be permit-
ted to be done directly, cannot be permitted to be done indi-
rectly. Indisputably, no leave was obtained in terms of Section B
170 of the Act. The quantum of compensation awarded by the
learned Tribunal was accepted by the owner. Only in some ex-
ceptional cases and that too when the liability to pay the amount
of compensation is fastened upon the insurance company and
insured, it can be heard on issues relating to the quantum of C
compensation and not otherwise.
17. in this case, the respondent No.3 has been given lib-
erty to recover the amount of compensation from the owner of
the vehicle. The insurance company has been held to have no
statutory liability as one of its contentions that the driver was not D
holding a valid and effective driving licence has been upheld.
18. In the aforementioned situation, we are of the opinion
that even Order 41 Rule 33 of the Code of Civil Procedure was
not applicable as in a situation of this nature, the respondent
No.3 ordinarily could not have maintained an independent ap- E
peal on the quantum of compensation having regard to the fact
situation obtaining herein, and, thus, in our opinion, the High
Court committed a serious error in issuing the impugned direc-
tions, despite noticing that even no appeal has been preferred
by the owner or driver of the vehicle as also respondent No.3. F

19. Order 41 Rule 33 of the Code of Civil Procedure has
limited application. When there exists a legal interdict, the same
would not apply. It was so held in S. Nazeer Ahmed v. State
Bank of Mysore & Ors. [(2007) 11 SCC 75], stating :
G
"8. We also see considerable force in the submission of
learned Counsel for the appellants that the High Court has
misconceived the object of Order XLI Rule 33 of the Code
and has erred in invoking it for the purpose of granting the
plaintiff Bank a decree. This is a case where the suit filed H
724 SUPREME COURT REPORTS ·[2008] 11 S.C.R.

A by the plaintiff Bank had been dismissed by the trial court.
The plaintiff Bank had come up in appeal. ltwas entitled
to challenge all the findings rendered against it by the trial
court and seek a decree as prayed for in the plaint, from
the appellate court. Once it is found entitled to a· decree
B on the basis of the reasoning of the appellate ·court, the
suit could be decreed by reversing the appropriate findings
of the trial court on which the dismissal of the suit was
based. For this, no recourse to Order XLI Rule 33 is·
necessary. Order XU Rule 33 enables the appellate court
c to pass any decree that ought to have been passed by the·
trial court or grant any further decree as the case may
require and the power could be exercised notwithstanding
that the appeal was only against a part of the decree and
could even be exercised in favour of the respondents,
though the respondents might not have filed any, appeal or
D
objection against what has been decreed. There is no
need to have recourse to Order XLI Rule 33 of the Code,
in a case where the suit of the plaintiff has been dismissed
and the plaintiff has come up in appeal claiming a decree
as prayed for by him in the suit. Then, it will be a question
E of entertaining the appeal considering the relevant
questions and granting the plaintiff the relief he had sought
for if he is found entitled to it. In the case on hand therefore
there was no occasion for applying Order XLI Rule 33 of
the Code. If the view of the High Court was that the suit
F was barred by Order II Rule 2 of the Code, it is difficult to
see how it could have resorted to Order XU Rule 33 of the
Code to grant a decree to the plaintiff in such a suit. In that
case, a decree has to be declined. That part of the
reasoning. of the High Court is therefore unsustainable."
G
20. In view of our findings aforementioned, the impugned
judgment cannot be sustained. It is set aside accordingly. The
appeal is allowed. However, in the facts ,and circumstances of
the case, there shall be no order as to costs.
H B.B.B. Appeal allowed.