1. The following question is referred to Larger Bench for adjudication :--
'Whether the appeal shall fail for non-service of notice or after dispensing with notice upon the respondents who were ex parte before the Court of first instance or they have not submitted the address for service of notice ?'
2. It was contended that Code of Civil Procedure is not applicable, but Rule 242 (3) of M.P. Motor Vehicles Rules, 1994 clearly provides that provisions of Order XLI41 of First Schedule of Code of Civil Procedure, 1908 shall mutatis mutandis apply to appeals preferred to the High Court under Section 173 of Motor Vehicles Act.
3. To examine the controversy it will be appropriate to reproduce the provisions of Order XLI Rule 14 (4) of Code of Civil Procedure.
'Notwithstanding anything to the contrary contained in Sub-rule (1), it shall not be necessary to serve notice of any proceeding incidental to an appeal on any respondent other than a person impleaded for the first time in the Appellate Court, unless he has appeared and filed an address for the service in the Court of first instance or has appeared in the appeal.'
Under Sub-rule (4) of Order XLI Rule 14 it is provided that the Court may dispense with service of notice upon the respondent unless he has appeared and filed an address for the service in the Court of first instance or has appeared in the appeal.
4. Division Bench of this Court in the case of Sushila and Anr. v. Rajveer Singh and Ors., 2000(1) M.P.H.T. 331 = (2000 ACJ 719) has held that dispensing with the service of notice relates to 'proceeding incidental to an appeal'. Division Bench held that Sub-rule (4) of Rule 14 is applicable only to the proceeding incidental to an appeal, since service of notice is not an incidental to an appeal, therefore, after dispensing with service upon the owner and driver appeal can not continue because in the event of modification of award owner and driver will be responsible to pay the compensation and has dismissed the appeal where the Court has dispensed with service of notice upon the parties, who were ex parte in the Court of first instance. The question which requires consideration is the meaning of word 'proceeding incidental to an appeal'.
5. Counsel for Insurance Company vehemently argued that since notices are dispensed with at the instance of appellant, it will be deemed that dispensing with notice to respondents is at the risk of the appellant and if he has chosen not to serve notice upon the respondents, who were exparte before the Claims Tribunal, he shall have to face consequences and in the cases where appeal can not be decided without active presence of owner and driver of the vehicle, Division Bench has rightly dismissed the appeal and judgment of Sushila lays down the correct law. On the other hand another Division Bench in the case of Ramandeep Singh v. Mohd. Hasan, in M.A. No. 1239/02, decided on 5-3-2003 at Indore [2003(1) MPWN 131] has taken a view that it is not necessary to serve notice upon the respondents, who were proceeded ex pane before the Court of first instance. After dispensing with notice appeal can be heard and decided on merits and the party, who has chosen to remain exparte and decided not to appear in the Court, can not be compelled to appear in appeal to submit its claim or appeal can not be adjourned for indefinite period on account of non-appearance or non-service of such exparte respondents.
6. To appreciate the meaning of word proceeding incidental to an appeal it will be useful to go through the provisions of different rules under Order XLI, Rule 11 of Order XLI confers the power upon the Appellate Court to dismiss the appeal without sending notice to Lower Court. Rule 12 provides that unless the Appellate Court dismisses the appeal under Rule 11, it shall fix a day for hearing of the appeal. Rule 14 provides that notice of the day fixed under Rule 12 shall be sent by the Appellate Court to the Court from whose decree the appeal is preferred, and shall be served on the respondent or on his pleader in the Appellate Court in the manner provided for the service on a defendant of a summons to appear and answer; and all the provisions applicable to such summons, and to proceedings with reference to the service thereof, shall apply to the service of such notice. Sub-rule (4) further provides that it shall not be necessary to serve notice of any proceeding incidental to an appeal on any respondent other than a person impleaded for the first time in the Appellate Court, unless he has appeared and filed an address for the service in the Court of first instance or has appeared in the appeal.
7. Sub-rule (4) of Order XLI Rule 14 has been introduced by amendment in Code of Civil Procedure (Amendment) Act, 1976. Objects and reasons for such amendment is provided under Clause 90 -- Sub-clause (vii) as under:--
'With a view to avoiding the delay in the disposal of appeal, it is felt that the service of the memorandum of appeal on those parties who had not appeared in the Court of first instance and who had not filed any address for service may be dispensed with. Sub-rules (3), (4) and (5) are being inserted in Rule 14 to achieve this object.'
8. Thus, it is clear that in order to avoid delay in the disposal of appeal, it was felt that service of memorandum of appeal on those parties, who had not appeared in the Court of first instance and who had not filed any address for service may be dispensed with. Sub-rules (3), (4) and (5) are being inserted in Rule 14 to achieve this object. Thus, powers are conferred upon the Court to dispense with service of notice upon the respondents, who have not appeared before the Court of first instance or have failed to file address for the service in the Court of first instance. Order 6 Rule 14-A provides for furnishing an address for service in a prescribed form in the Court of first instance.
9. We are unable to agree with the reasonings in the case of Sushila and Ors. (supra) that Sub-rule (4) of Rule 14 of Order XLI is applicable to incidental proceedings in appeal. On the contrary the Legislature has used specific word, i.e., proceedings incidental to an appeal, which shows that as and when appeal is filed and admitted for hearing, after admission the next incident in the appeal is of issuing notice to respondents. Thus, issuance of notice to respondents will be a 'proceeding incidental to an appeal'. While interpreting the provisions in the light of objects and reasons for introducing the amendment it is apparent that in order to avoid delay in deciding the appeal discretion is conferred upon the Appellate Court to dispense with service upon the parties, who were proceeded ex pane in the Court of first instance. Once discretion is exercised by the Court, then appeal can not be thrown out on the ground that owner and driver are going to be affected by modification of award in the appeal and on mere assumption appeal can not be dismissed. It may be mentioned that once discretion is exercised by the Court the order will not be nullified, unless that order is reversed or modified. Bench hearing the appeal finally can not throw out the appeal merely on the ground that the service of notice upon the respondents, who were ex parte before the Court of first instance has been dispensed with. The effect of dispensing with service is that the respondent remains a party in the appeal but service of notice is dispensed with. Dispensing with notice can not be termed as deleting the name of unserved respondents, on the contrary they continue to remain party in the appeal. Therefore, dismissal of appeal treating that they have not been impleaded as a party is not correct. In the case A. Robert v. United Insurance Company Limited (AIR 1999 SC 2977), Apex Court has considered the scope of appeal under Section 110 of Motor Vehicles Act (4 of 1939) and it is held that the question of negligence of the lorry driver is no longer open for consideration in this appeal by the claimant and the Insurance Company also can not have anything to say on this aspect. Therefore, proceedings on the basis that the accident was caused by rash and negligent driving of the driver of the offending motor lorry, only thing is to be considered is the appropriate compensation. Division Bench of this Court in M.A. No. 1239/02, decided on 5-3-2003 has heard on the application, which was allowed and service of notice on the driver of the offending vehicle, who was ex parte before the Tribunal was dispensed with and thereafter proceeded to decide the appeal on its merits and enhanced the quantum of compensation. However, the question whether appeal shall fail on the ground of non-service was not considered.
10. However, in Sushila's case while interpreting the provisions of Sub-rule (4) of Order XLI Rule 14 of the Code of Civil Procedure, only thing played in the mind of Bench that the proceeding must be incidental to an appeal and it was held that service of notice is not a proceeding incidental to an appeal. Similarly, in the case of Raghavendra Naik and Anr. v. Mahavir and Ors., [2001 (2) JLJ 135] same Bench has taken a view that the insured can not be saddled with any liability behind his back without affording him an opportunity of being heard as it is open to him to demonstrate that in fact no enhancement in the amount of compensation was either possible or permissible and it is also open to him to demonstrate that the award which had attained the finality as against him can not be viewed or modified to his detriment without affording any opportunity.
11. We are unable to agree with the reasons, as the view is contrary to Legislative intent. It may be made clear that when a party has chosen not to appear in the Court of first instance to oppose the application would mean that it has admitted claim of the claimant. Thus, by its conduct, it is apparent that it has nothing to say in the matter and even after passing of the award insured has not challenged the award. By his conduct he has not come farward to oppose the application for compensation. Thus, after the Court has exercised its discretion to dispense with notice, then it can not be said that compensation can not be enhanced behind the back of the insured. Insured shall be deemed to be served and intention of legislature is that it is not necessary to serve upon the party, who was ex parte before the Court of first instance.
12. Similar view is taken in the case of Kalabai Choubey v. Rajabahadur Yadav (AIR 2002 MP 8), where it is held that enhancement of compensation can not be ordered without notice to owner/driver of the offending vehicle. Even when notices are dispensed with and the Appellate Court is of the opinion that it is necessary to hear the owner and driver of the vehicle, then also appeal can not be dismissed, then the Appellate Court may review its own order and direct issuance of notice to the respondents but it may be kept in mind that such procedure will cause delay in decision of appeal. Motor Vehicles Act is a beneficiary piece of legislation to insure just compensation to the claimants, i.e., (victim of accident or legal representatives of a victim, who died in an accident). The intention of Legislature is to pay just compensation as early as possible. It will be difficult to decide the appeal if insured and driver do not appear before the Court of first instance and avoid service of notice at the appellate stage. If compensation can be awarded on their failure to appear before the Court of instance, claimant can not be denied enhancement of compensation behind the back of insured and driver since they have chosen not to oppose the application in the Court of first instance.
13. In the case of G. Govindan v. New India Assurance Co. Ltd. and Ors. (1999 ACJ 781) it is held that where two views are possible on interpretation, the view which promotes the object of the Legislature is to be preferred and while considering the scope of Section 94 of Motor Vehicles Act, 1939 it is held that the person issuing a policy of insurance shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons. Similar provision is laid down in Sections 147 and 149 of Motor Vehicles Act, 1988.
14. Division Bench has also ignored the State amendment under Order XLI Rule 14 (3) of Code of Civil Procedure, which is as under:--
'The Appellate Court may in its discretion dispense with notice to any respondent against whom the suit was heard ex parte.'
15. Thus, it is clear that there is no inconsistency in the M.P. Amendment and Sub-rule (4) of Rule 14 of Order XLI and the notice can be dispensed with upon the parties, who was proceeded ex parte before the Court of first instance. Language of Sub-rule (4) of Rule 14 of Order XLI is clear where it provides that it shall not be necessary to serve notice of any 'proceeding incidental to an appeal'. So the Legislature has made it mandatory that it is not necessary to serve notice and when Legislature has provided that it is not necessary to serve notice upon the party, who has not appeared in the Court of first instance or failed to file address for service of notice, the appeal can not be dismissed after notice upon the respondents are dispensed with by the Court.
16. We, therefore, hold that Division Bench judgments delivered in the cases of Sushila (supra), Raghavendra Naik (supra) and Kalabai Choubey (supra) do not lay down the correct law. We answer the question that the appeal shall not fail on account of dispensing with notice upon the respondents, who were ex parte before the Court of first instance and they have not submitted the address of service for notice. Since respondents have chosen not to appear before the Court of first instance, they can not claim right to be heard at the appellate stage. No benefit can be claimed by the party against the exercise of discretion of the Court in dispensing with notice. When notices have been dispensed with appeal can not be dismissed and Appellate Court has power to modify or enhance the quantum of compensation. Reference is answered accordingly. File be placed before the Bench for decision of appeal on merits.