The New India Assurance Company Ltd. Vs. Ganga Devi and ors. - Court Judgment

M.Y. Eqbal, J.

1. This revision application under Section 115 of the Code of Civil Procedure has been filed by the petitioner by New India Assurance Company Limited challenging the judgment and award dated 20.8.2004 passed by 12th Additional District Judge-cum-Motor Accident Claims Tribunal Judge, Dhanbad in Title (MV) Suit No. 5 of 1997 whereby he has awarded compensation in favour of the claimant on the application filed by the claimants under the Motor Vehicles Act.

2. The matter was heard by learned Single Judge and notices were issued for deciding maintainability of the revision application against filed by the appellant-insurer the judgment and award passed by the Tribunal.

3. After notice the matter was placed before the learned Single Judge and parties were heard. Learned Counsel appearing for the petitioner relied upon the decision of the Single Bench of this Court in the case of 'The New India Assurance Co. Ltd. v. Ramchandra Sao and Ors.' (2005) 1 JCR-163 and submitted that the learned Single Bench of this Court relying upon the decision of the Supreme Court in the case of 'Sadhana Lodh v. National Insurance Co. Ltd and Anr.' : [2003]1SCR567 held that the Insurance Company can challenge the award by filing revision in this Court under Section 115 of the Code of Civil Procedure on the ground other than those mentioned under Section 149(2) of the Motor Vehicles Act 1988. A Bench of this Court after hearing the parties on 2.8.2005, disagreeing with the decision of the learned Single Judge referred the matter to the Division Bench for deciding the question of maintainability of the revision application under Section 115 of the Code of Civil Procedure against the judgment and award passed by the Motor Accident Claims Tribunal. Hence, this revision application before this Division Bench for hearing.

4. Chapter XII of the Motor Vehicles Act, 1988 (Section 165 to Section 176) lays down the provisions with regard to constitution of claims Tribunal and the procedure for deciding the claim application made by the legal representative of the deceased or injured for grant of compensation for the death or injury caused in a motor vehicle accident.

5. Section 165 prescribes the procedure of constitution of claims Tribunal. Section 166 of the Act prescribes the procedure for filing application for grant of compensation. Section 168 of the Act confers power on the claims Tribunal to make an award after determining the amount of compensation. Section 169 of the Act speaks about the procedure and powers of claims Tribunal. Section 170 of the Act confers power to the Tribunal to implead Insurance Company in certain cases. Sections 171 and 172 of the Act confers power to the Tribunal to award compensatory cost in certain cases. Section 173 of the Act provides for statutory appeal against the judgment and award passed by the claims Tribunal. Section 173 reads as under:

Appeals: (1) Subject to the provisions of Sub-section (2) any person aggrieved by an award of a Claims Tribunal may, within ninety days from the date of the award, prefer an appeal to the High Court:

Provided that no appeal by the person who is required to pay any amount in terms, of such award shall be entertained by the High Court unless he has deposited with it twenty-five thousand rupees or fifty percent of the amount to awarded, whichever is less, in the manner directed by the High Court:

Provided further that the High Court may entertain the appeal after the expiry of the said period of ninety days, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal in time.(2) No appeal shall lie against any award of a Claims Tribunal if the amount in dispute in the appeal is less than ten thousand rupees.

6. It is, therefore, manifestly clear that Chapter XII of the Act provides full and exhaustive procedure in the matter of grant of compensation and also remedy to the aggrieved party by way of preferring appeal in the High Court.

7. Now I would like to refer Section 115 of the Code of Civil Procedure which lays down the provision of revision. Section 115 reads as under:

Section 115. Revision. - (1) The High Court may call for the record of any case which has been decided by Court subordinate to such High Court and in which no appeal lies thereto, and if such subordinate Court appears-

(a) to have exercised a jurisdiction not vested in it by law or,

(b) to have failed to exercise a jurisdiction so vested, or

(c) to have acted in the exercise of its jurisdiction illegally or with material irregularity,

The High Court may make such order in the case as it thinks fit:

(a) the order, if it had been made in favour of the party applying for revision, would have finally disposed of the suit or other proceeding, of

(b) the order, if allowed to stand, would occasion a failure of justice or cause irreparable injury to the party against whom it was made.

(2) The High Court shall not, under this section, vary or reverse any decree or order against which an appeal lies either to the High Court or to the Court subordinate thereto.

8. The Code of Civil Procedure, 1908 invests, in all High Courts, revisional jurisdiction. It declares that the High Court may call for the record of any case which has been decided by any court subordinate to such High Court wherein no appeal lies, to satisfy itself on three aspects: (1) that the order passed by the subordinate court is within its jurisdiction; (2) that the case is one in which the court ought to exercise jurisdiction; and (3) that, in exercising jurisdiction, the court has not acted illegally; that is, in breach of some provisions of law, or with material irregularity, that is, by committing some error of procedure in the course of trial which is material in that it may have affected the ultimate decision. The provision thus takes within its sweep jurisdiction alone, the irregular exercise or non-exercise of it, or the illegal assumption of it. It is not directed against conclusions of law or fact in which the question of jurisdiction is not involved. In other words, it is only in cases where the subordinate court has exercised jurisdiction not vested in it by law, or has failed to exercise jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity that the jurisdiction of the High Court can be properly invoked. The provision prescribes the conditions in which jurisdiction of the High Court arises, such as where there is a case decided by a subordinate court in which no appeal lies to the High court, and also sets out the circumstances in which the jurisdiction may be exercised. If there is no question of jurisdiction, the decision cannot be corrected by the High Court in the exercise of revisional powers for a court has jurisdiction to decide wrongly as well as rightly.

9. The primary object of the Code of Civil Procedure, 1908 is to prevent the subordinate courts from acting arbitrarily, capriciously and illegally or irregularly in the exercise of their jurisdiction. It clothes the High Court with the powers necessary to see that the proceedings of the subordinate courts are conducted in accordance with the law within the bounds of their jurisdiction and in furtherance of justice. The Judges of the lower courts have perfect jurisdiction to decide the case, and even if they decide wrongly, they do not exercise their jurisdiction illegally or with material irregularity. There is no justification for the view that the revisional jurisdiction is intended to authorize the High Court to interfere and correct gross and palpable errors of subordinate courts so as to prevent grave injustice in non-appealable cases and that it would be difficult to formulate any standard by which the degree or error of the subordinate courts could be measured. The Code, however, enables the High Court to correct, when necessary, errors of jurisdiction committed by the subordinate courts and provides the means to an aggrieved party to obtain rectification of a non-appealable order. In other words, for the effective exercise of its superintending and visitorial powers, revisional jurisdiction is conferred upon the High Court.

10. By virtue of C.P.C. (amendment Act) 1999 and C.P.C. (amendment Act) 2002, provisions of Section 115 has been amended whereby the power of revision has been limited. On the basis of recommendation of Malimath Committee, revisional power of the High Court has been limited to a great extent.

11. Provision of Section 115 is very much clear that revision lies only when there is no right of appeal. Where statutes provides an appeal, judgment and order cannot be challenged by filing revision under Section 115 of the Code of Civil Procedure. Appeal or Revision is a creature of the legislature and it is within their wisdom to provide or not to provide right of appeal against the judicial decision or order. Similarly, it is also for the legislature to decide whether High Court should be given revisional jurisdiction against any adjudicatory process. From bare reading of Section 115 of the Code of Civil Procedure, it reveals that revisional power can be exercised only when there is no appeal provided for. In other words where statutes provides for an appeal against the judgment or order, revision against such judgment or order will not lie irrespective of fact whether right of appeal is absolute or additional, restricted or otherwise.

12. In the case of 'The New India Assurance Co. Ltd. v. Ramchandra Sao (supra) learned Single Judge took the view that against the judgment and award of the Tribunal, revision application is maintainable as the grounds taken in revision application do not come within the ambit of Section 149(2) of the Motor Vehicles Act and remedy by way of filing revision before the High Court under Section 115 of the Code of Civil Procedure has not been expressly barred by any State enactment. In paragraph 12, learned Single Judge observed:

In view of the above discussion of law and the decisions of the Supreme Court, I hold that the instant civil revision applications are maintainable as the grounds taken in the revision applications do not come within the ambit of Section 194(2) of the Act as also remedy by way of filing revision before the High Court under Section 115 of the Code of Civil Procedure has been expressly barred by any State enactment. This point of maintainability of these civil revision applications is thus allowed in favour of the petitioners.

13. Learned Single Judge mainly relied upon the decision of the Supreme Court in the case of 'Sadhana Lodh (supra). The fact of that case was that a 24 years old son of the appellant died in a motor vehicle accident. The Tribunal awarded a sum of Rs. 3,50,000/-. Aggrieved by the said award, respondent-Insurance Company filed writ application under Article 226 and 227 of the Constitution of India before the Guwahati High Court. Learned Single Judge of the High Court dismissed the writ application. Aggrieved by the said order the Insurer preferred letters patent appeal before the Division Bench of the High Court. Before the Division Bench the claimant took an objection that since both under Articles 226/227 petition is not maintainable, therefore, appeal is totally misconceived and the same deserves dismissal on that ground alone. The Division Bench after overruling the objection allowed the appeal preferred by the insurer and reduced the compensation amount. The claimant/appellant thereafter filed special leave petition before the Supreme Court. It was argued on behalf of the appellant that in view of Section 173 of the Motor Vehicles Act, 1988, remedy by way of appeal to the High Court is available to the insurer against the award given by the Tribunal, therefore, the filing of petition under Article 227 of the Constitution of India was misconceived and deserves dismissal and the High Court ought not to have entertained and decided the writ application on merit.

14. On the other hand it was argued before the Supreme Court on behalf of the respondents that since an insurer has limited grounds available under Section 173 of the Act, it open to an insurer to file a petition under Articles 226/227 of the Constitution of India, the Supreme Court laid down the principles of law and held as under :

The right of appeal is statutory right and where the law provides remedy by filing an appeal on limited grounds, the grounds of challenge cannot be enlarged by filing a petition under Articles 226/227 of the Constitution on the premises that the insurer has limited grounds available for challenging the award given by the Tribunal. Section 149(2) of the Act limits the insurer to file an appeal on those enumerated grounds and the appeal being product of the statute it is not open to an insurer to take any plea other than those provided under Section 149(2) of the Act. (See National Insurance Co. Ltd. v. Nicolletta Rohtagi). This being the legal position, the petition filed under Article 227 of the Constitution by the insurer was wholly misconceived. Where a statutory right to file an appeal has been provided for, it is not open to the High Court to entertain a petition under Article 227 of the of the Constitution. Even if where a remedy by way of an appeal has not been provided for against the order and Judgment of a District Judge, the remedy available to the aggrieved person is to file a revision before the High Court under Section 115 of the Code of Civil Procedure. Where remedy for filing a revision before the High Court under Section 115 CPC has been expressly barred by a State enactment, only in such case a petition under Article 227 of the Constitution would lie and not under Article 226 of the Constitution. As a matter of illustration, where a trial court in a civil suit refused to grant temporary injunction and an appeal against refusal to grant injunction has been rejected, and a State enactment has barred the remedy of filing revision under Section 115 CPC, in such a situation a writ petition under Article 227 would lie and not under Article 226 of the Constitution. Thus, where the State Legislature has barred a remedy of filing a revision petition before the High Court under Section 115 CPC, no petition under Article 226 of the Constitution would lie for the reason that a mere wrong decision without anything more is not enough to attract jurisdiction of the High Court under Article 226 of the Constitution.

Their Lordships further observed in paras 7 and 8 as under:

The supervisory jurisdiction conferred on the High Courts under Article 227 of the Constitution is confined only to see whether an inferior court or tribunal has proceeded within its parameters and not to correct an error apparent on the fact of the record, much less of an error of law. In exercising the supervisory power under Article 227 of the Constitution, the High Court does not act as an appellate court or the tribunal. It is also not permissible to a High Court on a petition filed under Article 227 of the Constitution to review or reweigh the evidence upon which the inferior court or tribunal purports to have passed the order or to correct errors of law in the decision.

For the aforesaid reasons, we are of the view that since the insurer has a remedy by filing an appeal before the High Court, the High Court ought not to have entertained the petition under Articles 226/227 of the Constitution and for that reason, the judgment and order under challenge deserves to be set aside. We, accordingly, set aside the judgment and order under appeal. The appeal is allowed. There shall be no order as to costs. However, it would be open to the insurer to file an appeal if it is permissible under the law.

15. The insurer has a statutory right of appeal against the judgment and award passed by the Claims Tribunal but that is subject to certain restrictions and limitations. As per Section 149 of the Motor Vehicles Act, 1988 (Section 96 of 1939 Act), the insurer can, in a proceeding, defend the action only on certain grounds. For better appreciation relevant portions of Section 149 of the Act is reproduced herein below:

149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks. - (1) If, after a certificate of insurance has been issued under Sub-section (3) of Section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability us is required, to be covered by a policy under Clause (b) of Sub-section (1) of Section 147 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable there under, as if he were the judgment-debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.

(2) No sum shall be payable by an insurer under Sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the brining of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:

(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:

(i) a condition excluding the use of the vehicle-

(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or

(b) for organized racing and speed testing, or

(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or

(d) without side-car being attached, where the vehicle is a motor cycle; or

(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or

(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion or;

(b) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular.

(3) ...

(4) ...

(5) ...

(6) ...

(7) No insurer to whom the notice referred to in Sub-section (2) or Sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in Sub-section (1) or in such judgment as is referred to in Sub-section (3) otherwise than in the manner provided for in Sub-section (2) or in the corresponding law of the reciprocating country, as the case may be.

16. The law in this regard has been well settled by the Supreme Court in B.I.G. Insurance Co. v. Itbar Singh : [1960]1SCR168 . In that case, a question arose as to what defences are available to the insurer. In that case, the Supreme Court was of the view that the insurer can defend the action only on the grounds mentioned in sub-sections and no other. Interpreting Section 96(2) of the Act, the Supreme Court observed:

It also seems to us that even if Sub-section (2) and Sub-section (3) were confined only to defences based on the conditions of the policy that would not have led to the conclusion that the legislature thought that other defences not based on such conditions, would be open to an insurer. If that was what the legislature intended, then there was nothing to prevent it from expressing its intention. What the legislature has done is to enumerate in Sub-section (2) the defences available to an insurer and to provide by Sub-section (6) that he cannot avoid his liability excepting by means of such defences. In order that Sub-section (2) may be interpreted in the way the learned Solicitor-General suggests we have to add words to it. The learned Solicitor-General concedes this and says that the only word that has to be added is the word 'also' after the word 'grounds'. But even this the rules of interpretation do not permit us to do unless the section as it stands is meaningless or of doubtful meaning, neither of which we think it is. The addition suggested will, in our view, make the language used unhappy and further effect a complete change in the meaning of the words used in the sub-section.

Their Lordships further observed:

Again, we find the contention wholly unacceptable. The Statute has no doubt created a liability in the insurer to the injured person but the. statute has also expressly confined the right to avoid that liability to certain grounds specified in it. It is not for us to add to those grounds and therefore to the statute for reasons of hardship. We are furthermore not convinced that the statute causes any hardship. First, the insurer has the right, provided he has reserved it by the policy, to defend the action in the name of the assured and if he does so, all defences open to the assured can then be urged by him and there is no other defence that he claims to be entitled to urge. He can thus avoid all hardship if any, by providing for a right to defend the action in the name of the assured and this he has fully liberty to do.

17. In our considered opinion the learned Single Judge, in Ram Chandra Sao's case (supra) has not correctly appreciated the law laid down by the Supreme Court in Sadhana Lodh's case (supra). The learned Single Judge also noticed the decision of the Supreme Court in Baldevdas Shivlal v. Filmistan Dis (India) P. Ltd. (1969 (II) SCC, 201 and Rama Iyer v. Sundaresa Ponnapoondar : [1966]3SCR474 . In Baldevdas Shivlal's case (supra) the Supreme Court very clearly held that power under Section 115 C.P.C. shall be exercised in cases where no appeal lies thereto. Their Lordships observed as under:

By Section 115 of the Code of Civil Procedure the High Court is invested with power call for the record of any case decided by any court subordinate to such High Court and in which no appeal lies thereto, if such subordinate court appears - (a) to have exercised a jurisdiction not vested in it by law, or (b) to have failed to exercise a jurisdiction so vested, or (c) to have acted, in the exercise of its jurisdiction illegally or with material irregularity and to make such order in the case as it thinks fit. Exercise of the power is broadly subject to three important conditions (1) that the decision must be of a court subordinate to the High Court; (2) that there must be a case which has been decided by the subordinate court; and (3) that the subordinate court must appear to have exercised jurisdiction not vested in it by law or to have failed to exercise a jurisdiction so vested, or to have acted in the exercise of its jurisdiction illegally or with material irregularity.

18. Similarly in Rama Iyer's case (supra) the Supreme court observed as under:

In the present case, no question of revision under Sub-section (c) Section 115 arises, and we are concerned only with the power of revision under Sub-sections (a) and (b) of Section 115. Sub-section (a) empowers the High Court to correct an erroneous assumption of jurisdiction; Sub-section (b) empowers it to correct an erroneous refusal of jurisdiction. The decision of the subordinate court on all questions of law and fact not touching its jurisdiction is final and, however, erroneous such a decision may be, it is not revisable under Sub-sections (a) and (b) of Section 115. On the other hand, if by an erroneous decision on a question of fact or law touching its jurisdiction, e.g., on a preliminary fact upon the existence on which its jurisdiction depends, the subordinate court assumes a jurisdiction not vested in it by law or fails to exercise a jurisdiction so vested, its decision is not final, and is subject to review by the High Court in its revisional jurisdiction under Sub-sections (a) and (b) of Section 115. The question is on which side of the line the present case lies, and whether the decision of the Revenue Divisional Officer that the respondent is not a cultivating tenant of the appellant is subject to review by the High Court in its revisional jurisdiction. The Revenue Divisional Officer is an inferior court of limited jurisdiction functioning under the Madras Cultivating Tenants Protection Act, 1955. To ascertain the limit and extent of its jurisdiction, we must examine the provisions of the Act.

19. Having regard to the provisions of Sections 149 and 173 of the Motor Vehicles Act, 1988 and the law discussed hereinabove, in our considered opinion a revision application under Section 115 C.P.C. against the judgment and award passed by the Claims Tribunal is not maintainable. We are, therefore, of the view that the learned Single Judge has not correctly decided the law in the case of New India Assurance Co. Ltd v. Ram Chandra Sao and Ors. reported in 2005 (1) J.C.R. 163 and, therefore, the said decision stands overruled.

20. For the aforesaid reasons this revision application under Section 115 C.P.C. against the judgment and award passed by the Claims Tribunal is held to be not maintainable and is, accordingly, dismissed.