SUPREME COURT OF INDIA
National Insurance Company Limited
Vs
Mastan
Civil Appeal No. 7381 of 2005 (with C.A. No. 7383 of 2005)
(S.B.Sinha and P.K.Balasubramanyan)
09/12/2005
S.B. SINHA, J.
1. Leave granted.
2. Whether an insurer, while defending an action initiated under the Workmen's Compensation Act, 1923, (for short, '1923 Act')
is precluded from raising ay defence as envisaged in under sub-section (2) of
Section 149 of the Motor Vehicles Act, 1988, (for short,
'the 1988 Act') is the question involved in these appeals.
3. We will notice the fact of the matter from the Civil Appeal arising out of
Special Leave Petition (Civil) No. 26615 of 2004.
4. A lorry bearing registration No. KA 34-545 was insured with the Appellant
company. The First Respondent herein was a cleaner and the Second Respondent
was an owner of the said lorry. The said lorry was involved in an accident
resulting in sufferance of injuries by the First Respondent which led to his
disability to the extent of 45 to 50%. He initiated a proceeding under the 1923
Act. The Commissioner for Workmen's Compensation, Davangere, by an order dated
30.4.1997 awarded a sum of Rs. 2,70,264/- by way of compensation and interest
of Rs. 33,230/- to the workman payable by the Appellant herein.
5. Aggrieved by and dissatisfied therewith the Appellant preferred an appeal
before the High Court under Section 30(1) of the 1923 Act, which was dismissed
by the High Court on the premise that the Appellant was not entitled to urge
any ground therein which was not available to it in terms of the 1988 Act. In
support of the said finding, reliance was placed upon a Full Bench judgment of
the High Court dated 17.12.2003 in MFA Nos. 1910 of 1997 etc. The question
referred to the Full Bench of the High Court for its consideration was as
under:
"Whether the restrictions on the defences available to an insurance
company in terms of Section 149(2) of the Motor Vehicles Act have any
application to the proceedings under the workmen's Compensation Act?" *
6. Upon consideration of various provisions of the 1988 Act including Section
143, 167 and 149 thereof, the Full Bench held:
"..... Under the circumstances, under the W.C. Act, the Insurance
Company can only agitate violation of any condition of the policy to make
substantial question of law and therefore, the question of raising defences
available in terms of Sec. 149(2) of the M.V. Act does not arise." *
7. It was also held:
"Under the provisions of Workmen's Compensation Act a statutory appeal
is provided under Section 30 of the Act to the High Court on the orders
enumerated therein. The proviso to that Section makes it very clear that no
appeal shall lie against any order unless a substantial question of law is
involved in the appeal. As stated earlier negligence or contributory negligence
of the offending vehicle is not a ground to be considered at all while awarding
compensation under the Workmen's Compensation Act. Therefore, the insurer
cannot prefer any appeal either challenging the quantum of compensation or on
any other grounds except the ground available to him under Section 149(2) of
the 1988 Act." *
8. In arriving at the said findings, the Full Bench inter alia relied upon
decisions of this Court in National Insurance Company Ltd. vs. Nicolletta
Rohtagi and others 6, United India Insurance
Co. Ltd. vs. Bhushan Sachdeva and others as also Ved Prakash Garg vs.
Premi Devi and others (distinguished). The Full Bench apart from the
finding that the contributory negligence is not a defence on the part of the
owner of the vehicle or the insurance company further opined that the question
of proving negligence does not arise under the 1923 Act. It was further
observed that the expression 'death' shall carry the same meaning both under
the 1923 Act as also the 1988 Act.
9. Both the 1923 and 1988 Acts are self-contained Codes. Subject to the
provisions made in the later Act, Section 3 of the 1923 Act provides that if
personal injury is caused to a workman by accident arising out of and in the
course of his employment, his employer shall be liable to pay compensation in
terms of the provisions of the said Chapter. Section 4 of the 1923 Act provides
for amount of compensation. Section 5 elucidates the method of calculating wages.
Section 15B(ii) provides that the 1923 Act shall apply if the persons have been
sent for work abroad along with motor vehicles subject to the modifications
mentioned therein.
10. The Commissioner for Workmen's Compensation has been conferred with various
powers including the power to record evidence. He has also the power to refer
any question of law for the decision of the High Court.
11. The appeal against an order passed by a Commissioner lies before the High
Court on a substantial question of law involved.
12. Applicability of the 1988 Act in a proceeding under the 1923 Act is
contained in Section 143 of the 1988 Act, which reads as under:
"143. Applicability of Chapter to certain claims under Act 8 of 1923 - The
provisions of this Chapter shall also apply in relation to any claim for
compensation in respect of death or permanent disablement of any person under
the Workmen's Compensation Act, 1923 resulting from
an accident of the nature referred to in sub-section (1) of Section 140 and for
this purpose, the said provisions shall, with necessary modifications, be
deemed to form part of that Act." *
13. Section 143 occurs in Chapter X of the 1988 Act. Section 144 contains a
non-obstante clause stating that the provisions of the said chapter shall have
effect notwithstanding anything contained in any other provisions of the said
Act or of any other law for the time being in force. Chapter X deals with
liability without fault in certain cases. Chapter X, therefore, will have no
application in relation to a claim made in terms of Chapter XI of the 1988 Act.
14. Applicability of the provisions of the 1988 Act in a proceeding under the
1923 Act is confined to a matter coming within the purview of Chapter X only.
It cannot be stretched any further.
15. The High Court, noticed hereinbefore, was of the view that under the 1923
Act, negligence is not required to be proved for the purpose of determining the
quantum of compensation payable. However, under the 1988 Act, in a case where
the liability arises without fault no difficulty arises in this behalf in view
of the provisions of Section 143 of the 1988 Act. But difficulty in applying
the provisions of the 1988 Act arises in relation to a claim made under Chapter
XI thereof. Claims under the said chapter are to be proved in terms of Section
166 of the 1988 Act, where negligence on the part of the driver of the vehicle
is required to be proved. Indisputably, in relation to such a claim, insurer
can arise only a limited defence in view of sub-section (2) of Section 149
which reads as under:
"149. Duty of insurers to satisfy judgments and award against persons
insured in respect of third party risks.
(1) xxx xxx xxx
(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 of award is given the insurer had notice through the Court
or, as the case may be, the Claims Tribunal of the bringing 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 organised 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
nondisclosure of a material fact or by a representation of fact which was false
in some material particular." *
16. Interpretation of this provision fell for consideration before this Court
in National Insurance Company Ltd. vs. Baljit Kaur wherein the principles
have been laid down in some details and thus, it is not necessary to reiterate
the same herein once over again.
17. However, despite Section 149(2) of the 1988 Act, the Parliament was of the
opinion that if any circumstances arises as enumerated in Section 170 thereof,
an insurer may be granted leave to contest the claim on one or any of the
grounds available to the person against whom the claim has been made.
18. It is beyond any doubt or dispute that in a proceeding where the right
of the insurer to raise a defence is limited in terms of sub-section (2) of
Section 149, an appeal preferred by it against an award of the Motor Accidents
Claims Tribunal must only be confined or limit to some extent. But once a leave
has been granted to the insurer to contest the claim on any ground as envisaged
in Section 170 of the 1988 Act, an appeal shall also be maintainable as a
matter of right, wherein the High Court can go into all contentions. The Full
Bench of the Karnataka High Court, in our opinion, committed a serious error in
relying upon the judgments of this Court, in terms whereof the right of appeal
of the insurance company has been held to be limited, inasmuch in those
decisions this Court was considering a situation where sub-section (2) of
Section 149 was attracted. #
19. Section 143 of the 1988 Act limits its applicability to the 1923 Act in a
case where the liability arises despite of the fact that the accident might
have taken place without any fault on the part of the driver of the vehicle or
others in control thereof. Under the 1923 Act also, as noticed hereinbefore, a
workman is entitled to compensation even if no negligence is proved against the
owner or any other person in charge of the vehicle. It is, thus, not possible
to extend the applicability of Section 143 of the 1988 Act to include Chapter
XI thereof to a claim under the 1923 Act.
20. Right of appeal is a creature of statute. The scope and ambit of an appeal is terms of Section 30 of the 1923 Act and Section 173 of the 1988 Act are distinct and different. They arise under different situations. In a case falling under the 1923 Act, negligence on the part of the owner may not be required to be proved. Therein what is required to be proved is that the workman suffered injuries or died in course of employment. The amount of compensation would be determined having regard to the nature of injuries suffered by the worker and other factors as specified in the Act. The findings of fact arrived at by the Commissioner for Workmen's Compensation are final and binding. Subject to the limitations contained in Section 30 of the 1923 Act, an appeal would be maintainable before the High Court; but to put the insurer to further disadvantage would lead to an incongruous situation.
21. An insurer, subject to the terms and conditions of contract of insurance,
is bound to indemnify the insured under the 1923 Act as also the 1988. Act. But
as noticed hereinbefore, keeping in view the nature and purport of the two
statutes, the defences which can be raised by the insurer being different, the
scope and ambit of appeal are also different.
22. Under the 1988 Act, the driver of the vehicle is liable but we would not be
liable in a case arising under the 1923 Act. If the driver of the vehicles has
no licence, the insurer would not be liable to indemnify the insured. In a
given situation, the Accident Claims Tribunal, having regard to its rights and
liabilities vis-a-vis the third person may direct the insurance company to meet
the liabilities of the insurer, permitting it to recover the same from the
insured. The 1923 Act does not envisage such a situation. Role of Reference by
incorporation has limited application. A limited right to defend a claim
petition arising under one statute cannot be held to be applicable in a claim
petition arising under a different statute unless there exists express
provision therefor. Section 143 of the 1988 Act makes the provisions of the
1923 Act applicable only in a case arising out of no fault liability, as
contained in Chapter X of the 1988 Act. The provisions of Section 143,
therefore, cannot be said to have any application in relation to a claim
petition filed under Chapter XI thereof. A fortiori in a claim arising under
Chapter XI, the provisions of the 1923 Act will have no application. A party to
a lis, having regard to the different provisions of the two Acts cannot enforce
liabilities of the insurer under both the Acts. He has to elect for one.
23. Section 167 of the 1988 Act statutorily provides for an option to the
claimant stating that where the death of or bodily injury to any person gives
rise to a claim for compensation under the 1988 Act as also the 1923 Act, the
person entitled to compensation may without prejudice to the provisions of Chapter
X claim such compensation under either of those Acts but not under both.
Section 167 contains a non-obstante clause providing for such an option
notwithstanding anything contained in the 1923 Act.
24. The 'doctrine of election' is a branch of 'rule of estoppel', in terms
whereof a person may be precluded by his actions or conduct or silence when it
is his duty to speak, from asserting a right which he otherwise would have had.
The doctrine of election postulates that when two remedies are available for the
same relief, the aggrieved party has the option to elect either of them but not
both. Although there are certain exceptions to the same rule but the same has
no application in the instant case.
25. In Nagubai Ammal and others vs. B. Shama Rao and others 1956 AIR (SC) 593,
it was stated:
"It is clear from the above observations that the maxim that a person
cannot 'approbate and reprobate is only one application of the doctrine of
election, and that its operation must be confined to reliefs claimed in respect
of the same transaction and to the persons who are parties thereto." *
26. In C. Beepathuma and others vs. Velasari Shankaranarayana Kadambolithaya
and others, it was stated:
"The doctrine of election which has been applied in this case is well-settled
and may be stated in the classic words of Maitland –
"That he who accepts a benefit under a deed or will or other instrument
must adopt the whole contents of that instrument, must conform to all its
provisions and renounce all rights that are inconsistent with it." *
(see Maitland's lecturers on Equity Lecture 18)
The same principle is stated in White and Tudor's Leading Cases in Equity Vol.
18th Edn. at p. 444 as follows:
"Election is the obligation imposed upon a party by courts of equity to
choose between two inconsistent or alternative rights or claims in cases where
there is clear intention of the person from whom he derives one that he should
not enjoy both... That he who accepts a benefit under a deed or will must adopt
the whole contents of the instrument." *
(See also Prashant Ramachandra Deshpande vs. Maruti Balaram Haibatti, 1.
27. Thomas, J. in P.R. Deshpande vs. Maruti Balaram Haibatti 5 stated that the
law, thus:
"The doctrine of election is based on the rule of estoppel - the
principle that one cannot approbate and reprobate inheres in it. The doctrine
of estoppel by election is one of the species of estoppel in pais (or equitable
estopped) which is a rule in equity. By that rule, a person may be precluded by
his actions or conduct or silence when it is his duty to speak, from asserting
a right which he otherwise would have had." *
(See also Devasahayam (Dead) by LRs. vs. P. Savithramma and Others
28. The First Respondent having chosen the forum under the 1923 Act for the
purpose of obtaining compensation against his employer cannot now fall back
upon the provisions of the 1988 Act therefor, inasmuch as the procedure laid
down under both the Acts are different save and except those which are covered
by Section 143 thereof. #
29. We, therefore, with respect do not subscribe to the views of the Full Bench
of the Karnataka High Court.
30. Mr. P.R. Ramasesh is not correct in contending that both the Acts should be
read together. A party suffering an injury or the dependents of the deceased
who has died in course of an accident arising out of use of a motor vehicle may
have claims under different statutes. But when cause of action arises under
different statutes and the claimant elects the forum under one Act in
preference to the other, he cannot be thereafter permitted to raise a
contention which is available to him only in the former.
31. The decision of this Court in Ved Prakash Garg (supra) whereupon Mr.
Ramasesh placed strong reliance may not have any application in the instant
case as the liability of insurer therein arose under the 1923 Act; where having
regard to proviso (i)(c) appended to sub-section (1) of Section 147 was
considered in the context of clause (i) of sub-section (1) of Section 11 of the
insurance policy vis-a-vis Section 4A (3) thereof. Such a question does not
arise herein as the claim under the 1923 Act vis-a-vis Chapter XI of the 1988
Act stand absolutely on a different footing.
32. For the reasons aforementioned, the impugned judgments cannot be sustained
which are set aside accordingly. The appeals are allowed and the matters are
remitted to the High Court for consideration of these appeals afresh on merit.
The appeals, it is needless to say, would be entertain only in the event, the
Appellants satisfy the requirements contained in the proviso appended to
sub-section (1) of Section 30 of the 1923 Act. In the facts and circumstances
of the case, however, there shall be no order as to costs.
-------------------
P.K. Balasubramanyan, J.:-- I respectfully agree with the reasoning and
conclusion of my learned brother.
2. On the establishment of a Claims Tribunals in terms of Section 165 of the Motor Vehicles Act, 1988, the victim of a motor accident
has a right to apply for compensation in terms of Section 166 of that Act
before that Tribunal. On the establishment of the Claims Tribunal, the
jurisdiction of the Civil Court to entertain a claim for compensation arising
out of a motor accident, stands ousted by Section 175 of that Act. Until the
establishment of the Tribunal, the claim had to be enforced through the Civil
Court as a claim in tort. The exclusiveness of the jurisdiction of the Motor
Accidents Claims Tribunal is taken away by Section 167 of the Motor Vehicles
Act in one instance, when the claim could also fall under the Workmen's Compensation Act, 1923
3. On the language of Section 167 of the Motor Vehicles Act, and going by the
principle of election of remedies, a claimant opting to proceed under the
Workmen's Compensation Act cannot take recourse to or draw inspiration from any
of the provisions of the Motor Vehicles Act, 1988
4. Coming to the facts of the case, the claimant has not chosen to withdraw his
claim under the Workmen's Compensation Act before it reached the point of
judgment, with a view to approach the Motor Accidents Claims Tribunal. What he
has done is to pursue his claim under the Workmen's Compensation Act till the
award was passed and also to invoke a provision of the Motor Vehicles Act, not
made applicable to claims under the Workmen's Compensation Act by Section 167
of the Motor Vehicles Act. The claimant-respondent, is not entitled to do so.
The High Court was in error in holding that he is entitled to do so.