LexBRITISH INDIA GENERAL INSURANCE CO., LTD . versus CAPTAIN ITBAR SINGH AND OTHERS
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I959 .:.\!a_v II 168 SUPREME COURT REPORTS [1960(1)] BRITISH INDIA GENERAL INSVBANCE CO., LTD . v. CAPTAIN ITBAR SINGH AND OTHERS (S. K. DAs, A. K. SARKAR and K. SuBBA RAo, JJ.) Motor Car Insuranc.:--Suit for damages by third party- Insurance companv added defendants-Defence if other than statutory available-Interpretation of-Motor Vehicles Act, I939 (4 of I9J9), SS. 95, 96, . A suit claiming damages, for negligent driving was filed aginst the o\vner of a motor car, \V ho \vas insured against third party risks. The insurer, was subsequently added as defendant to the suit under s. g6(z) ;of the Motor Vehicles Act, 1939. It contended that the defence available to it was not restricted to the grounds enumerated ins. 9ti(2) of the Act, but that it was entitled to take all defences including those on which the assured himself could have relied for his defence, subject only to the restriction that it could not in view of s. 96(3) of the Act rely on the conditions of the policy as a defence. H cld, that an insurer made a defendant to the action under s. 96(2) of the Act was not entitled to defend it on a ground not specified in that section. CIVu. APPELLATE JURISDICTION: Civil Appeals Nos. 413, and 414 of 1958. Appeals from the order dated April 27, 1955, of the Punjab High Court in Civil Revisions Nos. 81-D of 1953 and 96-D of 1953 respectively. I959· April 2I. 22, 23, 24.-C. K. Daphtary, Solicitor- Ge11erat for India, Ram Behari Lal, D. K. Kapur and Sardar Bahadur, for the appellants. The question in the present appeals turn .around s. 96 of the Motor Vehicles Act, 1939. The purpose of sub-s. (z} of s- 96 is to state those gronnds based on the policy of insurance on which the insurer may rely for his defence. Sub-section (3} makes certain conditions of the policy of no effect as against the 3rd party. Both sub- ss. (2} and (3) are concerned only with the conditions of the policy. They should not be interpreted so as to oust other defences the insurer may wish to take e.g. that there was no accident or that the plaintiff was negligent or that there was contributory negligence etc. When a person is joined as a party he has the right to take all defences permissible in law. (Subba Rao, ].-Did the insurer have a right to be joined as a party, apart from the statute? Could he be joined under Order I, Rule IO, of the Code of Civil Procedure 1) S.C.R. SUPREME COURT REPOHTS 169 I am not basing my case on Order l, Rule ro of the Code of Civil Procedure. Apart from the statute, the)~urer would not be liable to the third party, but only to the assured. [Das, J.-Is it not correct that the statute gives the insurer a right to be joined as a party which he did not have pre- viously ? If so, the right cannot be extended beyond what the statute gives.] It is true that the statute gives a right to the insurer to become a party to the action by the injured pErson which he did not have previously, but the real question before the court is whether sub-s. (2) limits the right to defend on the grounds stated in that sub-section. In my submission, sub- s. (2) exhausts only the defences based on the conditions of the policy which the insurer may wish to take. If it was intended that these were to be the only defences open to the insurer the word "only" should have been used instead of the words "any' of" before the words "the following grounds." What the legislature meant was that the insurer could defend the action "also" on the grounds stated in sub-s. (2) in addi- tion to other grounds. If the court finds the section is clear no words can be added. However, I submit the section is ambiguous. It can mean either that the insurer can 'take other defences or that he is limited to the matters stated in in sub-s. (2). The Court should interpret the section to give effect to the interests of justice. The insurer is made liable to satisfy the judgment. It would be an extreme hardship if he were not allowed to defend the action on merits. Apart from the situations coming within sub-s. (2) the insurer would be condemned unheard. The legislatµre could not have intended such a result. Even the cases which h'lld that the defences of the insurer are limited to those stated in sub- s. (2) recognise that this causes hardship. LL.R. 1953 Born. 109, I.L.R. 1955 Born. 39 and I.L.R. 1955 Born. 278. In those cases the hardship was sought to be overcome by allowing the insurer to
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