NATIONAL INSURANCE CO.LTD. versus MAM CHAND AND ANR.

Citation: [2007] 2 S.C.R. 111 · Decided: 01-02-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Judgment (excerpt)

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NATIONAL INSURANCE CO.LTD. 
A 
v. 
MAM CHAND AND ANR. 
FEBRUARY I, 2007 
[DR. ARIJIT PASA YAT AND S.H. KAPADIA, JJ.] 
B 
Motor Vehicles Act, 1988: 
S. 166-Motor accident claim-Appeal-Parties for adjudication of 
liability-Claim petition by injured against insurer and owner of vehicle- C 
Allowed by Tribunal and insurer held liable to pay claim-amount-Appeal 
by insurer challenging fixation of liability and arraying claimant and owner 
of vehicle as respondents-High Court holding that claimant need not be 
issued notice-Held, since the controversy in th~ matter is linked with 
entitlement of claimant to receive the amount from insurer, the claimant is D 
required to be heard. 
Respondent no. 1 filed a claim petition under s.166 of the Motor Vehicles 
Act, 1988 claiming compensation for the injuries said to have been caused to 
him by the motor cycle which was being driven by respondent no. 2. The Motor 
Accident Claims Tribunal held the appellant-insurer liable to pay the E 
compensation. The appellant challenged fixation of the liability on it before 
the High Court, which held that even if the vehicle was not ensured at the 
relevant time that was a dispute between the appellant and respondent no. 2 
and there was no need to issue notice to the claimant. Aggrieved, the insurer 
filed the appeal. 
Allowing the appeal, the Court 
HELD: In the appeal before the High Court the appellant was questioning 
the fixation of liability so far as it is concerned. A specific stand has been 
taken that since vehicle was not the subject matter of insurance, the appellant 
cannot be saddled with any liability. This question is intimately linked with 
the entitlement of respondent no. 1 to receive the amount from the appellant. 
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In that sense it cannot be said that respondent No. 1 was not required to be 
heard and the appeal was to be dismissed so far as he is concerned. Since 
respondent No. 1 is represented in this Court, without further notice let him 
111 
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112 
SUPREME COURT REPORTS 
[2007] 2 S.C.R. 
A appear before the High Court. [Paras 7-81 [113-D-F[ 
B 
c 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 412 of2007. 
From the interim Judgment and Order dated 25.10.2004 of the High Court 
of Punjab and Haryana at Chandigarh in F.A.O No. 1556/2004. 
Ravinder Singh, Sudhir Kumar Gupta, Anurag Pandey Mihir Kumar and 
Saumya Sharma for the Appellant. 
Dr. Kailash Chand for the Respondents. 
The Judgment of the Court was delivered by 
DR. ARIJIT PASAYAT, J. I. Leave granted. 
2. Challenge in this appeal is to the order passed by a Division Bench 
of the Punjab and Haryana High Court at Chandigarh. By the impugned order 
the High Court dismissed the appeal, so far as related to the respondent No. 
D I-Mam Chand and issued notice only to the driver cum owner i.e. respondent 
No.2. 
3. Background facts in a nutshell are as follows: 
Respondent No. I (hereinafter referred to as the 'claimant') filed a claim 
E petition in terms of Section 166 of t~e Motor Vehicles Act, 1988 (in short the 
'Act'} claiming compensation for alleged injuries caused to him by the 
offending vehicle on 31.10.2001. The allegation was that the respondent No. 
2- Mohinder Pal i.e. the driver and owner of the offending vehicle, a motor 
cycle No. HROIC-1531 was driving the same in rash and negligent manner. 
The same dashed against the scooter which the claimant was riding causing 
F multiple injuries. Adjudicating the claim petition the Motor Accident Claims 
Tribunal, Jagadhari (hereinafter referred to as the 'Tribunal') held that claimant 
respondent No. 1 was entitled to compensation of Rs.60,000/- with interest at 
the rate of 9°/o from the date of filing of the claim petition till realization and 
cost of the petition. 
The appellant was held to be liable to pay the 
G compensation amount. Tribunal rejected the plea of the appellant that the 
offending vehicle was not the subject matter of insurance on the date of 
accident. The fixation of liability on the appellant was challenged by it by 
filing the appeal before the High Court. By the impugned order, the High 
Court held that even if a vehicle was not insured at the relevant time that was 
a dispute between the appellant and the respondent no. 2 and there was no 
H need for issuing notice to respondent No. I. 
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NATIONAL INSURANCE CO. LTD. v. MAM CHAND [PASAYAT,J.] 
113 
4. In support of the appeal, learned counsel for the appellant submitted A 
that challenge was to the fi

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