SMT. YALLWWA AND ORS. versus NATIONAL INSURANCE CO. LTD. AND ANR.

Citation: [2007] 6 S.C.R. 1113 · Decided: 16-05-2007 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

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Judgment (excerpt)

y 
SMT. YALLWWAANDORS. 
A 
v. 
NATIONAL INSURANCE CO. LTD. AND ANR. 
MAY 16, 2007 
[S.B. SINHA AND MARKANDEY KA TJU, JJ.] 
B 
Motor Vehicles Act, 1988: 
S. /40-No fault liability-Order under s.140, is an award within the 
meaning of s.173 and hence appealable. 
C 
The question for consideration in the present appeal is whether an order 
passed under s. 140 of Motor Vehicles Act, 1988 is an award within the 
meaning of s. 173 and hence appealable. 
Dismissing the appeal, the Court 
HELD: I. An order of the Tribunal awarding compensation under s.140 
of the Motor Vehicles Act, 1988 is appealable under s.173 as it amounts to 
an award under s.173. [Para 30] [1126-D] 
D 
2. S.140 of the Act is in Chapter X and provides for liability to pay E 
compensation in certain cases on the principle of no fault. An application 
under s.140 of the Act is maintainable by way of interim application or 
otherwise in a proceeding initiated in terms of s. 166 thereof. S.166 of the 
Act, on the other hand, is in Chapter XII thereof. [Para 8] (1117-F] 
3. An award of the Tribunal is to be made in terms ofs.168 of the Act. F 
For the said purpose, the Tribunal is required to issue a notice to the insurer 
and give the parties an opportunity of being heard. While making an award 
in terms of s.168 of the Act, the procedure laid down under s.166 of the Act 
are required to be complied with. The proviso appended to s.168 of the Act, 
however, lays down that where such application makes a claim for G 
compensation under s.140 in respect of the death or permanent disablement 
of any person, such claim and any other claim (whether made in such 
application or otherwise) for compensation in respect of such death or 
permanent disablement shall be disposed of in accordance with the provisions 
1113 
H 
1114 
SUPREME COURT REPORTS 
[2007] 6 S.C.R. 
A of Chapter X of the Act S.140 provides forno fault liability. It uses the words 
~ 
"accident arising out of the use of a motor vehicle", the owner of the vehicle 
and when more than two vehicles are involved, "the owners of the vehicles" 
shall, jointly and severally, be liable to pay compensation. The said provision, 
therefore, makes the owners of the vehicles liable but not the insurer per se . 
. Irrespective of the fact whether a claim petition is required to be adjudicated 
B under Chapter X or Chapter XII of the Act, it is permissible to raise a defence 
in terms of sub-section (2) of s.149 of the Act Even it is possible for the owner 
of the vehicle to raise a contention that his vehicle being not involved in the 
accident, he is not liable to pay any amount in terms of s.140 of the Act. 
c 
D 
[Paras 9 and 10) (1119-E-H; 1120-A) 
4. One of the defences available to the insurer is breach of conditions 
specified in the policy. When such a defence is raised, the Tribunal is required 
to go into the said question. S.140 of the Act does not contemplate that an 
insurance company shall also be liable to deposit the amount while it has no 
fault whatsoever in terms of sub-section (2) ofs.147 of the Act. 
[Para 11) (1120-B) 
5. There cannot be any doubt that an appeal is a creation of a statute. It 
may be noted that Chapter X of the Act provides for no forum for enforcement 
of the right under s.140. The only forum available is in Chapter XII. The right 
~ 
under s.140 can only be enforced under s.168 as an award. An appeal, 
E therefore, lies under s.173 against such an award seeking to enforce the right 
under s.140. [Paras 12 and 13) [1120-C-D) 
Sadhana Lodh v. National Insurance Co. Ltd. and Anr., (2003) 3 SCC 
524, held applicable. 
Divisional Controller, Maharashtra State Road Transport Corporation 
F v. Bapu Onkar Chaudhary, (2004) ACJ 35; National Insurance Co. Ltd. v. V. 
Chinnamma and Ors., [2004) 8 SCC 697 and British India General Insurance 
Co., Ltd. v. Captain Itbar Singh and Ors., [1960) 1 SCR 168, referred to. 
6. The question which is required to be considered is what would be the 
meaning of the term 'award' when such a contention is raised. Although in a 
G given situation having regard to the liability of the owner of the vehicle, a 
claim Tribunal need not go into the question as to whether the owner of the 
vehicle in question was at fault or not, but determination of the liability of the 
insurance company, stands on a different footing. When a statutory liability 
has been imposed upon the owner, the same cannot extend the liability of an 
H insurer to indemnify the owner, al

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