Holding

An order of the Tribunal awarding compensation under Section 140 of the Motor Vehicles Act, 1988 is an award under Section 173 and is appealable.

Summary

The appellants, heirs of victims of a tractor‑trailer accident, filed claim petitions under Section 140 of the Motor Vehicles Act, 1988, seeking compensation from the vehicle owner and the insurer. The Claims Tribunal ordered both the owner and the insurer to deposit a fixed sum for each deceased. The insurer appealed, contending that the Tribunal's order under Section 140 was not an "award" and therefore not appealable under Section 173. The Supreme Court examined the statutory scheme, noting that Section 140 creates a no‑fault liability enforceable only through an award made under Section 168, and that an appeal is a statutory creation under Section 173. It held that the Tribunal’s order awarding compensation under Section 140 is indeed an award within the meaning of Section 173 and is therefore appealable. Consequently, the Court dismissed the appeal, upholding the Tribunal’s order.

Issues considered

Whether an order passed under Section 140 of the Motor Vehicles Act, 1988 constitutes an 'award' within the meaning of Section 173 and is therefore appealable

Legislation cited

Motor Vehicles Act, 1988s. 140, s. 141, s. 147, s. 149, s. 166, s. 168, s. 173, s. 174

Subjects

Motor Vehicles ActSection 140no‑fault liabilityawardappealabilityClaims TribunalSection 173insurance liability

Judgment

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 D

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]

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]

y 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.
[Paras 9 and 10) (1119-E-H; 1120-A)

c 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)
D
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, although in terms of the insurance policy or
YALLWWA v. NATIONALINSURANCECO.LTD. 1115
under the Act, it would not be liable therefor. [Para 161 (1122-B-D) A
Oriental Insurance Co. Ltd. v. Mohiuddin Kureshi alias Md Moya and
Ors., (1994) ACJ 74, referred to.

P. Ramanatha Aiyar's Law Lexicon 3rd Edn. 2005 at page 428, referred
to. B
7. In a given case, the statutory liability of an insurance company,
therefore, either may be nil or a sum lower than the amount specified under
~ Section 140 of the Act. Thus, when a separate application is filed in terms of
s.140 of the Act, in terms ofs.168 thereof, an insurer has to be given a notice
in which event, it goes without saying, it would be open to the insurance c
company to plead and prove that it is not liable at all. [Para 17) (1122-D, E)

8. Furthermore, it is not in dispute that there can be more than one
award particularly when a sum paid may have to be adjusted from the final
award. Keeping in view the provisions ofs.168 of the Act, there cannot be any
doubt whatsoever that an award for enforcing the right under s.140 of the
D
Act is also required to be passed under s.168 only after the parties concerned
have filed their pleadings and have been given a reasonable opportunity of
y
being heard. A Claims Tribunal, thus, must be satisfied that the conditions
precedent specified in s.140 of the Act have been substantiated, which is the
basis for making an award. [Para 18) [1122-E, F, G) E
9. Furthermore, evidently, the amount directed to be paid even in terms
of Chapter X of the Act must as of necessity, in the event of non-compliance
of directions has to be recovered in terms of s.174 of the Act. There is no
other provision in the Act which takes care of such a situation. Even when
objections are raised by the insurance company in regard to its liability, the F
y Tribunal is required to render a decision upon the issue, which would attain
.., finality and, thus, the same would be an award within the meaning of s. 173 of
the Act. [Para 19) (1122-G, H; 1123-A)

United India Insurance Co. Ltd v. Lehru and Ors., [2003) 3 SCC 338,
held inapplicable. G

National Insurance Co. Ltd. v. Jethu Ram and Ors., [1999] 9 SCC 62;
T National Insurance Company Ltd. v. Swaran Singh and Ors., [2004) 3 SCC
297; National Insurance Co. Ltd. v. Laxmi Narain Dhut, (2007) 4 SCALE 36;
Oriental Insurance Company Ltd. v. Meena Variyal and Ors., (2007) 5 SCALE
H
1116 SUPREME COURT REPORTS [2007] 6 S.C.R.

A 269 and Kaushnuma Begum and Ors. v. New India Assurance Co. Ltd and )
Ors., [2001) 2 SCC 9, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2674 of2007.

From the Final Judgment and Order dated 04.07.2005 of the High Court
B ofKarnataka at B~galore inW.F.A. Nos. 8227 C/W 8234 to 8237 of2004 and
8239-8240 of2004.

N.D.B. Raju, C.M. Angadi, Bharathi Raju and Rameshwar Prasad Goyal
for the Appellants. I-

C Pankaj Bala Varma and Kiran Suri (for V.N. Raghupathy) for the
Respondents.

The Judgment of the Court was delivered by

S.B. SINHA, J. 1. Leave granted.
D
2. Whether ar1 order passed under Section 140 of the Motor Vehicles
Act, 1988 (for short, 'the Act') is an appealable one is the question involved
in this appeal which arises out of a judgment and order dated 04.07 .2005
passed by a learned Single Judge of the Karnataka High Court in M.F.A. Nos.
8227 of2004 c/w 8234 to 8237, 8239 and 8240 of2004.
E
3. The basic facts of the case are not in dispute. Appellants herein are
the heirs and legal representatives of the coolies travelling from Kankanwadi
to Saundatti in the State of Karanataka in a tractor trailer. The said tractor·
trailer met with an accident allegedly owing to rash and negligent driving on
F the part of its driver. Out of 44 persons travelling in the said tractor trailer,
nine persons died and others received serious injuries.
y
4. Appellants herein filed claim petitions in terms of Section 166 of the
Act read with Section 140 thereof before the Motor Accidents Claims Tribunal
(for short, 'the Tribunal'). By reason of an order dated 13.09.2004, the learned
G Tribunal directed both the owner as also Respondent No. 1 (Insurance
Company) to deposit a sum of Rs. 50,000/- each for every deceased within
a period of one month.

5. Aggrieved by and dissatisfied therewith, Respondent No. I herein Y
preferred appeals before the High Court. One of the contentions raised by the
H appellants was that the appeals under Section 173 of the Act were not
YALL WWA v. NATIONAL INSURANCE CO. LTD. [S.B. SINHA, J.] 1117

~
maintainable, inter alia, on the premise that the said order dated 13 .09 .2004 A
was not an award within the meaning of Section 173 of the Act. In support
of the said contention, reliance was placed on a decision of the Bombay High
Court in Divisional Controller, Maharashtra State Road Transport
Corporation v. Bapu Onkar Chaudhary, (2004) ACJ 35. The High Court,
however, in view of the fact that admittedly the deceased and the injured, who
were travelling in the tractor trailer, were unauthorised passengers and also B
having regard to the decision of this Court in National Insurance Co. Ltd.
v. V. Chinnamma & Ors., [2004] 8 SCC 697", opined that the said order would
be an appealable one.
~
6. The learned counsel appearing on behalf of the appellants would
submit that the right of appeal is a statutory right and in view of the fact that
c
no adjudication was required to be made by the Tribunal while passing an
order under Section 140 of the Act, the same would not come within the
purview of the definition of the term 'award'. Reliance has been placed on
British India General Insurance Co., Ltd. v. Captain Itbar Singh and Ors.,
[ 1960] I SCR 168 and Sadhana Lodh v. National Insurance Co. Ltd and Anr., D
[2003] 3 sec 524.

7. The learned counsel appearing on behalf of the respondents, on the
y
other hand, would support the judgment.

8. Section 140 of the Act is in Chapter X thereof provides for liability E
to pay compensation in certain cases on the principle of no fault. An
application under Section 140 of the Act is maintainable by way of interim
application or otherwise in a proceeding initiated in terms of Section 166
thereof. Section 166 of the Act, on the other hand, is in Chapter XII thereof.
The said provisions read as under :
F
y "Section 140 - Liability to pay compensation in certain cases on the
principle of no fault. -

(I) Where death or permanent disablement of any person has resulted
from an accident arising out of the use of a motor vehicle or motor
vehicles, the owner of the vehicle shall, or, as the case may be, the G
owners of the vehicles shall, jointly and severally, be liable to pay
compensation in respect of such death or disablement in accordance
with the provisions of this section.

(2) The amount of compensation which shall be payable under sub-
H
1118 SUPREME COURT REPORTS [2007) 6 S.C.R.

A section (I) in respect of the death of any person shall be a fixed sum
of [fifty thousand rupees] and the amount of compensation payable
under that sub-section in respect of the permanent disablement of any
person shall be a fixed sum of [twenty-five thousand rupees].

(3) In any claim for compensation under sub-section(!), the claimant
B shall not be required to plead and establish that the death or permanent
disablement in respect of which the claim has been made was due to
any wrongful act, neglect or default of the owner or owners of the
vehicle or vehicles concerned or of any other person.

(4) A claim for compensation under sub-section (1) shall not be
r-
c defeated by reason of any wrongful act, neglect or default of the
person in respect of whose death or permanent disablement the claim
has been made nor shall the quantum of compensation recoverable in
respect of such death or permanent disablement be reduced on the
basis of the share of such person in the responsibility for such death
or permanent disablement.
D
(5) Notwithstanding anything contained in sub-section (2) regarding
death or bodily injury to any person, for which the owner of the
vehicle is liable to give compensation for relief, he is also liable to pay '(

compensation under any other law for the time being in force:
E Provided that the amount of such compensation to be given under
any other law shall be reduced from the amount of compensatiQn
payable under this section or under section 163 A."

"Section 166 - Application for compensation

F (I) An application for compensation arising out of an accident of the
nature specified in sub-section (I) of section 165 may be made-
y
(a) by the person who has sustained the injury; or

(b) by the owner of the property; or

G (c) where death has resulted from the accident, by all or any of the
legal representatives of the deceased; or

(d) by any agent duly authorised by the person injured or all or any
of the legal representatives of the deceased, as the case may be:

H Provided that where all the legal representatives of the deceased have
YALLWWA v. NATIONAL INSURANCE CO. LTD. [S.B. SINHA,J.] 1119
1. not joined in any such application for compensation, the application A
shall be made on behalf of or for the benefit of all the legal
representatives of the deceased and the legal representatives who
have not so joined, shall be impleaded as respondents to the
application.

((2) Every application under sub-section (I) shall be made, at the B
option of the claimant, either to the Claims Tribunal having jurisdiction
over the area in which the accident occurred or to the Claims Tribunal
1 within the local limits of whose jurisdiction the claimant resides or
..-
carries on business or within the local limits of whose jurisdiction the
defendant resides, and shall be in such form and contain such
particulars as may be prescribed:
c
Provided that where no claim for compensation under section 140 is
made in such application, the application shall contain a separate
statement to that effect immediately before the signature of the
applicant.]
D
[***]
r [(4) The Claims Tribunal shall treat any report of accidents forwarded
to it under sub-section (6) of section 158 as an application for
compensation under this Act."
E
9. It is not in dispute that an award of the Tribunal is to be made in
terms of Section 168 of the Act. 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 Section 168 of the Act, the procedure
laid down under Section 166 of the Act are required to be complied with. The
y proviso appended to Section 168 of the Act, however, lays down that where F
such application makes a claim for compensation under Section 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 compensati~n
in respect of such death or permanent disablement shall be disposed of in
accordance with the provisions of Chapter X of the Act. Section 140, as G
noticed hereinbefore, provides for no 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.

I 0. The said provision, therefore, makes the owners of the vehicles H
1120 SUPREME COURT REPORTS [2007] 6 S.C.R.

A liable but not the insurer per se. Irrespective of the fact whether a claim
petition is required to be adjudicated under Chapter X or Chapter XII of the
Act, it is permissible to raise a defence in terms of sub-section (2) of Section
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
B to pay any amount in terms of Section 140 of the Act.

11. 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. Section 140 of the Act does not contemplate that
an insurance company shall also be liable to deposit the amount while it has
C no fault whatsoever in terms of sub-section (2) of Section 147 of the Act.

12. There cannot be any doubt that an appeal is a creation of a statute.

13. It may be noted that Chapter X of the Act provides for no forum
for enforcement of the right under Section 140. The only forum available is
D in Chapter XII. The right under Section 140 can only be enfor~ed under
Section 168 as an award. An appeal, therefore, lies under Section 173 against
such an award seeking to enforce the right under Section 140.

14. In P. Ramanatha Aiyar's Law Lexicon 3rd Edn. 2005 at page 428, it
is stated :
E
""A ward" means an arbitration award [Arbitration Act (I 0 of 1940, S.
2(b)]

"A ward" means an interim or a final determination of any industrial
dispute or of any question relating thereto by any Labour Court,
Industrial Tribunal or National Industrial Tribunal and includes an
F
arbitration award made under S. 10-A. (Industrial Disputes Act ( 14 of y
1947, s. 2(f).]"

15. In Oriental Insurance Co. Ltd v. Mohiuddin Kureshi alias Md.
Moya and Ors., (1994) ACJ 74, a Division Bench of the Patna High Court
G observed :
"7. Section 140 of the Motor Vehicles Act which is in Chapter X of
the said Act provides for liability to pay compensation on the principle
of no fault. An owner of a vehicle thus would be liable to pay
compensation in case death or permanent disablement to any person
H has resulted from an accident arising out of use of a motor vehicle or
YALLWWA v.NATIONALINSURANCECO.LTD.[S.B.SINHA,J.] 1121

vehicles and the amount of such compensation in tenns of Section 140 A
(2) is fixed as Rs. 25,000/- in case of death and Rs. 12,000/- in case
of pennanent disablement.

Sub-section (3) of Section 140 postulates that the claimant shall not
be required to plead and establish that the death or pennanent
disablement in respect of which claim was made was due to any B
wrongful act, neglect or default of the owner or owners of the vehicle
or vehicles concerned or of any other person.

xxx xxx
9. Section 141 of the said Act, however, provides that right to claim C
in tenns of Section 140 shall be in addition to any other right under
the provisions of the said Act or any other law for the time being in
force.

Sub-sections (2) and (3) of Section 141 of the said Act read thus:

(2) A claim for compensation under Section 140 in respect of death D
or permanent disablement of any person shall be disposed of as
expeditiously as possible and where compensation is claimed in respect
,- of such death or pennanent disablement under Section 140 and also
in pursuance of any right on the principle of fault, the claim for
compensation under Section 140 shall be disposed of as aforesaid in E
the first place.

(3) Notwithstanding anything contained in Sub-section (1 ), where in
respect of the death or permanent disablement of any person, the
person liable to pay compensation under Section 140 is also liable to
pay compensation in accordance with the right on the principle of F
fault, the person so liable shall pay the first-mentioned compensation
'
and-

(a) if the amount of the first-mentioned compensation is less than the
amount of the second-mentioned compensation, he shall be liable to
pay (in addition to the first-mentioned compensation) only so much G
of the second-mentioned compensation as is equal to the amount by
which it exceeds the first-mentioned compensation;

(b) if the amount of the first-mentioned compensation is equal to or
more than the amount of the second-mentioned compensation, he
shall not be liable to pay the second-mentioned compensation. H
1122 SUPREME COURT REPORTS [2007] 6 S.C.R.

A xxx xxx xxx

11. From a conjoint reading of the aforementioned provisions, there
cannot be any doubt that an application under Section 140 of the said
Act can be filed separately.

B However, Section 166 of the said Act contemplates filing of a
composite application, as is evident from the proviso appended to
Sub-section (2} of Section 166 of the said Act."

16. 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 )-
c in a 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, in our opinion, stands on a different footing. When
a statutory liability has been imposed upon the owner, in our opinion, the
same cannot extend the liability of an insurer to indemnify the owner, although
D in terms of the insurance policy or under the Act, it would not be liable
therefor.

17. In a given case, the statutory liability of an insurance company,
''(
therefore, either may be nil or a sum lower than the amount specified under
Section 140 of the Act. Thus, when a separate application is filed in terms of
E Section 140 of the Act, in terms of Section 168 thereof, an insurer has to be
given a notice in which event, it goes without saying, it would be open to
the insurance company to plead and prove that it is not liable at all.

18. Furthermore, it is not in dispute that there can be more than one
F award particularly when a sum paid may have to be adjusted from the final
award. Keeping in view the provisions of Section 168 of the Act, there cannot
be any doubt whatsoever that an award for enforcing the right under Section y
140 of the Act is also required to be passed under Section 168 only after the
parties concerned have filed their pleadings and have been given a reasonable
opportunity of being heard. A Claims Tribunal, thus, must be satisfied that
G the conditions precedent specified in Section 140 of the Act have been
substantiated, which is the basis for making, an award.

19. Furthermore, evidently, the amount directed to be paid even in terms
of Chapter X of the Act must as of necessity, in the event of non-compliance .,..
of directions has to be recovered in terms of Section 174 of the Act. There
H is no other provision in the Act which takes care of such a situation. We,
YALL WW A v. NATIONAL INSURANCE CO. LTD. [S.B. SINHA, J.] 1123
therefore, are of the opinion that even when objections are raised by the A
insurance company in regard to its liability, the Tribunal is required to render
a decision upon the issue, which would attain finality and, thus, the same
would be an award within the meaning of Section 173 of the Act.

20. In British India General Insurance Co. Ltd. (supra), the question
which arose for consideration was as to whether an insurer should be joined B
as a party in a proceeding under the Act apart from the provisions of the
statute. Therein, the court was considering a claim under the Motor Vehicles
Act, 1939. It was held therein:

"17. Again, we find the contention wholly unacceptable. The statute
has no doubt created a liability in the insurer to the injured person C
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 D
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 full liberty to do.
Secondly, ifhe has been made to pay something which on the contract E
of the policy he was not bound to pay, he can under the proviso to
sub-section (3) and under sub-section (4) recover it from the assured.
It was said that the assured might be a man of straw and the insurer
might not be able to recover anything from him. But the answer to that
is that it is the insurer's bad luck. In such circumstances the injured F
person also would not have been able to recover the damages suffered
by him from the assured, the person causing the injuries ...."

21. In National Insurance Co. Ltd. v. Jethu Ram and Ors., [1999] 9 SCC
62, this Court while construing the provisions of Section 92-A and 92-8 of
the Motor Vehicles Act, 1939, opined: G
"2. On a close scrutiny of the aforesaid provisions, we do not find
anything contained therein which would suggest that the liability
which accrues under the provisions of Section 92-A has to be borne
by the insurer even if it is ultimately held that under the policy of
insurance, the insurer is not liable to pay the compensation in question. H
1124 SUPREME COURT REPORTS [2007] 6 S.C.R.

A In our considered opinion, the Tribunal and the High Court have
misread the aforesaid provisions of the Motor Vehicles Act. In the
aforesaid premises, the impugned judgments of the Tribunal and the
High Court cannot be sustained so far as they relate to the liability
of the insurer arising under Sections 92-A and 92-B of the Act.. .. "

B 22. The decision of this Court in United India Insurance Co. Ltd v.
Lehru and Ors., [2003] 3 SCC 338 is not of much assistance in this case. The
question which arose for consideration therein was as to whether in a case
where the licence of the driver of the motor vehicle involved in the accident
was fake, the court can direct the insurance company to pay the amount of
C the compensation and recover the same from the owner, as the insurance
company is liable to satisfied the award.

23. Lehru (supra) has been taken into consideration in a subsequent
decision of this Court in National Insurance Company Ltd. v. Swaran Singh
and Ors.. [2004] 3 SCC 297, which has in tum been considered in National
D Insurance Co. Ltd v. Laxmi Narain Dhut, [2007] 4 SCALE 36 and The
Oriental Insurance Company Ltd. v. Meena Variyal & Ors., [2007] 5 SCALE
269.

24. The recent decisions of this Court are authorities for the proposition
that the insurance company would not be liable in cases where passengers
E of a vehicles are not third parties.

25. In Sadhana Lodh (supra), this Court was concerned with a case
where an application was filed under Articles 226 and 227 of the Constitution
of India, despite the fact that an appeal was maintainable against the award
and in that view of the matter, the court opined that when an insurer has a
F right to prefer an appeal on limited grounds available under Section 149 of
the Act, the grounds of challenge cannot be enlarged by filing a petition y·
under Articles 226 and 227 of the Constitution of India. It was observed
therein:

"7. The supervisory jurisdiction conferred on the High Courts under
G 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 face 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
H or the tribunal. It is also not permissible to a High Court on a petition
YALL WW A v. NATIONALINSURANCE CO. LTD. (S.B. SINHA, J.] ll25

filed under Article 227 of the Constitution to review or reweigh the A
evidence upon which the inferior court or tribunal purports to have
passed the order or to correct errors of law in the decision."

26. The said decision has also no application to the facts of the present
case. So far as the decision of the Bombay High Court in Bapu Onkar
Chaudhari (supra) is concerned, the High Court proceeded on the basis that B
in terms of the rules framed by the State of Maharashtra under the Motor
Vehicles Act, an order passed under Section 140 would not come within the
purview of the term 'award'.

27. In Bapu Onkar Chaudhari (supra), the Bombay High Court appears
to have placed strong reliance on Kaushnuma Begum and Ors. v. New India C

- Assurance Co. Ltd. and Ors., (2001) ACJ 428: (2001] 2 SCC 9. In Kaushnuma
Begum (supra), this Court was concerned with the question as to whether the
amount of compensation to be paid under Section 140 of the Act can be
deducted from the final amount awarded by the Tribunal and while doing so,
opined: D
"20 . "No fault liability" envisaged in Section 140 of the MV Act is
distinguishable from the rule of strict liability. In the former, the
compensation amount is fixed and is payable even if any one of the
exceptions to the rule can be applied. It is a statutory liability created
without which the claimant should not get any amount under that E
count. Compensation on account of accident arising from the use of
motor vehicles can be claimed under the common law even without
the aid of a statute. The provisions of the MV Act permit that
compensation paid under "no fault liability" can be deducted from the
final amount awarded by the Tribunal. Therefore, these two are resting
on two different premises. We are, therefore, of the opinion that even F
apart from Section 140 of the MV Act, a victim in an accident which
occurred while using a motor vehicle, is entitled to get compensation
from a Tribunal unless any one of the exceptions would apply. The
Tribunal and the High Court have, therefore, gone into error in
divesting the claimants of the compensation payable to them." G
28. In Bapu Onkar Chaudhary (supra), the High Court of Bombay
observed :

"19. A different phraseology is used in rules 273 and 281. The Claims
Tribunal in passing orders, is required to record concisely in a judgment H
1126 SUPREME COURT REPORTS [2007] 6 S.C.R.

A the findings of each of the issues framed and the reasons for such
findings and make an award specifying the amount of compensation
to be paid by the insurers and the owners of the vehicle, who may
be found vicariously responsible for causing the accident and also the
person of persons to whom compensation shall be paid."

B 29. The Bombay High Court posed unto itself a wrong question and,
thus, misdirected itself in arriving at the said decision. Its endeavour to draw
sustenance of its finding from the proposition that an order passed under
Section 140 of the Act is not an award having regard to Rule 281 of the
Maharashtra Motor Vehicles Rules, 1989 suffers from a manifest error as the
C Rule lays down the procedure for filing of an appeal and, thus, by reason
thereof substantive right of appeal vested in a person under a legislative Act
cannot be taken away.

30. In our considered opinion, the said decision does not state the law
correctly. In our opinion, an order of the Tribunal awarding compensation
-
D under Section 140 of the Act is appealable under Section 173 as it amounts
to an award under Section 173.

31. For the reasons aforementioned, there is no merit in this appeal,
which is dismissed accordingly. However, in the facts and circumstances of
the case, there shall be no order as to costs.
E
D.G. Appeal dismissed.