Lawyers Directory Listing
Chat with us free on WhatsApp — tell us your city and legal matter and our team connects you with the right lawyer. No form, no fee.
First Appeal No. 15 of 1960, decided on 24th September 1962.
Allega tion of rash and negligent driving of vehicle not denied specifically-- Deemed to have been admitted.
-Manager looking after transport business on behalf of owner-Not liable in damages for death caused by rash or negligent act of servant of owner.
"Proceedings" means "suit"-Notice, to make insurer liable in damages, must be given in course of suit before judgment is delivered (Per Qadeeruddin Ahmad, J., agreeing with Faruqui, J., on difference of opinion between Wahiduddin Ahmad, J. and Faruqui, J.) (Per Wahiduddin, J. : Insurer liable even if notice is given during execution proceedings or appeal-"Proceedings" includes proceed ings in suit, appeal, or execution-General Clauses Act (X of 1897), S. 6 (e)-Sarupsingh Mangatsingh v. Nailkant Bhaskar A I R 1953 Bom. 109 ; Windsor v. Chalcraft (1939) 1 K B 279 ; Royal Insurance Co. Ltd. v. Abdul Muhammad Meheralli A I R 1955 Bom. 39 ; Vanguard Fire and General Insurance Co. Ltd. v. Sarla Devi and others A I R 1959 Pb. 297 ; British India General Insurance Co. Ltd. v. Captain Itbar Singh and others A I R 1959 S C 1331 ; Halsbury's Laws of England (Ed. III), Vol. XXII, para. 696 ; Deb Narain Dutt v. Narendra Krishna & Co. I L R 16 Cal. 267 ; Sat Ghuri v. Mujidan I L R 15 Cal. 107 ; Mungal Pershad Dichit v. Grija Kant Lahiri I L R 8 Cal. 51 ; Ratanchand Shrichand v. Hanmantra V. Shivbakas 6 Bombay High Court Report 166 and Thakur Prasad v. Ahsan Ali I L R 1 All. 668 ref. [pp. 190, 198 207] C et seq, D et seq, E et seq.
-"Action"-Defined.
Construction to be adopted that will "suppress the mischief and advance the remedy"-Object of statute : public safety ; wording to be interpreted widely to effect such object.
Three methods : Analytical, historical and "philosophical".
Influence of personal preferences of Judges on judicial pronouncements.
-"Nothing to be implied in statutes or documents which is inconsistent with words expressly used."
-Effect must be given to every word and expression-"Effect" includes consideration of true "implications."
Not advanced by counsel-Judge nevertheless entitled to make use of his own legal knowledge.
-- Insurer can raise only specific defences set out in cls. (a), (b), (c).
Z. C. Valiani for Appellants.
Tahir Hussain for Respondent.
S. Riazul Hassan for Asian Mutual Insurance Co.
S. M. Sadi Amicus curiae.
Dates of hearing (before D. B.) : 7th and 13th March 1962 ; (before Qadeeruddin Ahmad, J,) : 27th August and 12th September 1962,
This is an appeal against the judgment and decree passed by Mr. A. H. Kureishy, Additional District Judge, Karachi decreeing the plaintiff's suit for damages amounting to Rs. 6,000 under the Fatal Accidents Act. The plaintiff in this suit was Muhammad Amin, the father of the boy Shamsur Rahman who was run over and killed by the bus No. KAP 1753 belonging to the defendants which was being driven by their servant Anwar Husain. The defendants were, the firm namely Rah-e-Manzil and three others, namely, Mst. Rashida Khatoon, defendant No. 2 ; Muhammad Iqbal, defen dant No. 3 ; and Muhammad Yunus, defendant No. 4 husband of defendant No. 2 Mst. Rashida. Between these three the business of running the bus in question and one other bus under the name and style of Rah-e-Manzil' was being carried on.
2. The plaintiff alleged that on 17th August 1954, the aforesaid bus was being plied as a public bus on route No. 22 between Keamari and Pir Elahi Bakhsh Colony No. 2 and was being driven by the defendants' servant Anwar Husain ; that th a hand-brakes and foot-brakes and the steering rod were not in working order ; that at the time of the accident the driver of the defendants was rashly and negligently driving the bus at an excessive speed and on the wrong side of the road and knocked down the plaintiff's only son Shamsur Rahman aged about 10 years near the Keamari Post Office. As a result of the injuries received Shamsur Rahman died on the spot. This boy was the only male issue of the plaintiff and was a hard working and intelligent boy and employed at Rs. 30 per month, besides food and clothing, and he also used to perform several household duties. Upon these allegations the plaintiff claimed a sum of Rs. 6,000 as damages which was also to be shared by the mother of the boy.
3. A joint written statement was filed on behalf of all the defendants and was signed by the defendants 2, 3 and 4. The main burden of the defence was that when the accident took place the bus was in a working order and not in a bad condition and was being plied by the driver Anwar Husain who was a licensed driver who had not pointed out any defect in the vehicle at the material time, and in any case the bus being duly insured the liability to pay the damages was that of the insurance company. The quantum of the damages was also denied and it was denied that the boy was employed or that he used to support his mother or the plaintiff. There was no denial of the specific allegation in the plaint that Anwar Husain had knocked down the boy while he was driving the bus rashly and negligently at an excessive speed and on the wrong side of the road. Several other objections were taken but they are not material in view of the fact that the judgment of the Court below was attacked before us only upon two points with which I shall presently deal.
4. The learned trial Court framed as many as nine issues which arose from the pleading and found in favour of the plaintiff on each of them and accordingly granted a decree. It is not necessary to refer to all these issues because the question involved in most of them were not pressed before us. On the admission of the defendant No. 4, Muhammad Yunus, who had gone into the witness-box, he held that the business of running the bus was carried on in partnership of defendants 2 and 3 and that the name of the firm was Rah-e-Manzil which owned the bus in question and another bus. The existence of another bus being run under the same name was admitted by the defendants' witness Mistri Amanat Khan. As for the defen dant No. 4 he held that he was looking after the affairs of the bus on behalf of his wife. With regard to the condition of the bus he believed the evidence of the plaintiff's witness Inspector Brooks who was in Traffic Department at the material time and held that both the brakes were out of order and the steering rod was loose and there was play in the steering. He further held that it was the duty of the defendants as proprietors of the bus not to allow this bus to have been plied on the road in the defective condition. On the main issue, which was issue No. 7, the learned Judge observed that the defendants had not denied the allegation that the bus at the material time was being driven rashly and negligently by the driver Anwar Hussain which had resulted in the death of the plaintiff's son. He observed that their defence upon this point was limited to the fact that the bus was insured and was in a fit condition and was being driven by a licensed driver. In view of the absence of any denial with regard to the rash and negligent driving the learned Judge found in favour of the plaintiff and held that on the principle of vicarious liability the defendants were liable for the rash and negligent act of their servant Anwar Husain. He further held that even though the bus was insured the defendants were still liable. In fact, this defence was not pressed before him. With regard to the quantum of damages he believed the plaintiff's evidence and held that the claim of Rs. 6,000 as consolidated amount of damages which was to be shared between the plaintiff and the mother of the boy was a reasonable amount in the circumstances of the case. He accordingly granted a decree in that sum.
5. It may be mentioned that in the execution proceedings of this decree a notice was sent at the instance of the decree-holder to the Asian Mutual Insurance Co. with which the bus was insured. A similar notice was also sent at the instance of the appellant by this Court in this appeal, and the point upon which a great deal of argument was advanced before us during the hearing related to the question whether the notice to the insurance company at the stage of appeal or during the execution proceed ings fulfilled the requirements of section 96 of the Motor Vehicles Act (Act IV of 1939), but to this I shall revert a little latter.
6. Mr. Zulfiqar Valiani, the learned counsel for the appel lants, urged only two points before us on the merits of the appeal. His first contention was that inasmuch as there was no evidence of rash and negligent driving by the servant of the appellants the trial Court has erred in giving a finding in favour of the plaintiff on this point. Secondly, he contended that upon the evidence on record no decree could have been passed against the defendant No. 4. Muhammad Yunus, the husband of defendant No. 2.
7. I have referred in the opening part of the judgment to the specific allegation made in para. 6 of the plaint that the defendants' servant while rashly and negligently driving the bus in question at an excessive speed and on the wrong side of the road dashed against the plaintiff's son Shamsur Rahman near the Keamari Post Office. The defendants dealt with this part of the plaintiff's case in para. 6 of the written statement wherein they stated as follows
"That the facts given in para. 6 of the plaint do not require any reply except that when the alleged incident took place the bus m question was perfectly in working order and not in a bad condition. The defendants are in no way respon sible for the accident, firstly, because the bus was already insured and if at all the insurance Company stands liable for the damages alleged to have been caused to the plaintiff, and secondly, because the driver Anwar Hussain was a licensed driver."
8. The rules of pleading as provided in the Civil Procedure Code are very clear. The material provisions with regard to the denial in the written statement are contained in Order VIII, rules 3, 4 and 5. Rule 5 provides that-
"every allegation of fact in the plaint, if not denied specifi cally or by necessary implication, or stated to be not admitted in the pleading of the defendant, shall be taken to be admitted except as against a person under disability."
In the present case, there was not even an unspecific denial of the clear assertion in para. 6 of the plaint with regard to the rash and negligent act of the defendants' servant. In the circum stances of the case we are quite clear that the learned Judge below was right in basing the finding upon this part of the case in the absence of any denial by the defendants and in not requiring this fact to be proved otherwise than by such admission. The fact that the boy was run over by the bus in question and died on the spot, was not disputed, and if the defendants did not choose to deny to the specific allegation of the rash and negligent act of their servant the plaintiff was well within his rights in not pleading any evidence with regard to that fact. When the attention of the learned counsel for the appellants was drawn to these provisions bf the Civil Procedure Code he frankly stated that he could not advance the matter any further in view of the state of the pleadings in the case,
9. On the second contention, however, it appears to us that the appellants must succeed. The evidence in the case with regard to the interest of the defendant No. 4 in this business was only to the effect that he was looking after the interest of his wife in this business and was managing it on her behalf. I cannot see how he could be held to be vicariously liable. Mr. Tahir Hussain, the learned Advocate for the respondent/ plaintiff, was not able to support before us the decree against the defendant No. 4.
10. No other point was urged before us on behalf of the appellants on the merits of the case and upon the conclusion that we have reached we uphold the judgment and decree of the learned Court below against the defendants 1, 2 and 3.
11. I now come to the question of the liability of the insurance company. As I have said above, notice of this appeal was given to the insurance company by this Court and so was the notice of the execution proceedings by the Court below. In answer to the notice issued by this Court Mr Riazul Hasan, Advocate appeared on behalf of the insurance company and he as well as the advocates for the appellants and the respondents asked us to decide the question in this appeal whether the notice by this Court at the stage of appeal or of the execution proceedings amounted to a compliance of the requirement of section 96 of the Motor Vehicles Act so as to make the company liable as a judgment-debtor. We have heard full arguments upon the point by the learned Advocates of the parties and Syed Muhammad Sadiq, Advocate whom we had given notice to appear as amicus curiae also addressed us. In the present case, admittedly no notice was given to the insurance company during the trial of the suit and the question which was urged before us by Mr. Zulfiqar Valiani, the learned counsel for the appellants, was that notwithstanding the failure to give such a notice the insurance company would still be liable under section 96 of the Motor Vehicles Act upon the basis of the notice by the executing Court as also upon the basis of the notice given by this Court in appeal. Mr. Valiani was supported in this stand by Mr. Tahir Hussain, the learned counsel for the respondent. I would now straightway go to section 96 of the Motor Vehicles Act (Act IV of 1939), because it is upon the construction of this provision that the answer to the question before us must largely depend. Section 96 will have to be repro duced in extenso :
"96.-(1) If, after a certificate of insurance has been issued under subsection (4) of section 95 in favour of the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under clause (b) of subsection (1) of section 95 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment-debtor, in respect of the liability, together with any amount payable in respect of costs acid any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.
(2) No sum shall be payable by an insurer under sub section (1) in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice through the Court of the bringing of the proceedings, or in respect of any judgment 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 the policy was cancelled by mutual consent or by virtue of any provision, contained therein before the accident giving rise to the liability, and that either the certi ficate of insurance was surrendered to the insurer or that the person to whom the certificate was issued has made an affidavit stating that the certificate has been lost or destroyed, or that either before or not later than fourteen days after the happening of the accident the insurer has commenced proceeding for cancellation of the certificate after compliance with the provisions of section 105 ; or
(b) that there bas 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 public service vehicle or a good 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
(a) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular.
(2A) Where any such judgment as is referred to in sub section (1) is obtained from a Court in a reciprocating territory and in the case of a foreign judgment is, by virtue of the provisions of section 13 of the Code of Civil Procedure 1908, conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act, 1938, and whether or not he is registered under the corres ponding law of the reciprocating territory) shall be liable to the person entitled to the benefit of the decree in the manner and to the extent specified in subsection (1) as if the judgment were given by a Court in the (Provinces and the Capital of the Federation)
Provided that no sum shall be payable by the insurer in respect of any such judgment unless, before or after the com mencement of the proceedings in which the judgment is given, the insurer had notice through the Court in the reciprocating territory of the bringing of the proceedings and the insurer to whom notice is so given is entitled under the corresponding law of the reciprocating territory, to be made a party to the pro ceedings and to defend the action on grounds similar to those specified in subsection (2).
(3) Where a certificate of insurance has been issued under subsection (4) of section 95 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby reference to any conditions other than those in clause (b) of subsection (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of subsection (1) of section 95, be of no effect
Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this subsection shall be recoverable by the insurer from that person.
(4) If the amount for which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by the policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person.
(5) In this section the expressions "material fact" and "material particular" mean, respectively, a fact or particular of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk and, if so, at what premium and on what conditions, and the expression "liability covered by the terms of the policy" means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy.
(6) No insurer to whom the notice referred to in sub section (2) (or subsection (2-A)) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment as is referred to in subsection (1) [or sub section (2-A)] otherwise than in the manner provided for in subsection (2) (or in the corresponding law of the reciprocating territory, as the case may be.)"
12. Section. 94 of the Act makes the insurance against the third party risk as a condition precedent to the plying of a motor vehicle in a public place. Section 95 deals with the requirement of the insurance policy and the limits of liability. Subsection (5) of this section provides that a person issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover.
13. There was no dispute as regards the interpretation of subsection (1) of section 96 which makes the insurer liable as if he were a judgment-debtor under the decree. But subsection (2) lays down that no sums shall be payable by an insurer unde subsection (1) unless before or after the commencement of the proceedings in which the judgment is given, the insurer had notice through the Court of the bringing of the proceedings, and an C insurer to whom notice of the bringing of any such proceeding is given, has been given a right to be made a party thereto and to defend the action on the grounds enumerated in sub-paras. (a), (b) and (c). And it was strenuously contended by Mr. Valiani that the "proceedings" referred to in subsection (2) included not only the proceedings in the suit but also the proceedings after the decree in the execution thereof and the proceedings in the appeal, if any. The argument was that the proceedings in appeal and in execution were in continuation of the proceedings in the suit and, therefore, a notice to the insurer after the decree either in appeal or during the execution of the decree fulfils the requirement of sub section (2) of section 96. I am afraid I do not find it possible to accept this contention.
14. The liability of the insurer to pay under the decree as if he were a judgment-debtor which has been provided by sub section (1) of section 96, is expressly subject to the provisions o subsection (2) which has been already indicated in the preceding para. Subsection (2) contains two clauses. The first clause makes the insurer immune if no notice is given to him as provided in this clause and the second clause suspends his liability in respect of a judgment, the execution of which has been stayed pending an appeal. The first clause lays down that the insurer shall not be liable under subsection (1) unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice through the Court of the bringing of the proceedings (the italics are mine). It has to be noted that the last part of sub-para. 2 entitled the insurer to whom notice of the bringing of any such proceedings is given to defend the action on any of the grounds set out in the subsequent sub-clauses. The meaning of the word "proceedings" in this sub-para. has to be given in the context in which the word has been used. Consider ing that the insurer has, upon receipt of the notice of the bringing of the proceedings, been given the right to defend the action, though of course upon the grounds mentioned in the sub-clauses, the inference becomes irresistible that such a notice has to be given before the "proceedings" have been concluded by the judgment of the Court in which the proceedings have been brought. It is true this judgment is not final and may be subject to appeal or appeals, but I cannot agree that the framers of the Act contemplated the defending of the action at the stage of the appeal. If upon the receipt of notice the insurer chooses to defend the action there would have to be pleadings and evidence and all this could only have been contemplated during the trial of the suit. Then it must be noted that the words used are "before or after the commencement of the proceedings in which the judgment is given". Proceedings, therefore, is clearly related to the judgment and the inescapable inference is that the notice contemplated is of the proceeding which has resulted in a judgment. Surely it cannot be said that the word "proceedings" in this sub-para. could be stretched to mean proceedings in execution after the judgment has been given. It has to be further noted that the notice contemplated under this sub-para. has to be given before or after the commencement of the pro ceedings, and I do not find it possible to hold that a notice after the conclusion of the proceedings by a judgment could be said to be covered by the aforesaid expression. Again notice through Court has to be of the "bringing of the proceedings" which clearly means, notice before the proceedings have ended by a judgment. The word "action" used to this sub-para. which the insurer has been given the right to defend, in my opinion, can only mean the suit in which the judgment is given. The word b "action" has been defined in Halsbury's Laws of England,) III Edition, Volume 1, at page 2 as follows :-
"An action', according to the legal meaning of the term, is a proceeding by which one party seeks in a Court of Justice to enforce some right against, or to restrain the commission of some wrong by another party. More concisely it may be said to be the legal demand of a right', or the mode of pursuing a right to judgment'."
I cannot bring myself to hold that the word "action" as used in this sub-para includes the execution proceedings or the proceed ings in appeal.
15. I may also refer to subsection (2-A) of section 96 which has been reproduced above. This relates to judgment obtained from a Court in a reciprocating territory. There is a proviso attached to this subsection which is similar to the one contained in subsection (2). It provides that no sum shall be payable by the insurer etc., unless he had notice through the Court in the reciprocating territory of the bringing of the pro ceedings and the insurer, to whom notice was so given, was entitled under the corresponding law of the reciprocating territory to be made a party to the proceedings and to defend the action on grounds similar to those specified in subsection (2). The liability of the insurer under subsection (1) in such a case has been made subject to a notice by the Court in the recipro cating territory in which the original action was tried. If it had been intended that a notice subsequently given in Pakistan during the recovery proceedings would fulfil the requirement of this provision there was no need to insist upon a notice through the Court in the reciprocating territory. The conclusion seems to be clear that the notice intended is that of the suit in which the judgment is given and not of the execution proceedings or the proceedings in appeal,
16. It would be of interest to look at the background of this legislation. Before the enactment of the Motor Vehicles Act, 1939 and section 96 thereof an injured person claiming damages would have to bring an action against the person who caused the injury directly or vicariously, and if this action succeeded and the defendant satisfied the judgment he would then recover from the insurance company to the extent of the insurance by instituting an action against the insurer, The injured person bad no right to bring in the insurer in his action against the wrongdoer. Likewise, the insurer was not entitled to intervene in the action between the injured person and the wrongdoer. In view of the increasing number of running down accidents the Legislature made insurance against third party risk compulsory for the protection of the injured person and to advance this purpose it prescribed a procedure by which the claim for com pensation by the injured person against the assured and the contractual claim of the assured against the insurer for indemni fication could be decided in one suit. This being the object of this provision it is difficult to interpret subsection (2) of section 96 in a manner whereby a notice to the insurer, even after the judgment in the action between the injured person and the insured, should become effective for the purpose of making the insurer liable as a judgment-debtor within the meaning of subsection (1) of section 96.
17. I would now proceed to notice certain Indian decisions which were cited by Mr. Riaz-ul-Hasan, the learned counsel appearing for the insurer, and from which he indirectly sought support for his contention that the notice must be given in the suit itself. The first case relied upon by him is a decision of the Bombay High Court by a Bench consisting of Chagla, C. J. and Bhagwati, J. This is reported in Sarupsing Mangatsing v. Nailkant Bhaskar (A I R 1953 Bom. 109). In this case an ex parte decree was passed by the Judge on the Original Side in a running down action because the defendant had failed to file a written statement and was absent when the case came up for hearing. A motion was taken out by the defendant to set aside the ex parte decree which was dismissed by the learned Single Judge. A notice had been served by the plaintiff in the trial Court upon the insurance company on the 21st of June 1951, but before they could put in appearance the ex parte decree was passed on 27th June 1951. It was contended by the insurance company in appeal that they did not have reasonable notice to enable them to defend the action and, therefore, the ex parte decree should be set aside to enable them to defend. This contention was accepted and their Lordships observed as follows :-
"In our opinion, the only proper construction to give to section 96 would be that when the Legislature required a notice to be served through Court, the notice must be of a reasonable duration, and if the ex parte decree was passed against the defendant and if the Insurance Co. through the defendant satisfied the Court that the Insurance Co. did not have reasonable opportunity to defend the action, then the Court acting under its inherent jurisdiction would set aside the ex parte decree, because although the defendant might have had sufficient cause to defend the action, if the defence was being conducted by the Insurance Co. and the defendant was only a nominal defendant, then it is not sufficient that the defendant should have had ample opportunity to defend the action, but the Insurance Co. should also be given ample opportunity to defend the action. In the view that we take of the law, if we are satisfied on the facts of this case that the Insurance Co. did not have a proper opportunity to defend the action, we would certainly have, under our inherent juris diction, set aside the decree, because the view we would then have taken would be that in the interest of justice the Insurance Co. should be given an opportunity to defend an action, the result of which would cast a liability upon it under the Motor Vehicles Act."
18. In a somewhat similar situation the Court of Appeal in England by majority, reached the same conclusion. The case is reported in Windsor v. Chalcraft (A I R 1955 Bom. 39). In this case also 'a judgment in default of the defendant had been given upon which the underwriters moved the Master who set aside the judgment. On appeal the Judge at Chambers made an order setting aside the order of the Master. On appeal by the underwriters it was held by the Court of Appeal that inasmuch as the underwriters, although not parties to the action were liable under the provisions of the Road Traffic Act, 1930 and 1934 to pay the amount of the judgment to the plaintiff they were persons aggrieved by the judgment and as such were entitled to an order setting aside the judgment and giving them leave to enter an appearance in the action in the name of the defendant or in their own name and to deliver a defence' In this case, according to the conditions of the policy the underwriters were entitled to settle or prosecute or defend any claim in the name of the insured. In the case before me also clause (4) of section 2 of the policy entitles the insurer to undertake the defence of proceedings in any Court of law in respect of any act or alleged offence. I may mention here that section 96 of the Motor Vehicles Act, 1939 with which I am dealing is based upon a similar provision contained in section 10 of the Road Traffic Act, 1934 of England. The difference in the two provisions is not material for the purposes of the present discussion.
19. In another case of the Bombay High Court reported in Royal Insurance Co. Ltd. v. Abdul Mahomed Meharalli ((1939) 1 K B 279), their Lordships went so far as to hold that the object of providing for a notice to the Insurance Company is really twofold. One is to enable it to defend the action in its own right and in its own name if it is challenging the claim on any of the grounds mentioned in section 96 (2). But the other purpose and the object of the notice, which is equally important, is to give intimation to the insurance company that an action has been started against the defendant so as to enable the insurance company to see that it is properly defended and that the decree does not go against the defendant by default or that a decree is not passed collusively. Upon these grounds their Lordships in the exercise of their inherent powers under section 151, C. P. C. permitted the insurance company to defend the action in the Name of the defendant who had left India and was not likely to defend the action.
20. In a Punjab case reported in Vanguard Fire and General Insurance Co. Ltd. v. Sarla Devi and others (A I R 1959 Pb. 297), the main question was whether the insurer, to whom notice was given under sub section (2) of section 96, could resist the suit on grounds other than those mentioned in that clause and their Lordships held that he could not. I may at once say that I am not called upon to decide this question upon which there is some difference of opinion between the Indian Courts. The question that I am dealing with is whether the insurance company can be made liable as if it were a judgment-debtor if notice was not given to it in the suit itself. In the Punjab case though the question was different, enough was said to show that their Lordships under stood the notice under section 96 (2) as a notice of the suit. I may reproduce para. 11 of the judgment at page 301
"As I read section 96, it enables the three parties interested in the litigation arising out of a running down accident to be made parties in one suit. It, however, maintains the respective rights and liabilities of one qua the others subject to the principles involved in compulsory insurance against third party risks. Section 96 (1) makes the insurers liable to pay the amount decreed to the persons entitled to the benefit of the decree provided that the insurers had a notice through the Court that suit had been brought. (Section 96 (2))."
21. The last decision which was cited at the Bar is a judgment of the Supreme Court of India reported in British India General Insurance Co. Ltd. v. Captain Itbar Singh and others (A I R 1959 S C 1331). Their Lordships while dealing with the question whether the insurer was entitled to take any defence which is not specified in subsection (2) of section 96, answered the question in the negative in para. 8. But dealing with the question of hardship which might result to an insurance company in a given case their Lordships proceeded to observe as follows in para. 16 of their judgment
"We are furthermore not convinced that the statute causes any hardship. First, the insurer has the right, provided he has reserved it by the 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."
Their Lordships did not decide the question whether in the absence of such a condition in the policy the Court can, in the exercise of its inherent jurisdiction, permit the insurer in a proper case to defend the action in the name of the defendant upon grounds other than those mentioned in subsection (2) of section 96. But as I have said that question is not before me. I may, however, refer to a passage in para. 4 of the judgment of the Supreme Court in support of the view that I have taken that the word "proceedings" in subsection (2) of section 96 refers to the proceedings resulting in the judgment in the suit. This is what their Lordships said
"It will have been noticed that subsection (1) of section 96 makes an insurer liable on the judgment obtained by the injured person against the assured. Subsection (2) provides that no sum shall be payable by the insurer under subsection (1) unless he has been given notice of the proceedings resulting in that judgment, and that an insurer who has been given such a notice shall be entitled to be made a party to the action and to defend it on the grounds enumerated."
22. The second argument of Mr. Valiani was based on the latter part of subsection (2) of section 96 which -reads as follows
". . or in respect of any judgment so long as execution is stayed thereon pending an appeal."
Mr. Valiani attempted to argue that the effect of this was that in cases where a judgment had been delivered and the execution had been stayed it-was still possible for the plaintiff to give notice to the insurance company and upon this being done the insurer will be liable as a judgment-debtor. The contention on the face of it is without any substance whatever. As I have indicated earlier, the main subsection (2) consists of two clauses and it has been provided firstly, that no sum shall be payable in respect of any judgment in which notice of the proceedings has not been given, and secondly, in respect of any judgment so long as execution is stayed thereon pending an appeal. The two clauses are joined by the word "or" and the words "in respect of any judgment" have been prefixed to both the clauses. In fact, in section 10 of the Road Traffic Act of 1934, referred to above, these two clauses are separately numbered. All that the second clause means is that if a judgment has been given and the execution thereof has been stayed pending an appeal the insurer shall not be liable to pay the amount of the judgment until the appeal is decided stay-order is vacated. I may add that what I have said above further strengthens my conclusion upon the first contention of Mr. Valiani, namely that the proceedings referred to in the first clause relate to the proceedings in the suit before the judgment is delivered. The first clause relates to the proceedings in the suit up to the point of judgment' and the second clause deals with the post-judgment period, namely appeal and execution.
23. For the reasons given above I hold that the insurance company in this case will not be liable as a judgment-debtor. In the result the defendants appeal is only allowed to the extent that the decree against the defendant No. 4 is set aside. In all other respects the decree of the trial Court is upheld and the defendants' appeal is dismissed. Defendants 1, 2 and 3 shall bear the plaintiffs' costs of this appeal.
WAHIDUDDIN AHMAD,
J.-I have had the advantage of going through the judgment proposed by Faruqui, J., in this appeal I agree that the appeal of appellant No. 4. who was defendant No. 4 in the original suit, be allowed and the decree against him be set aside. I further agree that the appeal of the rest of the appellants be dismissed and appellants Nos. 1-3, who were defendants Nos. 1-3 in the original suit,' should bear the costs of this appeal.
During the course of the hearing of this appeal a subsidiary question, which has no direct bearing on the decision of this appeal, also arose out of an application made by the appellants on May 4, 1960 under section 96 of the Motor Vehicles Act. By this application the appellants gave a notice under section 96 (2) of the Motor Vehicles Act to Messrs Asian Mutual Insurance Company Limited of Karachi, with whom the appellants' bus No. KAP-1753 was insured under policy No. H.819, dated April .20, 1954. This application is opposed by the Insurance Company. It is contended on their behalf that the notice issued. to them may be discharged as it was not issued through Court before the judgment was given in the suit. The question not being free from difficulty, we issued a notice to Mr. Syed Muhammad Sadiq, an Advocate of this Court, to appear as amicus curiae before us. After hearing the learned counsel for the parties and Mr. S. M. Sadiq I have come to the conclusion that the notice given to the Insurance Company is perfectly valid and proper and should not be discharged. Faruqui, J., in this connection has expressed a contrary opinion and has held that the Insurance Company in this case will not be liable as a judgment-debtor. It is unfortunate that I have not been able to persuade myself to agree with this view. I will, therefore, with utmost respect, record my own views separately on this particular question.
The question that arises for consideration is whether a notice about the bringing of the proceedings, as contemplated under section 96 (2), Motor Vehicles Act, given through Court in execution proceedings or in appeal will be valid. The answer of this question depends on the interpretation of the provisions of section 96 of the Motor Vehicles Act. This provision has been reprodued in extenso in the judgment of Faruqui, J., I shall, therefore, refrain from reproducing it. In order to appreciate the question under consideration it will be convenient at this stage to mention the legal rights and liabilities of the parties before the provisions of section 96 were incorporated in the Motor Vehicles Act of 1939. Before this provision the remedy of a victim in a running down accident was only against the owner of the Motor Vehicle who was directly or vicariously responsible for the injury. At common law, the injured person could not enforce any claim against the Insurance Company. In Halsbury's Laws of England, (Ed. I1I), Volume XXI1, para. 696, the legal position of the parties in such matters is stated as under :-
"At common law, where a person insured under a liability insurance policy became legally liable for injury or damage sustained by third party, the third party not being a party to the contract of insurance, had no right either to proceed directly against the insurers, or to attach, by garnishee proceedings or otherwise, the moneys payable by the insurers to the assured ; nor did equity put him in any better position, either in relation to the insurers, if they still held the money, or in relation to the assured, if he had been paid. In the event therefore of the assured's insolvency, the policy money became part of his general assets and, even where the policy money formed the whole of the assets, the third party ranked as an ordinary creditor only. Consequently, a position of great hardship was created, and this led to the progressive introduction of a limited system of statutory subrogation, by which, in the event of the insolvency of the assured, the third party was made entitled to be paid the policy money, and, if necessary, to enforce the policy against the insurers. The object was to secure that anything recoverable from the insurers enured for the benefit of the third party concerned, not of the creditors generally."
This rule of common law was also followed in this country and the unanimous view of the Courts in this sub-continent before the incorporation of the above provision of law was that the third party was not entitled to sue the Insurance Company, and the Insurance Company also was not entitled to sue the third party to enforce the contract of insurance. The result of this was that the injured person had only a right to proceed against the assured for damages, and in such suit the insurers could not intervene. Similarly, the injured party could not implead the insurers as defendants on the ground that the compensation fixed between the injured and the assured person by virtue of the contract between them was finally to be paid by them. This being so, the injured person could not claim any right in respect of money paid to the assured under the insurance policy by the insurers.
In order to safeguard their interests the insurers, who had ultimately to meet the liability of the assured persons, inserted a clause in the policy enabling them to take over the conduct and control of defence in such proceedings on behalf of the assured. But even under this clause the insurers could defend the action against the assured in his name, and in England the position of insurers was treated as that of strangers in such a suit. In view of the above legal position in this sub-continent in running down accidents, at first the injured used to sue the assured for compensation for his tortious act, and it was open to the assured in such suit to avoid his liability on all grounds open to him under the law. In case the assured was held liable for the claim of the injured person, he became entitled to enforce the contract of insurance by claiming indemnity for the loss sustained by him.
The above-mentioned legal position resulted in multiplicity of proceedings and caused hardships to the parties. In order to avoid these hardships, the Legislature in England brought legis lation to safeguard the interests of third parties. But this legislation was found to be insufficient to protect the interests of third parties who, under it, could sue the insurers only when the insured became insolvent. A more drastic provision was accordingly enacted in England. Compulsory insurance in relation to motor vehicles was imposed. It further imposed upon insurers once a certificate of insurance has been issued to the person effecting the policy the obligation to pay, up to a prescribed limit, a sum to third parties on a judgment against the assured. But this obligation was limited by certain conditions and qualifications. It was in this background that in this country in Chapter VIII of the Motor Vehicles Act, provisions about the compulsory insurance of third party risk were introduced. In these provisions it was made compulsory for the owners of Motor Vehicles to insure them against third party risk. In section 95, the requirements of the policy and limits of the liability of insurers under such policies were laid down. Under section 97, the insurers were directly made responsible to third parties in case of the insured becoming insolvent or bankrupt. Section 96 provides that the insurers under certain circumstances are under an obligation to pay the amount decreed against the assured in respect of third party risks. It would, therefore, be noticed that the object of these provisions of law was to protect the interests of third parties and to get the liability of the Insurance Company determined under the insurance policies in the same proceedings.
Now, as my learned brother Faruqui, J. has pointed out, section 96 of the Motor Vehicles Act, has been divided into a number of subsections. Section 96 (1) of this Act declares that if an Insurance Company has issued a certificate under sub section (4) of section 95 in favour of the person by whom the policy has been effected and the judgment in respect of any liability, as is required to be covered by a policy under clause (b) of subsection (1) of section 95, is obtained against any person insured by the policy, then notwithstanding that the insurer may be entitled to avoid or cancel, or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable there under, as if he were the judgment-debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments. It would thus be noticed that an Insurance Company is made liable to pay the amount of the decree Without being impleaded as a party to any suit brought by the injured person against the assured. In sub section (2) of section 98, this liability has been made conditional subject to the fulfillment of certain requirements. These requirements are that no sum shall be payable by an insurer under sub section (1) in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice through the Court of the bringing of the proceedings. The insurer on receipt of such notice can apply to be impleaded as party to those proceedings to defend the action on any of the grounds mentioned in subsection (2), clauses (a) to (e). But these grounds have nothing to do with the merits of the case and are codified only to questions such as the can cellation of, the policy and breach of a specified condition of the policy, or that the policy was void on the ground that it was obtained by the non-disclosure of a material fact, or by represen tation of a fact which was false in some material particular. It will thus be observed that the most important feature of this provision of law is that an insurer, on joining as a party is not entitled to resist his liability on the merits of the case.
But in spite of this, his obligations are limited by certain important qualifications and conditions. The first condition is that there must be a judgment against the insured ; the second is that the judgment must be in respect of a liability which is required to be covered by compulsory insurance. Then certain qualifications must be fulfilled in order to make the insurer liable on a judgment in favour of a third party, the most important among them being that the insurer must be given notice through Court of the bringing of the proceedings in which the judgment is given either before or after the commence ment of those proceedings. This is apparent from section 96 (2) of the Motor Vehicles Act, which is reproduced below :-
"(2) No sum shall be payable by an insurer under sub section (1) in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice through the Court of the bringing of the proceedings, or in respect of any judgment 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) * *
(b) * *
(c) * *
The contention of Mr. Riazul Hasan that the object of the notice, besides enabling the insured to defend the action in his own right on any of the - grounds mentioned in section 96 (2), is to enable the Insurance Company to see that the decree against the insured is not passed collusively, cannot be accepted in the face of the terms of the above-mentioned subsection. The learned counsel in this respect relied on a decision of the Bombay High Court in Royal Insurance Company v. Abdul Mahomed (A I R 1955 Bom. 39). But the view enunciated in this decision is opposed to the view expressed by the Indian Supreme Court in B. I. G. Insurance Co. v. Ilbar Singh (A I R 1959 S C 1331). It was contended before, the Indian Supreme Court that the Insurance Company on being added as a defendant in a third party suit, was entitled to take all legal defences excepting those expressly prohibited by section 96 (2). This contention was repelled and it was held that the only manner of avoiding liability provided for in subsection (2) is through the defences mentioned therein, and that other defences are not open to an insurer.
Mr. Riazul Hasan, in support of his contention has also relied on the case of Surup Singh v. Nilkant Bhaskar (A I R 1953 Bom. 109) and of Windsor v Chaleraft ((1939) 1 K B 279). But none of these decisions have any hearing on the point involved in this matter. The right to defend an action by an insurer in the name of the assured has nothing to do with sub section (2) of section 96 of the Motor Vehicles Act. It has an independent footing, and has its source in the common law of England under which, if a policy empowers an insurer to take over. in the name and on behalf of the assured, the conduct and control of the defence of the proceedings, he is entitled to defend the suit in the name of the assured by indemnifying him for the costs of the litigation. It is, therefore, apparent that the only object of section 96 (2) is to provide an opportunity to the insurer to avoid his liability on those grounds which are mentioned in those clauses, and on no other grounds.
This being the legal position, the next question arises whether the notice contemplated under section 96 (2) through the Court should be given to the insurer before a judgment is passed in a third party suit, or can it also be given in execution proceedings or in an appeal against such judgment. This question has received my anxious consideration, and it seems to me that on the terms and phraseology of subsection (2) of section 96 of the Motor Vehicles Act, a notice given to the insurer in the execution proceedings or in appeal will be perfectly valid and an insurer will not be able to avoid his liability on the ground that the notice was not given to him before the conclusion of the proceedings in which the judgment was given. It is quite clear to me that the only way in which the insurer can avoid his liability in such cases is that he must contest his liability on any of the grounds mentioned in the subsection, in the manner provided therein.
I shall now examine the qualifications under which an insurer can avoid his liability in respect of the judgment mentioned in section 96 (1) of the Motor Vehicles Act. The only qualification laid down in subsection (2) of section 96 is that no sum shall be payable by an insurer under subsection (1) in respect of any judgment unless before or after the commence ment of the proceedings in which the judgment is given the insurer had notice through the Court of the bringing of the proceedings, 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 grounds mentioned therein. It is not disputed that a notice before the commencement of the proceedings in which the judgment is given, though through Court, will not and cannot be given in the proceedings in which the judgment is ultimately passed. On the other hand, such notice can only be given by a separate application with the object of informing the insurer of the intention of the third party of bringing proceedings against the assured to claim compensation in a running down accident. The question arises : whether on receiving such notice, the insurer is entitled to contest such application and wk the Court which issued the notice to absolve him of all the responsibilities on the grounds mentioned in section 96 (2). Before considering this question, it may be mentioned that under the English law, the position is entirely different. Under it, the insurer is not entitled to be added as a party to the proceedings in which the judgment is given. The only requirement under the English law is that a notice must be given either before or after the com mencement of the proceedings in which the judgment is given to the insurer. It is not necessary under the English law to give such notice through a Court of law. Then, under the English law the insurer instead of getting himself impleaded as a party to the third party suit, is required to obtain a declaration by a separate action commenced before or within three months after the commencement of the proceedings in which the judgment was given that he is entitled to avoid his liability on the ground that the policy was obtained by non-disclosure of a material fact or by representation of facts false in some material particular, or if he has avoided the policy on that ground that he was entitled so to do apart from any provision contained in it. Therefore, any decision of the English Courts on the question under consideration is not relevant and can possibly have no bearing on the decision of this matter. In' my opinion under the Pakistan statute, it is open to the insurer to contest his liability by moving the Court to determine his liability in the proceedings in which the application is given: It is not necessary for him to wait till a suit is filed by a third party for establishing his claim against the assured.
Similarly, in my opinion, it is not obligatory on the third party or the assured to give notice of the bringing of the pro ceedings in which the judgment is given before the pronouncement of the judgment. In the first place, there is no time limit fixed in subsection (2) of section 96, secondly, if the notice given before the commencement of proceedings is valid, it is difficult to follow why a notice given after the pronouncement of judgment should be considered to be outside the scope or not in accordance with this provision of law. Mr. Riazul Hasan contended that a notice given after the pronouncement of the judgment will be ineffective because the insurer will not be able to defend the suit on the defences open to him. This contention has failed to impress me for obvious reasons. The only object of the notice is to enable the insurer to contest his liability on certain legal defences open to him. There is little doubt that this can be effectively done and easily achieved even in the proceedings subsequent to the judgment. The position might have been different in case the object of the notice had been to- provide an opportunity to the insurer to defend the suit on merits. But this being not the object, it is difficult for me to appreciate what prejudice would be caused to the insurer if the notice is given to him after the judgment is passed. I am also not impressed by the argument of the learned counsel for the Insurance Company that the words in section 96 (2) : "shall be entitled to be made a party thereto and to defend the, action on any of the following grounds" refer to the stage in the suit before the judgment is pronounced. The very fact that the Legislature has not used the term "suit" but "action" clearly indicates that the right to defend the action, or to contest the liability, was not confined to a particular stage in the a suit. The term "action" in its popular sense is used as denoting action commenced by writ or plaint or application. There is nothing in this subsection to prevent an insurer from becoming a party to the proceedings in which an application to give notice to him is preferred and defend those proceedings or action on the grounds available to him under the above provision of law.
It must also be borne in mind that, according to the well- recognised principle of interpretation of statutes, it is the duty of the Judge to make such construction of a statute as shall suppress the mischief and advance the remedy. In fact, the rule is that even where the usual meaning of the language falls short of the whole object of the Legislature, a more extended meaning may be attributed to the words, if they are fairly susceptible of it. Of course, by this I do not mean to suggest that the statute should be strained. to include cases plainly omitted from the natural meaning of the words. But, if there are circumstances in the Act showing that the phraseology is used in a larger sense than its ordinary meaning, that sense may be given to it. It may further be noted that where the object of a statute is the public safety, the rule of construction is that the wording may be interpreted widely to effect that object : (See Maxwell on Interpretation of Statutes, 10th Ed., pp. 68-69 under the heading Beneficial Construction').
I would, therefore, emphasize that the object of the statute under consideration is to suppress hardships of the third party, namely, if the owner of the motor vehicle is not in a position to meet the liability, he can have recourse for his claim against the Insurance Company to the extent provided under the provisions of the Motor Vehicles Act. In my opinion, if any other con struction is given to the provisions of section 96 (2), the above mentioned object will be clearly defeated, and I am not prepared to give such a construction if it is not warranted by the language of the provision of law under consideration.
I would, now, assume for the sake of argument that the notice contemplated under section 96 (2), Motor Vehicles Act, must be given in the proceedings in which the judgment is obtained by a third party against the assured : the question is whether the proceedings in which the judgment is given, include the execution proceedings or the proceedings in appeal filed against such a judgment. Fortunately, the term "proceedings" has been the subject-matter of a number of judicial decisions. It has been particularly interpreted with reference to section 6 of the General Clauses Act in which it is provided that
"6. Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not-
* ** * * ** *
(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid ;" It was held in Deb Narain Dutt v. Narendra Krishna & Co. (I L R 16 Cal. 267)
"The word proceedings' is a very general one, it is not limited to proceedings connected with civil suits ; but includes, I suppose, proceedings other than civil proceedings, and civil proceedings other than suits. When applied to suits, it may be , used to mean the suit as a whole, or it may be used, and often is used to express the separate steps taken in the course of a suit the aggregate of which makes up the suit."'
In Satghuri v. Mujidan ( I L R 15 Cal. 107) the word "proceedings" in section 6 of the General Clauses Act, as applied to a suit, was held to mean the suit in its entirety, that is, down to the final decree.
It would, therefore, be seen that the word "proceedings" is a very general one and when referred to civil proceedings in the nature of a suit, means the suit in its entirety down to the final decree. In Mungul Pershad Dichit v. Grija Kant Lahiri (ILR 8 Cal. 51) the question before the Privy Council was whether an application for execution was governed, in respect of limitation by the Limitation Act of 1859 or that of 1871, and the Privy Council held that an application for execution is an application in the suit and, therefore, the provision in the latter Act except for suits commenced before a certain date applied to proceedings in execution in such suits. Thus it would be seen that execution proceedings are also considered to be a step in a suit and are considered as proceedings in suits. The same is the position with regard to appeals. In Ratanchand Serichand v. Hanmantra :'. Shivbakas (6 Bom. H C 8,166), a Full Bench of the High Court held that the repeal of an Act under which an appeal lay against a decree did not bar the appeal in a case in which the decree was passed before but the appeal presented after the repealing Act. The learned Judges of the Bombay High Court in this connection observed as under :-
"The question is whether the word proceedings' is sufficiently comprehensive to include a suit in which a decree has been given. We are of opinion that it is, and this opinion is in accordance with the construction of section 2 of the Amended Letters Patent of the High Court, of December 1865, which was adopted by the Court in the case of Framji Bomanji v. Hormasji Barjorji 3 Bom. H C Rep. O C J 49. The words of that section are that all proceedings commenced in the said High Court prior to the date of the publication of these Letters Patent shall be continued and depend in the said High Court as if they had commenced after the date thereof'. A suit is a judicial proceeding, and the word proceedings' must be taken to include all the proceedings in the suit from the date of its institution to its final disposal, and therefore to include proceedings in appeal. It follows, in the judgment of the Court, that in all suits commenced before the passing of the Bombay Courts Act, the procedure must (unless another mode of procedure is expressly substituted by that Act) be the same as it would have been if that Act had not been passed. The appeal, therefore, in the case before the Court must be made, not to the High Court, but to the District Judge to whom the appeal would have lain if the Bombay Courts Act had not been passed."
In another case before Allahabad High Court, viz. Thakur Prasad v. Ahsan Ali (I L R 1 All. 668) it was held by the Full Bench that under clause (6) of the General Clauses Act an appeal is a part of the same proceedings as the thing appealed against. So it will - be noticed that the term "proceedings" used in section 6 of the General Clauses Act with reference to suits has been held to apply both to proceedings in execution of such suits, and the proceedings in appeal. Mr. Riazul Hasan contended that the words "unless before or after the commencement of the proceed ings in which the judgment is given" mean only the proceedings prior to the passing of the judgment. I have not been able to appreciate why such a limited construction should be given to these words. If the proceedings in which the judgment is given are in the nature of suit, it is quite apparent that the execution proceedings are also a part of such suit and the appeal filed from the judgment passed in that suit will also be considered to be included in the term proceedings'. In my opinion, in view of this legal position, it would be most unfair if such a restricted construction is given to these words.
Mr. Riazul Hasan contended that if the notice is given at the stage of appeal, it will not be possible for the Insurance Company to contest its liability, because in the appellate Court no pleadings are allowed to be filed. This contention has no substance. If a notice is given to an Insurance Company in appeal. The Insurance Company can easily come forward and say that it wants to contest its liability on the grounds mentioned in section 96 (2) and the case be remanded to the trial Court for consideration of its liability. This prayer would be quite legitimate and the appellate Court can remand the case for the decision of such objection and there is nothing in law to prevent it from doing so.
I have considered this question from a different angle also. Suppose a judgment is passed in a third party suit and an appeal is filed as in the present case against that judgment by the assured in respect of his liability. In law, a judgment and decree passed in appeal takes the place of a judgment and decree passed by the subordinate Court. The judgment and decree which will be executable will be that of the appellate Court, and not of the trial Court. Thus, it is quite obvious that the words "legal proceedings in which the judgment is given", referred to in section 96 (2), include the judgment passed in appeal, and it is not possible for me to accept that that is not the legal position under the Code of Civil Procedure.
I have also in arriving at my conclusion considered the effect of subsection (2-A) of section 96 of the Motor Vehicles Act. This subsection refers to suits brought on foreign judgments. It lay down that such judgment will not be binding unless before or after the commencement of the proceedings in which the judgment is given, the insurer had notice through the Court in the foreign country of the bringing of the proceedings and had a right to be made a party to the proceedings and to defend the action on the, grounds similar to those specified in subsection (2). With great respect, notice in such case given in a suit brought on foreign judgment cannot be of any avail or purpose. Such suit cannot be considered by any stretch of argument as the pro ceedings in which the judgment was given.
In these circumstances, I am quite clear in my mind that the objection of Mr. Riazul Hasan that the Insurance Company's liability has been extinguished because no notice was given to it after the commencement of the proceedings before the passing of the judgment has no substance, and must be rejected. In this view of the matter, 1 would hold that the notice given by the appellants to the insurance Company in this appeal is a perfectly valid notice and their liability on the judgment passed by this Court in this appeal subsists and has not extinguished.
It may be mentioned that the Insurance Company has not raised any objection.before us that they want to contest their liability on any of the, grounds mentioned in section 96 (2). The only objection before us is that they are not liable to pay the amount of the decree because no notice was given to them before -the judgment was passed by the trial Court. I have already discussed this aspect of the question and have found no force in it.
QADEERUDDIN AHMED,
J.-This is a reference, if I may say o with respect, by two able Judges of this Court, namely, Wahiduddin Ahmed, J. and A. S. Faruqui, J. It has been made in an appeal in which the Asian Mutual Insurance Company denied its liability as the insurer of a bus of the appellants to pay the sum that was decreed in favour of the respondent on account of the death of Shamsur Rehman, who was killed by the bus. The Company's stand was that no liability was created against it because no notice in terms of subsection (2) of section 96 of the Motor Vehicles Act, 1939 was given to it before the judgment of the trial Court. Admittedly, notices were given to the Insurance Company through Court, firstly, during the execution proceedings and then during the pendency of the appeal, but not earlier, A. S. Faruqui, J. has upheld the objection and come to the conclusion that the Company was not liable to pay the decretal amount, but Wahiduddin Ahmed, J. has held in a separate judgment, that the objection has no force in it. Their difference of opinion has resulted in this reference, which has been framed by the learned Judges as follows :-
"In order that the insurer may be held liable as if he were the judgment-debtor in terms of section 96 (1) of the Motor Vehicles Act, whether the notice required under section 96 (2) must be given in the suit itself, where no such notice has been given before the institution of the suit, or whether such a notice in appeal from the judgment of the trial Court, or in the execution proceedings, will satisfy the requirements of section 96 (2) so as to make the insurer liable as the judgment /debtor "
2. I have the benefit and have had the pleasure of studying both judgments. No effort was spared by the learned Judges for going deep into the question and taking a comprehensive view of the law. Section 96 of the Act has been interpreted after applying all the three methods of interpretation which are generally recognised and are. acceptable to reason, namely analytical, by examining several parts of the section ; historical, by setting out the background of the provision to discover historical trends and to seek guidance from them ; and philoso phical, by looking for the objects of the provision and keeping them in view to find the meaning of the language. It is a notable feature of the judgments that no doubt is entertained in either of them as to the correctness of the conclusions, although they are inconsistent with each other. These carefully written judgments provide a stimulating study of the processes of judicial mind.
3. They remind me of the following passage quoted by Crawford, at page 286 of his work, viz. Statutory Construction (1940 Ed.) from Gray's book : The Nature and Source of the Law :- .
"The dependence of the statutes upon the will of the Judges for their effect is indicated by the expression often used, that interpretation is an art and not a science ; that is, that the meaning is derived from the words according to the feeling of .the Judges, and not by any exact and foreknowable processes of reasoning. Undoubtedly rules for the interpretation of statutes have been sometimes laid down, but their generality shows plainly how much is left to the opinion and judgment of the Court."
In the sense of this quotation, Judges sometimes play the role of artists, and let me recognise that when they do so, their souls are pervaded with sincerity as much as those of the artists. They give expression to what they see and feel while the transparency of their sincerity makes personal preferences indistinguishable from their objective views. This influence of personal preferences on judicial pronouncements makes me conscious that my effort may amount to nothing more than adding another individual preference to one or the other of the two views. I shall, therefore, attempt to avoid this by choosing a process of reasoning which should excluded as much as is practicable my personal incli nations including those of them which may be inarticulate.
4. To achieve this object I have asked myself the question as to what is the best process of thought that should be adopted and have been helped in finding the answer by a quotation from the judgment of Lord Greene In Re Debtor ((1948) 2 All E R 533) reproduced by Maxwell at page 2 of his book on Interpretation of Statutes (10th Ed.), as follows :-
"If there is one rule of construction for statutes and other documents, it is that you must not imply anything in them which is inconsistent with the words expressly used."
The words and combination of words used in subsection (2) of section 96 will be the surest guide as well as decisive, provided that their meanings taken as a whole do not produce any ambiguity or uncertainty. I shall not rely on equitable inter pretation, because it is likely to expose me to the temptation of ascertaining inter-party equities according to my inclinations and then collecting and adjusting all that can be found to support them. Wahiduddin Ahmed, J. has found the equities to be that hardship to the third-party, namely the appellants, for whose benefit the insurance was taken, must be eliminated as the first object of the law, and that this object would be defeated if notice was held to be necessary before judgment was given by the trial Court : (See paragraph 14 of his judgment). A. S. Faruqui, J. has, on the other hand, emphasized that he could not "agree that the framers of the Act contemplated the defending of the action at the stage of the appeal", because the Insurance Company could not get a reasonable opportunity of defending the act at that stage, and that, therefore, the Company should have had notice before the judgment was delivered by the trial Court: (See the middle portion of paragraph 14 of his judgment) . They have with equal facility arrived at these conflicting conclusions historically also : See paragraphs 4 to 6 of the judgment of Wahiduddin Ahmed, J. and paragraph 16 of the judgment of A. S. Faruqui, J.'' because the interpretation of historical events is as much open to the influence of personal pre-disposition as equitable interpretation. I cannot entirely disagree with these conclusions on their respective equitable merits, and if I did disagree with any of these equitable grounds, my own preference for one or the other of them would not be conclusive. I cannot rely on any precedent for answering the question that has been raised in the reference, though there are suggestive expressions in several of them, because in none of those precedents which have come to my notice any observation has been made with a full realization that the question did or could arise and that it was being deliberately answered in it. Using merely suggestive expressions to support one or the other view may amount to manipulating them.
5. I would, therefore, like to see if there is any sufficient clue in the language of the section itself to directly lead me to a conclusion regarding the time at which notice ought to have been given to the insurer. If such a clue is found, then that will be decisive. In this respect I may be following a somewhat different method from those which were adopted by my learned brothers, but I should not be understood to be preaching theoretical "positivism" because my effort will be to escape from "the bewitchment of our intelligence by" the spell of the language and to be guided by words merely - as the surest available vehicle of legislative intent.
6. There are two words in subsection (2) of section 96 of the Act which have impressed the learned Judges differently ; they are : "proceedings" and "action". I shall guard myself against the chance of falling into an error by the ambiguity that may be dwelling in them by giving full effect to the other words and combination of words about which no doubt has been raised either in the two judgments or during the arguments addressed to me. This process is likely toe reveal the true scope of these two words also. I need not pause to justify the adoption of this process because it is a well-known rule of analytical inter pretation that effect should be given to every word and expression in a statute, but I may state that giving full effect to an expression includes the consideration of its true implications This is not a new proposition, because Crawford has stated at page 267 that-
" . true implications are as much a part of the language which makes -up the statute as the meanings of the various words are a part of it ;"
and has explained the reason, on the same page, as follows :-
"The reason for allowing the Court to give effect to necessary implications is quite apparent. Many matters of minor detail are often omitted from legislation. If these details could not be inserted by implication, the drafting of legislation would be an interminable process and the legislative intent would likely be defeated by a most insignificant omission."
7. Taking up the examination of section 96, which has been reproduced in extenso by A. S. Faruqui, J. in paragraph 11 of his judgment, I may state for convenience of reference that subsection (1) of that section provides that after a certificate of insurance is issued in favour of a person by whom a policy of third-party risk is taken and then a judgment is obtained in respect of the liability created by the certificate, the insurer, is bound to pay the decretal amount to the person entitled to the benefit of the decree as if he were the judgment debtor : provided that the requirements of the other provisions of the section are also complied with. There is no doubt or dispute about this provision. The controversial part of the section is subsection (2) only, which I reproduce here as I read it for the present purposes :-
"(2) No sum shall be payable by an insurer under sub section (1) in respect of any judgment unless before or after the com mencement of the proceedings in which the judgment is given the insurer had notice through the Court of the bringing of the proceedings,
or
in respect of any judgment s o long as execution is stayed thereon pending the 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 the policy was cancelled , . . . .; or
(b) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely :-
.
.
.
(c) that the policy is void on the ground that . . . . ."
8. Wahiduddin Ahmed, J. has come to the conclusion that the notice required to be given under the above-quoted sub-section (2) can be served after the judgment mentioned in the subsection has been given, because the word "proceedings" has a wide meaning and includes the proceedings of a suit as well as the proceedings of an: appeal. His conclusion, therefore, is that the required notice can be given during the execution proceedings or in appeal : (See the last part of paragraph 15 of his judgment). He has observed that this view finds support on the further ground that-
"The term action' in its popular sense is used as denoting action commenced by writ or plaint or application: There is nothing in this subsection to prevent an insurer from becoming a party to the proceedings in which an application to give notice to him is preferred and defend those proceedings or action on the grounds available to him under the above provision of law."
The words "by writ or plaint or application" in the above quotation are notable.
9. Mr. Riazul Hasan pointed out that Wahiduddin Ahmed, J. has relied on section 6 (e) of the General Clauses Act, and some of those judgments that were given under it for interpreting the word "proceedings", and made a mild grievance on the ground that, according to counsel, such an argument was not advanced in appeal. I would dispose of this grievance by pointing out that even if counsel was right and the argument was not advanced, a Judge is entitled to himself study the law and make use of his own legal knowledge. In this case, counsel had little reason to feel aggrieved because he had the opportunity to represent his point of view during the hearing of the reference.
10. Counsel argued that the wide meaning assigned to the word "proceedings" in the judgment of Wahiduddin Ahmed, J. was not satisfactory because the expression used in clause (e) of section 6 of the General Clauses Act was :
"any . . . . . legal proceeding"
in which the word "any" made an important difference. Section 96 (2) of the Motor Vehicles Act, on the other hand, had an entirely different context, because in it the word "proceedings" was used with reference to those legal. processes in which judgment was given against the insured. The subsection has provided firstly that
"No sum shall be payable by an insurer under sub section (1) in respect of any judgment . . . . . "
Secondly, it has laid down the condition that-
"Unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice . . . ."
Thirdly, it has qualified the "notice by providing that' it should be-
"Of the bringing of the proceedings".
Fourthly, it has protected the insurer by giving him the oppor tunity to defend himself as follows :-
"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 . . . ."
Thus, the word "proceedings" is restricted to those of the proceedings in which any judgment is given by which the liability of the insured is created in respect of the certificate of insurance. Such a judgment can neither be given in execution proceedings, nor in proceedings commenced by an application to give notice to the insurer. It may, of course, be given in an appeal confirming, varying or reversing the judgment delivered by the trial Court, but proceedings in appeal according to the above quoted views of Wahiduddin Ahmed, J. himself, though included in the generic word "proceedings" are not included in the term action", because an appeal is not "commenced by a writ or plaint or application". This means that the total effect of both the words : "proceedings" and "action", which in their context refer to the same legal process, is that proceedings in execution as well as those in appeal are excluded for the purpose of notice.
11. I have reproduced the above argument because without changing the meanings assigned by Wahiduddin Ahmed, J. to the words "proceedings" and "action" it leads to the conclusion at which A. S. Faruqui, J. has arrived in his judgment.
12. Supposing for the sake of argument that the above mentioned reasons are not adequate to so exclude appellate and execution proceedings, effect will still have to be given to the requirements of subsection (2) that notice to be given to the insurer must be of "the commencement of the proceedings" or "the bringing of the proceedings"; which means that the con templated notice must have a substantial relationship with the initiation of the proceeding. For this connection of the notice with the commencement of proceedings, it is immaterial whether or not the word "proceedings" includes the whole stretch of those legal processes which begin from the institution of a suit and extend to appeal or execution, because if the notice is given after the judgment of the trial Court is delivered, it will be a notice during the proceedings and not truly a notice of the commencement or of the bringing of the proceedings. If the notice, which is given after judgment, says that "proceedings have commenced" or that "proceedings have been brought", then it will convey misleading information, because at least the first and the Most important part of the proceedings would have been at that time over. The corresponding English provision, which is section 10 of the Road Traffic Act, 1934, provides that notice should be given.
"Before or within seven days after the commencement of the proceedings in which the judgment was given."
There is no such restriction in section 96 (2), but a notice that is given after the judgment is delivered cannot in the real sense be said to be a notice of the commencement of the proceedings in which the judgment was given because such a notice will be too far removed from the beginning of the proceedings and hardly true to the situation having regard to conclusion by judgment of the first part of the proceedings, to be described as a notice of their initiation.
13. Moreover, section 96 (2) says that the insurer to whom the notice is given shall be entitled to be made a party to the proceedings and to defend the "action". As the words "the' action" refer to the proceedings in which any judgment is given by which the liability of the insured in respect of a certificate) of insurance is created, the insurer is expected to have the opportunity of defending himself against any such judgments if more judgments than one are given in the course of the proceedings, which may, according to circumstances, include more appeals than one, then he should have the opportunity to defend himself against all of them, and not against the second judgment or the third judgment only. This is irrespective of what defences may be open to him and how effectively he may be able to raise them. Such an opportunity could be afforded to him only if he had notice before the first judgment. The length and meandering course is of their commencement because there will be one commencement at the nearer end. In this sense-which I believe is the sense of the language of the provision the contemplated commencement coincides with the institution of the suit.
14. This restricted sense is brought out in the subsection by substituting the word "action" for the word "proceedings" in relation to defence by the insurer. The word "action" has not been used in our Code of Civil Procedure to denote any particular type of proceedings. It has several statutory definitions in English Law, but in its popular sense it has a restricted meaning in English terminology. A. S. Faruqui, J. has reproduced in paragraph 14 of his judgment some of the meanings of the word as given at page 2 of Volume I of Halsbury's Laws of England (Ed. III). After setting out several meanings of the word, the author has stated
"It is, however, generally used in a popular sense as denoting a civil action commenced by writ or plaint."
Commencement of proceedings by an application has not been included by the author in this sense of the term. The manner in which an action is terminated is described by the author at page 6 as follows
"An action, in the strict sense of the term, ends at judgment. Thus a provision as to the costs of an action' does not affect the costs of an appeal against the judgment therein ; so it was ruled that a release of all actions' would not bar execution upon a judgment already obtained ; secus (contrariwise) a release of all suits', for without suit or prayer' none could have execution".
This means that an action' is terminated by judgment and does not include execution proceedings, but a suit' includes execution proceedings. The author has pointed out at pages 21 and 33 that in England there was an ancient procedure of bringing appeals by means of actions of error or false judgment, but those actions were not appeals in the sense in which we under-stand them, because they ,.were independent actions in which there was no continuity from the original proceedings and the person appealing against the judgment of an inferior Court was called. the plaintiff, in error'. Execution applications and appeals are thus not included in the term action'.
15. The insurer can, of course, raise only those defences which are set out in causes (a), .(b) and (c) of subsection (2) of section 96. A glance at them will show that thev are all defences of fact and law, namely, cancellation of the policy of insurance, breach of certain conditions and nullity of the policy of insurance owing to suppression or misrepresentation of material facts. The opportunity afforded by law to raise these defences cannot be the contemplated opportunity if the insurer gets the chance of) raising them for the first time in first-appeal or revision, or before the Supreme Court, or before the executing Court. His right to raise these defences at the proper time is assured by the expression "to defend the action" or, in the terminology of our Code of Civil Procedure, the suit up to its conclusion by, judgment.
16. The word suit' has not been used in the subsection because the pattern of section 10 of the Road Traffic Act, 1934 of England has been closely followed, but if the terminology of our Code had been used, it would have been necessary to qualify the word suit' by some phraseology to exclude from its execution proceedings which are ordinarily considered to be a continuation of the suit.
17. Thus, giving full effect to the language of the provision and taking into consideration the necessary implications of the words and combination of words that are used in it, the answer that follows to the question under reference is that
The notice required to be given to the insurer in terms of section 96 (2) of the Motor Vehicles Act; 1939 to make him liable as if he were the judgment-debtor in respect of the liability that is created by a certificate of insurance, must be given before the judgment is delivered in the suit, and not at any time afterwards.
A. H.
Dealing with a matter like this? Connect with a verified advocate in your city — free on SJP Lawyers Directory.
🔍 Find a Lawyer