Mantoo Sarkar vs Oriental Insurance Co.Ltd.& Ors on 16 December, 2008

Supreme Court of India
Mantoo Sarkar vs Oriental Insurance Co.Ltd.& Ors on 16 December, 2008
Author: S Sinha
Bench: S.B. Sinha, Cyriac Joseph
                                                                       REPORTABLE

                   IN THE SUPREME COURT OF INDIA

                   CIVIL APPELALTE JURISDICTION

                   CIVIL APPEAL NO. 7318 OF 2007
     (Arising out of Special Leave Petition (Civil) No. 18201 of 2007}



Mantoo Sarkar                                            ..... Appellant


            Versus


Oriental Insurance Co. Ltd. and others                         .....
Respondents




                             JUDGMENT

S.B. SINHA, J.

1. Leave granted.

2. Interpretation and/or application of Section 166 (2) of the Motor

Vehicles Act, 1988 (hereinafter referred to as `the Act’ for the sake of

brevity) in regard to territorial jurisdiction of a Tribunal is the question

involved herein.

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The said question arises in the following factual matrix.

3. Appellant had been travelling as a passenger in a bus, bearing

registration No.MP-04-7915, belonging to Madhya Pradesh Road Transport

Corporation. It met with an accident in the town of Faridpur in the District

of Uttar Pradesh having collided with truck bearing No.HR-38-E-5554.

Appellant suffered grievous injuries. A First Information Report was

lodged against the driver of the said truck under Sections 279, 338 and 427

of the Indian Penal Code.

Indisputably the said truck belonged to respondent No.2 and was

registered at Faridabad. It was insured with respondent No.1-company.

Appellant was working as a skilled migrant seasonal agricultural labourer.

He had been earning his livelihood at the relevant time by performing his

job as a labourer in the work of extracting sand gravel from a river named

`Hola River’ near Beri Pada, Lalkuan, Distt. Nainital, Uttaranchal. He is

said to have been living for a long time at Pilibhit in the State of Uttar

Pradesh. Indisputably, after he remained in the district Hospital at Bareilly

as an indoor patient upto 28th July, 2003, he was shifted to Prabhakar

Hospital in Pilibhit. He underwent several operations.

2

4. Appellant filed a claim petition before the Motor Accident Claims

Tribunal, Nainital (for short `the Tribunal’) claiming a sum of

Rs.23,90,000/- (Rupees twenty three lakh ninety thousand only) alongwith

interest @ 18% per annum from the date of the accident till the date of

actual payment.

5. Respondent No.1 has a branch office at Nainital.

The conductor of the bus and the driver of the truck examined

themselves before the Tribunal as witnesses. No oral evidence was,

however, adduced on behalf of the first respondent. One of the questions

which, only the first respondent raised and no other, was lack of territorial

jurisdiction on the part of the Tribunal.

The learned Tribunal inter alia on the premise that the jurisdiction

conferred on it, having regard to sub-section (2) of Section 166 of the Act is

wide and the insurance company having a branch office at Nainital, it had

territorial jurisdiction to determine the claim petition. It made an Award of

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Rs.2,40,000/ (Rupees two lakh forty thousand only) in favour of the

claimant.

6. The High Court, however, on an appeal preferred thereagaisnt by the

first respondent, opined –

“It is a well settled position of law that the claim
petition can only be entertained and filed before a
court having the territorial jurisdiction to hear the
matter. The claimant cannot take the matter to
different State on the pretext that his case would
be disposed of expeditiously in that State or
District without having the territorial jurisdiction.
The learned counsel for the claimants submitted
that in case the Court comes to the conclusion that
the Tribunal, Nainital had got no territorial
jurisdiction to dispose of the matter, the claimants
may be given liberty to file a fresh claim petition
before the competent Tribunal.”

On the basis of the said finding it was held that Motor Accident

Claims Tribunal, Nainital had no territorial jurisdiction to entertain the said

claim petition.

7. Mr. Shailendra Singh, learned counsel appearing on behalf of the

appellant would contend that the High Court committed a serious error in

passing the impugned judgment in so far as it failed to take into

4
consideration the evidence of the appellant (PW-1) wherein he clearly stated

that he had been working at Beri Pada, Lal Kuan in the District of Nainital,

although he had not given his Lalkuan’s address in his claim petition having

been doing his work as a labourer. The evidence of the said witness having

been accepted by the learned Tribunal, the High Court should not have

interfered therewith.

8. Mr. Ashish Wad, learned counsel for the respondent, on the other

hand, would contend that the accident having taken place at Bareilly, the

bus belonging to Gwalior depot of the Madhya Pradesh Road Transport

Corporation, the office of the owner of the truck being at Gurgaon, office of

the insurance company being at Delhi, the Tribunal at Nainital did not have

any territorial jurisdiction.

9. Section 166(2) of the Act reads as under :-

“166 – Application for compensation

(2) Every application under sub-section (1) shall
be made, at the option of the claimant, either to the
Claims Tribunal having jurisdiction over the area
in which the accident occurred or to the Claims
Tribunal 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

5
such form and contain such particulars as may be
prescribed:

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.”

10. The said Act is a special statute. The jurisdiction of the Tribunal

having regard to the terminologies used therein must be held to be wider

than the civil court.

A claimant has a wide option. Residence of the claimant also

determines jurisdiction of the Tribunal.

11. What would be a residence of a person would, however, depend upon

the fact situation obtaining in each case.

12. Appellant had been a resident of Pilibhit. It is in the State of Uttar

Pradesh. He being a migrant labourer accepts job wherever he gets and

resides there. He, admittedly, had been working in Nanital district and

residing there during the period of accident. The fact that he was thus a

6
resident of Nainital in the State of Uttaranchal is neither denied nor

disputed.

13. The High Court unfortunately in its judgment did not assign sufficient

or cogent reason as to why the Tribunal committed any illegality in holding

that he had the jurisdiction to entertain the claim petition.

14. No doubt the Tribunal must exercise jurisdiction having regard to the

ingredients laid down under sub-section (2) of Section 166 of the Act. We

are not unmindful of the fact that in terms of Section 169 of the Act, the

Tribunal, subject to any rules, may follow a summary procedure and the

provisions of the Code of Civil Procedure under the Act has a limited

application but in terms of the rules `save and except’ any specific provision

made in that behalf, the provisions of the Code of Civil Procedure would

apply. Even otherwise the principles laid down in the Code of Civil

Procedure may be held to be applicable in a case of this nature.

15. We say so because ordinarily an appellate court shall not, having

regard to the provisions contained in sub-section (1) of Section 21 of the

Code of Civil Procedure, entertain an appeal on the ground of lack of

7
territorial jurisdiction on the part of the court below unless he has been

prejudiced thereby. Other respondents did not raise any question of

jurisdiction. Although one witness each had been examined on behalf of the

truck owner and owner of the bus, neither a question of lack of territorial

jurisdiction was raised nor the question of any prejudice had been argued.

It is only the first respondent who raised the question of territorial

jurisdiction. However, no prejudice was caused to the appellant by the

claim petition being tried by the MACT at Nainital.

16. The liability of the insurance company arises for the purpose of

reimbursement of the amount of compensation found to be payable by the

owner of the vehicle insured. It is only in exceptional cases and as provided

for under Section 170 of the Act, the insurance company can defend a claim

petition. Only on limited grounds it may be permitted to question the

quantum of compensation.

17. The Tribunal is a court subordinate to the High Court. An appeal

against the Tribunal lies before the High Court. The High Court, while

exercising its appellate power, would follow the provisions contained in the

Code of Civil Procedure or akin thereto. In view of sub-section (1) of

8
Section 21 of the Code of Civil Procedure, it was, therefore, obligatory on

the part of the appellate court to pose unto itself the right question, viz.,

whether the first respondent has been able to show sufferance of any

prejudice. If it has not suffered any prejudice or otherwise no failure of

justice had occurred, the High Court should not have entertained the appeal

on that ground alone.

18. We, however, while taking that factor into consideration must place

on record that we are not oblivious of the fact that a decision rendered

without jurisdiction would be coram non juris. Objection in regard to

jurisdiction may be taken at any stage. ( See Chief Engineer, Hydel Project

v. Ravinder Nath , [ (2008) 2 SCC 350 ] ) wherein inter alia the decision of

this Court in Kiran Singh v. Chaman Paswan, [AIR 1954 SC 340] was

followed, stating:

“26. The Court also relied upon the decision in
Kiran Singh v. Chaman Pawan [AIR 1954 SC 340]
and quoted (in Harshad Chiman Lal case {[(2005)
7 SCC 791], SCC pp. 804-805, para 33}
therefrom: {Kiran Singh case (supra), AIR p.342,
para6

`6. …It is a fundamental principle
well established that a decree passed
by a court without jurisdiction is a
nullity, and that its invalidity could be
set up whenever and wherever it is
sought to be enforced or relied upon,

9
even at the stage of execution and
even in collateral proceedings. A
defect of jurisdiction, …strikes at the
very authority of the court to pass any
decree, and such a defect cannot be
cured even by consent of parties.”

Though in the aforementioned decision these
observations were made since the defendants
before raising the objection to the territorial
jurisdiction had admitted that the court had the
jurisdiction, the force of this decision cannot be
ignored and it has to be held that such a decree
would continue to be a nullity.”

19. A distinction, however, must be made between a jurisdiction with

regard to subject matter of the suit and that of territorial and pecuniary

jurisdiction. Whereas in the case falling within the former category the

judgment would be a nullity, in the latter it would not be. It is not a case

where the Tribunal had no jurisdiction in relation to the subject matter of

claim. As a matter of fact the civil court had no jurisdiction to entertain the

suit. If the Tribunal had the jurisdiction to entertain a claim petition under

the Motor Vehicles Act, in our opinion, the Court should not have, in

absence of any finding of sufferance of any prejudice on the part of the first

respondent, entertained the appeal.

10
In Bikash Bhushan Ghosh v. Novartis India Ltd., [ (2007) 5 SCC

591], this Court has held :

“17. There is another aspect of the matter which
cannot be lost sight of. If the provisions contained
in the Code of Civil Procedure are given effect to,
even if the Third Industrial Tribunal, West Bengal
had no jurisdiction, in view of the provisions
contained in Section 21 of the Code of Civil
Procedure, unless the respondent suffered any
prejudice, they could not have questioned the
jurisdiction of the court. In Kiran Singh v. Chaman
Paswan
this Court held: (AIR p. 342, paras
6-7)

`6. … If the question now under
consideration fell to be determined only on
the application of general principles
governing the matter, there can be no doubt
that the District Court of Monghyr was
`coram non judice’ and that its judgment
and decree would be nullities. The question
is what is the effect of Section 11 of the
Suits Valuation Act on this position.

7. Section 11 enacts that notwithstanding
anything in Section 578 of the Code of Civil
Procedure an objection that a court which
had no jurisdiction over a suit or appeal had
exercised it by reason of overvaluation or
undervaluation, should not be entertained by
an appellate court, except as provided in the
section. Then follow provisions as to when
the objections could be entertained, and how
they are to be dealt with. The drafting of the
section has come in–and deservedly–for
considerable criticism; but amidst much that
is obscure and confused, there is one

11
principle which stands out clear and
conspicuous. It is that a decree passed by a
court, which would have had no jurisdiction
to hear a suit or appeal but for overvaluation
or undervaluation, is not to be treated as,
what it would be but for the section, null
and void, and that an objection to
jurisdiction based on overvaluation or
undervaluation, should be dealt with under
that section and not otherwise.

The reference to Section 578, now
Section 99 CPC, in the opening words of the
section is significant. That section, while
providing that no decree shall be reversed or
varied in appeal on account of the defects
mentioned therein when they do not affect
the merits of the case, excepts from its
operation defects of jurisdiction. Section 99
therefore gives no protection to decrees
passed on merits, when the courts which
passed them lacked jurisdiction as a result
of overvaluation or undervaluation. It is
with a view to avoid this result that Section
11
was enacted. It provides that objections
to the jurisdiction of a court based on
overvaluation or undervaluation shall not be
entertained by an appellate court except in
the manner and to the extent mentioned in
the section. It is a self-contained provision
complete in itself, and no objection to
jurisdiction based on overvaluation or
undervaluation can be raised otherwise than
in accordance with it.

With reference to objections relating
to territorial jurisdiction, Section 21 of the
Civil Procedure Code enacts that no
objection to the place of suing should be

12
allowed by an appellate or revisional court,
unless there was a consequent failure of
justice. It is the same principle that has been
adopted in Section 11 of the Suits Valuation
Act with reference to pecuniary jurisdiction.
The policy underlying Sections 21 and 99
CPC and Section 11 of the Suits Valuation
Act is the same, namely, that when a case
had been tried by a court on the merits and
judgment rendered, it should not be liable to
be reversed purely on technical grounds,
unless it had resulted in failure of justice,
and the policy of the legislature has been to
treat objections to jurisdiction both
territorial and pecuniary as technical and not
open to consideration by an appellate court,
unless there has been a prejudice on the
merits. The contention of the appellants,
therefore, that the decree and judgment of
the District Court, Monghyr, should be
treated as a nullity cannot be sustained
under Section 11 of the Suits Valuation
Act.’ ”

Furthermore in determining as to whether a part of cause of action has

arisen within the territorial jurisdiction of the court vis-`-vis an appellate

court a large number of factors may have to be taken in consideration. [See

Ambica Industries v. CCE, (2007) 6 SCC 769].

We cannot also lose sight of the fact that the appellant herein was a

labourer. The justness or otherwise of the amount of compensation has not

been disputed before us. If the High Court judgment is to be complied with,

13
appellant would again have to initiate another proceeding either at Bareilly

or Gurgaon or at Delhi or at Jabalpur. The same evidence would have to be

rendered once again. The question of fact which was required to be

determined in the proceeding before the Tribunal, namely whether the driver

of the truck or the driver of the bus had been driving their respective

vehicles rashly and negligently would have to be determined afresh. The

factual finding recorded in this case is that the driver of the truck was

driving the truck rashly and negligently. In our opinion, in a case of this

nature, we may even exercise our extra ordinary jurisdiction under Article

142 of the Constitution of India. In New India Insurance Company v.

Darshana Devi and others, [(2008) 7 SCC 416], this Court held:

“20. Having said so, we must take notice of the
fact that the deceased Baldev Singh was labourer.
The Tribunal has found that besides being a
labourer, he also used to deal in Safeda wood. He
was the owner of the ‘Safeda’ wood which was
being transported to the market for its sale. The
first respondent, Darshana Devi, in her deposition,
stated that the deceased used to purchase wood
from the State of Himachal Pradesh on contract
basis. Only Gurdial Singh and Ravinder Singh
were accompanying him as labourer. His income
was assessed only at Rs. 2,400 per month.”

21. In this view of the matter, we are of the
opinion that it is not a fit case where this Court
should exercise its discretionary jurisdiction under
Article 136 of the Constitution of India. Even in

14
Brij Mohan this Court held: (SCC p. 64, paras 13-

14)
“13. However, Respondent 1 is a poor labourer.
He had suffered grievous injuries. He had become
disabled to a great extent. The amount of
compensation awarded in his favour appears to be
on a lower side. In the aforementioned situation,
although we reject the other contentions of Ms
Indu Malhotra, we are inclined to exercise our
extraordinary jurisdiction under Article 142 of the
Constitution of India so as to direct that the award
may be satisfied by the appellant but it would be
entitled to realise the same from the owner of the
tractor and the trolley wherefor it would not be
necessary for it to initiate any separate
proceedings for recovery of the amount as
provided for under the Motor Vehicles Act.

14. It is well settled that in a situation of this
nature this Court in exercise of its jurisdiction
under Article 142 of the Constitution of India read
with Article 136 thereof can issue suit directions
for doing complete justice to the parties.”

20. Reliance, however, has been placed on a decision of this Court in

State of Punjab v. Rajesh Syal, [ (2002) 8 SCC 158 ], to contend that this

Court should not exercise its jurisdiction under Article 142 of the

Constitution of India. Whether the extraordinary jurisdiction under Article

142 of the Constitution shall be exercised or not would depend upon the fact

of the each matter. Law in this case does not come in the way of exercise of

such jurisdiction.

15

21. For the reasons aforementioned, the impugned judgment cannot be

sustained. It is set aside accordingly and the order of the Tribunal is

restored. The appeal is allowed with costs. Counsel’s fee assessed at

Rs.10,000/-.

…………………………..J.

[ S.B. Sinha ]

…………………………..J.

[Cyriac Josesph ]
New Delhi
December 16, 2008

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