JUDGMENT
N.K. Jain, C.J.
1.
A learned single judge of this court found that the earlier Division Bench has not considered the provisions of Order 41, Rule 22 of the Civil Procedure Code, 1908, which enables the cross objector to take grounds which could have been taken in respect of the findings which are against him and therefore the decision of this court in United India Insurance Co. v. V. Balasubramanyam [1990] ILR Karn 483; [1990] 1 KLJ 104 relying on the earlier decision in National Insurance Co. Ltd. v. H. N. Rama Prasad [1985] ACJ 864 holding that in an appeal filed by the insurance company, the scope of appeal is limited and the question of quantum cannot be gone into by filing cross objections, requires reconsideration. Hence he referred the matter to the Honourable Chief Justice to constitute a larger Bench vide order dated January 22, 2002.
2. Thus, vide order dated April 1, 2002 passed by the Honourable Chief Justice, this reference is placed before us on April 8, 2002.
3. The necessary facts leading to the order of reference are : One Prakash Jogi while he was going on moped on October 20, 1996, collided with a lorry and died. Respondents Nos. 1 to 3 and one Devappa, petitioners Nos. 1 to 4, filed a petition under Section 166 of the Motor Vehicles Act, 1988 claiming compensation of Rs. 10,00,000 on November 30, 1996. Respondent No. 2 the insurance company, filed a counter denying the allegations. The owner of the lorry R-1 remained ex parte. After hearing the parties, the Tribunal, awarded compensation of Rs. 1,61,095 with costs and also awarded interest at 9 per cent. per annum from the date of filing of the petition till the date of payment, vide order datqd March 9, 1999. Aggrieved by the judgment and award passed, the appellant-National Insurance Company has filed this appeal alleging that the Tribunal was not justified in fixing the liability on the insurance company as it is not liable to pay compensation because as on October 20, 1996, the date of accident, the driver was not having a valid driving licence. The claimants-respondents Nos. 1 to 3 after notice have filed cross objections under Order 41, Rule 22 of the Civil Procedure Code, seeking enhancement of the compensation amount.
4. Learned counsel for the appellant-insurance company contended that the appellant is not liable to pay compensation as the lorry driver had no valid licence and further submitted that when this appeal is filed by the insurance company challenging the liability to pay compensation and has not challenged the quantum at all, the respondents cannot file cross objections for enhancement of compensation. Learned counsel relied on the following judgments in National Insurance Co. Ltd. v. H. N. Rama Prasad [1985] ACJ 864 ; Panna Lal v. State of Bombay, , United India Insurance Co. v. V. Balasubramanyam [1990] ILR Kam 483 ; [1990] 1 KLJ 104 and United India Insurance Co. ltd. v. Smt. V. Nagarathan [2000] ILR Karn 4618.
5. Learned counsel for respondents Nos. 1 to 3 contended that the Division Bench has said that when the insurance company has filed an appeal to the extent of its liability the respondents have no right to file cross-objections on that ground. It is submitted that in an appeal filed by the insurance company cross objections filed by the claimants are maintainable in view of the provisions of Rule 256 of the Motor Vehicle Rules read with Order 41, Rule 22 of the Code of Civil Procedure. Learned counsel relied on the decisions in United India Insurance Co. v. V. Balasubramanyam [1990] ILR Karn 483; [1990] 1 KLJ 104 and Panna Lal v. State of Bombay, .
6. The point for reference is whether the provisions of Order 41, Rule 22 of the Code of Civil Procedure enable the cross objectors to take grounds which could have been raised by way of appeal in respect of findings against them.
7. The decision of this court in United India Insurance Co. v. V. Balasubra-manyam [1990] ILR Karn 483; [1990] 1 KLJ 104 wherein it was held that in an appeal filed by the insurance company, no cross objections can be filed and the question of quantum cannot be permitted to be raised as per the earlier decision “of this court in National Insurance Co. Ltd. v. H. N. Rama Prasad [1985] ACJ 864 requires reconsideration.
8. We have heard learned counsel for the parties, perused the material on record, gone through the relevant observations and the case-law on the point.
9. It will be appropriate to refer to the following relevant provisions of the Code of Civil Procedure.
10. Order 41, Rule 2 :
“Grounds which may be taken in appeal.–The appellant shall not except by leave of the court, urge or be heard in support of any ground of objection not set forth in memorandum of appeal; but the appellate court in deciding the appeal, shall not be confined to the grounds of objection set forth in the memorandum of appeal or taken by leave of the court under this rule :
Provided that the court shall not rest its decision on any other ground unless the property who may be affected thereby has had a sufficient opportunity of contesting the case on that ground.”
11. Order 41, Rule 22 :
“22. Upon hearing respondent may object to decree as if he has preferred separate appeal.–(I) Any respondent, though he may not have appealed from any part of the decree, may not only support the decree but may also state that the finding against him in the court below in respect of any issue ought to have been in his favour; and may also take any cross objection to the decree which he could have taken by way of appeal, provided he has filed such objection in the appellate court within one month from the date of service on him or his pleader of notice of the day fixed for hearing the appeal, or within such further time as the appellate court may see fit to allow . . .”
12. Order 41, Rule 33 :
“Power of court of appeal.–The appellate court shall have power to pass any decree and make any order which ought to have been passed or made and to pass or make such further or other decree or order as the case may require, and this power may be exercised by the court notwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any of the respondents or parties, although such respondents or parties may not have filed any appeal or objection and may, where there have been decrees in cross-suits or where two or more decrees are passed in one suit, be exercised in respect of all or any of the decrees, although an appeal may not have been filed against such decrees :
Provided that the appellate court shall not make any order under Section 35A, in pursuance of any objection on which the court from whose decree the appeal is preferred has omitted or refused to make such order.”
13. A bare reading of Order 41, and Rule 22 of the Civil Procedure Code, reveals that in an appeal the respondents cannot only support any part of the decree but he can also challenge the finding against him contending that it should have been in his favour, and can also take any cross-objections to the decree which he could have taken by way of an appeal. Order 41, Rule 33 of the Civil Procedure Code, reveals that the appellate court can exercise its power under the rule to pass any order even if the appeal is filed only against a part of the decree of the lower court and thus this rule comes to the rescue of the objector ‘ even if the objections are not raised under Order 41, Rule 22 against the correspondent. Therefore, it is clear that in an appeal cross-objections can be filed contending that the finding given against him ought to have been given in his favour and further Order 41, Rule 2 reveals that the appellant can urge any ground of objection, in his support after obtaining leave of the court even the same is not taken in the memorandum of appeal. However, while permitting the other party has to be given an opportunity of contesting the case on that ground. In view of the clear provisions, one cannot give a restricted meaning to the provisions in the absence of any restrictions in the Motor Vehicles Act. Therefore, the provisions of Order 41, Rule 22 will be applicable in all cases. So in case an appeal is filed one has a right to file cross-objection.
14. While considering the scope of Order 41, rules 33 and 22, their Lordships in Panna Lal’s case, , observed as follows :
“18. In our opinion, the view that has now been accepted by all the High Courts that Order 41, Rule 22 permits as a general rule, a respondent to prefer an objection directed only against the appellant and it is only in exceptional cases, such as where the relief sought against the appellant in such an objection is intermixed with the relief granted to the other respondents, so that the relief against the appellant cannot be granted without the question being reopened between the objecting respondent and other respondents, that an objection under Order 41, Rule 22 can be directed against the other respondents, is correct. Whatever may have been the position under the old Section 561, the use of the word ‘cross-objection’ in Order 41 Rule 22 expresses unmistakably the intention of the Legislature that the objection has to be directed against the appellant.”
15. In Mahant Dhangir v. Madan Mohan [1987] (Suppl.) SCC 528, while considering the maintainability of the cross objection against co-respondents, the Supreme Court observed thus (page 533) :
“Generally, the cross-objection could be urged against the appellant. It is only by way of exception to this general rule that one respondent may urge objection as against the other respondent. The type of such exceptional cases are also very much limited . . . For instance, when the appeal by some of the parties cannot effectively be disposed of without opening of the matter as between the respondents inter se. Or in a case where the objections are common as against the appellant and co-respondent. The court in such cases would entertain cross-objection against the co-respondent.”
16. The Supreme Court further while holding that if the objection is not maintainable under Rule 22 the same can be considered under Rule 33 observed thus (page 534) :
“Rule 22 and Rule 33 are not mutually exclusive. They are closely related with each other. If objection cannot be urged under Rule 22 against corespondent, Rule 33 could take over and come to the rescue of the objector. The appellate court could exercise the power under Rule 33 even if the appeal is only against a part of the decree of the lower court. The appellate court could exercise that power in favour of all or any of the respondents although such respondent may not have filed any appeal or objection. The sweep of the power under Rule 33 is wide enough to determine any question not only between the appellant and respondent, but also between respondent and correspondents. The appellate court could pass any decree or order which ought to have been passed in the circumstances of the case. The appellate court could also pass such other decree or order as the case may require. The words ‘as the case may require’ used in Rule 33 of Order 41 have been put in wide terms to enable the appellate court to pass any order or decree to meet the ends of justice . . . The only constraint, . . . may be these : That the parties before the lower court should be there before the appellate court. The question raised must properly arise out of the judgment of the lower court.”
17. In National Insurance Co. Ltd. v. H. N. Rama Prasad [1985] ACJ 864, the Division Bench, while considering an appeal filed by the insurance company against the order of the Tribunal, wherein an employee who was travelling in the course of the employment sustained injuries due to accident and the Tribunal awarded compensation limiting the liability of the insurance company to the extent of Rs. 50,000, held that the liability of the insurance company is limited to the liability under the workmen’s compensation. In that appeal filed by the insurer, cross objection was also filed by the respondent contending that the quantum of compensation awarded is on the higher side, and on this point, the Division Bench held that the cross-objection against an appeal filed by the insurance company was not maintainable for the reason that the liability of the insurance company is limited.
18. In United India Insurance Co. v. V. Balasubramanyam [1990] ILR Karn 483 ; [1990] 1 KLJ 104, the Division Bench was dealing with an appeal filed by the insurance company which contended that the third party risk covered by the policy issued by the appellant-company was limited to Rs. 50,000 in view of Section 95(2)(b)(1) of the Motor Vehicles Act. The appeal was filed against the order of the Tribunal, wherein on a claim petition presented by the injured owner-driver of the car, who sustained injury as a result of accident due to colliding of car with the hind portion of the lorry, the Tribunal recorded the finding of contributory negligence to the extent of 75 per cent. and 25 per cent. on the driver of the lorry and the claimant and awarded compensation of Rs. 88,500 and on the question of liability, the Division Bench held that the owner of the lorry and the insurance company were jointly and severally liable to pay the compensation awarded. Cross objection was also filed contending that the finding of the Tribunal on contributory negligence by the cross-objector and the claimant at 75: 25 was erroneous and it should be 50: 50 and relied on the decision in National Insurance Co. Ltd. v. H. N. Rama Prasad [1985] ACJ 864, wherein it was held that when the appeal was by the insurer as to the extent of its liability, in a cross-objection in such an appeal by the respondent owner of the vehicle, the quantum of compensation awarded cannot be questioned. But, however, learned counsel submitted that once an appeal was filed and a notice was served on the respondent, the provisions of Order 41, Rule 22 of the Code of Civil Procedure are attracted and in the cross-objections filed by the respondent, he was entitled to raise all questions which he was entitled to raise in the original proceedings as well as in appeal if he had chosen to prefer an appeal independently. On this point, the Division Bench while interpreting the scope of the cross-objection in an appeal presented by an insurer under section 110D of the Act, held that:
“Under the provisions of the Motor Vehicles Act, both in the original proceedings as well as in the appeal, an insurer is entitled to raise only such of the grounds, as are specifically provided in Section 96(2) of the Act. . . The combined effect of Section 110D and Order 41, Rule 22 of the Civil Procedure Code is that in an appeal presented by an insurer in which the only ground of challenge is about the extent of liability of the insurance company, the cross objector in such an appeal cannot be permitted to contest the quantum of compensation or the findings recorded on any other issue.”
19. The aforesaid interpretation was placed in the context of the legal position as then existed to the effect that the insurer cannot prefer an appeal challenging the quantum of compensation and the insurer’s right was confined only to the liability to pay the compensation. However, in view of the law declared by the Supreme Court in the case of United India Insurance Co. Ltd. v. Bhushan Sachdeva where it has been held that under Section 173 of the Act, the insurer cannot file an appeal at all is based on an erroneous assumption. It has been held that so long as the insured has not challenged the award passed against him and so long as the liability would only fall on the insurance company it is inequitable to deny a remedy of appeal to the insurance company. Further it has been held that any interpretation denying such aggrieved insurance companies the opportunity to seek the legal remedy of appeal should not be adopted unless there is a statutory compulsion. There is nothing in Section 173 or in the other relevant provisions of the Act, which debars the insurance company to resort to the remedy of appeal when it knows that the award is unjust. Therefore, it was held when the insured do not prefer an appeal against the quantum of compensation, in such an eventuality the Act enables the insurer to context it on all grounds available to the insured including preferring an appeal against the award. Therefore, in view of this legal position any appeal preferred by the insurance companies either challenging only the liability to compensate or the quantum of compensation, the respondent/claimant is entitled to prefer a cross appeal seeking enhancement of compensation.
20. As discussed above, the appeal is a continuation of the original proceedings and the entire subject matter of the claim petition is before the appellate court and therefore even if the appellant has filed the appeal only against a part of a decree the court can consider the entire matter and pass appropriate orders. Therefore, as stated in our view cross objection is maintainable.
21. In view of what we have discussed above, the question is answered in the affirmative.