' This order would dispose of objections filed by the Insurance Co./Judgment-Debtor to the application for execution of the decree passed against it for Rs, 20,000 and costs under the Moter Vehicles Act.
1. The relevant facts of the case are that in the suit for recovery of damages filed against the defendants Nos. 1, 2 and 3, the owner, the driver and the Insurance Co., respectively under sections 1 and 2 of the Fatal Accidents Act, 1855, the learned Judge (0.S.) passed a decree for Rs, 1,10,000 the operative part whereof reads as follows : "That the defendants Nos. 1 and 2 do pay to the plaintiffs jointly and severally a sum of Rs, 90,000 (Rupees ninety thousand only) and the defendant No, 3 do pay to the plaintiffs a sum of Rs, 20,000 (Rupees twenty thousand only) as the liability of defendant No, 3 is restricted to Rs, 20,000 under the Motor Vehicles Act."
2. Against the decree passed as above, the defendant No, 1 filed Inter-Court Appeal (H.C.A. No, 18/1979) in which, besides the plaintiffs, the Insurance Company was joined as the respondent No,
6. The said appeal however was subsequently compromised by the appellant/defendant No, I with the respondents Nos. 1 to 4 (the plaintiffs) on the terms mentioned in the application made under Order XXIII, rule 3, C.P.C. Whereby the decree passed in the suit against the appellant for a sum of Rs, 90,000 was deemed to have been varied/reduced to Rs, 50,000 and the respondents Nos. 1 to 4 (the plaintiffs) agreed not to have any further claim against the appellant (owner of the vehicle).
The appeal against respondent No, 5 and the respondent No, 6 (Insurance Company) was withdrawn unconditionally.
' The learned Division Bench finding the compromise in the interest of the respondent No, 4 (then a minor) disposed of the appeal in terms of the above mentioned application.
3. The Insurance Company, though a party to the appeal had no notice of the compromise reached between the defendant No, 1 and the respondents Nos. 1 to 4 the plaintiffs, whereby the decree for Rs, 90,000 passed against the defendant No, 1 in the suit against the defendant No, 1 was reduced to Rs, 50,000, but the decree for 20,000 against the Insurance Company under the Motor Vehicles Act was left intact and subsisting for the execution of which the plaintiffs/decree-holders, have now filed the present application. The said execution application has been resisted on the ground that the appeal filed by the defendant No, 1 insured was compromised by him with the plaintiffs without the consent and behind the back of the Insurance Company who, therefore, stood discharged from its liability to indemnify the plaintiffs.
' Mr. Riazul Hassan, learned counsel for the judgment-debtor (Insurance Company) sought to support the plea raised by him by placing reliance upon the case Sarupsingh v. Nilkant Bhaskar (1).
The facts of the said case were that an ex parte decree was passed against the defendant/owner of the vehicle. The Insurance Company with whom the vehicle involved in the accident was insured, though served with the notice under subsection (2) of section 96 of the Motor Vehicles Act was absent when the decree was passed. The said Company, however, subsequently applied for setting aside the above-mentioned decree passed ex parte. As to the question of maintainability of the said application which arose in the said case, the learned High Court of Bombay observed that the Legislature under section 96 required a notice to be given through Court, the said notice therefore, must be of a reasonable duration, and if an ex parte decree was passed against the defendant and if the Insurance Company through the defendant satisfied the Court, that it 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 the defendant might have had sufficient cause to defend the action, if the defence was conducted by the Insurance Company. The learned High Court however on merits dismissed the said application with the observation that no sufficient cause was shown by the Insurance Company for setting aside the decree passed ex parte.
' Relying upon the above case, Mr. Riazul Hassan the learned Advocate for the Judgment-Debtor (Insurance Company) submitted that the decree passed on compromise in the appeal without notice to the Insurance Company,
(1) AIR 1953 Bom. 109 ' was not binding upon the said Company who was entitled to show that the decree passed by the learned Single Judge was erroneous, I have carefully considered the arguments advanced in the light of the facts of the above-cited case but find that the learned counsel failed to appreciate that in the present case, the Insurance Company Judgment-Debtor had not resorted to any legal remedy to get the judgment of the learned appellate Court set aside or modified in any manner as was done in the Bombay case. The case cited therefore, has no application.
' The learned counsel then referred to the cases reported as AIR 1955 Bom. 39, AIR 1958 A.P. 309, AIR 1959 SC 1331, PLD 1963 Kar.
182.
' In order to appreciate the arguments of the learned counsel I would now briefly examine the principles laid down in the above-cited cases :
(i) In the case of Royal Insurance Company Ltd. v. Abdul Muhammad Meheralli (1) the learned High Court while dealing with the statutory requirement of notice to the Insurance Company observed that the object for providing such a notice is really two-fold : "One is to enable it to defend that 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 (2o). But the other purpose and 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 action is properly defended and that the decree does not go against the defendant by default, that a decree is not passed collusively against the defendant."
(ii) In the case of Barrala Ramswa my v. Bhamidipati Satyanrayana and another (2) the learned High Court held that it was clear from the language of section 96 (1) that the suit must be filed against the insured and judgment is obtained against the insured that the sum is recoverable from the Insurance Company. It was further held : "Section 96 (2) provides of the issue of notice to the Insurance Company and the defences that might be raised by the Insurance, Company if made a party. From the terms of section 96 (2), it is implicit that no suit as against the Insurance Company can be maintained by the third party taking advantage of the Insurance Policy, section 97 supports this conclusion."
(iii) In the case of British India General Insurance Company Ltd. v. Captain Itbar Singh and others
(3) it was held that apart from the statute an insurer has no right to be made a party to the action by the injured person against the insured causing the injury and that subsection (2) of section 96, Motor Vehicles Act gives the insurer the right to be made a party and defend the suit. It was further held that the only manner of avoiding liability provided for in subsection (2) is through defences therein mentioned and that an insurer made a party to the action is not entitled to take any defence which is not specified in it.
(iv) The case of Rah-e-Manzil Transport v. Muhammad Ameen (4) was cited to emphasise that notice to make insurer liable in damages under Motor Vehicles Act must be given in course of suit before judgment is delivered.
(1) (AIR 1955 Bom. 39 (2) AIR 1956 Andh. Pra. 309
(3) AIR 1959 SC 1331 (4) PLD 1963 Kar. 182
4. I have considered the arguments of the learned counsel for the Insurance Company/Judgment- Debtor in the light of the principles laid down in the cited cases but find that the same do not any way can be construed to absolve the Insurance Company/Judgment-Debtor from its liability to pay Rs, 20,000 in terms of the decree passed by the learned Single Judge (0. S.) on 30th January, 1979 in the suit, which decree remained subsisting against the Insurance Company in spite of compromise between the insured (the owner of the truck), in appeal.
' Reference may here be made to the case of Muhammad Sharif v. Jalaluddin (1). In the said case the execution of the decree was resisted on the ground that the decree sought to be executed was passed in respect of the claim which was barred by time and was thus a nullity and therefore, the executing Court was competent to go behind the said decree and refuse to execute the same. The Honourable Supreme Court repelled the contentions raised as above and while observing that the decree was not a nullity, held that the executing Court cannot go behind the decree.
' Reference may also be made to the case Abdul Malik v. Muslahuddin (2) wherein while holding that an executing Court cannot go behind the decree, and that though under certain circumstances where the decree is without jurisdiction or is a nullity the executing Court is entitled to take notice of such circumstances, observed that illegality in the order on other grounds however cannot give such scope to the executing Court. The learned High Court further pointed out that want of jurisdiction is not the same thing as illegal exercise of jurisdiction.
' The principles laid down as above also find support from the cases M/s. Haji Ahmad & Co. v.
Muhammad Siddique (3), Saifee Development Corporation Ltd., Karachi v. M.A. Karim (4), S.A. Latif v.
Nadir Khan (5) and Khani Sher v. Secretary Post War Service Reconstruction Fund (6).
5. The learned counsel for the Insurance Company finally contended that the above-mentioned compromise made at the appellate stage was collusive and that due to the withdrawal of the appeal against the other respondents (including the Insurance Company) his client was deprived of the opportunity to contest the decree passed in suit in favour of the plaintiffs.
I, however, do not find any impropriety on the part of the appellant, who in order to protect his rights agreed to pay Rs, 50,000 to the plaintiffs in satisfaction of the decree for Rs, 90,000 passed against him in the suit. Neither the said compromise nor the decree passed by the learned Division Bench in appeal, affected any of the rights of the Insurance Company who under the decree passed in the suit was held liable to pay "Rs, 20,000 under the Motor Vehicles Act", and against which decree no appeal was preferred by it. Thecourse as adopted by the appellant is permissible, finds support from the case of Faizullah Khan v. Pir Mukammal Shah (7) wherein the Honourable Supreme Court observed : "There is nothing of turpitude or sharp practice in a person in obtaining for the protection of his rights a consent decree against persons
(1) 1971 SCMR 594 (2) PLD 1970 Dacca 743
(3) PLD 1965 Kar. 293 (4) PLD 1974 Kar. 426
(5) PLD 1968 Lah. 144 (6) PLD 1971 Pesh. 82
(7) PLD 1961 SC 34 ' who are prepared to concede in his favour by reason of harmonious relations."
' The learned counsel for the Insurance Company was unable to show that the procedure adopted in the appeal was against the law or that thereby decree passed in the suit against it, could be ignored by the executing Court.
The upshot of the above discussion is that it is not open to the Insurance Company/Judgment- Debtor to contend before the executing Court that it is absolved of its liability to pay the amount as directed under the decree' passed in the suit against it on the plea that plaintiffs and the defendant C No, 1/Insured entered into a compromise at the appellate stage and that the appeal against it was withdrawn, without any notice to it. The decree against the Insurance Company continues to subsist and has neither been rendered a nullity nor without jurisdiction by the compromise made between the plaintiffs and defendant No, 1 at the appellate stage.
' Accordingly the objections raised by the Insurance Company/Judgment Debtor are dismissed.
The execution of the decree shall proceed as prayed.