Y.V. Dixit JUDGMENT
M.C. Chagla, C.J.
1. Respondent 1 was knocked down by a motor cycle belonging to respondent 2 on 14-3-1950, and suffered certain injuries. He filed a suit against the defendant claiming a sum of Rs. 30,000 as damages in respect of those injuries. Respondent 2 was insured against third party risk with the appellant company and on 26-3-1953, a notice was issued to the insurance company under Section 93(2), Motor Vehicles Act.
The insurance company took out a chamber summons to be added as a party to the suit. That chamber summons was dismissed. It then took out a notice of motion to be allowed to defend the action in the name of the defendant. This notice of motion was also dismissed by Mr. Justice Coyajee, and it is against this decision that this appeal, is preferred.
2. Now, the position under Section 96, Motor Vehicles Act, is that a vicarious liability is cast upon the insurance company in respect of any decree that may be passed against the person in default and who has been insured with the insurance company. But before the plaintiff can become entitled to execute such a decree, it is obligatory that the insurer should have notice through the Court of the bringing of the proceedings and it was this notice that was served upon the insurance company on 26-8-1953.
After the notice is served, the insurer has been given the right to be made a party to the suit and to defend the action on any of the grounds mentioned in Sub-section (2) of Section 96. It is common ground that the insurance company in this case does not want to defend the action on any of those grounds. Therefore, it is clear that it is not entitled under Section 96(2) to be made a party and to defend the action in its own right. The question that we have to consider is whether the Court has any power independently of Section 96 to permit an insurance company to defend the action in the name of the defendant.
3. Now, the facts here are rather significant. The defendant is not in India. He has left India and he had to be served with a summons in the suit by substituted service and the possibilities are that at the hearing of the suit he will not appear to defend the action. Therefore, this very extraordinary situation arises, that although the defendant may not defend the action and although the insurance company cannot be made a party to the action under Section 96(2), if a decree were to be passed in favour of the plaintiff in an undefended action a statutory liability will be cast upon the insurance company to satisfy the decree inasmuch as the statutory notice has been served upon it; and the real question that arises for our determination is whether an insurance company is entitled to defend the action on merits, not in its own name, not in its own right, but in the name of the defendant.
Now, apart from authorities, we should have thought that it is a principle of elementary justice that a liability cannot be cast upon a party with out that party being given an opportunity to resist the claim which it has ultimately to satisfy. What we are told by Mr. Desai on behalf of the plaintiff is that, however elementary this notion of justice might be, the Motor Vehicles Act does not permit us to give effect to this well-established principle. Now, it is perfectly true that a Court should never avail itself of its inherent powers under Section 151 in order to do something which is contrary to what a statute lays down. Section 151 does not exist in the Code of Civil Procedure in order to arm the Court with doing something contrary to the policy of the Legislature; but the very ........