Page 298 - Motor Insurance Ebook IC 72

The Insurance Times

However, the Supreme Court in British India General
Insurance Co. Ltd. V/s. Captain Itbar Singh, held that
if the insurer has reserved a right in the policy to defend
an action in the name of the insured, it can raise all the
pleas that may be open to the insured with the
permission of the Tribunal. But as mentioned in chapter
3, this judgement was delivered in 1956-58 when
suitable Provisions were not there in the statute book.

Again, by virtue of sub section 2 (A) of Section 11O(C)
introduced in the Motor Vehicles Amendment Act in
1969, the Tribunal, if it is satisfied that there is collusion
between the person making the claim and the person
against whom the claim is made has failed to contest
the claim, then in such an event the Claims Tribunal
may, after recording reasons in writing, direct that the
insurer concerned shall be impleaded as a party to the
proceedings and may contest the claim on all or any of
the grounds that are available to the person against
whom the claim has been made.

In the other words, under these circumstances an
insurance company would be at liberty to avail all the
defences on merits that are open to the insured. Under
the M.V.Act 1988, this procedure is now contained in
Sec.170 of the said Act.

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