Insurers impleaded on remand are liable for compensation interest only from the date of impleadment.

Mahadev and Shantabai sought compensation for the death of Vilas in a road accident on 14 October 2012.

The Tribunal awarded them ₹4,50,000 with 6% annual interest and directed the sole respondent, Mastan, to satisfy the award.

The claimants appealed, principally alleging inadequate compensation. They later applied under Order I Rule 10(2) CPC to add Royal Sundaram Alliance Insurance Company and Reliance General Insurance Company as parties, asserting that they had learned after the Tribunal’s decision of insurance policies covering the vehicle. Reliance disputed the alleged policy and contended that it had never insured the vehicle. Neither insurer had been a party before the Tribunal. The appeal was accompanied by an application to condone a delay of 1,781 days.

1. Whether the proposed insurers could be added at the appellate stage, despite not having been parties before the Tribunal, where the existence and authenticity of the alleged policies were disputed.

2. Whether the Tribunal’s judgment should be set aside and the claim remanded for fresh adjudication, with an opportunity for the insurers to present their defences.

3. If the insurers were ultimately found liable, from what date should interest run against them.

Section 173(1) of the Motor Vehicles Act provides for an appeal from an award of the Motor Accident Claims Tribunal, while Order I Rule 10(2) CPC empowers the court to add a party whose presence is necessary for effective adjudication.

The Court also relied on the beneficial purpose of the Motor Vehicles Act—to provide just compensation to accident victims—and the need to afford parties a fair opportunity to contest disputed factual and documentary claims.

To protect the proposed insurers from delay for which they were not responsible, the Court directed that any liability ultimately established against them for interest would commence only from the date they were impleaded before the Tribunal.

No judicial precedents were cited.

The Court found that the parties’ opposing accounts raised disputed questions requiring inquiry: the claimants asserted that the insurers had issued policies, while the insurers disputed the policies’ authenticity and coverage.

Because those issues could not fairly be resolved on the appellate record, and because the insurers had not participated in the Tribunal proceedings, the Court considered remand appropriate.

It directed that the insurers be added and given the opportunity to file written statements, produce documents, and lead evidence.

In view of the time elapsed, it limited any interest liability of the insurers to the period beginning on the date they were impleaded.

The matter was remanded for fresh adjudication, with directions to permit the claimants to implead the two insurers and to allow all parties to present their evidence and contentions.

All contentions were left open, and the Tribunal was directed not to be influenced by the High Court’s observations.

Any insurer ultimately found liable would pay interest only from the date of its impleadment before the Tribunal.