Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOs.3798­3799 OF 2016

Sudarsan Puhan                Appellant(s)

VERSUS

Jayanta Ku. Mohanty & Ors.   Respondent(s)

                 J U D G M E N T

Abhay Manohar Sapre, J.

1) These appeals are filed by the appellant­

claimant against the final judgment and order dated

09.11.2015 passed by the High Court of Orissa at

Cuttack in M.A.C.A. No.690 of 2014 and M.A.C.A.

No.839 of 2014 whereby the High Court allowed the

appeal filed by the Insurance Company and reduced

the compensation awarded by  the Motor  Accident

1

Claims Tribunal (in short ‘the Tribunal”) from

Rs.24,62,065/­ to Rs.20,00,000/­ and in

consequence dismissed the M.A.C.A. No.690 of

2014 filed by the appellant­claimant in terms of the

main order passed in M.A.C.A. No.839 of 2014.

2) In order to appreciate the issue involved in

these appeals, few facts need mention infra.

3) The appellant herein was the claimant before

the Tribunal whereas respondent­owner of the

vehicle (motorcycle) was the non­applicant No.1 and

the Insurance Company was non­applicant No.2 in

the appellant’s claim petition.

4) On 31.10.2012, the appellant­claimant with

one Dipak Kumar Pradhan was going on a

motorcycle bearing No.OR­07 S 3133 from Baisinga

to Baripada on National Highway 18 in the State of

Orissa.   The abovesaid Motorcycle met with an

accident with a Mini Truck (407) wherein the

2

appellant­claimant suffered severe injuries. The

motorcycle was owned by Jayanta Kumar Mohanty

(respondent  No.1  in  CA 3798/2016 & respondent

No.2  in  CA No.3799/2016)  and was  insured with

the National Insurance Company Ltd. (respondent

No.2  in  CA 3798/2016 & respondent  No.1  in  CA

3799/2016).  

5) According to the appellant­claimant, he was in

the age group of 25­27 years at the time of accident

and suffered the disease of  “paraplegia”  (injury  in

spinal cord) as a result of the abovesaid accident.  

6) The appellant­claimant, therefore, filed a claim

petition before the Tribunal, Mayurbhanj Baripada

(Orissa)  under  Section  166  of the  Motor  Vehicles

Act, 1988 (hereinafter referred to as  ‘the MV Act”)

against the respondents (owner  of the  motorcycle

and the Insurance company) and claimed

reasonable compensation for the injuries sustained

3

by him and other statutory compensation payable

under the  MV Act for causing  such  injuries.  The

respondents contested the claim petition.

7) By award dated 17.05.2014, the Tribunal

allowed  the appellant’s  claim petition  in part  and

holding the respondents(non­applicants) liable for

payment of the compensation to the appellant­

claimant jointly and severely awarded a total sum of

Rs.24,62,065/­ with interest payable at the rate of

7% per annum under various heads.

8) The appellant­claimant and the Insurance

Company both felt aggrieved by the award, filed

appeals in the High Court of Orissa at Cuttack.   

9) So far as M.A.C.A.No.690/2014 is concerned,

it was filed by the appellant­claimant for

enhancement of the amount awarded by the

Tribunal whereas so far as M.A.C.A.No.839/2014 is

concerned, it was filed by the Insurance Company

4

against the award challenging therein the quantum

of compensation to be on a higher side.  

10) By impugned  order, the  High  Court allowed

the appeal filed by the Insurance Company

(M.A.C.A.No.839/2014) in part and accordingly

reduced the compensation from Rs.24,62,065/­ to

Rs.20,00,000/­.   As a result of the  main order

passed in favour of the Insurance Company in their

appeal, the appeal filed by  the  appellant­claimant

(M.A.C.A. No.690/2014) seeking enhancement in

the quantum of compensation  was dismissed as

having rendered infructuous.  

11) The appellant­claimant felt aggrieved by the

order of the High Court filed two appeals by way of

special leave in this Court. One is filed against an

order by which the claimant’s appeal for

enhancement in the quantum of compensation was

dismissed as having rendered infructuous and the

5

other is filed against an order by which the

Insurance Company’s appeal was partly allowed by

reducing the quantum of compensation from

Rs.24,62,065/­ to Rs.20,00,000/­.

12) It may be mentioned that so far as the

Insurance  Company is concerned, they have not

filed any appeal against the order of the High Court.

In other words, the Insurance Company seems

satisfied with the quantum of compensation amount

of Rs.20,00,000/­awarded by the High Court by the

impugned order.

13) The short question, which arises for

consideration in these two appeals, is whether the

High Court was justified in allowing the Insurance

Company's appeal (M.A.C.A. No.839/2014) and

was, therefore, justified in  reducing the quantum of

compensation amount from Rs.24,62,065/­ to

Rs.20,00,000/­ and, in consequence, was justified

6

in   dismissing the claimant’s appeal for

enhancement  of the quantum of  compensation as

having rendered infructuous.

14) Learned counsel for the appellant­claimant

while  assailing the  legality  and correctness of the

impugned order contended that the High Court

without adverting to any factual and legal issue

arising in the case simply  allowed the Insurance

Company’s  appeal  and  reduced  the  compensation

from Rs.24, 62,065/­ to Rs.20,00,000/­ awarded by

the Tribunal and, in consequence, dismissed the

appellant­claimant’s appeal in a cryptic manner.

15) According to learned counsel, the High Court

neither set out the facts, nor dealt with any issue,

nor appreciated the ocular and documentary

evidence  much  less in its  proper  perspective,  nor

examined the legal principles applicable to the

issues arising in the case and nor rendered its

7

findings on any contentious issues decided by the

Tribunal except to observe  “Considering the

submissions of the learned counsel for the parties”

and “I feel, the interest of justice  would be best

served if the awarded compensation amount of

Rs.24,62,065/­ is modified and reduced to

Rs.20,00,000/­”.   

16) Learned  counsel for the  appellant submitted

that it  was  not the   consideration  of the  case  of

either parties at all and yet the Insurance Company

succeeded in their appeal and  appellant­claimant

lost which caused prejudice to him due to reduction

in quantum of compensation.  

17) Learned counsel further contended that it was

the duty of the High Court exercising its first

appellate powers under Section 173 of the M.V. Act

to have dealt with all the submissions urged by the

parties  and  after  appreciating the entire  evidence

8

should have come to its own conclusion one way or

the other keeping in view the legal principles

governing  the issues as  to  whether  any case was

made out for enhancement or reduction in quantum

of compensation, as the case may be.  It was urged

that since it  was  not  done  by the  High Court,  a

jurisdictional error is committed which renders the

impugned order legally unsustainable.  

18) Lastly, the learned counsel  urged  that if  his

arguments are accepted, the remand of the case to

the  High  Court to  decide the  appeal filed  by the

appellant­claimant alone on merits is inevitable.

19) Learned counsel for the respondents

(Insurance Company), however, supported the

impugned orders and urged that they do not call for

any interference.

20) Having heard the learned counsel for the

parties and on perusal of the record of the case, we

9

find force in the submissions of the learned counsel

for the appellant­claimant.  

21) The powers of the first Appellate Court while

deciding the first appeal are indeed well defined by

various judicial pronouncements of this Court and

are, therefore, no more res integra.  

22) As far back in 1969, the learned Judge – V.R.

Krishna Iyer, J (as His Lordship then was the judge

of Kerala High Court) while deciding the first appeal

under  Section  96  of the  Code  of  Civil Procedure,

1908 (hereinafter referred to as “the Code”) Kurian

Chacko vs. Varkey Ouseph, AIR 1969 Kerala 316,

reminded the first appellate court of its duty to

decide the first appeal. In  his  distinctive style of

writing with subtle power of expression, the learned

judge held as under:  

“1. The plaintiff, unsuccessful in two Courts,  has come up here aggrieved by the dismissal of his suit which was one for declaration of title and recovery of

10

possession. The defendant disputed the plaintiff's title to the property as also his possession and claimed both in himself. The learned Munsif, who tried the suit, recorded findings against the plaintiff both on title and possession. But, in appeal, the learned Subordinate Judge disposed of the whole matter glibly and briefly, in a few sentences.

2. An appellate court is the final Court of fact ordinarily and therefore a litigant is entitled to a full and fair and independent consideration of the evidence at the appellate stage.  Anything less than this is  unjust to him and I have no doubt that in the present case the learned Subordinate Judge has fallen far short  of  what  is  expected of  him as an appellate Court.  Although there is furious contest between the counsel for the appellant and for the respondent, they appear to agree with me in this observation…..”

       (Emphasis supplied)

23) This Court also in various cases reiterated the

aforesaid principle and laid down the powers of the

Appellate Court under Section 96 of the Code while

deciding the first appeal.

24) We consider it apposite to refer to some of the

decisions.   

11

25) In  Santosh Hazari  vs.  Purushottam Tiwari

(Deceased) by L.Rs. (2001) 3 SCC 179, this Court

held (at pages 188­189) as under:

“.……..the appellate court has jurisdiction to reverse or affirm the findings of the trial court. First appeal is a valuable right of the parties and unless restricted by law, the whole case is therein open for rehearing both on questions of fact and law. The judgment of the appellate court  must, therefore, reflect its conscious application of mind and record findings supported by reasons, on all the issues arising along with the contentions put forth, and pressed by the parties for decision of the appellate court……while reversing a finding of fact the appellate court must come into close quarters with the reasoning assigned by the trial court and then assign its own reasons for arriving at a different finding. This would satisfy the court hearing a further appeal that the first appellate court had discharged the duty expected of it…………”  

26) The above view was followed by a three­Judge

Bench decision of this Court in Madhukar & Ors.

v.  Sangram & Ors.,(2001) 4 SCC 756, wherein it

was reiterated that sitting as a court of first appeal,

it is the duty of the High Court to deal with all the

12

issues and the evidence  led by  the  parties  before

recording its findings.

27) In  H.K.N. Swami  v.  Irshad Basith,(2005) 10

SCC 243,  this  Court (at  p.  244)  stated as under:

(SCC para 3)

“3. The first appeal has to be decided on facts  as  well  as  on  law. In  the  first  appeal parties  have the right  to be heard both on questions of law as also on facts and the first appellate court is required to address itself to all issues and decide the case by giving reasons. Unfortunately, the High Court, in the present case has not recorded any finding either on facts or on law. Sitting as the first appellate court it was the duty of the High Court to deal with all the issues and the evidence led by the parties before recording the finding regarding title.”

28) Again in  Jagannath  v.  Arulappa  & Anr.,

(2005) 12 SCC 303,  while considering the scope of

Section 96 of the Code, this Court (at pp. 303­04)

observed as follows: (SCC para 2)

“2.  A court of first appeal can reappreciate the entire evidence and come to a different conclusion……...”

13

29) Again in  B.V Nagesh & Anr.  vs.  H.V.

Sreenivasa Murthy, (2010) 13 SCC 530, this Court

taking note of all the earlier judgments of this court

reiterated  the  aforementioned principle  with  these

words:

“3.  How the regular first  appeal is  to be disposed of by the appellate court/High Court has been considered by this Court in various  decisions.  Order  41 CPC deals  with appeals from original decrees. Among the various rules, Rule 31  mandates that the judgment of the appellate court shall state:

(a) the points for determination; (b) the decision thereon; (c) the reasons for the decision; and (d) where the decree appealed from is

reversed  or varied, the relief to  which the appellant is entitled.

4.  The appellate court has jurisdiction to reverse or affirm the findings of the trial court. The first appeal is a valuable right of the parties and unless restricted by law, the whole case is therein open for rehearing both on questions of fact and law. The judgment of the appellate court  must, therefore, reflect its conscious application of mind and record findings supported by reasons, on all the issues arising along with the contentions put forth, and pressed by the parties for decision of the appellate court. Sitting as a court of

14

first appeal, it was the duty of the High Court to deal with all the issues and the evidence led by the parties before recording its findings. The first appeal is a valuable right and the parties have a right to be heard both on questions of law and on facts and the judgment in the first appeal  must address itself to  all the issues  of law and  fact  and decide it by giving reasons in support of the findings. (Vide  Santosh Hazari  v. Purushottam Tiwari, (2001) 3 SCC 179 at p. 188, para 15 and  Madhukar  v.  Sangram, (2001) 4 SCC 756 at p. 758, para 5.)

5. In view of the above salutary principles, on going through the impugned judgment, we feel that the High Court has failed to discharge the obligation placed on it as a first appellate court. In our view, the judgment under appeal is cryptic and none of the relevant aspects have even been noticed. The appeal has been decided in an unsatisfactory manner. Our careful perusal of the judgment in the regular first appeal shows that it falls short  of considerations  which  are  expected from the court  of first  appeal.  Accordingly, without going into the merits of the claim of both parties, we set aside the impugned judgment and decree of the High Court and remand the regular first appeal to the High Court for its fresh disposal in accordance with law.”

30) The aforementioned cases were relied upon by

this  Court  while reiterating the  same principle in

State Bank of India & Anr.  vs.  Emmsons

15

International Ltd. & Anr., (2011) 12 SCC 174 and

Uttar Pradesh State Road Transport

Corporation vs. Mamta & Ors. (2016) 4 SCC 172.

31) An appeal under Section 173 of the M.V. Act is

essentially in the nature of first appeal alike Section

96 of the  Code and, therefore, the  High Court is

equally  under  legal  obligation to  decide all issues

arising in the case both on facts and law after

appreciating the entire evidence.   [See  National

Insurance  Company  Ltd.  vs.  Naresh Kumar  &

Ors.  ((2000) 10 SCC 198 and  State of Punjab &

Anr. vs. Navdeep Kuur & Ors. (2004) 13 SCC 680].

32) As observed supra, as a first Appellate Court,

it was the duty of the High Court to have decided

the appeals keeping in view the requirements of

Order XX Rule 4 (2) read with Order XLI Rule 31 of

the Code which requires that judgment/order shall

16

contain a concise statement of the case, points for

determination, decisions thereon and the reasons.  

33) Coming now to the facts of the case at hand,

we consider it appropriate to reproduce the order of

the High Court infra:

“Considering the submissions  made by the learned counsel for the parties and keeping in view the quantum of compensation amount awarded and the basis on which the same has been arrived at I feel, the interest of justice would be best served if the awarded compensation amount of Rs.24,62,065/­ is modified and reduced to Rs.20,00,000/­ which is payable to the claimant along with the awarded interest. The impugned award is modified to the said extent.

The appellant­Insurance Company is directed to deposit the modified compensation amount of Rs.20,00,000/­ along with awarded interest with the learned Tribunal within six weeks hence.  On deposit of the amount, the same shall be disbursed to the claimant proportionately, as per the direction of the learned Tribunal given in the impugned award. ”

34) Mere perusal of the afore­quoted order of the

High Court would show that the High Court neither

set out the facts of the case of the parties in detail,

17

nor dealt with any of the submissions urged except

to  mention them, nor took note of the grounds

raised by the claimant and nor made any attempt to

appreciate  the  evidence  in  the light  of the  settled

legal  principles applicable to the  issues arising in

the case and proceeded to allow the appeal filed by

the Insurance Company and reduced the

compensation from Rs.24,62,065/­ to

Rs.20,00,000/­.

35) The High Court only observed “Considering the

submissions of the  learned counsel  for  the parties”

and “I   feel  that compensation should have been

awarded as   Rs.20,00,000/­ and   not

Rs.24,62,065/­“. No reasons were given by the  High

Court as to why the amount of compensation

should be reduced from Rs.24,62,065/­ to

Rs.20,00,000/­ and  why it cannot be enhanced.

Since the appellant­claimant had also filed appeal

18

for enhancement of the compensation, the entire

controversy was again open for decision before the

High  Court  at the instance  of   the  claimant  and

Insurance Company.   It  was, therefore,  necessary

for the  High  Court to  assign the reasons for  not

granting enhancement of compensation and/or its

reduction.   In the absence of any reasons, we are

unable to uphold the impugned orders of the High

Court.  

36) As mentioned above, the Insurance Company

did not choose to file any special leave to appeal in

this Court against the impugned order of the High

Court. The effect of non­filing of appeal is that the

Insurance Company has  in principle accepted the

High Court’s order.

37) This Court having allowed the claimant’s

appeal and setting aside the impugned order, it

results in dismissal of the appeal filed by the

19

Insurance Company (M.A.C.A. No.839 of 2014) and

allowing of the appeal (M.A.C.A.No.690/2014) filed

by the claimant.    Had the Insurance Company filed

special leave to appeal against the impugned order

in this Court seeking further reduction in the

compensation awarded by the High Court  like what

the Insurance  Company  did  when they  had filed

appeal before the High Court questioning  inter alia

the quantum of compensation being on higher side,

the Insurance Company too would have been

entitled to  prosecute their appeal on  merits  after

remand before the High Court in terms of this order.

It was, however, not done by the Insurance

Company.   

38) In this view of the matter, the appellant­

claimant  alone  will  have  a right to  prosecute  his

appeal (M.A.C.A. No.690 of 2014) on merits before

the  High  Court  after remand of the case  by this

20

Court wherein the High Court will examine the

question as to whether any case for further

enhancement in the quantum of compensation

awarded by the Tribunal is made out or not and, if

so, on what grounds.   

39) In view of the foregoing discussion, we remand

only the appellant­claimant’s appeal (M.A.C.A.

No.690 of 2014) to the High Court for deciding the

question as  to  whether  any case  is  made out for

further enhancement from Rs.24,62,065/­ awarded

by the Tribunal and, if so, on what grounds.

Needless to say, the Insurance Company will have a

right to oppose the appellant­claimant’s appeal on

the merits.

40) However,  we make  it  clear that  we have not

applied our mind to the merits of the issues

involved  in  the case having formed an opinion to

remand the case to the High Court and hence the

21

High Court would decide M.A.C.A. No.690/2014

strictly in accordance with law on merits

uninfluenced by any of our observations.   We

request the High Court to decide the appeal

preferably within six months.

41) The appeals thus succeed and are accordingly

allowed in part. The impugned orders are set aside.

No costs.

                                    .……...................................J.                     [ABHAY MANOHAR SAPRE]                  

                                    .……...................................J.                     [S. ABDUL NAZEER]

New Delhi, September 20, 2018.

22