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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION  

CIVIL APPEAL No.      838    OF 2020 (Arising out of SLP(C) No. 12230 of 2016)

URMILA DEVI & ORS.   ...APPELLANT(S)

VERSUS

BRANCH MANAGER, NATIONAL INSURANCE COMPANY LTD. & ANR.       .... RESPONDENT(S)

J U D G M E N T   

1. Leave granted.

2. Heard the learned counsels for the parties.

3. The present appeal challenges the judgment and order

dated 21.01.2016 passed by the learned single judge of the

High Court of Patna in Miscellaneous Appeal No.521 of 2011

thereby, holding the cross­objection of the claimant to be not

maintainable.

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4. The  facts,  bare  necessary, for  decision of the  present

appeal, are as under:

5. On 2.5.2008, Sanjay Tanti, husband of appellant No.1;

father of appellant Nos. 2 to 4 and son of appellant No.5 met

with an accident while he was travelling from Ladma to

Goradih by a Tata Maxi.   The appellants filed a Claim

Petition under Section  166  of the Motor Vehicles Act, 1988

(hereinafter referred to as “the M.V. Act”).   The owner of the

vehicle was joined as Opponent No.1; the driver of the vehicle

was joined as Opponent No.2 whereas, the  National

Insurance Company  Limited (hereinafter referred to as “the

Insurance Company”) were joined as Opponent Nos. 3 and 4.

6. The claim of the Insurance Company was that the driver

and owner of the vehicle had breached the terms and

conditions of the insurance policy and, as such, they are not

liable for payment of compensation.  

7. The Motor Vehicle Accidental Claim Tribunal

(hereinafter referred to as “the Tribunal”) vide judgment and

order dated  29.1.2011,  rejected the contention of the

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Insurance Company that the driver and owner of the vehicle

had breached the terms and conditions and while allowing

the Claim Petition directed the Insurance Company to pay

compensation of  Rs.2,47,500/­ to the claimants in terms of

the order dated 29.1.2011.  

8. Being aggrieved by the judgment and award passed by

the learned Tribunal, the Insurance Company preferred Misc.

Appeal No.521 of 2011 before the  High Court  at Patna

contending therein, that the learned Tribunal had

erroneously fastened the liability on it.  In the said appeal, a

cross­objection came to be filed by the appellants  herein.

When the appeal came up for hearing, it was noticed that the

appeal was dismissed  for want of  office objections and the

counsel for the appellants therein (Insurance Company)

stated that the appellants (Insurance Company) were not

interested in reviving the appeal.   The appeal was, as such,

disposed of by the High Court.  Insofar as the cross­objection

of the appellants  herein (the claimants) is concerned, the

High  Court  vide the impugned judgment and order dated

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21.01.2016 held, that when the appeal filed by the Insurance

Company is only restricted to denial of its liability to make

the payment of compensation then in such case the cross­

objection at the behest of the claimants in the shape of

appeal would not be tenable.  It,  however, held that  if the

Insurance Company in the appeal challenges the quantum of

compensation, in  such a  case, the claimant(s)  will  have  a

right to file an objection in terms of Order XLI rule 22 of the

Code of Civil Procedure, 1908  (hereinafter referred to as

“CPC”)  and,  as  such,  dismissed  the  cross­objection as  not

maintainable.    

9. The High Court of Patna in view of Rule 249 of the Bihar

Motor Vehicles Rules, 1992 has held, that there is no

impediment for  the claimant(s)  to  file  cross­objection in an

appeal filed by the Insurance Company if the Insurance

Company had challenged the quantum of  compensation

awarded to the claimant.  It, however, held that if the appeal

filed by the Insurance Company is restricted only to its

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liability to make the payment of compensation on the ground

of breach of terms and conditions of the insurance policy by

the vehicle owner and/or driver of the vehicle, then the cross­

objection filed by the claimant would not be tenable.   It has

been held, that in such a case the claimant(s)  will  have a

right to file an appeal as provided under Section 173 of the

M.V. Act.  

10. Being aggrieved, the appellants are before us by way of

present appeal by special leave.  

11. The learned counsel appearing on behalf of the

appellants submit that the High Court has totally  erred in

holding that the cross­objection filed by the claimants was

not maintainable since the appellant ­  Insurance Company

has not challenged the quantum of compensation.   

12. Per contra, the learned counsel for the Insurance

Company submit, that the High Court has rightly rejected the

cross­objection of the appellants herein.   It is submitted that

since the  Insurance Company had not  pressed the appeal,

the cross­objection was rightly rejected by the High Court.  

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13. The provisions of Section 173 of the M.V. Act and Order

XLI rule 22 of the CPC, relevant for the present appeal, read

thus:

Section 173 of the M.V. Act.  “173. Appeals. ­ (1) Subject to the provisions of sub­section (2) any person aggrieved by an award of a Claims Tribunal may, within ninety days from the date of the award, prefer an appeal to the High Court:  

Provided that no appeal by the person who is required to pay  any amount in terms of such award shall be entertained by the  High Court unless he has deposited with it twenty­five thousand rupees or fifty percent of the amount so awarded, whichever is less, in the manner directed by the High Court:  

Provided further that the High Court may entertain the appeal after the expiry of the said period of  ninety  days, if it is  satisfied  that the appellant was prevented by sufficient cause from preferring the appeal in time.

(2) No appeal shall lie against any award of a Claims Tribunal if the amount in dispute in the appeal is less than ten thousand rupees.”

Order XLI rule 22 of the CPC

“22.  Upon  hearing respondent  may  object to decree as if he had preferred separate appeal.—

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(1) Any respondent, though he may not have appealed from any part of the decree, may not only support the decree but may also state that the finding against him in the Court below in respect of any issue ought to have been in his favour; and may also take  any  cross­objection to the  decree which he could have taken by way of appeal, provided he has filed such objection in the Appellate Court within one month from the date of service on him or his pleader of notice of the day fixed for hearing the appeal, or within such further time as the Appellate Court may see fit to allow.

Explanation.—A respondent aggrieved by a finding of the Court in the judgment on which the decree appealed against is based may, under this rule, file cross­objection in respect of the decree in so far as it is based on that finding, notwithstanding that by reason of the decision of the Court on any other finding which is sufficient for the decision of the suit, the decree, is, wholly or in part, in favour of that respondent.

(2) Form of objection and provisions applicable thereto.—Such cross­objection shall be in the form of a memorandum, and the provisions of Rule 1, so far as they relate to the form and contents of the memorandum of appeal, shall apply thereto.

(3) * * *

(4) Where, in any case in which any respondent has under this rule filed a memorandum of objection, the  original  appeal is  withdrawn or is dismissed  for  default, the  objection so  filed may nevertheless be heard and determined after such notice to the other parties as the Court thinks fit.

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(5) The provisions relating to appeals by indigent persons shall, so far as they can be made applicable, apply to an objection under this rule.”

14. Rule 249 of the Bihar Motor Vehicle Rules, 1992 reads

thus:   “249. Manner of appeals. ­  (1) Every appeal against the Claims Tribunal shall be preferred in the form of a memorandum signed by the appellant or an advocate or attorney of the High Court duly authorised in that behalf by the applicant and presented to the High Court or to such officer as it appoints in this behalf. The memorandum shall be accompanied by a copy of the award.

(2) The memorandum shall set forth concisely and under district heads the grounds of objection to the award against which the appeal is preferred without any argument or narrative and such grounds shall be numbered consecutively.

(3) Save as provided in sub­rules (1) and (2), the provisions of  Order XLI and Order XXI  in First Schedule to the Code of Civil Procedure, 1908 (V of 1908) shall mutatis mutandis apply to appeals preferred to the High Court under Section 173.”

15. In view of the aforesaid provision, the High Court has

rightly  come to  a  conclusion that the claimants  would  be

entitled to file a cross­objection.   However, it has restricted

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the right of the claimants to file cross­objection only when an

appeal is filed by the Insurance Company challenging

quantum of  compensation  by  placing reliance  on  previous

judgments of Patna High Court.  It has been held, that when

the Insurance Company has not challenged the quantum of

compensation  but only challenges its liability to pay

compensation on the ground that there is a breach of terms

and condition by the driver and/or the owner of the vehicle,

the cross­objection would not be tenable at the instance of

the claimants.   

16. An issue arose before the learned Three­Judge Bench of

this Court in the case of Municipal Corporation of Delhi &

Ors   .  vs.  International Security & Intelligence Agency

Limited   1, as to whether in an appeal under Section 39 of the

Arbitration Act, 1940, a respondent has a right to file cross­

objection and, if so, whether the cross­objection  must be

heard and decided on merits though the appeal by reference

1 (2004) 3 SCC 250

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to which cross­objection has been filed is itself dismissed as

not maintainable.   

17. This Court in the said judgment observed thus: “14. Right of  appeal is creature of statute. There is no inherent right of appeal. No appeal can be filed, heard or determined on merits  unless the  statute  confers right  on the appellant and power on the court to do so. Section 39 of the Act confers right to file appeal, insofar as the orders passed under this Act are concerned, only against such of the orders as fall within one or other of the descriptions given in clauses (i) to (vi) of sub­section (1) of Section 39. Parliament has taken care to  specifically exclude any other appeal being filed, against any order passed  under the  Act  but  not covered  by clauses (i) to (vi) abovesaid, by inserting the expression “and from no others” in the text of sub­section (1). Clause (a) of Section 41 extends applicability of all the provisions contained in the  Code of  Civil Procedure, 1908 to (i) all proceedings before the court under the  Act,  and  (ii) to  all the  appeals, under the Act. However, the applicability of such of the provisions of the Code of Civil Procedure shall be excluded as may be inconsistent with the provisions of the Act and/or of rules  made thereunder. A  bare reading of these provisions shows that in all the appeals filed under Section 39, the provisions  of the  Code  of  Civil Procedure, 1908 would be applicable. This would include the applicability of Order 41 including the right to take any cross­

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objection under Rule 22 thereof to appeals under Section 39 of the Act.

15. Right to prefer cross­objection partakes of the right to prefer an appeal. When the impugned decree or order is partly in favour of one party and partly in favour of the other, one party may rest contented by his partial success with a view to giving a quietus  to  the  litigation.  However,  he may like to exercise his right of appeal if he finds that  the other party was not  interested  in burying the hatchet and proposed to keep the lis alive by pursuing the same before the appellate forum. He too may in such circumstances exercise his right to file appeal by taking cross­objection. Thus taking any cross­objection to the decree or order impugned  is the  exercise  of right  of appeal though such right is exercised in the form of taking cross­objection. The substantive right is the right of appeal; the form of cross­objection is a matter of procedure.

16.  Though the statement of law made hereinabove flows simply by the reading of the relevant  statutory  provisions yet some available decisions may also be noticed. In Bhadurmal v. Bizaatunnisa Begum [AIR 1964 AP 365 : (1964) 1 An WR 290] a Division Bench presided over by Jaganmohan Reddy, J. (as His Lordship then was) held cross­objection to be maintainable in an appeal preferred under Sections 47 to 49 of the Hyderabad Jagirdars Debt Settlement Act, 1952

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because the provisions of the Civil Procedure Code were generally applicable by virtue of Section 51 thereof. The applicability of Order 41 Rule 22 to the appeals under that Act was held not excluded merely because provisions governing grounds of appeal and court fees were specifically enacted in the Hyderabad Act. In Inayatullah Khan v. Diwanchand Mahajan [AIR  1959  MP  58 : 1958  MP  LJ 786] Chief Justice M. Hidayatullah (as His Lordship then was)  upheld  maintainability of the cross­objection in an election appeal under Section 116­A of the Representation of the  People  Act,  1951 because  the  High Court as an appellate court hearing an appeal under Section 116­A was enjoined to exercise the same powers, jurisdiction and authority and to follow the same procedure as it  would  have exercised or followed in respect of a civil appeal under the Code of Civil Procedure. In Ramasray Singh v. Bibhisan Sinha [AIR 1950 Cal 372] the Division Bench consisting of Harries, C.J. and Bachawat, J. (as His Lordship then was) held that conferment of right of appeal by Section 38 of the Bengal Money­Lenders Act,  1940 which spoke of the  order  being appealable in the same manner as if it were a decree of the court implied a right in the respondent to file cross­objection inasmuch as the jurisdiction to hear appeal was conferred on  a  pre­established civil court, namely, the Court of the District Judge and nothing was expressly stated as to the procedure regulating such appeal. In A.L.A. Alagappa Chettiar v. Chockalingam

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Chetty [AIR 1919 Mad 784 : ILR 41 Mad 904 (FB)] a Full Bench of the High Court of Madras  presided over  by  Wallis,  C.J.  held that right of the respondent to proceed by way of memorandum of cross­objections was strictly incidental to the filing of appeal by opposite party and therefore in an appeal under Sections 46 and 47 of the Provincial Insolvency Act, 1907, cross­objections were maintainable as the procedure prescribed in the Civil Procedure Code is the standard procedure and applicable to courts exercising powers in insolvency cases.

17. With advantage,  we may also refer to observations of this Court made in Baru Ram v. Prasanni [AIR 1959 SC 93 : 1959 SCR 1403] . Section 116­A of the Representation of the People Act, 1951 contemplates an appeal being laid before the Supreme Court from every order made by the High Court under Section 98 or Section 99 of that Act. Section 116­C provides for every such appeal being heard and determined by the  Supreme Court  as nearly as  may  be in  accordance  with the procedure applicable to the hearing and determination of any appeal from any final order passed by the High Court in exercise of its original civil jurisdiction subject to the provisions of that Act and the Rules, if any. All the provisions of the Code of Civil Procedure, 1908 and rules of the court shall, so far as may be, apply in relation to such appeal. P.B. Gajendragadkar, J. (as His Lordship then was) speaking for the Court observed: (AIR p. 99, para 11)

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“There  is  no doubt that, in an ordinary civil appeal, the respondent would be entitled to support the decree under appeal on grounds other than those found by the trial court in his favour. Order 41  Rule 22 of the  Code of Civil Procedure which permits the respondent to file cross­objections recognize the respondent's right to support the decree on any of the grounds  decided against him by the  court  below. In  the  present case no appeal could have been preferred by Respondent 1 because she had succeeded in obtaining the declaration that the appellant's election was void and it should therefore be open to her to support the final conclusion of the High Court by contending that the other finding recorded by the High Court which would go to the root of the matter is erroneous.  Prima  facie there  appears to be some force in this contention;”

However, the Court did not express any final opinion thereon as it was considered not necessary to decide the point in that appeal.

18. We have, therefore, no doubt in our mind that right to take a cross­objection is the  exercise  of  substantive right  of  appeal conferred by a statute. Available grounds of challenge  against the judgment,  decree  or order impugned remain the same whether it is an appeal or a cross­objection. The difference lies in the form and  manner  of exercising the right; the terminus a quo (the starting point) of limitation also differs.

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19. In Superintending Engineer v. B. Subba Reddy [(1999) 4 SCC 423] a two­Judge Bench of this Court observed (vide SCC p. 434, para 24):

“If there is no right of cross­objection given under Section 39 of the Act, it cannot be read into Section 41 of the Act. Filing of cross­objection is not procedural in nature.  Section 41 of the Act  merely prescribes that the procedure of the Code would be applicable to the appeal under Section 39 of the Act. We are, therefore, of the opinion that cross­objection by the respondent was not maintainable….”

Such observation is not correct and proceeds on certain wrong premises. Firstly, form of cross­objection is procedural and is only a manner of exercising right of appeal which is substantive, as  we  have already stated. Secondly, it is not merely the procedure  prescribed  by the  Code  of  Civil Procedure which has been made applicable to proceedings under the Arbitration Act by Section 41(a) of the Act; the entire body of the Code of Civil Procedure, 1908 has been made applicable to all proceedings before the court and to all appeals under the Arbitration Act, 1940. The provision is general and wide in  its applicability which cannot be curtailed; the only exception being where the provisions of the Arbitration Act and/or of the rules  made thereunder may be inconsistent with the provisions of the Code of Civil Procedure, 1908 in which case the applicability of the latter shall stand excluded but only to the extent of

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inconsistency. We may hasten to add that to the extent of our disagreement with the law laid down in B. Subba Reddy case [(1999) 4 SCC 423] the proposition appears  to  have been rather  widely  stated  in  that  case. In fact the question before the Court in B. Subba Reddy case [(1999) 4 SCC 423] was whether cross­objection seeking the relief of award of interest at a higher rate was maintainable though such an order did not fall  within  the  purview of  Section 39(1)  of the Act.

20. Once we hold that by taking cross­ objection what is being exercised is the right of appeal itself, it follows that the subject­ matter of cross­objection and the relief sought therein must conform to the requirement of Section 39(1). In other words, a cross­objection can be preferred if the applicant could have sought for the same relief by filing an appeal in conformity with the provisions of  Section 39(1) of the Act. If the subject­matter of the cross­ objection is to impugn such an order which does not fall within the purview of any of the categories contemplated by clauses (i) to (vi) of sub­section (1) of Section 39 of the Act, the cross­objection shall not be maintainable.”

18. It, thus, could be seen, that this Court has held that the

right  to prefer cross­objection partakes of the right to prefer

an appeal.  It has been held, that when the impugned decree

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or order is partly in favour of one party and partly in favour of

the other, one party may rest contented by his partial success

with a view to giving a quietus to the litigation.  It, however,

held that if he finds that the other party was not interested in

giving an end to the litigation and proposed to keep the lis

alive  by pursuing the same before the appellate forum, he

may like to exercise his right of appeal. It has been held, that

he too  may  in  such cases  and circumstances  exercise  his

right to file appeal by taking cross objection. It has been next

held, that taking any cross­objection to the decree or order

impugned is the exercise of right of appeal though such right

is exercised in the form of taking cross­objection.  It has been

held, that the substantive right is the right of appeal and the

form of cross objection is a matter of procedure.

19. While arriving at the said decision, this Court relied on

the judgment in the case of  Bhadurmal  vs.  Bizaatunnisa

Begum2, wherein an issue with regard to maintainability of

cross­objection in an appeal preferred under Sections 47 to

2 AIR 1964 AP 365

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49 of  Hyderabad Jagirdars Debt Settlement Act,  1952 was

considered.   It  also relied  on  the judgment in the  case  of

Inayatullah Khan  vs.  Diwanchand Mahajan3, wherein

maintainability of cross objection in an election appeal under

Section 116A of the Representation of the People Act, 1951

was upheld.  It further relied on the judgment of the Calcutta

High Court in the case of  Ramasray Singh & Ors. vs.

Bibhisan Sinha4,  upholding the right of the respondent to

file cross­objection in an appeal contemplated under Section

38 of Bengal Money­Lenders Act, 1940.  

20. It further relied on certain observations of this Court in

the case of  Baru Ram  vs.  Prasanni5.  This Court did not

agree with the contrary view taken by the learned two­judge

Bench of this Court in the case of Superintending Engineer

& Ors. vs.  B.  Subba  Reddy6.  However,  holding so, this

Court held that since the right to appeal under Section 39 of

the Arbitration Act, 1940 was only restricted to clauses (i) to

3 AIR 1959 MP 58 4 AIR 1950 Cal 372 5 AIR 1959 SC 93 : 1959 SCR 1403 6 (1999) 4 SCC 423

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(vi) of sub­section (1) thereof, the cross­objection also must

conform to the said requirement.  In other words, it was held

that a cross­objection would be maintainable only if the

subject­matter thereof falls in any of the category carved out

under clauses (i) to (vi) of sub­section (1) of Section 39 of the

Arbitration Act, 1940.   

21. This Court further found that the entire Order XLI rule

22 CPC would apply to a cross­objection including the

provisions of  sub­rule  (4) thereof.   It  was held, that if the

original appeal is found to be incompetent or not

maintainable if it is filed against an order not falling under

any of the clauses (i) to (vi) of sub­Section (1) of Section 39,

then the cross objection shall  also fail on that ground and

cannot be adjudicated upon on merits.   It  could, thus,  be

seen that the view taken  by the  Court is that the cross­

objection would be tenable only if appeal is validly tenable.   

22. A perusal of Section 173 of the M.V. Act would reveal

that the said provision does not restrict the right to file an

appeal  as  is  restricted under Section 39 of the Arbitration

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Act, 1940.   It provides, that  any person aggrieved by an

award of a Claims Tribunal, subject to the provisions of sub­

section (2) thereof, may prefer an appeal to the High Court.

The restriction imposed under sub­section (2) of Section 173

is with regard to non­filing of appeal against any award of a

Claims Tribunal if the amount in dispute in the appeal is less

than ten thousand rupees.   Needless to mention that this is

subject to the provisions about limitation.   

23. As already discussed herein above, the  learned single

judge of the High Court himself has observed that in view of

Rule 249 of the Bihar Motor Vehicle Rules, 1992, there

cannot be any issue with regard to the tenability of the cross­

objection.  Sub­rule (3) of Rule 249 of the Bihar Motor Vehicle

Rules, 1992 would show, that save as provided in sub­rules

(1) and (2),  the provisions of Order XLI   and Order XXI  in

First Schedule to the CPC shall apply mutatis mutandis to

appeals preferred to the High Court under Section 173 of the

M.V. Act.

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24. A conjoint reading of the provisions of Section 173 of the

M.V. Act; Rule 249 of the Bihar Motor Vehicle Rules, 1992;

and Order XLI rule 22 of the CPC would reveal, that there is

no restriction on the right to appeal of any of the parties.  It is

clear, that any  party aggrieved  by any  part of the  Award

would be entitled to prefer an appeal.   It is also clear, that

any respondent, though he may not have appealed from any

part of the decree, apart from supporting the finding in his

favour, is also entitled to take any cross­objection to the

decree which he could have taken by way of appeal.   

25. When in an appeal the appellant could have raised any

of the grounds against which he is aggrieved, we fail to

understand,  as to  how a respondent  can be  denied  to file

cross­objection in an appeal filed by the other side

challenging that part of the Award with which he was

aggrieved.   We find, that the said distinction as sought to be

drawn by the High Court is not in tune with conjoint reading

of the provisions of Section 173 of the M.V. Act; Rule 249 of

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the Bihar Motor Vehicle Rules, 1992; and Order XLI rule 22

of the CPC.

26. As a matter of fact, it  could be seen from the prayer

clause in the appeal preferred by the respondents herein

(Insurance Company) before the High Court that the entire

award was challenged by the respondents – Insurance

Company.   Not only that, but the appellants herein (the

claimants) were also impleaded as party respondents to the

said  appeal.   In such circumstances, the  High  Court  has

erred in declining to consider the cross­objection of the

appellants herein (the claimants) on merits.  

27. There is another angle to it.   Sub­rule (4) of Rule 22 of

Order XLI of the CPC specifically provides, that even if the

original appeal is withdrawn or is dismissed for default, the

cross­objection would nevertheless be heard and determined

after such notice to the other parties as the Court thinks fit.

We  are, therefore,  of the  considered view, that  even  if the

appeal of the Insurance Company was dismissed in default

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and the Insurance Company had submitted that they were

not interested to revive the appeal, still the High Court was

required to decide the cross­objection of the appellants herein

on merits and in accordance with law.  

28. In the result, the appeal is allowed.   The impugned

judgment and order dated 21.1.2016 holding that the cross­

objection of the present appellants was not maintainable is

quashed and set aside.   The matter is remitted back to the

High Court for deciding the cross­objection filed by the

present appellants on its own merits.  There shall be no order

as to costs.  

…....................CJI.                              [S.A. BOBDE]

......................J.                                                          [B.R. GAVAI]

......................J.                                                         [SURYA KANT]

NEW DELHI; JANUARY 30, 2020