SC: Cross-objection under Order XLI Rule 22 CPC maintainable in Motor Vehicle Act appeals even if insurer’s appeal withdrawn

Case Name: Urmila Devi & Others v. Branch Manager, National Insurance Company Ltd. & Another
Date of Judgment: JANUARY 30, 2020
Citation: Civil Appeal No. 838 of 2020 (arising out of SLP(C) No. 12230 of 2016)
Bench: Hon’ble Chief Justice S.A. Bobde, Hon’ble Mr. Justice B.R. Gavai, and Hon’ble Mr. Justice Surya Kant

Held: The Supreme Court held that the right to prefer a cross-objection is an exercise of the substantive right of appeal, and therefore a claimant can maintain cross-objections in appeals under Section 173 of the Motor Vehicles Act. Importantly, even if the insurer’s appeal is dismissed or withdrawn, the claimant’s cross-objection must still be adjudicated on merits in terms of Order XLI Rule 22(4) CPC.

Summary: The appellants had secured compensation of Rs. 2,47,500/- from the Motor Accident Claims Tribunal in 2011. The Insurance Company filed an appeal before the Patna High Court but the same was dismissed for default. In the meantime, the claimants had lodged a cross-objection seeking enhancement. The High Court dismissed the cross-objection as not maintainable, reasoning that such objections could only be filed when the insurer specifically challenged the quantum of compensation. On appeal, the Supreme Court examined the scheme of Section 173 of the Motor Vehicles Act, the Bihar Motor Vehicle Rules, and Order XLI Rule 22 CPC. It concluded that the right of cross-objection is co-extensive with the right of appeal and that the High Court’s restrictive interpretation was erroneous. The Court emphasized that once filed, a cross-objection must be considered on its merits, and the dismissal of the main appeal does not extinguish it.

Decision: The appeal was accordingly allowed. The High Court’s order was set aside and the matter was remitted to the Patna High Court for adjudication of the claimants’ cross-objection on merits.