Enhancing Compensation without Cross-Appeals in Motor Vehicle Accident Claims: An Analysis of Judicial Trends

Introduction

Order 41 Rule 22¹ permits a respondent, who has not appealed from a decree, to object to the said decree in the opposite party’s appeal as if he had himself preferred a separate appeal where, a decree is partly against one suitor and partly against another, one of such parties, being satisfied with his partial success, may not prefer an appeal within limitation, but on the other party appealing may like to reopen the adverse part of the decree. This provision is often invoked in appeals filed in motor vehicle compensation claim cases to plead for enhanced compensation. However, sometimes, the respondents in the appeal make a prayer for enhanced compensation without a specific cross-objection to that effect and instead ask the court to exercise its special jurisdiction under Order 41 Rule 33 to grant such a relief. This approach has seen different rates of success in different courts. This article aims to analyse and critique the judicial trend in this latter set of cases.

High Court judgments — Contradictory positions

Earlier this year, in National Insurance Co. Ltd. v. Pasala Vijaya Lakshmi² vide judgment dated 18-3-2024, the Andhra Pradesh High Court held that an order for enhanced compensation cannot be granted in a motor vehicles compensation case without a cross-appeal to that effect. A similar order was passed by the Rajasthan High Court on 31-1-2024.³

Both these judgments placed reliance on Ranjana Prakash v. Divisional Manager⁴ to reach this conclusion, wherein the Supreme Court stated that “in an appeal by the owner/insurer, the claimants will not be entitled to seek enhancement of the compensation by urging any new ground, in the absence of any cross-appeal”.⁵ Further, the Court in Ranjana Prakash case⁶ also stated that in an appeal challenging the quantum of compensation “the High Court cannot obviously increase the compensation in an appeal by owner/insurer for reducing the compensation, nor can it reduce the compensation in an appeal by the claimants seeking enhancement of compensation.”⁷

These judgments of the Andhra Pradesh High Court and Rajasthan High Court are in direct contrast to a judgment passed by the High Court of Patna on 19-1-2024 in Oriental Insurance Co. Ltd. v. Sushma Devi⁸. In this case, when an insurance company was appealing their liability in a motor accident case and the respondents prayed for enhanced compensation without filing a cross-appeal, the Court granted the relief of enhanced compensation. For the same, the Court placed reliance on a judgment passed by the Supreme Court in Surekha v. Santosh⁹, wherein the Supreme Court allowed a similar plea stating that “the court should not take hypertechnical approach and ensure that just compensation is awarded to the affected person or the claimants”.¹⁰ Ironically, this judgment of the Patna High Court also places reliance on Ranjana Prakash case¹¹, the very same judgment which was used by the Rajasthan High Court to deny relief to the respondents.

These cases demonstrate that there exists a contradictory position in law with respect to the power of the Court to grant enhanced compensation under Order 41 Rule 33 of the Civil Procedure Code, 1908 in an appeal filed by insurance companies challenging their liability. However, there is a lack of any substantial judicial reasoning supporting either interpretation in all the cases cited above. In light of the same, the proceeding section aims to identify the various factors that should be taken into account while interpreting Order 41 Rule 33 in such cases and make a case for the judgment passed by the Patna High Court as being correct in law.

Proposed interpretation

At the heart of this controversy lies a conflict between substantive and procedural law. It is a well-recognised legal principle that the function of procedural law is to facilitate the ends of justice. Therefore, the rules of procedure must be construed liberally and in such a manner so as to render effective the enforcement of substantive rights.¹² However, this principle comes with an important caveat that in the interest of justice procedural rules should not be ignored so often so as to make them redundant. Thus, to reach the correct interpretation of Order 41 Rule 33 in this case, it is proposed that four parameters need to be kept in mind:

(i) Whether such an interpretation is in line with the scheme of Order 41 Rule 33?

(ii) Whether the proposed interpretation is necessary to dispense substantive justice to the parties?

(iii) Whether such an interpretation will cause any prejudice to the parties involved?

(iv) Whether such an interpretation will adversely affect the functioning of the judiciary/create redundancy in the Civil Procedure Code?

Order 41 Rule 33 vests the appellate court with extraordinary jurisdiction to make whatever order it thinks fit, not only as between the appellant and the respondent but also as between one respondent and another respondent.¹³ Since the purpose of this rule is to effectuate full justice in cases presenting exceptional circumstances, the principle underlying this rule, inter alia, permits the appellate court to render a judgment in favour of a non-appealing party, notwithstanding the absence of a cross-appeal.¹⁴

There are only two requirements that need to be satisfied for this section to be invoked:

(i) the parties before the appellate court should be the same as the parties before the lower court; and

(ii) the issue before the appellate court should properly arise out of the judgment of the lower court.¹⁵

In most such cases, both requirements are satisfied. Therefore, the court is empowered to invoke this rule.

The question then arises whether such invocation is necessary in this case, which is where the second parameter of analysis set out hereinabove comes in. In this context, it is crucial to understand that motor accident claims are not typical adversarial proceedings. They are meant to provide just compensation to victims or their families who have suffered due to road accidents. The very nature of these proceedings is compensatory and remedial, not punitive. Therefore, the court’s primary objective should be to ensure fair compensation, regardless of procedural technicalities.

The court’s reliance on Ranjana Prakash case¹⁶, while providing a precedent, fails to consider the evolving nature of jurisprudence in motor accident claims. Over the years, courts have consistently emphasised the need for a liberal and purposive interpretation of motor vehicle laws to benefit the victims.¹⁷ By rigidly adhering to procedural requirements like cross-appeals, the court is essentially prioritising form over substance. Additional appeals also translate into increased legal costs for the claimants, who are often already financially strained due to the accident.

Furthermore, such an interpretation will not prejudice the appellants given the methodology of calculation of compensation in such cases. The calculation of compensation in such cases are done based on an objective formula which includes inter alia loss of income/dependency, future prospects, funeral expenses, etc.¹⁸ This structured approach means that any enhancement would be based on these predefined categories and not on factors over which there is a potential for any dispute. The value of these variables, in turn, is calculated using objective evidence. For instance, income is usually based on documented evidence or notional income in the case of non-earning victims, future prospects are typically a percentage addition based on age and employment status, and other heads like funeral expenses or loss of consortium often have standardised amounts set by precedents.¹⁹ Since these values are determined entirely based on the submissions made by the dependents of the deceased, the impact that any insurance company can make on the compensation granted once liability is ascertained is non-existent.

Lastly, such an interpretation is also preferable given the fact that the State has an inherent interest in ending litigation due to the scarcity of judicial resources and the consequent overburdened state of the Indian judiciary. This interest is not served by forcing claimants to file separate cross-appeals for enhancement, which could prolong the litigation process and occupy the time of another Bench when the same could have been easily addressed at the first appeal stage. While this approach might make the provision for cross-appeal seemingly redundant in such cases, it is justifiable because it more effectively achieves the fundamental goal of the legal process — ensuring justice and fair compensation for accident victims. The procedural tool of cross-appeal is merely a means to an end, not an end in itself; thus, if the court can achieve the same end (just compensation) through a more direct and efficient means, the same is preferable.