Inherent powers can let an insurer defend in the insured's name when the defendant will not contest the claim.

An insurer served with statutory notice, but lacking a statutory right to defend independently under the Motor Vehicles Act, may still be allowed to conduct the defence in the insured defendant's name where the defendant is absent, unwilling, or unable to contest the claim. The Bombay High Court treated this as a limited use of inherent powers under Section 151 CPC to ensure fairness and an effective opportunity to resist liability before a decree fastens liability on the insurer. The permission did not create a new statutory defence or implead the insurer in its own right; it only enabled defence through the defendant's name, and the objection was rejected.

---

---

Issues: Whether an insurer, after receipt of statutory notice and where the insured defendant is not defending the suit, can be permitted in the exercise of the Court's inherent powers to defend the action in the name of the defendant, notwithstanding that the insurer is not entitled to be impleaded or to defend in its own right under the Motor Vehicles Act.

Analysis: The statutory scheme gave the insurer a right to defend only on the grounds specified for an independent defence, and the case did not fall within that entitlement. However, the Court held that the statute had not dealt with the situation where the defendant was absent, unwilling, or unable to contest the claim, although any decree would still create liability for the insurer. In such a situation, elementary fairness and the interests of justice justified recourse to inherent powers under Section 151 of the Code of Civil Procedure to prevent a liability from being fastened without an effective opportunity to resist the claim. The Court further held that this relief did not amount to adding a new ground under the Motor Vehicles Act, because the insurer was not seeking to be made a party in its own right but only to conduct the defence through the defendant's name.

Conclusion: The insurer could be permitted to defend the suit in the name of the defendant, and the objection to such permission was rejected.

---