Research › Search › Judgment

Jharkhand High Court · body

2004 DIGILAW 726 (JHR)

New India Assurance Co. Ltd. v. Bhawa Devi

2004-07-21

M.Y.EQBAL, VISHNUDEO NARAYAN

body2004
JUDGMENT M.Y. Eqbal, J. 1. This appeal at the instance of the appellant. New India Assurance Company Limited is directed against the judgment and award dated 30.9.2000 passed by District Judge-cum-MVACT, Giridih in M.V. Claim Case No. 37/1998 whereby a sum of Rs. 20,67,076/- together with interest at the rate of 12.5% has been awarded on account of death of the deceased in a motor vehicle accident, 2. Claimants are the mother/mother -In-law, sons and daughters of the deceased. 3. The brief facts of the case is that on 16.7.1998 deceased Tuntun Kumar @ Tuntun Bhadani alongwith his wife late Asha Bhadani and others were going to Sultanganj by Car bearing registration No. BR-16-A-0377. As soon as the car reached near Makdiha line hotel at Jamua Chatro Road, a Leyland Truck bearing registration No. BRA 9821 loaded with scrap coming towards Chatro dashed the Ambassador car causing death of all the occupants including Tuntun Kumar and Asha Devi. It is alleged that the said accident took place due to rash and negligent driving of the truck. Claimants further case was that both Tuntun Kumar and Asha Devi died leaving behind their mother/mother-in-law and minor sons and daughters. It was contended that the deceased Tuntun Kumar was aged about 38 years and his wife Asha Devi was aged about 32 years. Claimants further case is that annual income of the deceased Tuntun Kumar was Rs. 1,11,300/- and the annual income of deceased Asha Bhadani was Rs. 85,842/- The Claims Tribunal taking the aforesaid amount as the annual income of the deceased Tuntun Kumar Bhadani assessed compensation at Rs. H.39,700/- and further taking annual income of the deceased Asha Devi Bhandani at Rs. 85.842/-. assessed compensation at Rs. 9.27.376/". The total compensation therefore, awarded for the death of Tuntun Kumar Bhadani and Asha Devi Bhadani is Rs. 20,67,076/- 4. The respondent-opposite parties, namely, the owner and driver of the truck neither appeared nor contested the claim petition by filing written statement. 5. The appellant who is insurer of both the Ambassador Car and truck appeared and contested the case by taking all the defences and disputed the amount of compensation claimed by the claimants. 6. Mr, D.C, Ghose, learned counsel appearing for the appellant Insurance Company assailed the impugned judgment and award on various grounds. 5. The appellant who is insurer of both the Ambassador Car and truck appeared and contested the case by taking all the defences and disputed the amount of compensation claimed by the claimants. 6. Mr, D.C, Ghose, learned counsel appearing for the appellant Insurance Company assailed the impugned judgment and award on various grounds. Learned counsel firstly submitted that the owner of the truck did not contest the claim and it was only the Insurance Company who contested the claim and therefore, the appellant is entitled to challenge the quantum of compensation awarded by the Tribunal. Learned counsel submitted that while assessing compensation the Tribunal has failed to take into consideration very important and relevant piece of evident which .has come from the side of the claimant. Learned counsel drawn our attention to the evidence of PW 1 who is mother of deceased Tuntun Kumar Bhadani. She has stated in her evidence that, her son and daugther-in-law were doing timber business. The income of her daughter-in-law was Rs. 80.000/-, 90,000/-" per annum. In her cross-examination she has stated that she has one more son, Govind Bhadani who also does timber business. After the death of the deceased the timber business is looked after by him. 7. Mr. A.K. Lal, learned counsel appearing on behalf of the respondents- claimants on the other hand, submitted that the Tribunal has assessed the compensation on the basis of the income shown in the income-tax return and, therefore, the compensation awarded by the Tribunal is neither excessive nor exorbitant. 8. As noticed above, the owner of the vehicle neither appeared nor contested the case and the case proceed ex parte against him. The appellant-Insurance Company reserved the right to contest the case on all the points which are available to the owner of the vehicle in case of his failure to contest the case. It further appears that the Insurance Company was allowed to cross-examine the witnesses on all the points including the income of the deceased and the nature of the business. 9. The question whether the Insurance Company can contest the claim on all the points was discussed by the Supreme Court in the case of British India General Insurance Company Ltd. v. Captain Itbar Singh and Ors., reported in AIR 1959 SC 1331 . Their Lordships while considering the aforesaid question held as follows :- "Again, we find the contention wholly unacceptable. Their Lordships while considering the aforesaid question held as follows :- "Again, we find the contention wholly unacceptable. The statute has no doubt created a liability in the insurer to the injured person but the statute has also expressly confined the right to avoid that liability to certain grounds specified in it. It is not for us to add to those grounds and therefore, to the statute for reasons of hardship. We are furthermore not convinced that the statute courses any hardship. First, the insurer has the right, provided he has reserved it by the policy, to defend the action in the name of the assured and if he does so, all defences open to the assured can then, be urged by him and there is no other defence that he claims to be entitled to urge. He can thus avoid all hardship if any by proving for a right to defend the action in the name of the assured and this he has full liberty to do." 10. In the case of Vanguard Insurance Company Ltd. v. Raghunath Patra, 1976 ACJ 12 (Ori). a question was raised whether the Insurance Company can challenge the quantum of damages claimed by the claimant. While considering the said question. There Lordships held :- "This contention of Mr. Roy is well founded. In view of the provisions contained in Sections 96(2) and 110(C)(2) of the Act it was open to the claimant to raise an objection to the defence taken by the insurer before the Tribunal challenging the quantum of damages claimed by the claimant, the claimant does not appear to have raised any objection to the defence taken by the insurer before the Tribunal and in the absence of any objection the Tribunal allowed the insurer to cross-examine the claimants witnesses on the question of damages. The records also show that the owner of the truck did not appear before the Tribunal and contest the claim of respondent No. 1. These being the state of things, in my view, there has been sufficient compliance of the conditions laid down in the aforesaid Supreme Court decision relied upon by Mr. R. Mohanty. The technical objection raised by Mr. Mohanty, therefore, fails." 11. These being the state of things, in my view, there has been sufficient compliance of the conditions laid down in the aforesaid Supreme Court decision relied upon by Mr. R. Mohanty. The technical objection raised by Mr. Mohanty, therefore, fails." 11. A Bench of the Orissa High Court in the case of New Indian Assurance Company Ltd. v. Surjyamoni Padhi and Ors., AIR 1980 Ori 17 , again considered the said question and observed :- "A conjoint reading of both the Sections 96(2) and 110(C)(2-A) indicates that when there is collusion between the person making the claim and the person against whom the claim is made or the person against whom the claim Is made has failed to contest the claim, the insurance company is entitled to defend . the suit on all or any of the grounds that are available to the person against whom the claim has been made. In the present case the insured did not enter contest and remained ex parte before the Tribunal. He has also not preferred any appeal. It was contended on behalf of the respondents that the appellant should have obtained permission of the Tribunal to contest the claim. I am unable to accept to this contention. The appellant was served with a notice as contemplated under Section 96(2) of the Act and was impleaded as a party to the claim proceeding. Before the Tribunal the respondents did not take the stand that the appellant was not entitled to defend the suit without obtaining permission. The appellant was allowed to contest the claim and cross-examine the witness without any objection by the respondents. The appellant has been saddled with the entire liability for payment of compensation, the appellant is. therefore, entitled to challenge the quantum of compensation as also its basis in this appeal. The preliminary objection raised on behalf of the respondents is without any merit." 12. Similarly a Division Bench of the Madras High Court in the case of New India Assurance Company Limited v. Mariappan and Anr., 1984 ACJ 222. therefore, entitled to challenge the quantum of compensation as also its basis in this appeal. The preliminary objection raised on behalf of the respondents is without any merit." 12. Similarly a Division Bench of the Madras High Court in the case of New India Assurance Company Limited v. Mariappan and Anr., 1984 ACJ 222. took the same view and observed ;- "Apart from this, there is also another aspect of this case which compels us to remit the matter to the Tribunal, The Tribunal in the present case has refused to permit the Insurance Company to cross-examine the eye-witnesses on the ground that its defence is limited to matters covered by Section 96(2) of the Motor Vehicles Act. However, the Tribunal has lover looked the fact that the owner of the vehicle has remained exparte in which case the Insurance Company will be entitled to put forward all the defences that are open to the owner of the vehicle under Section 110-C(2-A) of the Motor Vehicles Act which specifically states that if the person against whom the claim is made has failed to contest the claim, the Insurance Company shall have the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made. Therefore, it is clear that the Tribunal is in error in shutting out the Insurance Company from cross-examining the eye-witnesses and putting forward defence open to it." 13. In the case of New India Insurance Company Limited v. Smt. Chinta Devi and Ors., 1991 (2) TAC 259, a Bench of the Patna High Court, Honble Mr. Justice S.B. Sinha (as he then was) following the ratio of the different High Courts referred to hereinabove, held that in a case where the owner of the vehicle did not appear and contest the case and the Insurance Company is allowed to cross- examine the witnesses then the appellant Insurance Company would be entitled to question the quantum of compensation, payable in favour of the claimants. 14. In the case of United India Insurance Company Limited v. Jyotsnaben Sudhirbhai Patel and Ors., 2003 AIR SCW 4111. 14. In the case of United India Insurance Company Limited v. Jyotsnaben Sudhirbhai Patel and Ors., 2003 AIR SCW 4111. the Supreme Court while considering the aforesaid question held as under:- "In view of the aforesaid decisions on the point and on a consideration of the relevant provisions under the Motor Vehicles Act, it Is plain and clear that the Insurance Company can contest the claim preferred before the Tribunal only on the statutory grounds prescribed under Section 149(2) of the Act. but. if there is collusion between the person making the claim and the person resisting the claim or if the person against whom the claim is made has failed to contest the claim, the Insurance Company can step In and seek permission of the Tribunal and make a prayer for getting Itself impleaded as a party to the proceeding and the insurer so Impleaded can then contest the proceeding on grounds other than the grounds enumerated in sub-section (2) of Section 149 of the Act. This is an enabling provision in the event of collusion between the claimant and the Insured or the tortfeaser. In the instance case, the Insurance Company was Impleaded as third respondent. The driver and owner of the vehicle, though appeared before the Tribunal, did not contest the proceedings. They deed not file the written statement nor did they choose to give evidence before the Tribunal. Admittedly. the appellant filed an application under Section 170 of the Act seeking permission of the Tribunal to contest the proceedings giving the necessary details. The award passed by the Tribunal also evidently chows that pursuant to this permission, the counsel for the appellant-Insurance Company cross-examined the witnesses produced by the claimant to prove the negligence of the offending vehicle. Unfortunately, however, the Tribunal while passing its orders on the petition filed under Section 170 of the Act only stated that the prayer was granted, though the mandate of Section 170(b) of the Motor Vehicles Act states that the Tribunal while passing an order shall record its reasons. This Court In Shankarayyas case (supra) had emphasized this aspect. But it is every much evident in this case that the driver and the owner of the motor vehicle did not file the written statement and failed to contest the proceeding. The Tribunal could have merely recorded that fact while allowing the application. This Court In Shankarayyas case (supra) had emphasized this aspect. But it is every much evident in this case that the driver and the owner of the motor vehicle did not file the written statement and failed to contest the proceeding. The Tribunal could have merely recorded that fact while allowing the application. In a situation contemplated by clause (b) of Section 170. nothing more was required than recording the indisputable fact. For failure to do so. the appellant shall not suffer prejudice. Therefore, the appellant-Insurance Company was justified in contesting the proceedings on the grounds other than those enumerated under sub-section (2) of Section 149 of the Act, pursuant to the permission granted by Court. For the same reason, the Insurance Company can be legitimately considered to be person aggrieved within the meaning of Section 173 of the Act. Having regard to the above facts, we are constrained to hold that the High Court should not have dismissed the appeal on the sole ground that the appellant had not obtained reasoned order permitting it to contest under Section 170 of the Act. In the result, we allow this appeal, set aside the judgment and order passed by the Division Bench of the High Court and remand the matter to the High Court. We request the High Court to hear and dispose of the appeal on merits in accordance with law." 15. In the instant case, as noticed above, the appellant-Insurance Company reserved its right in the written statement to contest on all the points on failure of the owner of the vehicle to contest the case. Admittedly the owner of the vehicle neither appeared nor contested the case and the Tribunal, therefore, allowed the appellant-Insurance Company to cross-examine all the witnesses. In that view of the matter. I am of the opinion that in the Instant appeal if the quantum of compensation assessed by the Tribunal Is highly excessive and exorbitant and if the Tribunal has not correctly followed the settled principles of law in the matter of assessment of compensation then it would be proper for the appellate Court to fix just and reasonable compensation. 16. Coming back to the Instant case it appears that the Tribunal mainly relied upon the evidence with regard to the income of the deceased. Tuntun Kumar and Asha Devi at Rs. 1.11.300/- and 85.842/- respectively. 16. Coming back to the Instant case it appears that the Tribunal mainly relied upon the evidence with regard to the income of the deceased. Tuntun Kumar and Asha Devi at Rs. 1.11.300/- and 85.842/- respectively. The Tribunal failed to consider the evidence of the mother of the claimants who has stated that after the death of the deceased the business is looked after by her second son. Certainly there is a pecuniary loss because of the death of the deceased but in the facts of the case it cannot be held that there has been a total pecuniary loss from the business that was being run by the deceased. In that view of the matter, instead of taking 16 years of purchase for the purpose of assessing the compensation for the death of Tuntun Kumar the Tribunal ought to have taken 12 years of "purchase. Accordingly, if the annual Income of Rs. 1.11,300/- is multiplied by 12 then the total amount comes of Rs. 13,35.600/-. After deducting l/3rd out of the said amount the net compensation comes to Rs. 8.90,400/-. Similarly in the case of deceased, Asha Devi Bhandani, if her annual income of Rs. 85,842/- is multiplied by 12 years of purchase, the amount comes to Rs. 10,30,104/-. After deducting l/3rd out. of the said amount the net amount of compensation conies to Rs. 6,86,736/-. In this way the total compensation for the death of both the deceased can be assessed at Rs. 17,16,840/-. In my considered opinion, therefore, the total sum of Rs. 17,16,840/- would be just and reasonable compensation. 17. So far interest part is concerned, the Tribunal has awarded 12.5% interest from the date of filing of petition i.e. from 21.9.1998. In the light of the decision of the Supreme Court 9% interest on the compensation amount would be just and proper. I, lherefore, hold that the aforesaid amount of compensation shall carry interest at the rate of 9% from the date of filing of the claim petition. 18. Taking into consideration the facts of the case and the discussions made above, the instant appeal is allowed in part and the amount of compensation assessed by the Tribunal is reduced to Rs. 17.16.840/- which shall cany interest at tlie rate of 9% p.a. from the date of filing of the claim petition i.e. from 21.9.1998. 18. Taking into consideration the facts of the case and the discussions made above, the instant appeal is allowed in part and the amount of compensation assessed by the Tribunal is reduced to Rs. 17.16.840/- which shall cany interest at tlie rate of 9% p.a. from the date of filing of the claim petition i.e. from 21.9.1998. If the amount of interest is calculated at the rate of 9% on the total amount of compensation of Rs. 17.16.840/- then it comes to Rs. 9,18.000/- approximately. The appellant-Insurance Company is, therefore, directed to make payment of the aforesaid compensation amount and interest by handing over cheque to the claimants within two weeks from today and preferably on 1st August, 2004 when the Lok Adalat is going to be held in the premises of the High Court. 19. Since the deceased died leaving behind minor children. It is directed that 3/4th of the compensation amount together with interest shall be deposited in long term fixed deposit in the joint names of the minor sons and daughters. Respondent No. 1 who is the grant mother, will be entitled to withdraw the amount of interest accrued on the said amount of fixed deposit for the maintenance of the minor children. Vishnudeo Narayan, J. I agree.