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2006 DIGILAW 1158 (MP)

ORIENTAL INSURANCE CO. LTD. v. VAIKUNTHI BAI

2006-09-28

ABHAY GOHIL, P.K.JAISWAL

body2006
JUDGMENT Abhay Gohil, J. This judgment shall govern the disposal of all the aforesaid three connected appeals which arsise out of the same accident and the same award. In M.A. Nos. 527/2002 and 534/2002, Insurance Company has challenged the award on the ground that the cheque of the premium was dishonoured and policy was cancelled and intimation of the cancellation was given to the owner of vehicle, therefore, the Insurance Company is not liable, though the right of recovery has been granted in favour of the appellant-Insurance Company. In M.A. No. 529/2002, claimants have prayed for enhancement of compensation. Brief facts of the case are that on 31.8.1995, deceased Jagdish Singh Kaurav along with his wife Mrs. Asha had gone to Tighra Dam on their Hero Pitch bearing No. MP07/G-3237. When they were coming back near village Maharajpura on the main road, near turning one bus bearing No. MP07-N-0002, was being driven by respondent No. 1 - Rudrapal Singh very rashly and negligently without applying any horn. Bus came near the point of turning and dashed the motorcyclist from behind. As a result of this accident both Jagdish Singh Kaurav and Smt. Asha fell down, came under the bus and after crushing them the respondents ran away with the bus. As a result of this accident both died. Crime was registered at P.S. Tighra, the matter was investigated and criminal proceedings were in initiated against the driver. The claimants those who are the parents and minor children of the deceased have filed separate two claim petitions for claiming compensation for their death before Claims Tribunal. The claim was contested by the Insurance Company. After recording the evidence, Tribunal found that the accident took place because of rash and negligent driving of the bus by respondent No. 1 -driver Rudrapal Singh and awarded a compensation as per the award to the claimants. On the question of objection raised by the Insurance Company, Tribunal found that admittedly the cheque was dishonoured and the policy was cancelled by the Insurance Company, but the Tribunal has found that the Insurance Company has failed to prove that any information about cancellation of the policy was given to the owner of the vehicle and directed that in the light of the aforesaid circumstances, Insurance Company will pay the amount and shall have liberty to recover the same from the owner of the vehicle. Against the aforesaid award claimants as well as the Insurance Company both have filed all the three appeals. We have heard the learned Counsel for the parties and perused the evidence on record. Mr. S.S. Bansal, learned Counsel appearing for the Insurance Company in M.As. 527/2002 and 534/2002 submitted that the Insurance Company is not liable for payment of compensation and the Insurance Company should be exonerated from its liability. In reply, Mr. N.D. Singhal, learned Counsel for the claimants submitted that virtually it is a case of third party risk and in view of the provisions of Section 147 read with Section 149 of the Motor Vehicles Act, the Insurance Company cannot be exonerated from its liability even if it is found proved that the cheque was dishonoured or policy was cancelled. He submitted that there is no evidence on record that any intimation was given by the Insurance Company to the owner of the vehicle about the cancellation of the policy. In that case the Tribunal has rightly exercised its jurisdiction and held that the Insurance Company will pay the amount of compensation and shall have liberty to recover the same from the owner of the vehicle. Admittedly, the owner and the driver of the vehicle remained ex parte before the Claims Tribunal and they are also not present before this Court in the appeal even after service of notice to them. We have considered the rival contention of the learned Counsel for the parties and perused the judgment cited by the learned Counsel for the parties in the case of Oriental Insurance Co. Ltd. Vs. Inderjit Kaur and Others, , New India Assurance Co. Ltd. Vs. Rula and Others, , the decision of Division Bench of Allahabad High Court in the case of Oriental Insurance Co. Ltd. Vs. Upendra Babu Dubey and Others, and Division Bench decision of this High Court in the case of National Insurance Co. Limited v. Smt. Uma Tiwari and Ors. M.A. No. 107/2001, decided on 10.7.2006 and a recent decision of Division Bench of this High Court in the case of National Insurance Co. Limited v. Smt. Khelli Bai and Ors. 2000 (2) MPJR 2811. It is true that u/s 147 read with Section 149 of the Motor Vehicles Act, it is the duty of the Insurance Company to satisfy the claim of the third party risk. Limited v. Smt. Khelli Bai and Ors. 2000 (2) MPJR 2811. It is true that u/s 147 read with Section 149 of the Motor Vehicles Act, it is the duty of the Insurance Company to satisfy the claim of the third party risk. So far as the question of liability of the Insurance Company is concerned, if the cheque is dishonoured and even after giving intimation if the amount of premium is not deposited by the owner of the vehicle, after cancellation of the policy, Insurance Company would not be liable for the payment of amount of compensation and there is no dispute about this principle of law as has been decided recently by the Division Bench of this Court in the case of Smt. Khelli Bai (supra), but in this case as per the case of the Insurance Company, the policy was cancelled, therefore, it was burden on the Insurance Company to prove that intimation of the cancellation of policy was given to the owner of the vehicle. Insurance Company has produced Ex. D/8 which is a letter of Insurance Company regarding cancellation of the policy dated 10.3.1995 but the Insurance Company has not produced any documentary evidence that by which mode this letter was forwarded and communicated to the insured, though, earlier another letter dated 1.2.1995 regarding dishonour of the cheque was forwarded to the insured through registered post and postal receipt is Ex. D/7 It was argued that the accident took place after six months i.e., 31.8.1995 and in the meantime, even after receiving the intimation, premium was not paid but since the Tribunal has considered the question of service of order of cancellation on the owner of the vehicle and after considering this fact that there is no evidence that the order of cancellation was served has granted liberty to the Insurance Company to recover the amount of compensation paid to the claimants from the owner of the vehicle. Placing reliance on a decision in the case of Smt. Uma Tiwari (supra), the Tribunal held that for the dishonest intention on the part of the insured for not depositing the amount of premium even after dishonour of cheque holding the Insurance Company fully responsible for indemnifying the award would amount to granting premium of dishonesty to the insured and liberty was granted to the Insurance Company to recover the said amount from the owner of the vehicle. Learned Counsel for the Insurance Company has also demanded right of recovery which the Claims Tribunal has already granted. We reaffirm the same liberty and hold that after paying the amount of compensation to the claimants including the enhanced amount in appeal, the Insurance Company shall have liberty to recover the same from the insured, who is owner of the vehicle, by filing an application in the executing Court as has been held by the Supreme Court in the case of National Insurance Co. Ltd. Vs. Swaran Singh and Others, . So far as the question of enhancement of compensation is concerned, deceased Jagadish Prashad was working as a 'Painter'. His age was between 30 and 35 years. Tribunal has considered his income as Rs. 15,000 per year on the basis of notional income. Mr. N.D. Singhal submitted that the deceased was running a painter shop and he was earning Rs. 200 to 250 per day, but he has not produced any documentary evidence about the existence or registration of shop or any account book to prove that the was earning so much amount. It is also not in dispute that the notional income of Rs. 15,000 is being considered for the unemployed person. Though there is no cogent evidence, but it is a fact that the deceased was earning some amount to maintain his family. Therefore, we consider the income of the deceased at Rs. 2,000 per month and Rs. 24,000 per year. After deducting as usual 1/3rd amount towards the personal expenses, we assess the amount of dependency as Rs. 16,000 per year and looking to the age of the deceased the Tribunal has applied multiplier of 17 and we also apply the same multiplier and assess the compensation (16,000 x 17) of Rs. 2,72,000 and we further award a sum of Rs. 16,000 per year and looking to the age of the deceased the Tribunal has applied multiplier of 17 and we also apply the same multiplier and assess the compensation (16,000 x 17) of Rs. 2,72,000 and we further award a sum of Rs. 28,000 in various other heads like loss of love and affection, loss of estate and towards funeral expenses and we compute the total compensation as Rs. 3 lakh. The enhanced amount be deposited in nationalised Bank for a period of five years in the name of minor children. In our considered opinion, this would be just and proper compensation for the death of Jagdish in the facts and circumstances of the case. Claims Tribunal has awarded total compensation of Rs. 1,74,500 for the death of Mrs. Asha. Tribunal has also considered her income as Rs. 15,000 on the basis of notional income. Mr. N.D. Singhal submitted that she was also working and running a shop and earning Rs. 30-40 per day. Admittedly, the claimants have not produced any documentary evidence that she was running a shop or earning any amount out of that, but we agree that so far as the case of income of wife is concerned, her income can be treated as Rs. 15,000 per year on the basis of principle of notional income. Therefore, we hold that the income of the deceased Asha was Rs. 15,000 per year. Tribunal has deducted only 1/3rd towards personal expenses of the deceased and has assessed the dependency as 2/3rd i.e., Rs. 10,000 per year. The Insurance Company has challenged this finding and has stated that in case of the death of husband and wife, so far as the income of wife is concerned the dependency cannot be more than 50%, as the husband was spending his 2/3rd income on the dependents. After considering the various other facts when we separately assessed the Income of the wife, it can be safely held that she must be spending 50% amount on the dependents. Therefore, we consider the amount of dependency as 50% and Rs. 7,500 per year. The age of the deceased was about 30 years. Tribunal has applied the multiplier of 17. We consider that the same has righly been applied. Therefore, we assess the total compensation for the death of Asha (7500 x 17) as Rs. 1,27,500 and after adding further amount of Rs. 7,500 per year. The age of the deceased was about 30 years. Tribunal has applied the multiplier of 17. We consider that the same has righly been applied. Therefore, we assess the total compensation for the death of Asha (7500 x 17) as Rs. 1,27,500 and after adding further amount of Rs. 12,500 in various other heads we assess the total compensation of Rs. 1,40,000 and hold that for the death of Asha, claimants shall be entitled for a sum of Rs. 1,40,000 and reduce the amount from Rs. 1,74,500 to Rs. 1,40,000. Insurance Company shall have right to adjust the excess amount paid to the claimants in the case of death of Mrs. Asha from the amount payable in the case of death of Jagdish Prashad. The claimants shall be entitled for interest on the enhanced amount at the rate of 6% per annum from the date of filing of appeal. Consequently, M.A. 527/02 and M.A. 534/02 filed by the Insurance Company are disposed of with the direction that the Insurance Company will have right of recovery of the amount from the insured/owner of the vehicle as indicated above and the appeal (M.A. 529/2002) filed by the claimants is partly allowed as indicated above.