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2007 DIGILAW 186 (GAU)

Dhruba Bharali v. Shyam Chandra Kalita

2007-03-05

I.A.ANSARI

body2007
This is appeal under section HOD of the Motor Vehicles Act, 1939, against the award, dated 22.9.1992, passed by the learned Motor Accidents Claims Tribunal, Guwahati, in MAC Case No. 89(K)/88, awarding a sum of rupees one lakh twenty thousand, as compensation, to the claimants and directing the insurer-respondent No. 8 herein to pay, as their statutory liability, rupees fifteen thousand to the claimant-appellants, the appeal having been preferred against the said award by the owner of the vehicle, which was involved in the accident. 2. The claimants' case, in brief, is, thus : On 14.1.1988, when Jatin Kalita (since deceased) was travelling in a public bus, bearing registration No. AMU-335, the vehicle, due to its rash and negligent driving by the driver, dashed against a roadside tree. Jatin Kalita, who was a passenger in the bus, died as a result of the injuries sustained in the accident. The claimants, who are legal representatives of the deceased, sought for a sum of rupees two lakhs as compensation. 3. The present appellant, as owner of the said vehicle, resisted the claim by contending, inter alia, that the vehicle was comprehensively insured with the respondent No. 8 herein and, in such circumstances, whatever compensation were found payable to the claimants by the owner are to be indemnified by, and shall be recoverable from, the insurer. As against the plea, so taken by the owner of the vehicle, the insurer contended that though the relevant insurance policy was a comprehensive one, no special premium had been paid for enhancing the statutory liability of the insurer with regard to the passengers and, hence, the insurer's liability, in the present case, for the death of a passenger, remained limited to the tune of Rs. 15,000. 4. While, in order to sustain their claim for compensation, the claimants adduced evidence, the insurer also adduced evidence to show that the premium paid, in the present case, in respect of each of the passenger, was rupees twelve and, hence, the insurer's liability, in the case of the passengers, would not be more than rupees fifteen thousand per passenger. 5. The learned tribunal determined the income of the deceased as four hundred rupees per month and, applying 25 as multiplier, held that the claimants were entitled to receive compensation to the tune of Rs. 1,20,000. 5. The learned tribunal determined the income of the deceased as four hundred rupees per month and, applying 25 as multiplier, held that the claimants were entitled to receive compensation to the tune of Rs. 1,20,000. Having arrived at such a finding, the learned Tribunal further concluded that the insurer's liability, in the present case, was not more than Rs. 15,000 and, accordingly, while the learned Tribunal ordered the insurer to pay Rs. 15,000 only, it directed the owner of the vehicle to pay the remaining amount of compensation, so determined, with interest at the rate of 12 per cent per annum from the date of making of the claim application until the whole awarded amount was realized. Aggrieved by the award, so rendered, the owner of the vehicle has impugned the same in the present appeal. 6.1 have heard Mr. D.P. Chaliha, learned senior counsel, appearing on behalf of the owner, and Mr. B. Kalita, learned senior counsel, appearing on behalf of the claimants-respondents No. 1 to 7. I have also heard Mr. S. Dutta, learned counsel for the inserer-respondent No. 8. 7.1 In the present appeal, the impugned award has been challenged on two grounds. It is contended, on behalf of the owner-appellant, that in the case at hand, the deceased was a unmarried person and as the appellants are sufficiently old, the multiplier of 25, adopted by the learned Tribunal, was far in excess of legally permissible limit. The second ground of attack, on the impugned award, is that the vehicle, in question, having been comprehensively insured, the insurer's liability was unlimited and, hence, the learned Tribunal ought to have directed that the entire amount, payable as compensation, shall be recoverable from the insurer. 8. Controverting the submissions made on behalf of the appellants, it is submitted, on behalf of the claimants-respondents, that the learned Tribunal's determination of the quantum of compensation is wholly legal and justified in the facts and circumstances of the present case. 9. Appearing-on behalf of the insurer-respondent, Mr. S. Dutta, learned counsel, submits that in the present case, though the vehicle was comprehensively insured, the premium paid in respect of the passengers was at the rate of Rs. 12 per passenger. This rate of premium, according to Mr. Dutta, made the insurer liable to discharge only its statutory liability of the amount of Rs. 15,000 per passenger. S. Dutta, learned counsel, submits that in the present case, though the vehicle was comprehensively insured, the premium paid in respect of the passengers was at the rate of Rs. 12 per passenger. This rate of premium, according to Mr. Dutta, made the insurer liable to discharge only its statutory liability of the amount of Rs. 15,000 per passenger. It is also submitted by Mr. S. Dutta that a comprehensive policy does not mean that the liability of the insurer towards a passenger would be unlimited. What a comprehensive policy means, points out Mr. Dutta, is that the vehicle is insured on its estimated value and the insurer would be liable for payment of compensation to the extent of the liability, which it incurs in respect of the vehicle; but so far as the passengers of the vehicle are concerned, the insurer's liability would not be unlimited, but would remain confined in accordance with the premium, which may have been paid in any given case. In the present case, submits Mr. Dutta, since the premium paid was,Rs. 12 per passenger, the learned Tribunal was wholly justified in keeping the liability of the insurer to the extent of Rs. 15,000 per passenger. 10. While considering the present appeal, what may be noted is that the learned Tribunal's assessment that the income of the deceased was Rs. 400 per month is not in dispute. What is in dispute is the multiplier chosen in the present case. The deceased was, at the relevant time, aged about 26 years. Had the deceased been married, then, the maximum multiplier, which could have been applied, was 18. In the present case, the deceased was an unmarried man and the parents are the main claimants. It is also worth noticing that though, in the present case,. the father's age, at the time of his son's death, was about 62 years, the mother's age was around 40-45 years. Thus, if the age of the mother of the said deceased, at the time of the said accident, is treated to be around 40 years, the multiplier, to be resorted to, could not have exceeded 15. 11. the father's age, at the time of his son's death, was about 62 years, the mother's age was around 40-45 years. Thus, if the age of the mother of the said deceased, at the time of the said accident, is treated to be around 40 years, the multiplier, to be resorted to, could not have exceeded 15. 11. It needs to be borne in mind that while, in the case of determination of compensation of a widow or of a dependent child of a deceased, the multiplier to be applied has to be determined on the basis of the age of the deceased, the choice of multiplier, in the case of an unmarried person, shall depend on the age of the parent, who makes the claim, for, upon marriage, the deceased, had he remained alive, would have incurred the liability of maintaining his own family and his liability towards his parents would have accordingly got reduced. Viewed, thus, it is clear that the maximum compensation payable in the present case, if 15 was used as multiplier, would have been to the tune of Rs. 72,000. I, therefore, hold that the claimant-respondents, in the present case, were entitled to receive a sum of Rs. 72,000 as compensation. To this amount needs to be added a sum of Rs. 5,000 as funeral expense. In all, therefore, the claimants are entitled to receive Rs. 77,000 as compensation. 12. Turning to the question as to what would be the extent of liability of the insurer, one has to understand the meaning of the term 'comprehensive insurance'. The term 'comprehensive insurance' does not mean assumption of unlimited liability by the insurer. While an "Act Only policy" requires that a vehicle cannot be used unless it is covered, at least, under "Act Only policy"', it was not, under the Act of 1939, obligatory, for the owner of a vehicle, to comprehensively insure the vehicle. In the case of comprehensive policy, a higher premium is paid by the insurer on the estimated value of the vehicle. Such comprehensive insurance, therefore, entitles the owner to claim reimbursement of the entire amount of loss or damage suffered by him up to the estimated value of the vehicle. In the case of comprehensive policy, a higher premium is paid by the insurer on the estimated value of the vehicle. Such comprehensive insurance, therefore, entitles the owner to claim reimbursement of the entire amount of loss or damage suffered by him up to the estimated value of the vehicle. So far as a third party's claim is concerned, comprehensive insurance does not mean that the limited liability of the insurer towards the third party risk becomes unlimited or higher than statutory liability except in a case where special premium is paid to, or received by, the insurer assuming unlimited liability for payment of compensation even in respect of a third party. Explaining as to what a comprehensive policy means and what is the extent of an insurer's liability, under a comprehensive polidy, as far as a third party is concerned, the Apex Court, in National Insurance Co. Ltd., New Delhi, v. Jugal Kishore and Others, AIR 1988 SC 719 , observed and held, thus : '6. We have accordingly perused the photostat copy of the policy to ascertain whether risk for any amount higher than the amount of Rs. 20,000 contemplated by clause (b) aforesaid was covered. Our attention was invited by learned counsel for the respondents to the circumstance that at the right hand corner on the top of page 1 of the policy the words "Commercial Vehicle Comprehensive" were printed. On this basis and on the basis that the premium paid was higher than the premium of an "act only" policy it was urged by the learned counsel for the respondents that the liability of the appellant was unlimited and not confined to Rs. 20,000 only. We find it difficult to accept this submission.' Even though it is not permissible to use a vehicle unless it is covered at least under an "act only" policy it is not obligatory for the owner of a vehicle to get it comprehensively insure. In case, however, it is got comprehensively insured a higher premium than for an "act only" policy is payable depending on the estimated value of the vehicle. Such insurance entitles the owner to claim reimbursement of the entire amount of loss or damage suffered up to the estimated value of the vehicle calculated according to the rules and regulations framed in this behalf. Such insurance entitles the owner to claim reimbursement of the entire amount of loss or damage suffered up to the estimated value of the vehicle calculated according to the rules and regulations framed in this behalf. Comprehensive insurance of the vehicle and payment of higher premium on this score, however, do not mean that the limit of the liability with regard to third party risk becomes unlimited or higher than the statutory liability fixed under subsection (2) of section 95 of the Act. For this purpose a specific agreement has to be arrived at between the owner and the insurance company and separate premium has to be paid on the amount to liability undertaken by the insurance company in this behalf. Likewise, if risk of any other nature for instance, with regard to the driver or passengers etc. in excess of statutory liability, if any, is sought to be covered it has to be clearly specified in the policy and separate premium paid therefor. This is the requirement of the tariff regulations framed for the purpose. Coming to the photostat copy of the policy in the instant case it would be seen that section 11 thereof deals with liability to third parties. Sub-section (1) minus the proviso thereto reads as hereunder : (1) Subject to the limits of liability the company will indemnify the insured against all sums including claimant's cost and expenses which the insured shall become legally liable to pay in respect of - (i) death or bodily injury to any person caused by or arising out of the use (including the loading and or unloading) of the motor vehicle (ii) damage to property caused by the use (including the loading and/or unloading) of the motor vehicle.' 13. From what has been pointed out above in Jugal Kishore and Others (supra), it is clear that a comprehensive policy does not necessarily mean that the insurer has asrumed unlimited liability. A comprehensive policy would mean, as already indicated above, that the vehicle stands insured on the estimated value of the vehicle. Such a comprehensive insurance would entitle the owner to claim reimbursement of the entire amount of loss or damage suffered upto the estimated value of the vehicle. A comprehensive policy would mean, as already indicated above, that the vehicle stands insured on the estimated value of the vehicle. Such a comprehensive insurance would entitle the owner to claim reimbursement of the entire amount of loss or damage suffered upto the estimated value of the vehicle. Such comprehensive insurance would not entitle, if I may reiterate, the owner to impose unlimited liability on the insurer as against the liability towards the third party, for, as far as a third party is concerned, the insurer remained, under the Act of 1939, liable to pay the fixed compensation of Rs. 15,000 unless a special premium was received by the insurer binding itself with the liability to pay unlimited amount of compensation even in the case of a passenger. In short, if the premium paid is a fixed premium, the insurer would be liable to discharge only its statutory liability unless special premium is paid and special contract is entered into between the parties concerned, for, in a given case, the insurer may assume liability beyond its statutory limits. This aspect of law has been clarified in New India Assurance Co. Ltd. v. Smt. Shanti Bai AIR, 1995 SC 118, wherein, relying upon its decision in Jugal Kishore's case (supra), the Apex Court held, thus, "In the present case, therefore, a comprehensive policy which has been issued on the basis of the estimated value of the vehicle of Rs. 2,50,000 does not automatically result in covering the liability with regard to third party risk for an amount higher than the statutory limit". 14. In the case at hand, the evidence on record, including the relevant insurance policy, clearly discloses that the premium paid, in respect of each of the passenger, was Rs. 12. In such circumstances, the liability of the insurer ought not have been assessed, under section 95(2)(b)(i) of the Act of 1939, beyond its statutory liability of Rs. 15,000. The learned Tribunal, therefore, has not committed any error in fastening the insurer with the liability to pay a sum of Rs. 15,000 as its share of compensation. In the face of the facts of the present case, the remaining amount of Rs. 62,000 shall be payable by the owner-appellant to the claimant-respondents. 15. With the above observations and modifications in the impugned award, this appeal shall stand disposed of. 15,000 as its share of compensation. In the face of the facts of the present case, the remaining amount of Rs. 62,000 shall be payable by the owner-appellant to the claimant-respondents. 15. With the above observations and modifications in the impugned award, this appeal shall stand disposed of. The appellant shall make payment of his entire liability, as determined hereinabove, within a period of one month from today. 16. Send back the LCR.