Research › Search › Judgment

J&K High Court · body

2016 DIGILAW 529 (JK)

NEW INDIA ASSURANCE COMPANY LTD. v. REHANA BEGUM

2016-10-14

JANAK RAJ KOTWAL

body2016
JUDGMENT : JANAK RAJ KOTWAL, J. 1. This appeal by the Insurance company is directed against judgment and award dated 22-12-2012 rendered by the learned Motor Accident Claims Tribunal, Ramban (for short the Tribunal) in a claim for compensation under section 166 Motor Vehicles Act, 1988 (for short the Act) filed by legal representatives, respondents 1 to 5 (hereinafter to be referred as the claimants), of one Mudasir Afzal, who died in a road traffic accident that occurred on 4-2-2010. The breakup of the compensation is as under: 1. Loss of Dependency : Rs. 16,30,000/- 2. Funeral Expenses : Rs. 10,000/- 3. Loss of Estate : Rs. 10,000/- Total : Rs. 16,50,000/- 2. Heard Mr. Amrit Sareen, learned counsel for the appellant and Mr. Baldev Singh and Mr. Bari Abdullah, learned counsels for the respondents. 3. Claimant No.1 is wife of the deceased and claimants 2 and 3 are their sons. Claimants 4 and 5 are parents of the deceased. The case of the claimants in their claim application before the Tribunal is that the deceased was engaged as second driver with the vehicle bearing registration No. JK 14A 7976 (for short the offending vehicle). On 4-2-2010 deceased was standing at the side of the road and was giving signal for safe crossing to the driver of the offending vehicle. The driver lost control over the vehicle. This accident occurred due to rash and negligent driving of the driver of the offending vehicle who also died in this accident. The deceased died on spot. 4. Owner of the offending vehicle, herein respondent No. 6, in his reply before the learned Tribunal did not resist the claim or deny the allegation against the driver. The appellant-insurance company in its reply, however, raised a plea that there had been breach of the policy of insurance inasmuch as the driver of the offending vehicle was not holding a valid driving license issued by a competent authority authorizing him to drive the offending vehicle and the vehicle was being driven without requisite route permit and fitness certificate. Appellant raised a specific plea that deceased was not engaged as the second driver with the offending vehicle and had boarded the vehicle at a place called Haemda. 5. Following issues were framed by the Tribunal on 30-12-2011: 1. Appellant raised a specific plea that deceased was not engaged as the second driver with the offending vehicle and had boarded the vehicle at a place called Haemda. 5. Following issues were framed by the Tribunal on 30-12-2011: 1. 'Whether deceased Madassar Afzal Khan died as a result of injuries received in a Road Traffic Accident on 4-2-2010 under the jurisdiction of Police Station Banihal, involving vehicle No. 7976/JK 14A driven by driver of the offending vehicle rashly and negligently? (OPP) 2. Whether petitioners are entitled to receive compensation in terms of M. V. Act from the respondents? (OPP) 3. Whether the respondent No. 1 New India Assurance Co. is not liable to pay any compensation to the petitioner? (OPR1) 4. Relief ?' 6. Besides claimant No. 1 entering the witness box, claimants produced three witnesses, namely, Mohd. Afzal, Bashir Ahmed and Rehmat Ullah. Respondents, however, did not lead any evidence. 7. Learned Tribunal held that the claimants on the basis of oral as well as documentary evidence have succeeded to prove that deceased Mudasir Afzal had died as a result of the injuries received in a vehicular accident involving offending vehicle No. JK 14A/7976 on 4-2-2010 due to negligence of Mohd. Akhter driver of the offending vehicle. Learned Tribunal, while taking monthly income of the deceased as Rs. 12,000/- and the yearly income of as Rs. 1,44,000/-, deducted one-third of the income towards his personal and living expenses and, while taking Rs. 96,000/- as annual loss of dependency suffered by the claimants, applied multiplier of 17 and awarded compensation of Rs. 16,30,000/- under the head 'loss of dependency' In addition learned Tribunal awarded Rs. 10,000/- each as compensation for funeral expenses and loss to estate. 8. Appellant has assailed the impugned judgment and award mainly on the ground that from the evidence led by the claimants as also the copy of the FIR produced by them it is proved that the deceased was travelling by the offending vehicle, which was a goods carrying Tipper, as a gratuitous passenger so there was a breach of policy of insurance and the appellant/insurance company was not liable to indemnify the owner/insured. Judgment and award is also assailed on the quantum of compensation awarded by the learned Tribunal. It is contended that it had not been proved that income of the deceased was Rs. Judgment and award is also assailed on the quantum of compensation awarded by the learned Tribunal. It is contended that it had not been proved that income of the deceased was Rs. 12,000/- nor it could have been because, even if it is believed that he was a driver, his wages could not have been more than Rs. 5,000/- per month. It is contended also that Tribunal has not correctly determined the loss of dependency suffered by the claimants. 9. Mr. Amrit Sarin, learned counsel for the appellant argued vehemently that the appellant was not required to lead any evidence in rebuttal as there is nothing in the evidence of the claimants to show, much less to prove, that the deceased was engaged with the offending vehicle as its second driver. Mr. Sarin sought to point out that visualizing the difficulty involved in succeeding on the basis of plea that the deceased was engaged as a second driver with the offending vehicle, the claimants had pleaded before the learned Tribunal also that the deceased at the time of accident was standing at the side of the road to signal safe crossing to the driver but they did not lead any evidence in support of this aspect also. Learned Tribunal has fallen in error by awarding compensation and foisting the liability on the insurer without ascertaining as to whether deceased was sitting in the offending vehicle as a gratuitous passenger or was engaged with the vehicle as a second driver and was standing outside the vehicle for performing a duty related to the offending vehicle at the time of accident. Mr. Sarin sought to point out from the contents of the FIR, which was relied upon by the learned Tribunal that deceased was travelling by the offending vehicle as a gratuitous passenger. 10. Learned counsel for the claimants (respondents), however, supported the judgment and award rendered by the learned Tribunal. At the outset they challenged the maintainability of the appeal. Argument was that the appellant-insurer cannot file appeal under section 173 of the Act as it neither had sought leave in terms of section 170 before the Tribunal nor led any evidence in rebuttal. Learned counsel also argued that findings of fact recorded by the learned Tribunal are based on and supported by the unrebutted evidence led by the claimants. 11. Learned counsel also argued that findings of fact recorded by the learned Tribunal are based on and supported by the unrebutted evidence led by the claimants. 11. Respondent No. 6, who is owner of the offending vehicle, has not appeared to contest this appeal and has been set ex parte. 12. Clear contention of the claimants in their claim application was that the deceased was engaged as the deceased was engaged as the second driver with the offending vehicle and at the time of the accident he was on the side of the road and 'was just showing safe crossing to the driver'. Though not clearly stated, the understandable plea is that the deceased, while engaged as second driver with the offending vehicle, at the relevant time had come out of the vehicle and was standing at the side of the road to signal safe crossing to the driver of the offending vehicle. As against the plea of the claimants, clear stand of the appellant-Insurance company in its objections before the learned Tribunal was and now in this appeal is that there is breach of the policy of insurance as the deceased was allowed to board the offending vehicle, which is a goods carrier, as a gratuitous passenger whose risk was not covered under the policy of insurance. It was contended in the objections that 'the deceased was not driver of the vehicle' and that he had boarded the vehicle at Haemda and after that the vehicle met with the accident at Qulligan Phagooa. 13. The conflicting stand of the parties seems not to have attracted the attention of the learned Tribunal while reading the evidence of the claimants and passing the impugned judgment and award. Claimant, Rehana Begum, the wife of the deceased, appeared in the witness box and, while stating inter alia that deceased was engaged as a second driver with the offending vehicle, stated also that she had not seen the accident taking place. Same is that case with the evidence of PW Mohd. Afzal, who is father of the deceased. Claimant, Rehana Begum, the wife of the deceased, appeared in the witness box and, while stating inter alia that deceased was engaged as a second driver with the offending vehicle, stated also that she had not seen the accident taking place. Same is that case with the evidence of PW Mohd. Afzal, who is father of the deceased. He, while stating in the chief-examination that the offending vehicle had fallen down the road after the deceased boarded it, in cross-examination has stated that he was not present at the place of occurrence at the time of the accident and he was told that his son had fallen from the vehicle when he was boarding it and had come under its tyre. Evidence of the other two witnesses, PWs Bashir Ahmed and Rehmat Ullah is no better as far as the accident is concerned as in cross-examination both of them have stated that they had gone on spot after the accident. 14. On plain reading of the evidence of the witnesses including the testimony of Claimant No.1, Rehana Begum, it can be said that finding in regard to the accident has been recorded by the learned Tribunal without any evidence. Learned Tribunal relied upon their evidence without any analysis and appraisal thereof and unmindful of their say that all of them had reached at the site of the accident after the accident. It is noticed that learned Tribunal has based its finding in regard to the cause of accident on ' oral as well as documentary evidence" The oral evidence comprises of the testimonies of claimant No.1 and aforementioned three witnesses and the documentary evidence comprises of the copies of FIR No. 21/2010 of Police Station, Ramban and the closing report in the case. It is not understandable as to how the finding in regard to the accident has been recorded by the learned Tribunal as none of the aforementioned witnesses was present on spot at the time of accident. Contents of the FIR and the final report at the most could have been looked into in support of the evidence of witnesses of the occurrence but not as substantive evidence of the occurrence. 15. Contents of the FIR and the final report at the most could have been looked into in support of the evidence of witnesses of the occurrence but not as substantive evidence of the occurrence. 15. It needs to be stated that a claim for compensation under section 166 of the Act lies on the principle of tortuous liability of the driver of the offending vehicle, which, if established, leads to vicarious liability of the owner of the offending vehicle and contractual liability of the insurer with whom the offending vehicle is insured for third party risk. The sine qua non for succeeding in a claim for compensation is to prove the negligence of the driver of the offending vehicle by leading reliable evidence. The claims Tribunal cannot record the finding of negligence without any evidence even if there is no evidence in rebuttal. 16. Learned Tribunal seems to have proceeded with undue haste in closing the claimants" evidence and in that has ignored or skipped important questions relating to the status of the deceased; whether he was engaged as second driver with the offending vehicle and/or was he standing outside the vehicle at the time of accident. Both these aspects have important bearing with the liability of the owner as well as the insurer. Being engaged with the offending vehicle as its second driver and/or having been caught in the accident while standing outside the vehicle are two different situations and should not have been avoided or skipped consideration by the learned Tribunal. 17. It needs to be stated that section 168 of the Act casts a solemn duty on a claims Tribunal to hold inquiry into the claim and determine the amount of compensation, which is just and reasonable and to specify the person(s) to whom compensation shall be made. The duty is not well performed by recording the evidence produced by the parties and passing the award. There should be and endeavour to impress upon the parties to produce all such evidence as would be necessary for determining all the important questions involved in determination and settlement of the claim. 18. The Tribunal in this case has committed serious error of law in recording the finding of negligence of the offending driver without any evidence and skipping/avoiding consideration to important factual aspects relating to the status of the deceased. 18. The Tribunal in this case has committed serious error of law in recording the finding of negligence of the offending driver without any evidence and skipping/avoiding consideration to important factual aspects relating to the status of the deceased. The entire award is, therefore, liable to be set aside on that score. 19. Before setting aside the award, important question in regard to maintainability of this appeal raised by the learned counsel for the claimants needs to be taken up. Argument is that the insurer cannot file appeal when it had neither sought leave in terms of section 170 of the Act before the Tribunal nor led any evidence in rebuttal. 20. Contextually, it is noticed that the owner of the offending vehicle did not contest the claim before the learned Tribunal. In spite of that the appellant-Insurance Company did not seek leave of the Tribunal in terms of section 170 of the Act that gives the insurer right to contest a claim on all or any of the grounds that are available to the person against whom the claim has been made, that is, driver and/or owner of the offending vehicle. This right accrues when to the satisfaction of the Claims Tribunal there is collusion between the person making the claim and the person against whom the claim is made, that is, owner and/or driver of the offending vehicle or the person against whom the claim is made has failed to contest the claim. 21. Section 173 of the Act provides for the appeal against the award of a Claims Tribunal in a claim under section 166 of the Act. There is nothing in section 173 or any other provision in the Act that completely debars the insurance company from filing appeal against award of a Claims Tribunal, howsoever aggrieved it might feel. Section 173 in wider terms gives the right of appeal to ' any person aggrieved by any award of a Claims Tribunal." Argument of learned counsel for the claimant was that when the insurer fails to avail his right under Section 170, right to appeal under section 173 is not available to the insurer and it cannot be treated as aggrieved person as the aggrieved person may either be a claimant or the owner and/or driver of the offending vehicle. The question, thus, raised precisely is, whether insurer of an offending vehicle on whom liability of satisfying the award passed against the owner (insured) has been foisted has no independent right of appeal against the award of the Claims Tribunal? Answer to this question can be found in Supreme Court judgment in United India Insurance company Limited v. Bhushan Sachdeva and others, AIR 2002 SC 662 . Their Lordships have held in para 7 of the reporting: '7. In our view, the stand of the appellant that it cannot file an appeal at all before the High Court under Section 173 of the Act is based on an erroneous assumption. So long as the insured has not challenged the award passed against him and so long as the liability would only fall on the Insurance company it is inequitable to deny a remedy of appeal to the Insurance company. We will now see whether Section 173 contains any bar against filing such appeal by the Insurance company...' 22. In Bhushan Sachdeva's case ( AIR 2002 SC 662 ) Supreme Court has interpreted the term 'any person aggrieved by an award of the Claims Tribunal' to determine 'when can insurance company be aggrieved with the award passed by a Claims Tribunal to invoke the right envisaged in section 173 of the Act' and 'can it be said that the insurance company should not have any grievance at all even in a case where the award appears to be unjust to that company?' Supreme Court has held in para 10: '10. We are, therefore, of the view that the insurance company can fall within the ambit of the words ' any person aggrieved by an award of the Claims Tribunal' as used in Section 173(1) of the Act, when the insured failed to file an appeal against the award.' 23. Supreme Court in the same judgment has held that right to contest that accures to the insurer before the Claims Tribunal will similarly accrue if the insured fails to prefer an appeal against the award. Para 13 of the reporting is important, which I reproduce: '13. What is meant by the words ' failed to contest' ? Those words must be interpreted in a realistic manner. Right to contest would include the right to contest by filing an appeal against the award of the Tribunal as well. Para 13 of the reporting is important, which I reproduce: '13. What is meant by the words ' failed to contest' ? Those words must be interpreted in a realistic manner. Right to contest would include the right to contest by filing an appeal against the award of the Tribunal as well. Hence the insured can continue to contest the claim by filing an appeal as provided under Section 173 of the Act. If the insured fails to prefer an appeal that also would amount to failure to contest that claim effectively. Quite often the insured would lose the desire to contest the claim once he is told that he would not be mulcted with the liability as the same is siphoned off to the insurer. It means that insured had dropped out from contesting a claim midway. In such an eventuality the Act enables the insured to contest it on all grounds available to the insured.' 24. Legal position, thus, emerges clear. There is no statutory provision nor any recognised principle of law that debars insurer from filing appeal against award passed by a Claims Tribunal. It would not be impressible or difficult for the insurer to invoke remedy of appeal under Section 173 of the Act is award suffers from illegality, in a case where the insured has failed to contest the claim before the Tribunal or has not filed appeal against the award. In such a case seeking leave under section 170 of the Act before the Tribunal cannot be treated as a pre-condition to filing of appeal by the insurer. 25. It is noticed that even though the insured-respondent No. 2 herein, filed objections to the claim application before the learned tribunal, he did not contest the claim. He did not deny anything alleged or contended by the claimants. He did not cross-examine any of the witnesses produced by the claimants. While not holding that the insured had colluded with the claimants, it can be well said that he did not contest the claim before the Tribunal and has not filed appeal against the award and not even has come forward to participate in this appeal by the insurer. The insurer company, therefore, is well within its right to file this appeal even though it did not seek leave in terms of section 170 of the Act or did not lead any evidence before the Tribunal. The insurer company, therefore, is well within its right to file this appeal even though it did not seek leave in terms of section 170 of the Act or did not lead any evidence before the Tribunal. 26. For all that said and discussed above, this appeal is accepted and, while setting aside the impugned judgment and award, matter is remanded to the learned Tribunal for fresh inquiry from the stage of framing of the issues and for passing fresh award. Learned Tribunal shall afford opportunity to the claimants to lead additional evidence as also opportunity to the respondents to lead evidence in rebuttal. Learned Tribunal shall ensure that proceedings are concluded expeditiously. 27. The award amount, if deposited by the appellant in this Court, shall be returned to the appellant. However, no recovery from claimants of the amount already released in their favour, if any, shall be permissible, subject, however, to the fresh decision in the claim application. 28. Record of the Tribunal be remitted back along with a copy of this judgment where both sides shall cause their appearance on 2-11-2016. 29. Disposed of.