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2017 DIGILAW 1027 (BOM)

United India Insurance Co. Limited v. Mangala

2017-06-08

SHALINI PHANSALKAR-JOSHI

body2017
JUDGMENT : Shalini Phansalkarjoshi, J. By this appeal the judgment and award dated 14.11.2003 passed by the Motor Accident Claims Tribunal, Nagpur in M.A.C.P. No. 281/1995 is challenged by the original respondent No. 3 the insurance company of the offending vehicle. 2. Briefly stated, facts of the case are as under: Kishore, the husband of respondent No. 1, died in a motor accident dated 04.12.1994. The offending vehicle was the truck bearing No. WB23 088 and belonging to the original respondent No. 1. The truck was insured with the present appellant. As per the case of the claimants, the truck was being driven in a rash and negligent manner and as a result, deceased Kishore, who was proceeding on his Scooter No. MH31 4585, sustained the dash of the truck. In the said accident, Kishore suffered the injury to which he succumbed. The respondent No. 1 claimant, being the widow and having two minor sons filed the petition against the truck owner and the insurance company, seeking total compensation of Rs. 6 lakhs. 3. This claim petition came to be resisted by the appellant insurance company alone and proceeded ex parte against the original respondent Nos. 1 and 2, the truck owner and truck driver respectively. The Tribunal, on the basis of evidence produced before it held that the accident has occurred due to the rash and negligent driving of the truck and accordingly held the claimants entitled for the compensation of Rs. 6,75,000/-. 4. This judgment of the Tribunal is challenged in this appeal by learned counsel for the appellant mainly on the ground that the amount of compensation assessed by the Tribunal is not correct. It is submitted that absolutely no documentary or oral evidence was produced on record by the claimants to show that the deceased was earning the income of Rs. 5000/- per month. The Tribunal has proceeded simpliciter on the basis of the vague averment made in the claim petition to that effect. Secondly, it is submitted that even after the death of Kishore, the jewellery business of the deceased is being conducted by his widow, the respondent No. 1. This fact is admitted by her in her evidence also. Hence according to learned counsel for the appellant, there was no loss of income or loss of dependency. Secondly, it is submitted that even after the death of Kishore, the jewellery business of the deceased is being conducted by his widow, the respondent No. 1. This fact is admitted by her in her evidence also. Hence according to learned counsel for the appellant, there was no loss of income or loss of dependency. Hence the amount of compensation as awarded by the Tribunal being on higher side and without any foundation in the evidence on record, it needs to be modified, holding the notional income of the deceased to be Rs. 3000/- per month. 5. On perusal of the judgment of the Tribunal, it can be seen that in para 8, the Tribunal held that though in oral evidence the widow has stated that deceased used to earn the income of Rs. 10,000/- to Rs. 12000/- per month, however, in her petition, which was drafted under her own instructions, it was mentioned that his monthly income was of Rs. 5000/- to Rs. 6000/-. The Tribunal, therefore, held that as there is no documentary evidence produced on record by the claimant to prove the income of Rs. 12,000/- per month, her pleading regarding his earning of Rs. 5000/- p.m. needs to be accepted. The learned Tribunal further held that though widow has also admitted that she is managing the jewelry business after the death of her husband, it was because she has no other way, but to do something for livelihood and placing reliance Smt. Halimabi & Ors. v. Rakesh Kumar Mukhasia & Ors. reported in 2003 (1) ACC 488, the Tribunal held her entitled even for the compensation under the loss of dependency. 6. Now coming to the first submission advanced by the learned counsel for the appellant it may be true that no documentary evidence was produced on record by the claimant to show that her husband was earning Rs. 10,000/- to Rs. 12,000/- from his jewelry business, however, her evidence proves that her husband was giving her Rs. 6000/- to Rs. 8000/- per month for household expenses. Therefore, unless he was getting some amount which may be in the range of Rs. 10,000/- to Rs. 12,000/- per month, her husband would not have been in a position to give the amount of Rs. 6000/- to Rs. 8000/- per month for her household expenses. 6000/- to Rs. 8000/- per month for household expenses. Therefore, unless he was getting some amount which may be in the range of Rs. 10,000/- to Rs. 12,000/- per month, her husband would not have been in a position to give the amount of Rs. 6000/- to Rs. 8000/- per month for her household expenses. Her evidence further shows that even after the death of her husband, she is earning income of Rs. 5000/- to Rs. 6000/- p. m. from the jewelry business. Hence it follows that deceased must have been earning substantial amount from the said business. In such a situation, it cannot be said that the Tribunal has committed any error in holding the approximate income of the deceased to be Rs. 5000/per month and, accordingly calculated the amount of compensation. 7. The submission advanced by the learned counsel for the appellant is that if the source of income, the business continued to be run by the claimants even after the death of deceased, hence there is no loss of dependency. In support of this, he has relied upon the various decisions of the Hon'ble Supreme Court, like New India Assurance Co. Ltd. v. Yogesh Devi and Ors. reported in I (2012) ACC 649 (SC), National Insurance Co. Ltd. v. Keshav Bahadur and others reported in 2004 ACJ 648 that of Calcutta High Court: United India Insurance Co. Ltd. v. Anumita Paul and others reported in I (215) ACC 628 (DB) (Cal.) and New India Assurance Company Ltd. v. Radhika Chaturvedi reported in II (2014) ACC 49 (DB) (All.). 8. There cannot be two opinions about the legal proposition laid down in these authorities. However, in the facts of the present case, in my considered opinion the Tribunal has rightly placed reliance upon the decision of this Court in the case Smt. Halimabi & ors. v. Rakesh Kumar Mukhasia & ors., 2002 (3) TAC 601 the facts of which were similar to the facts of the present case. In that case also, there was a shop belonging to the deceased and after his death, it was left to the widow to eke out a living for herself and children. v. Rakesh Kumar Mukhasia & ors., 2002 (3) TAC 601 the facts of which were similar to the facts of the present case. In that case also, there was a shop belonging to the deceased and after his death, it was left to the widow to eke out a living for herself and children. In the light of the same, it was held that, "the fact that she took over the reins of the shop would not justify the inference that she was not entitled to compensation or that she has derived income to the same extent, as the deceased in the conduct of the business". It was further held that, "to deny a widow a claim to fair compensation for herself and her eleven children on the ground that after all, she was left with a shop to run, would simply be a travesty of justice. The law cannot be oblivious to social reality". 9. In the instant case also, it is clear that the claimant respondent No. 1 is the widow of deceased who had no other option, but to continue with the business of the deceased when two minor children were dependent on her. Hence it would not be just and proper to deny her the amount of compensation, which she is entitled to receive. 10. From any angle considering the amount of compensation which is awarded to the respondent Nos. 1 to 3, it cannot in any way be called as exorbitant or unreasonable so as to warrant interference therein. 11. However, to some limited extent, the interference is warranted in the impugned judgment and award of the Tribunal, as regards the penal interest. In its operative para of the judgment the Tribunal has directed the original respondent Nos. 1 to 3 to pay jointly and severally the amount of compensation with a further direction that the said amount shall be deposited within 45 days from the date of the order; failing which the petitioner was held entitled to recover the same from the respondents with interest at 12% per annum from the date of petition. As rightly submitted by the learned counsel for the appellant, this imposition of a penal rate of interest can not be legally permissible. In the decision of National Insurance Co. As rightly submitted by the learned counsel for the appellant, this imposition of a penal rate of interest can not be legally permissible. In the decision of National Insurance Co. Ltd. v. Keshav Bahadur and others reported in 2004 ACJ 648 when similar direction was given by the High Court, the Apex Court held that such penal interest of rate cannot be awarded. In the words of Hon'ble Supreme Court, such a direction is not statutorily envisaged. It was held that in para 14 of the judgment, as under: 14. Though section 110CC of the Act (corresponding to section 171 of the new Act) confers a discretion on the Tribunal to award interest, the same is meant to be exercised in cases where the claimant can claim the same as a matter of right. In the above background, it is to be judged whether a stipulation for higher rate of interest in case of default can be imposed by the Tribunal. Once the discretion has been exercised by the Tribunal to award simple interest on the amount of compensation to be awarded at a particular rate and from a particular date, there is no scope for retrospective enhancement for default in payment of compensation. No express or implied power in this regard can be culled out from section 110CC of the Act or section 171 of the new Act. Such a direction in the award for retrospective enhancement of interest for default in payment of compensation together with interest payable thereon virtually amounts to the imposition of penalty which is not statutorily envisaged and prescribed. It is, therefore, directed that the rate of interest as awarded by the High Court shall alone be applicable till payment, without the stipulation for higher rate of interest being enforced, in the manner directed by the Tribunal. (Emphasis supplied) 12. In the present case, the Tribunal has in para 2 of operative para directed the payment of interest at the rate of 9% per annum from the date of petition and in para 3 of the operative order, directed the payment of interest at the rate of 12% per annum from the date of petition, in case the original respondents failed to pay the compensation within 45 days from the date of order. This direction of penal interest is clearly against the law, as laid down by the Hon'ble Supreme Court. This direction of penal interest is clearly against the law, as laid down by the Hon'ble Supreme Court. Hence, the direction to that effect as given by the Tribunal of imposing penal rate of interest at the rate of 12% per annum has to be set aside. 13. Accordingly, it is directed the amount of compensation is to be paid at the rate of 9% per annum from the date of the petition. To that extent only the judgment and order of the Tribunal stands modified. Otherwise appeal holds no merits and stands dismissed. 14. On the request of the learned counsel for the appellant, time of three weeks is granted to deposit in the Court, the balance amount of consideration as already part of the consideration is deposited in the Court at the time of granting ad interim stay to the execution of the award.