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2017 DIGILAW 757 (ALL)

ORIENTAL INSURANCE CO. LTD. , LKO. v. MUNNI DEVI

2017-03-10

SUDHIR AGARWAL, VIRENDRA KUMAR II

body2017
JUDGMENT By the Court.—Heard learned counsel for the parties. 2. This First Appeal From Order No. 1193 of 2001 has been preferred on behalf of Insurance Company and F.A.F.O No. 163522, cross appeal, on behalf of claimants, against judgement and award dated 30.4.2001 delivered by Motor Accident Claims Tribunal/Special Judge (E.C. Act) Mainpuri (hereinafter referred to as ‘Tribunal’) in M.A.C.T Case No. 112 of 2000 (Smt. Munni Devi and others v. Manager M/s Metro Cargo Carriers and another). 3. Learned Counsel for Insurance company has argued that judgement and award is wholly arbitrary and illegal. On the basis of evidence on record, it was clearly established that accident took place as a result of negligence of drivers of both the tractor and truck. Therefore owner of tractor and insurers of tractor were necessary parties. Claim petition was bad for non joinder of necessary parties i.e. owner and insurer of the tractor. It is also contended that driving licence of driver of truck had expired on 30.8.1997 and renewed on 6.6.2000 upto 5.6.2003. Therefore, it was not valid on the date of accident, i.e. 18.3.2000. It is also argued that income of deceased has already been assessed including agricultural income as an amount of Rs. 10,000/- per annum, and thus highly excessive amount of compensation has been awarded. 4. Learned counsel for the claimants urged that Tribunal has partly allowed compensation of Rs. 8,51,850/- alongwith interest at the rate of Rs. 6% per annum. It is contended that Tribunal has committed manifest error of law and ignored the facts on record and as such, judgement and award is liable to be modified by enhancing awarded amount of compensation. Deceased was a teacher in Basic Siksha Parisad. He was drawing salary of Rs. 6,228/- per month and earning Rs. 50,000/- per year from agricultural crops/produce of his agricultural land. Therefore, total annual income of deceased has been computed on lower side. It is also argued that Tribunal had deducted 1/3 amount from income in place of 1/4. It is also argued that deceased was aged about 45 years and he had very lucrative carrier. Tribunal has not considered for loss of future prospect. Tribunal has not considered 50% amount of income of the deceased by way of future prospect, which was due to him. The income assessed by Tribunal is low and insufficient. Likewise, Tribunal has awarded Rs. Tribunal has not considered for loss of future prospect. Tribunal has not considered 50% amount of income of the deceased by way of future prospect, which was due to him. The income assessed by Tribunal is low and insufficient. Likewise, Tribunal has awarded Rs. 2000/- for funeral expenses and Rs. 2,500/- for loss of estate, which are also inadequate. It has also ignored loss of consortium of the wife and love and affection of the children. Likewise, interest at the rate of 12% per annum should have been awarded. 5. Learned counsel for Insurance Company has relied upon Ram Babu Tiwari v. United India Insurance Co. Ltd. and others, 2008 (3) TAC 769 (SC) and argued that in this case driving licence of driver of offending vehicle was valid from 11.2.1990 upto 10.2.1993 and again from 7.2.1996 to 7.2.1999. Driver did not hold any licence during the period from date 11.2.1993 upto 6.2.1996. Accident occurred on 27.1.1996. As such, no valid driving licence was held on the date of accident by driver of the vehicle. In these circumstances, Tribunal had wrongly held that driver was having licence and for this reason driving of tractor in violation of terms of policy was not proved and Insurance Company cannot escape from its liability. High Court reversed finding of Tribunal and held that violation of policy condition was proved and opined that Insurance Company was not liable to indemnify insured. It was observed that driver of vehicle involved in the accident failed and neglected to renew his licence. Licence was renewed after accident only from 7.2.1996. Insurance Company was exonerated by High Court and it was held that insurers would not be liable to indemnify the insured. Supreme Court confirmed this view. 6. Learned counsel for Insurance Company has argued that the same fact and circumstances are present in this case. Driver of offending vehicle Truck No. UP 32 T-9659 was not holding effective and valid driving licence on the date of incident i.e. 18.3.2000 which occurred about 5.30 a.m., near Krishak Vidya Peeth Inter College situated at Bhagaon, Mainpuri Road, due to rash and negligent driving of vehicle/truck. The driver of the truck collided with tractor No. UTM 5665. Deceased, Ram Lal was driving tractor at the time of incident. 7. The driver of the truck collided with tractor No. UTM 5665. Deceased, Ram Lal was driving tractor at the time of incident. 7. Learned counsel for the appellant relying upon S.Iyyanpan v. M/s United India Insurance Company Ltd. and another, 2013 (3) TAC 392 (SC), argued that Court had interpreted Sections 146, 147 and 149 of Motor Vehicles Act, 1988 and held that in cases of 3rd party risk, insurer cannot disown its liability on the ground that although driver was holding a licence to drive a light motor vehicle, but before driving light motor vehicle was used as commercial vehicle, no endorsement to drive commercial was obtained on the driving licence. It was held that it is statutory right of third party to recover amount of compensation so awarded from Insurer. It was Insurer to proceed against insured for recovery of amount in that event of violation of any condition of insurance policy. It was held that driver was holding a valid driving licence to drive light motor vehicle. In this case, motor vehicle involved was Mahindra Max, which was a light motor vehicle. Court held that High Court has committed grave error in holding that insurer is not liable to pay compensation, because driver was not holding licence to drive commercial vehicle. In this case Court has held that insurer was liable to pay compensation so awarded to dependents of fatal accident. Insurance Company was given right to recover from vehicle owner amount of compensation paid by it to the dependents of the victim. 8. Special Leave Petition No. 9027 of 2003 (National Insurance Co. Ltd. v. Swaran Singh and others), decided on 5.1.2004, Court has considered various decisions, and held : (i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object. (ii) Insurer is entitled to raise a defence in a claim petition filed under Section 163 A or Section 166 of the Motor Vehicles Act, 1988 inter alia in terms of Section 149(2)(a)(ii) of the said Act. (ii) Insurer is entitled to raise a defence in a claim petition filed under Section 163 A or Section 166 of the Motor Vehicles Act, 1988 inter alia in terms of Section 149(2)(a)(ii) of the said Act. (iii) The breach of policy condition e.g., disqualification of driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of section 149, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licenced driver or one who was not disqualified to drive at the relevant time. (iv) The insurance companies are, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish ‘breach’ on the part of the owner of the vehicle; the burden of proof wherefor would be on them. (v) The Court cannot lay down any criteria as to how said burden would be discharged, inasmuch as the same would depend upon the facts and circumstance of each case. (vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply “the rule of main purpose” and the concept of “fundamental breach” to allow defences available to the insured under Section 149(2) of the Act. The Tribunals in interpreting the policy conditions would apply “the rule of main purpose” and the concept of “fundamental breach” to allow defences available to the insured under Section 149(2) of the Act. (vii) The question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver, (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case. (viii) If a vehicle at the time of accident was driven by a person having a learner’s licence, the insurance companies would be liable to satisfy the decree. (ix) The claims tribunal constituted under Section 165 read with Section 168 is empowered to adjudicate all claims in respect of the accidents involving death or of bodily injury or damage to property of third party arising in use of motor vehicle. The said power of the tribunal is not restricted to decide the claims inter se between claimant or claimants on one side and insured, insurer and driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes inter se between insurer and the insured. The decision rendered on the claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and the award made thereon is enforceable and executable in the same manner as provided in Section 174 of the Act for enforcement and execution of the award in favour of the claimants. (x) Where on adjudication of the claim under the Act the tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of Section 149 (2)read with sub-section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the tribunal. Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the tribunal to the Collector in the same manner under Section 174 of the Act as arrears of land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub-section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the tribunal. (xi) The provisions contained in sub-section (4) with proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse of by the Tribunal and be extended to claims and defences of insurer against insured by relegating them to the remedy before regular Court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims. 9. Although learned Counsel for Insurance Company could not show any nexus of the defect of driving licence held by driver of the truck and cause of accident as observed by Supreme Court in precedent National Insurance Co. Ltd. v. Swaran Singh and others (Supra) that unless there was any nexus between invalidity of driving licence and the cause of accident, Insurance Company is liable to pay, at the first instance compensation awarded to the dependents of the victim and to proceed against insured for recovery of amount in the event of violation of the condition of the policy. 10. In this case driver of truck, bearing Truck No. UP 32, T-9659, involved in the accident, was not disqualified for driving heavy vehicles. There was non-renewal of driving licence during period 30.8.1997 upto 6.6.2000 and on the date of i.e. 18.3.2000. it was not renewed. Thereafter from 6.6.2000 upto 5.6.2003, after the date of incident, it was renewed. Therefore driving licence of driver of offending truck was not renewed and effective on the date of accident would make no substantial detriment to the claimants, thought this fact attracted violation of condition of Insurance policy, in this regard. 11. it was not renewed. Thereafter from 6.6.2000 upto 5.6.2003, after the date of incident, it was renewed. Therefore driving licence of driver of offending truck was not renewed and effective on the date of accident would make no substantial detriment to the claimants, thought this fact attracted violation of condition of Insurance policy, in this regard. 11. Learned counsel for Insurance Company has also argued that learned Tribunal has assessed excessive income from the agricultural land owned by the deceased whereas, he was employed as teacher and he was not able to look after his agricultural land. Therefore the annual income amount of Rs. 10,000/- earned by the deceased from his agricultural land was assessed by Tribunal without any basis. It is pertinant to mention here that appellants had claimed income from agricultural land to the amount of Rs. 50,000/-. Instead, Tribunal has assessed income at Rs. 10,000/- from agricultural land owned by the deceased. 12. As far as learned counsel for claimant has argued that deduction was made 1/3 in the head of personal expenses incurred by deceased, in stead of ¼. it is pertinent to notice here that claimant Manoj Kumar is aged about 22 years and Saroj Kumar is aged about 20 years. Both major according to details given by petitioners in the claim petition, therefore 1/3 deduction from income of the deceased cannot be termed excessive or incorrect. 13. So far as future prospects of increase of salary income of deceased is concerned, it is relevant to mention that, deceased Ram Lal was about 45 years and he would have retired from the post of teacher after 15 years. He was posted as Head Master of a school, it required compensation on the count of future prospect. 14. 13. So far as future prospects of increase of salary income of deceased is concerned, it is relevant to mention that, deceased Ram Lal was about 45 years and he would have retired from the post of teacher after 15 years. He was posted as Head Master of a school, it required compensation on the count of future prospect. 14. In Sarla Verma and others v. Delhi transport Corporation, 2009 (6) SCC 121 , Court in para 21 has held that the multiplier to be used should be as mentioned in column (4) of the Table (prepared by applying Susamma Thomas, General Manager, Kerala State Road Transport Corporation v. Susamma Thomas, 1994 (2) 176, Trilok Chandra, U.P. State Road Transport Corporation v. Trilok Chandra, 1996(4) SCC 362 and Charlie, New India Assurance Company Ltd. v. Charlie, 2005 (10) SCC 720 ), which starts with an operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25 years), reduced by one unit for every five years, that is M-17 for 26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45 years, and M-13 for 46 to 50 years, then reduced by two units for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65 years and M-5 for 66 to 70 years. 15. Hon’ble Supreme Court in paras 14 and 15 of the judgement also said: “14. Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in Trilok Chandra, the general practice is to apply standardized deductions. Having considered several subsequent decisions of this Court, we are of the view that where the deceased was married, the deduction towards personal and living expenses of the deceased, should be one-third (1/3rd) where the number of dependent family members is 2 to 3, one-fourth (1/4th) where the number of dependent family members is 4 to 6, and one-fifth (1/5th) where the number of dependent family members exceed six. 15. Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. 15. Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. In regard to bachelors, normally, 50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting married in a short time, in which event the contribution to the parent/s and siblings is likely to be cut drastically. Further, subject to evidence to the contrary, the father is likely to have his own income and will not be considered as a dependent and the mother alone will be considered as a dependent. In the absence of evidence to the contrary, brothers and sisters will not be considered as dependents, because they will either be independent and earning, or married, or be dependent on the father. Thus even if the deceased is survived by parents and siblings, only the mother would be considered to be a dependent, and 50% would be treated as the personal and living expenses of the bachelor and 50% as the contribution to the family. However, where family of the bachelor is large and dependent on the income of the deceased, as in a case where he has a widowed mother and large number of younger non-earning sisters or brothers, his personal and living expenses may be restricted to one-third and contribution to the family will be taken as two-third.” 16. Therefore, in Sarla Verma and others (Supra), we hold that 20% income should be added in the head of future prospect of increase of income. 17. Tribunal, while answering issue No. 4, has assessed salary income as Rs. 6228/-. He was employed as Head Master in a to primary school. PW. 1 Manoj Kumar has accepted that his father used to go to teach and it has come in his cross-examination that there was annual income of Rs. 10,000/- to 20,000/- from agriculture. Therefore, Tribunal has added minimum income of Rs. 10,000/- received from agriculture. The total annual income of deceased come to Rs. 1,94,736. Age of deceased Ram Lal yadav was 45 years. This is admitted to both the parties. Tribunal after having deducted 1/3rd of amount as personal expenses, of deceased, has awarded sum of Rs. 8,51,850,/- after adopting the appropriate multiplier of 15. 18. The Tribunal has awarded amount of Rs. The total annual income of deceased come to Rs. 1,94,736. Age of deceased Ram Lal yadav was 45 years. This is admitted to both the parties. Tribunal after having deducted 1/3rd of amount as personal expenses, of deceased, has awarded sum of Rs. 8,51,850,/- after adopting the appropriate multiplier of 15. 18. The Tribunal has awarded amount of Rs. 2000/- in head of loss of estate and Rs. 2500/- per funeral expenses also. By adding 20% of amount Rs. 8,47,350/- i.e. 1,69,470/- The amount of compensation carves out Rs. 10,21,320/-. Therefore, the appellants, who are wife and sons of the deceased, are entitled to get compensation of Rs. 10,21,320/-. 19. Learned Tribunal has not considered the head of consortium and love and affection of the children and no compensation has been awarded under these heads. Therefore, petitioners/appellants Munni Devi would also receive amount of Rs. 5,000/- in the head consortium and other petitioners would also get amount of Rs. 5,000/- in the head of love and affection. In the head of loss of estate and funeral expenses of the deceased does not require any interference. 20. On the basis of above discussions, this appeal is liable to be partly allowed and the impugned award settled by the Motor Accident Claims Tribunal is modified in the manner herein above. 21. On the basis of appreciation and evaluation of the evidence adduced on behalf of both the parties, it revealed that driving licence held by driver of truck involved in the incident of this case was not renewed on the date of incident i.e. on 18.3.2000, it was renewed whereof on 6.6.2000 upto 5.6.2003. This is a case of third party risk, the Tribunal has answered issue No. 2 in affirmative by holding that on the date of accident i.e. on 18.3.2000, the offending vehicle was driven by the driver, was having the valid licence. Although it was not brought on record on behalf of the Insurance Company that driver of the truck was ever disqualified to drive heavy vehicle truck, as held by Hon’ble Supreme Court in precedent National Insurance Co. Although it was not brought on record on behalf of the Insurance Company that driver of the truck was ever disqualified to drive heavy vehicle truck, as held by Hon’ble Supreme Court in precedent National Insurance Co. Ltd. v. Swaran Singh and others (Supra) in third party risk cases, and in cases of violation conditions of insurance policy regarding driving licence, the Insurance Company may proceed to recover from the owner of the offending vehicle amount of compensation paid by the Insurance Company to the dependents of the victim. Therefore, in our opinion impugned judgment dated 30.4.2001 is liable to be modified to the extent that opposite party No. 2, Oriental Insurance Company Ltd. would be entitled to recover amount of compensation paid by it, from owner O.P. No. 1 of the offending truck involved in the accident of this case. Therefore both the appeals preferred by the insurance company and the appellants Smt. Munni Devi and another are hereby partly allowed and disposed of accordingly. The impugned judgment dated 30.4.2001 is also hereby modified for enhancement of compensation. 22. Record of M.A.C.T Case No. 112 of 2000 (Smt. Munni Devi and others v. Manager M/s Metro Cargo Carriers and another) be sent back to the Motor Accident Claims Tribunal, Mainpuri.