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2019 DIGILAW 270 (JK)

Kajal Chib v. Kuldeep Singh

2019-05-10

SANJEEV KUMAR

body2019
ORDER : Sanjeev Kumar, J. 1. Appellant No. 1-Kajal Chib, is wife, appellant No. 2 is father and appellant No. 3 is sister of deceased Sohan Singh, who died in accident which took place at Diyani Morh, Tehsil Samba on 03.01.2007 due to rash and negligent driving of respondent No. 1, the driver of the offending vehicle (Bus) bearing registration No. JK02N-2312. The respondent No. 2 is the registered owner of the offending vehicle. A claim petition was filed by the appellants against the respondents seeking compensation to the tune of Rs. 45,00,000/- along with interest @ 18% per annum from the date of filing of the claim petition till its realization. The claim petition was contested by the respondent No. 3, the insurer of the offending vehicle whereas respondents 1 and 2 remained in ex parte. On the basis of the pleadings of the parties, the Tribunal framed the following issues:- i. Whether an accident occurred on 03.01.2007 at Diyani Morh, NHW A1 Tehsil Samba by rash and negligent driving of offending vehicle No. JK02N-2312 being driven in the hands of erring driver in which deceased Sohan Singh sustained fatal injuries? OPP ii. If issue No. 1 is proved in affirmative, whether petitioners are entitled to the compensation, if so to what amount and from whom? OPP iii. Whether driver of offending vehicle at the time of accident was not holding valid and effective driving licence and drove the vehicle in violation of terms and conditions of insurance policy? OPR-3 iv. Whether the accident has occurred by the contributory negligence of driver of motorcycle and he is a necessary party to the case, if so how? OPR3 v. Relief. OP Parties. 2. To prove their case and to discharge the burden, the appellants examined appellant No. 1, one Paramjit Singh and Jagdish Singh. The Insurance Company, however, produced Jagdish Raj, a Clerk in the office of Regional Transport Officer concerned. On the basis of the record and evidence adduced by the parties, the Tribunal held the issue No. 1 proved in favour of the appellants. The Tribunal found that the respondent No. 1 had caused the accident due to rash and negligent driving of the offending vehicle in which the deceased Sohan Singh sustained injuries to which he later on succumbed. The Tribunal found that the respondent No. 1 had caused the accident due to rash and negligent driving of the offending vehicle in which the deceased Sohan Singh sustained injuries to which he later on succumbed. So far as issue No. 3 is concerned, the Tribunal returned the findings that since the licence possessed by the respondent No. 1 only authorised him to drive light transport vehicle or Omni bus and therefore, he was not competent/authorised to drive the heavy passenger motor vehicle which the offending vehicle was. Accordingly, the Tribunal that held the issue No. 3 proved in favour of respondent No. 3 and against the appellants and held that the driver of the offending vehicle was not possessed of a valid and effective driving licence. Accordingly, the Tribunal found the appellants entitled to the compensation to the tune of Rs. 8,26,800/- along with interest @ 9% per annum from the date of filing of the claim petition. Later on, the amount which was erroneously indicated in the award was corrected by the Tribunal vide its order dated 06.10.2009 and the appellants were held entitled to a sum of Rs. 16,36,464/- instead of Rs. 8,26,800/-. The amount was held payable along with interest @9% p.a. from the date of filing of the claim petition. However, no interest was paid on the amount awarded on account of loss of future earnings. The appellant-insurance company was absolved of its liability to indemnify the owner and, accordingly, the owner of the offending vehicle-the respondent No. 2 was held liable to satisfy the award. 3. The appellants are aggrieved of the findings of the Tribunal on issue No. 3 whereby, the driver of the offending vehicle has been held not possessing the valid driving licence authorising him to drive the offending vehicle and the respondent No. 3 has been absolved of its liability to indemnify the owner. The appellants are also seeking enhancement of the amount on the ground that the Tribunal has not adopted the correct multiplier, which given the age of the deceased being 28 years should have been 18 and not the 16 applied by the Tribunal. The award amount has also been challenged on the ground that the Tribunal has erroneously denied the interest to the appellants on the compensation on account of "loss of future earning". 4. The appeal is contested by the respondents No. 3. The award amount has also been challenged on the ground that the Tribunal has erroneously denied the interest to the appellants on the compensation on account of "loss of future earning". 4. The appeal is contested by the respondents No. 3. The finding of the Tribunal on issue No. 3 has been supported by respondent No. 3. On behalf of respondent No. 3, it is claimed that the owner of the offending vehicle by authorising respondent No. 1 to drive the heavy passenger vehicle (passenger bus) despite being aware that respondent No. 1 was not holding a valid licence to drive such vehicle, has committed breach of fundamental condition of the contract of insurance and therefore, the appellants cannot be held liable to indemnify the owner, i.e., respondent No. 2. It is, thus, submitted that the Tribunal committed no illegality in absolving respondent No. 3 of any liability towards the owner or the third party. The award, it is submitted, is required to be satisfied by the owner. Regarding the applicability of the multiplier, the respondent No. 3 has not seriously disputed the position that as per Sarla Verma Vs. Delhi Transport Corporation, reported in (2009) 6 SCC 121 , operative of multiplier of 18 was applicable. The plea of the appellants that they are entitled to interest on the whole award amount and the Tribunal has erroneously denied to pay the interest on future earnings has also been contested by the respondent No. 3. 5. Having heard the learned counsel for the parties and perused the record, the controversy involved in this appeal, primarily raises the following questions for determination:- (i) Whether on facts, the respondent No. 3 has proved that the respondent No. 1 was not holding a valid and effective driving licence authorising him to drive the offending vehicle; (ii) If the answer to question No. 1 is in the affirmative, whether the Company is completely absolved of its duty to indemnify the owner and pay the compensation to the respondent No. 3 or the principle of "Pay and Recover" would apply; (iii) Whether the appellants are entitled to enhancement of the compensation as also the grant of interest even on the amount awarded under the head "loss of future earnings"? 6. 6. With a view to appreciate the question No. 1, I have gone through the evidence produced on issue No. 3 before the Tribunal by the parties. The only witness examined by the respondent No. 3 is one Jagdish Raj, a Clerk in the office of RTO concerned, who could not produce the record of driving licence issued to the driver respondent No. 1, but, has produced the original record of PS V endorsement done on 20.07.2000. In his statement, Jagdish Raj has categorically stated that the licence possessed by the respondent No. 3, was issued in the year 1998 and it was for authorising him to drive the motor cycle with gear/light motor vehicle. Later on PSV endorsement also came to be made on 20.07.2000 whereby respondent No. 1 was authorised to drive PSV only, which covers light motor vehicles only. Nothing has come on record to show that the offending vehicle, which though was a Transport Vehicle did not have the unladen weight exceeding 7500 kgs. In absence of any evidence brought on record, it was not justified on the part of the Tribunal to hold that the offending vehicle was a heavy passenger motor vehicle, which driver-respondent No. 1 was not authorised to drive by the licence which he possessed at the time of the accident. From the copy of the certificate of insurance placed on record by the appellants, it only transpires that the offending vehicle was a video coach bearing registration No. JK02N-2312. The certificate of insurance does contain the particulars of the offending vehicle, but, does not indicate its unladen weight. That apart, the respondent No. 3, which contested the claim petition by filing its objections had not indicated as to how the respondent No. 1 was not holding a valid and effective driving licence authorising him to drive the offending vehicle. The preliminary objections taken by the respondent No. 3 in the reply filed before the Tribunal deserves to be noticed is reproduced as under:- "3. That the answering respondent is not liable to pay any compensation as the alleged vehicle involved in the accident, was driven by a driver who had no valid and effective driving licence at the time of accident as required under Motor Vehicle Act and rules made thereunder hence the petition against the answering respondent is not maintainable." 7. That the answering respondent is not liable to pay any compensation as the alleged vehicle involved in the accident, was driven by a driver who had no valid and effective driving licence at the time of accident as required under Motor Vehicle Act and rules made thereunder hence the petition against the answering respondent is not maintainable." 7. The respondent No. 3 has even not placed policy of insurance on record. In absence of specific pleadings and the only evidence produced by the respondent No. 3 in the shape of the statement of Jagdish Raj, a Clerk in the office of RTO concerned, it cannot be said that the respondent No. 3 has effectively discharged the burden of proving the issue No. 3. Assuming though not admitting that the respondent No. 1 was not holding a valid and effective driving licence authorising him to drive the offending vehicle, which as claimed was a heavy passenger vehicle, in that eventuality also by operation of Section 149 of the Motor Vehicle Act, 1988 and the law laid down in the case of National Insurance Co. Ltd. vs. Swarn Singh, 2004 ACJ (1) SC, which was followed later in the case of Kusum Lata and others Vs. Satbir and others (2011) 3 SCC 646 , the respondent No. 3 was liable to satisfy the award and pay compensation to the third party, i.e. the appellants herein and thereafter could have recover the same from respondent No. 2 the insured, who was guilty of committing the breach of fundamental condition of the policy of insurance. In no way, the respondent No. 3 could have been absolved of its liability absolutely as has been done by the Tribunal. In paragraph No. 13 of Kusum Lata's case, the Supreme Court held thus:- "13. In respect of the dispute about licence, the Tribunal has held and, in our view rightly, that the insurance company has to pay and then may recover it from the owner of the vehicle. This Court is affirming that direction in view of the principles laid down by a three-Judge Bench of this Court in the case of National Insurance Company Limited v. Swaran Singh and others reported in (2004) 3 SCC 297 ." 8. This Court is affirming that direction in view of the principles laid down by a three-Judge Bench of this Court in the case of National Insurance Company Limited v. Swaran Singh and others reported in (2004) 3 SCC 297 ." 8. Needless to say that the breach of any essential condition of the contract of insurance may absolve the insurer to indemnify the insured, but, its statutory liability created under Section 149 of the Motor Vehicle Act in so far as third party is concerned shall subsist notwithstanding that the insurer may, for breach of such condition, cancel or withdraw the policy of insurance. In such situation, as provided under Section 149 of the Act, the appellant insurance company, who is made to meet the statutory liability shall be entitled to recover the said amount from the insured. In any case, the award qua the third party is required to be satisfied by the insurer if it had issued the certificate of insurance/insurance policy qua the offending vehicle and the same was in operation at the time of accident. 9. Learned counsel for the respondents has placed reliance on the judgment of the Supreme Court in the case of Mukund Dewangan v. Oriental Insurance Co. Ltd.,: 2017 ACJ 2011 to claim and urge that the driver of offending vehicle, who was holding a driving licence to drive the light motor vehicle including a transport vehicle and Omni bus, the gross weight of either of which did not exceed 7500 kgs, could not be said to possess a valid and effective driving licence authorising him to drive the heavy passenger vehicle, the video coach in the instant case, which admittedly had the unladen weight exceeding 7500 kgs. While there is no dispute with regard to the proposition elucidated in the case of Mukund Dewangan, but, the same is not attracted in the case in hand. It is nowhere brought on record by the respondent No. 3 that the offending vehicle was a transport vehicle unladen weight of which was exceeding 7500 kgs. To the similar effect are other judgments relied upon by the counsel for the respondent No. 3. 10. The next question, which begs for determination is with regard to the admissibility of interest on the amount awarded on account of "loss of future earnings". To the similar effect are other judgments relied upon by the counsel for the respondent No. 3. 10. The next question, which begs for determination is with regard to the admissibility of interest on the amount awarded on account of "loss of future earnings". Learned counsel for the appellants vehemently submits that the interest is payable on the award amount in terms of Section 171 of the Act of 1988, which does not make any such distinction that the interest is payable only on a part of the award and is not payable on the other part, which may be comprised of "loss of future earnings" 11. Per contra, learned counsel appearing for the respondent No. 3 relies upon the judgment of this court in case of National Insurance Co. Ltd. v. Deep Raj and others, (2005) 2 JKJ 132 (HC) and argues that no interest is payable on the amount awarded on account of "loss of future earnings". This is the judgment which has relied upon by the Tribunal also to deny the interest to the appellants on the compensation awarded on account of "loss of future earnings". 12. I have given my thoughtful consideration to this debatable question. Before I proceed to decide the question, I deem it fit to reproduce Section 171 of the Act of 1988, which reads thus:- "171. Award of interest where any claim is allowed.-- Where any Claims Tribunal allows a claim for compensation made under this Act, such Tribunal may direct that in addition to the amount of compensation simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim as it may specify in this behalf." 13. Apparently and on plain reading, it is amply clear that the Tribunal has been empowered to direct that in addition to the amount of compensation, simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim. The grant of simple interest on the compensation awarded by the Tribunal is mandatory, but, the rate at which it should be paid and from the date it should be paid, is left to the discretion of the Tribunal with a rider that no interest should be paid from a date, earlier than the date of making the claim. The grant of simple interest on the compensation awarded by the Tribunal is mandatory, but, the rate at which it should be paid and from the date it should be paid, is left to the discretion of the Tribunal with a rider that no interest should be paid from a date, earlier than the date of making the claim. Put it simply, the Tribunal is bound to award the compensation along with simple interest. It shall, however, be in the discretion of the Tribunal to grant this simple interest either from the date of making of the claim or any subsequent date thereto as it may specify in this behalf. What should be the rate of simple interest is also left to the discretion of the Tribunal. Mind it, the discretion to be exercised has to be judicial and keeping in view the facts and circumstances of each case and cannot be capricious. As rightly contended by the learned counsel for the appellants that Section 171 of the Act does not split the award or permit the Tribunal to split the award for award of interest. Whatever the amount is awarded as compensation would attract the simple interest at such rate and from such date not earlier than the date of making the claim as the Tribunal may specify in this behalf. No other interpretation of Section 171 of the Act, which is statutory source of grant of interest on the award amount, is permissible or can be resorted to. The judgment relied upon by the respondent No. 3 passed by this Court in the case of Deep Raj and others(supra) has not taken note of the provisions of Section 171 of the Act nor it has supported by any reason. One line occurring in the judgment that is interest of 9% per annum, however, will not be applicable on the 'loss of future earnings', cannot be said to be ratio decidendi of the case nor the same can be said to have laid down the law that no interest is payable for the compensation awarded on account of loss of future earnings. Reliance placed by the learned counsel for the respondent No. 3 on the judgment of the Allahabad High Court in the case of New India Assurance Co. Ltd. Vs. Rahul Verma and others, 2004 ACJ 1889 is also misplaced. Reliance placed by the learned counsel for the respondent No. 3 on the judgment of the Allahabad High Court in the case of New India Assurance Co. Ltd. Vs. Rahul Verma and others, 2004 ACJ 1889 is also misplaced. The Division Bench of Allahabad High Court relied upon the judgment of the Supreme Court in the case of R.D. Hattangadi v. Pest Control (India) Pvt. Ltd., 1995 ACJ 366 wherein the Hon'ble Supreme Court has declined to pay interest on the amount paid to the claimants in respect of future expenditure. The Apex Court in the aforesaid case has further held that the interest is to be paid only over the amount, which has become payable on the date of award. So far as the amount payable on account of 'future earnings' is concerned, the same when paid becomes part of award, constitutes an integral part of the award and becomes payable on the date of the award. That being so, by the operation of Section 171 of the Act, it would attract simple interest as may be specified by the Tribunal. 14. For the foregoing reasons I am not persuaded to accept the contention of the learned counsel for the respondent No. 3 that the Tribunal has rightly denied the interest to the appellant on the amount awarded on account of loss of future earnings. 15. This brings me to the last issue, which pertains to enhancement of compensation. In view of what has been held hereinabove, the appellants would be entitled to interest as awarded by the Tribunal on whole of the award amount. The Tribunal has apparently committed illegality in applying the multiplier of 16 instead of 18, which is applicable in view of the law now settled in the judgment of Sarla Verma and affirmed by the Constitution Bench of the Supreme Court in the case of Pranay Sethi. 16. Viewed thus, this appeal is allowed to the extent provided above. The appellants shall be entitled to the compensation in the following manner:- (i) The monthly income of the deceased as taken by the tribunal is Rs. 8300/- (ii) To be increased by 50% towards future prospectus, it will come to Rs. 8300+4150= 12450. There world be deduction @ 1/3rd on account of personal expenses, which would bring the amount to Rs. 8300/- (ii) To be increased by 50% towards future prospectus, it will come to Rs. 8300+4150= 12450. There world be deduction @ 1/3rd on account of personal expenses, which would bring the amount to Rs. 8300/- The annual income to be taken for consideration for computing the compensation – 8300*12=Rs. 99600/- (iii) The multiplier to be used is 18. (iv) Loss of dependency would come to Rs. 99600*18 = Rs.17,92,800/- (v) The appellants are also entitled to compensation on conventional head in the following manner : Funeral expenses : Rs.15,5000/- Loss of estate  : Rs.15,000/- Loss of consortium of appellant No. 1 Rs.40,000/- Loss of consortium of appellant No. 2 Rs.40,000/- Total : 18,07,272+15,000+15,000+40,400+40,000=Rs.19,02,800/- (Rupees Nineteen Lac Two Thousand and Eight Hundred only) 17. The award passed by the Tribunal is modified to the aforesaid extent. Let award amount be paid by the respondent No. 3 to the appellants-claimants if not already paid along with interest @ 7.5% per annum from the date of filing of the petition till its realization. Respondent No. 3 insurance company, however, shall be at liberty to recover the same from the owner of the offending vehicle, i.e. respondent No. 2 herein in accordance with law. The appeal is, accordingly, allowed and award modified to the extent as above. 18. Disposed of as above along with connected IA(s).