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2023 DIGILAW 77 (JK)

United India Insurance Co. Ltd. v. Dilshada Begum

2023-02-23

SANJAY DHAR

body2023
JUDGEMENT 1. The appellant-Insurance company has challenged award dated 31.05.2013 passed by the Motor Accidents Claims Tribunal, Ramban (hereinafter referred to as the 'Tribunal') whereby the respondents-claimants have been held entitled to an amount of Rs. 5,00,000/- as compensation on account of death of one Mohd. Rafiq Malik who is stated to have died on 01.02.2011 as a result of motor vehicular accident involving vehicle bearing No. JK 03/4413. 2. It has been contended by the appellant-Insurance Company that the income of the deceased was pleaded and proved to be more than Rs. 40,000/- per annum, therefore, it was not open to the Tribunal to scale it down to Rs. 40,000/- per annum so as to bring the claim petition within the parameters of Section 163-A of Motor Vehicles Act, 1988 (hereinafter referred to as the 'Act of 1988'). It has also been contended that, while calculating the compensation, the Tribunal has made deduction and applied multiplier as per the ratio laid down by the Supreme Court in the case of Sarla Verma and others v. Delhi Transport Corporation and another, (2009) 6 SCC 121 , whereas, in the case of a claim petition under section 163-A of the Act of 1988, the compensation has to be assessed strictly in accordance with the Second Schedule to the said Act. It has further been contended that a cheque relating to the premium of policy of insurance was dishonored and, as such, the policy of insurance issued by the appellant-Insurance Company in favour of the insured in respect of the vehicle in question stood automatically cancelled. Accordingly, the vehicle in question was not covered under any policy of insurance at the time of the accident. Thus, according to the appellant-Insurance Company, it could not have been saddled with liability to satisfy the award. 3. I have heard learned counsel appearing for the appellant-Insurance Company and learned counsel appearing for the respondents-claimants and perused the record of the case. 4. It appears that on 01.02.2011, a vehicle bearing No. JK03/4413, that was being driven by deceased Mohd. Rafiq Malik, suffered an accident which resulted in serious injuries to the deceased driver leading to his death. The respondents-claimants, who happen to be the wife, sons and daughter of the deceased, filed a claim petition under section 163-A of the Act of 1988 before the Tribunal. Rafiq Malik, suffered an accident which resulted in serious injuries to the deceased driver leading to his death. The respondents-claimants, who happen to be the wife, sons and daughter of the deceased, filed a claim petition under section 163-A of the Act of 1988 before the Tribunal. In the claim petition, it was claimed that the age of the deceased at the time of his death was 35 years, he was driver by profession and that his monthly income was Rs. 20,000/- per month. The compensation was claimed by the respondents-claimants in terms of the Second Schedule to the Act of 1988. 5. The appellants-Insurance Company filed its objections to the claim petition in which it was contended that the vehicle in question was being driven in violation of the terms and conditions of the policy of insurance at the time of the accident, inasmuch as, its driver was not holding a valid driving licence. It was also contended that the vehicle in question was being driven without a valid and effective route permit and fitness certificate and that the driver of the vehicle in question was driving the same in a rash and negligent manner. It was further contended that five gratuitous passengers were also travelling in the vehicle in question at the relevant time. The appellant-Insurance, however, admitted that the vehicle in question was covered by a policy of insurance having its validity from 20.05.2010 to 19.05.2011. The reply filed by the appellant-insurance company has been signed by its authorized officer as well as by its counsel before the Tribunal. 6. The Tribunal, on the basis of pleadings of the parties, framed the following issues: (i) Whether the deceased Mohd. Rafiq Malik died as a result of injuries received in a vehicular accident on 01.02.2011 at Zanchoos on Banihal Neel Road involving vehicle No. JK03/4413 driven by the deceased himself under the jurisdiction of Police Station Banihal? OPP (ii) Whether the petitioners are entitled to receive any compensation under Motor Vehicle Act from the respondents, if so, to what extent and from whom? OPP; (iii) Whether the offending vehicle was being driven at the time of accident in contravention of terms and conditions of Insurance Policy and respondent insurance company is not liable to pay any compensation to the petitioners? OPP (iv) Relief. 7. OPP; (iii) Whether the offending vehicle was being driven at the time of accident in contravention of terms and conditions of Insurance Policy and respondent insurance company is not liable to pay any compensation to the petitioners? OPP (iv) Relief. 7. The respondents-claimants examined three witnesses, namely the claimant Dishada Begum, PW Abdul Rashid and PW Mohd. Rafiq, whereas no evidence was led by the appellant-Insurance Company. The learned Tribunal, after appreciation of evidence on record, came to the conclusion that the deceased has died as a result of the accident involving vehicle bearing No. JK03/4413 which he was driving at the relevant time. The Tribunal further observed that, though the income of the deceased has been shown to be Rs. 20,000/-, however, because the claim petition has been filed under section 163-A of the Act of 1988, therefore, the annual income of the deceased is to be restricted to Rs. 40,000/- per annum. Accordingly, the compensation was assessed at Rs. 5.00 lac along with interest at the rate of 7.5% per annum. 8. The first contention that has been raised by the appellant-Insurance Company is that the vehicle in question was not covered under the policy of insurance at the relevant time because the cheque relating to premium had been dishonored and consequently, the policy of insurance was automatically cancelled. In this regard, the appellant-Insurance Company has placed on record the original cheque, original dishonor memo and a copy of the notice stated to have been sent to the insured. 9. Learned counsel for the appellant-Insurance Company has submitted that the reply to the claim petition was filed by the counsel for the insurance company without instructions from the company and the same was signed by any authorized officer of the company, therefore, the aforesaid plea could not be raised before the Tribunal. 10. The stand taken by the learned counsel for the appellant is factually incorrect for the reason that the record of the Tribunal clearly shows that the reply filed by the appellant-Insurance Company has been signed not only by the counsel for the insurance company, but also by the authorized officer of the company and it bears seal and signatures of the said officer. In para (4) of the reply, the appellant-insurance company has admitted that the vehicle in question was insured under a policy of insurance with its validity from 20.05.2010 to 19.05.2011. In para (4) of the reply, the appellant-insurance company has admitted that the vehicle in question was insured under a policy of insurance with its validity from 20.05.2010 to 19.05.2011. Obviously, no issue as regards the question, whether or not, the vehicle in question was covered under the policy of insurance has been framed by the Tribunal. 11. The plea that the vehicle in question was not insured at the relevant time has been raised by the appellant-insurance company for the first time in the appeal and at the same time the insurance company has categorically admitted in its reply before the Tribunal that the vehicle in question was insured at the relevant time. The appellant-insurance company cannot take inconsistent pleas and deny the insurance policy for the first time in the appeal. Allowing such plea to be raised in appeal would cause grave prejudice to the claimant and the owner as they have no chance to meet this new plea at the appellate stage. 12. The claim petition remained pending before the Tribunal for more than one year, but it never occurred to the appellant-insurance company to bring to the notice of the Tribunal that the policy of insurance had been cancelled. This plea cannot be allowed to be raised for the first time at the appellate stage, particularly when the appellant-insurance company has specifically admitted before the Tribunal that the vehicle in question was insured at the relevant time. The argument of learned counsel for the appellant-insurance company is, therefore, without any merit. 13. It has been next contended that, once it was shown that the annual income of the deceased was more than Rs. 40,000/- per annum, it was not open to the Tribunal to restrict the income of the deceased to Rs. 40,000/- per annum and award compensation in terms of the provisions contained in Section 163-A of Act of 1988. In this regard, learned counsel for the appellant-insurance company has relied upon a judgment of the Supreme Court in the case of Deepal Girishbhai Soni and others v. United India Insurance Co. Ltd., 2004 ACJ 934 . Reliance has also been placed upon judgment of Punjab and Haryana High Court in the case of National Insurance Co. Ltd v. Nagina Devi and others, 2016 ACJ 176 , a judgment of Gauhati High Court in the case of New India Assurance Co. Ltd., 2004 ACJ 934 . Reliance has also been placed upon judgment of Punjab and Haryana High Court in the case of National Insurance Co. Ltd v. Nagina Devi and others, 2016 ACJ 176 , a judgment of Gauhati High Court in the case of New India Assurance Co. Ltd. v. Lalthangveli and others, 2009 ACJ 299 , judgment of Kerala High Court in the case of United India Insurance Co. Ltd., v. Akbar Shihab, 2013 ACJ 121 , judgment of Kerala High Court in the case of National Insurance Co. Ltd., v. Jabbar and another, 2007 ACJ 1371 , judgment of High Court of Himachal Pradesh in the case of Satya Devi v. Bakshi Ram and others, 2011 ACJ 760 and judgment of Punjab and Haryana High Court in the case of Gurmeet Singh v. Chandigarh Transport Undertaking and others, 2008 ACJ 2303 . 14. In Deepal Girishbhai Soni's case (supra), the Supreme Court, after discussing the scope of provisions contained in Section 163-A and Section 166 of the Act of 1988, came to the conclusion that the proceedings under section 163-A being a social security provision, providing for a distinct scheme, only those whose, annual income is up to Rs. 40,000/- per annum can take the benefit thereof. All other claims are required to be determined in terms of Chapter XII of the Act. It was further held that, in Section 163-A, the expression "notwithstanding anything contained in the Act or, in any other law for the time being in force" has been used, which goes to show that the Parliament intended to insert a non-obstante clause of wide nature which would mean that the provisions of Section 163-A of the Act of 1988 would apply despite the contrary provisions existing in the said Act, or any other law for the time being in force. The Court went on to observe that Section 163-A of the Act covers cases where negligence is on the part of the victim and it is by way of an exception to Section 166 and the concept of social justice has been duly taken care of. 15. The Court went on to observe that Section 163-A of the Act covers cases where negligence is on the part of the victim and it is by way of an exception to Section 166 and the concept of social justice has been duly taken care of. 15. Again in the case of United India Insurance Company Ltd. v. Sunil Kumar and another, 2013 ACJ 2856 , it has been held that liability to award compensation under section 163-A of the Act of 1988 is on the principle of "no fault", therefore, the question as to who is at fault is immaterial and foreign to an enquiry under section 163-A of the Act. It was further observed that the Legislature never wanted the claimant to plead or establish negligence on the part of the owner or the driver. The Court went on to observe that, once it is established that the death or permanent disablement has occurred during the course of use of the vehicle and the vehicle is insured, the insurance company or the owner, as the case may be, shall be liable to pay the compensation, which is a statutory obligation. 16. Expounding the law regarding intention behind incorporation of Section 163A of the Act, the Supreme Court in the case of Sarla Verma (supra), in para (34) of the judgment observed as under: "34. The Motor Vehicle Act, 1988 was amended by Act 54 of 1994, inter alia inserting Section 163-A and the Second Schedule with effect from 14.11.1994. Section 163-A of the MV Act contains a special provision as to payment of compensation on structured formula basis, as indicated in the Second Schedule to the Act. The Second Schedule contains a Table prescribing the compensation to be awarded with reference to the age and income of the deceased. It specifies the amount of compensation to be awarded with reference to the annual income range of Rs. 3,000/- to Rs. 40,000/-. It does not specify the quantum of compensation in case the annual income of the deceased is more than Rs. 40,000/-. But it provides the multiplier to be applied with reference to the age of the deceased. The table starts with a multiplier of 15, goes upto 18, and then steadily comes down to 5. It also provides the standard deduction as one-third on account of personal living expenses of the deceased. 40,000/-. But it provides the multiplier to be applied with reference to the age of the deceased. The table starts with a multiplier of 15, goes upto 18, and then steadily comes down to 5. It also provides the standard deduction as one-third on account of personal living expenses of the deceased. Therefore, where the application is under section 163A of the Act, it is possible to calculate the compensation on the structured formula basis, even where compensation is not specified with reference to the annual income of the deceased, or is more than Rs.40,000/-, by applying the formula : (2/3 x AI x M), that is two-thirds of the annual income multiplied by the multiplier applicable to the age of the deceased would be the compensation. Several principles of tortious liability are excluded when the claim is under section 163A of MV Act". 17. The question whether the Tribunal can restrict the income of the deceased/injured to Rs. 40,000/- per annum in spite of the claimant having pleaded that the income of the deceased/injured is more than Rs. 40,000/- per annum, came up for consideration before this Court in the case of Bajaj Allianz General Ins. Co. Ltd v. Mohd. Sharief and others, 2017 (5) JKJ 110 [HC]. This Court, after discussing the afore-noted judgment of the Supreme Court, has observed as under: "The possibility of exercising the option of filing a claim application under section 166 of the Act or under section 163-A, however, is not available in a case where admittedly the accident had occurred due to the wrongful act, neglect or default on the part of the victim of the accident himself for the reason that in such a case a claim under section 166 of the Act would not lie. In such a case, the claimants cannot be debarred from filing a claim under section 163-A of the Act, which covers cases where even negligence is on the part of victim, only for the reason that the annual income of the victim was more than Rs. 40,000/-. 18. In the aforesaid case, in the claim application, the income of the deceased was pleaded as Rs. 7,000/-per month, but the Tribunal, after holding an enquiry, restricted the income of the deceased to Rs. 36,000/- per annum. 40,000/-. 18. In the aforesaid case, in the claim application, the income of the deceased was pleaded as Rs. 7,000/-per month, but the Tribunal, after holding an enquiry, restricted the income of the deceased to Rs. 36,000/- per annum. The award was challenged by the insurer on two grounds including the ground that the claim petition under section 163A of the Act of 1988 is not maintainable when annual income of its deceased is more than Rs. 40,000/- per annum. This Court in view of its foregoing observations rejected the argument of the insured. 19. Again in the case of National Insurance Company Ltd. v. Rukhsana Begum and others, Manu/JK/0479/2019, this Court in a case where the claimant had shown the income of the deceased as Rs. 7,000/-per month, but the Tribunal did not accept this assertion and held that income of the deceased cannot be taken as more than Rs. 40,000/-. This Court, placing reliance upon the ratio laid down in Mohd. Sharief's case (supra) held the claim petition as maintainable. 20. Again in Neema v. Sohan Singh, 2019 SCC Online HP 1805, challenge was laid to the order of the Tribunal dismissing the claim petition on the ground that the same was not maintainable as the claimants had failed to demonstrate that the income of the deceased was not less than the maximum limit of Rs. 40,000/- per annum. The appellant in the aforesaid case relied upon the Division Bench Judgment of High Court of Himachal Pradesh in the case of Oriental Insurance Company Ltd v. Sihnu Ram and others (FAO No. 474/2010, decided on 28.09.2016) in which it was held that de hors the fact as to whether the income of the deceased is Rs. 40,000/-or more per annum, once the claim petition has been filed by the claimant, may be under section 163A of the Act of 1988, the same has to be decided by the Tribunal on merit and the claim petition cannot be thrown out on flimsy grounds that the income of the deceased was Rs. 40,000/- or more.. 40,000/-or more per annum, once the claim petition has been filed by the claimant, may be under section 163A of the Act of 1988, the same has to be decided by the Tribunal on merit and the claim petition cannot be thrown out on flimsy grounds that the income of the deceased was Rs. 40,000/- or more.. The Court agreed with the view taken in Sihnu Ram's case (supra) and set aside the award passed by the Tribunal holding the award to be bad in law as the Tribunal could not have dismissed the claim petition filed under section 163A of the Act simply on the ground that the income of the deceased was more than Rs. 40,000/- per annum. The matter was remanded back to the Tribunal for fresh consideration. 21. Again in the case of Narayan Rama Chougale v. Shekhar Shankereppa Kulgod and ors, MANU/KA/4954/2022, Karnataka High Court, in an appeal filed against the award of the Tribunal rejecting the claim petition under section 163A of the Act of 1988, observed as under: "5. The contention of the learned counsel for the appellant is that annual income of Rs. 40,000/- fixed as per Section 163A of the Act is an enabling provision and therefore, the claimant who has an annual income in excess of Rs. 40,000/- can always restrict it to Rs. 40,000/- and maintain a claim petition under section 163A of the Act and thereby he can claim compensation without proving negligence on the part of the driver of the offending vehicle. It is his further contention that this is an enabling provision provided for the benefit of the claimants, who are willing to forego a higher income for the purpose of claiming compensation without proving the negligence on the part of the driver of the offending vehicle and thereby giving up his right to claim higher compensation. This aspect of the law is no longer res integra. As a matter of fact, learned Tribunal has referred to the relevant case laws and rejected the said contention after elaborate discussion and I have no reason to disagree with the same. I may immediately refer to the decision of the Hon'ble Supreme Court in the case of Deepal Girishbhai Soni and others v. United India Insurance Co. Ltd., Baroda MANU/SC/0246/2004 6. Following the said decision, a Division Bench of this Court in United India Insurance Co. I may immediately refer to the decision of the Hon'ble Supreme Court in the case of Deepal Girishbhai Soni and others v. United India Insurance Co. Ltd., Baroda MANU/SC/0246/2004 6. Following the said decision, a Division Bench of this Court in United India Insurance Co. Ltd., Bangalore v. Anita and others, MANU/KA/8206/2006: 2007(1) T.A.C. 48(Kant.) has rejected the same contentions. Therefore, there is no merit in this appeal and accordingly, it is liable to be dismissed." 22. From the foregoing analysis of law on the subject, it is clear that even in a case where the claimant pleads that the income of the deceased or injured is more than Rs. 40,000/- per annum, he can opt to file a claim petition under section 163A of the Act and if he opts to do so, his income has to be taken not more than Rs. 40,000/- per annum and in such a case, the compensation has to be calculated on the structured formula basis even though his actual income may be more than Rs. 40,000/- per month. 23. A claimant, who opts to file a claim petition under section 163A of the Act, is saved from the requirement of proving that the accident had occurred due to neglect or default on the part of the owner of the offending vehicle. But, in such a case, a claimant would only get the limited compensation in accordance with the structured formula provided under the Second Schedule of the Act of 1988, whereas, if a clamant opts to file his claim petition under section 166 of the Act, he has to prove neglect or default on the part of the owner or driver of the offending vehicle, only then he would be entitled to compensation and the liability of the driver, owner and insurer, in such cases, would be unlimited. Thus, a person having income more than Rs. 40,000/- per annum is not debarred from filing a petition under section 163A of the Act of 1988, provided his income is taken within the aforesaid limit and the compensation is calculated as per the structured formula under the Act. The argument of the learned counsel for the appellant-insurance company, that the claim petition is not maintainable because the income of the deceased is shown to be Rs. 20,000/- per month is, therefore, without any merit. 24. The argument of the learned counsel for the appellant-insurance company, that the claim petition is not maintainable because the income of the deceased is shown to be Rs. 20,000/- per month is, therefore, without any merit. 24. As already noted, once a claim petition is filed by the claimants in terms of Section 163A of the Act, the claimants are only entitled to compensation in terms of the structured formula given in the Second Schedule of the Act. In the instant case, the learned Tribunal has calculated the compensation on the basis of the ratio laid down by the Supreme Court in Sarla Verma's case (supra). The same is not in accordance with law. Once, the Tribunal proceeds to restrict the income of the deceased to Rs. 40,000/- per annum and claim petition was filed under section 163-A of the Act, the only option available with the Tribunal is to calculate the compensation on the basis of the structured formula. Therefore, the applicable multiplier has to be in accordance with the Second Schedule of the Act and the deduction of personal expenses of the deceased towards maintaining himself has to be 1/3rd of the income. However, in the instant case, neither the applicable multiplier, nor the deduction has been made by the Tribunal in accordance with the structured formula. The award is, therefore, required to be modified to this extent. 25. Another aspect of the matter relates to the age of the deceased. It appears that the Tribunal has fallen in error while determining age of the deceased. The Tribunal has taken the age of the deceased as 35 years but a perusal of the documents on record shows that the date of birth of the deceased, as per his driving licence, is 21.07.1974, meaning thereby that, at the time of his death, he was more than 36 years old. 26. In view of what has been discussed above, the award of the Tribunal is modified in the following manner: (i) Annual loss of dependency Annual income less by 1/3rd deduction on account of personal expenses multiplied by applicable multiplier as per Second Schedule i.e. Rs.40,000-Rs.13333=Rs. 26,667x16 Rs. 4,26,672/- (ii) Funeral expenses Rs. 2000/- (iii) Loss of Estate Rs. 2500/- (iv) Loss of consortium Rs. 5000/- Total Rs. 4,36,172/- 27. Thus, the claimants are entitled to compensation of Rs. 4, 36, 172/-. 26,667x16 Rs. 4,26,672/- (ii) Funeral expenses Rs. 2000/- (iii) Loss of Estate Rs. 2500/- (iv) Loss of consortium Rs. 5000/- Total Rs. 4,36,172/- 27. Thus, the claimants are entitled to compensation of Rs. 4, 36, 172/-. The appeal is, therefore, partly allowed and an award in the amount of Rs. 4,36,172/- along with interest at the rate of 7.5% per annum from the date of filing of the claim petition till realization of the awarded amount is passed in favour of the claimants and against the appellant, Insurance Company. Other terms and conditions of the impugned award shall remain unchanged. 28. The Registrar Judicial shall release the amount deposited by the appellant-Insurance Company in favour of the claimants in terms of this judgment, if not already released, on their proper identification. The excess amount, if any, shall be released in favour of the appellant-company along with interest accrued thereon. 29. Appeal stands disposed of accordingly.