Jammu & Kashmir High Court - Srinagar Bench
United India Insurance Company Limited vs Manzoor Ahmad Wani And Others on 1 September, 2022
Author: Vinod Chatterji Koul
Bench: Vinod Chatterji Koul
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT SRINAGAR
...
Mac App no.29/2019
c/w Mac App no.17/2021
Mac App no.30/2019
Reserved on: 27.04.2022
Pronounced on: 01.09.2022
United India Insurance Company Limited
.........Appellants(s)
Through: Mr Shabir Hussain Kanth, Advocate
Versus
Manzoor Ahmad Wani and others
.........Respondent(s)
Through: Mr Sheikh Abdul Hai, Advocate
CORAM:
HON'BLE MR JUSTICE VINOD CHATTERJI KOUL, JUDGE
JUDGEMENT
1. Impugned in these three Appeals is a common Award dated27th June 2018, passed by Motor Accident Claims Tribunal, Shopian (for brevity "Tribunal"), allowing three Claim Petitions and directing appellant Insurance Company to pay compensation to respondents/claimants therein. The appeals are taken up, discussed and decided ad seriatim.
Mac App no.29/2019 (Titled: United India Insurance Company Limited v. Manzoor Ahmad Wani and others)
2. A claim petition, bearing File no.16/Claim, was filed by respondents 1&2/claimants before the Tribunal, averring therein that on 8th July Page 1 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 2010, an accident took place, in which their son, namely, Kifayat Hussain, who was driver of offending vehicle (platform), bearing Registration no.JK02AE-4947, died, besides other casualties. On the basis of case set up, claimants/respondents sought compensation of Rs.10.00 Lakhs along with interest and costs.
3. Appellant Insurance Company filed Written Objections, insisting therein that driver of offending vehicle was not having valid driving licence and that appellant was not liable to pay compensation as owner of offending vehicle had violated terms and conditions of insurance policy.
4. The Tribunal, given the pleadings of parties, framed following issues for determination of claim petition:
(i) Whether on 08.07.2010, the accused Kifayaz Ahmad Wani S/o Ahmad Wani R/o Heerpora Shopian who was driver of the offending vehicle bearing Registration No.4947-JK02E died in an accident as he was driving the said vehicle at Sarbal Mughal Road when he lost the control of the said vehicle? (OPP)
(ii) Whether the petitioners are entitled to any compensation on account of the death of the deceased as being his legal heir and to what extent of compensation they are entitled to and from whom? (OPP)
(iii) Whether the respondent Insurance Company is not liable to pay any compensation to the petitioners on the count that the accident occurred due to rash and negligent driving of the deceased driver? (OPR)
(iv) Whether the Insurance Company is liable to indemnify the owner insured of the offending vehicle as he has violated terms and conditions of the policy insurance? (OPR)
(v) Relief.
5. Claimants/respondents produced and examined four witnesses. Appellant Insurance Company produced two witnesses in support of Page 2 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 its stand. In terms of impugned common Award, the Tribunal directed appellant Insurance Company to pay an amount of Rs.13,10,064/- with 6% interest from the date of institution of claim petition, to claimants/respondents.
6. I have heard learned counsel for parties and considered the matter.
7. Learned counsel for appellant Insurance Company has stated that appellant Insurance Company demonstrated before the Tribunal that claim petition filed by respondents/claimants under Section 163-A of the Motor Vehicles Act is not maintainable against appellant Insurance company for the reason that Section 163-A being the social security provision providing for a distinct scheme to those with annual income up to Rs.40,000/-. His further submission is that the Tribunal has of its own taken income of deceased as Rs.6000/- per month which comes to Rs.72,000/- annually and after deducting 1/3 personal living expenses, took annual income of deceased of Rs.48,000/-, and applied multiplier of 17 as the age of deceased was 23 years and Rs.8,16,000/- was awarded as compensation under the head of loss of dependency. He has also stated that claimants are not entitled to compensation on other heads, like loss of estate and funeral expenses. He avers that the Tribunal has not kept in view amendment made to Second Schedule to Section 163-A of the Act; in terms whereof compensation of Rs.5.00 Lakhs is to be paid in case of death, but this aspect has been ignored by the Tribunal while passing impugned Award.
Page 3 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019
8. In the above backdrop, it is mentioned here that Section 163A of the Act deals with special provisions as to compensation on structured formula basis. The said provision was inserted vide Section 51 of the Motor Vehicles (Amendment) Act, 1994, with effect from 14.11.1994. It would be beneficial to reproduce Section 163A infra:
"163A. Special provisions as to payment of compensation on structured formula basis. --
(1) Notwithstanding anything contained in this Act or in any other law for the time being in force or instrument having the force of law, the owner of the motor vehicle of the authorised insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be.
Explanation. --For the purposes of this sub-section, "permanent disability" shall have the same meaning and extent as in the Workmen‟s Compensation Act, 1923. (2) In any claim for compensation under sub-section (1), the claimant shall not be required to plead or establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act or neglect or default of the owner of the vehicle or vehicles concerned or of any other person.
(3) The Central Government may, keeping in view the cost of living by notification in the Official Gazette, from time to time amend the Second Schedule."
As can be seen from bare reading of Subsection (1) of Section 163A, it provides that notwithstanding anything contained in the Act or in any law for the time being in force, or instrument having the force of law, owner of motor vehicle or authorised insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in Second Schedule, to the legal heirs of victim, as the case may be. "Permanent disability" in terms of Explanation to Subsection Page 4 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 (1) shall have the same meaning and extent as in the Workmen‟s Compensation Act, 1923. Subsection (2) envisions that in any claim for compensation under subsection (1), claimant shall not be required to plead or establish that death or permanent disablement in respect whereof claim has been made was due to any wrongful act or neglect or default of the owner of vehicle or vehicles concerned or of any other person. Subsection (3) envisages that the Central Government may, keeping in view the cost of living, by notification in the Official Gazette, from time to time, amend the Second Schedule.
9. Chapter X of the Motor Vehicles Act deals with liability to pay compensation in certain cases on the principle of „no fault‟. It would be profitable to reproduce Section 140 of the Act hereunder:
"140. Liability to pay compensation in certain cases on the principle of no fault. -- (1) Where death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of this section. (2) The amount of compensation which shall be payable under sub-section (1) in respect of the death of any person shall be a fixed sum of fifty thousand rupees and the amount of compensation payable under that sub-section in respect of the permanent disablement of any person shall be a fixed sum of twenty-five thousand rupees.
(3) In any claim for compensation under sub-section (1), the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person.
(4) A claim for compensation under sub-section (1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim has been made nor shall the quantum of compensation recoverable in respect of such death or Page 5 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement.
(5) Notwithstanding anything contained in sub-section (2) regarding death or bodily injury to any person, for which the owner of the vehicle is liable to give compensation for relief, he is also liable to pay compensation under any other law for the time being in force:
Provided that the amount of such compensation to be given under any other law shall be reduced from the amount of compensation payable under this section or under section 163A."
Subsection (1) of Section 140, on its bare perusal, provides that where death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of this Section. As per Subsection (3), in any claim for compensation under subsection (1), the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person.
10.Chapter XI of the Motor Vehicles Act deals with insurance of motor vehicles against third party risks. Section 145 gives definition of expressions "authorised insurer", "certificate of insurance", "liability, policy of insurance", "property", "reciprocating country", "third party". Section 146 relates to necessity for insurance against third party risk, which for facility of reference is reproduced below:
Page 6 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 "146. Necessity for insurance against third party risk.--(1) No person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this Chapter:
Provided that in the case of a vehicle carrying, or meant to carry, dangerous or hazardous goods, there shall also be a policy of insurance under the Public Liability Insurance Act, 1991.
Explanation.--A person driving a motor vehicle merely as a paid employee, while there is in force in relation to the use of the vehicle no such policy as is required by this sub- section, shall not be deemed to act in contravention of the sub-section unless he knows or has reason to believe that there is no such policy in force.
(2) Sub-section (1) shall not apply to any vehicle owned by the Central Government or a State Government and used for Government purposes unconnected with any commercial enterprise.
(3) The appropriate Government may, by order, exempt from the operation of sub-section (1) any vehicle owned by any of the following authorities, namely: --
(a) the Central Government or a State Government, if the vehicle is used for Government purposes connected with any commercial enterprise;
(b) any local authority;
(c) any State transport undertaking:
Provided that no such order shall be made in relation to any such authority unless a fund has been established and is maintained by that authority in accordance with the rules made in that behalf under this Act for meeting any liability arising out of the use of any vehicle of that authority which that authority or any person in its employment may incur to third parties.
Explanation. -- For the purposes of this sub-section, "appropriate Government" means the Central Government or a State Government, as the case may be, and--
(i) in relation to any corporation or company owned by the Central Government or any State Government, means the Central Government or that State Government;
(ii) in relation to any corporation or company owned by the Central Government and one or more State Governments, means the Central Government;
(iii) in relation to any other State transport undertaking or any local authority, means that Government which has control over that undertaking or authority."
Page 7 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 On a meticulous reading of Section 146 of the Act, it prescribes, as a mandate of law, necessity of insurance against third party risks during the use of a motor vehicle by a person in a public place. Unless there exists a policy of insurance in relation to use of vehicle by that person or any other person and policy of insurance complies with requirements of Chapter XI of the Act, the vehicle is prohibited from being used. The policy must, therefore, provide for insurance against any third-party liability incurred by that person while using that vehicle. The policy should, therefore, be with respect to that particular vehicle.
11.On a plain reading of abovesaid provision, it is deducible that it extends protectionto a third party in respect of death, bodily injury or damage to the property while using the vehicle in a public place. Thus, insurance of a vehicle had been made compulsory under this particular provision read with Section 147 of the Act by incorporating the statutory requirement and also contractual obligation of insurer and insured. When a certificate of insurance is issued, in law, the insurance company is bound to indemnify owner if vehicle is insured as the case may be. If owner is liable under the facts and circumstances of a particular case, applying the principle of „in pari delicto‟, the insurance company is also jointly liable to third parties and to the damage to the property of the third parties in view of the indemnity given to insured of vehicle. Section 146 of the Act, therefore, provides for statutory or compulsory insurance of a motor vehicle. Thus, once policy is issued, it should cover all legal Page 8 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 prerequisites as contemplated under Section 146 and 147 of the Act and, consequently, insurance is a mandatory requirement to be obtained by a person in charge of or in possession of a vehicle. It goes without saying that once Insurance Company had undertaken its liability to third parties as incurred by persons specified in the policy, the third parties‟ right to recover any amount under or by virtue of the provisions of the Act is not affected by any other condition in the policy. Therefore, object behind legislation is that no third parties‟ right should suffer on account of failure to comply with any other condition of Insurance Company by insured and, therefore, Insurance Company is legally liable under Section 146 and 147, which are virtually recognised as statutory policies or „Act Policies‟. The liability of the Insurance Company is fixed by virtue of incorporation of legal requirements as contemplated under Section 146 and 147 of the Act. It is conspicuous that compulsorily insurance is a benefit to third parties and others covered under the statute since the said provisions enunciate broad and magnanimous intentions of the Parliament in order to fulfil the social welfare objects of the Act. A third party can enforce liability undertaken by insurer irrespective of other conditions which are not recognised under any other provisions of the Act. However, at the same time, aforesaid obligation does not apply to any vehicle owned by Central Government or State Government used for government purpose and connected with any commercial enterprise, unless a fund has been established and is maintained by that authority in accordance with the rules made in that Page 9 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 behalf under the Act for meeting any liability arising out of the use of any vehicle of that authority which that authority or any person in its employment may incur to the third parties. Therefore, the whole object is to cover the third-party risk under this provision.
In the aforesaid background, an insurance policy has to contain statutory conditions and limits of the liabilities as per the statute and may also have other contractual obligations mutually agreed upon by the insurer and the insured. In that view of matter, Section 147 of the Act is also another provision required to be understood.
12.Section 147 of the Act deals with requirements of policies and limits of liability, which, therefore, is necessary to be reproduced below:
"147. Requirements of policies and limits of liability. --
(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which--
(a) is issued by a person who is an authorised insurer; and
(b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)--
(i) against any liability which may be incurred by him in respect of the death of or bodily 1[injury to any person, including owner of the goods or his authorized representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;
(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:
Provided that a policy shall not be required--
(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen‟s Compensation Act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, any such employee--
(a) engaged in driving the vehicle, or Page 10 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019
(b) if it is a public service vehicle engaged as a conductor of the vehicle or in examining tickets on the vehicle, or
(c) if it is a goods carriage, being carried in the vehicle, or
(ii) to cover any contractual liability.
Explanation.--For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.
(2) Subject to the proviso to sub-section (1), a policy of insurance referred to in sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely:--
(a) save as provided in clause (b), the amount of liability incurred;
(b) in respect of damage to any property of a third party, a limit of rupees six thousand:
Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier.
(3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases.
(4) Where a cover note issued by the insurer under the provisions of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe.
(5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect Page 11 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 of any liability which the policy purports to cover in the case of that person or those classes of persons."
As per Subsection (1) of Section 147, with an aim to comply with the requirements of Chapter XI, a policy of insurance must be a policy which is issued by a person who is an authorized insurer; and insures the person or classes of persons specified in the policy to the extent specified in subsection (2) against any liability which may be incurred by him in respect of death of or bodily injury to any person, including owner of goods or his authorized representative carried in vehicle or damage to any property of a third party caused by or arising out of use of vehicle in public place or against death of or bodily injury to any passenger of a public service vehicle caused by or arising out of use of vehicle in public place.
13.In the above backdrop, let me see how the Supreme Court has dealt with the provisions of 163A of the Act in the context of liability of insurer whenever the liability to indemnify the insured arose and when the insurer was made to pay the compensation.
14.In Deepal Girishbhai Soni v. United India Insurance Company Ltd. (2004) 5 SCC 385, a three-Judge Bench of the Supreme Court held that in Section 163A of the Act, the expression „notwithstanding anything contained in this 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 163A would apply despite the contrary provisions existing in the said Act or any other law for the time being Page 12 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 in force. Section 163A of the Act covers cases where even negligence is on the part of the victim. It is by way of an exception to Section 166 and the concept of social justice has been duly taken care of.
15.The Supreme Court in Ningamma v. United India Insurance Company Ltd. (2009) 13 SCC 710, after referring to paragraph 42 of the Three-Judge Bench decision in the case of Deepal Girishbhai Soni (supra) has held that the Parliament by introducing Section 163A in the Act has provided for payment of compensation on structured formula basis by mandating that owner of a motor vehicle or authorised insurer would be liable to pay compensation, as indicated in Second Schedule in the case of death or permanent disablement due to accident arising out of use of motor vehicle, to legal heirs or victim, as the case may be, in a claim made under Subsection (1) of Section 163A of the Act.
16.Taking into account submissions made by learned counsel for appellant-Insurance Company and above discoursed well-settled legal position on the subject, the instant appeal deserves to be allowed and judgement dated 1st February 2021 needs to be set-aside to the extent of instant appeal, more particularly given the Second Schedule to Section 163A of the Act providing compensation for third party fatal accidents/injury cases claims. It would be advantageous to reproduce S.O.2022(E) dated 22nd May 2018, issued by Ministry of Road Transport and Highways, making amendments to the Second Schedule to the Act, hereunder:
Page 13 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 "MINISTRY OF ROAD TRANSPORT AND HIGHWAYS NOTIFICATION New Delhi, the 22nd May, 2018 S.O. 2022(E). --In exercise of the powers conferred by sub-section (3) of Section 163A of the Motor Vehicles Act, 1988 (59 of 1988), the Central Government, keeping in view the cost of living, hereby makes the following amendment to the Second Schedule to the said Act, namely. --
In the Motor Vehicles Act, 1988, for the Second Schedule, the following Schedule shall be substituted namely: -
-
"THE SECOND SCHEDULE (See Section 163A) SCHEDULE FOR COMPENSATION FOR THIRD PARTY FATAL ACCIDENTS / INJURY CASES CLAIMS
1. (a) Fatal Accidents:
Compensation payable in case of Death shall be five lakh rupees.
(b) Accidents resulting in permanent disability:
Compensation payable shall be = [Rs.5,00,000/- x percentage disability as per Schedule I of the Employee‟s Compensation Act, 1923 (8 of 1923)]:
Provided that the minimum compensation in case of permanent disability of any kind shall not be less than fifty thousand rupees.
(c) Accidents resulting in minor injury:
A fixed compensation of twenty-five thousand rupees shall be payable:
2. On and from the date of 1st day of January, 2019 the amount of compensation specified in the clauses (a) to (c) of paragraph (1) shall stand increased by 5 per cent annually".
Bare perusal of S.O.2022(E) dated 22nd May 2018 reveals payment of compensation in the amount of Rs.5.00 Lakhs in case of death in respect of claims preferred under Section 163A of the Act. As regards the cases of permanent disabilities, compensation payable shall be Rs.5.00 Lakhs multiplied by percentage disability as per Schedule I of the Employee‟s Compensation Act, 1923 and minimum Page 14 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 compensation shall not be less than Rs.50,000/-. In case of minor injuries, a fixed compensation of Rs.25,000/- shall be payable.
17.In view of above well settled legal position and taking into consideration peculiar facts and circumstances of present case, there is substance in the submission of learned counsel for appellant Insurance Company that the Tribunal has erred in computing the compensation to be paid by it to claimants/respondents. The Tribunal was required to follow Schedule II (Section 163A), as hereinabove quoted and discussed. In that view of matter, impugned Award is liable to be set- aside.
18.For the reasons discussed above, instant appeal (Mac App no.29/2019)is disposed of and judgement dated 27th June 2018, passed by the Tribunal insofar as it relates to claim petition, bearing File no.16/Claim, titled Manzoor Ahmad Wani and another v. United India Insurance Company Limited, granting compensating in the amount of Rs.8,16,000/- in favour of claimants/ respondents, is set-aside. Appellant-Insurance Company is held liable to pay compensation of Rs.5,00,000/- as provided in terms of Schedule II (Section 163A of Motor Vehicles Act) as also Rs.20,000/-,as enumerated below:
(i) Compensation (as provided under Schedule II in case of death) Rs.5,00,000.00
(ii) Funeral Expenses: Rs. 10,000.00
(iii) Loss of Estate: Rs. 10,000.00 Total compensation: Rs.5,20,000.00
19.Appellant Insurance Company shall pay Rs.5,20,000/- along with interest @ 6% per annum from the date of claim petition till its final Page 15 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 realization. Amount, if any, received by claimants/respondents shall be deducted from the amount as awarded by the Tribunal.
20.Disposed of in terms of above.
Mac App no.30/2019 (United India Insurance Company Limited v. Mehjoor Hussain Sheikh and another)
21.This appeal has arisen against common Award dated 27 th June 2018, passed on a claim petition, bearing File no.16/Claim titled as Mahjoor Hussain Sheikh v. United India Insurance Company and another, insofar as it relates to grant of compensation to respondent no.1/ claimant in the amount of Rs.70,000/- along with 6% interest from the date of institution of claim till its realisation.
22.In the instant case, respondent no.1/claimant filed a claim petition for payment of compensation of Rs.10.00 Lakhs, on account of injuries he suffered due to vehicular accident.
23.Appellant Insurance Company took a stand before the Tribunal that it was not liable to pay compensation to claimant/respondent no.1 as he was an unauthorised passenger travelling in a goods vehicle and owner of offending vehicle violated terms and conditions of insurance policy by allowing passengers to be carried in the goods vehicle and, therefore, claimant, being gratuitous passenger, was not covered under the policy of insurance and could not claim compensation from respondent company. The Tribunal vide order dated 2nd May 2015 framed following issues:
(i) Whether on 8.7.2020, the injured Mahjoor Hussain Sheikh S/o Abdul Latief Sheikh R/o Kuilthroan Shopian who was injured by the said offending vehicle bearing registration no.4947/JK02AE injured in an accident as he was working Page 16 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 as labourer on the road side which was under construction? (OPP)
(ii) Whether the accident was out of the outcome of rash and negligent driving of offending vehicle bearing registration no.JK02AE/4947 by its driver? (OPP)
(iii) In case issue no.1 & 2 are proved in affirmative to what extent of compensation the petitioners are entitled and from whom? (OPP)
(iv) Whether the respondent Insurance Company is not liable to pay any compensation to the petitioner on the count that injured was travelling in the offending vehicle unauthorisedly as a gratuitous passenger? (OPR)
(v) Whether the insurance company is liable to indemnify the owner insured of the offending vehicle as he has violated terms and conditions of policy insurance? (OPP)
(vi) Relief.
24.The witnesses produced and examined in another claim petition, titled as Mst Sakeena v. United India Insurance Company, in view of submission made by counsel for claimant/respondent, were treated and taken as witnesses in the present case as well. In terms of impugned Award, appellant Insurance Company was directed to pay compensation in the amount of Rs.70,000/- minus the interim compensation of Rs.25.000/- along with 6% interest from the date of filing of claim petition till its realisation.
25.Learned counsel for appellant Insurance Company has stated that appellant Insurance Company proved and demonstrated before the Tribunal that owner /driver of offending vehicle at the time of accident violated terms and conditions of insurance policy as they allowed claimant/respondent no.1 to travel in goods vehicle as an unauthorised passenger and as such claimant/respondent no.1 was a gratuitous passenger and not covered by insurance policy and as a consequence of which, Insurance Company is not liable to pay Page 17 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 compensation, but this important fact situation of the matter has been overlooked by the Tribunal while passing impugned Award. The Tribunal is also stated to have not taken into account the record on the file. Learned counsel also states that compensation granted by the Tribunal is on higher side inasmuch as respondent/claimant has not produced any medical bills or documentary proof. His next submission is that 6% interest awarded by the Tribunal is on higher side.
As regards claimant/respondent no.1, being gratuitous passenger, as exhorted by learned counsel for appellant, it would be apt to mention here that the Tribunal has looked into all these facets of the matter while settling and determining issue no.4. The Tribunal has discussed in detail statement of witnesses adduced by claimants as also Insurance Company and it has come therefrom that on 8th July 2010, certain persons, including claimant/respondent no.1 herein, as working as labourers on Mughal Road near Sarbal and Mohd Ayoub Mughal was there as mate, and that due to rash and negligent driving of driver of offending vehicle, the accident took place, causing injuries on the spot, including death of Mohd Ayoub. It also surfaces from the record that claimant/respondent no.1 herein had not been a gratuitous passenger as claimed by appellant Insurance Company. Thus, there is no substance in the submission of learned counsel for appellant Insurance Company that claimant/respondent no.1 was a gratuitous passenger.
Page 18 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019
26.Rules of evidence to prove charges in a criminal trial cannot be used while deciding an application under Section 166 of the Motor Vehicles Act, 1988, which is summary in nature and there is no reason to doubt the veracity of the statement of witnesses adduced by claimants before the Tribunal. Claim petition under the Act has to be decided on the basis of evidence led before it and not on the basis of evidence which should have been or could have been led in a criminal trial.
27.Insofar as grant of compensation in the amount of Rs.70,000/- is concerned, there is no impetus in the submission of learned counsel for appellant that it is on higher side. The Tribunal has comprehensively discussed the claim projected by respondent/claimant no.1 as also stand of appellant Insurance Company and rightly found that claimant/respondent no.1 is entitled to Rs.70,000/-. The Tribunal, while assessing and calculating the compensation, has relied upon a judgement rendered in the case of Mr R.D. Hattangadi v. M/s Pest Control (India) Pvt. Ltd and others, 1995 (1) SCC 551, in which the Supreme Court has said that in its very nature whenever a Tribunal or a Court is required to fix the amount of compensation in cases of accident, it involves some guess work, some hypothetical consideration, some amount of sympathy linked with the nature of the disability caused, but all these elements have to be viewed with objective standards.It would be apropos to reproduce relevant parts of the judgement hereunder:
Page 19 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 "7. During the last few decades question of payment of compensation for accidents has assumed great importance, which is co-related with the accidents which have touched a new height not only in India but in different parts of the world. Initially, the theory of payment of compensation was primarily linked with tort compensation only if the injury or damage was caused by someone's fault, of late the injury or damage being caused by someone's fault is being read as because of someone's negligence or carelessness. That is why any damage caused by negligent conduct is generally actionable irrespective of the kind of activity out of which the damage arose. Even in an action based on the tort, the applicant has to show that the defendant was negligent i.e. there was a failure on his part to take that degree of care which was reasonable in the circumstances of the case. There has never been any doubt that those using the highways are under a duty to be careful and the legal position today is quite plain that any person using the road as a motorist will be liable, if by his action he negligently causes physical injuries to anybody else.
xxxxxxx
9. Broadly speaking while fixing an amount of compensation payable to a victim of an accident, the damages have to be assessed separately as pecuniary damages and special damages. Pecuniary damages are those which the victim has actually incurred and which is capable of being calculated in terms of money, whereas non-pecuniary damages are those which are incapable of being assessed by arithmetical calculations. In order to appreciate two concepts pecuniary damages may, include expenses incurred by the claimant: (i) medical attendance; (ii) loss of earning of profit upto the date of trial; (iii) other material loss. So far non-pecuniary damages are concerned, they may include (i) damages for mental and physical shock, pain suffering, already suffered or likely to be suffered in future; (ii damages to compensate for the loss of amenities of life which may include a variety of matters i.e. on account of injury the claimant may not be able to walk, run or sit; (iii) damages for the loss of expectation of life, i.e. on account of injury the normal longevity of the person concerned is shortened; (iv) inconvenience, hardship, discomfort, disappointment, frustration and mental stress in life.
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11. In the case Ward v. James 1965(1) All E.R.563 it was said:
"Although you cannot give a man so gravely injured much for his "lost years", you can, however, compensate him for his loss during his shortened span, that is, during his expected "years of survival ". You can compensate him for his loss of earnings during that time, and for the cost of Page 20 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 treatment, nursing and attendance. But how can you compensate him for being rendered a helpless invalid? He may, owing to brain injury, be rendered unconscious for the rest of his days, or, owing to back injury, be unable to rise from his bed. He has lost everything that makes life worth- while. Money is no good to him. Yet judges and juries have to do the best they can and give him what they think is fair. No wonder they find it well nigh insoluble. They are being asked to calculate the incalculable. The figure is bound to be for the most part a conventional sum. The judges have worked out a pattern, and they keep it in line with the changes in the value of money."
12. In its very nature whenever a Tribunal or a Court is required to fix the amount of compensation in cases of accident, it involves some guess work, some hypothetical consideration, some amount of sympathy linked with the nature of the disability caused. But all the aforesaid elements have to be viewed with objective standards.
13. This Court in the case of C.K. Subramonia Iyer and others v. T. Kunhikuttan Nair and others, AIR 1970 SC 376 in connection with the Fatal Accidents Act has observed:
"In assessing damages, the Court must exclude all considerations of matter which rest in speculation or fancy though conjecture to some extent is inevitable."
14. In Halsbury's Laws of England, 4th Edition, Vol.12 regarding non-pecuniary loss at page 446 it has been said: -
"Non-pecuniary loss: the Pattern. Damages awarded for pain and suffering and loss of amenity constitute a conventional sum which is taken to be the sum which society deems @ fairness being interpreted by the courts in the light of previous decisions. Thus there has been evolved a set of conventional principles providing a provisional guide to the comparativeseverity of different injuries, and indicating a bracket of damages into which a particular injury will currently fall. The particular circumstances of the plaintiff, including his age and any unusual deprivation he may suffer, is reflected in the actual amount of the award.
The fall in the value of money leads to a continuing reassessment of these awards and to periodic reassessments of damages at certain key points in the pattern where the disability is readily identifiable and not subject to large variations in individual cases."
28.From the above, it is well settled that while fixing an amount of compensation payable to a victim of an accident, the damages have to be assessed separately as pecuniary damages and special damages.
Page 21 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 Pecuniary damages are those which the victim actually incurs and which is capable of being calculated in terms of money whereas non- pecuniary damages are those which are incapable of being assessed by arithmetical calculations and that pecuniary damages may include expenses incurred by the claimant, i.e., medical attendance, loss of earning of profit up to the date of trial, and other material loss. And insofar as non-pecuniary damages are concerned, they may include damages for mental and physical shock, pain suffering, already suffered or likely to be suffered in future; damages to compensate for the loss of amenities of life which may include a variety of matters, i.e., on account of injury the claimant may not be able to walk, run or sit; damages for loss of expectation of life, i.e., on account of injury the normal longevity of the person concerned is shortened; and inconvenience, hardship, discomfort, disappointment, frustration and mental stress in life. The principles qua determination of just compensation contemplated under the Motor Vehicles Act are well settled. The injuries cause deprivation to the body entitling claimant to claim damages. The damages may vary as per gravity of injuries sustained by a claimant in an accident and on account of injuries, claimant may suffer consequential losses such as loss of earning; expenses on treatment that may include medical expenses, transportation, special diet, attendant charges etc.; loss or diminution to the pleasures of life by loss of a particular part of the body, and loss of future earning capacity. Damages can be pecuniary as well as non-- pecuniary, but all have to be assessed in rupees and paise.
Page 22 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019
29.It is not possible to equate human suffering and personal deprivation with money but this is what the Act enjoins upon the Courts to do. The court has to make a judicious attempt to award damages to compensate claimant for the loss suffered by him. While the compensation should not be assessed very conservatively, yet it should also not be assessed in a liberal fashion so as to make it a bounty to the claimant. The Court, while assessing compensation, should have regard to the degree of deprivation and the loss caused by such deprivation as such compensation is what is termed as just compensation. The compensation or damages assessed for personal injuries should be substantial to compensate the injured for deprivation suffered by him throughout his life. They should not be just token damages.
30.In the present case, the Tribunal has rightly and correctly granted the compensation in favour of claimant/respondent in the amount of Rs.70,000/- and impugned Award does not warrant any interference, as such.
31.For the reasons discussed above, the instant Appeal (Mac App no.30/2019) is dismissed with connected CM(s). Interim direction, if any, shall stand vacated.
Mac App no.17/2021 (United India Insurance Company Limited v. Sakeena Begum and others)
32.In this appeal as well, the same grounds the appellant Insurance Company has taken as it has raised in appeal, being Mac App no.30/2019, vis-à-vis gratuitous passenger. The matter, to that extent, Page 23 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 although has already been discussed and squared-off herein above and needs no further elaboration to unnecessarily verbose this judgement,yet brief discussion would be imperative.
33.A claim petition, bearing File no.14/Claim titled as Sakeena Begum and others v. United India Insurance Company and another, was filed by claimants/respondents 1 to 3 herein before the Tribunal for grant of compensation in the amount of Rs.20,70,000/-. Respondents 1 to 3 are legal representatives of deceased, Mohd Ayoub Mughal, who died in the accident which took place on 8th July 2010.
34.Appellant Insurance Company filed its objections against claim petition. The Tribunal, considering rival contentions of parties, framed following issues for determination of claim petition:
(i) Whether on 8.7.2020, the deceased Mohd Ayoub Mughal S/o Abdul Aziz Mughal R/o Kilhatran Shopian who was hit by the offending vehicle bearing Registration no.4947-JK02AE, died in an accident as he was working as head labourer on the road side which was under
construction? (OPP)
(ii) Whether accident was the outcome of rash and negligent driving of the offending vehicle bearing registration no.JK02AE/4947 by its driver? (OPP)
(iii) In case issue no.1 and 2 are proved in affirmative to what extent of compensation the petitioners are entitled and from whom? (OPP)
(iv) Whether respondent Insurance Company is not liable to pay any compensation to the petitioners on the count that the deceased was travelling in the offending vehicle unauthorisedly as a gratuitous passenger? (OPR)
(v) Whether the Insurance Company is liable to indemnify the owner insured of the offending vehicle as he has violated terms and conditions of the policy insurance? (OPP)
(vi) Relief.
35.Claimants/respondents adduced and examined seven witnesses, namely, Mst Sakeena; Shah Mohammad; Shoiab Ahmad; Shah-din;
Page 24 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 Khalid Hussain Bhat; Abdul Rashid Sheikh; Mohammad Ashraf Bhat, before the Tribunal. Appellant Insurance Company produced two witnesses, namely, I.O. Kamal din S.I. and Mohd Amin Khan. The Tribunal vide impugned Award granted compensation of Rs.13,10,064/- in favour of claimants/respondents.
36.Learned counsel for appellant Insurance Company has strenuously asserted that appellant Insurance Company proved before the Tribunal that owner/driver of offending vehicle violated terms and conditions of insurance policy as he allowed deceased, namely, Mohd Ayoub Mughal, to travel in the goods vehicle as unauthorised passenger and, as such, being gratuitous passenger claimants were not entitled to claim the compensation from appellant Insurance Company. According to learned counsel, the record before the Tribunal would suggest that deceased was travelling in offending vehicle, but the Tribunal did not take this important aspect of the matter into consideration while passing impugned Award.
Above submission of learned counsel for appellant Insurance Company is ill-thought-out. Analysation of statement of witnesses, adduced and examined by the Tribunal, would unequivocally demonstrate that deceased, Mohd Ayoub Mughal, at the time of accident, was working as Supervisor/ Mate on the spot and was not a passenger or travelling in offending vehicle. This important facet of the matter cannot be overlooked by this Court while deciding the appeal on hand.
Page 25 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 As has already been pointed out that rules of evidence to prove charges in a criminal trial cannot be used while deciding an application under Section 166 of the Motor Vehicles Act, 1988, which is summary in nature and there is no reason to doubt the veracity of the statement of witnesses adduced by claimants before the Tribunal inasmuch as claim petition under the Act is to be decided on the foundation of evidence led before it and not on the basis of evidence which should have been or could have been led in a criminal trial.
37.Learned counsel for appellant has also exhorted that grant of compensation of Rs.12,80,064/- on account of loss of dependency is on higher side as deceased, by occupation, was a labourer and that although monthly income of deceased was taken as Rs.10,000/- per month yet no documentary proof of income, to cement this contention, was brought on record by claimants/respondents before the Tribunal. Again, this contention raised by learned counsel for appellant Insurance Company qua grant of compensation awarded by the Tribunal is without any merit given the discussion hereinafter.
38.Section 166 of the Motor Vehicles Act deals with a claim petition for compensation, which is reproduced as under:
"166. Application for compensation. --
(1) An application for compensation arising out of an accident of the nature specified in sub-section (1) of section 165 may be made--
(a) by the person who has sustained the injury; or
(b) by the owner of the property; or
(c) where death has resulted from the accident, by all or any of the legal representatives of the deceased; or Page 26 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019
(d) by any agent duly authorised by the person injured or all or any of the legal representatives of the deceased, as the case may be:
Provided that where all the legal representatives of the deceased have not joined in any such application for compensation, the application shall be made on behalf of or for the benefit of all the legal representatives of the deceased and the legal representatives who have not so joined, shall be impleaded as respondents to the application. (2) Every application under sub-section (1) shall be made, at the option of the claimant, either to the Claims Tribunal having jurisdiction over the area in which the accident occurred or to the Claims Tribunal within the local limits of whose jurisdiction the claimant resides or carries on business or within the local limits of whose jurisdiction the defendant resides, and shall be in such form and contain such particulars as may be prescribed:
Provided that where no claim for compensation under section 140 is made in such application, the application shall contain a separate statement to that effect immediately before the signature of the applicant. ....
(4) The Claims Tribunal shall treat any report of accidents forwarded to it under sub-section (6) of section 158 as an application for compensation under this Act."
39.In terms of Subsection (1) of Section 166, an application, as is also called or known as a claim petition, for compensation arising out of an accident of the nature specified in Subsection (1) of Section 165 can be made by a person who sustains injury or can be made by owner of property or where death has resulted from accident, the same can be filed by all or any of legal representatives of deceased or the application can be filed by any agent duly authorised by the person injured or all or any of legal representatives of deceased. Proviso to Subsection (1) of Section 165 envisions that where all the legal representatives of deceased have not joined in any such claim petition for compensation, it shall be made on behalf of or for the benefit of all legal representatives of deceased and legal representatives who have Page 27 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 not so joined, shall be impleaded as respondents to claim petition. In terms of Subsection (2) of Section 166 of the Act, every application/petition under Subsection (1) shall be made, at the option of claimant, either to Claims Tribunal having jurisdiction over the area in which accident occurred or to Claims Tribunal within local limits of whose jurisdiction claimant resides or carries on business or within local limits of whose jurisdiction defendant resides, and shall be in such form and contain such particulars as may be prescribed. Proviso to Subsection (2) of Section 166 provides that where no claim for compensation under Section 140 is made in such application, the application shall contain a separate statement to that effect immediately before the signature of the applicant. Subsection (4) of Section 166 mentions that Claims Tribunal shall treat any report of accidents forwarded to it under Subsection (6) of Section 158 as an application for compensation under the Act.
40.It would also be pertinent to mention here that Subsection (6) of Section 158 of the Act provides that the momentan information concerningan accident involving death or bodily injury to any person is recorded or report is completed by a police officer, the officer in charge of police station shall forward a copy of the same within thirty days from the date of recording of information or, as the case may be, on completion of such report to Claims Tribunal having jurisdiction and a copy thereof to concerned insurer, and where a copy is made available to owner, he shall also within thirty days of receipt of such report, forward the same to such Claims Tribunal and insurer.
Page 28 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019
41.Section 168 of the Act deals with award of the Claims Tribunal, which, for facility of reference and being advantageous considering the case in hand, is reproduced below:
"168. Award of the Claims Tribunal. --
(1) On receipt of an application for compensation made under section 166, the Claims Tribunal shall, after giving notice of the application to the insurer and after giving the parties (including the insurer) an opportunity of being heard, hold an inquiry into the claim or, as the case may be, each of the claims and, subject to the provisions of section 162 may make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid and in making the award the Claims Tribunal shall specify the amount which shall be paid by the insurer or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be:
Provided that where such application makes a claim for compensation under section 140 in respect of the death or permanent disablement of any person, such claim and any other claim (whether made in such application or otherwise) for compensation in respect of such death or permanent disablement shall be disposed of in accordance with the provisions of Chapter X. (2) The Claims Tribunal shall arrange to deliver copies of the award to the parties concerned expeditiously and in any case within a period of fifteen days from the date of the award.
(3) When an award is made under this section, the person who is required to pay any amount in terms of such award shall, within thirty days of the date of announcing the award by the Claims Tribunal, deposit the entire amount awarded in such manner as the Claims Tribunal may direct."
Reading of Subsection (1) of Section 168 provides that when Claims Tribunal receives an application for grant of compensation preferred under Section 166 of the Act, shall issue notice of application to insurer and give parties an opportunity of being heard, hold an inquiry into the claim or, as the case may be, each of the claims and, subject to the provisions of Section 162 may make an Page 29 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 award determining the amount of compensation which appears to the Tribunal to be just and specifying the person or persons to whom compensation shall be paid and while making the award, Claims Tribunal shall specify amount which shall be paid by insurer or owner or driver of vehicle involved in accident or by all or any of them, as the case may be. As per Proviso to Subsection (1) where such application makes a claim for compensation under Section 140 regarding death or permanent disablement of any person, such claim and any other claim, whether made in such application or otherwise, for compensation with respect to such death or permanent disablement shall be disposed of in accordance with the provisions of Chapter X. In terms of Subsection (3) when an award is passed, the person, required to pay any amount, shall, within thirty days of the date of announcing the award by Claims Tribunal, deposit entire amount awarded in such manner as the Claims Tribunal may direct.
42.Section 169 of the Act deals with procedure and powers of Claims Tribunal. As per Subsection (1) of Section 169, in holding any inquiry under Section 168, Claims Tribunal mayfollow such summary procedure as it thinks fit. Subsection (2) provides that Claims Tribunal shall have all powers of a Civil Court for the purpose of taking evidence on oath and of enforcing the attendance of witnesses and of compelling the discovery and production of documents and material objects and for such other purposes as may be prescribed and Claims Tribunal shall be deemed to be a Civil Court for all the purposes of Section 195 and Chapter XXVI of the Code of Criminal Procedure.
Page 30 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 Subsection (3) of Section 169 provides that Claims Tribunal may for the purpose of adjudicating upon any claim for compensation choose one or more persons possessing special knowledge of any matter relevant to the inquiry to assist it in holding the inquiry.
43.Insofar as Section 173 of the Act is concerned, it deals with appeals. Subsection (1) thereof provides that any person aggrieved by an award of Claims Tribunal may within ninety days from the date of passing of the Award, prefer an appeal to the High Court. In terms of Proviso to Subsection (1), no appeal by the person who is required to pay any amount in terms of such award shall be entertained by the High Court unless he deposits with it Rs.25,000/- or 50% of the amount so awarded, whichever is less, in the manner directed by the High Court. Second proviso provides that the High Court may entertain the appeal after the expiry of ninety days if Claims Tribunal is satisfied that appellant was prevented by sufficient cause from preferring an appeal in time. As per Subsection (2) of Section 173, no appeal shall lie against any award of a Claims Tribunal, if the amount in dispute in the appeal is less than Rs.10,000/-.
44.After having illumination of certain provisions of the Motor Vehicles Act pertinent to the present case, it would also be apposite to have glance of some judgements relating to the subject matter of case in hand. A Three Judge Bench of the Supreme Court in Nagappa v. Gurudayal Singh, (2003) 2 SCC 274, held that in view of the provisions of Subsection (4) of Section 166, which provides that the Claims Tribunal shall treat any report of accidents forwarded to it Page 31 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 under Subsection (6) of Section 158, as an application for compensation under the said Act, the Claims Tribunal in an appropriate case can treat the report forwarded to it as an application for compensation even though no such claim is made or no specified amount is claimed.
45.In Jai Prakash v. National Insurance Co. Ltd., (2010) 2 SCC 607, a three-Judge Bench of the Supreme Court noticed that by the Motor Vehicles (Amendment) Act, 1994, the Legislature tried to reduce period of pendency of claim cases and quicken process of determination of compensation by making two significant changes in the Act, making it mandatory for registration of a motor accident claim within one month of receipt of first information of the accident, without the claimants having to file a claim petition.
46.In General Insurance Council v. State of A.P., (2007) 12 SCC 354, the Supreme Court emphasised the need for implementing the aforesaid provisions, by directing all State Governments and Union Territories to instruct all police officers concerned about the need to comply with the requirement of Subsection (6) of Section 158 of the Motor Vehicles Act, keeping in view the requirement indicated in Rule 150 and in Form 54 of the Central Motor Vehicles Rules. Periodical checking shall be done by the Inspector General of Police concerned to ensure that the requirements are being complied with. In case there is non-compliance, appropriate action shall be taken against the erring officials. The Court directed the Ministry of Road Transport and Highways to make periodical verification to ensure that action is Page 32 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 being taken and in case of any deviation immediately bring the same to the notice of the State Governments/Union Territories concerned so that necessary action can be taken against the officials concerned. But unfortunately, neither the police nor the Motor Accidents Claims Tribunals have made any effort to implement these mandatory provisions of the Act. If these provisions are faithfully and effectively implemented, it will be possible for the victims of accidents and/or their families to get compensation, in a span of few months. There is, therefore, an urgent need for the concerned police authorities and Tribunals to follow the mandate of these provisions.
47.As held by the Supreme Court in Nagappa(supra) and iterated/relied upon in a catena of decisions, in view of the provisions of Subsection (4) of Section 166 of the Act, the Claims Tribunal shall treat the Accident Information Report forwarded to it under Subsection (6) of Section 158 of the Act, read with Subrule (1) of Rule 150 of the Central Motor Vehicles Rules, in Form No.54, as an application for compensation under Section 166, even though no such claim is made or no specified amount is claimed. The said provisions make it mandatory, registration of a motor accident claim within one month of receipt of the first information of the accident, without the claimants having to file a claim petition.
48.In Syed Basheer Ahmad v. Mohd. Jameel, (2009) 2 SCC 225, The Supreme Court noticed that Section 168 of the Actenjoins the Claims Tribunal to make an award determining "the amount of compensation which appears to be just". However, objective factors, that may Page 33 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 constitute the basis of compensation appearing as just, have not been indicated in the Act. Thus, expression "which appears to be just" vests wide discretion in Claims Tribunal in the matter of determination of compensation. Nevertheless, wide amplitude of such power does not empower the Tribunal to determine compensation arbitrarily or to ignore settled principles relating to determination of compensation. Similarly, although the Act is a beneficial legislation, it can neither be allowed to be used as a source of profit nor as a windfall to the persons affected nor should it be punitive to the persons liable to pay compensation. The determination of compensation must be based on certain data, establishing reasonable nexus between the loss incurred by the dependants of the deceased and the compensation to be awarded to them. In a nutshell, the amount of compensation determined to be payable to the claimants has to be fair and reasonable by accepted legal standards. As observed in Kerala State Road Transport Corporation v. Susamma Thomas, (1994) 2 SCC 176, the determination of the quantum must answer what contemporary society „would deem to be a fair sum such as would allow the wrongdoer to hold up his head among his neighbours and say with their approval that he has done the fair thing‟. The amount awarded must not be niggardly since the 'law values life and limb in a free society in generous scales'. At the same time, misplaced sympathy, generosity and benevolence cannot be the guiding factor for determining compensation. The object of providing compensation is to place the claimants, to the extent possible, in almost the same Page 34 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 financial position, as they were in before the accident and not to make a fortune out of misfortune that has befallen them.
49.The Supreme Court in Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343, has held that the provisions of the Motor Vehicles Act, makes it clear that the award must be just, which means that compensation should, to the extent possible, fully and adequately restore the claimant to the position prior to the accident. The object of awarding damages is to make good the loss suffered as a result of wrong done as far as money can do so, in a fair, reasonable and equitable manner. The Court or the Tribunal shall have to assess the damages objectively and exclude from consideration any speculation or fancy, though some conjecture with reference to the nature of disability and its consequences, is inevitable. A person is not only to be compensated for the physical injury, but also for the loss which he suffered as a result of such injury. This means that he is to be compensated for his inability to lead a full life, his inability to enjoy those normal amenities which he would have enjoyed but for the injuries, and his inability to earn as much as he used to earn or could have earned. [See: C.K. Subramania Iyer v. T. Kunhikuttan Nair, (1969) 3 SCC 64; Baker v. Willoughby, (1969) 3 All ER 1528 (HL); and R. D. Hattangadi v. Pest Control (India) (P) Ltd., (1995) 1 SCC 551].
50.A Three-Judge Bench of the Supreme Court in the case of United India Co. Ltd v. Shila Datta, (2011) 10 SCC 509, noticed that the Motor Vehicles Act nowhere says that insurer is not a "person aggrieved" with reference to the amount of compensation awarded Page 35 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 which he is required to pay. It is difficult to countenance the submission that a person who is required to pay a sum of money, from his pocket, has no right even to say: "Look here, the calculation of the amount claimed is wrong". Interests of justice will not be served by allowing obvious errors to remain uncorrected.
51.In ICICI Lombard General Insurance Co. Ltd. v. Ajay Kumar Mohanty, (2018) 3 SCC 686, the Supreme Court reiterated the law laid down in Laxman v. Oriental Insurance Co. Ltd., (2011) 10 SCC 756, that if a victim of an accident suffers permanent or temporary disability, then efforts should always be made to award adequate compensation not only for the physical injury and treatment but also for the pain, suffering and trauma caused due to accident, loss of earnings and victim's inability to lead a normal life and enjoy amenities, which he would have enjoyed but for the disability caused due to the accident.
52.In Pappu Deo Yadav v. Naresh Kumar, AIR 2020 SC 4424, a three- Judge Bench of the Supreme Court noticed that the principle consistently followed by the Court in assessing compensation in motor accident claims, is to place the victim in as near a position as she or he was in before the accident, with other compensatory directions for loss of amenities and other payments. These general principles have been stated and reiterated in several decisions. It has been emphasised time and again that „just compensation‟ should include all elements that would go to place the victim in as near a position as she or he was in, before the occurrence of the accident.
Page 36 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 Whilst no amount of money or other material compensation can erase the trauma, pain and suffering that a victim undergoes after a serious accident, (or replace the loss of a loved one), monetary compensation is the manner known to law, whereby society assures some measure of restitution to those who survive, and the victims who have to face their lives.
53.In Jithendran v. New India Assurance Co. Ltd., (2021) SCC OnLine SC 983, the Supreme Court reiterated that the Motor Vehicles Act is in the nature of social welfare legislation and its provisions make it clear that the compensation should be justly determined. As held in Helen C. Rebello & Others Vs. Maharashtra State Road Transport Corporation & others (1999) 1 SCC 90, the word „just‟, as its nomenclature, denotes equitability, fairness and reasonableness having a large peripheral field. The largeness is, of course, not arbitrary; it is restricted by the conscience which is fair, reasonable and equitable, if it exceeds; it is termed as unfair, unreasonable, unequitable, not just. A person, therefore, is not only to be compensated for the injury suffered due to the accident but also for the loss suffered on account of the injury and his inability to lead the life he led, prior to the life-altering event. As observed by the Three- Judges Bench in Jagdish v. Mohan, (2018) 4 SCC 571, the measure of compensation must reflect a genuine attempt of the law to restore the dignity of the being. Our yardsticks of compensation should not be so abysmal as to lead one to question whether our law values human life. If it does, as it must, it must provide a realistic recompense for the Page 37 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 pain of loss and the trauma of suffering. Awards of compensation are not law's doles. In a discourse of rights, they constitute entitlements under law. The Courts should strive to provide a realistic recompense having regard to the realities of life, both in terms of assessment of the extent of disabilities and its impact including the income-generating capacity of the claimant.
54.In Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121, the Supreme Court held that the compensation awarded did not become „just compensation‟ merely because the Tribunal considered it to be just. Just compensation is adequate compensation which is fair and equitable, on the facts and circumstances of the case, to make good the loss suffered as a result of the wrong, as far as money can do so, by applying the well settled principles relating to the award of compensation. It is not intended to be a bonanza, largesse or source of profit.
55.In Oriental Insurance Co. Ltd. v. Mohd. Nasir, (2009) 6 SCC 280, the Supreme Court held that Workmen‟s Compensation Act, 1923, and the Motor Vehicles Act, 1988, are beneficent legislation insofar as they provide for payment of compensation to the workmen employed by the employers and/or by use of motor vehicle by the owner thereof and/or the insurer to the claimants suffering permanent disability. The amount of compensation is to be determined in terms of the provisions of the respective Acts. Whereas in terms of the 1923 Act, the Commissioner who is a quasi- judicial authority, is bound to apply the principles and the factors laid down in the Act for the purpose of Page 38 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 determining the compensation, Section 168 of the Act enjoins the Tribunal to make an award determining the amount of compensation which appears to be just. Both the Acts aim at providing expeditious relief to the victims of accidents. Both the statutes are beneficial ones for the workmen as also the third parties. The benefits thereof are available only to the persons specified under the Act besides under the contract of insurance. The statutes, therefore, deserve liberal construction. The legislative intent contained therein is required to be interpreted with a view to give effect thereto.
56.In Ningamma v. United India Insurance Co. Ltd., (supra) the Supreme Court noticed that Section 166 of the Act deals with „just compensation‟ and even if in the pleadings no specific claim was made under Section 166 of the Act, a party should not be deprived of getting „just compensation‟ in case the claimant is able to make out a case under any provision of law. The said Act is beneficial and welfare legislation. In fact, the court is duty-bound and entitled to award „just compensation‟ irrespective of the fact whether any plea on that behalf was raised by the claimant or not.
57.In Jitendra Khimshankar Trivedi v. Kasam Daud Kumbhar, (2015) 4 SCC 237, the Supreme Court held that, in terms of Section 168 of the Motor Vehicles Act, the Courts/Tribunals are to pass awards determining the amount of compensation as to be fair and reasonable and accepted by the legal standards. Though the claimants have not filed any appeal against the award passed by the Tribunal, as it is obligatory on the part of Courts/Tribunals to award just and Page 39 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 reasonable compensation, the Apex Court took the income of the deceased as Rs.3,000/- per month, in order to award just and reasonable compensation. After deducting 1/3rd towards the personal and living expenses of the deceased and adopting the multiplier of 18, the Apex Court recalculated loss of dependency at Rs.4,32,000/-. Paragraph 12 of the judgment reads thus;
"12. The Tribunal has awarded Rs.2,24,000 as against the same, the claimants have not filed any appeal. As against the award passed by the Tribunal when the claimants have not filed any appeal, the question arises whether the income of the deceased could be increased and compensation could be enhanced. In terms of Section 168of the Motor Vehicles Act, the courts/the Tribunals are to pass awards determining the amount of compensation as to be fair and reasonable and accepted by the legal standards. The power of the courts in awarding reasonable compensation was emphasised by this Court in Nagappa v. Gurdayal Singh [(2003) 2 SCC 274], Oriental Insurance Co. Ltd. v. Mohd. Nasir, [(2009) 6 SCC 280] and Ningamma v. United India Insurance Co. Ltd. [(2009) 13 SCC 710] As against the award passed by the Tribunal even though the claimants have not filed any appeal, as it is obligatory on the part of courts/the Tribunals to award just and reasonable compensation, it is appropriate to increase the compensation."
58.In National Insurance Company Limited v. Pranay Sethi, AIR 2017 SC 5157,a Constitution Bench of the Supreme Court held that Section 168 of the Motor Vehicles Act, 1988 deals with the concept of 'just compensation' and the same has to be determined on the foundation of fairness, reasonableness and equitability on acceptable legal standard because such determination can never be in arithmetical exactitude. It can never be perfect. The aim is to achieve an acceptable degree of proximity to arithmetical precision on the basis of materials brought on record in an individual case. The conception of 'just compensation' Page 40 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 has to be viewed through the prism of fairness, reasonableness and non-violation of the principle of equitability.
59.In Ramla v. National Insurance co. Ltd, (2019) 2 SCC 192, the Supreme Court held that taking into consideration the high cost of living at Doha, the fact that the deceased was having his wife, two minor children and aged father as dependants, with no other earning member in the family, a deduction of 40% of the salary for the personal expenses would be appropriate for the purpose of quantifying compensation. Taking into consideration such factors including the factor of uncertainties in the job at Doha as well as uncertainty in staying back at Doha for a longer period and in the absence of any material to show the balance service of the deceased as per the terms of the contract, the Apex Court found that the claimants are entitled to total compensation of Rs.28,00,000/- inclusive of the compensation awarded by the High Court, together with interest at the rate of 8% per annum from the date of filing the claim petition till its realisation, as just and reasonable compensation under the facts and circumstances of the case. Though the claimants had claimed only a total compensation of Rs.25,00,000/- in the claim petition filed before the Claims Tribunal, the Apex Court found that the compensation which the claimants are entitled to is higher than that claimed in the claim petition. The Apex Court noticed that there is no restriction that the Court cannot award compensation exceeding the claimed amount, since the function of the tribunal or court under Section 168 of the Motor Vehicles Act, is to award „just compensation‟. The Motor Page 41 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 Vehicles Act is a beneficial and welfare legislation. A 'just compensation' is one that is reasonable on the basis of evidence produced on record. It cannot be said to have become time-barred. Further, there is no need for a new cause of action to claim an enhanced amount. The courts are duty-bound to award just compensation.
60.The assessment of compensation under different heads is done for the purpose of granting just compensation. Hence, once it is found that the compensation to which the claimant is legally entitled, be it under any particular head or aggregate, is more than what is claimed, its denial would result in denial of „just compensation‟. Therefore, once it is found that the claimant had suffered a legal grievance by the award passed by the Claims Tribunal under Section 168 of the Act, whereby he is deprived of 'just compensation' to which he was legally entitled to under any particular head, he can be considered as a 'person aggrieved' to prefer an appeal in terms of 173 of the Act, seeking enhancement of compensation awarded by the Tribunal. Such legal grievance can be with reference to the adoption of wrong multiplier; improper deduction towards personal and living expenses; improper assessment of percentage of functional disability; improper addition of future prospects; denial of 'just compensation' under the conventional heads like, loss of estate, loss of consortium, funeral expenses, etc., in terms of the law laid down by the Supreme Court in the supra- mentioned case of Pranay Sethi.
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61.The Supreme Court in Santosh Devi v. New India Assurance Company Limited, (2012) 6 SCC 421, has held that judicial notice can be taken of the fact that income of self-employed persons as well as ordinary skilled and unskilled labourers, such as barber, blacksmith, cobbler, mason, etc., periodically increases due to inflation and, therefore, it would be reasonable to make addition to the income for computation of compensation. The Supreme Court held as under:
"14. We find it extremely difficult to fathom any rationale for the observation made in paragraph 24 of the judgment in Sarla Verma's case that where the deceased was self- employed or was on a fixed salary without provision for annual increment, etc., the Courts will usually take only the actual income at the time of death and a departure from this rule should be made only in rare and exceptional cases involving special circumstances. In our view, it will be naïve to say that the wages or total emoluments/income of a person who is self employed or who is employed on a fixed salary without provision for annual increment, etc., would remain the same throughout his life. The rise in the cost of living affects everyone across the board. It does not make any distinction between rich and poor. As a matter of fact, the effect of rise in prices which directly impacts the cost of living is minimal on the rich and maximum on those who are self-employed or who get fixed income/emoluments. They are the worst affected people. Therefore, they put extra efforts to generate additional income necessary for sustaining their families. The salaries of those employed under the Central and State Governments and their agencies/instrumentalities have been revised from time to time to provide a cushion against the rising prices and provisions have been made for providing security to the families of the deceased employees. The salaries of those employed in private sectors have also increased manifold. Till about two decades ago, nobody could have imagined that salary of Class IV employee of the Government would be in five figures and total emoluments of those in higher echelons of service will cross the figure of rupees one lac. Although, the wages/income of those employed in unorganized sectors has not registered a corresponding increase and has not kept pace with the increase in the Page 43 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 salaries of the Government employees and those employed in private sectors but it cannot be denied that there has been incremental enhancement in the income of those who are self-employed and even those engaged on daily basis, monthly basis or even seasonal basis. We can take judicial notice of the fact that with a view to meet the challenges posed by high cost of living, the persons falling in the latter category periodically increase the cost of their labour. In this context, it may be useful to give an example of a tailor who earns his livelihood by stitching cloths. If the cost of living increases and the prices of essentials go up, it is but natural for him to increase the cost of his labour. So will be the cases of ordinary skilled and unskilled labour, like, barber, blacksmith, cobbler, mason etc. Therefore, we do not think that while making the observations in the last three lines of paragraph 24 of Sarla Verma‟s judgment, the Court had intended to lay down an absolute rule that there will be no addition in the income of a person who is self employed or who is paid fixed wages. Rather, it would be reasonable to say that a person who is self- employed or is engaged on fixed wages will also get 30 per cent increase in his total income over a period of time and if he / she becomes victim of accident then the same formula deserves to be applied for calculating the amount of compensation."
62.In the above milieu, it is germane to add here that there cannot be actual compensation for anguish of heart or for mental tribulations. The quintessentiality lies in the pragmatic computation of the loss sustained which has to be in the realm of realistic approximation. Therefore, Section 168 of the Motor Vehicles Act, 1988 stipulates that there should be grant of "just compensation". Thus, it becomes a challenge for a court of law to determine "just compensation" which is neither a bonanza nor a windfall, and simultaneously, should not be a pittance. The compensation has to be determined on foundation of fairness, reasonableness and equitability on acceptable legal standard because such determination can never be in arithmetical precision on basis of materials brought on record in individual case. Conception of Page 44 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 "just compensation" has to be viewed through prism of fairness, reasonableness and non-violation of principle of equitability. [Vide:
K. Suresh v. New India Assurance Co. Ltd. (2012) 12 SCC 274; and Pranay Sethi, (supra)].
63.The Supreme Court in the case of Yadav Kumar Vs. Divisional Manager, National Insurance Company Limited and others 2010(10)SCC 341, held that "it goes without saying that in matters of determination of compensation both the tribunal and the court are statutorily charged with responsibility of fixing "just compensation".
64.When the above settled legal position is looked into in the backdrop of the present case, the Tribunal has been conservative in awarding compensation in favour of claimants/respondents and, thus, there is no force in submission of learned counsel for appellant Insurance Company with reference to compensation awarded by the Tribunal.
65.The Tribunal deliberated upon statements of all the witnesses produced by claimants, who deposed and stated that deceased Mohd Ayoub Mughal was working as Supervisor when he died due to vehicular accident and his monthly income was Rs.10,000/-. The Tribunal also deliberated upon the statements of witnesses of appellant Insurance Company. The Tribunal, after taking income of deceased as Rs.10,000/- make deduction of 1/3rd from his monthly income for personal expenses. Thereafter, the Tribunal applied multiplier of 16 and multiplied it with multiplicand of Rs.6667/-. The Tribunal assessed and calculated, and rightly so, compensation of Rs.12,80,064/-; Rs.10,000/- on account of Funeral Expenses;
Page 45 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019 Rs.10,000/- on account Consortium for widow; and Rs.10,000/- on account of Loss of Estate. In that view of matter, impugned Award does not call for any interference.
66.For the reasons discussed above, the instant appeal (Mac App no.17/2021) is dismissed with connected CM(s). Interim direction, if any, shall stand vacated.
67.Copy of this judgement be sent down. The record of the Tribunal be also remitted.
(Vinod Chatterji Koul) Judge Srinagar 01.09.2022 Ajaz Ahmad, PS Whether approved for reporting? Yes/No. Page 46 Mac App no.29/2019 c/w Mac App no.17/2021 Mac App no.30/2019