Himachal Pradesh High Court
Reliance General Insurance Company ... vs Smt. Mathru Devi And Others on 13 June, 2019
Author: Ajay Mohan Goel
Bench: Ajay Mohan Goel
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
FAO No. 213 of 2016
.
Decided on: 13.06.2019.
Reliance General Insurance Company Limited ....Appellant.
Versus
Smt. Mathru Devi and others ...Respondents.
Coram
The Hon'ble Mr. Justice Ajay Mohan Goel, Judge.
Whether approved for reporting?1 No
For the appellant : Mr. Jagdish Thakur, Advocate.
For the respondents : Ms. Devyani Sharma, Advocate for
respondent No. 1.
: None for respondents No. 2 and 3.
Ajay Mohan Goel, Judge (Oral)
By way of this appeal filed under Section 173 of the Motor Vehicles Act,1988, appellant-Insurance Company has challenged the award passed by learned Motor Accident Claims Tribunal-II, Solan, District Solan, HP, Camp at Nalagarh, in MAC Petition No. 26-NL/2 of 2011, dated 08.01.2016, vide which, the claim filed by the respondent No. 1 herein has been allowed in the following terms:-
::: Downloaded on - 28/09/2019 23:25:48 :::HCHP"As a cumulative effect of my aforesaid discussion, the petition is allowed with costs of 10,000/- and .
total compensation amount of 17,53,000/- i.e. 17,28,000/- towards compensation on account of loss of future income of the deceased, and 25,000/-
being expenses incurred by the petitioner on the transportation and funeral of the deceased, is awarded to the petitioner along with interest at the rate of 7% per annum payable from the date of the institution of the petition i.e. 16.5.2011, till depositing of the entire compensation amount, by respondent No. 3 being insurer of the offending vehicle. Memo of costs be prepared accordingly. The file after its due completion be consigned to the record room."
2. Brief facts necessary for adjudication of the present appeal are as under:-
Smt. Mathru Devi, mother of deceased Shiv Ram filed a claim petition under Section 166 of the Motor Vehicles Act before Motor Accident Claims Tribunal-II, Solan, District Solan, H.P. Camp at Nalagarh, i.e. M.A.C. Petition No. 26- NL/2 of 2011, seeking compensation to the tune of 25,00,000/- (Twenty Five Lac) alongwith interest from the respondents therein, on account of death of her 21 years old son Shiv Ram, who was knocked down to death by a speeding ::: Downloaded on - 28/09/2019 23:25:48 :::HCHP Truck bearing registration No. WB-23-A-9477, on 11.12.2010 at about 6:05 a.m. near Crossing of Clive Ghat Street and .
Strand Road (in front of Godown of Inland Transport), 6 Clive House, Opposite of 12 Strand Road, Kolkata, (WB). As per the claimant, deceased Shiv Ram was working as a Labourer with Inland Transport Company Kolkata and in addition, he also used to do agricultural work and thus, was earning an amount of 20,000/- per month. The Truck was owned by one Vikram Singh (respondent No. 1 before the learned Tribunal). It was being driven by Amar Dash (who was impleaded as respondent No. 2 before the learned Tribunal).
The Truck was insured with Reliance General Insurance Company Limited (which was impleaded as respondent No. 3 before the learned Tribunal).
3. Record demonstrates that respondents No. 1 and 2 before the learned Tribunal did not appear despite service effected by way of proclamation.
4. Insurance Company resisted and contested the claim inter alia on the ground that offending vehicle was not insured nor was it having a valid fitness certificate and ::: Downloaded on - 28/09/2019 23:25:48 :::HCHP further that the driver who was driving the offending vehicle was not possessing a valid driving licence.
.
5. On the basis of pleadings of the parties, learned Tribunal framed the following issues:-
"Issue No. 1 Whether deceased Shiv Om died in a motor vehicle accident having been taken place on 11.12.2010 at about 6:05 a.m. at place near Crossing of Clive Ghat Street and Strand Road (in front of Godown of Inland Transport), 6 Clive House, Opposite of 12 Strand Road, Kolkata-2, on account of rash and negligent driving of vehicle bearing No. WB-23A-9477 by respondent No. 2, as alleged? OPP Issue No. 2 Whether the petitioner is entitled for compensation, if so, to what extent and from which of the respondents? OPP Issue No. 3 Whether the driver of the offending vehicle was not having valid and effective driving licence to drive the vehicle in question? OPR-3 Issue No. 4 Whether the vehicle in question was being plied in contravention of the provisions of Motor Vehicles Act and in violation of the terms and conditions of the standard insurance policy? OPR-3.
Issue No. 5 Relief."::: Downloaded on - 28/09/2019 23:25:48 :::HCHP
6. The issues so framed were answered by the learned Tribunal on the basis of the pleadings of the parties .
as also the evidence led by them as under:-
"Issue No. 1 Yes
Issue No. 2 Yes, as per operative part of the
award.
Issue No. 3 No
Issue No. 4 No
Issue No. 5 The petition is allowed as per
r operative part of the Award."
7. Learned Tribunal after holding that claimant had succeeded in establishing that death of her son was on account of rashness or negligence on the part of the driver driving the offending vehicle further went on to held that on the basis of the evidence led on record by the Insurance Company, it had failed to prove that the offending vehicle was not properly registered with the competent authority or was not being plied with valid registration and fitness certificates or that respondent No. 2 was not possessing a valid driving licence. It thereafter held that though the claimant stated that deceased was earning an amount of 20,000/- per month as a Labourer and by agricultural work but she did not produce ::: Downloaded on - 28/09/2019 23:25:48 :::HCHP any documentary evidence to led corroboration to her said stand. Learned Tribunal went on to hold that as deceased was .
admittedly working as Labourer away from his native village at Kolkata, it was not possible that deceased was in a position to pursue any agricultural work at his native place from Kolkata. However, from the statement of PW-2 Asha Ram, it could be held that deceased was working as Labourer. It thereafter held that as under Section 4 (1B) of the Employee's Compensation Act, 1923, the Central Government of India vide its notification No. S.O. 1258(E), dated 31st May, 2010, had notified the monthly wages of an employee/workman at 8,000/- w.e.f. 31.5.2010 and as the accident had taken place on 11.12.2010, the amount of 8,000/- per month could be held to be the monthly wages of the deceased at the time of his death. Learned Tribunal taking into consideration the fact that the deceased was about 22 years old and was unmarried, went on to hold that 50% of the monthly income of the deceased had to be deducted towards his personal and living expenses, relying upon the judgment of Hon'ble Supreme Court in Sarla Verma's case reported in 2009 (6) SCC 121. It thus held that for the purpose of compensation, the monthly ::: Downloaded on - 28/09/2019 23:25:48 :::HCHP income of the deceased was to be taken to be 4,000/-.
Thereafter, relying upon the judgment of Hon'ble Supreme .
Court in Rajesh & others vs. Rajbir and others, 2013 (2) Apex Court Judgments 245 SC, learned Tribunal went on to hold that 50% of the monthly income of the deceased had to be added towards future prospects for the purpose of calculating the compensation. Learned Tribunal thus took the total income of the deceased to be r 8,000 per month+50% of 8,000/- is equal to 12,000/- per month and from this it deducted 4,000/- per month as monthly expenses of the deceased and calculated the annual income of the deceased for the purpose of assessing compensation to be 96,000/-
per annum. Learned Tribunal applied the multiplier of 18 and calculated the compensation payable to the claimant to be 96,000 x 18=17,28,000/-. It also held claimant entitled to funeral expenses to the tune of 25,000/-. Learned Tribunal also returned a specific finding that during the course of the arguments, it was not disputed on the part of the Insurance Company that the offending vehicle was duly insured with the said Company for the purpose of third party liability. Learned Tribunal thus held the Insurance Company to be liable to pay ::: Downloaded on - 28/09/2019 23:25:48 :::HCHP the compensation on behalf of the owner of the vehicle to the claimant. Learned Tribunal also awarded interest @ 7% per .
annum in favour of the claimant payable from the date of institution of the petition, i.e. 16.5.2011.
8. Feeling aggrieved, the Insurance Company has filed the present appeal.
9. Learned Counsel for the appellant-Company has primarily argued that the impugned order is not sustainable in the eyes of law for the reason that fixation of monthly income of the deceased by the learned Tribunal was completely arbitrary. He has in the alternative argued that even if the income of the deceased was taken to be 8,000/-
per month, then also learned Tribunal has erred in not appreciating that addition of only 40% of the established income could have been given and not 50%. For the said submission, learned Counsel has relied upon para 59.4 of the judgment of Hon'ble Supreme Court in National Insurance Company Limited versus Pranay Sethi and Others, (2017) 16 Supreme Court Cases 680. Learned Counsel has also argued that the amount of funeral expenses has also to be reduced to ::: Downloaded on - 28/09/2019 23:25:48 :::HCHP 15,000/- from 25,000/- in terms of the judgment of Hon'ble Supreme Court in Pranay Sethi's case (supra).
.
10. On the other hand, learned Senior Counsel appearing for the claimant while defending the award has argued that there is not infirmity with the compensation as has been awarded by the learned Tribunal and in the absence of there being any evidence on record with regard to income of the deceased, learned Tribunal rightly took the income of the deceased to be 8,000/- per month, relying upon Section 4 (1B) of the Employee's Compensation Act, 1923. He has further argued that in terms of the law as it exists, the claimant is entitled for interest upon compensation @ 12% per annum and not at the rate of 7%, as has been given by learned Tribunal and the same can be awarded by this Court also in absence of specific appeal by the claimant to do justice in terms of Order 41, Rule 33 of the Code of Civil Procedure. These were the respective submissions of learned Counsel for the parties.
11. No other point was urged.::: Downloaded on - 28/09/2019 23:25:48 :::HCHP
12. I have heard learned Counsel for the parties and gone through the record of the case as also the impugned .
award.
13. I will deal with the above points raised by learned Counsel for the appellant and respondent No. 1 one by one.
a) Whether fixation of monthly income by learned Tribunal is arbitrary?
It is not in dispute that the deceased was about 21 years of age when he was killed by the offending vehicle on 11.12.2010 in Kolkata. Claimant, i.e. mother of the deceased, sought compensation to the tune of 25.00 Lac on the ground that the deceased was working as a labourer with Inland Transport Company at Kolkata and in addition, he was doing agricultural work and thus he was earning 20,000/- per month. While deciding the issue that what compensation the claimant was entitled to, learned Tribunal held that as deceased was working away from his native village at Kolkata, therefore, it was not possible that deceased was in a position to pursue any agricultural work at his native place from Kolkata. However, learned Tribunal also held that from the contents of FIR Ext. P-4, as also statement of PW2 Asha Ram, ::: Downloaded on - 28/09/2019 23:25:48 :::HCHP it could safely be inferred that petitioner was working as labourer. Thereafter, it went on to assess monthly wages of .
the deceased on the basis of Section 4(1)(b) of the Employees Compensation Act, 1923. Learned Tribunal by relying upon the Notification No. S.O. 1258(E), dated 31st May, 2010, issued by the Government of India took the monthly wages of the deceased to be 8,000/- per month on the ground that in the said notification, the monthly wages of an employee/ workman w.e.f. 31.5.2010 had been notified to be 8,000/-
per month. In my considered view, it cannot be said that learned Tribunal has fixed the monthly wages of the deceased arbitrarily. Learned Tribunal has relied upon a statutory notification (supra) while holding that monthly wages of the deceased were to be taken to be 8,000/- per month. It is not the case of the appellant that said Notification could not have been relied upon by the learned Tribunal. Therefore, the contention of the appellant that the fixation of monthly income of deceased was done by the Tribunal in an arbitrary manner is rejected.
b) Whether additional income of 50% of the monthly income towards future prospects is sustainable or not.
::: Downloaded on - 28/09/2019 23:25:48 :::HCHPLearned Tribunal after holding that the monthly wages of the deceased were to be taken to be 8,000/- per .
month, further held that 50% of the monthly income had to be added towards future prospects. While working out the calculation of compensation, learned Tribunal out of the amount of 8,000/-, first deducted an amount of 4,000/- per month towards the personal expenses of the deceased, and thereafter, taking the amount of r 4,000/- to be monthly income, added in the same another amount of 4,000/- on account of 50% of the monthly income added towards future prospects. Thereafter, learned Tribunal applied the multiplier of 18 and held the claimant to be entitled for compensation by taking the yearly income of the deceased to be 96,000/-.
In my considered view, there are two flaws in the calculation so made by learned Tribunal, (i) It erred in not appreciating that when the monthly income of the deceased was taken to be 8,000/- and 50% towards future prospects was held to be added to it, then it was incumbent upon learned Tribunal to have had made 50% deduction out of the total income of the deceased which would have then come to 6,000/- per month instead of 8,000/- per month because if ::: Downloaded on - 28/09/2019 23:25:48 :::HCHP 8,000/- was monthly income of the deceased and 50% future prospects was to be added to it, then total comes to 12,000/-
.
and from this 50% was ought to be deducted, which comes to 6,000/-. Yet further, in view of the judgment of Hon'ble Supreme Court in National Insurance Company Limited versus Pranay Sethi and Others, (2017) 16 Supreme Court Cases 680, in the present case, only 40% of the monthly income can be added towards future prospects and not 50%.
Therefore, there is merit in the contention so raised by learned Counsel for the appellant and Award passed by the learned Tribunal is liable to be modified in the following manner:-
Monthly income of the deceased= 8,000/-
40% of the monthly income to 8000+ 3200
be added towards future prospects= (40% of 8000)
= 11,200/-
50% to be deducted towards 5600/-
personal expenses of the deceased=
Total compensation claimant is 5600x12=67200;
entitled to = 67200x18= 1209600/-
Therefore, compensation awarded by the learned Tribunal is ordered to have been modified in terms of the above part of this judgment.::: Downloaded on - 28/09/2019 23:25:48 :::HCHP
c) Whether funeral expenses are liable to be reduced from 25,000/- to 15,000/-?
.
In terms of the judgment of Hon'ble Supreme Court in Pranay Sethi's case supra, the same is liable to be reduced from 25,000/- to 15,000/-. Ordered accordingly.
d) Whether the claimant is entitled to interest upon compensation @ 12% per annum and not @ 7% per annum as given by learned Tribunal.
14. As far as issue of quantum of interest is concerned, learned Tribunal has granted interest in favour of the claimant @ 7% per annum. This Court in Oriental Insurance Company Limited V. Mathu Ram and others, 2019 ACJ 65, has dealt with regard to the quantum of interest, to which claimant is entitled to. Relevant portion of which reads as under:-
"Now, adverting to the question of interest, I find that the learned Tribunal below has granted interest ranging from 7.5% to 9% and in majority of the cases, the interest rate is 7.5% which is on the lower side. This Court in CWP No.933 of 2011, titled The New India Assurance Company Ltd. vs. Jagdish Lakhanpal and others, decided on 22.3.2016, has elaborately considered this aspect in the following manner:
Interest:::: Downloaded on - 28/09/2019 23:25:48 :::HCHP
"(57). Learned counsel for the petitioner has laid challenge to the grant of interest, that too, from the date of filing of the petition till date of actual deposit and has further .
questioned the rate at which such interest has been awarded i.e. 9% per annum.
(58) It is vehemently argued by learned counsel for the petitioner that though the petition had been filed on 26.2.2000, it was on account of in action and negligence on part of the claimant that issues could only be framed on 4.11.2008 and thereafter additional issues were framed on 25.8.2009 and therefore, in such circumstances, no interest could have been awarded for the aforesaid period or else that would amount to granting premium to the claimant for his own inaction and negligence. (59) Section 171 of the Motor Vehicles Act provides for grant of interest in cases arising out of compensation under the Motor Vehicles Act, which reads thus:-
'171. Award of interest where any claim is allowed. Where any claims Tribunal allows a claim for compensation made under this Act, such Tribunal may direct that in addition to the amount of compensation simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim as it may specify in this behalf.' The aforesaid provision provides for awarding of simple interest on the compensation awarded at such rate and from such date, not earlier than the date of making the claim, as it may specify in this behalf. The interest is not awarded for the damage done. Interest is awarded to the claimant for being illegally kept away from the due money, which ought to have been paid to him. Conversely, the ::: Downloaded on - 28/09/2019 23:25:48 :::HCHP claimant cannot claim interest as a matter of right for the proved delay, inaction or negligence on his part. (62) Now coming to challenge laid with respect to the .
rate of interest, it would be noticed that the recent trend of the Hon'ble Supreme Court clearly indicates that instead of awarding 7 or 8%, as is canvassed by the learned counsel for the petitioner, it has been awarding interest @ 9% per annum. Here I need only refer to a recent judgment of the Hon'ble Supreme in Jakir Hussein Vs. Sabir (2015) 7 SCC 252, wherein it was held:-
'(20). As regards the rate of interest to be awarded on the compensation awarded in this appeal, we are of the view that the Tribunal and the High Court have erred in granting interest @ 7% p.a. and 8% p.a., respectively on the total compensation amount instead of 9% p.a. by applying the decision of this Court in MCD Vs. Uphaar Tragedy Victims Assn. (2011) 14 SCC 481. Accordingly, we award the interest @ 9% p.a. on the compensation determined in the present appeal."
30. In view of the aforesaid discussion, FAOs (MVA) No.306 of 2014, 317 to 323 of 2014 are partly allowed in the terms indicated above, whereas, FAO(MVA) No.328 of 2014 is dismissed, leaving the parties to bear their own costs. All pending application(s) also stand disposed of.
Registry is directed to place a copy of this judgment on the files of connected matters."
15. Hon'ble Supreme Court in Sangeeta and others V. Krishan Kumar and others, 2019 ACJ 558, has held as under:-
::: Downloaded on - 28/09/2019 23:25:48 :::HCHP"3. The appellants are before this Court seeking enhancement of compensation. The Motor Accident Claims Tribunal, Patiala (for short, 'the Tribunal') granted .
Rs.9,85,000/- with interest at the rate of 6 per cent per annum. The High Court enhanced the compensation to Rs.12,12,000/- with interest at the rate of 9 pert cent per annum. It is seen from the decretal portion of the impugned judgment of the High Court that interest at the rate of 9 per cent per annum is made applicable only on the enhanced portion of the compensation, namely, Rs.2,27,000/-, which appears to be a mistake and in any case unjust.
4. We do not think that we need to issue notice for this purpose to the respondents. Hence, the appeal is partly allowed holding that the appellant shall be entitled to interest at the rate of 9 per cent per annum on the entire amount of compensation granted by the High Court from the date of filing of the claim petition before the Tribunal. The amount already deposited by the Insurance Company will be duly adjusted."
16. In view of above mentioned case law, it is held that the claimant shall be entitled to interest at the rate of 9 per cent per annum on the entire amount of compensation which has been granted by this Court from the date of filing of the claim petition before the learned Tribunal.
Appeal is partly allowed in above terms and award dated 08.01.2016, passed by learned Motor Accident Claims Tribunal-II, Solan, District Solan, HP, Camp ::: Downloaded on - 28/09/2019 23:25:48 :::HCHP at Nalagarh, in MAC Petition No. 26-NL/2 of 2011, is modified accordingly. Pending miscellaneous application(s), if any, also .
stand disposed of.
(Ajay Mohan Goel)
Judge
June 13, 2019
(narender)
r to
::: Downloaded on - 28/09/2019 23:25:48 :::HCHP