Allahabad High Court
Oriental Insurance Co. Ltd. vs Shyam Babu Kesarwani And Another on 8 April, 2022
Author: Kaushal Jayendra Thaker
Bench: Kaushal Jayendra Thaker
HIGH COURT OF JUDICATURE AT ALLAHABAD
A.F.R.
Reserved on: 08.03.2022
Delivered on: 08.04.2022
Court No. - 2
Case :- FIRST APPEAL FROM ORDER No. - 1741 of 2002
Appellant :- Oriental Insurance Co. Ltd.
Respondent :- Shyam Babu Kesarwani And Another
Counsel for Appellant :- Ramesh Singh,K.L. Grover
Counsel for Respondent :- S.K. Srivastava,D.S. Shukla,Devi Shanker Shukla,Sushil Kumar Srivastava
&
Case :- FIRST APPEAL FROM ORDER No. - 2127 of 2021
Appellant :- Shyam Babu Kesherwani
Respondent :- Mewa Lal Keshwerwani And Another
Counsel for Appellant :- Devi Shanker Shukla,Ravi Shanker Prasad
Counsel for Respondent :- Ramesh Singh,K.L. Grover
Hon'ble Dr. Kaushal Jayendra Thaker,J.
1. Heard Sri Ramesh Singh, learned counsel for the insurance company; Shri Anurag Shukla appearing for Shri Devi Shanker Shukla, learned counsel for the claimants; and perused the record and award.
2. Appeal No.2127 of 2021, at the behest of the claimant, challenges the judgment and award dated 15.7.2002 passed by Motor Accident Claims Tribunal/ Special Judge, E.C. Act, Allahabad (hereinafter referred to as 'Tribunal') in Motor Accident Claim Petition No.160 of 2001 awarding a sum of Rs.65,000/- with interest at the rate of 8.5% as compensation. The appellant has questioned the compensation granted.
3. Appeal No.1741 of 2002 is by Insurance company challenging the award on several grounds; (i) driver of vehicle involved not joined as party; (ii) licence of driver of vehicle insured was fake as first licence was found fake but there were two licences the tribunal negatived this objection; and (iii) the case is of Contributory negligence and issue of negligence has been wrongly decided.
4. While issuing notice, this Court had called for the record of the tribunal. Section 173 in The Motor Vehicles Act, 1988 reads is as follows:
173. Appeals.--
(1) Subject to the provisions of sub-section (2) any person aggrieved by an award of a Claims Tribunal may, within ninety days from the date of the award, prefer an appeal to the High Court: Provided that 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 has deposited with it twenty-five thousand rupees or fifty per cent. of the amount so awarded, whichever is less, in the manner directed by the High Court: Provided further that the High Court may entertain the appeal after the expiry of the said period of ninety days, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal in time.
(2) No appeal shall lie against any award of a Claims Tribunal if the amount in dispute in the appeal is less than ten thousand rupees."
5. The brief facts of the case in a nutshell are that Km. Pooja daughter of Shyam Babu Kesarwani, died on account of rash and negligent driving by the truck driver of truck number MP 17 C 0034 on 16th February, 2001 at about 6 p.m.. The unfortunate death of Km. Pooja was the result of rash and negligent driving by the truck driver and the first information report was lodged as case crime no.15 of 2001. The claimant/respondent is the father of the deceased, and since at the time of death age of the deceased was 5 years of age. The claimant filed claim petition for claiming compensation of Rs.2,10,000/- before the Motor Accident Tribunal. The owner of the vehicle contested the case but admitted that he is the registered owner. The owner took plea that the vehicle was duly insured with the Oriental Insurance Company and the driver was driving the vehicle with a valid licence.
6. There is no dispute regarding involvement of vehicle. The injuries caused death is not disputed. Except the three issues which are posed for adjudicating the rest of the findings of the tribunal in the award have attained finality and therefore not discussed.
7. F.A.F.O No. - 2127 of 2021 was filed in 2003 delay was condoned in the year 2021. This is a claimants' appeal claiming enhancement for the death of child who was 5 years of age at the time of death. Learned counsel for the appellant has relied on the decisions of this Court and Apex Court in Kishan Gopal and another v. Lala and others, 2013 (101) ALR 281 (SC) and Manju Devi's case, 2005 (1) TAC 609 (SC) interpreted and by this Court in its recent decision of this Court in United India Insurance Company Limited. Vs. Mumtaz Ahmad and Another, 2017 (2) AICC 1229 wherein this Court held as follows:
"6. Sri Ram Singh has heavily relied on the decision in the case of Kishan Gopal and another v. Lala and others, 2013 (101) ALR 281 (SC) = 2013 (131) AIC 219 = 2014 (1) AICC 208 (SC) and Manju Devi's case, 2005 (1) TAC 609 = 2005 AICC 208 (SC). It goes without saying the notional figure fixed by the Apex Court since Manju Devi's judgment has been consistently Rs.2,25,000 for children below the age of 15 years. I think that is just and proper and hence, the amount requires to be enhanced from Rs.1,57,000 to Rs.2,25,000 with 6% be recovered from the owner. The appeal is partly allowed. The cross-objection is also partly allowed."
8. The learned counsel contended that even in the year of accident the amount payable would be Rs.5,00,000/- (Rupees Five Lacs Only) as per decision of the Apex Court in Kishan Gopal (Supra).
9. F.A.F.O. No.1741 of 2002: this appeal is preferred by Insurance Company and the challenge is on five grounds, (i) that the claim petition was bad for non - joinder of necessary parties as the driver was not made party in this claim petition; (ii) that the driving licence which was given by the owner of the driver of vehicle involved, after verification by insurance company was found fake, but the learned tribunal did not consider this evidence which was a public document and admissible under the Evidence Act, without examining the authority concerned; and comitted material illegally in awarding; and committed material illegality in awarding compensation directing the appellant company to indemnity the owner for acts of his driver; (iii) it is submitted that the vehicle insured was being plied against the Insurance Policy and the appellant Company was not liable to pay any compensation; but the learned tribunal fastened the liability against the appellant company though the claim petition was liable to be dismissed; (iv) It is further submitted that the learned tribunal erroneously drew inference that the second driving licence was not verified by the opposite party (appellant company) and presumed that the driving was having a valid licence and passed the award against the appellant company in violation of section 6 of the Motor Vehicles Act; and (v) the accident occurred due to contributory negligence on the part of the deceased, was playing on the road, but the learned tribunal without considering the case on facts and law, awarded compensation on the higher side against the appellant company in breach of established principles of law.
10. The claimant is aggrieved by the compensation awarded, where as the Insurance Company has raised several grounds for challenging the said award. In light of the judgment of the Apex Court reported in U.P.S.R.T.C. Vs. Km. Mamta AIR 2016 (SC) 948, all the issues raised have to be decided by this Court under Section 173 of the Motor Vehicles Act.
11. In view of the submission made by both the counsels as far as negligence is concerned this court will have to decide the issue of negligence. It would be relevant to discuss the principles for deciding negligence and to decide whether it is a case of contributory negligence and whether the minor child can contribute to the accident having taken place which will also have to be looked into.
12. The principles enunciated for considering the same in a motor accident claim will be sifted and discussed finding on negligence.
13. Negligence means failure to exercise required degree of care expected of a prudent person. Negligence is the omission to do something which a reasonable man, guided upon the considerations, which ordinarily regulate conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do. Negligence is not always a question of direct evidence, it is an inference to be drawn from proved facts. Negligence is not an absolute term, but is a relative one, it is rather a comparative term. What may be negligence in one case may not be so in another. Where there is no duty to exercise care, negligence in the popular sense has no legal consequence. Where there is a duty to exercise care, reasonable care must be taken to avoid acts or omissions which would be reasonably foreseen and likely to cause physical injury to person. The degree of care required, of course, depends upon facts in each case. On these broad principles, the negligence of parties to accident is required to be assessed.
14. It would be seen that burden of proof for contributory negligence on the part of deceased has to be discharged by the opponents. It is the duty of driver of the offending vehicle to explain the accident. It is well settled law that it is the duty of a fast moving vehicle to slow down and if driver did not slow down, but continued to proceed at a high speed without caring to notice that another person/vehicle was at what speed was either then the conduct of driver necessarily leads to conclusion that vehicle was being driven by him rashly as well as negligently and the driver can be held to be the author of the unforseen incident.
15. In view of the fast and constantly increasing volume of traffic, motor vehicles upon roads may be regarded to some extent as coming within the principle of liability defined in Rylands V/s. Fletcher, (1868) 3 HL (LR) 330, from the point of view of pedestrian, the roads of this country have been rendered by the use of motor vehicles, highly dangerous. 'Hit and run' cases where drivers of motor vehicles who have caused accidents, are unknown.
16. In light of the above discussion, even if courts may not by interpretation displace the principles of law which are considered to be well settled and, therefore, court cannot dispense with proof of negligence altogether in all cases of motor vehicle accidents, it is possible to develop the law further on the following lines; when a motor vehicle is being driven with reasonable care, it would ordinarily not meet with an accident and, therefore, rule of res-ipsa loquitor as a rule of evidence may be invoked in motor accident cases with greater frequency than in ordinary civil suits (reference to Jacob Mathew V/s. State of Punjab, 2005 0 ACJ(SC) 1840) would be necessary.
17. The negligent act must contribute to the accident having taken place. The Apex Court recently has considered the principles of negligence in case of Archit Saini and Another v. Oriental Insurance Company Limited, AIR 2018 SC 1143.
18. The burden of proof would ordinarily be cast on the defendants in a motor accident claim petition to prove that motor vehicle driven by the driver was being driven with reasonable care or it is proved that there is equal negligence on the part the other side in causing the accident.
19. Contention of learned counsel for the insurance company qua negligence of minor child as pleaded by the appellants is required to the rejected as even under the Indian Penal Code, a child cannot be held guilty till the age of 7 years. In our case, the law is very clear that the factors which are necessary for consideration of negligence against insurance company. The minor was on the extreme left and playing with other children. There was nothing to show that the boy tried to go across the path of the vehicle suddenly just because it is mentioned that the vehicle was being driven slowly the same has not been proved that the driver was not rash and negligent. The very fact that the vehicle dashed with the child is a factor which goes to show that the driver was responsible for the accident and the death of the boy. This Court is fortified in its view by the Division Bench of this Court in Darshan Singh v. Vimal Rani, (1998) 1 SCC 265 (ALL) (DB).
20. The finding of the tribunal is also very important and this Court concurs with the said finding, the reason being the minor child was not found to have contributed to the accident having taken place and, therefore, this issue is also decided against the Insurance Company. The fact that the driver who is the best witness did not even appear before the tribunal is also considered against the driver of offending vehicle.
Breach of Policy
21. Sections 147, 148 and 149 of the Motor Vehicles Act, 1988 reads are as follows:-
"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 27 [injury to any person, including owner of the goods or his authorised 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
(b) if it is a public service vehicle engaged as 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 of any liability which the policy purports to cover in the case of that person or those classes of persons.
Section 148 in The Motor Vehicles Act, 1988
148. Validity of policies of insurance issued in reciprocating countries.--Where, in pursuance of an arrangement between India and any reciprocating country, the motor vehicle registered in the reciprocating country operates on any route or within any area common to the two countries and there is in force in relation to the use of the vehicle in the reciprocating country, a policy of insurance complying with the requirements of the law of insurance in force in that country, then, notwithstanding anything contained in section 147 but subject to any rules which may be made under section 164, such policy of insurance shall be effective throughout the route or area in respect of which, the arrangement has been made, as if the policy of insurance had complied with the requirements of this Chapter.
Section 149 in The Motor Vehicles Act, 1988
149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.--
(1) If, after a certificate of insurance has been issued under sub-section (3) of section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (l) of section 147 (being a liability covered by the terms of the policy) 1[or under the provisions of section 163A] is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.
(2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:--
(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:--
(i) a condition excluding the use of the vehicle--
(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
(d) without side-car being attached where the vehicle is a motor cycle; or
(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or
(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or
(b) that the policy is void on the ground that it was obtained by the non- disclosure of a material fact or by a representation of fact which was false in some material particular.
(3) Where any such judgment as is referred to in sub-section (1) is obtained from a Court in a reciprocating country and in the case of a foreign judgment is, by virtue of the provisions of section 13 of the Code of Civil Procedure, 1908 (5 of 1908) conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act, 1938 (4 of 1938) and whether or not he is registered under the corresponding law of the reciprocating country) shall be liable to the person entitled to the benefit of the decree in the manner and to the extent specified in sub-section (1), as if the judgment were given by a Court in India: Provided that no sum shall be payable by the insurer in respect of any such judgment unless, before the commencement of the proceedings in which the judgment is given, the insurer had notice through the Court concerned of the bringing of the proceedings and the insurer to whom notice is so given is entitled under the corresponding law of the reciprocating country, to be made a party to the proceedings and to defend the action on grounds similar to those specified in sub-section (2).
(4) Where a certificate of insurance has been issued under sub-section (3) of section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any condition other than those in clause (b) of sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub-section (1) of section 147, be of no effect: Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person.
(5) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person.
(6) In this section the expression "material fact" and "material particular" means, respectively a fact or particular of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk and, if so, at what premium and on what conditions, and the expression "liability covered by the terms of the policy" means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy.
(7) No insurer to whom the notice referred to in sub-section (2) or sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in sub-section (1) or in such judgment as is referred to in sub-section (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be. Explanation.--For the purposes of this section, "Claims Tribunal" means a Claims Tribunal constituted under section 165 and "award" means an award made by that Tribunal under section 168."
22. The provision of Section 158 (6) will also apply for the benefit of the claimants. The decision in First Appeal From Order No.1731 of 2010 dated 21.11.2011 in the case of New India Assurance Co. Ltd. v. Sita Ram Kevidayal Jaiswal, 2012 (2) AllMR 429, 2012 (2) MahLJ 710, 2012 (2) TAC 156 will enure for the benefit of the claimants.
23. It is contended that the driver was not joined and, therefore, the claim petition should have been dismissed. The said issue is not longer res integra in case of Machindranath Kernath v. D.S. Mylarappa, 2008 ACJ 1964, the said issue has been decided.
24. In the light of the judgment in Oriental Insurance Company Limited v. Poonam Kesarwani and others, 2008 LawSuit (All) 1557, when it was not proved by the Insurance Company that there was breach of policy conditions, the appeal cannot succeed.
25. As far as the amount of compensation for the death of five years old child is concerned, the judgment of Kisan Gopal (Supra) has been interpreted and distinguished by this Court and, therefore, a sum of Rs.2,25,000/- with interest would be payable.
26. As far as issue of rate of interest is concerned, the rate of interest on awarded amount of Rs.65,000/- at the rate of 8.5% can be found fault with as repo rate in the year of 2001 and when the matter was decided was considered and therefore rate of interest 8.5% cannot be found fault. It should be 7.5% in view of the latest decision of the Apex Court in National 7 Insurance Co. Ltd. Vs. Mannat Johal and Others, 2019 (2) T.A.C. 705 (S.C.) wherein the Apex Court has held as under :
"13. The aforesaid features equally apply to the contentions urged on behalf of the claimants as regards the rate of interest. The Tribunal had awarded interest at the rate of 12% p.a. but the same had been too high a rate in comparison to what is ordinarily envisaged in these matters. The High Court, after making a substantial enhancement in the award amount, modified the interest component at a reasonable rate of 7.5% p.a. and we find no reason to allow the interest in this matter at any rate higher than that allowed by High Court."
27. The Tribunal shall follow the guidelines issued by the Apex Court in Bajaj Allianz General Insurance Company Private Ltd. v. Union of India and others vide order dated 27.1.2022, as the purpose of keeping compensation is to safeguard the interest of the claimants. As 10 years have elapsed, the amount be deposited in the Saving Account of claimants in Nationalized Bank without F.D.R.
28. Hence the appeal preferred by the insurance company being devoid of merits and is dismissed and the appeal preferred by the claimant is partly allowed. Hence, the respondent-insurance company would deposit a sum of (Rs.2,25,000 - Rs.65,000) = Rs.1,60,000/- with interest at the rate of 7.5%. Judgment and decree passed by the Tribunal shall stand modified to the aforesaid extent. The Insurance Company shall deposit the additional amount within a period of 12 weeks from today with interest at the rate of 7.5% on additional amount from the date of filing of the claim petition till the amount is deposited. The amount already deposited be deducted from the amount to be deposited.
29. This Court is thankful to learned counsels for the parities for getting these very old matters disposed off.
30. The record be sent back to the Court below, if any.
Order Date :- 08.04.2022 / A.N. Mishra