The Branch Manager, The New India ... vs Urmila Biswakarma (Chettri) And Ors on 26 May, 2022

[Cites 20, Cited by 1]

Sikkim High Court

The Branch Manager, The New India ... vs Urmila Biswakarma (Chettri) And Ors on 26 May, 2022

1.(i) The Appellant-Insurance Company, herein, was ordered to pay compensation of Rs.32,25,946/- (Rupees thirty two lakhs, twenty five thousand, nine hundred and forty six) only, to Respondents No.1, 2 and 3 on account of the death of the husband of Respondent No.1 and the father of Respondents No.2 and 3, in a motor vehicle accident, involving a Truck, bearing Registration No. SK-04-D/0294, driven by the deceased on 14.05.2016, which met with an accident near Rambi Bazaar, West Bengal. Aggrieved by the said Judgment, dated 18.04.2019 in MACT Case No.80 of 2017, the Appellant assails the same.

2. Learned Counsel for the Appellant contended that the admitted position of the Respondents No.1 to 3 (Claimants No.1 to 3 before the Learned Tribunal) is that the deceased was driving the vehicle in accident at the relevant time and no other vehicle was involved. It was also admitted by Respondents No.1 to 3 that the MAC App. No.10 of 2019 The Branch Manager, The New India Assurance Co. Ltd. 2 vs. Urmila Biswakarma (Chettri) and Others accident had occurred due to the deceased, driving the vehicle at an excessive speed, which resulted in his death by his own negligence. Hence, the Respondents No.1 to 3 cannot take advantage of the fault of the deceased who was the tortfeasor and seek compensation. It was next contended that the concerned vehicle had no valid Route Permit to ply and it had not been certified by the concerned Authority as being fit to be used as a Goods Carrying Vehicle. Despite the facts supra before the Learned Tribunal, the compensation was erroneously granted and deserves to be set aside. In support of his contentions, Learned Counsel placed reliance on the ratio of Pawan Kumar and Another vs. Harkishan Dass Mohan Lal and Others1; Khenyei vs. New India Assurance Company Limited and Others2; National Insurance Company Limited vs. Ashalata Bhowmik and Others3 and T.O. Anthony vs. Karvarnan and Others4.

3.(i) Per contra, Learned Counsel for the Respondents No.1 to 3 contended that no error emanates in the grant of compensation to the said Respondents, as the documents of the vehicle including the Insurance Policy, which was a Comprehensive Policy, the Driving Licence of the deceased and the Route Permit were valid at the time of the accident. The attention of this Court was invited to the provisions of Section 147(1)(b)(i) of the Motor Vehicles Act, 1988 (for short, the "M.V. Act") and it was urged that it clearly states that the Insurance Policy insures the person or classes of persons specified in the Policy against any liability which may be incurred by him in respect of the death or bodily injury to "any person," including the owner of the goods or his authorized 1 (2014) 3 SCC 590 2 (2015) 9 SCC 273 3 (2018) 9 SCC 801 4 (2008) 3 SCC 748 MAC App. No.10 of 2019 The Branch Manager, The New India Assurance Co. Ltd. 3 vs. Urmila Biswakarma (Chettri) and Others representative carried in the vehicle, or damage to any property of a third party caused by or arising out of the use of the motor vehicle in a public place. That, the term "any person" thereby includes the deceased employed Driver, besides which, he is a third party being neither the insured nor the insurer. On this count, strength was garnered from the ratio in The Branch Manager, National Insurance Co. Ltd., Gangtok vs. Master Suraj Subba and Another 5 wherein it was held that the deceased, who was the husband of the insured, had a valid Driving Licence, was not a party to the agreement of Insurance and thereby fell within the meaning of "third party." It was also urged that the provisions of Section 166 of the M.V. Act is benevolent legislation intended to mitigate the difficulties of the Claimants who seek compensation on account of the death of the earning member of their family, hence the Respondents No.1 to 3 are entitled to compensation under Section 166 of the M.V. Act. On this count, reliance was placed by Learned Counsel on The Branch Manager, United Insurance Company Limited vs. Lily Ongmu Lepcha6.

(ii) The Court was next invited to consider the provisions of Section 147(5) of the M.V. Act and it was argued that the provision puts the liability on the insurer 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. On this aspect, Learned Counsel for Respondents No.1 to 3 relied on the case of Branch Manager, New India Assurance Co. Ltd. vs. Jasu Subba and Others7 wherein it was clearly enunciated that "Driver" means any person including the 5 AIR 2014 Sikkim 7 6 2016 SCC OnLine Sikk 198 7 2011 SCC OnLine Sikk 20 MAC App. No.10 of 2019 The Branch Manager, The New India Assurance Co. Ltd. 4 vs. Urmila Biswakarma (Chettri) and Others insured, the only condition being that such person should hold an effective Driving Licence at the time of the accident and is not disqualified from holding or obtaining a Licence. That, although the Appellant's claim is that the accident vehicle did not have a valid Route Permit on account of the failure of the Respondent No.4 (Opposite Party No.2 before the Learned Tribunal) to produce the document, even if this be so, the Hon'ble Supreme Court in Kamala Mangalal Vayani and Others vs. United India Insurance Company Limited and Others8 held that the Claim Petition cannot be rejected on grounds of non-filing of the Route Permit when it was established that the vehicle was comprehensively insured with the insurer to cover the passenger risk. Since, there was no breach of the terms and conditions of the Insurance Policy and the Driving Licence of the deceased was valid, the Appeal be dismissed.

4. The Respondent No.4-owner of the vehicle in accident, contended that all required documents of the vehicle, including the Insurance Policy, were valid at the time of the accident. The Driving Licence of the deceased was also valid though the Route Permit of the vehicle was misplaced, however, a copy of the Permit was found by the Respondent No.4 in the month of October, 2019, hence the application Under Order XLI Rule 27 of the Code of Civil Procedure, 1908 (for short, the "CPC") before this Court in I.A. No.03 of 2020, seeking to file the document. The vehicle also had a Comprehensive Package Policy and the onus to prove that there was a breach in the terms and conditions of the Insurance Policy lay with the Appellant. On this count, reliance was placed on Kamala Mangalal Vayani's case (supra) hence the Appeal be dismissed.

8 (2010) 12 SCC 488 MAC App. No.10 of 2019 The Branch Manager, The New India Assurance Co. Ltd. 5 vs. Urmila Biswakarma (Chettri) and Others

5. The rival arguments of all parties were heard in extenso. All documents examined, evidence perused, including the impugned Judgment and the citations made at the Bar. The question that falls for consideration before this Court is;

                               "Whether        the     Claimants       are   entitled   to
                       compensation         under Section 166 of              the Motor

Vehicles Act, 1988, when the deceased is the tortfeasor and succumbed to the accident on account of his own rash and negligent act?"

6.(i) Reliance on Pawan Kumar supra by Learned Counsel for the Appellant is not relevant to the matter at hand as it distinguishes between "composite" and "contributory" negligence of the tortfeasors who injured a third party, while we are concerned with the death of the tortfeasor and the liability of the insurer, if at all.

(ii) The case of T.O. Anthony supra relied on by Learned Counsel for the Appellant is also distinguishable from the facts of the case under consideration as it was concerned with "contributory negligence" when two vehicles collided with each other and one of the drivers, who was injured in the accident, claimed compensation from the other, alleging negligence, which the second driver denied. In the ratio of Khenyei supra, also the distinction between "composite" and "contributory" negligence was made out by the Hon'ble Supreme Court and is not relevant for the present purposes.

(iii) In Ashalata Bhowmik supra, the deceased was the owner of the offending vehicle and driving it when the accident occurred, it was ruled that he could not be treated as a third party. In the instant case, the deceased was the Employee of the insured and not being the insurer or the insured, fell within the ambit of MAC App. No.10 of 2019 The Branch Manager, The New India Assurance Co. Ltd. 6 vs. Urmila Biswakarma (Chettri) and Others third party and duly covered by the Policy of insurance, as will emanate from the discussions hereinbelow.

(iv) While addressing the argument of Learned Counsel for the Appellant pertaining to non-existence of Route Permit, Learned Counsel for the Respondents No.1 to 3 have rightly relied on the ratio of Kamala Mangalal Vayani supra where it was propounded that once it is established that the vehicle was comprehensively insured with the insurer to cover the passenger risk, the burden to prove that it was not liable in spite of such a policy, shifts to the insurer. In light of this decision, there is no requirement to consider the application filed by the Respondent No.4 under Order XLI Rule 27 of the CPC, which is disposed of accordingly.

7.(i) Section 146 of the M.V. Act necessitates insurance against third party risk. The object of this provision is to enable the third party to claim and recover damages from the Insurance Policy without recourse to the financial capacity of the Driver or the Owner of the vehicle.

(ii) Section 147(1)(b)(i) of the M.V. Act provides 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).........

(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 injury to any person, including owner of the goods or his authorized representative carried in the vehicle out of the use of the vehicle in a public place. ........."

(iii) In New India Assurance Co. Ltd. vs. Asha Rani and Others9 the Hon'ble Supreme Court, while considering the meaning of the words "any person" occurring in Section 147 of the M.V. Act supra, 9 (2003) 2 SCC 223 MAC App. No.10 of 2019 The Branch Manager, The New India Assurance Co. Ltd. 7 vs. Urmila Biswakarma (Chettri) and Others held that the words must be attributed having regard to the context in which they have been used i.e. "a third party." In Ningamma and Another vs. United India Insurance Company Limited 10 it was held that the apparently wide words "any person" are qualified by the setting in which they occur and that "any person" is to be understood as a third party.

(iv) In Rameshray Singh vs. New India Assurance Co. Ltd. and Others11 it was held that the words "any person" and "any passenger" occurring in clauses (i) and (ii) of Sub-Section (b) to Section 147(1) of the M.V. Act, are of wide amplitude, however the proviso to the Sub-Section carves out an exception in respect of one class of persons and passengers as required under the Statute to cover only certain employees. This would still allow the insured to enter into an Agreement to cover other employees but under the proviso to Section 147(1) (b) of the M.V. Act, it is clear that for the purposes of Section 146(1) of the M.V. Act, a Policy shall not be required to cover liability in respect of the death arising out of and in the course of any employment of the person insured unless, first, the liability of the insured arises under the Workmen's Compensation Act, 1923. If the concerned employee is neither a driver nor conductor nor examiner of tickets, the insured cannot claim that the employee would come under the description of "any person" or "passenger." If this were permissible, then there would be no need to make special provisions for employees of the insured. The words "any person" or "passenger" which occur in Section 147 of the M.V. Act are of wide amplitude but they do not 10 (2009) 13 SCC 710 11 2003 (3) TAC 3 SC MAC App. No.10 of 2019 The Branch Manager, The New India Assurance Co. Ltd. 8 vs. Urmila Biswakarma (Chettri) and Others cover employees other than those mentioned in proviso to Sub- Section (b) of Section 147(1)(i) of the M.V. Act.

8.(i) Relevant reference at this juncture may be made to the first proviso to Section 147 (1) of the M.V. Act which reads as follows;

"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)     .........
                               (c)     ........."

(ii)               Section 147 (5) of the M.V. Act provides as under;

"147. Requirements of policies and limits of liability.--

.........................................................................................................

(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."

9.(i) Before proceeding further with the discussions, it is necessary to state here that the Insurance Policy in the instant matter is a "Comprehensive Policy" also known as a "Package Policy." This is different from an "Act Policy." A Comprehensive Policy covers the liability of the Insurer for payment of compensation for the occupant. In National Insurance Company Limited vs. Balakrishnan and Another12 the Hon'ble Supreme Court, while distinguishing between a "Comprehensive Policy" and an "Act Policy," observed that a Comprehensive/Package Policy would cover the liability of the insurer for payment of compensation for the occupant in a car. An Act Policy cannot cover a third party risk 12 (2013) 1 SCC 731 MAC App. No.10 of 2019 The Branch Manager, The New India Assurance Co. Ltd. 9 vs. Urmila Biswakarma (Chettri) and Others of an occupant in a car which a Comprehensive/Package Policy would cover.

(ii) The terms and conditions of the Insurance Policy herein inter alia reveals as follows;

"This policy is subject to the Terms, conditions and exceptions applicable to Package/Liability policy attached/available on the web site http://newindia.co.in; IMT Endorsement Number(s) printed herewith attached 23, 40, 62, 65."

[Emphasis supplied]

(iii) The India Motor Tariff (for short, the "IMT") Endorsement 40 reads as under;

"IMT 40 Legal Liability to paid driver and/or Conductor and/or cleaner employed in connection with the operation of Motor vehicle.

(For buses, taxis and motorized three/four wheelers under commercial vehicles tariff) In consideration of the payment of an additional premium it is hereby understood and agreed that notwithstanding anything contained herein to the contrary the insurer shall indemnify insured against his legal liability under the Workmen's Compensation Act, 1923 and subsequent amendments of that Act prior to the date of this endorsement, the Fatal Accidents Act, 1855 or at Common Law in respect of personal injury to any paid driver and/or conductor and/or cleaner whilst engaged in the service of the insured in such occupation in connection with the vehicle insured and will in addition be responsible for all costs and expenses incurred with its written consent.

The premium to be calculated and paid while taking insurance of the vehicle concurred at the rate of Rs.25/- per driver and/or conductor and/or cleaner. Provided..............."

(iv) The Insurance Policy further reveals thus;

"Schedule of Premium Own Damage Liability Basic OD Cover Basic TP Cover GVW above 12000KG, Inclusion of LL to persons employed for IMT 23 opn. and/or maint. and/or loading and/or unloading, LL to paid driver conductor cleaner employed for oprn NCB(35%) OD Premium in ₹ 3457 TP Premium in ₹ 19832 Net Premium in ₹: 23289 Service Tax in ₹: 2879 Total Payable in ₹: 26168 ..................................................."

(v) The Insurance Policy, Exhibit 5, was relied upon by Respondents No.1 to 3 and the contents of the document were not MAC App. No.10 of 2019 The Branch Manager, The New India Assurance Co. Ltd. 10 vs. Urmila Biswakarma (Chettri) and Others challenged or demolished by cross-examination of their Witness, Rajen Kumar Sharma. In such circumstance, although a break up of the Premium under different Heads have not been detailed in the document, a total sum of Rs.19,832/- (Rupees nineteen thousand, eight hundred and thirty two) only, was paid by way of Third Party Premium, and it can safely be assumed that it included additional premium to cover the Driver who was the employee of the Insured and thereby a "third party," the insurer and the insured being the first and the second party. The Respondents No.1 to 3 cannot be held at ransom for the lackadaisical attitude of the Insurance Company and its agent while filling up the form.

10. In light of the discussions above and considering that the deceased was an Employee of the Insured, and additional premium paid, nothing debars the Respondents No.1 to 3 from making a claim for compensation under Section 166 of the M.V. Act, 1988. This soundly answers the question formulated above.

11.(i) Accordingly, the Monthly Income of the deceased is taken as Rs.20,000/- (Rupees twenty thousand) only, which has not been disputed herein.

(ii) As per the ratio in Sarla Verma (Smt) and Others vs. Delhi Transport Corporation and Another13 the Multiplier adopted for calculating loss of earnings ought to be "16" in consideration of the age of the victim who was 35 years at the time of the accident instead of "17," as erroneously adopted by the Learned Tribunal.

(iii) The amount of Rs.40,000/- (Rupees forty thousand) only, calculated by the Learned Tribunal towards "mental tension"

and "loss of prospective happiness" incorrectly clubbed along with "loss of consortium" are set aside lacking statutory sanction.

(2009) 6 SCC 121 MAC App. No.10 of 2019 The Branch Manager, The New India Assurance Co. Ltd. 11 vs. Urmila Biswakarma (Chettri) and Others

(iv) In the ratio of Magma General Insurance Company Limited vs. Nanu Ram alias Chuhru Ram and Others14 the Hon'ble Supreme Court, while discussing "Consortium," concluded that "Consortium" can be "Spousal Consortium," "Parental Consortium"

and "Filial Consortium." It was further propounded that Consortium is a special prism reflecting changing norms about the status and worth of actual relationships. That, modern jurisdictions world over have recognized the value of a child's consortium which far exceeds the economic value of the compensation awarded in the death of a child. Most jurisdictions therefore permit parents to be awarded compensation under loss of consortium on the death of a child. The amount awarded to the parents is a compensation for loss of the love, affection, care and companionship of a deceased child. That, in case where a parent has lost their child, they are entitled to be awarded Loss of Consortium under the head of "Filial Consortium." In the instant matter, the Respondent No.1 is found entitled to Spousal Consortium while Respondents No.2 and 3 are entitled to Parental Consortium at the rate of Rs.40,000/- (Rupees forty thousand) only, each as held in Magma General Insurance Company Limited supra.

(v) The amount computed for "Medical Expenditure" by the Learned Tribunal was Rs.4,35,946/- (Rupees four lakhs, thirty five thousand, nine hundred and forty six) only, however, as per the Second Schedule to the M.V. Act, (which is followed even for compensation under Section 166 of the M.V. Act for the purposes of attaining uniformity in grant of compensation), it is elucidated that the "medical expenses" would include actual expenses incurred before death supported by bills/vouchers but not 14 (2018) 18 SCC 130 MAC App. No.10 of 2019 The Branch Manager, The New India Assurance Co. Ltd. 12 vs. Urmila Biswakarma (Chettri) and Others exceeding Rs.15,000/- (Rupees fifteen thousand) only. Accordingly, the medical expenses stands computed as Rs.15,000/- (Rupees fifteen thousand) only, instead of Rs.4,35,946/- (Rupees four lakhs, thirty five thousand, nine hundred and forty six) only, wrongly computed by the Learned Tribunal.

(vi) The amounts awarded by the Learned Tribunal towards "Loss of Estate" and "Funeral Expenses" are allowed.

12. Consequently, in light of the aforesaid facts and circumstances, the Judgment of the Learned Tribunal stands modified as follows;

Annual Income of the deceased Rs.2,40,000/- (Rs.20,000/- x 12) Less 1/3 of Rs.2,40,000/- (-) Rs.80,000/- [Deducted from the said amount as expenses that the deceased would have incurred towards his maintenance had he been alive] Net Yearly Income Rs.1,60,000/-

Multiplier of "16" adopted in terms of Sarla Verma's Judgment [Rs.1,60,000/- x 16] Rs.25,60,000/- Add Loss of Spousal Consortium (+) Rs.40,000/- [Rs.40,000/-, payable to Respondent No.1] Add Loss of Parental Consortium (+) Rs.80,000/-

[Rs.40,000/- each, payable to
Respondents No.2 and 3]
Add Loss of estate                                                 (+) Rs.15,000/-
Add Funeral expenses                                               (+) Rs.15,000/-
Add Medical expenses                                               (+) Rs.15,000/-

                               Total                               Rs.27,25,000/-

(Rupees twenty seven lakhs and twenty five thousand) only.

13. The Respondents No.1 to 3 shall be entitled to Simple Interest @ 10% per annum on the above amount of Rs.27,25,000/- (Rupees twenty seven lakhs and twenty five thousand) only, with effect from the date of filing of the Claim Petition before the Learned Tribunal till full realization.

14. The awarded amount shall be paid by the Appellant to the Respondents No.1 to 3 within one month from today with MAC App. No.10 of 2019 The Branch Manager, The New India Assurance Co. Ltd. 13 vs. Urmila Biswakarma (Chettri) and Others interest @ 10%, failing which, the Appellant shall pay Simple Interest @ 12% from the date of filing of the Claim Petition till realization, duly deducting the amounts, if any, already paid by it to the Respondents No.1 to 3.

15. The awarded amount of compensation shall be divided as follows;

(i) From the total amount awarded, Claimant-

Respondent No.1, spouse of the deceased is entitled to 50%, along with interest as specified above.

(ii) 50% of the total amount awarded shall be divided equally amongst the Claimants-

Respondents No.2 and 3, of which 15% of the share of each child, shall be kept in individual Fixed Deposit in a Nationalised Bank, until the child attains the age of majority. The remaining 10% of each of the minor's share shall be expended on their education.

16. The impugned Judgment stands modified to the above extent.

17. Appeal dismissed and disposed of accordingly.

18. No order as to costs.

19. Copy of this Judgment be sent to the Learned Motor Accident Claims Tribunal, East Sikkim at Gangtok, for information, along with its records.

( Meenakshi Madan Rai ) Judge 26.05.2022 ml Approved for reporting : Yes

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Sikkim High Court