Karnataka High Court
Sri. Mahesh B. G vs Sri. Srinivas on 24 February, 2023
1 M.F.A.No.4925/2018
C/w M.F.A.No.3957/2018
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF FEBRUARY 2023
PRESENT
THE HON'BLE MRS. JUSTICE K.S.MUDAGAL
AND
THE HON'BLE MR.JUSTICE ANIL B KATTI
MISCELLANEOUS FIRST APPEAL NO.4925/2018 (MV-I)
C/w
MISCELLANEOUS FIRST APPEAL NO.3957/2018 (MV-I)
M.F.A. NO.4925/2018:
BETWEEN:
SRI MAHESH B.G.
S/O. B.S.GOPAL
AGED ABOUT 23 YEARS
R/AT NO.3, BUDDANAGARA
HUSKUR GATE, BIOCON BACKSIDE
HEBBAGODI, ANEKAL TALUK
ELECTRONIC CITY, BENGALURU SOUTH
BENGALURU - 560 100 ...APPELLANT
(BY MRS.BHUSHANI KUMAR, ADVOCATE)
AND:
1. SRI SRINIVAS
S/O. NARAYANA SWAMY
MAJOR, R/AT K.G.HALLI VILLAGE
MALUR TALUK
KOLAR DISTRICT - 563 120
2. THE BRANCH MANAGER
UNITED INDIA INSURANCE CO. LTD.
R.O. HUB, 5TH AND 6TH FLOOR
KRUSHIBHAVAN, HUDSON CIRCLE
BENGALURU-560 001 ...RESPONDENTS
(BY SRI L.SREEKANTA RAO, ADVOCATE FOR R2;
NOTICE TO R1 IS DISPENSED WITH V/C/O DTD: 28.06.2021)
2 M.F.A.No.4925/2018
C/w M.F.A.No.3957/2018
THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER
SECTION 173(1) OF MV ACT PRAYING TO MODIFY THE JUDGMENT
AND AWARD DATED 19.02.2018 PASSED BY THE VIII ADDITIONAL
SMALL CAUSES JUDGE & XXXIII ACMM, MEMBER, MACT (SCCH-5),
BENGALURU IN MVC NO.1347/2017.
M.F.A. No.3957/2018:
BETWEEN:
THE MANAGER
UNITED INDIA INSURANCE CO. LTD.,
REGIONAL OFFICE, HUB 5TH AND 6TH FLOOR
KRUSHI BHAVAN, HUDSON CIRCLE
NRUPATHUNGA ROAD, BANGALORE - 560 002
REP. BY ITS MANAGER
ARUNKUMAR RAJULU ...APPELLANT
(BY SRI L.SREEKANTA RAO, ADVOCATE)
AND:
1. SRI MAHESH B.G.
S/O. B. S. GOPAL
AGED ABOUT 23 YEARS
R/AT NO.3, BUDDANAGARA
HUSKUR GATE, BIOCON BACKSIDE
HEBBAGODI, ANEKAL TALUK
BENGALURU SOUTH- 560 100
2. SRI SRINIVAS
S/O. NARAYANA SWAMY
MAJOR
R/AT K.G.HALLI VILLAGE
MALUR TALUK
KOLAR DISTRICT - 563 130 ...RESPONDENTS
(BY MRS.BHUSHANI KUMAR, ADVOCATE FOR R1;
R2 SERVED AND UNREPRESENTED)
THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER
SECTION 173(1) OF MV ACT PRAYING TO MODIFY THE JUDGMENT
AND AWARD 19.02.2018 PASSED BY THE VIII ADDITIONAL SMALL
CAUSES JUDGE & XXXIII ACMM, MEMBER, MACT (SCCH-5),
BENGALURU IN MVC NO.1347/2017 AWARDING COMPENSATION OF
RS.3,40,000/- WITH INTEREST @ 9% P.A. FROM THE DATE OF
PETITION TILL THE DATE OF REALIZATION.
3 M.F.A.No.4925/2018
C/w M.F.A.No.3957/2018
THESE MISCELLANEOUS FIRST APPEALS HAVING BEEN
HEARD AND RESERVED ON 02.02.2023, COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, K.S.MUDAGAL J.,
DELIVERED THE FOLLOWING:
JUDGMENT
Challenging the award in M.V.C.No.1347/2017 passed by VIII Additional Small Causes Court Judge and MACT, Bangalore, the Insurer has preferred M.F.A.No.3957/2018 and the claimant has preferred M.F.A.No.4925/2018. For the purpose of convenience, the parties will be referred to henceforth according to their ranks before the Tribunal.
2. On 25.12.2016 at about 9.00 a.m. when the claimant was proceeding on his TVS Motor cycle bearing Registration No.KA-51-U-4034 near Biocon, Hebbagodi of Hosur-Bangalore Road, Qualis car bearing No.KA-05-MB-4999 hit the claimant and caused the accident. Due to the accident, the claimant suffered grievous injuries. Regarding the accident, Gopal the father of the claimant filed complaint before Hebbagodi Police. Based on such complaint, Hebbagodi police registered First Information Report as per Ex.P1 against the driver of Qualis Car bearing No.KA-05-MB-4999. On investigation, the police filed charge sheet as per Ex.P6 4 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018 against the said driver for the offences punishable under Sections 229 and 338 of IPC. It appears in the charge sheet by typographical error the vehicle number was mentioned as KA-05-MD-4999. But Exs.P1 to P3 the first information report, spot mahazar and IMV report show that the investigation was conducted against the driver of the car bearing No.KA-05-MB- 4999.
3. The claimant was initially shifted to Sparsh Hospital. Then he was shifted to Sanjay Gandhi Hospital and treated there as inpatient from 25.12.2016 to 25.01.2017. During relevant period, respondent Nos.1 and 2 were the registered owner and Insurer of the vehicle respectively.
4. The claimant filed M.V.C.No.1347/2017 against the respondents claiming compensation of Rs.33,00,000/- on the ground that the accident occurred due to actionable negligence of the driver of Qualis Car and he suffered grievous injuries leading to permanent physical disability.
5. Respondent No.1 did not contest the petition. Respondent No.2 alone contested the petition denying occurrence of the accident, actionable negligence on the part 5 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018 of the driver of Qualis Car, injuries and permanent physical disability of the claimant. The Insurer though admitted coverage of the vehicle under the policy issued by it, contended that its liability is subject to the terms and conditions of the policy, the driver of the offending vehicle having effective Driving Licence and the validity of registration certificate, fitness certificate and permit of the vehicle.
6. In support of the case of the claimant, PWs.1 to 3 were examined and Exs.P1 to P17 were marked. Respondent No.2 examined RWs.1 and 2 and got marked Exs.R1 to R3. The Tribunal on hearing both side by the impugned award held that the accident occurred due to actionable negligence on the part of the driver of the car bearing No.KA-05-MB-4999. Though PW.3 the doctor who treated the claimant assessed physical permanent disability of the claimant at 15% to the whole body, the Tribunal relying on Gazette Notification dated 01.06.2001 issued by the Ministry of Social Justice and Empowerment, New Delhi assessed disability at 9% to the whole body.
6 M.F.A.No.4925/2018C/w M.F.A.No.3957/2018
7. Relying on Ex.P11 Aadhar card of the claimant, the Tribunal considered his age as 22 years, notionally assessed his income at Rs.7,000/- per month, applied multiplier 18 and awarded compensation of Rs.1,37,000/- on the head of loss of future earnings. The Tribunal in all awarded a sum of Rs.3,40,000/- on all different heads as per the table below:
Sl. Head of Compensation Amount in
No. Rs.
I PECUNIARY DAMAGES (Special Damages)
1. Expenses relating to:
a) to treatment, hospitalization, medicines, 78,000-00
transportation (Rs.78,025/- rounded off
Rs.78,000/-
b) nourishing food and miscellaneous expenditure 15,000-00
2. Loss of earnings which the injured would have -
made had he not been injured, comprising:
a) Loss of earnings during period of treatment
b) Loss of future earnings on account of 1,37,000-00 permanent disability (Rs.7,000/-x12x18x9%= Rs.1,36,080/- rounded off Rs.1,37,000/-)
3. Future medical expenses -
II. NON-PECUNIARY DAMAGES (General
Damages)
4. Damages for pain, suffering and trauma as a 1,00,000-00
consequence of the injuries
5. Loss of amenities ( and/or loss of prospects of 10,000-00
marriage)
6. Loss of expectation of life (shortening of normal -
longevity)
Total 3,40,000-00
8. The claimant challenges the award on the ground that the compensation awarded is inadequate. The Insurer challenges the award on the ground of its liability and quantum both.7 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018
Submissions of Sri L.Sreekanta Rao, learned Counsel for the Insurer:
9. The evidence of RWs.1 and 2 shows that Qualis car was not holding valid registration certificate and permit to operate the vehicle in that area. Thereby there was breach of policy conditions. The fitness certificate of the said vehicle expired on 17.07.2015 and the accident occurred on 25.12.2016. The fitness certificate was renewed on 26.09.2017. Registration certificate of the vehicle was also lapsed. Respondent No.1 got renewed the Insurance policy suppressing the said material facts, thereby played fraud on the insurer. The Tribunal failed to appreciate such material evidence and erroneously fastened the liability to the Insurer.
The compensation awarded on all heads is on the higher side.
10. In support of his submissions, he relies on the following judgments:
(i) New India Assurance Co. Ltd. v. Yallavva1
(ii) United India Insurance Co. Ltd. v. Sushil Kumar Godara2 1 ILR 2020 KAR 2239 2 2021 SCC Online SC 844 8 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018 Submissions of Smt. Bhushani Kumar, learned Counsel for the claimant:
11. Though registration certificate expired on 17.07.2015 and renewed on 26.09.2017, the policy was issued on 26.11.2016. The admissions of RW.1 show that the registration certificate of the vehicle was not cancelled and the fitness certificate of the vehicle was renewed. RW.2 in her evidence unequivocally admits that the policy will be issued on verification of the registration certificate and in case the Registration certificate has expired, the policy will be issued advising the owner to get the same renewed. She further admits that at the time of accident, the policy was in force. The renewal of the registration certificate dates back to it's expiry. As per Section 56 of the Motor Vehicles Act, 1988 ('the MV Act' for short) the fitness certificate is required only for transport vehicle and the offending vehicle was non-transport vehicle. The defence of validity of registration certificate and fitness certificate is not available to the Insurer. There was no pleading with regard to fraud, misrepresentation or suppression of material facts in the statement of objections of respondent No.2. Therefore it is not open to urge that 9 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018 contention at the appellate stage. The Tribunal was not justified in rejecting the disability spoken by the doctor. The compensation awarded by the Tribunal on all heads is on lower side. The Tribunal should have awarded compensation on the head of diet and attendant charges. The judgments relied on by learned Counsel for the Insurer is not applicable.
12. In support of her submissions, she relies on the following judgment of this Court
(i) Shamanna dead by his LR vs. The Division Manager3.
13. Having regard to the submissions of both side and the materials on record, the points that arise for determination are:
(i) Whether the Tribunal was justified in holding that the Insurer/respondent No.2 is liable to pay the compensation?
(ii) Whether the compensation awarded to the claimant is just?
Reg: Point No.1:
14. The Insurer contended that though the vehicle was insured under the policy issued by it, respondent No.1 3 MFA No.1110/2010 DD 08.01.2015 10 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018 obtained such policy suppressing the fact that the registration of the vehicle was not renewed and the vehicle was not having valid fitness certificate and permit. Such act amounts to playing fraud on the Insurer. Therefore, the Insurer is not liable to indemnify respondent No.1 of the damages.
15. It is settled law that whenever the party seeks to nullify the contract on the basis of fraud, undue influence, coercion or misrepresentation, such aspects and particulars of such fraud, undue influence, coercion or misrepresentation have to be pleaded. As rightly pointed out by learned Counsel for the claimant, in the statement of objections of respondent No.2 absolutely there is no whisper about any fraud or misrepresentation played by respondent No.1 in obtaining the insurance policy. Therefore such plea is not open to the Insurer for the first time before this Court.
16. In addition to that, Insurer's own witness RW.2 in her cross-examination admits that while issuing policy they verify whether registration certificate of the vehicle has expired and if there is no registration certificate, they issue policy with the advice to the owner of the vehicle to get the 11 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018 same renewed. She states that though RC is not valid, Insurance Company can issue insurance policy, but it is not liable to indemnify the damages. If the Insurer accepts the premium and issues Insurance policy, despite knowing that the registration certificate is not in force, it is not open to the Insurer to claim that it can receive money, but cannot indemnify the damages. Such stand amounts to unjust enrichment.
17. RW.2 further admits that once they issue policy on receiving the premium, they are bound by the conditions of policy. She admits that the policy itself does not contain the condition that if registration certificate expires, then policy also expires. But she says that the condition is implied one. When the agreement is in writing such contention of implied condition cannot be accepted unless the same is admitted or proved.
18. RW.2 unequivocally admits that the policy does not contain recital to the effect that if registration certificate expires, that amounts to violation of the condition of the Insurance contract. She unequivocally admits that though at 12 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018 the time of issuance of policy, respondent No.2 was aware that registration certificate is not in force, the policy was issued. Such admission of RW.2 falsifies the contention of learned Counsel for the Insurer that the policy was obtained by playing fraud or by suppressing material facts or by misrepresentation.
19. Exs.R2 and R3 show that vehicle bearing No.KA-05-MB-4999 i.e. insured vehicle was private/non- transport vehicle. Section 56 of the MV Act which deals with certificate of fitness of transport vehicles reads as follows:
"56. Certificate of fitness of transport vehicles.--
(1) Subject to the provisions of sections 59 and 60, a transport vehicle shall not be deemed to be validly registered for the purposes of section 39, unless it carries a certificate of fitness in such form containing such particulars and information as may be prescribed by the Central Government, issued by the prescribed authority, or by an authorized testing station mentioned in sub-
section (2), to the effect that the vehicle complies for the time being with all the requirements of this Act and the rules made there under:
Provided that where the prescribed authority or the "authorized testing station" refuses to issue such certificate, it shall supply the owner of the vehicle with its reasons in writing for such refusal.13 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018
(2) ...................................................................................... (3) ....................................................................................... (4) ....................................................................................... (5) ......................................................................................"
20. Reading of the above provision shows that requirement of fitness certificate contemplated under Section 56 of the MV Act is only for the transport vehicle and not for non transport vehicle. Therefore, there is no merit in the contention that the vehicle had no fitness certificate, thereby there was violation of policy conditions.
21. Section 149(2) of the MV Act speaks of the defences available to the Insurer in a claim petition. Section 149 (1) (2) (a) and (b) of the MV Act which are relevant for this case read as follows:
"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) or under the provisions of section 163A is obtained against any person insured by the policy, then, 14 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018 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 15 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018 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."
22. Section 149(2)(c) of the MV Act applies only to transport vehicles. Since the vehicle was private car the contention that permit to operate the vehicle was not in force, has no merit. It is not the case of the Insurer that the vehicle was used for any of the purposes mentioned in 16 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018 Section 149(2)(a) (ii) & (b) of the MV Act. The burden of establishing the grounds under the condition under Section 149(2)(a) of the MV Act is on the Insurer. But it did not adduce any evidence to show that the driver was not holding valid driving licence. The contention that the policy was obtained suppressing the validity of the registration certificate, fitness certificate is already over-ruled. Admittedly, the police have not charge sheeted the driver of the offending vehicle for violations of the provisions of the MV Act. Under such circumstances, the judgment in Yellavva's case referred to supra relied on by learned Counsel for the Insurer is not applicable.
23. Reading of the judgment in Sushil Kumar Godara's case referred to supra shows that in the said case, the vehicle had only temporary registration and that expired, despite that the owner of the vehicle drove the said vehicle to another city. When the vehicle was parked there, that was stolen during such night. In that context, it was held that theft would not have occurred if the owner of the vehicle had not driven the same despite expiry of the registration, which is in clear violation of Sections 39 and 192 of the MV Act and that 17 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018 amounts to fundamental breach of terms and conditions of the policy.
24. The evidence of RW.2 shows that though they had issued policy with the knowledge that the registration certificate has expired, the driver of the vehicle was not charge sheeted for those offences under the MV Act. Under the aforesaid facts and circumstances, the judgment in Sushil Kumar Godara's case referred to supra is not applicable to the facts of the case.
25. Having regard to the aforesaid facts and circumstances, the Tribunal was justified in holding that respondent No.2 is liable to indemnify the damages. Reg. Point No.2:
26. As per the evidence of PW.3 the doctor, the claimant had suffered the following injuries:
(i) Amputation of 3rd, 4th and 5th toes right foot with raw area and exposed metalcarpal bones.
(ii) Dislocation of right hip reduced and upper tibial traction in place.18 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018
As per the evidence on record, the claimant was treated as inpatient between 25.12.2016 to 25.01.2017. The claimant underwent surgery for the right foot undergone vac dressings and skin grafting on 13.01.2017. PW.3 says that when he examined the claimant on 18.08.2017, he found the following disabilities:
(i) Scar over the dorsum of foot with skin graft 15 x 10 cm, loss of 3rd, 4th and 5th toes.
(ii) Deformity of foot unable to do eversion of foot
(iii) Ankle joint movement stiffness
(iv) Hip joint range active restricted.
27. PW.3 deposes that the claimant suffered 45% disability to right lower limb and 15% to the whole body. There was no dispute that PW.3 is expert in the field. Except for citing Notification, the Tribunal has not assigned any other justifiable reasons for reducing disability from 15% to 9%. Therefore, reduction is unacceptable.
28. Though the claimant contended that he was drawing salary of Rs.10,000/- per month from his employment in coffee day. The evidence of PW.2-the proprietor, Coffee Palace, for the said employment in coffee day and the salary 19 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018 was not found acceptable. Therefore, the Tribunal was justified in resorting to assess the income notionally. The accident had taken place in the year 2016.
29. Having regard to the age of the claimant, the prevailing wage rates and the cost of living during the said period, the Tribunal ought to have taken notional income at Rs.9,500/- per month. Having regard to the judgment of the Hon'ble Supreme Court in National Insurance Company Limited vs. Pranay Sethi4 and the nature of the employment of the claimant, the Tribunal should have added 40% of the notional income to the same by way of future prospects which comes to 9,500 x 40%= Rs.3,800/-. Therefore his monthly income comes to Rs.9,500+3,800= 13,300/- per month. The disability spoken by the doctor is 15% to the whole body. The medical and other records show that the claimant was aged 22 years. The applicable multiplier was 18. Therefore, the compensation payable on the head of loss of future income comes to Rs.4,30,920/- (13,300 x 15%=1995 x 18 x 12). 4 AIR 2017 SC 5157 20 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018
30. The compensation awarded on the head of medical expenses is based on the records and that needs to be maintained. Having regard to the period of hospitalization and the treatment undergone by the claimant, the compensation awarded on the head of food, nourishment, attendant charges needs to be maintained.
31. The claimant suffered amputation of three of his toes in addition to hip dislocation. Having regard to the nature of the injuries suffered by the claimant, the compensation of Rs.1,00,000/- awarded on the head of pain and sufferings has to be maintained.
32. Having regard to the nature of the injuries and the period of hospitalization, the compensation awarded on the head of loss of amenities needs to be enhanced to Rs.50,000/-. Having regard to the nature of the injuries, treatment undergone and the period of hospitalization, the Tribunal ought to have awarded compensation on the head of loss of income for three months i.e. laid up period. Therefore the compensation on the head of loss of income during laid up 21 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018 period comes to (Rs.9,500 x 3) Rs.28,500/-. Hence, the just compensation payable is as follows:
Sl. Particular Compensation
No. amount in Rs.
1 Loss of future earnings 4,30,920/-
2 Medical expenses 78,000/-
3 Food/nourishment/attendant 15,000/-
charges
4 Pain and sufferings 1,00,000/-
5 Loss of amenities 50,000/-
6 Loss of income during laid 28,500/-
up period
Total 7,02,420/-
33. The Tribunal without assigning any reasons for awarding interest at 9% per annum has granted the same. Having regard to Section 34 of CPC, it would be just and appropriate to award interest at the rate of 6% per annum. For the aforesaid reasons, the insurer is liable to pay the compensation amount. Both the appeals deserve to be allowed partly. Hence the following:
ORDER The appeals are partly allowed. The impugned order of the Tribunal is modified as follows:
The claimant is entitled to compensation of Rs.7,02,420/- with interest thereon at 6% per annum from the date of the petition till realization.22 M.F.A.No.4925/2018 C/w M.F.A.No.3957/2018
Respondent No.2/Insurer shall deposit the said amount after adjusting the amount already deposited if any, before the Tribunal within four weeks from the date of receipt of copy of this order.
The order of the Tribunal with regard to apportionment and investment is maintained.
Registry shall transmit the amount in deposit if any and the trial Court records to the Tribunal forthwith.
Sd/-
JUDGE Sd/-
JUDGE KSR