Punjab-Haryana High Court
The New India Insurance Company Limited vs Dharam Vati And Ors. on 10 May, 2003
Equivalent citations: I(2006)ACC282, 2004ACJ1739, (2004)136PLR476
Author: S.S. Saron
Bench: S.S. Saron
JUDGMENT S.S. Saron, J.
1. This order will dispose of F.A.O. No,948 of 1984 and Cross-objection No. 49-CII of 1997, filed in the said appeal. In the appeal under Section 110-D of the Motor Vehicles Act, 1939 (Act-for short) the appellant New India Insurance Company Limited assails the Award dated 17.8.1984 passed by the Motor Accident Claims Tribunal (Tribunal-for short) Ambala whereby the claim petition of the claimants for the demise of Lt. Anil Kumar was accepted and a sum of Rs. 2,20,320/- was awarded. It was directed that the said amount shall be paid by all the respondents before the Tribunal jointly and severally and shall carry interest at the rate of 10% per annum from the date of filing the petition viz 30.9.1982 till realisation of the amount. In the cross-objection respondents No. 1 to 3 have prayed for modification of the said award by enhancing the amount of compensation awarded.
2. Lt. Anil Kumar of 22 Sikh Regiment died in a motor vehicular accident which occurred on 17.7.1982 near Saket, within the jurisdiction of Police-Station, Chandi-Mandir, District Panchkula. The deceased Lt. Anil Kumar was sitting on the pillion of the motor cycle driven by Lt. Surinder Jhakhar. The said motor cycle was hit from the opposite side by an Ambassador car No. HPZ-71 which had come towards the wrong side of the road and was being driven by Darshan Singh (respondent No. 4). As a result of the collision injuries were sustained by both the occupants of the motor cycle. They were taken to the hospital and Lt. Anil Kumar succumbed to his injuries. The parents of the deceased and his minor brother filed a claim petition claiming compensation on account of the demise of Lt. Ail Kumar to the extent of Rs. 3,00,000/-. The Ambassador car was owned by Jagjit Singh (respondent No. 5) and was insured with the appellant New India Insurance Company.
3. The Tribunal after considering the evidence on record came to the conclusion that the death of Lt. Anil Kumar was caused because of the rash and negligent driving of the Ambassador car No. HPZ-71 driven by Darshan Singh (respondent No. 4). It was, however held that the claim of the minor younger brother of the deceased was not maintainable and only the parents of the deceased i.e. respondents No. 1 and 2 were entitled to compensation. Besides, on the basis of the earning of the deceased and keeping in view his age which was less than 24 years a multiplier of 18 was applied. The compensation payable for the demise was assessed by the Tribunal to the extent of Rs. 2,30,320/-. Besides, interest at the rate of 10% per annum was awarded from the date of filling the petition viz 30.9.1982 till realization of the amount. The said order of the Tribunal, as already noticed, is assailed in this appeal.
4. At the time of admission of the appeal on 29.11.1984 the execution of the award over and above Rs. 50,000/- was stayed pending disposal of the appeal.
5. I have heard Shri L.M.Suri, Senior Advocate, appearing with Shri Neeraj Khanna, Advocate for the appellant and Shri Rameshwar Malik, Advocate, appearing for the claimants-respondents and with their assistance perused the records of the case.
6. Learned senior counsel appearing for the appellant has contended that the Tribunal has misinterpreted the terms of the insurance policy Ex.R1 in terms of which the liability of the appellant Insurance Company was only to the extent of Rs. 50,000/-. It is contended that in terms of the insurance policy Ex.Rl the limits of liability have been indicated and the Company's liability under Section II-l(i) and (ii) in respect of any one accident and in respect of any claim or series of claim arising out of one event is Rs.50,000/-. Besides, in terms of Section 95(2)(1) of the Act the liability of the appellant is only Rs. 50,000/- as the vehicle involved was a taxi meant for carrying passengers. These material provisions of the insurance policy of the Act, have not been considered by the Tribunal which has vitiated the impugned award and the award beyond Rs. 50,000/- is liable to be set aside.
7. The learned counsel appearing for the claimant-respondents No. 1 to 3, however, has contended that the case set up by the appellant insurance company is devoid of any merit and even if the liability of the insurance company under the policy is limited to the extent of Rs. 50,000/- it is the duty of the insurer to satisfy the judgment against the person insured. It may, however, recover from the insured the payment made in excess of its liability. In support of his contention, the learned counsel has placed reliance on the judgment of the Supreme Court in Oriental Insurance Company Ltd v. Cheruvak-kara Nafeesu, (2001-1)127 P.L.R. 422 (S.C.).
8. It is also contended by the learned counsel for the claimants that the cross-objections are liable to be accepted and the claimants are entitled for higher compensation. Therefore, the award under appeal is liable to be modified and the claimants are entitled for higher compensation. It is contended that the Tribunal gravely erred in applying 1/3rd deduction while assessing the dependency. In the Armed Forces the daily requirements are provided for by the Army and, therefore, reducing 1/3rd of the salary of the deceased to be an amount spent on himself is without any basis. It is also contended that a higher multiplier was liable to be applied and even the interest granted is liable to be increased to atleast 18% per annum.
9. In response, the learned senior counsel for the insurance company states that the contentions as urged by the learned counsel for the cross-objectors-claimants are without any merit. In fact the Tribunal has already awarded higher compensation for the demise of Lt. Anil Kumar. Therefore, the cross-objections merit dismissal.
10. After considering the contentions of the respective counsel for the parties it may be noticed that the contention as urged by the learned senior counsel appearing for the appellant insurance company has been considered by the Supreme Court in the case of Oriental Insurance Co. Ltd. v. Cheruvakkara Nafeesu (supra). The question considered in the said case was as to what is the extent of liability of an insurance company towards third party as per Section 95(1)(b) of the Act and what are the rights in case of payment of an amount in excess of the limit of the liability under the insurance policy vis-a-vis the insured. In the said case in terms of the insurance policy the limit of the Company's liability in respect of any one claim or series of claims arising out of one event was Rs. 50,000/- only. The Insurance Policy Ex.R1, in the case in hand, was issued on 22.3.1982 i.e., before the new Motor Vehicles Act came into force on 1.7.1989. In the case before the Supreme Court also the position was the same. After considering the provisions of Section 96(1) of the Act and the terms of the policy, it was held that a co-joint reading of all the terms of the policy of Insurance executed in the said case indicated that the total extent of liability of the insurance policy was Rs. 50,000/- but the company was liable to indemnify the insured against all sums including claimants costs and expenses which the insured becomes liable to pay and nothing in the policy affects the right of any person indemnified by the policy or any other person to recover an amount under or by virtue of the provisions of Section 96 of the Act. However, the insured was liable to repay to the Company all the sums payable by the company which the company would not have been liable to pay but for the condition of liability relating to third party. After considering the case law, it was held that despite holding the liability under the policy was limited to the extent of Rs. 50,000/- the Claim Tribunal and the High Court were not unjustified in directing the insurance company to pay whole of the awarded amount to the claimants on the basis of the contractual obligations contained in Clauses relating to the liability of third parties and avoidance clause. However, it was held that the claims Tribunal and the High Court were not justified in rejecting the right of the insurance company to recover from the insured the excess amount paid in execution and discharge of the award of the Tribunal. It was held that the Insurance Company was liable to pay the entire award amount to the claimants and upon making such payment it can recover the excess amount from the insured by executing the award against insured to the extent of such excess as per Section 174 of the Motor Vehicles Act, 1988.
11. In the case in hand, the insurance policy Ex.R1 restricts the liability of the appellant insurance company to the extent of Rs. 50,000/-. However, this would not mean that the appellant insurance company is not to indemnify the insured in respect of the excess amount payable beyond the liability of the appellant. In terms of the above dictum of the Supreme Court, the appeal of the Insurance Company to recover the excess beyond its liability from the insured.
12. Insofar as the cross-objections filed by the claimants are concerned, the learned counsel for the claimants-respondents, has not been able to show as to how the deceased was not spending 1/3rd of his income on himself. Merely because all facilities are provided for by the Armed Forces, it would not mean that the deceased was not spending anything on himself. The Tribunal assessed the total annual income of the deceased on the basis of evidence on the record to the extent of Rs. 18360/-. To this amount, deduction to the extent of 1/3rd was made taking it to be the amount that the deceased must be spending on himself. In this manner, the annual amount of dependency was worked out to Rs. 12240/-. The deceased was less than 24 years of age and the multiplier of 18 was applied. Besides, interest at the rate of 10% per annum from the date of filing of the petition viz 30.9.1982 till the realisation of the amount was awarded. In the facts and circumstances on the basis of the material on record the Tribunal has correctly awarded the amount of compensation. The multiplier of 18 is reasonable and the award of interest at the rate of 10% per annum from the date of filing of petition till realisation is justified. Therefore, in the circumstances, there is no case for enhancement of the amount of compensation and the cross-objections filed by the claimants-respondents are dismissed.
13. In the circumstances, the appeal of the appellant-insurance company is dismissed and it is directed that it shall pay the entire award amount to the claimants-respondents No. 1 and 2 and upon making such payment, the appellant insurance company would be at liberty to recover the excess amount from the insured by executing this award against the insured to the extent of such excess as per Section 174 of the Motor Vehicles Act, 1988. In respect of the amount payable, the executing court shall consider the liability of the insurance company vis-a-vis the insured independently uninfluenced by any observation made therein. The cross objections of the claimants-respondents are dismissed.
No costs.