Allahabad High Court
The New India Assurance Company Ltd. vs Dr. Smt. Sunita Jain And Others on 5 March, 2022
Author: Kaushal Jayendra Thaker
Bench: Kaushal Jayendra Thaker
HIGH COURT OF JUDICATURE AT ALLAHABAD A.F.R. Reserved on 23.2.2022 Delivered on 5.3.2022 Court No. - 2 Case :- FIRST APPEAL FROM ORDER No. - 1046 of 1992 Appellant :- The New India Assurance Company Ltd. Respondent :- Dr. Smt. Sunita Jain And Others Counsel for Appellant :- Arun Kumar Shukla Counsel for Respondent :- Shashi Kant,Rama Nand Gupta,S.P. Srivastava,Vinod Sinha Hon'ble Dr. Kaushal Jayendra Thaker,J.
1. Heard Sri Arun Kumar Shukla, learned counsel for the appellant. None has appeared for the respondents.
2. By way of this appeal, the New India Assurance Co. Ltd., has challenged the judgment and award dated 19.5.1992 passed by Motor Accident Claims Tribunal/1st Additional District Judge, Kanpur Nagar in Claim Petition No.125 of 1985 awarding sum of Rs.5,60,000/- as compensation with 12% rate of interest. The deceased was survived by widow, two sons and mother. Cross objections came to be filed belatedly and, therefore, though the delay is condoned, it goes without saying that while discussing grant of interest, this aspect has to be considered as per judgment of the Apex Court in Lakkamma and Others Vs. The Regional Manager M/s United India Insurance Co. Ltd., AIR 2021 SC 3301.
3. By way of this appeal, the Insurance Company has challenged the award and the formal order mainly on two grounds namely that the vehicle was unauthorizedly taken out of the garage and driver had no driving license where it was sent for repairs by the owner of the vehicle and that the compensation awarded is on the higher side.
4. Brief facts as culled out from the record and the judgment of the Tribunal as from 1992 though the appeal is pending, record has not been summoned. The reason being it is an admitted position of fact that issue number 3 which has been decided by the Tribunal is against the principle laid down by the Apex Court way back in the year 1997 in the case of United India Insurance Co. Ltd. v. Gian Chand and others, AIR 1997 SC 3824. Recent judgment of Apex Court in Pappu and others v. Vinod Kumar Lamba and another, 2018 (1) TAC 360.
5. The factual scenario as it emerges is that the deceased met with the vehicular accident because of the negligence of the driver of the opposite vehicle. The issue of negligence decided by the Tribunal is not in dispute.
6. The Insurance Company has challenged the judgment contending that finding of the Tribunal is wrong and incorrect as the statement of Ajay Malhotra could not have been relied upon in as much as in fact for which documentary evidence was available but was not produced by the person in whose possession vehicle was and his oral statement cannot be relied upon regarding the fact that driver had driving license.
7. The Insurance Company has raised the ground that if the Ajay Malhotra had any driving license for driver cum mechanic Mahesh employed by him that should have been produced before the Tribunal to prove that fact and, therefore, the Insurance Company had no way of laying its hands on the aforesaid document.
8. It is also a ground that decision of the Supreme Court which has been cited, there was no element of driving involved and as such that ruling is not applicable to the present case. It has also been averred that the owner having specifically stated that he did not permit the garage owner to take out the vehicle on road that means the vehicle was being driven without the permission of the owner and as such the owner as well as the insurer cannot be held liable for the same.
9. It is next averred that the license being in possession of the respondent, Kanpur Tractors and their employee and the same having not been produced, the Tribunal should have drawn an adverse inference against them and the Tribunal has erred in law in holding that Mahesh, respondent, was having a valid driving license.
10. It is lastly averred that the amount awarded is highly excessive inasmuch as the income of the deceased was assessed at Rs.6,000/- per month and since he would have been spending a substantial amount for personal expenses, the sum of Rs.5,60,000/- as award is highly excessive.
11. Neither the driver of the vehicle nor the owner namely respondent No.6 filed any documentary evidence so as to bring on record that the vehicle was driven with knowledge of the original owner of the vehicle whose name appeared in the R.T.O records.
12. The judgment as far as issue no.3 is concerned, the onus is shifted on the Insurance Company so as to prove that the vehicle was being driven without license. It was denied that the tempo was ever brought to the garage by respondent No.6 rather the owner did not even file the license of the mechanic who had taken the vehicle outside. The stand of respondent No.6 has not been believed as the F.I.R., Charge-sheet and written statement of the original owner has been brought on record which proves that he had given the vehicle to respondent No.6 for repairs.
13. Sri R.K. Arora, who is the owner of the tempo has categorically mentioned that respondent No.7 was driving the tempo which was given for repairs. The owner of garage where Mahesh was employed is respondent No.6. The Insurance Company has categorically mentioned that there was breach of policy condition. Section 147 and 149 of the Motor Vehicles Act, 1988 reads 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 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"
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) 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" 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"
14. The principle enunciated by the learned Tribunal cannot be concurred by the undersigned as the driving license was not filed. Issue No.6 only states that respondent No.6 conveys that the driver had driving license but the same was not filed which is an admitted position of fact as it emerges from the finding of fact in Issue No.6. The Tribunal casts burden on the Insurance Company to prove that the driver had no driving license. This could not have been done in the absence of driving license being produced.
15. Decisions in Gian Chand and others (Supra) and Pappu & others (Supra) will apply in full force.
16. By interim relief, the Insurance Company was directed to deposit the entire amount and, therefore, this Court directs recovery of the amount from respondent Nos. 6 & 7, the tort feasors and the person where the vehicle was sent for repair. The owner of the garage, respondent No.6 would be vicariously liable. However, in view of the Division Bench Judgment in FIRST APPEAL FROM ORDER No. - 3659 of 2018 (Smt. Vimla Devi And 4 Ors. v. United India Insurance Co. Ltd. And 2 Ors) where the undersigned is also signatory will apply to the facts of this case also. The tort-feasors is the person who drove the vehicle and the owner would be vicariously liable to whom the vehicle was pledged for/given for repairs by the original owner and, therefore, the custody of the vehicle would play a vital role. The original owner had not authorized the drive to take out the vehicle as is clear from the written statement of the owner of the vehicle, hence, the respondent No.6 would be liable for the deeds of his driver. However, the Insurance Company would prove the fact that the owner was aware about the fact that driver did not have driving license. In our case, though ample opportunity is given to the owner of garage, he or his driver has not produced any license nor have they appeared before this Court.
17. This takes this Court to the cross objections filed by the claimants.
18. The fact that the deceased was a doctor by profession in the year of accident. The accident occurred when the old Act was in vogue and the litigation was filed under the Motor Vehicles Act, 1939. The claimants had claimed Rs.16,60,000/- by way of compensation. Both the Insurance Company and the claimants have challenged the award whereby the Tribunal granted sum of Rs. 5,60,000/-. The Tribunal has granted conditional interest at the rate of 12% if the Insurance Company did not deposit the said amount within one month and and directing that the interest to be paid from the date of award. This has also been challenged by claimants by filing their cross objection. While going through the decision and appended documents, it transpires that the deceased was doctor by profession and on 22.5.1985 in the afternoon when he was plying on a scooter and when he was near Medical College, Kanpur, the vehicle insured with the appellant-Insurance Company came and dashed with the said service and the deceased died after three days due to the injuries. This aspect and aspect of negligence decided by the Tribunal is not in dispute. The deceased was aged 49 years and could have served for a period of 9 years it is on this basis that multiplier of 9 has been granted by the Tribunal.
19. The Tribunal on a lump sum basis considered that Rs.12,60,000/- would be admissible and the claimants had demanded Rs.16,45,000/-. The Tribunal deducted 1/3rd towards personal expenses of the deceased and recalculated the figure to Rs.8,40,000/-. The Tribunal again deducted 1/3rd which could not have been done. The amount will have to be recalculated even if we consider the income of the deceased to be Rs.8,000/- per month, to which 25% will have to be added as per the judgment in National Insurance Co. Ltd. Vs. Pranay Sethi and others, 2017 LawSuit (SC) 1093 1/3rd has to be deducted and that is how calculation would have to be made. The direction that the amount would carry 12% rate of interest if the amount is not paid within on month, the said conditional grant of interest could not have been done even under the Act, 1939 and therefore, the same is quashed. The rate of interest even in the year 1992 could not have been granted at 12%, to that aspect, the appeal of Insurance Company requires to be allowed. The multiplier applied would be on the basis of age of deceased and consideration of multiplier on the basis of remainder of service could not have been done in light of the decision of National Insurance Co. Ltd. Vs. Pranay Sethi and others, 2017 LawSuit (SC) 1093 and Smt. Meena Pawaia & others Vs. Ashraf Ali and others 2021 0 Supreme (SC) 694, the multiplier applicable would be 13. The Tribunal has deducted the amount of pension which could not have been deducted. in view of decision in Vimal Kanwar and Others Vs. Kishore Dan and others, 2013 (3) T.A.C. 6 (S.C.). I grant Rs.20,000/- for medical expenses.
20. Hence, the total compensation payable to the appellant is computed herein below:
i. Monthly Income : Rs. 8,000/-
ii. Percentage towards future prospects : 25% of income : 2000 iii. Total income : Rs. 10000 iv. Income after deduction of 1/3rd towards personal expenses of the deceased : Rs.7,000 (rounded figure) v. Annual Loss : 84,000/-
vi. Multiplier applicable : 13 vii. Loss of dependency: Rs.10,92,000/-
viii. Amount under non pecuniary damages : 40,000/-
ix. Medical Expenses : 20,000/-
ix. Total compensation : 11,52,000/-
21. In view of the above, this appeal and the cross objections are partly allowed. The judgment and decree shall stand modified. The amount be deposited by the Insurance Company within 12 weeks from today at 6% rate of interest as repo rate are day in day out reducing and as the matter has remained pending since 1992 for no fault of the Insurance Company, the interest would be payable only for the period from date of filing of the claim petition till award as the claimants have remained unrepresented throughout except filing of claim petition. The counsel for the respondent-claimants has remained absented but as the Court on appeal has decided all the issues and granted just compensation even in absence of the counsel for the claimants, this order is passed. Recovery rights are granted to the appellant against respondent nos. 6 & 7.
22. As the record is not before this Court, the Tribunal shall disburse the amount.
Order Date :- 5.3.2022 DKS