Gujarat High Court
Future Generally India Insurance ... vs Dr. Shashinath Mahendra Jha on 14 July, 2023
Author: Gita Gopi
Bench: Gita Gopi
NEUTRAL CITATION
C/FA/1615/2023 JUDGMENT DATED: 14/07/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1615 of 2023
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2023
In
R/FIRST APPEAL NO. 1615 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE GITA GOPI
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1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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FUTURE GENERALLY INDIA INSURANCE COMPANY LIMITED
Versus
DR. SHASHINATH MAHENDRA JHA
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Appearance:
MR CHIRAYU A MEHTA(3256) for the Appellant(s) No. 1
for the Defendant(s) No. 2,3
MR A R DWIVEDI(11319) for the Defendant(s) No. 1
MR R G DWIVEDI(6601) for the Defendant(s) No. 1
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CORAM:HONOURABLE MS. JUSTICE GITA GOPI
Date : 14/07/2023
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NEUTRAL CITATION
C/FA/1615/2023 JUDGMENT DATED: 14/07/2023
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ORAL JUDGMENT
1. The Future Generally India Insurance Co. Ltd., aggrieved by the judgment and award dated 12.10.2022 passed by Motor Accident Claims Tribunal, Anand in M.A.C.P. No.579 of 2013, has preferred this First Appeal, challenging the same on the ground inter alia raised that the claimant was already indemnified by Oriental Insurance Company under Own Damage Claim and was paid Rs.2,89,972/-, out of the total expense incurred, which is stated to be Rs.3,34,372/- by the claimant, who had preferred the claim petition under section 166 of Motor Vehicles Act, 1988 (Hereinafter referred to as the 'M.V. Act', for short) for the damage, which had occurred to his Car No.GJ-23-H-1264.
2. The claimant was driving his Car No.GJ- 23-H-1264 on 08.09.2010 going from Bhavnagar towards Mahuva, and suddenly driver of the Truck Page 2 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined No.GJ-01-BY-5538 ahead of him, applied brakes without any tail light, brake light or any signal, and as per the claimant, owing to the full beam headlight of the vehicle coming from the opposite direction, he could not see that the driver of Truck No.GJ-01-BY-5538, ahead of him, applied sudden brake and had stopped his truck; as a result his Car dashed at the rear side of the Truck, and, hence, vehicular accident took place, and the claimant sustained grievous injuries and was taken to Hanumant Hospital at Mahuva for treatment.
2.1 The claimant in his affidavit under Order 18 Rule 4 of the Code of Civil Procedure, at Exh.28, had deposed that at the time of accident, he was earning Rs.25,000/- per month by practicing as a Doctor and was also in the business of Ayurvedic Products. The learned Tribunal while considering the quantum of compensation had observed that the claimant was Page 3 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined hale and healthy at the time of accident, and nothing was produced to show any injuries sustained by him in the vehicular accident. The learned Tribunal was also of the view that, if the applicant himself is a Doctor by profession, then certainly he would have the medical papers suggesting the injuries, and as no documents have been produced, the learned Tribunal did not believe of any personal injury sustained by the applicant in the vehicular accident. In absence of any injury, the learned Tribunal concluded that the applicant was not entitled for any compensation under section 166 of the M.V. Act. No such ground has been raised in the present appeal against dismissal of the plea for personal injury. Thus, this Court has no reason to enter into the conclusion arrived at by the learned Tribunal.
2.2 However, in addition to the claim of personal injury, the applicant had also moved the Page 4 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined Court for damage caused to his vehicle, and, for that a prayer was made to compensate him to the extent of Rs.3,50,000/-. In the deposition, the claimant had stated that in the vehicular accident, his car was badly damaged, and he had incurred expense of Rs.3,18,752/- for repairing the car. The panchnama was produced at Exh.35, which reflected that the Car being Registration No.GJ-23-H-1264 was damaged from the front side; the Engine of the vehicle was also badly affected. The front side wheels were broken and there were cracks in the engine. In addition to that, rear glass of the vehicle was also broken and the interior of the car was damaged. The estimated cost of the car repairing was to the tune of Rs.4,36,778/-. The document produced on record shows that actual expense incurred for repairing the car, was Rs.3,34,372/-. 2.3 The learned Tribunal had found that the Insurance Company of the car had already Page 5 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined indemnified the damages by paying Rs.2,89,972/-. While considering the judgment of this Court in case of Gujarat State Road Transport Corporation Vs. Hargovinddas R.Modi, reported in III (2007) ACC 596, the learned Tribunal was of the view that the amount already received for the damage of the car from his Insurance Company cannot be deducted as collateral benefit, which insured was entitled to receive for his prudent act, and the tortfeasor cannot take advantage of such benefit received. Hence, the Tribunal concluded that the applicant was entitled for the entire amount of expenses incurred due to damage in the vehicular accident without any deduction; thus, made the applicant entitled to receive the amount of Rs.3,44,372/- at the rate of 9% from the date of the claim petition.
2.4 The Insurance Company having been aggrieved by the said order, raised the contention that though in the Own Damage Claim, Page 6 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined the Insurance Company of the Car had already paid the amount of Rs.2,89,972/- settling the claim to the total expense of Rs.3,34,372/-. Still the claim petition was partly allowed permitting the claimant to recover Rs.3,34,372/- with 9% interest from the opponent nos.1 to 3 jointly and severally.
3. Mr. Chirayu A.Mehta, learned advocate for the appellant submitted that the order passed by the Tribunal to pay the expense amount would lead to a situation, where the claimant would receive an amount double the value of his car, and further stated that the Tribunal has failed in appreciating the order passed in Gujarat State Road Transport Corporation Vs. Hargovinddas R.Modi (supra).
3.1 Advocate Mr.Chirayu Mehta submitted that the judgment of larger bench of this Court in Upendra Mangaldas Modi Vs. Manji Ranchhodbhai Page 7 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined Patel and Ors., rendered in First Appeal No.1482 of 1990 on 04.09.2015, is a case, where the issue was referred by the single bench, and on consideration, the larger bench was of the view that the claimant cannot have a windfall and he cannot claim from both the Insurance Companies, he has to choose from amongst both the Insrance Companies, and if there is deficit in the amount, he can claim it from the other Insurance Company. If the other Insurance Company pays such deficit amount, then that Insurance Company can recover it from the Insurance Company of the tortfeasor, and in view of that clarification, it was found that the decision in case of Gujarat State Road Transport Corporation Vs. Hargovinddas R.Modi (supra), was not required to be reconsidered; hence, Advocate Mr. Chirayu Mehta submits that, the larger bench quoted the observation of the learned single Judge made in para-15 of judgment of Hargovinddas R.Modi (supra), and did not Page 8 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined require the decision of learned single judge rendered in First Appeal No.1583 of 1983 and other connected matters to be reconsidered; and accordingly the larger bench answered, the matter to be placed before the learned single Judge for deciding the same on merits.
3.2 Paragraph-15 of G.S.R.T.C. Vs. Hargovind Das R.Modi (supra) decided by the learned single Judge, is reproduced hereinbelow:
"15. The net result is that First Appeal No. 1583 of 1983, filed by G.S.R.T.C., is dismissed. First Appeal No. 1584 of 1983 filed by the Insurance Company against the award made in MACP No. 126/1980 also stands dismissed. First Appeal No. 1426 of 1983 which is filed by M/s. Deepak Transport owner of the motor tanker is partly allowed and it shall be entitled to recover additional sum of Rs.16,000=00 which has been wrongly deducted by the Tribunal. First Appeal no. 2025 of Page 9 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined 1983 filed by the G.S.R.T.C., stands dismissed and First Appeal No. 1896 of 1983 filed by the driver of the S.T. Bus is also dismissed. In the facts and circumstances of the case, there is no order of costs."
3.3 After having considered the Full Bench view, the learned single Judge on 30.03.2016, while observing in para-5, disposed the matter accordingly. Para-5 of the said order reads as under:
"5. In view of the above, the submission of learned advocate Mr.Shah cannot be countenanced. The amount of claim as per the bills comes to a sum of Rs.48,000/- which would mean that the claimant would be entitled to claim Rs.24,000/- from the insurance company of the offending vehicle whose driver was held to be negligent by the Tribunal. It is submitted that the bills for Rs.48,000/- were not exhibited and the Tribunal has held Page 10 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined that he claims more than that of his income and therefore he cannot claim more amount then what was awarded to him by his own insurance company. The bills may not be there but it is pointed out by learned advocate Davawala that some receipts which is at Exh.102 to 104 shows that the truck remain idle for 25 days and there is estimated of Rs.48,000/- even by the surveyor, and therefore, it would not in the fitness of things to remand the matter to the Tribunal instead the amount is ordered to be paid and even he has produced the bills at Exh.72 and 85. Thus when his insurance company has paid him less, he was not entitled to get more money and hence he was awarded Rs.24,000/- with interest at the rate of 6% from 1984 till 1990 as it was prevalent in those days and not 12% and thereafter also from 1990 the amount would carry 6 % interest and this order is passed in peculiar facts and circumstances of the case and the same shall not be treated as precedent."Page 11 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023
NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined 3.4 It is to be noted that the learned single Judge in the order dated 30.03.2016, had considered the aspect, that the truck has remained idle for 25 days, and has ordered to pay Rs.48,000/- as estimated by the surveyor for loss of those period. Further observed that the claimant has produced bills at Exhibits-72 and 85, and, thus having found that his Insurance Company has paid in less, he was not entitled to get more amount, hence, was awarded Rs.24,000/- from the insurance company of the offending vehicle whose driver was held to be negligent by the Tribunal.
3.5 The case of Economic Transport Organization, Delhi Vs. Charan Spinning Mills Pvt. Ltd. reported in (2010) 4 SCC 114, was referred before the Full Bench in Upendra Mangaldas Modi Vs. Manji Ranchhodbhai Patel and Ors. (supra), and relied on paragraphs Paras 28, Page 12 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined 28.1, 30 and 35, which are reproduced herein below for ready reference:
"28. We may, therefore, classify subrogation under three broad categories:
(i) subrogation by equitable
assignment;
(ii) subrogation by contract; and
(iii) subrogation-cum-assignment.
28.1 In the first category, the subrogation is not evidenced by any document, but is based on the insurance policy and the receipt issued by the assured acknowledging the full settlement of the claim relating to the loss. Where the insurer has reimbursed the entire loss incurred by the assured, it can sue in the name of the assured for the amount paid by it to the assured. But where the insurer has reimbursed only a part of the loss, in settling the insurance claim, the insurer has to wait for the assured to sue and recover compensation from Page 13 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined the wrongdoer; and when the assured recovers compensation, the assured is entitled to first appropriate the same towards the balance of his loss (which was not received from the insurer) so that he gets full reimbursement of his loss and the cost, if any, incurred by him for such recovery. The insurer will be entitled only to whatever balance remaining, for reimbursement of what it paid to the assured.
30. The assured has no right to deny the equitable right of subrogation of the insurer in accordance with law, even whether there is no writing to support it. But the assured whose claim is settled by the insurer, only in respect of a part of the loss may insist that when compensation is recovered from the wrongdoer he will first appropriate the same, to recover the balance of his loss. The assured can also refuse to execute a subrogation-cum-assignment which has the effect of taking away his right to receive the balance of the loss. But once a subrogation is reduced to Page 14 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined writing, the rights inter se between the assured and insurer will be regulated by the terms agreed, which is a matter of negotiation between the assured and insurer.
35. The principles relating to subrogation can therefore be summarized thus :
(i) Equitable right of subrogation arises when the insurer settles the claim of the assured, for the entire loss. When there is an equitable subrogation in favour of the insurer, the insurer is allowed to stand in the shoes of the assured and enforce the rights of the assured against the wrong-doer.
(ii) Subrogation does not terminate nor puts an end to the right of the assured to sue the wrong-doer and recover the damages for the loss.
Subrogation only entitles the insurer to receive back the amount paid to the assured, in terms of the principles of subrogation.
(iii) Where the assured executes a Letter of Subrogation, reducing the Page 15 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined terms of subrogation, the rights of the insurer vis-a-vis the assured will be governed by the terms of the Letter of Subrogation.
(iv) A subrogation enables the
insurer to exercise the rights of
the assured against third parties in the name of the assured.
Consequently, any plaint, complaint or petition for recovery of compensation can be filed in the name of the assured, or by the assured represented by the insurer as subrogee-cum-attorney, or by the assured and the insurer as co-
plaintiffs or co-complainants.
(v) Where the assured executed a subrogation-cum-assignment in favour of the insurer (as contrasted from a subrogation), the assured is left with no right or interest.
Consequently, the assured will no
longer be entitled to sue the
wrongdoer on its own account and for its own benefit. But as the instrument is a subrogation-cum-
assignment, and not a mere
assignment, the insurer has the
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choice of suing in its own name, or in the name of the assured, if the instrument so provides. The insured becomes entitled to the entire amount recovered from the wrong- doer, that is, not only the amount that the insured had paid to the assured, but also any amount received in excess of what was paid by it to the assured, if the instrument so provides."
4. Mr. Dwivedi, learned advocate for the respondent no.1 stated that, the Division Bench in the judgment of G.S.R.T.C. Vs. Hargovind Das R.Modi has also referred the judgment of Mrs. Hellen C. Rebello & Ors. Vs. Maharashtra State Road Transport Corpn., reported in (1999) 1 SCC 90, wherein the case was considered about the life insurance amount received by the heirs on account of victim's death. Mr. Dwivedi, thus, stated that the amount received by a person of the Provident Fund, which is a deferred payment out of the contribution made by an employee Page 17 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined during the tenure of his service, such employee or his heirs are entitled to receive this amount irrespective of the accidental death. The amount as secured is certain to be received, while the amount under Motor Vehicle Act is uncertain and is receivable only on the happening of the event i.e. the accident, and in the same line, he stated that, as referred in Mrs. Hellen C. Rebello case (supra), family pension is also earned by an employee for the benefit of his family in the form of his contribution in the service in terms of service conditions receivable by the heirs after his death; the heirs would certainly receive the family pension, even otherwise than the accidental death. There is no co-relation between the two. Similarly in Life Insurance Policy either the assured or the heirs of the assured on account of contract with the insurer for which the assured contributes in the form of premium would be receivable by the Page 18 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined assured if he lives till the maturity after paying all the premiums, while in case of death, the insurer indemnifies to pay the heirs in terms of the contract for the premium paid, and, this amount is receivable by the claimant not on account of accidental death, but otherwise on the insurer death. Death is the only step or contingency in terms of the contract to receive the amount; thus, Mr. Dwivedi stated that in this present case too, when the applicant had made a contract with the Insurance Company and pays premium covering own damage of the car, that contract would be independent of any damage caused to the vehicle by way of vehicular accident. The claimant would be entitled to receive the money independent of his own damage contract.
4.1 The reference was made of a judgment of Delhi High Court in case of Dr. A.C. Mehra Vs. Behari Lal and Another, reported in I (1996) ACC Page 19 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined
657. In the said case, it was held that the tortfeasor cannot take advantage of the privity of contract with the 3rd party i.e. Insurance Company. It was held that the payment by the Insurance Company to M/s. Saran Motors was not on account of the accident, but on account of contract entered into by the appellant with the Insurance Company. Therefore, it cannot be said that by claiming damages under the Act because of the rash and negligent driving of the driver of DTC bus and damaging the car of the appellant, he would be debarred from claiming compensation under the Act, nor claiming such a compensation under the Act would amount to unjust enrichment. A plea was taken that the Insurance Company paid cost of repair to repairer i.e. Saran Motors (P) Ltd. The Tribunal awarded compensation deducting the cost of repair paid to the repairer. The Insurance Company contended that the right of the claimant stood subrogated. It was noted that Page 20 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined there was no agreement of right of subrogation, and the fact of subrogation has not been proved. The point that was decided was, doctrine of subrogation, which does not apply automatically, and would come into operation only when there has been an express agreement. It was noted that, tortfeasors i.e. drivers and owners of the offending vehicle cannot take advantage of the privity of contract between the Insurance Company and owners of the vehicles, comprehensively insured and claim, set off of the amount paid by the Insurance Company towards repair.
5. In the present case, in the cross- examination, the Doctor has stated of having continued in his practice of medicine. He was not compensated by the Tribunal, as the Doctor could not prove any personal injury because of the vehicular accident. It is not the case of the Doctor that he had suffered any loss because of Page 21 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined non-use of the vehicle. In Economic Transport Organization, Delhi Vs. Charan Spinning Mills Pvt. Ltd. (Supra), the doctrine of subrogation was dealt with in para -15, which reads as under:
"15. A contract of insurance is a contract of indemnity. The loss/damage to the goods covered by a policy of insurance, may be caused either due to an act for which the owner (assured) may not have a remedy against any third party (as for example when the loss is on account of an act of God) or due to a wrongful act of a third party, for which he may have a remedy against such third party (as for example where the loss is on account of negligence of the third party). In both cases, the assured can obtain reimbursement of the loss, from the insurer. In the first case, neither the assured, nor the insurer can make any claim against any third party. But where the damage is on account of negligence of a third party, the assured will have the Page 22 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined right to sue the wrongdoer for damages; and where the assured has obtained the value of the goods lost from the insurer in pursuance of the contract of insurance, the law of insurance recognizes as an equitable corollary of the principle of indemnity that the rights and remedies of the assured against the wrong-doer stand transferred to and vested in the insurer."
5.1 Further was noted in paragraph no.16 as under:
"16. The equitable assignment of the rights and remedies of the assured in favour of the insurer, implied in a contract of indemnity, known as `subrogation', is based on two basic principles of equity :
(a) No tort-feasor should escape liability for his wrong;
(b) No unjust enrichment for the injured, by recovery of compensation for the same loss, from more than one source.
The doctrine of subrogation will Page 23 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined thus enable the insurer, to step into the shoes of the assured, and enforce the rights and remedies available to the assured."
5.2 Thus, it was noted that the doctrine of subrogation is based on principle of equity and there cannot be any unjust enrichment for the recovery of the compensation for the same loss from more than one source. The Apex Court, thus, observed that the subrogation may be classified under three sub-categories being (i) subrogation by equitable assignment (ii) subrogation by contract, and (iii) subrogation-cum-assignment. 5.3 The principle of subrogation is on the basis of equity that no tortfeasor should escape from liability for his wrong and at the same time there could be no unjust enrichment for the injured for recovery of the compensation for the same loss from more than one source. In the case of Reliance General Insurance Company Ltd. Vs. Page 24 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined Shashi Sharma and Ors., reported in (2016) 9 SCC 627, it was held that the general principals under common law for estimating damages cannot be applicable for determination of compensation under Motor Vehicles Act; 'Pecuniary advantage' from whatever source must correlate to injury or death arising out of motor vehicle accident. The principles expounded in Mrs. Hellen C. Rebello case (supra) is that the application of general principles under the common law to estimate damages cannot be invoked for computing compensation under the Motor Vehicle Act. The two cardinal principles run through the provisions of Motor Vehicles Act, 1988 in the matter of determination of compensation; firstly the measure of compensation must be just and adequate, and secondly no double benefit should be passed on to the claimants in matter of award of compensation. It was held that word "just" means fair, adequate and reasonable. The Latin Page 25 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined word "justus" connoting right and fair, correlate with the expression "just" to denote that the amount must be equitable, fair, reasonable and not arbitrary. The compensation, as has been held in the judgment of Reliance General Insurance Company Ltd. Vs. Shashi Sharma and Ors. (supra), is not intended to be bonanza, largesse or source of profit.
5.4 The Division Bench of this Court in United India Insurance Company Ltd. Vs. Hasumatiben Kanubhai Patel, in First Appeal No.1500 of 2005, decided on 06.02.2015, where it was the case of appellant that in the unfortunate accident, his motor car was badly damaged and the same was unrepairable. The car was inspected by "Works Manager of United Motors (India) Ltd. Bombay, who estimated Rs.20 lacs for labours charges, repairs and spare parts etc. The owner of the motor car claimed Rs.20 lacs towards compensation for the damage caused to the Page 26 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined Mercedes Car. The Division Bench while considering the submission and having referred to the judgments of (1) Gujarat State Road Transport Corporation Vs. Hargovindas R.Modi and Ors., reported in 2007 (1) GLR 369, (2) Satishkumar Rasiklal Doctor Vs. Baldevbhai Chhaganbhai Thakore and Ors., reported in 2007 (1) GCD 727 and (3) Oriental Insurance Co. Vs. K.P. Kapur, reported in 1997 (1) ACC 138, observing the fact that the owner of the vehicle had already received Rs.4,45,000/- towards own damage from the Insurance Company, came to the conclusion that the owner of the car would, therefore, be entitled to receive the amount after deducting Rs.4,45,000/- for the risk covered under the insurance policy for own damage of the car. The market value of the motor car in question on the date of accident was assessed as Rs.12,50,000/- and deducting Rs.70,000/- towards salvage of the car, it was noted that the amount would come to Page 27 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined Rs.11,80,000/-, and that amount was made receivable on deduction of the amount received under own damage of the car. The Division Bench while passing the order had made the observation in paragraph no. 8.3, which reads as under:
"8.3. Further the claimant should not be permitted to earn profit out of accident which he met. Whatever expenses are incurred, he is entitled to get reimburse but law provides that he can get reimbursement from two sources resulting in undue enrichment. As observed herein above, if the contention on behalf of the original claimant is accepted, in that case, as observed herein above, owner of the vehicle will get more amount then the actual market value / value of the motor car and to that extent the claimant shall earn profit, which is not permissible. Therefore, on the ground of unjust enrichment and / or double benefit the amount of Rs.4,45,000/- which the owner of the Car received from her Insurance Page 28 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined Company towards "own damage" to the car is required to be deducted, while awarding the compensation towards damage caused to the motor car from the appellant."
5.5 In G.S.R.T.C. Vs. Hargovind Das R.Modi (supra), the controversy which was raised was regarding loss of income that could have been earned or generated from the use of property, and the loss of business income was direct and proximate result of act of tortfeasor, and when the vehicle remained idle for a particular period on account of damage caused to it in a vehicular accident, and the loss of earning for that period was required to be compensated. It was held that even when there is loss of business income, which is damage to property, claims tribunal has jurisdiction to entertain the claim and award compensation. In Hargovind Das R.Modi (supra), learned single Judge of this Court had referred the case of Union of India Vs. Ratan Lal, Page 29 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined reported in 1998 A.C.J. 992, of Rajasthan High Court and expressed agreement to the views therein to consider that the Motor Vehicles Act is a social legislation for the benefit of public at large and the sections therefore should be interpreted in a more wider and comprehensive manner so as to give relief to the victims, not to debar them. The expression "damage to the property" carries wide amplitude. The future earning cannot be said to be an ascertained sum, but it is property in future which the owner of the damaged vehicle would have earned out of his vehicle, if his recurring income has been lost on account of this damage, and that could not be deprived to owner of the vehicle. 5.6 Further, the reference was made of Madhya Pradesh High Court in the case of Rajkumar Vs. Mahendra Singh, reported in 1985 A.C.J. 103, wherein it was held that the claim Tribunal is empowered to award compensation for death or Page 30 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined bodily injury or damage to any property. It was decided that loss of business on account of vehicle remaining idle during repairs is a damage or loss to the owner and Claims Tribunal has no jurisdiction pertaining to such loss. The single bench disagreeing with the view, hold the opinion that loss of earning caused due to vehicle remaining idle for repairing is also damage to property, and claim to such loss stands covered in third category namely, damage to property; and it is only the Claims Tribunal which has jurisdiction and not the Civil Court, since bar is imposed by the Act.
5.7 In the case of General Manager, Kerala State Road Transport Corporation Vs. Saradamma, reported in I (1998) ACC 255, the Kerala High Court had categorically observed of two kind of damages, general damages and special damages, and to that single bench of this Court in Hargovind Das R.Modi (supra) was not in agreement, since Page 31 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined the disagreement as emerged was noted in the following terms:
"(1) Though provision is for entertaining claims for compensation in respect of accidents death of, or bodily injury to, persons arising out of the use of motor vehicles, the admitted legal position is that not only claim for non-pecuniary loss can be entertained and adjudicated upon by the Claims Tribunal but even the claim for specifically proved pecuniary losses falling under the head of special damages can be adjudicated upon and granted by the Tribunal. In fact damage to the property will cause pecuniary loss alone i.e., (a) for carrying out repairs and (b) in a given case loss of earning since vehicle remained idle for repairs. (2) Even assuming that the Section empowers the Claims Tribunal to adjudicate upon claim in respect to damage to the property alone, the loss of earning due to non use of Page 32 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined vehicle is damage to the property of person/third party and the claims Tribunal has jurisdiction to entertain and decide such claim."
6. Advocate Mr. Dwivedi has referred to paragraph-5 of the judgment of G.S.R.T.C. Vs. Hargovind Das R.Modi (supra), to state that the amount, which had been given for the loss of business income, was under a separate head, and the amount which had been paid by the applicant as a premium to the Insurance Company was to ensure the coverage, and the amount which the applicant has received from the Insurance Company is to the own damage to the vehicle against such premium, which had been paid for the coverage, and tortfeasor cannot take advantage of such benefit received by the assured.
7. Indisputably, the tortfeasor cannot be allowed to escape liability for his wrong, but at the same time there can be no unjust enrichment Page 33 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined by recovery of compensation for the same loss, from more than one source. The fact remains to be answered, if, in a case one receives the money from the Insurance Company under Own Damage Policy, whether he on his own behalf, as a claimant, can claim for the amount which he has received from his own Insurance Company, as he has been sufficiently compensated, and, if at all he claims for the total damage, then could he do so only on behalf of the Insurance Company from whom he had received the benefit. On having received the money from his Insurance Company, can he continue the litigation for the benefit of his Insurance Company, under contract.
8. As per the evidence on record, the actual expense, as per the document produced at Exhibits 43, 44 and 45 for repairing of the car, is Rs.3,34,372/-. Advocate Mr. Chirayu Mehta for the appellant Insurance Company has referred to a certified copy of the actual payment by the Page 34 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined Insurance Company under Own Damage Policy, which as referred, is Rs.1,28,000/-, as reflected in Exhibit-50.
8.1 The insurer, if settles the claim of the assured for the entire loss, then equitable right of subrogation arises and in such case of subrogation by equitable assignment, the insurer would be allowed to stand in the shoes of the assured and can enforce the right of the assured against wrongdoer. Such subrogation is based on the Insurance Policy and the receipt issued by the assured acknowledging the full settlement of the claim relating to the loss. Subrogation does not terminate the right of the assured to sue the wrongdoer, nor that puts an end to recover the damages for the loss. Under the principle of subrogation, insurer would be entitled to receive the amount paid to the assured, and when insurer pays the entire loss to the assured, then the insurer can sue in the name of assured for the Page 35 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined amount paid to the assured.
8.2 But when assured executes a Letter of subrogation by reducing the terms in writing, which can be termed as subrogation by contract, the rights of the insurer qua the assured will be governed by the terms of the Letters of subrogation. Thus, subrogation enables the insurer to exercise the right of the assured against 3rd party in the name of the assured, and, hence the plaint for recovery of the compensation can be filed in the name of the assured or the assured represented by the insurer as subrogee- cum-attorney or the petition can be filed jointly by the assured and the insurer and insurer becomes entitled to recover sum not exceeding what was paid by it under the contract of insurance by suing in the name of the assured. 8.2.1 However, in a case where the letter of subrogation is along with assignment i.e. Page 36 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined subrogation-cum-assignment, the insurer shall have right to retain entire amount recovered, even if it is more than the amount paid to the assured, and in such case the assured is left with no right or interest, and the assured would no longer be entitled to sue the wrongdoer on its own account or for its benefit.
8.3 Here, in the present case, no such evidence has been placed on record of any Letter of Subrogation or subrogation-cum-assignment. The claimant has not pleaded, that the claim petition was pursued for and on behalf of the insurer on the basis of Letter of Subrogation. The claimant had prayed compensation for an amount of Rs.3,50,000/- for the damage caused to his vehicle, in his oral evidence he stated that the repairing cost of the car is to the extent of Rs.3,18,752/-, while the estimated cost of repairing was Rs.4,36,778/-. The learned Tribunal while observing the document at Exhibits 43, 44 Page 37 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined and 45 found that total expense incurred is Rs.3,34,372/-. The case was registered on the ground that the Insurance Company of the said car had indemnified the damages and paid him Rs.2,89,972/-. The learned Tribunal placing reliance on the judgment of Gujarat State Road Transport Corporation Vs. Hargovinddas R.Modi (supra), had noted that the amount, which has already been received for the damages of the car from his Insurance Company, cannot be deducted as collateral benefit, which assured is entitled to receive for his prudent act and the tortfeasor cannot take advantage of such benefits, and, thus the learned Tribunal granted him the entire amount expended due to damage in the vehicular accident without any deduction, and the compensation award of Rs.3,34,372/- was passed. 8.4 While granting the money the learned Tribunal has relied on the judgment of Gujarat State Road Transport Corporation Vs. Hargovinddas Page 38 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined R.Modi (supra). The said case was of the loss of business, where the controversy was regarding the loss of income that could have been earned and generated from the use of the vehicle, on the ground that the loss of business income has direct and proximate result of act of tortfeasor, and when the vehicle remained idle for a particular period on account of damage caused to it in a vehicular accident, and the loss of earning for that period, as observed, was considered to be compensated, and it was held that the claim Tribunal has jurisdiction to entertain the claim on the basis of loss of business income owing to damage to properties. In the case of Hargovinddas R.Modi (supra), it was, thus, held that in entertaining claims for compensation in respect of accidental death of, or bodily injury to, person arising out of the use of motor vehicle, the legal position would be that not only the claim for non-pecuniary loss Page 39 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined can be entertained and adjudicated by the claim Tribunal but even the claim for specifically proved pecuniary losses falling under the head of special damages can be adjudicated upon, and granted by the Tribunal. It was held that damage to the property will cause pecuniary loss alone i.e. (a) for carrying out repairs and (b) loss of earning since vehicle remained idle for repairs. It was further held that even if it is assumed that sections empowers the Claims Tribunal to adjudicate upon claim in respect of damage to the property alone, the Claims Tribunal has jurisdiction to entertain and decide the claim for the loss of earning due to non-use of vehicle, as it is to be considered as damage to the property of person / 3rd party. 8.5 Here, in the instant case, it has been very categorically observed by the Tribunal that the claimant - Doctor had not received any personal injury, and his prayer for compensation Page 40 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined on the ground of personal injury was not accepted by the Tribunal concerned. Further, no case was pleaded by the claimant - Doctor, for any special damage on the ground of loss of earning because of the non-use of the vehicle. The learned Tribunal failed to appreciate this factum. Except in case of equitable suborgation by assignment where the entire loss suffered by the assured is reimburse, in absence of any contract of subrogation and/or subrogation-cum-assignment in favour of the insurer, the assured claimant would have no right or interest to claim on behalf of the Insurance Company on own damage claim basis and the assured would have no authority to sue the wrongdoer on its own account and for its own benefit, except for the difference amount not reimbursed by the insurance company under own damage claim.
9. In view of the reasons and discussions Page 41 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023 NEUTRAL CITATION C/FA/1615/2023 JUDGMENT DATED: 14/07/2023 undefined made hereinabove, and since the tortfeasor cannot run away from his own liability and as the claimant had expended Rs.3,34,372/- for repairing his car, and since the learned advocate for the Insurance Company referred to the certified copy of the actual payment made by the Insurance Company under own damage policy of Rs.1,28,000/-, on the ground that the claimant cannot be permitted for double benefit and recover from two sources, the claimant, thus, would be entitled for the difference amount, which comes to Rs.2,06,372/- at the rate of 6%. The appeal stands disposed of accordingly. Record and Proceedings, if any, be sent back to the concerned Court forthwith.
10. In view of the above, no order in Civil Application, the same stands disposed of.
(GITA GOPI,J) Pankaj Page 42 of 42 Downloaded on : Sat Sep 16 21:34:31 IST 2023