Karnataka High Court
Smt Nithya Venkatesh @ Nithya Kalayani vs National Insurance Co Ltd on 22 December, 2020
Bench: Alok Aradhe, H T Narendra Prasad
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 22ND DAY OF DECEMBER 2020
PRESENT
THE HON'BLE MR.JUSTICE ALOK ARADHE
AND
THE HON'BLE MR.JUSTICE H.T.NARENDRA PRASAD
MFA NO.5993 OF 2015(MV)
BETWEEN:
1. Smt. Nithya Venkatesh
@ Nithya Kalayani,
Aged about 47 years.
2. Kum. Ashwini,
D/o Late. K.Venkatesh,
Aged about 25 years.
3. Kum. Ashwarya,
D/o Late. K.Venkatesh,
Aged about 21 years.
All are residing at No.123,
1st Main, 6th cross, Kanaka Layout,
Padmanabhanagar,
Bangalore-560 070.
.... Appellants
(By Sri.K.T.Gurudeva Prasad, Adv.)
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AND
1. National Insurance Co. Ltd.,
No.672, 1st Floor, 11th main,
Jayanagar 4th Block,
Bangalore-560 011,
Rep. by its Manager.
2. Arjun J.R.,
S/o Range Gowda,
No.696/40, 23rd Cross,
Krishnaiah Layout,
Ittamadu, Bangalore-560 085.
...Respondents
(By Sri. Lakshminarasappa, Adv. for
Sri. B.C.Seetharama Rao, Adv. for R1:
Vide order dated:02.01.2020
Notice to R2 is held sufficient)
This MFA is filed under Section 173(1) of MV Act
against the judgment and award dated:09.04.2015
passed in MVC No.1855/2013 on the file of the 5th
Additional Small Causes Judge, 24th ACMM, Member,
MACT, Court of Small Causes, Mayo hall Unit ,
Bengaluru, partly allowing the claim petition for
compensation and seeking enhancement of
compensation.
This MFA Coming on for admission, through
video conference, this day, H.T. Narendra Prasad J.,
delivered the following:
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JUDGMENT
This appeal under Section 173(1) of the Motor Vehicles Act, 1988 (hereinafter referred to as 'the Act', for short) has been filed by the claimants being aggrieved by the judgment dated:09.04.2015 passed by the Motor Accident Claims Tribunal.
2. Facts giving rise to the filing of the appeal briefly stated are that on 17.12.2012 at about 10-15 a.m. while the deceased K.Venkatesh, was proceeding in a motor cycle Bearing registration No. KA-05/EM- 5093 on J.C.Road and 1st Cross junction, Kalasipalyam, Bangalore, at that time, a car bearing registration No. KA-06/B-5809 which was being driven in a rash and negligent manner, dashed against the deceased. As a result of the aforesaid accident, the deceased sustained grievous injuries and 4 succumbed to the injuries in the hospital on 19.12.2012, during the course of treatment.
3. The claimants filed a petition under Section 166 of the Act on the ground that the deceased was aged about 56 years at the time of accident and was working as Window Operator and was earning Rs.45,000./- p.m. The claimants claimed compensation to the tune of Rs.50,00,000/- along with interest.
4. On service of summons, the respondent No.1 appeared through counsel and filed written statement in which the averments made in the petition were denied. It was pleaded that the petition itself is false and frivolous in the eye of law. It was further pleaded that the accident was due to the rash and negligent riding of the motorcycle by the deceased himself. It was further pleaded that driver 5 of the offending vehicle was not holding valid and effective driving licence and the owner was not holding valid FC and permit to the said vehicle, as on the date of accident and that the quantum of compensation claimed by the claimants is exorbitant. Hence, he sought for dismissal of the petition.
5. On the basis of the pleadings of the parties, the Claims Tribunal framed the issues and thereafter recorded the evidence. The claimants, in order to prove their case, examined claimant No.1 - wife of the deceased as PW-1 and one Rashmi Ranjan Panigrahi, Chief Manager of State Bank of Mysore - employer of the deceased as PW-2 and got exhibited documents namely Ex.P1 to Ex.P.19. On behalf of respondents, an officer of the insurance company was examined as RW-1 and got exhibited documents namely Ex.R1 to Ex.R.7. The Claims Tribunal, by the impugned judgment, inter alia, held that the accident 6 took place on account of rash and negligent driving of the offending vehicle by its driver, as a result of which, the deceased sustained injuries and succumbed to the injuries. The Tribunal further held that the claimants are entitled to a compensation of Rs.28,51,000/- along with interest at the rate of 6% p.a. and since there is violation of terms and conditions of the policy, directed the owner of the offending vehicle to deposit the compensation amount along with interest. Being aggrieved, this appeal has been filed.
6. The learned counsel for the claimants has raised the following contentions:
Firstly, the Tribunal is not justified in fastening the liability on the insured - owner of the offending vehicle on the ground that the offending vehicle was not having valid fitness certificate and the driver of the offending vehicle was not holding a valid and 7 effective driving licence. In view of the law laid down by the Hon'ble Apex Court in the case of MUKUND DEWANGAN vs. ORIENTAL INSURANCE COMPANY LIMITED reported in (2017) 14 SCC 663 wherein it is held that licence to drive light motor vehicle includes licence to drive transport vehicle, the finding of the Tribunal that the owner of the offending vehicle is liable to pay the compensation is unsustainable.
Secondly, in respect of fitness certificate is concerned, he contended that the requirement of having fitness certificate is not one of the conditions of insurance policy and it is not the defence available to the insurer under Section 149(2)(a) of the Act. In support of his contentions, he relied upon the judgment of this Court in the case of 'SMT.SUMA AND ANOTHER vs. SYED AHEER JAIN AND ANOTHER' ILR 2017 Kar.4301.
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Thirdly, as per the pay-slip Ex.P18 the total salary of the deceased was Rs.43,861/- out of which only professional tax of Rs.200/- per month and income tax of Rs.640/- per month has to be deducted, but the Tribunal is not justified in taking the monthly salary of the deceased as Rs.18,056/-. The same is contrary to the law laid down by the Hon'ble Supreme Court in the case of 'HELEN C.REBELLO (MRS.) & OTHERS vs. MAHARASHTRA STATE ROAD TRANSPORT CORPORATION AND ANOTHER' (1999) 1 SCC 90. Hence, he sought for allowing the appeal.
7. On the other hand, learned counsel appearing for the insurance company has raised the following contentions:
Firstly, the offending vehicle was not having valid fitness certificate to ply on the road as on the date of alleged accident. Therefore, there is a 9 violation of the terms and conditions of the policy and also Motor Vehicles Act. Hence, the Insurance Company is not liable to indemnify the insured. The Tribunal considering the aforesaid facts has rightly fastened the liability on the owner of the offending vehicle. He has also relied upon Sections 56 and 84 of the Act and contended that the transport vehicle shall not be deemed to be validly registered for the purpose of Section 39, unless it carries a certificate of fitness. Since there is no valid fitness certificate to the offending vehicle, the finding of the Tribunal that the insurer is liable to pay compensation is unsustainable. In support of his contention, he relied on the judgment of the Kerala High Court in the case of 'PAREED PILLAI vs. ORIENTAL INSURANCE CO. LTD. AIR 2019 Kerala 9'.10
Secondly, the Tribunal as per the pay-slip rightly considered the take home salary of the deceased as Rs.18,056/-.
Thirdly, at the time of the accident deceased was aged about 58 years, the Tribunal contrary to the law laid down by the Hon'ble Apex Court in the case of NATIONAL INSURANCE CO. LTD. -v- PRANAY SETHI AND OTHERS [AIR 2017 SC 5157], has considered addition of 30% towards future prospects instead of 10%.
Fourthly, contrary to the law laid down by the Hon'ble Apex Court in the case of MAGMA GENERAL INSURANCE CO. LTD. -V- NANU RAM reported in 2018 ACJ 2782, the compensation awarded by the Tribunal under 'loss of consortium' and conventional heads is on the higher side. Hence, he sought for dismissal of the appeal.11
8. We have considered the submissions made by the learned counsel for the parties and have perused the records.
9. It is not in dispute that deceased died in the road traffic accident occurred due to rash and negligent driving of the offending vehicle by its driver. As per the pay slip at Ex.P18 deceased was earning a total salary of Rs.43,861/- per month, out of which Rs.200/- towards professional tax and Rs.640/- towards income tax has to be deducted, the net salary comes to Rs.43,021/-. To the aforesaid amount, 10% has to be added on account of future prospects in view of the law laid down by the Constitution Bench of the Supreme Court in 'PRANAY SETHI' (supra). Thus, the monthly income comes to Rs.47,323/-, out of which, we deem it appropriate to deduct 1/3rd towards personal expenses since there are 3 dependents and therefore, the monthly income comes 12 to Rs.31,548/-. The deceased was aged about 58 years at the time of the accident and multiplier applicable to his age group is '9'. Thus, the claimants are entitled to compensation of Rs.34,07,184/- (Rs.31,548*12*9) on account of 'loss of dependency'.
In view of the law laid down by the Supreme Court in MAGMA GENERAL INSURANCE (supra), claimant No.1, wife of the deceased is entitled for compensation of Rs.40,000/- under the head of 'loss of spousal consortium', claimant Nos.2 and 3, children are entitled for compensation of Rs.40,000/- each under the head of 'loss of parental consortium'.
In addition, the claimants are entitled to Rs.15,000/- on account of 'loss of estate' and Rs.15,000/- on account of 'funeral expenses'.
10. Thus, the claimants are entitled to the following compensation:
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Compensation under Amount in
different Heads (Rs.)
Loss of dependency 34,07,184
Funeral expenses 15,000
Loss of estate 15,000
Loss of spousal 40,000
consortium
Loss of Parental 80,000
consortium
Total 35,57,184
The claimants are entitled to a total
compensation of Rs.35,57,184/-.
11. In respect of liability is concerned, with respect to the fitness certificate, it is worth noticing a few relevant Sections namely, 56(1), 66(1), and 84(a) of the Motor Vehicles Act, 1988 touching the aspect of the fitness certificate, which are extracted herein below:-
"56. Certificate of fitness of transport vehicles.--
(1) Subject to the provisions of Sections 59 and 60, a transport vehicle shall not be 14 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 thereunder:
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.
66. Necessity for permits.--
(1) No owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place whether or not such vehicle is actually carrying any passengers or goods save in accordance with the conditions of a permit 15 granted or countersigned by a Regional or State Transport Authority or any prescribed authority authorising him the use of the vehicle in that place in the manner in which the vehicle is being used:
Provided that a stage carriage permit shall, subject to any conditions that may be specified in the permit, authorise the use of the vehicle as a contract carriage: Provided further that a stage carriage permit may, subject to any conditions that may be specified in the permit, authorise the use of the vehicle as a goods carriage either when carrying passengers or not:
Provided also that a goods carriage permit shall, subject to any conditions that may be specified in the permit, authorise the holder to use the vehicle for the carriage of goods for or in connection with a trade or business carried on by him.
84. General conditions attaching to all permits. -The following shall be conditions of every permit--16
(a) that the vehicle to which the permit relates carries valid certificate of fitness issued under Section 56 and is at all times so maintained as to comply with the requirements of this Act and the rules made thereunder;
12. According to Section 56(1) of the Motor Vehicles Act, 1988, for registration of transport vehicles under Section 39, a valid fitness certificate is required and in the absence of such fitness certificate, transport vehicle shall not be deemed to have valid registration.
13. Section 66(1) provides necessity for permit for the use of a vehicle as a transport vehicle in a public place. According to Section 66(1), a transport vehicle shall be used or permitted to be used by owner of vehicle in any public place in accordance with the condition of permit.
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14. Section 84(a) provides the general condition which are attached to all the permits. One of the condition as contemplated under Section 84(a) of the Motor Vehicles Act, 1988 is that vehicle to which the permit relates carries valid certificate of fitness issued under Section 56 and is at all times so maintained as to comply with the requirements of the Act, 1988 and the rules made thereunder.
15. From the aforesaid provisions, it can be safely culled out that for the purposes of registration of transport vehicle, a fitness certificate as contemplated under Section 56 of the Motor Vehicles Act, 1988 is mandatory and plying of a transport vehicle without a valid fitness certificate amounts to violation of condition of permit.
16. At this juncture, it is useful to notice Section 86(1) (a) which provides that the transport authority which has granted permit may cancel the permit or 18 suspend it for the period as it thinks fit on the breach of any condition specified in Section 84 or of any condition contained in the permit. The proviso to Section 86 (1) of the Motor Vehicles Act, 1988 provides that no permit shall be suspended or cancelled unless an opportunity of hearing has been given to the holder of permit to furnish his explanation. Section 86(1) of the Act, 1988 is reproduced herein below:-
"86. Cancellation and suspension of permits.- (1) The Transport Authority which granted a permit may cancel the permit or may suspend it for such period as it thinks fit -
(a) on the breach of any condition specified in Section 84 or of any condition contained in the permit, or
(b) if the holder of the permit uses or causes or allows a vehicle to be used in any manner not authorised by the permit, or 19
(c) if the holder of the permit ceases to own the vehicle covered by the permit, or
(d) if the holder of the permit has obtained the permit by fraud or misrepresentation, or
(e) if the holder of the goods carriage permit, fails without reasonable cause, to use the vehicle for the purposes for which the permit was granted, or
(f) if the holder of the permit acquires the citizenship of any foreign country :
Provided that no permit shall be suspended or cancelled unless an opportunity has been given to the holder of the permit to furnish his explanation."
17. The proviso to Section 86 (1) clearly contemplates an opportunity of hearing to the holder of permit before cancellation or suspension of the permit on the ground specified in Section 86 (1) (a) to
(f). Thus, it is evident that the Act does not 20 contemplate that if there is violation of any condition of the permit, the permit shall automatically be deemed to have been cancelled. In fact competent authority has to pass an order before cancelling or suspending the permit after affording opportunity of hearing to the holder of permit.
18. In the instant case, it is also not in dispute that the offending vehicle has a valid registration certificate and as on the date of the accident it has a valid permit and the same has not been cancelled by the competent authority by exercising the powers under the Motor Vehicles Act. There is no order passed by the competent authority as regards the cancellation of the permit after giving an opportunity of hearing to the owner of the truck on the ground that the condition has been violated by the owner of the truck by plying without valid fitness certificate. Thus, in such a situation, it cannot be said that truck 21 was not having a valid permit. It is further useful to notice that Section 149(2)(a)(i)(c) of the Motor Vehicles Act specifies about the breach of condition of the policy where vehicle is used for the purpose not allowed by the permit.
19. In so far as the judgment of the Kerala High Court in the case of PAREED PILLAI (supra) relied upon by the learned counsel appearing for the insurance company is concerned, in the first place, a Division Bench of this Court in the case of UNITED INDIA INSURANCE COMPANY LIMITED vs. SMT.YASMIN BEGUM @ YASMIN passed in MFA No.5159/2016 decided on 19.07.2019 has held as hereinbelow:
"17. The controversy is with regard to there being any breach in the terms and conditions of the policy which according to learned counsel for the appellant-insurer 22 would call for exoneration of the insurance company. In this regard, learned counsel for the appellant-insurance company drew our attention to Section 66 of the Act which deals with necessity for permit of vehicle used as a transport vehicle in any public place and Section 56 of the Act which deals with regard to transport vehicle possessing a certificate of fitness. He contended that both these are mandatory requirements and in the instant case, the offending vehicle, the tipper lorry neither possessed a certificate of fitness nor had a permit to ply the vehicle on Bannerghatta Road. He further drew our attention to column No.7 of the charge-sheet wherein, it has been stated that the vehicle did not possess the fitness certificate as well as the permit.
18. Section 56 of the Act states that subject to the provisions of Sections 59 and 60 of the Act, 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 23 such particulars and information as may be prescribed by the Central Government, issued by the prescribed authority, or by an authorised testing station mentioned in sub-section (2), to the effect that the vehicle complies for the time being with all the requirements of the Act and Rules made thereunder.
19. The contention of appellant-
insurer is that vehicle did not possess a fitness certificate, but the fact remains that in the instant case, the vehicle being a transport vehicle, had a valid registration under Section 39 of the Act. Registration of the vehicle under Section 39 of the Act would call for compliance of a condition precedent namely, possessing of a valid fitness certificate. In the instant case, since the vehicle in question was validly registered, it implies that it had a fitness certificate. Further, this is not a case where there has been cancellation of the fitness certificate. When once registration of the vehicle has been made under Section 39 of 24 the Act, it is presumed that the vehicle possesses a valid fitness certificate. There is no evidence on record to the effect that the fitness certificate of the vehicle had expired and if so, as to on what date it had expired. In the circumstance, we do not find any substance in the contention of learned counsel for the appellant-insurance company on the aspect that the offending vehicle did not possess a valid fitness certificate on the date of the accident. Further, it is noted that this is not a case where the Registration Certificate of the vehicle in question had been cancelled on account of the cancellation of the fitness certificate. No evidence has been let-in in that regard by the insurance company. Moreover, the necessity of the vehicle having a fitness certificate is not a condition of the policy at the time of issuance of the insurance policy. But before a vehicle could be registered, there is a need for such a vehicle to have a fitness certificate and in the instant case 25 even as per Ex.R.3, the vehicle in question had a valid Registration Certificate."
20. This Court in 'RAJESH POOJARY vs. RAJESH AND ANOTHER ILR 2019 Kar.2940' following another Division Bench judgment has held that as on the date the policy was in force and that the permit is not cancelled, the insurance company is liable to pay the compensation. It has also opined that even if the insured did not possess the 'fitness certificate' for the offending vehicle, the Insurance Company cannot be exonerated on that ground.
21. In so far as the judgment of Kerala High Court in the case of PAREED PILLAI (supra) relied on by the learned counsel for the insurance company is concerned, in the first place the decision of one High Court is not binding as a precedent on another High Court unlike a decision of the Apex Court. The Apex Court in the case of VALLIAMMA CHAMPAKA 26 PILLA vs. SHIVATHANU PILLAI AND OTHERS reported in 1979 (4) SCC 429 has held that a decision of one High Court is not binding precedent on another High Court and that does have a persuasive value. In the second place, the Kerala High Court, while deciding the case, has proceeded on the basis that it is a mandatory requirement that every vehicle must have a route permit and carry valid certificate of fitness issued under Section 56 of the Motor Vehicles Act at all times, absence of which constitutes technical breach and that vehicle shall not be deemed to have any valid permit, thus there is violation of insurance policy. With great respect to the judgment of the Kerala High Court, in the judgment it is not noticed that provisions of Section 86(1) of the Motor Vehicles Act which talks about the situation that even if there is a breach of any condition of permit specified in Section 84 of the Motor Vehicles Act, the competent 27 authority is required to give an opportunity of hearing to the holder of the permit.
22. In the case on hand, it is not in dispute that as on the date of the accident the offending vehicle was having a valid registration certificate and also valid permit issued under the Act and the same has not been cancelled by the competent authority as per Motor Vehicles Act.
23. In view of the above discussion, in the instant case, it is not in dispute that as on the date of accident the offending vehicle was having valid registration certificate and also valid permit issued under the Act. Since the vehicle in question was validly registered, it implies that it had a fitness certificate. In view of the above, the submission of the learned counsel for the Insurance Company in respect of breach of policy conditions and the insurer is not 28 liable to pay the compensation, is unsustainable. Accordingly, Insurance Company is held liable to indemnify the insured and Insurance Company is directed to pay compensation awarded along with interest.
24. In respect of the finding of the Tribunal that since the driver of the offending vehicle was not holding a valid and effective driving licence is concerned, the Hon'ble Apex Court in the case of MUKUND DEWANGAN (supra) has held that licence to drive light motor vehicle includes licence to drive transport vehicle, the finding of the Tribunal that the owner of the offending vehicle is liable to pay the compensation is unsustainable and the Insurance Company is fastened with liability to pay the compensation.
The Insurance Company is directed to deposit the compensation amount along with interest within a 29 period of four weeks from the date of receipt of copy of this judgment.
Needless to state that the aforesaid amount of compensation shall carry interest at the rate of 6% p.a. from the date of petition till payment is made.
To the aforesaid extent, the judgment of the Claims Tribunal is modified.
Accordingly, the appeal is allowed-in-part.
Sd/-
JUDGE Sd/-
JUDGE Cm/-