Patna High Court
Oriental Insurance Co. Ltd. vs Suresh Kumar And Ors. on 4 September, 2001
Equivalent citations: 2003ACJ1170
Author: S.N. Pathak
Bench: S.N. Pathak
JUDGMENT S.N. Pathak, J.
1. This miscellaneous appeal has been filed by Oriental Insurance Co. Ltd., opposite party No. 3 of the Claim Case No. 14 of 1993.
2. The relevant fact was that the claimants of the aforesaid claim case had preferred an application under Section 166 of the Motor Vehicles Act, 1988, for compensation on account of the death of his minor child, 4 years old, who was allegedly killed in an accident that occurred on 7.5.1993. The accident was caused by a motor vehicle bearing registration No. BPK 6874. The Claims Tribunal decided the claim of the applicant Suresh Kumar on the basis of evidence adduced and directed the appellant company to pay compensation of Rs. 1,55,000 with interest at the rate of 12 per cent per annum from 31.5.1993 till realisation.
3. The appellant before me submitted that the learned Tribunal adopted a wrong approach in calculating the amount of compensation. The alleged accident took place in the year 1993 when the Motor Vehicles Act, 1988, was in force and, therefore, the compensation should not have been calculated on the principles as laid down in the Motor Vehicles Amendment Act, 1994. The Tribunal took the notional income of the deceased child to be Rs. 15,000 on the basis of the Second Schedule of the Motor Vehicles Amendment Act, 1994. So, the Tribunal committed a legal error. Besides the same, a child of four years was not supposed to earn any income in order to contribute to its family and, therefore, the notional income fixed by the Motor Vehicles Amendment Act, 1994, which is for unemployed persons, but who are capable of earning, should not have been used as the basis for calculating the income of the deceased child.
4. The respondents' lawyer submitted that under Section 170 of Motor Vehicles Act, the insurance company is not entitled to challenge the amount of award fixed by the Claims Tribunal. Its objection should be limited to the provisions as laid down under Sections 147, 148 and 149 of the Motor Vehicles Act and for his contention he relied on a decision Chinnama George v. N.K. Raju 2000 ACT 777 (SC), as also the decision in Kaushnuma Begum v. New India Assurance Co. Ltd. 2001 ACJ 428 (SC). Appellant's lawyer referred to a decision rendered by this court reported in 2001 (1) PLJR 431. Of course, Section 170 of Motor Vehicles Act has placed certain restrictions upon the insurer of the motor vehicle regarding its plea in a claim case. It is better to set forth the provisions of the aforesaid section to appreciate the legal principles laid down by the aforesaid section:
170. Impleading insurer in certain cases.-Where in the course of any inquiry, the Claims Tribunal is satisfied that-
(a) there is collusion between the person making the claim and the person against whom the claim is made, or
(b) the person against whom the claim is made has failed to contest the claim, it may, for reasons to be recorded in writing, direct that the insurer who may be liable in respect of such claim, shall be impleaded as a party to the proceeding and the insurer so impleaded shall thereupon have, without prejudice to the provisions contained in Sub-section (2) of Section 149, the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made.
All that the aforesaid section of the Motor Vehicles Act has laid down is that when there is a collusion between the claimant and vehicle owner and when the latter has failed to contest the claim, the Tribunal for reasons to be recorded in writing may direct the insurer of a vehicle to be impleaded as a party to the proceedings and then the insurer without prejudice to the provisions contained in Sub-section (2) of Section 149 shall have the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been preferred. So the wording of Section 170 of the Motor Vehicles Act, 1988, are explicit to the effect that once the insurance company is impleaded in the case before the Tribunal, it can contest the claim case on all of the grounds which are available to the person against whom a claim is made; that means, the owner of the vehicle, in question. However, it has become customary for the owner of a vehicle, which caused accident to shift their liability upon the insurance company and wash their hands off all the liabilities incurred on account of the alleged accident. It has also become customary for the owners and the claimants to object to the appeal filed by the insurance company and make a plea that the insurance company cannot challenge the quantum of compensation fixed by the Tribunal except to the extent as mentioned in Sections 147, 148 and 149 of the Motor Vehicles Act. However, I am of the opinion that when Section 170 of the Motor Vehicles Act itself has provided that the insurance company is entitled to contest the claim on all or any of the grounds that are available to the owner of the concerned vehicle, I think when an appeal is filed, the grounds which are available to the insurance company shall be available to it even in an appeal. Of course, there are decisions by the Supreme Court that the insurance company cannot challenge the quantum of compensation, but those decisions did not mean that the insurance company cannot challenge the very principles on which the quantum of compensation is calculated. When the very foundation of calculating the compensation amount is illegal or improper, the insurance company cannot be precluded from challenging the quantum of compensation on its principles though, of course, not on its internal merits. I am fortified in my opinion by the decision rendered by this court in 2001 (1) PLJR 430 wherein decision rendered by the Hon'ble Apex Court in Shankarayya v. United India Insurance Co. Ltd. 1998 ACJ 513 (SC) and Rita Devi v. New India Assurance Co. Ltd. 2000 ACJ 801 (SC), as also the decision rendered by a Division Bench of this court as in Oriental Fire & Genl. Ins. Co. Ltd. v. Laxman Mahto 1985 ACJ 775 (Patna), have been referred. The decisions referred to by the respondents' lawyer, which I have mentioned above, did not and have not debarred the insurance company from challenging the principles applied by the Tribunal in calculating, the amount of compensation although the insurance company is not entitled to challenge the quantum of compensation fixed by the Tribunal on its internal merits. So, I am again constrained to remark that the appellant before this court is entitled to challenge the principles applied by the Tribunal in calculating the amount of compensation to the claimants of the relevant claim case.
5. I find that in the instant case a child of four years died in an accident. The child of four years cannot be supposed to earn any income to contribute to its family. So, a lump sum amount of Rs. 50,000 shall be the proper amount to be paid to the claimants of the concerned claim case. Besides the same, lump sum amount of Rs. 5,000 for loss of love and affection to be received from the deceased child to his father shall be added to the lump sum amount of compensation. So, in total a sum of Rs. 55,000 would be the most proper/just amount of compensation to be paid to the claimant-respondent, Suresh Kumar.
6. In the result, this appeal is allowed and the award granted by the Claims Tribunal is set aside, but subject to the amount of compensation fixed by this court, as referred to above. If the insurance company has already paid any amount to the claimants and even if it be in excess of the amount fixed by this court, that shall not be refunded. I was informed during the hearing of this appeal that, perhaps, the appellant paid Rs. 25,000 as interim relief and it had deposited Rs. 35,000 during the course of pendency of this appeal. If the amount deposited by the insurance company has not until now been paid to the claimant, the latter shall be entitled to withdraw the said amount.