Allahabad High Court
The National Insurance Co. Ltd. Lucknow ... vs Mani Ram And Others on 7 August, 2013
Author: Ritu Raj Awasthi
Bench: Ritu Raj Awasthi
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH HIGH COURT OF JUDICATURE AT ALLAHABAD LUCKNOW BENCH, LUCKNOW ***************** Court No. - 5 Case :- FIRST APPEAL FROM ORDER No. - 121 of 2007 Appellant :- The National Insurance Co. Ltd. Lucknow Thr. Manager Respondent :- Mani Ram And Others Counsel for Appellant :- U.P.S.Kushwaha Counsel for Respondent :- Ram Kushal Tewari,Subhash Vidyarthi ******************* Hon'ble Ritu Raj Awasthi,J.
Heard Mr. U.P.S. Kushwaha, learned counsel for appellant as well as Ram Kushal Tewari, learned counsel for respondents no. 1 to 3 & Mr. Subhash Vidyarthi, learned counsel for respondent no. 4 and perused the record.
No one has put in appearance on behalf of respondent nos. 5 & 6.
The instant First Appeal From Order has been filed under Section 173 of the Motor Vehicles Act, 1988 (for short 'the Act') against the judgment and award dated 29.11.2006 in Motor Accident Claim Petition No. 312 of 2005 (Maniram & Others VS. Wasimul Haque & Others) passed by learned Motor Accident Claims Tribunal whereby Rs. 3,25,264/- has been awarded as compensation along with interest @ 6% per annum from the date of presentation of petition upto the date of payment provided the payment is made within one month and if the payment was not made, interest shall be payable @9% per annum for the entire period.
Learned counsel for appellant submits that the learned Tribunal while deciding the aforesaid compensation has directed the interest to be paid @ 6% simple interest per annum from the date of presentation within a period of one month and in case it is not paid then the appellant would be liable to pay the interest @ 9% simple interest per annum which amounts to imposition of penal interest which is not permissible under law.
It is submitted that the Apex Court in the case of National Insurance Company Ltd. Vs. Keshav Bahadur & Ors; AIR 2004 SC 1981 has held that once the Tribunal has awarded simple interest on the amount of compensation to be awarded at a particular rate and from a particular date, there is no scope for retrospective enhancement for default in payment of compensation. No express or implied power in this regard can be culled out from Section 110CC of the Act or Section 171 of the new Act.
Submission is that as per direction of the learned Tribunal imposition of 9% interest after the period of one month, in case the compensation amount is not paid within the said period, amounts to imposition of enhanced rate of interest from retrospective date which amounts to imposition of penalty which is not statutorily envisaged and prescribed.
Learned counsel for respondent submitted that the Tribunal in its judgment has clearly provided that the claimants are entitle to get compensation amount along with interest of 6% simple interest from the date of presentation of the claim petition. The said amount is to be paid within one month. The Tribunal has also imposed 9% interest, in case the said amount is not paid within the period prescribed.
I have considered the submissions made by the parties' counsel in this regard.
The Apex Court in the case of National Insurance Company Ltd. & Others (supra) has held that Section 110CC of the Act (corresponding to Section 171 of the New Act) confers a discretion on the Tribunal to award interest, the same is meant to be exercised in cases where the claimant can claim the same as a matter of right. It has been held that once the Tribunal has exercised its discretion to award certain interest on the amount of compensation to be awarded at a particular rate and from a particular date, there is no scope for retrospective enhancement. The relevant observations made in the aforesaid judgment on reproduction read as under:
"Though Section 110CC of the Act (corresponding to Section 171 of the New Act) confers a discretion on the Tribunal to award interest, the same is meant to be exercised in cases where the claimant can claim the same as a matter of right. In the above background, it to be judged whether a stipulation for higher rate of interest in case of default can be imposed by the Tribunal. Once the discretion has been exercised by the Tribunal to award simple interest on the amount of compensation to be awarded at a particular rate and from a particular date, there is no scope for retrospective enhancement for default in payment of compensation. No express or implied power in this regard can be culled out from Section 110CC of the Act or Section 171 of the new Act. Such a direction in the award for retrospective enhancement of interest for default in payment of the compensation together with interest payable thereon virtually amounts to imposition of penalty which is not statutorily envisaged and prescribed. It is, therefore directed that the rate of interest as awarded by the High Court shall alone be applicable till payment, without the stipulation for higher rate of interest being enforced, in the manner directed by the Tribunal."
In this view of the matter, I am of the considered opinion that the Tribunal was not justified in directing the appellant to pay the enhanced rate of 9% interest from retrospective effect, in case the amount of compensation as determined by it along with 6% interest is not paid within a period of one month from the date of judgment.
As such, the impugned judgment and award is modified to the extent that the claimants are entitled to get the amount of compensation along with 6% simple interest from the date of presentation of claim petition which shall be paid within a period of month. In case the amount is not paid within one month, the claimants would be entitle to get 9% interest on the delay in payment of compensation amount.
The next submission made by learned counsel for appellant is that the driver of vehicle No. UP 78AF 0027 was not having valid licence at the time of occurrence of accident and, as such, the appellant-Insurance Company is not liable to pay the compensation as determined and awarded by the impugned judgment.
It is submitted by learned counsel for appellant that it has come in the findings of the learned Tribunal that the driver-Chintu was driving the aforesaid vehicle at the time of occurrence of the aforesaid accident and he was not having valid licence at the particular time. Once it has been held by the Tribunal that the driver was not having valid licence, it was the liability of the owner of the vehicle to have paid the compensation and the appellant-Insurance Company cannot be held liable to pay the same.
It is further submitted that it was the burden of the owner of the vehicle to have proved that he had taken due care for the compliance of Section 149 (2)(a)(ii) of the Act and was not having knowledge that the driver of vehicle was not having valid licence at the time of occurrence of the accident.
In this regard, learned counsel for appellant has relied on the judgment of the Apex Court in the case of Lal Chand Vs. Oriental Insurance Co. Ltd; (2006) 7 SCC 318 wherein it has been observed by the Apex Court that it is the liability of the owner to have satisfied himself that the driver is having a valid licence and was driving the vehicle competently in order to ensure the compliance of Section 149 (2) (a) (ii).
Learned counsel for respondent, on the other hand, submitted that the learned Tribunal has come to conclusion that the Insurance Company has failed to prove that the owner of the vehicle was having knowledge from before that the driver of the vehicle was not having valid licence and, as such, it cannot be said that the liability to pay the compensation was not on the insurer.
It is to be noted that under Section 5 Motor Vehicle Act no owner or person in charge of a motor vehicle shall cause or permit any person who does not satisfy the provisions of section 3 or section 4 to drive the vehicle, meaning thereby it is the liability and responsibility of the owner of the vehicle to ensure that no vehicle is driven by a person who does not satisfy the requirement of driving licence and is ineligible and not entitle to get the said licence. Section 149 of the Act relates to duty of insurer to satisfy judgments and awards against persons insured in respect of third party risks.
The Apex Court in the case of Lal Chand Vs. Oriental Insurance Co. Ltd. (supra) while examining the aforesaid aspect of the matter has held that the insurer, namely, the Insurance Company, has to prove that the insured, namely, the owner of the vehicle, was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant point of time. Relevant paragraphs 9 & 11, on which reliance has also been placed by learned counsel for appellant, on reproduction read as under:
"9. In the instant case, the owner has not only seen and examined the driving licence produced by the driver but also took the test of the driving of the driver and found that the driver was competent to drive the vehicle and thereafter appointed him as driver of the vehicle in question. Thus, the owner having satisfied himself that the driver had a licence and was driving competently, there would be no breach of Section 149 (2)(a)(ii) and the Insurance Company would not then be absolved of its liability.
11. As observed in the above paragraphs, the insurer, namely, the Insurance Company, has to prove that the insured, namely, the owner of the vehicle, was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant point of time."
There is nothing on record to indicate that the owner of the vehicle was having knowledge that the driver of the vehicle was not having valid licence at the time of occurrence of the said accident; rather it was the case of the owner of the vehicle before the learned Tribunal that he has come to know about the validity of licence of driver-Chintu only after the said fact was brought before the Tribunal, as such, I am of the considered opinion that the learned Tribunal was right in its conclusion that the Insurance Company has failed to prove that the owner of the vehicle was having full knowledge of the invalid or valid licence of the driver at the time of occurrence of the accident. Therefore, the learned Tribunal has rightly held that the appellant-Insurance Company is liable to pay the compensation to the claimants.
Now, I come to the last argument of learned counsel for appellant.
It is submitted by learned counsel for appellant that the deceased at the time of occurrence of the accident was 58 years. The learned Tribunal has failed to appreciate that the claimants were not dependent on the deceased and, as such, the learned Tribunal has wrongly calculated the amount of compensation by applying multiplier and awarded a sum of Rs. 3,25,264/- as amount of compensation.
It is also submitted that since the claimants were not dependent on the deceased, as such, the amount of compensation was to be awarded as per Section 140 of the Act and it can be, at the most, Rs. 50,000/- and nothing more.
In this regard, learned counsel for appellant has relied on the judgment of the Apex Court in the case of Smt. Manjuri Bera Vs. The Oriental Insurance Company Ltd. and Anr.; AIR 2007 SC 1474 wherein the Apex Court has held that where there is no dependency on the deceased, the compensation is to be awarded in terms of Section 140 of the Act.
Learned counsel for respondent in his reply submitted that it is wrong to say that there was no dependency of claimants on the deceased. In fact, the claimants are the sons of deceased, Ram Bodh. They were living in a joint family having a common house. PW-1, Kandhai in his statement has stated that the claimants are having two houses and separate farming. The deceased was living with claimant-Kandhai.
It is submitted that the learned Tribunal has calculated the annual income of the deceased as Rs. 60,612/- and has rightly applied the multiplier of 8 to decide the compensation as per Section 163A of the Act.
The claim petition was filed under Section 166 of the Act. The learned Tribunal has come to conclusion, in the impugned judgment, that the aforesaid accident had taken place due to rash and negligent driving of the driver-Chintu in which the deceased, Ram Bodh, had died. The claimants are the legal heirs of deceased, Ram Bodh, who are entitle to get compensation.
The short question involved is whether the claimants, in case not dependent on the deceased, as claimed by learned counsel for appellant, are entitle to get compensation as determined under Section 166 of the Act or whether the compensation is to be determined only as per Section 140 of the Act.
Section 166 of the Act provides that an application for compensation arising out of an accident of the nature specified in sub-section (1) of Section 165 may be made (a) by the person who has sustained the injury; or (b) by the owner of the property; or (c) whether death has resulted from the accident, by all or any of the legal representatives of the deceased; or (d) by any agent duly authorized by the person injured or all or any of the legal representatives of the deceased, as the case may. For convenience Section 166 of the Act is reproduced below:
"166. Application for compensation.- (1) An application for compensation arising out of an accident of the nature specified in sub-section (1) of section 165 may be made--
a.By the person who has sustained the injury; or b.By the owner of the property; or c.Where death has resulted from the accident, by all or any of the legal representatives of the deceased; or d.By any agent duly authorized by the person injured or all or any of the legal representatives of the deceased, as the case may be:
Provided that where all the legal representatives of the deceased have not joined in any such application for compensation, the application shall be made on behalf of or for the benefit of all the legal representatives of the deceased and the legal representatives who have not so joined, shall be imp leaded as respondents to the application.
2.Every application under sub-section (1) shall be made to the Claims Tribunal having jurisdiction over the area in which the accident occurred, and shall be in such form and shall contain such particulars as may be prescribed:
Provided that where any claim for compensation under section 140 is made in such application, the application shall contain a separate statement to that effect immediately before the signature of the applicant.
3. [******]
4.Where a police officer has filed a copy of the report regarding an accident to a Claims Tribunal under this Act, the Claims Tribunal may, if it thinks necessary so to do, treat the report as if it were an application for compensation under this Act."
Section 163 of the Act provides for payment of compensation in case of hit and run motor accidents whereas Section 163A of the Act provides for special provisions as to payment of compensation on structured formula basis and Section 163B of the Act provides for option to file claim in certain cases. For convenience Sections 163, 163A and 163B of the Act are reproduced below:
"163. Scheme for payment of compensation in case of hit and run motor accidents.- (1) The Central Government may, by notification in the Official Gazette, make a scheme specifying, the manner in which the scheme shall be administered by the General Insurance Corporation, the form, manner and the time within which applications for compensation may be made, the officers or authorities to whom such applications may be made, the procedure to be followed by such officers or authorities for considering and passing orders on such applications, and all other matters connected with, or incidental to, the administration of the scheme and the payment of compensation.
(2) A scheme made under sub-section (1) may provide that--
a.a contravention of any provision thereof shall be punishable with imprisonment for such term as may be specified but in no case exceeding three months, or with fine which may extend to such amount as may be specified but in no case exceeding five hundred rupees or with both;
b.the powers, functions or duties conferred or imposed on any officer or authority by such scheme may be delegated with the prior approval in writing of the Central Government, by such officer or authority to any other officer or authority;
c.any provision of such scheme may operate with retrospective effect from a date not earlier than the date of establishment of the Solatium Fund under the Motor Vehicles Act,1939, (4 of 1939.) as it stood immediately before the commencement of this Act:
Provided that no such retrospective effect shall be given so as to prejudicially affect the interests of any person who may be governed by such provision.
163A. Special provisions as to payment of compensation on structured formula basis.-(1) Notwithstanding anything contained in this Act or in any other law for the time being in force or instrument having the force of law, the owner of the motor vehicle or the authorised insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may.
Explanation.-For the purposes of this sub-section, "permanent disability" shall have the same meaning and extent as in the Workmen's Compensation Act, 1923 (8 of 1923).
(2) In any claim for compensation under sub-section (1), the claimant shall not be required to plead or establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act or neglect or default of the owner of the vehicle or vehicles concerned or of any other person.
(3) The Central Government may, keeping in view the cost of living by notification in the official Gazette, from time to time amend the Second Schedule.
163B. Option to file claim in certain cases.-Where a person is entitled to claim compensation under Section 140 and Section 163A, he shall file the claim under either of the said sections and not under both."
Section 140 of the Act relates to liability to pay the compensation in certain cases on the principle of no fault. Section 140 for convenience is reproduced below:
"140. Liability to pay compensation in certain cases on the principle of no fault.- (1) Where death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of this section.
(2) The amount of compensation which shall be payable under sub- section (1) in respect of the death of any person shall be a fixed sum of twenty-five thousand rupees and the amount of compensation payable under that sub-section in respect of the permanent disablement of any person shall be a fixed sum of twelve thousand rupees.
(3) In any claim for compensation under sub-section (1), the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person.
(4) A claim for compensation under sub-section (1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disablement the claim has been made nor shall the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement."
The learned Tribunal while calculating the amount of compensation has come to conclusion that the age of deceased at the time of death was 58 years, his annual income was Rs. 5051X12 = 60612/-. In case he had remained alive, he would have spent 1/3rd of the aforesaid amount on his own expenses where saved 2/3rd i.e. Rs. 40,408/-. The learned Tribunal applying the multiplier of 8 as per Second Schedule of Section 163A of the Act has calculated the amount of compensation as Rs. 3,23,264/-, over and above aforesaid amount the Tribunal has awarded a sum of Rs. 2,000/- as expenses for his last rites, as such, an amount of Rs. 3,25,264/- as total amount of compensation along with 6% simple interest from the date of institution of claim petition was awarded by the Tribunal.
In the case of Smt. Manjuri Bera (supra), the Apex Court had the occasion to consider the question as to whether the claim petition filed by a person who is not dependent on the deceased is entitle to get any compensation or not. This fact is evident from reading of first para of the judgment itself, which on reproduction reads as under:
"An interesting question is involved in this appeal. By the impugned judgment the Calcutta High Court held that though the appellant, a married daughter of Bata Krishan Mondal (hereinafter referred to as the 'deceased') could maintain a claim petition in terms of Section 166 of the Motor Vehicles Act, 1988 (in short the 'Act') she was not entitled to any compensation as she was not dependent upon the deceased. Factual position is undisputed and needs a brief reference."
The Apex Court while deciding the aforesaid question has come to conclusion that even if there is no loss of dependency the claimant if he or she is legal representative will be entitled to compensation, the quantum of which shall be not less than the liability flowing from Section 140 of the Act.
Learned counsel for appellant has laid great stress on the observations of the Apex Court in paragraphs preceding to the concluding paragraphs.
The relevant paragraphs on reproduction read as under:
"There are several factors which have to be noted. The liability under Section 140 of the Act does not cease because there is absence of dependency. The right to file a claim application has to be considered in the background of right to entitlement. While assessing the quantum, the multiplier system is applied because of deprivation of dependency. In other words, multiplier is a measure. There are three stages while assessing the question of entitlement. Firstly, the liability of the person who is liable and the person who is to indemnify the liability, if any. Next is the quantification and Section 166 is is primarily in the nature of recovery proceedings. As noted above, liability in terms of Section 140 of the Act does not cease because of absence of dependency.
Section 165 of the Act also throws some light on the controversy. The explanation includes the liability under Sections 140 and 163-A. Judged in this background where a legal representative who is not dependent files an application for compensation, the quantum cannot be less than the liability referable to Section 140 of the Act. Therefore, even if there is no loss of dependency the claimant if he or she is legal representative will be entitled to compensation, the quantum of which shall be not less than the liability flowing from Section 140 of the Act. The appeal is allowed to the aforesaid extent. There will be no order as to costs. We record our appreciation for the able assistance rendered by Shri Jayant Bhushan, the learned Amicus Curiae"
Reading the entire judgment of the Apex Court and taking into consideration the question which was before the Apex Court, there is no doubt in my mind that the Apex Court has held that merely loss of dependency of claimants on the deceased would not amount to say that the claimants are not entitle to get compensation under Section 163A of the Act and would entitle the claimant to get compensation as per Section 140 of the Act at least.
The Apex Court has categorically held that the right to file a claim application has to be considered in the background of right to entitlement. While assessing the quantum, the multiplier system is applied because of deprivation of dependency. In other words, multiplier is a measure. There are three stages while assessing the question of entitlement. Firstly, the liability of the person who is liable and the person who is to indemnify the liability, if any. Next is the quantification and Section 166 is is primarily in the nature of recovery proceedings.
In the present case, first of all it has not been proved before the Tribunal that the claimants have not proved beyond doubt that the claimants were not dependent on the deceased. Secondly, it is to be noted that there is no bar under the Act that while calculating the amount of compensation, the Court cannot take into consideration Section 163A of the Act and apply the multiplier as provided under Second Schedule of the Act, in case there is no dependency on the claimants. Moreover, in the present case the claim petition was filed under Section 166 of the Act claiming the accident due to rash and negligent driving of the driver of the vehicle. It was not a case of no fault liability or hit & run.
Taking into consideration the entire facts and circumstances of the case in hand, I am of the view that the amount of compensation awarded by the learned Tribunal is just and proper and it has to be paid by the appellant as per direction issued in the impugned judgment.
The appeal in hand is partly allowed to the extent as observed above.
The statutory amount deposited at the time of filing of the appeal shall be remitted back to the learned Tribunal forthwith.
[Justice Ritu Raj Awasthi] Order Date :- 7.8.2013 Santosh/-