Karnataka High Court
Sri Suresh S/O Hari Singh vs M/S The New India Assurance Co Ltd on 11 June, 2012
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 11TH DAY OF JUNE 2012
BEFORE
THE HON'BLE MR JUSTICE K. N. KESHAVANARAYANA
MFA No.717 OF 2008 (MV)
BETWEEN:
SRI.SURESH,
S/O HARI SINGH,
AGED ABOUT 40 YEARS,
RESIDING AT No.15,
OPPOSITE TO MARAMMA TEMPLE,
12TH CROSS, MAGADI ROAD,
BANGALORE-560 023. .... APPELLANT
(BY SRI.T.N.VISWANATHA, ADVOCATE)
AND :
1. M/S. THE NEW INDIA ASSURANCE CO.LTD.,
BY ITS DIVISIONAL MANAGER,
DO-III, BANK OF INDIA BUILDING,
K.G.ROAD,
BANGALORE-560 009.
2. SRI.S.RAJU,
S/O SRI.SUBRAMANI,
MAJOR,
R/AT No.379, 11TH CROSS,
MARIYAPPANAPALYA,
BANGAORE-560 021. ... RESPONDENTS
2
(BY SMT.HARINI SHIVANAND, ADVOCATE FOR R-1;
NOTICE TO R-2 IS HELD SUFFICIENT VIDE ORDER DATED
25.11.2011)
THIS MISCELLANEOUS FIRST APPEAL IS FILED
UNDER SECTION 173 (1) OF MV ACT, AGAINST THE
JUDGMENT AND AWARD DATED 24.01.2005 PASSED IN
MVC No.3077/2000 ON THE FILE OF THE 14TH ADDITONAL
JUDGE, COURT OF SMALL CAUSES, MEMBER, MOTOR
ACCIDENT CLAIMS TRIBUNAL, BANGALORE (SCCH-10)
PARTLY ALLOWING THE CLAIM PETITION FOR
COMPENSATION AND SEEKING ENHANCEMENT OF
COMPENSATION.
THIS APPEAL COMING FOR HEARING ON THIS DAY,
THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
This appeal by the claimant is directed against the judgment and award dated 24.01.2005 passed by the MACT, Court of Small Causes, Bangalore City (SCCH-
10) in MVC No.3077/2000.
2) The appellant filed claim petition under Section 166 of Motor Vehicles Act ( for short, MV Act') seeking compensation of Rs.4,00,000/- for the personal injuries sustained by him in the motor vehicle accident that occurred at 8.30 p.m. on 21.08.2000, as a result of the tempo bearing registration No. KL.13.B.1593 3 driven by its driver in a rash and negligent manner dashing against him in front of Ravindra Kalakshethra on J.C. Road, Bangalore.
3) The claim petition was filed against the insurer and the owner of the offending vehicle. The owner remained absent in spite of service of notice of the petition.
4) The insurer of the vehicle contested the petition inter alia contending that there was no valid policy issued as on the date and time of the accident and therefore, it is not liable to indemnify the insured in respect of the claim arising out of the accident alleged.
5) After the parties led evidence, the Tribunal by the judgment under appeal answered Issue No.1 raised regarding actionable negligence in the affirmative in favour of the claimant holding that the accident was due to the rash and negligent driving of the tempo by its driver and in the accident, the claimant sustained 4 grievous injuries, viz., fracture of right sub-trochanteric femur, therefore, he is entitled to the compensation for the injuries suffered by him. The Tribunal quantified the compensation payable under different heads as under:-
Pain and agony Rs. 30,000/- Medical expenses Rs. 33,500/- Conveyance and Nourishment Rs. 5,000/- Loss of income during treatment Rs. 9,000/-
Loss of future income and loss of amenities Rs. 10,000/-
Future Medical expenses Rs. 15,000/-
Total Rs.1,02,500/-
6) With regard to the liability, the Tribunal
noticed that though the evidence on record indicates that the premium for the policy had been paid by the owner and received by the insurer on 21.08.2000 as per the receipt issued-Ex.R2., the risk under the policy commenced from 14.49 hours on 22.08.2000 to the midnight of 21.08.2001 and since the accident in question occurred at about 8.45 pm on 21.08.2000, i.e., prior to the commencement of the policy, there was no valid policy as on the date and time of the accident, as such ,the insurer is not liable to answer the claim of 5 the claimant. In this view of the matter, the Tribunal exonerated the insurer from the liability to pay the compensation quantified and consequently, the claim petition against the insurer came to be dismissed. The owner of the offending vehicle was directed to pay the entire compensation of Rs.1,02,500/- with interest at 6% from the date of petition till the date of deposit. Being aggrieved by the order exonerating the insurer from its liability to pay the amount and feeling dis- satisfied with the quantum of compensation, the claimant has presented this appeal.
7) I have heard Sri. Vishwanath, learned counsel appearing for the appellant-claimant and Smt.Harini Shivanand, learned counsel appearing for the Respondent-Insurer. I have perused the records secured from the Tribunal.
8) The principal contention of Sri. T.N. Vishwanath is that, the Tribunal has committed error in exonerating the insurer from its liability. According to 6 the learned counsel, when admittedly the premium for the issuance of policy had been paid by the owner and received by the insurer before the closure of the office hours on 21.08.2000 itself, as per the provisions of Section 64(V)(B) of Insurance Act, the risk is deemed to have been covered from the time of the receipt of the money, though the policy came to be issued on the next day. Therefore, he contended that having regard to the admitted evidence on record regarding receipt of the premium amount on 21.08.2000 itself, irrespective of the fact that the policy was issued on the next day with effect from 14.49 hours, the risk is deemed to have been covered from the time of receipt of the premium money. He contended that the Tribunal has completely ignored the effect of the provisions of Section 64(V)(B) of Insurance Act. Learned counsel placed reliance on two decisions of this Court reported in the case of UNITED INDIA INSURANCE CO. LTD. Vs. B.S. PRASAD AND ANOTHER [2011(2) AIR KAR 688], in the case of NATIONAL 7 INSURANCE CO.LTD VS. BHADRAMMA AND OTHERS [2010 ACJ 1687] as also the judgment of the Apex Court in the case of ORIENTAL INSURANCE CO. LTD. VS. DHARAM CHAND [2010 ACJ 2659] and contended that the finding recorded by the Tribunal that, the insurer is not liable to indemnify the insured in respect of the claim of this petitioner is contrary to the law laid down in the aforesaid decisions, therefore, it is liable to be set aside and the insurer will have to be held liable to satisfy the award.
9) With regard to the quantum of compensation, the learned counsel contended that the Tribunal has ignored the material evidence on record regarding the permanent disability suffered by the claimant, which has resulted in functional disability and therefore, the Tribunal ought to have awarded the proper compensation towards the loss of future earning in addition to adequate compensation towards loss of amenities in life and it is also his submission that the 8 award under other heads are grossly inadequate and deserves to be enhanced.
10) On the other hand, learned counsel for the insurer sought to justify the reasonings adopted by the Tribunal. She contended that though as per Section 64(V)(B) of the Insurance Act, the insured can assume any risk from the time of the receipt of the money, in the case on hand, since the very insured, in the proposal form submitted, had sought coverage of the risk from a particular date, which was subsequent to the date of payment of the premium, the insurer issued the policy as requested by the insured and therefore, the risk under the policy commenced only from the time and date as mentioned in the policy in question, as such, the Tribunal has not committed any error in holding that at the relevant time and date of the accident, there was no valid policy in force in respect of the vehicle in question, therefore, the Tribunal is justified in exonerating the insurer from the liability. 9 Learned counsel further contended that the decisions relied upon by the learned counsel for the appellant- claimant are not applicable to the facts of this case and they are distinguishable in the light of the contents of the proposal form submitted by the insured, a copy of which is marked as Ex.R1. Therefore, she sought for dismissal of the appeal as against the Insurance Company.
11) In the light of the above, the points that arise for consideration are,-
i) Whether the Tribunal is justified in exonerating the insurer from its liability to satisfy the award?
ii) Whether the appellant-claimant is entitled for enhancement of compensation? If so, to what extent?
12) Certain undisputed facts as could be seen from the oral and documentary evidence are that the owner had taken-out a policy in respect of vehicle in question for the period from 08.06.1999 to 07.06.2000. However, upon expiry of the said policy on 07.06.2000, 10 he did not get the policy renewed nor he took a fresh policy immediately thereafter. For the purpose of obtaining fresh policy, the owner paid premium of Rs.2,949/- to the Insurance Company on 21.08.2000 as evidenced by Ex.R2. The policy came to be issued as per Ex.R3 mentioning therein that the policy has came into force from 14.49 hours on 22.08.2000 and valid upto the midnight of 21.08.2001. The insured had also submitted a proposal form as per Ex.R1, wherein, he wanted the policy to be in force from 22.08.2001 to 21.08.2001. The payment of premium was made during the office hours of the Company on 21.8.2000, which was generally from 10.30 am to 5.00 p.m.
13) As already noticed supra, the owner of the vehicle did not contest the petition nor was examined before the Tribunal.
14) Section 64(V)(B) of the Insurance Act, on which reliance was placed, deals with the risk to be 11 assumed by the insurer. Sub-Sections (1) & (2) are relevant for our purpose, which read as under:-
64(V)(B). No risk to be assumed unless premium is received in advance.-
1) No insurer shall assume any risk in India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such person in such manner and within such time as may be prescribed or unless and until deposit of such amount as may be prescribed, is made in advance in the prescribed manner.
2) For the purposes of this Section, in the case of risks for which premium can be ascertained in advance, the risk may be assumed not earlier than the date on which the premium has been paid in cash or by cheque to the insurer.
Explanation: Where the premium is tendered by postal money order or cheque sent by post, the risk may be assumed on the date 12 on which the money order is booked or the cheque is posted, as the case may be.
xxx xxx xxx xxx xxx
15) Interpreting Section 64(V)(B) of the
Insurance Act, the Apex Court in the case of DEOKAR EXPORTS PVT. LTD. VS. NEW INDIA ASSURANCE CO. LTD. reported in AIR 2009 SC 2026, has held in Para-8 thus:-
8. xxx xxx xxx xxx xxx "Two things emerge from the said section. The first is that the insurer cannot assume risk unless and until premium is received or guaranteed or deposited. The second is that a policy issued can assume the risk from a retrospective date provided such date is not earlier than the date on which premium had been paid in cash or by cheque to the insurer."
16) In the two Division Bench decisions of this Court referred to supra, of course this Court has held that, as per Section 64(V)(B) of the Insurance Act, the 13 insurer assures risk only on receipt of premium and the risk commences from the very moment it has received the premium. Even in the decision referred to supra in the case of Dharmachand, the Apex Court has held that the insurance must be deemed to have commenced on receipt of the premium. There is absolutely no quarrel about the legal position laid down in the aforesaid decisions. The only question is, as to whether these principles are applicable to the facts of this case. In my opinion, having regard to the evidence on record in this case, the aforesaid decisions are not applicable to the facts of this case.
17) As noticed supra, there is no dispute about the receipt of the premium amount on 21.08.2000 within office hours. In the absence of any other evidence, as held in the aforesaid decisions, the risk would have come into force from the time of receipt of the premium, despite the fact that in the premium different date and time is mentioned. However, in the 14 case on hand, there is yet another important evidence on record which would clearly indicate that the insured specifically wanted the risk to be covered from a particular date. It is well-settled that policy of insurance would be issued pursuant to contract. Before issuance of policy, there would be a proposal from the owner of the vehicle giving particulars of the vehicle and also the period for which he requires the risk to be covered. It is for the Insurance Company to act on that, verify the particulars and if the details furnished are acceptable, it is open to the Insurance Company to accept the proposal. Once the Insurance Company accepts, it becomes a contract. The Apex Court in Deokar Exports' case referred to supra, in Para-11, has observed thus:-
"11. A policy of insurance is a contract based on an offer (proposal) and an acceptance.
The appellant made a proposal. The respondent accepted the proposal with a modification. Therefore, it was a counter-15
proposal. Appellant had three choices. The first was to refuse to accept the counter- proposal, in which event there would have been no contract. The second was to accept either expressly or impliedly, the counter- proposal of the respondent (i.e., respondent's acceptance with modification) which would result in a concluded contract in terms of the counter-proposal. Third was to make a counter-proposal to the counter-proposal of the respondent in which event there would have been no concluded contract unless the respondent had agreed to such counter proposal. But, the appellant definitely did not have the fourth choice of propounding a concluded contract with a modification neither proposed nor agreed to by either party..................."
18) In the case on hand, Ex.P.1 is the proposal form submitted by the owner. The proposal form has been submitted on 21.08.2000. In column No.24 of the proposal form, the insured had sought for coverage of the policy from 22.08.2000 to 21.08.2001. It is the 16 contention of the learned counsel for the appellant that in the proposal form the particulars are filled by some officials in the office of the Insurance Company and without understanding the consequence thereof, the insured must have subscribed his signature to the same. However, it is for the insured to come-out with such kind of explanation and not for the 3rd party like the claimant. It was the owner of the vehicle who wanted the risk to be covered by issuance of policy and for that he had submitted the proposal form specifying the period for which he wanted the risk to be covered. When that was the proposal by the insured and the same having been accepted by the insurer, a concluded contract came into existence pursuant to which the policy was issued. In the policy, it has been specifically mentioned that it commenced from 14.49 hours on 22.08.2000. From this it is clear that the insured wanted the risk to be covered from a future date though he had paid the premium amount earlier. It is open to 17 the proposer to ask for coverage of the risk from a future date after paying the premium amount in advance. In fact as per Section 64(V)(B) of the Insurance Act, the premium is required to be received in advance. It cannot be said that even where the proposer wants coverage of the risk from a future date, the policy is deemed to have come into force from the time and date of the payment of premium. Therefore, in the light of the contents of Ex.R1, it cannot be said that the policy deemed to have come into force from 21.08.2000 immediately after the receipt of the premium amount. Having regard to the contents of Ex.R1, the risk for which the policy had been issued, had come into force only from 22.08.2000, as requested by the owner of the vehicle and since the accident occurred at about 8.45pm on 21.08.2000, there was no valid policy issued by the Respondent-Insurance Company in respect of the vehicle in question. In this view of the matter, the Tribunal is justified in holding 18 that the insurer is not liable to indemnify the insured in respect of the claim of the claimant arising out of the accident in question. The said finding is in accordance with the evidence on record as well as the provisions of law. In this view of the matter, I find no ground to interfere with the said finding recorded by the learned Member of the Tribunal. Therefore, the insurer cannot be held liable to pay compensation amount quantified. In this view of the matter, the appeal is liable to be dismissed against the Insurance Company.
19) There is no dispute as to the occurrence of the accident and the appellant sustaining injuries as a result of the user of the vehicle in question. Therefore, the owner of the vehicle is vicariously liable for the act of his employee, as such, the owner is liable to compensate the claimant for the injuries sustained by him.
20) As per the medical evidence on record, the petitioner sustained fracture of sub-trochanter of right 19 femur and he was treated in Hosmat Hospital as inpatient for 7 days, during which period, he underwent surgery for reduction of the fracture with implants. After discharge from the hospital, for quiet some time he must have taken rest. Taking into consideration the nature of the injury, duration of treatment and the surgery undergone, I am of the considered opinion that the quantum of compensation determined towards pain and agony at Rs.30,000/-, conveyance and nourishment at Rs.5,000/-, future medical expenses at Rs.15,000/- are just and proper and does not warrant any enhancement.
21) The Tribunal has assessed the income of the claimant at Rs.3,000/- p.m. According to the claimant, he was working as a driver in Maruthi Van belonging to PW.3 on a monthly salary of Rs.4,500/-. PW.3 in her evidence reiterated the case of the claimant in this behalf. However, the claimant has not produced any evidence to show that he possessed driving licence nor 20 any evidence is produced to show that PW.3 owned a Maruthi Car. In the absence of any acceptable evidence that the claimant was working as a driver, in my opinion, the Tribunal is justified in assessing monthly income of the claimant at Rs.3,000/- by treating him as an ordinary labourer.
22) The accident occurred in the year 2000 and during that period, even an ordinary labourer was getting Rs.100/- per day. Therefore, the monthly income assessed by the Tribunal at Rs.3,000/- is just and proper. Therefore, the loss of earning for a period of three months during treatment and rest, is just and proper and does not warrant enhancement.
23) The medical expenses at Rs.33,500/- is awarded on the basis of the bills produced, therefore, there is no grievance in that regard.
24) The only grievance made-out by the learned counsel for the appellant is that the Tribunal has not 21 awarded adequate compensation towards loss of amenities and loss of future earning on account of permanent disability, in the light of the evidence of the doctor.
25) Having regard to the nature of injuries and disability suffered by the claimant, the compensation awarded by the Tribunal under the head of loss of future income and loss of amenities, is too low and inadequate. The Tribunal ought to have independently assessed compensation towards loss of amenities and loss of future income. The evidence of PW.2, the Doctor, who treated the claimant, clearly indicates that the claimant has suffered permanent disability on account of fracture. According to the Doctor, the implant is still in situ and it requires to be removed. The evidence of the Doctor would clearly indicate that there is a great amount of restriction in the movement of the right leg of the claimant and he has estimated the percentage of disability in the right lower limb at 36% and the whole 22 body disability at 14%. There is no serious challenge to this part of evidence of PW.2. Therefore, in my opinion, the Tribunal ought to have taken into consideration the percentage of disability as spoken to by PW.2, as the functional disability for the purpose of quantifying the future loss of earning. The nature of the disability suffered by the claimant will have to be endured during the rest of his life. Therefore, it would certainly come in the way of his future enjoyment of life, as such, there is loss of amenity.
26) Having regard to the evidence on record, I am of the considered opinion that the claimant is entitled for compensation of Rs.20,000/- towards loss of amenities and loss of future earning to be calculated by accepting the functional disability at 14% and adopting the multiplier of '15', as the claimant is aged about 36 years. The compensation payable towards the loss of earning on this basis works out to Rs.75,600/-. Thus, the claimant is entitled for enhancement of 23 compensation by Rs.85,600/- over and above the compensation awarded by the Tribunal. To this extent, the appeal deserves to be allowed.
27) Accordingly, the appeal is allowed. The owner of the offending vehicle, namely, the 2nd respondent herein is directed to pay the enhanced compensation of Rs.85,600/- with interest at 6% pa. from the date of petition till the date of payment. The appeal against Respondent No.1 is hereby dismissed.
SD/-
JUDGE KGR*