* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ F.A.O. No.12 of 1991 & C.M. Appl. No.5043 of 2004
% 31.05.2010
KAMLA KUMARI THROUGH L.R.‟S ...... Appellant
Through: None.
Versus
DROPATI DEVI & ORS. ......Respondents
Through: Mr. Navneet Goyal & Mr. Varun Kumar,
Advocates.
WITH
F.A.O. No.17 of 1991 & C.M. Appl. Nos.284 of 2001, 12071 of 2004
DAROPATI DEVI & ORS. ...... Appellants
Through: Mr. Navneet Goyal & Mr. Varun Kumar,
Advocates.
Versus
GULTAR CHAND & ORS. ......Respondents
Through: None.
Reserved on: 12th April, 2010
Pronounced on: 31st May, 2010
JUSTICE SHIV NARAYAN DHINGRA
1. Whether reporters of local papers may be allowed to see the judgment?
2. To be referred to the reporter or not?
3. Whether judgment should be reported in Digest?
JUDGMENT
1. These two appeals have been preferred against the award dated 17th August, 1990 whereby the learned Tribunal awarded a sum of Rs.90,000/- as compensation to the claimants along with interest of 10 per cent per annum. The claimants, Smt. Daropati Devi & others, have assailed the award alleging that the compensation granted was inadequate, whereas the owner of the vehicle Smt. Kamla Kumari (through LRs) has F.A.O. Nos.12 & 17/1991 Page No.1 of 7 assailed the award on the ground that the Tribunal wrongly held that the liability of the insurance company was limited only to the extent of Rs.50,000/- and rest of the compensation was payable by the owner. The owner also raised an issue that there was no negligence on the part of the driver. The bus was running on a DTC route under a contract, therefore, DTC was liable for damages and learned Tribunal did not appreciate the evidence properly and did not take into consideration the entire evidence on record.
2. The insurance company had contested both the appeals on the issue of liability of the insurance company being limited to the extent of Rs.50,000/-.
3. I shall deal with the issue of liability to the insurance company first. This court in F.A.O. No. 257 of 1991 titled Neeta Trehan & Ors. Vs. Gopal Krishan & Ors., decided on 17th May, 2010, had considered the issue of liability and observed as under :-
"14. The issue arises whether this insurance cover obtained by the insured was limited to a liability of Rs.1,50,000/- being the minimum liability for which a vehicle was required to be insured by the owner or this premium covered wider liability. Counsel for the appellants has drawn my attention to the judgment in Veena Pruthi's case (supra) given by the Division Bench of this court where the Division Bench of this court held that if the premium was Rs.125/-, the liability would be limited to Rs.1,50,000/- and not unlimited. On the same logic it is stated that if the premium was Rs.240/- for class A(2) vehicle, the liability of insurance company would be limited to Rs.1,50,000/-.
15. Where obtaining of an insurance cover is made mandatory by statute, the contract is to be interpreted in the light of statutory provisions. In case of motor vehicles, obtaining of an insurance cover by the owners of vehicles is a statutory requirement. Thus, an insurance policy has to be interpreted keeping in view the statutory provisions and the rules of tariff as framed by the Advisory Board. Under the tariff rules, two separate tariffs are provided for 'Act Only Liability' and for 'Public Risk'. It cannot be said that the Advisory Board provided tariff for 'Act Only Liability' as a superfluous phenomenon. The Advisory Board was having in mind that where the owner wants to take an insurance policy covering the minimum liability under Section 95 of the Act, then the premium should be different. If the owner wants wider F.A.O. Nos.12 & 17/1991 Page No.2 of 7 liability then the premium should be different and that is the reason that for 'Act Only Liability', a premium of Rs.200/- was provided and for 'Public Risk', a premium of Rs.240/- was provided. Public risk is a wider term and takes into account the entire risk faced by the owner for bringing vehicle on road. If there had been no compulsion under the Act to obtain an insurance policy, the only insurance cover which owner could have obtained from an insurance company for covering public risk would have been this that he would pay Rs.240/- and get the public risk covered. If the Act would have not prescribed any limit, the public risk would naturally have been unlimited. The Act prescribed that every owner of vehicle should get insurance cover covering a minimum amount. Beyond that, the Act did not provide anything. It is under these circumstances that the Tariff Advisory Committee prescribed separate premium for 'Act Only Policy' and separate premium for a 'Public Risk Policy'. I, therefore, consider that the 'Public Risk' premium would cover unlimited amount of risk and would not cover a limited amount of risk.
...................................
18. There is another aspect to be kept in mind. When an owner approaches insurance agent for insurance, he is told what would be the tariff payable by him and on payment of tariff, an insurance certificate or cover note is issued. The contract of insurance, thus, stands concluded on receipt of tariff/premium in terms of the tariff schedule as laid down by Advisory Board. Insurance policy is subsequently mailed to owner by insurance company. If insurance company unilaterally inserts a clause in the policy which is contrary to tariff regulations, such a clause is not binding. All insurance policies are in the shape of one standard performa used for different kinds of coverage. If while sending insurance policy to owner the company official does not score off non-applicable clauses or inserts a limited liability clause which is contrary to the tariff charged from owner, such a clause is not binding."
4. I consider that in order to fix the liability of insurance company, the Tribunal should have seen the premium charged by the insurance company and the tariff rules prevalent at that time to find out whether the premium charged was for the „Act Only Liability‟ or it was for covering „Public Risk‟. If the premium had been charged for „Act Only Liability‟, the liability of insurance company would be limited to Rs.50,000/-. It was obligatory on the owner of vehicle to obtain a minimum insurance cover as prescribed under the Act by paying the premium as prescribed by the Advisory Board in the tariff F.A.O. Nos.12 & 17/1991 Page No.3 of 7 rules. If the insurance company has charged a premium for „Act Only Liability‟, the rest of the damages were liable to be paid by the owner himself. In the present case, there is no dispute that the bus was insured and a premium of Rs.111/- was paid by the owner of the bus towards „Third Party Risk‟. This fact is admitted by the insurance company even in reply to this appeal. The tariff rules prevalent at that time for Class B (1) passenger service vehicles are as under :-
CLASS "B (1)" : PUBLIC PASSENGER SERVICE VEHICLES-
(EXCLUDING PASSENGER RISK) (Endorsement No.26 must be used except in the case of Liability to the Public Risks and "Act Only" Liability Policies) Maximum Licensed Comprehensive Liability "Act Passenger Carrying to the Only"
Capacity Public Liability
Risks
(a) SINGLE DECK
1. Not exceeding 18 .. .. Rs.276 + ½ % Rs.78/- Rs.65/-
on I.E.V.
2. 19 to 24 inclusive .. .. Rs.301 + ½ % Rs.82/- Rs.69/-
on I.E.V.
3. 25 to 30 inclusive .. .. Rs.351 + ½ % Rs.97/- Rs.74/-
on I.E.V.
4. 31 to 36 inclusive .. .. Rs.401 + ½ % Rs.106/- Rs.79/-
on I.E.V.
5. Exceeding 36 .. .. Rs.426 + ½ % Rs.111/- Rs.84/-
on I.E.V.
(b) DOUBLE DECK
1. Not exceeding 60 .. .. Rs.426 plus 1 Rs.111/- Rs.84/-
per cent on
I.E.V.
2. Exceeding 60 Rs.526 plus 1 Rs.135/- Rs.103/-
per cent on
I.E.V.
5. It is apparent from the above tariff rates as prescribed under India Motor Tariffs Rules by Advisory Board that the „Act Only Liability‟ was covered if premium of Rs.84/-
was paid. In the present case, the premium of Rs.84/- was not paid by the owner but the premium paid by the owner was Rs.111/- which covered „Liability to the Public Risks‟ F.A.O. Nos.12 & 17/1991 Page No.4 of 7 and no limits of this liability have been provided. I, therefore, consider that the Tribunal wrongly came to conclusion that the liability of the insurance company was limited to Rs.50,000/-. I consider that the liability of insurance company was unlimited in this case.
6. As far as quantum of compensation is concerned, the Tribunal awarded a compensation of Rs.90,000/- taking into account the salary of the deceased as Rs.350/- per month and observing that contribution being made by the deceased towards the family must be around Rs.300/- per month. The Tribunal used a multiplier of 25 looking that the age of deceased was 31 years and awarded above compensation. Counsel for the appellant/claimants have relied upon Sarla Varma & Ors. vs. Delhi Transport Corporation & Anr.; (2009) 6 SCC 121 to seek enhanced compensation and have also submitted that the salary of the deceased was wrongly taken as Rs.350/- whereas evidence adduced on record shows that the salary of the deceased was around Rs.450/- per month.
7. I have perused the evidence led before the trial court. The evidence shows that the deceased was initially working with M/s. Frick India Ltd. and his services with M/s. Frick India Ltd. were terminated in April, 1982 as he had started absenting. The deceased had joined M/s. Frick India Ltd. in the year 1977 @ Rs.325 per month. It was testified by the official of M/s. Frick India Ltd. that the deceased was getting bonus of 15 per cent and Contributory Provident Fund on the pay. His salary in the month of October-November, 1982 would have been Rs.348.84 besides other benefits. It is under these circumstances that the Tribunal had considered salary of the deceased as Rs.350 per month. However, this same witness stated that salary of the deceased had he been working in the company in September, 1982 would have been Rs.455/-. This seems to have been calculated after adding bonus and other benefits. Since the deceased has left M/s. Frick India Ltd. in April, 1982, the Tribunal considered the last drawn salary of the deceased as the basis of F.A.O. Nos.12 & 17/1991 Page No.5 of 7 computing compensation. It is on record that the deceased had left M/s. Frick India Ltd. and started his own contract work. The deceased would not have left M/s. Frick India Ltd. unless he had better prospects and was having better earnings by working independently. I, therefore, consider the Tribunal should have considered future prospects of the deceased. Since the deceased was only 31 years old, 50 per cent future prospects as per Sarla Varma's case (supra) would be just and proper. I also consider that the income of the deceased in September should have been considered as Rs.400/- as his income in April, 1982 was around Rs.400/- (Rs.350/- + 15 per cent of Rs.350/-). The deceased left behind a large family, namely, a widow, five children and parents. Thus, the deduction to be made from the income of the deceased would be 1/5th. The deceased would have, therefore, been contributing towards maintenance of his family Rs.480/- (400+200=600 x 4/5). Since the age of the deceased was 31 years, I consider a multiplier of 18 would have been the appropriate multiplier. Thus, the total compensation payable to the claimants would be Rs.1,03,680/- (480 x 12 x 18). The Tribunal has also not awarded anything to the claimants towards non-pecuniary benefits. I consider that the Tribunal ought to have awarded Rs.3,000/- towards funeral expenses, Rs.5,000/- each towards loss of estate and loss of consortium. Since the Tribunal left behind five young tender age children, I consider that they were entitled to be a suitable compensation for loss of love and affection. So, I award Rs.10,000/- towards loss of love and affection to the claimants who were sons and daughters of the deceased. I, therefore, consider that the claimants were entitled to Rs.1,26,680/-. The award of the Tribunal is accordingly modified and claimants are held entitled to this compensation. The Tribunal has awarded interest @ 10 per cent per annum from the date of filing of the petition, that is, 5th January, 1983 till realization. On the enhanced amount, the claimants shall be entitled to recover interest @ 7.5 per cent per annum.
F.A.O. Nos.12 & 17/1991 Page No.6 of 7
8. The plea raised by the owner that DTC should have been held liable to pay compensation is not tenable. The owner has failed to prove a contract between itself and DTC showing that DTC had taken up the responsibility of paying damages. As far as issue of negligence is concerned, the learned Tribunal appreciated the evidence properly and came to a right conclusion that it was the driver of the bus who was responsible for the accident.
9. The liability of the insurance company is held to be unlimited. The award stands modified in terms of paragraph 7 above. The insurance company is held liable to make the payment of entire award amount. The insurance company seems to have paid only Rs.50,000/-. Rest of the amount shall be deposited by the insurance company within eight weeks from the date of the judgment with the Tribunal and the Tribunal shall disburse the same amongst the claimants in the same ratio in which it has ordered earlier in the award.
10. Both the appeals are disposed of in terms of the above order.
SHIV NARAYAN DHINGRA J.
MAY 31, 2010 'AA' F.A.O. Nos.12 & 17/1991 Page No.7 of 7