The Single Bench of the Jammu & Kashmir High Court in the case of National Insurance Company Limited vs Mst. Aisha Bano & Ors. consisting of Justice M. A. Chowdhary held that the loss of dependency begins from the date of accident, but the compensation is calculated on the date the Tribunal awards it.
Bench added that "Interest is given to compensate for the time that has passed during legal proceedings and the delay in receiving the money. However, future earnings are not compensated with interest because they have not yet happened".
Facts
The National Insurance Company Limited filed an appeal under Section 173 of the Motor Vehicles Act against an award (“the impugned award”) made by the Motor Accident Claims Tribunal (“the Tribunal”) in a claim petition. The tribunal awarded compensation of Rs. 23,84,800 to the claimants, with interest of 6% per annum, and the appeal sought to challenge this decision.
The claimants, who are the respondents in this case, filed a petition stating that Amir Rashid, the son of the respondents and brother of respondent No.3, was riding a motorcycle with Sameer Ahmad Bhat as a passenger. While they were traveling from Pampore to Awantipora, a Tipper truck driven by Mudasir Jamal Gojri, the respondent No.4, collided with the motorcycle. The motorcycle was severely damaged, and both riders were seriously injured. They were first taken to Sub District Hospital, Pampore, and then referred to Government SMHS Hospital, Srinagar, where Amir Rashid later died from his injuries. The claimants allege that the accident was caused by the negligent driving of respondent No.4. A case had also been registered with the police for various offences punishable u/s 279, 337, 304A of the Ranbir Penal Code (RPC), which is now repealed with the re-organization of Jammu and Kashmir.
Procedural History
Respondents 4 and 5, the driver and owner of the vehicle in question, did not attend the Tribunal despite being served with notice. So, the case proceeded ex-parte. The Appellant appeared through its Counsel and argued that they should not be held responsible for compensating the claimants as they had violated the terms of the insurance policy by driving the vehicle without a valid permit and fitness certificate. They also claimed that the compensation demanded was unfounded and excessive. However, the Tribunal ruled in favour of the claimants and awarded them Rs.23,84,800, along with 6% interest per year from the date of filing the claim until the amount was fully paid. It ordered the Insurance Company to deposit the awarded amount with the Tribunal and gave them the right to recover it from the vehicle owner.
Contentions Made
Appellant: It was contended that the compensation given by the Tribunal was unfair and excessive. The Ld. Tribunal did not follow the guidelines and laws when awarding compensation and went beyond its authority. Reliance was placed on R. D. Hattangadi v. M/S Pest Control (India) Pvt. Ltd. and United India Insurance Co. Ltd. v. Smt. Savitri Devi to contend that the Ld. Tribunal also committed an error by awarding interest on the future prospects, as it is not allowed. Additionally, the Tribunal awarded very exorbitant amounts of Rs. 50,000/- for loss of estate and funeral expenses, which goes against the settled position of law in National Insurance Company Limited v. Pranay Sethi & Ors. wherein the Apex Court granted only Rs.15,000/- under each of the aforesaid heads.
Respondent: It was contended that the Tribunal estimated the income of the deceased in a way that is commonly done for compensation cases, as supported by previous court rulings. It was also argued that the claim about the compensation amount for loss of estate and funeral expenses being limited to Rs.15,000 was incorrect, as the Hon’ble Apex Court nowhere laid that the compensation under these heads cannot be more than Rs.15,000/-. Reliance was placed on Kirti & Anr. v. Oriental Insurance Company Ltd wherein an amount of Rs.25,000/- had been granted by the Hon’ble Apex Court under each of the aforesaid heads.
Observations by the Court
Regarding the first contention of the learned Counsel for the Appellant that the income of the deceased has been wrongly accepted by the learned Tribunal, the Bench noted that deceased was reported to be 25 years old and was the son of a contractor involved in business. Therefore, his income was to be assessed on guesswork. It noted that the Tribunal determined that the deceased was a businessman/contractor based on witness statements and had an Octrai Contract in his name. Despite the lack of documentary proof, the Tribunal accepted the deceased's monthly income as Rs.16,000, considering his background as the son of a contractor/businessman. This income was deemed reasonable as the deceased owned a motorcycle. After deducting personal expenses and factoring in future prospects and the multiplier of 17 as per the Sarla Verma Judgment rendered by the Apex Court, it concluded that the compensation for loss of dependency was rightly assessed at Rs.22,84,800.
Regarding the second contention that the Tribunal awarded exorbitant amounts of Rs. 50,000/- for loss of estate and funeral expenses, it observed that while most cases awarded Rs. 15,000 for these expenses, there is no Supreme Court ruling stating that compensation cannot exceed Rs. 15,000 for these categories. After considering the Apex Court’s ruling in Kirti and Anr. v. Oriental Insurance Company Ltd, it decided that an amount of Rs. 25,000/- for funeral expenses and loss of estate was appropriate in this case. The award was to be modified accordingly.
It concurred with the third contention that compensation granted under the head of loss of future prospects should not have been subjected to payment of any interest thereon. There cannot be any interest on future prospects, as the same related to an income to be given in the future
Decision:
The Bench partly allowed the appeal. The modified amount of compensation, except that of loss of future prospects of an amount of Rs.6,52,800/-, was payable along with interest @ 6 % per annum from the date of filing of the claim Petition till its realization.
Case: National Insurance Company Limited vs Mst. Aisha Bano & Ors.
Citation: Mac App No. 33/2022 CM Nos. 6083/2022; 3307/2023, on 14th July 2023
Bench: Justice M. A. Chowdhary
For Appellant: Mr Areeb Javed Kawoosa vice Mr Aatir Javed Kawoosa, Advs.
For Respondents: Mr Shabir Ahmad Dar, Advocate for R-1 to 3; and None for R-4 & 5.
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