National Insurance Company vs Abdul Karim & Others
2013 Latest Caselaw 810 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 
Reserved
 

 

 

 
First Appeal From Order No. 744 of 1994
 
National Insurance Company Ltd. (Divisional  Office) Allahabad, through Administrative Officer...................................Defendant-Appellant
 
Vs.
 
Abdul Karim and others..............................Claimants-Respondents.
 

 
Hon'ble Rajes Kumar, J.

Heard Sri V.K. Birla, learned counsel for the appellant and Sri R.K. Porwal, learned counsel appearing on behalf of the respondents.

Despite the service of notice on respondent no. 3 no one appears on behalf of respondent no. 3.

This is an appeal by the insurer of Metador Toyota, bearing registration no. U.P. 78/B-3603. It was the case of the claimants that on 9.7.1991 when Abdul Karim, along with his daughter Km. Najma, had gone to meet his elder daughter Smt. Shakeela in her in-laws house in village Nandpur , P.S. Phaphund, District Etawah, while returning from village Nandpur they were waiting for bus at Kakor Buzurg on Dibiyapur Auraiya Road and were sitting at a distance of about 5-6 steps away from the road under a tree near a cycle repairing shop. At about 9-30 a.m. Metador Toyota, bearing registration no. U.P. 78/B-3603 reached at the spot which was being driven rashly and negligently, dashed with a box kept at the cycle repairing shop and also dashed Abdul Karim and his daughter Km. Najma-deceased as a result Abdul Karim and his daughter Km. Najma received grievous injuries along with other persons standing over there. The driver of the vehicle Sri Rajesh alias Bhanoo left the vehicle and ran away from the spot. The claimant Abdul Karim and his daughter were taken to Dibiyapur Hospital where Km. Najma succumbed to her injuries on reaching at the hospital. Km. Najma was 18 years old and used to lookafter the household work and her parents. The claimants, who are the parents of the deceased Km. Najma, claimed that on account of death the parents suffered loss of Rs.25 per day and accordingly total compensation was claimed at Rs.2,55,000/- for 25 years. The age of Abdul Karim was stated at 45 years and the age of the mother was 42 years. The Tribunal by the impugned order allowed the compensation at Rs.1,00,000/- along with interest @ 12%.

Learned counsel for the appellant submitted that the claimants have not made out a case that they were dependants upon the deceased Km. Najma, therefore, the determination of pecuniary loss for dependency at Rs.90,000/- is unjustified. Reliance is placed on the decisions of the Apex Court in the case of Sarla Verma (Smt) and others Vs. Delhi Transport Corporation and another, reported in (2009) 6 SCC 121 Para-31 and Smt. Manjuri Bera Vs. Oriental Insurance Company Ltd. and another, reported in 2007 (2) TAC 431 (S.C.). He further submitted that admittedly the driving licence has not been filed and, therefore, claimants and owner of the vehicle failed to discharge the burden that the driver of the vehicle possessed the valid driving licence. Reliance is placed on the decisions of the Apex Court in the case of Bhushan Singh Vs. Oriental Insurance Company Limited and another, reported in (2009) 5 SCC 136 and National Insurance Company Ltd. Vs. Brij Pal Singh and another, reported in 2003 (3) TAC 849 (All.). He further submitted that in any view of the matter, the compensation should be awarded having regard to the average age of the parents and not on the basis of the age of the deceased as the deceased was unmarried. He further submitted that the interest awarded @ 12% is excessive.

Sri R.K. Porwal, learned counsel appearing on behalf of the respondents relied upon the decision of the Tribunal and submitted that the deceased was 18 years old and was involved in the household services and was providing physical and mental contribution to the family, therefore, the evaluation of her service @ Rs.300/-per month and the annual evaluation at Rs.3600/- per annum cannot be said to be excessive. The multiplier applied at 25 times is also justified. He submitted that the multiplier has been applied having regard to the reasonable expected age of the deceased. Reliance is placed on the decisions of the Apex Court in the case of National Insurance Company Ltd. Vs. Swaran Singh and others, reported in (2004) 3 SCC 297, Lata Wadhwa and others Vs. State of Bihar and others, reported in (2001) 8 SCC 197, New India Insurance Company Ltd. Vs. Padam Singh and others, reported in 2007 (4) TAC 388 and New India Insurance Company Ltd. Vs. Smt. Shanti Pathak and others, reported in 2007 (4) TAC 17 (SC).

Having heard learned counsel for the parties, I have perused the impugned order. From the impugned order, it appears that the owner of the vehicle, DCM Toyota, Sri Subhash Chandra did not file any reply and did not appear before the Tribunal and the case proceeded exparte against him. However, the case has been contested by the insurance company.

In the case of Mrs. Hafizum Begum Vs. Md. Ikram Heque and others, reported in 2007 (4) TAC, 1 (S.C.), Apex Court held that liability under Section 140 of the Act does not cease because of absence of dependency. Right to file a claim application has to be considered in 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.

In the case of Smt. Manjuri Bera Vs. Oriental Insurance Company Ltd. and another, reported in 2007 (2) TAC, 431, Apex Court has reiterated its view taken in the case of Mrs. Hafizum Begum Vs. Md. Ikram Heque and others (Supra).

Apex Court in the case of Sarla Verma (Smt) and others Vs. Delhi Transport Corporation and others, reported in (2009) 6 SCC, 121 has held that under Section 166 of the Act Tribunal has to assess the just compensation to the legal heirs where the deceased is unmarried leaving behind parents only. Apex Court has held that mother would be considered to be dependent and fifty percent could be treated as personal living expenses of the bachelor and the fifty percent as contribution to the family. Apex Court held that where the deceased was a bachelor and the claimants are parents, deduction follows different principle. In regard to the bachelors, normally, fifty percent is to be deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting married in a short time, in which event the contribution to the parents and siblings is likely to be cut drastically. Further, subject to evidence to the contrary, the father is likely to have his own income and will not be considered as a dependant and the mother alone will be considered as a dependent. In the absence of evidence to the contrary, brothers and sisters will not be considered as dependants, because they will either has independent earning, or married, or be dependent on the father.

In the case of UPSRTC and others vs. Trilok Chandra and others, reported in 1996 (2) TAC, 286, Three Judges Bench of the Apex Court has held that the selection of multiplier cannot, in all the cases, be solely dependent on the age of the deceased. If the deceased is bachelor and his dependents are his parents, the age of the parents would also be relevant in the choice of multiplier. The Two Judges' Bench of the Apex Court, in the case of National Insurance Co. Ltd. vs. Shyam Singh and others (supra), has followed the decision of Three Judges' Bench decision of the Apex Court in the Case of UPSRTC and others vs. Trilok Chandra and others (Supra) and further following the decision of the Apex Court in the case of New India Assurance Co. Ltd. v. Charlie, AIR 2005 SC 2157 and yet another decision of the Apex Court in the case of Oriental Insurance Co. Ltd. vs. Syed Ibrahim and others, reported in AIR 2008 SC 103, has held that in the case of death of a bachelor where the parents are the dependants, the age of the parents or the age of the deceased, whichever is higher, will be taken for the purposes of applying the multiplier.

In the present case the deceased was 18 years unmarried daughter. It is not the case of the claimants that she was earning and father was dependant upon her income. At the most her contribution would be to some help to her mother and that too could be only upto the age till she remains unmarried and, therefore, even if the evaluation of service @ Rs.300/- per month and the annual income at Rs.3,600/- as assessed by the Tribunal is taken, and having regard to the possibility of her service which would have been given to the mother upto the age of 30-35 years maximum multiplier can be 15 and according to which total amount comes to Rs.25,200/- after deduction of 50% for personal expenses. Even if the compensation is to be assessed even otherwise, applying the multiplier of 15 having regard to the age of mother and after fifty percent deduction for personal purposes, the amount can not be more than as has been assessed above. The total compensation in this regard is assessed at Rs. 25,000/-. The order of Tribunal is modified to this extent.

In view of the decision of the Apex Court in the case of Sarla Verma (Smt) and others Vs. Delhi Transport Corporation and others (Supra) legal heirs are not entitled for any compensation under the head of pain, suffering or hardship and, therefore, a sum of Rs.15,000/- awarded under this head is unjustified. Thus total compensation is assessed at Rs.25,000/-.

The Apex Court in the cases of Tejinder Singh Gujral v. Inderjit Singh and another, reported in 2007 (1) T.A.C. 15 (SC) as well as National Insurance Co. Ltd. v. Keshav Bahadur and others, reported in 2004 (2) T.A.C. 1 (SC) has allowed interest @ 9% per annum and following the aforesaid two decisions, the Division Bench of this Court in the case of National Insurance Co. Ltd. v. Salil Prakash Gupta, reported in 2012 (3) T.A.C. 359 has also awarded interest only @ 9% and modified the order of the Tribunal to that extent.

Having regard to the facts and circumstances and the decisions, referred herein above, I am of the view that the interest awarded @ 10% is excessive and it is accordingly reduced to 9%. The order of the Tribunal is modified to this extent only.

Now coming to the next question that whether the claim of the insurance company that since there was breach of contract as the owner of the vehicle was not able to produce the valid driving licence of the driver, the insurance company is not liable to indemnify the owner of the vehicle as the burden lies upon the owner of the vehicle to prove that driver possessed the valid driving licence.

Reliance is placed on the various decisions.

In the case of Oriental Insurance Company Limited Vs. Meena Variyal and others, reported in 2007 (2) TAC, 417, Apex Court has held that ordinarily contract of insurance is a contract of indemnity. When a car belonging to an owner is insured with the insurance company and it is being driven by a driver employed by the insured, when it meets with an accident, the primary liability under law for payment of compensation is that of the driver. Once the driver is liable, the owner of the vehicle becomes vicariously liable for payment of compensation. It is this vicarious liability of the owner that is indemnified by the insurance company and, therefore, the claimant should implead the driver of the vehicle as party.

In the case of New India Assurance Co. Ltd. Vs. Mandar Madhav Tambe, reported in 1996 ACJ, 253 (SC), two Judges Bench of the Apex Court held that exclusion clause in the insurance policy makes it clear that the insurance company, in the event of an accident, would be liable only if the vehicle was being driven by a person holding a valid driving licence of a permanent driving licence 'other than a learner's licence'. The use of the words 'permanent driving licence' in the insurance policy was to emphasise that a temporary or a learner's licence holder would not be covered by the insurance policy.

In the case of National Insurance Co. Ltd. Vs. Brij Pal Singh and another, reported in 2003 (3) TAC, 849, the Division Bench of this Court has held that driving licence is especially within the knowledge of the person concerned, therefore, burden lies upon the owner of the vehicle to prove that the driver had a valid driving licence and not upon the insurer and in case, if the driver of the vehicle did not possess the valid and effective driving licence, the insurance company can not be made liable to satisfy the award against the owner.

Apex Court in the case of Bhuwan Singh Vs. Oriental Insurance Company Limited and another, reported in (2009) 5 SCC, 136 held that burden of proof ordinarily would be on the insurance company to establish that there has been a breach of conditions of the contract of insurance. In terms of Section 149 of the Act the insurance company would be liable to pay the awarded amount to the claimants provided the accident is covered by the terms of the policy, although the burden in respect thereof would be on the insurance company. It has been further held that the question as to whether the appellant was holding a valid licence or not was within his knowledge. The driver was to show that he held licence in respect of the vehicle for which he had filed an application.

Learned counsel for the respondent submitted that in the case of Narcinva V. Kamat and others etc. Vs. Alfredo Antonio Doe Martins and others, reported in 1985 (2) TAC, 396 Apex Court held that burden lies upon the insurance company to prove the breach of terms of contract. Apex Court further held that merely because driving licence could not be produced in the cross-examination, the insurance company can not riggle out its liability under the contract of insurance.

On the principle laid down above it emerges that burden lies upon the insurance company to prove that there is breach of terms of contract. Once insurance company alleges that there is breach of policy for the want of driving licence by the driver of vehicle, since it is within the knowledge of the driver and the owner of the vehicle that the driver possess valid driving licence, it is upon the owner and the driver of the vehicle to give details of the driving licence and to produce the same before the Tribunal. Thereafter, the burden shifts upon the insurance company to establish that there was breach of contract.

In the present case, neither the driver of vehicle nor the owner of the vehicle appeared before the Tribunal and neither filed any statement alleging that the driver possessed the valid driving licence. No details of the driving licence has been furnished and in such situation, it will amount that the insurance company discharged its burden to prove that there was breach of policy.

In the result, the appeal is allowed in part. The order of Tribunal is modified to the extent stated above. However, the insurance company is directed to pay the entire amount of compensation and recover the same from the owner of the vehicle. Any amount already deposited in excess of the amount of compensation fixed above, the insurance company shall be entitled to get refund.

Dated: 12th April, 2013

OP