Darshan Lal & Another vs Krishan Kumar Gupta & Others
2017 Latest Caselaw 6335 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

							Reserved on: 26.10.2017
 
							Delivered on: 06.11.2017
 

 
										    A.F.R.
 

 
Case :- FIRST APPEAL FROM ORDER No. - 2436 of 2004
 

 
Appellant :- Darshan Lal & Another
 
Respondent :- Krishan Kumar Gupta & Others
 
Counsel for Appellant :- Bhoopendra Nath Singh,A.K.Dubey
 
Counsel for Respondent :- A.Sinha,Amit Singh,Anil Kumar,S.K.Srivastava,V.K.Birla
 

 
Hon'ble Ran Vijai Singh,J.

Hon'ble Neeraj Tiwari,J.

(Delivered by Hon'ble Neeraj Tiwari,J.)

We have heard Dr. S.B. Singh, learned counsel for the appellants and Sri Anand Kumar Tripathi, Advocate holding brief Sri Amresh Sinha, learned counsel for the Insurance Company - respondent no. 3. None appears for respondent Nos. 1 and 2.

Brief facts of the case is that the deceased Dilip Kumar, aged about 11 years was son of claimant. He was going to medical store along with his uncle in the evening of 26.6.2000 and a truck bearing No. BR-14 G 0939 coming from Gursahaiganj Side crushed him, resulting his death on the spot. Truck was surrounded by local villagers and shop keepers and truck driver and cleaner left the truck on the spot and ran away. Uncle of the deceased had lodged the F.I.R. and later on, appellants filed Claim Petition No. 81/70/2000 (Darshan Lal and Others Vs. Krishan Kumar Gupta and Others), under Section 163-A of the Motor Vehicles Act before Motor Accident Claims Tribunal/District and Sessions Judge, Kannauj, which was decided vide judgment and award dated 14.9.2001. While deciding the claim petition, after exchange of pleadings, Tribunal has framed three issues:-

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Feeling aggrieved by the judgment and award dated 14.9.2001 passed by the Motor Accidents Claim Tribunal / District and Sessions Judge, Kannauj in Motor Accident Claim Petition No. 81/70/2000 (Darshan Lal and Others Vs. Krishan Kumar Gupta and Others), by which the Tribunal has awarded a sum of Rs. 52,000/- along with 15% interest per annum as compensation, filed appeal before this Court.

Challenging the impugned judgment and award, Dr. Singh has submitted that the Tribunal has erred in fixing the compensation on the basis of item no. 1 of 2nd Schedule appended to section 163 of the Motor Vehicle Act, 1988 (hereinafter referred to as, 'the Act'). In his submissions, in respect of appellants, the Tribunal ought to have taken note of the item no. 6 of the schedule, which talks about the notional income for compensation to those who had no income prior to accident, i.e., Rs. 15,000/- per annum. He has also submitted that in view of the judgment of the Hon'ble Apex Court in the case of Kishan Gopal and Another Vs. Lala and Others (2014 (1) SCC 244); wherein, the Hon'ble Apex Court, taking note of the fact that the value of rupee has come down drastically from the year 1994 (when 2nd schedule of 1994 was inserted), when the notional income of the non-earning member prior to the date of accident was fixed at Rs. 15,000/-, has fixed Rs. 30,000/- per annum as notional income. In his submissions, the Tribunal ought to have fixed notional income of the deceased to be Rs. 30,000/- and by applying the multiplier of 15. He has also contended that in view of the law laid down by the Hon'ble Apex Court in the case of Lakhmi Chand Vs. Reliance General Insurance (2016 (3) SCC 100), the liability of payment of compensation ought to have been imposed upon the insurance company, maybe with a right to recover the same from the owner of the vehicle. In his submissions, mere breach of insurance policy cannot be a ground for the insurance company to escape from the liability of payment of the awarded amount; unless, the breach is so fundamental in nature that it brings the contract ceased.

Rebutting the submissions of learned counsel for the appellants, Sri Sinha submitted that in the case of Putamma and Others Vs. K.L. Narayana Reddy and Another (2014 (1) TAC 926 SC), the Hon'ble Apex Court has fixed the amount of compensation of the deceased, who was minor and was non-earning member of the family, to the tune of Rs. 1,50,000/- and not more than that. He has further contended that in view of the fact that the appellants have not taken any ground in the appeal with regard to shifting of the liability of payment of compensation upon the insurance company on the ground of breach of insurance policy, therefore, the argument to that extent is not tenable in the eyes of law.

Issue no. 1 was decided in favour of appellants. With respect to issue nos. 2 & 3, the Tribunal, taking note of the fact that the deceased was a non-earning member of the family, fixed the compensation on the basis of the item no. 1 of 2nd Schedule appended to section 163 of the Act and assessed the amount of compensation to the tune of Rs. 52,000/-.

Learned counsel for the appellants relying upon the judgment of the Hon'ble Apex Court in the case of R.P. Malik Vs. Kiran Pal (2009 (14) SCC 1), has submitted that in a case where the deceased has no income and was a minor at the time of accident, in that eventuality, the notional income should be as per schedule - II of the Act, i.e., Rs. 15,000/- per annum. Here, it would be appropriate to reproduce the observation made by the Hon'ble Apex Court in the aforesaid case, which reads as under:

"15. The real problem that arises in the cases of death of children is that they are not earning at the time of the accident. In most of the cases they were still studying and not working. However, under no stretch of imagination it can be said that the parents, who are appellants herein, have not suffered any pecuniary loss. In fact, Loss of dependency by its very nature is awarded for prospective or future loss. In this context, Lord Atkinson aptly observed in Taff Vale Rly. Co. v. Jenkins, (1911-13) All England Reporter 160 as follows:

"In case of the death of an infant, there may have been no actual pecuniary benefit derived by its parents during the child's lifetime. But this will not necessarily bar the parents' claim and prospective loss will found a valid claim provided that the parents establish that they had a reasonable expectation of pecuniary benefit if the child had lived."

16. Then, how does one calculate pecuniary compensation for loss of future earnings and loss of dependency of the parents, grand parents etc. in the case of non-working student? Under the Second Schedule of the Act in case of a non earning person, his income is notionally estimated at Rs. 15,000/- per annum. The Second Schedule is applicable to claim petitions filed under Section 163 A of the Act. The Second Schedule provides for the multiplier to be applied in cases where the age of the victim was less than 15 years and between 15 years but not exceeding 20 years. Even when compensation is payable under Section 166 read with 168 of the Act, deviation from the structured formula as provided in the Second Schedule is not ordinarily permissible, except in exceptional cases. [see Abati Bezbaruah v. Dy. Director General, Geological Survey of India, (2003) 3 SCC 148); United India Insurance Company Ltd. v. Patricia Jean Mahajan, (2002) 6 SCC 281 and UP State Road Transport Corp. v. Trilok Chandra, (1996) 4 SCC 362].

17. Reverting back to the factual position of the present case, the date of accident is 18.11.1997. Prior to this, the Second Schedule of the Act was already introduced w. e. f. 14.11.1994. Thus, the notional income mentioned in the Second Schedule and the multiplier specified therein can form the basis for the pecuniary compensation for the loss of dependency in the present cases. No fact and reason was highlighted during the arguments why the Second Schedule should not apply in the present cases. The Second Schedule also provides for deduction of 1/3rd consideration towards expenses; which the victim would have incurred on himself if he had lived. As compensation for loss of dependency is to be calculated on the basis of notional income because the deceased was a child. It by necessary implication takes into account future prospects, inflation, price rise etc.

18.Therefore keeping in view of Second Schedule of the Act, this Court do not see any reason to differ with the view taken by the Tribunal as well as the High Court in so far as award of pecuniary compensation to the dependents/ claimants is concerned. We must point out here that the learned counsel for the appellants had argued that the notional sum of Rs. 15,000/- should be enhanced and increased as the legislature has not amended the Second Schedule and the same continues to be in existence since it was enacted on 14.11.1994. We are not examining and going into this aspect as the accident had taken place in the present case nearly three years after the enactment of the Second Schedule. The time difference between the date of the enactment and the date of accident is not substantial."

Dr. Singh has further contended that in view of the law laid down by the Hon'ble Apex Court in the case of Kishan Gopal (supra), the notional income, at the present time, ought to have been assessed @ Rs. 30,000/- per annum, instead of Rs. 15,000/- per annum; whereas Sri Sinha has contended that in view of the decision in the case of Puttamma (supra), the amount of compensation, in the case of a minor where he was having no income, cannot exceed beyond Rs. 1,50,000/-. In his submissions, while deciding the case of Puttamma (supra), the Hon'ble Apex Court has placed reliance upon the decision by the three Judges Bench of the Hon'ble Apex Court in the case of Reshma Kumari and Others Vs. Madan Mohan and Another (2013 (2) TAC 369 SC), where the Hon'ble Apex Court has observed that in cases where the age of the deceased is upto 15 years, irrespective of the section 166 or section 163A of the Act under which the claim for compensation has been made, multiplier of 15 and the assessment as indicated in the 2nd Schedule subject to correction as pointed out in Column (6) of the table in the case of Sarla Verma Vs. Delhi Transport Corporation and Others (2009) 6 SCC 121, should be followed. In his submissions, since the case of Puttamma (supra) is later in time, therefore, the same would pravail over the case of Kishan Gopal (supra).

We would like to observe here that while deciding the case of Puttamma (supra), it appears that the Hon'ble Apex Court has not taken note of the judgment in the case of Kishan Gopal (supra), wherein following observation has been made:

"...... and held that the contribution of such children should be Rs.24,000/- p.a. In our considered view, the aforesaid legal principle laid down in Lata Wadhwa's case with all fours is applicable to the facts and circumstances of the case in hand having regard to the fact that the deceased was 10 years' old, who was assisting the appellants in their agricultural occupation which is an undisputed fact. We have also considered the fact that the rupee value has come down drastically from the year 1994, when the notional income of the non- earning member prior to the date of accident was fixed at Rs.15,000/-. Further, the deceased boy, had he been alive would have certainly contributed substantially to the family of the appellants by working hard. In view of the aforesaid reasons, it would be just and reasonable for us to take his notional income at Rs.30,000/- ......"

Considering the de-valuation of the money and rising price index, we find substance in the submissions of learned counsel for the appellants, but in view of the fact that the decision in the case of Puttamma (supra)is later in time and is based on the decision in the case of Reshma Kumari (supra); wherein, following observation has been made:

"40(ii). In cases where the age of the deceased is upto 15 years, irrespective of the section 166 or section 163A under which the claim for compensation has been made, multiplier of 15 and the assessment as indicated in the 2nd Schedule subject to correction as pointed out in Column (6) of the table in Sarla Verma should be followed."

Law laid down by the Apex Court in case of Puttamma (supra) is later in time than the law laid down in the case of Kishan Gopal (supra). Therefore that would prevail and will have binding effect.

Learned counsel for the appellants has further contended that in a case of breach of insurance policy, the insurance company cannot escape itself from payment of awarded amount, unless the breach is so fatal that it, in itself, may render the contract ceased and ineffective. In support of his submissions, he has placed reliance upon the judgment of the Hon'ble Apex Court in the case of Lakhmi Chand (supra); wherein, following observation has been made:

"17. It becomes very clear from a perusal of the above mentioned case law of this Court that the insurance company, in order to avoid liability must not only establish the defence claimed in the proceeding concerned, but also establish breach on the part of the owner/insured of the vehicle for which the burden of proof would rest with the insurance company. In the instant case, the respondent-Company has not produced any evidence on record to prove that the accident occurred on account of the overloading of passengers in the goods carrying vehicle. Further, as has been held in the case of B.V. Nagaraju (supra) that for the insurer to avoid his liability, the breach of the policy must be so fundamental in nature that it brings the contract to an end. In the instant case, it is undisputed that the accident was infact caused on account of the rash and negligent driving of the offending vehicle by its driver, against whom a criminal case vide FIR no. 66 of 2010 was registered for the offences referred to supra under the provisions of the IPC. These facts have not been taken into consideration by either the State Commission or National Commission while exercising their jurisdiction and setting aside the order of the District Forum. Therefore, the judgment and order of the National Commission dated 26.04.2013 passed in the Revision Petition No. 2032 of 2012 is liable to be set aside, as the said findings recorded in the judgment are erroneous in law.

18. Accordingly, we allow these appeals and restore the judgment and order of District Forum. Further, we award a sum of Rs.25,000/- towards the cost of the litigation as the respondent-Company has unnecessarily litigated the matter up to this Court despite the clear pronouncement of law laid down by this Court on the question with regard to the violation of terms and conditions of the policy and burden of proof is on the insurer to prove the fact of such alleged breach of terms and conditions by the insured."

We have considered the argument of learned counsel for the parties and perused the record and we are of the firm view that the Tribunal has erred in awarding Rs. 52,000/- as compensation to the claimants by applying item no. 1 of 2nd Schedule appended to section 163 of the Act, instead of treating the income of the deceased as notional one as provided in the schedule to be Rs. 15,000/- per annum. Therefore, in view of the observations made by the Hon'ble Apex Court in the case of Puttamma (supra), we assess the amount of compensation to be Rs. 1,50,000/-.

We have also considered the argument of learned counsel for the appellants with regard to the liability of payment not by the owner, but by the insurance company and in view of the law laid down by the Hon'ble Apex Court in Lakhmi Chand (supra), we direct the insurance company to pay the awarded amount to the appellants along with interest @ 7% per annum from the date of institution of the claim petition to till the date of actual payment, with the right to recover the same from the owner of the vehicle in case the insurance company is able to prove the breach of insurance policy such that it resulted in ending the contract.

In the light of the observation made herein above, the judgment and award dated 14.9.2001 passed by the Motor Accidents Claim Tribunal / District and Sessions Judge, Kannauj in Motor Accident Claim Petition No. 81/70/2000 (Darshan Lal and Others Vs. Krishan Kumar Gupta and Others) is set aside to the extent as indicated herein above.

The appeal succeeds and is allowed.

Order Date :- 06.11.2017

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