Smt. Kokila And Another vs Ajay Kumar Singh And Ors.
2018 Latest Caselaw 922 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

							         A.F.R.     
 
							Reserved Judgment
 
Court No. - 3									
 
Case :- FIRST APPEAL FROM ORDER No. - 287 of 2010
 
Appellant :- Smt. Kokila And Another
 
Respondent :- Ajay Kumar Singh And Ors.
 
Counsel for Appellant :- Pritish Kumar
 
Counsel for Respondent :- Hari Prakash Srivastava
 

 
Hon'ble Ajai Lamba,J.

Hon'ble Anant Kumar,J.

(Per : Anant Kumar, J.)

1. This First Appeal From Order has been filed under Section 173 of Motor Vehicles Act, 1988, against the award dated 09.12.2009, passed by Additional District Judge/Special Judge, Ayurved Ghotala Prakaran/Motor Accident Claims Tribunal, Lucknow in Claim Petition No.329 of 2005 : Smt. Kokila and another Vs. Ajay Kumar Singh and another.

2. In this appeal, a prayer for enhancement of compensation has been made by the appellants, who were claimants before the Motor Accident Claims Tribunal.

3. Brief facts relevant for disposal of this appeal are that claimants Smt. Kokila and Rajesh Kashyap are the mother and father of the deceased Sonu Kashyap, who was about 20 years of age at the time of accident. Claimants had filed a claim petition before the Motor Accident Claims Tribunal, Lucknow with the assertion that on 14.07.2005, deceased Sonu Kashyap, who was aged about 20 years, was sitting in a Tempo bearing Registration No. UP 32 Z 4666 and was going towards Semramau, Police Station Mall, District Lucknow. While traveling in the said Tempo, near Village Kakrabad, Police Station Mall, Lucknow the driver of the Tempo lost control over the vehicle, due to which the Tempo turned turtle, in which Sonu Kashyap sustained grievous injuries and due to the said injuries he died on the spot.

Post Mortom of the deceased was conducted at King George's Medical College, Lucknow. It was further stated in the claim petition that the occupation of the deceased was driving. He was a self employed person and his monthly income was Rs.7500/- per month. The vehicle was owned by one Ajay Kumar Singh. At the relevant time, vehicle was insured with the United India Insurance Company Ltd., Ashok Marg, Lucknow.

4. The owner and insurer of the vehicle filed their respective Written Statement before the Motor Accident Claims Tribunal.

Owner of the vehicle admitted the accident. It was also stated that the vehicle was ensured for the period from 08.10.2004 to 07.10.2005, which covers the date of accident.

5. The Insurance Company in its Written Statement stated that deceased was a companion of the driver of the said Tempo and since no premium amount was paid towards his insurance, as such, the Insurance Company was not liable to pay any compensation. It was further stated that the driver of the said vehicle was not having valid licence, route permit, etc. hence the liability of insurance company was denied. Therefore, a prayer was made that the claim petition be dismissed.

6. On the basis of pleadings, learned Tribunal framed as many as six issues.

7. The Issue No.1 was regarding the rash and negligent driving of the vehicle by its driver. Issue No.2, 4, 6, were pertaining to Insurance of the vehicle in question with the Insurance Company, validity of driving licence of the driver and regarding the violation of the conditions of the insurance policy. Issue No. 3 and 5 were regarding the compensation for which the claimants were entitled.

8. While deciding Issue No.1, learned Tribunal came to the conclusion that because of negligence of the driver of Tempo, he lost control over the vehicle, due to which the vehicle had turned turtle. As such the Tribunal concluded that the accident had been caused due to the rash and negligent driving of the driver of Tempo in which deceased died.

9. Issue Nos. 2, 4 & 6 were jointly decided. The Tribunal concluded that the vehicle was insured with the United India Insurance Company Ltd. but since the owner of the vehicle had not produced any route permit of the vehicle and other evidences, it was inferred that the vehicle was being run against the terms and conditions of the policy of insurance. As such the Tribunal concluded that the insurance company was not liable to pay any compensation.

10. While deciding issue Nos.3 & 5, learned Tribunal concluded that since no proof of income had been produced, the notional income of the deceased should be assessed as Rs.36,000/- per annum and since the deceased was bachelor, 2/3 of the said income be deducted towards his personal expenses and the dependency of the claimants on the deceased was assessed to the tune of Rs.12,000/- per annum. Further, the learned Tribunal, keeping in view the age of the parents of the deceased, applied the multiplier of 14. As such, the total compensation of Rs.1,68,000/- has been granted. The learned Tribunal further granted Rs.2,000/- towards the funeral expenses. Thus, the learned Tribunal has awarded a compensation of Rs.1,70,000/- plus 7 % simple interest from the date of petition till actual payment.

11. Aggrieved by the award, this appeal has been field by the appellants/claimants for enhancement of the compensation amount.

12. We have heard the learned counsel for the appellants/claimants and learned counsel for the Insurance Company. None has appeared on behalf of respondent no.1/ owner of the vehicle.

13. It is mainly argued by learned counsel for the appellants that though he does not dispute the income of the deceased as assessed by the Tribunal but in this case 40% enhancement towards the future prospects should have been granted by the Tribunal as has been held in the case of National Insurance Company Ltd. Vs. Pranay Sethi and others, 2017 16 SCC 680. Further contention is that the learned Tribunal has wrongly recorded a finding that the dependency of the parents on the income of the deceased is only to the extent of 1/3, and 2/3 income has been deducted towards the personal expenses of the deceased.

It is contended that since the deceased was a bachelor, at the most deduction of 50% of the income of the deceased should have been done towards his personal expenses. It is also contended that compensation towards funeral expenses and other allied expenses must have been granted, as per the mandate of Hon'ble Apex Court in the case of National Insurance Company Ltd. Vs. Pranay Sethi (supra).

14. Learned counsel for the appellants/claimants has further contended that learned Tribunal, by applying a wrong principle, has applied the multiplier of 14, which is incorrect. As per the driving licence of the deceased, which was on record, the date of birth of the deceased was 08.06.1984, on the basis of which age of deceased comes to about 21 years, as such, the multiplier of 18 should have been applied, as has been held in the case of Sarla Verma (Smt.) and others Vs. Delhi Transport Corporation & another, (2009) 6 SCC 121.

15. Learned counsel for the appellants has further contended that though in this case, learned Tribunal has held that the vehicle in question "Tempo" involved in the accident was being driven against the terms and conditions of the policy, therefore, the Insurance Company is not liable to pay compensation. It is submitted that the learned Tribunal has committed a mistake in completely exonerating the Insurance Company and entire liability was fastened on the owner of the vehicle, which is wrong. The Tribunal should have directed the Insurance Company to make the payment of the awarded amount with a right to recovery from the owner of the vehicle, in view of law laid down in the case of National Insurance Company Ltd. Vs. Swaran Singh and others, AIR 2004 SC 1531.

16. Learned counsel for the respondents encountering the arguments has stated that in this case the award made by the Tribunal is fully justified on every count, and is not liable to be set aside. It is argued that since the deceased was a bachelor, the dependency of the claimants has rightly been assessed to the extent of 1/3 of his income. Further contention of learned counsel for the respondent/Insurance Company is that since the Tribunal had come to the conclusion that at the time of accident the said Tempo was being plied against the terms and conditions of the policy, therefore, the Tribunal has rightly fastened the liability of payment of compensation upon the owner of the vehicle and the Insurance Company has rightly been exonerated from the liability of payment. In alternative, the learned counsel for the Insurance Company has argued that if at all the Court comes to the conclusion that the Insurance Company is directed to make payment of the awarded amount with the right to recovery, in such circumstances, the dictum of full bench judgment of this Court rendered in United India Insurance Company Ltd. Vs. Smt. Shashi Prabha Sharma and others, F.A.F.O. No.2174 of 2014, decided on 11st August, 2015, be followed.

17. We have considered the rival submissions and have perused the record.

18. Learned counsel for the appellants has not disputed the income of the deceased. So, the income of the deceased as recorded by the Tribunal to the tune of Rs.36,000/- per annum is correct, therefore, the finding recorded by the Tribunal in this regard needs no interference.

19. So far as the deduction towards the personal expenses of the deceased is concerned, as has been held in the cases of bachelors, a deduction of 50% towards the personal expenses should have been done by learned Tribunal, in stead of 2/3 of the income. In the case of Sarla Verma (supra), it has been held that where the deceased was a bachelor and the claimants are the parents, the deduction follows different principle. In the cases where the deceased was a bachelor, normally 50% income is deducted towards personal and living expenses because it is assumed that a bachelor would tend to spend more on himself. The Hon'ble Apex Court in the case of Sarla Verma (supra) has held as under : -

"31. Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. In regard to bachelors, normally, 50% is 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 parent(s) 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 dependant. In the absence of evidence to the contrary, brothers and sisters will not be considered as dependants, because they will either be independent and earning, or married, or be dependent on the father."

20. So, to our view learned Tribunal has apparently committed a mistake while making deduction towards the personal expenses of the deceased to the extent of 2/3 and arriving at a conclusion that dependency of the claimants on the income of deceased was only to the extent of 1/3 only. So, keeping in view the principle as laid down in the case of Sarla Verma (supra), the dependency of the claimants in this case is held to the extent of 50%, which comes to Rs.18,000/- per annum, in stead of Rs.12,000/- per annum.

21.  So far as the question of future prospects is concerned, it is to be noted that the deceased was a driver by profession, as is evident from the record, and he was holding a valid driving licence. In the case of National Insurance Company Ltd. Vs. Pranay Sethi (supra), in para 64, the Hon'ble Apex Court has held as under :-

"64. In view of the aforesaid analysis, we proceed to record our conclusions : -

(i) ...................................................................................

(ii) ...................................................................................

(iii) ..................................................................................

(iv) In case the deceased was self-employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component.

(v) For determination of the multiplicand, the deduction for personal and living expenses, the tribunals and the courts shall be guided by paras 30 to 32 of Sarla Verma which we have reproduced hereinbefore.

(vi) The selection of multiplier shall be as indicated in the Table in Sarla Verma read with para 42 of that judgment

(vii) The age of the deceased should be the basis for applying the multiplier.

(viii) Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs 15,000, Rs 40,000 and Rs 15,000 respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three years."

(emphasised by us)

22. Thus, in view of condition (iv) of the above mentioned guidelines, where the deceased was a self employed, an addition of 40 % of the established income should be the warrant, where the deceased was below the age of 40 years. So, in the case in hand an addition of 40 % to the income of the deceased is granted. Thus, the dependency of the claimants, on the income of the deceased, along with the future prospects comes to Rs.18,000+Rs.7200/- (Rs.25,200/-) per annum.

23. So far the multiplier to be applied in this case is concerned, in para 42 of Sarla Verma (supra), the Hon'ble Apex Court has held that for the age group between 21 to 25, the multiplier of 18 is to be applied.

Thus, in the case in hand, learned Tribunal has wrongly applied the multiplier of 14. So, the multiplier in this case should have been of 18, in stead of 14 .

24. So far as the conventional heads are concerned, in the case of National Insurance Company Ltd. Vs. Pranay Sethi (supra), in para 64 (viii) (extracted above), it has been held that reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs.15,000/-, Rs.40,000/- and Rs.15,000/- respectively. The aforesaid amount should be enhanced at the rate of 10% every three years.

So, to our view a minimum of Rs.15,000/- for funeral expenses, Rs.15,000/- for loss of estate and Rs.40,000/- towards consortium should have been granted by the Tribunal, which has not been done. So, we hereby grant an amount Rs.15,000/- for funeral expenses, Rs.15,000/- for loss of estate and Rs.40,000/- towards consortium, total amounting to Rs.70,000/-. So, the total amount to our view for which the claimants are entitled comes to Rs. 5,23,600/- [25200 X18 = 453600] + [70000].

25. In view of the above observations, we hold that the claimants/appellants are entitled for an amount of  Rs.5,23,600/- towards the compensation.

26. Now the question remains as to whether the liability to pay the compensation should be fastened upon the Insurance Company or the owner of the offending vehicle.

27. In this case the learned Tribunal has held that the owner of the vehicle has not produced route permit or fitness certificate of the vehicle in question. So, the learned Tribunal came to the conclusion that the vehicle was being driven against the terms and conditions of the policy. The learned Tribunal placing reliance upon a case law Chandresh Kumar Agarwal Vs. Yogendra Kumar Srivastava, 2005 (2) TAC 6 Allahabad, has held that in case the vehicle is driven without permit, it will be deemed to be violation of the policy and in such case the liability to pay compensation should be fastened upon the owner of the vehicle.

28. So far as question of fastening of liability on the Insurance Company with a right to recovery from the owner of the vehicle is concerned, learned counsel for the appellants has placed reliance on the law laid down in the case of Swaran Singh (supra), in which the Hon'ble Supreme Court has held as under :-

"78. Sub-section (5) of Section 149 which imposes a liability on the insurer must also be given its full effect. The insurance company may not be liable to satisfy the decree and, therefore, its liability may be zero but it does not mean that it did not have initial liability at all. Thus, if the insurance company is made liable to pay any amount, it can recover the entire amount paid to the third party on behalf of the assured. If this interpretation is not given to the beneficent provisions of the Act having regard to its purport and object, we fail to see a situation where beneficent provisions can be given effect to. Sub-section (7) of Section 149 of the Act, to which pointed attention of the Court has been drawn by the learned counsel for the petitioner, which is in negative language may now be noticed. The said provision must be read with sub-section (1) thereof. The right to avoid liability in terms of sub-section (2) of Section 149 is restricted as has been discussed hereinbefore. It is one thing to say that the insurance companies are entitled to raise a defence but it is another thing to say that despite the fact that its defence has been accepted having regard to the facts and circumstances of the case, the Tribunal has power to direct them to satisfy the decree at the first instance and then direct recovery of the same from the owner. These two matters stand apart and require contextual reading."

29. Considering the principle as laid down by the Hon'ble Apex Court in the case of Swaran Singh (supra), we find that the learned Tribunal has committed a mistake in completely exonerating the Insurance Company from payment of awarded amount.

In the present set of circumstances, where insurance policy was subsisting and only there was a violation of policy conditions, the learned Tribunal should have fastened the liability of payment of compensation upon the Insurance Company with a right to recovery from the owner of the offending vehicle.

30. So, in such circumstances, we hold that on the basis of law laid down in the case of Swaran Singh (supra) the liability to pay compensation lies upon the Insurance Company and Insurance Company is given a right to recovery. Learned counsel for the respondent/Insurance Company has relied upon the case of Smt. Shashi Prabha Sharma (supra). In the case of Smt. Shashi Prabha Sharma (supra), it is held as under : -

"In these circumstances, we hold that where the insurer is directed to pay the amount in the first instance despite having been held not to be under a legal liability to pay the awarded amount, while permitting the insurer to recover the amount from the owner, the procedure which has been laid down in Challa Upendra Rao (supra) would have to be followed. This would envisage that before the amount is released to the claimant, the owner of the offending vehicle shall furnish security for the amount which the insurer has to pay to the claimants. The offending vehicle is to be attached as a part of the security for the purpose of recovering the amount from the insured. The insurer shall not be required to file a suit and may initiate a proceeding before the executing Court. The executing Court may pass appropriate orders in accordance with law as to the manner in which the insured, namely the owner of the vehicle, shall make payment to the insurer. In the event that there is any default, it is open to the executing Court to direct realisation by the disposal of the securities to be furnished or from any other property or properties of the owner of the vehicle. In the event that the person on whose behalf payment has been made by the insurer, does not furnish security or is not in a position to furnish security to the insurer, the insurer should promptly move the executing Court. The executing Court shall then duly ensure that it exercises all its available powers in execution in accordance with law so that while on one hand payment is made to the person to whom it is due, the concerns of the insurer are duly balanced. We may only add here that all necessary and proper steps should be taken by the executing Court to ensure that the intent and object of the legislature in enacting the beneficial provisions of the Act is duly preserved and are expeditiously implemented."

(emphasised by us)

31. In this case accident is shown to have taken place on 14.07.2005, i.e., 13 years back and since the liability to pay the amount of compensation was fastened upon the owner of the vehicle, the appellants/claimants could not reap the fruit of the award and they are still waiting for the amount to be paid to them. So, to our view it would be proper that the Insurance Company may be directed to make payment to the appellants/claimants and then proceed with the recovery of the said amount from the owner of the offending vehicle, as held above.

32. The order of the learned Motor Accident Claims Tribunal, Lucknow which is under appeal is modified.

The appellants/claimants are held entitled for a compensation to the tune of Rs.5,23,600/- (Rupees Five Lacs Twenty Three Thousand and Six Hundred only). The amount of compensation shall be paid to the appellants/claimants by the respondent no.2/United India Insurance Company Ltd. Along with interest @ 7% per annum from the date of petition till actual payment.

33. The United India Insurance Company Ltd. is given a right to recovery of the amount against the owner of the vehicle, in the above terms. The Insurance Company may initiate proceedings for recovery of the amount against the owner of the vehicle after making payment of the compensation amount to the appellants/claimants in terms of full bench judgment rendered in the case of Smt. Sashi Prabha Sharma (supra).

34. Appeal is accordingly partly allowed.

Order Date: - 25.05.2018

ML/-