Bombay High Court
Oriental Insurance Co.Ltd vs Sadhana Devidas Gujarathi And Ors on 3 February, 2021
Bench: P. K. Chavan
2-FA-1069-2018.doc
Shailaja
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO.1069 OF 2018
A/W
INTERIM APPLICATION NO.132 OF 2021
IN
FIRST APPEAL NO.1069 OF 2018
Oriental Insurance Company Ltd. ]
Bombay City Divisional Office No.9, ]
10, Homi Modi Street, Mumbai. ]
(Through Oriental Insurance Co.) ]
M.B.R.O, II, Oriental House, 7th Floor, ]
J.T. Road, Mumbai 400 020. ] Appellant
(Original Opponent No.2)
Vs.
1. Sadhana Devidas Gujarathi, ]
Age 45 years, Occ. Household, ]
2. Chi. Harsha Devidas Gujarathi, ]
Age 17 years, Occ. Education, ]
3. Smt. Vithabai Rakhamaji Gujarathi, ]
(since deceased) ]
Age 87 years, Occ: Nil, ]
All having address C/o D.N. Gangaji ]
¾ Shaniwar Peth, Solapur. ]
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Shailaja S. Digitally signed by Shailaja S.
Halkude
Halkude Date: 2021.02.05 17:31:19
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3(i) Gangadhar Rakhmaji Gujrathi, ]
Age 67, Occ:-Business, ]
R/o. Dharmabad, Dist. Nanded. ]
(ii) Laxminarayan Rakhmaji Gujrathi ]
Age 65, Occ: Business, ]
R/o. Dharmabad, Dist. Nanded. ]
(iii) Sushila Srinivas Gujrathi, ]
Age 50, Occ: Household, ]
R/o Visant Nagar, Nanded. ]
(iv) Sudarshan Rukhmaji Gujrathi ]
R/o. Dharmabad, Dist. Nanded, ]
(v) Vijaykumar Rukhmaji Gujrathi, ]
Age 50, Occ: Business, ]
R/o. Dharmabad, Dist:- Nanded. ]
(vi) Vinayak Rukhmaji Gujrathi, ]
Age 49, Occ:- Service, ]
R/o. 54, Dhanishta, Tarangan, ]
Samata Nagar, Thane (W). ]
3(ii) Laxminarayan Rakhmaji Gujrathi ]
(since deceased through heirs) ]
(a) Anusayabai Laxminarayan Gujrathi ]
(widow). ]
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(b) Nagesh Laxminarayan Gujrathi, ]
(c) Sanjay Laxminarayan Gujrathi, ]
(d) Vasudhara Prakash Lalpoth ]
(e) Pushpa Gopal Gorakh ]
(f) Shamla Gajanan Bakle ]
(g) Nirmala Ravindra Vishwanath ]
(h) Kamal Prashant Gangi ]
All residents of Main Road, ]
Pansare Chowk, Dharmabad, ]
Dist. Nanded 431 809. ]
3 (vii) Chandrakant Rukhmaji Gujrathi ]
R/o Devi Road, Dharmabad, ]
Dist. Nanded. ]
4. M/s. Vaneeta Travels, ]
Sankraman Shibir, Bldg. No.97/1934, ]
National Highway, Goregaon (East), ]
Mumbai 400 065. ] Respondents
(No.1 to 3 Orig. Applicants)
No.4 Orig. Opponent No.1)
.....
Ms. Minal Chandani, for Appellant-Insurer in Appeal and for
Respondent in I.A. No.132 of 2021.
Mr. Sumit Khanna a/w Ms. Bhoomi Katira i/b Dewani Associates, for
Respondents No.1 and 2 in the Appeal and Applicant in I.A. No.132
of 2021.
.....
CORAM : PRITHVIRAJ K. CHAVAN, J.
RESERVED ON : 29th JANUARY, 2021.
PRONOUNCED ON : 3rd FEBRUARY, 2021.
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JUDGMENT:
1. By this appeal, the Oriental Insurance Company Limited
takes an exception to a Judgment and Award dated 31 st July, 2004
passed by the Chairman, The Motor Accident Claims Tribunal,
Solapur (for short 'M.A.C.T") in M.A.C.P No.171 of 1997, by which
the original respondents were awarded compensation to the tune
of Rs.20,00,000/-, on account of death of one Devidas Rakhmaji
Gujarathi in motor vehicle accident, which occurred on 26 th
August, 1996.
2. Briefly stated, the facts are as follows;
Devidas Rakhmaji Gujarathi (for short 'deceased') was 46
years old hale and hearty Ward Officer working with Municipal
Corporation of Greater Mumbai. On the fateful day of 26th August,
1996, he was travelling in his Maruti Car bearing Registration No.
MP-28 799 from Chiplun to Mumbai by Mumbai - Goa National
Highway No.17. Maruti car was being driven by his Driver
Birjusingh Bahadursingh. When the car was approaching the spot
of accident, a Luxury Bus bearing Registration No. MH-02/9612
(for short 'offending bus') came from opposite direction in a
tremendous speed. The offending bus came to the wrong side of
the road and dashed against Maruti Car coming from opposite
direction. Due to the collision between those two vehicles,
deceased was seriously injured. He was immediately taken to
Mumbai and was admitted in Lokmanya Tilak Hospital. He was in
coma for nine days. Ultimately, he succumbed to the injuries.
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The Police reached the spot, drew spot panchanama and
recorded the statements of the witnesses. A sketch map of scene of
occurrence was also prepared by the Investigating Agency.
Respondent No.1-Sadhana is the widow of the deceased.
Respondent No.2-Harsha was son of the deceased and respondent
No.3-Vithabai was the mother of the deceased. A Claim Petition
bearing No.171 of 1997 came to be filed in M.A.C.T, Solapur
against respondent No.4-M/s. Vaneeta Travels and respondent
No.2, it's insurer viz. The Oriental Insurance Company Limited.
3. Despite service of the notice, respondent No.4-owner of the
offending bus did not appear and, therefore, the claim proceeded
ex-parte against it.
4. The appellant-insurer in it's written statement has resisted
the claim. The factum of fatal accident resulting into the death of
deceased has been admitted. However, the appellant-insurer has
denied that the accident had taken place due to rash and negligent
driving by the Driver of the offending bus. It is a specific
contention of the appellant-insurer that the Driver of the offending
bus was driving it in a moderate speed from the correct side of the
road by observing traffic rules. When it reached near the spot of
the accident, Maruti Car came from opposite direction in a very
high speed which was being driven by the deceased and not by the
Driver as contended by the respondents. The deceased lost control
over the car resulting into a dash against the offending bus.
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5. Thus, it is contended by the appellant-insurer that the
accident had occurred due to the own negligence of the deceased
and, therefore, the respondents-claimants cannot claim
compensation from the insurer of the offending bus. In the
alternative, it is the contention of the appellant that the accident
had taken place due to contributory negligence of the Drivers of
both the vehicles. It is also the contention of the appellant-insurer
that a cheque of the premium of the insurance policy issued by
respondent No.4-M/s. Vaneeta Travels, owner of the offending bus,
was dishonoured; the insurance policy was cancelled and the
requisite intimation was given to the owner and, therefore, the risk
in case of third party claim does not exist. The Insurance Company
has also denied the age, income and status of health of the
deceased as contended in the application.
6. After framing necessary issues and recording the evidence of
respondents and one Mr. Demelo Charls Alex, employee of Bombay
Municipal Corporation in Borivali Section and Deepak Bhimrao
Ghongade, Assistant Manager, In-charge of Divisional Office of
Oriental Insurance Company Limited, the learned Chairman, by
the impugned judgment and award directed an amount of
Rs.20,00,000/- with 9% interest to be paid by the appellant-
insurer and respondent No.4 - M/s. Vaneeta Travels jointly and
severally. The learned Chairman, inter alia, granted liberty to the
appellant-insurer to realize the amount of compensation from
respondent No.4-M/s. Vaneeta Travels-owner of the offending bus.
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7. Aggrieved by the Award passed by the learned Chairman, the
appellant-insurer has preferred this appeal mainly amongst the
following facts and grounds;
The impugned award has been assailed on the ground that
the learned Chairman has failed to take into consideration the fact
that the accident had taken place due to the own negligence of the
deceased. The Driver of the offending bus was not at all
responsible for the same as he was driving the bus in a moderate
speed from the correct side of the road by observing traffic rules.
It is assailed on the ground that the learned Chairman failed to
appreciate that if the Driver of Maruti Car Birjusingh Bahadursingh
was driving then it is unbelievable as to how the deceased
sustained injury who was sitting behind the Driver and the Driver
escaped unhurt. Respondents No.1 to 3 have not examined Driver
of the car. The appellant-insurer had also raised an issue of
contributory negligence as already stated hereinabove.
8. The appellant-insurer has mainly assailed the impugned
award on the ground that on the date of the accident, insurance
policy of the offending bus bearing No.121800/31/97/3776 dated
19th August, 1996 was cancelled by a letter dated 5 th September,
1996 since inception as the cheque of Rs.15,629/- issued by
respondent No.4-M/s Vaneeta Travels was returned un-encashed.
As such, there was no insurance contract in existence at the time of
the accident. The appellant-Insurance Company is, therefore, not
liable to pay compensation to respondents No.1 to 3 and it ought
not to have held liable to pay compensation. In other words, it is
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the contention of the appellant that in the absence of the insurance
contract on the date of the accident, it was respondent No.4-owner
of the offending bus who was liable to make payment of the
compensation to the claimants.
9. The appellant has also taken an exception as regards
applicability of the multiplier as per the second schedule in respect
of age of the deceased who was 46 years. The multiplier ought to
have been 13 but the learned Chairman has erred in applying the
multiplier 14. As such, the appellant has prayed for setting aside
the judgment and award passed by the learned Chairman,
M.A.C.T., Solapur being perverse and contrary to the well settled
principles of law and the different pronouncements which shall be
referred hereinafter.
10. I heard Ms. Chandani, learned Counsel for the appellant.
The learned Counsel has reiterated the grounds referred
hereinabove in her arguments. The learned Counsel would argue
that the accident took place on 26th August, 1996 and the policy
was cancelled on 5th September, 1996. The cheque issued by
respondent No.4-M/s. Vaneeta Travels was dishonoured and,
therefore, the appellant ought to have been absolved from
indemnifying the owner of the offending bus while compensating
the respondents-claimants.
11. In short, it is the contention of the learned Counsel for the
appellant that the policy of the insurance was not active on the
date of the accident, apart from the objection as regards
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applicability of the multiplier.
12. On the other hand, Mr. Khanna, learned Counsel appearing
for respondents No.1 and 2 supported the impugned judgment and
award by drawing my attention to the sketch of the spot of the
accident. According to the learned Counsel, there is no question of
contributory negligence since the offending bus came in a rash and
negligent manner to the wrong side of the road and gave a violent
dash to the car in which the deceased was travelling. He would
argue that the learned Chairman has correctly applied the
multiplier considering the age of the deceased. In so far as, the
validity of the insurance policy is concerned, the learned Counsel
submits that the insurer cannot wriggle away from it's liability to
compensate the claimants as the deceased was a third party and,
therefore, the claimants are not at all concerned with the contract
between the owner of the offending bus and the insurer.
13. In support of his arguments, Mr. Khanna has placed reliance
upon a few judgments of the Hon'ble Supreme Court which shall
be referred hereinafter. As such, the learned Counsel prays for
dismissing the appeal.
14. Though, the learned Counsel for the appellant has not
seriously challenged the issue of rash and negligent driving of the
Driver of the offending bus in her arguments, however, it seems to
be the defence before the Tribunal that the deceased was in fact
driving the car in rash and negligent manner and, therefore, it can
be a case of contributory negligence also and consequently, the
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compensation which, according to the appellant is already on
higher side should have been much lesser than what has been
awarded.
15. At the outset, a brief reference to the evidence on record on
the aspect of rash and negligent driving of the offending bus is
necessary. Admittedly, no eye witness has been examined either by
the respondents No.1 to 3-claimants or by the appellant-insurer.
The owner of the offending bus was already absent. Respondent
No.1-Sadhana, widow of the deceased, in her evidence testified
that she came to know about the accident which took place on 26 th
August, 1996 on Bombay Goa National Highway. Her husband
was returning to Mumbai from Solapur in his own car and the car
was driven by the Driver. The evidence of this witness is of hearsay
nature and, therefore, would not be of any assistance on the point
of rash and negligent driving of the driver of the offending bus or
even for that matter, car of her husband. As a matter of fact, the
appellant-insurer could have examined the Driver of the offending
bus to substantiate it's contention that it was the Driver of Maruti
Car who was rash and negligent. Burden of proof as to this
particular fact lay upon the appellant. However, it failed to
discharge the same.
16. A bare look at the true copies of the First Information
Report, Exhibit 54 as well as a spot panchanama, Exhibit 55 makes
the picture clear in view of the principle of res ipsa loquitur. It is
apparent from these two documents that the tar road on the spot
of the accident was 21 feet wide with 5 feet wide strip of kaccha
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road on each side. It necessarily means the width of the road on
the spot of the accident was approximately 31 feet. After the
impact, the offending bus had gone ahead to a distance of about
15 feet towards north from the spot of the accident. It can be seen
that the sport of the accident was only 1 feet away from the
western edge of the tar road. Admittedly, Maruti Car was
proceeding towards Mumbai from Chiplun. As the road on the spot
of the accident runs South North, the correct side of Maruti Car
was western lane of the tar road. The offending bus was coming
from the opposite direction and proceeded towards South from
North. It was obvious that the correct side of the offending bus was
the eastern lane of the tar road. Thus, since the spot of the
accident was in the western lane of the tar road, which obviously
mean that the offending bus collided with Maruti Car in the
western lane of the tar road. The only inference which can be
deduced is that though it was a clear straight road of 1 k.m as is
evident from Panchanama, Driver of the offending bus swerved out
to its extreme, resulting it into the fatal accident, thereby causing
death of the deceased due to the accidental injuries.
17. Once, it has been proved that the accident took place due to
the rash and negligent driving by the Driver of the offending bus,
the next question would be whether it can alternatively be said to
be a contributory negligence.
18. In view of the aforesaid observations, it cannot be said to be
a case of contributory negligence as contributory negligence is a
matter of proof and not an assumption. There was absolutely no
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reason for the Driver of the offending bus to swerve to extreme
western side of the tar road. Thus, Driver of the offending bus can
only be said to be responsible for causing the accident. Since the
Driver of the offending bus had not entered into the witness box,
nor an attempt to that effect appears to have been made by the
appellant-insurer and, therefore, an adverse inference can be
drawn against the Driver of the offending bus. Findings of the
Tribunal to that effect, therefore, are proper and correct in that
regard.
19. In so far as income of the deceased is concerned, his widow
P.W.1-Sadhana has testified that her husband was a Ward Officer in
Bombay Municipal Corporation. He was getting salary of
Rs.17,000/- per month. He was spending Rs. 10,000 to 11,000/-
for the family expenses. She had no independent source of income
except the salary of her husband. Her evidence is supported and
corroborated in material particulars by the second witness of the
applicant namely Demelo Charles Alex who was working in Legal
Department as Court Clerk at the relevant time. According to this
witness, the deceased had drawn a total salary of Rs.17,269/- in
the month of August, 1997. The salary register was brought and
proved at Exhibit 68 before the Tribunal. In the cross-examination,
it is surfaced that it was a computerized salary statement brought
by the witness and, therefore, there is no question of any doubt as
regards monthly salary of the deceased.
20. Turning to the another important aspect of the case is the
challenge to the insurance policy. The appellant has come up with
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a specific case that the insurance policy of the offending bus was
not valid at the time of the accident. It is the contention of the
appellant-insurer as already stated that the cheque issued by
respondent No.4-M/s. Vaneeta Travels towards the premium of the
policy was bounced and, therefore, the appellant-Insurance
Company cannot be held liable to indemnify the insured while
awarding compensation to the legal representatives of the
deceased.
21. In that regard, the appellant-Insurer has examined one Dr.
Deepak Bhimrao Ghongade, who was working as Assistant
Manager, In-charge of Divisional Office of Oriental Insurance
Company Limited at Bombay Office at the relevant time. His
evidence indicates that the cheque which was issued by the
insured towards the premium of the policy was deposited with
Bank of India, Mumbai Branch. However, the cheque was
bounced/dishonoured. Intimation was given to Motor branch of
the Insurance Company. He had proved a letter at Exhibit 76 by
which, the Divisional Manager had cancelled the insurance policy.
According to this witness, an intimation was given to the insured
by a registered letter. The letter is proved at Exhibit 77 and it's
postal acknowledgment is at Exhibit 78. However, in the cross-
examination, he admits that there is an endorsement over the
cheque by the Bank indicating "funds expected, present again". It
appears that the appellant-insurer has not again presented the
cheque as directed by the Bank and thereafter cancelled the policy
on 5th September, 1996. From the endorsement over the cheque as
above, it appears that the cheque was not dishonoured but the
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Bank expected the funds and, therefore, asked the appellant-
insurer to present it again. Dr. Ghongade admits that it was the
responsibility of the insurer to re-deposit the cheque with the Bank
and, therefore, it cannot be said that on the date of the accident,
policy was not in force or not valid. It is, thus, clear that when the
accident had taken place, the insurance policy of the offending bus
was valid and in force. The learned Chairman of the Tribunal has,
therefore, rightly held in his well reasoned judgment that despite
an endorsement directing re-deposit of the cheque, the insurer
failed to do the same and, therefore, it can be inferred that only in
order to avoid the claim, the insurer, perhaps cancelled the policy
on 5th September, 1996 and issued an intimation to the insured
vide communication Exhibit 77. Thus, the claimants who are third
parties are certainly entitled to the claim compensation from the
insured and insurer.
22. Law is no more res integra that the Insurance Company
cannot be absolved from it's liability on the ground that at the
time of the accident, there was no valid insurance policy because
the policy has been cancelled post accident as cheque of the
premium got dishonoured subsequently. In view of these facts, a
reference can be made to a judgment of the Hon'ble Supreme
Court in case of United India Insurance Company Limited Vs.
Laxmamma and others, (2012) 5 Supreme Court Cases 234. After
having considered the various pronouncements viz; Oriental
Insurance Company Ltd Vs. Inderjit Kaur, (1998) 1 Supreme Court
Cases, 371, National Insurance Company Ltd Vs. Seema Malhotra,
(2001) 3 Supreme Court Cases 151, a question which was
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formulated by the Hon'ble Supreme Court in case of United India
Insurance Company Limited Vs. Laxmamma and others is that
whether, the appellant-United India Insurance Company Limited
(Insurer) is absolved of its obligation to the third party under the
policy of the insurance because the cheque given by the owner of
the vehicle towards the premium got dishonoured and subsequent
to the accident, the insurer cancelled the policy of the insured. It
would be apposite to refer paragraphs 14, 15, 16, 17 and 26;
"14. The above provisions came up for consideration
in Inderjit Kaur, Oriental Insurance Co. Ltd. Vs.
Inderjit Kaur, (1998) 1 SCC 371. That was a case
where a bus met with an accident. The policy of
insurance was issued by the Oriental Insurance Co.
Ltd on 30-11-1989 The premium for the policy was
paid by cheque but the cheque was dishonoured.
The insurance company sent a letter to the insured
on 23-1-1990 that the cheque towards premium had
been dishonoured and, therefore, the insurance
company was not at risk. The premium was paid in
cash on 2-5-1990 but in the meantime on 19-4-1990
the accident took place, the bus collided with the
truck and the truck driver died. The truck driver's
wife and minor sons filed the claim petition.
15. A three-Judge Bench of this Court noticed the
above provisions and then held in paras 9, 10 and
12 as under: (Inderjit Kaur case Oriental Insurance
Co. Ltd. Vs. Inderjit Kaur, (1998) 1 SCC 371, SCC
pp.375 & 376.
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"9. We have, therefore, this position. Despite
the bar created by Section 64-VB of the
Insurance Act, the appellant, an authorised
insurer, issued a policy of insurance to cover the
bus without receiving the premium therefor. By
reason of the provisions of Sections 147(5) and
149 (1) of the Motor Vehicles Act, the appellant
became liable to indemnify third parties in
respect of the liability which that policy covered
and to satisfy awards of compensation in
respect thereof notwithstanding its entitlement
(upon which we do not express any opinion) to
avoid or cancel the policy for the reason that
the cheque issued in payment of the premium
thereon had not been honoured.
10. The policy of insurance that the appellant
issued was a representation upon which the
authorities and third parties were entitled to
act. The appellant was not absolved of its
obligation to third parties under the policy
because it did not receive the premium. Its
remedies in this behalf lay against the insured.
12. It must also be noted that it was the
appellant itself who was responsible for its
predicament. It had issued the policy of
insurance upon receipt only of a cheque
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towards the premium in contravention of the
provisions of Section 64-VB of the Insurance
Act. The public interest that a policy of
insurance serves must, clearly, prevail over the
interest of the appellant".
16. In Inderjit Kaur Oriental Insurance Co. Ltd. Vs.
Inderjit Kaur, (1998) 1 SCC 371, the Court invoked the
doctrine of public interest and held that the insurance
company was liable to indemnify the third parties in
respect of the liability which the policy covered despite
the bar created by Section 64-VB of the Insurance Act.
The Court did leave open the question of insurer's
entitlement to avoid or cancel the policy as against the
insured when the cheque issued for payment of the
premium was dishonoured.
17. In New India Assurance Co. Ltd V. Rula, (2000) 3
SCC 195 the Court was concerned with a question very
similar to the question posed before us. That was a
case where the insurance policy was issued by the New
India Assurance Co. Ltd in terms of the requirements of
the MV Act but the cheque by which the owner had
paid the premium bounced and the policy was
cancelled by the insurance company but before the
cancellation of the policy, accident had taken place. A
two-Judge Bench of this Court considered the statutory
provisions contained in the MV Act and the judgment in
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Inderjit Kaur, Oriental Insurance Co. Ltd. Vs. Inderjit
Kaur, (1998) 1 SCC 371. In para 13, the Court held as
under: (Rula case (2000) 3 SCC 195, SCC p. 200).
"13. This decision, which is a three-Judge Bench
decision, squarely covers the present case also.
The subsequent cancellation of the insurance
policy in the instant case on the ground that the
cheque through which premium was paid was
dishonoured, would not affect the rights of the
third party which had accrued on the issuance of
the policy on the date on which the accident took
place. If, on the date of accident, there was a
policy of insurance in respect of the vehicle in
question, the third party would have a claim
against the insurance company and the owner of
the vehicle would have to be indemnified in
respect of the claim of that party. Subsequent
cancellation of the insurance policy on the ground
of non-payment of premium would not affect the
rights already accrued in favour of the third party.
26. In our view, the legal position is this: where the
policy of insurance is issued by an authorised insurer on
receipt of cheque towards the payment of premium and
such a cheque is returned dishonoured, the liability of
the authorised insurer to indemnify the third parties in
respect of the liability which that policy covered subsists
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and it has to satisfy the award of compensation by
reason of the provisions of Sections 147 (5) and 149 (1)
of the MV Act unless the policy of insurance is cancelled
by the authorised insurer and intimation of such
cancellation has reached the insured before the
accident. In other words, where the policy of insurance
is issued by an premium and the cheque gets
dishonoured and before the accident of the vehicle
occurs, such insurance company cancels the policy of
insurance and sends intimation thereof to the owner, the
insurance company's liability to indemnify the third
parties which that policy covered ceases and the
insurance company is not liable to satisfy awards of
compensation in respect thereof".
(emphasis supplied)
23. The judgment of the Hon'ble Supreme Court in case of
United India Insurance Company Limited Vs. Laxmamma and
others (supra), as well as a three Judge Bench referred in case of
Oriental Insurance Co. Ltd Vs. Inderjit Kaur, (1998) 1 SCC 371
squarely covers the facts and situation in the case at hand.
24. Thus, it is clear that subsequent cancellation of the insurance
policy by the appellant herein on 5th September, 1996 on the
ground that the cheque through which the premium was paid was
dishonoured, would not affect the rights of the third party which
accrued on the insurance of the policy on the date on which the
accident took place i.e on 26th August, 1996.
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25. As already clarified in the preceding paragraphs, in fact, the
cheque was not bounced or dishonoured, rather the appellant was
asked to re-deposit the cheque as Bank was expecting funds.
26. Turning to the next important issue of quantifying the
compensation awardwable to the claimants, the Hon'ble Supreme
Court in case of Sarla Verma and others Vs. Delhi Transport
Corporation and another, 2009 ACJ 1298, has in a very detailed
and elaborated manner discussed the aspect of the structured
formula as per the second schedule under section 163A of the
Motor Vehicles Act, 1988, the legal representatives of the deceased
who can claim compensation in case of a fatal accident,
determination of income tax and deduction thereof while
quantifying the compensation as well as almost all the relevant
aspects.
27. The Hon'ble Supreme Court in case of National Insurance
Co. Ltd., Vs. Pranay Sethi and others, 2017 ACJ 2700, has again
clarified on the aforesaid aspects by taking a survey of the various
case laws on those subjects including the aspects of application of
multiplicand and multiplier. Both these judgments have carved
out salient features and the principle of assessment of the quantum
of compensation awardable to the claimants under the Motor
Vehicles Act. It is always essential to work out a just compensation
on the basis of the material placed on record. Just compensation
should be adequate, fair and equitable on the facts and
circumstances of a given case.
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28. It has been observed by the Hon'ble Supreme Court in
case of Sarla Verma (supra), that awarding of compensation
should not be intended to be a bonanza, largesse or source of
profit. The assessment of compensation though involving certain
hypothetical considerations are nevertheless be objective. Justice
and justness emanate from equality in treatment, consistency and
thoroughness in adjudication and fairness and uniformity in the
decision making process and the decisions. While it may not be
possible to have mathematical precision or identical awards, in
assessing compensation.
29. This being a case death of the deceased in a motor
vehicle accident, the important factors which are required to be
taken into consideration are age of the deceased, his income,
number of dependents and the suitable multiplier, as stated
hereinabove. Widow of the deceased Sadhana has testified that
deceased was getting salary of Rs.17,000/- per month which has
further been corroborated by A.W. 2-Demelo Charles Alex. Salary
statement of deceased Devidas has been proved by witness Demelo
Charles Alex at Exhibit 68. There is no reason to disbelieve oral
evidence supported with the salary extract Exhibit 68. As regards
age of the deceased, there has not been any dispute that he was 46
years old at the time of the accident which has further been
corroborated by Exhibit 58. The deceased must have been
contributing major part of his earnings for the expenses of the
family.
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30. In view of the judgment of the Hon'ble Supreme Court in
case of National Insurance Co. Ltd. Vs. Pranay Sethi and others
(supra), while applying method of multiplicand/multiplier, it has
to be accepted on the basis of income established by the legal
representatives of the deceased. Future prospects are to be added
to the sum on the percentage basis and "income means actual
incomes, less tax paid". The multiplier has already been fixed in
case of Sarla Verma (supra). So far as future prospects of the
deceased are concerned, cumulative factors viz; passage of time,
changing society, escalation of price, the change in price index, the
human attitude to follow a particular pattern of life etc are to be
taken into account. In view of judgment in the case of National
Insurance Co. Ltd Vs. Pranay Sethi (supra), income of the deceased
towards future prospects where deceased is between age of 40 and
50 years, would be 30%. Quantifying of the compensation would
include deduction of the income tax prevailing at the relevant time
as well as personal notional expenses of the deceased as per the
judgment in case of Sarla Verma (supra).
31. As regards non pecuniary damages in the form of loss of
consortium, loss of estate and funeral expenses as determined by
the aforesaid judgment will have to be taken into consideration
while finally quantifying total amount of compensation awardable
to the claimants under different heads can be described in the
following tabular form:
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HEAD CALCULATIONS
1. Salary of the deceased Devidas Rs.17,000/-
per month
2. Future prospects income @ Rs. 5100/-
30% for age between 40 to 50 Rs.17000+5100=22,100/
years
3. Deduction towards income tax 15%
as per the prevalent tax Rs.22,100-3315=18785/-
4. 1/3 of the same is required to Rs.6262/-
be deducted towards personal 1/3 of Rs.18785=12523/-
notional expenses of the
deceased
5. This would be loss of Rs.12,523/-
dependency per month
6. Loss of dependency per year Rs.1,50,276/-
7. Suitable multiplier as per Sarla 1,50,276x13=19,53,588/-
Verma would be 13
8. Loss of estate Rs.15,000/
9. Loss of consortium Rs.40,000/-
10. Funeral charges Rs.15,000/-
Total: Rs.20,23,588/-
Thus, total amount of compensation awardable to the claimants
would be Rs.20,23,588/- inclusive of amount of 'no fault liability'
as well as 50% amount which has already been withdrawn by the
claimants.
32. A pursis is given on behalf of respondents No.1 and 2 by the
learned Counsel Mr. Khanna, stating therein that except
respondents No.1 and 2, rest of the legal representatives of the
deceased have already relinquished their claim vide Civil
Application No.3750 of 2018. The pursis is taken on record.
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33. In view of the aforesaid observations, following order is
expedient.
:ORDER:
[1] The appeal is dismissed with costs.
[2] The Judgment and Award passed by the Chairman,
M.A.C.T, Solapur in M.A.C.P No.171 of 1997 on 31 st
July, 2004 stands modified as under;
(a) The appellant-Oriental Insurance Company
Limited and respondent No.4-M/s. Vaneeta
Travels shall jointly and severally deposit
Rs.20,23,588/- with accrued interest as
awarded by the Chairman, M.A.C.T., Solapur.
(b) This amount shall be inclusive of the amount
under 'no fault liability'.
(c) The total amount of compensation shall be
inclusive of 50% amount already withdrawn
by the respondents-claimants.
(d) The entire amount of compensation with
accrued interest shall be deposited in the
Registry of this Court within a period of four
weeks.
(e) After deposit of the entire amount of
compensation with accrued interest,
respondents No.1 and 2 are at liberty to
withdraw entire amount of compensation
including the interest as awarded by the
Tribunal.
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(f) Registry to pay the amount after due
verification of the identity of the
respondents-claimants No.1 and 2.
[2] The appeal stands disposed of.
[3] In view of disposal of the appeal, Interim
Application No.132 of 2021 stands disposed of.
[PRITHVIRAJ K. CHAVAN, J.]
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