Bombay High Court
National Insurance Co. Ltd vs Mr. Ashok Rajaram Bambulkar And ... on 13 January, 2022
Bench: N. J. Jamadar
fa-1142-2019.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
APPELLATE SIDE CIVIL JURISDICTION
FIRST APPEAL NO.1142 OF 2019
WITH
CROSS OBJECTION (ST.) NO.4431 OF 2021
National Insurance Company Limited ...Appellant
vs.
Ashok Rajaram Bambulkar and Others ...Respondents
VISHAL Mr. Amol Gatne, for the Appellant
SUBHASH Mr. T.J. Mendon, for Respondents/Applicants in Cross Objection.
PAREKAR
Digitally signed by CORAM : N.J. JAMADAR, J.
VISHAL SUBHASH
PAREKAR RESERVED ON : 26th OCTOBER, 2021
Date: 2022.01.13
15:30:20 +0530 PRONOUNCED ON : 13th JANUARY, 2022
-------------
JUDGMENT :
1. This appeal and cross objection are directed against the
judgment and award dated 2nd December, 2014 passed by the
learned Member, MACT, Mumbai in MACP No. 1036 of 2013
whereby the application preferred by respondent Nos. 1 and 2/
original claimants for compensation under section 166 of the Motor
Vehicles Act, 1988 (MV Act, 1988) in respect of death of their son
Milind Ashok Bambulkar (the deceased) in the vehicular accident,
came to be partly allowed by awarding a compensation of Rs.
8,87,000/- along with interest at the rate of 7.5% p.a. from the date
of application till realization.
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2. Shorn of superfluities, the background facts leading to appeal
and cross objection can be stated as under:
(a) Milind, the deceased, then 25 years of age was working as an
Office Assistant with Royal Art Electrodes Limited, Vasai. He drew
salary of Rs. 10,000/- p.m. On 18th May, 2013 at about 11.40 pm the
deceased was riding a motor cycle bearing No. MH-02-CS 710 on his
way to Pramila Nagar, Flyover bridge, Dahisar (w), Mumbai. Mr.
Sunil Patre was the pillion rider. When they reached Pramila Nagar
Flyover bridge, a car, of Tata Indica make, bearing registration No.
MH-04-DE-9946 came from behind in a high speed. The driver of the
said car lost control and gave a violent dash to the motor cycle from
behind. The deceased was dragged for a distance.
(b) After primary treatment at Bhagwati hospital, the deceased
was shifted to Nair hospital, and therefrom to Bombay hospital,
Mumbai. The deceased succumbed to his injuries on 26 th May, 2013.
The accident occurred on account the negligence on the part of
driver of the offending car, which was owned by opponent No.
1/respondent No. 3 and insured with opponent No. 2/appellant
herein. Hence, respondent Nos. 1 and 2/ original applicants
preferred a claim for compensation of Rs. 20 lakhs.
(c) The opponent No. 1 did not appear despite notice and hence
the application proceeded ex-parte against opponent No. 1.
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(d) The opponent No. 2/insurer resisted the application by filing
written statement. The averments in the application adverse to the
interest of the insurer were denied. It was, inter alia, contended that
the driver of the offending car was a necessary party and, in his
absence, the application for compensation could not be entertained
and decided. It was further contended that the driver of the
offending car was not at fault and the accident occurred due to the
sole negligence of the deceased. Even otherwise, the insurer was not
liable to indemnify the insured as there was breach of condition of
insurance.
(e) In the light of the rival pleadings, learned Member framed
issues at Exhibit 15. The learned Member recorded evidence of
applicant No. 1 Ashok Babulkar (AW-1), the father of the deceased,
and Satish Mohite (AW.2), who was then attached as a Senior Clerk
with Bombay Hospital, Sunil Patre (AW.3), the pillion rider on motor
cycle driven by the deceased, and Mr. Karim Shaikh (AW.4) who
was working as an Accountant in Royal Art Electrode Limited,
where the deceased was employed as an Office Assistant.
(f) After appraisal of the evidence and documents tendered for
his perusal, the learned Member was persuaded to record the
finding that the deceased met death on account of injuries sustained
in the accident, which took place due to negligence on the part of the
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driver of the offending car, there was no breach of conditions of
insurance and the application was not bad in law for non-joinder of
the driver of the offending car. The learned Member was not,
however, persuaded to believe the testimony of the applicant and
Karim Shaikh (AW.4) that the deceased was employed as an Office
Assistant with Royal Art Electrodes Limited and drew salary of Rs.
9,449/- for the month of April, 2013, for the reason that the
appointment letter and other particulars of employment were not
placed on the record of the Tribunal. Thus, assessing the income of
the deceased on notional basis at Rs. 3,000/- per month, the learned
Member determined the compensation of Rs. 8,87,000/-.
3. Being aggrieved by and dissatisfied with the impugned
judgment and award, the insurer is in appeal.
4. The applicants/respondent Nos. 1 and 2 have also filed the
cross objection being dis-satisfied with the quantum of
compensation. The applicants have assailed the determination of
loss of dependency on the ground that learned Member committed
an error in not assessing the income of the deceased on the basis of
positive evidence on record to the effect that the deceased was
employed with Royal Art Electrode Limited and, instead,
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determining the same on the basis of notional income at a much
lower threshold. The failure to award compensation towards the
future prospects and under conventional heads is also sought to be
assailed.
5. In the aforesaid backdrop, I have heard Mr. Amol Gatne, the
learned counsel for the appellant and Mr. T.J. Mendon, the learned
counsel for the respondent Nos. 1 and 2 at length. Learned counsels
have taken me through the pleadings, depositions of the witnesses
and the material before the Tribunal.
6. Mr. Gatne, the learned counsel for the appellant, would urge
that the learned Member committed a grave error in law in holding
that the application was not bad for non-joinder of the driver of the
offending car. Amplifying the submission, Mr. Gatne would urge that
it is not a case where the objection to non-joinder of the necessary
party was raised by way of a technical defence, casually. In the
written statement itself, the appellant insurer had raised the said
ground of non-joinder with sufficient clarity. An issue (issue No. 2)
was duly framed on the basis of pleadings of the parties.
Nonetheless, the learned Member proceeded to decide the issue
against the appellant, by simply observing that it hardly matters
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whether the driver was made a party, as ultimately the insurer was
liable to pay the compensation. This approach of the Tribunal in the
face of the express statutory prescription under Rule 260 of the
Maharashtra Motor Vehicle Rules, 1989 (Rules, 1989) is legally
unsustainable. Therefore, on this count alone, the appeal deserves
to be allowed, urged Mr. Gatne. In order to lend support to the
aforesaid submission, Mr. Gatne placed a strong reliance on a
judgment of the learned single judge of this Court in the case of New
India Assurance Company Limited vs. Suman Bhaskar Pawar and
Others1.
7. Mr. Gatne would further urge that finding recorded by the
learned Member that the impact occurred on account of negligence
on the part of driver of the offending car is also not borne out by the
record. In the circumstances, the insurer could not have been
saddled with the liability to pay the compensation.
8. In opposition to this, Mr. Mendon, the learned counsel for the
respondent Nos. 1 and 2/applicants strenuously submitted that the
submission sought to be canvased on behalf of the appellant on the
premise that the driver of the offending car was a necessary party,
is not in consonance with law. It is well recognized that the driver of
1 2010 (1) Bom. C.R. 319.
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the offending vehicle, in a proceeding under section 166 of the Act
for compensation, is not a necessary party. According to Mr.
Mendon, the reliance sought to be placed on the judgment of this
Court in case of Suman Pawar (supra) is not well founded. Reliance
was palced on the judgment of another learned single judge of this
Court, in the case of New India Assurance Co. Ltd. vs. Sitaram
Devidayal Jaiswal and Others2 wherein the aforesaid judgment in
the case of Suman Pawar (supra) was explained. Reliance was also
placed on the judgment of the Supreme Court in the case of
Josphine James vs. United India Insurance Co. Ltd. and Another 3 to
bolster up the submission that in a proceeding under section 166 of
the Act, the driver is not a necessary party.
9. On the aspect of quantum of compensation, Mr. Mendon would
urge that the learned Member of the Tribunal committed a grave
error in law in not assessing loss of dependency by taking into
account the salary which the deceased drew. Mr. Mendon urged,
with a degree of vehemence, that in the face of evidence of official of
the employer to the effect that the deceased was employed as an
Office Assistant, it was not open to the Tribunal to discard the same
on the premise that appointment order was not placed on the record
2 2012 ACJ 2647.
3 (2013) 16 Supreme Court Cases 711.
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of the Tribunal and, therefore, assess the income on notional basis.
Mr. Mendon, would urge that the Tribunal completely lost sight of
the nature of the jurisdiction exercised by it and the object of the
ameliorative provisions under section 168 of the Act. It was further
submitted that the Tribunal was in error in not taking into account
future prospects and awarding appropriate amount under
conventional heads. Thus the compensation awarded by the
Tribunal is required to be suitably enhanced to make it a just and
fair compensation, submitted Mr. Mendon.
10. To begin with since an endevour was made to urge the ground
that the accident did not occur due to negligence on the part of the
driver of the offending car, it may be apposite to have recourse to
the evidence of Mr. Sunil Patre (AW.3), the pillion rider. Mr. Sunil
Patre (AW.3) informed the Tribunal that when the motor cycle
driven by the deceased, on which he was the pillion rider, was
proceeding towards Dahisar (E) on Borivali Dahisar link road, the
offending car came from behind and gave dash to the bike. He was
thrown off the bike. However, the deceased, who was holding handle
of the motor cycle, was dragged away by the car along with the bike
for a distance of 10-15 fts. The driver of the car did not apply breaks.
Apart from motor cycle on which he was pillion rider, the offending
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car gave dash to another motor bike and a WagnoR car.
11. Nothing material could be elicited in the cross examination of
Mr. Sunil Patre (AW.3). He gave a vivid account of the manner in
which the accident occurred. The existence of opportunity to Mr.
Sunil Patre (AW.3) to witness the events as they unfolded can
hardly be questioned. In the circumstances, the learned Member of
the Tribunal was well within his rights, in recording the finding that
the impact occurred due to negligence on the part of the driver of
the offending car.
12. Mr. Gatne, learned counsel for the appellant, would urge that
such finding could not have been recorded against the driver of the
offending car without impleading him as a party/ opponent to the
application and, in the least, without giving notice as envisaged by
Rule 260 of the Rules, 1989. A submission was forcefully canvassed
on behalf of the appellant that impleadment of the driver of the
offending vehicle as a party opponent is the mandate of the
statutory prescription. In any event, according to Mr. Gatne, the
Tribunal is enjoined to issue a notice to the driver of the offending
vehicle under Rule 260 of the Rules, 1989. In the absence thereof,
the jurisdictional condition to award the compensation cannot be
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said to have been fulfilled. According to Mr. Gatne, what exacerbates
the situation at hand is fact that a specific ground of non-joinder of
necessary party was raised in the written statement by the insurer
and even the Tribunal framed an issue of non-joinder and, yet, on
the one hand, the applicants made no effort to implead the driver,
and, on the other hand, the Tribunal determined the said issue
without adequate consideration of facts and law.
13. As the thrust of the submission was based on Rule 260 of the
Rules, 1989, it may be expedient to extract the same:-
260. Notice to the parties involved.-
(1) If the application is not dismissed under Rule 259,
the Claims Tribunal shall. send to the owner or the
driver of the vehicle or both involved in the accident
and its insurer, a copy of the application, and the
annexures thereto together with the notice of the date
on which the parties shall enter their appearance
either in person, or through their duly authorised
agents, and may also file their written statement, if
any, with additional copies of the same, for being
furnished to the other parties connected with the
matter. It will dispose off the application, and may call
upon the parties to produce on that date any evidence
which they may wish to tender.
(2) The service of the notice shall be effected on the
owner, the driver and the insurer of the vehicle in
question. as the case may be, by way of personal
service, through the bailiff or by Registered Post A/D
or both.
(3) Where the applicant makes a claim for
compensation under Section 140, the Claims Tribunal
shall give notice to the owner and insurer, if any, of the
vehicle involved in the accident directing them to
appear on the date, not later than fifteen days from the
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date of issue of such notice. The date so fixed for such
appearance shall also be not later than fifteen days
from the receipt of the claim application filed by the
claimant. The Claims Tribunal shall state in such
notice that in case they fail to appear on such
appointed date, the Claims Tribunal shall proceed ex-
parte on the presumption that they have no contention
to make against the award of compensation.
14. Laying emphasis on the opening part of sub rule (1) of Rule
260 which employs the word "shall", Mr. Gatne strenuously
submitted that the provisions of Rule 260 are mandatory and not
directory. Amplifying the submission, it was urged that the issue of
notice to the driver of the offending vehicle is not a matter of
procedural compliance only as the question of liability to pay
compensation primarily hinges upon the determination that the
death or injury in a vehicular accident resulted on account of the
negligence on the part of the driver of the offending vehicle. Such
finding, according to the Mr. Gatne, cannot be recorded without
providing an opportunity of hearing to the driver. Thus, the non
impleadment of the driver was fatal to the tenability of the
application, especially when a specific plea of non-joinder was raised
at the first possible opportunity by the insurer.
15. To bolster up this submission, Mr. Gatne placed a strong
reliance on the judgment of this Court in the case of Suman Pawar
(supra), wherein after adverting to the provisions contained in Rule
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260, extracted above, few propositions were enunciated.
Paragraphs No. 14 to 16 of the aforesaid judgment are material and
hence extracted below:
14. The aforesaid Rule 260(1), states that the Claims
Tribunal shall, send to the owner or driver of the of
the vehicle or both involved in the accident and its
insurer, the copy of the application, and annexures
thereto, together with notice of the date on which the
parties shall enter their appearance, either in person
or through their duly authorized agents and may also
file their written statement, if any, with additional
copies of the same, for being furnished to the other
parties connected with the matter. The sub rule (2) of
Rule 260 requires that the service of notice shall be
effected on the owner, driver and insurer of the
vehicle in question, as the case may be, by way of
personal service through bailiff or by Registered post
A/D or both. Thus, both the provisions of sub-rule (1)
and (2) are mandatory and are required to be
followed by the Claims Tribunal, to involve the owner,
driver and insurer of the vehicle in question, in the
manner prescribed. It is in the light of this, the
Claims Tribunal has to pass an award under section
168 of the Motor Vehicles Act, 1988 as to the amount
of compensation to be paid by the insurer or owner or
driver of the vehicle involved in the accident or by all
or in all them, as the case may be. It is not necessary
that in every case, where the driver of the offending
vehicle is found to be rash and negligent in driving
vehicle, that he shall be held liable to pay
compensation. It will depend upon the facts and
circumstances of each case and instead, the Tribunal
may direct only the owner and the insurer of the
vehicle to pay the compensation, however, the
involvement of driver in accordance with rules, in
claim petition would be must.
15. The next question would be whether after
compliance with aforesaid provision, will it be
necessary to examine the driver of offending vehicle
as witness ? It is for the parties to decide in the facts
and circumstances of the case, whether to examine
the driver as witness to prove either negligence or to
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prove breach of policy or any defence under section
149 (2) of said Act, since it will be the question of
burden of proof and the quantum of proof. However,
in such situation, the proceedings of claim petition
cannot vitiate on the ground of non-involvement of
the driver of offending vehicle.
16. In view of the above, my findings on all aforesaid
aspects are summarised are as under :-
(i) Meena Varial's Case decided by the Apex Court
does not lay down a law that driver of offending
vehicle is necessary party in all cases and in his
absence, the Judgment and Award shall vitiate.
(ii) In an unreported Judgment of this Court in First
Appeal No.3839/2008 (National Insurance Company
Ltd., V/s Vachista) decided on 14.09.2009, it has not
been laid down that driver of the offending vehicle
was not necessary party, in case of claim petition
under Motor Vehicles Act.
(iii) In Machindranath's case the contention that, the
driver of the offending vehicle was necessary party
in a claim petition and in his absence the entire
judgment and award would vitiate, has been rejected.
(iv) In view of the Judgment of the Apex Court in
Machindranath's case, the driver of the offending
vehicle would be a proper party or he should at least
be examined, as witness on the allegations of rash
and negligent driving on his part and without his
involvement, no adverse finding on negligence can be
made against him and if any such finding is recorded,
same would vitiate the proceedings.
(v) No decree or award can be made personally
against the driver of the offending vehicle unless he
is involved in a claim petition either as party or at
least as witness.
(vi) If there are specific rules involving the driver in
a claim petition in particular manner, then the
matter would be governed by the said rules and its
compliance will have to be shown.
(vii) The requirement of Rule 260(1) and (2) of the
Maharashtra Motor Vehicles Rules, 1989 is
mandatory and the Tribunal shall send to the owner
or driver of the vehicle or both, involved in the
accident and its insurer, a copy of the application and
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annexures thereto, together with notice of the date
on which the parties shall enter their appearance.
(viii) The service of notice shall be effected on owner,
driver and insurer of the offending vehicle in
question, as the case may be, by way of personal
service, through the bailiff or by Registered Post A/D
or both, as the Tribunal may deem fit and proper.
(ix) If the driver or owner or insurer of the offending
vehicle does not respond to the notice so issued and
duly served, the Tribunal may proceed exparte and
pass an award against any of them or all of them and
the proceedings shall not vitiate for not calling a
driver and examining him as witness.
In view of all aforesaid findings, it is not necessary
to consider other grounds of challenges along with
the judgments cited by the learned Counsels for the
parties. What is required to be done now in the
instant case is, to set aside the judgment and award
passed by the Tribunal on 17.11.2008 in M.A.C.P.
No.607/2005, which is impugned in the present
Appeal, on the ground that there is non-compliance of
mandatory requirement of Rule 260(1) and (2) of
the Maharashtra Motor Vehicles Rules, 1989 with
further directions to follow the mandate of Rule
260(1) and (2) of the Maharashtra Motor Vehicles
Rules, 1989 by sending to the owner or driver of the
vehicle or both involved in the accident, a copy of
application and annexures thereto, together with a
notice of date on which they shall enter their
appearance. Such notice shall be sent either through
bailiff or by registered post acknowledgment due or
both, as Tribunal deems fit and proper.
16. Per contra, Mr. Mendon, the learned counsel for the
respondent Nos. 1 and 2 submitted that the aforesaid submission on
behalf of the appellant looses sight of the nature of the proceeding
under section 166 of the MV Act, 1988. Mr. Mendon, would submit
that it has been authoritatively laid down that in a proceeding under
section 166 of MV Act, 1988, in no case, a driver can be said to be a
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necessary party. Thus, the entire edifice of the submission that the
application was bad for non-joinder of necessary party falls through.
In any event, according to Mr. Mendon, the aforesaid judgment in
the case of Suman Pawar (supra) was explained by another learned
single Judge of this Court in the case of Sitaram Jaiswal (supra).
Thus, not much mileage can be drawn from the said pronouncement
in the case of Suman Pawar (supra).
17. The nature of the proceeding for compensation for death or
injury, caused in a motor vehicle accident, and the liability of the
owner and driver of the offending vehicle came up for consideration
before the Supreme Court in the case of Machindranath Kernath
Kasar vs. D.S. Mylarappa and Others 4. After adverting to the object
of the enactment of the MV Act, 1988 and the various provisions of
the Act, Supreme Court expounded the legal position in the
following words.
"28. When a damage is caused by an act of
negligence on the part of a person, the said person is
primarily held to be liable for payment of damages. The
owner of the vehicle would be liable as he has permitted
the use thereof. To that effect only under the Motor
Vehicles Act, both driver and owner would be jointly
liable. This, however, would not mean that they are joint
tortfeasers in the strict sense of the term. There exists
a distinction between the liability of the owner of a
vehicle which was used in commission of the accident
and that of the driver for whose negligence the accident
4 (2008) 13 Supreme Court Cases 198.
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was caused, but the same would not mean that the
owner and the driver are joint tortfeasers in the sense
as it is ordinarily understood.
29. The Karnataka Rules, therefore, were required
to be construed having regard to the appropriate
interpretative principles applicable thereto. Common
law principles were therefor required to be kept in
mind. In this case, we are not required to lay down a law
that even in absence of any rule, impleadment of the
driver would be imperative.
30. It is however, of some interest to note the
provisions of Section 168 of the Motor Vehicles Act. In
terms of this aforementioned provision, the Tribunal is
mandatorily required to specify the amount which shall
be paid by the owner or driver of the vehicle involved in
the accident or by or any of them. As it is imperative on
the part of the Tribunal to specify the amount payable
inter alia by the driver of the vehicle, a fortiori he
should be impleaded as a party in the proceeding. He
may not, however, be a necessary party in the sense
that in his absence, the entire proceeding shall not be
vitiated as the owner of the vehicle was a party in his
capacity as a joint tortfeaser.
31. Appellant not only made averments as regards
absence of negligence on his part; he made specific
allegations against the driver of the truck. The driver of
the truck alone would have been competent to depose.
In a given case, like the present one, the owner of the
truck may not defend the action at all keeping in view
the fact that the vehicle was an insured one. There are
some decisions of this Court, where even a plea has
been raised that the insured company would not be an
aggrieved person in such an extent although such a
contention has been negatived by this Court.
32. The principles of natural justice demand that a
person must be given an opportunity to defend his
action.
(emphasis supplied)
18. The necessity of impleading the driver as a party to the
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proceeding is indicated in the aforesaid pronouncement. However,
the Supreme Court has categorically observed, in clear and explicit
terms, that the driver of the offending vehicle was not a necessary
party in a claim petition so as to entail the consequence of vitiating
the judgment and award, where a driver has not been impleaded as
party respondent. The import of the aforesaid judgment of the
Supreme Court is that, in a given case, the driver of the offending
vehicle may be a proper party or, in the least, he ought to be
examined as a witness before an adverse finding on negligence can
be made against him.
19. In the case of Sitaram Jaiswal (supra) this Court adverted to
the aforesaid pronouncement in the case of Machindranath Kasar
(supra) and the judgment of this Court in the case of Suman Pawar
(supra) and also noted the text of Rule 260 of the Rules, 1989
extracted above. Thereafter, the legal position was culled out in
paragraph Nos. 10 and 11 as under:
10. Thus, the law is that the claimant while filing a
claim application is under no obligation to ensure that
all necessary and proper parties are impleaded as
opponents to the claim petition. Considering the
nature of the proceedings, the responsibility is of the
Tribunal to ensure that the notices are issued to all
the necessary parties. This power can be exercised by
the Tribunal at any stage of the proceedings.
11. It is a matter of common knowledge that while
defending a claim petition, diverse defences are raised
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in the written statements by the owners and
especially the Insurers. However, in many cases, we
find that all the defences pleaded are not pressed into
service at the time of final hearing. Whenever a
contention is pressed into service by any of the
opponents to the claim petition or the persons to
whom the notice of the claim petition is issued under
Rule 260 that the driver of a vehicle is a necessary
party, the Tribunal is under an obligation to examine
the said contention and if found correct, issue a notice
to the driver. It is obvious that if such contention is
not pressed by the party to whom the notice is served,
the said party cannot be allowed to raise the said
contention for the first time in the appeal. A claimant
cannot be allowed to suffer as he is under no
obligation to implead any party as the opponent to the
claim petition. In such a case, if the driver is
aggrieved by the adverse finding recorded against
him by the award of the Tribunal, he has a remedy of
preferring an appeal against the award after
obtaining a leave of the Appellate Court. If neither the
owner nor the Insurer raises a contention before the
Tribunal regarding the non-joinder of the driver, it is
not open for them to contend in the appeal that the
driver was a necessary party and that the award is
vitiated because of non-joinder of the driver. The
observations made by this Court in the case of New
India Assurance Company Ltd. Vs. Suman Bhaskar
Pawar and others, 2010 (2) Mh L J 177 in clause (iv)
of paragraph No.16 will apply only when specific
defence of non-joinder of the driver is pressed into
service either by the owner or by the Insurer. If they
fail to raise the said contention, the same is not
available for them in the appeal. Needless to say that
the same will remain available to the driver who is
not made party. As the law is that the responsibility of
issuing the notice to the proper parties is entrusted to
the Tribunal, if a contention regarding non-joinder is
not raised, the claimant cannot be allowed to suffer on
the ground that the Tribunal has failed to perform its
duty. Even if a contention regarding non-joinder of
driver is raised at the time of final hearing of a claim
petition, if the said condition is correct, the Tribunal
can issue notice to the driver at any stage.
(emphasis supplied)
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20. This Court has held in no uncertain terms that a claimant is
under no obligation to ensure that necessary and proper parties are
impleaded as opponent to the petition. Conversely, it is the
obligation of the Tribunal to ensure that notice is issued to all the
necessary parties. The Tribunal is empowered to do so at any stage
of the proceeding. However, a claimant cannot be made to suffer the
consequences of non-impleadment as the claimant is under no
obligation to implead any party as the opponent to the claim
petition. This Court has gone a step further to hold that even where
the ground of non-joinder or no notice to the driver is raised in the
written statement, the owner or the insurer cannot be permitted to
draw mileage therefrom if the said ground was not effectively
pursued.
21. Indeed, in the case at hand, the insurer has raised the ground
of non-joinder of the driver in the written statement and the
Tribunal had also framed an issue on the basis of the pleadings in
the written statement. Nay the Tribunal has adverted to this aspect
of the matter in the impugned judgment. Yet, in my considered view,
that by itself does not justify an inference that the said ground was
effectively persued by the insurer. No effort seems to have been
made on behalf of the insurer to summon and examine the driver of
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the offending vehicle. Nor the ground of no negligence on the part of
driver was pursued by the insurer to the hilt.
22. Even otherwise, in the peculiar facts of the case, especially in
the face of the evidence of Sunil Patre (AW.3), who was the pillion
rider on the motor cycle driven by the deceased, the failure on the
part of the Tribunal to issue notice to the driver does not seem to
have resulted in failure of justice. As indicated above, the testimony
of Sunil Patre (AW.3) gives a vivid account of the manner of the
accident. Sunil Patre (AW.3) has deposed to the fact that the driver
of the offending car had not only knocked down the motor cycle
driven by the deceased and dragged him, but had also dashed
another motor cycle and a WagnoR car, as the said driver had lost
control over the car. The nature of the accident speaks for itself in
volumes, and the negligence on the part of the driver of the
offending car becomes writ large.
23. Mr. Mendon also invited the attention of the Court to the
judgment of the Supreme Court in the case of Josphine James
(supra) to lend support to the submission that the Supreme Court
has approved the position in law that non impleadment of the driver
of the offending vehicle is not fatal to the proceeding under MV Act,
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1988. Paragraph 13 of the said judgment reads as under:
13. It is an undisputed fact that the son of the appellant
died in a motor vehicle accident on 12.6.1998, who was
the sole earning member of the family. The respondent
driver and insurer were initially impleaded as parties but
notice could not be served to the driver despite repeated
efforts. The driver was therefore later on deleted from the
array of parties on the basis of the decisions of various
High Courts including Delhi High Court wherein it was
held that non-impleadment of driver of the offending
vehicle is not fatal to the proceedings in view of the fact
that the liability of the owner and the insurer of the
offending vehicle is joint and several. The insured was
placed ex-parte since he remained absent despite the
service of notice upon him in the proceeding whereas the
Insurance Company filed written statement wherein it has
admitted that on the date of accident the offending truck
stood duly insured with it and the insured was respondent
No. 2 in the proceedings before the Tribunal.
(emphasis supplied)
24. In the aforesaid view of the matter, I am not persuaded to
accede to the submission of the appellant that the non impleadment
of the driver of the offending car or absence of notice to the driver,
under Rule 260 of the Rules, 1989 vitiated the proceeding before
the Tribunal.
25. This propels me to the aspect of the justness of loss of
dependency determined by the Tribunal.
26. Mr. Karim Shaikh (AW.4) endevoured to impress upon the
Tribunal that he was working as Accountant in Royal Art Electrodes
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Limited, Vasai. The deceased was working as an Office Assistant. For
the month of April, 2013, net salary of the deceased was Rs. 9,449/-.
The pay slip for the month of April, 2013 (Exhibit 43) came to be
proved in the evidence of Karim Shaikh (AW.4). In addition, Karim
Shaikh (AW.4) placed on record the extract from salary register for
the month of April and May, 2013 (Exhibit 46); extract from leave
register (Exhibit 47) and register of attendance (Exhibit 48).
During the course of cross examination of Karim Shaikh (AW.4), it
was elicited that he had not brought the appointment letter of the
deceased. According to Karim Shaikh (AW.4), the deceased was not
liable to pay income tax.
27. The Tribunal was not prepared to place reliance on the
aforesaid evidence. Two reasons weighed with the Tribunal. One, the
failure on the part of the applicant and employer to place on record
the appointment letter of the deceased and the documents to
evidence the terms and conditions of the contract of service
between the deceased and the alleged employer. Two, the deceased
had not filed income tax returns. Even if it was assumed that the
salary of the deceased for the month of April, 2013 was Rs. 9,449/-
as deposed to by Karim Shaikh (AW.4), it was obligatory on the part
of the deceased to file a Nil income tax return and, in the absence
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thereof, mere filing of extract of salary and attendance register was
of no avail to the applicants, held the Tribunal.
28. Mr. Mendon, learned counsel for the applicants submitted that
the aforesaid approach of the Tribunal is wholly unsustainable. This
submission appears to carry conviction. First and foremost, there
was no justifiable reason to discard the testimony of Karim Shaikh
(AW.4). It is imperative to note that it was not a bald assertion,
unsupported by contemporaneous record, that the deceased was
employed with Royal Art Electrodes Limited. In addition to salary
certificate, Karm Shaikh (AW.4) the Accountant of the employer,
placed on record the relevant documents namely extract of salary
register (Exhibit-46), extract of leave record (Exhibit 47) and
attendance register (Exhibit-48). Failure on the part of the
applicants or for that matter the employer's witness to place on
record the appointment letter could not have been exalted to such a
pedestal as to throw the evidence of Karim Shaikh (AW.4)
overboard. The Tribunal completely misdirected itself in ignoring
the positive evidence that the deceased was employed with Royal
Art Electrodes Limited.
29. The second ground of not placing the income tax returns,
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without recording a categorical finding that the deceased was liable
to pay income tax, in the given financial year, stands on an equally
infirm foundation. Karim Shaikh (AW.4) made a categorical
statement that the deceased was not liable to pay income tax. The
Tribunal, it seems, also lost sight of the fact that had the deceased
been liable to pay tax, it was the responsibility of the employer to
deduct tax at source. In the absence of any such material, it was
impermissible to discard the evidence of Karim Shaikh (AW.4) on
the premise that the deceased had not submitted return of income.
30. A useful reference, in this context, can be made to the
judgment of the Supreme Court in the case of Vimal Kanwar and
Others vs. Kishore Dan and Others 5 wherein the Supreme Court
inter alia considered the question whether the income tax is liable
to be deducted for determination of compensation under the MV
Act, 1988. The observations of the Supreme Court in paragraphs No.
22 and 23 are material and, hence, extracted below:
22. The third issue is "whether the income tax is liable to
be deducted for determination of compensation under
the Motor Vehicles Act"
23. In the case of Sarla Verma & Anr, this Court held
"20 Generally the actual income of the
deceased less income tax should be the
starting point for calculating the
compensation."
5 (2013) 7 Supreme Court Cases 476.
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This Court further observed that:(SCC
p.134, para 24)
"24. ........ ......Where the annual income is in
taxable range, the word "actual salary"
should be read as "actual salary less tax".
Therefore, it is clear that if the annual
income comes within the taxable range
income tax is required to be deducted for
determination of the actual salary. But while
deducting income-tax from salary, it is
necessary to notice the nature of the income
of the victim. If the victim is receiving
income chargeable under the head "salaries"
one should keep in mind that under Section
192 (1) of the Income-tax Act, 1961 any
person responsible for paying any income
chargeable under the head "salaries" shall at
the time of payment, deduct income-tax on
estimated income of the employee from
"salaries" for that financial year. Such
deduction is commonly known as tax
deducted at source ('TDS' for short). When
the employer fails in default to deduct the
TDS from employee salary, as it is his duty
to deduct the TDS, then the penalty for non-
deduction of TDS is prescribed under
Section 201(1A) of the Income-tax Act,
1961. Therefore, in case the income of the
victim is only from "salary", the
presumption would be that the employer
under Section 192 (1) of the Income- tax
Act, 1961 has deducted the tax at source
from the employee's salary. In case if an
objection is raised by any party, the objector
is required to prove by producing evidence
such as LPC to suggest that the employer
failed to deduct the TDS from the salary of
the employee. However, there can be cases
where the victim is not a salaried person i.e.
his income is from sources other than
salary, and the annual income falls within
taxable range, in such cases, if any objection
as to deduction of tax is made by a party
then the claimant is required to prove that
the victim has already paid income tax and
no further tax has to be deducted from the
income."
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31. In view of the aforesaid pronouncement, in the absence of any
cogent material to draw an inference that it was incumbent on the
part of the deceased to file return of income, the Tribunal committed
a grave error in recording the finding that the deceased was not
employed with Royal Art Electrodes Limited, for the specious
reason that there was no proof of filing of income tax returns. The
Tribunal approached the issue from a completely incorrect
perspective. Karim Shaikh (AW.4) categorically affirmed that the
deceased was not liable to pay income tax. Nor any endevour was
made on behalf of the appellant to establish the fact that the
deceased was liable to pay income tax. In this view of the matter, the
Tribunal was not at all justified in assessing the income of the
deceased on notional basis.
32. The connotation of the term "income" for the purpose of
determination of just compensation under section 168 of the MV
Act, 1988 came up for consideration before the Supreme Court in
the case of National Insurance Co. Ltd. vs. Indira Shrivastava and
Others6. The Supreme Court, after adverting to the various
pronouncements and etymological meaning of the term "income",
expounded the connotation of the term "income" as under:
"19] The amounts, therefore, which were required to be
6 (2008) 2 Supreme Court Cases 763
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paid to the deceased by his employer by way of perks,
should be included for computation of his monthly
income as that would have been added to his monthly
income by way of contribution to the family as
contradistinguished to the ones which were for his
benefit. We may, however, hasten to add that from the
said amount of income, the statutory amount of tax
payable thereupon must be deducted.
-------------- ---------- ------
21] If the dictionary meaning of the word 'income' is
taken to its logical conclusion, it should include those
benefits, either in terms of money or otherwise, which
are taken into consideration for the purpose of payment
of income-tax or profession tax although some elements
thereof may or may not be taxable or would have been
otherwise taxable but for the exemption conferred
thereupon under the statute."
(emphasis supplied)
33. On the aforesaid touchstone, reverting to the facts of the case,
it is imperative to note that the Tribunal recorded a finding that the
salary slip for the month of April, 2013 indicated that the net salary
of the deceased was Rs.9,449/-. From the perusal of a copy of the
salary slip for the month of March, 2013, which was tendered on
behalf of the appellant, what can be lawfully deducted therefrom is
the professional tax of Rs. 175/-.
34. I am therefore persuaded to hold that the deceased was
employed with Royal Art Electrodes Limited and drew salary of Rs.
9,449/- for the month of April, 2013. Deducting Rs. 175/- towards
professional tax, net monthly salary would be Rs. 9,274/-. Since the
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deceased was a bachelor, deducting ½ towards personal and living towards personal and living
expenses, the annual income would come to Rs. 55,644/- (9,274 x
12 x ½ towards personal and living).
35.
36. There is evidence to indicate that the deceased was 25 years
of age. Since the deceased was below 40 years of age and was in a
private employment, in view of the pronouncement of the
Constitution Bench in the case of National Insurance Company
Limited vs. Pranay Sethi and Others7 40% of the income is required
to be added towards the future prospects. The multiplicand would
thus be Rs. 77,902/- (55,644/- + 22,258/- [40% of 55,644/-]).
37. Having regard to the age of the deceased, the multiplier of '18'
is required to be applied. Thus, the loss of dependency would come
to Rs. 14,02,236/- (77,902 x 18). In addition to the loss of
dependency, under the conventional heads, in view of the
standardization of the compensation thereunder, in the case of
Pranay Sethi (supra), the applicants are entitled to Rs. 15,000/-
towards loss of estate, Rs. 15,000/- towards funeral expenses and
Rs. 40,000/- each towards filial consortium.
38. There is no dispute over the fact that the applicants had
7 (2017) 16 Supreme Court Cases 680.
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incurred expenses of Rs. 3,91,493/- towards the medical treatment
of the deceased, which was duly proved in the evidence of Satish
Mohite (AW.2).
39. The applicants are thus entitled to compensation under the
following heads:
Expenses towards medical treatment - 3,91,493/-
Loss of dependency - 14,02,236/-
Loss of estate - 15,000/-
Funeral expenses - 15,000/-
Filial consortium - 80,000/-
19,03,729/-
40. The upshot of the aforesaid consideration is that the appeal
deserves to be dismissed and cross objection preferred by the
respondent Nos. 1 and 2/ original applicants, for enhancement in
the quantum of compensation, deserves to be allowed.
Hence, the following order:
ORDER
1] The appeal stands dismissed with costs.
2] The cross objection stands allowed with costs.
3] The impugned award stands modified as under:
(i) The appellant and respondent No. 3/ original opponent Nos. 1
and 2 do jointly and severally pay a sum of Rs. 19,03,729/- along
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with interest @ 7.5% p.a. from the date of application till realization,
to the applicants.
(ii) The amount already deposited by the opponent Nos. 1 and 2 or
either of them, shall stand deducted from the amount of
compensation awarded under this order.
4] Award be drawn accordingly.
(N.J. JAMADAR, J.)
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