Calcutta High Court (Appellete Side)

Anita Chatterjee (Bose) & Anr vs New India Assurance Company Ltd. & ... on 31 August, 2023

31.08.2023
 Ct. 654
 D/L 25
  ab/kb

                       IN THE HIGH COURT AT CALCUTTA
                         CIVIL APPELLATE JURIDICTION
                               APPELLATE SIDE

                                   FMA 1112 of 2022

                       Anita Chatterjee (Bose) & Anr.
                                    -Vs-
                  New India Assurance Company Ltd. & Anr.


             Mr. Ashique Mandal
                                     ... for the appellants-claimants
             Mrs. Sucharita Paul
                     ... for the respondent no. 1-insurance company

This appeal is preferred against the judgment and

award dated 3rd June, 2022 passed by the learned

Additional District Judge -cum-Judge, Motor Accident

Claims Tribunal, 5th Court, Barasat, 24 Parganas

(North) in MAC Case No. 40 of 2016 granting

compensation of Rs. 3,45,500/- together with interest

in favour of the claimants under Section 166 of the

Motor Vehicles Act, 1988.

The brief fact of the case is that on 1st November,

2015 at about 22.00 hours the offending vehicle bearing

registration No. WB-25C/6078 (30B-Bus) proceeding

towards Jessore Road, in a rash and negligent manner,

dashed the victim near 2½ No. Airport Gate under

Airport P.S., as a result of which the victim sustained

severe injuries on his person and immediately was

taken to R. G. Kar Medical College & Hospital where he

succumbed to his injuries and died on 7th November,

2015 at about 14.30 hours. On account of sudden

demise of the victim, the claimants being the widow and

the minor daughter filed application for compensation

of Rs. 5,60,000/- together with interest under Section

166 of the Motor Vehicles Act, 1988.

The claimants in order to establish their case

examined two witnesses and produced documents,

which have been marked as Exhibits 1 to 4

respectively.

The respondent no. 1-insurance company also

adduced the evidence of one witness and produced

documents, which have been marked as Exhibits A to

E/1 respectively.

Since the respondent no. 2, owner of the

offending vehicle did not contest the claim application,

service of notice of appeal upon the said respondent

stands dispensed with.

Upon considering the materials on record and the

evidence adduced on behalf of the respective parties,

the learned Tribunal granted compensation of Rs.

3,45,500/- together with interest in favour of the

claimants under Section 166 of the Motor Vehicles Act,

1988 and directed the owner of the offending vehicle to

make payment of the compensation amount.

Being aggrieved by and dissatisfied with the

impugned judgment and award of the learned Tribunal,

the claimants have preferred the present appeal.

Mr. Ashique Mandal, learned advocate for the

appellants-claimants submits that the learned Tribunal

erred in directing the owner of the offending vehicle to

make payment of the compensation amount on the

ground that the cheque deposited for payment of

premium towards the policy of insurance was

dishonoured and there was no valid insurance policy

existing on the relevant date of accident. However, it

failed to consider that the intimation of cancellation of

insurance policy was never served upon the owner of

the offending vehicle, which has been admitted by the

D.W-1 in his cross-examination. Thus, when the actual

service of intimation of the cancellation of the insurance

policy has not been made, the insurance company is to

satisfy the award. In support of his contention, he relies

on the decisions of this Court passed in FMA 2204 of

2015 (ICICI Lombard General Insurance Company

Limited versus Sekh Mariyam Bibi & Others) and in

FMA 50 of 2019 with COT 21 of 2019 (Tata AIG

General Insurance Company Limited versus

Narayan Pal @ Narayan Paul & Anr. He further

submits that the victim at the time of accident was an

electrician and had an income of Rs. 9,000/- per

month. However, the learned Tribunal erred in

determining the income at Rs. 3,000/- per month

without any reasonable basis. To buttress his

contention, he relies on the decisions of the High Court

of Madras passed in N. Kathirvel and Another versus

R. Sethuraman, reported in 2021 SCC OnLine Mad

9488 and in Gembu Ammal and Others versus R.

Baskar and Another reported in 2020 SCC OnLine

Mad 19782 and also another decision of the Hon'ble

Supreme Court passed in Pushkar Mehra verus Brij

Mohan Kushwaha And Others reported in (2015) 12

SCC 688. He further submits that the claimants are

entitled to an amount equivalent to 25% of the annual

income of the victim towards future prospect and

general damages of Rs. 70,000/- under the

conventional heads with 10% escalation on the said

amount. In the light of his aforesaid submissions, he

prays for modification of the impugned judgment and

award of the learned Tribunal as well as enhancement

of the compensation amount.

In reply to the contentions raised on behalf of the

appellants-claimants, Mrs. Sucharita Paul, learned

advocate for the respondent no. 1-insurance company

submits that the cancellation of insurance policy was

duly intimated to the owner of the offending vehicle,

which would be evident from the deposition of D.W-1 as

well as the postal receipts produced by the insurance

company marked Exhibit D, D/1. Thus, when the

factum of cancellation of insurance policy has been

intimated to the owner of the offending vehicle, the

insurance company has got no liability. So far as the

determination of income is concerned, she submits that

not a single scrap of documentary evidence has been

produced to sufficiently establish that at the relevant

time of accident, the victim was an electrician. Save and

except the oral evidence of P.W-1, there is no other

evidence in respect of the profession of the victim.

Therefore, the learned Tribunal has rightly assessed the

income of the victim at Rs. 3,000/- per month. As

regards entitlement of future prospect and general

damages are concerned, she leaves the matter to the

discretion of the Court.

Having heard the learned advocates for respective

parties, following issues have fallen for consideration.

Firstly, whether in the facts and circumstances of the

case the insurance company is liable to satisfy the

award. Secondly, whether the learned Tribunal erred in

determining the income of the victim. Thirdly, whether

the claimants are entitled to future prospect of 25% of

the annual income of the victim. Fourthly, whether the

claimants are entitled to general damages of

Rs.70,000/- under conventional heads together with

escalation of 10% on such amount.

With regard to the first issue it is found that the

learned tribunal exonerated the insurance company from

satisfying the award on the ground that the intimation of

cancellation of policy of insurance was given to the owner

of the offending vehicle and thereby holding that there

was no valid insurance policy subsisting on the date of

accident. The insurance company in its written statement

has contended that the policy of insurance was cancelled

due to dishonour of the cheque bearing no.305175 drawn

on UBI, Dum Dum Branch issued towards premium of

policy of insurance. Due to dishonour of the said cheque

further notice of cancellation of said policy was sent to the

owner by way of registered post with acknowledgement

due. In order to establish such fact the insurance

company has examined one Pran Gopal Dey. Assistant

Manager, New India Assurance Company Limited who

proved the authorization letter, the cheque bearing no.

305175, letter of intimation dated 5th January, 2015,

postal receipts and cheque returning memos which have

been marked as Exhibit-A, B, C, C/1, D, D/1, E and E/1

respectively. The postal receipt (Exhibit D/1) shows that

the letter of intimation of cancellation of policy of

insurance was sent to the owner of the offending vehicle.

Considering the documents produced by the insurance

company, the learned tribunal observed that the

insurance company had cancelled the policy of insurance

on 5th January, 2015 and had informed the owner as well

as R.T.O. properly and no premium was paid thereby

holding that the offending vehicle did not have any valid

policy. On such basis it directed the owner of the

offending vehicle to compensate and/or satisfy the

amount of compensation.

In Daddappa and Ors. versus Branch Manager,

National Insurance Company Limited reported in 2008

A.C.J. 581, the Hon'ble Supreme Court observed as

follows:

"26. We are not oblivious of the distinction between the statutory liability of the insurance company vis- à-vis a third party in the context of Sections 147 and 149 of the Act and its liability in other cases. But the same liability arising under a contract of insurance would have to be met if the contract is valid. If the contract of insurance has been cancelled and all concerned have been intimated thereabout, we are of the opinion, the insurance company would not be liable to satisfy the claim."

In United India Insurance Co. Ltd. versus

Laxmamma and Ors. reported in AIR 2012 SC 2817,

the Hon'ble Supreme Court observed as follows:

"19. In our view, the legal position is this: where the policy of insurance is issued by an authorized insurer on receipt of cheque towards payment of premium and such cheque is returned dishonured, the liability of authorized insurer to indemnify third parties in respect of the liability which that policy

covered subsists and it has to satisfy award of compensation by reason of the provisions of Sections 147(5) and 149(1) of the M.V. Act unless the policy of insurance is cancelled by the authorized 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 authorized insurer to cover a vehicle on receipt of the cheque paid towards premium and the cheque gets dishonored 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."

The Hon'ble Court in Laxmamma (supra) has also

dealt with the proposition laid down in Daddappa (supra)

and observed that the insurance company is to satisfy the

award unless an intimation of such cancellation of policy

of insurance has reached the insured before the accident.

Now it is to be examined whether effective and actual

service of intimation of the cancellation of policy of

insurance has been made to the owner of the offending

vehicle. DW1 Pran Gopal Dey, Assistant Manager of New

India Assurance Company Limited has admitted in cross-

examination that he cannot submit the acknowledgement

due card in respect of the letter of intimation issued to the

owner of the offending vehicle. He also stated in cross-

examination that he has no document to show that the

letters of intimation were at all received by the addressee.

The materials on record thus goes to show that there is no

document showing service and/or delivery of intimation of

cancellation of insurance policy made to the owner of the

offending vehicle. Such being the position, the principles

laid down by Hon'ble Supreme Court in Daddappa (supra)

and Laxmamma (supra) squarely applies in this case. The

direction of the learned tribunal upon the owner to satisfy

the award needs to be modified to the extent that the

same shall be satisfied by the insurance company with

liberty to recover the compensation amount from the

owner of offending vehicle in accordance with law.

With regard to the second issue relating to

determination of income, it is found that the claimants

have claimed the income of the victim at Rs.9,000/- per

month by working as electrician. Though PW1 stated the

income and profession of the victim but no other

supporting evidence has been produced by the claimants.

The decision cited of Hon'ble Supreme Court in Puskar

Mehra (supra) shows that the victim in the said case was

having a business of trading in paints and hardware.

Thus, the facts and circumstances of the cited decision is

distinguishable from the case at hand.

The decisions passed by the High Court of Madras

in Gembu Ammal (supra) and N. Kathirval (supra) do not

lay down any proposition but an opinion of the Court

which in that particular case appeared to it to be

reasonable. The income of the victim of Rs. 9,000/- per

month claimed by the claimants appears to be exorbitant.

In the case of Sri Ramachandrappa versus The

Manager, Royal Sundaram Alliance Insurance

Company Limited reported in (2011) 13 SCC 236, the

Hon'ble Supreme Court observed as follows:

"14. . . . We hasten to add that in all cases and in all circumstances, the Tribunal need not accept the claim of the claimant in the absence of supporting material. It depends on the facts of each case. In a given case, if the claim made is so exorbitant or if the claim made is contrary to the ground realities, the Tribunal may not accept the claim and may proceed to determine the possible income by resorting to some guesswork, which may include the ground realities prevailing at the relevant point of time. . . ."

Bearing in mind the aforesaid observation of

Hon'ble Court, resorting to certain guesswork and keeping

in mind the economic factors and prices of essential

commodities prevailing in the year 2015 and also the

principles laid down in the catena of decisions of this

Court, I am inclined to hold that the monthly income of

the victim of Rs.5,000/- would be reasonable and

appropriate.

With regard to future prospect, admittedly at the

time of accident the victim was 45 years of age and self-

employed, thus following decision of Hon'ble Supreme

Court passed in National Insurance Company Limited

versus Pranay Sethi and Others reported in (2017) 16

SCC 680, the claimants are entitled to an amount

equivalent to 25% of the annual income of the victim

towards future prospect.

So far as the general damages are concerned, the

learned Tribunal has granted Rs.9,500/- on conventional

heads. However, following the observation of Hon'ble

Supreme Court in Pranay Sethi (supra), the claimants are

entitled to general damages under the conventional heads

of loss of estate, loss of consortium and funeral expenses

to the tune of 15,000/-, Rs.40,000/- and Rs.15,000/-

together with escalation of 10% on such amount.

Other factors have not been challenged in this

appeal.

Bearing in mind the aforesaid, calculation of

compensation is made hereunder.


                 Calculation of Compensation

      Monthly income                         Rs.5,000/-
      Yearly income                          Rs.60,000/-
      (Rs.5,000/- x 12)
      Add: 25% of the yearly income          Rs.15,000/-
           towards future prospects
                                             Rs.75,000/-
      Less: 1/3rd towards personal           Rs.25,000/-
            and living expenses
                                             Rs.50,000/-
      Multiplier 14                          Rs.7,00,000/-
      (Rs.50,000/- x 14)
      Add: General damages                   Rs.70,000/-
           Loss of estate: Rs.15,000/-
           Loss of consortium: Rs.40,000/-
           Funeral expenses: Rs.15,000/-
      Add: 10% escalation on general         Rs.7,000/-
            damages
      Total                                  Rs.7,77,000/-

Thus, the claimants are entitled to Rs. 7,77,000/-

together with interest @6% per annum from the date of

filing of the claim application (21.12.2015) till payment.

Respondent no. 1-insurance company is directed

to deposit the aforesaid compensation together with

interest as indicated above by way of cheque before the

learned Registrar General, High Court, Calcutta within

a period of six weeks from date.

Respondent No.1-insurance company is granted

liberty to recover the compensation amount to be

satisfied from the owner of the offending vehicle in

accordance with law.