The Oriental Insurance Company ... vs Smt. Kavita Sahu
2022 Latest Caselaw 4530 Chatt

                                1

                                                           NAFR

       HIGH COURT OF CHHATTISGAH , BILASPUR

              Misc. Appeal (C) No. 548 of 2016

     The Oriental Insurance Company Ltd., Through - Divisional
     Branch Manager, Divisional Office Madina Building, Kachheri
     Chowk Jail Road, Raipur, District - Raipur (C.G.)
                                                       (Insurer)

                                                   ---- Appellant

                            Versus

     1. Smt. Kavita Sahu, Aged 32 years, W/o Balaram Sahu,

     2. Parmeshwar Sahu, Aged 11 years, S/o Late Balaram
     Sahu,

     3. Ku. Lalita Sahu, Aged 7 years, D/o Late Balaram Sahu,

     Respondents No. 2 & 3 are minor through natural guardian

mother Smit Kavita Sahu, All R/o Village Pirda, P.S. - Mandir Hasaud, District - Raipur (C.G.) [Claimants]

4. Mahendra Gupta, Aged 32 years, S/o Premchand Gupta, R/o In front of Advani School, Beergaon, P.S.- Urla, District Raipur (C.G.) [Driver]

5. Prashsant Kumar Shukla, S/o Kailash Narayan Shukla, R/o Qr. No. 17556, Karan Provisional Stores, Ravinagar, Rajatalab, Raipur, District Raipur- (C.G.) [Owner]

Address- 1- R.K. Plaza, Pachpedi Naka, Ring Road No.1

2- Aman Nagar, Mowa Raipur, District-Raipur

----Respondents

For Appellant : Mr. Raj Awasthi, Advocate. For Respondents No. 1 to 3 : Mr. Shikhar Sharma, Advocate. For Respondents No. 4 & 5 : Mr. Ankur Agrawal, Adv. on behalf of Mr. Chandradeep Prasad, Adv.

Hon'ble Shri Justice N.K. Chandravanshi

Order On Board 18.07.2022

1. The appellant/Insurance Company has preferred this appeal under Section 173 of the Motor Vehicles Act, 1988 (for short "MV Act, 1988") challenging the award passed by 8 th Additional Motor Accident Claims Tribunal, Raipur (for short 'the Claims Tribunal') in Claim Case No. 79/2013 whereby the liability of payment of compensation has been saddled upon the appellant/Insurance Company to indemnify the award of ₹ 8,24,000/- along with interest @ 6 percent per annum if amount is paid within one month and in default @ 9 percent per annum from the date of application i.e. 24.7.2013 till its realization.

2. As against the compensation of Rs. 21,00,000/- claimed by the unfortunate widow and children of deceased Balaram Sahu by filing application under Section 166 of MV Act for his death on 16.05.2013 on account of the motor accident on 20.04.2013; the Tribunal awarded a total sum of ₹ 8,24,000/- as compensation along with interest @ 6 percent per annum from the date of filing of application till its realization and further awarded penal interest @ 9% per annum on the amount of compensation, if the same is not deposited within the period of one month from the date of award.

3. The Tribunal, on a close scrutiny of evidence led, material placed and submissions made by the parties, held that the accident had occurred due to rash and negligent driving of JCB Crane bearing registration No. CG-04/D.T.-0611 (offending vehicle) by its driver Mahendra Gupta, owned by Prashant Kumar Shukla, dashed the deceased, who died on account of the injuries sustained by him in the said accident. Learned Claims Tribunal further held that although the driver of the JCB Crane did not have valid & effective driving licence to drive the offending vehicle at the

time of accident but in view of the dictum given by the Hon'ble Supreme Court in the case of S. Iyyapan v. United India Insurance Company Limited 1 since the offending vehicle was insured with the Oriental Insurance Company Pvt. Ltd. at the time of incident, hence, it is primary liability upon the Insurance Company to first pay the amount of compensation to the claimants, then recover it from owner & driver of the offending vehicle by filing execution petition before the concerned claims Tribunal, thus, the liability of payment of compensation has been fastened upon the appellant/Insurance Company and driver & owner of the offending vehicle jointly and severally.

4. Learned counsel appearing for the appellant would submit that he does not want to press other grounds of appeal and he would confine his arguments to the extent that the Claims Tribunal has fallen in error in awarding penal interest @ 9% per annum to respondents No. 1 to 3/claimants, as there is no provision to award penal interest in default of depositing of amount by the insurer or insured in pursuance of the award passed by the Claims Tribunal within stipulated time. Hence, the same is liable to be set aside.

5. Respondents No. 1 to 3/claimants have also filed cross appeal/cross objection under Order 41 Rule 22 of the CPC raising a grounds that learned Claims Tribunal has erred in awarding low amount of compensation by wrongly assessing the low income of the deceased; multiplier applied by the Claims Tribunal was not appropriate and the award amount in each heads are also not proper. Hence, the amount under award is required to be enhanced suitably.

6. I have heard learned counsel for the parties and perused the record of Claims Tribunal.

1 2013 (3) A.C.C.D. 1337 (SC)

7. A perusal of the impugned award would go to show that after considering every aspect of the mater, learned Claims Tribunal has awarded a total compensation of ₹ 8,24,000/- in favour of the respondents No. 1 to 3/claimants along with interest @ 6 % per annum if amount is paid within one month and in default @ 9 percent per annum from the date of application till its actual payment.

8. The award of penal interest @ 9 percent per annum on the amount of compensation awarded by the Tribunal, in case, amount of compensation is not deposited within a period of one month, is contrary to the law laid down by the Supreme Court in the case of National Insurance Co. Ltd. v. Keshav Bahadur and others 2, in which their Lordships of the Supreme Court has held in para 13 as under:

"13. Though Section 110-CC of the Act (corresponding to Section 171 of the New Act) confers a discretion on the Tribunal to award interest, the same is meant to be exercised in cases where the claimant can claim the same as a matter of right. In the above background, it is to be judged whether a stipulation for higher rate of interest in case of default can be imposed by the Tribunal. Once the discretion has been exercised by the Tribunal to award simple interest on the amount of compensation to be awarded at a particular rate and from a particular date, there is no scope for retrospective enhancement for default in payment of compensation. No express or implied power in this regard can be culled out from Section 110-CC of the Act or Section 171 of

2 2004 (2)SCC 370

the new Act. Such a direction in the award for retrospective enhancement of interest for default in payment of the compensation together with interest payable thereon virtually amounts to imposition of penalty which is not statutorily envisaged and prescribed. It is, therefore directed that the rate of interest as awarded by the High Court shall alone be applicable till payment, without the stipulation for higher rate of interest being enforced, in the manner directed by the Tribunal."

9. In view of above discussion and above referred judgment of Hon'ble Supreme Court, it is apparent that since there is no specific provisions under the Act of 1988 for awarding penal interest, this Court finds that Claims Tribunal has erred in awarding penal interest @ 9% per annum on the amount of compensation awarded by Claims Tribunal, if the appellant/Insurance Company fails to deposit the same within one month. Accordingly, the award of penal interest @ 9% per annum on the amount of compensation is unsustainable and, therefore, the same deserves to be and is hereby set aside.

10. Thus, it is held that aforementioned amount of compensation of ₹ 8,24,000/- shall carry interest @ 6% per annum from the date of filing of claim petition, till its actual payment. Rest of the conditions mentioned in the impugned award shall remain intact.

11. So far as cross-appeal/cross-objection filed by respondents No. 1 to 3/claimants seeking enhancement of the compensation amount under award is concerned, perusal of the impugned award would go to show that it has not been proved that the deceased was having any fixed job/work or he is having any fixed income,

hence, his monthly income has been assessed by learned Claims Tribunal on the basis of prevailing daily wages rate i.e. ₹ 4,500/- per month i.e ₹ 54,000/- per annum; after deducting 1/3rd of it towards his personal expenses, claimants' annul dependency has been assessed as ₹ 36,000/- and on the basis of age of the deceased available on record, applied multiplier of '16' in view of the dictum of the Supreme Court in the matter of Sarla Verma (Smt.) & others V. Delhi Transport Corporation and another 3 and held that claimants suffered loss of dependency amount to the tune of ₹ 5,76,000/- on account of death of deceased - Balaram Sahu.

12. Learned Claims Tribunal has also granted ₹ 90,000/- towards other conventional heads i.e. loss of consortium, loss of love & affection and funeral expenses, which, in the opinion of this Court, cannot be termed as on lower side warranting interference of this Court in the instant appeal and therefore, there is no scope for enhancement of compensation awarded by the Tribunal.

13. In view of the aforesaid observations, appeal filed by the appellant/Insurance Company is partly allowed whereas the cross- appeal/cross-objection filed by the respondents No. 1 to 3/claimants filed by respondents No. 1 to 3/claimants is hereby dismissed.

Sd/-

(N.K. Chandravanshi) Judge

D/-

3 2009 (6) SCC 121