Dal Jitsawhney And Another vs Jagtar Singh And Others
1988 Latest Caselaw 139 Del

JUDGMENT

S.B. Wad, J.

1. This is an appeal filed by the legal representatives of the deceased, Sardar Amarjit Singh Sawhney, for enhancement of compensation awarded by the Motor Accidents Claims Tribunal, Delhi. The Tribunal had awarded a sum of Rs. 14,834 while the claimants had claimed the compensation in the sum of Rs. 2,00,000. The deceased, Amarjit Singh, was 28 years old at the time of the accident. He had completed the I.T.I. Certificate Course and was working as a fitter. He had received a certificate for being craftsman in 1965. His salary at the time of the accident was Rs. 350. He is survived by his widow and one child.

2. Respondent No. 1 was the driver of the vehicle belonging to respondent No. 2. Respondent No. 3 is the insurance company. On January 18, 1968, at about 7 p.m., the deceased was attending to his work at the time back side of Gokhley market near the workshop of one Aya Singh within the limits of Police Station, Subzimandi, Delhi. Respondent No. 1, Jagtar Singh, who was driving truck No. DLG 5945 reversed the truck at a great speed. There was nobody behind the truck to warn the driver or to guide him. The truck knocked down the deceased. Amarjit Singh received grievous injuries and was rushed to Irwin Hospital. Dr. Bishnu Kumar (PW-8), Head of the Department of Forensic Medicine, Maulana Azad Medical College, conducted the post-mortem. Apart from the external injuries, the deceased had suffered extensive rupture of liver 16 x 15 x 8 cms. area on the right upper surface and blood was present in the abdominal cavity. The doctor further opined that the death was caused due to haemorrhage and shock consequent on the rupture of the liver caused by blunt force injury in that region. Amarjit Singh died in the hospital the next day. Cross-objection is filed by the D.T.C. in this court. Before the Tribunal, a common written statement was filed by respondent No. 2, the owner, and respondent No. 3, the insurance company. In fact, the defense was conducted by the insurance company on its behalf and on behalf of the owner.

3. I was taken through the evidence at the time of hearing. I am satisfied with the assessment of evidence by the Tribunal. The evidence of the eye witnesses and the doctor confirmed the version of the claimants. I have no hesitation in accepting the findings of the Tribunal. After considering the written statement and the evidence of the respondents, the Tribunal came to the conclusion that the respondents had totally failed to establish their version of the accident. I agree with the findings of the Tribunal. I hold that Amarjit Singh died because of the rash and negligent driving of respondent No. 1 during the course of employment with respondent No. 2.

4. Amarjit Singh was drawing Rs. 350 per month at the time of the accident. He was a qualified fitter. He was only 28 years old at the time of his death. He was working as a supervisor (technical). PW-5, Gurbachan Singh, and PW-6, Sardar Bhupendar Singh, had stated that his monthly income was Rs. 350 and Rs. 400-450, respectively. As no documentary evidence was produced, the Tribunal concluded that his monthly earning was Rs. 275. The Tribunal held that the deceased must be spending Rs. 125 on his own maintenance and contributing Rs. 150 per month to the family. The Tribunal took the life expectancy at fifteen years. After making deductions for the insurance amount of Rs. 5,000, Rs. 3,000 lying in the savings bank account and 15 per cent. deductions for lump sum payment, the Tribunal awarded a sum of Rs. 14,834 as compensation. The approach of the Tribunal is wholly unsatisfactory and untenable in law. To take the life span at 15 years for a young man of 28 years doing a fitter's job was most unreasonable. Even by the normal expectancy of life, Amarjit Singh would have certainly lived for another 30 to 35 years. He was a qualified fitter and there is no reason to believe that he was not earning about Rs. 350 per month as a supervisor (technical). Even the minimum wages fixed for unskilled labour are about Rs. 350 per month. Technical hands, such as qualified fitters, are in great demand and he would have certainly earned up to Rs. 1,500 per month if he had worked till the natural termination of his life. Deductions of the insurance amount of Rs. 5,000 which he had himself made and the small saving of Rs. 3,000 in the bank should not have been made by the Tribunal, as also deductions for lump sum payment where the basic figure arrived at by the Tribunal was as low as Rs. 17,000. Amarjit Singh is survived by his widow and a minor daughter. From the strata of society where Amarjit Singh could obtain education only up to matriculation and then take a fitter's certificate, it cannot be presumed, in the absence of any evidence, that the widow would have earned some income. Considering the above facts, the just compensation would be Rs. 75,000. It would have been certainly more if Amarjit Singh was working in some Government Department or public sector where the rise in income can be normally predicted with certainty. The claimants are also entitled to 9% simple interest on the said amount of Rs. 75,000 from March, 1970, till the date of this decision.

5. Neither the claim proceedings nor this appeal is contested separately by the owner. It was the insurance company, who was respondent No. 3, which contested the claim before the Tribunal as well as before me. In fact, a common written statement was filed for the owner as well as the insurance company. The liability of the insurance company and the owner for payment of compensation is to be determined in terms of the provisions of section 95 and 96 of the Motor Vehicles Act and the contract of insurance between the owner of a vehicle and the insurance company. If the insurance policy shows that the insurance company had accepted the liability for the minimum amount as envisaged by section 95(1)(b), the apportionment of liability of compensation has to be determined in one manner. In what is called "Act only policy" the liability of the insurance company is not the total liability as determined by the Tribunal. The liability, in other words, is not unlimited but is only to the extent of the statutory minimum. At the given time of the policy, that statutory minimum was fixed at Rs. 20,000. The claimants had claimed compensation of Rs. 2,00,000. Therefore, if the policy had created a limited liability on the insurance company to only Rs. 20,000, the owner would have contested the claim substantively because over and above Rs. 20,000, the balance of the compensation would have been payable by the owner. But the owner did not contest the claim separately. The insurance company filed the written statement on behalf of the owner also. It can be safely assumed from this fact that the policy in question was for unlimited liability undertaken by the insurance company and it was not limited to the statutory minimum of Rs. 20,000. This is further confirmed from the fact that neither the owner nor the insurance company produced the insurance policy before the Tribunal. Counsel for the insurance company had requested me to give an opportunity to produce the insurance policy in this court. I had permitted the counsel to do so but no policy was produced. It has been held by this court in a number of decisions that where the insurance company fails to produce the insurance policy, the court should presume that the insurance company has undertaken unlimited liability. In Mahila Phoolvati v. Girdharilal [1982] ACJ 386, the Division Bench judgment of the Madhya Pradesh High Court has taken the same view. This appeal could have been disposed on the basis of the facts stated above and the principle of law adverted to but Mr. Dhanda, counsel for the insurance company, has strongly urged that the provisions of section 95(1)(b) and section 96(1) of the Motor Vehicles Act have been erroneously interpreted in some decisions of this court and the decisions of other High Courts. His submission in short is that the statutory limit of compensation, (which a third party can claim from the insurance company) can in no case be exceeded. By a contract to the contrary, that statutory maximum can be reduced but not increased. He has relied upon the decision of the Andhra Pradesh High Court in Barrala Ramaswami v. Bhamidipati Satyanarayana [1958] 28 Comp Case (Ins) 23; AIR 1958 AP 309, and the decisions of the Supreme Court in Sheikhupura Transport Co. Ltd. v. Northern India Transporters Insurance Co. Ltd. and Minu B. Mehta v. Balakrishna Ramachandra Nayan [1977] 47 Comp Case 736 (SC).

6. The law on the question of the liability of the insurance company may be stated thus :

(1) The owner of a vehicle is primarily liable for his negligence and, therefore, for the payment of compensation. The liability is a variety of tortious liability. The liability of the insurance company was originally only a contractual liability between the owner of the vehicle and the insurance company. Now, the said liability is regulated by the provisions of the Motor Vehicles Act.

(2) The principle of law being one of negligence in torts, proof of negligence is necessary before the computation of compensation. Merely because the statute has regulated the said liability, the requirement of proof of negligence is not dispensed with.

(3) Section 94 of the Motor Vehicles Act makes insurance compulsory for every vehicle to ply on public roads and public places.

(4) as a corollary to section 94, the Motor Vehicles Act, lays down the maximum limit of statutory liability of the insurance company to third parties and the same is incorporated in section 95(1)(b) of the Act. The Legislature has stepped in to ensure that a certain minimum compensation is paid in every case irrespective of whether the owner of the vehicle has the means to pay or not. But the said section does not lay down the principle of "no fault" liability or strict liability.

(5) Through statutory notifications the amount of liability is fixed on the basis of the vehicles, number of persons involved, etc. Generally speaking, the original liability fixed was at Rs. 20,000. It was then raised to Rs. 50,000. Now, the amount so fixed is Rs. 1,50,000. This limit of liability under section 95(1)(b) represents simultaneously a maximum amount in one sense and a minimum amount in another sense. To illustrate, if the Tribunal comes to a conclusion that only Rs. 10,000 is a just compensation, the insurance company will be liable to pay only Rs. 10,000 and not Rs. 20,000 (the original limit fixed by the notification). If the compensation is Rs. 20,000, the liability of the insurance company will be to the whole amount of Rs. 20,000, but if the compensation exceeds Rs. 20,000, the minimum of Rs. 20,000 will be payable by the insurance company. This is the way the statutory maximum and minimum is to be understood.

(6) However, the statutory liability is subject to a contract to the contrary, when by a contract with the owner, the insurance company can take on more liability than the statutory minimum. In a comprehensive policy, higher risk is covered by taking initial premium substantially higher than the premium for what is called "Act only policy". So also, additional liability can be taken by the insurance company covering different types of risks charging separate premium for each type of risk. So also, the insurance company can accept unlimited liability by the insurance contract.

(7) Therefore, while deciding the just amount of compensation, the risk covered by the policies must be closely scrutinised. Mere reliance on section 95 and section 96 or the notification issued under them would be untenable in law.

(8) These propositions are supported by the decisions of this court which are mostly the decisions of a single judge, but they are supported by the Division Bench judgment of the Allahabad High Court in Desraj v. Ram Narain [1980] ACJ 202 ; [1981] 51 Comp Case 138 and the rulings of the Division Bench of the Punjab and Haryana High Court in Ajit Singh v. Sham Lal [1984] ACJ 255 ; [1986] 59 Comp Case 946 (P & H).

7. But Mr. Dhanda, appearing for the insurance company, submits that this interpretation of section 95 and section 96 is contrary to the decisions of the Supreme Court in Sheikhupura Transport Co, Ltd. v. Northern India Transporters Insurance Co. Ltd. [1971] ACJ 296 and Minu B. Mehta v. Balakrishna Ramachandra Nayan [1977] 47 Comp Case 736 (SC). I do not agree. In the first decision, the Supreme Court recognised that the statutory liability is subject to a contract to the contrary and in fact examined the clauses of the insurance contract to see whether a liability higher than the statutory liability was created. There is an implied rejection of the contention that under section 96, a third party, in no case, can expect more than the amount fixed under section 95(1)(b), say Rs. 20,000. Thus, if the insurance company produces a policy and shows that it has not accepted more than the statutory liability, the amount of liability fixed under section 95(1)(b) will govern the case. The said decision does not take the principle of law any further. In the second decision, the main question was whether proof of negligence was mandatory or whether the statutory liability created by section 95(1)(b), read with section 96(1), was in the nature of strict liability dispensing with proof of negligence. The Supreme Court held that as the liability is a tortious liability, proof of negligence was necessary. The court was not called upon to answer whether the liability was only restricted to the limit of statutory liability. The submission of counsel for the insurance company is, therefore, rejected.

8. Counsel for the appellants has drawn my attention to the fact that the nationalised insurance companies do not produce the policies before the Tribunal but still insist on the limited statutory liability. He has also complained that the insurance companies do not follow the directions of the Tariff Advisory Committee set up under section 64U of the Indian Insurance Act, 1938. In some of my decisions, I had adverted to these facts. It has been observed in a number of cases that the instructions of the Tariff Advisory Committee are not followed by the insurance companies. Although some of them are directly beneficial to prospective policyholders, there is a veil of secrecy in regard to such instructions. The insurance business was nationalised with the object of stopping the abuse and exploitation in the said business and to ensure that public interest is attended to more satisfactorily. The insurance companies are now instrumentalities of the State and have, therefore, a legal obligation to act fairly and to avoid arbitrariness. The companies are bound by the directions of the Tariff Advisory Committee which is a statutory committee. It is, therefore, the statutory duty of the nationalised insurance companies to publish and widely publicise the instructions of the Tariff Advisory Committee which are meant for the benefit of the prospective policy holders. It was found in one case that the statutory instructions in regard to the liability of insurance companies for gratuitous passengers, although published in 1978, was not given sufficient publicity. In spite of the said instructions, the insurance company argued before the court that the company was not liable. What is more surprising is that the counsel appearing for the insurance company are not briefed fully on the up-to-date instructions of the Tariff Committee and counsel for the claimants are required to procure them from their private sources. This is a most unsatisfactory state of affairs. I, therefore, direct that a copy of this judgment be sent to the Secretary, Ministry of Finance, Government of India, New Delhi, for appropriate action in this matter.

9. Respondent No. 3, insurance company, is liable to pay Rs.7,5000 and simple interest at the rate of 9% per annum from March, 1970, under section 110CC till the date of this judgment. The appellants are also entitled to cost. The insurance company shall draw a cheque for the said amounts minus Rs. 14,843 already paid in the name of Mrs. Daljit Sawhney and deposit the same with the Registrar of this court within three months from today. The Registrar shall issue a notice to the appellants and hand over the cheque personally.

10. For the reasons stated above, the appeal is allowed with costs and cross-objections are dismissed.