National Assurance Co.Ltd. vs Smt.Neelam & Ors.
2008 Latest Caselaw 2165 Del

      *       HIGH COURT OF DELHI : NEW DELHI
                   MAC App. No.138 of 2007

      %      Judgment reserved on: 1st December, 2008

             Judgment delivered on: 5th December, 2008

National Assurance Co. Ltd.
Regional Office No.1
Jeevan Bharti Building
124, Connaught Circus
New Delhi-110001                           ....Appellant

                    Through: Pradeep Gaur and Associates.

                                  Versus

1. Smt. Neelam
Widow of late Sh. Jagjit Singh

2. Kumari Sarbjit Kaur
D/o late Sh. Jagjit Singh

3. Kumari Pavneet Kaur
D/o Late Sh. Jagjit Singh

4. Shri Gurdial Singh
S/o Shri Prithi Singh

5. Smt. Lajwanti
W/o Shri Gurdial Singh

All r/o 1129-A,
Maruti Vihar, Gurgaon
Haryana

6. Raj Pal
S/o Sh. Jagga Ram


MAC App.No.138 of 2007                          Page 1 of 20
 R/o 18/3,
Arya Samaj Road, Karol Bagh
New Delhi.

7. PTC Clearing & Forwarding Agency,
18/3, Arya Samaj Road, Karol Bagh,
New Delhi.
Also at Vivek Automobile, Mehta Building,
Ground Floor, Bhikaji Cama Place,
New Delhi-110066                       ...Respondents.

                    Through: Nemo

Coram:
HON'BLE MR. JUSTICE V.B. GUPTA

1. Whether the Reporters of local papers may
   be allowed to see the judgment?                     Yes

2. To be referred to Reporter or not?                  Yes

3. Whether the judgment should be reported
   in the Digest?                                      Yes


V.B.Gupta, J.

Present appeal under Section 173 of the Motor

Vehicles Act, 1988 (for short as „Act‟) has been filed by

the appellant-Insurance Company against the award

dated 23rd December, 2006 passed by Shri D.K.Sharma,

Judge, MACT, Delhi (for short as „Tribunal‟).

2. The brief facts of this case are that deceased Shri

Jagjit Singh aged about 34 years died in road accident

on 8th December, 1996 while driving two wheeler

scooter bearing no. DL-4SL-5468. The accident took

place as the offending vehicle bearing no. HR-47-3727

was parked on the wrong side with head lights off. The

deceased was taken to the hospital where he was

declared dead.

3. The offending vehicle is owned by Respondent

no.7 whereas, Respondent no.6 was the driver of the

offending vehicle. This vehicle was insured with the

appellant-insurance company.

4. Vide impugned judgment the tribunal passed an

award for a sum of Rs. 20,50,000/- in favour of

claimants and against appellant and respondent no.6

and 7.

5. It has been contended by learned counsel for

appellant that the compensation awarded by Tribunal is

on very much higher side. It has wrongly taken into

consideration that the deceased was receiving

Rs.4,000/- per month as production incentive, ignoring

the statement of the PW4 who stated that production

incentive is different every month depending upon

production.

6. The other contention is that the widow and the

children are getting family pension and moreover, the

widow has got a job in Maruti Udyog Ltd. where her

husband was working, on compassionate grounds.

7. It is also contended that the driver of offending

vehicle was not holding a valid and effective driving

licence at the time of accident. Despite service, neither

the owner nor driver appeared nor they contested the

matter on merits before the Tribunal. Notices under

Order 12 rule 8, CPC were sent through registered post

at the address of driver and owner but same could not

be served.

8. Lastly, the Tribunal considered the future increase

in income whereas, the witness examined on behalf of

the claimant did not say a single word regarding future

increase in income of the deceased.

9. In support of his contention the learned counsel

for appellant has cited the decision of the Apex Court in

Oriental Insurance Co. Ltd. v. Jashuben and

others, 2008 ACJ 1097.

10. On the other hand, it has been contended by the

learned counsel for the owner that the onus, was upon

the appellant to prove that the driver was not holding a

valid driving licence but the appellant has failed to

discharge the onus, which was upon him. Secondly,

notice under Order 12 Rule 8 CPC has not been served

either on the driver or owner.

11. Learned Counsel for the claimants contended that

the Tribunal has rightly taken monthly income of the

deceased which has been proved on record. There is no

ambiguity or infirmity in the judgment of the Tribunal.

12. Though it is correct that the respondents i.e.

owner and the driver, did not contest the claim petition

before the Tribunal, but the initial onus is upon the

appellant to show that the driver was not having a valid

and effective driving licence.

13. Before delving with the contentions of the

appellant counsel, it is relevant to reproduce herein the

relevant sections of the Act.

14. Section 3 of the Act reads as under;

"Necessity for driving licence.-

(1) No person shall drive a motor vehicle in any public place unless he holds an effective driving licence issued to him authorising him to drive the vehicle; and no person shall so drive a transport vehicle other than a motor cab or motor cycle hired for his own use or rented under any scheme made under sub-section (2) of section 75 unless his driving licence specifically entitles him so to do.

(2) The conditions subject to which sub-section (1) shall not apply to a person receiving instructions in

driving a motor vehicle shall be such as may be prescribed by the Central Government."

Section 181 of the Act reads as under;

"Driving vehicles in contravention of section 3 or section 4.-

Whoever drives a motor vehicle in contravention of section 3 or section 4 shall be punishable with imprisonment for a term which may extend to three months, or with fine which may extend to five hundred rupees, or with both."

15. Chapter XI of the Act, providing compulsory

insurance of vehicles against third party risks are a

social welfare legislation to extend relief by

compensation to victims of accidents caused by use of

motor vehicles. The provisions of compulsory insurance

coverage of all vehicles are with this paramount object

and the provisions of the Act have to be so interpreted

as to effectuate the said object.

16. Section 149 of the Act provides as follows;

"Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.-

(1) x x x

(2) No sum shall be payable by an insurer under sub-section (1)in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court, or as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:

(a) x x x x

(i) x x x x

(ii) a condition excluding driving by a named person or persons or by any person who

is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualifications;

(iii) x x x x

17. In a plethora of cases, the Apex Court and various

High Courts have held that, if there is a condition in the

insurance policy that only a licensed driver is to drive

the vehicle, the insurance company would not be liable

in case there is a breach.

18. There could be no doubt that in order to escape

liability, not only it should be proved that the driver of

the vehicle was not having a licence at the time of the

accident, but also the insurance company should prove

that the driver was disqualified from holding or

obtaining a licence or never had any licence at all.

Merely proving that on the date of the accident, the

driver did not have a licence, is not enough to hold that

the insurance company is not liable for claim. The onus

of proving that the driver of the vehicle never had a

licence or was disqualified from holding a licence is on

the insurance company.

19. The Apex Court in Narcinva V. Kamat and Anr.

v. Alfredo Antonia Doe Martins and Ors. [1985 ACJ

397], observed;

"When the Insurance Company complains of a breach of the term of contract, which would permit it to disown its liability under the contract of insurance, the burden is squarely on the Insurance Company to prove that the breach has been committed by the other party to the contract. The rest in such a situation would be 'who would fail, if no such evidence is led'. With this principle of law in view, the evidence has to be judged. Merely non-

production of licence or non-

examination of the driver of the vehicle is not enough nor any adverse inference can be drawn against the person holding that because of non-

examination of the driver or non-

production of the licence, the burden is discharged by a mere question in cross examination nor the owner is under any obligation to furnish the evidence so as

to enable the Insurance Company not to riggle out its liability under the contract of insurance."

20. When the Insurance Company takes the plea that

it is not liable to pay compensation or to indemnify the

insured as the driver was not holding a valid licence for

driving the vehicle on the date of the accident and the

vehicle was being driven in breach of the terms of the

policy, the Insurance Company has to discharge the

burden by placing legal and cogent evidence before the

Tribunal (see Narcinva V. Alfredo (supra)) : and a

Division Bench case of this Court in Shajadibai v.

Babookhan and Ors. Vol. (1) 1988 ACC 24).

21. The Tribunal in this regard has held:

"In the present case the Insurance Company has brought evidence on record that Driving Licence No.R 8641 which was seized from the driver of the offending vehicle has not been issued and renewed by RTA Karnal. However, the Insurance company has not brought any evidence on the record so as to prove that there was willful

breach of condition on the part of the owner/insured. The Insurance Company even did not prove the notice u/o 12 rule 8 C.P.C sent to the Insured/driver. Merely by bringing evidence on record that the driver was holding a fake license, the Insurance company cannot be absolved from its liability, in absence of cogent and reliable evidence. In the cross examination, the licensing clerk admitted that he has not brought the record as to the renewal of the license therefore the possibility that this license might have been renewed cannot be totally ruled out. In the circumstances, I consider that Insurance Company in view of discussion made herein above cannot be exonerated from its liability."

22. I do not find any reason to disagree with the

findings of the tribunal on this ground as the onus was

on the appellant-Insurance company to prove this fact

and it has failed to discharge its onus and as such the

appellant, cannot be exonerated from its liability.

23. Now coming to quantum, the monthly salary of the

deceased has been proved as Rs. 11,000/- per month

and it includes, production incentive also.

24. As per the statement of PW4 Shri Om Prakash,

Assistant, Maruti Udyog Ltd., the salary includes

incentive and deductions. Production incentive is

different every month depending on production of the

company. The witness has filed „Production Incentive

Record‟ of one year production of the company which is

Ex. PW4/A. He also stated that the deceased was

holding a pensionable post and his wife and two

children are getting pension as per EPF pension

scheme.

25. As per the production incentive record Ex. PW4/A

for the year 1996, the total production incentive paid to

the deceased during this year, was about Rs. 52,730/-

which comes to be a little more than Rs. 4000/- per

month.

26. Therefore, the Tribunal has rightly considered the

production incentive in the salary of the deceased.

27. The important question for consideration is when

the widow of deceased and her two children are getting

family pension amounting to Rs. 3200/- per month and

the widow has also been given a job by the Maruti

Udyog Ltd. on compassionate grounds, can these

benefits are required to be correspondingly reduced

from the amount of total compensation payable or not?

28. In Mrs.Helen C.Rebello and others v.

Maharashtra State Road Transport Corpn. and

another, AIR 1998 SC 3191, about pensionary

benefits, the Apex Court in para 16 referred to the case

of the Grand Trunk Railway of Canada v. Jenning,

(1888) 13 AC 800 and held as under:-

"At the Common Law, pecuniary benefits from insurance policies, whatever the source, and pension schemes whether contributory or non- contributory, were deducted. The various English Courts' decisions

reveal the unsettled state of adjudication regarding the deductions from the compensation payable under the Fatal Accidents Act, 1846. Various divergent opinions were expressed, some favourable to the claimant to exclude any sum payable on life insurance or pensions from deduction out of the compensation payable to the claimant and other not to deduct till, as aforesaid, the matter was set at rest by various legislations culminating into the Fatal Accidents Act, 1959. Till before this, within the limitation of the restrictive language of the Act and in the absence of any motivating and guiding words under the statute the general principles under the common law was applied to ascertain the pecuniary loss and gain. Thus, the 'pecuniary advantage' from whatever source comes to the claimant by reason of the death, was interpreted giving its widest meaning. This amplitude of large sphere has been the cause of concern of the Courts, Legislative and the Jurists and reference to the insurance, pension, gratuity etc. whether it is a pecuniary gain deductible, if it is, whether one‟s conscience, equity and fairness are eroded, specially if it is applied with reference to the provisions of Motor Vehicles Act? To salvage from this onslaught, some decisions declined to interpret for deduction and some other, even after holding deductible, expressed their conscience in favour of the sufferer. This we find both in the

English decisions and the Indian decisions."

The Apex Court further in para 36 has pointed out about the family pension as under;

"Similarly, family pension is also earned by an employee for the benefit of his family in the form of his contribution in the service in terms of the service conditions receivable by the heirs after his death. The heirs receive family pension even otherwise than the accidental death. No co-relation between the two."

29. This Court in Delhi Transport Corporation v.

Meena Chaturvedi and others, 2006 ACJ 406, held

that deductions on account of life insurance, provident

fund, pension, etc. are not admissible in view of the

decision of the Apex Court in Helen C.Rebello

(supra).

30. In case of N.Sivammal and others v. The

Managing Director, Pandian Roadways Corpn. and

another, AIR 1985 106, the Apex Court pointed out

that the reduction of monetary benefit of pension from

the amount of compensation is without justification.

31. In Savitri Devi & Ors. v. Pala Ram & Ors., II

(2000) ACC 152 (DB), the Punjab and Haryana High

Court has taken the view that the pension/family

pension payable to the widow could not be taken into

consideration for reducing the dependency of the

claimants.

32. In view of the aforesaid principles laid down by

the various judgments, the question is no more res

integra and the Tribunal exercising jurisdiction under

the Motor Vehicles Act is required to consider the

payment of damages/compensation to the person

concerned on the basis of income and the loss that

others would suffer irrespective of benefits, such as,

insurance, provident fund, pension, etc.

33. As regards the widow getting job on

compassionate grounds, our own High court has held in

Nirmala Sharma v. Raja Ram, AIR 1982 Del. 233

that:

"If the heir has joined service her salary cannot be taken into consideration or deducted from the amount of compensation payable to her."

34. Karnataka High Court in Lalitha and another v.

Dashanbhat Haribansh Bhat and others, AIR 1998

Kar. 344 that:

"In our view, the Tribunal has gravely erred in denying the compensation under the head 'loss of dependency' to appellant 1 because of her appointment on compassionate grounds in the place of the deceased. The Tribunal erred in recording a finding that the salary earned by appellant 1 would compensate for the loss of salary which was being earned by the deceased. Whatever salary she got after employment was in lieu of services rendered by her. The same does not mean that there was no loss of dependency. While the

husband was earning she must have employed herself gainfully in the house-hold work. Salary earned by the deceased was in lieu of the services rendered by him and because of his death loss was caused to the estate resulting in loss of dependency to the appellants. Salary earned by appellant 1 was due to the work put in by her and could not be adjusted or treated as compensation for the loss of earning of the deceased. Salary earned by appellant 1 could not be equated with the compensation she was entitled to on account of the death of her husband. While determining the compensation under the head loss of dependency/loss to the estate, the Courts have to examine as to what was the loss caused to the estate of the deceased or to the dependants for the income which was contributed by the deceased to them. To the extent of loss of the income which was being contributed by the deceased to the dependants, the dependants are entitled to be compensated. Simply because one of the family members was given employment in the place of the deceased on compassionate grounds, the loss of dependency

would not be off-set against the income earned by the dependents from the appointment given to him/her on compassionate grounds.

The income earned by the dependant would be for the services rendered by him/her independently of the loss to the estate caused due to the death of the deceased."

35. In the light of the above decisions, the contention

of the appellant stands rejected.

36. Thus, I do not find any illegality or infirmity in the

impugned judgment of the Tribunal. The compensation

awarded in this case is just, fair and equitable.

37. Hence, the present appeal is dismissed.

38. No order as to costs.

39. Trial Court record be sent back.

December 05, 2008 V.B.GUPTA, J.

Bisht