Vidya Devi & Ors. vs Ram Narain & Ors.
2010 Latest Caselaw 2732 Del

 *                   IN THE HIGH COURT OF DELHI AT NEW DELHI

+                  F.A.O. No.2 of 1985 & C.M. Appl. Nos.233-234/2002, 5834/2004

%                                                                             24.05.2010

         VIDYA DEVI & ORS.                                        ...... Appellants
                                       Through: None.

                                            Versus

         RAM NARAIN & ORS.                                         ......Respondents
                                       Through: Mr. Varun Kumar & Mr. Navneet Goyal,
                                                Advocates for R-2.
                                                Mr. Mohan Babu Aggarwal, Advocate for
                                                R-3/insurance company.

                                                            Reserved on: 13th April, 2010
                                                          Pronounced on: 24th May, 2010

         JUSTICE SHIV NARAYAN DHINGRA

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

2.       To be referred to the reporter or not?

3.       Whether judgment should be reported in Digest?

                                      JUDGMENT

1. The present appeal has been preferred by dependents of deceased Sh. Ravi

Shankar Updahyay against award dated 14th September, 1984 assailing the quantum of

compensation awarded by the Tribunal with a prayer that the compensation should be

enhanced. In response, counter objections have been filed by the owner that the Tribunal

wrongly held that liability of the insurance company was limited only to Rs.50,000/- and

rest of the amount was recoverable from the owner. The owner has also assailed the

order of the Tribunal on the issue of negligence and quantum of compensation. The

appeal has been contested by the insurance company and the stand of insurance company

has been that its liability was limited to Rs.50,000/-.

2. Brief facts relevant for the purpose of deciding this petition are that on 5th June,

1979 Sh. Ravi Shankar Upadhyay was going on his motorcycle bearing No.DEW 7217

from Connaught Place office of DESU to other office of DESU situated at Nizamuddin.

When he reached at Nizamuddin crossing, he was hit from behind by mother dairy milk

van being driven rashly and negligently by its driver. The deceased, at the time of his

death, was working as an engineer with DESU. He was allotted a residential

accommodation by his department and was drawing a salary of Rs.1,018.80 per month at

the time of his death. It was proved on record that his next promotion would have been as

Assistant Executive Engineer. It was also submitted that he being a brilliant engineer was

likely to reach the top. The deceased had left behind his wife and four children. His

children at the time of his death were aged between 2 years and 5 years. The learned

Tribunal while considering the just and fair compensation deducted 1/3rd of the income

towards personal expenses of deceased and calculated dependency of the family at

Rs.720/- per month and applied a multiplier of 16 as the age of the deceased at the time of

death was 35 years. Thus, the Tribunal awarded a sum of Rs.1,38,240/- as compensation.

To this amount, Rs.11,760/- was awarded on account of loss of expectation of life and

loss of love and affection and the total compensation awarded was Rs.1,50,000/-.

3. In order to prove negligence of the milk van bearing No.DHL 502, claimants had

examined PW 10 Sh. V.K. Mahajan. PW 9 Sub-Inspector Sh. Om Prakash had done

investigation of the case and supported the claimants' case of van driver being negligent.

After appreciating the evidence of the witnesses, the Tribunal came to the conclusion that

it was the driver of milk van who was negligent. It would be seen that in the written

statement, driver had even denied the collusion. The driver of the van did not appear in

the witness box in support of his pleading. It was proved before the Tribunal on record

that motor cycle was hit from behind. I, therefore, consider that the Tribunal rightly came

to the conclusion that the accident took place due to rash and negligent driving of milk

van in question.

4. There is no denial of the fact that the deceased was drawing a salary of Rs.1,018/-

per month at the time of accident. The claimants had also placed on record before the

Tribunal the letter of allotment of house allotted to the deceased by his Department in

pursuance to his service as mark 4/A. I consider that while considering the income of the

deceased, the court has to take real income of the deceased available for himself and for

benefit of his family. Since the deceased was allotted residential accommodation for

family by DESU, the rental value of the quarter should have been added as his income or

the income of the deceased should have been considered in a situation where he had not

been allotted a quarter but received House Rent Allowance. During 1980's in

Government and Government departments, 10 per cent was the House Rent Allowance

being paid to all employees. The salary of the deceased of Rs.1018.80 being given to him

did not include the House Rent Allowance, which deceased would have got had the

quarter not been allotted to him. I consider that 10 per cent of the salary was the

minimum which should have been added on this count. Thus, around Rs.100/- would

have been added to his monthly salary and his salary should have been taken as

Rs.1118.80 say Rs.1119/-. Since the deceased had left behind five dependents and all his

children were young, aged between 2 and 5 years, their necessities of life would have

been such that deceased could not have been able to spend 1/3rd of income on his own

expenses even if he was maintaining a motorcycle. I, therefore, consider that deduction

of 1/3rd income for his own expenses has been wrongly considered by the Tribunal. As

per judgment in Sarla Varma & Ors. vs. Delhi Transport Corporation & Anr.; (2009) 6

SCC 121 where dependants were four to six, the deduction for personal expenses should

be 1/4th of the income.

5. The deceased was a qualified engineer, he was having a regular job with DESU.

It has been brought on record that his next promotion was of Assistant Executive

Engineer and his carrier would have progressed along with time. I consider that looking

at his age and in view of Sarla Varma's case (supra), in order to compute dependency of

the dependents, future prospects of deceased should have been taken into account. In

terms of Sarla Varma's case (supra), future prospects of a person who is below 40 years

of age, having permanent job are to be taken as 50 per cent of salary minus tax. As the

income of the deceased was below taxable limits, 50 per cent of the salary was required to

be considered towards future prospects. Since the deceased was aged 35 years at the time

of death, the appropriate multiplier as per Schedule II was 17 and as per Sarla Varma's

case (supra) was 16. The Tribunal applied multiplier of 16. Thus, no fault can be found

with the multiplier. I consider dependency of claimants would have been Rs.840/-

[Rs.1,119/- x 3/4] plus 50 per cent (Rs.420/-) towards future prospects. Thus, the total

monthly dependency would have been Rs.1,260/- (Rs.840/- + Rs.420/-). The

compensation payable would have been Rs.2,41,920/- [Rs.1260/- x 12 x 16].

6. The claimants were also entitled to non-pecuniary benefits like loss of consortium,

loss of estate and loss of love and affection as all the children of the deceased were very

young, between the age of 2 to 5 years. I, therefore, consider that 10,000/- towards love

and affection, Rs.10,000/- towards loss of estate and Rs.5,000/- towards funeral expenses

and other last rites would be the appropriate amount. Thus, the total compensation

payable to the claimants would be Rs.2,66,920/-. I also consider that the claimants would

be entitled to interest over this amount @ 8 per cent from the date of filing of claim

petition till realization.

7. The next issue which arises is whether the liability of insurance company was

limited to Rs.50,000/- as held by the Tribunal or it was unlimited. The insurance cover

would show that a premium of Rs.236/- was charged from the owner for 'Public Risk'

being the basic premium. The tariff rates would show that the premium for minimum

'Act Only Liability' was Rs.200/- and not Rs.236/-. The total premium charged from the

owner was Rs.1733/- which included 'Wider Legal Liability' for driver and cleaner as

well. This court in F.A.O. No. 257 of 1991 titled Neeta Trehan & Ors. Vs. Gopal Krishan

& Ors., decided on 17th May, 2010, observed as under :-

"14. The issue arises whether this insurance cover obtained by the insured was limited to a liability of Rs.1,50,000/- being the minimum liability for which a vehicle was required to be insured by the owner or this premium covered wider liability. Counsel for the appellants has drawn my attention to the judgment in Veena Pruthi's case (supra) given by the Division Bench of this court where the Division Bench of this court held that if the premium was Rs.125/-, the liability would be limited to Rs.1,50,000/- and not unlimited. On the same logic it is stated that if the premium was Rs.240/- for class A(2) vehicle, the liability of insurance company would be limited to Rs.1,50,000/-.

15. Where obtaining of an insurance cover is made mandatory by statute, the contract is to be interpreted in the light of statutory provisions. In case of motor vehicles, obtaining of an insurance cover by the owners of vehicles is a statutory requirement. Thus, an insurance policy has to be interpreted keeping in view the statutory provisions and the rules of tariff as framed by the Advisory Board. Under the tariff rules, two separate tariffs are provided for 'Act Only Liability' and for 'Public Risk'. It cannot be said that the Advisory Board provided tariff for 'Act Only Liability' as a superfluous phenomenon. The Advisory Board was having in mind that where the owner wants to take an insurance policy covering the minimum liability under Section 95 of the Act, then the premium should be different. If the owner wants wider liability then the premium should be different and that is the reason that for 'Act Only Liability', a premium of Rs.200/- was provided and for 'Public Risk', a premium of Rs.240/- was provided. Public risk is a wider term and takes into account the entire risk faced by the owner for bringing vehicle on road. If

there had been no compulsion under the Act to obtain an insurance policy, the only insurance cover which owner could have obtained from an insurance company for covering public risk would have been this that he would pay Rs.240/- and get the public risk covered. If the Act would have not prescribed any limit, the public risk would naturally have been unlimited. The Act prescribed that every owner of vehicle should get insurance cover covering a minimum amount. Beyond that, the Act did not provide anything. It is under these circumstances that the Tariff Advisory Committee prescribed separate premium for 'Act Only Policy' and separate premium for a 'Public Risk Policy'. I, therefore, consider that the 'Public Risk' premium would cover unlimited amount of risk and would not cover a limited amount of risk.

..................

18. There is another aspect to be kept in mind. When an owner approaches insurance agent for insurance, he is told what would be the tariff payable by him and on payment of tariff, an insurance certificate or cover note is issued. The contract of insurance, thus, stands concluded on receipt of tariff/premium in terms of the tariff schedule as laid down by Advisory Board. Insurance policy is subsequently mailed to owner by insurance company. If insurance company unilaterally inserts a clause in the policy which is contrary to tariff regulations, such a clause is not binding. All insurance policies are in the shape of one standard performa used for different kinds of coverage. If while sending insurance policy to owner the company official does not score off non-applicable clauses or inserts a limited liability clause which is contrary to the tariff charged from owner, such a clause is not binding."

8. I, therefore, consider that liability of insurance company in this case would be

unlimited and the claimant would be liable to recover the enhanced compensation from

the insurance company. The enhanced amount shall be apportioned amongst the

claimants in the same ratio in which the original amount was apportioned.

9. With this, the appeal stands disposed of.

SHIV NARAYAN DHINGRA J.

MAY 24, 2010 'AA'