Delhi High Court

Sharda Devi & Ors. vs Jaspal Singh & Ors. on 27 September, 2011

Author: Reva Khetrapal

                                        REPORTED
*    IN THE HIGH COURT OF DELHI AT NEW DELHI

+             FAO 61/1995
       SHARDA DEVI & ORS                       ..... Appellants
                        Through: Mr. Manu Shahalia, Advocate.
                 versus
       JASPAL SINGH & ORS                      ..... Respondents
                 Through: Mr. D.D.Dayani, Advocate for the
                             respondent No.1.
                             Mr. A.K.Soni, Advocate for the
                             respondent No.3-Insurance Company.

%                           Date of Decision :      September 27, 2011

CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL
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 (ORAL)

: REVA KHETRAPAL, J.

1. This appeal is directed against the judgment and award dated

14.11.1994 passed by the Motor Accident Claims Tribunal, Delhi,

whereby a sum of ` 2,00,000/- was awarded in favour of the

appellants with interest at the rate 12% per annum from the date of

the institution of the petition till the date of the award.

2. The facts relevant for the decision of the present appeal are that

one Raje Singh, while he was going on his cycle to Shahdra on

04.10.1984 at 11:00 p.m., was hit by a taxi bearing No. DLT 4031 at

Koria Bridge. He was taken to the JPN Hospital, where he succumbed

to the injuries sustained by him on 08.10.1984. A claim petition was

filed by his legal representatives being his wife and two minor

children under Section 110A of the Motor Vehicles Act, 1939,

claiming compensation in the sum of ` 5,00,000/- for the untimely

demise of their bread-earner against the driver, the owner and the

insurer, (the respondents No. 1 to 3 herein) of the offending taxi.

3. A joint written statement was filed by the respondents No.1 and

2, wherein the factum of accident was admitted. In the written

statement filed by the respondent No.3-Insurance Company, it

admitted that the offending vehicle was insured with it, but pleaded

that its liability was limited to the extent of ` 50,000/- only. The

learned Tribunal after holding an enquiry held that the accident was

the outcome of the rash and negligent driving of the respondent No.1

and proceeded to compute the compensation payable to the

appellants. In view of the fact that there was on record the salary

certificate of the deceased proved by PW2-Sh. G.P.Gupta, an official

from Khadi Gramodyog Bhawan, the employer of the deceased, the

learned Tribunal accepted the salary of the deceased to be in the sum

of ` 1,234/- per month as shown in the said certificate, and taking into

account the fact that with the passage of time there would be an

increase in the aforesaid salary, assessed the income of the deceased

at the time of his retirement to be in the sum of ` 2,000/- per month

by applying the ratio of the judgment in the case of 'Kerala State

Road Transport Corporation versus Susamma Thomas', 1994 ACJ

1. Deducting one-third from the aforesaid average income of the

deceased towards his personal expenses, the Claims Tribunal

assessed the loss of dependency of the appellants to be about

` 1,400/- per month to which it applied the multiplier of 12, thereby,

computing the total loss of dependency of the appellants to be in the

sum of ` 2,01,600/- only (that is, ` 1,400/- X 12 X 12 = ` 2,01,600/-)

rounded off to ` 2,00,000/- (Rupees two lakh only). As regards the

defence of the Insurance Company that its liability was limited to the

sum of ` 50,000/- only, the learned Tribunal held that no additional

premium having been paid by the respondent No.2, the liability of the

Insurance Company was limited to ` 50,000/- only.

4. Aggrieved from the aforesaid findings of the Tribunal, the

appellants, who were the claimants before the learned Tribunal, have

preferred the present appeal to challenge the findings of the Tribunal

on the aspect of quantum of compensation payable to them as well as

on the aspect of the limited liability of the Insurance Company.

5. As regards the quantum, Mr. Manu Shahalia, the learned

counsel for the appellants, relying upon the judgment of the Hon‟ble

Supreme Court in the case of 'Smt. Sarla Verma and Ors. vs. Delhi

Transport Corporation and Anr.' (2009) 6 SCC 121, contends that

the learned Tribunal erred in applying the multiplier of 12 instead of

the multiplier of 15, which is the multiplier approved of by the

Supreme Court for the age group of deceased persons between 36 to

40 years of age. He pointed out since it is not in dispute that the

deceased was 39 years of age on the date of the accident, the learned

Tribunal ought to have applied the multiplier of 15 to augment the

multiplicand constituting the loss of dependency of the appellants.

He also contends that no amount whatsoever has been awarded by the

learned Tribunal towards the pecuniary and non-pecuniary damages

suffered by the appellants apart from the loss of dependency.

6. On the second aspect viz., the aspect of limited liability, Mr.

Shahalia, contends that the defence raised by the Insurance Company

of limited liability is altogether unsustainable, in view of the fact that

admitted position is that the original policy was never sent to the

insured, and as such the original policy, which was produced in

evidence by RW2 - Shri O.P.Aggarwal, an official of the Insurance

Company, cannot be relied upon, more so, in view of the fact that the

„Tariff‟ was not produced by the said witness as also the proposal

form and the receipt of the premium.

7. Mr. D.D.Dayani, the learned counsel for the respondent

No.1/insured, supports the aforesaid contentions of the counsel for the

appellants by contending that in the absence of the proposal form, the

receipt for the premium and as well as the „Tariff‟, the original policy

of insurance produced by the Insurance Company is a self-serving

document, which appears to have been produced by the Insurance

Company with a view to avoid its liability and to fasten the liability

upon the insured, who had duly insured his vehicle against unlimited

third party liability.

8. Mr. A.K.Soni, the learned counsel for the Insurance Company,

however, sought to support the award and to contend that this was a

case of limited liability. On the aspect of quantum of compensation,

Mr. Soni, contended that not more than 50% increase to the actual

income of the deceased could have been made by the learned Tribunal

in terms of the judgment of the Supreme Court in the case of Sarla

Verma (supra), and that the learned Tribunal has wrongly assessed

the income of the deceased at ` 2,000/- per month on the basis of the

judgment rendered in Susamma Thomas (supra). He further

contended that if the judgment of Susamma Thomas (supra) is to be

followed, then the multiplier in accordance with the judgment in the

case of Sarla Verma (supra), cannot be applied.

9. It may be noted at this juncture that with a view to ensure

uniformity in the assessment of compensation payable to the victims

of motor vehicular accidents, the Supreme Court in the case of Sarla

Verma (supra) laid down certain guidelines to be uniformly followed

by all courts and tribunals so as to avoid inconsistency in the awards

passed by courts and tribunals all over the country. It is accordingly

proposed to follow the guidelines laid down in the said judgment and

to re-compute the compensation payable to the appellants in the light

of the ratio of the said decision. On facts, it is not in dispute that the

salary of the deceased on the date of the accident as per his salary

certificate, which is duly proved on record (Exhibit PW- 2/1) was in

the sum of ` 1,234/- per month. Taking into account the prospects of

increase in the income of the deceased and adding 50% on account of

the anticipated increase in his salary in consonance with the judgment

in Sarla Verma's case (supra), the average monthly income of the

deceased is assessed to be in the sum of ` 1,851/- per month [that is,

` 1,234/- (monthly salary at the time of accident) + ` 617/-

(anticipated increase in salary)]. Deducting one-third therefrom

towards the personal expenses of the deceased, the loss of

dependency of the appellants comes to ` 1,234/- per month or say `

14,808/- per annum. To the aforesaid multiplicand, the multiplier of

15, which is the tabulated multiplier, approved of by the Supreme

Court in the case of Sarla Verma (supra), must be applied.

Calculated in this manner, the total loss of dependency of the

appellants comes to ` 14,808/- X 15 = ` 2,22,120/- (Rupees two lakh

twenty two thousand one hundred and twenty only). In addition to

the aforesaid amount of loss of dependency, the appellants are held

entitled to receive a sum of ` 8,000/- towards the medical expenses

incurred by them for the 4 days for which the deceased was

hospitalized and towards the last rites of the deceased. Non-

pecuniary damages under the heads of loss of estate, loss of love and

affection and loss of consortium of the appellant No.1 in the sum of `

10,000/- each are also awarded. Thus, the total award amount works

out to ` 2,60,120/- rounded off to ` 2,60,000/- (Rupees two lakh and

sixty thousand only). Interest at the rate of 12% per annum as

awarded by the learned Tribunal shall be paid on the initial award

amount of ` 2,00,000/- from the date of the institution of the petition

till the date of the realisation. On the enhanced amount of

compensation, that is, on ` 60,000/-, however, the interest shall be

paid at the rate of 7.5% per annum from the date of the institution of

the petition till the date of realisation.

10. Adverting next to the defence of the Insurance Company that

its liability is limited to the extent of ` 50,000/- only, there is nothing

on record to support this defence. Interestingly, as noticed above, the

original insurance policy has been produced on record by the

Insurance Company. There is also on record the admission of RW2,

the official of the Insurance Company, that the original policy was in

fact never sent to the insured. Had the Insurance Company produced

the original proposal form and the receipt for the premium, possibly

something could be deduced therefrom, but the Insurance Company

has failed to produce either the proposal form or the original receipt

showing the payment of premium to it by the insured. There is, thus,

no corroborative evidence to corroborate the contents of the original

policy and the production of the original policy by RW2, the witness

of the Insurance Company, is therefore of no avail to the Insurance

Company.

11. As regards the „Tariff‟, though a specific query was put to

RW2 in cross-examination, the „Tariff‟ was not produced by the

respondent No.3 - Insurance Company to show that the policy was a

limited one as regards third party liability. Interestingly, the witness

of the Insurance Company in his cross-examination admitted that in

the instant case, the respondent No.1 (that is, the owner) was insured

for third party risk liability and further admitted as correct the

suggestion that premium for „Act only policy‟ is less than premium

for third party liability. Then again, a perusal of the original policy

(Exhibit R-1) shows that on extreme right hand corner of the policy

the words "Thirty Party" are clearly set out, just above the policy

number. It is also relevant to note that document Exhibit R-1

mentions that the limit of the Company‟s liability under Section II-

1(ii) "in respect of any one claim or series of claims arising out of one

event is to the extent of ` 1,50,000/-." This Section, as is clear from

the „Tariff‟, relates to property damage and there is provision in it for

unlimited personal injury. For the sake of ready reference, the

relevant portion of the „Tariff‟ is reproduced hereunder:

"ADDITIONAL PREMIUM IN RESPECT OF THIRD PARTY & INDEMNITY LIMITS.

Liability to the Public Risks:

The indemnity granted to the Insured may be increased in respect of the undernoted vehicles by payment of an additional premium on the following scale. In case where the limits or indemnity provided under the standard policy exceed Rs.50,000/- such limits may be increased in accordance with the scale at an additional premium equivalent to the difference between the scale rates for such standard policy limits and those for required increased limits.

              Limits of liability   Scales of rates       Scale    of     rates
                                    applicable to all     applicable to goods
                                    commercial            carrying     vehicles
                                    vehicles except (i)   General     Cartage
                                    goods     carrying    Class A(2)
                                    vehicles -General
                                    Cartage      Class
                                    A(2) & (ii) Motor
                                    Trade Road Risk
                                    only Class E.
                                    Per        Per        Per vehicle       Per
                                    vehicle    Trailer                      Trailer

              personal       injury
              Rs.150000/-
              property damage

              personal       injury
              Rs.300000/-
              property damage.
              Per         unlimited Above rate plus       Above      rate        plus
              personal injury and Rs.2.50                 Rs.5/-.
              for every Additional
              Rs.100000/0 or part                         NB. For vehicles
              thereof, for property                       designed        as
              damage in excess of                         commercial vehicle



                Rs.3,00,000/-                              and      used    for
                                                          commercial      and
                                                          private     purposes
                                                          excluding use for
                                                          hire or reward.
               Note:

The property damage limits in respect of Whether unlimited vehicles rated under Class „E‟ may be personal injury is increased in accordance with the above required to be scale by charging 50 per cent of the covered under an above rates. "Act only" policy in respect of vehicles rated under Regulation 2 of the Commercial Vehicles Tariff and registered as such this may be granted by charging 50% of the rates shown in the first item of Schedule for vehicles appearing at (a) above.

12. A look at the India Motor Tariff effective from 01.02.1982

shows that the premium for an „Act Only‟ policy is limited to ` 100/-

only. A bare glance at the insurance policy produced in the present

case shows that a premium of ` 120/- was paid along with ` 48/- for

passenger liability (4 passengers x ` 12/- = 48), meaning thereby

that the policy was not an „Act Only‟ policy and it was for unlimited

third party liability.

13. In view of the aforesaid, the award amount is enhanced from

` 2,00,000/- to ` 2,60,000/- with interest thereon as set-out herein

above with a direction to the Insurance Company to deposit the entire

award amount, less the amount already paid, if any, with the

Registrar-General of this Court within 30 days from the date of this