Delhi High Court
Purshottam Lal Goel vs Gurdhian Singh & Ors. on 2 July, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 12th January, 2012
Pronounced on: 2nd July, 2012
+ FAO. 298/1994
PURSHOTTAM LAL GOEL ..... Appellant
Through: Mr. Navneet Goyal with
Ms. Suman N. Rawat,
Advocates.
versus
GURDHIAN SINGH & ORS. ..... Respondents
Through: Mr. A.K. De with Mr. Rajesh
Dwivedi, Advocates for the
Respondent No.3 Insurance
Company.
Mr. Dipak K. Nag with Ms.
Debopama Ray, Advocates for
IRDA.
WITH
+ FAO. 302/1994
SAVITA GUPTA ..... Appellant
Through: Mr. Navneet Goyal with
Ms. Suman N. Rawat,
Advocates.
versus
GURDHIAN SINGH & ORS. ..... Respondents
Through: Mr. A.K. De with Mr. Rajesh
Dwivedi, Advocates for the
Respondent No.3 Insurance
Company.
Mr. Dipak K. Nag with Ms.
Debopama Ray, Advocates for
IRDA.
FAO Nos.298/1994 & 302/1994 Page 1 of 17
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J.
1. These two Appeals arise out of a judgment dated 13.09.1994
passed by the Motor Accident Claims Tribunal (the Claims
Tribunal) whereby a compensation of `74,000/- and 40,000/-
respectively was granted in favour of the Appellants Purshottam
Lal Goel and Savita Gupta (in FAO No.298/1994 and FAO
No.302/1994 respectively) for having suffered injuries in a
motor accident which occurred on 02.09.1973.
2. On appreciation of evidence, the Claims Tribunal found that the
accident was caused on account of rash and negligent driving of
Taxi No. DLT 1960 by its driver Gurdhian Singh (the First
Respondent). As against a claim of `1,00,000/-, a compensation
of `74,000/- was awarded in favour of the Appellant Purshottam
Lal Goel and as against a claim of `50,000/-, a compensation of
`40,000/- was awarded in favour of the Appellant Savita Gupta.
During the inquiry, it was brought to the notice of the Claims
Tribunal that the owner of the Taxi (Respondent No.2 Mohal
Singh) failed to produce the original insurance policy; its
photocopy was obtained from counsel for the owner (Sh. J.N.
Verma, Advocate) which reflected that the liability of the
Insurance Company was limited to `5,000/-. The Third
Respondent (M/s. United India Fire & General Insurance Co.
Ltd.) was directed to pay the compensation of `5,000/- in each
of the case and the Respondents No.1 and 2 were held liable to
pay the balance compensation.
3. The finding on negligence is not challenged by any of the
Respondents. The Appellants challenge the impugned judgment
dated 13.09.1994 on the grounds:
(i) The Insurance Company failed to produce secondary
evidence within the meaning of Section 63 of the Indian
Evidence Act, 1872 (the Evidence Act) due to the non-
production of the insurance policy by the insured,
therefore, the liability of the Insurance Company was
unlimited;
(ii) The compensation awarded is on the lower side;
(iii) The Claims Tribunal erred in not awarding any interest
on the amount of compensation held payable to the
Appellants. The interest, is compensation payable to a
victim for detention of money by the tortfeasor/Insurance
Company, therefore, the Claims Tribunal should have
awarded the interest @ 12% per annum on the
compensation granted to the Appellants.
LIABILITY:
4. While dealing with the issue of limited liability, the Claims
Tribunal held that the original insurance policy was not
produced by the owner (the Respondent No.2 herein) in spite of
service of the notice under Order XII Rule 8 CPC; the Insurance
Company was entitled to lead secondary evidence; the
Insurance Company could not produce the office copy of the
policy as the same was destroyed after five years; the Insurance
Company's investigator (RW1) obtained photocopy of the
insurance policy (Ex.R2) from the owner's advocate which was
duly proved, to show that the Insurance Company's liability
was limited.
5. As far as service of the notice Ex.R4 is concerned, the same is
established from the postal receipt Exs.R5 and R6. Mohal
Singh (the Respondent No.2) himself entered the witness box as
RW2. He did not utter a word that the notice Ex.R4 was not
received by him. A presumption of service of notice has to be
drawn as per Section 114 of the Evidence Act and Section 27 of
the General Clauses Act. I am supported in this view by a
report of a three Judge Bench of the Supreme Court in
C.C.Alavi Haji v. Palapetty Muhammed and Anr., (2007) 6 SCC
555. The relevant portion of the report in C.C.Alavi Haji
(supra) is extracted hereunder:-
"12. Therefore, the moot question requiring
consideration is in regard to the implication of Section
114 of the Evidence Act, 1872 insofar as the service of
notice under the said proviso is concerned. Section 114
of the Evidence Act, 1872 reads as follows:
"114. Court may presume existence of certain
facts.--
The court may presume the existence of any fact
which it thinks likely to have happened, regard
being had to the common course of natural events,
human conduct and public and private business, in
their relation to the facts of the particular case.
Illustrations
The court may presume--
(f) that the common course of business has been
followed in particular cases;
13. According to Section 114 of the Act, read with
Illustration (f) thereunder, when it appears to the court
that the common course of business renders it probable
that a thing would happen, the court may draw
presumption that the thing would have happened, unless
there are circumstances in a particular case to show that
the common course of business was not followed. Thus,
Section 114 enables the court to presume the existence of
any fact which it thinks likely to have happened, regard
being had to the common course of natural events,
human conduct and public and private business in their
relation to the facts of the particular case. Consequently,
the court can presume that the common course of
business has been followed in particular cases. When
applied to communications sent by post, Section 114
enables the court to presume that in the common course
of natural events, the communication would have been
delivered at the address of the addressee. But the
presumption that is raised under Section 27 of the GC
Act is a far stronger presumption. Further, while Section
114 of the Evidence Act refers to a general presumption,
Section 27 refers to a specific presumption. For the sake
of ready reference, Section 27 of the GC Act is extracted
below:
"27. Meaning of service by post.--Where any
Central Act or Regulation made after the
commencement of this Act authorises or requires
any document to be served by post, whether the
expression „serve‟ or either of the expression
„give‟ or „send‟ or any other expression is used,
then, unless a different intention appears, the
service shall be deemed to be effected by properly
addressing, pre-paying and posting by registered
post, a letter containing the document, and, unless
the contrary is proved, to have been effected at the
time at which the letter would be delivered in the
ordinary course of post."
14. Section 27 gives rise to a presumption that service of
notice has been effected when it is sent to the correct
address by registered post. In view of the said
presumption, when stating that a notice has been sent by
registered post to the address of the drawer, it is
unnecessary to further aver in the complaint that in spite
of the return of the notice unserved, it is deemed to have
been served or that the addressee is deemed to have
knowledge of the notice. Unless and until the contrary is
proved by the addressee, service of notice is deemed to
have been effected at the time at which the letter would
have been delivered in the ordinary course of business.
This Court has already held that when a notice is sent by
registered post and is returned with a postal endorsement
"refused" or "not available in the house" or "house
locked" or "shop closed" or "addressee not in station",
due service has to be presumed......"
6. The Claims Tribunal's finding that the insurance policy in
possession of the Insurance Company could have been
destroyed as such records are destroyed after every five years is,
however, not tenable. This accident took place on 02.09.1973.
The Claim Petitions were filed on 27.02.1974 within a period of
five months. The Respondent Insurance Company must have
been served with the notice of the Claim Petition immediately
after it (the petition) was filed, the Insurance Company could
have taken steps to preserve the record. In any case, the written
statement was filed by the Respondent Insurance Company on
25.04.1975 i.e. one year and seven months after the accident
and the Respondent Insurance Company took preliminary
objection that its liability was limited. Therefore, it should have
filed the office copy of the insurance policy along with the
written statement, but it failed to do so. In National Insurance
Co. Ltd. v. Jugal Kishore & Ors., (1988) 1 SCC 626, the
Supreme Court emphasized the need to file a copy of the
insurance policy by an Insurance Company along with the
written statement. Para 10 of the Report is extracted hereunder:
"10. Before parting with the case, we consider it
necessary to refer to the attitude often adopted by the
Insurance Companies, as was adopted even in this
case, of not filing a copy of the policy before the
Tribunal and even before the High Court in appeal.
In this connection what is of significance is that the
claimants for compensation under the Act are
invariably not possessed of either the policy or a
copy thereof. This Court has consistently emphasized
that it is the duty of the party which is in possession
of a document which would be helpful in doing
justice in the cause to produce the said document and
such party should not be permitted to take shelter
behind the abstract doctrine of burden of proof. This
duty is greater in the case of instrumentalities of the
State such as the appellant who are under an
obligation to act fairly. In many cases even the
owner of the vehicle for reasons known to him does
not choose to produce the policy or a copy thereof.
We accordingly wish to emphasise that in all such
cases where the Insurance Company concerned
wishes to take a defence in a claim petition that its
liability is not in excess of the statutory liability it
should file a copy of the insurance policy along with
its defence. Even in the instant case had it been done
so at the appropriate stage necessity of approaching
this Court in civil appeal would in all probability
have been avoided. Filing a copy of the policy,
therefore, not only cuts short avoidable litigation but
also helps the court in doing justice between the
parties. The obligation on the part of the State or its
instrumentalities to act fairly can never be over-
emphasised."
7. The finding of the Claims Tribunal on the basis of RW3's
testimony that the Insurance Company could not produce the
office copy of the insurance policy as the record is destroyed
after every five years is misconceived. The Insurance Company
could and should have placed on record the office copy of the
insurance policy along with its defence if it really wanted to
establish that the Insurance Company's liability was limited to
`5,000/-. The explanation for non-production of the copy of the
insurance policy given by the Insurance Company through RW3
is, therefore, not tenable. The Claims Tribunal admitted a
photocopy of the insurance policy purported to have been
obtained from Sh. J.N. Verma, Advocate counsel for the
Respondent No.2. The same was neither properly proved nor
was secondary evidence within the meaning of Section 63 of the
Evidence Act. This finding is supported by the report of the
Supreme Court in J. Yashoda v. K. Shobha Rani, (2007) 5 SCC
730. In para 8, the Supreme Court held as under:
"8. Essentially, secondary evidence is an evidence
which may be given in the absence of that better
evidence which law requires to be given first, when a
proper explanation of its absence is given. The
definition in Section 63 is exhaustive as the section
declares that secondary evidence "means and
includes" and then follow the five kinds of secondary
evidence."
8. The document Ex.R2 is only a photocopy of the insurance
policy, the same does not fall in any of the five clauses within
the meaning of Section 63 of the Evidence Act and, therefore,
the same cannot be looked into. In the absence of proof of the
insurance policy, the Appellant has failed to prove that its
liability was limited to `5,000/-. It shall have to be held that the
Appellant's liability was unlimited. I am fortified in this view
by the report of the Supreme Court in Tejinder Singh Gujral v.
Inderjit Singh & Anr., (2007) 1 SCC 508. Relevant para of the
report is extracted hereunder:-
"13. The learned Tribunal, however, committed an error
in opining that the insurance policy was not required to
be proved. Learned Single Judge of the High Court, in
our opinion, rightly held that the insurance policy having
not brought on records, a presumption would arise that
the liability of the insurer was unlimited........"
9. In Chandro Devi & Ors. v. Jit Singh & Ors., 1989 ACJ 41,this
court held that in the absence of proof of the insurance policy
by the insurance company it shall be presumed that the liability
of the insurance company is unlimited. Relevant para of the
report says:-
"The insurance company must prove that the policy in
question is the „Act only‟ policy. The amount mentioned
by the statute is the minimum amount. But the policy can
always cover higher risk to third party by taking
additional premium. It is obligatory on the part of the
insurance company to prove the insurance policy and its
terms and conditions. In a number of decisions by this
court, it has been held that where the insurance company
has to produce the insurance policy or prove the same in
accordance with law, then, it shall be presumed that the
liability of the insurance company is unlimited. As I have
already held that the insurance company has failed to
prove the insurance policy in accordance with law, so I
hold that the liability of the insurance company is
unlimited in the present case."
10. In view of the non-production of secondary evidence with
regard to the insurance policy, I hold that the Insurance
Company cannot take the plea that its liability was limited.
QUANTUM OF COMPENSATION:
11. With regard to the quantum of compensation, the contention
raised is two-fold. It is urged that the compensation of ` 1 lac
and `50,000/- respectively should have been awarded in the
case of Appellants Purshottam Lal Goel and Savita Gupta as
claimed. It is contended that the Claims Tribunal erred in not
granting any interest during pendency of the petition.
12. I may say that this accident took place in the year 1973. The
Appellant Purshottam Lal Goel suffered injuries on his head as
the pieces of the wind screen glass pierced his skull. He also
suffered a fracture in his left shoulder. The Claims Tribunal
dealt with the quantum of compensation in Paras 23 to 25 of the
impugned judgment, which are extracted hereunder:
"23. Issue No.3 relating to the case of Purshotam
Lal, and according to the petitioner he has claimed `1
lac as compensation. According to the para No.11, he
got injuries on his face, head. He received fractures in
the arm and knees. He has not given the details of
compensation claimed under different heads. Regarding
his treatment etc, his statement is there as PW3 and
from the Hospital where he remained admitted, PW7,
PW13, PW11 and PW12 are the relevant witnesses.
According to Purshotam Lal himself as PW, glasses of
wind-screen entered his head and there was bleeding;
he got his left shoulder fractured. (According to the
petition he got his arm fractured). He was not normal
for 6 months, his memory was also effected, he spent
`1500/- for a doctor, he spent `20/- per day for visit to
the hospital etc. ` 2,000/- to 3,000/- were spent on
medicines, `6,000/- on his special diet and he could not
regularly attend to his duty as Metropolitan counsel (sic
counselor) and as a professor. He has been unable to
give the number of leaves availed by him. No bills etc.
regarding the treatment of the injured have been
produced. Thus, there is no documentary evidence
regarding the expenses incurred by him. But all the
same it can be presumed that for getting recovered from
the injuries he had to spend some amount. According to
the doctors examined he remained admitted in the
hospital from 2.9.73 to 29.9.73 and there was fracture
on his person. Now this is all the evidence produced in
this respect. Injuries are proved on his person from the
medical record produced in this respect. X-ray was also
done.
24. For the purpose of assessing the compensation
in the case of injuries to the person broadly speaking the
same can be divided under different heads like
compensation for pain and sufferings, loss of enjoyment
of life, loss of income due to accident, expenses incurred
in treatment etc. and special diet. It is true that no
amount of compensation can put the claimant in the
same position as he was before meeting with the
accident but all the same just compensation under the
Motor Vehicles Act, has to be assessed and in this
regard, specially in the case of injuries some guess work
has to be done. The claimant was 32 years of age when
this unfortunate incident happened. He was earning
`1200/- per month. He remained on leave for the period
of fat least one month. He has also to undergo pain and
sufferings, plaster was put on his person and even now
he is not fully recovered.
25. Keeping in view the age etc., I assess the
compensation in this case as under:
1. Pain and Sufferings `20,000/-
2. Loss of Enjoyment of Life `25,000/-
3. Loss of Income `2,000/-
4. Expenses incurred on Medicines, `20,000/-
Special Diet and Conveyance
5. Other Misc. Expenses `7,000/-"
13. Similarly, the Appellant Savita Gupta who was a student of
B.A. 1st Year at the relevant time suffered fracture of right arm.
The Claims Tribunal dealt with the aspect of grant of
compensation in paras 26 to 28 of the impugned judgment,
which are extracted hereunder:-
"26. Now in case of Savita Gupta she is a student of
B.A. and she was of 17-18 years of age and she
appeared herself as PW-5. According to her she
cannot lift heavy weight, she cannot even dance. She
has no flexibility in her right arm. According to her,
her father had to spend ` 8,000/- to 10,000/- for
conveyance. ` 2,000 to 3,000/- on medicines. `4,500/-
on special diet @ `30/- per day for 5 months. As
against it her father appeared as PW-6 and deposed
that the expenses on medicines spent were `1,000/-, on
conveyance was also `1,000/- amount paid to a private
Dr. Daraswami is `1,000/-.
27. There is clear discrepancy in the statement of the
two persons with regard to the expenses incurred.
There are no documents to prove any expenses. As
mentioned above it is difficult to assess the
compensation exactly and cent percent correct in
injury case. Some guess work has to be done.
28. Keeping in view the evidence produced, I assess
the compensation under different heads as under:-
1. Pain & Suffering ` 10,000/-
2. Loss of Enjoyment of Life ` 15,000/-
3. Expenses incurred on Special
Diet, Conveyance and Medicines ` 10,000/-
4. Other Misc. Expenses ` 5,000/-
` 40,000/-"
14. Only a vague plea has been taken for enhancement of the
compensation. No documentary evidence was produced by the
Appellants with regard to the expenditure on their treatment or
the amount spent on conveyance. The oral evidence
produced with regard to the amount spent on treatment in the
case of the Appellant Savita Gupta was found to be
contradictory by the Claims Tribunal. Considering that this
accident took place in the year 1973, I would say that the
Claims Tribunal was very liberal in awarding a sum of
`45,000/- towards non-pecuniary damages in case of
Purshottam Lal and `25,000/- in case of Savita Gupta. General
damages awarded in respect of the expenditure incurred were
also liberal. In the absence of any Appeal by the Insurance
Company or the owner, I would not interfere with the guess
work made by the Claims Tribunal in awarding the
compensation.
15. As far as grant of interest is concerned, Section 110 CC of the
Motor Vehicles Act 1939 (Section 171 of the Motor Vehicles
Act, 1988) provides payment of simple interest on the amount
of compensation at such rate and from such date not earlier than
the date of making a claim, as the Claims Tribunal may decide.
Normally, the Claims Tribunal and the Courts grant interest as
payable on long term fixed deposit by the nationalized Banks.
In Dharampal & Ors. v. U.P. State Road Transport
Corporation, AIR 2008 SC 2312, the Supreme Court held as
under:
"10. Interest is compensation for forbearance or
detention of money, which ought to have been paid to the
claimant. No rate of interest is fixed under Section 171
of the Act and the duty has been bestowed upon the court
to determine such rate of interest. In order to determine
such rate we may refer to the observations made by this
Court over the years. In the year 2001 in the case of
Kaushnuma Begaum (Smt.) and Ors. v. New India
Assurance Co. Ltd. & Ors.,(2001) 1 SCR 8 on the
question of rate of interest to be awarded it was held that
earlier, 12% was found to be the reasonable rate of
simple interest but with a change in economy and the
policy of Reserve Bank of India the interest rate has been
lowered and the nationalized banks are now granting
interest @ 9% on fixed deposits for one year.
Accordingly, interest @ 9% was awarded in the said
case. We may at this stage also refer to the following
observations of their Lordships in the aforesaid decision
which are relevant to the present case:
"24. Now, we have to fix up the rate of
interest. Section 171 of the MV Act empowers the
Tribunal to direct that „in addition to the amount of
compensation simple interest shall also be paid at
such rate and from such date not earlier than the
date of making the claim as may be specified in this
behalf‟. Earlier, 12% was found to be the
reasonable rate of simple interest. With a change
in economy and the policy of Reserve Bank of India
the interest rate has been lowered. The
nationalized banks are now granting interest at the
rate of 9% on fixed deposits for one year. We,
therefore, direct that the compensation amount
fixed hereinbefore shall bear interest at the rate of
9% per annum from the date of the claim made by
the appellants...."
11. In the year 2002, in United India Insurance Co.
Ltd. & Ors. v. Patricia Jean Mahajan & Ors. (2002)3
SCR 1176 this Court held that the interest is payable on
the equitable grounds to the aggrieved person who is
deprived of using the money which is due and payable to
him. Following the observations made in the case of
Kaushnuma Begaum (supra) interest @ 9% was awarded
in this case also. It was held as follows:
"In our view the reason indicated in the case of
Kaushnuma Begaum (supra) is a valid reason and it
may be noticed that the rate of interest is already on
the decline. We therefore, reduce the rate of interest
to 9% in place of 12% as awarded by the High
Court."
12. In the year 2003 in the case of Abati Bezbaruah v.
Dy. Director General, Geological Survey of India & Anr,
(2003) 1 SCR 1229 it was held that the question as to
what should be the rate of interest, in the opinion of this
Court, would depend upon the facts and circumstances of
each case. Award of interest would normally depend
upon the bank rate prevailing at the relevant time. After
referring to the aforementioned decisions interest @ 9%
was awarded in the said case.
13. However, in the year 2005, in Tamil Nadu State
Transport Corporation Ltd. v. S. Rajapriya, AIR 2005
SC2985 this Court again taking note of the then
prevailing rate of interest on bank deposits directed for
lowering the rate of interest fixed by the Tribunal at 9%
per annum and altered the same to 7.5% per annum."
16. In the instant case, the Claims Tribunal did not give any reason
for awarding interest only for a period after 30 days of the
passing of the order. The rate of interest in 70's and 80's was
quite high. The same started falling since the beginning of this
century. Taking all the facts and circumstances into
consideration, I would award interest @ 7.5% per annum from
the date of filing of the Petition till the date of award and then
from the date of the award till the date of decision in these
Appeals.
17. The Respondent No.3 Insurance Company is directed to deposit
the balance compensation along with interest in the name of the
Appellants with UCO Bank, Delhi High Court Branch within
six weeks. On deposit, the amount shall be released to the
Appellants forthwith.
18. The Appeals are allowed in above terms.
19. Pending Applications are disposed of accordingly.
(G.P. MITTAL)
JUDGE
JULY 02, 2012/pst
