Delhi High Court
National Insurance Company Ltd vs Chander Prabha & Ors on 30 July, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 10th July, 2012
Pronounced on: 30th July, 2012
+ MAC.APP. 537/2009
NATIONAL INSURANCE COMPANY LTD ..... Appellant
Through: Mr. Manoj Ranjan Sinha,
Advocate
versus
CHANDER PRABHA & ORS ..... Respondent
Through: Mr. A.K. Mishra, Advocate for
the Respondents No.1 to 3.
Mr. Rahul Sharma, Advocate
for the Respondent No.6.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J.
1. The Appeal is for reduction of compensation of `8,35,000/-
awarded for the death of Suchir Kumar Chaudhary (a bachelor
of 21 years), who died in a motor vehicle accident which
occurred on 30.09.2002.
2. The finding on negligence reached by the Claims Tribunal is
not challenged by the Appellant, the driver or the owner. Thus,
the same has become final between the parties.
3. During inquiry before the Motor Accident Claims Tribunal (the
Claims Tribunal) it was claimed that the deceased was in
employment with M/s. Ashima Traders (Pvt.) Ltd., 2481/9,
Second Floor, Tulsi Bhawan, Karol Bagh, New Delhi and was
getting a salary of `6,000/- per month. The Claims Tribunal
relied on the salary certificate and took the deceased's income
to be `6,000/-; added 50% towards the future prospects;
deducted 50% towards the personal and living expenses and
applied the multiplier of '15' as per the age of the deceased's
mother to compute the loss of dependency as `8,10,000/-. On
adding further a sum of `25,000/- towards pecuniary and non-
pecuniary damages, the overall compensation of `8,35,000/-
was awarded.
4. The following contentions are raised on behalf of the Appellant
Insurance Company:-
(i) The Claims Tribunal erred in believing the salary
certificate Ex.PW-1/C. Although, the employer or his
representative was not examined and the salary certificate
was not properly proved.
(ii) There was no evidence with regard to the deceased's
bright future. The Claims Tribunal erred in granting
increase of 50%.
(iii) The Appellant Insurance Company served a notice under
Order XII Rule 8 CPC on the addresses of Respondents
No. 4 and 6 as given in the Insurance Policy and as
mentioned in the Claim Petition. The notices were
returned back undelivered. The Respondents No.4 and 6
failed to contest the proceedings. The Insurance
Company did whatever was in its power. In the absence
of any driving licence being produced, the Claims
Tribunal should have presumed that the driver did not
possess any driving licence and the Appellant having
successfully proved the willful and conscious breach of
the terms of policy. The Claims Tribunal erred in not
granting the recovery rights to the Appellant.
QUANTUM OF COMPENSATION
5. In order to prove the deceased's income, Respondents No.1 to 3
examined Surender Singh, the deceased's father. He testified
that the deceased Sudhir was his only son and was aged 21
years at the time of the accident. He deposed that he has a
daughter who is deaf and dumb. He proved the disability
certificate in respect of his daughter Anita as Mark X-1. He
deposed that his son Sudhir was working with M/s.
Ashmia Traders (Pvt.) Ltd., 2481/9, Second Floor, Tulsi
Bhawan, Karol Bagh, New Delhi and was getting a salary of
`6,000/- per month. He proved the salary certificate as Ex.PW-
1/C and deposed that the deceased used to give entire salary to
him.
6. In cross-examination, Surender Singh PW-1 admitted that he
was not in possession of any appointment letter given by the
employer. He denied the suggestion that his deceased's son was
not working with M/s. Ashmia Traders (Pvt.) Ltd. or that the
certificate Ex.PW-1/C is fake.
7. Admittedly, Respondents No.1 to 3 did not examine either the
employer or his representative. In the circumstances, it was not
permissible to place implicit reliance on the salary certificate
Ex.PW-1/C.
8. In the absence of any evidence as to the deceased's income, the
Claims Tribunal was entitled to grant compensation towards
loss of dependency on the basis of deceased's qualification who
was a Matriculate as per the mark sheet X-2 placed on record.
9. The deceased's father was a small agriculturist. Thus, deceased
Sudhir Kumar had the responsibility to look after his
handicapped sister after the death of his father. In the
circumstances and peculiar facts of this case, deduction of one-
third is required to be made towards the personal and living
expenses and the multiplier as per the age of the deceased
should have been given as Respondent No.3, the deceased's
sister was younger to him. There was no evidence with regard
to the deceased's future prospects.
10. In the case of Santosh Devi v. National Insurance Company Ltd.
& Ors., 2012 (4) SCALE 559; the Supreme Court distinguished
Sarla Verma (Smt.) & Ors. v. Delhi Transport Corporation &
Anr., (2009) 6 SCC 121 and held that in case of self-employed
and persons having fixed income, an increase to the extent of
30% could be given towards inflation. Para 14 of the report is
extracted hereunder:-
"14........In our view, it will be naive to say that the
wages or total emoluments/income of a person who is
self-employed or who is employed on a fixed salary
without provision for annual increment, etc., would
remain the same throughout his life. The rise in the cost
of living affects everyone across the board. It does not
make any distinction between rich and poor. As a matter
of fact, the effect of rise in prices which directly impacts
the cost of living is minimal on the rich and maximum on
those who are self- employed or who get fixed
income/emoluments. They are the worst affected people.
Therefore, they put extra efforts to generate additional
income necessary for sustaining their families. The
salaries of those employed under the Central and State
Governments and their agencies/instrumentalities have
been revised from time to time to provide a cushion
against the rising prices and provisions have been made
for providing security to the families of the deceased
employees. The salaries of those employed in private
sectors have also increased manifold. Till about two
decades ago, nobody could have imagined that salary of
Class IV employee of the Government would be in five
figures and total emoluments of those in higher echelons
of service will cross the figure of rupees one lac.
Although, the wages/income of those employed in
unorganized sectors has not registered a corresponding
increase and has not kept pace with the increase in the
salaries of the Government employees and those
employed in private sectors but it cannot be denied that
there has been incremental enhancement in the income of
those who are self-employed and even those engaged on
daily basis, monthly basis or even seasonal basis. We can
take judicial notice of the fact that with a view to meet
the challenges posed by high cost of living, the persons
falling in the latter category periodically increase the
cost of their labour. In this context, it may be useful to
give an example of a tailor who earns his livelihood by
stitching cloths. If the cost of living increases and the
prices of essentials go up, it is but natural for him to
increase the cost of his labour. So will be the cases of
ordinary skilled and unskilled labour, like, barber,
blacksmith, cobbler, mason etc. Therefore, we do not
think that while making the observations in the last three
lines of paragraph 24 of Sarla Verma's judgment, the
Court had intended to lay down an absolute rule that
there will be no addition in the income of a person who is
self-employed or who is paid fixed wages. Rather, it
would be reasonable to say that a person who is self-
employed or is engaged on fixed wages will also get 30
per cent increase in his total income over a period of
time and if he / she becomes victim of accident then the
same formula deserves to be applied for calculating the
amount of compensation."
11. The loss of dependency thus comes to ` 7,76,131/- (4146/- +
30% x 12 x 2/3 x 18).
12. The deceased was a bachelor. The Claims Tribunal erred in
granting a sum of `10,000/- towards loss of consortium. On the
other hand, I would make a provision of `25,000/- towards the
loss of love and affection in addition to `10,000/- each towards
funeral expenses and loss to estate. The overall compensation
thus comes to `8,21,131/-.
13. The Claims Tribunal awarded compensation of `8,35,000/-. In
some of the cases higher amount has been awarded towards the
loss of love and affection. In the circumstances, the overall
compensation cannot be said to be exorbitant or excessive.
LIABILITY
14. As for as the liability of the Insurance Company is concerned, a
notice under order XII Rule 8 CPC Ex.R3W1/B was sent to the
Mr. Raghu Raj Singh, driver of truck No.HR-38-BG-5795,
(Respondent No.4) and to the Superdar M/s. D.P. Freight
Carriers Pvt. Ltd., (Respondent No.5). The notice sent to the
Superdar was returned back as refused, whereas notice sent to
the driver was not returned back. Similarly, the notice under
Order XII Rule 8 CPC (Ex.R3W1/F) was served upon Ms.
North West Cases Pvt. Ltd., Respondent No.6, the owner of the
truck No. HR-38-BG-5795.
15. In the written statement filed by the Appellant Insurance
Company it was averred that the Insurance Company was not
liable to pay the compensation as the driver was not holding a
proper and valid driving licence to drive Tata 709 No. HR-38-
BG-5795.
16. The driver (Respondent No.4) and owner (Respondent No.6)
preferred not to contest the Claim Petition despite service.
17. Learned counsel for Respondent No.6 submits that the written
statement was amended by the Appellant Insurance Company
after much delay and, therefore, the Insurance Company cannot
avoid its liability. It is true that the amended written statement
was taken on record on 19.12.2008. The amendment, however,
was with regard to the insurance particulars as
Respondent No.6, owned two vehicles and there was inter
change of the policy number. In my view, the Respondent No.6
cannot shark its responsibility to abide by the terms of the
insurance policy as laid down under Section 149 (2) of the Act.
18. The Appellant Insurance Company examined R3W-1
Dharmender Arya regarding service of the notice under Order
XII Rule 8 CPC. His testimony was not challenged as
Respondents No.4 and 6 (the driver and owner) were ex-parte.
A presumption of service of notice can be drawn against
Respondents No.4 and 6 under Section 114 (g) of the Indian
Evidence Act.
19. Thus, it is evident that the Appellant Insurance Company did
whatever it could do to prove the breach of the terms of the
policy. Since the Appellant was not in possession of the
particulars of any driving licence, it could not have made any
fishing inquiry from any transport authority in this country. A
driving licence can be obtained by a driver from any place
where he was residing at the time of grant of the driving licence.
Since Respondent No.4 and 6 failed to produce a driving
licence, it shall be presumed that Respondent No.4 did not
possess a valid driving licence at the time of the accident.
Respondent No.6 has also not come forward with any
explanation as to the circumstances under which he handed over
the vehicle to Respondent No.4. An inference of breach of the
terms of insurance policy can be drawn against Respondent
No.6. I am fortified in this view by a judgment of this Court in
New India Assurance Co. Ltd. v. Sanjay Kumar and Ors., ILR
2007(II) Delhi 733 where it was held as under:-
"23. Where the assured chooses to run away from the
battle i.e. fails to defend the allegation of having
breached the terms of the insurance policy by opting not
to defend the proceedings, a presumption could be drawn
that he has done so because of the fact that he has no
case to defend. It is trite that a party in possession of best
evidence, if he withholds the same, an adverse inference
can be drawn against him that had the evidence been
produced, the same would have been against said person.
As knowledge is personal to the person possessed of the
knowledge, his absence at the trial would entitle the
insurance company to a presumption against the owner.
24. That apart, what more can the insurance company do
other than to serve a notice under Order 12 Rule 8 of the
Code of Civil Procedure calling upon the owner as well
as the driver to produce a valid driving licence. If during
trial such a notice is served and proved to be served, non
response by the owner and the driver would fortify the
case of the insurance company."
20. Since the Appellant Insurance Company successfully proved the
breach of the terms of the policy Ex.R3W1/A in accordance
with Section 149 (2)(a)(ii) of the Act, it is entitled to recover the
compensation from Respondents No.4 and 6, the driver and the
owner of the vehicle.
21. The Appeal is allowed in above terms.
22. The statutory deposit of `25,000/- be refunded to the Appellant
Insurance Company.
23. Pending Applications stand disposed of.
(G.P. MITTAL)
JUDGE
JULY 30th 2012
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