Oriental Insurance Co Ltd vs Dinesh Kumar & Ors
2014 Latest Caselaw 5003 Del

$~10,11 & 12
*     IN THE HIGH COURT OF DELHI AT NEW DELHI
                                                  Date of decision: 01.10.2014
+     MAC.APP. 1014/2011
      ORIENTAL INSURANCE CO LTD                ..... Appellant
                      Through Mr.Pradeep Gaur, Adv.
               versus
      DINESH KUMAR & ORS                       ..... Respondent

Through

+ MAC.APP. 1020/2014 ORIENTAL INSURANCE CO LTD ..... Appellant Through Mr.Pradeep Gaur, Adv.

               versus
      MOHD. AYUB & ORS                         ..... Respondent
                      Through

+     MAC.APP. 336/2012
      MOHD.AYUB                                        ..... Appellant
                         Through       Mr.S.P.Verma, Adv.
               versus
      SHABBIR & ORS                                      ..... Respondent
                         Through
      CORAM:
      HON'BLE MR. JUSTICE JAYANT NATH

JAYANT NATH, J.(ORAL)

1. Mac.App.No.1014/2011 and Mac.App.No.1020/2014 are filed by the appellant/insurance company. These appeals arise out of the common Award dated 27.09.2011. I will first deal with these two appeals. The brief facts are that on 20.10.1999 Mohd. Ayub, Santosh Kumar Singh and Dinesh Kumar were travelling in a bus. It was stated to be driven in a rash and negligent

manner. When the bus reached near National Museum, Janpath, Delhi the bus hit a tree. The said three passengers suffered injuries. Subsequently Mohd.Ayub moved an application under Order 6 Rule 17 CPC stating that he had sustained injuries while crossing the road and has been hit by the offending vehicle. The prayer was allowed on 8.11.2010.

2. The issues raised in the present appeal pertain to the liability of the appellant/insurance company. It is urged by learned counsel appearing for the appellant that the appellant/insurance company did not receive the insurance premium and that the cheque received was dishonoured and due intimation in this regard was sent to the owner Shri Jogender Singh/respondent No.3. Hence, it is stated that the Tribunal has wrongly in the Award directed the appellant to comply with the Award. It is further urged that the driver of the offending vehicle did not have a valid license and hence the appellant is not in any case liable.

3. A perusal of the Award shows that the Tribunal noted that the original dishonoured cheque has been placed on record. The Tribunal also noted the evidence of Shri Vikram Singh examined by the appellant as R3W1 who has placed on record the dishonoured cheque and the cheque return memo. The said witness states that intimation of dishonour was sent to the owner/respondent No.3. However, copy of the notice is not placed on record. The Tribunal also noted that no attempt was also made to prove that the driver/respondent No.2 did not have a valid driving license. Based on this evidence the Tribunal held that the appellant is liable to pay compensation.

4. A perusal of the evidence of R3W1 shows that he has pointed out that the cheque issued by respondent No.3 was returned unpaid on presentation to

the banker. The postal receipts regarding information sent to the insured respondent No.3 Shri Jogender Singh regarding cancellation of policy is marked as Ex.R3W1/4. It is further stated that notice under Order 12 Rule 8 CPC was sent. However, the copy of the notice sent to Joginder Singh intimating about cancellation of the policy has not been placed on record. The Ex.R3W1/4 are photocopies of the postal receipts. No address is mentioned on the postal receipts. Based on this document it is not possible to conclude that the notice cancelling the insurance policy was served on the owner/respondent No.3.

5. The Supreme Court in in the case of United India Insurance Company Ltd. vs. Laxmamma & Ors., (2012) 5 SCC 234 after noticing the judgment of the Supreme Court in the case of Oriental Insurance Co. Ltd. vs. Inderjit Kaur & Ors., 1998 ACJ 123 has held that the insurance company has to prove the delivery of intimation to the insured about the dishonour of the cheque and cancellation of the insurance policy to absolve itself of its liability. Relevant para is as follows:-

"26. In our view, the legal position is this: where the policy of insurance is issued by an authorized insurer on receipt of cheque towards payment of premium and such cheque is returned dishonoured, the liability of the authorized insurer to indemnify the third parties in respect of the liability which that policy covered subsists and it has to satisfy award of compensation by reason of the provisions of Sections 147(5) and 149(1) of the M.V. Act unless the policy of insurance is cancelled by the authorized insurer and intimation of such cancellation has reached the insured before the accident. In other words, where the policy of insurance is issued by an authorized insurer to cover a vehicle on receipt of the cheque paid towards premium and the cheque gets dishonored and before the accident of the vehicle occurs, such insurance company cancels the policy of insurance and sends

intimation thereof to the owner, the insurance company's liability to indemnify the third parties which that policy covered ceases and the insurance company is not liable to satisfy awards of compensation in respect thereof."

In the absence of proof of cancellation of the insurance policy, the submission of the appellant cannot be accepted.

6. On the issue of the driving license of respondent No.2, the Tribunal noted that though R3W1 has mentioned about the notice under Order 12 Rule 8 CPC, but it has not summoned the concerned officer from Ashok Vihar to prove the fact that the license of the driver was invalid. What has been placed on record is a letter dated 3.9.2001 addressed to MLO and necessary charges have been deposited. There is nothing on record to show that the license of respondent No.2 was not valid. Further, the Tribunal noted that counsel for appellant appeared before the Tribunal for the first time on 22.7.2002. The notice under Order 12 Rule 8 CPC has been sent on 26.10.2009. The Tribunal in these facts held that the appellant has failed to prove that the license of respondent No.2 is valid.

7. In my opinion, there are no reasons to differ with the views of the Tribunal. There is no merit in the said contention. Accordingly, the present appeals are without merit and dismissed. The statutory amount deposited by the appellant at the time of filing the appeal be refunded to the appellant. All interim orders stand vacated.

MAC. APP. No.336/2012

1. In this case, as per the appellant, on 20.10.1999, he was crossing the road at National Museum, Janpath. At that time he was hit by the bus which also struck a tree.

2. The tribunal noted that as per the disability certificate, the appellant suffered 35% disability. However, the tribunal noted that the appellant had not examined any doctor to prove the disability certificate. Hence, the tribunal did not accept the disability certificate. The injuries suffered by Mohd. Ayub as per the MLC PW1/5, were noted. Keeping in view the nature of injuries, the tribunal awarded the following compensation:-

1.      Pain and Suffering                  Rs.50,000/-
2.      Loss of Amenities                   Rs.25,000/-
3.      For medicines                       Rs.10,000/-
4.      For conveyance                      Rs.10,500/-
5.      For special diet                    Rs.5,000/-
6.      For loss of earnings for 6 months
        @      Rs.3248/-     per    month
        minimum wages applicable to
        "unskilled" worker                  Rs.19,488/-
            Total                           Rs.1,19,488/-
        Rounded off to (Rupees One Lac Rs.1,20,000/-
        & Twenty Thousand Only)

3. Learned counsel appearing for the appellant submits that pursuant to directions of this Court, an application for leading additional evidence was allowed by this Court on 19.02.2013. The appellant examined AW1 Dr. Sankalp Bali, Specialist Orthopaedic in Hindu Rao Hospital who confirmed that the disability certificate was issued by Hindu Rao Hospital and that the

appellant was suffering deformity of left thumb with a fixed flexion deformity of left middle finger and he was having 35% disability in relation to his left upper limb.

4. Hence, in view of the above evidence, it is clear that the appellant has a permanent disability of left upper limb. The issue would be as to the effect of this disability on his functional disability.

5. The appellant in his affidavit by way of evidence, as PW1 has stated that he was working as a kharad mistri (mechanic) and was working with Bharat Boring Works, Kotla Mubarakpur, at the time of accident.

6. Keeping in view the nature of physical disability suffered by the appellant and the nature of his profession which is of a mechanic, the disability is likely to affect his occupation/functioning. I assess his functional disability as 35% based on the judgment of the Supreme Court in Raj Kumar vs. Ajay Kumar Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343 which stated the methodology for determining functional disability in paragraph 14 as follows:-

"14. Ascertainment of the effect of the permanent disability on the actual earning capacity involves three steps. The Tribunal has to first ascertain what activities the claimant could carry on in spite of the permanent disability and what he could not do as a result of the permanent ability (this is also relevant for awarding compensation under the head of loss of amenities of life). The second step is to ascertain his avocation, profession and nature of work before the accident, as also his age. The third step is to find out whether (i) the claimant is totally disabled from earning any kind of livelihood, or (ii) whether in spite of the permanent disability, the claimant could still effectively carry on the activities and functions, which he was earlier carrying on, or (iii) whether he was prevented or restricted from discharging his previous activities and functions, but could carry on some other or lesser scale of

activities and functions so that he continues to earn or can continue to earn his livelihood. For example, if the left hand of a claimant is amputated, the permanent physical or functional disablement may be assessed around 60%. If the claimant was a driver or a carpenter, the actual loss of earning capacity may virtually be hundred percent, if he is neither able to drive or do carpentry. On the other hand, if the claimant was a clerk in government service, the loss of his left hand may not result in loss of employment and he may still be continued as a clerk as he could perform his clerical functions; and in that event the loss of earning capacity will not be 100% as in the case of a driver or carpenter, nor 60% which is the actual physical disability, but far less. In fact, there may not be any need to award any compensation under the head of 'loss of future earnings', if the claimant continues in government service, though he may be awarded compensation under the head of loss of amenities as a consequence of losing his hand. Sometimes the injured claimant may be continued in service, but may not found suitable for discharging the duties attached to the post or job which he was earlier holding, on account of his disability, and may therefore be shifted to some other suitable but lesser post with lesser emoluments, in which case there should be a limited award under the head of loss of future earning capacity, taking note of the reduced earning capacity. It may be noted that when compensation is awarded by treating the loss of future earning capacity as 100% (or even anything more than 50%), the need to award compensation separately under the head of loss of amenities or loss of expectation of life may disappear and as a result, only a token or nominal amount may have to be awarded under the head of loss of amenities or loss of expectation of life, as otherwise there may be a duplication in the award of compensation. Be that as it may."

7. The tribunal had assessed the income of the appellant based on the minimum wages for an unskilled worker at Rs.3248/- per month. Keeping in view the evidence on record, in my opinion, it would be appropriate to assess

the income of the appellant based on the same minimum wages as taken by the tribunal.

8. As per the claim petition, the appellant is aged 44 years. Hence the loss of future income would be Rs.1,90,983/-[Rs.3,248/- x 14 x 35% x 12] Rs.1,90,983/-]. The total compensation would hence now read as follows:-

      1.    Pain and Suffering                 Rs.50,000/-
      2.    Loss of Amenities                  Rs.25,000/-
      3.    For medicines                      Rs.10,000/-
      4.    For conveyance                     Rs.10,500/-
      5.    For special diet                   Rs.5,000/-
      6.    For loss of earnings for 6
            months @ Rs.3248/- per month
            minimum wages applicable to
            "unskilled" worker                 Rs.19,488/-
      7.    Loss of future earnings            Rs.1,90,983/-
               Total                           Rs.3,01,298/-
            Rounded off to (Rupees One         Rs.3,10,971/-
            Lac & Twenty Thousand
            Only)

9. The concerned insurance company namely, oriental insurance company limited-respondent No.3 in MAC.App. 336/2012 shall deposit the additional compensation amount with the Registrar General of this High Court along with interest at the rate of 7.5% per annum from the date of filing of the claim petition till deposit in the High Court. On receipt of the said amount, the Registrar General shall release the additional compensation to the appellant.

10. The appeal stands disposed of.

JAYANT NATH, J OCTOBER 1, 2014 n