Delhi High Court
Oriental Insurance Co Ltd vs Babita & Ors on 17 March, 2016
$~11& 41
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 17th March, 2016
+ MAC.APP. 332/2011 & CM No. 7455/2011
ORIENTAL INSURANCE CO LTD ..... Appellant
Through: Mr. A.K. Soni, Adv.
versus
BABITA & ORS ..... Respondents
Through: Mr. G.P. Thareja & Mr. Satyam
Thareja, Advs. for R-1 & 2.
+ MAC.APP. 956/2015
BABITA & ANR ..... Appellants
Through: Mr. G.P. Thareja & Mr. Satyam
Thareja, Advs.
versus
ORIENTAL INSURANCE CO LTD & ORS ..... Respondents
Through: Mr. A.K. Soni, Adv. for R-1.
CORAM:
HON'BLE MR. JUSTICE R.K.GAUBA
JUDGMENT
R.K.GAUBA, J (ORAL):
1. Vijay Kumar, then aged 26 years, a self-employed person engaged as a
contractor with New Delhi Municipal Council (NDMC) died as a result of
injuries suffered in a motor vehicular accident that occurred on 17.10.2005
involving motor vehicle described as UP 12K 1397 (the offending vehicle),
admittedly insured against third party risk for the period in question with
Oriental Insurance Company Ltd. (appellant in connected MAC Appeal No.
956/2015). His widow Babita and minor daughter Shruti (first and second
respondents in MAC Appeal No. 332/2011) preferred a claim petition under
Sections 166 and 140 of Motor Vehicles Act, 1988 (MV Act) before the
motor accident claims tribunal (the tribunal) whereupon it was registered as
MACT No. 278/2010. Besides the insurer (appellant in MAC Appeal No.
332/2011), Rajpal Singh and UP Transport Corporation, the driver and owner
respectively of the offending vehicle were impleaded as parties. It may be
added, per pleadings of the claimants, the dependants of Vijay Kumar who
were entitled to seek compensation included his parents Tej Singh and
Chander Kali who were shown in array of parties in the claim petition as
fourth and fifth respondents.
2. The tribunal, after notice, held inquiry and by judgment dated
20.12.2010 awarded compensation in the total sum of ₹ 10,13,763/- with
interest @ 8 % per annum from the date of filing of the petition till
realization. The said amount included ₹ 8,41,500/- calculated as the loss of
dependancy and ₹ 1,72,263/- which had been proved to be expenditure
incurred for treatment of Vijay Kumar after the injuries had been suffered.
3. It may be added here that during the inquiry, the insurer had inter alia
taken the defence that there has been a violation of terms and conditions of
the insurance policy inasmuch as, in spite of notice under Order 12 Rule 8 of
the Code of Civil Procedure, 1908 (CPC), the owner/fourth respondent in
MAC Appeal No. 332/2011 had failed to respond or produce the documents
required to be shown which included the permit of the offending vehicle.
The insurer led evidence in support of the said contention by examining its
official Vikram Singh (R3W1). Noticeably, neither the driver nor the owner
participated after having filed a common written statement. No evidence was
led on their behalf.
4. The insurance company by its appeal has questioned the method of
calculation of the loss of dependency stating that the tribunal has proceeded
on conjectures and surmises to arrive at the notional income of ₹ 66,000/-
per annum. It is argued that the income tax return (ITR) for the assessment
year 2005-2006 which had been submitted in evidence showed that in the
preceding year, the deceased was in the receipt of income only to the extent
of ₹ 16,283/-. The other grievance of the insurance company is that though
evidence had been led to show that there had been breach of terms and
conditions of the insurance policy, the tribunal did not consider or address
the said issue in the impugned judgment, thereby denying the recovery rights
to which the insurance company is entitled.
5. The claimants, by their independent appeal, which was initially filed as
cross objections, have submitted that the tribunal fell into error by not
factoring in the future prospects of increase in the income and further that no
award has been made under the non-pecuniary heads of damages, namely,
loss of consortium, loss of love & affection, funeral expenses and loss to
estate.
6. The tribunal considered the evidence with regard to the earnings of the
deceased to reach the conclusion that the income is to be assumed notionally
at ₹ 66,000/- per annum in the following manner:-
"Now, coming to the income aspect of the deceased. It is stated
by the petitioner no.l that the deceased was earning ` 7000/-
p.m as he was NDMC contractor. There is no other evidence on
record to prove this fact. However, petitioner has filed
certificate issued by NDMC i.e. .certificate of Enlistment of the
deceased as one of the contractor in which it is mentioned that
the deceased Vijav Kumar, sole proprietor of VK Constructions
has been enlisted as a contractor for NDMC for a period of
3years from the date of issue. This certificate was issued on
14.12.04. Apart from this, the petitioner has also filed
formno.l6 A Ex.P2 in the name of the V. K' Constructions, 128,
Baldev Park, Krishna Nagar, Delhi showing the total payment
made to the deceased in the year 2005 & as per this certificate,
an amount of ` 3,26,354/- has been paid by the NDMC to the
deceased and the TDS to the extent of ` 7322/-has been
deducted while making this payment. It is argued by the Ld.
Counsel for the petitioner that the income of the deceased was
quite high but he has only these documents. This is otherwise
opposed by the Ld. Counsel for the respondent and it is argued
that the income shown in the document is not income rather it is
only a total receipt as the deceased might have received this
amount from the NDMC.
I have given my thoughtful consideration to the rival
contentions. One fact is clear from the evidence that the
deceased was the official Contractor with NDMC but the fact
as to what he was doing for NDMC as contractor is not specific
i. e. .whether he was taking the amount in totality from the
NDMC or was paying salary to the labour, or whether he
himself was purchasing the material for NDMC & then was
collecting it or whether it was his pure income. All such facts
have not been clarified. No bill supporting this payment has
been placed on record. Therefore, the court is of the opinion
that the amount shown in the certificate only denotes gross
receipt by the deceased and not the gross income. As far as the
other document which is filed by the petitioner on record is
Income Tax of the deceased for the year 2005-06 & it only
shows a total income of the deceased to the extent of Rs.
16,283/-. Therefore, if a person was having total income of
Rs.16,283/- for the year 2005-06, it cannot be presumed that his
Income would have been increased upto Rs.3,26,354/- for the
next year nor it can be presumed that a person who is
government contractor might have been earning Rs. 16,283/-
p.a. only i.e..in the-entire period of one year but in absence of
any other evidence, court is unable to accept this version and
particularly in the circumstances when the petitioners claim
that the deceased was earning ` 7000/-p.m. Since there is no
other record and since it is the duty of the court to come to the
conclusion with respect to just compensation' to the family of
the deceased, court is presuming that the deceased would have
been saving about 20% of amount on his gross receipt after
paying and after meeting out all such other expenses like
payment to labour, payment towards material, towards
transport etc. There is no other evidence and 20% has been
calculated only on the basis of deceased being government
contractor. It bring the income of the deceased to the extent of `
65271/- approximately p.a. It is further observed that if "the
deceased has not filed any ITR, one fact is clear that neither he
had paid more tax than ` 7322/- p.a. nor he has claimed the
return of such tax by giving exact calculation as to v/hat exactly
he had to pay more or less than this amount of ` 7322/-p.a.
which has been deducted at source by NDMC and if this is
presumed to be the tax on his income, then the court can
presume that a person who is paying tax to the extent of
Rs.7,322/-p.a in the considered opinion of the court would have
been earning at least ` 73,220/-p.a. and then only he would be
able to pay ` 7,322/-p.a as tax i.e. minimum slab provided in
the income tax. In-any case, income of the deceased comes in
between ` 65,000/-p.a. to ` 73,200/-p.a. Therefore, in such
cases where the exact income, is not on the court file, and the
status of a person is such that he even cannot be equated with a
person who is assessed on the basis of income of an unskilled
labour under Minimum Wages Act, the duty of the court is bit
more difficult to assess the income of such person so that the
family may get 'Just Compensation'. Accordingly, keeping in
view all these facts, the income of the deceased is taken to be `
66,000/-p.a. Since the deceased was married &he has left
behind the, wife, daughter and parents, he would have been
spending 1/4th salary on himself which comes to ` 16,500/- and
the amount which deceased would have been saving towards
dependency allowance payable to petitioners & respondent
no.4 &5 would come to ` 49,500/- p.a. and the total
dependency allowance would come to ` 49,500 x 17 = `
8,41,500/- p.a."
7. This Court finds the reasons set out by the tribunal to be logical.
Sitting in appeal it will not be proper for this Court to interfere with the view
taken by the tribunal on the available material. Of course, the claim that the
deceased was earning ₹ 7,000/- per month could not have been blindly
accepted but the tribunal has taken pains to analyse the available material
including the certification by NDMC that the deceased was an enlisted
contractor and also the proof of payments made to him on such account in the
year 2005. The assessment made by the tribunal is fair and for reasons well
founded in the material on record and do not merit being tinkered with.
8. In the case reported as Sarla Verma & Ors. vs. Delhi Transport
Corporation & Anr., (2009) 6 SCC 121, Supreme Court, inter-alia, ruled that
the element of future prospects of increase in income will not be granted in
cases where the deceased was "self employed" or was working on a "fixed
salary". Though this view was affirmed by a bench of three Hon'ble Judges
in Reshma Kumari & Ors. Vs. Madan Mohan & Anr., (2013) 9 SCC 65, on
account of divergence of views, as arising from the ruling in Rajesh & Ors.
vs. Rajbir & Ors., (2013) 9 SCC 54, the issue was later referred to a larger
bench, inter-alia, by order dated 02.07.2014 in National Insurance Company
Ltd. vs. Pushpa & Ors., (2015) 9 SCC166.
9. Against the above backdrop, by judgment dated 22.01.2016 passed in
MAC Appeal No. 956/2012 (Sunil Kumar v. Pyar Mohd.), this Court has
found it proper to follow the view taken earlier by a learned single judge in
MAC Appeal No. 189/2014 (HDFC Ergo General Insurance Co. Ltd. v. Smt.
Lalta Devi & Ors.) decided on 12.1.2015, presently taking the decision in
Reshma Kumari (Supra) as the binding precedent, till such time the law on
the subject of future prospects for those who are "self-employed" or engaged
in gainful employment at a "fixed salary" is clarified by a larger bench of the
Supreme Court. Since the deceased was self-employed, given the present
state of law, as mentioned law, the plea of the claimants for future prospects
to be added cannot be accepted.
10. There is merit in the grievance of the claimants that they also deserved
non-pecuniary damages. Following the view taken in Rajesh & Ors. v.
Rajbir Singh & Ors., (2013) 9 SCC 54 and Shashikala V.
Gangalakshmamma (2015) 9 SCC 150, compensation in the sum of `1 lakh
each under the heads loss of love and affection and loss of consortium and
`25,000/- each under the heads of loss to estate and funeral expense are
added.
11. It is noted that the tribunal awarded interest at 8% per annum.
Following the consistent view taken by this Court, the rate of interest is
increased to 9% per annum from the date of filing of the petition till
realization of the compensation awarded.
12. Thus, the impugned judgment is increased by ₹ 2,50,000/- with the
element of increased rate of interest to be paid from date of filing of the
petition till realization. Given the amounts already apportioned in favour of
the claimants, it is directed that the amount payable in terms of the above
modifications, shall be payable only to the first claimant (widow).
13. The contention of the insurance company with regard to non-
consideration of its plea of breach of terms and conditions of the insurance
policy is found to be correct. The tribunal should have returned a clear
finding in that regard. Ideally, the insurance company should have gone
back with an application for review and prayed for a finding to be returned.
14. In the facts and circumstances, the proper course is that the matter
limited to that extent be remitted to the tribunal for adjudication. Needless to
add, the insurance company will be obliged to pay the compensation to the
claimants in terms of the award modified as above, by depositing the amount
now required to be paid as a result of increases, with the tribunal within 30
days. It may, however, press the issue about breach of terms and conditions
of the policy against both the owner and driver or against one of them, as the
case may be, before the tribunal.
15. The parties required for such further inquiry and adjudication shall
appear before the tribunal for further proceedings in accordance with law on
27th April, 2017.
16. By order dated 19.04.2011, the insurance company had been directed
to deposit the entire awarded amount with upto date interest in terms of the
impugned award with the Registrar General whereupon the execution was
stayed. Out of such deposit, 75% was allowed to be released to the claimants
before the tribunal. The balance was kept in fixed deposit receipt initially for
a period of one year subject to automatic renewal. The balance shall now
also be released to the claimants which include the parents.
17. The statutory deposit, if made, by the insurance company shall be
refunded.
18. Both appeals are disposed of in above terms.
R.K. GAUBA
(JUDGE)
MARCH 17, 2016
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