Karnataka High Court
Sri Supreeth S @ Supreeth Sathendra ... vs B Sakthivel on 1 August, 2024
Author: K.Somashekar
Bench: K.Somashekar
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU R
DATED THIS THE 1ST DAY OF AUGUST, 2024
PRESENT
THE HON'BLE MR JUSTICE K.SOMASHEKAR
AND
THE HON'BLE DR. JUSTICE CHILLAKUR SUMALATHA
M.F.A. NO. 511 OF 2020 (MV-D)
C/W
M.F.A. CROB. NO. 40 OF 2022 (MV-D)
IN M.F.A. NO. 511 OF 2020:
BETWEEN:
THE RELIANCE GENERAL
INSURANCE COMPANY LIMITED,
EAST WING, 5TH FLOOR, NO.28,
CENTENARY BUILDING, M.G. ROAD
BENGALURU- 560001.
NOW REPRESENTED BY
MANAGER LEGAL.
.... APPELLANT
(BY SRI. ASHOK N. PATIL, ADVOCATE)
AND:
SUPREETH S. @ SUPREETH
SATHYENDRA
SINCE DEAD BY HIS LRS
1. SATHYENDRA BABU K
S/O KHANDE,
AGE 62 YEARS,
2. GEETHA S.,
W/O SATHYENDRA BABU @
SATHYENDRA BABU,
AGE 54 YEARS,
3. KARTHIK S.,
S/O SATHYENDRA @
SATHYENDRA BABU,
AGE 29 YEARS,
2
ALL ARE RESIDING AT NO.1,
MUNIYAPPA COMPOUND, KOTE TEMPLE CIRCLE,
NEW POLICE STATION ROAD,
BENGALURU-560 036.
4. B. SAKTHIVEL
S/O LATE HOMMANNA,
AGE MAJOR,
RESIDING AT NO.7,
R.C. COMPLEX-206-261,
S.G. MUTT ROAD, CHAMARAJPET,
BENGALURU-560018.
5. MADHUKAR L.,
S/O. LAKSHMINARAYANA REDDY,
AGE MAJOR,
RESIDING AT SWAPNA NILAYA,
NEAR NEW BALDWIN SCHOOL,
BANASAWADI,
BENGALURU-560 043.
6. THE REGIONAL MANAGER,
UNITED INDIA INSURANCE
COMPANY LIMITED,
REGIONAL OFFICE, 5TH AND 6TH FLOOR,
KRUSHI BHAVANA BUILIDNG, NO.18,
NRUPATHUNGA ROAD, HUDSON CIRCLE,
BENGALURU-560 001.
...RESPONDENTS
(SRI. G.M. SRINIVASA REDDY, ADVOCATE FOR R1-R3;
SRI. B.A. RAMAKRISHNA, ADVOCATE FOR R6;
R4- NOTICE D/W V/O. DATED 19.10.2022;
R5-SERVED, UNREPRESENTED)
THIS MFA FILED U/S.173(1) OF MV ACT, AGAINST THE
JUDGMENT AND AWARD DT.17.06.2019 PASSED IN
MVC NO.3751/2015 ON THE FILE OF THE XVIII ADDITIONAL
JUDGE, COURT OF SMALL CAUSES, MEMBER, MACT, BENGALURU
(SCCH-4), AWARDING COMPENSATION OF RS.51,57,000/- WITH
INTEREST AT 6 PERCENT P.A. FROM THE DATE OF PETITION TILL
ITS REALIZATION.
3
IN M.F.A. CROB. NO. 40 OF 2022:
BETWEEN:
SRI. SUPREETH S., @ SUPREETH
SATHENDRA
SINCE DEAD BY HIS LRS.,
1. SATHYENDRA BABU K.,
S/O KHANDE RAO
AGED ABOUT 63 YEARS,
2. GEETHA S.,
W/O SATHYENDRA BABU
@ SATHYENDRA BABU
AGED ABOUT 55 YEARS,
3. KARTHIK S.,
S/O SATHYAENDRA
@ SATHYENDRA BABU
AGED ABOUT 30 YEARS,
ALL ARE RESIDING AT NO.1
MUNIYAPPA COMPOUND KOTE TEMPLE CIRCLE
NEW POLICE STATION ROAD
BENGALURU-560 036. ...CROSS OBJECTORS
(BY SRI. G. M. SRINIVASA REDDY., ADVOCATE)
AND:
1. B. SAKTHIVEL
S/O LATE BOMMANA
AGE MAJOR, RESIDING AT NO.7,
R. C. COMPLEX AT NO.7
R C COMPLEX 206-261
S G MUTT ROAD CHAMRAJPET,
BENGALURU-560018.
2. THE MANAGER,
M/S. RELIANCE GENERAL INSURANCE
COMPANY LTD.,
NO.28/5 CENTENARY BUILDING
EAST WING, M. G. ROAD,
BENGALURU-560001.
4
3. MADHUKAR L.,
S/O LAKSHMINARAYANA REDDY
AGE MAJOR,
R/AT SWAPNA NILAYA,
NEAR NEW BALDWIN SCHOOL
BANASWADI, BENGALURU-560 043.
4. THE REGIONAL MANAGER
UNITED INDIA INSURANCE CO. LTD.,
REGIONAL OFFICE, 5TH AND 6TH FLOOR,
KRUSHI BHAVANA BUILDING,
NO.18 NRUPATHUNGA ROAD,
HUDSON CIRCLE, BENGALURU-560 001
...RESPONDENTS
(BY SRI. ASHOK N. PATIL, ADVOCATE FOR R2;
SRI. B.A. RAMAKRISHNA, ADVOCATE FOR R4;
R1 AND R3- NOTICE D/W V/O. DATED 19.10.2022)
THIS MFA CROB. FILED UNDER ORDER 41 RULE 22 R/W
SECTION 173(1) OF MV ACT AGAINST THE JUDGMENT AND AWARD
DATED 17.06.2019 PASSED IN MVC.NO.3751/2015 ON THE FILE OF
THE XVIII ADDITIONAL JUDGE, COURT OF SMALL CAUSES,
BENGALURU, SCCH-4 PARTLY ALLOWING THE CLAIM PETITION FOR
COMPENSATION AND SEEKING ENHANCEMENT OF COMPENSATION.
THIS MFA AND MFA.CROB. HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT ON 30.07.2024, COMING ON FOR
PRONOUNCEMENT, THIS DAY, DR. CHILLAKUR SUMALATHA, J.,
DELIVERED THE FOLLOWING:
CORAM: HON'BLE MR JUSTICE K.SOMASHEKAR
AND
HON'BLE DR. JUSTICE CHILLAKUR SUMALATHA
CAV JUDGMENT
(PER: HON'BLE DR. JUSTICE CHILLAKUR SUMALATHA)
Questioning the validity and legality of the order that is
rendered by the Motor Accidents Claims Tribunal, Bengaluru in MVC
No.3751/2015 dated 17.06.2019, these two appeals were filed.
2. Disputing its liability to pay the compensation, the
insurance company against whom liability to the extent of 95% was
fastened has preferred appeal vide MFA No.511/2020. On the other
hand, seeking enhancement of compensation, the claimants
preferred a Cross Appeal vide MFA.CROB No.40/2022. As both the
appeals thus arose from the same order, they are disposed of
through this common judgment.
3. Heard Sri.Ashok N. Patil, learned counsel for the
appellant in MFA No.511/2020 i.e., The Reliance General Insurance
Company Limited, Sri.G.M.Srinivasa Reddy, learned counsel who
represented the claimants in both the appeals as well as
Sri.B.A.Ramakrishna, learned counsel who represented United India
Insurance Company Limited, which is arrayed as 6th respondent in
MFA No.511/2020 and 4th respondent in MFA.CROB No.40/2022.
4. The matrix of the case as projected by the claimants is
that on 18.11.2014 the deceased Supreeth (hereinafter be referred
as 'the deceased' for brevity) was travelling in a car bearing
Registration No.KA-53 MB-7335 along with his friends. The car was
proceeding on National Highway from Krishnagiri side towards
Bengaluru. When the car reached near Chinnur Sangeetha Dhaba
Hotel, Hosur Road, at about 4.00 a.m. a lorry bearing Registration
No.KA-01 C-1773 which was proceeding in front of the car suddenly
turned to the right side being driven by its driver in a rash and
negligent manner. No signal or indication was given by the driver of
the lorry. Due to such sudden turning, the car dashed against the
lorry. The deceased who was present in the car sustained severe
head injury and other injuries all over the body. The deceased was
shifted to hospital for treatment. Despite of giving best treatment
and all efforts to save his life, he succumbed to injuries in the year
2018.
5. It is borne by record that the deceased while
undergoing treatment filed petition claiming compensation and after
his death his legal representatives came on record.
6. The Tribunal through the impugned order awarded a
sum of Rs.51,57,000/- as compensation under the following heads:
Sl. Description Amount
No Rs.
1 Loss of dependency
45,12,500.00
2 Towards transportation of
dead body and funeral 15,000.00
expenses
3 Loss of estate
15,000.00
4 Medical expenses
6,13,636.00
Total Compensation 51,56,136.00
rounded to
51,57,000.00
7. Sri.Ashok N. Patil, learned counsel for the Insurance
Company against whom 95% of the liability was fastened made
vigorous submission with regard to the merits of the matter and
contended that the liability fixed to the extent of 95% is highly
unjustifiable. Learned counsel projected three grounds disputing his
liability.
The first ground is that the entire negligence lies on part of
the driver of the car in which the deceased was travelling at the
relevant time and therefore, the owner and the insurer of the car
are alone liable to pay compensation, if any, to the claimants.
The second ground urged is that the amount awarded as
compensation is highly excessive and exorbitant.
The third ground is that the Tribunal ought not to have
awarded interest over the amount that is fixed toward loss of future
prospects.
8. Coming to the first ground that is in respect of the
alleged negligence on part of the driver of the car, Sri.Ashok N. Patil
submitted that there was head on collusion between the lorry and
the car which were involved in the accident. Learned counsel
submits that in case the driver of the car maintained sufficient and
proper distance between his vehicle and the lorry which was
proceeding ahead, the accident might not have occurred and thus,
entire negligence lies on part of the driver of the car. Learned
counsel took aid of the contents of Ex.P1- FIR, Ex.P5- spot hand
sketch and also Exs.P6 and P7 - IMV reports. Learned counsel also
submitted that the relevant medical record also discloses the
manner of happening of accident and that is head on collusion
between two vehicles. Also with a request to apply the 'doctrine of
last opportunity' learned counsel relied upon the decision of Hon'ble
Supreme Court in the case between Municipal Corporation of
Greater Bombay Vs. Laxman Iyer and Another. The translated
copy of Ex.P1 - FIR is Ex.P1(a). By the contents of the said
document it is clear that a case in Crime No.433/2014 of Shoolagiri
Police Station was registered basing on the complaint given by one
Madhu Kumar who was the driver of the car at the relevant time. In
the said complaint, Madhu Kumar narrated that basing on the
request of his neighbour for going to Shabrimalya, he accepted to
drive his car bearing Registration No.KA-53 MB-7335. On
15.11.2014, they left to Shabrimalya from Bengaluru and after
visiting Shabrimalya, all of them started coming back to Bengaluru.
On 18.11.2014, at about 4.00 a.m., when they were reached Hosur,
the driver of the lorry bearing Registration No.KA-01 C-1773, who
was driving the lorry ahead of his vehicle on the left side of the
road, suddenly turned his vehicle to the right side and hit the car
and caused the accident. The deceased who was sitting in the car
sustained severe injuries.
9. There is no denial of the fact that the concerned police
investigated into the case and filed charge sheet with an
observation that the accident solely occurred due to the negligence
on part of the driver of the lorry. There is a clear observation in
Ex.P2- charge sheet, the translated copy of which is marked as
Ex.P2(a) that, the driver of the lorry who was driving his lorry well
ahead of the car on the left side of the road, had suddenly turned
his vehicle to the right side without giving any signal and dashed
the car. The car was badly damaged and the deceased who was
travelling in the car sustained severe head injury.
10. Taking into consideration the contents of Ex.P3 - spot
mahazar and Exs.P6 and P7 - IMV reports and further recording the
statements of the witnesses including ocular witnesses, charge
sheet is filed. The insurance company who is the appellant in MFA
No.511/2020 has not adduced any cogent and convincing evidence
to show that the driver of the car was solely negligent and that his
negligence is the only cause for the accident to occur.
11. On the other hand, as rightly submitted by
Sri.G.M.Srinivasa Reddy, learned counsel for the claimants, the
claimants through all the evidence they have adduced, have clearly
established that the negligence to the major extent is on part of the
driver of the lorry.
Undoubtedly, the vehicle moving behind another vehicle is at
liability to maintain safe distance from the vehicle moving ahead. In
this case, it appears that the driver of the car did not maintain such
safe distance. However, at the same time, one cannot expect that
the vehicle moving ahead on the left side of the road would
suddenly turn to its right, that too without any signal or indicator.
Having observed all these factors, the Tribunal has rightly fastened
liability of 95% against the insurer and insured of the lorry and 5%
against the insurer and insured of the car. Having considered these
aspects, we are of the view that there are no grounds to disturb the
findings of the Tribunal so far as fastening of the liability is
concerned.
12. Coming to the second ground urged by Sri.Ashok N.
Patil, that is with regard to the extent of amount awarded as
compensation, the version of the learned counsel is that the
Tribunal erred in assessing the monthly income of the deceased as
Rs.31,798/- and ultimately awarding a sum of Rs.45,12,500/- under
the head 'loss of dependency'. Learned counsel states that even the
professional tax was not deducted. Learned counsel also states that
the Tribunal went wrong in awarding a sum of Rs.6,13,636/- toward
medical expenses.
13. Contradicting the said submission, learned counsel
Sri.G.M.Srinivasa Reddy submitted that the claimants examined six
witnesses on their side including the Doctor who treated the
deceased. Learned counsel also stated that entire medical record
was producing to establish the treatment taken by the deceased.
Learned counsel also contended that there is no denial of the fact
that the deceased succumbed to injuries. Learned counsel further
submitted that the deceased was working as Team Manager at
Thomson Reuters and was earning huge amount as salary and apart
from other perks. Learned counsel also contended that the
deceased completed MBA in Marketing and in case he is alive, he
would have attained great heights in his professional career.
Learned counsel also stated that due to the negligence of the driver
of the lorry, the deceased died at the young age of 26 years.
14. A perusal of the relevant record reveals that the
claimants examined the Manager, Thomson Reuters as PW4 and
produced 20 pay slips which are marked as Ex.P36, Form-16 which
is marked as Ex.P35, Attendance Register which is marked as
Ex.P34, Service Certificate which is marked as Ex.P32 and
appointment letter which is marked as Ex.P31. Basing on the said
evidence, the Tribunal took the income of the deceased as
Rs.31,798/- per month. Also the Tribunal has deducted a sum of
Rs.200/- toward professional tax. Adding 40% towards future
prospects in the light of the decision of the Hon'ble Apex Court in
Pranaya Sethi's case, applying appropriate multiplier "17" as
indicated by the Hon'ble Apex Court through the judgment in Sarala
Verma's case, the Tribunal computed the compensation to be
awarded under the head loss of dependency. This Court does not
find any error in doing so by the Tribunal. Also considering the
medical bills produced, the Tribunal awarded a sum of
Rs.6,13,636/-, the expenditure that was incurred for the treatment
of the deceased. The Tribunal also awarded a sum of Rs.15,000/-
towards transportation of dead body and funeral expenses and
Rs.15,000/- towards loss of estate. This Court does not find any
convincing grounds to interfere with the sum thus awarded as
compensation to the claimants by the Tribunal.
15. However, learned counsel Sri.G.M.Srinivasa Reddy
submitted that the Tribunal has not awarded any amount towards
loss of consortium. The first claimant is the father of the deceased
and the second claimant is the mother of the deceased. Therefore,
as rightly contended, the Tribunal ought to have awarded a sum of
Rs.40,000/- under the head loss of filial consortium. Therefore, this
Court is of the view that the said sum of Rs.40,000/- is required to
be awarded as per the decision of the Hon'ble Apex Court in
Pranaya Sethi's case and the enhancement to that effect is
justifiable.
16. The third and the last ground urged by Sri.Ashok N.
Patil, learned counsel for the appellant in MFA No.511/2020 is that,
the Tribunal ought not to have awarded interest on the future
prospects. Learned counsel submits that the amount awarded under
the head loss of future prospects is the amount which the claimants
would indeed derive at future point of time, but not immediately
even in case the deceased is alive and thus, awarding of interest
even on future prospects is unjustifiable.
17. In this regard, learned counsel relies upon the decision
of the Co-ordinate Bench of this Court in the case between
CHANDRAKALA AND ANOTHER Vs. DILIPKUMAR M.A. and
another in MFA No.1662/2023. In the said case, giving a finding
that as the amount under the head loss of future prospects is yet to
become due, it would be illogical and illegal to direct the insurance
company to pay interest on loss of future prospects, the Court at
paragraph 19.3 of the decision observed as follows:
"19.3: Since the amount due under the head
loss of future prospects is yet to become due, it
would be illogical and illegal to direct the insurance
company to pay interest on loss of future prospects.
Therefore, out of the total compensation payable,
the respondent No.1 is not liable to pay any interest
on the compensation under the head loss of future
prospects."
Though the learned counsel for the appellant - insurance
company relied upon the aforementioned decision, he fairly
conceded that there is no decision from the Hon'ble Supreme Court
denying interest on future prospects.
18. The submission of Sri.G.M.Srinivasa Reddy, learned
counsel for the claimants on the other hand is, that the accident
occurred in the year 2014 and this appeal is being heard in the year
2024 and in this ten years of period, the claimants are put to huge
financial sufferance besides mental stress and agony. Learned
counsel contended that for all this period the insurance company is
enjoying the fruits of the amount which the claimants are legally
entitled to and thus denial of interest is unjustifiable.
19. In catena of decisions the Hon'ble Apex Court awarded
interest even on future prospects. Few of them are cited for the
benefit of discussion. Holding that award of interest would normally
depend upon the bank rate prevailing at relevant time and the
amount of interest should be just basing on the facts and
circumstances of each case, the Hon'ble Apex Court in the case of
ABATI BEZBARUAH Vs. DY.DIRECTOR GENERAL, GEOLOGICAL
SURVEY OF INDIA AND ANOTHER reported in (2003)3 SCC
148, at paragraph No.18 observed as follows:
"18. Three decisions were cited before us by
Mr A.P. Mohanty, learned counsel appearing on
behalf of the appellant, in support of his
contentions. No ratio has been laid down in any of
the decisions in regard to the rate of interest and
the rate of interest was awarded on the amount of
compensation as a matter of judicial discretion.
The rate of interest must be just and reasonable
depending upon the facts and circumstances of
each case and taking all relevant factors including
inflation, change of economy, policy being
adopted by Reserve Bank of India from time to
time, how long the case is pending, permanent
injuries suffered by the victim, enormity of
suffering, loss of future income, loss of enjoyment
of life etc., into consideration. No rate of interest
is fixed under Section 171 of the Motor Vehicles
Act, 1988. Varying rates of interest are being
awarded by Tribunals, High Courts and the
Supreme Court. Interest can be granted even if a
claimant does not specifically plead for the same
as it is consequential in the eye of law. Interest is
compensation for forbearance or detention of
money and that interest being awarded to a party
only for being kept out of the money which ought
to have been paid to him. No principle could be
deduced nor can any rate of interest be fixed to
have a general application in motor accident claim
cases having regard to the nature of provision
under Section 171 giving discretion to the
Tribunal in such matter. In other matters,
awarding of interest depends upon the statutory
provisions, mercantile usage and doctrine of
equity. Neither Section 34 CPC nor Section 4-A(3)
of the Workmen's Compensation Act are
applicable in the matter of fixing rate of interest
in a claim under the Motor Vehicles Act. The
courts have awarded the interest at different
rates depending upon the facts and circumstances
of each case. Therefore, in my opinion, there
cannot be any hard-and-fast rule in awarding
interest and the award of interest is solely on the
discretion of the Tribunal or the High Court as
indicated above."
20. Stating that interest has to be awarded from the date of
the petition, the Hon'ble Apex Court in the case between AMRESH
KUMARI Vs. NIRANJAN LAL JAGDISH PD. JAIN AND OTHERS
reported in (2015) 4 SCC 433, at paragraph No.2 held as under:
"2. We have heard the learned counsel for
the parties. The question whether interest on the
amount of compensation determined to be
payable to the claimant is to be awarded from the
date of the award or from the date of the filing of
the claim petition came up for consideration
before this Court in Mohinder Kaur v. Hira Nand
Sindhi [(2015) 4 SCC 434] , to which one of us
(D.K. Jain, J.) was a party, it was held that the
claimant was entitled to interest from the date of
filing of the claim petition. Following the said
decision, we hold that the appellant would be
entitled to simple interest @ 9 per cent, as
awarded by the learned Single Judge, from the
date of filing of the claim petition i.e. 11-8-1986."
21. Interest was awarded on entire compensation including
future prospects in the decision that is rendered in the case
between N.JAYASREE AND OTHERS Vs. CHOLAMANDALAM MS
GENERAL INSURANCE COMPANY LIMITED reported in (2022)
14 SCC 712, wherein the Hon'ble Apex Court while awarding total
compensation of Rs.85,81,815/- at paragraph No.38 directed as
follows:
"38. The appellants are also entitled to interest
on the said amount @ 7.5% p.a. from the date of
the claim petition till the date of its realisation.
The respondent is accordingly directed to deposit
the above amount with accrued interest thereon
@ 7.5% p.a. from the date of claim petition till
the date of deposit, after deducting amounts, if
any, deposited by the respondent, within eight
weeks from today."
22. Dictating that the interest is payable even on the
enhanced amount, the Hon'ble Apex Court in the case between
SWARAN LATA AND OTHERS Vs. RAM CHET AND OTHERS
reported in (2007)15 SCC 650, at paragraph No.11 held as
follows:
"11. So far as the question of award of
interest is concerned, we find that the High Court,
though enhanced the amount, refused to award
interest, stating "since the appeals are being
disposed of at motion stage, no interest on the
enhanced amount of compensation will be paid to
the claimants". We find it to be no good reason to
deny the interest on the enhanced amount. It
would be taken that the amount enhanced was
liable to be paid to the claimants right from the
beginning though enhanced later on appeal. That
being the position, it will be logical to award the
interest on the increased amount as well. We find
that as a result of the order which is being passed
today in these appeals, namely, by applying the
higher multipliers of 13 and 15 in regard to the
claimants of Narinder Kumar and Subhash
Aggarwal respectively, the amount of
compensation shall be further increased. Interest
would also be payable on the said increased
amount."
23. In the aforementioned case when the High Court
refused to award interest on the enhanced amount with an
observation that as the appeals have been disposed of at the
motion stage, there is no need to award interest on the enhanced
amount of compensation, the Hon'ble Apex Court held that it would
be logical to award interest on the increased amount as well.
24. While dealing with a motor accident claim in the case
between THE DIVISIONAL CONTROLLER, KSRTC VS. MAHADEV
SHETTY AND ANOTHER reported in (2003)7 SCC 197 held as
under:
"It is true that perfect compensation is hardly
possible and money cannot renew a physique frame
that has been battered and shattered, as stated by
lord Merris in West v. Shepard (1964 AC 326).
Justice requires that it should be equal in value,
although not alike in kind. Object of providing
compensation is to place claimant as far as possible
in the same position financially as he was before
accident. Broadly speaking in the case of death
basis of compensation is loss of pecuniary benefits to
the dependants of the deceased which includes
pecuniary loss, expenses, etc and loss to the estate.
Object is to mitigate hardship that has been caused
to the legal representatives due to sudden demise of
the deceased in the accident. Compensation awarded
should not be inadequate and should neither be
unreasonable, excessive, nor deficient. There can be
no exact uniform rule for measuring value of human
life and measure of damage cannot be arrived at by
precise mathematical calculation, but amount
recoverable depends on broad facts and
circumstances of each case. It should neither be
punitive against whom claim is decreed nor it should
be a source of profit of the person in whose favour it
is awarded."
25. Likewise in the decision which is rendered by the
Hon'ble Apex Court in the case between Mrs.HELEN C. REBELLO
AND OTHERS Vs. MAHARASHTRA STATE ROAD TRANSPORT
CORPORATION reported in (1999) 1 SCC 90 the Court observed
as follows:
"As we have observed the whole scheme of
the Act, in relation of the payment of
compensation to the claimant, is beneficial
legislation, the intention of the legislature is made
more clear by the change of language from what
was in Fatal Accidents Act, 1855 and what is
brought under Section 110-B of 1939 Act. This is
also visible through the provision of Section
168(1) under the Motor Vehicles Act, 1988 and
Section 92-A of 1939 Act which fixes the liability
on the owner of the vehicle even on no fault. It
provides where the death or permanent
disablement of any person has resulted from an
accident spite of no fault of the owner of the
vehicle, an amount of compensation fixed therein
is payable to claimant by such owner of the
vehicle. Section 92 - B ensures that the claim for
compensation under Section 92-A is addition to
any other right to claim compensation respect
whereof under any other provision of this Act or
of any other law for the time being in force. This
clearly indicates the intention of the legislature
which is conferring larger benefit to the claimant.
Interpretation of such beneficial legislation is also
well settled. Wherever there be two possible
interpretations in such statue then the one which
subserves the object of legislation, viz., benefit to
the subject should be accepted."
26. Income can generally be defined as the money which an
individual receives for the work he does or services he render.
Likewise, interest is the monitory charge for the money borrowed or
the money one withholds. In the natural parlance, interest is the
component that one party pays to another for incurring risk or
sacrificing the opportunity to use the funds.
27. When a person leaves his money in savings account or
makes a Fixed Deposit, the bank credits interest as the bank uses
the said money and loans it out to its client or re-invests it either in
mutual funds or anything alike resulting in earning interest revenue.
28. Thus, it is abundantly clear that the person who
withholds some one else's funds is under liability to make good the
same along with interest which the person who had used those
funds would have earned by investing the said fund.
While Section 2(24) of the Income Tax Act, 1961 defines
'income', Section 2(28A) of the said Act defines 'interest' as under:
"2(24): Interest means interest payable in any
manner in respect of any moneys borrowed or
debt incurred (including a deposit, claim or other
similar right or obligation) and includes any
service fee or other charge in respect of the
moneys borrowed or debt incurred or in respect of
any credit facility which has not been utilised."
29. Motor Vehicles Act is a beneficial legislation which
intents to place the claimants in the same position as they were
before the accident and to compensate the loss sustained by them.
The Hon'ble Apex Court time and again held that, the provisions of
the Motor Vehicles Act, 1988 should be interpreted liberally so as to
achieve the object of the said Act. It is incumbent on part of the
insurance companies to settle the claims relating to the accidents as
soon as possible. Also the insurance companies are directed to
settle the claims by designating an Officer for processing the
settlement of claims of compensation. Section 149 of the Motor
Vehicles Act, 1988 thus reads as under:
"149. Settlement by insurance company
and procedure therefor. -
(1) The insurance company shall, upon
receiving information of the accident, either from
claimant or through accident information report or
otherwise, designate an officer to settle the claims
relating to such accident.
(2)An officer designated by the insurance
company for processing the settlement of claim of
compensation may make an offer to the claimant
for settlement before the Claims Tribunal giving
such details, within thirty days and after following
such procedure as may be prescribed by the
Central Government.
(3)If, the claimant to whom the offer is made
under sub-section (2), -
(a)accepts such offer, -
(i)the Claims Tribunal shall make a
record of such settlement, and such
claim shall be deemed to be settled by
consent; and
(ii)the payment shall be made by
the insurance company within a
maximum period of thirty days from the
date of receipt of such record of
settlement;
(b)rejects such offer, a date of hearing shall be
fixed by the Claims Tribunal to adjudicate such
claim on merits."
30. Thus, the course which the insurance company should
adopt immediately upon receiving information about the occurrence
of an accident in which the vehicle to which insurance policy was
issued by it would be as under:
(1) To designate an officer to settle the claims
relating to such accident.
(2) The officer designated for settlement of
claim of compensation may make an offer to the
claimant within thirty days.
(3) If the claimant to whom the offer is made by
the officer designated accepts such offer, Claims
Tribunal to make a record of such settlement.
(4) The insurance company shall make the
payment as per the settlement arrived at within thirty
days from the date of receipt of such record of
settlement.
(5) In case the claimant rejects such offer, the
Claims Tribunal to fix a date of hearing for
adjudication of such claims on merits.
31. By the aforementioned provision one can draw an
inference that the legislative intent is that the claims should be
settled by the insurance companies within least possible time. Also
as per the said provision of law, the insurance company is at liability
to designate an officer to settle the claim relating to accident
immediately upon receiving information of the accident either from
the claimant or through accident information report or otherwise.
32. Matters may be very few or negligible where insurance
companies are coming forward for settlement of claims upon
receiving information in respect of occurrence of accident. The
insurance companies never claim that they have designated an
officer to settle the claims relating to the accidents soon after the
occurrence of accident upon receiving such information as
envisaged under Section 149 of the Motor Vehicles Act, 1988.
33. Despite of the aforementioned facts, in this case, the
insurance company has raised a plea that it is not liable to pay any
interest on the amount awarded towards loss of future prospects.
The justification in such a plea can be verified through the following
illustration:
"'X' met with an accident and succumbed to injuries
in the year 2014. 'Y' his wife, A and B, their children, files
a petition claiming compensation in the light of the death
of their bread winner. The insurance company enters into
appearance. On contest, the Tribunal allows the claim
petition in the year 2018 and awards a sum of
Rs.50,00,000/- as compensation. The insurance company
prefers appeal and the appeal gets dismissed in the year
2022 upholding the award of the Tribunal. The insurance
company approaches the Hon'ble Apex Court and the
Hon'ble Apex Court passes judgment in the year 2024
negating the pleas taken by the insurance company.
Thus, the award attains finality in the year 2024.
'Y' the wife, A and B the children of the deceased
'X' would be bearing legal expenses for the entire period
of ten years i.e. from 2014 to 2024. That apart, 'Y' would
be at liability to provide education to her children either
by begging or by borrowing. For all the three to survive,
food, shelter and clothing are required. Therefore, 'Y'
might have incurred debts, would have sold out any
valuable property, or would have mortgaged the said
property or might have pledged the valuable articles like
gold. Thus, for all the expenditure incurred for the ten
years, 'Y' and her children A and B would be liable to pay
interest.
On the other hand, the insurance company would
be reaping the profit in the form of interest on the
amount that fell due to the claimants for all the said ten
years period."
34. In the circumstances aforementioned which would be
present in almost all motor vehicles claims, if the dependents are
denied with the interest over the amount awarded under the head
'loss of future prospects', it would be most unjustifiable. The
reasons are two fold.
(i) Despite making stringent provisions for settlement of
claims at the earliest date, it is taking years and decades for
settlement of claims. In the interregnum period, the survival of
claimants would be based on the available resources and the
capability of getting debts.
(ii) The insurance companies who are liable to pay the
compensation as soon as possible as indicated under the Motor
Vehicles Act, 1988 would be enjoying the principle amount and the
fruits that accrued through the investment of the principle amount.
35. The amount payable to the claimants which lies with the
insurance companies for years together is one way the debt the
insurance companies have to make good to the claimants. When the
insurance companies are enjoying the fruits of the said amount and
the accrued interest for years together, they cannot take plea that
they are not liable to pay interest to the claimants over the amount
which they are liable.
36. In the case on hand, the accident occurred in the year
2014 and the claim is not settled till this day. Thus, the amount
which the claimants are legally entitled to is being enjoyed by the
insurance company for a long period of ten years. Now the
insurance company has taken a plea that it is not liable to pay the
interest on future prospects.
37. The plea taken by the insurance company that it is not
liable to pay interest on the future prospects, as the amount
awarded under that head would be the future earnings of the
deceased is not justifiable due to the reason that the claimants are
not being paid the entire earnings of the deceased which he would
have earned had he been alive. Cases where there is no proof in
certainty regarding exact income, the Courts are taking notional
income into consideration. Either applying appropriate multiplier as
per the decision in Sarala Verma's case or taking percentage of the
said income towards future prospects as per the decision in Pranay
Sethi's case is on probabilities but not on exact figures. In no case,
the claimants get the exact amount which the deceased would have
earned had he been alive. In all cases the amount which the
claimants would get for their livelihood through the deceased would
be many times more than the actual amount awarded. That apart,
the insurance companies are depositing the compensation years
after the date of accident which is in clear violation of Section 149
of the Motor Vehicles Act, 1988.
38. Further more, award of amount as compensation is a
one time procedure. Even if in the future course it is found that the
deceased would have earned much more amount in the light of hike
in his position and global opportunities, the Tribunals will not order
payment of any further amount and insurance companies will not be
made liable on that count. Such being the case, this Court is of the
view that the insurance companies are liable to pay the awarded
amount including the amount awarded under the head future
prospects together with banking rate of interest which is prevalent
during relevant time. Thus, we ultimately hold that, the insurance
company cannot escape from the liability to pay interest on the
future prospects.
39. In the light of the foregoing discussion, the judgment is
concluded with the following
ORDER
MFA No.511/2020 which is filed by the Reliance General
Insurance Company Limited stands dismissed without costs.
The appeal preferred by the claimants vide MFA.CROB
40/2022 is allowed in part.
The amount awarded as compensation is enhanced by
Rs.40,000/-.
The enhanced amount shall carry interest at the rate of 6%
per annum from the date of petition till the date of deposit.
The appellants No.1 and 2 are entitled to the enhanced sum
with equal share.
Amount if any in deposit before this Court be transmitted to
the concerned Tribunal for disbursement.
Records received be returned.
Sd/-
(K.SOMASHEKAR)
JUDGE
Sd/-
(DR.CHILLAKUR SUMALATHA)
JUDGE
AP
CT:TSM
