Hem Singh And Others vs Shamsher Singh And Others
2021 Latest Caselaw 7422 Raj/2

                                        (1 of 13)                  [CMA-5521/2011]


       HIGH COURT OF JUDICATURE FOR RAJASTHAN
                   BENCH AT JAIPUR

          S.B. Civil Miscellaneous Appeal No. 5521/2011
1.Hem Singh S/o Shri Prem Singh, aged 58 years.
2.Smt. Jamna W/o Shri Hem Singh, aged 57 years.
3.Smt. Geet W/o Late Shri Nem Singh, aged 36 years.
4.Roshan S/o Late Shri Nem Singh, aged 18 years.
5.Kumari Mamta D/o Late Shri Nem Singh, aged 16 years.
6.Master Dinesh S/o Late Shri Nem Singh, aged 13 years.
  Appellants No.5 and 6 are the minor through their natural
guardian mother appellant No.3 Smt. Geeta.
  All resident of Shiv Colony, Rajiyawas, P.S. Jawaja, Tehsil
Beawar, District Ajmer.
                                                                  ----Appellants
                                   Versus
1. Shamsher S/o Shri Ladu Mehrat, R/o Rajiyawas, P.S. Jawaja,
Tehsil Beawar, District Ajmer (Driver of the Motorcycle No.RJ-36-
SA-5465).
2. Balveer Singh S/o Shri Man Singh Mehrat, R/o Rajiyawas, P.S.
Jawaja, District Ajmer (Owner of the Motorcycle No.RJ-36-SA-
5465).
3. United India Insurance Co. Ltd., Branch Office, Ajmer Road,
Beawar having its Regional Officer at Sahara Chambers, Tonk
Road, Jaipur (Insurer of the Motorcycle No.RJ-36-SA-5465).
                                                                 ----Respondent

For Appellant(s) : Mr. Jai Prakash Gupta Mr. Naresh Gupta For Respondent(s) : Mr. V.P. Mathur

HON'BLE MR. JUSTICE ANOOP KUMAR DHAND Order

09/12/2021

Feeling aggrieved by the impugned judgment and award

dated 13.06.2011 passed by Motor Accident Claims Tribunal-cum-

Additional District and Sessions Judge (Fast Track) No.1, Beawar,

District Ajmer in Claim Case No.09/2009(280/2007). The claimant

-appellants (hereinafter referred as the claimants) have

submitted that this appeal for enhancement of compensation

amount and have also challenged the finding recorded by the

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Tribunal while deciding the issue No.2 and exonerating the

Insurance Company from its liability to make payment of

compensation.

Learned counsel for the appellants submitted that the

amount of compensation granted by the Tribunal is on the lower

side and requires suitable enhancement. He further submitted that

while deciding issue No.3, the Tribunal has recorded a

contradictory finding by saying that the driver of the vehicle was

having a valid licence Ex.9 but the Tribunal has seriously erred in

holding that since no evidence was produced by the driver owner

of the vehicle that the driver of the vehicle was driving the vehicle

on the instructions of the person having valid licence. Counsel

further submitted that quashing the aforesaid finding recorded

while deciding issue No.3 a direction be issued to the Insurance

Company to pay compensation to the claimants and thereafter

recover the same from the driver owner of the vehicle in this

regard.

Learned counsel has placed reliance on the decision of the

Hon'ble Supreme Court in the case of Shamanna and Ors.

Versus The Divisional Manager, The Oriental Insurance

Company Ltd. and Ors. reported in (2018) 9 SCC 650 which

reads as under:.

"Learned counsel has further submitted that the direction be issued to the Insurance Company to pay the amount of compensation to the appellants and thereafter, recover the same from owner of the vehicle.

In this regard, learned counsel has placed reliance on the decision of the Hon'ble Supreme Court in Shamanna and Ors. Versus The Divisional Manager,

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The Oriental Insurance Co. Ltd. and Ors (2018) 9 SCC 650,wherein, it was held as under:-

"In the present case, to deny the benefit of 'pay and recover', what seems to have substantially weighed with the High Court is the reference to larger Bench made by the two-Judge Bench in National Insurance Co. Ltd. v. Parvathneni and another (2009) 8 SCC 785 which doubted the correctness of the decisions which in exercise of jurisdiction under Article 142 of the Constitution of India directing insurance company to pay the compensation amount even though insurance company has no liability to pay. In Parvathneni case, the Supreme Court pointed out that Article 142 of the Constitution of India does not cover such type of cases and that "if the insurance company has no liability to pay at all, then, it cannot be compelled by order of the court in exercise of its jurisdiction under Article 142 of the Constitution of India to pay the compensation amount and later on recover it from the owner of the vehicle". The above reference in Parvathneni case has been disposed of on 17.09.2013 by the three- Judges Bench keeping the questions of law open to be decided in an appropriate case.

Since the reference to the larger bench in Parvathneni case has been disposed of by keeping the questions of law open to be decided in an appropriate case, presently the decision in Swaran Singh case followed in Laxmi Narain Dhut and other cases hold the field. The award passed by the Tribunal directing the insurance company to pay the compensation amount awarded to the claimants and thereafter, recover the same

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from the owner of the vehicle in question, is in accordance with the judgment passed by this Court in Swaran Singh and Laxmi Narain Dhut cases. While so, in our view, the High Court ought not to have interfered with the award passed by the Tribunal directing the first respondent to pay and recover from the owner of the vehicle. The impugned judgment of the High Court exonerating the insurance company from its liability and directing the claimants to recover the compensation from the owner of the vehicle is set aside and the award passed by the Tribunal is restored.

So far as the recovery of the amount from the owner of the vehicle, the insurance company shall recover as held in the decision in Oriental Insurance Co. Ltd. v. Nanjappan and others (2004) 13 SCC 224 where this Court held that "....that for the purpose of recovering the same from the insured, the insurer shall not be required to file a suit. It may initiate a proceeding before the concerned Executing Court as if the dispute between the insurer and the owner was the subject matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer."

In the result, the impugned judgment of the High Court insofar as enhancement of the compensation to Rs.4,94,700/- is affirmed. Insofar as direction of the impugned judgment directing the appellants/claimants to recover the compensation from the owner of the vehicle is set aside and the appeal is partly allowed. The first respondent insurance company shall pay the enhanced compensation to the appellants/claimants along with the

(5 of 13) [CMA-5521/2011]

accrued interest and the insurance company shall recover the same from the owner of the vehicle. No costs."

Learned counsel has next placed reliance on the decision of the Hon'ble Supreme Court in Pappu and Ors. Versus Vinod Kumar Lamba and Ors., wherein, it was held as under:-

"The next question is: whether in the fact situation of this case the insurance company can be and ought to be directed to pay the claim amount, with liberty to recover the same from the owner of the vehicle (respondent No.1)? This issue has been answered in the case of National Insurance Company Ltd. (supra). In that case, it was contended by the insurance company that once the defence taken by the insurer is accepted by the Tribunal, it is bound to discharge the insurer and fix the liability only on the owner and/or the driver of the vehicle. However, this Court held that even if the insurer succeeds in establishing its defence, the Tribunal or the Court can direct the insurance company to pay the award amount to the claimant(s) and, in turn, recover the same from the owner of the vehicle. The three-Judge Bench, after analysing the earlier decisions on the point, held that there was no reason to deviate from the said well-settled principle. In paragraph 107, the Court then observed thus:

"We may, however, hasten to add that the Tribunal and the court must, however, exercise their jurisdiction to issue such a direction upon consideration of the facts and circumstances of each case and in the event such a direction has been issued, despite arriving at a finding of fact to the

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effect that the insurer has been able to establish that the insured has committed a breach of contract of insurance as envisaged under sub-clause (ii) of clause

(a) of sub-section (2) of Section 149 of the Act, the insurance company shall be entitled to realize the awarded amount from the owner or driver of the vehicle, as the case may be, in execution of the same award having regard to the provisions of Sections 165 and 168 of the Act. However, in the event, having regard to the limited scope of inquiry in the proceedings before the Tribunal it has not been able to do so, the insurance company may initiate a separate action therefor against the owner or the driver of the vehicle or both, as the case may be. Those exceptional cases may arise when the evidence becomes available to or comes to the notice of the insurer at a subsequent stage or for one reason or the other, the insurer was not given an opportunity to defend at all. Such a course of action may also be resorted to when a fraud or collusion between the victim and the owner of the vehicle is detected or comes to the knowledge of the insurer at a later stage."

Further, in paragraph No.110, the Court observed thus:

110. The summary of our findings to the various issues as raised in these petitions are as follows:

(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to extend relief by

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compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object.

(ii) Insurer is entitled to raise a defence in a claim petition filed under Section 163A or Section 166 of the Motor Vehicles Act, 1988 inter alia in terms of Section 149(2)(a)

(ii) of the said Act.

(iii) The breach of policy condition, e.g. disqualification of driver or invalid driving licence of the driver, as contained in Sub- section (2)(a)(ii) of Section 149, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licensed driver or one who was not disqualified to drive at the relevant time,

(iv) The insurance companies are, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish 'breach' on the part of the owner of the vehicle; the burden of proof where for would be on them.

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(v) The court cannot lay down any criteria as to how said burden would be discharged, inasmuch as the same would depend upon the facts and circumstance of each case.

(vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/ are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply "the rule of main purpose" and the concept of "fundamental breach" to allow defences available to the insured under Section 149(2) of the Act. (vii) The question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver, (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case.

(viii) xxx

(ix) xxx

(x) Where on adjudication of the claim under the Act the tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of Section 149(2) read with Sub-section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the tribunal Such determination of

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claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the tribunal to the Collector in the same manner under Section 174 of the Act as arrears of land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by Sub-section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the tribunal.

(xi) The provisions contained in Subsection (4) with proviso thereunder and Sub-

section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse of by the Tribunal and be extended to claims and defences of insurer against insured by, relegating them to the remedy before, regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims." (emphasis supplied) In the present case, the owner of the vehicle (respondent No.1) had produced the insurance certificate indicating that vehicle No. DIL- 5955 was comprehensively insured by the respondent No.2 (Insurance Company) for unlimited liability. Applying the dictum in the case of National Insurance Company Ltd. (supra), to subserve the ends of justice, the insurer (respondent No.2) shall pay the claim amount awarded by the Tribunal to the appellants in the first instance, with liberty to recover the same from the

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owner of the vehicle (respondent No.1) in accordance with law.

Accordingly, the appeal is allowed to the extent that the compensation amount awarded by the Tribunal and confirmed by the High Court shall be paid and satisfied by the insurer (respondent No.2) in the first instance, with liberty to recover the same from the owner of the vehicle (respondent No.1) in accordance with law."

Learned counsel for the respondents have opposed the appeal. Learned counsel for the Insurance Company has submitted that the direction cannot be issued to the Insurance Company to pay the compensation amount to the appellants and then, recover the same from the owner."

The counsel for the claimants placed reliance in the

judgment delivered by the Hon'ble Apex Court in the case of

National Insurance Co. Ltd. Vs. Swaran Singh and Ors.

reported in AIR 2004 SC 1531 wherein it has been held that it is

the liability of the Insurance Company to satisfy the decree at the

first instance and to recover the awarded amount from the owner

or driver.

The second contention of the counsel for the claimants is

that the Tribunal has committed an error in awarding in lesser

compensation, the Tribunal has erred in accessing the monthly

income of the deceased as Rs.3,000/- only without any basis while

the claimants have specifically mentioned in their claim petition

that the deceased was mason earning Rs.6,000/- per month. He

further submitted that the respondents have not produced any

evidence in rebuttal and the Tribunal has not recorded any finding

for coming the conclusion that the income of the deceased was

Rs.3,000/- per month only. He further submits that no amount

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under the future prospects have been awarded by the Tribunal

and under the conventional heads also suitable amount has not

been awarded. Hence, the impugned award needs suitable

enhancement.

Learned counsel for the appellant has placed reliance upon

the judgment of Hon'ble Supreme Court of Syed Sadiq Etc. Vs.

Divisional Manager, United India Insurance Company

reported in 2014 MACD SC 84.

Per contra, learned counsel appearing for the Insurance

Company opposed the arguments and stated that the Tribunal has

not committed any illegality while passing the award and after

considering the facts and material available on the record.

Suitable compensation has been awarded to the claimants which

needs no interference by this Court.

I have considered the rival submissions made at bar by both

counsel for the parties and perused the material available on the

record. The claim petition has been filed by the claimants for

compensation on account of death of one Hem Singh who died in

a road accident occurred on 12.06.2007.

This is not in dispute that the deceased was a mason. But

both the parties have not produced any cogent evidence about the

specific earnings/income of the deceased but I am of the

considered view that looking to the inflation and rise in prices it is

difficult to believe that the deceased was not capable of earning

more than Rs.3,000/- per month. Thus, keeping in mind, the

inflation and the judgment quoted above, I am inclined to believe

that the deceased must have easily been earning Rs.3,500/- per

month at the time of accident.

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Keeping in view, the law laid down by the Hon'ble Supreme

Court in the case of Shamanna (supra) and Swaran Singh (supra),

I am of the view that the finding recorded by the learned Tribunal

while deciding issue No.3 is not sustainable in eye of law and more

particularly to the fact that the Tribunal has itself recorded on

finding that the respondent No.1 was having valid learning licence

Ex.9. So, under these circumstances, the Tribunal has committed

serious irregularity while exonerating the Insurance Company

from its liability to make payment of compensation to the

claimants. Hence, the finding recorded on issue No.3 is liable to be

quashed and is hereby quashed and the Insurance Company is

given liberty to recover the amount of compensation from the

driver owner of the vehicle in question.

Keeping in view the number of dependents who are six in

number 1/4th income of the deceased is liable deducted towards

the personal expenses. Keeping in view, the age of the deceased

i.e. 36 years, the Tribunal has rightly applied the multiplier of 16

to work out the dependency of the claimant.

Looking to the overall facts and circumstances of the case, I

am of the view that the income of the deceased should be

calculated Rs.3,500/- per month and the claimants are entitled to

get 40% future prospects and they are also entitled to get receive

to Rs.70,000/- towards the conventional heads, in view of the

various judgments delivered by the Hon'ble Supreme Court.

Looking to the facts and circumstances, I passed the

following order:

1. The Insurance Company is liable to make payment of

compensation amount to the claimant-respondents with liberty to

recover the same from the driver owner of the vehicle.

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2. The income of the deceased is determined as Rs.3,500/- per

month, the claimants are entitled to get compensation in the

following manner Rs.3,500/- X 12 X 16 = Rs.6,72,000/- after

deducting 1/4th amount as personal expenses i.e. Rs.1,68,000/-

and after calculating future prospects @ 40% that the claimants

are entitled to get the additional amount of Rs.2,01,600/- and

under conventional heads the claimants are entitled to get

Rs.70,000/- after deducting the amount of Rs.40,000/- already

ordered by the Tribunal.

Accordingly, this appeal is partly allowed and the impugned

award dated 13.06.2021 is modified to the extent that the

compensation amount receivable by the claimants is

Rs.7,35,600/- instead of Rs.4,24,000/- as awarded by the

Tribunal. Remaining the terms and conditions of the award shall

be same, the Insurance Company shall deposit the entire amount

along with interest @ 6% per annum from the date of filing the

claim petition till the date of payment with the Tribunal within a

period of four months from today. The tribunal is further directed

to deposit a sum of Rs.2,00,000/- in the saving bank amount of

the claimants-respondents and remaining amount shall be

invested in Fixed Deposit in any Nationalized Bank for a period of

two years and the interest accrued there upon shall be paid to the

claimants on monthly basis. It is further ordered that the

respondent No.3 Insurance Company shall be at liberty to recover

the aforesaid amount from the respondents No.1 and 2.

(ANOOP KUMAR DHAND),J

Arun/7

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