Sikkim High Court
Smt. Passi Lamu Sherpa And Anr vs The Branch Manager, New India Assurance ... on 14 May, 2024
Author: Meenakshi Madan Rai
Bench: Meenakshi Madan Rai
THE HIGH COURT OF SIKKIM : GANGTOK
(Civil Appellate Jurisdiction)
DATED : 14th MAY, 2024
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SINGLE BENCH : THE HON‟BLE MRS. JUSTICE MEENAKSHI MADAN RAI, JUDGE
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MAC App. No.07 of 2023
Appellants : Passi Lamu Sherpa and Another
versus
Respondent : The Branch Manager, New India Assurance Co. Ltd.
Appeal under Section 173 of the Motor Vehicles Act, 1988
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Appearance
Mr. Umesh Ranpal, Advocate with Ms. Laxmi Khawas, Advocate for
the Appellants.
Mr. Dipayan Roy, Advocate for the Respondent.
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JUDGMENT
Meenakshi Madan Rai, J.
1. The Appellants/Claimants were denied compensation
by the Learned Motor Accidents Claims Tribunal, Namchi, Sikkim
(for short, "MACT"), placing reliance on the Judgment of this Court
in Branch Manager, New India Assurance Co. Ltd. vs. Geeta Khatiwada
and Others . Aggrieved they are before this Court impugning the
Judgment dated 31-05-2023, in MACT Case No.07 of 2020 (Smt.
Passi Lamu Sherpa and Another vs. The Branch Manager, New
India Assurance Company Limited).
2. Learned Counsel for the Appellants submitted that the
Learned MACT sans reasons for its reliance on the Judgment supra,
erroneously dismissed the claim of the Appellants. That, in Geeta
Khatiwada (supra) the deceased persons were gratuitous
passengers in a private Bolero vehicle, whereas in the instant case
the deceased was travelling in the private vehicle of her husband
2021 SCC OnLine Sikk 196
Smt. Passi Lamu Sherpa vs. The Branch Manager, New India Assurance Company Limited
and was not a gratuitous passenger but a third party. That, all
documents of the vehicle in accident were found to be in order,
including Exhibit 7, the insurance policy which reflects that third
party premium had been duly deposited by the insured. That, as a
distinction arises in Geeta Khatiwada (supra) and the instant Appeal,
the Appellants are entitled to the compensation claimed.
3. Per contra, Learned Counsel for the Respondent-
Insurance Company submitted that the husband was the owner of
the vehicle in accident, the deceased being his wife was merely an
„occupant‟ in the vehicle and did not qualify as a third party,
thereby disentitling the Appellants from the compensation claimed.
That, as the deceased wife was the legal heir of her deceased
husband the insurer, on this ground also the Appellants were not
entitled to claim the compensation. That, on the death of the
insured who was the son of Appellant No.1 and father of minor
Appellant No.2, the compensation amounting to ₹ 15,00,000/-
(Rupees fifteen lakhs) only, had already been granted to the
Appellants in terms of the Personal Accident Cover of the
owner/driver and the Respondent had no further liabilities. As, no
error arises in the findings of the Learned MACT, the appeal
deserves a dismissal.
4. Before delving into the merits of the matter, we may
consider the facts briefly for clarity. On 05-12-2019, the deceased
Laki Sherpa was traveling in the private vehicle, "Renault Duster"
bearing registration No. SK 04 P 3222, owned and driven by her
husband Norden Sherpa, from Ravangla South Sikkim to
Kalimpong, West Bengal, which was duly insured with the
Respondent, vide Exhibit 7. At around 0945 hours, the vehicle
Smt. Passi Lamu Sherpa vs. The Branch Manager, New India Assurance Company Limited
veered off the road approximately 350 ft. into the Rangeet River,
near the Kali Mandir along the Melli-Jorethang Highway in South
Sikkim. The accident resulted in the fatality of the couple. The
Appellants sought compensation amounting to ₹ 37,10,000/-
(Rupees thirty seven lakhs and ten thousand) only, by filing a claim
petition before the Learned MACT.
5. The claim petition was resisted by the Respondent,
which inter alia averred in its written statement that the vehicle
was driven in contravention to the insurance policy and it was
exempted from any liability and payment of the compensation
claimed. Pausing here, it is evident from a perusal of the Written
Statement that the insurance company did not in its averments
raise the issue of the wife not being a third party, however, its
witness the Deputy Manager, during his evidence deposed that the
insured vehicle was a private vehicle and the insurance policy,
Exhibit 7 of the vehicle did not cover the compensation claimed by
the Claimants in the instant case, as it covered only the personal
accident of the owner/driver amounting to ₹ 15,00,000/- (Rupees
fifteen lakhs) only, since released to the legal heirs.
6. To support the Appellants‟ claim, the Appellant No.1
was examined as witness before the Learned MACT. The Deputy
Manager of the Respondent Company testified as the Respondent‟s
witness.
7. The short question for consideration in this Appeal is;
Whether the Claimants-Appellants are entitled to compensation on
account of the death of the daughter-in-law of the
Appellant/Claimant No.1 and the mother of the minor
Appellant/Claimant No.2, who was travelling in the private vehicle
Smt. Passi Lamu Sherpa vs. The Branch Manager, New India Assurance Company Limited
of her husband, which met with an accident leading to the death of
both the husband and wife?
8. The policy of insurance emanates from a contract of
indemnity between the insurer and the insured, against the liability
incurred by the insured. The insurer is the first party and the
insured is the second party. Section 147 of the Motor Vehicles Act,
1988, elucidates the requirement of policies and limits of liability.
Consequently, other than the contracting parties to the insurance
policy, a third party would be a person who was not a party to the
insurance policy and could be a person on the road, an occupant of
an another vehicle or an occupant of the vehicle which is the
subject-matter of the insurance policy. It is not in dispute that the
vehicle was a private one owned by the deceased owner/driver and
his wife was travelling with him.
(i) In the first instance, it is necessary to notice that the
instant matter is to be distinguished from the case of Geeta
Khatiwada (supra). The deceased persons therein were travelling in
a private Bolero vehicle sans payment. Gratuitous passenger has
not been explained in the Act, but it is understood to be a
passenger travelling without payment of consideration.
(ii) The contents of Exhibit 7 reveal that premium for
compulsory personal accident cover for the owner/driver of the
vehicle with sum assured at ₹ 15,00,000/- (Rupees fifteen lakhs)
only, to cover such a person was duly paid by the issued. In other
words, compensation was payable to the owner/driver of the
vehicle of a sum of ₹ 15,00,000/- (Rupees fifteen lakhs) only, in
the event of an accident, which undisputedly has already been paid
to the Appellants.
Smt. Passi Lamu Sherpa vs. The Branch Manager, New India Assurance Company Limited
(iii) As the wife who was travelling in the vehicle of her
husband who was the owner/driver, she was neither the insurer
nor the insured neither can she be termed a gratuitous passenger
as she is the wife of the owner/driver, resultant she is covered by
the ambit of third party. Exhibit 7 reflects that a third party
premium has been paid for covering any liability that would accrue
to the owner/driver on account of the involvement of a third party
in an accident involving his vehicle. The argument that the limits
of liability is only up to ₹ 7,50,000/- (Rupees seven lakhs and fifty
thousand) only, in terms of the limits of liability entered in Exhibit
7 is, in my considered opinion, an erroneous interpretation. The
concerned provision as seen in Exhibit 7 is extracted hereinbelow;
Limits of Liability
Limit of the amount the Company‟s Liability Under
Section II 1(i) in respect of any one accident: as per
the Motor Vehicles Act, 1988.
Limit of the amount of the Company‟s Liability Under
Section II 1(ii) in respect of any one claim or series of
claims arising out of one event: Up to ₹ 7,50,000
As per the India Motor Tariff, the first pertains to liability
covered in respect of death and as stated in Exhibit 7, the liability
is as per the Motor Vehicles Act, 1988, which thereby makes the
insurer liable to pay compensation as computed in terms of the
said Act. The second pertains to damage to property of a third
party and the claim therein would be limited to ₹ 7,50,000/-
(Rupees seven lakhs and fifty thousand) only. In view of the
above, the question of the liability for the death of the wife of the
insured being limited to ₹ 7,50,000/- (Rupees seven lakhs and fifty
thousand) only, is an erroneous interpretation advanced by
Learned Counsel for the Respondent before this Court.
Smt. Passi Lamu Sherpa vs. The Branch Manager, New India Assurance Company Limited
(iv) The argument that she is the legal heir and would step
into shoes of the owner/driver and therefore her Claimants would
be disentitled to the compensation is a preposterous argument,
more so when both husband and wife are no longer living.
(v) The reliance of the Learned MACT in Geeta Khatiwada
(supra) to dismiss the claim petition, is misplaced. On pain of
repetition, it is pointed out that in the said case the deceased
persons were travelling gratuitously in a private Bolero vehicle
whereas here the deceased is the wife of the driver/owner,
qualifying as a third party and cannot be considered to be a
gratuitous passenger.
9. The concept of just compensation has been succinctly
explained by the Supreme Court in National Insurance Company
Limited vs. Pranay Sethi and Others as follows;
"55. ........................................... The conception
of "just compensation" has to be viewed through the
prism of fairness, reasonableness and non-violation of
the principle of equitability. In a case of death, the
legal heirs of the claimants cannot expect a windfall.
Simultaneously, the compensation granted cannot be
an apology for compensation. It cannot be a pittance.
Though the discretion vested in the tribunal is quite
wide, yet it is obligatory on the part of the tribunal to
be guided by the expression, that is, "just
compensation". The determination has to be on the
foundation of evidence brought on record as regards
the age and income of the deceased and thereafter
the apposite multiplier to be applied. The formula
relating to multiplier has been clearly stated in Sarla
Verma [(2009) 6 SCC 121] and it has been approved
in Reshma Kumari [(2013) 9 SCC 65]. The age and
income, as stated earlier, have to be established by
adducing evidence. The tribunal and the courts have
to bear in mind that the basic principle lies in
pragmatic computation which is in proximity to
reality. It is a well-accepted norm that money cannot
substitute a life lost but an effort has to be made for grant
of just compensation having uniformity of approach. There
has to be a balance between the two extremes, that
is, a windfall and the pittance, a bonanza and the
modicum. In such an adjudication, the duty of the
tribunal and the courts is difficult and hence, an
(2017) 16 SCC 680
Smt. Passi Lamu Sherpa vs. The Branch Manager, New India Assurance Company Limited
endeavour has been made by this Court for
standardisation which in its ambit includes addition of
future prospects on the proven income at present. As
far as future prospects are concerned, there has been
standardisation keeping in view the principle of
certainty, stability and consistency. We approve the
principle of "standardisation" so that a specific and
certain multiplicand is determined for applying the
multiplier on the basis of age." [emphasis supplied]
(i) In Pappu Deo Yadav vs. Naresh Kumar and Others3, the
Supreme Court observed that;
"8. ................. "just compensation" should
include all elements that would go to place the victim
in as near a position as she or he was in, before the
occurrence of the accident. Whilst no amount of
money or other material compensation can erase the
trauma, pain and suffering that a victim undergoes
after a serious accident (or replace the loss of a loved
one), monetary compensation is the manner known to
law, whereby society assures some measure of
restitution to those who survive, and the victims who
have to face their lives. ......................"
10. Consequently, the computation of the compensation
which is „just compensation" is as follows;
The income of the deceased wife, aged 34 years at the time
of accident, is shown to be ₹ 15,000/- (Rupees fifteen thousand)
only, per month. She was employed on a fixed salary, in a hotel,
this fact was not decimated by cross-examination.
Accordingly, the annual income of the deceased (₹ 15,000/- x 12) ₹ 1,80,000.00
Add 40% of ₹ 1,80,000/- as Future Prospects (+) ₹ 72,000.00
[in terms of Paragraph 59.4 of the Judgment of National Insurance ₹ 2,52,000.00
Company Limited vs. Pranay Sethi and Others : (2017) 16 SCC 680]
Less 1/3rd of ₹ 2,52,000/- (-) ₹ 84,000.00
[in terms of Paragraph 30 of the Judgment of Sarla Verma (Smt)
and Others vs. Delhi Transport Corporation and Another : (2009)
6 SCC 121 -- deducted from the above amount as expenses that the
deceased would have incurred towards herself had she been alive]
Net yearly income ₹ 1,68,000.00
Multiplier to be adopted „16‟ (₹ 1,68,000/- x 16) ₹ 26,88,000.00
[The age of the deceased at the time of death was ‟34‟ and the
relevant multiplier in terms of Paragraph 42 as per Judgment of
Sarla Verma (supra) is „16‟]
Add Funeral Expenses (+) ₹ 16,500.00
[in terms of Paragraph 59.8 of the Judgment of Pranay Sethi (supra)
with enhancement @ 10% in every three years. Therefore, the figure
calculated is -- ₹ 15,000 @ 10% = ₹ 1,500 + ₹ 15,000 = ₹ 16,500]
(2022) 13 SCC 790
Smt. Passi Lamu Sherpa vs. The Branch Manager, New India Assurance Company Limited
Add Loss of Estate (+) ₹ 16,500.00
[in terms of Paragraph 59.8 of the Judgment of Pranay Sethi (supra)
with enhancement @ 10% in every three years. Therefore, the figure
calculated is -- ₹ 15,000 @ 10% = ₹ 1,500 + ₹ 15,000 = ₹ 16,500]
Add Loss of Parental Consortium (+) ₹ 44,000.00
[@ one son of the deceased, in terms of Paragraph 21 of the Judgment
of Magma General Insurance Company Limited vs. Nanu Ram alias
Chuhru Ram and Others : (2018) 18 SCC 130 and Paragraph 59.8 of
the Judgment of Pranay Sethi (supra) with enhancement @ 10% in
every three years. Therefore, the figure calculated is -- ₹ 40,000 @ 10%
= ₹ 4,000 + ₹ 40,000 = ₹ 44,000]
Total = ₹ 27,65,000.00
(Rupees twenty seven lakhs and sixty five thousand) only.
11. The total compensation is therefore calculated as ₹
27,65,000.00 (Rupees twenty seven lakhs and sixty five thousand)
only, to which the Appellants are entitled, with simple interest @ 9%
per annum, on the above amount with effect from the date of filing
of the Claim Petition before the Learned MACT, i.e., 20-06-2020, till
its full realisation.
12. The Appellant-Insurance Company is directed to pay
the awarded compensation to the Claimants-Appellants No.1 and 2
within one month from today with interest @ 9% per annum,
failing which, it shall pay simple interest @ 12% per annum from
the date of filing of the Claim Petition, till full realisation.
Amounts, if any, already paid by the Respondent-Insurance
Company to the Claimants-Appellants No.1 and 2, for the instant
claim petition, shall be duly deducted from the awarded
compensation.
13. The awarded amount of compensation along with
interest as specified above, shall be divided amongst the Claimant-
Appellant No.1 being the mother-in-law of the deceased and
Claimant-Appellant No. 2 being the minor son, in the following
manner;
Smt. Passi Lamu Sherpa vs. The Branch Manager, New India Assurance Company Limited
(i) From the awarded compensation, the Claimant-
Appellant No.1, mother-in-law of the deceased, is
entitled to 25%; and
(ii) The balance of 75% of the awarded compensation shall
be granted to the Claimant-Appellant No. 2 (minor son
of the deceased).
50% out of the share of the child, shall be kept in
a Fixed Deposit in a Nationalised Bank, until the child
attains the age of majority. The remaining 50% of the
minor‟s share shall be expended towards his education
and upkeep.
14. The impugned Judgment is set aside.
15. Appeal disposed of accordingly.
16. No order as to costs.
17. Copy of this Judgment be sent to the Learned MACT for
information, along with its records.
( Meenakshi Madan Rai )
Judge
14-05-2024
Approved for reporting : Yes
ds
