Sikkim High Court

The Manager,The New India Assurance Co. ... vs Krishna Bahadur Mukhia And Anr on 3 October, 2024

Author: Meenakshi Madan Rai

Bench: Meenakshi Madan Rai

                THE HIGH COURT OF SIKKIM : GANGTOK
                                    (Civil Appellate Jurisdiction)
                                   DATED : 3rd October, 2024
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   SINGLE BENCH : THE HON‟BLE MRS. JUSTICE MEENAKSHI MADAN RAI, JUDGE
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                                  MAC App. No.01 of 2024
                  Appellant                :   The Manager, The New India Assurance
                                               Company Limited

                                                                    versus

                  Respondents              :   Krishna Bahadur Mukhia and Another

        Appeal under Section 173 of the Motor Vehicles Act, 1988
         ---------------------------------------------------------------------------------------
             Appearance
                  Mr. Dipayan Roy, Advocate for the Appellant.
                  Ms. Vidya Lama and Mr. Nima Tshering Sherpa, Advocates for the
                  Respondents.
          ---------------------------------------------------------------------------------------

                                           JUDGMENT

Meenakshi Madan Rai, J.

1. The Learned Motor Accidents Claims Tribunal

(hereinafter, the "MACT"), Gangtok, Sikkim, vide its Judgment

dated 24-05-2023, in MACT Case No.23 of 2021 (Krishna Bahadur

Mukhia and Another vs. Suresh Rai and Others), granted a sum of ₹

11,50,100/- (Rupees eleven lakhs, fifty thousand and one

hundred) only, to the Respondents (Claimants before the MACT),

with interest @ 10% per annum, from the date of filing the

application (i.e. 20-12-2021) till its full realization, on account of a

motor vehicle accident which occurred on 22-08-2021, between

09.00 a.m. to 11.50 a.m. at "Vertical Bhir", Sudunglakha, East

Sikkim.

(i) The Respondents case is that their mother, a fifty-eight

year old agriculturist, earning a monthly income of ₹ 12,000/-

(Rupees twelve thousand) only, was travelling from Rongli to

The Manager, The New India Assurance Company Limited vs. Krishna Bahadur Mukhia and Another

Rhenock in the said vehicle (Bolero), bearing registration no.SK-

01-PC-1884, when the vehicle careened off the road to about 300

feet below, on account of the driver (OP No.3 before the MACT), of

the vehicle speeding at the relevant time. That, due to her sudden

death, the Respondents faced a loss of family income and

accordingly sought compensation of ₹ 11,11,900/- (Rupees eleven

lakhs, eleven thousand and nine hundred) only, from the

Respondents therein.

(ii) The Appellant-Insurance Company herein (OP No.2

before the MACT), contested the claim petition, denying its liability

by averring that no extra premium to cover gratuitous passenger

was deposited as apparent from the Insurance Policy Exhibit-8.

Thus, the owner of the vehicle (OP No.1 before the MACT) and OP

No.3, the driver of the vehicle were liable to pay the compensation.

The age and income and the relationship of the deceased to the

Respondents were also denied.

(iii) The OP No.3, the driver contested the claim petition on

grounds that his driving license was effective at the time of the

accident and the vehicle was not driven in a rash and negligent

manner thereby divesting him of any liability.

(iv) The OP No.1, the owner of the vehicle, denied his

liability claiming to have engaged OP No.3, a qualified driver and

the vehicle having been properly maintained and mechanically fit

at the time of accident besides being insured with the Appellant-

Insurance Company and the Insurance Policy which was a

"Package Policy" was subsisting at the time of accident.

(v) On the basis of the pleadings of the parties, the

Learned MACT framed the following issues for determination;

The Manager, The New India Assurance Company Limited vs. Krishna Bahadur Mukhia and Another

(1) Whether all the documents of the vehicle bearing registration no.SK-01-PC-1884 including the driving licence of the driver were valid and effective at the time of accident on 22.08.2021?

(2) Whether the petitioner/claimant is entitled to the reliefs claimed?

(vi) In Issue no.1, the Learned MACT after examining all

documents on record observed and concluded that, all documents

of the vehicle including the driving license of the driver were valid

and effective at the time of accident.

(vii) In Issue no.2, it was found that the

Petitioners/Claimants were entitled to the reliefs claimed and the

liability was upon the OP No.2 (Appellant-Insurance Company).

That, in terms of the observations of the Supreme Court in M.

Mansoor vs. United India Insurance Co. Ltd., [2013 (12) SCALE 324], the

Petitioners/Claimants were also entitled to the amounts under the

heads "Love and Affection" and "Cost of Litigation". The

compensation was accordingly calculated and granted under the

following heads;

              Sl. No.                 Head                   Amount in ₹

                  1        Loss of earning                9,93,600
                  2        Funeral expenses               16,500
                  3        Loss of estate                 15,000
                  4        Love and affection             1,00,000
                  5        Cost of litigation             25,000
                           TOTAL                          ₹ 11,50,100

2. Dissatisfied with the Judgment of the Learned MACT

the Appellant-Insurance Company is before this Court. It is

contended by Learned Counsel for the Appellant that the deceased

at the relevant time was travelling as a passenger in the vehicle

and the Insurance Policy did not cover the liability of any

The Manager, The New India Assurance Company Limited vs. Krishna Bahadur Mukhia and Another

unauthorized person travelling as passenger. That, although on

the date of the accident, the third party coverage was subsisting,

the policy being a "Bundled Motor Policy for Private Car" the

liability of the Appellant-Insurance Company was limited to ₹

2,00,000/- (Rupees two lakhs) only, and not beyond. Hence, the

Judgment be set aside.

3. Learned Counsel for the Respondents argued that no

interference was required in the impugned Judgment as the policy

was a "Bundled Motor Policy for Private Car", which was a package

policy and nowhere is it mentioned therein that the liability of the

Insurance Company was limited to ₹ 2,00,000/- (Rupees two

lakhs) only, as is evident from Exhibit-8 relied on by the

Respondents. That, an extra premium had been paid to cover all

occupants of the vehicle. The Appeal thereby deserves a dismissal.

4. Based on the averments of the parties and the rival

submissions advanced by Learned Counsel, the only question for

determination by this Court is; Whether the liability of the

Appellant towards the Respondents is limited to the payment of ₹

2,00,000/- (Rupees two lakhs) only.

(i) Exhibit-8 relied on by the Respondents is a policy

schedule cum certificate of insurance, "Bundled Motor Policy for

Private Car". The policy is valid for the period 21-09-2019 to 20-

09-2022 and covers own damages and third party. The accident

occurred on 22-08-2021. It is averred in Paragraph 12 of the

Memo of Appeal by the Appellant that the policy is a "package

policy". The document reveals that, for "own damages" a premium

has been deposited and an "additional premium" has been paid for

third party. Ext-D2-3/DW-1 is also the same insurance policy but

The Manager, The New India Assurance Company Limited vs. Krishna Bahadur Mukhia and Another

is stated to be "enhanced covers" and the insured declared value

was ₹ 8,44,902/- (Rupees eight lakhs, forty four thousand, nine

hundred and two) only. The document also details as follows;

"............................................................................................................ ATTACHED TO AND FORMING PART OF POLICY NO.51230231190900003907 Additional Premium: Rs. 3379.608 In consideration of payment of an additional premium by the Insured, it is hereby agreed and declared that notwithstanding anything to the contrary contained in the Policy, the Company hereby undertakes to indemnify:

1. Depreciation on replacement of parts including tyres, tubes, rubber/plastic for Partial Loss Claims.

2. Midterm inclusion of cover is not permitted.

3. Total Loss and Constructive Total Loss will be settled on the basis of IDV.

Subject otherwise to the terms, exceptions, conditions and limitation of this Policy.

Date of Issue: 20/07/2022 ................................................................................................."

The vehicle vide this second document was also insured for

the period 21-09-2019 to 20-09-2022 as before.

5. In National Insurance Company Limited vs. Balakrishnan

and Another , the Supreme Court had an occasion to examine the

difference between "Act Policy" and "Comprehensive/Package

Policy" and observed as follows;

"24. It is extremely important to note here that till 31-12-2006 the Tariff Advisory Committee and, thereafter, from 1-1-2007 IRDA functioned as the statutory regulatory authorities and they are entitled to fix the tariff as well as the terms and conditions of the policies issued by all insurance companies. The High Court had issued notice to the Tariff Advisory Committee and IRDA to explain the factual position as regards the liability of the insurance companies in respect of an occupant in a private car under the "comprehensive/package policy". Before the High Court, the competent authority of IRDA had stated that on 2-6-1986, the Tariff Advisory Committee had issued instructions to all the insurance companies to cover the pillion riderof a scooter/motorcycle under the "comprehensive policy" and the said position continues to be in vogue till date. It had also admitted that the "comprehensive policy" is presently called a "package policy". It is the admitted position, as the decision would show, the earlier Circulars dated 18-3-1978 and 2-6-1986 continue to be valid and effective and all insurance companies are bound to pay the compensation in

(2013) 1 SCC 731

The Manager, The New India Assurance Company Limited vs. Krishna Bahadur Mukhia and Another

respect of the liability towards an occupant in a car under the "comprehensive/package policy"

irrespective of the terms and conditions contained in the policy. The competent authority of IRDA was also examined before the High Court who stated that the Circulars dated 18-3-1978 and 2-6-1986 of the Tariff Advisory Committee were incorporated in the Indian Motor Tariff effective from 1-7-2002 and they continue to be operative and binding on the insurance companies. .....................

...............................................................

26. In view of the aforesaid factual position, there is no scintilla of doubt that a "comprehensive/package policy" would cover the liability of the insurer for payment of compensation for the occupant in a car. There is no cavil that an "Act policy" stands on a different footing from a "comprehensive/package policy". As the circulars have made the position very clear and IRDA, which is presently the statutory authority, has commanded the insurance companies stating that a "comprehensive/package policy" covers the liability, there cannot be any dispute in that regard. We may hasten to clarify that the earlier pronouncements were rendered in respect of the "Act policy" which admittedly cannot cover a third-party risk of an occupant in a car. But, if the policy is a "comprehensive/package policy", the liability would be covered. ..................................."

The above position clarifies that a Comprehensive/Package

Policy would cover the liability of the insurer for payment of

compensation for the occupant in a car, in other words, it covers a

third party risk of an occupant in a car.

6. Relevantly at this juncture, it is essential to notice that

an "additional premium" was paid by the owner of the vehicle (OP

No.1 before the MACT) and the policy was a "Bundled Motor Policy

for Private Car" (Exhibit-8). In the said circumstances, in view of

the document relied on by the Appellant themselves, I am of the

considered view that the Respondents are entitled to the total

losses as calculated hereinbelow and the argument of Appellant

that the liability is limited to ₹ 2,00,000/- (Rupees two lakhs) only,

fails to impress unsubstantiated as it is by documentary evidence.

The Manager, The New India Assurance Company Limited vs. Krishna Bahadur Mukhia and Another

7. "Cost of litigation" has not been granted in any of the

Judgments of the Supreme Court viz; National Insurance Company

Limited vs. Pranay Sethi and Others , Sarla Verma (Smt) and Others vs.

Delhi Transport Corporation and Another and Magma General

Insurance Company Limited vs. Nanu Ram alias Chuhru Ram and

Others . The compensation of ₹ 25,000/- (Rupees twenty five

thousand) only, granted by the Learned MACT under this head is

thereby disallowed and set aside. However, the amount computed

under "Love and Affection" is allowed in terms of the decision in

Magma General Insurance Company Limited (supra). Although,

Magma General Insurance Company Limited (supra) also provides that

"Parental consortium" is to be granted on the death of a parent or

parents but it specifies that parental consortium is granted to the

child upon the premature death of a parent, for loss of "parental

aid, protection, affection, society, discipline, guidance and

training". Considering that the Respondents are both aged above

thirty years, they would surely not fall within the ambit of the

observation and therefore are not entitled to parental consortium.

8. In conclusion, the compensation which is found to be

"just compensation" which the Appellant is liable to pay the

Respondents is re-computed as follows;

Annual income of the deceased (₹ 12,000/- x 12) ₹ 1,44,000.00

Add 10% of ₹ 1,44,000/- as Future Prospects (+) ₹ 14,400.00 [in terms of Paragraph 58 of the Judgment of National Insurance ₹ 1,58,400.00 Company Limited vs. Pranay Sethi and Others : (2017) 16 SCC 680]

Less 1/3rd of ₹ 1,58,400/- (-) ₹ 52,800.00 [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 ₹ 1,05,600.00

Multiplier to be adopted „9‟ (₹ 1,05,600/- x 9) ₹ 9,50,400.00

(2017) 16 SCC 680

(2009) 6 SCC 121

(2018) 18 SCC 130

The Manager, The New India Assurance Company Limited vs. Krishna Bahadur Mukhia and Another

[The age of the deceased at the time of death was '58' and the relevant multiplier in terms of Paragraph 42 as per Judgment of Sarla Verma (supra) is „9‟]

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]

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 Love and Affection (+) ₹ 1,00,000.00 [@ ₹ 50,000/- each, in terms of Paragraph 19 of the Judgment of Magma General Insurance Company Limited vs. Nanu Ram alias Chuhru Ram and Others : (2018) 18 SCC 130] Total = ₹ 10,83,400.00 (Rupees ten lakhs, eighty three thousand and four hundred) only.

9. The Respondents-Claimants are therefore entitled to

compensation ₹ 10,83,400/- (Rupees ten lakhs, eighty three

thousand and four hundred) only, 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., 20-12-2021, till its

full realisation.

10. The Appellant-Insurance Company is directed to pay

the awarded compensation to the Respondents-Claimants 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 Appellant-Insurance Company