Hdfc Ergo General Insurance ... vs Sunkulamma
2022 Latest Caselaw 5195 Tel

          THE HON'BLE JUSTICE M. G. PRIYADARSINI

                 M.A.C.M.A. No.3934 of 2014
                               and
          CROSS OBJECTIONS (Sr) No. 26359 of 2015

COMMON JUDGMENT:

      M.A.C.M.A.No.3934 of 2014 is preferred by the insurance

company, HDFC ERGO General Insurance Company Limited,

questioning the order and decree, dated 19.09.2011 made in

O.P.No.485 of 20010 on the file of the Motor Accidents Claims

Tribunal-cum-III Additional District Judge (Fast Track Court),

Mahabubnagar at Gadwal (for short, the Tribunal). Challenging

the very same order and decree, the claimants filed cross-

objections seeking enhancement of compensation.

      For the sake of convenience, hereinafter the parties are

referred to as per their array before the Tribunal.


      The claimants filed a petition under Section 166 of the

Motor Vehicles Act claiming compensation of Rs.5,00,000/- for

the death of the deceased, Kurva Chinna Ramudu, aged about

32 years, who died in a motor vehicle accident that occurred on

12.08.2009.   It is stated that on the fateful day, while the

deceased was proceeding towards Jillamgeri of Karnataka State
                                 2

on a motorcycle, at about 6:00 p.m., when he reached the

limits of Baligera Village, bus bearing No. AP 27Y 0102, owned

by respondent No. 2, insured with respondent No. 3 and hired

with respondent No. 1, being driven by its driver in a rash and

negligent manner, dashed the motorcycle of the deceased. As a

result, the deceased fell down and died on the spot. According

to the claimants, the deceased was getting an income of

Rs.1,00,000/- per annum by doing agriculture apart from

Rs.200/- per day from dairy business. Therefore, they laid a

claim for Rs.5.00 lakhs against the respondents.

Before the Tribunal, while the respondent Nos. 1 & 2

remained ex parte, respondent No. 3, insurance company,

opposed the claim petition. After considering the oral and

documentary evidence on record, the tribunal came to the

conclusion that the accident was occurred due to the rash and

negligent driving of the offending bus by its driver and awarded

total compensation of Rs.4,04,000/- with interest @ 7.5% per

annum to be paid by the respondent Nos. 2 and 3 jointly and

severally. Aggrieved by the said order, the insurance company

filed the appeal and seeking enhancement of compensation, the

claimants filed the cross-objections.

Heard both sides and perused the material available on

record.

The only contention raised by the learned Standing

Counsel for the appellant, insurance company, is that before

the tribunal, by producing Exs.B.1 to B.4, apart from examining

R.W.1, the insurance Company has adequately established the

fact that the cheque, Ex.B. 1, issued by the owner of the

offending bus, towards insurance premium, was dishonoured

due to insufficient funds and returned unpaid by the bank

through the cheque return memo, Ex.B. 2, that as the contract

of insurance became void ab initio, the insurance company has

issued the policy cancellation letter, Ex.B. 3, and therefore, the

insurance company is not on risk in respect of insurance policy,

Ex.A.7, as there is no contract between the insurance company

and the offending bus. It is contended that the cheque issued

by the owner of the offending bus, towards premium, was on

30.03.2009 and due to it dishonour on 07.04.2009, the insurance

company cancelled the policy on 12.05.2009 and whereas the

accident was occurred on 12.08.2009 and therefore, in the

absence of valid subsisting contract between the insurance

company and the owner of the offending bus, no liability can be

fastened upon the insurance company for payment of

compensation.

On the other hand, the learned counsel for the claimants,

cross-objectors, has contended that inasmuch as the insurance

company has not challenged Ex.A.7, policy, and has not cross-

examined P.W.1 to the effect that Ex.A.7 is not the copy of the

insurance policy and as the cancellation of the policy under

Ex.B.3 pertains to different engine and chassis number, the

tribunal, after analyzing the evidence brought on record, has

rightly rejected the claim of the insurance company as to the

cancellation of Ex.A.7 policy and the said findings needs no

interference by this Court.

As regards the quantum of compensation awarded by the

tribunal, it is contended by the learned counsel for the

claimants that as the dependants of the deceased are five in

number, as per the decision of the Apex Court in Smt. Sarla

Varma v. Delhi Transport Corporation1, the deduction towards

personal expenses of the deceased should be 1/4th, but the

(2009) 6 SCC 121

tribunal has erroneously deducted 1/3rd towards personal

expenses. It is further contended that though the deceased was

owning Ac.10.00 guntas of land, as seen from Ex.A.8, and

getting an income of Rs.1,00,000/- per annum, apart from

Rs.200/- per day by doing milk business, yet the tribunal has

fixed the meagre monthly income of Rs.3,000/- and therefore,

the learned counsel seeks enhancement of the compensation

awarded by the tribunal. Even the amount of Rs.20,000/-

awarded by the tribunal under conventional heads needs

enhancement.

Considering the contention of the insurance company

about its liability on the ground that the policy stood cancelled

by the time of the accident, basing on Exs.B. 1 to B.4, the

tribunal has extensively dealt with the issue at para No. 18,

which reads as under:-

"18. In the present case Ex.A7 is copy of policy is marked through the evidence of PW.1. The respondent No.3 has not challenged Ex.A7 and the respondent No.3 has not cross examined PW.1 stating that Ex.A7 is not the copy of the insurance policy. Hence it is held that Ex.A7 is the copy of the insurance policy of the crime vehicle. The respondent No.3 has not filed copy of Insurance policy to show that Ex.A7 is not the copy of insurance policy of the crime vehicle. Admittedly the registration number of the vehicle is not

mentioned in Ex.A7 for the reason that the vehicle is new one and identity of the vehicle can be ascertained with engine and chassis numbers mentioned in Ex.A7. In Ex.A7 Registration mark and number of the vehicle is mentioned as "New". Engine number and chassis number are mentioned as "LXE 1059672 and KXE 670987" respectively. Since the respondent No.3 has not challenged Ex.A7 and as the respondent No.3 has not filed any copy of insurance policy to prove that originally Ex.A7 was not issued by the respondent No.3, the court relied on Ex.A7 and comes to a conclusion that the engine and chassis number of the crime vehicle are "{LXE 105972" and "KXE 670897". As seen from Ex.B1 returned cheque it was issued for two cover notes that is VCO 1614098, UCO 1614099. Ex.B3 is cancellation endorsement of policy. The court perused Ex.B3. As seen from Ex.B3 it is very clear that the policy was cancelled in respect of vehicle bearing engine No.23689 and chassis number 65892 but not the policy issued under Ex.A7. The court comes to this conclusion as engine and chassis numbers mentioned in Ex.B3 cancellation endorsement and in Ex.B4 certificate of posting receipt are different with that of engine number and chassis number mentioned in Ex.A7 copy of policy. Therefore, from Ex.B3 and Ex.B4 it cannot be said that Ex.A7 policy was cancelled and the owner was duly informed about the cancellation of Ex.A7 policy. If at all the respondent No.3 cancelled Ex.A7 policy and duly intimated the same to the owner of the vehicle, the policy endorsement Ex.B3 and certificate of posting receipt Ex.B4 must contain the engine and chasis number as mentioned in Ex.A7. But the Ex.B3 and B4 contain different engine and chassis numbers. There is no explanation to this from the side of the respondent No.3. Further the respondent No.3 has not pleaded in the counter that the policy issued to the crime vehicle was duly cancelled and the same was informed to the respondent No.3. In view of the difference in engine number and chassis number mentioned in Ex.B3 and B4 with that of engine number and chassis number mentioned in Ex.A7 copy of policy, from the evidence of RW.1 and from Ex.B1 to B4 it cannot be said that

the respondent No.3 cancelled the Ex.A7 policy for non realization of premium amount and the respondent No.3 failed to establish that Ex.A7 policy was cancelled and the same was duly informed to the owner. Hence the contention of the respondent No.3 that the respondent No.3 is not liable to pay the compensation amount payable to the petitioners is not accepted......"

Thus, on scrutiny of the evidence, more particularly,

considering Ex.B. 3, which reflects that the policy was cancelled

in respect of vehicle bearing engine No. 23689 and chassis

number 65892, but not in relation to the policy issued under

Ex.A.7, the tribunal came to the conclusion that the insurance

company failed to establish that Ex.A.7, policy, was cancelled

and rightly rejected the contention that the insurance company

is not liable to pay the compensation. The said findings of the

tribunal, which are on proper appreciation of evidence brought

on record, needs no interference by this Court. Hence, the

appeal filed by the insurance company is liable to be dismissed.

Coming to the cross-objections, although the claimants

claimed that the deceased used to earn a sum of Rs.1,00,000/-

per annum by doing agriculture, except filing copy of pahani,

Ex.A.8, showing that the deceased was owning agricultural land,

no income proof was filed. Even the claimants failed to

establish that the deceased used to earn a sum of Rs.200/- per

day by doing milk business. However, the income of the

deceased assessed by the tribunal at Rs.3,000/- per month, in

the opinion of this Court, is meagre and needs enhancement.

Considering the prevailing rate of minimum wages at the

relevant point of time, this Court is inclined to fix the monthly

income of the deceased at Rs.4,000/- per month. Inasmuch as

the deceased was self-employed and aged about 32 years, as

per the decision of the Apex Court in National Insurance

Company Limited v. Pranay Sethi2, 40% to the established

income of the deceased needs to be added towards future

prospects. By adding 40% to the income of the deceased, the

future monthly income of the deceased comes to Rs.5,600/-

(Rs.4,000/- plus Rs.1,600/- being 40% thereof). Inasmuch as the

dependants are five in number, the tribunal ought to have

deducted 1/4th towards personal expenses of the deceased but

not 1/3rd. Therefore, by deducting 1/4th from Rs.5,600/-, the

net monthly contribution to the family comes to Rs.4,200/-

which works out to Rs.50,400/- per annum. Since the deceased

was 32 years at the time of the accident, the appropriate

2017(6) 170 (SC)

multiplier is '16'. By applying the multiplier '16', the loss of

dependency comes to Rs.8,06,400/-. That apart, as per the

decision of the Apex Court in Pranay Sethi (supra), the

claimants are entitled to Rs.77,000/- under the conventional

heads, but not Rs.20,000/- as was awarded by the tribunal.

Thus, in all, the claimants are entitled for the total

compensation of Rs.8,83,400/-.

In the result, while dismissing the M.A.C.M.A. No.3934 of

2014 filed by the insurance company, the cross-objections filed

by the claimants are allowed enhancing the compensation from

Rs.4,04,000/- to Rs.8,83,400/-. The enhanced compensation

shall carry interest at 7.5% per annum till the date of

realization. Time to deposit the amount is two months.

However, the claimants are directed to pay deficit court fee on

the enhanced compensation amount. There shall be no order as

to costs.

Miscellaneous petitions, if any, pending shall stand closed.

_________________________ JUSTICE M. G. PRIYADARSINI .10.2022 tsr