Translate
Text Highlighter

Bookmark

PDF

Share

Report a problem
AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
  • K.C Agarwal
  • O.P Saxena, JJ.
Acts
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Click here to upload
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
  • K.C Agarwal
  • O.P Saxena, JJ.
Acts
See more information ...
Smart Summary

Structured Summary of the Opinion (O.P. Saxena, J.)

Factual and Procedural Background

This opinion arises from four connected First Appeals From Orders (F.A.F.Os) challenging an order dated 8.5.80 of the Motor Accidents Claims Tribunal (II Additional District Judge), Allahabad. The underlying accident occurred on 6 July 1975 at about 9 a.m. at the circular crossing of Sarojini Naidu Marg and Mahatma Gandhi Marg, Allahabad. The deceased, Santosh Behari Mittal, an advocate, was travelling by rickshaw from Allahabad Junction Railway Station when an Ambassador car (registration UPF 6720) dashed into the rickshaw from the rear. The rickshaw was smashed; the deceased suffered severe injuries and later died.

Relevant parties: Claimant No.1 was the widow Raj Kumari Mittal; Claimants Nos.2 and 3 were the minor sons. Opposite parties included (1) Divisional Manager, Life Insurance Corporation of India, Varanasi (owner on general law and named insured on registration), (2) Oriental Fire and General Insurance Co. Ltd. (insurer), (3) R.K. Ahuja (driver), and (4) B.S. Ahuja (in actual use and purchaser under a hire-purchase agreement).

The claim petition (filed 5 January 1976) sought Rs. 3,00,000/- as compensation, alleging rash and negligent driving by the car driven by R.K. Ahuja. The Tribunal found the driver negligent and awarded Rs. 2,10,500/-, allocating liability among the opposite parties. The present appeals challenge various aspects of that award including amendment refusal, quantum of compensation, allocation of liability among owner, insurer and divisional manager, and other legal findings. The High Court judgment disposes the four appeals and modifies parts of the Tribunal's award.

Legal Issues Presented

  1. Whether the Tribunal rightly rejected the claimants' late application to amend the petition (to increase stated income and quantum of claim).
  2. What is the correct measure of pecuniary loss (monthly income, deductions, annual dependency, and appropriate multiplier) for assessing compensation in this case?
  3. Whether the Tribunal correctly awarded separate compensation heads (loss of conjugal rights, mental agony, loss of fatherly love) in addition to a lump sum award.
  4. Whether the Divisional Manager, Life Insurance Corporation of India, was liable as the 'owner' under section 2(19) of the Motor Vehicles Act in respect of the vehicle subject to a hire-purchase agreement.
  5. Whether Oriental Fire and General Insurance Co. Ltd. is liable to indemnify the owner for third party risk, and whether any policy conditions (including limitation as to use or driver licence) were validly proved to be breached so as to deny liability.
  6. What rate of interest should apply to the compensation under section 110-CC of the Motor Vehicles Act (and whether higher rates applied by some High Courts can be followed).

Arguments of the Parties

Claimants' Arguments

  • The deceased was earning not less than Rs. 1,000/- per month as a practising lawyer; claimants sought an amendment to increase the stated income to Rs. 2,000/- and to plead future prospects rising to Rs. 10,000/- in five years and Rs. 25,000/- in ten years; the total claim sought to be increased from Rs. 3 lakhs to Rs. 30 lakhs by amendment.
  • Counsel for claimants contended that oral and documentary evidence (clerks' testimony and a certificate by an Advocate Vice‑President of the Bar Association) supported a higher income figure (up to Rs. 3,000/- per month or more).
  • Claimants sought full compensation as assessed by the Tribunal and argued for higher interest (argued for 12% by counsel).

Opposite Party No. 1 (Divisional Manager, LIC) — as represented in pleadings

  • Alleged it had no knowledge of the accident and that for practical purposes opposite party No.4 (B.S. Ahuja) was the owner under a hire-purchase agreement.
  • Contended that under section 2(19) of the Motor Vehicles Act the owner for Act purposes was the person in possession under the hire-purchase agreement and that the Divisional Manager was not liable.
  • Denied liability to pay damages on several grounds pleaded in written statement.

Opposite Party No. 2 (Oriental Fire and General Insurance Co. Ltd.)

  • Alleged lack of knowledge of the accident and that the car was in possession of B.S. Ahuja under a hire-purchase agreement.
  • Pleaded that the driver, R.K. Ahuja, had no driving licence and that therefore the insurer was not liable under the policy.
  • Contended that the compensation claimed was excessive and that policy conditions might be breached.

Opposite Party No. 3 (R.K. Ahuja, driver)

  • Pleaded denial: he asserted he was not driving the vehicle and that no accident was caused by him.

Opposite Party No. 4 (B.S. Ahuja)

  • Pleaded denial: asserted that no accident was caused by UPF 6720 (the car).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
M.P.S.R.T. Corporation v. Sudhakar, 1977 ACJ 290 (SC) Guidance on multiplying annual dependency by a suitable multiplier, and on accounting for imponderable factors and uncertainties when assessing damages. Cited as foundational authority for adopting the multiplier method and for considering imponderables in choosing a multiplier.
Mallett v. Mc Monagle, 1969 ACT 312 (HL) English authority describing the method of calculating net pecuniary loss on an annual basis and arriving at total award by a multiplier. Used to support the multiplier approach to compute lump sum compensation (as discussed along with Sudhakar).
Lachman Singh v. Gurmit Kaur, 1979 ACJ 170 (P&H) Endorses the multiplier method and discusses components of compensation (pecuniary loss vs. solatium); used to indicate that separate awards under certain heads are not permissible when lump sum is awarded. Applied to hold that additional awards for loss of conjugal rights, mental agony and loss of fatherly love were without legal basis where lump sum compensation is determined by dependency and multiplier.
Bishan Devi v. Sir-baksh Singh, 1979 ACJ 496 (SC) Example where a multiplier of 12 was suggested in assessing compensation for a young deceased. Referred to as comparative authority on selection of multipliers in earlier cases; Court reviewed such precedents in selecting an appropriate multiplier here.
State of Punjab v. Harbhajan Lal Kocnar, 1980 ACJ 437 (HP) Observation that for a healthy deceased around 33 years, it is safe to take a multiplier ranging from 15 to 18 absent compelling circumstances. Relied upon to justify choosing a multiplier of 18 for a 31-year-old deceased after considering facts and imponderables.
H.P. Road Transport Corporation v. Jai Ram, 1980 ACJ 1 (HP) Earlier decision cited in State of Punjab v. Harbhajan Lal Kocnar about appropriate multipliers in comparable factual situations. Referred to in the discussion of authorities on selection of multipliers.
U.P.S.R.T. Corporation v. Raja Ram, 1982 ACJ 194 (All) Application of multiplier (15) for deceased aged 34; another comparative multiplier authority. Referred to as an example of multiplier usage in comparable cases.
Bhagat Singh Sohan Singh v. Om Sharma, 1983 ACJ 203 (P&H) Authority holding that insurance money paid under a policy should not be deducted from the compensation awarded to claimants. Cited to support refusal to reduce award by the sum of insurance moneys already paid to claimants.
Krishna Sehgal v. U.P. State Road Transport Corporation, 1983 ACJ 619 (All) Similar authority to Bhagat Singh on non-deduction of insurance proceeds from damages awarded. Relied upon to hold no reduction of compensation for insurance money already paid.
New India Assurance Co. Ltd. v. Sushila Devi Sharma, 1981 ACJ 119 (Raj) Principle that under section 96(2) (Motor Vehicles Act) the insurer must plead and prove breach of policy condition to avoid liability. Applied to hold that insurer failed to prove that driver lacked licence or that any qualifying policy condition was breached; insurer therefore liable.
Shanti Bai v. Principal, Govind Ram Sakseria Technological Institute, 1972 ACJ 354 (MP) Also supports the duty of insurer to prove breach of policy condition under section 96(2). Used in the line of authorities establishing the insurer's burden of proof; court applied that principle to reject insurer's plea.
Pesumal v. New Asiatic Insurance Co., AIR 1964 Bombay 121 Another authority on insurer's duty to plead and prove conditions to avoid liability. Referred to as part of the consistent line of cases putting onus on insurer; court relied on this principle.
Bhairon v. Nand Ram, 1980 ACJ 513 (Raj) Supports the requirement that insurer prove breach of policy condition. Included among authorities reinforcing insurer's burden under section 96(2); applied to find insurer failed to discharge burden.
National Insurance Co. Ltd. v. Bachi Bai, 1979 ACJ 83 (MP) Also cited in context of insurer's duty to prove breach of conditions. Referred to as supportive precedent for the principle that mere averments in written statement are insufficient to negate insurer liability.
Abdul Ghafoor v. New India Assurance Co. Ltd., 1981 ACJ 340 (All) Case relied on by counsel to argue that if the named insured is not liable, insurer might avoid liability. Cited by insurer's counsel but the Court examined the policy wording and factual matrix and concluded insurer remained liable as co‑insured presence and other facts meant insurer could not escape liability.
Sita Ram v. Santanu Parsad, 1966 ACJ 89 (SC) Case on vicarious liability principles (cited by parties). Distinguished by the Court as not applicable on the facts because the hire‑purchase possession provision in section 2(19) excludes vicarious liability of the Divisional Manager for Act purposes.
National Insurance Co. Ltd. v. Sarla R. Gupta, 1982 ACJ 40 (P&H) and Jugal Kishore v. Red Singh, 1982 ACJ 503 (Delhi) Instances where High Courts awarded interest at higher rates than 6%. Court noted these decisions but declined to follow them in the absence of precedent of this Court, and held that interest should normally be 6% under section 110‑CC unless dilatory tactics justify more.

Court's Reasoning and Analysis

The Court proceeded through a sequence of legal and factual determinations, applying statutory provisions and precedents cited in the record. The reasoning follows the structure of the major issues raised on appeal:

  1. Amendment application: The petition filed 5.1.1976 sought monthly income at Rs. 1,000/-; an application to amend (filed 8.11.1977) sought to increase stated income to Rs. 2,000/- and to plead optimistic future prospects and increase overall claim dramatically. The Court held that the application was late (moved after over 1½ years), lacked verification by the claimant (the petition had been verified earlier by claimant No.1 but the amendment by counsel was not similarly verified), did not explain how figures were revised and appeared not bona fide but introduced an exorbitant claim. On these grounds the Tribunal's rejection of the amendment was held to be right.
  2. Quantum — income and dependency: The Court examined oral testimony and documentary exhibits relating to the deceased's income. It found contradictions and inadequacies in the evidence offered for a higher income: contradictory statements by clerks, absence of ledger details distinguishing fees and expenses, non-production of a bank passbook and the best witness (the widow) not examined, as well as non-payment of income tax. A certificate by an Advocate (Exh. 14) could not be used to raise a presumption about its contents without proof. The Court concluded there was no reliable evidence to accept the higher income contentions and thus accepted the Tribunal's finding that the deceased's monthly income was Rs. 1,000/-.
  3. Deductions and annual dependency: The Tribunal had allowed an adjustment of Rs. 500/- for office expenses and Rs. 125/- for personal expenses, fixing dependency at Rs. 375/- per month (Rs. 4,500/- per annum). The Court disagreed with the Tribunal's arithmetic reasoning for dependency at that figure and concluded, on the facts and circumstances, that annual dependency amounted to Rs. 8,400/- (which implies a different deduction structure accepted by the High Court in computing dependency).
  4. Multiplier selection: Reviewing authorities (including Sudhakar, Lachman Singh, Bishan Devi, Harbhajan Lal), the Court emphasized the need to account for imponderables and uncertainties when selecting the multiplier. Considering the deceased's age (31), health and the factual matrix, the Court held that a multiplier of 18 was "adequate and proper."
  5. Computation of compensation: Applying the annual dependency of Rs. 8,400 x multiplier 18 produced Rs. 1,51,200/-. The Tribunal's Rs. 2,10,500/- award included separate heads (loss of conjugal rights Rs.30,000; mental agony Rs.20,000; loss of fatherly love Rs.28,000) and medical expenses Rs.2,000. The Court held that separate awards for those heads were not legally permissible where lump sum compensation is being awarded on the multiplier method (citing Lachman Singh). It accepted medical expenses of Rs.2,000. Consequently the Court fixed total compensation at Rs. 1,53,200/-.
  6. Ownership under section 2(19): The Court analysed the hire-purchase agreement and statutory definition of 'owner' in section 2(19) of the Motor Vehicles Act. Although under general law the Divisional Manager might be the owner (having advanced purchase money), for the purposes of the Motor Vehicles Act the person in possession under the hire-purchase agreement (B.S. Ahuja) is deemed the owner. The legislature had confined the definition to eliminate dual ownership for Act purposes. The Court therefore held the Tribunal erred in holding the Divisional Manager vicariously liable under the Act; the Divisional Manager was not owner for Act purposes and was not liable under section 110‑B.
  7. Insurer liability and policy conditions: The insurance policy described the insured as the Divisional Manager "in use of Mr. B.S. Ahuja." The insurer had admitted in written statement that the car was in the possession of B.S. Ahuja subject to hire‑purchase. The Court reasoned that the insurance company knew B.S. Ahuja was in possession under hire‑purchase and accepted the risk accordingly; B.S. Ahuja was therefore co‑insured. Under policy terms B.S. Ahuja had to keep the car insured and pay premiums. The insurer's plea that the driver had no licence (thus breaching the driver condition) was a matter of proof; under section 96(2) of the Motor Vehicles Act the insurer has the duty to plead and prove breach. The insurer had only averred in the written statement and produced no witness to prove lack of licence; the Tribunal incorrectly assumed the driver had no licence. The Court relied on precedents holding the burden on the insurer and found insurer failed to discharge that burden; accordingly the insurer remained liable to indemnify the owner for third party risk.
  8. Extent of insurer's liability: The Tribunal had limited insurer liability to Rs. 50,000/-. The Court reviewed section 95(2) (limits of liability under a policy) and determined that the sub-clause limiting to Rs.50,000 applied to specific categories (passenger vehicles). The Ambassador car was not such a vehicle; therefore clause (c) applied and the insurer's liability extended to the amount of liability incurred — i.e., the full Rs.1,53,200/-. Consequently the insurer could not be limited to Rs.50,000/-.
  9. Interest: The Court held that under section 110‑CC interest should, as a norm, be awarded at 6% per annum. Higher rates awarded by other High Courts were noted, but in the absence of a precedent of this Court the normal rate chosen was 6%. The Court allowed interest at 6% per annum from the date of the petition until payment.
  10. Miscellaneous directions: The Court accepted Mr. S.N. Verma's statement that Divisional Manager had deposited Rs.1,00,000/- which the claimants had withdrawn; the Court directed that on deposit by the insurer of the entire awarded amount, the Divisional Manager would be permitted to withdraw Rs.1,00,000/- and claimants to withdraw the balance. The insurer (Opposite Party No.2) was directed to indemnify and deposit the entire amount in Court within three months; costs directions were provided.

Holding and Implications

Core Ruling: AWARD MODIFIED TO RS. 1,53,200/- WITH INTEREST AT 6% PER ANNUM; DIVISIONAL MANAGER (LIC) NOT LIABLE AS 'OWNER' UNDER THE MOTOR VEHICLES ACT.

Consequences and specific orders (as stated in the opinion):

  • F.A.F.O. No. 811 of 1982 (claimants' appeal on amendment etc.) was dismissed.
  • F.A.F.O. No. 425 of 1980 (appeal by Divisional Manager) was allowed: the petition was dismissed against the Divisional Manager, Life Insurance Corporation of India, Varanasi, with costs between parties. The Divisional Manager is held not to be the 'owner' under section 2(19) for purposes of the Act and therefore not liable under section 110‑B.
  • F.A.F.O. Nos. 430 of 1980 and 685 of 1980 were partly allowed: the Tribunal's award was modified and claimants were awarded Rs. 1,53,200/- with interest at 6% per annum from the date of the petition until payment, together with costs.
  • Liability was confirmed against opposite parties Nos. 2 to 4 (Oriental Fire and General Insurance Co. Ltd., R.K. Ahuja (driver), and B.S. Ahuja (owner for Act purposes)).
  • Oriental Fire and General Insurance Co. Ltd. (opposite party No.2) was directed to completely indemnify opposite party No.4 (B.S. Ahuja) and to deposit the entire amount in Court within three months. On deposit, opposite party No.1 (Divisional Manager) would be permitted to withdraw Rs.1,00,000/- and the claimants to withdraw the balance. The same directions apply in any execution of the decree. Court costs were made 'easy' (i.e., not heavy).
  • The appeal concluded with "Appeal dismissed" (final appellate disposition as recorded in the ruling section of the opinion).

Note: The Court did not create or announce any broad new legal doctrine beyond the application of existing statutory definitions (notably section 2(19) of the Motor Vehicles Act) and established precedents on multiplier methodology, insurer burden of proof under section 96(2), and the normal interest rate under section 110‑CC. The decision's direct effects are the modified award amount, allocation of liability among the parties, and directions regarding deposit and distribution of funds.

Show full summary ...

    Divisional Manager, Life Insurance Corporation Of India And Others v. Raj Kumari Mittal And Others

    O.P Saxena, J.:— These are four connected F.A.F.Os against the order dated 8.5.80 passed by the Motor Accidents Claims Tribunal (II Additional District Judge), Allahabad.

    2. The petitions related to an accident in which Mr. Santosh Behari Mittal, Advocate received serious injuries and succumbed to the same. The accident took place on the 6th of July, 1975 at about 9 a.m on the crossing of Sarojini Naidu Marg and Mahatma Gandhi Marg which is in the form of a circle around the Church in the centre. The place of the accident was on the south-western sector of the circle near the turning of Mahatma Gandhi Marg. The deceased was on his way home from the Allahabad Junction Railway Station. He was going on a rickshaw. Ambassador car UPF 6720 dashed against the rickshaw from the rear side. The rickshaw was on the left side of road and the car was driven rashly and negligently. No horn was blown. As a result of the accident the rickshaw was smashed and the deceased received severe injuries. The car was being driven by opposite party No. 3, R.K Ahuja, at a very high speed and he could not bring it to a stop for a considerable distance. Claimant No. 1 is the widow. Claimants 2 and 3 are the minor sons of the deceased. It was said that the deceased was earning not less than Rs. 1,000/- per mensem as a practising lawyer of the Allahabad High Court. The car was registered and insured in the name of opposite party No. 1, Divisional Manager, Life Insurance Corporation of India, Vardhasi. The car was in actual use of opposite party No. 4, B.S Ahuja, who was employed as Assistant Branch Manager, Life Insurance Corporation of India, Gyanpur Branch. A sum of Rs. 3,00,000/- was claimed as compensation.

    3. Opposite party No. 1 contested the petition with the allegations that it had no knowledge of the accident, that opposite party No. 4, B.S Ahuja, was for all practical purposes the owner of the car, that there was a hire-purchase agreement between the opposite party No. 1 and opposite party No. 4, in accordance with which the opposite party No. 1 advanced the money for the purchase of the car to opposite party No. 4 who was an employee of the Life Insurance Corporation of India, that under section 2(19) of the Motor Vehicles Act, opposite party No. 4 was the owner and was responsible, that the compensation claimed is highly excessive, that the Oriental Fire and General Insurance Co. Ltd. was the insurer of the vehicle for third party risk and that the opposite party No. 1 is not liable for any damages.

    4. Opposite party No. 2, Oriental Fire and General Insurance Co. Ltd., contested the petition with the-allegations that it had no knowledge of the accident, that the car was in the possession of opposite party No. 4, B.S Ahuja, subject to a hire-purchase agreement, that opposite party No. 3, R.K Ahuja, had no driving licence, that the opposite party No. 2 is not liable to pay any compensation under the insurance policy, that the death was not caused due to rash and negligent driving of the car and that the compensation claimed is highly excessive.

    5. Opposite party No. 3, R.K Ahuja, contested the petition on a plea of denial. His case was that he was not driving the vehicle and no accident was caused by him.

    6. Opposite party No. 4, B.S Ahuja, also contested the petition on a plea of denial. It was said that no accident was caused by UPF 6720.

    7. The Tribunal held that opposite party No. 3, R.K Ahuja, was driving the car rashly and negligently and the accident was caused as a result thereof, that all the opposite parlies are liable to pay compensation under section 110-A of the Motor Vehicles Act and that claimants are entitled to get a total sum of Rs. 2,10,500/- as compensation as per details given below:

    For death of Santosh Behari Mittal. Rs. 1,30,500/- For loss of conjugal rights and comforts suffered by applicant No. 1, Raj Kumari Mittal. Rs. 30,000/- For mental torture and agony caused to applicant No. 1, Raj Kumari Mittal. Rs. 20,000/- For loss of fatherly love, affection and care caused to applicant Nos. 2 and 3, the minor sons of the deceased. Rs. 28,000/- For medical expenses incurred, in the treatment of the deceased. Rs. 2,000/- Total Rs. 2,10,500/-

    8. The Tribunal decreed the claim for Rs. 2,10,500/- and directed that opposite party No. 1 will pay a sum of Rs. 1,40,500/-, that opposite party No. 2 will pay a sum of Rs. 50,000/- and that opposite parties No. 3, 4 will pay a sum of Rs. 10,000/- each. He further directed that applicant No. 1 would receive Rs. 95,500/- and applicant Nos. 2 and 3 would receive Rs. 57,500/- each. He also awarded costs against all the opposite parties in equal share. Hence these four appeals. Mr. S.N Verma, Mr. A.B Saran and Mr. Murlidhar learned counsel for appellants-opposite parties 1, 2 and 4, Divisional Manager, Life Insurance Corporation of India, Oriental Fire and General Insurance Co. Ltd. and Mr. B.S Ahuja respectively did not assail the findings of the Tribunal that Mr. Santosh Behari Mittal met with an accident with Ambassador car UPF 6720 on 6th July, 1975 at 9 a.m or that the car was being driven by opposite party No. 3, Mr. R.K Ahuja, the younger brother of opposite party No. 4, Mr. B.S Ahuja or that the accident took place due to rash and negligent driving of the car by Mr. R.K Ahuja.

    9. Mr. S.K Vidyarthi, learned counsel for the claimants-appellants in F.A.F.O No. 811 of 1982 had a grievance that the Tribunal erred in rejecting the application for amendment of petition.

    10. The accident took place on 6th July, 1975. The petition was filed on 5th January, 1976. The application for amendment was moved on 8th November, 1977. It was rejected on 19th November, 1977. In the petition the claimants gave the income of the deceased as not less than Rs. 1,000/- in paras 6 and 7. No amendment was sought in para 6 of the petition. In para 7 the sum of Rs. 1,000/- was sought to be increased to Rs. 2,000/-. It was further sought to be incorporated that the income of the deceased would have risen to Rs. 10,000/- per mensem within five years and Rs. 25,000/- per mensem within ten years. In para 22 the sum of Rs. 3 lakhs was sought to be increased to Rs. 30 lakhs. The petition had been verified earlier by claimant No. 1, Raj Kumari Mittal. She had solemnly declared that the particulars given in the petition were true and correct to the best of her knowledge. The application for amendment of the petition was given by the counsel for the claimants and there was no verification by claimant No. 1. The application was moved after over a year and half of the filing of the petition. The application does not show as to how the claimants' counsel revised the estimate given by the claimants or the amount claimed by the claimants. The application was hardly bona fide and introduced a highly exorbitant claim. In the circumstances the Tribunal rightly rejected the application.

    11. Mr. S.N Verma, Mr. A.B Saran, and Mr. Murlidhar, learned counsels for the appellants in F.A.F.O Nos. 425, 685 and 430 of 1980 assailed the compensation awarded by the Tribunal on the ground that it is highly exorbitant. Mr. S.K Vidyarthi, learned counsel for the appellants in F.A.F.O No. 811 of 1982 assailed the compensation as inadequate.

    12. The monthly income of Mr. Mittal was Rs. 1,000/- per month. He was a junior lawyer and the Tribunal was in error in allowing an adjustment of Rs. 500/- per mensem for office expenses and Rs. 125/- per mensem for his personal expenses and thereby fixing the dependency at Rs. 375/- per mensem or Rs. 4,500/- per annum. The deceased had a wife and two minor sons. He could not have spent more than Rs. 300/- per mensem on himself and his office and the dependency of the family could be fixed at Rs. 700/- per mensem. The deceased was 31 years old at the time of the accident. The Tribunal held that the deceased would have lived upto 60 years. It determined the compensation by multiplying the annual dependency by 29. The Tribunal erred in fixing the annual dependency at Rs. 4,500/- instead of Rs. 8,400/- and also in applying the multiplier of 29.

    13. In the case of M.P.S.R.T, Corpora tion v. Sudhakar, 1977 ACJ 290 (SC), compensation was awarded to the husband for the death of his wife who was 23 years old at the time of the accident. She had 35 years' service before her. The Supreme Court applied a multiplier of 20. While considering the question of a lump sum payment, the Supreme Court held on page 292:

    “Allowance must be made for the uncertainties and the total figure scaled down accordingly. The deceased might not have been able to earn till the age of retirement for some reason or other, like illness or for having to spend more time to look after the family which was expected to grow. Thus the amount assessed has to be reduced taking into account these imponderable factors. Some element of conjecture is inevitable in assessing damages.”

    14. In the next para, i.e para 6, the Supreme Court held as below:

    “A method of assessing damages, usually followed in England, as appears from Mallett v. Mc Monagle, 1969 ACT 312 (HL, England), is to calculate the net pecuniary loss upon an annual basis and to [arrive at the total award by multiplying the figure assessed as the amount of the annual ‘dependency’ by a number of ‘years' purchase’, (para 43)] that is, the number of years the benefit was expected to last, taking into consideration the imponderable factors in fixing either the multiplier or the multiplicand.”

    15. In the case of Lachman Singh v. Gurmit Kaur, 1979 ACJ 170 (P&H), it was held (on p. 179):

    “In view of the judgments of the English Courts and the Supreme Court, as discussed in the earlier part of this judgment, the most ‘just and reasonable’ view appears to be that the total amount of damages should be arrived at by multiplying the annual dependency by a suitable multiplier.”

    16. The legal position was summed up in para 27, p. 181 as below:

    “(1) The compensation to be assessed is the pecuniary loss caused to the dependents by the death of the person concerned, and no compensation is to be assessed on any extraneous consideration like love, affection, mental agony or any such similar consideration. Solatium is alien to the concept of compensation;

    (2) For the purpose of calculating the just compensation, annual dependency of the dependents should be determined in terms of the annual loss accruing to them due to the abrupt termination of life. For this purpose, annual earning of the deceased at the time of the accident and the amount out of the same which he was spending for the maintenance of the dependents will be the determining factor. This basic figure will then be multiplied by a suitable multiplier,

    (3) The suitable multiplier, as referred to in (2) above, shall be determined as held in Sudhakar's case, 1977 ACJ 290 (SC), decided by the Supreme Court as well as in Mallett's case, 1969 ACJ 312 (HL, England), by taking into consideration the number of years of the dependency of the various dependents, the number of years by which the life of the deceased was cut short and the various imponderable factors such like early natural death of the deceased, his becoming incapable of supporting the dependents due to illness or any other natural handicap or calamity, the prospects of the remarriage of the widow, the coming up of age of the dependants and their developing their independent sources of income as well as the pecuniary benefits which might accrue to the dependents on account of the death of the person concerned. Such benefits, however, should not include the amount of the insurance policy of the deceased to which the dependents may become entitled on account of its maturity as a result of the death;

    (4) The method adopted in certain decisions of this Court of multiplying the amount of the annual loss to the dependents with the number of years by which the life has been cut short without anything else cannot be sustained and all those decisions in which this view has been taken are hereby overruled;

    (5) The compensation cannot be assessed on the basis of the so called interest theory as the same provides the dependents with capital as well as the amount of annual loss earned by way of interest and it also suffers from a number of other defects, as have been discussed in this judgment; and

    (6) Consideration of ever growing inflation and the decrease in the money value are also not relevant for the purpose of assessment of compensation.”

    17. In the above case the deceased was about 23 years old. Life expectancy was fixed at 60 years. The life was cut short by 37 years. However, keeping into consideration the imponderables and the uncertainties of life, the multiplier of 16 was applied.

    18. In the case of Bishan Devi v. Sir-baksh Singh, 1979 ACJ 496 (SC) the multiplier of 12 was suggested by the Supreme Court. The deceased was a Patwari drawing Rs. 109.50 paise per mensem. He used to give Rs. 100/- per mensem to his family. A sum of Rs. 24,000/- was awarded as compensation and Rs. 2,500/- was awarded as costs of all the courts.

    19. In the case of State of Punjab v. Harbhajan Lal Kocnar, 1980 ACJ 437 (HP), various persons were involved in the accident. It was observed on p. 442 para 22 that in the case of a deceased who was hale and hearty and was round about 33 years of age at the time of his death it would be safe to take the multiplier ranging from 15 to 18 years provided there were no other compelling circumstances for adopting a multiplier which was lower or higher. Reliance was placed on the earlier decision in H.P Road Transport Corporation v. Jai Ram, 1980 ACJ 1 (HP).

    20. In the case of U.P.S.R.T Corporation v. Raja Ram, 1982 ACJ 194 (All), the deceased was 34 years old and a multiplier of 15 years applied.

    21. No reduction could be allowed for the insurance money paid to the claimants on a policy for Rs. 35,000/- after the death of San-tosh Behari Mittal. Reliance may be placed on cases of Bhagat Singh Sohan Singh v. Om Sharma, 1983 ACJ 203 (P&H) and Krishna Sehgal v. U.P State Road Transport Corporation, 1983 ACJ 619 (All).

    22. Mr. S.K Vidyarthi submitted that oral evidence shows that the income of Mr, Mittal was not less than Rs. 2,000/-. PW 1 Ram Kumar was the senior clerk of Mr. Mittal for 2 or 3 years. He stated that Mr. Mittal used to earn Rs. 2,500/- or Rs. 3,000/- p.m Later on he stated that Mr. Mittal earned Rs. 4,000/-per mensem and had a telephone. In his cross-examination he first of all stated that Mr. Mittal kept an account of his income. In the next breath, he stated that Mr. Mittal had no register and he noted the receipts on file covers. PW 7 Mr. Nath Patel was the junior clerk of Mr. Mittal. He stated that an account of the income of Mr. Mittal was maintained by the senior clerk. It was the senior clerk who used to receive the money from clients. He could not say if Mr. Mittal paid Income Tax. PW 6 Ramesh Behari Mittal, elder brother of Mr. Mittal also deposed that Mr. Mittal used to earn more than Rs. 3,000/- per mensem and he advised him to pay Income Tax. He himself is in service and he could have reliable knowledge about the income of Mr. Mittal. From the statements of the two clerks, it becomes highly probable that account of income was maintained by Mr. Mittal. The same has not been produced. Claimant No. 1, Raj Kumari Mittal, the widow of Mr. Mittal, has not entered the witness box. She was the best person to depose as to how much money her husband used to give her every month or how much money he used to deposit in the bank. The pass book of the bank account of Mr. Mittal has not been produced. The claimants have suppressed the available evidence and their version that Mr. Mittal used to earn Rs, 2,500/- or Rs. 3,000/- per mensem cannot be accepted.

    23. Mr. S.K Vidyarthi placed reliance on Exh. 14, the certificate of Mr. N.C Up-adhyay, Advocate and Vice-President, Allahabad High Court Bar Association regarding the income of Mr. Mittal being Rs. 3,000/-per mensem, but be could not point out any provision of the Evidence Act under which the certificate could be admissible. The dispensing with of formal proof meant that it could be presumed that the certificate was given by Mr. Upadhyay: It could not, however, raise a presumption regarding the correctness of the contents of the certificate. Mr. Upadhyay was not examined to prove the contents of the certificate.

    24. Mr. S.K Vidyarthi contended that other documentary evidence on the record shows that the income of the deceased was at least Rs. 2,000/- per mensem. We are unable to accept this for reasons which follow. Firstly, the deceased never paid any Income Tax. Secondly, the Ledger Book Exh. 18 does not give the income of the deceased in various cases conducted by him. Thirdly, in some of the entries in the Ledger Book the entries have been made under the following sub-heads:

    “DEBIT CREDIT BALANCE”

    The entries do not show as to what was the income of the deceased. The amount shown under the head ‘debit’ obviously included both the fees as well as the expenses. It is not clear as to what was the fees and what was the amount of expenses. Fourthly, some file covers have been produced in which deposits have been noted. In only some fees have been noted. In the rest the amount credited has been noted. Lastly, it cannot be said that the Ledger Book was regularly maintained as required under the rules, The account of income has been in fact withheld. Only such an account could have been admissible under section 34 of the Evidence Act.

    25. The future prospects of a lawyer are very uncertain. Every one who dons a black coat, gown and a band does not become a top lawyer. The claimants have withheld available evidence regarding the income of Mr. Mittal at the time of his death. We are unable to accept the submission of Mr. S.K Vidyarthi that we should hold that the future prospects of Mr. Mittal were very bright and that he would have been earning Rs. 10,000/- per mensem in 5 years or Rs. 25,000/- per mensem in 10 years. We cannot record any finding on surmises or conjectures. We hold that there is no reliable evidence in this regard.

    26. Taking into consideration the circumstances of this case, we hold that the Tribunal rightly accepted Rs. 1,000/- as the monthly income of Mr. Mittal.

    27. The deceased was 31 years old at the time of the accident. PW 1, Ramesh Behari Mittal, stated that his brother was very healthy. The annual dependency of the family was Rs. 8,400/-. In the circumstances of the case we think a multiplier of 18 to be adequate and proper and the compensation payable would come to Rs. 1,51,200/-.

    28. The Tribunal has awarded the following amounts also as compensation:

    (a) For loss of conjugal rights and comforts suffered by claimant No. 1, Raj Kumari Mittal; Rs. 30,000/- (b) For mental torture and agony caused to Raj Kumari Mittal; and Rs. 20,000/- (c) For loss of fatherly love, affection and care caused to claimant Nos. 2 and 3, the minor sons of the deceased. Rs. 28,000/-

    29. We are of the opinion that there was no legal basis for awarding these amounts as compensation to the claimants, Where a lump sum payment is made, award of compensation under these separate heads is not permissible. We may refer to the case of Lachman Singh v. Gurmit Kaur, 1979 ACJ 170 (P&H).

    30. The Tribunal awarded a sum of Rs. 2,000/- for medical treatment. This amount has been rightly awarded.

    31. We, therefore, hold that the total amount of compensation payable to the claimants comes to Rs. 1,53,200/-. The Tribunal awarded a sum of Rs. 2,10,500/- as compensation. We consider the amount somewhat on the higher side and deem it proper to fix it at Rs. 1,53,200/-.

    32. In the absence of any precedent of this Court, we are unable to place reliance on some decisions of Punjab and Haryana High Court and Delhi High Court in the cases of National Insurance Company Ltd. v. Sarla R. Gupta, 1982 ACJ 40 (P&H) and Jugal Kishore v. Red Singh, 1982 ACJ 503 (Delhi), in which interest at higher rate than 6% was awarded. We are of the opinion that under section 110-CC of the Motor Vehicles Act, in terest may be normally awarded at 6% per annum. Where the Tribunal finds that the con testing opposite party has been guilty of dilatory tactics in the disposal of the petition, a higher rate of interest may be considered. We find no merit in the contention of Mr. S.K Vidyarthi that the Tribunal should have awarded interest at the rate of 12% per an num. The claimants are entitled to interest on the amount of compensation at the rate of 6% per annum from the date of petition till the date of final payment.

    33. Mr. S.N Verma, learned counsel for appellant in F.A.F.O No. 425 of 1980, submitted that the Tribunal erred in fixing any liability on the Divisional Manager, Life Insurance Corporation of India, Varanasi. Mr. B.S Ahuja was an Asstt. Branch Manager, Life Insurance Corporation of India, Gyanpur. The Divisional Manager advanced money for the purchase of car by Mr. B.S Ahuja and the parties entered into a hire-purchase agreement vide Exh. A-l.

    34. Section 2(19) of the Motor Vehicles Act provides:

    “‘Owner’ means where the person in possession of-a motor vehicle is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase agreement, the person in possession of the vehicle under that agreement.”

    35. Sections 22 and 94 (1) of the Motor Vehicles Act provide for the necessity for registration and insurance against third party risk. Section 31-A of the Act deals with special provisions regarding motor vehicles subject to hire-purchase agreement. Sub-clause (2) pro vides as below:

    “(2) Where the ownership of any motor vehicle registered under this Chapter is transferred and the transferee enters into a hire-purchase agreement with any person, the registering authority shall, on receipt of an application from the parties to that agreement, make an entry as to the existence of such hire-purchase agreement in the certificate of registration.”

    36. The car was registered in the name of Divisional Manager and under the terms of the agreement the registration was to be transferred in favour of Mr. B.S Ahuja on payment of the last instalment.

    37. Under the general law, the Divisional Manager was the owner of the vehicle. For the purposes of Motor Vehicles Act, however, Mr. B.S Ahuja was the owner. The definition of ‘owner’ in section 2(19) of the Act was given with reference to two cases only: (i) where the person in possession of a vehicle is a minor; and (ii) where the vehicle is subject to hire-purchase agreement. It is obvious that the legislature in its wisdom confined the ownership of a vehicle under hire-purchase agreement to the person in possession of the vehicle under the agreement. It has done away with the duality of ownership under a hire-purchase agreement. In this case the Divisional Manager was the owner under the general law while Mr, B.S Ahuja was the owner for all practical purposes as he was in possession. According to the definition of ‘owner’ referred to above, the Divisional Manager shall be deemed to have been excluded from the ownership and Mr. B.S Ahuja alone shall be deemed to be the owner for the purposes of the Motor Vehicles Act.

    38. There is no question of any vicarious liability of the Divisional Manager. He was not the owner of the vehicle for the purposes of the Act. Mr. B.S Ahuja was not using the car of the Life Insurance Corporation of India in his official capacity. He was using the car under a hire-purchase agreement and was the owner of the car for the purposes of the Act. The case of Sita Ram v. Santanu Parsad, 1966 ACJ 89 (SC), is not applicable to the facts of this case. The Tribunal erred in applying the principle of vicarious liability.

    39. We find that the attention of the Tribunal was not drawn to the definition in section 2(19) of the Motor Vehicles Act. We hold that the Divisional Manager was not the owner of the vehicle for the purposes of the Motor Vehicles Act and was consequently not liable to pay compensation under section 110-B of the Act. The liability has been confined to the owner, the insurer and the driver of the vehicle. Mr. B.S Ahuja was the owner, Oriental Fire and General Insurance Co. Ltd. was the insurer and Mr. R.K Ahuja was the driver. The Tribunal erred in holding the Divisional Manager, Life Insurance Corporation of India liable to pay compensation.

    40. Mr. A.B Saran, learned counsel for appellant in F.A.F.O No. 685 of 1980 submitted that if Divisional Manager, Life Insurance Corporation of India was not liable, Oriental Fire and General Insurance Co. Ltd. could also not be liable. He placed reliance on the case of Abdul Ghafoor v. New India Assurance Co. Ltd., 1981 ACJ 340 (All).

    41. We may quote a relevant extract from the insurance policy Exh. A-2:

    “The Insured

    Name:Divisional Manager,

    Address:L.I.C of India, Varanasi, (in use of Mr. B.S Ahuja).”

    42. In para 18 of the written statement of Oriental Fire and General Insurance Co. Ltd., it was admitted that the car was in possession of Mr. B.S Ahuja subject to hire-purchase agreement.

    43. Thus the insurance company knew that the car was in possession of Mr. B.S Ahuja under a hire-purchase agreement and it was due to this that the words ‘in use of Mr. B.S Ahuja’ were also put down opposite the name and address of the insured. The insurance company should have known that under section 2(19) of the Motor Vehicles Act, Mr. B.S Ahuja was the owner of the car and it accepted the insurance of the car in use of Mr. B.S Ahuja.

    44. Para 5 (b) of the agreement Exh. A-1 provided that Mr. B.S Ahuja would keep the car insured in the name of the Corporation ……….at his own expense and pay the premiums from time to time and continue such insurance until the said motor car shall be transferred to him as his exclusive property.

    45. Para 1 of Section II—Liability to Third Parties—of the policy Exh. A-2 pro vides as below:

    “(1) The company will indemnify the insured in the event of accident caused by or arising out of the use of the motor car against all sums including claimant's costs and expenses which the insured shall become legally liable to pay in respect of—

    (a) death or bodily injury to any person but except so far as is necessary to meet the requirements of section 95 of the Motor Vehicles Act, 1939, the Company shall not be liable where such death or injury arises out of and in the course of the employment of such person by the insured;

    (b)… … ….”

    46. In view of the description of the insured the liability of Mr. B.S Ahuja to pay the premium, the knowledge of the insurance company that Mr. B.S Ahuja was in possession of the car under hire-purchase agreement and para 1 of section II—Liability to Third Parties, quoted above, we have no difficulty in holding that Mr. B.S Ahuja was co-insured along with the Divisional Manager. Mr. B.S Ahuja was the owner under section 2(19) of the Act and was liable to pay compensation under section 110-B of the Act. As he was also a co-insured the insurance company cannot claim exemption on the ground that one of the insured was not liable. The insurance company cannot avoid liability as the other insured person is liable and there is a covenant to indemnify the other insured person in the event of accident caused by the use of the motor car.

    47. Mr. A.B Saran next submitted that Mr. B.S Ahuja was entitled to use the car solely for the business of the Corporation. He referred to para 4(d) of agreement Exh. A-l. Para 17 of the written statement filed by Divisional Manager shows that he denied knowledge about the alleged accident. The plea raised by Mr. A.B Saran was not taken by the Divisional Manager to whom the plea was open in terms of the agreement. Under section 96(2)(b) of the Motor Vehicles Act, the insurance company could defend the action on the breach of a specified condition of the policy. The pleas which can be raised by the insurance company have been limited to those given in section 96(2) of the Act. In the policy Exh. A-2 it was provided:

    “Limitation as to use : Use only for social, domestic and pleasure purposes and for the insured's business.”

    48. In view of this specific provision, the insurance company cannot have any grievance regarding breach of condition in para 4 (1) of the agreement Exh. A-l. There was no breach of the aforesaid condition of the policy and we are unable to accept the submis sion of Mr. A.B Saran.

    49. Mr. A.B Saran lastly submitted that there was a breach of a condition, of the policy regarding ‘driver’ and as such the insurance company is not liable. The relevant pro vision is as below:

    “Driver: any of the following—(a) any person provided that the person driving holds a licence to drive the motor car or has held and is not disqualified from holding or maintaining such a licence.”

    50. The plea raised in para 27 of the written statement of the insurance company was that as Mr. R.K Ahuja had no valid licence, the answering opposite party is not liable to pay any compensation under the insurance policy. The contents of this para were verified by the Manager, Oriental Fire and General Insurance Co. Ltd. to the best of his knowledge and belief. The Manager has not entered the witness box to prove as to how and from where he acquired knowledge of the above fact. No question was put to DW 1, Mr. B.S Ahuja that his brother Mr. R.K Ahuja had no driving licence.

    51. In New India Assurance Co. Ltd. v. Sushila Devi Sharma, 1981 ACJ 119 (Raj), Shanti Bai v. Principal, Govind Ram Sakseria Technological Institute, 1972 ACJ 354 (MP), Pesumal v. New Asiatic Insurance Co., AIR 1964 Bombay 121 and Bhairon v. Nand Ram, 1980 ACJ 513 (Raj), it has been held that under section 96(2) of the Act, it is the duty of the insurance company to plead and prove the breach of a condition of the policy. A mere averment in written statement is hardly of any avail. The non-production of Mr. R.K Ahuja will not make any difference. We may refer to the case of National Insurance Co. Ltd. v. Bachi Bai, 1979 ACJ 83 (MP). The insurance company has failed to prove the plea and as such it cannot escape liability. The Tribunal erred in assuming that Mr. R.K Ahuja had no driving licence. It did not take into consideration the principle of burden of proof incorporated in section 96(2) of the Motor Vehicles Act. We hold that the insurance company has failed to prove that Mr. R.K Ahuja had no driving licence or that there was any breach of any condition of the policy and the insurance company, is liable to indemnify the owner Mr. B.S Ahuja for third party risk.

    52. The Tribunal erred in limiting the liability of the insurance company to Rs. 50,000/-. Section 95(2) provides as below:

    “(2) Subject to the proviso to sub-section (1) a policy of insurance shall cover any liability incurred in respect of any one accident upto the following limits, namely—

    (a)… … … …

    (b) where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a con tract of employment—

    (i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all;

    (ii) in respect of passengers—

    (1) a limit of fifty thousand rupees in all where the vehicle is registered to carry not more than thirty passengers;

    (2) a limit of seventy five thousand rupees in all where the vehicle is registered to carry more than thirty but not more than sixty passengers;

    (3) a limit of one lakh rupees in all where the vehicle is registered to carry more than sixty passengers; and

    (4) Subject to the limits aforesaid ten thousand rupees for each individual passenger where the vehicle is a motor car, and five thousand rupees for each individual passenger in any other case;

    (c) save as provided in clause (d), where the vehicle is a vehicle of any other class, the amount of liability incurred;

    (d) irrespective of the class of the vehicle a limit of rupees two thousand in all in respect of damages to any property of a third party.”

    53. Ambassador car UPF 6720 was not a vehicle registered to carry passengers. Subclause (b) was not applicable. Sub-clause (d) relates to damage to any property of a third party. Sub-clause (c) was applicable and the liability of the insurance company would extend to the amount of liability incurred, i.e a sum of Rs. 1,53,200/- and not to Rs. 50,000/- only.

    54. Mr. S.N Verma stated before the court that a sum of Rs. 1,00,000/- was deposited by Divisional Manager, Life Insurance Corporation of India and was withdrawn by claimants and suitable order may be passed to recompense the Divisional Manager.

    55. F.A.F.O No. 811 of 1982 is dismissed. F.A.F.O No. 425 is allowed and the petition is dismissed against Divisional Manager, Life Insurance Corporation of India, Varanasi with costs on parties. F.A.F.O Nos. 430 of 1980 and 685 of 1980 are partly allowed. The award made by the Tribunal is modified. The claimants are awarded a sum of Rs. 1,53,200/-with interest at 6% per annum from the date of petition till the date of payment and costs.

    56. The award is made against opposite parties Nos. 2 to 4 with the direction that opposite party No. 2, Oriental Fire and General Insurance Co. Ltd. will completely indemnify opposite party No. 4 Mr. B.S Ahuja, the owner of the car and will deposit the entire amount in Court within three months. On the amount being deposited, opposite party No. 1 will be permitted to withdraw the sum of Rs. 1,00,000/- and the claimants, will be entitled to withdraw the balance. In case of execution of decree, the same direction will be followed. The costs of this Court shall be easy.

    57. Appeal dismissed.

    Use AI to get other relevant cases.
    Try AI Pro free for 7 days Upgrade to AI Pro

    Comments

    Divisional Manager, Life Insurance Corporation Of India And Others v. Raj Kumari Mittal And Others
    (Nov 11, 1983)