Shakuntla Garg & Others v. Megh Raj & Others.

K. Ramamoorthy, J.— FAO. 352/80 is appeal by the claimants and FAO.353/80 is appeal by the Insurance Company. The claimants filed the petition u/s 110-A of the Motor Vehicles Act. 1939 claiming a sum of Rs. 6 lakhs on the death of 35 year old man on 8.10.1971 at about 2.15 P.M on the Ring Road, Near Defence Colony. The Tribunal granted a sum of Rs. 60.868/- towards compensation with interest at 6% per annum from the date of the petition by order dated 30.4.1980 The following issues were framed by the Tribunal:—

“1. Whether G.D Garg sustained fatal injuries due to rash and negligent driving of truck No. DLL 5127 on the part of the respondent No. 1 as alleged?

2. Whether the petitioners are the legal representatives of the deceased?

3. Whether the accident occurred due to negligence of the deceased as alleged in the written statement?

4. To what amount of compensation, if any, is the petitioner entitled?

5. Relief.”

2. On issues No. 1 & 3, the Tribunal held:—

“For the foregoing reasons I have no difficulty in arriving at the irresistible conclusion that the accident took place on account of rash and negligent driving of the Oil tanker on the part of respondent No. 1 and no negligence can be attributed to the deceased. Accordingly Issue No. 1 is decided in the affirmative and issue No. 3 in the negative.”

3. With reference to the mode of assessment of compensation, the Tribunal held that the only dependency of the claimants was Rs. 8,184/-. The Tribunal applying n ulti-plier of 12 years fixed the compensation at Rs. 98,208/-. Out of this, the Tribunal deducted certain amounts and ultimately fixed, as I had noticed above, the compensation at Rs. 60,868/-. With reference to the claim of compensation, the Tribunal gave a finding that the deceased was 35 years old on the date of the accident i.e 8.10.1971 In paragraph 26, the Tribunal held:—

“Next question that arises for consideration is the probable period for which the deceased would have lived up more had he not been killed in this accident. Petitioner No. 1 appearing as PW 10, has stated that her husband enjoyed an excellent health. She has further stated that the father of the deceased as well as the mother are still alive and they are 65 years and 60 years old respectively. Moreover, there is nothing on the record to show that the deceased was suffering any ailment which could have cut short his normal span of life which has been held to be between 65 and 70 years by different High Courts as well as Supreme Court of our country. Accordingly, I hold that the deceased would have lied up atleast upto the age of 65 years in case he had not been killed in this accident.”

4. This is not challenged.

5. With reference to the dependency, the Tribunal proceeded to discuss the point in the following manner:—

“In so far as the question of dependency of the petitioners upon the deceased is concerned, the same has to be determined on the basis of the actual carry home income which the deceased used to lay by for meeting the family expenses. The widow, petitioner No. 1, in her statement as PW 10 has asserted that the deceased was earning approximately Rs. 2000/- P.M The same figure has also been mentioned in the petition itself. It has been urged on behalf of the petitioner that the deceased had a brilliant academic career, and that he had left the service of the Heavy Electricals Ltd., Bhopal and joined the partnership business as working partner of M/s. United Engineering Works, Panipat and would have in the course of time earned at-least Rs. 10,000/- per month. The actual figure of dependency however has to be determined on the basis of the actual date furnished on the record and not hypothetical or conjectural basis. For this purpose the actual income derived by the deceased as a partner immediately preceding his death has to be taken into account. Record confirms that the deceased had entered into partnership business with M/s United Engineering Works, Panipat vide partnership deed Ex.RW2/2. This document reveals that the partnership deed related to specifically for the execution of some pending contracts as mentioned in Schedule ‘A’ attached to the said partnership deed. To put the record straight, it would also be pertinent to note that the deceased had entered into partnership to note that the deceased has entered into partnership business on 2.5.70, while he had left the service of M/s. Heavy Electricals on 17.5.69 As per Ex.PW10/5, the unfortunate accident which cut short the life of the deceased took place on 8.10.71 This means that it was only for the brief spell of period between 2.5.70 to 8.10.71 when the deceased worked as a partner with M/s United Engg. Works. Ex.PW7/1 is the Assessment Order of the said firm for the assessment year 1971/72 i.e accounting year 1.4.70 to 31.3.71 According to this document the net share of 45% allocated to the deceased has been given as Rs. 7010/- while the total income of the firm has been shown as Rs. 15,580/- inclusive of inadmissible expenses of Rs. 4000/-. It may be noted that for the purpose of income tax At the total income has been computed including the above expenses which were disallowed by the Income Tax authorities. The learned counsel for the respondent No. 2 has contended that the expenses of Rs. 4000/- disallowed by the Income Tax authorities should not taken into account as part of the earning of the deceased. I do not agree with the contention of the learned counsel for the simple reason that the expenses claimed by the deceased were disallowed by the Income Tax authorities and no rebate was allowed to him and the deceased was compelled to pay income tax even on his 45% share of the total expenses of Rs. 4000/-. As such I hold that the entire amount of Rs. 7010/- has to be treated as income of the deceased for the year 1.4.70 to 31.3.71 The petitioner has also filed on the record another Assessment Order Ex. P.W 7/3 or the said period in which in addition to the income of Rs. 7010/- derived by the deceased as his share from the aforesaid firm, an additional income of Rs. 619/- has also been shown to the credit of the deceased i.e in all an income of Rs. 7629/- which can be rounded off to Rs. 7630/- has been shown as the income of the deceased for the year 1.4.70 to 31.3.71 Similarly, Ex.PW7/2 is Assessment Order for the period 1.4.71 to 8.10.71 (the date on which the deceased expired in the aforesaid accident) which proves the income for the last six months of the deceased at Rs. 10760/-. The learned counsel for respondent No. 2, as discussed above has contended that out of Rs. 5000/- shown as inadmissible expenses, the 45% share of the deceased should not be taken into account while computing the income of the deceased for the last six months. I have already held above that this argument of the learned counsel does not hold good for the simple reason that the deceased had been compelled to pay income tax on his share of 45% of Rs. 5000/- and as such that share cannot be ignored while computing the income of the deceased. In this way, the total income of the deceased for 18 months comes to Rs. 7630/- + Rs. 10760/- = Rs. 18390/-. As such the average monthly income of the deceased Comes to Rs. 1022/-. Out of this amount 1/3rd amount has to be deducted towards personal expenses of the deceased. The same being Rs. 340/- balance strikes at Rs. 682/- which can be termed as monthly dependency of the petitioner upon the deceased or Rs. 5184/- annual dependency. This will reflect a reasonable nexus between the amount arrived at and the object sought to be achieved.”

6. With reference to the applicability of multiplier, the Tribunal held:—

“Still more important question that arises to be determined is the suitable multiplier that can be adopted in this case. The same is to be determined after taking into consideration the number of hears of dependency of the various dependents, the number of years by which the life of the deceased was cut short, the various imponderable factors and 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 of age of the dependants on account of the death of the person concerned. This is so in view of the fact that solatium is alien to the concept of compensation and that the net loss should not be assessed by simply multiplying the annual dependency with the numbers of years by which the life has been cut short without anything else. I am sustained in this view by the recent Full Bench Judgement of the Punjab & Haryana High Court in Lachhman Singh & Others v. Gurmit Singh & Others, 1979 PLR page 1.

Applying the ratio of the above principle, it is to be noted that the deceased was about 35 years of age when his life was cut short by the fatal accident. The children who are minors have yet to complete their education. Keeping all the imponderable factors in view, I am of the view that ends of justice would be adequately met if 12 years' multiplier is adopted in this case. I am sustained in this view by the decision of the Supreme Court cited as 1979 A.C.J 496 Supreme Court of Indian in Bishan Devi and Another v. Sirbaksh Singh and Others in which 12 years was commended as the suitable multiplier. Thus, the total dependency of the petitioners upon the deceased can be arrived at by multiplying the annual dependency of Rs. 8184/- by the multiplier of 12 years which work out at Rs. 98,208/-.”

7. With reference to the deductions, the Tribunal had adopted a very curious method and the same is as follows:—

“During the course of arguments it was urged on behalf of the respondents that the parents of the deceased are still alive and they have not been im-pleaded as LRs of the deceased. In this connection it is pertinent to note that provisions of Section 110-A of the Motor Vehicles Act as amended (on 2.3.1970) makes it obligatory on the part of the petrs, that all the LRs must join together in claiming compensation and in case all of them do not join the application shall be made on behalf and for the benefit of the all the LRs who must then be impleaded as respondents to the application. The legal position has not undergone the change as a result of the aforesaid amendment which is mandatory. Prior to the said amendment even if the petition was not filed by all the L/Rs the same was deemed to be in the rep-rcscntalive capacity for the benefit and on behalf of all the L/Rs. It is only in the admission of the widow as PW10 that it was disclosed for the first time that the parents of the deceased namely Ami Lal and Smt. Bhago Devi were alive. The same finds confirmations from the Agreement Ex.RW2/1 which disclosed the names of Smt. Bhago Devi and Sh. Ami Lal Garg who were given the share from the income of the deceased on the dissolution of the partnership firm and this fact of the parents being alive having been disclosed in the course of the proceedings the same cannot be legally ignored. There is no explicit provision by which the petition can be rendered legally not maintainable for non-joinder. But at the same time, reason and common sense dictate that the share of the parents cannot be allowed to be appropriated by the petrs. Keeping all these factors into consideration particularly, the admission of the widow as PW10 that she is still living with her in-laws it can reasonably be inferred that the parents were also dependent upon the deceased. Considering the fact that the parents are still alive much after the death of the deceased even on the date of the deposition of the widow, PW10, they are likely to survive for a further period of about 10 years. As such it would be reasonable to allow Rs. 10,000/- each to the father and mother of the deceased. Accordingly, after making deduction of Rs. 20,000/- as the share of the parents, the share of the petitioners comes to Rs. 60,868/-. Issue No. 4 is decided accordingly.”

8. With reference to the liability of the Insurance Company on Issue No. 5, the Tribunal held that the original policy had not been produced. In paragraph 38 the Tribunal discussed this point and had said:—

“It may be mentioned here that respondent No. 3 have admitted the ownership of the offending vehicle in question in the name of respondent No. 2 as well as the same being insured with them. However, it was contended on their behalf that their maximum liability was limited as per provisions of the Motor Vehicles Act and the Insurance Policy. In other words, their stand is that the liability of the Insurance Company was limited to Rs. 50,000/- only as per provisions of the Motor Vehicles Act. This Argument would hold good only where the Insurance Policy is proved. The onus to prove the Insurance Policy lay upon respondent No. 3 which they have as already noted above, failed to discharge meaning thereby that no Insurance Policy was produced and proved. In the absence of the Insurance Policy it cannot be held that the liability of the Insurance Co. was limited to Rs. 50,000/-. Besides, it is also pertinent to note that there is no express prohibition in the Motor Vehicles Act for covering of risk of a higher amount. In other words, by accepting higher premium the Insurance Co. may accept unlimited liability in respect of a vehicle. This view finds support from the authority reported as 1979 A.C.J 208 Shyam Lal and Others v. The New India Assurance Co. Ltd. (supra).

9. The learned counsel for the appellants-claimants in FAO.325/80 submitted that the learned Tribunal had committed an error in fixing the dependency at Rs. 682/- per month on the basis that the monthly income of the deceased from the partnership, of which he was a partner, entitling to 45% share was only Rs. 1020/- per month. The Tribunal had taken into account income of the deceased for a period of 18 months. The Tribunal had completed ignored the fact that the deceased was a Chartered Accountant and with all potentiality he earned money using his expertise. The Tribunal failed to see that the income tax records would show the income as produced by the partnership firm and the records conclusively show for a period of 18 months the deceased had shown an income of Rs. 1022/- per month. What was shown was the bes evidence and what was not shown when we consider the income tax records. The deceased being a Chartered Accountant would have had a very decent life and as pe-the own finding of the Tribunal the deceased was maintaining very good health witl enough life and, therefore, the dependency should have been fixed at Rs. 2,000/- per month. Therefore, the order of the Tribunal in so far as is against the claimants is set aside. The dependency is fixed at Rs. 2,000/- per month.

10. With reference to the multiplier, in the light of the judgments of the Supreme Court the multiplier should have been 16 years. Therefore, applying the same, the claimants shall be entitled to a sum of Rs. 3,84,000/-. The discussion by the Tribunal with reference to deductions is absolutely meaningless and while considering the case of compensation the Tribunal ought not to have indulged in such exegesis. Therefore, the process of deductions is erroneous in law and that part of the finding given by the Tribunal is set aside.

11. With reference to claim of interest, the Tribunal had fixed only at 6% per annum. The principles relating to the award of interest have been considered in the following cases:—

“1. Rukmani Devi and Others v. Om Prakash and Others, 1991 ACJ 3.

2. Bimla Devi and Another v. New India Assurance Co. Ltd and Others, 1995 ACJ 789.

3. Subhadara Kumari & Ors v. Lallu Ram & Ors., 1995 ACJ 935.

4. Arvind Kumar… v. Rajesh Kumar & Ors.…, 1995 ACJ 948.

5. Sandeep Taneja and Others v. State of Haryana and Another, 1995 ACJ 1030.

6. Kailash Rani and Others v. Satya Pal Singh and Others, 1996 ACJ 297.

12. Having regard to the fact that 35 years old man had died and the claim was resisted on frivolous grounds, I fix the rate of interest at 12% per annum from the date of the petition.

13. With reference to the expenses of marriage of the daughter, that has not been considered at all by the Tribunal. The claim was for a sum of Rs. 50,000/-.and that Was not granted by the Tribunal. I hereby fix the claim with respect to the marriage of the daughter at Rs. 50,000/- and that will not carry any interest.

14. With reference to the case of the Insurance Company that the liability was limited to the extent of Rs. 50,000/-, the Tribunal as could be seen from the portion extracted above, the Insurance Company failed to discharge its burden by producing the valid Insurance Policy. Even otherwise, the Tribunal took the view that the Insurance Company was liable to pay the amount to the claimants.

15. The learned senior counsel for the appellant Insurance Company Mr. V.P Chaudhary submitted that the Tribunal had taken wrong view with reference to policy. The carbon copy of the policy was produced by the Insurance Company. The original policy remained with the owner and the owner had not placed it on record and that cannot be put against the Insurance Company. The learned senior counsel referred to number of rulings and submitted that once the liability of the Insurance Company is limited, the Tribunal was bound to follow the terms of the policy and cannot direct the Insurance Company to pay larger amount. The learned senior counsel referred to the following rulings:—

1. Shyam Lal and Others v. The New India Assurance Co. Ltd. and Another, 1979 A.C.J 208.

2. Sushila Devi and Others v. Ibrahim and Another, 1974 A.C.J 150.

3. Automobile Transport (Rajasthan) Priatek Ltd. and Another v. Dewalal and Others, 1977 ACJ 150.

4. Desraj and Others v. Ram Narain and Others, AIR 1979 Allahabad 328.

5. National Insurance Co. Ltd. v. Jugal Kishor& Ors., 1988 (1) ACJ 270.

6. Oriental Fire & Gerl. Ins. Co. Ltd. v. Veena Pruthi and Others, 1989 (2) A.C.J 1163.

7. New India Assurance Co. Ltd. v. Shanti Bai and Others, 1995 (1) A.C.J 470.

8. Vilasini and Others v. Kerala State Road Trans. Corpn. and Another, 1988 (2) A.C.J 755.

9. National Insurance Co. Ltd. v. Smt. Kamla Devi & Others, 1997 1 AD (Delhi) 368.

16. The learned senior counsel also submitted written notes in reply to the written submissions made by the learned counsel on behalf of the 6th respondent-owner.

17. The principles laid down in the above rulings do not apply to the facts of this case.

18. Section 96 of the Motor Vehicles Act, 1939 reads as under:—

“96. Duty of insurers to satisfy judgments against persons insured in respect of third party risks.- (1) If, after a certificate of insurance has been issued under sub-section (4) of Section 95 in favour of the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (1) of Section 95(being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer maybe entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this Section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if however the judgment-debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.

(2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice through the Court of the bringing of the proceedings, or in respect of any judgment so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings, is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:—

(a) that the policy was cancelled by mutual consent or by virtue of any provision contained therein before the accident giving rise to the liability, and that either the certificate of insurance was surrendered to the insurer or that the person to whom the certificate was issued has made an affidavit stating that the certificate has been lost or destroyed, or that either before or not later than fourteen days after the happening of the accident the insurer has commenced proceedings for cancellation of the certificate after compliance with the provisions of Section 105; or

(b) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:—

(i) a condition excluding the use of vehicle-

(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or

(b) for organised racing and speed-testing, or

(c) for a purpose not allowed by the permit under which the vehicle is used where the vehicle is [a transport vehicle], or

(d) without side-car being attached, where the vehicle is a motor-cycle; or

(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holing or obtaining a driving licence during the period of disqualification; or

(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or

(c) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular,

[(2A) Where any such judgment as is referred to in sub-section (1) is obtained from a Court in a reciprocating country and in the case of a foreign judgment is, by virtue of the provisions of Section 13 of the Code of Civil Procedure, 1908, conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act, 1938, and whether or not he is registered under the corresponding law of the reciprocating country) shall be liable to the person entitled to the benefit of the decree in the manner and to the extent specified in sub-section (1), as if the judgment were given by a Court in India;

Provided that no sum shall be payable by the insurer in respect of any such judgment unless, before or after the commencement of the proceedings in which the judgment is given, the insurer had notice through the Court concerned of the bringing of the proceedings and the insurer to whom notice is so given is entitled under the corresponding law of the reciprocating country, to be made a party to the proceedings and to defend the action on grounds similar to those specified in sub-section (2)]

(3) Where a certificate of insurance has been issued under sub-section (4) of Section 95 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in clause (b) of sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub-section (1) of Section 95, be of no effect:

Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person.

(4) If the amount which an insurer becomes liable under this Section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would, apart from the provisions of this Section, be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person.

(5). In this section the expressions “material fact” and “material particular” mean, respectively, a fact or particular of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk and, if so, at what premium and on what conditions, and the expression “liability covered by the terms of the policy” means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy.

(6) No insurer to whom the notice referred to in sub-section (2) [or sub-section (2A)] has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment as is referred to in sub-section (1) [or sub-section (2A)] otherwise than in the manner provided for in subsection (2) or in the corresponding law of the reciprocating country as the case may be.]”

19. The Insurance Company cannot put forth the plea of limited liability against a third party without producing the original policy.

20. In this view FAO.352/80 stands allowed and

1. The respondents shall pay a sum of Rs. 3,84,000/- along with interest at 12% per annum from the date of the petition till the date of payment.

2. The respondents shall pay Rs. 50,000/- with respect to the marriage of the daughter and that will not carry any interest.

21. The amount which has already been disbursed to the appellants claimants shall be taken into consideration while working out the amount now held payable. FAO.353/80 stands dismissed. There shall be no order as to costs.