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Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
  • Mr. B.C Misra, J.
Acts
  • Section 95(2) of the Motor. Vehicles Act (4 of 1939),
  • Order 41 Rule 27 of the Code of Civil Procedure
  • Section 96 Sub-Section (4)
  • Order 41 Rule 27 CPC
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
  • Mr. B.C Misra, J.
Acts
  • Section 95(2) of the Motor. Vehicles Act (4 of 1939),
  • Order 41 Rule 27 of the Code of Civil Procedure
  • Section 96 Sub-Section (4)
  • Order 41 Rule 27 CPC
See more information ...
Smart Summary

Structured Summary of Judgment — B.C. Misra, J.

Factual and Procedural Background

The judgment disposes two First Appeals from Orders (FAO No. 96 and FAO No. 104 of 1974) arising from an award of the Motor Accidents Claims Tribunal dated 30th November, 1973. The Tribunal had awarded Rs. 32,000/- as compensation to the legal representatives of the deceased, Shri N.R. Adyanthaya, against respondents 1, 2 and 4 jointly and severally. FAO No. 96 was filed by the Insurance Company seeking reduction of the award; FAO No. 104 was filed by the claimants seeking enhancement.

Material facts (as stated in the opinion): Shri N.R. Adyanthaya, a scientist employed at the National Institute of Oceanography (Council of Scientific and Industrial Research, Ministry of Education), was involved in a road accident on 6th September, 1966 at about 4:30 pm at Bahadur Shah Zaffar Marg while riding his scooter. He was struck by a bus (No. DLP 3383) owned by respondent No. 6 and driven by respondent No. 5 (Mohindar Singh); the deceased sustained multiple injuries and died the same day in Irwin Hospital. The claim petition sought Rs. 3,50,000/- in compensation. During trial the insurer of the offending vehicle had been taken over by the Oriental Fire and General Insurance Co. (appellant in FAO No. 96). The Municipal Corporation of Delhi was impleaded as respondent No. 3 on the ground that the bus was allegedly operating under a contract with the Delhi Transport Undertaking.

The Claims Tribunal framed eight issues (see Legal Issues Presented below), conducted evidence, answered the issues, and awarded Rs. 32,000/- with 6% future interest and costs against respondents 1, 2 and 4. The insurance company and the claimants both appealed to this Court—one seeking reduction (insurer) and the other enhancement (claimants).

Legal Issues Presented

  1. Whether the accident resulting into death of Shri Nitte Ranganath Adyanthaya was due to rash and negligent driving on the part of respondent No. 1?
  2. Whether respondent No. 3 is vicariously liable for the legal tort committed by respondent No. 1?
  3. Whether the petitioners are legal representatives of the deceased?
  4. To what amount if any, are the petitioners entitled?
  5. Whether respondent No. 1 had a valid driving licence? If not its effect?
  6. Whether the vehicle was being operated without any permit or in contravention of the purpose of the permit if any, if so its effect on the liability of the Insurance Co?
  7. What is the maximum liability of the Insurance Co.?
  8. Relief

Arguments of the Parties

Appellant (Oriental Fire & General Insurance Co.) — Principal Contentions

  • Application under Order 41 Rule 27 CPC: The insurer sought leave to produce and prove the insurance policy as additional evidence in the appeal, explaining earlier non-production by reference to the death (murder) of their earlier counsel Shri Nitya Nand Dhawan and the subsequent death of the advocate who took over, Shri Makhan Lal. A copy of the insurance policy was then placed on record and the insurer sought to prove it.
  • Limitation on liability under Motor Vehicles Act: The insurer contended that under Section 95(2) of the Motor Vehicles Act the statutory limit of liability (at the material time) for a vehicle carrying passengers for hire or reward was Rs. 20,000/- (and Rs. 4,000/- for individual passengers as described in the section), and therefore the Tribunal's award in excess of that amount should not bind the insurer beyond the statutory limit. The insurer sought exoneration from liability for the excess beyond the sum (statutory limit) recoverable under the policy.

Contesting Respondents (1, 2, 3, 4, 5 and 6) — Opposition to Additional Evidence

  • The opposing respondents argued the insurance policy or its counterpart was in the possession of the insurer and that the insurer had, in its written statement before the Tribunal, admitted the insurance. Accordingly they contended it was the insurer's duty to produce and prove the document before the Tribunal when issues were framed; failure to do so should not be excused by the subsequent deaths of counsel.
  • They argued the insurer could and should have instructed counsel properly, inspected the court file when new counsel was engaged, and taken necessary steps to produce the document earlier; the claimed reasons for delay were insufficient.

Claimants (Legal Representatives of the Deceased)

  • The claimants filed FAO No. 104 of 1974 seeking enhancement of the Tribunal's award to Rs. 3,50,000/-. The appeal challenges the amount awarded by the Tribunal and seeks a larger compensation sum. No further detailed argumentation by the claimants is recorded in the provided opinion beyond the claim for enhancement and the Tribunal's findings on calculation of loss.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court's reasoning follows two parallel strands addressing the insurer's appeal and the claimants' appeal respectively.

1. Analysis of the Insurer's Application to Admit Additional Evidence (Order 41 Rule 27 CPC)

  • The Court examined the insurer's application to produce and prove the insurance policy late. It noted that the insurance (the fact of insurance) had been admitted by the insurer in its written statement before the Claims Tribunal, and that the policy or its counterpart had been in the insurer's possession.
  • The Court emphasized the insurer's responsibility to file necessary documentary evidence before the Tribunal at the time issues were framed; failure to do so could lead to consequences. The subsequent deaths of the insurer's counsel (first Shri Nitya Nand Dhawan, then Shri Makhan Lal) were considered not to furnish a sufficient ground for late production of the policy.
  • The Court reasoned that a newly engaged counsel would be expected to inspect the court file and to take any necessary steps for production of important documents; the failure to do so suggested that counsel possibly did not consider production necessary because insurance had already been admitted and because the extent of liability would, in any event, be a matter of adjustment between insurer and owner rather than affecting the claimants' right to compensation.
  • On balance the Court held no sufficient ground had been shown to allow the application under Order 41 Rule 27 CPC and therefore rejected the application to admit the policy as additional evidence.

2. Analysis of the Insurer's Statutory-Liability Argument (Sections 95(2) and 96(4), Motor Vehicles Act)

  • The Court considered Section 95(2) of the Motor Vehicles Act as it stood at the material date and observed that the statutory minimum liability for a vehicle carrying passengers for hire or reward was Rs. 20,000/- in aggregate (with Rs. 4,000/- for an individual passenger, etc.). The opinion notes that later legislative increases are not material to the decision.
  • The Court also relied on Section 96(4) of the Act which provides that if the amount the insurer becomes liable to pay under the statutory scheme exceeds the amount for which the insurer would, apart from the Act, be liable under the policy, then the insurer is entitled to recover the excess from the insured person. Thus, where the insurer's contractual cover is less than the amount for which the insurer is held liable under the statute, the insurer can seek recovery of the excess from the insured.
  • Applying these provisions, the Court held that the statutory minimum liability at the material date was Rs. 20,000/-, but there is nothing to prevent parties from contracting for higher insurance cover. Importantly, if the policy limit were less than the Tribunal's award, the insurer would not be prejudiced because it would have a statutory right to recover the excess from the insured under Section 96(4). The policy itself, according to counsel, contained terms reflecting the insurer's right to reclaim sums paid that the insurer did not have a legal liability to pay.
  • Given these legal positions and the absence of proof that the insurer would be prejudiced by the Tribunal's award, the Court found no merit in the insurer's contention that the Tribunal's award should be modified on the ground of policy limits.

3. Analysis of the Claimants' Appeal for Enhancement

  • The Court reviewed the Tribunal's assessment of pecuniary loss. The Tribunal had (in its calculation) arrived at a monthly amount available for the benefit of the family of Rs. 275/- and calculated pecuniary loss over 20 years as Rs. 66,000/-. The Tribunal then made deductions for benefits the family would receive (including pension and assets) and ultimately fixed pecuniary loss at Rs. 32,000/-; it also awarded 6% future interest and costs against respondents 1, 2 and 4.
  • The opinion notes the Tribunal's deduction of a pension of Rs. 80/- per month for 20 years (total Rs. 19,200/-) to the widow and accepts that this deduction was proper. The Tribunal also deducted amounts representing assets received by the legal representatives that were accelerated by the death of the deceased; the Court found those deductions justified.
  • Further, the Court took note of an important pragmatic consideration recorded in the record: the owner of the offending vehicle, Motor Transport Society Limited (respondent No. 5 in some parts recorded as No. 6), was reportedly wound up, making it futile for the widow and minor children to seek enhanced recovery from the society's members. In light of these facts, the Court found no legal infirmity in the Tribunal's calculation or deductions and saw no reason to interfere with the Tribunal's award.

Holding and Implications

HOLDING: Both appeals (FAO No. 96 of 1974 by the insurer and FAO No. 104 of 1974 by the claimants) are dismissed.

Direct Effect / Relief: The award of the Motor Accidents Claims Tribunal dated 30th November, 1973 awarding Rs. 32,000/- to the legal representatives of the deceased (with 6% future interest from the date of the award until realisation and costs against respondents 1, 2 and 4) is affirmed. The parties are left to bear their respective costs.

Implications: The Court found no basis to admit late documentary evidence (Order 41 Rule 27 CPC) in the circumstances and reaffirmed the statutory framework that an insurer's statutory liability under the Motor Vehicles Act (Section 95(2)) may exceed its contractual policy limit but that Section 96(4) permits the insurer to recover any excess paid from the insured. The opinion does not purport to lay down any new legal precedent beyond applying these statutory provisions and the established approach to applications for additional evidence; it confines itself to affirming the Tribunal's assessment and dismissing both appeals.

This summary is confined strictly to information contained in the provided opinion and does not add material beyond the text of the judgment.

Show full summary ...

    The Oriental Fire & General Ins. Co. Ltd. & Another v. Leelavati R. Adyanthaya & Others

    B.C Misra, J.:— This judgment will dispose of two First Appeal from Orders (FAO No. 96 and 104 of 1974) arising out of the award of the Motor Accidents Claims Tribunal dated 30th November, 1973 by which it has awarded a compensation of Rs. 32,000/- to the legal representatives of the deceased against respondents 1, 2 and 4 jointly and severally. The first mentioned appeal has been filed by the Insurance Company for reduction of award and the second mentioned appeal by the claimants for its enhancement.

    2. The material facts of the case are that Shri N.R Adyanthaya deceased was a Scientist employed in National Institute of Oceoniography, Council of Scientific and Industrial Research, Ministry of Education and was at the material time drawing a salary of Rs. 872.40

    3. At the time of the accident, he was driving his scooter and got involved in an accident with a bus bearing No DLP 3383 which was owned by respondent No. 6 and was being driven by Mohindar Singh, respondent No. 5. The accident took place at about 4.30 pm. at Bahadur Shah Zaffar Marg on 6th September, 1966 and the deceased was thrown off the seat a long distance away and received about 15 injuries as a result of which he died on the the same day in the Irwin Hospital. His legal representatives made a claim tor a sum of Rs. 3,50,000/- for award of compensation. During the trial ot the claim, the insurance company which had insured the offending motor vehicle had been taken over by the Oriental Fire and General insurance Co., (appellant in the appeal No. 96 of 1974). The Municipal corporation of Delhi was also impleaded in the proceedings as respondent No. 3 on the ground that the aforesaid offending bus was working for its Delhi Transport Undertaking on the basis of some contract with them, the claim petition was contested and on the pleadings of the parties, the following issues were framed,—

    “1. Whether the accident resulting Into death of Shri Nitte Ranganath Adyanthaya was due to rash and negligent driving on the part of respondent No. 1?

    2. Whether respondent No. 3 is vicariously liable for the legal tort committed by respondent No. 1?

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

    4. To what amount if any, are the petitioners entitled?

    5. Whether respondent No. 1 had a valid driving licence? If not its effect?

    6. Whether the vehicle was being operated without any permit or in contravention of the purpose of the permit if any, if so its, effect on the liability of the Insurance Co?

    7. What is the maximum liability of the Insurance Co.?

    8. Relief,”

    4. The Claims Tribunal after examining the entire evidence on record came to the conclusion that the accident had occured due to the rush and negligent driving on the part of the driver of the offending bus and the first issue was answered in the affirmative. With regard to issue No. 2, it came to the conclusion that the Municipal Corporation of Delhi respondent No. 3 was not vicariously liable for the tort and omissions of the driver or owner of the offending bus. With regard to issue No. 3, the Tribunal recorded a finding that the claimants namely the widow and son of the deceased were his legal representatives, entitled to receive compensation with regard to issue No. 5, it held that the driver was in possession of a valid driving licence. With regard to issue No. 6, the tribunal held that the burden of establishing the said issue was on the insurance Company which did not lead any evidence and so it did not find any merit in the allegation that the offending bus had been operated without any permit or contrary to terms of the permit and the issue was answered in the negative. With regard to issue No. 7, the Tribunal observed in paragraph 22 that the respondents had not brought to the notice of the Tribunal any law or authority laying down the maximun liability of the insurance Company in such cases. It, therefore, came to the conclusion that Insurance Company was jointly liable to pay the awarded amount and it decided the issue accordingly. With regard to issue No. 4, it came to the conclusion that out of the salary received by the deceased, the amount available for the benefit of the family came to Rs. 275/- per month and the pecuniary loss to them for a period of 20 years amounted to Rs. 66,000/-. As against this, the Tribunal deducted certain amounts on account of benefits acquired by the legal representatives as a result of death. The Tribunal also deducted the pension at the rate of Rs. 80/- per month which was payable to the widow for the period of 20 years after making the Said adjustment Tribunal came to the conclusion that Rs. 32,000/- was the pecuniary loss to the petitioners and it decided the issue accordingly. In answer to issue No. 8, it held that the leeal representatives of the deceased were entitled to recover Rs. 32,000/- as a compensation from respondents 1, 2 and 4 jointly as severally and it awarded 6 percent future interest from the date of the award upto the date of the realisation with costs against respondents 1, 2 and 4.

    5. Feeling aggrievd by this order, the Insurance Company has filed (appeal No. 96 of 1974). Mr. P.R Monga, learned counsd for he appellant has raised two contentions. He has filed on application under Order 41 Rule 27 of the Code of Civil Procedure and hasgraved that the insurance policy of the offending bus has not been proved and that the same be allowed to be produced and exhibited in evidence. The reason disclosed in the application for not proving it earlier is that Shri Nitya Nand Dhawan, Advocate who was representing the company was murdered and the case was taken over by his father Shri Makhan Lal, Advocate who was not aware whether or not the policy had been produced and proved on the record. Mr. Monga submits that Mr. Makhan Lal, Advocate has also died during the pendency of the appeal in this Court. He has now filed a copy of the insurance policy which he wants to prove. The second contention of Monga is that under the law the maximum liability of the insurance company is limited to Rs. 2,000/- and so the decree for the excess of Rs. 12,000/- awardedby the Tribunal should be confined to the other respondents and the Insurance Company be exonerated to the liability in excess of Rs. 20,000/-.

    6. This application for additional evidence is being opposed on behalf of the contesting respondents 1, 2, 3, 4, 5 and 6. The Insurance policy or at least its counter-part was in possession of the Insurance company and the Insurance Company had filed a written statement in which it had admitted the insurance but-disputed its liability, ft was, therefore its duty to file the necessary documents before the Tribunal below on the date, the issues were framed. If it failed to do so, it must bear the consequences. It is true that unfortunately Mr. Nitya Nand Dhawan Advocate died an untimely death but that is no ground to hold that there was any valid reason for the Insurance Company hot to instruct the counsel properly and file the insurance policy intime and take legal steps to prove the same. Moreover, the counsel before the death could properly take all the necessary steps Even later when another consel Mr. Makhan Lal, Advocate had been engaged and had taken over the brief, it is obvious that he must have inspected the court file before taking further steps in the matter., He could easily take any steps necessary fof production of the document had he considered it essential for the case I am of the view that probably the counsel did not consider it necessary to burden the file with the production and proof of the insurance policy since the factum of insurance had been admitted and the extent of liability would be a matter for determination between the Insurance Company and the owner of the vehicle and it had very little material bearing on the case so far as the claim of the legal representatives of the deceased was concerned. No sufficient ground has been made out for allowing the application under Order 41 Rule 27 CPC and the same is, therefore, rejected.

    7. Mr. Monga has then pressed his second contention. It is correct that under Section 95(2) of the Motor. Vehicles Act (4 of 1939), it is provided that where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment (i) in respect of persons other than passengers carried for hire or reward, a limit of Rs. 20.000/- in all and” Rs. 4,000/- in respect of individual passenger and etc. This limit has subsequently been raised in sub-section (i) to Rs. 50,000/- but that is not material for the decision of the present case. However, under Section 96 Sub-Section (4) it is provided 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 the section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person. It is. therefore, obvious that the Statutory minimum liability at the material date was Rs. 20,000/- but there is nothing in the provisions of law to prevent the parties from contracting for an insurance to cover a large amount. In case the amount of insurance contracted between the parties is less than the amount for which the Insurance Company has been held to be liable, the Insurance Company is given a statutory right to recover the excess amount from the party. The Insurance Company, therefore, does not suffer any prejudice if it finds that its liability, on the face of the insurance policy if any, does not exceed Rs. 20,000/-, as under the law it would be entitled to recover the excess from the party to the insurance. Mr. Monga and Mr. Malhotra both counsel have further pointed out that this provision of law is also reflected in the insurance policy and it contains a term to the effect that the insurer will repay to the company sums paid by the company which the company would not'have a legal liability to pay. Under these circumstances, 1 find no substance in the contention that the award of the Tribunal below be modified or that it will cause any prejudice to the Insurance Company in respect of its claim on the basis of the insurance policy.

    8. As a result I find there is no force in the appeal F.A.O 96 of 1974 and the same is dismissed.

    9. The legal representatives of the deceased have filed the other appeal (F.A.O 104 of 1974) in which they have claimed that the award be enhanced to a sum of Rs. 3,50,000/-. It is really a matter of regret that in this accident the country has lost a Scientist. The Tribunal below has found his salary to be Rs. 67240 per month. Out of this amount, he had to pay the income tax and make a contribution to the provident fund and he was also spending something on his scooter and so the Tribunal held that only a sum ot Rs. 275/- was available to be spent by him on the legal representatives and calculating it for a period of 20 years. the compeasation determined amounted to Rs. 66,000/-. I do not find any legal infirmity with the same.

    10. The Tribunal has, however, proceeded to reduce the amount of compensation awarded on various grounds. One of the grounds which is indisputable is pension of Rs. 80/- per month for a period of 20 years which has been granted to Smt. Lila wati, the widow of the deceased. This amount will come to Rs. 19,200/- and it has properly been deducted. The other deduction that the Tribunal has made, consists of the amounts of assets that the family of the deceased have obtained on account of death of the deceased. There is no doubt that receipt of the assets of the deceased has been accelerated in the hands of the legal representatives and so the deductions have been properly allowed. Moreover an important fact for consideration is that the owner of the vehicle involved viz. the Motor Transport Society Limited respondent No. 5 is reported to have been wound up and it would be futile to pursue the assets of the transport society in the hands of its various members in an attempt to realise any enhanced amount of compensation by the widow and her minor children. Under these circumstances, 1 find that the impugned order does not call for any interference and the appeal is, therefore, dismissed and the award is affirmed.

    11. As a result, both the appeals are dismissed and the parties are left to bear their respective costs.

    12. Appeals dismissed.

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    Comments

    The Oriental Fire & General Ins. Co. Ltd. & Another v. Leelavati R. Adyanthaya & Others
    (Feb 5, 1975)