Reliance General Insurance Co. Ltd. v. Dagdabai Gida @ Bhika Shinde

1. Heard learned Advocate for the Appellant Insurance Company and learned Advocate for the Respondents who are the Legal Representatives of the deceased – Ashok Shinde. He was a passenger in Tavera car. He was travelling on 30th June 2011 from Nashik to Ulhasnagar. The Tavera car was driven by one driver. When the car reached in the vicinity of Rajur Bahula within the jurisdiction of Vadivanhe Police Station, Taluka: Igatpuri, District: Nashik, the driver lost control and dashed to another vehicle which is a JCB bearing registration No.MH-17/V-7202. The driver of Tavera car has driven the car at a great speed. Due to the injuries, the said Ashok died. Though he was shifted to the hospital, recovery was not possible.

2. The present Appellant Insurance Company has insured the owner of the Tavera car. The owner is one Rekha Baniya. The said Rekha–Respondent No.5 has not appeared before the Motor Accident Claims Tribunal – Kalyan (“MACT – Kalyan”) so also before this Court. The Insurance Company has taken multifold defenses before the Tribunal. One of them is “the cover-note was cancelled on behalf of the Insurance Company, and as such there was no insurance policy is in existence at the time of accident.” Evidence and findings

3. From the Claimants, the Claimant No.1 has given evidence whereas from the Insurance Company, one Officer – Vivek Ashok Karne has given the evidence. After appreciation, the Tribunal allowed the Claim and directed the insured as well as the insurer to pay compensation of Rs.9,30,160/- (Rupees Nine Lakh Thirty Thousand One Hundred Sixty) with 6% interest. There is challenge to the said Award on behalf of the Insurance Company. Challenge to award

4. Primarily it is on the ground of ‘non-existence of the insurance policy at the time of accident.’ Whereas on behalf of the Claimants, there is a Cross-Objection for enhancement of compensation. Learned Advocate Ms.Kundu has produced computation of the income. It is taken on record and marked Annexure-X. She has also produced minimum wage rate issued by the State of Maharashtra with effect from 1st January 2011 to 30th June 2011. Findings

5. Learned Advocate for the Appellant has invited my attention to the relevant findings by the Tribunal about want of insurance policy. They are in paragraph No.20 to paragraph No.25. Even she has read the evidence given by the witness on behalf of the Insurance Company. Following are the relevant facts:- (a) The cover-note is valid for 60 days as per Rule 142 of the Central Motor Vehicles Rules, 1989. In this case, the covernote has come to an end on 11th May 2011. There is an argument on behalf of the Appellant about whose responsibility to issue the insurance policy. Sub-rule 2 of Rule 142 of the said Rules mentions that cover-note is valid for a period of 60 days from the date of issue and it is the insurer who has to issue such policy before the date of expiry of cover-note. (b) Admittedly in this case, the insurance policy is not issued. If we go by the wordings of that Sub-rule, it is clear that the policy has to be issued by the insurer i.e. by the Appellant and it has to be issued prior to the expiry of the cover-note. Admittedly in this case, the policy is not issued. Certainly the Claimants / deceased are not privy to the said contract. There is no control of deceased about the issuance of insurance policy but it is the responsibility of the Insurance Company only. It can not also be the responsibility of the insured / owner of the vehicle.

(c) As per the provisions of Section 147, Sub-section 4 of the

Motor Vehicles Act, if the cover-note is not followed by a policy of insurance within a specified time, it is the responsibility of insurer to “inform the said fact to the Registering Authority within 7 days after the expiry of valid period of the cover-note.”

(d) The Officer of the Insurance Company has admitted that he has not complied with those provisions. I have read his evidence. He has pleaded that the cover-note was cancelled by the Insurance Company. Admittedly along with the compilation, no documents are produced to show any letter of cancellation. There is a remark on the cover-note that it is cancelled. Even the date of cancellation is not clearly visible. From this evidence, it is difficult to ascertain the reason for cancellation.

6. The learned Tribunal has discussed all these aspects in above mentioned paragraphs and had come to a conclusion that the Insurance Company cannot be exonerated for non-compliance of the statutory provisions which they are supposed to comply with. Learned Advocate for the Appellant tried her level best to convince me that it is the responsibility of the insured / owner to obtain an insurance policy. She argued that once the insured has not fulfilled her responsibilities, the insurer cannot be held responsible. I am afraid that these submissions can be accepted. It is for the reason the relevant provisions of the Act and Rules in fact cast an obligation on the insurer only.

7. I am unable to accept the submission that the cover-note is cancelled. It is for the reason it is not clarified why it is cancelled and even it is not informed within 7 days to the Registering Authorities. At least there is no evidence to that effect. The Company is not relieved from their responsibility accrued as per cover-note. So by inaction on the part of the insurer and by not adducing the evidence to that effect, I find no fault in the findings by the Tribunal. The insurer is bound to indemnify the insured for the amount of compensation to be awarded to the Claimants. As such there is no merit in the Appeal. About Cross-Objection

8. Learned Tribunal has discussed the evidence on the point of income of the deceased. That find place in paragraph Nos.14, 15 & 16. Learned Tribunal for want of evidence about the income has considered the notional income of the deceased as Rs.4,000/- (Rupees Four Thousand) per month and done the necessary calculation accordingly. The deceased was Mason. He was getting daily income of Rs.4,000/- (Rupees Four Thousand). Admittedly there is no document to support that claim. No witness is examined on that aspect. Even sufficient particulars are not there to justify the income of Rs.4,000/- (Rupees Four Thousand). According to learned Advocate for the Appellant, that calculation is proper whereas according to learned Advocate Ms.Kundu, the deceased was getting monthly income of Rs.12,000/- (Rupees Twelve Thousand) and according to her, it was required to be considered by the Tribunal.

9. The law on this point is very clear. If there is no evidence about the income, the Court is required to apply the test of ‘notional income’. For considering it, even the Court can consider the minimum wages which were in force in that area at that time. As per the circular issued by the State of Maharashtra for Zone-II, the skilled worker is paid with basic pay of Rs.4,950/- (Rupees Four Thousand Nine Hundred Fifty) and with all the additions, it comes to Rs.6,365/- (Rupees Six Thousand Three Hundred Sixty Five) per month. According to Ms.Kundu, the spot of the accident comes in Zone-II. This is for the workers in case the construction of roads and buildings. Whereas according to Ms.Trivedi, the Mason cannot be considered as a skilled worker. I am inclined to accept the submission of Ms.Kundu. Certainly the Mason requires some skill. So for calculating the compensation, the monthly income has to be considered as Rs.6,365.40/- (Rupees Six Thousand Three Hundred Sixty Five and Forty Paisa). In no case, monthly income as Rs.12,000/- (Rupees Twelve Thousand) can be believed. The Tribunal has considered it on a lower side. It can be enhanced.

10. The deduction of personal expenses done by the Tribunal is 1/5th. Whereas the deceased was survived by the mother and four children. At the time of filing of the Claim Petition, all were minor. They can be considered as dependents. As per observations in case of Smt.Sarla Verma and Ors. V/s. Delhi Transport Corporation and Anr.[1] if number of dependents is 4 to 6, deduction towards personal expenses is 1/4th. So the deduction towards personal expenses ought to have been 1/4th. The remaining 3/4th as dependency for the family of deceased comes to Rs.6,683.67/-. It is true the Tribunal has allowed consortium for the mother. The children have also lost their father and the love and affection. They will also entitled to the compensation towards the head “consortium”. There are four children. Everyone is entitled at the rate of Rs.40,000/-. It is true after 3 years, there has to be an increase at the rate of 10%. So it comes to Rs.48,000/-x[4]. The head of loss of estate of Rs.15,000/- is rightly granted by the Tribunal. So far as the interest component of 6%, the Tribunal has granted it from 23rd February 2017. The reasoning is there in paragraph No.25. The ex parte order was passed against the Opponent No.1 insured in 1 2009 AIR SCW 4992 the year 2017. So no modification in the date of application of the interest.

11. If it is considered as base, the subsequent calculation will change. It is as follows:- Sr.No. Heads Compensation Awarded/Stepped up

(i) Monthly Income:- Rs.6,365.40/-