United India Insurance Company Limited v. Smt. Rukmini Deepak alias Dilip Kachare & Ors.

2. (2009) 6 SCC 121.

3. (2018) 18 SCC 130. Additionally, the Claimants are entitled to get Rs.18,000/- under the head ‘funeral expenses’ and Rs.18,000/- under the head ‘loss of estate’. Thus, total compensation comes to Rs.10,18,560/- and the enhancement of the compensation will be as under:- Total compensation amount: Rs.10,18,560/- Compensation awarded by Tribunal: – Rs. 3,66,000/- Enhanced compensation amount: = Rs. 6,52,560/- Enhancement of Compensation

12) Now, question is whether the Claimants are entitled for the enhancement of the amount of compensation. Mr. Mendon, the learned Advocate, submitted that the enhancement of compensation and award is permissible in such Appeal by an insurance company although the Claimant/s did not file a separate Appeal or crossobjection for the enhancement.

12.1) Mr. Deshmukh, appointed Amicus Curiae submitted that the Act is a beneficial and welfare legislation under which such claims are filed for compensation on account of the injuries sustained or deaths occurred in motor vehicular accidents. “Just Compensation” is at the heart of the provisions thereby empowering the Tribunal/Court to quantify and award the compensation to the Claimants. If there is an error on the part of the Tribunal/Court in quantifying “just compensation” and for some reason/s, the Claimant/s do not file Appeal or cross-objection seeking to rectify that error and enhancement of the compensation, such Claimant/s cannot be restricted from pointing as to how the error occurred in quantifying the “just compensation” and it would be justifiable to rectify that error. Otherwise, the object of the ‘beneficial legislation’ will fail. With this submissions, Mr. Deshmukh showed his unison with the submissions by Mr. Mendon.

13) However, according to Mr. Misar, the learned Advocate, unless there is a separate Appeal or cross-objection by the Claimant/s, the enhancement of the compensation and award is not permissible in such Appeal at the instance of insurance company. To bolster this submissions, Mr. Misar relied upon following cases:i) Ranjana Prakash & Ors. vs. Divisional Manager & Anr.[4] therein the Division Bench of the Hon’ble Supreme Court held that,

5. 2020 ACJ 434. is also followed by this court in “United India Insurance Co. Ltd. v. Rajani Suresh Bhore”, [(2017) 5 AIR Bom R 592]. No doubt, in Jitendra Khimshankar Trivedi v. Kasam Daud [(2015) 4 SCC 237] in para 13 of the judgment, the Apex Court observed that: “(13) The tribunal has awarded Rs.2,24,000/- as against the same, claimants have not filed any appeal. As against the award passed by the tribunal when the claimants have not filed any appeal, the question arises whether the income of the deceased could be increased and compensation could be enhanced. In terms of Section 168 of the Motor Vehicles Act, the courts/tribunals are to pass awards determining the amount of compensation as to be fair and reasonable and accepted by the legal standards. The power of the courts in awarding reasonable compensation was emphasised by this Court in Nagappa v. Gurudayal Singh, (2003) 2 SCC 274, Oriental Insurance Company Ltd. v. Mohd. Nasir, (2009) 6 SCC 280, and Ningamma v. United India Insurance Company Ltd., (2009) 13 SCC 710. As against the award passed by the tribunal even though the claimants have not filed any appeal, as it is obligatory on the part of courts/tribunals to award just and reasonable compensation, it is appropriate to increase the compensation.”

38. However, after carefully going through this judgment, it emerges that while enhancing the compensation, the Apex Court exercised jurisdiction under Article 142 of the Constitution of India, which a High Court does not possess. Thus, though compensation determined by this court in the case at hand is more than awarded by the Tribunal, this Court cannot enlarge the scope of this appeal and cannot enhance the compensation more than awarded by the Tribunal. However, by exercising its jurisdiction under Order 41, Rule 33 of the Code of Civil Procedure, this court can only enhance the rate of interest to the extent of nine per cent per annum from the date of filing of claim petition till realization of the entire compensation amount.” iii) Sangita Arya & Ors. vs. Oriental Insurance Co. Ltd. Ors.6. In this case the MACT held that, the deceased was aged 35 years, and his income was Rs.1,00,000 p.a. The deceased had left behind five dependents. Therefore, the MACT deducted 1/4th of his income towards personal expenses, adopted the multiplier of “16” and computed the loss of dependency at Rs.12,20,000/-. In Appeal by the insurer, the High Court observed that the ITRs for the years 2002-03, 2003-04 and 2004-05 showed that the average annual income of the deceased for these three years was Rs.52,635/-. The ITR for the year 2006-07 revealed an income of Rs.98,500 p.a., which was almost double the income of the preceding three years. But the High Court did not consider the ITR for the year 2006-07. Accordingly, the High Court took the average of the ITRs for years 2002-03, 2003-04 and 2004-05, for determining the income of the deceased at Rs.52,635 p.a., deducted 1/3rd of the income towards personal expenses and applied the multiplier of “16”. Thus, the loss of dependency was assessed at Rs.5,61,440. The consortium payable to the widow was reduced by the High Court

6. (2020) 5 SCC 327. from Rs.20,000 (as awarded by the MACT) to Rs.10,000; the amount awarded towards loss of love and affection to the minor daughters was reduced from Rs.10,000 to Rs.5,000. However, it maintained amount of Rs.5,000 awarded by the MACT towards funeral expenses. Ultimately, the Hon’ble Supreme Court (three Judge bench) observed that, the ITRs for the assessment years 2005-06 and 2006-07 were filed prior to the death of the deceased, which reflected the income of approximately Rs.1,00,000 p.a. (as assessed by the MACT). Therefore, making that income as the basis for computing the compensation and in accordance with the decision in Pranay Sethi (supra), deducted a ¼th income towards personal expenses and awarded Rs.17,50,000/-. In this regard the Hon’ble Supreme Court observed that,

iv) United India Insurance Co. Ltd. vs. Surekha Kisan Shirke & Ors.7. In this case, the learned Single Judge of this Court held that, “appellate Court cannot enhance the amount of compensation unless

7. FA No.873/2004 dt. 30/09/2021. the claimants file appeal or cross-objection for enhancement.” In this regard, reliance was placed on the decisions in Ranjana Prakash & Ors. (supra) and Sangita Arya & Ors. (supra). Further, reference was made to the Division Bench decision of the Hon’ble Supreme Court in Shivawwa and Anr. vs The Branch Manager National India.[8] wherein the Tribunal allowed the claim against Respondent No.1 insurance company, Respondent No.2 - owner and the driver. Aggrieved, Respondent No.1 insurance company assailed the Tribunal’s award before the High Court of Karnataka, contending that the deceased had not travelled along with his goods in the tractor-trailer and therefore, it could not be made liable to pay any compensation. The High Court found merit in the contention raised by Respondent No.1, hence, held that Respondent No.1 insurance company could not be saddled with any liability. The Appellants challenged the judgment of the High Court including on the ground that the High Court failed to appreciate the evidence on record and that the deceased was the sole earning member of the family. The Appellants also submitted that the quantum of compensation awarded by the Tribunal was meager and unjustifiable and therefore, also sought enhancement of the Tribunal’s award. While addressing the argument of the appellants

8. (2018) 5 SCC 762. that the Tribunal committed a manifest error in computing the compensation amount, the Hon’ble Supreme Court, observed that, “… we find that the appellants (claimants) did not file an appeal for enhancement of compensation amount against that part of the award passed by the Tribunal nor chose to file any cross-objection in the First Appeal filed by the insurer before the High Court. Moreover, from the judgment of the High Court there is no indication that any attempt was made on behalf of the appellants to ask for enhanced compensation amount on the grounds as would have been available to the appellants in that behalf. Significantly, in the present appeal also, the appellants have not asked for any “relief” against that part of the award passed by the Tribunal, regarding the quantum of compensation. The relief claimed in this appeal is only to set aside the decision of the High Court passed in the First Appeal preferred by the insurer. In this backdrop, it will not be appropriate for this Court to consider the argument regarding the quantum of compensation at the instance of the appellants (claimants).” v) Choudhary Sahu (Decd.) vs. State of Bihar[9] therein the Hon’ble Supreme Court considered the provision of Order XLI, Rules 22 with 33 and held that, in absence of any cross-objection or Appeal, findings recorded by the Court/authority below cannot be interfered with by the Appellate Court/authority.

9. (1982) 1 SCC 232. vi) Ram Pravesh Singh & Ors. vs. State of Bihar & Ors.10 therein the Hon’ble Supreme Court observed that, any direction given on special facts, in exercise of jurisdiction under Article 142, is not a binding precedent.

14) Mr. Mendon, the learned Advocate for the Claimants, on the other hand, cited following cases to accept his submission that enhancement of compensation and award is permissible in such Appeal by the insurer even if the Claimant/s did not file a separate Appeal or cross-objection. i) A.P.S.R.T.C. Rep. by its General Manager & Another vs.

iv) Surekha W/o Rajendra Nakhate & Ors. vs. Santosh S/o Namdeo Jadhav & Ors.16 therein the decision of this Court in Shriram General Insurance Co. Ltd. vs. Surekha and Others (supra) was impugned. After considering the matter, the Hon’ble Supreme Court (three Judge bench) observed that, the High Court, even though agreed with the stand of the appellants that just compensation amount ought to be Rs.49,85,376/-, declined to grant enhancement

15. 2022 SCC Online Bom 4749.

16. (2021) 16 SCC 467. merely on the ground that the appellants had failed to file crossappeal. Therefore, it has been held that, by now, it is well-settled that in the matter of insurance claim compensation in reference to the motor accident, the Court should not take a hyper technical approach and ensure that just compensation is awarded to the affected person or the claimants. As a result, the Apex Court modified the order passed by the High Court to the effect that the compensation amount payable to the appellants has been determined at Rs.49,85,376/-, with interest thereon as awarded by the High Court, and allowed the Appeal, accordingly. This decision is very recently followed by the High Court of Kerala in Oriental Insurance Co. Ltd. vs. C. Hamza and Others17. v) Solapur Municipal Corporation & Anr. vs. Rupali Rahul Pawar & Anr.18. In this case this Court considered the decisions in A.P.S.R.T.C. (supra) and Nagappa (supra), and in paragraph 15 held that, “It is thus well settled that the Tribunal/Court is under an obligation to award just compensation and there is no embargo in enhancing the compensation in the absence of appeal or cross objection. ….” As a result, this Court enhanced the compensation of Rs.12,58,000/- to Rs.16,06,200/-. Said decision is in line with the

17. 2025 SCC OnLine Ker 2162.

18. FA No.476/2016 dt. 29/08/2023. earlier decision in Kelkar and Kelkar vs. Shripad Narayan Gore And Ors.19 therein reference was made to the decisions in Ranjana Prakash & Ors. (supra), Nagappa (supra) and Pranay Sethi (Supra).

15) I have carefully considered the said rival submissions and the cited decisions. In A.P.S.R.T.C. (supra), the Tribunal held that, deceased was aged 40 years and he was getting a salary of Rs.4,000/p.m. and after deduction his take home pay was Rs.2,367/- and the total emoluments was Rs.3,983/-. Applying the multiplier of “12” the entitlement was fixed at Rs.2,16,000/-, in addition Rs.15,000/- for non-pecuniary damages and Rs.5,000/- as consortium was awarded. Thus the total compensation awarded was at Rs.2,46,000/- with interest @ 12% p.a. The High Court held that the pay of the deceased was Rs.3,536/- and not Rs.2,367/- as noted by the Tribunal. Hence, it fixed the basic pay of Rs.3,500/- after deducting 1/3rd towards the personal expenses. The monthly contribution was fixed at Rs.2,333/and the annual contribution at Rs.27,996/-. The multiplier was taken at “12”. Accordingly, entitlement was fixed at Rs.3,35,952/- to which was added the sum of Rs.20,000/- additionally awarded by the Tribunal. In the Appeal, the Hon’ble Supreme Court reduced the compensation to Rs.2,60,000/-, taking multiplier of “10”. Thus, said amount was higher than the amount awarded by the Tribunal.

19. 2019 SCC Online Bom 4140. Meaning thereby the enhancement by the High Court in the Appeal by the A.P.S.R.T.C. was partially agreed.

15.1) In the case in hand, as held above, the deceased’s net annual income was Rs.41,600/-. Mr. Mendon, the learned Advocate has not claimed that the deceased was earning more than that amount nor did he request to enhance the compensation, accordingly. In fact, his main grievance is that, no compensation was conceived and awarded towards the future prospects, the deduction towards personal expenses is on higher side and the multiplier taken as “16”, is incorrect.

15.2) In the case of Pranay Sethi (supra), the Hon’ble Supreme Court in paragraph 57 observed and held that, “57. … To follow the doctrine of actual income at the time of death and not to add any amount with regard to future prospects to the income for the purpose of determination of multiplicand would be unjust. The determination of income while computing compensation has to include future prospects so that the method will come within the ambit and sweep of just compensation as postulated under Section 168 of the Act. In case of a deceased who had held a permanent job with inbuilt grant of annual increment, there is an acceptable certainty. But to state that the legal representatives of a deceased who was on a fixed salary would not be entitled to the benefit of future prospects for the purpose of computation of compensation would be inapposite. It is because the criterion of distinction between the two in that event would be certainty on the one hand and staticness on the other. One may perceive that the comparative measure is certainty on the one hand and uncertainty on the other but such a perception is fallacious. It is because the price rise does affect a selfemployed person; and that apart there is always an incessant effort to enhance one’s income for sustenance.... We are inclined to think that there can be some degree of difference as regards the percentage that is meant for or applied to in respect of the legal representatives who claim on behalf of the deceased who had a permanent job than a person who is selfemployed or on a fixed salary. But not to apply the principle of standardization on the foundation of perceived lack of certainty would tantamount to remaining oblivious to the marrows of ground reality. ….”

15.3) From the aforesaid observation it is evident that, the compensation towards the loss of the future prospects is a mandate of the law. It is common experience that, at times, the Claimants do not prefer an Appeal on the ground of denial of “just compensation”. There may be various reasons for not filing such Appeal. One of the reasons must be the financial burden in filing the Appeal which the Claimants may not be capable to endure because of the money they already incurred in the litigation until they receive the compensation. Therefore, such Claimants let the award passed in their claims become final notwithstanding there is a scope to enhance the same.

15.4) In the backdrop of the above discussion and considering the reported decisions cited by Mr. Mendon, I hold that although the Claimants have not filed separate Appeal or cross-objection for enhancement of the compensation, they are entitled for enhancement of the compensation towards the future prospect.

16) The second limb of the submissions of Mr. Misar, the learned Advocate for the Appellant is that, Respondent No.6 expired during the pendency of the claim and no steps have been taken by the Claimants to implead his LRs. Therefore, enhancement of the compensation is not possible in this Appeal. To hold this proposition, Mr. Misar relies the decision in Smt. Sushila & Anr. vs. Rajveersingh & Ors.20 therein Respondent No.1 - driver of the offending vehicle was not served with the notice of the Appeal. On Application of the Appellants/Claimants the High Court deleted the name of Respondent No.2 - owner of the offending vehicle as he expired during pendency of the Appeal. In this background and considering the provisions of Order XLI, Rule 14 with Order XXII of Code of Civil Procedure (“CPC”) and provisions of Section 155 of the Act, the Madhya Pradesh High Court in paragraph 29 and 31 held that:- “29. It may be noticed that an ‘estate’ cannot face any litigation or satisfy any decree unless it is held by some owner

20. AIR 2000 MP 121. or his representative in his absence. There cannot be a decree against an ‘estate’. It is, therefore, obvious that survival of cause of action contemplated by the provision contained in Section 155 of the aforesaid Act can only be against the legal representative of the deceased owner and not against his ‘estate’ as such. In the circumstances, on the death of the owner during the pendency of a lis/action, it can be continued by bringing the legal representatives of the deceased on the record.

31. The liability of the owner which has been determined under the provisions of the aforesaid Act has to be discharged by the Insurer as its liability is co-extensive with that of the owner. The cause of action contemplated under Section 155 of the said Act does not cease to exist so as to enforce the liability of the owner as against the Insurer. But once a situation is created where the liability of the owner cannot be enhanced in his absence, the mere presence of the Insurer could be of no avail as its liability being co-extensive with that of the owner, it cannot be enhanced without affording an opportunity of hearing to the heirs and legal representatives of the deceased owner. The appeal as against the deceased owner has to be taken to have abated in view of the failure of the appellants to take the requisite steps as contemplated under Order XXII, Rule 4 of the Code of Civil Procedure, 1908.” In view thereof the Madhya Pradesh High Court held that in the absence of the driver, the Respondent No.1 who had filed the written statement and contested the proceedings but has not been served with the notice of the Appeal and since the Appeal abated as against Respondent No.2 - owner of the offending motor vehicle, the quantum of compensation determined by the Tribunal as payable by that Respondent (Insurer) cannot be enhanced. Hence, it upheld the preliminary objection raised by Respondent No.3 - Insurer and dismissed both, the Appeal as well as the cross-objection.

17) However, Mr. Mendon, the learned Advocate for the Claimants submitted that, the facts in Sushila & Anr. (supra) are distinct, and pointing the same Section 155 of the Act, submitted that although Respondent No.6 herein has expired during pendency of the claim, in the facts, the enhancement of the compensation in this Appeal is permissible in law. To substantiate the said suggestion, Mr. Mendon relied upon the following decisions:i) Natha Singh vs. Gurdial Singh & Ors.21. In this case, the vehicle owner was served with the notice but he failed to attend the Court as he was confined to bed and subsequently, he died during pendency of the claim. The Appellant/Claimant filed an Application to bring his LRs on record, which Application was rejected by the Tribunal. The Respondent No.2 - insurance company filed the written statement and took over the defence of the insured and in that capacity, it was allowed to cross-examine the witness. Therefore, and considering the provision of Sections 96 and 102 of the old

21. 1982 ACJ 95. Motor Vehicles Act of 1939, the Punjab & Haryana High Court held that the claim application could not be dismissed only because the Claimant failed to implead the LRs. The relevant part of paragraph 3 thereof reads thus:-

iv) United India Insurance Co. Ltd. vs. Santro Devi & Ors.24. In this case the offending truck was hypothecated to the bank. The contract of insurance was continued to be renewed by the bank in the name of the owner for several years after his death. The widow of the driver of the truck claimed compensation from the widow of the owner. The Appellant-insurance company had neither pleaded particulars of fraud nor examined any witness in support thereof. Hence, it has been held that the Appellant-insurance company is bound to satisfy the claim.

24. (2009) 1 SCC 558.

18) Looking at the aforesaid controversy, it is necessary to consider the provisions of Section 155 of the Act of 1988, which is similar to Section 102 of the old Act of 1939 and reads:-

18.1) Rule 261 of the Maharashtra Motor Vehicles Rules, 1989 deals with Appearance and examination of parties and sub-Rule (2) thereof provides that, “(2) If the opposite party contests the claim, the Claims Tribunal may, and if no written statement has been filed, shall, proceed to examine the parties to the claim and shall reduce the result of examination to writing.” On a plane reading of this sub- Rule (2), it is crystal clear that, its second limb acts as a mandate against the opposite party who did not file the written statement. As provided in Rule 276 (1) (b) of the said Rules of 1989, Order XXII, Rules 1 to 7 (both inclusive) and 9 of the Code of Civil Procedure shall be applicable to the proceedings before every Claims Tribunal. The Order XXII, Rules 1, 2 and 4 (4) of C.P.C. read:-

1. No abatement by party’s death if right to sue survives.—The death of a plaintiff or defendant shall not cause the suit to abate if the right to sue survives.

2. Procedure where one of several plaintiffs or defendants dies and right to sue survives.— Where there are more plaintiffs or defendants than one, and any of them dies, and where the right to sue survives to the surviving plaintiff or plaintiffs alone, or against the surviving defendant or defendants alone, the Court shall cause an entry to the effect to be made on the record, and the suit shall proceed at the instance of the surviving plaintiff or plaintiffs, or against the surviving defendant or defendants.

4. Procedure in case of death of one of several defendants or of sole defendant.— (4) The Court whenever it thinks fit, may exempt the plaintiff from the necessity of substituting the legal representatives of any such defendant who has failed to file a written statement or who, having filed it, has failed to appear and contest the suit at the hearing; and judgment may, in such case, be pronounced against the said defendant notwithstanding the death of such defendant and shall have the same force and effect as if it has been pronounced before death took place.

18.2) As noted earlier, the Appellant was allowed to take all the defences available to Respondent No.6 under Section 147 of the Act. In view of the provisions of Section 155 of the Act, the death of Respondent No.6 in this case shall not be a bar to the survival of the cause of action against estate of Respondent No.6 or against the Appellant - insurer, as the Respondent No.6 died after arising of the cause of the action for this claim. Since Respondent No.6 failed to appear pursuant to the notice in the claim, the Claimants could have been exempted from the necessity of substituting the LRs of Respondent No.6, as provided in Order XXII, Rule 4 (4) of C.P.C. Looking at the facts of the case, it appears that, the Claimants were not aware of death of Respondent No.6. As such, they cannot be blamed for not impleading his LRs. By not attending in the claim proceedings, Respondent No.6 left it to the discretion of the Tribunal to decide the claim in his absence, on its own merit and, at the same time, let his estate exposed to the award that could have passed in the claim. One of the purposes of Order XXII, Rule 4 (4) of C.P.C. is to avoid unnecessary delays and complications in the legal process when a defendant who has not actively participated in the suit dies. It prevents the plaintiff from being penalized for the nonparticipation of a defendant who essentially lost his opportunity to context the case. Needless to state that, such claim proceedings should be decided at the earliest. Order XXII, Rule 11 of the C.P.C. provides that, in the application of this Order to appeals, so far as may be, the word “Plaintiff” shall be held to include an appellant, the word “defendant” a respondent, and the word “suit” an appeal. But said Rule 11 is not included in the aforesaid Rule 276 (1) (b) of the Rules, 1989.

18.3) In Bismilla (supra), in paragraph 14, it is held that if an Award or Judgment has been made in respect of a liability which is required to be covered under the policy by Section 95 of the said Act of 1939, the insurer is under obligation to satisfy the Judgment or Award to the extent of its liability. Chapter XI of the Act of 1988 deals with the insurance of motor vehicles against the third party risks. Section 146 of the Act of 1988 is similar to Section 94 of the said Act of 1939. Section 147 of the Act of 1988 lays down the requirements of the policies and limits of liability of the insurer. Sub-Section (1) of Section 149 of the said Act of 1988 virtually reproduces sub-Section (1) of Section 96 with necessary modifications required to be made on account of introduction of Section 163A of the said Act of 1988. In paragraph 15 it is held that, “Thus, by legal fiction, Section 96 of the said Act of 1939 and Section 149 of the said Act of 1988 make the liability of the insurer under a contract of insurance a statutory liability. …” Further it is held that, considering the scheme of Chapter XI of the Act of 1988, it is apparent that if there is a Judgment holding the insured liable to pay an amount to a third party, the insurer has to pay the amount to the person for whose benefit the Judgment is delivered, subject to the liability incorporated in policy.

18.4) Section 155 and 149 of the Act of 1988 are substantive provisions of law. In Vimla Devi & Ors. vs. National Insurance Co. Ltd. & Ors.25, cited by Mr. Mendon, the Hon’ble Supreme Court enunciated as under:- “19.4. So far as Section 166 of the Act is concerned, it also deals with payment of compensation. Section 168 of the Act deals with award of the Claims Tribunal whereas Section 169 of the Act provides procedure and powers of the Claims Tribunal. As has been held by this Court (Three-Judge Bench), the claim petition filed under the Act is neither a suit nor an adversarial lis in the traditional sense but it is a proceeding in terms of and regulated by the provisions of Chapter XII of the Act, which is a complete Code in itself. (See United India Insurance Company Ltd. v. Shila Datta, (2011) 10 SCC 509).”

18.5) In view of the above discussion, the reported decisions cited by Mr. Mendon, and submissions by Mr. Deshmukh, the learned Amicus Curiae, I hold that even if Respondent No.6 herein has expired during pendency of the claim and his LRs have not been impleaded, the Claimants are entitled for the enhancement of the compensation.

19) Now coming to the question of contributory negligence. In the cross-examination of AW[1], the Appellant conceded that the

25. (2019) 2 SCC 186. deceased was the pillion rider. Therefore, Mr. Mendon, the learned Advocate submitted that the 25% deduction of the amount of the compensation towards the contributory negligence is illegal. As noted in Khenyei vs. New India Assurance Co. Ltd. and others26, the case of composite negligence is one when accident occurs and resulting injuries and damages flow without any negligence on the part of the claimant but as a result of the negligence on the part of two or more persons. As held in Khenyei (supra), “In the case of composite negligence, plaintiff/claimant is entitled to sue both or any one of the joint tortfeasors and to recover the entire compensation as liability of joint tortfeasors is joint and several”. Secondly, as held in Sushma vs. Nitin Ganapati Rangole & Ors.27, in paragraph 19, “... the contributory negligence on the part of a driver of the vehicle involved in the accident cannot be vicariously attached to the passengers so as to reduce the compensation awarded to the passengers or their legal heirs as the case may be”.

19.1) The F.I.R. (Exh.14) was registered only against the driver of the truck. No doubt, in the claim it was pleaded that, the M/cycle was proceeding from Indapur towards Tenguni and the truck dashed the M/cycle on its rear side. But in the evidence, AW[1] stated that the

26. (2015) 9 SCC 273.

27. 2024 SCC Online SC 2584. M/cycle was proceeding from Solapur towards Pune (Indapur), and at that time the truck dashed the M/cycle (to its front). This evidence is corroborated with the F.I.R. and the Spot Panchnama (Exh.15). In Ningamma & Anr vs. United India Insurance Co. Ltd.28, paragraph 25, it is held that “Undoubtedly, Section 166 of the MVA deals with “Just Compensation” and even if in the pleadings no specific claim was made under Section 166 of the MVA, in our considered opinion a party should not be deprived from getting “Just Compensation” in case the claimant is able to make out a case under any provision of law. Needless to say, the MVA is beneficial and welfare legislation. In fact, the court is duty bound and entitled to award “Just Compensation” irrespective of the fact whether any plea in that behalf was raised by the claimant or not. ….” Therefore, the inconsistency as to the direction of the M/cycle has no effect on the quantum of the compensation to be awarded here.

19.2) It is significant to note that, the Tribunal did not record any reason for deduction of the 25% of the compensation amount towards the contributory negligence. In the decision in State of Orissa vs. Dhaniram Luhar29, in paragraph 8, the Apex Court has observed that,

28. (2009) 13 SCC 710.

29. 2004 (5) SCC 568. “Even in respect of administrative orders Lord Denning M.R. in Breen v. Amalgamated Engineering Union (1971 (1) All E.R.

1148) observed “The giving of reasons is one of the fundamentals of good administration". In Alexander Machinery (Dudley) Ltd. v. Crabtree (1974 ICR 120)(NIRC) it was observed: “Failure to give reasons amounts to denial of justice”. Reasons are live links between the mind of the decision-taker to the controversy in question and the decision or conclusion arrived at”. Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the “inscrutable face of the sphinx”, it can, by its silence, render it virtually impossible for the Courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an indispensable part of a sound judicial system; reasons at least sufficient to indicate an application of mind to the matter before Court. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made; in other words, a speaking out. The “inscrutable face of a sphinx” is ordinarily incongruous with a judicial or quasi-judicial performance.”

19.3) In view thereof, I hold that the deduction of the 25% of the compensation amount done by the Tribunal on account of the contributory negligence, was erroneous. As such, the Claimants are entitled to get the enhanced compensation, i.e., entire amount of Rs.10,18,560/-, as quantified in the forgoing paragraph 11 of this judgment.

20) Now, dealing with the question of liability to pay the compensation. Mr. Misar, the learned Advocate submitted that once the Tribunal held that the driving licence was fake, it was clear that said driver was not holding valid and effective driving licence. As such, the Tribunal could not have held the Appellant jointly and severally liable to pay the compensation because driving the truck with fake licence was a fundamental breach of the subject policy terms and conditions. Therefore, he urged to exonerate the Appellant from that liability. To substantiate this submission Mr. Misar relied upon the decision in United India Insurance Co. Ltd. vs. Anubai G. Thakare & Ors.30, therein this Court held that Section 168 of the Act is an enabling provision but it does not empower the Tribunal to issue direction to the insurer to pay the amount of compensation, though finding is reached that the insurer is not liable to pay such amount on account of fundamental breach of the terms of insurance policy.

20.1) In the alternative, Mr. Misar stated that, considering the settled law, the impugned Order ‘to pay jointly and severally’ may be substituted with the Order ‘to pay and recover’. In fact, it is the main ground of the Appeal.

21) In reply, Mr. Mendon, submitted that the Appellant has failed to prove that the subject driving licence was fake. Secondly,

30. 2008 (1) Mah.L.J. 73. that there is no evidence that Respondent No.6 was aware of the said fact and yet, he allowed the driver to drive the offending truck. As such, this is not a case of fundamental breach of the policy terms and condition. On this premise, Mr. Mendon claimed that the impugned Order ‘to pay jointly and severally’, is correct. To bolster this submission he cited the decision in Pepsu Road Transport Corp vs. National Insurance Co. Ltd.31 and Rishi Pal Singh vs. New India Assurance Co. Ltd. & Ors.32. But the facts therein are distinct.

22) In the case of Pappu and Ors. vs. Vinod Kumar Lamba and Anr.33, Respondent No.1 – the owner of the offending vehicle merely raised a vague plea in the written statement that the offending vehicle DIL-5955 was being driven by a person having valid driving licence. He did not disclose the name of the driver and his other details. Besides, Respondent No.1 did not enter the witness box or examine any witness in support of this plea. Respondent No.2 – Insurance Company in the Written Statement had plainly refuted that plea and also asserted that the offending vehicle was not driven by an authorized person and having valid driving licence. Respondent No.1 – owner of the offending vehicle did not produce any evidence except a driving licence of one Joginder Singh, without

31. (2013) 10 SCC 217.

32. 2022 SCC Online SC 2119.

33. (2018) 3 SCC 208. any specific stand taken in the pleadings or in the evidence that the same Joginder Singh was, in fact, authorized to drive the vehicle in question at the relevant time. Therefore, the Tribunal allowed the application in part and it absolved the insurance company by dismissing the claim petition against it. The High Court affirmed the view taken by Tribunal. In this background the Hon’ble Supreme Court held that, “… Merely producing a valid insurance certificate in respect of the offending Truck was not enough for the respondent No.1 to make the Insurance Company liable to discharge his liability arising from rash and negligent driving by the driver of the vehicle. The Insurance Company can be fastened with the liability on the basis of a valid insurance policy only after the basic facts are pleaded and established by the owner of the offending vehicle – that the vehicle was not only duly insured but also that it was driven by an authorised person having a valid driving licence. Without disclosing the name of the driver in the Written Statement or producing any evidence to substantiate the fact that the copy of the driving licence produced in support was of a person who, in fact, was authorized to drive the offending vehicle at the relevant time, the owner of the vehicle cannot be said to have extricated himself from his liability. The Insurance Company would become liable only after such foundational facts are pleaded and proved by the owner of the offending vehicle.” However, to subserve the ends of justice, it was directed that the Insurer shall pay the claim amount awarded by the Tribunal to the appellants in the first instance, with liberty to recover the same from the owner of the vehicle in accordance with law.

22.1) In the case of Nirmala Kothari vs. United India Insurance Co. Ltd.34, the Hon’ble Supreme Court observed that., “… In the case of United India Insurance Co. Ltd. vs. Lehru & Ors. a two Judge Bench of this court has taken the view that the Insurance Company cannot be permitted to avoid its liability on the ground that the person driving the vehicle at the time of the accident was not duly licenced. It was further held that the willful breach of the conditions of the policy should be established....” In paragraph 10 thereof, the Hon’ble Supreme Court observed that, “… It has been categorically held in the case of National Insurance Co. Ltd vs. Swaran Singh & Ors.35 that,

110. (iii)…Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licenced driver or one who was not disqualified to drive at the relevant time.”

34. (2020) 4 SCC 49.

35. (2004) 3 SCC 297.

22.2) In the case in hand, the evidence of DW[1] - Anant Hadapi indicates that at the relevant time he was working in the licence Section of the RTO Office, Mumbai. He deposed that, as per the Office record, Driving Licence No. MH-01-89-C-1472 was issued in the name of Mr. Manojkumar Omkar Deshwali on 27/06/1989. In this regard DW[1] referred the “Licence Extract (Exh.27)”. DW[1] deposed that once such licence was issued with the given number, no second licence is issued with the same number. When confronted with the photocopy of the subject licence (Article “Z”), DW[1] deposed that the said licence is not the licence issued by his Office.

22.3) In view of the said evidence the Tribunal held that DW[1] deposed that the licence (Article “Z”) is a fake one as much as no like licence was issued by the RTO Office and the licence (Exh.27) was issued in the name of Mr. Manojkumar Omkar Deshwali. It is noticed that, similar photocopy of the licence was produced by the Claimants below the list (Exh.7). Thus, it is evident that the Investigation Officer supplied the same licence copy to the Claimants. It is not the case that immediately after the accident the driver of the truck and/or Respondent No.6 went to the Investigation Officer/Police and informed about the subject driving licence and the background in which Respondent No.6 had appointed the driver of the offending truck as his driver. As such, the Tribunal rightly held that the licence was fake. In the cross-examination DW[1] admitted that the licence issued in 1989 was expired on 26/07/1992 and it was renewed from 23/09/1992 to 26/09/1995 (vide Exh.27). This fact indicates that on the date of the accident, the subject driving licence was also not valid. In the backdrop, the Appellant is not liable to pay the compensation amount workout above. However, it cannot be ignored that the Claimants are third party to the policy. They are poor. The deceased died at young age. Therefore, and in accordance with the decisions in Pappu and Ors. (supra), Nirmala Kothari (supra) and Swaran Singh & Ors. (supra), it would be appropriate that the Appellant shall pay the compensation amount of Rs.10,18,560/- to the Claimants in the first instance, with liberty to recover the same from the owner of the vehicle in accordance with law.

22.4) The Claimants are entitled to receive some interest on the compensation amount. The claim was filed on 27/08/1996. The Tribunal held that a keen interest was shown by the Claimants to prosecute the claim. Yet, awarded the interest from 01/02/1999. No reason is recorded for not awarding the interest from the date of filing the claim. Needless to state that an insurer is liable to pay the “just compensation” immediately after the accident. However, the Tribunal did not consider what difficulties the Claimants widow, minor children and aged mother must have faced after the sudden death of the sole earning member. Therefore, I hold that the Claimants are entitled to get the interest at the rate of 7.5% per annum from the date of filing of the claim. To fortify this conclusion I have considered the following observation of the Apex Court in Abati Bezbaruah vs. Dy. Director General Geological Survey of India and Another36, in paragraph 18 that, “... No rate of interest is fixed under Section 171 of the Motor Vehicles Act, 1988. Varying rates of interest are being awarded by Tribunals, High Courts and the Supreme Court. Interest can be granted even if claimant does not specifically plead for the same as it is consequential in the eye of law. Interest is compensation for forbearance or detention of money and that interest being awarded to a party only for being kept him out of the money which ought to have been paid to him. No principle could be deduced nor any rate of interest can be fixed to have a general application in motor accident claim cases having regard to nature of provision under Section 171 giving discretion to Tribunal in such matter. ….”

23) The upshot of the above discussion is that, despite the claimants were entitled for compensation towards the loss of the future prospects, the Tribunal did not award the same. The deceased was not responsible for the cause or the contributory negligence

36. (2003) 3 SCC 148. behind the accident. However, and without recording any reason, the Tribunal deducted the 25% of the compensation amount payable to the Claimants. The Claimants diligently prosecuted the claim. Nevertheless, the interest on the award amount was granted from 01/02/1999, without recording any reason. This resulted in denying the “just compensation” or say, awarding lesser compensation, which is erroneous. Therefore, although the Claimants have not filed separate Appeal or cross-objection, they are entitled to the compensation of Rs.10,18,560/- by way of the enhancement. Lastly, it was proved by the Appellant that the driving licence in question was not only fake but also invalid. Therefore, the contention of the Appellant was acceptable that this is a fit case to pass the ‘pay and recover order’. Yet, the Tribunal held the Appellant ‘jointly and severally liable’ to pay the compensation amount, which is not correct. In view of the said infirmities, the impugned Judgment and Award warranted an interference to modify the same. Thus, the Appeal is liable to be disposed of, accordingly.

23.1) Hence, following Order is passed. (a) The impugned Judgment and Award dated 13/10/2006, in Application No.2935 of 1996, passed by the Motor Accident Claims Tribunal, Mumbai is modified. (b) Appellant – The United India Insurance Company Limited is directed to pay the Claimants the compensation of Rs.10,18,560/- (inclusive of no fault liability) together with interest thereon at the rate of 7.5% per annum from the date of filing the Claim Petition, i.e, 27/08/1996 till its realisation. (b-1) The Appellant is at liberty to recover the compensation amount of Rs.10,18,560/- alongwith the interest, from the available assets of the deceased Respondent No.6, filing an execution application based on this Judgment and Order/ modified Award.

(c) The parties to bear their own costs.

(d) The Appellant is directed to comply with this Judgment within a period of four months from today, by depositing the amount in the Tribunal. (e) On deposit of the amount, the Tribunal shall immediately inform about the deposit to the Claimants. (f) The amount deposited shall be apportioned amongst the Claimants as directed by the Tribunal. (g) The Claimants are permitted to withdraw the amount from the Tribunal, subject to payment of a deficit Court fee, if any, towards the enhanced compensation. (h) The amount deposited in the Tribunal shall not be invested for a period of eight weeks from the date of the deposit. In the event the amount is not withdrawn within a period of eight weeks from the date of deposit, the same shall be invested by the Tribunal, passing appropriate directions.

(i) The Appellant - insurance company will be entitled to adjustment of the amount against the already paid under the impugned Order. (j) Appeal is disposed of in aforesaid terms. (k) Record and Proceedings of the Tribunal be immediately returned. (SHYAM C. CHANDAK, J.)