United India Insurance Co. Ltd v. Naresh Narayan Jha

1. Akhil Kumar Jha, a 20 year old bachelor, working as clerk, died as a result of injuries suffered in a motor vehicular accident that occurred on 18.03.2009 when the motorcycle bearing No. DL 6SS 9717 (the motorcycle), which he was driving, was hit by oil tanker bearing No. HR 69 4477 (the offending vehicle) concededly insured against third party risk for the period in question with the appellant insurance company (insurer). His parents (first and second respondents herein) instituted an accident claim case (Suit No. 807/2009) on 20.04.2009 under Sections 166 and 140 of Motor Vehicles Act, 1988 (MV Act) before the motor accident claims tribunal (the tribunal) impleading the insurer, driver and owner respectively of the offending vehicle as the respondents; the said 2016:DHC:2878 driver and owner now third and fourth respondents in the appeal before this Court.

2. The tribunal held inquiry and, by judgment dated 31.03.2015, awarded compensation in the sum of Rs. 18,30,500/-, which includes Rs. 15,80,500/- calculated as loss of dependency, this, in addition to Rs. 2,50,000/- awarded under non-pecuniary heads of damages. The calculation of loss of dependency was made after returning a finding that the deceased was earning Rs. 6,500/- per month from the private company, a fact proved by Mr. Rajesh Kr. Thakur (PW-3) an official from the accounts of the said employer. The tribunal added 50% of the last drawn salary as future prospects of increase and deducted 1/4th towards personal & living expenses and applying the multiplier of 18 computed the loss of dependency.

3. The insurance company questions the computation of compensation on account of loss of dependency. The contention of the insurance company against factoring in of future prospects cannot be accepted as the evidence of PW-3 affirming that the deceased was a permanent employee and was entitled to increments and promotions in future has gone unchallenged. But, there is an error in deduction on account of personal & living expenses which, in the case of a bachelor, should have been to the extent of 50% rather than 1/4th. Further, the multiplier had to be adopted as per the age of the claimants rather than the age of the deceased, whichever is higher [G.M. Kerela SRTC vs Susamma Thomas (1994) 2 SCC 176; U.P.S.R.T.C. vs Trilok Chandra (1996) 4 SCC 362; New India Assurance Co. Ltd. vs Charlie AIR 2005 SC 2157; New India Assurance Co. Ltd. vs Shanti Pathak (Smt.) & Ors., (2007) 10 SCC 1; Ramesh Singh & Anr. vs Satbir Singh & Anr. (2008) 2 SCC 667; National Insurance Company Ltd. vs Shyam Singh & Ors. (2011) 7 SCC 65; Ashwinbhai Jayantilal Modi vs Ramkaran Ramchandra Sharma & Anr. (2015) 2 SCC 180]

4. In the above facts and circumstances, the income on which loss of dependency has to be worked out comes to (6,500 x 150 ÷100) Rs. 9,750/-. After deducting personal & living expenses to the extent of 50%, the monthly loss of dependency comes to (9750÷ 2) Rs. 4,785/-. Since on the relevant date the age of the father (first respondent) was 52 years and that of the mother (second respondent) was 47 years, the average age being 49, the multiplier of 13 has to be applied. Therefore, the total loss of dependency comes to (4,785 x 12 x 13) Rs. 7,60,500/-. Adding the non-pecuniary damages in the total sum of Rs. 2,50,000/-, the total compensation in the case comes to (7,60,500 + 2,50,000) Rs. 10,11,000/. The compensation is reduced accordingly. It shall carry interest as levied by the tribunal.

5. Before the tribunal, the insurance company had also taken the plea that there was breach of terms and conditions of the insurance policy inasmuch as the driver of the offending vehicle (third respondent) was not holding a valid and effective driving license for purposes of the offending vehicle which was carrying goods of dangerous or hazardous nature that requires certain further conditions to be satisfied in terms of proviso to Section 14(2) (a) of MV Act read with Rules 9 and 132 of Central Motor Vehicles Rules 1989. The insurer had led evidence to this effect by examining K.K. Vij, Deputy Manager (as R3W[1]). The tribunal, however, observed as under in the impugned judgment: “It is not denied that offending vehicle was insured with resp. no. 3 i.e. United India Assurance Company Ltd., same is held liable to pay the amount of compensation to the petitioner. However, it can recover the amount from other respondents, if permissible by law. This issue is therefore, decided in favour of the petitioner and against the respondents”.

6. The above approach cannot be approved of. The issues arising inter se between the insurer and insured also require to be addressed in the same inquiry by the tribunal. If the contentions of the insurance company as to the breach of terms and conditions of the policy are found to be correct, it (insurer) would deserve to be granted recovery rights against the insured, even while it can be called upon to satisfy the claim of the third party. Since the tribunal has failed to address the issue raised by the insurer, the proper course is to remit the limited issue for proper adjudication even while the insurer is called upon to satisfy the award in favour of the claimants.

7. By order dated 29.05.2015, the insurance company had been directed to deposit 60% of the awarded amount with proportionate interest with UCO Bank, Delhi High Court Branch within the period specified and out of such deposit Rs. 1,00,000/- was allowed to be released to the first and second respondents, the balance having been kept in fixed deposit to be renewed from time to time. The Registrar General shall now calculate the balance payable to the claimants in terms of the award modified as above and release the same in accordance with the above directions. If the deposit made by the insurer is found to be in excess of its liability, the same shall be refunded. Conversely, if there is a shortfall, the insurer shall be obliged to deposit the same with the tribunal within 30 days for it to be released to the claimant.

8. The insurer (appellant), the driver (third respondent) and the owner (fourth respondent) are directed to appear before the tribunal for further proceedings in light of above observations / directions on 4th May, 2016.

9. The appeal is disposed of in above terms.

10. Statutory deposit, if made, shall be refunded.

R.K. GAUBA (JUDGE) APRIL 06, 2016