Ghansham vs Oriental Insurance Co. Ltd. and Others

K. Kannan, J.—The appeal is at the instance of the owner of a tractor bearing registration No. HR 36-G 9210 which has been made liable

for the consequences of an accident that caused the death of a boy aged 16 years, who was said to be travelling in yet another tractor bearing

registration No. HR 36-V 2973. On account of a collision between two tractors, the boy was said to have fallen from the tractor and suffered fatal

injuries. On a claim for compensation, the Tribunal found the appellant-insured liable for the accident finding that his driver was guilty of rash and

negligent driving. The insurance company had been exonerated on the ground that the driver had licence only to drive the motor cycle, car and jeep

and he did not have a licence to drive a tractor. The court assessed a compensation of Rs. 4,60,000 taking the income to be Rs. 3,000 per month,

making a deduction of 73rd and adopting a multiplier of 18. It also added Rs. 15,000 towards medical treatment and Rs. 13,000 towards

miscellaneous expenses.

As regards the liability, I would find that the Claims Tribunal was in error in exonerating the insurance company on a finding of alleged violation

of terms of policy. The nature of licence that could be granted is set out in the Central Motor Vehicles Rules, 1989, under rule 4 read with Form

VI. The Central Motor Vehicles Rules set out the categories of vehicles for which the licences could be issued. The form merely prescribes a

transport vehicle as a distinct class and the two-wheelers, light motor vehicles as another class. The tractor itself is not in one of the categories

mentioned either under rule 4 or in Form VI. A tractor is a light motor vehicle as defined in section 2(44) of the Motor Vehicles Act. A car or a

jeep is also a light motor vehicle. If the driver, therefore, had a licence to drive a light motor vehicle such as a car or a jeep, the said licence ought

to be taken as sufficient for a tractor as well. There had been no breach of terms of policy and the exoneration of liability afforded to the insurer

was clearly wrong.

The learned counsel appearing on behalf of the insurance company argues that the appellant himself has bargained only for a right of recovery

for the claimant against the insurer with a later right of recovery against the appellant and he had not pleaded for a full right of indemnity. I cannot

take this as an argument that should obtain my concurrence since a legal liability of what the law fastened, cannot be said to be forsaken by the

appellant by the only fact that he was pleading that the claimants should have had the first right of recovery against the insurer. I hold that if the

appellant''s driver was negligent, he was entitled to a full right of indemnity from his insurer for a claim arising out of the accident.

The liability of the insurer invariably arises on a liability which is principally cast on the tortfeasor or on the owner. The question of quantum of

compensation would, therefore, require to be seen as properly assessed or not. The court has observed that it was applying a formula as given by

the Apex Court in Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, and has assessed a compensation taking the

income at Rs. 3,000 per month, providing for a 1/3rd deduction and applying a multiplier of 18. The said decision allows for 50 per cent deduction

for a claim by the parents and it could not have 1/3rd deduction. If 1/3rd deduction was possible under Second Schedule for a person whose

income was less than Rs. 40,000, then even the multiplier to be adopted must conform to what was set out in Second Schedule. In either event,

the compensation assessed does not fall within the ambit of law, I will take Second Schedule formula as more beneficial to the claimants and will

take Rs. 3,000 as an income per month and determine the yearly contribution towards the family at Rs. 24,000 and adopt a multiplier of 16 which

is suitable to the age of a person, who was less than 18 years of age. The total loss of dependency would be taken as Rs. 3,84,000. I will make an

additional amount of Rs. 9,500 towards the conventional heads of claim and Rs. 15,000 for medical expenses already incurred. The total amount

of compensation would be Rs. 4,08,500. There is a marginal difference in the amount as already awarded by the Tribunal. The liability stands

modified and the quantum of compensation also stands modified to the above extent. The appeal is allowed with a right of enforcement available to

the claimants against the insurer.