National Insurance Company Limited vs Khajani

K. Kannan, J.—The point urged in appeals by the insurer in FAO Nos. 928 to 931 of 1997 is that even as per the contentions raised in the claim petitions, 3 deceased and one injured person were all passengers in a goods vehicle when the accident took place on 26.07.1995. The contention raised was that the persons were all gratuitous passengers and there is no policy coverage to the risk to such passengers in the truck. Section 147 of the Motor Vehicles Act requires a compulsory insurance cover only to owners of goods travelling along with the goods or the driver or conductor or loadman who are required to be covered for the risk under the Workmen''s Compensation Act. There is no compulsion for coverage for any other class of persons. The policy of insurance cannot therefore extend to the benefit of the claimants or the owner to make the insurer liable for the compensation. The law on this has been firmly set forth in New India Assurance Co. Ltd. Vs. Asha Rani and Others, The liability cast on the insurer is against the law laid down in the above decision. The liability shall be only on the owner and driver. The award passed against the insurer is set aside and the right of enforcement of the award is available for the claimants against the owner and driver.

The appeals in FAO Nos. 928 to 931 of 1997 at the instance of the Insurance Company are allowed but reserving to the claimants the above benefit. If during the pendency of the appeals, any portion of the award has been recovered from the insurer, the insurer will press for recoveries against the owner and driver only in the interest of justice and not against the claimants. For any unrecovered portion of the award, the claimants will have a right of recourse not against the insurer but against the owner and driver.

FAO Nos. 1348 to 1341 of 1997 are at the instance of the claimants seeking for enhancement of compensation. In FAO No. 1348 of 1997, the deceased was 40 years of age and was said to own 5 acres of land and had taken on lease 8 acres. The claimants would contend that the deceased had an income of Rs. 7,000/- per month. The Tribunal took the income at Rs. 15,000/- per annum, applied a multiplier of 15 and assessed a compensation of Rs. 1,77,500/-. The claimants were widow, 5 minor children and mother. I would take the managerial skills of the deceased for the 5 acres of land that he had at Rs. 2,500/- and value his contribution on an agricultural land taken on lease at Rs. 2,000/- and take the loss of income at Rs. 4,500/- and reassess the compensation on the scales laid down through some of the recent decisions of the Supreme Court and tabulate the various heads of claims as under:-

There shall be an award of Rs. 10,05,500/- and the additional amount secured through this award will attract interest at 7.5% per annum from the date of petition till date of payment. The entitlement shall be distributed amongst widow, 5 children and mother in such a way that the widow and children take twice as much as the mother of the deceased. Consistent with my finding in the above appeals filed by the insurer, the right of enforcement shall be available for the additional amount only against the owner and driver and not against the insurer.

In FAO No. 1339 of 1997, the deceased was an agriculturist, aged 28 years. The possession of his lands was not disclosed and I would take him to be an agricultural labourer. The claimants were widow and 2 children. I will reassess the compensation and tabulate the various heads of claims as under:-

There shall be an award of Rs. 5,47,500/- and the additional amount secured through this award will attract interest at 7.5% per annum from the date of petition till date of payment. The amount shall be distributed amongst the claimants equally. The right of enforcement shall be available against the owner and driver.

In FAO No. 1340 of 1997, the deceased was aged 50 years. He was also said to be an agriculturist. The claimants were the widow, 3 children and mother. I will reassess the compensation and tabulate the various heads of claims as under:-

There shall be an award of Rs. 5,50,000/- and the additional amount secured through this award will attract interest at 7.5% per annum from the date of petition till date of payment. The right of enforcement shall be available against the owner and driver and the amount shall be distributed amongst the widow, children and mother in such a way that the widow and children take twice as much as the mother of the deceased.

In FAO No. 1341 of 1997, the claimant was 28 years of age and was said to be a Clerk in a government department. He was hospitalized for a period of 2 1/2 months and the medical expenses brought on record were said to have been reimbursed but the injury suffered was so serious that he had suffered an amputation of one leg and suffered serious crush injury on the other. The disability was assessed at 80%. Since amputation is a schedule injury under the WC Act, it ought to be taken also resulting in equal percentage of loss of earning capacity, no matter that he continued in his employment. The loss of earning capacity is always understood from the context of loss, if he were to seek for employment in labour market afresh. I will reassess the compensation and tabulate the various heads of claims as under:-

There shall be an award of Rs. 5,96,680/- and the additional amount secured through this award will attract interest at 7.5% per annum from the date of petition till date of payment. The right of enforcement shall be available against the owner and driver.

All the appeals for enhancement of compensation in FAO Nos. 1338 of 1341 of 1997 are allowed subject to modification regarding the right of enforcement being available only against the owner and driver and exonerating the Insurance Company for the reasons set forth in the appeals filed by the insurer.