National Insurance Company Ltd vs Sh. Lachhi Ram and Others

Deepak Gupta, J.—This petition, under Article 227 of the Constitution of India, by the Insurance Company is directed against the award of the Motor Accident Claims Tribunal, Kinnaur at Rampur Bushehar Kinnaur at Rampur Bushahr, in MAC Petition No. 89 of 2006 whereby he awarded a sum of Rs. 5,05,000/- in favour of the claimant and against the Respondents and held the Insurance Company liable to pay the said amount.

Since this petition has been filed under Article 227 of the Constitution of India, at the outset, it may be stated that this Court while exercising its supervisory jurisdiction does not act as an Appellate Court. The Insurance Company is not entitled to challenge an award on the issues of negligence or quantum and normally a petition under Article 226 or 227 of the Constitution of India would not be entertained in such a case.

The question that arises is, if the award is perverse or one which shocks the judicial conscience of this Court, should this Court refuse to exercise its supervisory powers only on the ground that the Insurance Company is not entitled to challenge the award in terms of the provisions of the Motor Vehicles Act? No doubt this Court is not to exercise its supervisory jurisdiction to correct any error or other illegality in the order of the Courts subordinate to it but at the same time this Court would be failing in its duty when a totally perverse order is brought before it and this Court does not exercise its supervisory jurisdiction. The Courts over whom this Court exercises supervisory jurisdiction must be made aware of their limits and must act within the bounds of law. Errors or mistakes may not be rectified under Article 227 but when the order is perverse or where the order shocks the judicial conscience then this Court should not hesitate in exercising these powers. This Court may also exercise such powers when the Court below does not give any reasons in support of its finding.

A Full Bench of this Court in National Insurance Company v. Soma Devi and Ors. Latest HLJ 2003 (HP) 982 , after considering the provisions of Motor Vehicles Act and those of Article 227 of the Constitution of India and the judgment of the Apex Court in Sadhana Lodh Vs. National Insurance Company Ltd. and Another, held as follows:

Taking Another fact situation, by way of citing Anr. reference, when it is brought to the notice of this Court by invoking its extraordinary jurisdiction under Articles 226/227 of the Constitution that a fraudulent act was committed in obtaining the Award against the Insurer of that otherwise a fraud was committed upon the insurer and either, under the provisions of the Motor Vehicles Act, 1988 or otherwise, Insurer has no remedy of either approaching the Tribunal for reviewing or recalling of the Award because of the absence of any statutory provision to that effect, or that the scope of the appeal u/s 173 of the Act is so limited as to exclude the consideration of any such contingency or situation, this Court cannot and should not hesitate in entertaining the petition and granting or moulding the relief appropriately. In this connection, reference may be invited to a judgment of the Supreme Court in the case of United India Insurance Co. Ltd. Vs. Rajendra Singh and Others, wherein their Lordships, while dealing with a similar situation where the Insurance Company undoubtedly had no other alternative (because the Tribunal had refused to open its doors to the Insurer on the ground of the absence of any power to review or recall the Award as originally passed), had the following observations to make and we quote:

For a High Court in India to say that it has no power even to consider the contention that the awards secured are the byproducts of stark fraud played on a Tribunal, the plenary power conferred on the High Court by the Constitution may become a mirage and people''s faith in the efficacy of the High Courts would corrode. We would have appreciated if the Tribunal or at least the High Court had considered the plea and found them unsustainable on merits, if they are meritless. But when the Courts pre-empted the Insurance Company by slamming the doors against them, this Court has to step in and salvage the situation.

It was further observed:

Thus the Tribunal refused to open the door to the Appellant Company as the High Court declined to exercise its writ jurisdiction which is almost plenary for which no statutory constrictions could possibly be imposed. If a party complaining of fraud having been practised on him as well as on the Court by Anr. party resulting in a decree, cannot avail himself of the remedy of review or even the writ jurisdiction of the High Court, what else is the alternative remedy for him? Is he to surrender to the product of the fraud and thereby became a conduit to enrich the imposter unjustly? Learned single Judge who indicated some other alternative remedy did not unfortunately spell out what is the other remedy which the Appellant Insurance Company could pursue with.

Finally, it was held as under:

It is unrealistic to expect the Appellant company to resist a claim at the first instance on the basis of the fraud because Appellant company had at that stage no knowledge about the fraud allegedly played by the claimants. If the Insurance Company comes to know of any dubious concoction having been made with the sinister object of extracting a claim for compensation, and if by that time the award was already passed, it would not be possible for the company to file a statutory appeal against the award. Not only because of bar of limitation to file the appeal but the consideration of the appeal even if the delay could be condoned, would be limited to the issues formulated from the pleadings made till then.

It, therefore, becomes abundantly clear that in all such like cases where the award on the face of it is a perversity, or is based on fraud, and the Insurance Company has no remedy under the Motor Vehicles Act of either challenging the award in appeal or being either to have it recalled or reviewed by the Tribunal itself, the power of judicial review by this Court in the exercise of its extraordinary jurisdiction under Articles 226/227 of the Constitution can always be invoked and exercised by this Court in dispensing justice to the parties.

I now proceed to decide the matter in the light of the aforesaid law laid down by the Apex Court and the Full Bench of this Court.

Coming to the facts in hand, the claimant filed a claim petition alleging that he was travelling as a pillion rider on the scooter being driven by Sh. Bhagwan Dass which met with an accident with a TATA Sumo No. HP-01A-3078 and suffered injuries. According to the claimant this accident occurred due to the rash and negligent driving of Sh. Dharam Pal, owner-cum-driver of TATA Sumo. Dharam Pal filed a written statement in which he stated that he was not driving his vehicle rashly or negligently and it was the scooter driver who was driving the same in a rash and negligent manner. Issues were framed and the main issue with which we are concerned is issue No. 1 which reads as follows:

Whether on 4.9.2005 at about 9.30 A.M. the Petitioner sustained multiple injuries on account of rash and negligent driving of Tata Sumo No. HP-01A-3078 by Respondent No. 1?OPP.

The learned Tribunal held that the driver of the Tata Sumo was not negligent and negligence was that of the scooter driver. Sh. Jagdish Thakur, vehemently contended that since this was not a plea taken in the claim petition nor was such issue framed the Tribunal could not have taken this decision. I am afraid that this argument cannot be accepted. The parties were fully aware that one of the issues involved was whether it is the Sumo driver who was negligent or not. In case the Sumo driver was not negligent then obviously it would be the driver of the scooter who would be negligent. Merely, because there was no specific issue as to whether the scooter driver was negligent is no ground to hold that such a dispute did not arise out of the pleadings. A perusal of the pleadings clearly shows that Dharam Pal had taken a specific plea that he was driving his vehicle in a proper manner and it was the scooter driver who was negligent. The scooter driver was represented by counsel and he was aware of this dispute having been raised. Both sides led evidence. Both the parties knew that the main dispute was as to which of the two drivers was negligent. This dispute has been decided by the learned Tribunal on the basis of evidence led before it. Even if the decision is wrong this Court cannot interfere in the same in exercise of its supervisory jurisdiction and hence as far as this contention of the Insurance Company is concerned the same is rejected.

The next contention of Sh. Jagdish Thakur, learned Counsel for the Insurance Company is that the award is perverse and is so excessive that it shocks the judicial conscience of this Court. According to him the award is so excessive that this Court should interfere in exercise of its supervisory jurisdiction.

The Petitioner was 42 years old at the time of the accident. The learned Tribunal has assessed income of the Claimant at Rs. 3000/- per month. The evidence on record shows that the claimant had suffered fracture in his right leg and the medical board had assessed his disability at 46% in respect of his right leg vide disability certificate Ext.PW-3/A.

The learned Tribunal held that a claimant in a case of bodily injury is entitled to compensation under various heads. The claimant was awarded Rs. 35,000/- on account of medical treatment, Rs. 5000/- on account of conveyance charges, Rs. 10,000/-on account of services of an attendant, Rs. 35,000/- on account of leave for one year, Rs. 20,000/- on account of mental and physical pain, shock and suffering i.e. Rs. 1,05,000/- under these heads and Rs. 4,00,000/- for loss of future earning. It is only the last head which is disputed before me.

Income of the claimant has been assessed at Rs. 3,000/- per month. The learned Tribunal in its judgment has not stated how it has calculated the amount of Rs. 4 lakhs under this head. All that is stated is that after taking into consideration the facts and circumstances of the case the claimant is allowed compensation of Rs. 4 lakhs for loss of future income, loss of amenities of life, loss of expectation of life, inconvenience, hardship, mental stress, dejection, frustration etc.

The evidence on record shows that the claimant was working as a mason. According to him, due to this injury he cannot work properly. He states that he has become a cripple after the accident and cannot work as a mason. However, this bald statement of the claimant cannot be accepted. The claimant examined PW-3 Dr. Ramesh Chauhan who has clearly stated that the claimant suffered compound fracture in both bones right leg with stiff ankle and knee joints and his disability is 46% in regard to the right leg only. The medical expert has not stated a word as to what work the claimant can do and what work he cannot do. The claimant also did not lead any other evidence in this behalf.

Sh. Balbir Chauhan, learned Counsel for the claimant submits that even if the learned Tribunal has not discussed the evidence properly since there is virtually no cross examination of the Petitioner his income should be taken at Rs. 7000/- per month as claimed by him and since he has suffered a disability of 46%, the loss of income would work out to more than Rs. 3000/- per month and the award under this head is more than justified. Even with regard to income, the Petitioner other than making a bald statement has not led any evidence whatsoever to show that he was working as a mason and what were the daily-wages that he was earning.

The accident in question occurred on 5.9.2005. Even assuming that the claimant was a mason , he was working in a rural area and would not be employed every day. Therefore, though I do not agree that the income can be assessed at Rs. 7000/-per month, I also feel that the assessment made by the learned Tribunal that the income was only Rs. 3000/- per month is on the lower side. In the year 2005 a mason would earn approximately Rs. 200/- per day but since employment round the year would not be certain the income can be assessed at Rs. 150/- per day or Rs. 4500/- per month.

The most important factor is the loss of earning capacity. The learned Tribunal has not even worked out the loss of earning capacity. The loss of disability cannot be equated to loss of earning capacity in every case. Furthermore, the learned Tribunal totally lost sight of the fact that the disability of 46% in question was in relation to one limb only and not in relation to the entire body. True it is that the claimant belongs to the working class where physical fitness is important. Since the claimant has not led complete evidence in this regard some element of guess work will have to be done. His disability of 46% to one limb cannot be treated as loss of earning capacity to the extent of 46%. However, a mason is required to be on his legs the whole day and the earning capacity of the claimant would definitely decrease. He can still function as a mason but his efficiency would come down. Keeping into consideration all these factors, I feel that the loss of earning capacity can be taken to be half of the disability i.e. 23%. Translated into monetary terms it works out to Rs. 1035/- per month or Rs. 12,420/- per year.

Now comes the question with regard to the multiplier which should be applied in this case. The Apex Court in Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, has laid down the law in this regard and as per the formula laid down in this case, for a person, aged 42 years, the multiplier would be 14 and the compensation payable under this head is Rs. 1,73,880/- as against Rs. 4 lakhs worked out by the learned Tribunal.

Therefore, the award of the learned Tribunal is inordinately high and shocks the judicial conscience and is perverse since he has worked out compensation of Rs. 4 lakhs without giving reasons, without making any calculations, without ascertaining the actual loss of income or earning capacity and without applying any multiplier. Therefore, this Court had to go into the entire evidence and recalculate the compensation. In fact if this Court was to take the income at Rs. 3000/- per month, as assessed by the learned Tribunal, then the amount of compensation payable works out to only Rs. 1,26,000/-. Therefore, I feel that this is a case where the interference is called for in exercise of the supervisory jurisdiction. The total compensation, thus, works out to Rs. 1,05,000/- + Rs. 1,73,880/- = Rs. 2,78,880/- which is rounded of to Rs. 2,80,000/-.

The Tribunal also made Anr. error. It while awarding interest did not give interest to the claimant from the date of filing of the petition but directed that in case the Insurance Company did not deposit the compensation amount within two months it shall be liable to pay interest @ 8% p.a. from the date of award till payment. This is Anr. gross error in the award. u/s 171 of the Motor Vehicles Act, a claimant is entitled to interest from the date of filing of the claim petition. Therefore, the claimant is held entitled to interest @ 9% p.a. from 25.11.2006 till deposit/payment of the amount.

In view of the above discussion, the petition is allowed and the award of the learned Tribunal is modified and the compensation reduced from Rs. 5,05,000/- to Rs. 2,80,000/- along with interest @ 9% p.a. from the date of filing of the petition till payment/deposit of the awarded amount. No order as to costs.