Oriental Insurance Co. Ltd. vs Sarita Devi and Others

Nawal Kishore Agarwal, J.—Both the appeals i.e. MA No. 138/2006, filed by Oriental Insurance Co. Ltd. i.e., insurer of offending vehicle, and MA no. 126/2005, filed by the claimants for enhancement of compensation against the award dated 29.9.2004 passed by IVth Addl. Motor Accidents Claims Tribunal (FTC), Surajpur in claim case No. 06/04 are being disposed of by this common award as the common facts and issues are involved in both the appeal and are arising out same accident. The questions involved in these appeals are whether or not in the facts and circumstances of the case, the liability of insurance company is limited to Rs. 50,000/- and the amount of compensation awarded is adequate.

One Sitaram Yadav, sitting in Rajdoot Motorcycle as a pillion rider met with an accident on 01.10.1988 with Cash Van bearing registration No. CPL-9100, owned by respondent/SECL, and being driven by respondent/Deepnayaran, and succumbed to the injuries sustained by him in the said accident.

As against compensation of Rs. 22,00,000/- claimed by legal representatives of deceased Sitaram by filing application u/s 166 of the Motor Vehicles Act, 1988 (for short "the Act, 1988") for the death of deceased in the said motor accident, the Tribunal awarded a total sum of Rs. 2,40,000/- along with interest @ 6% per annum from the date of application i.e. 20.12.2002 till its actual payment.

The Tribunal, on a close scrutiny of the evidence led, held: the accident had occurred due to rash and negligent driving by driver of Cash Van bearing registration No. CPL-9100 i.e. respondent/Deepnarayan; Sitaram Yadav died on account of injuries sustained in the said accident; wife of deceased was given compassionate appointment and also compensation by the respondent/SECL; the liability of Oriental Insurance Company Ltd. is not limited; insurance company liable for payment of compensation as it could not establish violation of policy conditions; awarded a total sum of Rs. 2,40,000/- as compensation along with interest @ 6 percent per annum from the date of application, i.e. 20.12.2002 till its actual payment.

Shri A.K. Athaley, learned counsel appearing for the appellant/Oriental Insurance Co. Ltd. would submit: u/s 95(2) (b) (i) of the Motor Vehicles Act; 1939 (for short "the Act, 1939") as amended w.e.f. 01.10.1982, the liability of the appellant/insurance company is limited to the extent of Rs. 50,000/- only and the Tribunal has erred in holding insurance company liable for payment of entire compensation awarded.

Per contra, Shri DN Prajapati, learned counsel appearing for the claimants while supporting the findings of Tribunal in holding insurance company liable for the payment of entire compensation awarded, would submit the Tribunal has erred in awarding low amount of compensation in the facts and circumstances of the case which deserves to be suitably enhanced.

We have heard the counsel appearing for the parties, perused the records of the Tribunal including award impugned.

Undisputedly, the accident took place on 01.10.1988 i.e. prior to coming into force of the Act, 1988 which came in force w.e.f. 01.07.1989. It is now settled law the Act, 1988 is not retrospective in nature. The rights and liability of the parties are required to be determined when the cause of action for filing claim petition arises.

In the instant case, cause of action for filing claim petition arose on 01.10.1988, therefore, the rights and liability of the parties are required to be determined in accordance with the provisions of the Act, 1939 as amended vide amendment dated 01.10.1982, and not by the Act, 1988. Section 95 (2) of the Act, 1939, reads as under:

(2) Subject to the provisions of sub-section (1), a policy of insurance shall cover any liability incurred in respect of any one accident up to the following limits, namely:-

(a) Where the vehicle is a goods vehicle, a limit of (one lakh and fifty thousand rupees) in all, including the liabilities, if any, arising under the Workman''s Compensation Act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, employees (other than the driver), not exceeding six in number, being carried in the vehicle;

(b) Where the vehicle is a vehicle in which passengers are carried for hire or reward, or by reason of or in pursuance of a contract of employment.

(i) in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all.

2[(ii) in respect of passengers-

(c) save as provided in clause (d), where the vehicle is of any other class, the amounts of liability incurred;

(d) irrespective of the class of the vehicle, a limit of rupees [six thousand] in all in respect of damage to any property of a third party.

The provisions of Section 95 (2) (b) of the Act, 1939, were interpreted by the Supreme Court in case of National Insurance Co. Ltd., New Delhi Vs. Jugal Kishore and Others, . In a case where the claimant Jugal Kishore, a three wheeler scooter driver, met with an accident with Bus, the Supreme Court held: the liability of the insurance company u/s 95 (2) (b) of the Act, 1939, could not be in excess of statutory liability of Rs. 20,000/- as stood on the date of accident i.e., 15.07.1969, and observed in para 8 of its judgment as under:

A perusal of the policy, therefore, indicates that the liability undertaken with regard to the death or bodily injury to any person caused by or arising out of the use (including the loading and or unloading) of the motor vehicle falling u/s 2(1)(i) has been confined to "such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939". This liability, as is apparent from clause (b) of sub-section (2) of Section 95 of the Act, was at the relevant time Rs. 20,000 only. The details of the premium also indicate that no additional premium with regard to a case falling u/s 2(1)(i) was paid by the owner of the vehicle to the insurance company. It is only the vehicle which was comprehensively insured, the insured''s estimate of value including accessories (IEV) thereof having been shown as Rs. 40,000. In this view of the matter the submission made by learned counsel for the respondents that the appellant had in the instant case undertaken an unlimited liability does not obviously have any substance, the liability under the policy in the instant case was the same as the statutory liability contemplated by clauses (b) of sub-section (2) of Section 95 of the Act namely Rs. 20,000. An award against the appellant could not, therefore have been made in excess of the said statutory liability.

The Supreme Court in case of Jameskutty Jacob Vs. United India Insurance Co. Ltd. and Others, has held: in a case covered u/s 95 (2) (c) of the Act, 1939, the liability of the insurance company would be the amount of liability incurred even though policy is an "Act only Policy".

Now reverting to the facts of the case, indisputably, the Cash Van i.e. offending vehicle is insured vide policy Ex. NA3/1 as a private Car and is an Act only Policy. Schedule to the policy indicates premium of Rs. 277/- has been charged covering "liability of public risk". Indisputably, the vehicle is neither a goods carriage vehicle nor passenger carrying vehicle being plight for hire or reward. The vehicle was cash Van and was being used for the purpose of insured business at the time of accident. Therefore, the vehicle in question would come under the category of vehicle of "any other clause" as provided u/s 95 (2) (c) of the Act, 1939.

As per Section 95(2) (c) of the Act, 1939, the liability of insurance company would be the amount of liable incurred even though policy is an Act only Policy as held by the Supreme Court in case of Jameskutty Jacob (Supra). Therefore, since the vehicle in question is not a passenger carrying vehicle and would come under the category of "any other vehicle" as defined in clause-c of Section 95(2) of the Act, 1939, the liability of the insurance company cannot be limited to the extent of Rs. 50,000/- only.

In view of above, in our considered opinion, the findings of the Tribunal regarding insurer''s responsibility of entire payment of compensation awarded does not suffer from any illegality for the reason vehicle in question would come under the category of "any other vehicle" as defined in Section 95(2) (c) of the Act, 1939.

Now let us deal with second question, whether or not the amount of compensation awarded by the Tribunal is adequate.

The deceased was working as a Pharmacist T&S Grade-C in Bhatgaon sub-area of respondent/SECL. As per Ex. P/4, his basic salary was Rs. 1342/- besides that, he was getting Rs. 132.08/- as VDA, Rs. 186.31/- as FDA, Rs. 24.08/- as SDA and for the month of July, August & September, attendance bonus of Rs. 134.20/- was also given to him. Salary slip shows his annual bonus for the year 1987-88 as Rs. 1359.49/-.

The Tribunal, taking into consideration the salary of deceased as Rs. 1717/- after deducting attendance bonus of Rs. 134.20/- which was not being paid regularly, assessed the income of the deceased as Rs. 1800/- month, deducted 1/3rd of it towards personal expenses of the deceased, assessed claimant''s monthly dependency as Rs. 1200/- i.e., Rs. 14400/- per annum. Looking to the age of the deceased as 35 years at the time of accident applied multiplier of 16 and awarded Rs. 2,30,500/-. The Tribunal further awarded Rs. 9500/- on other heads, and thus awarded a total sum of Rs. 2,40,000/- along with interest @ 6 percent per annum from the date of application i.e., 20.12.2002 till its actual payment.

While assessing the amount of compensation, the Tribunal has also considered the fact that widow of deceased Sitaram Yadav i.e. Sarita Devi was given compassionate appointment by the respondent/SECL.

The Supreme Court in case of Bhakra Beas Management Board Vs. Smt. Kanta Aggarwal and Others, has observed in paragraphs 12 & 13 as under:

It is pointed out that the award as made is extremely high and the concept of just compensation has been lost sight of.

Learned counsel for the respondent supported the judgment and additionally submitted that appeal of Respondent 1 is pending. In normal course, when two appeals are directed against the common judgment, both the appeals should be heard by the same Bench of the High Court. But we find that the High Court had lost sight of the fact that the benefits which the claimant receives on account of the death or injury have to be duly considered while fixing the compensation. It is pointed out that Respondent 1 was getting Rs. 4700 p.m. and a residence has been provided to her and actually the compassionate appointment was given immediately after the accident.

The amount of compensation of Rs. 2,40,000/- awarded by the Tribunal for the death of deceased Sitaram Yadav, when examined in the context of above broad features of the case, the fact that although the accident had occurred in the year 1988 but the claim application was filed in the year 2002 and the fact that one of the family members of deceased was given compassionate appointment, in our opinion, there is no scope for enhancement in the amount of compensation awarded by the Tribunal.

For the foregoing, both the appeals, being devoid of merits, are liable to be and are hereby dismissed. No order as to costs.