The New India Assurance Company Ltd. vs Shri Awwal Singh & Ors.

These two connected appeals are arising from the judgment and award dated 20.12.2011 passed by the learned Motor Accident Claims Tribunal, Tehri Garhwal in MAC Case No. 27 of 2010. Appeal From Order No. 47 of 2012 has been preferred by the Insurance Company, whereas Appeal From Order No. 103 of 2012 has been preferred by the claimant for enhancement.

The brief facts of the case are that on 13.02.2008, at about 5:00 p.m., the claimant, Abbal Singh, was travelling in Tata Scorpio Gold bearing registration No. UA-07P-5337 from Sarkanda towards his village Chamiyala. At village Sarkanda, within the jurisdiction of Revenue Police Circle Tugara, Tehsil Ghansali, District Tehri Garhwal, the said vehicle met with an accident, resulting in grievous injuries to the claimant. The claimant was initially treated at Baleshwar Hospital and thereafter at Doon Hospital, C.M.I. Hospital, Dehradun and Indian Spinal Injuries Centre, New Delhi. He was subsequently found to have suffered 80% permanent disability. The claimant thereafter instituted M.A.C. Case No. 27 of 2010 before the Motor Accident Claims Tribunal/Additional District Judge, Tehri Garhwal, claiming compensation of ₹11,16,000/-. The learned Tribunal, vide judgment and award dated 20.12.2011, awarded a sum of ₹9,74,000/- along with the interest @ of 6 % per annum from the date of filing of claim petition till actual payment in favour of the claimant against the appellant-Insurance Company. Aggrieved by the said judgment and award, the Insurance Company has preferred the present appeal under Section 173 of the Motor Vehicles Act, 1988.The claimant has also preferred connected A.O. No. 103 of 2012 seeking enhancement of the compensation awarded by the learned Tribunal to the extent of the amount claimed in the claim petition.

The claimant pleaded that on 13.02.2008, while he was travelling in Tata Scorpio Gold bearing registration No. UA-07P-5337, the vehicle was being driven by respondent No.2 in a rash and negligent manner, on account of which it met with an accident and the claimant sustained grievous injuries resulting in permanent disability. It was further pleaded that the claimant had incurred substantial expenditure towards his treatment and, owing to the disability suffered in the accident, had suffered loss of earning capacity. On these grounds, compensation of ₹11,16,000/- was claimed.

Respondent No.2, the owner of the vehicle, denied the allegations of rash and negligent driving and pleaded that the vehicle was being driven properly and that the accident occurred on account of technical failure in the vehicle. It was further pleaded that the vehicle was duly insured with respondent No.3-Insurance Company and that the driver was holding a valid driving licence. The liability, if any, was thus pleaded to be upon the Insurance Company.

Respondent No. 3 - driver of the vehicle submitted that the said incident occurred due to technical and mechanical faults that developed in the vehicle and that the vehicle was not being driven in rash and negligent manner.

The appellant-Insurance Company denied the allegations contained in the claim petition and disputed the claimant's entitlement to the compensation claimed. It was pleaded that the claim was excessive and that the claimant had failed to establish the alleged expenditure and loss. The Insurance Company also disputed its liability to indemnify the owner in respect of the claim.

The learned Tribunal framed the following issues for determination:

a. Whether the accident in question took place on 13.02.2008 at about 5:00 p.m. at village Sarkanda, Revenue Police Circle Tugara, Tehsil Ghansali, District Tehri Garhwal, on account of rash and negligent driving of Tata Scorpio Gold bearing registration No. UA-07P-5337 by its driver, resulting in grievous injuries to the claimant?

b. Whether, on the date of the accident, the driver of the vehicle in question did not possess a valid driving licence and the owner did not possess valid permit and fitness in respect of the vehicle, as alleged by opposite party No.3 in its written statement? If so, its effect?

c. To what amount of compensation is the claimant entitled and from which of the opposite parties?

I. While deciding Issue No. 1 the burden of proving rash and negligent driving was placed upon the claimant. The Tribunal considered the statement of the claimant as well as the other evidence available on record. It noticed that, although the accident and the injuries sustained by the claimant were established from the documentary evidence, there was no sufficient evidence to establish that the accident had occurred on account of rash and negligent driving of the vehicle by its driver. The testimony of the claimant and the other witness was not found sufficient to establish the manner of the accident or rash and negligent driving. Accordingly, the Tribunal held that the allegation of rash and negligent driving was not proved and decided Issue No. 1 against the claimant.

II. While deciding Issue No. 2 the Tribunal considered the documentary evidence produced in respect of the vehicle, its insurance, permit, fitness and the driving licence of the driver. It found that the offending vehicle was duly registered and insured on the date of the accident and that the requisite permit was available. The Tribunal further found that the driver, Bachan Singh, was holding a valid driving licence bearing No. 565, which was valid from 15.05.2007 to 14.05.2010 and was thus valid on the date of the accident. On such consideration, the Tribunal held that the vehicle had valid registration and permit and that its driver possessed a valid driving licence on the date of the accident. Accordingly, Issue No. 2 was decided in favour of opposite party Nos. 1 and 2.

III. While deciding Issue No. 3 While considering the entitlement of the claimant to compensation, the Tribunal took into account the medical evidence, the permanent disability suffered by the claimant and the material placed on record regarding his income and loss of earning capacity. The Tribunal assessed the claimant's permanent disability at 80% and awarded compensation under different heads, including future loss of earnings, medical expenses and loss of enjoyment. The total compensation was assessed at ₹9,74,000/-, which was directed to be paid to the claimant by the appellant-Insurance Company.

The appellant-Insurance Company vehemently submitted that the learned Tribunal, having itself recorded a finding that rash and negligent driving of the insured vehicle was not proved, erred in fastening liability upon the appellant. It was contended that negligence being the foundation for a claim under Section 166 of the Motor Vehicles Act, in the absence of proof thereof against the driver of the insured vehicle, no liability could have been fastened upon the Insurance Company. It was further submitted that the Tribunal had also erred in awarding ₹50,000/- towards medical expenses despite the alleged expenditure not being duly proved, and another ₹50,000/- towards loss of enjoyment without sufficient evidentiary basis. Accordingly, it was urged that the impugned judgment and award be set aside insofar as the same fastens liability upon the appellant.

In the connected A.O. No. 103 of 2012, the claimant submitted that the learned Tribunal had erred in assessing the compensation at ₹9,74,000/- despite the claimant having established the extent of his permanent disability, his income and the expenditure incurred towards treatment. It was contended that the compensation awarded was inadequate and that the Tribunal had failed to award the entire amount of ₹11,16,000/- claimed by the claimant. It was accordingly urged that the compensation be enhanced to the amount claimed in the claim petition.

The Respondent No. 2 – owner of the offending vehicle in his written statement submitted that the offending vehicle Tata Scorpio Gold no. U.A. 07 P 5337 was duly insured with the appellant- Insurance Company and that all the documents pertaining the vehicle were valid. He further submitted that the Insurance Company alone was liable to pay the compensation to the claimants.

The Respondent No. 3, driver of the offending vehicle in his written statement submitted that the vehicle was carefully driven and that the vehicle developed technical and mechanical faults due to which the accident occurred. He also submitted that he possessed a valid driver’s licence on the date of the accident.

Having heard learned counsel for the parties and perused the record, this Court finds that the controversy in the present appeals primarily concerns the effect of the finding recorded by the learned Tribunal with regard to rash and negligent driving and the quantum of compensation payable to the claimant. While considering Issue No.1, the learned Tribunal recorded a finding that the claimant had failed to establish that the accident had occurred on account of rash and negligent driving of the vehicle by its driver. However, despite recording the aforesaid finding, the learned Tribunal ultimately answered Issue No.1 in favour of the claimant and proceeded to determine the compensation payable to him. The learned Tribunal accepted the occurrence of the accident and the injuries suffered by the claimant and, on consideration of the medical evidence, accepted the permanent disability suffered by him to the extent of 80%. It thereafter proceeded to award compensation of ₹9,74,000/- in favour of the claimant.

The aforesaid finding of the learned Tribunal has to be considered in the backdrop of the nature of injuries suffered by the claimant. The claimant sustained serious spinal injuries in the accident and underwent treatment at different medical institutions. The medical evidence on record, which has been accepted by the learned Tribunal, establishes permanent disability to the extent of 80. The claimant was a young person and was earning his livelihood as a driver. Thus, the disability suffered by him was not temporary but had a permanent bearing upon his capacity to earn his livelihood and lead his ordinary life. Section 163-A of the Motor Vehicles Act, 1988 was introduced as a special provision providing for compensation on a structured-formula basis in cases of death or permanent disablement arising out of the use of a motor vehicle. Sub-section (2) thereof dispenses with the requirement of establishing wrongful act, neglect or default on the part of the owner of the vehicle or any other person. The object and nature of the provision came to be considered by the Hon'ble Supreme Court in Oriental Insurance Co. Ltd. v. Hansrajbhai V. Kodala and others, (2001) 5 SCC 175, wherein the Court explained that Section 163-A provides for compensation on the basis of a structured formula, thereby providing a predetermined basis for determination of compensation without requiring protracted adjudication on the question of fault.

The scope and relationship between Sections 163-A and 166 were subsequently considered by the Hon'ble Supreme Court in Deepal Girishbhai Soni and others v. United India Insurance Co. Ltd., (2004) 5 SCC 385. The Hon'ble Supreme Court explained that Section 163-A introduced a distinct statutory scheme for determination of compensation on the basis of the structured formula contained in the Second Schedule, whereas a claim under Section 166 is founded upon fault liability. The Court further held that an award under Section 163-A is to be determined in accordance with the structured formula and is not in the nature of an interim award. The present case, however, arises in a different procedural setting. The claimant has already prosecuted his claim before the learned Tribunal, the accident and the injuries suffered by him stand established on the record, the permanent disability of 80% has been accepted and the learned Tribunal, despite its observation regarding proof of negligence that no rash and negligent driving is proved, did not dismiss the claim but rather proceeded to determine and award compensation. The matter is now before this Court in appeals arising from the very same award. In these peculiar circumstances, this Court cannot call upon the claimant to file a fresh claim under Section 163-A. Rather, having regard to the permanent disablement suffered by the claimant and the peculiar manner in which the learned Tribunal has dealt with the claim, the question is now about the appropriate basis for determining the compensation payable to the claimant in the present appellate proceedings. The claimant, who has already undergone prolonged treatment and has suffered permanent disablement, ought not, in backdrop of the facts of the present case, be relegated to another round of proceedings merely for determination of compensation on the basis of the no-fault structured formula under Section 163-A of the Motor Vehicles Act, 1988.

Accordingly, for the limited purpose of determining the compensation payable in the present proceedings, this Court considers it appropriate to apply the structured formula contemplated under Section 163-A read with the Second Schedule to the Act, as applicable on the date of the accident especially for the reason that rash and negligent driving was not proved by the claimant and that was not challenged by the claimant in his appeal. The exercise is confined to determination of the compensation payable to the claimant on the material already available on record. The learned Tribunal accepted the monthly income of the claimant at ₹5,000/-. Thus, the annual income of the claimant comes to ₹60,000/-. His permanent disability has been accepted at 80%. The claimant was about 21 years of age at the time of the accident. The Second Schedule specifies multiplier 17 for the age group of 21 to 25 years. The distinction between the multiplier specified in the Second Schedule and the multiplier subsequently evolved for claims under Section 166 has been noticed by the Hon'ble Supreme Court in Sarla Verma (Smt.) and others v. Delhi Transport Corporation and another, (2009) 6 SCC 121. The table reproduced therein records 17 as the multiplier specified in the Second Schedule for the age group of 21 to 25 years. The annual income of the claimant being ₹60,000/-, the annual loss corresponding to 80% permanent disability would be ₹48,000/-. Applying the multiplier of 17, the compensation towards permanent partial disablement comes to ₹8,16,000/-(₹60,000 × 80% × 17). Having regard to the claimant’s 80% permanent disability, spinal injuries and occupation as a driver, this Court considers the maximum period of 52 weeks for loss of income, and accordingly awards ₹60,000/- under this head as per the Second Schedule of the Act.

The claimant incurred medical expenses during his prolonged treatment, as evidenced by the medical bills and receipts on record. However, being governed by the structured formula under the Second Schedule, he is entitled to ₹15,000/- towards medical expenses and ₹5,000/- towards grievous injury, as prescribed therein. The compensation payable to the claimant, on the basis of the aforesaid structured formula, is accordingly worked out at ₹8,16,000/-towards permanent partial disablement, ₹60,000/-towards loss of income for the period of 52 weeks, ₹15,000/- towards medical expenses and ₹5,000/-towards grievous injury, aggregating to ₹8,96,000/-. The aforesaid calculation also demonstrates that the compensation determined by the learned Tribunal does not conform to the structured formula. Once the compensation is required to be determined in accordance with the structured formula contemplated under Section 163-A and the Second Schedule, the learned Tribunal’s calculation cannot be sustained in its present form. The claimant, therefore, has failed to establish any entitlement to enhancement of the compensation awarded by the learned Tribunal. At the same time, the Insurance Company cannot be completely exonerated merely on the basis of the finding recorded by the learned Tribunal regarding proof of rash and negligent driving. The learned Tribunal itself ultimately answered Issue No.1 in favour of the claimant and proceeded to determine compensation. Further, this Court, in the peculiar circumstances noticed above, has adopted the structured-formula basis for determining the compensation payable to the claimant in the present proceedings. The liability of the Insurance Company to satisfy the compensation, therefore, remains, but only to the extent of the amount determined by this Court.

Accordingly, A.O. No. 47 of 2012, preferred by The New India Assurance Company Limited, is partly allowed. The judgment and award dated 20.12.2011 passed by the learned Motor Accident Claims Tribunal/Additional District Judge, Tehri Garhwal in M.A.C. Case No. 27 of 2010 is modified to the extent that the compensation payable to the claimant is determined at ₹8,96,000/- instead of ₹9,74,000/-. The liability of the appellant-Insurance Company to satisfy the aforesaid compensation shall remain unchanged.

A.O. No. 103 of 2012, preferred by the claimant seeking enhancement of compensation, is dismissed.

The amount of ₹7, 50,000/- deposited by the appellant pursuant to the order dated 22.02.2012, along with the amount of ₹25,000/- deposited by way of FDR, shall be adjusted against the compensation of ₹8,96,000/- determined herein. After such adjustment, the balance amount of ₹1,21,000/-, together with 6 % interest as awarded by the learned Tribunal on the compensation, shall be deposited by the appellant i.e. before the learned MACT one month from today i.e. 23.09.2026. The learned MACT is directed to release all the amount under award and put in the form of FDR to the claimant alongwith entire interest accrued thereon adjusting the amount already received by the claimant. Statutory deposit of Rs. 25,000/- if not remitted, be remitted forthwith to the MACT concerned and be paid to the claimant.

(Pankaj Purohit, J.)