R.S. Chauhan, J.
1. Having lost one of his legs, having been granted a compensation of Rs. 1,45,000/- by the Motor Accident Claims Tribunal, Bharatpur ('the Tribunal', for short), vide award dated 10.2.1997, the appellant has filed the present appeal for enhancement of the compensation amount. The Insurance Company, on the other hand, has filed a cross-objection against the award dated 10.2.97. Since the appeal and the cross-objection arise out of the same impugned award, both the appeal and the cross-objection are being decided by this common judgment.
2. The brief facts of the case are that on 17.12.95 the appellant, Ghanshyam Das Choudhary, was riding his scooter in the evening at 5.30 P.M. on National Highway No. 11. While he was riding his scooter, a truck, bearing Registration No. HP 33/2358, being driven rashly and negligently came and hit the scooter from the front side. Consequently, the appellant's right leg had to be amputated and he also sustained fracture in his right hand. Subsequently, the appellant filed a claim petition against the owner and the driver of the offending truck as well as against the Insurance Company, the National Insurance Co. Ltd. The respondents Nos. 1, 2 and 3 submitted their written statement and denied their liability for the payment of damages to the appellant. The learned Tribunal framed five issues. In order to prove his case, the appellant examined three witnesses including him self and submitted 106 documents. The respondents, on the other hand, did not examine any witness, but did submit a single document, namely, the Insurance Cover Note before the learned Tribunal. After going through the oral and documentary evidence, vide award dated 10.3.97, the learned Tribunal granted the appellant the compensation as aforementioned. However, the appellant, who has suffered a disability of 63%, has filed this appeal for enhancement of the compensation amount.
3. Mr. R.S. Agrawal, the learned Counsel for respondent No. 3, the insurance Company, has raised a preliminary objection: according to him, vide order dated 29.8.97 this court had issued notices to all the three respondents. However, vide order dated 9.3.04, this Court had dispensed with the service of notice on respondents Nos. 1 and 2, the owner and the driver of the offending truck. Mr. Agrawal has contended that once the owner and the driver are dispensed with, then the compensation cannot be enhanced and the Insurance Company cannot be held liable for payment of the enhanced amount. In case the compensation amount were to be enhanced, then it is imperative that notice be served on the owner and the driver. According to him, since the liability of the payment of the compensation amount is severely and jointly placed upon the driver, owner and the Insurance Company, it is imperative that the owner and driver be heard prior to the passing of any judgment for enhancement. In order to support his contention, he has relied upon the case of Mehrun v. Samin Akhatar 1 (2005) ACC 248) : RLW 2004 (4) Raj. 2741, Smt. Kalabai Choubey and Ors. v. Rajabahadur Yadav and Anr. III (2002) ACC 193 (DB), Raghavendra Naik and Anr. v. Mahavir and Ors. II (2002) ACC 700 (DB) and Mrs. Jamunabai and Ors. v. Chhote Singh and Ors. 1 (2004) ACC 190 (FB).
4. On the other hand, Mr. Sandeep Mathur, the learned Counsel for the appellant has argued that under Section 147 of the Motor Vehicles Act, 1988 ('the Act of 1988', for short) the liability of the Insurance Company for payment of compensation is unlimited. Therefore, even if the compensation is enhanced behind the back of the owner and the driver, ultimately the Insurance Company is liable to pay the enhanced amount. Therefore, the interest of the owner or the driver is not adversely effected by an order of enhancement. Secondly, the case of Mehrun (supra) was decided under the Motor Vehicle Act of 1939, where the statutory liability of the Insurance Company was a limited one. However, the present case is under the Motor Vehicle Act of 1988 where the statutory liability of the Insurance Company is unlimited one. Therefore, the case of Mehrup (supra) is not applicable to the present case. Thirdly, in the case of A. Robert v. United India Insurance Co. Ltd. : AIR1999SC2977 , the Apex Court dealt with a case where the name of the insured (the owner) was deleted and the S.L.P. against him was dismissed. Yet, the Apex Court did not hesitate to enhance the compensation amount from Rs. 96,500/-to Rs. 1,50,000/-. The said enhanced amount was directed to be paid by the Insurance Company. Therefore, according to Mr. Mathur, the Insurance Company is liable to pay the enhanced amount, if any.
5. Before we proceed to note the other contentions raised by the learned Counsels about the merits of the case, it is imperative to first settle the preliminary objection raised by Mr. Agrawal.
6. Chapter XI of the Act of 1988 deals with insurance of motor vehicles against third party risk. Section 146 makes it imperative that there shall be insurance against third party risk for every vehicle. Further, Section 147 is as under:
147. Requirements of policies and limits of liability-(1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which.
(a) Is issued by a person who is an authorised insurer; or
(b) Insurer the person or classes of persons specified in the policy to the extent specified in Sub-section (2)-
(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including owner of the goods or his authorised representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;
(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:
Provided that a policy shall not be required-
(i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923) in respect of the death of, or bodily injury to, any such employee-
(a) engaged in driving the vehicle, or
(b) if it is a public service engaged as conductor of the vehicle or in examining tickets on the vehicle, or
(c) if it is a goods carriage, being carried in the vehicle, or
(ii) to cover any contractual liability.
Explanation.-For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.
(2) Subject to the proviso to Sub-section (1), a policy of insurance referred to in Sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely:
(a) save as provided in Clause (b), the amount of liability incurred;
(b) in respect of damage to any property of a third party, a limit of rupees six thousand:
Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier.
(3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases.
(4) Where a cover note issued by the insurer under the provisions of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe.
(5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons.
7. A bare perusal of this section reveals that the legal requirements are that the policy of an insurance must be a policy which is issued by a person who is authorised insurer and the policy shall insure person or classes of person specified in the policy to the extent specified in Sub-section (2). According to Sub-section (2) subject to the proviso to Sub-section (1), an insurance policy shall cover any liability incurred in respect of any accident, up to the following limits namely: save what provided in Sub-section (b) the amount of liability incurred. According to Clause (b) the damage to any property of a third party, the liability of insurance company is limited to only rupees six thousand.
8. Thus, unlike the Act of 1939, the Act of 1988 imposes an unlimited statutory liability upon the insurance company in case of accident with a third party. The insurance policy is a contract entered into between the Insurance Company and the insured. Since the statutory liability has been made unlimited by the Act of 1988, the Insurance Company cannot escape its liability under the contract entered into between the Insurance Company and the insurer. Once the vehicle is insured under the Act of 1988, the Insurance Company is liable to pay the compensation amount, whether the said compensation amount has been decided by the learned Tribunal or enhanced by the appellate Court. Since the liability is eventually imposed upon the Insurance Company for payment of the compensation, the enhancement, if any, does not affect the interest of the insured, but affects the interest of the insurer. Therefore, this court is of the opinion that since the interest of the owner is not adversely effected, he need not be heard and service upon him can be dispensed with. Thus, a compensation amount can be enhanced without hearing the owner. However, as the interest of the Insurance Company is adversely affected, it is essential that the Insurance Company be heard prior to the passing any order for enhancement.
9. The case of Mehrun (supra) was a case under the Act of 1939, where the statutory liability of the Insurance Company was limited one. Therefore, the said case is inapplicable to the present case as the present case falls under the Act of 1988. As far as the case of Kalabai Choubey (supra), Raghvendra Naik & Anr. (supra) and the case of Mrs. Jamunabai & Ors. (supra) decided by the Hon'ble MP. High Court are concerned, this Court is in respectful disagreement with the reasoning given by their Lordships of the M.P. High Court. Sufice it to say, that in the case of A. Robert (supra) The Apex Court had enhanced the compensation amount despite the fact that the name of the insurer was deleted from the array of the respondents and the S.L.P. against him was already dismissed. In view of the decision of the Hon'ble Supreme Court in the case of A. Robert (supra), this Court is also of the opinion that in case the notice to the insurer were dispensed with, the Insurance Company would still be liable for the payment of the enhanced compensation amount, if any, and the appeal can be decided by this Court notwithstanding the dispensing of the service of notice on the insurer.
10. Similarly, in the case of Shiv Chandra and Anr. v. Jasvinder Singh and Ors. this court also dealt with a case where the owner died during the pendency of the appeal. In that case, since the legal representatives of the insured owner were not brought on record, the question arose whether the appeal abates or not? This Court answered the issue in the negative and held that on the death of the insured the right to sue survives against the insurer as Order 22 of the C.P.C. is not made applicable to these proceedings.
11. There are two more aspects of the matter which need to be noted : firstly, before the learned Tribunal, the Insurance Company had not denied its liability to pay the compensation. It had merely argued that the accident was a case of contributory negligence. Once it had accepted its liability to pay the compensation before the learned Tribunal, it cannot foresake or deny its liability before the appellate Court. Secondly, many a times service on the owner and/or the driver cannot be completed as their whereabouts' are unknown. In case Mr. Agarwal's argument is accepted, the claimant would never receive the enhanced amount in absence of the owner and/or driver. The relief to the claimant cannot be denied, if the notice cannot be served for no fault of the claimant. Once the factum of accident is proved, once the insurance of the offending vehicle is established, the Insurance Company cannot escape its liability to pay the compensation on the spacious plea of absence of the owner and/or the driver before this Court.
12. On the merits of the case, Mr. Sandeep Mathur has contended that according to the disability certificate the appellant has suffered a disability of 63.3%. Despite the coming into the force of the Second Schedule attached to the Act of 1988, the learned Tribunal has not implemented the formula laid down in Note 5 of the Second Schedule. Therefore, the very basis for calculating the compensation is legally unjustified.
13. On the other hand, Mr. R.S. Agrawal has argued that the learned Tribunal had considered all the aspects of the case, namely the pecuniary and non-pecuniary aspects and had granted a reasonable compensation of Rs. 1,45,000/-. Considering the fact that the award was passed in the year 1997, a compensation of such a high amount is more than just and reasonable. Secondly, he has contended that according to the site-plan, it was a heard on collision between the truck and the scooter. Therefore, clearly it was a case of contributory negligence. Despite the fact that this contention of contributory negligence was raised by the Insurance Company before the learned Tribunal, the learned Tribunal had dismissed this argument. Since the issue of contributory negligence has been decided against the Insurance Company, the Insurance Company has filed its cross-objection. In order to support his contention about the contributory negligence, the learned Counsel has relied upon the case of Bijoy Kumar Dugar v. Bidyadhar Dutta and Ors. II (2006) ACC 36 (SC). According to the learned Counsel in the case of Bijoy Kumar Dugar (supra) the Apex Court has laid down the principle that in case of a head on collision between two vehicles, in middle of the road, the learned Tribunal should ipso facto conclude that it is a case of contributory negligence.
14. In rejoinder, Mr. Mathur has contended that no universal principle of contributory negligence has been laid down by the Apex Court in the case of Bijoy Kumar Dugar (supra). And each case has to be appreciated on the basis of peculiar facts and circumstances of the case. According to the learned Counsel, the learned Tribunal had discussed this aspect of the case in detail and had rightly rejected the contention of the Insurance Company. With regard to the cross-objection filed by the Insurance Company, the learned Counsel has argued that the cross-objectipn is hit by limitation. For, while the impugned award was passed in 1997, the cross-objection was not filed till 20.12.2005. Thus, the cross-objection was filed after an inordinate delay of eight years. Moreover, till 2.3.2007, the defects pointed out by the Registry in the cross-objection were not even removed. Thus the cross objection should be rejected.
15. We have heard the learned Counsels and have perused the impugned award and examined the record placed before this Court.
16. The Second Schedule attached to the Act of 1988 lays down the guidelines to be followed by the learned Tribunal while assessing the compensation to be paid to the claimants. Note 5 of the Second Schedule deals with disability in non-fatal accident. The Note 5 is as under:
5. Disability in non-fatal accidents:
The following compensation shall be payable in case of disability to the victim arising on of non-fatal accidents:
Loss of income, if any, for actual period of disablement not exceeding fifty two weeks.PLUS either of the following:
(a) In case of permanent total disablement the amount payable shall be arrived at by multiplying the annual loss of income by the Multiplier applicable to the age on the date of determining the compensation, or
(b) In case of permanent partial disablement such percentage of compensation which would have been payable in the case of permanent total disablement as specified under item (a) above.
Injuries deemed to result in Permanent Total Disablement/Permanent Partial Disablement and percentage of loss of earning capacity shall be as per Schedule I Under Workmen's Compensation Act, 1923.
17. According to Note 5(b), in case of permanent partial disability such percentage of compensation which would have been payable in case of permanent total disability is specified in item (a) above should be paid to the claimant. According to item (a), in case of permanent total disability, the amount payable shall be arrived at by multiplying the annual loss of income by the Multiplier applicable to the age, on the date of determining the compensation. Once this guideline was prescribed by law, the learned Tribunal was legally bound to follow it. In case it wished to deviate from the said guideline, the learned Tribunal should have given cogent reasons for such deviation. However, in the instant case no reason whatsoever has been assigned by the learned Tribunal for granting Rs. 70,000/-for 63% of disability.
18. According to the appellant, he was working as a Sub-Inspector in the Rajasthan Police and was earning a salary of Rs. 4,500/- per month. The appellant has testified that the grade payable to the Sub-Inspector was Rs. 1180/-. He also admitted in his cross-examination that he is working in the Police Department. However, according to his testimony, in examination-in-chief, because of his disability he would be prevented from promotion to the post of Inspector and Dy. S.P. Act the time of the accident, he was 42 years old and at the time of the impugned award he was 44 years old. Taking his salary to be Rs. 4,500/- per month and applying the formula given in Note 5(b) of the Second Schedule, in loss of dependency should be calculated as under:
4,500 x 15 x 12- Rs. 8,10,000/-
63% of this amount comes out to be Rs. 5,10,300/-. Therefore, a compensation of Rs. 5,10,300/- should have been paid to the appellant by the learned Tribunal. Thus, clearly by granting a compensation of Rs. 70,000/-only to the appellant, the learned Tribunal has erred in not applying the formula prescribed by Note 5 (b) of the Second Schedule of the Act.
19. The contention raised by Mr. Agrawal that in case of head on collision the learned Tribunal should presume the accident to be caused by the contributory negligence, cannot be accepted. Accidents, by their very nature, are unpredictable. Therefore, no universal principle can be applied regarding the cause of an accident. In the case of Bijoy Kumar Dugar (supra), the Apex Court has not laid down any universal principle. The factual situation of Bijoy Kumar Dugar (supra) is inapplicable to the present case. Therefore, the contention raised by the learned Counsel is without force.
20. In the result, this appeal is allowed and the Insurance Company is directed to pay the enhanced amount, as calculated and mentioned above, to the appellant after deducting the amount already disbursed to the appellant by the Company. The Insurance Company is further directed to pay the remaining enhanced amount with an interest @ 6% per annum from the date of the filing of the claim petition i.e. 24.2.96 till the date of realisation. The learned Tribunal is directed to issue notice to the appellant and to ensure that the enhanced amount is paid to the appellant within a period of two months from the date of the receipt of the certified copy of this judgment. This appeal is allowed with the above observations. The cross objection was filed after an ordinate delay of eight years and yet no application under Section 5 of the Limitation Act, has been filed therewith. Therefore, this Court has no option but to dismiss the cross objection on the ground of limitation. The same is accordingly dismissed.