National Insurance Co. Ltd. Vs. Vijaya Devi and ors. - Court Judgment

Excerpt:
- - 15. in the claim case, after filing the written statement, the insurance company failed to contest and the insurance policy under which the bus aforesaid was insured at the relevant time was not marked as an exhibit. the terms of the policy are clearly referable to the said statutory amount. gurusharan sharma, j.1. on 16.5.85, at about 6 p.m., while going on scooter, bearing registration no. bhi 9942, one j.d. kumar, a resident of p and t colony, kidwaipuri, patna was dashed by a bus, bearing registration no. bhi 9647, coming from the opposite direction, on account of rash and negligent driving of the driver of the bus, resulting into his instantaneous death.2. vijaya devi, parwati devi, munna, tunna and raju being the widow, mother and the minor sons respectively of the deceased j.d. kumar, jointly filed claim case no. 20 of 1985, before the motor accidents claims tribunal, patna and had claimed compensation to the tune of rs. 10,59,500, under the provisions of the motor vehicles act, 1939 (hereinafter referred to as 'the act').3. at the time of the accident and death j.d. kumar was 31 years old and was working as executive officer in the bihar state credit investment corporation and was getting a salary of rs. 2,431 per month.4. the said bus belonged to the bihar state tourism development corporation and was insured at the relevant time with the national insurance co. ltd.5. both the owner of the vehicle and the insurance company have filed separate written statements, denying the allegation of rash and negligent driving of the bus.according to them the accident took place for non-compliance of traffic rules and negligence on the part of the deceased scooterist. the insurance company made pairvi till 5.11.1992. both of them did not contest the claim case and it was decided ex parte.6. in the impugned judgment and award dated 27.2.1993 the tribunal deducted a sum of rs. 1,000 per month towards the personal expenses of the deceased, out of his monthly salary, which came to round about rs. 1,450. accordingly, the annual dependency was fixed at rs. 17,400 and thereafter using a multiplier of 26, the compensation amount was calculated at rs. 4,52,000. a deduction of 25 per cent on account of contingency, acceleration of benefits and lump sum payment to the tune of rs. 1,13,000 was made therein and net amount of compensation was held to be payable at rs. 3,39,000 with interest at the rate of 6 per cent per annum from the date of claim application till payment by the insurance company. a sum of rs. 15,000 already paid to the claimants on account of interim compensation was to be adjusted therein.7. out of the compensation amount the widow for self and on behalf of her three minor children was held entitled to get 92 per cent and the rest 8 per cent was payable to the mother of the deceased. in case of non-payment of the award amount by the insurance company within a month, a direction was given for payment of interest at the rate of 15 per cent from the date of the judgment and award.8. the present appeal against the impugned judgment and award has been preferred by the national insurance co. ltd. in spite of valid service of appeal notice, the owner of the vehicle, namely, the bihar state tourism development corporation, respondent no. 6, has not appeared in this appeal. the driver of the vehicle, the respondent no. 7 has also not appeared. only the claimant-respondent nos. 1 to 5 have appeared and are contesting this appeal.9. the claim case was filed in the year 1985 and it was disposed of on 27.2.1993. during the said period it was transferred time without number to different courts. lastly, on 19.12.1992 the claim case was transferred to the court of first additional district judge, patna. by that time three witnesses on behalf of the claimants were already examined. on 8.1.1993 chirkut was marked as exh. 7. on 19.1.1993, aw 4 was examined and post-mortem report of the deceased was marked as exh. 8. on the said date the claimants closed their evidence and the tribunal fixed 27.1.1993 for arguments, without giving an opportunity to the opposite parties to adduce evidence, if any. the case was not even fixed for ex parte hearing. on 3.2.1993, pw 1 was recalled and was further examined by the claimants. on 17.2.1993 the arguments of the counsel for the claimants were heard and judgment was delivered on 27.2.1993.10. the present appeal has been preferred by the insurance company against the impugned judgment and award dated 27.2.1993 on the ground that in terms of the insurance policy, it was liable to pay part of the total compensation amount only to the extent of the statutory liability under section 95 (2) (b) (i) of the act.11. as stated above in spite of valid service of notice of this appeal the owner of the vehicle, namely, the bihar state tourism development corporation, patna, the respondent no. 6, has not chosen to appear and contest the appeal.12. on behalf of claimant-respondent nos. 1 to 5 it was submitted that the tribunal ought not to have deducted 25 per cent in the compensation amount on account of contingency of life, acceleration of benefits and lump sum payment and further instead of 6 per cent, the interest at the rate of 12 per cent per annum should have been granted from the date of the claim application till payment.13. a petition for additional evidence under order xli, rule 27 of the code of civil procedure has been filed on behalf of the appellant, wherein prayer has been made to admit the carbon copy of the insurance policy in question as additional evidence in this appeal.14. it appears that the carbon copy of the insurance policy, which was annexed to the petition for additional evidence was misplaced/lost by the office and is not on record. however, a photostat copy of the said insurance policy was filed along with the memorandum of appeal, as annexure 1 thereto and is available on record.15. in the claim case, after filing the written statement, the insurance company failed to contest and the insurance policy under which the bus aforesaid was insured at the relevant time was not marked as an exhibit. in my opinion, for the ends of justice it is necessary to determine the extent of liability for payment of the compensation amount by the insurer and as such the insurance policy must be brought on record under order xli, rule 27 of the code. the counsel for the claimants-respondents has no objection in admitting the same in evidence. accordingly, the insurance policy is admitted in evidence on behalf of the insurance company. in the present case, i find that there was no such contract between the owner of the bus and the insurance company to cover unlimited liability in respect of third party accident.16. i have, accordingly, perused the photostat copy of the policy to ascertain whether the risk for any amount higher than the amount of rs. 50,000 was covered under it. the schedule of the policy indicates the limitation of the policy and the amount of premium paid. a perusal of the policy indicates that the liability undertaken with regard to death or bodily injury to any person caused by or arising out of the use of the motor vehicle under section ii (1) (i) has been confirmed 'such amount as is necessary to meet the requirements of the motor vehicles act, 1939'. this liability, as is apparent from clause (b) (i) of sub-section (2) of section 95 of the act was at the relevant time rs. 50,000 only. the terms of the policy are clearly referable to the said statutory amount.17. in the instant case, the appellant is not seeking to avoid its liability, but wanted determination of the extent of its liability which has to be determined. according to the appellant in absence of any contract to the contrary, the company's liability was to be decided in accordance with the statutory provisions contained in this behalf in section 95 (2) (b) (i) of the act. in the present case, as seen above, the appellant did not undertake in the policy any liability in excess of the statutory liability, in my view, the award against it could be in accordance with the said statutory liability.18. in new india assurance co. ltd. v. shanti bai, 1995 acj 470 (sc), it was held that a comprehensive policy was issued on the basis of estimated value of the vehicle but such comprehensive insurance policy has no consequence in respect of limit of liability with regard to third party risk. such liability does not become unlimited or higher than the statutory liability, unless for this purpose there was specific agreement and separate premium was paid by the insured.19. in this view of the matter, the submission made by the counsel for the respondents that the appellant had in the instant case undertaken an unlimited liability does not obviously has any substance. the liability under the policy in the instant case was the same as the statutory liability contemplated under section 95 (2) (b) (i) of the act, namely, rs. 50,000. the award against the appellant could not, therefore, have been made in excess of the said statutory liability. the appellant insurance company is liable to pay the limited liability and for the rest amount of compensation the owner of the bus is liable.20. the tribunal deducted 25 per cent of the compensation amount towards contingency of life, acceleration of benefits and lump sum payment.in hardeo kaur v. rajasthan state road trans. corpn., 1992 acj 300 (sc), it was held in view of the earlier decision in motor owners' insurance co. ltd. v. jadavji keshavji modi, 1981 acj 507 (sc) and manjushri raha v. b.l. gupta, 1977 acj 134 (sc), that delay in the final disposal of motor accident compensation cases, as in all other classes of litigation, takes a sting out of the laws of compensation and added to that the monstrous inflation and the consequent fall in the value of rupee makes the compensation demanded years ago less than quarter of its value when it is received after such a long time. so with the value of rupee dwindling due to high rate of inflation, there was no justification for making any deduction due to lump sum payment. i, therefore, hold that in the present case the tribunal has no justification in making any deduction towards lump sum payment.21. in the present case the tribunal used the multiplier of 26 to the annual dependency of rs. 17,400. in u.p. state road trans. corpn. v. trilok chandra, 1996 acj 831 (sc), the apex court considered the application of multiplier method for determining just compensation in fatal accident cases and reiterated the correct principles and laid down the multiplier to be adopted. keeping in view the principle laid down by the apex court, in my view, the tribunal was not justified in exceeding 16 as the multiplier. using the multiplier of 16 to the amount of annual dependency the total amount of compensation comes to rs. 2,78,400, i.e., round about rs. 2,78,000.22. in my opinion, grant of interest was a discretion vested in the tribunal. however, this discretion must be exercised judicially on the basis of the facts and circumstances of a particular case. in the present case the delay caused in disposal of the claim was not due to either the owner of the vehicle or the insurer. keeping in view the fact that the claimants have been allowed a handsome amount of compensation which in my view completely meets the ends of justice and so it would be wrong use of discretion to allow interest in the present case at the rate of 12 per cent per annum.23. it appears that pursuant to the order dated 15.12.1993 passed by this court on a petition under order xli, rule 5 and section 151 of the code of civil procedure by the appellant insurance company a sum of rs. 2,66,448 was deposited in this court by challan no. 296 dated 20.12.1993 by the insurer and by further order dated 6.10.1994 the said amount has been invested in term deposit in a nationalised bank in the name of the registrar of this court.24. it is further stated that sum of rs. 15,000 was already received by the claimants, during the pendency of the claim case before the tribunal, by way of ad interim compensation, so the said amount has to be deducted from the total amount of compensation.25. since the deceased left behind three minor children, besides his widow and old mother, the aforesaid sum of rs. 2,66,448 already invested in term deposit shall continue till the three minor children attain majority. however, the claimants are given liberty for withdrawal only in case of an emergency. to meet such a contingency, they may apply to this court for the said purpose. the insurance company shall not be allowed to withdraw the same. however, the insurance company is entitled to recover the amount paid in excess of its statutory liability, as held above, from the owner of the vehicle, in accordance with law. after the balance amount, deducting rs. 2,81,448 already paid, from the total amount of compensation with interest up to date payable to the claimants is deposited, the tribunal will make appropriate orders within two months from the date of deposit of the balance, as it thinks reasonable.26. i do not find any provisions under the act to grant penal interest for nonpayment of the compensation amount within the time fixed by the tribunal and as such i set aside the said part of the impugned judgment and award providing interest at the rate of 15 per cent per annum in such circumstances from the date of the award till payment of the compensation amount.27. with the aforesaid modifications, observations and directions the impugned judgment and award of the tribunal are confirmed.28. this appeal is disposed of accordingly. however, there shall be no order as to costs.

Judgment:

Gurusharan Sharma, J.

1. On 16.5.85, at about 6 p.m., while going on scooter, bearing registration No. BHI 9942, one J.D. Kumar, a resident of P and T Colony, Kidwaipuri, Patna was dashed by a bus, bearing registration No. BHI 9647, coming from the opposite direction, on account of rash and negligent driving of the driver of the bus, resulting into his instantaneous death.

2. Vijaya Devi, Parwati Devi, Munna, Tunna and Raju being the widow, mother and the minor sons respectively of the deceased J.D. Kumar, jointly filed Claim Case No. 20 of 1985, before the Motor Accidents Claims Tribunal, Patna and had claimed compensation to the tune of Rs. 10,59,500, under the provisions of the Motor Vehicles Act, 1939 (hereinafter referred to as 'the Act').

3. At the time of the accident and death J.D. Kumar was 31 years old and was working as Executive Officer in the Bihar State Credit Investment Corporation and was getting a salary of Rs. 2,431 per month.

4. The said bus belonged to the Bihar State Tourism Development Corporation and was insured at the relevant time with the National Insurance Co. Ltd.

5. Both the owner of the vehicle and the insurance company have filed separate written statements, denying the allegation of rash and negligent driving of the bus.

According to them the accident took place for non-compliance of traffic rules and negligence on the part of the deceased scooterist. The insurance company made pairvi till 5.11.1992. Both of them did not contest the claim case and it was decided ex parte.

6. In the impugned judgment and award dated 27.2.1993 the Tribunal deducted a sum of Rs. 1,000 per month towards the personal expenses of the deceased, out of his monthly salary, which came to round about Rs. 1,450. Accordingly, the annual dependency was fixed at Rs. 17,400 and thereafter using a multiplier of 26, the compensation amount was calculated at Rs. 4,52,000. A deduction of 25 per cent on account of contingency, acceleration of benefits and lump sum payment to the tune of Rs. 1,13,000 was made therein and net amount of compensation was held to be payable at Rs. 3,39,000 with interest at the rate of 6 per cent per annum from the date of claim application till payment by the insurance company. A sum of Rs. 15,000 already paid to the claimants on account of interim compensation was to be adjusted therein.

7. Out of the compensation amount the widow for self and on behalf of her three minor children was held entitled to get 92 per cent and the rest 8 per cent was payable to the mother of the deceased. In case of non-payment of the award amount by the insurance company within a month, a direction was given for payment of interest at the rate of 15 per cent from the date of the judgment and award.

8. The present appeal against the impugned judgment and award has been preferred by the National Insurance Co. Ltd. In spite of valid service of appeal notice, the owner of the vehicle, namely, the Bihar State Tourism Development Corporation, respondent No. 6, has not appeared in this appeal. The driver of the vehicle, the respondent No. 7 has also not appeared. Only the claimant-respondent Nos. 1 to 5 have appeared and are contesting this appeal.

9. The claim case was filed in the year 1985 and it was disposed of on 27.2.1993. During the said period it was transferred time without number to different courts. Lastly, on 19.12.1992 the claim case was transferred to the court of First Additional District Judge, Patna. By that time three witnesses on behalf of the claimants were already examined. On 8.1.1993 chirkut was marked as Exh. 7. On 19.1.1993, AW 4 was examined and post-mortem report of the deceased was marked as Exh. 8. On the said date the claimants closed their evidence and the Tribunal fixed 27.1.1993 for arguments, without giving an opportunity to the opposite parties to adduce evidence, if any. The case was not even fixed for ex parte hearing. On 3.2.1993, PW 1 was recalled and was further examined by the claimants. On 17.2.1993 the arguments of the counsel for the claimants were heard and judgment was delivered on 27.2.1993.

10. The present appeal has been preferred by the insurance company against the impugned judgment and award dated 27.2.1993 on the ground that in terms of the insurance policy, it was liable to pay part of the total compensation amount only to the extent of the statutory liability under Section 95 (2) (b) (i) of the Act.

11. As stated above in spite of valid service of notice of this appeal the owner of the vehicle, namely, the Bihar State Tourism Development Corporation, Patna, the respondent No. 6, has not chosen to appear and contest the appeal.

12. On behalf of claimant-respondent Nos. 1 to 5 it was submitted that the Tribunal ought not to have deducted 25 per cent in the compensation amount on account of contingency of life, acceleration of benefits and lump sum payment and further instead of 6 per cent, the interest at the rate of 12 per cent per annum should have been granted from the date of the claim application till payment.

13. A petition for additional evidence under Order XLI, Rule 27 of the Code of Civil Procedure has been filed on behalf of the appellant, wherein prayer has been made to admit the carbon copy of the insurance policy in question as additional evidence in this appeal.

14. It appears that the carbon copy of the insurance policy, which was annexed to the petition for additional evidence was misplaced/lost by the office and is not on record. However, a photostat copy of the said insurance policy was filed along with the memorandum of appeal, as Annexure 1 thereto and is available on record.

15. In the claim case, after filing the written statement, the insurance company failed to contest and the insurance policy under which the bus aforesaid was insured at the relevant time was not marked as an exhibit. In my opinion, for the ends of justice it is necessary to determine the extent of liability for payment of the compensation amount by the insurer and as such the insurance policy must be brought on record under Order XLI, Rule 27 of the Code. The counsel for the claimants-respondents has no objection in admitting the same in evidence. Accordingly, the insurance policy is admitted in evidence on behalf of the insurance company. In the present case, I find that there was no such contract between the owner of the bus and the insurance company to cover unlimited liability in respect of third party accident.

16. I have, accordingly, perused the photostat copy of the policy to ascertain whether the risk for any amount higher than the amount of Rs. 50,000 was covered under it. The Schedule of the policy indicates the limitation of the policy and the amount of premium paid. A perusal of the policy indicates that the liability undertaken with regard to death or bodily injury to any person caused by or arising out of the use of the motor vehicle under Section II (1) (i) has been confirmed 'such amount as is necessary to meet the requirements of the Motor Vehicles Act, 1939'. This liability, as is apparent from Clause (b) (i) of Sub-section (2) of Section 95 of the Act was at the relevant time Rs. 50,000 only. The terms of the policy are clearly referable to the said statutory amount.

17. In the instant case, the appellant is not seeking to avoid its liability, but wanted determination of the extent of its liability which has to be determined. According to the appellant in absence of any contract to the contrary, the company's liability was to be decided in accordance with the statutory provisions contained in this behalf in Section 95 (2) (b) (i) of the Act. In the present case, as seen above, the appellant did not undertake in the policy any liability in excess of the statutory liability, in my view, the award against it could be in accordance with the said statutory liability.

18. In New India Assurance Co. Ltd. v. Shanti Bai, 1995 ACJ 470 (SC), it was held that a comprehensive policy was issued on the basis of estimated value of the vehicle but such comprehensive insurance policy has no consequence in respect of limit of liability with regard to third party risk. Such liability does not become unlimited or higher than the statutory liability, unless for this purpose there was specific agreement and separate premium was paid by the insured.

19. In this view of the matter, the submission made by the counsel for the respondents that the appellant had in the instant case undertaken an unlimited liability does not obviously has any substance. The liability under the policy in the instant case was the same as the statutory liability contemplated under Section 95 (2) (b) (i) of the Act, namely, Rs. 50,000. The award against the appellant could not, therefore, have been made in excess of the said statutory liability. The appellant insurance company is liable to pay the limited liability and for the rest amount of compensation the owner of the bus is liable.

20. The Tribunal deducted 25 per cent of the compensation amount towards contingency of life, acceleration of benefits and lump sum payment.

In Hardeo Kaur v. Rajasthan State Road Trans. Corpn., 1992 ACJ 300 (SC), it was held in view of the earlier decision in Motor Owners' Insurance Co. Ltd. v. Jadavji Keshavji Modi, 1981 ACJ 507 (SC) and Manjushri Raha v. B.L. Gupta, 1977 ACJ 134 (SC), that delay in the final disposal of motor accident compensation cases, as in all other classes of litigation, takes a sting out of the laws of compensation and added to that the monstrous inflation and the consequent fall in the value of rupee makes the compensation demanded years ago less than quarter of its value when it is received after such a long time. So with the value of rupee dwindling due to high rate of inflation, there was no justification for making any deduction due to lump sum payment. I, therefore, hold that in the present case the Tribunal has no justification in making any deduction towards lump sum payment.

21. In the present case the Tribunal used the multiplier of 26 to the annual dependency of Rs. 17,400. In U.P. State Road Trans. Corpn. v. Trilok Chandra, 1996 ACJ 831 (SC), the Apex Court considered the application of multiplier method for determining just compensation in fatal accident cases and reiterated the correct principles and laid down the multiplier to be adopted. Keeping in view the principle laid down by the Apex Court, in my view, the Tribunal was not justified in exceeding 16 as the multiplier. Using the multiplier of 16 to the amount of annual dependency the total amount of compensation comes to Rs. 2,78,400, i.e., round about Rs. 2,78,000.

22. In my opinion, grant of interest was a discretion vested in the Tribunal. However, this discretion must be exercised judicially on the basis of the facts and circumstances of a particular case. In the present case the delay caused in disposal of the claim was not due to either the owner of the vehicle or the insurer. Keeping in view the fact that the claimants have been allowed a handsome amount of compensation which in my view completely meets the ends of justice and so it would be wrong use of discretion to allow interest in the present case at the rate of 12 per cent per annum.

23. It appears that pursuant to the order dated 15.12.1993 passed by this Court on a petition under Order XLI, Rule 5 and Section 151 of the Code of Civil Procedure by the appellant insurance company a sum of Rs. 2,66,448 was deposited in this Court by challan No. 296 dated 20.12.1993 by the insurer and by further order dated 6.10.1994 the said amount has been invested in term deposit in a nationalised bank in the name of the Registrar of this Court.

24. It is further stated that sum of Rs. 15,000 was already received by the claimants, during the pendency of the claim case before the Tribunal, by way of ad interim compensation, so the said amount has to be deducted from the total amount of compensation.

25. Since the deceased left behind three minor children, besides his widow and old mother, the aforesaid sum of Rs. 2,66,448 already invested in term deposit shall continue till the three minor children attain majority. However, the claimants are given liberty for withdrawal only in case of an emergency. To meet such a contingency, they may apply to this Court for the said purpose. The insurance company shall not be allowed to withdraw the same. However, the insurance company is entitled to recover the amount paid in excess of its statutory liability, as held above, from the owner of the vehicle, in accordance with law. After the balance amount, deducting Rs. 2,81,448 already paid, from the total amount of compensation with interest up to date payable to the claimants is deposited, the Tribunal will make appropriate orders within two months from the date of deposit of the balance, as it thinks reasonable.

26. I do not find any provisions under the Act to grant penal interest for nonpayment of the compensation amount within the time fixed by the Tribunal and as such I set aside the said part of the impugned judgment and award providing interest at the rate of 15 per cent per annum in such circumstances from the date of the award till payment of the compensation amount.

27. With the aforesaid modifications, observations and directions the impugned judgment and award of the Tribunal are confirmed.

28. This appeal is disposed of accordingly. However, there shall be no order as to costs.