United India Insurance Co. Ltd. Vs. Kamlesh Singh and ors. - Court Judgment

Excerpt:
- - considering all these circumstances, we are satisfied that a lump sum of rs. this can be best protected in the present case if we direct that an amount of rs.1. this is an appeal by the insurer under section 173 of the motor vehicles act, 1988.2. on 20th april, 1991, the deceased, ram singh vimal, who was a headmaster in an educational institution met with an accident caused by a truck bearing registration no. utc 1101. sustaining fatal injuries he succumbed, this gave rise to the claim by his wife, daughters and two minor sons, their case is the deceased was getting a salary of rs. 2,750 per month and was also getting a sum of rs. 1,100 per month from article contributed to journals and was maintaining the family. thus, they are entitled to the compensation of rs. 13,44,400. the insurer contested his liability on the ground that though cover note has been issued, but it was unauthorised and, accordingly, it would have no liability for the compensation payable. it also claims that compensation claimed is unreasonable.3. considering the materials on record, the tribunal held that there was valid insurance in respect of vehicle and the insurer is liable to indemnify the owner for any incident. on computation the compensation awarded was rs. 4,28,000 and the same was directed to be paid to the claimants by the insurer with interest at the rate of 9 per cent. per annum from the date of application till the date of payment. this is the grievance of the appellant.4. mr. vineet saran, learned counsel for the insurer, strenuously contended that issue of cover note by an agent, who had already been removed would not make the insurer liable. this stand does not impress us. if an agent is removed, all the documents and other valuables are to be recovered from him or a declaration at least should be made that these documents are invalid and could not give any right to any person on that basis, if issued by a removed agent. no such action has been taken in the present case. accordingly, we hold that the insurer is liable for the payment of compensation on the basis of a cover note issued by an agent admittedly belonging to the insurer. if the insurer so feels it can recover the amount of compensation from the delinquent agent.5. coming to the question of quantum of compensation, there is some force in the contention of mr. saran that on the finding that salary of the deceased was rs. 2,750 per month and a sum of rs. 1,100 per month towards the articles contributed to journals, the total emoluments come to rs. 3,850 per month and that a portion of it should be deducted for own expenses of the deceased. it is true that the employment as headmaster would continue till the age of 60 years. in such circumstance, we are to make a guess work as to what would be the contribution to the family members, since normally the longevity of a male in india is 70 years. in the absence of clear material we find that a contribution of rs. 3,000 per month to the family would be reasonable. thus, the claimants lost rs. 36,000 annually on account of the death of the deceased. as has been held in kerala road transport corporation v. mrs. susamma thomas, air 1994 sc 1631, that court should adopt multiplier, which would secure the loss to the family. if normal rate of interest is taken into consideration multiplier of ten would be justified. however, we cannot forget that expenses for the marriage of daughters should also to be taken care of. we take note of the fact that there are future uncertainties and the claimants are getting the benefit of lump sum payment. considering all these circumstances, we are satisfied that a lump sum of rs. 3,60,000 would be just compensation in this case and the same would accrue interest at the rate of 10 per cent. per annum from the date of application till the date of payment.6. as a part of social justice, it is the duty of court to see that the amount awarded as compensation is properly utilised by the claimants so that the amount available is not misutilised or taken possession of by unholy persons in the colour of helping the claimants. this can be best protected in the present case if we direct that an amount of rs. 60,000 shall be paid to the claimants in cash and the balance amount, which would include interest, shall be invested in fixed deposit in a nationalised bank of the choice of the claimants till the last minor attains majority, so that the annual interest is available to them for their maintenance. the tribunal shall see that the bank undertakes not to allow encumbrance on the fixed deposit without it in any manner (sic). in case any amount is necessary which would be beyond the normal maintenance expenses, the claimants can approach the tribunal, which shall after considering the necessity direct that a portion of fixed deposit shall be released as and when necessary. fixed deposit be in joint names of widow and other claimants with authority to widow to operate the same.7. in the result, appeal is allowed in part with the costs of appeal.