National Insurance Co. vs Mst. Sitara and Another

Hasnain Massodi, J.—Shri Mohammad Shafi Wani son of Ghulam Rasool Wani resident of Sarnal Payeen, Anantnag, on 5th Nov. 2005

met with a vehicular accident at Main Chowk, Awantipora, resulting in his death on 9th November 2005 at SKIMS Soura. The dependents of the

deceased on 23rd Nov. 2005 filed a claim petition u/s 166 Motor Vehicles Act, before the Motor Accident Claims Tribunal, Anantnag. The

claimants in all claimed a compensation of Rs. 26,20,728 on the grounds of loss of dependency, funeral expenses, loss of consortium, etc. Though

the owner and driver of the offending vehicle were arrayed as respondents 1 and 2 in the claim petition yet a direction was sought to the Insurance

Company with which the offending vehicle was insured to pay the claimed compensation as the Company was under contractual obligation to

indemnify the owner. The claim petition was opposed by respondents 1 and 2 on the ground that the vehicle (Tata Sumo JK03-2242) was falsely

connected with the accident in question. The appellant Insurance Company- respondent No. 3 before the Tribunal contested the claim petition on

the ground that respondent No. 1- driver of the offending vehicle- was not having a valid and effective driving license on the date of the accident

and the Insurance Company was not liable to pay the compensation because of breach of insurance policy.

The tribunal on perusal of the pleadings settled following issues:

Whether on 05.11.2005 the driver while driving vehicle No. 2242 JK03 from Srinagar to Khanabal rashly and negligently and while reaching at

Main Chowk, Awantipora National Highway a pedestrian Mohammad Shafi Wani son of Ghulam Rasool Wani resident of Sarnal Payee was hit

and injured and thereafter succumbed to the injuries at Soura Institute? OPP

Whether the vehicle involved was insured with respondent No. 3 at the time of accident? OPP

Whether the petitioners are entitled to compensation, if so to what extent and from whom? OPP

Whether the respondent No. 3 is not liable to pay compensation, if so how and who has to pay? OPR1-3.

The Tribunal on consideration of the evidence brought on the file held the accident to have been the result of rash and negligent driving of the

offending vehicle (Tata-Sumo JK03-2242) by respondent No. 1 and the vehicle to have insurance cover from respondent No. 3 on the date of the

accident. The deceased at the time of the accident as per the evidence available on the file was of 40 years age and working as a tailor with John

Bishop Memorial Hospital Anantnag, on a monthly salary of Rs. 4883. The Tribunal found the deceased to have been working as tailor at his

residence before and after office working hours and assessed his income from the said source at Rs. 3000 per month. Taking monthly income of

the petitioner at Rs. 8000 per month and allowing a deduction of one-fourth of the actual income on account of personal expenses, the Tribunal

treated monthly income of the petitioner a.fter deducting personal expenses etc at Rs. 6000 and using it as multiplied and applying multiplier of 15,

worked out the loss of dependency at Rs. 10.80 lakh. The Tribunal awarded Rs. 25,000 on account of loss of consortium and Rs. 10,000 to each

child for loss of parental love and Rs 2,000 for funeral expenses, Rs 2500 on account of loss of estate and Rs 2500 for medical treatment and

transport. The Tribunal in total awarded an amount of Rs 11,32,000. The driver of the vehicle-respondent No. 1 herein was held to have been

driving the vehicle without any valid and effective licence.

The Tribunal on scanning the evidence on the file made an award of Rs 11.32,000 to be paid by the appellant to the claimants respondents and

awarded interest on the award amount @ 7.5 per cent per annum from the date of institution till final realization. The Insurance Company,

however, was given a right to recover the award amount from the owner of the vehicle after it was deposited with the court.

The award dated 29th October 2009, is assailed by the Insurance Company in the present CIMA on the grounds that once the driving licence

held by the driver of the offending vehicle was found to be fake and forged, the Tribunal ought not to have burdened the appellant with the liability

to pay compensation to the claimants. The appellants also questions the quantum of compensation insisting that the Tribunal erroneously took

monthly salary of the deceased as Rs 5,000 as against take-home salary of Rs 4173 established by the material on the file. The Tribunal, it is

pleaded, was not to add Rs. 3000 per month to the salary of the deceased on account of income derived from stitching in absence of any reliable

evidence that the deceased had a tailoring shop. The award dated 29th Oct 2009 is also impugned on the ground of incorrect multiplier applied by

the Tribunal. The Tribunal is said to have erroneously deducted one-fourth (1/4th) of the income on account of personal expanses as against one-

third (1/3rd) income expected to be spent by the deceased on such expenses. The appellant also disputes the authority of the Tribunal to award Rs

25,000 on loss of consortium, Rs 10,000 to each child on account of parental love and Rs 2500 for medical and transport expense. The rate of

interest awarded, according to the appellant is exorbitant and not permitted under law.

I have gone through the memorandum of appeal as also the Tribunal record. I have heard learned Counsel for the parties.

The appellant does not dispute involvement of vehicle- Tata Sumo JK03-2242 in the accident that claimed life of Shri Mohamad Shafi Wani or

that the vehicle was not being driven rashly and negligently by its deriver. It is also not disputed that the offending vehicle had the insurance cover

from the appellant on the date of accident. The challenge to the award impugned in the appeal, is restricted to uantum of the compensation

awarded by the Tribunal and liability of the appellant to pay the compensation in view of a clear finding by the Tribunal that the driver of the

offending vehicle did not possess valid and effective licence to drive the offending vehicle at the time of accident. The focus in the present appeal

obviously is to be on said aspect of the matter. The Accident Claims Tribunal under the Motor Vehicle Act, 1988 is in terms of Section 168 of the

Act, under the statutory obligation to award ""just compensation"", to the dependants of the victim of the accident in case of death and to the victim

where the accident results in injury to the victim. The Tribunal as laid down in Nagappa Vs. Gurudayal Singh and Others, is not to allow the

pleadings to stand in its way to work out the ""just compensation"" payable to the dependants or the victim as the case may be. The Supreme Court

in Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, has while commenting on import and meaning expression ""just

compensation"" held: -

Just compensation is adequate compensation which is fair and equitable, on the facts and circumstances of the case, to make good the loss

suffered as a result of the wrong, as far as money can do so, by applying the well settled principles relating to award of compensation. It is not

intended to be a bonanza, largesse or source of profit. Assessment of compensation though involving certain hypothetical considerations, should

nevertheless be objective. Justice and justness emanate from equality in treatment, consistency and thoroughness in adjudication, and fairness and

uniformity in the decision making process and the decisions. While it may not be possible to have mathematical precision or identical awards, in

assessing compensation, same are similar facts should lead to awards in the same range. When the factors/inputs are the same, and the

formula/legal principles are the same, consistency and uniformity, and not divergence and freakiness, should be the result of adjudication to arrive

at just compensation.

The claimants to help the Tribunal to assess the just compensation in case of death are in terms of law laid down in Sarla Verma's case; (a) Age

of, the deceased (b) Claim of the deceased (c) Number of dependants. The Tribunal to assess the loss of dependency is required to arrive at a

conclusion regarding additions/deductions to be made to find out the income of the deceased, the deduction to be made on account of personal

expenses of the deceased and multiplier to be applied with reference to the age of deceased. Once loss of dependency is worked out on the anvil

of principles governing additions/deductions to the income, deductions on account of personal expenses and the multiplier, it does not involve any

further labour to work out just compensation within the meaning of Section 168 of the Act.

The Tribunal in the present case has taken into account income derived by the deceased while working as tailor, at his place before and after

schedule work hours in his office. There is no rule to debar the Tribunal from taking into account extra income of the deceased in addition to the

salary, as on inquiry is found to have been earned by the deceased by working before or and after scheduled office hours. It however, needs no

emphasis that the claimants before Tribunal must establish by convincing evidence that deceased did, as a matter of fact work before and after

scheduled office hours and was in receipt of additional income or overtime generated income for the deceased that was added to the family

kitty/coffers. In the present case the respondents appear to have brought on the file sufficient evidence to prove that the deceased by profession a

tailor, before reporting to his duty at Johan Bishop Memorial Hospital Anantnag, and after his duty hours used to work as a tailor at his home and

stitch dresses for of his customers. There has been no rebuttal from the appellant. The Tribunal having regard to the evidence on file and taking

note of the fact that, the appellant did not adduced any evidence in rebuttal, rightly held the deceased to have on an average derived income of Rs.

3,000/- per month, from dress making at his residence before and after office hours. The conclusions drawn by the Tribunal so viewed can not be

faulted.

The deceased admittedly had his wife, two minor children and mother as his dependants. The deceased with such a responsibility was not

expected to spend one-third (1/3) of his income on his personal expenses. A bachelor without any responsibility may indulge in such a luxury and

even spend one half of his income on his personal expenses. But a persons with four dependants without any source to fall back upon, except the

income of such person can ill-afford to spend one-third (1/3) of his income on his personal expenses. The Tribunal was in the circumstances right in

restricting deduction on account of personal expenses of the deceased to 1/4th of his income. There in the circumstances, is no reason to disagree

with the conclusions drawn by the Tribunal, that otherwise are in conformity with the law laid down in Sarla Verma's case (supra). It would be

appropriate to extract following observations made in the aforesaid reported case. Where the deceased, was married the deduction towards

personal and living expenses of the deceased, should be one-third (1/3rd) where the number of dependant family members is 2 to 3, one-fourth

(1/4th) where the number of dependant family members is 4 to 6 and one-fifth (1/5th) where the number of dependant family members exceed six.

The Tribunal on the basis of evidence on the file found the deceased to have been of 40 years of age and applied multiplier of 15 to work out

the loss of dependency. There is no substance in the grounds urged in the appeal that Tribunal applied an incorrect multiplier and that the multiplier

applied ought to have been 12 and not 15 applied by the Tribunal. It again needs to be pointed out that as per law laid down in Sarla Verma's case

the Tribunal is required to apply multiplier of 18 for the age groups of 15 to 20 and 21 to 25, reduced by one unit for every five years the Tribunal

having regard to the aforesaid formal was required to apply multiplier of 15 as the deceased was within the age group of, ""36 to 40"" years at the

time of his death. The Tribunal has done exactly, what it was required to do in terms of law laid down in the reported case.

The Tribunal however has erred while awarding Rs. 10,000/- each to the respondents 2 and 3 (son and daughter of the deceased) on account

of loss of love and affection. The compensation worked out by the Tribunal on account of loss of dependency brings within its fold loss on account

of love and affection with which the dependants are visited. In the circumstance there was no reason for the Tribunal to award a separate amount

on the said count. The compensation, if any, in addition to loss of dependency can be awarded on account of loss of consortium, loss of estate and

actual expenses incurred by the dependants on account of medical treatment, if any, given to the deceased before his death, or on account of

transportation of dead body and funeral expenses. Again the compensation awarded on account of, loss of consortium in on a higher side without

any reason given there for. The award made by the Tribunal in the circumstances warrants to be modified to the extent of the amount awarded to

respondents 2 and 3 on account of loss of love and affection.

The other ground of challenge relates to rate of interests awarded by the Tribunal. The Tribunal has awarded interest at the rate of 7.5% p.a.

on the awarded amount from the date of filing of the claim petition till actual payment of awarded amount. The Tribunal ought to have restricted the

rate of interest to 6% p.a. in absence of any special circumstances like delay in disposal of the claim petition, attributable to the appellant. In

absence of such finding the Tribunal ought not have awarded interest at the rate of 7.5% p.a.

This takes us to the second and only other limb of the case sought to be set up by the appellant. The Tribunal has found the driver of the

offending vehicle to have been not in possession of a valid and effective driving licence to drive the offending vehicle at the time of accident. The

appellant insists that in face of such a finding the only option available to the Tribunal was to burden the owner of the vehicle with the liability to pay

compensation to the respondents 1 to 4, because of breach of Insurance policy/contract on his part. It is pleaded that the appellant by establishing

before the Tribunal that the driver of the offending vehicle was not in possession of a valid driving licence, was not to be held responsible for

payment of the award amount. The Tribunal, it is insisted acted without jurisdiction while directing the appellant to pay the award amount with the

right to recover it from the owner of the vehicle. The plea set up is devoid of any force. The fatal accident took place on 5th November 2005, and

having regard to the long pendency of the claim petition, the Tribunal rightly directed the Insurance company to pay the compensation so as to

provide immediate relief and succour to the respondents 1 to 4 who because of unfortunate death of their bread earner were deprived of the only

source of sustenance. It needs no emphasis that the object and purpose of Chapter XI and X, Motor Vehicles Act, 1988 is to provide an efficient

and hassle free mechanism to the dependents of the victim, to get compensation on account of death of the victim. The law makers in their wisdom

have decided not to leave the dependant of a victim of the vehicular accident, to fall back upon the ordinary civil remedy available under ordinary

law as such a remedy would have delay recovery of compensation and push the dependants of the victim to rigmarole of procedural wrangles. The

imperatives of Public policy make room for a direction to the Insurance company to pay the compensation to the dependents of the victim even

where the Insurance company is found to be not liable to pay compensation because of breach in Insurance policy/contract on part of insured i.e.

owner of the offending vehicle. The order requiring the appellant to pay compensation and recover it from the owner without institution of a suit is

in conformity with dictates of public policy and law laid down in Ishwar Chandra and Others v. Oriental Insurance Co' Ltd and Others AIR 2007

SCW 1889.

The appellant Insurance company shall pay an amount of Rs. 10,97,000 (Rs. 10,80,000/- on account of loss of dependency, Rs. 10,000/- on

account of loss of consortium, Rs. 2500/- on account of loss of estate, Rs. 2500/- and medical expenses and Rs. 2000 on account of funeral

expenses) with interest at the rate of 6% p.a. from the date of filing of claim petition till its realization.

Decree sheet be drawn up. The appeal is disposed of accordingly.