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Judgment
Mohd. Yaqoob Mir, J.—Death of a 7th standard student at the age of 14 years in a road accident resulted in filing petition u/s 166 of Motor
Vehicle Act before Motor Accident Claims Tribunal, Srinagar which culminated in passing the award (judgment) whereunder compensation
amounting to Rs. 4,10,000/- including interim compensation and 6% interest from the date of institution of the petition till final realization has been
awarded. Aggrieved and dissatisfied with the finding Appellant (Insurance Company) has filed the instant appeal. .
Respondents 1 & 2 are the parents whereas Respondents 3 & 4 are the sisters of the deceased (boy). Respondent No. 5 is the owner and
driver of the offending vehicle (Tipper). The learned Counsel for the Appellant (Insurance Company) would contend that the judgment (award)
passed against the Appellant is illegal as the Appellant-Company is not liable to indemnify. Elaborating this submission, it is stated that admittedly
offending vehicle (Tipper) on the date of accident i.e. 15.10.2004 was insured but on the date of accident driver did not possess the valid driving
licence which contravene the stipulation as contained in the policy of insurance, that being so Company is exonerated.
It is further contended that the driver who is also the owner of the offending vehicle did possess the driving licence which was initially valid for
the period 22.08.1998 till 21.08.2001. From 21.08.2004 till 14th March, 2005 said licence had not been renewed. Thereafter, same was
renewed on 14.03.2005 under renewal No. 1l8104/MVD upto 21st August, 2,007 but such renewal in any case will validate the licence only from
the date of renewal so admittedly oh the date of accident i.e. 15.10.2004 licence was not valid. The Tribunal has wrongly fastened the liability on
the Company. In view of the law laid down in the judgments Ram Babu v. United India Insurance Company Limited (2008) 8 SCC 156 and the
National Insurance Company Ltd. v. Vidhyadhar Mahariwala and Ors. (2009) SC 208, Company is not liable to indemnify.
Learned Counsel for the Respondents 1 to 4 would contend that the judgment rendered by the bench of Hon'ble three Judges of the Apex
Court in National Insurance Co. Ltd. Vs. Swaran Singh and Others, is applicable. Same has been relied upon by the Tribunal, therefore, same will
apply, latest two judgments as relied upon by Appellant have been delivered by the bench of Hon'ble two Judges only.
On behalf of Respondent No. 5, the contention is that the driver was a competent driver, he possessed a valid driving licence though for
intervening period which include the date of accident, the licence remained to be renewed but that does not mean that the driver was in any way
disqualified, more particularly, driving licence was neither suspended nor cancelled. It is further contended that the renewal of the licence for the
period March, 2005 would mean renewal of the licence from the date of its expiry i.e. will be deemed renewed with effect from 21.08.2001.
Further it is also contended that the welfare legislation has to be applied and implemented in the context of the main purpose. Supporting this
contention, learned Counsel also placed reliance on the judgment rendered in National Insurance Co. Ltd. Vs. Swaran Singh and Others, .
Learned Counsel also contended that the amount of award is excessive, Tribunal should have awarded the compensation while having resort to
the schedule i.e. structured formula.
While considering the contention as raised the controversy is narrow down, the first question which arise for the determination is as to whether
the driving licence which was not renewed on the date of accident would have no effect on the liability of the Company. In Swaran Singh's case
(Supra) in the summary of findings, it has been laid down that mere absence, fake or invalid driving licence or dis-qualification of the driver for
driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties.
The judgment rendered in Swaran Singh's case alongwith other number of judgments have been noticed by the Hon'ble Supreme Court in the
judgments reported in Ram Babu Tiwari Vs. United Indian Insurance Co. Ltd. and Others, and National Insurance Co. Ltd. Vs. Vidhyadhar
Mahariwala and Others, .
In Ram Babu's case (2008) SCC 165 the identical question, as is in issue, in the instant case has been dealt with, the driver of the offending
vehicle was having a valid licence only for the period 11.02.1990 to 10.02.1993 and again from 07.02.1996 to 07.02.1999 but admittedly did not
hold any licence during the period 11.02.1993 to 06.02.1996. It was contended that on the date of accident the driver did not hold any licence,
therefore, Insurance Company is not liable to pay the compensation. The Hon'ble High Court of Madhya Pradesh has held that the Insurance
Company was not liable to indemnify. Same was challenged before the Hon'ble Apex Court. Hon'ble Apex Court while relying on various
judgments including the Swaran Singh's case affirmed the judgment of the High* Court.
In the case National Insurance Co. Ltd. Vs. Vidhyadhar Mahariwala and Others, , similar question arose for consideration as in the said case
date of accident was 11.06.2004, the driving licence was initially valid from 15.12.1997 to 14.12.2000 and thereafter from 29.12.2000 to
14.12.2003 then it was again renewed from 16.05.2005 to 15.05.2008. The Tribunal had taken a view that though the licence was not renewed
on the date of accident, driver would not be incompetent or dis-qualified to drive the vehicle so the Insurance Company was held liable to
indemnify. In the appeal, the Hon'ble High Court also came to hold that the Insurance Company was liable to indemnify the award. It was held that
merely there was a gap in the renewal of driving licence that cannot be a ground for exoneration. The Hon'ble Apex Court while noticing all the
judgments as referred including the Swaran Singh case finally held that the Company is not liable to indemnify the award. In this connection Para
11 is quite apt to quote:
(11) ""In Ishwar Chandra's case (Supra) the three decisions referred to by the High Court were considered and it was held that the insurance
company would have no liability in the case of this nature. We are in agreement with the view. The appeal deserves to be allowed which we direct.
The impugned order of the High Court is set aside. It is open to ' the claimant to recover the amount from Respondent No. 2.
In the case in hand, the company has specifically set up defence to the effect that the Driver of the offending vehicle at the time of accident did
not possess valid licence, in support thereof has produced the witnesses, more particularly, Irshad Ahmad, Junior Assistant, RTO, Kashmir who
has categorically stated that the licence was not renewed from 21.08.2004 till 14.03.2008 which mean on the date of accident i.e. 15.10.2004, the
licence was not valid.
Applying the ratio rendered in the judgment above referred, the case in hand is squarely covered by the same, therefore, the Insurance Company is
not liable to indemnify.
The contention of learned Counsel for Respondent No. 5 is that the amount of award is on higher side needs reconsideration. Admittedly a 14
years old boy reading in 7th Class has died. Grant of compensation in such cases varies from case to case and when no special case is made out
then amount of award has to be inconsonance with the structured formula.
The learned Tribunal while relying on the judgment rendered in Lata Wadhwa and Others Vs. State of Bihar and Others, has held that the
annual contribution on behalf of deceased would be Rs. 24,000/- applying the multiplier of 15, the awarded amount is worked as Rs. 3,60,000/-
plus Rs. 30,000/- on account of love and affection, Rs. 5000/- as funeral expenses, loss of estates Rs. 15,000/-, in total Rs. 4,10,000/-, while
doing so Tribunal has highlighted that the deceased was exceptionally brilliant child and was only son of the parents, would be expected to take up
the profession of a doctor or engineer and would have reached to the highest position.
Lata Wadhwa's case as relied by the Tribunal is of no help to the Appellant, every case has its own facts and features dependent on which the
amount of compensation is awarded. In the reported judgment, the children have been divided in the age group of 05 to 10 and 10 to 15 years.
For the age group of 05 to 10 years, the annual notional income has been taken as Rs. 15,000/- whereas for the age group of 10 to 15 years, the
annual notional income has been taken as Rs. 24,000/- and multiplier of 15 was held appropriate but the Hon'ble Apex Court has noticed the
peculiar facts of the case. It shall be quite relevant to quote the portion of Para-11.
Loss of a child to the parents is in coupable and no amount of money could compensate the parents. Having regard to the environment from which
these children were brought, their parents being reasonably well placed official of the Tata Iron and Steel Company and on considering the
submission of Mr. Nariman, we would direct that the compensation amount for the children between the age group of 5 and 10 years should be
three times. In other words, it should be Rs. 1,50,000/- to which the conventional figure of Rs. 50,000/- should be added and thus the total
amount in each case would be Rs. 2,00,000/-. So far as the children between the age group of 10 to 15 years, they are all students of Class VI to
Class X and are children of employees of TISCO. The TISCO itself has a tradition that every employee can get one of his children employed in
the Company. Having regard to these facts, in their case, the contribution of Rs. 12,000/- per annum appears to us to be on the lower side and in
our considered opinion, the annual contribution should be Rs. 24,000/- and instead of multiplier of 11, the appropriate multiplier would be 15.
Therefore, the compensation, so calculated on the aforesaid basis should be worked out to Rs. 3,60,000/- to which an additional sum of Rs.
50,000/-has to be added, thus making the total compensation payable at Rs. 4,10,000/- for each of the claimants of the aforesaid deceased
children.
In the instant case no such evidence has been led-so as to show that the deceased (boy) would get the assured chance of employment as was
available to the deceased boy in the reported case. On the surmises, it has been assumed that the child would become a doctor or engineer, that
may be true but it is also equally true that the boy might have given up education. While awarding compensation, it has to be kept in the mind that
the amount shall neither be windfall nor pittance. Reasonable and fair compensation has to be awarded. The finding returned on Issue No. 4 has to
be modified. In the given facts and circumstances of the case, it shall be quite appropriate to have re-course to the structured formula whereunder
annual notional income of the boy has been provided as Rs. 15,000/- and the multiplier applicable as 15, it is worked out as 15,000/- x 15 =
2,25,000/-, funeral expenses as Rs. 2000/-, in total Rs. 2,27,000/-. Rs. 30,000/- on account of love and affection, Rs. 15,000/- on account of
loss of estates as granted by the Tribunal is impermissible.
While summing up the appeal succeeds and is disposed of in the following terms:
(i) That the total amount of compensation Rs. 15,000/- x 15 = Rs. 2,25,000/- plus funeral expenses as Rs. 2000/- and interest at the rate of 6%
per annum from the date of institution till the date of recovery is awarded.
(ii) Insurance Company is exonerated so is not liable to indemnify the award, However, since the amount as awarded by the Tribunal has been
deposited, out of that amount now the awarded amount including 6% interest less by any amount already paid be released in favour of the
Respondents 1 to 4 and the balance amount shall be refunded to the Appellant-Insurance Company with liberty to Insurance Company to recover
the awarded amount as ordered to be released in favour of the claimants from Respondent No. 5 (Owner and Driver of the offending vehicle).
Appeal succeeds to the extent indicated above. Copy of the order alongwith record of the Tribunal be sent to the Tribunal.